VHM LIMITED

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2023 Annual Report For the year ended 30 June 2023 ACN 601 004 102

Corporate Directory ........................................................................................................................ 3 Letter from the Chairman .............................................................................................................. 4 Board of Directors ...........................................................................................................................6 Key Highlights ..................................................................................................................................8 Review of Operations ...................................................................................................................10 Asset Overview ................................................................................................................................11 Approvals and Licence Updates .............................................................................................. 20 Sustainability ...................................................................................................................................21 Funding and Offtake Considerations .......................................................................................25 Market Outlook ..............................................................................................................................26 Exploration Activities ....................................................................................................................27 Ore Reserves and Mineral Resources .....................................................................................30 Directors' Report ............................................................................................................................36 Auditor’s Independence Declaration .......................................................................................63 Directors’ Declaration ................................................................................................................100 Independent Auditor’s Report...................................................................................................101 Additional Shareholder Information .......................................................................................105

2 VHM Limited | 2023 Annual Report

Corporate Directory

Directors

Donald George Runge Non-Executive Chairman

Graham Roger Howard Managing Director

Maree Arnason Non-Executive Director (appointed 18 August 2023)

Ron Douglas Non-Executive Director (appointed 18 August 2023)

Ian Smith Non-Executive Director (appointed 18 August 2023)

Former Directors

Michael Barry Allen Executive Director (resigned 18 August 2023)

Gamini Malcolm Colless Non-Executive Director (resigned 18 August 2023)

Company Secretary

Ian Hobson

Notice of Annual General Meeting

The details of the annual general meeting of VHM Limited are:

20 November 2023

Registered Office

Suite 8, 110 Hay Street Subiaco, Western Australia 6008 T: 08 9388 8290

Prinicipal Office

Share Registry

Automic Pty Ltd Level 2, 267 St Georges Terrace Perth, Western Australia 6000 T: 1300 288 664

Auditor

HLB Mann Judd (WA) Partnership Level 4, 130 Stirling Street Perth, Western Australia 6000

Solicitors

HWL Ebsworth Level 21, 91 King William Street Adelaide, South Australia 5000

Gilbert + Tobin Level 16, Brookfield Place Tower 2/123 St Georges Terrace Perth, Western Australia 6000

Bank

Westpac Level 9, 150 Collins Street Melbourne, Victoria 3000

Stock Exchange Listing

VHM Limited shares are listed on the Australian Securities Exchange (ASX code: VHM)

Website

www.vhmltd.com.au

Corporate Governance Statement

Corporate governance | VHM Ltd

Letter from the Chairman

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On behalf of the Board of VHM Limited I am pleased to present the Company’s 2023 Annual Report – our first as an ASX-listed company.

I am proud to report on the achievements of your Company during the 2023 financial year. While the share price performance since listing has been disappointing, it is reassuring to report on many successful work streams that have advanced. The metallurgical pilot plant has proven the production path for high purity Mixed Rare Earth Carbonate; Resources and Reserves have increased overall and include multiple high-grade zones and the appointment of three new board members strengthens the development and oversight capability.

We are proud to report that with an unwavering focus on safety, these programs have been completed with zero lost time injuries. The field work alone conducted 13,000 hours on the job without incident; an exemplary outcome considering the substantial workload required to rapidly advanced the Goschen, Cannie and Nowie Projects.

The most important action during the year has been the submission of the adequacy assessment of the Environment Effects Statement (EES) for the Goschen Project. This document is critical to advance any major project in Victoria and addresses all identified environmental and community aspects with a view to minimise and avoid impacts where possible. This work involved engagement with the local community, and I’m pleased to report that existing relationships have been strengthened and increased in support for our submission. The community recognises the lasting benefits that will be delivered for the district and is now expressing public support for the Project. Preparation of a mining licence application is underway in anticipation of the EES advancing.

At the Goschen Project, the release of a Definitive Feasibility Study (DFS) Refresh and Pilot Hydromet Plant results outlined a project with excellent economics. The value is driven by dual-commodity revenues, simple extraction requirements, efficient processing, and world leading metallurgy recoveries. An initial 20-year mine life demonstrates a $1.5 billion pre-tax Net Present Value (NPV) and 44% Internal Rate of Return (IRR) (see ASX release 28 March 2023). These are spectacular metrics for a project with significant scalable capacity.

4 VHM Limited | 2023 Annual Report

Beyond Goschen, the Cannie Project defined a maiden Mineral Resource estimate only four months from first drilling; another outstanding achievement by the exploration team. In August 2023, the first drilling results at the Nowie Project returned some of the highest grades the VHM team has seen in the region. In combination, the VHM team has assembled a world class rare earths and mineral sands province that is incredibly exciting.

Rare earth market forecasts continue to consistently predict a supply crunch arriving in 2025, which aligns with the anticipated timeline for the commissioning of the Goschen Project. As the race to secure critical minerals supply intensifies, VHM is firmly positioning to deliver into a tightening market at the right time.

The quality of the VHM Projects has been recognised by multiple international and domestic downstream industry participants. Offtake discussions have commenced and are advancing with several potential partners. The Company retains a Memorandum of Understanding for take-or-pay offtake with Shenghe Resources for 60% of Phase 1 Goschen products and has elected to extend the date that the formal agreement is to be finalised.

All these activities were accelerated by the funds raised from the Initial Public Offer (IPO) on the Australian Securities Exchange (ASX) on 9 January 2023. The listed structure provides VHM with the framework to secure the combination of financing required to rapidly progress the Goschen Project through construction and commissioning.

Subsequent to the end of the reporting period, the Company released the maiden Mineral Resource estimate for Area 4. Situated 8km to the north of Goschen, Area 4 offers a credible development option for the Board to access, in conjunction with the Goschen and Cannie projects. This distinct high-grade project area opens new possibilities for the Company.

To support the transition to development, the Company has welcomed three new directors, Ian Smith, Ron Douglas, and Maree Arnason who bring a wealth of experience in large scale project development, delivery and operations management; as well as organisation-wide governance, risk and ESG expertise. Their first priority is to review the Company’s overall strategy and development approach for the regional rare earth and mineral sands province in North West Victoria, to optimise benefits for shareholders.

In addition, Graham Howard announced that he will step back from his role as Managing Director however will remain on the Board as a Non-Executive Director. I thank Graham for his incredible service as Managing Director and guidance through the early growth as a Company. The search for a new Managing Director or Chief Executive Officer is well advanced however in the meantime, Ron Douglas has agreed to serve as an Executive Director. Ian Smith has also agreed to assume the role of Chairman at the conclusion of our 2023 Annual General Meeting. I am thankful to Ian for agreeing to take on this responsibility and I have complete confidence that his experience will lead our organisation to new heights.

We are grateful for the support of our loyal staff and shareholders during our transition from explorer to developer. The outlook for VHM remains incredibly strong and will look forward to delivering on our portfolio of projects for the benefit of all stakeholders.

Yours sincerely,

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Don Runge Chairman

VHM Limited | 2023 Annual Report 5

Board of Directors

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Don Runge

BE (Mining), MAusIMM

Chairman of the Operations, Safety and ESG Committee

Member of the Nomination and Remuneration Committee

Member of the Audit and Risk Committee

Mr Runge has over 40 years’ operations and project experience including industrial minerals where he managed the development of the Uley Graphite Project in South Australia. He has held executive management positions for Newcrest Mining Limited, including Manager for Ridgeway Underground Project; and Development and General Manager of Cracow Gold Mine. He has managed a team of expats advising Philix Mining Corporation on development of their Silangan Au/Cu Project.

Current Listed Directorships: Nil

Other Current Directorships/ Appointments: Nil

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Graham Howard

BAppSc (Geology), FAusIMM

Managing Director

Member of the Operations, Safety and ESG Committee Member of the Nomination and Remuneration Committee

Mr Howard was appointed to the position in 2016 and brings 35 years’ operations and project experience and significant corporate experience as Chief Executive Officer and Managing Director of unlisted public companies and an ASX-listed gold company. He managed the early 2000's Telfer Gold Mine (Newcrest) mineral resource inventory expansion to >30MOz >1Mt Cu, held significant senior management functions including Boddington Gold Mine (Newcrest) and Silangan Au/Cu Project (Philex/Silangan) and has managed numerous Definitive Feasibility Studies.

Current Listed Directorships: Nil

Other Current Directorships/ Appointments:

NED of VPM Limited

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Ian Smith

BEng Mining (Honours), BFinAdmin, FAusIMM, FIEAust

Non-Executive Director

Mr Smith was appointed a Non-executive Director in August 2023. Mr Smith is an experienced executive and board director with more than 40 years’ experience gained in the domestic and international mining and mining services sectors.

Mr Smith has held some of the most senior positions in the Australian resources industry, including Managing Director and Chief Executive Officer for Orica and Newcrest Mining Limited. His technical, operational and commercial stewardship during his Newcrest tenure was instrumental to the Company’s success – transforming the business into Australia’s largest gold mining companies of the time, and elevating Newcrest to one of the largest gold mining operators in the world.

Mr Smith’s previous senior and executive positions include those with Rio Tinto, WMC Resources, CRA Limited and Pasminco.

Current Listed Directorships:

Chair of Rex Minerals Limited

Other Current Directorships/ Appointments:

NED of Kestrel Coal Limited
NED of Ravenswood Gold Limited

6 VHM Limited | 2023 Annual Report

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Maree Arnason BA, FAICD

Non-Executive Director

Ms Arnason was appointed a Non-executive Director in August 2023. Maree has over 35 years’ experience across the natural resources, energy and manufacturing sectors with companies including BHP Billiton, Carter Holt Harvey, Svenska Cellulosa AB and Wesfarmers. She has worked across commodities including iron ore, gold, copper, timber, coal, mineral sands and natural gas and has gained expertise in governance, strategy, sustainability, risk, corporate affairs, stakeholder relations, transformations, divestments and integrations.

Current Listed Directorships:

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Ron Douglas

BE, FAIM, MAusIMM, MAICD

Non-Executive Director

Mr Douglas was appointed a Non-executive Director to the board in August 2023. Mr Douglas has extensive executive and operations delivery experience gained over a 40 year career with publicly listed global mining, energy, and manufacturing companies. He brings valuable major construction experience gained in both operator and engineering/construction contractor organisations, to his board positions.

Current Listed Directorships: Nil

Other Current Directorships/ Appointments:

Director of Talbot Investments
NED of Gold Road Resources Limited
NED of Ardea Resources Limited

Other Current Directorships/ Appointments:

Chair of Juniper Aged Care
Co-founder and Director of Energy Access Services
ASIC Corporate Governance Consultative Panel
WA AICD Division Councillor

VHM Limited | 2023 Annual Report

Key Highlights

No Reportable Incidents or Injuries

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Approximately 13,000 were hours of field work performed during the period.

Advanced Approvals

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All environmental and

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Project of National Significance

Goschen received Major Project Status by the Australian Federal Government.

Discovery of new Major Critical Minerals Province in Victoria

Stretching over 55 kilometres along the western flank of the Lake Boga Granite.

social assessments complete.

Adequacy review with Victorian government complete.

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Critical Minerals

87%

of Goschen’s rare earth minerals basket value will be derived from Dysprosium, Neodymium, Praseodymium, and Terbium oxides, all of which are high demand ‘critical’ rare earths used in permanent magnets for EV traction motors[1] .

Zircon and titanium are also listed on the Australian and US Critical Minerals List.

Notes:

1: Source Adamas Intelligence Marketing Report Q1 CY 2023

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8 VHM Limited | 2023 Annual Report

Goschen’s Strong Financials[2]

NPV IRR Low FCF $1.525B 44% Capex $270M $500M

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Goschen Life of Mine
20 YEARS
Potential for a further
20 years based on Global
Ore Reserves of 198.7Mt
(subject to future approvals)
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Potential for a further 20 years based on Global Ore Reserves of 198.7Mt (subject to future approvals)

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Advanced Flowsheet

Developed in partnership with Mineral Technologies and ANSTO.

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First Offtake MOU Indicating quality of commercial product from the Goschen Project.

Local & State Benefits The Project will bring significant : benefits to the local community[3]

$2 billion $1.3 billion 250 400+ to the Loddon-Mallee to the Victorian construction jobs in economy (Project economy jobs operations construction and operation)

“The Company’s rare earth inventory is now one of the largest in Australia and this is complemented by the significant zircon inventory of 5.1 million tonnes and rutile inventory of 2.7 million tonnes”.

Managing Director, Graham Howard (ASX release 16 May 2023)

2: ASX release 28 March 2023, free cash flow on pre-tax average per year over initial ten years

3: Source Deloitte Access Economics Report 2022, in Australian dollars

Notes:

VHM Limited | 2023 Annual Report

Review of Operations

VHM Limited (the “Company” or “VHM”) is fully focused on bringing the advanced stage Goschen Rare Earth and Mineral Sands Project (“Goschen Project” or “Goschen”) into production. Goschen’s Resource contains the key “Critical Minerals” Neodymium, Praseodymium, Dysprosium, and Terbium that are essential for the manufacturing of electric vehicles and other technologies at the forefront of the global renewable energy transition.

The key events of the Company’s operations over the last twelve months, and to the date of this Report are as follows:

Successful IPO listing on the ASX on 9 January 2023.
Completed the DFS Refresh for the Goschen Project outlining a 20 year mine life and underlying economics of pre-tax NPV of $1.5B and IRR of 44% (ASX release 28 March 2023).
Progressed the approvals pathway with completion of the Goschen Environment Effects Statement (EES) Adequacy Review by the Department Transport and Planning.
Completed Pilot Hydromet Plant testwork at Australian Nuclear Science and Technology Organisation (ANSTO) converting the rare earth mineral concentrate (REMC) to a high purity mixed rare earth carbonate (MREC). The testwork produced market leading rare earth mineral recoveries.
Commenced Detailed Engineering Design for the Process Plant (Phase 1).
Commenced preliminary technical works for the Hydromet Plant (Phase 1A) Engineering Study.
Discovery of major rare earth mineral and zircon resource with Cannie maiden Mineral Resource estimate.
New discovery of high-grade rare earth, zircon, and titania ore body at Nowie, 22km north of the proposed Goschen treatment plant.

ASX Listing

The Company successfully listed on the ASX on 9 January 2023. The IPO consisted of 22.22 million fully paid ordinary shares at an issue price of $1.35 each to raise gross proceeds of $30 million (before costs). Canaccord Genuity (Australia) Limited acted as Lead Manager of the IPO, supported by Co-Manager Reach Markets, and Standard Chartered Bank as corporate financial adviser. HWL Ebsworth Lawyers acted as Legal Adviser.

10 VHM Limited | 2023 Annual Report

Asset Overview

VHM is building a business focused on accessing Australia’s critical minerals and rare earths deposits to help meet global demands to transition to low-carbon economies and achieving Australia’s net zero goals.

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NOWIE
GOSCHEN
CANNIE
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VHM Limited | 2023 Annual Report

Goschen Project

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SWAN HILL
ULTIMA
KERANG
GOSCHEN
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VHM owns 100% of the flagship Goschen Rare Earth and Mineral Sands Project located in the Loddon Mallee Region of Victoria a known mineral sands-rich region, approximately 35km south of Swan Hill. The Project would involve the mining and processing of heavy mineral sands and rare earth minerals.

Project Maturity

EXPLORE DFS DESIGN CONSTRUCT OPERATE

FY2023 Milestones

Goschen Project Definitive Feasibility Study Refresh
Detailed Engineering Design for Base Plant (Phase 1)
Pilot testwork at ANSTO complete for Hydromet Plant (Phase 1A)

Ore Reserve: 198.7 million tonnes (Mt)

Resources: 629Mt Mineral Resource estimate

Mineralogy: THM 3.7%, zircon 21.7%, rutile 9.7%, leucoxene 8.2%, monazite 3.5%, xenotime 0.6%

Proposed Mine Plan: 98.8Mt at 5Mtpa

Mining: 20 year LOM, truck shovel-pit, block mining heavy mineral sands

Staged Development: Phase 1, Phase 1A

Products: Zircon/titania heavy mineral concentrate (HMC), rare earth mineral concentrate (REMC) and mixed rare earth carbonate (MREC)

The flagship Goschen Rare Earth and Minerals Sands Project positions VHM on an attractive trajectory toward producing critical mineral products containing rare earth elements and heavy mineral sands which offer a highly economic, dual-revenue stream.

12 VHM Limited | 2023 Annual Report

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Goschen Project proposed Process Plant Phase 1 and Hydromet Plant Phase 1A

Goschen Project Definitive Feasibility Study Refresh

During the reporting period the Company completed a DFS Refresh (ASX release 28 March 2023) that confirmed the potential of the Goschen Project as a world-class operation that delivers robust economics.

The DFS Refresh describes a well-defined and low-risk project across a number of categories including Mineral Resources, Ore Reserves, mining methods, processing, land access, capex, life-of-mine, and operating costs.

The DFS demonstrated relatively simple processing is required to take rare earth and heavy minerals sands through production, and into the project economics described in the DFS Refresh indicate a low-risk, high-return capital, and operational profile for the Goschen Project.

Advancing the Goschen Project (Phase 1)

A significant amount of work has been undertaken during the reporting period to advance Phase 1 of the Goschen Project to establish a clear development pathway. With the completion of the DFS and Front End Engineering Design (FEED) studies, the Company has reached a major milestone in the development of its Detailed Engineering Design. Key achievements for the reporting period include:

Detailed Engineering for Phase 1 has progressed in accordance with the planned schedule.
Non-Process Infrastructure (NPI) contract pathway defined, and the Early Contractor Involvement (ECI) process has commenced.
Tailings Test Work and Tailings Facility Detailed Design has progressed in accordance with the planned implementation schedule.
The Invitation to Tender (ITT) for the Mining Contract is scoped and ready for tender.

5Mtpa >20 years

Conventional open cut mining methods excavation, load, and haul

9.4ktpa REMC

10 year average annual production rates for REMC

$564 million 44% Revenue IRR

Average per annum

Pre-tax internal rate of return

134.5ktpa HMC

10 year average annual production rates for zircon-titania HMC

8.5ktpa MREC

10 year average annual production rates for MREC

$1.5 billion 2.8 years NPV Payback Initial 10 year average From commencement nominal price forecast of production

Initial 10 year average nominal price forecast

Note: DFS Financial Metrics (Phase 1 and 1A) (nominal dollars)

VHM Limited | 2023 Annual Report

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Phase 1 – Base Plant Phase 1A – Hydromet Circuit
Mining Screening Wet Flotation REMC Kiln Hydromet Circuit
Concentrator Circuit Product
Plant (WCP) Stockpile
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Zircon/titania Rare Earth Mixed
Heavy Mineral Mineral Rare Earth
Concentrate Concentrate Carbonate
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Goschen process and product flowsheet

Goschen Project Detailed Engineering

Initial Detailed Engineering for the Base Plant was undertaken with Mineral Technologies to ensure the continued development of the Detailed Engineering and subsequent Procurement and Construction phases in accordance with the Project implementation schedule and planned advance towards Final Investment Decision (FID).

The Base Plant Detailed Engineering scope comprises the: Mining Unit Plant, Feed Preparation Plant, Wet Concentrator Plant and Rare Earth Plant facilities, including key infrastructure.

The Detailed Engineering for the Base Plant is being delivered in two stages. The current Stage 1 will produce sufficient engineering to support FID. A subsequent Detailed Engineering Part 2 will be undertaken to progress Detailed Engineering to a maturity to facilitate progressing to Procurement and Construction.

Non-Process Infrastructure Early Contractor Involvement

The Company has adopted an ECI contracting pathway for the Project’s NPI. The ECI process has been adopted by the Company to leverage contractor industry expertise and to collaboratively develop the optimal technical and commercial outcome for the NPI component of the Project. This approach positions the Project for a well-defined Execution phase with significant planning undertaken as part of the ECI phase.

The ECI process has commenced with prospective contractors, and the Company is currently working with prospective participants prior to awarding a contract for the ECI services.

Tailings Facilities Test Work and Detailed Engineering

ATC Williams has been engaged to undertake geochemical and mechanical test work of the tailings that will inform the tailings deposition strategy and tailings facility in-pit embankment detailed design.

Geochemical tailings column leachate testing of tailings samples commenced in July 2023. The resulting baseline characterisation report will enhance understanding of initial in-ground tailings performance. The 12 week column testing program will provide a more comprehensive understanding of tailings leach potential over time.

Mechanical test work on the tailings stream commenced in August 2023, to facilitate the detailed design of pumping and dewatering infrastructure.

The Tailings Facility Detailed Engineering and Operating Manuals will be prepared by ATC Williams during 1H FY2024.

Mining Contractor

Initial Requests for Quotation (RFQ) were sought from prospective Mining Contractors during the period. After receiving the RFQ responses, an ITT for the Mining Contract was scoped and is due out for tender in 1H FY2024.

14 VHM Limited | 2023 Annual Report

Advancing the Hydromet Plant (Phase 1A)

Over the last 5 years, VHM has worked closely with the world leading rare earth research facility located at the Australian Nuclear Science and Technology Organisation (ANSTO). ANSTO's dedicated mineral processing team have worked closely together to design and demonstrate a process for recovering rare earths from the Goschen ore body. These include the critical light rare earths of Neodymium and Praseodymium, and critical heavy rare earths of Dysprosium and Terbium.

The pre-pilot works undertaken at ANSTO resulted in the design of a process flowsheet that utilises industry standard sulphation bake technology whilst incorporating novel reagent and water and recycle circuits (ASX release 17 January 2023). The resulting flowsheet is seen as both technologically robust and resource efficient.

The flowsheet was successfully demonstrated via a Pilot Hydromet Plant (Pilot Plant) confirming that a very high quality MREC can be produced from the Goschen mineral concentrate (ASX release 6 June 2023).

The Pilot Plant also confirmed that exceptionally high recoveries are achievable from the mineral concentrate using the processing pathway including:

97% for critical light rare earths Neodymium (Nd) and Praseodymium (Pr); and
92% for Dysprosium (Dy) and 94% for Terbium (Tb), critical heavy rare earths.

Impurities in the final MREC product are low, at 2.5% — 3.0% with the radioactive elements of thorium and uranium being exceptionally low being at or below detection limits.

Initial discussions with potential offtake partners indicate that the MREC product meets criteria for potential domestic, European, North American, and Asian specifications. Samples are being made available to advance commercial offtake discussions.

In completing this major testwork program, the Goschen Project is another step forward to enhancing Australia's sovereignty in rare earth processing capacity and unlocking critical minerals supply chains for the benefit of the Australian economy.

Pre-Engineering Studies

Pre-Engineering Study works relating to the Hydromet Plant have been carried out by GPA Engineering (GPA) throughout the period.

GPA has been engaged on the Project for various pre-engineering assessment, risk management and design optimisation study scopes throughout the Development phase.

