Aeon Metals 2021 Annual Report by APM Graphics Management

2021

Annual Report

ABN 91 121 964 725

aeonmetals.com.au

Corporate Directory Directors

Auditors

Fred Hess (managing director)

BDO Level 11, 1 Margaret Street Sydney, NSW, 2000

Paul Harris (non-executive chair) Ivan Wong (non-executive director) Andrew Greville (non-executive director)

Company Secretary David Hwang

Registered Office Aeon Metals Limited Automic Pty Ltd Level 5 126 Phillip Street Sydney, NSW, 2000 Ph: 07 5574 3830 Web: www.aeonmetals.com.au Email: info@aeonmetals.com.au ACN: ABN:

121 964 725 91 121 964 725

Ph: 02 9251 4100

Share Registry Boardroom Pty Limited Grosvenor Place Level 12, 225 George Street Sydney, NSW, 2000 Ph: 02 9290 9600 ASX Code: AML

Tenement Managers Ardent Group Pty Ltd 159 Musgrave Road Red Hill, QLD, 4059 Ph: 07 3368 1033

Contents Chair’s Letter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 Directors’ Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 Remuneration Report – audited . . . . . . . . . . . . . . . . . . . 20 Auditor’s Independence declaration . . . . . . . . . . . . . . 24 Consolidated Financial Statements . . . . . . . . . . . . . . . 25 Consolidated Statement of Financial Position . . . . . . . 25 Consolidated Statement of Profit or Loss and Other Comprehensive Income . . . . . . . . . . . . . . . . 26 Consolidated Statement of Changes in Equity . . . . . . . 27 Consolidated Statement of Cash Flows . . . . . . . . . . . . . 28 Notes to the Consolidated Financial Statements . . . 29 Directors’ Declaration . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51 Independent Auditor’s Report . . . . . . . . . . . . . . . . . . . . 52 Additional Information . . . . . . . . . . . . . . . . . . . . . . . . . . . 56

AeonMetalsAnnualReport201b/b 1

Chair’s Letter Dear fellow shareholder, It is my pleasure to present the Aeon Metals Annual Report for 2021.

thasbeenayearofsigniQcantevolution,bothacross tous the atBoardlevel.DrFredHessassumedtheCEOroleon worldandforAeonitself.wouldliketobeginbyoering aninterimbasisinMarch201.Afteranin-depthreviewof mysincerethanksandgratitudetoallouremployees theWalfordCreekProjectandopportunityset,heaccepted andcontractorsfortheirworkoverthelast12months. anoerfromtheBoardtobecomethepermanent-Manag nachallengingglobalenvironmentourpeople - have ing per DirectorandCEOinJune201.Fredisanexperienced severed,conscientiouslyworkingwithintherestrictions metallurgist,projectdeveloper,mineoperator, andexec imposedonthembytheCOVD-19pandemic.Toyouall, utiveleader,withastrongtrackrecordofprojectdeliver saythankyouforyouendeavourstheyhavenotgoneandvaluerealisation.amdelightedthathehascommitted unnoticed. toguidingAeonontheexcitingpathahead.

ForAeon,thepastyearhasbeenoneofsigniQcantchange UnderFred$sleadership,wehaveembarkedonchanges andprogress.WewelcomedanewCEOtothebusiness, instrategicdirectionfortheWalfordCreekProjectthat butintheformofanindividualwhowasalreadywellhave known beentransformational.Wehaveembracedarevised

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o sheet o ussed on a i ising re o eries and produ n tehal o the Aeon oard ould li e to nish ith paya ilities a ross the ull suite o in situ etal alue athatouple o urther e pressions o than s he rst is to lies ithin the al ord ree deposits As a preli inaryour pre ious Managing ire tor and a ish ollins step this ul inated in the release o a re ised opingho departed Aeon in Mar h 2021 a ish ade an tudy or the al ord ree ro e t in une 2021 enor his ous ontri ution to the gro th o Aeon through study as ased on ul sulphide otation ollo ed the y a uisition e ploration su ess and de elop ent o pressure o idation lea hing as the pre erred pro essingthe al ord ree ro e t sin e oining the o pany in path ay portantly it de onstrated the te hni al and 2012 ould li e to say than you to a ish and ish e ono i ia ility o the al ord ree ro e t under hi all the ery est in his uture endea ours he se ond hat e elie e to e a set o relati ely onser ati is e to our a or shareholder and lender Asia our te hni al and e ono i assu ptions ongoing support or the usiness is a ey dri er o our urrent positioning and opportunity set e are no pro eeding rapidly to ards o pletion o a o prehensi e re easi ility tudy underloo this or ard to o uni ating ith all attending de elop ent odel hi h is due or o pletion during shareholders at our 2021 Annual eneral Meeting 1o alendar 2022 e loo or ard to presenting All the est and stay ell the out o es o this ore detailed and rigorous study ours aith ully progra to all shareholders Aeon has also rein igorated its e ploration agenda signi antly o er re ent onths his eatures a dual approa h su stantial resour e e tensional and in ll drilling at al ord ree oupled ith enhan ed regional e ploration a ti ities targeted at ier 1 opper dis o eries e are pursuing these progra s aggressi ely into 2022 and are e ited in parti ular y the ne geophysi ally generated targets announ ed re ently a pleased to say that Aeon ontinues to target leading pra ti e ith respe t to ne pro e t de elop ent in ter s o rene a le energy supply penetration and en iron ental sa eguarding e are proud to e ad an ing a pro e t set to produ e a range o etals integral to a rapidly de ar onising orld

Aeon Metals Annual Report 2021 /b 3

Directors’ Report For the year ended 30 June 2021 The directors present their report, together with the financial report of the Group, comprising Aeon Metals Limited (the “Company” or “Aeon”) and its controlled entities (together, “the Group”) for the year ended 30 June 2021 and the Independent Auditor’s report thereon.

Directors

ThedirectorsoftheCompanyatanytimeduringorsince TheGroup$smineralassetsotherwisecomprisea the end of the reporting period are: regionallyextensive,butdisparate,tenementholdingin Queensland,namely: 3 DrFredHess(ManagingDirector)appointed

3 3 3 3

12March201,previouslyaNon-ExecutiveDirector MrPaulHarris(Non-ExecutiveChair) MrvanWong(Non-ExecutiveDirector)

A10%interestinpermitscomprising:

3 3 3

MrAndrewGreville(Non-ExecutiveDirector) MrHamishCollins(ManagingDirector)resigned 26March201

GreaterWhitewashPolymetallicProject (GreaterWhitewash(); BenHurCopperProject(BenHur();and 7BCopper/GoldProject(7B().

3 A10%interestintheForsythGoldProject. 3 VariousinterestsinpermitsofthesaNorthbase Thedirectorshavebeeninozcesincethestartofthe metalsEPMsandMDLs. Qnancialperiodtothedateofthisreport - unlessother wisestated.nformationoneachperson$squaliQcations, 3 Various interests in permits of the Isa West base experienceandspecialresponsibilitiesisgivenlater metals inthe EPMs. Directors$report. Various interestsinpermitsofthesaSouth 3

Company Secretary

copper-goldEPMs.

VariousinterestsinpermitsoftheConstanceRange basemetalsEPMs. TheCompanySecretaryattheendoftheQnancialperiod wasMrDavidHwang. TherewerenosigniQcantchangesinthenatureofthe Group$sprincipalactivitiesduringtheQnancialperiod. DetailsofMrHwang$sskillsandexperiencearedetailed later in this Report.

Principal Activities

Operating and financial review Operating Results

TheprincipalactivitiesoftheGroupduringtheQnancial ThelossoftheGroupamountedto$6,058(2: period were: $5,402)includingimpairmentlossesof$1,40 (20:$3,15). 3 TheexplorationanddevelopmentoftheWalford Creek(10%owned)Copper-Cobaltproject Dividends (WalfordCreek(ortheProject(). Nodividendswerepaidordeclared,andnodividends havebeenrecommendedbytheDirectors(20:$Nil).