GPA has been a key participant in the Hydromet Pilot Plant testwork program and is using information obtained from the pilot testwork to optimise the flow sheet and inform early vendor engagement activities.

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Goschen final MREC product produced from ANSTO's Pilot Hydromet Plant

VHM Limited | 2023 Annual Report 15

Cannie Project

VHM confirmed a new Cannie Inferred Mineral Resource located just 13.5km south of the Goschen Project. The Cannie Mineral Resource extends 7.2km north-south and 4.4km east-west and remains open in all directions.

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SWAN HILL
ULTIMA
KERANG
CANNIE
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Project Maturity

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EXPLORE DFS DESIGN CONSTRUCT OPERATE
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Resource: 192Mt Mineral Resource estimate Minerology: THM 3.1%, zircon 24.5%, rutile 15.5%, leucoxene 24.3%, monazite 4.1%, xenotime 0.81%

FY2023 Milestones

Completion of >5,000m drilling program
Maiden Mineral Resource estimate released

The maiden Cannie results (ASX release 16 May 2023) demonstrated an increase of 176,000 tonnes of rare earths (TREO + Y2O3), and a material lift to the Company’s zircon and titanium mineral inventory:

zircon 5.1Mt (additional 1.4Mt zircon)
rutile 2.7Mt (additional 0.9Mt rutile)
leucoxene 2.9Mt (additional 1.4Mt leucoxene)

It’s proximity just 13.5km to the south of VHM’s flagship Goschen Project reinforces VHM’s dominant position in Victoria’s Critical Minerals Province.

The grades of the rare earth minerals, zircon, rutile, and leucoxene within the Cannie Mineral Resource are higher than most of those reported in the Company’s Goschen Project Mineral Resource estimate (Table 1).

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16 VHM Limited | 2023 Annual Report

Down hole geophysics and geological logging from all 137 drill holes in EL 6664 and 5 drill holes from EL 6419 was sufficient to provide spatial continuity. The Inferred classification reflects the appropriate level of confidence in grade tenor and spatial continuity of this estimate.

The close proximity to Goschen plus the successful early drilling results is very exciting for VHM. This discovery provides a lot of optionality for VHM to create value for shareholders.

“The grade profile and significant tonnage associated with the Cannie Mineral Resource enables the Company to commence engineering evaluations for a standalone project south of the flagship Goschen Project.”

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Managing Director Graham Howard

(ASX release 16 May 2023)

Table 1: Cannie Mineral Resource estimate composite next to Goschen Mineral Resource estimate

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Goschen MRE Grade
Cannie MRE Grade (Measured, Indicated
Mineral (Inferred) and Inferred)
Total Heavy Mineral 3.1% 2.9%
TREO + Y2O3 3.0% 2.3%
Monazite 4.1% 3.3%
Xenotime 0.8% 0.6%
THM Assemblage
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VHM Limited | 2023 Annual Report 17

Nowie Project

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SWAN HILL
ULTIMA
KERANG
NOWIE
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The Company announced a major new discovery of high-grade strandline deposits within the Nowie Project area. Nowie is located 22km north of the Company’s proposed Goschen plant.

Project Maturity

EXPLORE DFS DESIGN

CONSTRUCT OPERATE

VHM commenced drilling in January 2023 and has completed a 50 hole drilling program with early assay results indicating a high-grade ore body with significant total rare earth oxide (TREO), zircon and high value titanium minerals of rutile and leucoxene (ASX release 8 August 2023).

FY2023 Milestones

Initial high-grade rare earth, zircon and rutile deposit discovered
Confirmed the extent of the North West Victoria Critcal Minerals Province
Exemplary in-situ zircon grades ranging from 1.6% – 2.6% and in-situ TREO grades greater than 2000ppm

Geological interpretation concluded that the Nowie deposit is formed from multiple high-grade strandline systems which occur above a thick sequence of moderate total heavy mineral (THM) grade sheet style mineralisation up to 20m thick. The drilling program revealed that areas of Nowie contain up to two times higher valuable heavy minerals than the highest-grade areas of the Goschen Reserve.

The Company will continue to evaluate the results from the 50 drill holes completed in the program. Future work programs will test the extent of the mineralisation that appears to be consistent from the results of this first program. The Company anticipates releasing a maiden Mineral Resource estimate in 1H FY2024.

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18 VHM Limited | 2023 Annual Report

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Nowie exploration drilling: Cross section indicating near surface high-value THM composites (12.5%)

“These are excellent results from our initial drilling program at Nowie and they firmly support our plan to continue developing this Critical Minerals Province in Victoria's North West. The Goschen Project has already illustrated it is a highly economic project and the higher grades at Nowie are a welcome addition to the Company’s rare earths and mineral sands project portfolio.”

Managing Director Graham Howard (ASX release 8 August 2023)

VHM Limited | 2023 Annual Report 19

Approvals and Licence Updates

The Goschen Environment team and its consultants have completed all necessary environmental and social studies for the Goschen Environment Effects Statement.

Permitting Update

During the reporting period, VHM made significant progress on its Environment Effects Statement (EES) for the Goschen Project approval. All chapters of the EES were completed and submitted to the Victorian Department of Transport and Planning (DTP).

The DTP completed the adequacy review of the Goschen final environmental and social technical reports and the associated EES chapters, against the scoping requirements.

The EES is currently going through final stages of regulatory review prior to public exhibition.

The Victorian EES process is accredited to assess potential impacts on Matters of National Environmental Significance (MNES) for the purpose of the Environment Protection and Biodiversity Conservation (EPBC) Act , under the bilateral assessment agreement between the Commonwealth and the State of Victoria.

The completion of adequacy review and the approval by the Government to release the EES documentation for Public Exhibition is a key milestone to advance the Goschen Project.

Mining Licence Application

The Company submitted a Mining Licence (MIN) application to Earth Resources Regulator on 30 March 2023 for the proposed Goschen Mine Site area.

Once the Minister for Planning has assessed the EES application and given it a positive recommendation, it will allow the Minister for Resources to assess the MIN application and subsequently accept an application of the Project Work Plan; which is one of the final steps in obtaining the approvals for the Goschen Project.

Land Access Agreements

During the reporting period, the Company completed a fourth Land Acquisition Agreement for the final freehold land parcel required within the proposed Goschen Project mine footprint, with settlement expected prior to FID. Therefore the Company has secured 100% of the proposed Goschen Project mine footprint area.

All land purchase arrangements satisfy regulatory requirements to enter into access agreements with affected landowners and address operational requirements during the Construction and Operational phases, as set out in the Company’s Prospectus (ASX release 5 January 2023).

Next steps in the EES process

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5 4 3 2 1
ASSESSMENTADEQUACYCOMPLETE EXHIBITIONPUBLICESS SUBMISSIONSASSESSMENTPUBLIC APPROVALSPRIMARY SECONDARYAPPROVALS CONSTRUCTIONCOMMENCES PRODUCTIONFIRST
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20 VHM Limited | 2023 Annual Report

Sustainability

VHM leadership recognises the important role the Company plays in creating a sustainable contribution to society; both through the production of vital rare earth products for downstream markets, and through ensuring our operations are responsibly designed and powered.

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VHM Limited | 2023 Annual Report

This section highlights the early steps VHM has made in its Sustainability journey and plans to define its Enivroment, Social and Governance (ESG) Framework entailing reporting standards, offsets, and performance measures.

At its core, VHM’s purpose is to responsibly produce rare earth and mineral sands products while respecting the rights of future generations.

Our value is not just determined by our financial performance, but also by our environmental and social license to operate. We focus on four key pillars when it comes to operating sustainably:

Safety and protecting the environment and community is an absolute priority of everyone.
We respect each other and embrace our diversity.
We do what we say, acting honestly and with integrity in all we do.
We care about our people and the communities we live and work in.

During the period, our commitment to developing a robust ESG reporting framework has been demonstrated by a number of early corporate and operation design initiatives including:

Exploration of viable partnerships with renewable energy developers to supply the Goschen Project.
Renewable energy supply and transmission options have been a critical consideration for the Detailed Engineering Design for the Goschen base plant (Phase 1).
VHM signed up to the Mineral Council of Australia’s Towards Sustainable Mining framework and will use this as one of the inputs for developing the Company’s ESG framework.

Environment

Our goal is to understand and manage the impact we have on the environment and to utilise our resources efficiently.

During the reporting period, our focus was the environmental approvals for the Goschen Project, and ensuring any field work performed was done in accordance with VHM’s policies and procedures and regulatory requirements.

The Company had zero reportable environmental incidents during the reporting period.

This year saw the culmination of over four years of extensive field and background studies that support the EES Impact Assessment for the Goschen Project. Each of the technical studies examines the existing conditions of the Project area, the likely impacts of the proposed project and the environmental mitigations measure that VHM will implement to minimise impacts to the environment and the community we operate within.

Extensive engagement through the DTP led Technical Review Group with our subject matter experts and representatives from the various regulatory authorities, has led to a comprehensive understanding of the existing environment and how we will protect the environmental and social values at Goschen. The EES is currently going through final stages of regulatory review prior to public exhibition.

Climate Change

VHM is working towards execution of initiatives to decarbonise its operations and report on climaterelated financial disclosures (including the Task Force on Climate-related Financial Disclosures (TCFD)).

Material and strategic risks associated with climate change have been evaluated and noted, and considered for the stage of development of the Goschen Project.

As the Company grows and the Goschen Project progresses through Construction and Operations phases, Company climate-related financial disclosures will be revised in line with the maturation of the Goschen Project lifecycle.

22 VHM Limited | 2023 Annual Report

Social

People and Culture

VHM places an emphasis on establishing a workplace environment where everyone is welcomed to bring their technical expertise, and diverse backgrounds and thoughts to work. This principle instils a positive and productive culture for business efficiency and success.

Gender diversity is one metric which VHM Executives place high on the agenda for workforce planning, recruitment and retention. During the period, the Company maintained a leading example for gender balance for operating in the Resources industry.

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Health and Safety

VHM is committed to the health, safety and wellbeing of our team members and members of the public who interact with our operations. This is demonstrated by the exemplary OHS performance for FY2023 with zero reportable incident or injuries.

43% of employees are female with 30% in management positions 57% of employees are male with 70% in management positions

“The VHM team developing the Goschen Project presented well-considered options for bringing the Goschen Project online – with a focus on legacy, equitable outcomes and opportunity for the people and businesses here in the Loddon-Mallee Region.”

– Swan Hill Rural City Council Chief Executive Officer Scott Barber

VHM Limited | 2023 Annual Report

Community and Social Responsibility

The Company has invested in the local Gannawarra Shire region with the recent acquisition of the Kerang Warehouse. This facility serves as a hub for key stakeholders and the community, as well as a base for VHM personnel visiting the site. It also houses the core samples extracted from the field during the Company's drilling operations.

Landowners and Neighbours

VHM recognises there will be a change of amenity to residents who live in close proximity to the proposed Goschen mine site. The Company presented a Neighbour Agreement to nearby landowners outlining our acknowledgement of this change and our commitment to our neighbours.

First Nations Engagement

VHM recognises the importance of acknowledging and respecting the traditional landowners and First Nations people whose lands we operate on. We are committed to engaging with First Nations people in a meaningful and respectful way, recognising their unique knowledge and cultural perspectives. An internal working group has been established to ensure appropriate engagement, and adherence to our Cultural Heritage Management Plan.

Local Government Engagement

VHM is committed to working cooperatively and collaboratively with the relevant Local Government Councils to identify and progress opportunities that will deliver social and economic development benefits to the region.

During the period, the Company entered a Memorandum of Understanding (MOU) with both the Gannawarra and Swan Hill Rural City councils outlining our joint commitment to a working relationship.

VHM has continued to engage with the local community through general information sessions, council and community group meeting presentations and attendance at local events.

We will continue to honour our commitments to ensure strong ties in the community in the Loddon Mallee Region to maximise benefits to the local people and the economy as we progress the Goschen Project into Construction.

Sponsorship

VHM believes a diverse sponsorship portfolio is important to a broad audience of beneficiaries to maximise positive outcomes.

Sports and Recreation

During the period, VHM renewed its sponsorship of the Mallee Eagles FootballNetball Club in Lalbert and has now signed a major three-year sponsorship program supporting the Golden Rivers and Central Murray Football-Netball Leagues.

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Arts

The Company continues to support the Rotary Annual Kerang Art Show, funding the Silver Sponsorship for the second consecutive year. A sponsorship highlight for the year has been the Kerang Christmas Lights competition.

Education

The Company has sponsored the Teacher Earth Science Education Program which brings earth and environmental science topics into schools for middle-school education, including those in Victoria’s Loddon-Mallee Region.

Industry

The Company is a co-sponsor of the Mineral Council of Australia – Victorian Chapter’s Mine Rescue Competition to support mine rescue teams with emergency simulation exercises to make the mining industry safer.

24 VHM Limited | 2023 Annual Report

Funding and Offtake Considerations

Offtake

Prominent rare earth minerals market player Shenghe Resources, has entered into a non-binding MOU with the Company for the Goschen Project’s first production. The Company is advancing offtake negotiations which will include a binding take-or-pay offtake agreement that would entail Shenghe committing to purchase 6,400 tonnes per annum (tpa) of REMC and 100,000tpa of HMC for each calendar year over a three-year term. This amount approximates 60% of the Project's nominal production rate based on the anticipated 5 Mtpa output of the Goschen Project.

A significant benefit of the agreement with Shenghe is the confirmation of the marketability of all products from the Goschen Project.

In the recent quarterly report (ASX release 27 July 2023) VHM advised that both parties continue contract negotiations and have agreed to extend the date that the formal agreement is to be finalised to 31 December 2023.

Funding

In the reporting period, VHM has advanced discussions with prospective Australian and international commercial lenders along with Australia’s Export Credit Agency with the aim of securing a project debt facility with financial completion upon approval by all regulatory authorities. In addition, VHM will pursue opportunities for governmentsupported grants, debt financing, and credit support.

In November 2022 the Company received a Research and Development Tax Incentive (R&DTI) of $4.4 million for the Financial Year ended 30 June 2022.

Since commencing R&D activities in 2018 the Company has received $15.6 million in R&DTI, and anticipates that additional R&DTI support will be forthcoming in future years as we develop one of Australia’s first rare earths focused mineral sands projects.

Working with Deloitte, the Company is considering the opportunity to seek an Advanced Finding for what is anticipated to be substantial R&D over the Construction and Operations phases.

The Company will continue to engage with a number of Domestic, European, Asian, and North American prospective partners for offtake agreements for its products.

The Company will utilise the high-grade MREC product produced from the recent pilot-scale Hydromet Plant to supply samples for potential offtake partners.

VHM Limited | 2023 Annual Report 25

Market Outlook

Even though the global markets have had a turbulent year, VHM remains optimistic about the long-term prospects of its products due to their potential applications in renewable energy, decarbonisation, and electric vehicle manufacturing.

Rare Earth Market Outlook

In 2023, prices for rare earth oxides, including NdPr oxide, declined overall due to weak consumer demand in key markets and temporary overproduction in China.

Adamas Intelligence predicts a 5% to 6% growth in the global market for rare earth oxides (REOs) in 2024, led by strong demand growth for magnet REOs (i.e., Nd, Pr, Dy and Tb).

Looking forward to 1H CY 2024, Adamas expects seasonality to drive demand for NdFeB magnets higher in all geographies, while rare earth production in China and inflows from Myanmar tighten adding support for an upturn in rare earth prices.

In Adamas' view, consumer confidence and auto industry performance are key indicators for the market.

Mineral Sands Market Outlook

Despite a slowdown in the global pigment market, average prices of titanium feedstocks have remained relatively resilient during 1H CY 2023. Better pricing outcomes were achieved for some high-grade chloride feedstocks such as chloride slag and

synthetic rutile, partially reflecting the incremental price growth some producers have pushed through and the influence of pricing mechanisms in offtake contracts where prices are linked to CPI metrics. Average bulk rutile prices were occurring in the US$1,400-1,700 per tonne Free on Board (FOB) range, while sulfate ilmenite offtake was largely trading at US$300-390 per tonne FOB.

In terms of zircon, sequential demand improvement was noted in Q1 CY 2023 however customers remain cautious when it comes to making purchasing decisions, particularly from the ceramics end-use segment. In the near term, zircon demand is expected to be constrained by market uncertainty and generally weak consumer sentiment given the high interest rate settings.

Zircon prices in China recovered strongly during Q1 CY 2023 following improved purchasing and renewed optimism that the country’s economic growth was anticipated to pick up pace in Q2 CY 2023 onwards. However, the pricing momentum fell short of expectations and Chinese zircon prices began to decline in mid-April, falling to US$1,980 per tonne (inclusive of VAT) by the end of June 2023. Outside China, zircon prices from western producers have remained stable during 1H CY 2023.

Source: Rare earth market update was compiled by Adamas Intelligence. Mineral sands market update was compiled by TZMI.

26 VHM Limited | 2023 Annual Report

Exploration Activities

VHM holds RL 6806 and Exploration Licence (EL) 6419, which encompass the Goschen Project. Additionally, VHM holds ELs for other areas, namely EL6666, EL6664, and EL6769. Collectively, these tenements cover an expansive area of approximately 2,860km².

Subsequent to the reporting period, VHM was granted five-year extension terms for EL6419, EL6664 and EL6666, with new expiry dates of 17 May 2028, 17 June 2028, and 17 June 2028 respectively. These tenements are key Company assets, and the licence extensions secure the future for further development of Goschen, Cannie and Nowie, which fall within these tenements.

The Company discovered two new high-grade prospects supporting a new critical minerals province in North West Victoria.

The Company completed a comprehensive exploration drilling program for its Cannie (137 holes totalling 5,482m) and Nowie Prospects (50 drill holes totalling 2,106m) with drilling contractor Wallis Drilling. Aircore drilling techniques were used to conduct the program for rare earth and heavy mineral sands mineralisation.

The Cannie and Nowie deposits boost VHM's appeal for potential partners. Located near Goschen, Cannie’s maiden results show a notable Mineral Resource with significant TREO. This, along with additional zircon, rutile, and leucoxene, elevates VHM's global status with its significant rare earths and mineral sands inventory, and dominant presence in the North West Victoria Critical Minerals Province.

Exploration data across the Company's tenements has demonstrated the prospectivity of the area by confirming rare earth mineralisation over more than 55km, ranging from the Cannie deposit, through Goschen and north beyond Nowie.

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VHM tenement location map

VHM Limited | 2023 Annual Report

The Company is on track to deliver one of Australia’s largest Critical Mineral deposits which could feed critical minerals into supply chains to enable decarbonisation of global economies.

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Metallurgical Results

During the reporting period the Company completed two metallurgical testwork programs in Area 1 and Area 4. Mineral Technologies conducted the testwork and is VHM’s trusted partner, responsible for executing the Company’s extensive metallurgical testwork program.

Area 4 Metallurgical Testwork

In January 2023, 1.6 tonnes of material sourced from four geological domains of interest in Area 4 were characterised by Mineral Technologies and treated though the Goschen Project mineral sands process flowsheet (ASX release 25 January 2023).

Area 4 is located outside of the Goschen Project footprint and is part of a high-grade strandline deposit defined by resource definition drilling in 2018 and 2019.

Results indicated:

THM grade of 11.1% in upper mineralised zone of Area 4 (2.8 times higher in THM grade compared to Goschen Project Ore Reserve average THM grade of 4%).
Mineralisation is amenable for processing through the flowsheet proposed for the Goschen Project (Areas 1 and 3).
High value zircon and titania products are consistent with previous Area 1 testwork outcomes.

The results from Area 4 metallurgical testwork confirmed high THM grades and amenability to the Goschen Project’s conventional processing flowsheet.

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28 VHM Limited | 2023 Annual Report

Area 1 Metalllurgical Testwork

Mineral Technologies characterised and treated ten tonnes of material sourced from Area 1 though the Goschen Project process flowsheet. The material used for the trial comprised the drill sample generated during the 2022 drilling program. The testwork confirms that a second bulk sample of material sourced from Area 1 was amenable to processing through the envisaged process flowsheet with recoveries in line with industry benchmarks.

The testwork program was designed to assess the metallurgical performance of the material through the process flowsheet and considered three key aspects:

Validation of mineral sands plant process flowsheet using material representing the first five years of operation.
Confirmation of mineral performance through the envisaged flowsheet.
Confirmation of product quality.

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The testwork validated the exceptional grade of zircon/titania concentrate and REMC, as well as key processing stages for the mineral sands process flowsheet. Importantly, the metallurgical characteristics and quality are consistent with previous Area 1 bulk trials.

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Company Mineral Resource areas map

VHM Limited | 2023 Annual Report

Ore Reserves and Mineral Resources

The Company’s licensed tenements are situated within the Murray Basin, a region known for its rich mineralogical diversity and geology, specifically hosting heavy mineral sands and rare earth minerals.

The deposit is identified as a placer monazitexenotime type. Formed from rock weathering, sediments are moved by water and wind to places like rivers, streams, and deltas. Here, denser minerals such as monazite and xenotime, rich in rare earth elements, accumulate. As the energy of the moving medium wanes, these minerals concentrate in specific areas, over time becoming key rare earth sources.

The deposit consists of two rare earth minerals: monazite and xenotime; and three heavy minerals: rutile, leucoxene, and ilmenite.

The extensive Company drilling program added material increases to the Company’s Mineral Resource and TREO inventory for the maiden Mineral Resource estimate for the Cannie Project in May 2023 (ASX release 16 May 2023).

Mineral Resources

VHM announced an initial Mineral Resource of 628.7Mt @ 2.9% THM for the Goschen deposit, in North West Victoria, in the Company Prospectus (ASX release 5 January 2023).

The Company increased the Mineral Resource inventory over the period with the addition of the maiden Cannie Mineral Resource, representing a 43% uplift for a further 192Mt @ 5.9% THM (ASX release 16 May 2023).