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Review of operations

Directors' Report

nlateAugust,ourmajorshareholderanddebtprovider, OCPAsia(OCP),announcedthatithadextendedthe - matu ThepastyearhasbeenoneofsigniQcantchangeforAeon, ritydateforourexistingdebtfacilityto17December203. markedbytheembraceoffreshapproaches.Ourbusiness Thenewmaturitydateiswellpasttheexpectedcompletion hastransitionedtoanezcientdistributedwork model date ofatargetedFeasibilityStudy(followingthePFS)and underthevariouswavesofCOVD-19inducedrestrictions. decisiontodeveloptheWalfordCreekProject. WealsofarewelledourlongservingManagingDirectorand CEO,HamishCollins,andappointedDrFredHessashisnaddition,OCPcontinueditslong-termsupportof Aeonwhenitparticipatedstronglyinthe$9.5million replacement. placementthatweundertookinJuly201.Aspartofthis However,perhapsthemostimportantchangeisthat process,wealsobroadenedtheregisterwith anum AeonhasadoptedarevisedprocessRowsheetthat oers ber ofnewinstitutionalshareholdersandsophisticat thepotentialtoQnallyunlockthesubstantialinvestors, in-situvalue demonstratingstrongsupportforourfresh containedwithintheWalfordCreekdeposit.Wehave approachtotheWalfordCreekmetallurgy. updatedourMineralResourceEstimatesfortheVardy andMarleyzones,which,inconjunctionwiththerevised Executive Changes Rowsheet,hasallowedboththeopencutand - under groundminingschedulestobere-optimised.Thisresulted nMarch201,previousManagingDirectorandCEO, inprojectthroughputscaleincreasingby50%to3MtpaMr.HamishCollins,resignedafter10yearsofserviceto andminelifebeingextendedto14years.Theculmination Aeon.Hewasreplaced,initiallyinaninterimcapacity, ofthisworkwasthereleaseofarevisedScopingStudy in and subsequentlypermanently,byexistingnon-executive June201andthedecisiontoproceedtocompletionofadirector,DrFredHess. Pre-FeasibilityStudy(PFS),whichistargetedforcompletion MrCollinswasresponsiblefortheacquisition, substan in Q1 CY2022. tialresourceexpansionandinitialstudyprogressionof ThesesuccesseshavealsoprovidedAeonwiththe theWalfordCreekCopper-CobaltProject.DrHesshas conQdencetofurtherexploreourWalfordCreek tene astrongmetallurgicalbackgroundandfollowinghis ments.n-QlldrillingoftheVardyandMarleyzoneswill appointmenthasoverseenchangestotheprocess Row furtherincreaseclassiQcationconQdencewhile providing sheet thathaveresultedintheadoptionofbulksulphi additionalcoreformetallurgicaltestwork.Following this it Rotation and pressureoxidationleaching. isproposedtoconductadrillingcampaigntoensurethat LongstandingExplorationManager,MrDanJohnson asigniQcantlylargerproportionofthe6kmofsparsely resignedinAugust201andhasbeenreplacedby drilled Amy strike length is further drilled to allow further MrPeterMoorhouse.naddition,MrJeBottinghas expansionoftheexistingWalfordCreekMineralResource takenupthenewroleofProjectManagertoadvance Estimates. theprojectexecutionandrelatedengineeringelement Subsequenttoyearend,Aeonreleasedtheresults of WalfordCreekProject. ofthe highresolutionairbornemagneticandground-based gravitysurveyswhichhaveidentiQedanumberofnew Walford Creek Copper-Cobalt Project drilltargetareastoexplore.Ofparticularinterestisthe Study Progress largedensebodiessittingbelowthePy3horizoninPre-Feasibility the Walford dolomites beneath both the Vardy and Marley PriortoMarch201,Aeonwaspursuingaprocess zones. RowsheetforWalfordCreekthatrequiredasequential

basemetalRoataimingtoproducesaleablebasemetal AndQnally,wehavemadetheQrststeptowardsbuilding concentrates(copper,zinc,lead)followedbypyrite leach onourWalfordCreekexplorationsuccessesbytargeting 2 ing to extract predominantly cobalt and nickel. Following theregionalpotentialofourextensive )tene (4,6kmdisappointing testworkresults,andthearrivalofanew mentpackageidentifyingasubstantialOCGsystem at ManagingDirectorandCEO,thedecisionwasmadeto BeauchampstothewestofMountsa. undertakeaholisticreviewoftheprocessRowsheet. nadditiontopursuingourorganicgrowthstrategy,Aeon Thisreview,conductedwiththebeneQtoftheextensive hasalsoreviewedseveralexternalgrowthopportunities bodyofcompletedRotationandleachtestworkgathered overthepastyear.Todate,noneoftheseopportunities over severalyears,resultedintheadoptionofafresh hasbeensuzcientlyattractivetoadvancebeyond the approachtoextractingthevariousmetals.Therevised preliminaryevaluationandduediligencestage.Aeon Rowsheettargetstheproductionofabulksulphide remains alert to any new potential growth options that concentrate(containingcopper,lead,zinc,silver,cobalt maycomplementourexistingfocusondevelopingthe andnickel)whichisthensubjectedtopressureoxidation WalfordCreekCopper-CobaltProjectandundertaking leaching regionalexplorationactivitiestofurtherenhance andtoyieldsaleableendproductsofbothhigher qualityandquantitythanpreviouslypursued. diversifyshareholdervalue.

AeonMetalsAnnualReport201b/b 5

Floatingabulksulphideconcentratedoesnot require concentrates lib providedasoundbasisfordemonstrating erationofindividualmetals,onlyseparationofthemerits metal ofthePOXRowsheetformetalextraction.And sulphides(copper,zinc,leadandiron)fromthenonsul Qnally,pregnantleachsolution(PLS)precipitation test phidegangue.Thiscanbeachievedatacoarserprimary worktorecoverindividualmetalsandtorejectunwant grind(P80-150µm)resultinginaconsiderableenergy metalsfromsolutionprovidedsuzcientunderstanding saving.Also,thebulksulphideconcentratesimpliQcation ofthedownstreammetalrecoverychemistrytosupport resultedinarelativelystraightforward - circuit adoption conQguofthedownstreamRowsheetelements. rationandrobustRotationchemistryyieldingveryhigh ThebeneQtsofthenewRowsheetarethatitdelivers high metalrecoveries. ermetalrecoveriesandessentiallyQnishedendproduct Pressureoxidationleaching(POX)ofthebulksulphide thatdonotattractfurthertreatmentchargesandhav concentrateinanautoclaveoperatingat130-8°Candlowertransportcosts.Thetrade-oforachievinggreater 10-5barpressureyieldsveryhighmetal(copper,zinc, eectivenessishoweverahighercapitalcost.However, cobaltandnickel)extractionsintoahightenorthe pregnant substantialincreaseinrevenuesachievedmoretha leachsolutionwithinashortresidencetime.While compensates lead fortheincreasedcapitalcost. andsilverremainlargelyunleached,thepotentialexists AScopingStudyincorporatingtherevisedRowsheetwas torecoveratleastthesilverfromtheautoclavesolids releasedinJune201.ThisstudywasbasedontheApril residueusingadierentleachingprocess. 201updatedMineralResourceEstimatesfortheVardy Afterseparationofthepregnantleachsolution and from Marley the zones.Ata3Mtpaproductionrate,the - Wal autoclavesolidsresidue,themetalsinsolution ford can Creek be Projectisforecasttoproduceapproximately50 sequentiallyandselectivelyextracted-usingsolvent ktCuEqmetal ex perannumovera14yearminelife.Life-oftraction.Onceextracted,thevariousmetalsstreams minecontained can productionisforecasttobe243ktcopper, bepuriQedtoyieldhighqualityendproducts(e.g.copper 3ktcobalt,278ktzinc,26Mozsilverand15ktnickel.The cathode,zincingot,batterygradecobaltand - nickel suite sul ofbatterymetalsbeingproducedalignsstronglywith phates)thatdonotrequirefurthertreatmentaor global reQning. decarbonisationthematicandisfrom - asafe/ethi calgeo-politicalenvironment,bothofwhichare - increasing TherevisedRowsheetalreadyhadanextensivebody lyresonatingwithinvestorswhileprovidingenhancedris ofmetallurgicaltestworkthatsupporteditsadoption. diversiQcationthroughaportfoliometalsexposure. ExtensiveRotationtestworkresultscollectedinthe pursuitofproducingindividualmetalconcentrates Theeconomic pro resultswerepresentedfortwopricing videdanenormousdatasetwhichcouldbeapplied scenarios with reRectinglongtermestimatesand- spotassump conQdencetobulkRotation.Similarly,previoustestwork tions.Forthesetwoscenariostheungeared,post-taxNet investigatingpressureoxidationleaching(POX)onPresent pyrite Value8%(NPV 8)rangewas$375mto$80m,with