Table 2: Company Mineral Resources as at 30 June 2023

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----- Start of picture text -----

Oversize
THM Assemblage [(3)]
Resource In-Situ Bulk material
Area Category Material THM Density THM Slimes >2mm Zircon Rutile Leucoxene Ilmenite Monazite Xenotime
(Mt) (Mt) (gcm3) (%) (%) (%) (%) (%) (%) (%) (%) (%)
Area 1 [(1)] Measured 30.7 1.8 1.76 5.72 15 5 29.9 10.8 9.0 24.7 4.3 0.8
Indicated 62.2 1.4 1.72 2.31 18 2 26.6 11.5 9.2 25.0 4.6 0.9
Total 92.9 3.2 1.73 3.44 17 3 27.7 11.2 9.1 24.9 4.5 0.8
Area 2 West [(1)] Indicated 26.0 0.7 1.72 2.80 20 8 22.0 16.0 12.0 25.0 3.0 1.0
Total 26.0 0.7 1.72 2.80 20 8 22.0 16.0 12.0 25.0 3.0 1.0
Area 3 [(1)] Indicated 204.1 6.9 1.73 3.38 19 3 19.2 9.0 8.0 25.0 3.2 0.6
Inferred 287.7 6.7 1.72 2.32 18 3 17.2 8.7 7.5 22.7 2.9 0.5
Total 491.8 13.6 1.73 2.76 18 3 18.2 8.9 7.7 23.9 3.0 0.6
Area 4 [(1)] Indicated 18.0 0.8 1.74 4.60 20 5 19.0 11.0 10.0 24.0 3.0 1.0
Total 18.0 0.8 1.74 4.60 20 5 19.0 11.0 10.0 24.0 3.0 1.0
Cannie [(2)] Inferred 191.7 5.9 1.70 3.1 19 6 24.5 15.5 24.3 2.1 4.1 0.8
Total 191.7 5.9 1.70 3.1 19 6 24.5 15.5 24.3 2.1 4.1 0.8
Grand Total Measured 30.7 1.8 1.76 5.72 15 5 29.9 10.8 9.0 24.7 4.3 0.8
Indicated 310.3 9.8 1.73 3.19 19 3 20.5 10.1 8.6 24.9 3.4 0.7
Inferred 479.4 12.5 1.71 2.61 18 4 20.6 11.8 15.4 13.1 3.4 0.7
TOTAL 820.4 24.1 1.72 2.95 18 4 21.2 11.0 12.1 18.8 3.5 0.7
In-Situ TREO In-Situ
Material Grade [(4)] TREO
(t) (%) (t)
Area 1, Area 2 West,
820,364,884 0.07 588,355
Area 3, Area 4, Cannie
----- End of picture text -----

30 VHM Limited | 2023 Annual Report

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|||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
|The Company's total Mineral Resource inventory|
|at 30 June 2023 consists of 820Mt with 24Mt of|
|Measured minerals, 5.1Mt zircon, 2.6Mt rutile and|
|588,000 tonnes TREO + Y2O3.|
|The Mineral Resource estimates were prepared|
|utilising Company exploration data only. Any historic|
|exploration data supplied to VHM has only been|
|used to corroborate analysis commissioned by|
|the Company.|
|Plans to develop a maiden Mineral Resource|
|estimate for Area 2 East and Nowie is planned to|
|commence in 2H 2023.|
|The updated Mineral Resource|
|estimate demonstrates VHM’s|
|progression towards building a|
|world-scale critical mineral inventory.|
|Rare Earth Oxides|
|CeO2|Dy2O3|Er2O3|Eu2O3|Gd2O3|La2O3|Nd2O3|Pr6O11|Sm2O3|Tb4O7|Tm2O3|Y2O3|Yb2O3|TREO|
|(%)|(%)|(%)|(%)|(%)|(%)|(%)|(%)|(%)|(%)|(%)|(%)|(%)|(%)|
|0.96|0.07|0.05|0.004|0.06|0.48|0.38|0.11|0.07|0.01|0.01|0.47|0.05|2.72|
|1.11|0.07|0.05|0.004|0.07|0.53|0.46|0.12|0.08|0.02|0.01|0.48|0.05|3.04|
|1.06|0.07|0.05|0.004|0.07|0.51|0.43|0.12|0.08|0.02|0.01|0.48|0.05|2.94|
|0.66|0.06|0.04|0.003|0.05|0.31|0.28|0.07|0.05|0.01|0.01|0.39|0.04|1.97|
|0.66|0.06|0.04|0.003|0.05|0.31|0.28|0.07|0.05|0.01|0.01|0.39|0.04|1.97|
|0.78|0.05|0.04|0.000|0.05|0.36|0.33|0.09|0.06|0.01|0.01|0.37|0.04|2.19|
|0.76|0.05|0.03|0.003|0.05|0.35|0.31|0.08|0.06|0.01|0.01|0.36|0.03|2.10|
|0.77|0.05|0.03|0.003|0.05|0.36|0.32|0.09|0.06|0.01|0.01|0.36|0.04|2.14|
|0.67|0.05|0.03|0.002|0.05|0.32|0.28|0.07|0.05|0.01|0.01|0.33|0.04|1.90|
|0.67|0.05|0.03|0.002|0.05|0.32|0.28|0.07|0.05|0.01|0.01|0.33|0.04|1.90|
|1.06|0.07|0.05|0.004|0.07|0.49|0.45|0.12|0.08|0.01|0.01|0.49|0.05|3.00|
|1.06|0.07|0.05|0.004|0.07|0.49|0.45|0.12|0.08|0.01|0.01|0.49|0.05|3.00|
|0.96|0.07|0.05|0.004|0.06|0.48|0.38|0.11|0.07|0.01|0.01|0.47|0.05|2.72|
|0.81|0.05|0.04|0.003|0.05|0.38|0.34|0.09|0.06|0.01|0.01|0.38|0.04|2.27|
|0.90|0.06|0.04|0.003|0.06|0.42|0.37|0.10|0.07|0.01|0.01|0.42|0.04|2.52|
|0.87|0.06|0.04|0.003|0.06|0.41|0.36|0.10|0.07|0.01|0.01|0.41|0.04|2.43|

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Notes:

Any discrepancies in totals are a function of rounding

(1) Mineral resources reported at a cut-off grade of 1.0% THM

(2) Mineral resources reported at a cut-off grade of 1.75%THM

(3) THM assemblage, via QEMScan Particle Analysis, is reported as a percentage of in-situ THM content

(4) In-situ TREO Grade is calculated by THM Grade (2.95%) multiplied by TREO Grade (2.43%)

VHM Limited | 2023 Annual Report

Ore Reserve

The Company Ore Reserve stands at 198.7Mt @ 3.7% THM (Table 3), having been prepared and first disclosed under the JORC Code (2012) in the Prospectus dated 21 November 2022, as supplemented by the supplementary prospectus dated 5 December 2022, lodged with ASX on 5 January 2023.

The Company Ore Reserve includes the Goschen DFS Ore Reserve of 98.8Mt @ 4.0% THM, on which the 20 year life-of-mine Goschen Project footprint is based (Table 4).

Measured and Indicated Mineral Resources were converted to Proved and Probable Ore Reserves respectively, subject to mine design, modifying factors and economic evaluation. Reported Ore Reserves are current as at 30 June 2023 and are a subset of the Mineral Resource.

The Company Ore Reserve estimates remain unchanged from those recorded for the previous year (FY2022). An update to the Company's Ore Reserve estimates is expected to be completed before the end of 1H 2024.

Table 3: Company Ore Reserves as at 30 June 2023

Area	Classifcation				In-Situ	In-Situ			THM Assemblage1	THM Assemblage1	THM Assemblage1	THM Assemblage1	THM Assemblage1	THM Assemblage1	THM Assemblage1	THM Assemblage1	THM Assemblage1	THM Assemblage1
		Ore			THM		THM		Zircon Rutile Leucoxene Ilmenite Monazite Xenotime
		(Mt)			(Mt)		(%)		(%) (%) (%) (%) (%) (%)
Area 1	Proved	24.5			1.3		5.4		29.9 10.8 9.0 24.7 4.3 0.8
Area 1	Probable	14.6			0.5		3.2		29.2 11.7 9.2 25.5 4.5 0.9
Area 3	Probable	159.6			5.6		3.5		20.3 9.4 8.1 25.8 3.4 0.6
Total	Proved	24.5			1.3		5.4		29.9 10.8 9.0 24.7 4.3 0.8
	Probable	174.2			6.1		3.5		21.0 9.6 8.2 25.8 3.5 0.6
Grand Total		198.7			7.4		3.7		21.7 9.7 8.2 25.7 3.5 0.6

Area	Classifcation		Rare Earth Oxides1
			CeO2 Dy2O3 Er2O3 Eu2O3 Gd2O3 La2O3 Nd2O3 Pr6O11 Sm2O3 Tb4O7 Tm2O3 Y2O3 Yb2O3 TREO
			(%)	(%)		(%)		(%)	(%)	(%)	(%)	(%)	(%)	(%)	(%)	(%)	(%)	(%)
Area 1	Proved		0.960	0.070		0.050		0.004	0.060	0.480	0.380	0.110	0.070	0.012	0.008	0.470	0.050	2.720
Area 1	Probable		0.971	0.067		0.047		0.004	0.060	0.468	0.400	0.108	0.072	0.011	0.007	0.458	0.050	2.721
Area 3	Probable		0.805	0.057		0.039		0.003	0.056	0.378	0.339	0.093	0.064	0.009	0.006	0.386	0.040	2.297
Total	Proved		0.960	0.070		0.050		0.004	0.060	0.480	0.380	0.110	0.070	0.012	0.008	0.470	0.050	2.720
	Probable		0.817	0.058		0.039		0.003	0.056	0.385	0.344	0.094	0.065	0.009	0.006	0.391	0.041	2.328
Grand Total			0.844	0.060		0.041		0.003	0.057	0.402	0.351	0.097	0.066	0.010	0.006	0.406	0.043	2.401

Notes: Any discrepancies in totals are a function of rounding (1) THM Assemblage and Rare Earth Oxides are reported as a percentage of in-situ THM content

32 VHM Limited | 2023 Annual Report

Table 4: Goschen DFS Ore Reserves subset of global Company Ore Reserves as at 30 June 2023

Area	Classifcation				In-Situ	In-Situ			THM Assemblage1	THM Assemblage1	THM Assemblage1	THM Assemblage1	THM Assemblage1	THM Assemblage1	THM Assemblage1	THM Assemblage1	THM Assemblage1	THM Assemblage1
		Ore			THM		THM		Zircon Rutile Leucoxene Ilmenite Monazite Xenotime
		(Mt)			(Mt)		(%)		(%) (%) (%) (%) (%) (%)
Area 1	Proved	25.5			1.4		5.6		29.6 10.8 9.1 24.7 4.3 0.8
Area 1	Probable	7.6			0.2		2.2		27.6 12.7 10.5 25.9 4.3 0.9
Area 3	Probable	65.7			2.4		3.6		19.7 9.1 7.9 25.3 3.3 0.6
Total	Proved	25.5			1.4		5.6		29.6 10.8 9.1 24.7 4.3 0.8
	Probable	73.3			2.5		3.4		20.2 9.3 8.1 25.4 3.4 0.6
Grand Total		98.8			4.0		4.0		23.6 9.9 8.5 25.1 3.7 0.7

Area	Classifcation		Rare Earth Oxides1
			CeO2 Dy2O3 Er2O3 Eu2O3 Gd2O3 La2O3 Nd2O3 Pr6O11 Sm2O3 Tb4O7 Tm2O3 Y2O3 Yb2O3 TREO
			(%)	(%)		(%)		(%)	(%)	(%)	(%)	(%)	(%)	(%)	(%)	(%)	(%)	(%)
Area 1	Proved		0.960	0.070		0.050		0.004	0.060	0.480	0.380	0.110	0.070	0.012	0.008	0.470	0.050	2.720
Area 1	Probable		0.957	0.065		0.045		0.003	0.059	0.454	0.398	0.104	0.071	0.012	0.007	0.456	0.050	2.682
Area 3	Probable		0.795	0.056		0.038		0.003	0.055	0.373	0.335	0.091	0.063	0.009	0.006	0.383	0.039	2.271
Total	Proved		0.960	0.070		0.050		0.004	0.060	0.480	0.380	0.110	0.070	0.012	0.008	0.470	0.050	2.720
	Probable		0.806	0.056		0.039		0.003	0.055	0.379	0.339	0.092	0.064	0.009	0.006	0.388	0.040	2.298
Grand Total			0.862	0.061		0.043		0.003	0.057	0.415	0.354	0.099	0.066	0.010	0.007	0.417	0.044	2.451

Notes: Any discrepancies in totals are a function of rounding (1) THM Assemblage and Rare Earth Oxides are reported as a percentage of in-situ THM content

Table 5: Comparison of Company Mineral Resource from previous year

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Mineral Total Heavy In-Situ
Resource In-Situ Mineral TREO + TREO In-Situ
Project [(1)] Category Material THM (THM) Y2O3 Grade [(3)] TREO
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Project(1)	Mineral Resource Category	Material	In-Situ THM	Total Heavy Mineral (THM)	TREO + Y2O3	In-Situ TREO Grade(3)	In-Situ TREO
		(Mt)	(Mt)	(%)	(%)	(%)
2022 Resource Goschen	Measured	30.7	1.8	5.72	2.72	0.16	48,000
Goschen	Indicated	310.3	9.8	3.19	2.27	0.07	225,000
Goschen	Inferred	287.7	6.7	2.32	2.1	0.05	140,000
2023 Resource Cannie	Inferred	192	5.9	3.05	3	0.09	176,000
Grand Total	Measured	30.7	1.8	5.72	2.72	0.16	48,000
	Indicated	310.3	9.8	3.19	2.1	0.07	225,000
	Inferred(2)	479.4	12.5	2.61	2.52	0.07	316,000
	Total reported as at 30 June 2022	628.7	18.3	2.92	2.25	0.07	413,000
	Total reported as at 30 June 2023	820.4	24.2	2.95	2.43	0.07	589,000

Notes: Any discrepencies in totals are a function of rounding

(1) Mineral Resources reported at a grade of 1.0% THM for Goschen and 1.75% THM for Cannie

(2) Mineral Resources reported at a combined cut-off of 1.0% THM and 1.75% THM

(3) In-situ TREO grade is calculated by THM Grade (2.95%) multipled by TREO Grade (2.43%)

VHM Limited | 2023 Annual Report

Governance Arrangements and Internal Controls

VHM has ensured that the Ore Reserves and Mineral Resources quoted are subject to good governance arrangements and internal controls. The Ore Reserves and Mineral Resources reported have been generated by expert consultants who are experienced in best practices in modelling and estimation methods. The consultants have also undertaken reviews of the quality and suitability of the underlying information used to generate the resource estimation. In addition, VHM management carries out regular reviews of internal processes and external contractors that have been engaged by the Company. All Mineral Resources reported here were compiled in accordance with the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’ (JORC Code) 2012 Edition.

Competent Persons and Compliance Statements

Previously Reported Information

This report includes information that relates to Mineral Resources and Ore Reserves prepared and first disclosed under the JORC Code 2012 and a Definitive Feasibility Study. The information was extracted from the Company’s previous ASX announcements as follows:

Mineral Resource Statement: “New Cannie Critical Mineral Project” 16 May 2023
Definitive Feasibility Study: “Goschen Project DFS Refresh” 28 March 2023

These announcements are available to view on VHM’s website at www.vhmltd.com.au.

Ore Reserves and Mineral Resources prepared and first disclosed under the JORC Code (2012):

Item Report Title Report Date Competent Person	Item Report Title Report Date Competent Person	Item Report Title Report Date Competent Person	Item Report Title Report Date Competent Person
Company Mineral Resource	New Cannie Critical Mineral Project	16 May 2023	G. Howard
Cannie Mineral Resource	New Cannie Critical Mineral Project	16 May 2023	E. Henry
Company Ore Reserves	DFS Refresh	28 March 2023	A. Keers
Goschen DFS Ore Reserves	DFS Refresh	28 March 2023	A. Keers

Item Name Company Professional Afliation
Company Mineral Resource	Graham Howard	VHM Limited	FAusIMM
Cannie Mineral Resource	Emily Henry	Right Solutions Australia	MAusIMM
Company Ore Reserves	Anthony Keers	Auralia Mining Consulting	MAusIMM
Goschen DFS Ore Reserves	Anthony Keers	Auralia Mining Consulting	MAusIMM

34 VHM Limited | 2023 Annual Report

Competent Persons Statement

The information that relates to the Goschen Mineral Resource estimates is based on, and fairly represents information and supporting documentation compiled by Mr Graham Howard, who is an employee of VHM Limited. Mr Howard is a Competent Person who is a Fellow of Australasian Institute of Mining and Metallurgy and who consents to the inclusion in the release of the matters based on the information in the form and context in which it appears. Graham Howard has sufficient experience that is relevant to the style of mineralisation and type of deposit under consideration and to the activity being undertaken to qualify as a Competent Person as defined in the 2012 Edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (JORC Code 2012).

The information that relates to Cannie Exploration Results and Mineral Resource estimates is based on, and fairly represents information and supporting documentation compiled by Ms Emily Henry, who is an employee of Right Solutions Australia. Ms Henry is a Competent Person who is a member of Australasian Institute of Mining and Metallurgy and who consents to the inclusion in the release of the matters based on the information in the form and context in which it appears. Emily Henry has sufficient experience that is relevant to the style of mineralisation and type of deposit under consideration and to the activity being undertaken to qualify as a Competent Person as defined in the 2012 Edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (JORC Code 2012).

The information that relates to the Goschen Ore Reserve is based on, and fairly represents information and supporting documentation compiled by Mr Anthony Keers who is a member of the Australian Institute of Mining and Metallurgy and has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he has undertaken to qualify as a Competent person as defined by the JORC Code 2012. Mr Keers is a full-time employee of Auralia Mining Consulting Pty Ltd. Mr Keers consents to the inclusion in ths announcement of the matters based on his information in the form and context in which it appears.

Compliance Statement

The information in this annual report that relates to the DFS and FEED studies, the JORC estimates of the Goschen DFS Ore Reserve and Company Ore Reserves was first reported in the ASX announcement on 28 March 2023 and Company Mineral Resource and Cannie Mineral Resource were reported in the ASX announcement on 16 May 2023. The Area 4 Ore Reserve was reported in the ASX release on 18 September 2023. The Company confirms that it is not aware of any new information or data that materially affects the matters previously reported and that all material assumptions and technical parameters underpinning the estimates in the relevant market announcements continue to apply and have not materially changed. The Company confirms that the form and context in which the Competent Persons’ findings are presented have not been materially modified.

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VHM Limited | 2023 Annual Report

Directors' Report

The Directors present their report, together with the financial statements, on the consolidated entity (referred to hereafter as the ‘consolidated entity’ or 'group') consisting of VHM Limited (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 VHM Limited during the whole of the financial year and up to the date of this report, unless otherwise stated:

Donald Runge	Non-Executive Chairman
Graham Howard	Managing Director
Maree Arnason	Non-Executive Director
	(appointed 18 August 2023)
Ron Douglas	Non-Executive Director
	(appointed 18 August 2023)
Ian Smith	Non-Executive Director
	(appointed 18 August 2023)
Michael Allen	Executive Director
	(resigned 18 August 2023)
Gamini Colless	Non-Executive Director
	(resigned 18 August 2023)

Company Secretary

Ian Hobson

Principal Activities

During the financial year, the principal continuing activities of the consolidated entity consisted of exploration and pre-development activity in respect of the consolidated entity’s exploration and retention licences situated in Victoria, Australia.

Review of Operations

The review of the Group’s operations over the last twelve months, and to the date of this Report are as follows:

Successful Initial Public Offer (IPO) to raise $30 million and listing on the Australian Securities Exchange (ASX) on 9 January 2023. The Company has actively progressed the key activities set out in its prospectus, delivering on the key objectives, and associated positive results as follows.

The Company undertook a 200-tonne bulk sample in H1 FY2023. This underpinned the Pilot Plant testwork program for both heavy minerals sands and hydromet circuit. This enabled the advancement of engineering and metallurgical programs.

The Pilot Hydromet Plant testwork was completed for the Goschen hydromet plant at Australian Nuclear Science and Technology Organisation and successfully converted the rare earth mineral concentrate to a high purity, mixed rare earth carbonate with class leading metallurgical recoveries.

Detailed engineering design for the heavy mineral sands process plant progressed during the year with preliminary technical works for the hydromet plant engineering study also commencing during the period.

This enabled the completion of the 2023 Definitive Feasibility Study Refresh which was released for the Goschen Rare Earths and Mineral Sands Project. The key outputs included an outlined +20-year mine life with strong economic metrics derived from the dual commodity product stream (ASX release 28 March 2023).

VHM made significant progress on its Environment Effects Statement (EES) for the Goschen Project approval. All chapters of the EES were completed and submitted to the Victorian Department of Transport and Planning (DTP). The DTP completed the Adequacy Review of the Goschen final environmental and social technical reports and the associated EES chapters, against the scoping requirements.

In addition to progressing the Goschen Project, the Company completed a comprehensive resource definition drilling program, that resulted in an expansion of the in-situ tonnage of the key commodities within the mineral resource inventory. As a result of the release of the maiden Cannie Mineral Resource estimate (ASX release 16 May 2023), an inventory increase occurred of 43% total rare earth oxide, 39% of zircon, 51% of rutile and 95% of leucoxene. A new discovery of high-grade rare earth, zircon, and titania ore body to the north of the Goschen Project was also discovered in the period, at the Nowie Project area.

36 VHM Limited | 2023 Annual Report

Results

The results of the Group for the financial year ended 30 June 2023 was a loss after tax of $17.9 million (2022: $9.1 million). The loss for the financial year was driven largely by finance costs (fees and interest) in respect of the convertible notes issued, non-capitalised corporate and employee expenditure and land compensation payments. No dividends were paid during the year and the directors do not recommend payment of a dividend.

Significant Changes in the State of Affairs

On 9 January 2023, VHM commenced trading on the ASX and successfully completed the IPO of 22.22 million fully paid ordinary shares at an issue price of $1.35 each to raise gross proceeds of $30 million (before costs).

Matters Subsequent to the End of the Financial Year

Michael Allen and Gamini Colless resigned from the Board on 18 August 2023. Maree Arnason, Ron Douglas and Ian Smith were appointed to the Board as Non-Executive Directors on 18 August 2023.

Subject to shareholder approval, Don Runge, Graham Howard and the three newly appointed Board members will be granted 500,000 options each exercisable at $1.35, expiring three years from the date of issue and vesting on 17 August 2024.

Apart from the above, there are no matters or circumstances that have arisen since 30 June 2023 that have or may significantly affect the operations, results, or state of affairs of the consolidated entity in future financial periods.

Likely Developments and Expected Results of Operations

The consolidated entity intends to continue its exploration and pre-development activities on its existing projects.

Environmental Regulations

The Group is subject to and is compliant with all aspects of environmental regulation of its exploration and pre-development activities, with no reportable

environmental incidents during the 2023 reporting period. The directors are not aware of any environmental law that is not being complied with.

Health and Safety

During the 2023 financial year there were no reportable injuries or high potential significant incidents. The Lost Time Injury Frequency Rate (LTIFR) for the full year 2023 remained at zero. This compares with the WorkSafe Victoria, “Victorian Mining, Exploration and Extractive Industries Health and Safety Statistics” for Exploration activities during 2021 of LTIFR 4.2 (Note: 2021 data was used, as 2022 data has not yet been released).

Risk Management

VHM Limited takes a proactive approach to risk management. The Directors are responsible for ensuring that risks and opportunities are identified on a timely basis and that the Group’s objectives and activities are aligned with these risks and opportunities.