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Furtherdesignandengineeringtooptimisecapital andoperatingcostestimates.

Directors' Report

ConQrmingandincorporatinganypotentialpremia availableforhigherqualitymetalendproducts.

Aeon has embarked on a program of preliminary engagementwithanumberofpotentialdebtprovidersincluding CommonwealthGovernmentQnancingagencies,commer cialbanksandotherrelevantsourcesofQnance.Aeonhas alsocommencedpreliminaryengagementwithanumber ofpotentialo-takers.tisreadilyapparentthatthereis substantial market appetite for Walford Creek end productssincetheyenjoyfavourfromarisingdemandglobally forbatterymetals;willbesourcedethicallyfromastable politicaljurisdictiontherebyavoidingfurtherreQningb monopolisticinterests;theintentiontoinclude asubst tialrenewablecomponentinouroverallenergymix;and, thelongminelifeandhigherqualityofmetalendproducts.

Whilepreliminary,thecollectivefeedbackisverypositiv andgivesrisetocautiousoptimism.Australiaisalow-ris jurisdictionandourlocationinnorth-westQueensland alignswellwithCommonwealthandStategovernment supportfornorthernandregionalinvestmentinnew projects,especiallythosewithstronggreen(andnationa interestcredentials.WiththeexpectationthatourQn forecastfreecashgeneratedof$1.2Bto$1.9B.Operating projectparameterswillcontinuetobetightenedovert costswereintherangeUS$2.0toUS$2.0/lbCuEq.The courseofthePFS,theintentionistocommencemore initialdevelopmentcapitalof$96mwasdeterminedusing detaileddiscussionswiththesevariouscounterparti broadbenchmarkingandhenceincorporatessigniQcant contingency(andpotentialroomforimprovement).Atthe suchlead-uptoitscompletioninQ1CY202.

apreliminarystage,theeconomicresultsareindicative and Atthecompletion ofthePFS,itisexpectedthat asub wereprimarilyinterpretedtosupportcontinuing immedi stantial proportionoftheprojectdeQnitionwillhave atelyintothenextstudyphase(i.e.PFS). completedtoaFeasibilityStudystandardofaccuracy.

The TheforecasteconomicsoersigniQcantpotential forbulk op oftheminingscheduleisderivedfromtheVardy and Marley Esti timisationasafunctionofarangeofreadilyidentiQable zoneswheretheMineralResource mates of Measured and ndicated classiQcations already potentialimprovementopportunitiesincluding: exceed95%ofthetotalresources.WithafurtherMineral 3 mprovedRotationmetalrecoveriesandPOXmetal ResourcesEstimatesupdateplannedatthecompletion extractions. oftheexistingdrillingprograminQ3CY2021,thiswill in thenecessarymineralresourceresolutionand 3 Recoveryofleadwhichisnotcurrentlyincluded provide therevenuestream. scaleforcompletingQnalmineoptimisationsanddetaile fromdesignsandschedules.nconjunctionwiththe 3 UpdatedMineralResourceEstimatesarisingmine completionofthemetallurgicaltestworkprogram,now thecurrentexplorationprogram. already welladvanced,theprocessRowsheetdeQnition ore 3 Potentialtreatmentofoxideandtransitional and performance parameterswillalsobecompletedtoa currentlyexcludedfrommineschedules. FeasibilityStudystandardofaccuracy. 3 ModiQedandcheaperbulkminingmethodfor TheprincipalareaswhereaFeasibilityStudyisexpected undergroundproduction. toprovidefurtherimprovementwillrevolvearoundthe 3 Optimisedminedesigntominimisewaste-develop detailedengineeringrequiredtosupportacapitalcost ment and bring forward higher grade material. estimateincorporatinglowercontingency,detailedproje 3 ncreasedproportionofcheapersolarPVinthe executionandscheduling,updatedproductmarketing overallelectricitygenerationmix. analysisandcommoditypriceforecasts,andthe - environ 3 Optimisationoftheautoclaveoperatingconditions mentalimpactstatement(ES).Thecompletionofmanyof toachievereducedPOXoxygenconsumption. thePre-FeasibilityStudycomponentstohigherFeasibility Studystandardsunderpinstheabbreviatedprojected Codeposition of acid forming mine waste with acid 3 consumingprocesstailings. timelineforcompletionofaFeasibilityStudyinH2CY202.

AeonMetalsAnnualReport201b/b 7

Mineral Resource Estimates nApril201,AeonannouncedanupdatetotheMineral ResourcesEstimates(seeTable1)completed-byinde pendentgeologicalconsultants,H&SConsultantsPty Ltd(H&SC),usingdensityweightingofthecomposite sampleswiththedynamicinterpolationOrdinaryKriging technique.TheResourceestimatesaredividedintotwo components:aCopperLodeResourceandaCobalt PeripheralResource.TheMineralResourcesEstimates weresubsequentlyusedasthebasisforcompleting mineoptimisationsandschedulesusedintheJune201 ScopingStudy. TheCopperLoderesourceestimatesarereportedata 0.5%coppercutofromblockcentroidswithinthe-min eralisationwireframes.Measuredandndicated Resourc esconstitute95%ofthetotalVardy/MarleyCopperLode Resource.

TheCobaltPeripheralresourceestimatesarereported a60ppmcobaltcuto(andcopper<0.5%)fromblock centroidsinsidethecobaltmineralisationwireframes MeasuredandndicatedResourcesconstitute95%ofthe totalVardy/MarleyCobaltPeripheralResource. TheApril201copperresourceestimatesshowan increaseintonnagerelativetothepublishedDecember 2019estimatesbyjustunder6%duetotheintroduc tionofdensityweightingtothecompositedata.Thishas beenaccompaniedbyanincreaseincopperandcobalt gradesofaround4%whilsttheleadgradehasincreased Table 1: Walford Creek Project Global Mineral Resource Estimates

Vardy/Marley Copper Lode Category

Cu %

Pb %

Zn %

Ag g/t

Co %

Ni %

Pyrite %

Measured

6.4

1.17

1.02

0.88

27.9

0.15

0.07

42.8

1.03

0.66 31.8

0.15

0.07

39.0

1.0

1.05 1.3

0.73

36.2

0.14

0.06

42.9

19.6

1.08

1.03

0.73

30.8

0.15

0.07

40.4

ndicated Inferred Total

12.2

Vardy/Marley Cobalt Peripheral Category

Cu %

Pb %

Zn %

Ag g/t

Co %

Ni %

Pyrite %

Measured

6.4

0.24

0.85

1.20

19.5

0.10

0.04

44.4

11.7

0.25

0.99 1.03

21.8

0.10

0.04

38.5

ndicated Inferred

0.9

0.20

1.27

0.72 23.7

0.09

0.04

39.

19.0

0.24

0.96

1.07

21.1

0.10

0.04

40.5

Category

Cu %

Pb %

Zn %

Ag g/t

Co %

Ni %

Pyrite %

Inferred

5.1

1.25 1.35

0.63

0.15

0.08

Total

Amy Copper Lode

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36.9

37.

Directors' Report

by21%,thezincgradeby3%andthesilvergradeby Figure1highlightsthecontinuityofmineralisationover almost10kmofstrikelengthadjacenttotheFishRiver approximately6%.Asaresult,therehasbeenanincrease fault(FRF).TheVardyandMarleyzoneshavebeenexten incontainedcopper,cobaltandzincmetalofaround sively drilled while the more extensive Amy zone isonly 9%andleadandsilvermetalincreasesof21%and12% sparsely drilled to date but clearly shows the continuit respectively. of mineralisation along the FRF. Figure 2 highlights the TheApril201cobaltresourceestimatesshowanincrease drillingdensityusedtodeQnethelocation - oftheminer inthetonnagerelativetothepublishedDecember 2019 alised Py1andPy3lodeswithinthelithologyoftheVardy estimatesby1%withtheintroductionofdensity. weighting and Marley zones.