VHM operates within a dynamic environment, making it susceptible to various factors and business risks that could impact its future performance. To address these risks effectively, VHM has implemented a Risk Management Policy and a Risk Management Framework, ensuring oversight and management of significant business risks.

The risk identification process involves evaluating the inherent risk associated with different activities and determining the appropriate measures for mitigation. Regular updates on risk assessments are provided by both the operations and management teams and reported to the Board of Directors.

Outlined below are the principal risks and uncertainties that could significantly impact VHM’s future results, both operationally and financially. Ascertaining the likelihood of these risks occurring with certainty is challenging. However, if any of these risks materialise, they could have a material and adverse effect on VHM's reputation, strategy, business operations, financial condition, and overall future performance. Additionally, there might be other risks that are currently unknown or considered immaterial but could later be recognised as material and adversely affect VHM, either individually or in combination.

VHM Limited | 2023 Annual Report

Risks Specific to the Company

Future Capital Requirements

The Company has no operating revenue and is unlikely to generate any operating revenue unless and until its projects are successfully developed and production commences.

The Company will require ongoing funding to meet its objectives of developing and operating the Proposed Operation, meeting obligations to maintain licensing tenure and to settle on the purchase of land which the Company has contracted to buy. There can be no certainty that the Company can raise the funds to undertake the development of these projects.

Permitting Risk – Proposed Operation

The Company's ability to proceed with the Proposed Operation is dependent upon its ability to secure all necessary approvals, permits and licences. The most material approvals yet to be obtained include securing a mining lease, obtaining all necessary environmental approvals, planning approvals and an approved work plan.

Before construction can commence on the Goschen Project, part of Retention Licence 6806 needs to be converted to a mining lease. There is no certainty this will occur or if it does, that the mining lease will be subject to conditions which are acceptable to the Company.

Final Investment Decision

The Company is yet to make the FID to proceed with the Goschen Project. While the Goschen DFS was completed in March 2022 and updated in the period (DFS Refresh), there are still several other factors and hurdles that need to be adequately addressed before the economic viability of the project can be confirmed. Until these matters are addressed, it would not be prudent for the Board to commit the Company to proceeding with the Project.

Life of Mine (LOM) Plan

The Goschen Project LOM Plan is based on Goschen DFS independent commodity marketing analysis and a range of other factors. The Company is undertaking further engineering and design as part of ongoing refinement of accuracy and precision of engineering, capital and operating estimates that are used as inputs into the LOM Plan. This work will further test base case inputs and outputs which could lead to adjustments in proposed development plans and the LOM Plan. As the Company moves through its further assessment and preparatory work in relation to the Goschen Project, there is a risk that key assumptions on which the LOM Plan is based may prove to be untrue or require adjustment. This could result in material changes to expected Capex or Opex, financing costs, commodity prices and other factors, which could either significantly change the expected financial outcomes or jeopardise the economic viability of the Goschen Project.

Currently the Company has developed its plant design based on the Goschen DFS, results of JORC 2012 Ore Reserve statement and approvals program. There is a risk that the design may be inappropriate, but it is intended that progressive programs of engineering and procurement should de-risk the development of further stages of the Goschen˜Project.

Regulatory Risk

The availability and rights to explore and produce REM, the ability to develop the Proposed Operation, as well as operational profitability generally, can be affected by changes in government policy which are beyond the control of the Company. The governments of the relevant States in which the Company has interests conduct reviews from time to time of policies in connection with the granting and administration of exploration and mining tenements and related permits and approvals. Changing attitudes to environmental matters, land care, cultural heritage, and indigenous rights; together with the nature of the political process, provide the possibility for future policy changes. There is a risk that such changes may affect the Company's current or planned operations.

38 VHM Limited | 2023 Annual Report

Offtake Risk

The Company has signed a legally binding MOU with Shenghe in respect of 60% of its nameplate production, for an initial three year term. This commitment is however subject to certain conditions first being met and there is no guarantee that these conditions will be met.

Additionally, the Company is yet to secure offtake arrangements for the balance of its expected production from the Proposed Operation. The Company's ability to generate sufficient revenue or to secure debt financing for the Goschen Project is dependent upon its ability to secure offtake partners for all or most of its production. There can be no certainty the Company can enter into offtake contracts covering all of its production, at prices or on terms which support the economics or funding of the Company’s projects.

Land Acquisition Risk

Certain of the Company’s wholly owned subsidiaries are party to land acquisition contracts for freehold land on which many of the Company’s projects are located, including the Goschen Project. Control of the land is critical to being able to conduct the proposed mining operations. These subsidiaries currently owe the vendors an aggregate amount of approximately $9.3 million under the contracts, payable in monthly instalments over five years in the case of one contract and ten years in the case of two others.

If the subsidiaries are unable to make these payments, there is a risk that the contracts will be terminated, and the subsidiaries will not acquire the land.

Likewise, if any counterparty defaults in the performance of their obligations, it may be necessary for the Company to seek a legal remedy, which can be costly. Either of these outcomes could result in a potential delay to project development and may deny the Company access to the Ore Reserves located on those properties.

These contracts have however been structured to be binding on the vendors (and are no longer conditional) with long dated settlement dates, providing flexibility for the Company to determine when to complete the acquisitions based on operational requirements.

Native Title Risk

In relation to the Tenements, there may be areas over which legitimate common law native title rights of Aboriginal Australians exist. Where native title rights do exist, the ability of the Company to gain access to the affected parts of a Tenement or to progress from exploration to development and mining operations may be adversely affected. Generally, risk associated with native title for mining activities centres on the validity of ‘future acts’, being something that is done on land / waters, or the authorisation of such activities, which would be inconsistent with native title.

The grant of mining authorisations (such as a mining licence for the land covered by a retention licence) typically constitutes a ‘future act.’ A ‘future act’ can be lawfully undertaken if it is validated pursuant to certain procedures set out in the Native Title Act 1993 (Cth) (NT Act). Native title risk associated with future acts typically crystallises when a ‘future act’ undertaken in non-conformity with the procedures in the NT Act is invalid to the extent of inconsistency with native title, and compensation may be payable for actions that impair the exercise of native title rights.

Native title risk also arises in relation to tenements which are yet to be granted to the Company (this includes any mining licences sought in the future for the land covered by retention licence RL6806 or any of the other Tenements). This risk can be managed by following appropriate ‘future act’ validation procedures under the NT Act, such as the ‘right to negotiate’ process or entry into an Indigenous Land Use Agreement (ILUA) with registered native title holders or claimants. Project scheduling must, therefore, consider and address any need to comply with 'future act' procedures.

The Company's Tenements currently overlap a native title claim, native title determination and two ILUAs to varying degrees, outlined in the Solicitor's Tenement Report. It is possible the terms and conditions of any such ILUAs may be unfavourable for, or restrictive against, the Company.

Any delays or costs in respect of conflicting thirdparty rights, obtaining necessary consents, or compensation obligations may adversely impact the Company's ability to carry out exploration or mining activities within the affected areas.

VHM Limited | 2023 Annual Report

Mineral Resource and Ore Reserve Estimates

The Company’s present Mineral Resources and Ore Reserves estimates are compliant with the JORC Code 2012. Mineral Resources and Ore Reserves estimates involve subjective judgement from competent persons on a number of modifying factors including the resource definition drilling parameters tenor and grade distribution of mineral assemblages, geological interpretation of the drilling and assay data ability to economically extract and process mineralisation as well tailings management, future commodity prices, geotechnical and hydrogeology assessments, transport and logistics parameters, permitting and approvals, ESG parameters, operating and capital expenditure and royalties. Variability of these factors may result in reductions of the Company’s Mineral Resource and Ore Reserve estimates which could adversely affect the Life of Mine Plans and may impact on the value of the Company’s Mineral Resource and or Ore Reserve mineral inventory and or the assessment of realisable value of one or more of the Company’s assets. Mineral Resource and Ore Reserve restatements could negatively affect the Company’s operating and financial results.

No assurances can be given that the Company Mineral Resource and Ore Reserves can be recovered at the forecast mineral assemblages or product yields and qualities. There are no assurances that Company Mineral Resources are capable of being assessed and classified as Ore Reserves under the JORC 2012 Code, or that those Mineral Resources can be economically mined.

Occupational Health and Safety

Safety is a fundamental risk for any exploration and production company particularly concerning personal injury, damage to property and equipment and other losses. The occurrence of any of these risks could result in legal proceedings against the Company and substantial losses to the Company due to injury or loss of life, damage or destruction of property, regulatory investigation, and penalties or suspension of operations.

R&D Claims

As an explorer, the Company has previously claimed material amounts of tax offsets in respect of its research and development activities. These claims have been self-assessed but are subject to comprehensive criteria and may be subject to future audit and adjustment or claw-back.

Mining Industry Risks

Title Risk

Interests in all tenements in Victoria are governed by State legislation and are evidenced by the granting of licenses or leases. Each license or lease is for a specific term and carries with it annual expenditure and reporting commitments, as well as other conditions requiring compliance. Failure to comply with these conditions may result in forfeiture of the Company's tenements.

Further, the Company's tenements are subject to periodic renewal. While there is no reason to believe such renewals will not be granted, the Company cannot guarantee this will occur. New conditions may also be imposed on the tenements under the renewal process which may adversely affect the Company.

Consequently, the Company could be exposed to additional costs, have its ability to explore or mine the tenements reduced or lose title to or its interest in the tenements if license conditions are not met or if insufficient funds are available to meet expenditure commitments.

The Company also cannot give any assurance that title to such tenements will not be challenged or impugned. Accordingly, there is a residual risk that, despite the Company’s investigations, the tenements may be subject to prior unregistered agreements or transfers, or title may be affected by unregistered encumbrances, third party interests or defects.

Aboriginal Cultural Heritage Risk

There are Aboriginal heritage objects and/or places within the area of the Company's tenements which are either registered or have been lodged for registration.

There is a risk that additional Aboriginal objects or places may exist on the land the subject of the tenements, and it is an offence to disturb or damage such objects or places without a cultural heritage permit or approved cultural heritage management plan. The existence of such objects or places may preclude or limit mining activities in certain areas of the tenements or cause delays in the progression of the development of a mine.

40 VHM Limited | 2023 Annual Report

Exploration and Development Risks

Mineral exploration and development are a speculative and high-risk undertaking which may be impeded by circumstances and factors beyond the control of the Company. Even where apparently viable mineral resources are identified, there is no guarantee that they can be economically exploited due to changes in parameters such as downward commodity price fluctuations.

The delivery of the Goschen DFS and subsequent DFS Refresh is a significant de-risking step which informs the project definition and commercial packages which are to be taken forward. Further refinement will continue to be taken through the Detailed Engineering Design phases of the project to better define the commercial work packages. Even with the delivery of the Goschen DFS and DFS Refresh, there are future risks such as negative change in commodity prices, which could potentially delay economic exploitation of the Ore Reserves.

The exploration and development activities of the Company may be adversely affected by a range of factors including geological conditions, unanticipated technical and operational difficulties, seasonal weather patterns, contracting risk from third parties providing essential services and changing government laws and regulations.

Metallurgy

Metal and/or mineral recoveries are dependent upon the metallurgical process that is required to liberate economic minerals and produce a saleable product and by nature contain elements of significant risk such as:

identifying a metallurgical process through test work to produce a saleable metal and/or concentrate;
developing an economic process route to produce a metal and/or concentrate; and
changes in mineralogy in the ore deposit can result in inconsistent metal recovery, affecting the economic viability of the project.

Resource Estimation Risks

The Company has already defined a resource at its Goschen Project and intends to undertake further exploration activities at Goschen and to develop the ore bodies at its Cannie and Nowie projects. However, no assurances can be given that the exploration will result in the determination of any additional resources. Even if such resources are expanded or identified, no assurance can be provided that this can be economically extracted.

Minerals and Currency Price Volatility

The Company's ability to proceed with the development of the Proposed Operation and its other projects, and benefit from any future mining operations will depend on market factors, some of which may be beyond its control.

As the Company’s potential earnings will be largely derived from the sale of REM and heavy mineral sands, the Company’s future revenues and cash flows will be impacted by changes in the prices and available market for these commodities. The price for heavy mineral sands and REM are negotiated prices and so any substantial decline in the prices of these commodities or increase in transport or distribution costs may have a material adverse effect on the Company and the value of its Shares.

Commodity prices fluctuate and are affected by numerous factors beyond the control of the Company. These factors include current and expected future supply and demand, forward selling by producers, production cost levels in major mineral producing centres and macroeconomic conditions such as inflation and interest rates.

Exchange Rate Risk

The international prices of most commodities are denominated in United States dollars while the Company cost base will be in Australian dollars. Consequently, changes in the Australian dollar exchange rate will impact on the earnings of the Company.

VHM Limited | 2023 Annual Report

Competition Risk

The industry in which the Company will be involved is subject to domestic and global competition and the Company will have no influence or control over the activities or actions of its competitors. Other companies may develop new projects or expand their existing projects which result in greater supply coming into the market which adversely affects the price the Company will receive for its production.

Environmental Risk

The Company’s activities are subject to State and Federal laws and regulations concerning the environment. As with most exploration projects and mining operations, the Company's activities are expected to have an impact on the environment, particularly if advanced exploration or field development proceeds.

The Company's tenements are subject to conditions, including in respect of environmental matters. Such conditions are on standard terms setting out the minimum operating requirements which the licence holder must comply with.

The Company intends to conduct its activities in an environmentally responsible manner and in compliance with all applicable laws, including all conditions of its environmental approvals. Areas disturbed by the Company’s activities will be rehabilitated as required by regulatory authorities.

The disposal of mining and process waste and mine water discharge are under constant legislative scrutiny and regulation. There is a risk that environmental laws and regulations become more onerous making the Company’s operations more expensive.

Climate Change Risks

Mining of mineral resources is relatively energy intensive and is dependent on the consumption of fossil fuels. As a mining development company, the Company is exposed to both transition risks and physical risks associated with climate change.

Climate change is a risk the Company has considered, particularly related to its operations in the mining industry. The climate change risks particularly attributable to the Company include:

transitioning to a lower-carbon economy may entail extensive policy, legal, technology and market changes. Increased regulation and government policy designed to mitigate climate change may adversely affect the Company’s cost of operations and adversely impact the financial performance of the Company; and
physical risks resulting from climate change can be acute or chronic. Acute physical risks refer to those that are event-driven, including increased severity of extreme weather events, such as cyclones or floods. Chronic physical risks refer to longer term shifts in climate patterns (for example, sustained higher temperatures) that may cause sea level rises or chronic heat waves. The transition and physical risks associated with climate change (including also regulatory responses to such issues and associated costs) may significantly affect the Company’s operating and financial performance.

Approvals are required for land clearing and for ground disturbing activities. However, the Company may be unsuccessful in obtaining an approval, or may obtain an approval on unacceptable conditions or even with an approval, the Company may be the subject of accidents or unforeseen circumstances that could subject the Company to extensive liability.

42 VHM Limited | 2023 Annual Report

General Risks

Economic Risks

The future viability of the Company is also dependent on a number of other factors affecting performance of all industries and not just the exploration and mining industries.

Market Conditions

The market price of the shares can fall as well as rise and may be subject to varied and unpredictable influences on the market for equities in general and resource exploration stocks in particular.

Further, share market conditions may affect the value of the Company's quoted Shares regardless of the Company's operating performance. Share market conditions are affected by many factors such as:

general economic outlook;
interest rates and inflation rates;
currency fluctuations;
changes in investor sentiment;
the demand for, and supply of, capital; and

Force Majeure

Events may occur within or outside the markets in which the Company operates that could impact upon the global or Australian economies and the operations of the Company. These events include acts of terrorism, outbreaks of international hostilities, fires, pandemics, floods, earthquakes, labour strikes, civil wars, natural disasters, outbreaks of disease, and other man-made or natural events or occurrences that can have an adverse effect on the Company’s ability to conduct business.

Litigation Risks

The Company is exposed to possible litigation risks including native title claims, tenure disputes, environmental claims, occupational health and safety claims and employee claims. Further, the Company may in the ordinary course of business become involved in litigation and disputes, for example with service providers, customers or third parties infringing the Company’s intellectual property rights. Any such claim or dispute if proven, may impact adversely on the Company's operations, financial performance, and financial position.

terrorism or other hostilities.

Changes to Legislation or Regulations

Neither the Company nor the Directors warrant the future performance of the Company or any return on an investment in the Company.

Technology

Any failure or delay in developing new technology or an inability to exploit technology as successfully or cost-effectively as competitors could result in a decrease in customer demand, which could have a material adverse effect on the Company’s business and cash flows, prospects for growth, financial condition, and results of its operations.

The Company may be affected by changes to laws and regulations in Australia. Such changes could have adverse impacts on the Company from a financial and operational perspective.

Other Risks

This list of risk factors is not an exhaustive list of the risks faced by the Company or by investors in the Company. The risk factors described in this Section as well as risk factors not specifically referred to above may in the future materially affect the financial performance of the Company and the value of its securities.

VHM Limited | 2023 Annual Report

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.

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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.

Proceeding 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

During the year the Company has not used its auditors, HLB Mann Judd, to complete any non-audit related work (2022: nil).

Rounding of Amounts

The amounts contained in the financial report have been rounded to the nearest $1,000 (unless otherwise stated) pursuant to the option available to the Company under ASIC Class Order 2016/191. The Company is an entity to which the class order applies.

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.

Auditor

HLB Mann Judd continues in office in accordance with section 327 of the Corporations Act 2001 .

44 VHM Limited | 2023 Annual Report

Information on Directors and Company Secretary

The names and details of the Company’s directors who were in office during or since the end of the financial year are as set out below. All directors were in office for this entire period unless otherwise stated.

Donald Runge Qualifcations:	Non-Executive Chairman BE (Mining), MAusIMM
Experience:	Mr Runge has over 40 years operational and project experience including industrial minerals where he managed the development of the Uley Graphite Project in South Australia. He has previously held executive management positions for Newcrest Mining Limited, including Manager for Ridgeway Underground Project Development and General Manager of Cracow Gold Mine. He has also managed a team of expats advising Philix Mining Corporation on development of their Silangan Au/Cu Project.
Other current directorships:	None
Former directorships (last 3 years):	None
Special responsibilities:	Chairman of the Operations, Safety and ESG Committee Member of the Nomination and Remuneration Committee Member of the Audit and Risk Committee
Interests in shares:	4,498,287 ordinary shares
Interests in options:	500,000 options with an exercise price of $1.00
Contractual rights to shares: Graham Howard	None Managing Director
Qualifcations:	BAppSc (Geology), FAusIMM
Experience:	Mr Howard has signifcant corporate experience as Chief Executive Ofcer and Managing Director of ASX listed gold companies with
	major project experience including Telfer, Boddington (Newcrest)
	and Silangan Au/Cu Project (Philex/Silangan). Mr Howard has
	managed the development of VHM Limited since September 2016.
Other current directorships:	None
Former directorships (last 3 years):	None
Special responsibilities:	Member of the Operations, Safety and ESG Committee
	Member of the Nomination and Remuneration Committee
Interests in shares:	4,515,515 ordinary shares
Interests in options:	2,156,230 zero exercise price options
Contractual rights to shares:	None

VHM Limited | 2023 Annual Report 45

Maree Arnason Qualifcations:	Non-Executive Director (appointed 18 August 2023) BA, FAICD
Experience:	Ms Arnason has over 35 years’ experience across the resources, energy and manufacturing sectors and is highly experienced in the areas of governance, strategy, sustainability, risk, corporate afairs, stakeholder relations, transformations, divestments and integrations. Her broad commodity experience includes iron ore, gold, copper, timber, coal, mineral sands, and natural gas. Ms Arnason serves on the Corporate Governance Consultative Panel for Australian Securities and Investments Commission (ASIC).
Other current directorships:	NED – Gold Road Resources Limited (appointed 15 June 2020) NED – Ardea Resources Limited (appointed 10 July 2023)
Former directorships (last 3 years):	NED – Trigg Minerals Limited (17 December 2021 – 24 May 2023)
Special responsibilities:	None
Interests in shares:	None
Interests in options:	None
Contractual rights to shares: Ron Douglas	None Non-Executive Director (appointed 18 August 2023)
Qualifcations:	BE, FAIM, MAusIMM, MAICD
Experience:	Mr Douglas has extensive executive and operations delivery
	experience gained over a 40 year career with publicly listed global
	mining, energy, and manufacturing companies. Mr Douglas expertise
	is in executive operations delivery positions with strengths in major capital program execution, and running corporate proft/loss centres,
	involving strategic program directorship, safety leadership and
	corporate transaction negotiations.
Other current directorships:	None
Former directorships (last 3 years):	NED – Rex Minerals Limited (18 February 2019 – 21 April 2022)
Special responsibilities:	None
Interests in shares:	168,400 ordinary shares
Interests in options:	None
Contractual rights to shares:	None

46 VHM Limited | 2023 Annual Report

Ian Smith Qualifcations:	Non-Executive Director (appointed 18 August 2023) BE Mining (Honours), BFinAdmin, FAusIMM, FIEAust
Experience:	Mr Smith is a highly experienced executive and board member with a career spanning over 40 years in domestic and international mining and mining services companies. Mr Smith’s technical, operational and commercial discplines have been attributes of his successful delivery of major capital projects and business growth for a number of listed companies including Orica Limited, Rio Tinto and Newcrest Mining Limited.
Other current directorships:	Chair – Rex Minerals Limited (appointed NED on 18 February 2019, and appointed Chairman on 1 June 2021)
Former directorships (last 3 years):	None
Special responsibilities:	None
Interests in shares:	400,000 ordinary shares
Interests in options:	None
Contractual rights to shares: Michael Allen	None Executive Director (resigned 18 August 2023)
Qualifcations:	BA Accounting, CA
Experience:	Mr Allen is a Chartered Accountant and experienced Chief Financial Ofcer with more than 30 years’ experience in businesses such
	as KPMG, Walt Disney International, Opportunity International and
	Engineers Australia.
Other current directorships:	None
Former directorships (last 3 years):	None
Special responsibilities:	Member of the Audit and Risk Committee
Interests in shares:	2,255,102 ordinary shares
Interests in options:	None
Contractual rights to shares:	None

VHM Limited | 2023 Annual Report 47

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Gamini Colless Non-Executive Director (resigned 18 August 2023)
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Qualifcations:	BA, LLB
Experience:	Mr Colless has been practising as a solicitor for over 30 years and is highly experienced in the key areas of corporate fnance, project fnance, structured fnance, major property, and infrastructure projects.
Other current directorships:	Partner, HWL Ebsworth Lawyers
Former directorships (last 3 years):	None
Special responsibilities:	Chairman of the Nomination and Remuneration Committee
	Chairman of the Audit and Risk Committee
Interests in shares:	918,831 ordinary shares
Interests in options:	500,000 options with an exercise price of $1.00
Contractual rights to shares:	None

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.

Company Secretary

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Ian Hobson Company Secretary
B.Bus FCA ACIS MAICD
Qualifications:
----- End of picture text -----

Qualifcations:	B.Bus FCA ACIS MAICD
Experience:	Mr Ian Hobson is a fellow chartered accountant and chartered secretary with 38
	years’ experience who acts as independent director and company secretary to
	ASX listed companies. Prior to commencing his own practice, Mr Hobson held senior positions with large international chartered accounting frms together with
	commercial experience in Australia, UK, and Canada.

48 VHM Limited | 2023 Annual Report

Meetings of Directors

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

Full board Nomination and Remuneration Committee Audit and Risk Committee	Full board Nomination and Remuneration Committee Audit and Risk Committee	Full board Nomination and Remuneration Committee Audit and Risk Committee	Full board Nomination and Remuneration Committee Audit and Risk Committee	Full board Nomination and Remuneration Committee Audit and Risk Committee	Full board Nomination and Remuneration Committee Audit and Risk Committee	Full board Nomination and Remuneration Committee Audit and Risk Committee
Attended Held Attended Held Attended Held
Don Runge	13	13	1	1	2*	2*
Graham Howard	12	13	-	-	2*	2*
Michael Allen	12	13	-	-	2*	2*
Gamini Colless	13	13	1	1	2*	2*

* Business of the Audit and Risk Committee was carried out in the context of the full board meetings over the course of the year. All Board members were invited and attended those discussions.

Interests in the Shares and Options of the Company

The following relevant interests in shares and options of the Company were held by the Directors as at the date of this report.

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Options subject to
Directors Fully paid ordinary shares Share options shareholder approval
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Don Runge	4,498,287	500,000	500,000
Graham Howard	4,515,515	2,156,230	500,000
Maree Arnason	-	-	500,000
Ron Douglas	168,400	-	500,000
Ian Smith	400,000	-	500,000
Michael Allen	2,255,102	-
Gamini Colless	918,831	500,000

* Shareholder approval will be sought in respect of these options at the upcoming AGM.

Shares Under Option or Issued on Exercise of Options

At the date of this report, unissued Ordinary shares or interests of the Company under option are:

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----- Start of picture text -----

Date options Number of shares
granted under option Exercise price of option Expiry of option
----- End of picture text -----

Date options granted	Number of shares under option	Exercise price of option	Expiry of option
2 November 2018	2,017,475	-	19/05/2027
31 December 2019	634,375	-	31/12/2024
1 March 2021	423,938	-	28/02/2026
25 March 2022	1,097,917	-	19/05/2027
25 March 2022	203,452	-	28/02/2026
19 April 2022	1,000,000	$1.00	31/07/2025
1 February 2023	1,563,593	$1.89	01/08/2025
1 February 2023	1,563,593	$2.16	01/08/2025

VHM Limited | 2023 Annual Report

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. This Remuneration Report forms part of the Directors’ Report.

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 objective of the consolidated entity's executive reward framework is to ensure reward for performance is competitive and appropriate for the results delivered. The framework aligns executive reward with the achievement of strategic objectives and the creation of value for shareholders, and it is considered to conform to the market best practice for the delivery of reward. The Board ensures that executive reward satisfies the following key criteria for good reward governance practices:

competitiveness and reasonableness
acceptability to shareholders
performance linkage / alignment of executive compensation
transparency

The Nomination and Remuneration Committee is responsible for determining and reviewing remuneration arrangements for its directors and executives. The performance of the consolidated entity depends on the quality of its directors and executives. The remuneration philosophy is to attract, motivate and retain high performance and high quality personnel.

In consultation with external remuneration consultants (refer to section Use of Remuneration Consultants), the Nomination and Remuneration Committee has structured an executive remuneration framework that is market competitive and complementary to the reward strategy of the consolidated entity.

50 VHM Limited | 2023 Annual Report

The reward framework is designed to align executive reward to shareholders' interests. The Board have considered that it should seek to enhance shareholders' interests by:

having economic profit as a core component of plan design while incorporating alternative criteria appropriately reflecting the Company’s near term objectives during the exploration and development phases of the Company’s life cycle
focusing on sustained growth in shareholder wealth, consisting of project implementation, ore reserve replacement and growth, dividends (when appropriate) and growth in share price, and delivering constant or increasing return on assets as well as focusing the executive on key non-financial drivers of value
attracting and retaining high calibre executives

Additionally, the reward framework should seek to enhance executives' interests by:

rewarding capability and experience
reflecting competitive reward for contribution to growth in shareholder wealth
providing a clear structure for earning rewards

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

Non-Executive Directors’ Remuneration

Fees and payments to non-executive directors reflect the demands and responsibilities of their role. Non-executive directors' fees and payments are reviewed annually by the Nomination and Remuneration Committee. The Nomination and Remuneration Committee may, from time to time, receive advice from independent remuneration consultants to ensure non-executive directors' fees and payments are appropriate and in line with the market. The chairman's fees are determined independently from the fees of other non-executive directors based on comparative roles in the external market. The chairman is not present at any discussions relating to the determination of his own remuneration. Non-executive directors do not generally receive share options or other incentives. However, in certain circumstances, share options may be considered as additional remuneration, where warranted for the assumption of activities

in addition to those generally undertaken by non-executive directors. The grant of such options is subject to shareholder approval.

ASX listing rules require the aggregate non-executive directors' remuneration be determined periodically by a general meeting. The latest determination was at a general meeting of the Company on 27 March 2018 when shareholders approved aggregate remuneration of $450,000 per year.

Executive Remuneration

The consolidated entity aims to reward executives based on their position and responsibility, with a level and mix of remuneration which has both fixed and variable components.

The executive remuneration and reward framework has four components:

base pay and non-monetary benefits
short-term performance incentives
share-based payments
other remuneration such as superannuation and long service leave

The combination of these comprises the executive's total remuneration.

Fixed remuneration, consisting of base salary, superannuation, and non-monetary benefits, are reviewed annually by the Nomination and Remuneration Committee based on individual and business unit performance, the overall performance of the consolidated entity and comparable market remuneration.

Executives may receive their fixed remuneration in the form of cash or other fringe benefits (for example motor vehicle benefits) where it does not create any additional costs to the consolidated entity and provides additional value to the executive.

The short-term incentives ('STI') program is designed to align the targets of the Company with the performance hurdles of executives. STI payments are granted to executives based on specific annual objectives and key performance indicators ('KPIs') being achieved. KPIs for the 2023 financial year included matters such as achievement of satisfactory HSE measures, demerger of VP Minerals Limited, successful completion of the Company’s listing on the IPO and completion of the Goschen Project definitive feasibility study refresh.

VHM Limited | 2023 Annual Report

The long-term incentives ('LTI') include share-based payments established under an Incentive Options Plan that addresses the practicalities of a pre-development/pre-production listed entity.

The Nomination and Remuneration Committee reviewed the long-term equity-linked performance incentives specifically for executives during the year ended 30 June 2023 and no options were awarded during the year. The review recognised the importance of transition to a short and long term remuneration award structure consistent with publicly listed entities. As a consequence of this review, the Board has resolved to phase out awards under the legacy remuneration program and implement a revised program in the 2024 financial year. The Company expects options to be awarded during the 2024 year in respect of 2023.

At this point in the Company's development, the Board considers it more appropriate to link executive officers' remuneration with specific corporate and project objectives rather than the Company's financial performance.

Use of Remuneration Consultants

During the financial year ended 30 June 2022, the consolidated entity, through the Nomination and Remuneration Committee, engaged Guerdon Associates, remuneration consultants, to review its remuneration policies and provide recommendations on how to improve both the STI and LTI programs. There were no material changes to the structure proposed during the year ended 30 June 2023. The Company subsequently engaged BDO to structure a new LTI plan now that the Company is listed. BDO was paid $61,187 for these services.

An agreed set of protocols was put in place to ensure that the remuneration recommendations would be free from undue influence from key management personnel. These protocols include requiring that the consultant not communicate with affected key management personnel without a member of the Nomination and Remuneration Committee being present, and that the consultant not provide any information relating to the outcome of the engagement with the affected key management personnel, without Board approval. The Board is also required to make inquiries of the consultant's processes at the conclusion of the engagement to ensure that they are satisfied that any recommendations made have been free from undue influence. The Board is satisfied that these protocols were followed and as such there was no undue influence.

Voting and Comments Made at the Company's 2022 Annual General Meeting ('AGM')

The Company was an unlisted public company in the first half of 2023 and the 2022 financial year. Accordingly, a shareholder vote on remuneration was not undertaken at the 2022 annual general meeting. The Company did not receive any specific feedback at the AGM regarding its remuneration practices.

52 VHM Limited | 2023 Annual Report

Details of Remuneration

Amounts of Remuneration

Details of remuneration of key management personnel of the consolidated entity are set out in the following tables. Directors and other key management personnel of the Company consisted of the following:

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Directors
Current Directors
Donald Runge Non-Executive Chairman
Graham Howard Managing Director
Maree Arnason Non-Executive Director (appointed 18 August 2023)
Ron Douglas Non-Executive Director (appointed 18 August 2023)
Ian Smith Non-Executive Director (appointed 18 August 2023)
Former Directors retiring FY23
Gamini Colless Non-Executive Director (resigned 18 August 2023)
Michael Allen Executive Director (resigned 18 August 2023)
Former Directors retiring FY22
Tim Lehany Non-Executive Director (resigned 26 July 2021)
Ayten Saridas Non-Executive Director (appointed 23 July 2021, resigned 24 February 2022)
Samantha Tough Non-Executive Director (resigned 29 July 2021)
Dr. Mark Bennett Non-Executive Director (resigned 19 July 2021)
Other Key Management Personnel
Michael Sheridan
Chief Financial Officer and Deputy Chief Executive Officer
Carly O’Regan Executive General Manager, Strategy and Corporate Affairs
Bernard Hyde Executive General Manager, Operations Readiness (appointed 16 November 2022)
Michael Reynolds Executive General Manager, Projects (resigned 30 November 2022)
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Changes since the end of the reporting period:

Michael Allen resigned as an Executive Director on 18 August 2023.
Gamini Colless resigned as a Non-Executive Director on 18 August 2023.
Ian Smith, Ron Douglas and Maree Arnason were appointed as Non-Executive Directors on 18 August 2023.

VHM Limited | 2023 Annual Report

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----- Start of picture text -----

Post- Long-
employment term Share based
Short-term benefits benefits benefit payments
Cash Long Equity Equity
salary Cash Non- Super- service settled settled
and fees Bonus monetary annuation leave shares options Total
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2023 $ $ $ $ $ $	2023 $ $ $ $ $ $	2023 $ $ $ $ $ $	2023 $ $ $ $ $ $	2023 $ $ $ $ $ $	2023 $ $ $ $ $ $	2023 $ $ $ $ $ $	2023 $ $ $ $ $ $	2023 $ $ $ $ $ $
Non-Executive Directors
Donald Runge	117,647	-	-	12,353	-	-	71,084	201,084
Gamini Colless1	81,263	-	-	8,646	-	-	71,084	160,993
Executive Directors
Graham Howard10	519,537	116,250	-	25,292	-	-	706,941	1,368,020
Michael Allen2,10	343,997	78,750	-	25,292	-	-	483,487	931,526
Other Key Management Personnel
Michael Sheridan10	474,708	87,500	-	25,292	-	-	468,287	1,055,787
Carly O'Regan10	375,000	56,048	-	25.292	-	-	330,431	786,771
Bernard Hyde3	255,307	-	-	17,714	-	-	-	273,021
Michael Reynolds4	97,942	-	-	6,446	-	-	-	104,388
Total	2,265,401	338,548	-	146,327	-	-	2,131,314	4,881,590

1 Gamini Colless : FY2022 represents remuneration from 23 July 2021 to 30 June 2022. Mr Colless’ 2022 renumeration including equity settled sign-on bonus approved by shareholders on 31 May 2022. Fees accrued for the period from January 2022 to June 2022 amounting to $45,000 were paid in July 2022. Gamini resigned as a Non-Executive Director effective 18 August 2023.

2 Michael Allen : Resigned as Executive Director effective 18 August 2023.

3 Bernard Hyde : Represents remuneration from 16 November 2022 to 30 June 2023.

4 Michael Reynolds : Represents remuneration from 1 July 2022 to 30 November 2022. 2022 represents remuneration from 28 March 2022 to 30 June 2022.

10 The cash bonuses paid to employees Mr Howard, Mr Allen, Mr Sheridan and Ms O’Regan were awarded in respect of performance for FY2022, subject to deferral of payment until the listing of VHM Limited in January 2023. As at 30 June 2023, no bonuses were awarded

54 VHM Limited | 2023 Annual Report

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Non-Executive Directors

Donald Runge	115,152	-	-	11,515	-	-	5,924	132,591
Gamini Colless1	40,909	-	-	4,091	-	109,699	5,924	160,623
Ayten Saridas5	52,500	70,000	-	-	-	-	-	122,500
Tim Lehany6	9,848	-	-	985	-	-	-	10,833
Samantha Tough7	6,818	-	-	682	-	-	-	7,500
Dr Mark Bennett8	6,818	-	-	682	-	-	-	7,500
Executive Directors
Graham Howard	493,099	-	-	23,568	-	-	343,416	860,083
Michael Allen	351,432	-	-	23,568	-	-	249,643	624,643
Other Key Management Personnel
Michael Sheridan9	391,613	-	-	21,105	-	-	27,546	440,264
Carly O’Regan	288,333	-	-	23,149	-	-	170,371	481,853
Michael Reynolds4	111,243	-	-	5,892	-	-	-	117,135
Total	1,867,765	70,000	-	115,237	-	109,699	802,824	2,965,525

1 Gamini Colless : FY2022 represents remuneration from 23 July 2021 to 30 June 2022. Mr Colless’ 2022 remuneration including equity settled sign-on bonus approved by shareholders on 31 May 2022. Fees accrued for the period from January 2022 to June 2022 amounting to $45,000 were paid in July 2022. Gamini resigned as a Non-Executive Director effective 18 August 2023.
4 Michael Reynolds : Represents remuneration from 1 July 2022 to 30 November 2022. 2022 represents remuneration from 28 March 2022 to 30 June 2022.

5 Ayten Saridas : Represents remuneration from 1 July 2021 to 24 February 2022

6 Tim Lehany : Represents remuneration from 1 July 2021 to 26 July 2021

7 Samantha Tough : Represents remuneration from 1 July 2021 to 29 July 2021

8 Dr Mark Bennett : Represents remuneration from 1 July 2021 to 19 July 2021

9 Michael Sheridan : Represents remuneration from 6 September 2021 to 30 June 2022

VHM Limited | 2023 Annual Report 55

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

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Fixed remuneration At risk – STI At risk – LTI
2023 2022 2023 2022 2023 2022
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Non-Executive Directors	Non-Executive Directors	Non-Executive Directors	Non-Executive Directors	Non-Executive Directors	Non-Executive Directors	Non-Executive Directors
Donald Runge	65%	96%	-	-	35%	4%
Gamini Colless	56%	28%	-	-	44%	72%
Ayten Saridas	N/A	43%	N/A	57%	-	-
Tim Lehany	N/A	100%	N/A	-	N/A	-
Samantha Tough	N/A	100%	N/A	-	N/A	-
Dr Mark Bennett	N/A	100%	N/A	-	N/A	-
Executive Directors
Graham Howard	40%	60%	8%	-	52%	40%
Michael Allen	40%	60%	8%	-	52%	40%
Other Key Management Personnel
Michael Sheridan	48%	94%	8%	-	44%	6%
Carly O'Regan	51%	65%	7%	-	42%	35%
Bernard Hyde	100%	N/A	-	N/A	-	N/A
Michael Reynolds	100%	100%	-	-	-	-

The proportion of cash bonus paid/ payable or forfeited is as follows:

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----- Start of picture text -----

Cash bonus paid / payable Cash bonus forfeited
2023 2022 2023 2022
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Graham Howard	96%	0%	4%	100%
Michael Allen	100%	0%	0%	100%
Michael Sheridan	97%	0%	3%	100%
Carly O’Regan	83%	0%	17%	100%
Ayten Saridas	N/A	100%	N/A	0%

56 VHM Limited | 2023 Annual Report

Service Agreements

Remuneration and other terms of employment for key management personnel are formalised in service agreements. Details of these agreements are as follows:

Name:	Graham Howard
Title:	Managing Director
Agreement commencement:	1 March 2018
Terms of agreement:	Indefnite
Details:	Base salary for the year ending 30 June 2023 is $525,000 inclusive
	of superannuation, to be reviewed annually by the Nomination and
	Remuneration Committee. Six months termination notice by either party.
	Employee entitled to participate in the Company’s short and long term
	incentive programs.
Name:	Michael Allen
Title:	Executive Director
Agreement commencement:	1 February 2018
Terms of agreement:	Indefnite
Details:	Base salary for the year ending 30 June 2023 of $375,000 inclusive
	of superannuation, to be reviewed annually by the Nomination and
	Remuneration Committee. Four months termination notice by either party.
	Employee entitled to participate in the Company’s short and long term incentive programs. Michael has resigned from his position efective
	17 August 2023.
Name:	Michael Sheridan
Title:	Chief Financial Ofcer and Deputy Chief Executive Ofcer
Agreement commencement:	6 September 2021
Terms of agreement:	Indefnite
Details:	Base salary for the year ending 30 June 2023 of $500,000 inclusive
	of superannuation, to be reviewed annually by the Nomination and
	Remuneration Committee. Six months termination notice by either party.
	Employee entitled to participate in the Company’s short and long term
	incentive programs.

VHM Limited | 2023 Annual Report 57

Name:	Carly O’Regan
Title:	Executive General Manager, Strategy and Corporate Afairs
Agreement commencement:	22 January 2018
Terms of agreement:	Indefnite
Details:	Base salary for the year ending 30 June 2023 of $375,000 plus
	superannuation, to be reviewed annually by the Nomination and
	Remuneration Committee. Six months termination notice by either party.
	Employee entitled to participate in the Company’s short and long term
	incentive programs.
Name:	Bernard Hyde
Title:	Executive General Manager, Operations Readiness
Agreement commencement:	16 November 2022
Terms of agreement:	Indefnite
Details:	Base salary for the year ending 30 June 2023 of $450,000 including
	superannuation, to be reviewed annually by the Nomination and
	Remuneration Committee. Four months termination notice by either party.
	Employee entitled to participate in the Company’s short and long term
	incentive programs.

Key management personnel have no entitlement to termination payments in the event of removal for misconduct.

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58 VHM Limited | 2023 Annual Report

Share-Based Compensation

Issue of shares

No shares were issued to directors and other key management personnel during the year ended 30 June 2023. As noted below, shares were issued as a result of the conversion of options exercised during the year.

Options

No share options were granted to directors or other key management personnel during the year ended 30 June 2023. Options granted in prior years carry no dividend or voting rights.

All options that were granted in prior years were over unissued fully paid ordinary shares in the Company. The number of options granted were determined taking into account reasonable compensation for the material additional activities to be undertaken by Messrs Runge and Colless in the period to final investment decision in respect of the Goschen Project and an independent valuation of the options.

Options vest based on the provision of service over the vesting period whereby the executive becomes beneficially entitled to the option on vesting date. Options are exercisable by the holder as from the vesting date. There has not been any alteration to the terms or conditions of the grant since the grant date.

There are no amounts paid or payable by the recipient in relation to the granting of such options other than on their potential exercise. All employee options vested as a result of the successful IPO in January 2023.

The value of options over ordinary shares granted, exercised, and lapsed for directors and other key management personnel as part of compensation during the year ended 30 June 2023 are set out in the Value of Options table below.

Fair Value of Options Granted

The fair value at grant date of options issued was determined by an independent corporate valuations expert using a binomial option pricing model that takes into account factors including the exercise price, the term of the options 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 options. The binomial model is applied on the basis that the options are not subject to any market based vesting conditions given the vesting of the options is not dependent on the future market price of VHM’s ordinary shares and the options are exercisable at any time prior to the Expiry Date. The model inputs for options granted are disclosed in Note 26 of the financial statements.

Value of Options

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----- Start of picture text -----

Value of options Value of options Value of options Remuneration
granted during exercised during lapsed during consisting of
the year the year the year options for the year
----- End of picture text -----

$ $ $ %	$ $ $ %	$ $ $ %	$ $ $ %	$ $ $ %
Donald Runge	-	-	-	35%
Graham Howard	-	-	-	52%
Michael Allen	-	1,519,102	-	52%
Gamini Colless	-	-	-	44%
Michael Sheridan	-	-	-	44%
Carly O'Regan	-	349,305	-	42%

VHM Limited | 2023 Annual Report

Additional Disclosures Relating to Key Management Personnel

Shareholdings

The numbers of shares in the Company held during the financial years ended 30 June 2023 and 2022 by Key Management Personnel, including shares held by entities they control, are set out below:

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----- Start of picture text -----

Balance on
commencement
Opening Options Other or cessation Closing
balance exercised movements balance
of office
2023
Donald Runge 4,498,287 - - - 4,498,287
Graham Howard 4,515,515 - - - 4,515,515
Michael Allen 736,000 1,519,102 - - 2,255,102
Gamini Colless 918,831 - - - 918,831
Carly O'Regan 288,000 349,305 - - 637,305
Michael Sheridan - - 79,012 - 79,012
- - - - -
Bernard Hyde
2022
Donald Runge 4,498,287 - - - 4,498,287
Graham Howard 4,131,515 384,000 - - 4,515,515
Michael Allen 384,000 352,000 - - 736,000
Gamini Colless - - 918,831 - 918,831
Carly O'Regan - 288,000 - - 288,000
Dr Mark Bennett 480,000 - - (480,000) -
Tim Lehany 2,176,000 - - (2,176,000) -
60 VHM Limited | 2023 Annual Report
----- End of picture text -----

Option holdings

The numbers of options over ordinary shares in the Company held during year ended 30 June 2023 by Key Management Personnel, including options over ordinary shares held by entities they control, are set out below:

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----- Start of picture text -----

Opening Expired/ Closing
balance Granted Exercised forfeited balance
----- End of picture text -----

2023	2023	2023	2023	2023	2023
Donald Runge	500,000	-	-	-	500,000
Graham Howard	2,156,230	-	-	-	2,156,230
Michael Allen	1,519,102	-	(1,519,102)	-	-
Gamini Colless	500,000	-	-	-	500,000
Michael Sheridan	826,389	-	-	-	826,389
Carly O'Regan	1,030,994	-	(349,305)	-	681,689
Bernard Hyde	-	-	-	-	-
2022
Donald Runge	-	500,000	-	-	500,000
Graham Howard	1,442,313	1,097,917	(384,000)	-	2,156,230
Michael Allen	1,127,352	743,750	(352,000)	-	1,519,102
Gamini Colless	-	500,000	-	-	500,000
Michael Sheridan	-	826,389	-	-	826,389
Carly O’Regan	789,650	529,344	(288,000)	-	1,030,994

VHM Limited | 2023 Annual Report

Other Transactions with Key Management Personnel

Loans to Directors and Executives

HWL Ebsworth Lawyers, a law firm of which Mr Colless is a partner, has provided legal services to the Company, including advice on matters relating to the initial public offering of VHM Limited, material service and land purchase contracts, remuneration and employment agreements, corporate restructure, and taxation. Total fees of $612,559 were paid or were payable to HWL Ebsworth for the financial year ended 30 June 2023, including $429,069 paid in respect of the IPO. Transactions between HWL Ebsworth and the Company are on normal commercial terms and conditions unless otherwise stated. At balance date, $39,377 (2022: $3,253) was outstanding to HWL Ebsworth Lawyers.

During the financial year ended 30 June 2023, no loans were provided to Directors or Executives (30 June 2022: Nil).

This concludes the remuneration report which has been audited.

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

On behalf of the Directors.

Graham Howard Managing Director 20 September 2023

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62 VHM Limited | 2023 Annual Report

Auditor’s Independence

Declaration

AUDITOR’S INDEPENDENCE DECLARATION

As lead auditor for the audit of the consolidated financial report of VHM Limited for the year ended 30 June 2023, I declare that to the best of my knowledge and belief, there have been no contraventions of:

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

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Perth, Western Australia L Di Giallonardo 20 September 2023 Partner

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VHM Limited | 2023 Annual Report

Consolidated Statement of Profit or Loss and Other Comprehensive Income

For the year ended 30 June 2023

For the year ended 30 June 2023
Notes	Consolidated
	2023 $'000 2022 $’000
Revenue Interest income Other income 3 Expenditure Employee benefts expense Corporate and administrative expenses 4 Land compensation 21 Depreciation expense 13 Share based payment expense 26 Finance costs 6 Loss before income tax Income tax expense 8 Loss after income tax Other comprehensive (loss) Items that may be reclassifed to proft or loss: Total comprehensive (loss) for the year Loss per Share Basic loss per share (dollar per share) 7 Diluted loss per share (dollar per share) 7	226 4 111 2
	337 6 (3,115) (1,788) (6,313) (3,764) (2,002) - (279) (126) (2,090) (1,047) (4,454) (2,431)
	(18,253) (9,156)
	(17,916) (9,150) - -
	(17,916) (9,150)
	- -
	(17,916) (9,150)
	(0.10) (0.07) (0.10) (0.07)

The above Consolidated Statement of Profit or Loss and Other Comprehensive Income should be read in conjunction with the accompanying notes.

64 VHM Limited | 2023 Annual Report

VHM Limited

Consolidated Statement of Financial Position

As at 30 June 2023

Notes	Consolidated
	2023 $'000 2022 $’000
ASSETS Current assets Cash and cash equivalents 9 Loans and advances 11 Other assets 10 Total current assets Non-current assets Rehabilitation bond Deferred exploration and evaluation expenditure 12 Property, plant and equipment 13 Right-of-use assets 14 Total non-current assets Total assets LIABILITIES Current liabilities Trade and other payables 15 Convertible notes liability 17 Lease liabilities 18 Provisions 19 Land acquisition liabilities 20 Total current liabilities Non-current liabilities Convertible notes liability 17 Lease liabilities 18 Land acquisition liabilities 20 Total non-current liabilities Total liabilities Net assets EQUITY Issued capital 22 Reserves 23 Accumulated losses 24 Total equity	20,649 24,366 1,201 - 405 919
	22,255 25,285
	55 20 39,193 27,217 16,273 10,733 990 5
	56,511 37,975

	78,766 63,260
	3,091 3,636 - 349 255 - 606 395 4,029 1,046
	7,981 5,426
	- 34,073 767 - 5,258 6,416
	6,025 40,489

	14,006 45,915
	64,760 17,345
	108,375 41,287 3,881 5,638 (47,496) (29,580)
	64,760 17,345

The above Consolidated Statement of Financial Position should be read in conjunction with the accompanying notes.

VHM Limited | 2023 Annual Report 65

VHM Limited

Consolidated Statement of Changes in Equity

For the year ended 30 June 2023

Consolidated	Issued capital $’000 Share based payment reserve $’000 Accumulated losses $’000 Total equity $’000
Balance at 1 July 2021 Loss for the period Total comprehensive loss for the period Transactions with owners in their capacity as owners: Shares issued during the period Transfer from reserve Share based payments recognised Balance at 30 June 2022 Consolidated	40,193 4,940 (20,849) 24,284 - - (9,150) (9,150)
	- - (9,150) (9,150) 984 (984) - - - (419) 419 - 110 2,101 - 2,211
	41,287 5,638 (29,580) 17,345

	Issued capital $’000 Share based payment reserve $’000 Accumulated losses $’000 Total equity $’000
Balance at 1 July 2022 Loss for the period Total comprehensive loss for the period Transactions with owners in their capacity of owners: Equity capital raising (net of fees) Shares issued on exercise of options Conversion of notes into share capital Capital reduction on in-specie distribution of shares in VP Minerals Share based payments recognised Balance at 30 June 2023	41,287 5,638 (29,580) 17,345 (17,916) (17,916)
	- - (17,916) (17,916) 28,127 - - 28,127 5,302 (4,298) - 1,004 35,530 - - 35,530 (1,871) - - (1,871) - 2,541 - 2,541
	108,375 3,881 (47,496) 64,760

The above Consolidated Statement of Changes in Equity should be read in conjunction with the accompanying notes.

66 VHM Limited | 2023 Annual Report

VHM Limited

Consolidated Statement of Cash Flows

For the year ended 30 June 2023

Notes	Consolidated
	2023 $'000 2022 $’000
Cash fows from operating activities Interest received Payments to suppliers and employees Net cash outfows from operating activities 27 Cash fows from investing activities Payments for exploration expenditure Payments for property, plant and equipment Proceeds from sale of property, plant and equipment Advances to VP Minerals Repayments of land acquisition liabilities Research and development tax ofset Net cash outfows from investing activities Cash fows from fnancing activities Proceeds from share issue Share issue costs Proceeds from convertible notes issue Convertible notes issue costs Payment of lease liabilities Proceeds from borrowings Repayment of borrowings Interest and fnance cost paid Net cash infows from fnancing activities Net (decrease)/increase in cash and cash equivalents Cash and cash equivalents at the beginning of fnancial year Cash and cash equivalents at the end of fnancial year 9	185 4 (10,672) (3,993)
	(10,487) (3,989)
	(19,708) (12,182) (2,815) (359) - 9 (1,050) - (1,056) (911) 4,441 3,044
	(20,188) (10,399)
	30,000 - (1,383) - - 31,840 - (1,948) (137) (80) 3,480 99 (3,480) (650) (1,522) (1,382)
	26,958 27,879
	(3,717) 13,491 24,366 10,875
	20,649 24,366

The above Consolidated Statement of Cash Flows should be read in conjunction with the accompanying notes.

VHM Limited | 2023 Annual Report 67

VHM Limited

Notes to the Financial Statements

For the year ended 30 June 2023

General information

The financial statements cover VHM Limited as a consolidated entity consisting of VHM Limited and the entities it controlled at the end of, or during, the year (collectively known as the Group or consolidated entity). The financial statements are presented in Australian dollars, which is VHM Limited’s functional and presentation currency.

VHM Limited is a listed public company limited by shares, incorporated, and domiciled in Australia. Its registered office and principal place of business are:

Registered office Principal place of business Suite 8, 110 Hay Street Suite 1, Level 11, 330 Collins Street Subiaco, Western Australia 6008 Melbourne, Victoria 3000

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

The Group comprises VHM Limited and its wholly owned subsidiaries, GP Land Holdings Pty Ltd, GPB Land Holdings Pty Ltd, GPF Land Holdings Pty Ltd and GPBJ Holdings Pty Ltd. During the year, a former wholly owned subsidiary, VP Minerals Limited, was demerged as detailed in Note 11.

The financial statements were authorised for issue, in accordance with a resolution of directors, on 20 September 2023. The directors have the power to amend and reissue the financial statements.

Note 1: Summary of Significant Accounting Policies

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

New or amended Accounting Standards and Interpretations adopted

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

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

It has been determined by the Directors that there is no impact, material or otherwise, of the new and revised Standards and Interpretations on its business in issue, and those not early adopted, and, therefore, no change is necessary to the Group’s accounting policies.

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

This financial report has been prepared on an accruals basis under the historical cost convention. Cost is based on the fair values of the consideration given in exchange for assets.

68 VHM Limited | 2023 Annual Report

VHM Limited

Notes to the Financial Statements

For the year ended 30 June 2023

Going concern

The financial statements have been prepared on a going concern basis which assumes the commercial realisation of the future potential of the Group’s assets and discharge of its liabilities in the normal course of business.

The Group recorded a loss of $17,916,000 (2022: $9,150,000) for the year. At balance date, the Group had net assets of $64,760,000 (2022: $17,345,000) which included cash and cash equivalents of $20,649,000 (2022: $24,366,000) and a working capital surplus of $14,274,000 (2022: $19,859,000).

Based on the working capital surplus and cash and cash equivalents at balance date and, for the following reasons, the Directors believe that the assumption of going concern is valid in the preparation of these financial statements:

The Directors have a track record of successfully raising equity capital for the expenditure required to progress the project. As at the date of this report, the Company has mandated brokers to assist the Company in its capital raising endeavours; and
The Company also has the capacity to reduce discretionary expenditure in line with available funding.

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.

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 30.

Principles of consolidation

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

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.

Non-controlling interest in the results and equity of subsidiaries are shown separately in the statement of profit or loss and other comprehensive income, statement of financial position and statement of changes in equity of the consolidated entity. Losses incurred by the consolidated entity are attributed to the non-controlling interest in full, even if that results in a deficit balance.

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.

VHM Limited | 2023 Annual Report

VHM Limited

Notes to the Financial Statements

For the year ended 30 June 2023

Deferred exploration and evaluation expenditure

Exploration and evaluation expenditures in relation to each separate area of interest are recognised as an exploration and evaluation asset in the year in which they are incurred where the following conditions are satisfied:

i. the rights to tenure of the area of interest are current; and
ii. at least one of the following conditions is also met:
a. the exploration and evaluation expenditures are expected to be recouped through successful development and exploration of the area of interest, or alternatively, by its sale; or
b. exploration and evaluation activities in the area of interest have not at the reporting date reached a stage which permits a reasonable assessment of the existence or otherwise of economically recoverable reserves, and active and significant operations in, or in relation to, the area of interest are continuing.

Exploration and evaluation assets are initially measured at cost and include acquisition of rights to explore, studies, exploratory drilling, trenching, and sampling and associated activities and an allocation of depreciation and amortisation of assets used in exploration and evaluation activities. General and administrative costs are only included in the measurement of exploration and evaluation costs where they are related directly to operational activities in a particular area of interest.

Exploration and evaluation assets are assessed for impairment when facts and circumstances suggest that the carrying amount of an exploration and evaluation asset may exceed its recoverable amount. The recoverable amount of the exploration and evaluation asset (for the cash generating unit(s) to which it has been allocated being no larger than the relevant area of interest) is estimated to determine the extent of the impairment loss (if any). Where an impairment loss subsequently reverses, the carrying amount of the asset is increased to the revised estimate of its recoverable amount, but only to the extent that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset in previous years.

Revenue and other income

Revenue is recognised to the extent that it is probable that the Group will collect the consideration to which it will be entitled in exchange for the goods or services that will be transferred to the customer.

Interest income is recognised on a proportional basis taking into account the interest rates applicable to the financial assets.

Cash and cash equivalents

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

Goods and services tax (GST)

Revenues, expenses, and assets are recognised net of the amount of associated GST, unless the GST incurred is not recoverable from the taxation authority. In this case it is recognised as part of the cost of acquisition of the net asset or 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 taxation authority is included with other receivables or payables in the Consolidated Statement of Financial Position.

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

70 VHM Limited | 2023 Annual Report

VHM Limited

Notes to the Financial Statements

For the year ended 30 June 2023

Trade and other payables

Trade and other payables are carried at cost and represent liabilities for goods and services provided to the Group prior to the end of the financial year that 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.

Borrowings

Recognition and measurement

Borrowings are initially recognised at fair value, net of transaction costs incurred. Borrowings are subsequently stated at amortised cost using the effective interest rate method. Any difference between the proceeds and the redemption value is recognised in the Consolidated Statement of Profit or Loss and Other Comprehensive Income over the period of borrowings using the effective interest rate.

The component of the convertible notes that exhibits characteristics of a liability is recognised as a liability in the statement of financial position, net of transaction costs.

Borrowings are classified as current liabilities unless the Group has an unconditional right to defer settlement of the liability for at least 12 months after the end of the reporting period.

Trade and other receivables

Trade receivables, which generally have 30-90 day terms, are recognised, and carried at original invoice amount less an allowance for any uncollectible amounts. An allowance for expected credit losses is made when collection of the full amount is no longer probable. Bad debts are written off when identified.

Contributed equity

Ordinary shares and options are classified as contributed 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.

Share based payment expense

The Group measures the cost of equity settled transactions with employees and consultants by reference to the fair value of the equity instruments at the date at which they are granted. The fair value of options is determined using a binomial model, using the assumptions detailed in Note 26.

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.

VHM Limited | 2023 Annual Report

VHM Limited

Notes to the Financial Statements

For the year ended 30 June 2023

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.

VHM Limited (the 'head entity') and its wholly owned Australian subsidiaries have formed an income tax consolidated group under the tax consolidation regime. The head entity and each subsidiary in the tax consolidated group continue to account for their own current and deferred tax amounts. The tax consolidated group has applied the 'separate taxpayer within group' approach in determining the appropriate amount of taxes to allocate to members of the tax consolidated group.

In addition to its own current and deferred tax amounts, the head entity also recognises the current tax liabilities (or assets) and the deferred tax assets arising from unused tax losses and unused tax credits assumed from each subsidiary in the tax consolidated group.

Assets or liabilities arising under tax funding agreements with the tax consolidated entities are recognised as amounts receivable from or payable to other entities in the tax consolidated group. The tax funding arrangement ensures that the intercompany charge equals the current tax liability or benefit of each tax consolidated group member, resulting in neither a contribution by the head entity to the subsidiaries nor a distribution by the subsidiaries to the head entity.

Property, plant and equipment

Items of property, plant and equipment are carried at cost less accumulated depreciation and impairment losses (see accounting policy “Impairment”).

Land

Land is initially recognised at cost. After initial recognition at cost, the Group will continue to carry the land, which is acquired primarily for its mineral resources, at its cost less any accumulated impairment losses.

Plant and equipment

Plant and equipment, including fixture and fittings acquired are initially recorded at their cost of acquisition at the date of acquisition, being the fair value of the consideration provided plus incidental costs directly attributable to the acquisition.

Motor vehicles

Motor vehicles are recorded at cost of acquisition at the date of acquisition, being the fair value of the consideration provided plus incidental costs directly attributable to the acquisition.

Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. All other repairs and maintenance are charged to the statement of comprehensive income during the financial period in which they are incurred.

Depreciation

Depreciation is calculated on a straight-line basis to write off the net cost of each item of property, plant, and equipment (excluding land) over their expected useful lives as follows:

Buildings	30-40 years
Leasehold improvements	20-30 years
Motor vehicles	8 years
Plant and equipment	3-7 years

72 VHM Limited | 2023 Annual Report

VHM Limited

Notes to the Financial Statements

For the year ended 30 June 2023

Depreciation and amortisation rates and methods are reviewed annually for appropriateness. When changes are made, adjustments are reflected prospectively in current and future periods only.

Gains and losses on disposals are determined by comparing proceeds with the carrying amount. These gains and losses are included in the statement of comprehensive income. When revalued assets are sold, amounts included in the revaluation reserve relating to that asset are transferred to accumulated losses.

Impairment

The carrying amount of the Group’s assets, other than deferred tax assets, are reviewed at each reporting date to determine whether there is any indication of impairment. Where such an indication exists, a formal assessment of recoverable amount is then made and where this is in excess of carrying amount, the asset is written down to its recoverable amount.

Recoverable amount is the greater of fair value less costs to sell and value in use. Value in use is the present value of the future cash flows expected to be derived from the asset or cash generating unit. In estimating value in use, a pre-tax discount rate is used which reflects current market assessments of the time value of money and the risks specific to the asset. Any resulting impairment loss is recognised immediately in the statement of comprehensive income.

Impairment losses are reversed when there is an indication that the impairment loss may no longer exist and there has been a change in the estimate used to determine the recoverable amount. An impairment loss is reversed only to the extent that the carrying amount of the asset(s) does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised.

Right-of-use assets

A right-of-use asset is recognised at the commencement date of a lease. The right-of-use asset is measured at cost, which comprises the initial amount of the lease liability, adjusted for, as applicable, any lease payments made at or before the commencement date net of any lease incentives received.

Right-of-use assets are depreciated on a straight-line basis over the unexpired period of the lease or the estimated useful life of the asset, whichever is the shorter. Where the consolidated entity expects to obtain ownership of the leased asset at the end of the lease term, the depreciation is over its estimated useful life. Right-of-use assets are subject to impairment or adjusted for any remeasurement of lease liabilities.

The consolidated entity has elected not to recognise a right-of-use asset and corresponding lease liability for short-term leases with terms of 12 months or less and leases of low-value assets. Lease payments on these assets are expensed to profit or loss as incurred.

Employee benefits

Wages, salaries and other employee benefits

Liabilities for wages and salaries, including non-monetary benefits, annual leave and long service leave to be settled wholly within 12 months of the reporting date are recognised in provisions in respect of employees’ services up to the reporting date. They are measured at the (undiscounted) amounts expected to be paid when the liabilities are settled.

Contributions are made by the Group to superannuation funds as stipulated by statutory requirements and are charged as expenses when incurred.

VHM Limited | 2023 Annual Report

VHM Limited

Notes to the Financial Statements

For the year ended 30 June 2023

Earnings/ loss per share

Basic earnings/ loss per share are determined by dividing the net result attributable to members, adjusted to exclude costs of servicing equity (other than dividends), by the weighted average number of ordinary shares, adjusted for any bonus element.

Diluted earnings/ loss per share are determined by dividing the net result attributable to members, adjusted to exclude costs of servicing equity (other than dividends) and any expenses associated with dividends and interest of dilutive potential ordinary shares, by the weighted average number of ordinary shares (both issued and potentially dilutive) adjusted for any bonus element.

Segment reporting

Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker. The chief operating decision maker, who is responsible for allocating resources and assessing performance of the operating segments, has been identified as the Board of Directors of VHM Limited.

Financial instruments

Financial instruments, incorporating financial assets and liabilities, are recognised when the entity becomes a party to the contractual provisions of the instrument. Trade data accounting is adopted for financial assets that are delivered within timeframes established by marketplace convention.

Financial instruments are initially recognised at fair value plus transaction costs where the instrument is not classified at fair value through profit and loss. Transaction costs related to instruments classified as at fair value through profit and loss are expensed to profit and loss immediately. Financial instruments are classified and measured as set out below.

Derecognition

Financial assets are derecognised where the contractual rights to receipt of cash flows expires, or the asset is transferred to another party whereby the entity no longer has any significant continuing involvement in the risks and benefits associated with the asset. Financial liabilities are derecognised where the related obligations are either discharged, cancelled, or expire. The difference between the carrying value of the financial liability extinguished or transferred to another party and their fair value of consideration paid, including the transfer of non-cash assets or liabilities assumed, is recognised in profit or loss.

Classification and subsequent measurement

Loans and receivables

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market and are subsequently measured at amortised cost using the effective interest rate method.

Financial liabilities

Non-derivative financial liabilities (excluding financial guarantees) are subsequently measured at amortised cost using the effective interest rate method.

Impairment of financial assets

The consolidated entity assesses at the end of each reporting period whether there is any objective evidence that a financial asset or group of financial assets is impaired. Objective evidence includes significant financial difficulty of the issuer or obligor; a breach of contract such as default or delinquency in payments; the lender granting to a borrower concessions due to economic or legal reasons that the lender would not otherwise do; it becomes probable that the borrower will enter bankruptcy or other financial reorganisation; the disappearance of an active market for the financial asset; or observable data indicating that there is a measurable decrease in estimated future cash flows.

74 VHM Limited | 2023 Annual Report

VHM Limited

Notes to the Financial Statements

For the year ended 30 June 2023

The amount of the impairment allowance for financial assets carried at cost is the difference between the asset's carrying amount and the present value of estimated future cash flows, discounted at the current market rate of return for similar financial assets.

Fair value

When an asset or liability, financial or non-financial, is measured at fair value for recognition or disclosure purposes, the fair value is based on the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date; and assumes that the transaction will take place either: in the principle market; or in the absence of a principal market, in the most advantageous market.

Fair value is measured using the assumptions that market participants would use when pricing the asset or liability, assuming they act in their economic best interest. For non-financial assets, the fair value measurement is based on its highest and best use. Valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, are used, maximising the use of relevant observable inputs, and minimising the use of unobservable inputs.

Assets and liabilities measured at fair value are classified, into three levels, using a fair value hierarchy that reflects the significance of the inputs used in making the measurements. Classifications are reviewed each reporting date and transfers between levels are determined based on a reassessment of the lowest level input that is significant to the fair value measurement.

For recurring and non-recurring fair value measurements, external valuers may be used when internal expertise is either not available or when the valuation is deemed to be significant. External valuers are selected based on market knowledge and reputation. Where there is a significant change in fair value of an asset or liability from one period to another, an analysis is undertaken, which includes a verification of the major inputs applied in the latest valuation and a comparison, where applicable, with external sources of data.

Lease liabilities

A lease liability is recognised at the commencement date of a lease. The lease liability is initially recognised at the present value of the lease payments to be made over the term of the lease, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the consolidated entity's incremental borrowing rate. Lease payments comprise of fixed payments less any lease incentives receivable, variable lease payments that depend on an index or a rate, amounts expected to be paid under residual value guarantees, exercise price of a purchase option when the exercise of the option is reasonably certain to occur, and any anticipated termination penalties. The variable lease payments that do not depend on an index or a rate are expensed in the period in which they are incurred.

Lease liabilities are measured at amortised cost using the effective interest method. The carrying amounts are remeasured if there is a change in the following: future lease payments arising from a change in an index or a rate used; residual guarantee; lease term; certainty of a purchase option and termination penalties. When a lease liability is remeasured, an adjustment is made to the corresponding right-of-use asset, or to profit or loss if the carrying amount of the right-of-use asset is fully written down.

VHM Limited | 2023 Annual Report

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.

Refundable research and development tax offset

To the extent that research and development costs are eligible activities under the “Research and development tax incentive” programme, a refundable tax offset is available for companies with annual turnover of less than $20 million. The Group recognises refundable tax offsets received in the financial year directly against capitalised exploration expenditure, in the statement of financial position, resulting from the monetisation of available tax losses that otherwise would have been carried forward. These amounts are recognised at their fair value only to the extent that there is reasonable assurance that the incentive will be received.

Exploration and evaluation expenditure

The Board of Directors determines when an area of interest should be abandoned. When a decision is made that an area of interest is not commercially viable, all costs that have been capitalised in respect of that area of interest are written off. The Directors’ decision is made after considering the likelihood of finding commercially viable reserves.

Share-based payment expense

The Company measures the cost of equity-settled transactions with employees and consultants by reference to the fair value of the equity instruments at the date at which they are granted. The fair value of these equity instruments is determined using a binomial model, using various assumptions detailed in the notes to the financial statements.

Note 3: Other Revenue	Consolidated
	2023 $'000 2022 $’000
Interest income Service charges1 Proft on disposal of assets Other income	226 4 110 - - 2 1 -
	337 6

1 Service charges charged to VP Minerals as further explained in Note 11.

76 VHM Limited | 2023 Annual Report

VHM Limited

Notes to the Financial Statements

For the year ended 30 June 2023

Note 4: Corporate and Administrative Expense	Consolidated
	2023 $'000 2022 $’000
IPO related costs: Professional fees (Standard Chartered Bank fnancial advisory services) Legal fees Listing and fling fees Other corporate and administrative expenses: Professional fees Legal fees Audit fees Accounting fees Other corporate and administrative expenses (rent, insurance etc) Note 5: Auditor’s Remuneration	1,485 267 600 497 333 12
	2,418 776 2,262 1,671 206 275 79 46 106 111 1,242 885
	3,895 2,988
	6,313 3,764

	Consolidated
	2023 $ 2022 $
Auditors – HLB Mann Judd (WA) Partnership – audit and review of fnancial reports Note 6: Finance Costs	79,000 31,000
	79,000 31,000

	Consolidated
	2023 $'000 2022 $’000
Unwinding of convertible note issue costs Interest on convertible notes Interest on land acquisitions Interest on other borrowings Interest on lease liabilities	1,810 369 1,709 1,051 850 972 44 35 41 4
	4,454 2,431

VHM Limited | 2023 Annual Report 77

VHM Limited

Notes to the Financial Statements

For the year ended 30 June 2023

Note 7: Loss Per Share	Consolidated
	2023 $ 2022 $
Loss after tax for the year Weighted average number of ordinary shares used in the calculation of basic loss per share Basic loss per share Note 8: Income Tax Expense	(17,916) (9,150)
	No. '000 No. "000 170,836 138,321
	Cents Cents 10.4 7.0

	Consolidated
	2023 $'000 2022 $’000
Income tax expense The major components of tax expense are: Accounting loss before tax from continuing operations Income tax (beneft) calculated at 25% (2022 – 25%) Non-deductible expenses Other deferred tax assets and tax liabilities not recognised Income tax expense	(17,916) (9,150) (4,479) (2,287) 1,408 315 3,071 1,973
	- -

Unrecognised deferred tax balances

Potential deferred tax assets attributable to tax losses carried forward of $14,400,000 (2022: $7,100,000) have not been brought to account at 30 June 2023 because the directors do not believe it is appropriate to regard realisation of the deferred tax assets as probable at this point in time. These tax losses will be available if future assessable income is derived of a nature and of an amount sufficient to enable the benefit to be realised and the conditions for deductibility imposed by the relevant tax legislation continue to be complied with and no changes in tax legislation adversely affect the Group in realising the benefit.

Note 9: Cash and Cash Equivalents	Consolidated
	2023 $'000 2022 $’000
Current Cash at bank Term Deposit Petty cash	4,932 24,365 15,715 - 2 1
	20,649 24,366

78 VHM Limited | 2023 Annual Report

VHM Limited

Notes to the Financial Statements

For the year ended 30 June 2023

Note 10: Other Assets	Consolidated
	2023 $'000 2022 $’000
Current Prepayments – IPO Prepayments – Insurance Prepayments – Other GST receivable Cash collateralised bank guarantees Note 11: Related Party Transactions	- 302 89 67 52 7 233 532 31 11
	405 919

	Consolidated
	2023 $'000 2022 $’000
Loan to VP Minerals	1,201 -
	1,201 -

Under the terms of the Intercompany Agreement and Loan Facility Agreement between the Company and its former subsidiary, VP Minerals Limited, certain services were provided, and third-party costs were incurred by VHM Limited. Such amounts were credited under the terms of the Loan Facility Agreement. At balance date, the loan receivable includes services charged to VP Minerals amounting to $110,000 that have been identified in the Statement of Profit or Loss and Other Comprehensive Income and Note 3 as Other Income. Interest is charged on the loan balance on a monthly basis at a rate of BBSW + 10%. The loan is secured and expected to be recoverable within 3 months of report date. VP Minerals is still a related party due to common Directors.

HWL Ebsworth Lawyers, a law firm of which non-executive director Mr Colless is a partner, has provided legal services to the Company, including advice on matters relating to the initial public offering of VHM Limited, material service and land purchase contracts, remuneration and employment agreements, corporate restructure, and taxation. Total fees of $612,559 were paid or were payable to HWL Ebsworth for the financial year ended 30 June 2023. Transactions between HWL Ebsworth and the Company are on normal commercial terms and conditions unless otherwise stated. At balance date, $39,377 (2022: $3,253) was outstanding to HWL Ebsworth Lawyers.

VHM Limited | 2023 Annual Report

VHM Limited

Notes to the Financial Statements

For the year ended 30 June 2023

Note 12: Deferred Exploration and Evaluation Expenditure	Consolidated
	2023 $'000 2022 $’000
Costs carried forward in respect of areas of interest in the following phases: Exploration and evaluation phase – at cost Movement in carrying amounts Exploration and evaluation phase at cost – inception to period commencement Exploration expenditure incurred (including share based payment expense) – current year Eligible exploration expenditure tax ofset rebate – prior years Eligible exploration expenditure tax ofset rebate – current year Sale of licences to VP Minerals Limited1	39,193 27,217
	39,193 27,217
	38,467 25,232 18,289 13,237 (11,251) (8,208) (4,441) (3,044) (1,871) -
	39,193 27,217

The recoupment of costs carried forward in relation to the exploration and evaluation phase activities on the Group’s retention and exploration licences is dependent upon the successful development and commercial exploitation or sale of the respective tenements.

Expenditure incurred includes employee expenses related to share-based payments of $1,265,275 (2022: $1,054,253) for options issued to employees directly engaged in exploration activities.

1 In accordance with the agreement signed on 18 July 2022, four exploration licenses – EL6895, EL6923, EL6926 and EL6915 were transferred to VP Minerals Limited, a wholly-owned subsidiary of the Company. An agreed consideration of $1,871,000 was payable of which $1,400,000 was the base consideration payable in shares, together with the aggregate amount of expenditure incurred by VHM from 1 January 2022 to the completion date. The demerger of VP Minerals was completed in August 2022, via the in-specie distribution of shares in VP Minerals to VHM shareholders.

80 VHM Limited | 2023 Annual Report

VHM Limited

Notes to the Financial Statements

For the year ended 30 June 2023

Note 13: Property, Plant and Equipment

==> picture [483 x 297] intentionally omitted <==

----- Start of picture text -----

Land
acquisition Property Fixtures Low
under Land and and and Motor value
Consolidated contract buildings equipment fittings vehicles pool Total
30 June 2023 $’000 $’000 $’000 $’000 $’000 $’000 $’000
Carrying amount –
at cost 14,490 1,280 436 29 292 42 16,569
Accumulated
depreciation - (24) (178) (27) (62) (5) (296)
14,490 1,256 258 2 230 37 16,273
Reconciliation
Opening balance –
1 July 2022 10,307 - 157 3 267 - 10,734
Additions 4,183 [(1)] 1,280 136 3 - 42 5,644
Disposals - - - - - - -
Depreciation - (24) (35) (4) (37) (5) (105)
Closing balance –
30 June 2023 14,490 1,256 258 2 230 37 16,273
----- End of picture text -----

1 Additions relate to purchase price adjustments. See Note 20 for further details.

==> picture [483 x 70] intentionally omitted <==

Carrying amount – at cost Accumulated depreciation Reconciliation Opening balance – 1 July 2021 Additions Disposals Depreciation Closing balance – 30 June 2022	10,307 - 299 25 291 - 10,922 - - (142) (23) (24) - (189)
	10,307 - 157 2 267 - 10,733
	10,307 - 39 79 97 - 10,522 - - 161 7 191 - 359 - - (10) (73) - - (83) - - (33) (11) (21) - (65)
	10,307 - 157 2 267 - 10,733

VHM Limited | 2023 Annual Report

VHM Limited

Notes to the Financial Statements

For the year ended 30 June 2023

Note 14: Right-of-Use Assets	Consolidated
	2023 $'000 2022 $’000
Carrying value: At cost Additions Accumulated depreciation Reconciliation: Opening balance Additions Depreciation	270 270 1,159 - (439) (265)
	990 5
	5 67 1,159 - (174) (62)
	990 5

The Group’s Right-of-Use assets comprise operating leases for office premises (refer to Note 18).

Note 15: Trade and Other Payables	Consolidated
	2023 $'000 2022 $’000
Trade creditors Accruals Others	2,497 2,785 575 495 19 356
	3,091 3,636

Trade and other payables amount represent liabilities for goods and services provided to the Group prior to the end of the financial period which are unpaid. The amounts are unsecured and are usually paid within 30 days of recognition.

Note 16: Borrowings

On 19 October 2022, Radium Capital provided a loan of $3,480,000 to the Company in respect of eligible R&D expenditure. The loan was repaid on 21 November 2022.

82 VHM Limited | 2023 Annual Report

VHM Limited

Notes to the Financial Statements

For the year ended 30 June 2023

Note 17: Convertible Notes Liability	Consolidated
	2023 $'000 2022 $’000
Current Convertible notes – face value Interest capitalised Convertible notes – issue costs Carrying value at period end Non-Current Convertible notes – face value Interest capitalised Convertible notes – issue costs Carrying value at period end	- 349 - 9 - (9)
	- 349
	- 35,180 - 693 - (1,800)
	- 34,073

In December 2022, 35,069,753 shares were issued upon the conversion of the Convertible Notes, with 34,745,679 of these shares being issued at a price of $1.0125 per share and 324,074 at $1.08.

	Consolidated
	2023 $'000 2022 $’000
Reconciliation Opening balance Issue of notes Interest capitalised Unamortised issue costs Conversion to shares Closing balance	34,422 3,532 - 31,840 1,108 629 - (1,579) (35,530) -
	- 34,422

VHM Limited | 2023 Annual Report

VHM Limited

Notes to the Financial Statements

For the year ended 30 June 2023

Note 17: Convertible Notes Liability (continued)

The table below provides a summary of all the convertible notes before conversion:

==> picture [484 x 401] intentionally omitted <==

----- Start of picture text -----

2021 2022 2023
Security Class Convertible Notes Convertible Notes T1 Convertible Notes T2
Number of securities 35 1,839 1,679
Face value ($) 10,000 10,000 10,000
Issue date 29/03/2021 15/03/2022 12/05/2022
Maturity Date 31/03/2023 31/01/2024 31/01/2024
convertible at the convertible at the convertible at the
Conversion right
election of the issuer election of the issuer election of the issuer
20% discount to the 20% discount to the
Offer Price if Conversion Offer Price if Conversion
occurred prior to occurred prior to
30 June 2022; 30 June 2022;
20% discount to the
Conversion price Offer Price 25% discount to the Offer Price if 25% discount to the Offer Price if
Conversion occurs prior Conversion occurs prior
to 31 December 2022, to 31 December 2022,
otherwise 30% discount otherwise 30% discount
if Conversion occurs if Conversion occurs
prior to Maturity Date prior to Maturity Date
In the event conversion In the event conversion In the event conversion
does not occur prior does not occur prior does not occur prior
Redemption at maturity to Maturity Date, 110% to Maturity Date, 110% to Maturity Date, 110%
of the face value of of the face value of of the face value of
the notes the notes the notes
----- End of picture text -----

84 VHM Limited | 2023 Annual Report

VHM Limited

Notes to the Financial Statements

For the year ended 30 June 2023

Note 18: Lease Liabilities	Consolidated
	2023 $'000 2022 $’000
Current liabilities Non-current liabilities Reconciliation Opening balance Additions Interest Principal repayments Closing balance	255 - 767 -
	1,022 -
	- 76 1,159 - 41 4 (178) (80)
	1,022 -

The Group entered into one lease during the year in December 2022 for the Melbourne office. The lease expires in November 2026.

Note 19: Provisions	Consolidated
	2023 $'000 2022 $’000
Employee benefts (annual leave and long service leave)	606 395
	606 395

The current provision for employee benefits includes all unconditional entitlements where employees have completed the required period of service. The long service leave is presented as current given the known departures after year end.

Based on past experience, the Group does not expect all employees to take the full amount of accrued leave or require payment within the next 12 months.

VHM Limited | 2023 Annual Report 85

VHM Limited

Notes to the Financial Statements

For the year ended 30 June 2023

Note 20: Land Acquisition Liabilities	Consolidated
	2023 $'000 2022 $’000
Carrying value: Current liabilities Non-current liabilities Reconciliation Opening balance Purchase price adjustment Plus: Interest expense Less: Repayments (principal plus interest) Closing balance at the end of the year	4,029 1,046 5,258 6,416
	9,287 7,462
	7,462 8,326 2,830 - 851 972 (1,856) (1,836)
	9,287 7,462

Key terms of the acquisition contracts are detailed in the below table:

==> picture [484 x 308] intentionally omitted <==

----- Start of picture text -----

Contract No.1 No.2 No.3
Purchase Price $6,550,000 $2,819,229 $1,416,403
Purchase Price adjustment $2,829,614 $1,353,914
Payments made $3,969,229 $434,225 $1,575,973
Balance $2,580,771 $5,214,608 $1,194,344
Monthly instalment Monthly instalment Monthly instalment
commencing commencing commencing
Terms January 2021 December 2020 December 2020
and ending and ending and ending
December 2025 December 2030 December 2030
Total cash instalments over period of
$6,000,000 $7,603,766 $3,744,687
purchase contract (including interest)
Discount rate per annum [1] 12% 12% 12%
Tenure 5 years 10 years 10 years
Notes (a), (b) (c), (d) (e), (f)
----- End of picture text -----

1 The discount rate has been used to estimate liabilities on a net present value basis.

86 VHM Limited | 2023 Annual Report

VHM Limited

Notes to the Financial Statements

For the year ended 30 June 2023

Note 20: Land Acquisition Liabilities (continued)

Other key terms and conditions of the new contracts:

a) If within 3 years after settlement GPB Land Holdings Pty Ltd acquires land from a third party within 10km of the land under Contract No.1 above a specified threshold amount, it must pay the contract No.1 vendor a price differential.
b) If GPB Land Holdings Pty Ltd determines to dispose the land under Contract No.1 after settlement, it must first offer it back to the vendor for the nominal amount of $1.
c) GPF Land Holdings Pty Ltd can effect early settlement by giving 9 months notice, but in that case a minimum of $3,394,301 (inclusive of all preceding monthly instalments) is payable at settlement with that settlement amount rising to $4,774,152 (inclusive of all preceding monthly instalments) as settlement approaches December 2030.
d) A one-off adjustment payment will be payable by GPF Land Holdings Pty Ltd under Contract No. 2 to reflect movement in land values from the initial date of the rescinded contract to February 2023, as calculated by an independent valuer.
e) A one-off adjustment payment was paid by GPF Land Holdings Pty Ltd under Contract No.3 to reflect movement in land values from the initial date of the rescinded contract to February 2023, as calculated by an independent valuer.
f) GPF Land Holdings Pty Ltd can effect early settlement by giving 9 months notice, but in that case a minimum of $1,699,779 (inclusive of all preceding monthly instalments) is payable at settlement with that settlement amount rising to $2,390,773 (inclusive of all preceding monthly instalments) as settlement approaches December 2030.

Settlement of all properties will occur upon the payment of the final instalment under the relevant contract.

Note 21: Land Compensation	Consolidated
	2023 $'000 2022 $’000
Land Compensation	2,002 -
	2,002 -

The Company entered into a Compensation Deed dated 19 August 2022 concerning approximately 2,500 acres of land which comprises a portion of the area required for the proposed operation of the Goschen mine. Compensation amounting to $2 million was paid to the landowner.

As noted in the Company’s Prospectus dated 21 November 2022, the Company will pay the landowner $150 per acre per annum from the date the operational period of the mine commences, amounting to an aggregate total of approximately $368,667 per annum. The Company will also pay the landowner $12,500 per annum towards travel expenses.

VHM Limited | 2023 Annual Report 87

VHM Limited

Notes to the Financial Statements

For the year ended 30 June 2023

Note 22: Issued Capital

Issued capital

Fully paid ordinary shares carry one vote per share and carry the right to dividends.

Ordinary Shares

	2023 Number 2022 Number 2023 $ 2022 $
Ordinary shares – fully paid	203,101,902 139,141,273 108,374,667 41,287,027

2023: Movement in ordinary shares

==> picture [483 x 403] intentionally omitted <==

----- Start of picture text -----

Issue Price
Date Shares ($) $
Balance 1 July 2022 139,141,273 41,287,027
Capital reduction due to in-specie
distribution of shares in VP Minerals [1] 17 August 2022 - - (1,870,869)
Shares issued upon exercise
of adviser options 23 August 2022 320,000 0.22 69,710
Shares issued upon exercise
of adviser options 23 August 2022 320,000 0.37 119,502
Transfer of options exercised from
- -
share based payment reserve 23 August 2022 176,134
Convertible notes converted into
shares (net of costs) 23 December 2022 35,069,753 1.01 35,530,000
Capital raising – net of costs 9 January 2023 22,222,222 1.35 28,126,591
Shares upon exercise of ZEPOs 20 January 2023 5,140,865 0.00 -
Transfer of options exercised from
- -
share based payment reserve 20 January 2023 4,328,096
Shares upon exercise of ZEPOs 13 February 2023 587,789 0.00 -
Transfer to options exercised from
- -
share based payment reserve 13 February 2023 428,476
Shares upon exercise of ZEPOs 24 May 2023 300,000 0.00 -
Transfer of options exercised from
- -
share based payment reserve 24 May 2023 180,000
203,101,902 108,374,667
----- End of picture text -----

1 Refer to Note 11 for further details of the demerger of VP Minerals.

88 VHM Limited | 2023 Annual Report

VHM Limited

Notes to the Financial Statements

For the year ended 30 June 2023

Note 22: Issued Capital (continued)

2022: Movement in ordinary shares

==> picture [483 x 473] intentionally omitted <==

----- Start of picture text -----

Issue Price
Date Shares ($) $
Balance 1 July 2021 137,107,627 40,193,238
23 August
Shares upon exercise of options
2021 432,440 1.05 454,061
23 August
Shares upon exercise of options
2021 1,344,000 0.38 503,999
23 August
Shares upon exercise of options
2021 74,375 0.35 26,030
Shares issued in lieu of salary 7 June 2022 182,831 0.60 109,699
139,141,273 41,287,027
Options
Opening (Lapsed)/ Closing
2023 balance Issued Exercised reinstated balance
Zero Exercise Price
- -
Options (ZEPOs) 10,405,811 (6,028,654) 4,377,157
- - -
Special exertion options 1,000,000 1,000,000
-
Adviser options 640,000 3,127,186 (640,000) 3,127,186
-
12,045,811 3,127,186 (6,668,654) 8,504,343
Opening (Lapsed)/ Closing
2022 balance Issued Exercised reinstated balance
Zero Exercise Price
Options (ZEPOs) 7,932,806 4,159,142 (1,850,815) 164,678 10,405,811
- - -
Special exertion options 1,000,000 1,000,000
Adviser options 640,000 - - - 640,000
8,572,806 5,159,142 (1,850,815) 164,678 12,045,811
----- End of picture text -----

VHM Limited | 2023 Annual Report

VHM Limited

Notes to the Financial Statements

For the year ended 30 June 2023

Note 23: Share Based Payment Reserve	Consolidated
	2023 $ 2022 $
Balance at beginning of year Value of share based payments capitalised to Deferred Exploration and Evaluation Expenditure Value of share based payments expensed Transfer to accumulated losses Transfer to issued capital (options exercised during current year) Balance at end of period Note 24: Accumulated Losses	5,638,150 4,939,923 1,265,275 1,054,253 2,090,156 1,046,797 - (418,733) (5,112,706) (984,090)
	3,880,875 5,638,150

	Consolidated
	2023 $'000 2022 $’000
Accumulated losses at the beginning of the year Loss for the year Transfer from share based payment reserve	(29,580) (20,849) (17,916) (9,150) - 419
	(47,496) (29,580)

90 VHM Limited | 2023 Annual Report

VHM Limited

Notes to the Financial Statements

For the year ended 30 June 2023

Note 25: Controlled Entities

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----- Start of picture text -----

Ownership interest
Principal place
Date of of business/country 2023 2022
Name incorporation of incorporation % %
Parent entity
VHM Limited (Previous Name: 31 July 2014 Australia - -
VHM Exploration Limited)
Controlled entities
GP Land Holdings Pty Ltd 5 February 2018 Australia 100% 100%
GPB Land Holdings Pty Ltd 3 July 2020 Australia 100% 100%
GPF Land Holdings Pty Ltd 3 July 2020 Australia 100% 100%
GPBJ Holdings Pty Ltd 11 May 2022 Australia 100% 100%
VP Minerals Limited [1] 26 November 2021 Australia 0% 100%
----- End of picture text -----

1 Refer to Note 11 for further details of the demerger of VP Minerals.

Note 26: Share Based Payments

Incentive Option Plan

The Group adopted an Incentive Option Plan (“IOP”) in 2019 as a way to provide incentives, assist with recruitment, reward, and retain employees and provide opportunities for employees (both present and future) to participate directly in the equity of the Company. The plan was superseded during the year when the Company adopted a new plan as set out in the prospectus.

Other share based payments

The Group makes share based payments to Directors, consultants and/or service providers from time to time, not under any specific plan.

Share based payment expenses are recognised in the Consolidated Statement of Profit or Loss and Other Comprehensive Income and, where appropriate, capitalised under exploration expenditure in the Consolidated Statement of Financial Position.

The share based payment expense for the reporting period is $3,355,431 (30 June 2022: $2,210,749) and relates to options over unissued shares. The expense has been recorded as follows:

	Consolidated
	2023 $'000 2022 $’000
Expensed in Consolidated Statement of Proft or Loss and Other Comprehensive Income Capitalised to Deferred Exploration and Evaluation Expenditure (Note 12)	2,090 1,157 1,265 1,054
	3,355 2,211

VHM Limited | 2023 Annual Report

VHM Limited

Notes to the Financial Statements

For the year ended 30 June 2023

Note 26: Share Based Payments (continued)

The following table illustrates the number and weighted average exercise prices and movements in share options issued during the year under the Incentive Option Plan and in accordance with shareholder approval of the Special Exertion Options issued to Non-Executive Directors:

2023	Number of Options Weighted average exercise price ($)
Outstanding at the beginning of the period Granted during the period Exercised during the period Lapsed during the period Outstanding at the end of the period	12,045,811 0.0988 3,127,186 2.0250 (6,668,654) 0.0285 - -
	8,504,343 0.8622

The share options outstanding at the end of the year had a weighted average exercise price of $0.86 and a weighted average time to maturity of 2.7 years.

2022	Number of Options Weighted average exercise price ($)
Outstanding at the beginning of the period Granted during the period Exercised during the period Reinstated during the period Outstanding at the end of the period	8,572,806 0.0219 5,159,142 0.1938 (1,850,815) - 164,678 -
	12,045,811 0.0988

The share options outstanding at the end of the year had a weighted average exercise price of $0.85 and a weighted average time to maturity of 2.7 years.

During the year ended 30 June 2023, the following options were issued:

Adviser options: 3,127,186 unlisted options allotted to CG Nominees (Australia) Pty Ltd for ongoing market advisory work.

92 VHM Limited | 2023 Annual Report

VHM Limited

Notes to the Financial Statements

For the year ended 30 June 2023

Note 26: Share Based Payments (continued)

The following table lists the inputs to the binomial valuation model used to value the options issued to the adviser during the year:

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Adviser options
Tranche 1 Tranche 2
Number 1,563,593 1,563,593
Grant date 1 February 2023 1 February 2023
Expiry date 1 August 2025 1 August 2025
Market vesting conditions Nil Nil
Share price $0.96 $0.96
Exercise price $1.89 $2.16
Risk free rate 3.19% 3.19%
Early exercise multiple 2.5x 2.5x
Expected share price volatility 75% 75%
Dividend yield Nil Nil
Fair value per option $0.2756 $0.2457
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VHM Limited | 2023 Annual Report

VHM Limited

Notes to the Financial Statements

For the year ended 30 June 2023

Note 27: Cashflow Information

Reconciliation of cash flows from operating activities with loss from ordinary activities after income tax:

	Consolidated
	2023 $'000 2022 $’000
Loss for the year Add back non-cash items: Depreciation Surrender of lease expense Shares issued in lieu of fees Share based payment expense Loss on disposal of property, plant and equipment Service charge VP Minerals Borrowing and interest expense (fnancing outfow) Changes in assets and liabilities: Decrease/(Increase) in other assets (Increase)/Decrease in prepayments Increase in annual leave liability Increase in operating payables Net cash outfows from operating activities	(17,916) (9,150) 279 126 - 76 - 110 2,090 1,047 - (2) (110) - 4,454 2,431 191 (681) (55) 246 211 24 369 1,784
	(10,487) (3,989)

Note 28: Segment Information

The Group has identified its operating segments based on the internal reports that are reviewed and used by the board of directors in assessing performance and determining the allocation of resources. Reportable segments disclosed are based on aggregating operating segments, where the segments have similar characteristics.

The reportable segment is represented by the primary statements forming these financial statements.

94 VHM Limited | 2023 Annual Report

VHM Limited

Notes to the Financial Statements

For the year ended 30 June 2023

Note 29: 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:

	Consolidated
	2023 $ 2022 $
Short-term employee benefts Post-employment benefts Share-based payments Note 30: Parent Entity Disclosures	2,603,949 1,937,765 146,327 115,237 2,131,314 912,523
	4,881,590 2,965,525

	2023 $'000 2022 $’000
Balance sheet Current assets Non-Current assets Total assets Current liabilities Non-Current liabilities Total liabilities Net assets Equity Issued capital Reserves Accumulated losses Loss after income tax Total comprehensive loss for the year	22,255 25,285 56,511 37,975
	78,766 63,260 7,981 5,426 6,025 40,489
	14,006 45,915
	64,760 17,345
	108,375 41,287 3,881 5,638 (47,496) (29,580)
	64,760 17,345
	(17,916) (9,150) (17,916) (9,150)

VHM Limited | 2023 Annual Report

VHM Limited

Notes to the Financial Statements

For the year ended 30 June 2023

Note 31: Commitments and Contingencies

Exploration commitments:

Under the terms of mineral tenement licences held by the Group, minimum annual expenditure obligations are required to be expended during the forthcoming financial year in order for the tenements to maintain a status of good standing.

This expenditure may be subject to variation from time to time in accordance with the relevant state department’s regulations. The Group may at any time relinquish tenements and as such avoid the requirement to meet applicable expenditure requirement or may seek exemptions from the relevant authority.

Expenditure commitments at the reporting date but not recognised as liabilities are as follows:

	Consolidated
	2023 $'000 2022 $’000
Within one year Later than a year but not later than fve years Later than fve years Total	1,800 2,349 5,399 3,587 - -
	7,199 5,936

Commitment for land compensation

As disclosed in Note 21, the Company will pay the landowner $150 per acre per annum from the date the operational period of the mine commences, amounting to an aggregate total of approximately $368,667 per annum. The Company will also pay the landowner $12,500 per annum towards travel expenses.

Contingent liabilities

A liability for payroll tax will arise in respect of certain of the Company’s employee options issued in prior financial years on the exercise of those employee options. The Company’s present estimate of potential liability is approximately $355,000. The extent and timing of any liability will be dependent on the Company’s share price as at the time of exercise of the employee options.

Note 32: Financial Risk Management and Financial Instruments

The activities of the Group expose it to a variety of financial risks, including market risk, credit risk and liquidity risks. The Group’s overall risk management program focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the financial performance of the business. The Group employs different methods to measure different types of risk to which it is exposed. These methods include sensitivity analysis in the case of interest rate, and other price risks and ageing analysis for credit risk.

This note presents information about the Group’s exposure to each of the above risks, their objectives, policies, and processes for measuring and managing risk, and the management of capital.

The Board of Directors has overall responsibility for the establishment and oversight of the risk management framework. Management monitors and manages the financial risks relating to the operations of the Group through regular reviews of the risks.

96 VHM Limited | 2023 Annual Report

VHM Limited

Notes to the Financial Statements

For the year ended 30 June 2023

Note 32: Financial Risk Management and Financial Instruments (continued)

Market Risk

Interest Rate Risk

The Group may be exposed to interest rate risk through financial assets and liabilities. The risk is measured using sensitivity analysis and cash flow forecasting.

At 30 June 2023, if interest rates had increased/decreased by 100 basis points from the weighted average effective rate for the year, with other variables constant, the (loss)/profit for the year would have been $247,058 lower (June 2022: $121,802)/ $247,058 higher (June 2022: $121,802).

None of the financial assets and financial liabilities are readily traded on organised markets in standardised form. The carrying amounts of financial assets and financial liabilities are materially in line with their fair values.

The Group manages its capital to ensure that entities in the Group will be able to continue as a going concern while maximising the return to stakeholders through the optimisation of the debt and equity balance.

The Group’s overall strategy remains unchanged from 2022.

The capital structure of the Group consists of cash and cash equivalents, and equity attributable to equity holders of the parent, comprising issued capital, reserves and retained earnings.

None of the Group’s entities are subject to externally imposed capital requirements.

Operating cash flows are used to maintain and expand operations, as well as to make routine expenditures such as tax, dividends, and general administrative outgoings.

The following table summarises interest rate risk for the Group, together with effective interest rates as at balance date.

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Weighted
average Floating Non-
effective interest 1 year Over interest
interest rate or less 1 year bearing Total
2023 rate $’000 $’000 $’000 $’000 $’000
Financial Assets
Cash and cash equivalents 2.89% 4,672 15,715 - 263 20,650
Loans and advances 1,201 - - - 1,201
Other receivables - - 55 264 319
Total Financial Assets 5,873 15,715 55 527 22,170
Financial Liabilities
- - -
Trade and other payables 3,091 3,091
Lease liabilities 6.46% - 313 833 - 1,146
Land acquisition liabilities 12% - 1,875 6,635 297 8,807
Total Financial Liabilities - 2,188 7,468 3,388 13,044
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VHM Limited | 2023 Annual Report

VHM Limited

Notes to the Financial Statements

For the year ended 30 June 2023

Note 32: Financial Risk Management and Financial Instruments (continued)

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Weighted
average Floating Non-
effective interest 1 year Over interest
interest rate or less 1 year bearing Total
2022 rate $’000 $’000 $’000 $’000 $’000
----- End of picture text -----

Financial Assets Cash and cash equivalents 1.3% Other receivables Total Financial Assets Financial Liabilities Trade and other payables Convertible Notes 10% Land acquisition liabilities 12% Total Financial Liabilities	24,251 - - 115 24,366 - - - 563 563
	24,251 - - 678 24,929
	- - - 3,635 3,635 - 349 34,073 - 34,422 - 1,819 8,509 256 10,584
	- 2,168 42,582 3,891 48,641

Credit Risk Exposures

Credit risk is the risk that a counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. The Group is exposed to credit risk from its operating activities and from its financing activities, including deposits with banks and financial institutions, foreign exchange transactions and financial instruments.

As the Group is exclusively involved in exploration rather than trading there is currently very little credit risk. For banks and financial institutions, only reputable institutions with sound financial positions are dealt with.

Liquidity and Capital Risk

The Group’s total capital is defined as the shareholders’ net equity plus any net debt. The objective when managing the Group’s capital is to safeguard the business as a going concern, to maximise returns to shareholders and to maintain an optimal capital structure in order to reduce the cost of capital.

The Group does not have a target debt/equity ratio but has a policy of maintaining a flexible financing structure so as to be able to take advantage of investment opportunities when they arise. There are no externally imposed capital requirements. Whilst the Group is in an exploration phase, it is unlikely to operate with debt capital, although this may change as projects become more advanced.

There have been no changes in the strategy adopted by management to control the capital of the Group since the prior year.

Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due. The Group’s approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Group’s reputation.

The risk is measured using sensitivity analysis and cash flow forecasting. The Group manages liquidity risk by maintaining adequate reserves by continuously monitoring its forecasted and actual cash flows.

98 VHM Limited | 2023 Annual Report

VHM Limited

Notes to the Financial Statements

For the year ended 30 June 2023

Note 32: Financial Risk Management and Financial Instruments (continued)

If the Group anticipates a need to raise additional capital in the next 12 months to meet forecast operational activities, then the decision on how the Group will raise future capital will depend on market conditions existing at that time.

Typically, the Group ensures that it has sufficient cash on demand to meet expected operational expenses for a period of 60 days, including the servicing of financial obligations; this excludes the potential impact of extreme circumstances that cannot reasonably be predicted, such as natural disasters.

Fair Value Estimation

The Directors consider that the carrying amount of financial assets and financial liabilities, as recorded in the financial statements, represent, or approximate their respective fair values. The Group’s financial assets and liabilities are measured at amortised cost. Therefore, the disclosures required by AASB13: Fair Value Measurement , of the fair value measurement hierarchy have not been made.

Note 33: Events Subsequent To Balance Date

Michael Allen and Gamini Colless resigned from the Board on 18 August 2023. Maree Arnason, Ron Douglas and Ian Smith were appointed to the Board as Non-Executive Directors on 18 August 2023.

Subject to shareholder approval, Don Runge, Graham Howard and the 3 newly appointed Board members will be granted 500,000 options exercisable at $1.35, expiring 3 years from the date of issue and vesting on 17 August 2024.

VHM Limited | 2023 Annual Report

Directors’ Declaration

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

Graham Howard Managing Director 20 September 2023

100 VHM Limited | 2023 Annual Report

Independent

INDEPENDENT AUDITOR’S REPORT Auditor’s Report

To the Members of VHM Limited

Report on the Audit of the Financial Report

Opinion

We have audited the financial report of VHM Limited (“the Company”) and its controlled entities (“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:

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

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.

We have determined the matter described in the next page to be the key audit matter to be communicated in our report .

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101

VHM Limited | 2023 Annual Report

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Key Audit Matter How our audit addressed the key audit matter Deferred exploration and evaluation expenditure Refer to Note 12 of the financial report In accordance with AASB 6 Exploration for and Our procedures included but were not limited to Evaluation of Mineral Resources , the Group the following: capitalises all exploration and evaluation - Obtaining an understanding of the key expenditure, including acquisition costs and processes associated with management’s subsequently applies the cost model after review of the carrying value of deferred recognition. exploration and evaluation expenditure; - Considering the Directors’ assessment of Deferred exploration and evaluation expenditure potential indicators of impairment in addition to was determined to be a key audit matter as it is making our own assessment; important to the users’ understanding of the - Obtaining evidence that the Group has current financial statements as a whole and was an area rights to tenure of its areas of interest; which involved the most audit effort and - Considering the nature and extent of future communication with those charged with planned ongoing activities; governance. - Checking the impact of the application of the research and development tax incentive refund offset against the capitalised exploration and evaluation expenditure balance; - Substantiating a sample of expenditure by agreeing to supporting documentation; and - Examining the disclosures made in the financial report.

Information Other than the Financial Report and Auditor’s Report Thereon

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 our 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.

102 VHM Limited | 2023 Annual Report

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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 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.

As part of an audit in accordance with the Australian Auditing Standards, we exercise professional judgement and maintain professional scepticism throughout the audit. We also:

Identify and assess the risks of material misstatement of the financial report, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group’s internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the directors.
Conclude on the appropriateness of the directors’ use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial report or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Group to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the financial report, including the disclosures, and whether the financial report represents the underlying transactions and events in a manner that achieves fair presentation.

We communicate with the directors regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide the directors with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

From the matters communicated with the directors, we determine those matters that were of most significance in the audit of the financial report of the current period and are therefore the key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

VHM Limited | 2023 Annual Report 103

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REPORT ON THE REMUNERATION REPORT

Opinion on the Remuneration Report

We have audited the Remuneration Report included in the directors’ report for the year ended 30 June 2023.

In our opinion, the Remuneration Report of VHM Limited 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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HLB Mann Judd Chartered Accountants

L Di Giallonardo Partner

Perth, Western Australia 20 September 2023

104 VHM Limited | 2023 Annual Report

Additional Shareholder Information

The shareholder information set out below was applicable as at 30 August 2023.

Distribution of Equitable Securities

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

	Ordinary shares Exercisable $1 options Exercisable $1.89 options Exercisable $2.16 options
	Number of holders % of total issued Number of holders % of total issued Number of holders % of total issued Number of holders % of total issued
1 to 1,000 1,001 to 5,000 5,001 to 10,000 10,001 to 100,000 100,001 and over	214 0.07 - - - - - - 500 0.74 - - - - - - 276 1.11 - - - - - - 802 15.64 - - - - - - 287 82.44 2 100 1 100 1 100
	2,079 100 2 100 1 100 1 100

There are 155 holders holding less than a marketable parcel of ordinary shares as at 30 August 2023.

ZEPO Expiring 31/12/2024 ZEPO Expiring 28/2/2026 Number of holders % of total issued Number of holders % of total issued	ZEPO Expiring 31/12/2024 ZEPO Expiring 28/2/2026 Number of holders % of total issued Number of holders % of total issued	ZEPO Expiring 31/12/2024 ZEPO Expiring 28/2/2026 Number of holders % of total issued Number of holders % of total issued	ZEPO Expiring 19/5/2027 Number of holders % of total issued	ZEPO Expiring 19/5/2027 Number of holders % of total issued	ZEPO Expiring 19/5/2027 Number of holders % of total issued
1 to 1,000
1,001 to 5,000
5,001 to 10,000
10,001 to 100,000
100,001 and over	1	100 3 100	6		100
Unlisted Options
		Holders with more than 20%	Number of holders Number
ZEPO expires 19/05/2027		2 – Employee incentive scheme		6	3,115,392
ZEPO expires 31/12/2024		1 – Employee incentive scheme		1	634,375
ZEPO expires 28/02/2026		2 – Employee incentive scheme		3	627,390
Exercisable $1.00, expires	31/07/2025	2 – Employee incentive scheme		2	1,000,000
Exercisable $1.89, expires	01/08/2025	CG Nominees (Australia) Pty Ltd		1	1,563,593
Exercisable $2.16, expires	01/08/2025	CG Nominees (Australia) Pty Ltd		1	1,563,593
Total unlisted options					8,504,343

VHM Limited | 2023 Annual Report 105

Equity Security Holders

Twenty largest quoted equity security holders

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

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Ordinary shares
% of total
Number shares
held issued
----- End of picture text -----

Ordinary shares
Number
held
% of total
shares
issued

ELLISON (WA) PTY LTD
ACN 664 400 382 PTY LTD
MEGA HOLDINGS PTY LTD
REDMONT RESOURCES PTY LTD
AGENS PTY LTD
ADFAR PTY LTD
FLOWER & DOUGH PTY LTD
MR DAMIEN LENNARD HARRIS
ARC GEOSCIENCES PTY LTD
DONALD GEORGE RUNGE & LYNETTE RUNGE
MS CHRISTINE ALEXANRA STANDING
RBJ NOMINEES PTY LTD
PETER IRVINE RUNGE & NOELA JEAN RUNGE
NAVIGATOR AUSTRALIA LTD
MICHAEL BARRY ALLEN
MR CONLEY MICHAEL MANIFIS
HEAVILY VALUABLE INVESTMENTS PTY LTD
CITIVIEW PTD LTD
PETER IRVINE & NOELA JEAN RUNGE
CAMIRA HOLDINGS PTY LTD

18,007,539
8.87
9,937,293
4.89
5,805,691
2.86
5,260,957
2.59
4,461,580
2.20
3,688,776
1.82
3,253,800
1.60
2,802,286
1.38
2,697,333
1.33
2,596,572
1.28
2,304,000
1.13
2,246,000
1.11
2,000,000
0.98
1,881,470
0.93
1,871,102
0.92
1,769,199
0.87
1,632,000
0.80
1,558,350
0.77
1,500,000
0.74
1,456,639
0.72

76,730,586
37.78

Substantial Holders

Substantial holders in the Company are set out below:

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Ordinary shares
% of total
Number shares
held issued
ELLISON (WA) PTY LTD 18,007,539 8.87
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106 VHM Limited | 2023 Annual Report

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 with voting rights.

Securities Subject to Escrow

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Number held Escrow end date
----- End of picture text -----

Fully paid ordinary shares – escrowed 12M	27,164,494	09/01/2024
Fully paid ordinary shares – escrowed 24M	49,396,412	09/01/2025
Employee options @ nil expiring 31/12/2024	634,375	09/01/2025
Employee options @ nil expiring 28/02/2026	423,938	09/01/2025
Employee options @ nil expiring 19/05/2027	1,097,917	09/01/2025
Unlisted options @ $1.00 expiring 31/07/2025	1,000,000	09/01/2025

On-Market Buy-Back

VHM currently has no on-market buy-back programme.

Group Cash and Assets

In accordance with Listing Rule 4.10.19, the Group confirms that it has used the cash and assets in a form readily convertible to cash that it had at the time of admission in a way that is consistent with its business objective and strategy for the period from its admission to 30 June 2023.

107

VHM Limited | 2023 Annual Report

Mining Tenements Held by VHM Limited

Table 5: VHM Limited tenements

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Licence Location Registered Project Status Area Grant date Expiry Date
Number Holder (km [2] )
----- End of picture text -----

RL6806	North West Victoria	VHM Ltd	Goschen	Current	311	10/01/2020	9/01/2027
EL 6419	North West Victoria	VHM Ltd	Cannie	Current	443	18/05/2018	17/05/2028
EL 6664	North West Victoria	VHM Ltd	Cannie	Current	618	18/06/2018	17/06/2028
EL 6666	North West Victoria	VHM Ltd	Nowie	Current	447	18/06/2018	17/06/2028
EL 6769	North West Victoria	VHM Ltd	Exploration	Current	1041	27/08/2018	26/08/2023
Total Km2					2,860
Tenements	pending transfer to	VPM1
EL 7827	North West Victoria	VHM Ltd	Exploration	Current	335	15/08/2022	14/08/2027
EL 7807	North West Victoria	VHM Ltd	Exploration	Current	421	15/08/2022	14/08/2027
EL 7810	North West Victoria	VHM Ltd	Exploration	Current	424	15/09/2022	14/9/2027
EL 7803	North West Victoria	VHM Ltd	Exploration	Current	609	11/10/2022	10/10/2027
Total Km2					1,789

1 These tenements are to be transferred to VP Minerals 12 months after the grant date of all licenses pursuant to the Demerger Asset Sale Agreement i.e. 11 October 2023.

108 VHM Limited | 2023 Annual Report

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Suite 1 Level 11 330 Collins Street Melbourne VIC 3000

Australia [email protected] www.vhmltd.com.au ACN 601 004 102

AI assistant

VHM LIMITED — Annual Report 2023

66004_rns_2023-10-02_0d0c2a48-15f0-4a32-a9b8-c4c410f314c9.pdf

Contents

Corporate Directory

Directors

Former Directors

Company Secretary

Notice of Annual General Meeting

Registered Office

Prinicipal Office

Share Registry

Auditor

Solicitors

Bank

Stock Exchange Listing

Website

Corporate Governance Statement

Company Information

Letter from the Chairman

Board of Directors

Don Runge

Member of the Nomination and Remuneration Committee

Member of the Audit and Risk Committee

Graham Howard

Member of the Operations, Safety and ESG Committee Member of the Nomination and Remuneration Committee

Ian Smith

Non-Executive Director

Current Listed Directorships:

Non-Executive Director

Current Listed Directorships:

Ron Douglas

Non-Executive Director

Key Highlights

No Reportable Incidents or Injuries

Advanced Approvals

All environmental and

Project of National Significance

Discovery of new Major Critical Minerals Province in Victoria

social assessments complete.

Critical Minerals

87%

Advanced Flowsheet

Review of Operations

ASX Listing

Asset Overview

Goschen Project

Project Maturity

FY2023 Milestones

Goschen Project Definitive Feasibility Study Refresh

Advancing the Goschen Project (Phase 1)

5Mtpa >20 years

9.4ktpa REMC

$564 million 44% Revenue IRR

134.5ktpa HMC

8.5ktpa MREC

$1.5 billion 2.8 years NPV Payback Initial 10 year average From commencement nominal price forecast of production

Goschen Project Detailed Engineering

Non-Process Infrastructure Early Contractor Involvement

Tailings Facilities Test Work and Detailed Engineering

Mining Contractor

Advancing the Hydromet Plant (Phase 1A)

Pre-Engineering Studies

Cannie Project

Project Maturity

FY2023 Milestones

Managing Director Graham Howard

Nowie Project

Project Maturity

FY2023 Milestones

Approvals and Licence Updates

Permitting Update

Mining Licence Application

Land Access Agreements

Sustainability

Environment

Climate Change

Social

People and Culture

Health and Safety

VHM LIMITED Annual Report 2023