Figure 1: Long section of Vardy, Marley and Amy zones along the Fish River fault

Figure 2: Long section of Vardy/Marley lithology

AeonMetalsAnnualReport201b/b 9

2021 Walford Exploration Program

nconjunctionwiththedecisiontoembracearevised 3 Phase3:DrillingactivitiestailoredtoreRectthe Rowsheet,itwasresolvedtocontinueexplorationat outcomesofthePhase2drillingwithafocuson WalfordCreekinpursuitofbothanexpansionandan achievingasuzcientlevelofdelineation - toincorpo upgradetotheclassiQcationoftheexistingMineralrateinMineralResourcesEstimates. ResourcesEstimates.Thisprogramwasplannedtobe Phase1oftheexplorationprogramisnowcomplete. undertaken in three phases: Assayresultsarestilloutstandingformuchofthein-Qll with programconductedatthelargerPQdiameter 3 Phase1:Metallurgicalandin-Qlldrilling-largely drilling intheVardy/Marleyzones,anairbornemagneticcoresize.Thismaterialwillbeusedtoformcomposites surveyandagroundgravitysurvey. forfurtheruseinthebulksulphideRotationandpressur Phase 2: Utilisation of results from the tenement oxidationleachoptimisationtestworkprograms. 3 widegeophysicalsurveystoimprovetargetingforan Theresultsoftwoextensivehighresolutionmagnetic extensionaldrillingcampaignintheAmyzoneandto andgravitysurveyswereannouncedon9August201. potentiallytestnewlygeneratedexplorationtargets.

Figure 3: RTP (Reduced to Pole) magnetics survey with location of the drilling and the target zones

Figure 4: Bouguer gravity survey with location of the drilling and the target zones

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Directors' Report

nterpretationoftheseresults(seeFigures3andt4)has isenvisagedthatupdatedMineralResourcesEstimate providedexcitingnewinsightsintothepotential forthe forfur VardyandMarleyzoneswillbecompiled- onceQ therextensionstothealreadysubstantialWalford nalassay Creek resultsarereceivedfortheholescompletedas MineralResourcesEstimates.Themuchhigherresolution partofthein-Qlldrillingcampaign.TheseupdatedMineral achievedinthenewdatahasrevealedseveralstructural ResourcesEstimatesareexpectedtoinformthePFSwith featureswhichwerepreviouslypoorlydeQnedinthe results targeted for release in late Q4 CY2021. historic,wide-spacedgeophysicaldatasets.Thenew datasetsfurtherreQnethegeophysicalsignaturesofthe Vardy,MarleyandAmyzoneswherestrongcorrelations Figure 5: Schematic crossexistbetweentheknownpresenceofmineralisationand section illustrating the possible themodelledgeophysicalresponse. target at depth in Vardy zone NewconceptualtargetareashavebeenidentiQedwhich arenowsettobetestedbydrillingoverH2CY2021: 1.

VardyDeepsandMarleyDeepsapproximately 30mbeneaththePy3; 2.

AmyWestSplay; 3.

VardyEastFRFcontinuation;and 4.

EasternDogLegTrend.

TheVardyDeepsdensebodyisaprioritydrilltarget giventhepreviouslyencounteredcopperinterceptinits uppermarginsanditspotentialscale.Theextensionofan existingdrillholeinVardywithafavourableorientation tointersectthetargetareahasbeenidentiQedandoers theopportunitytoacceleratetestingofthisexcitingtarget. Figure5showsschematicallythemodelled3Dgravity shellsandtheirexcellentcorrelationwithexistingPy1and Py3mineralisedlodes,andtheunexplaineddeeperdense body within the Walford dolomites. Thesenewtargetareaswillbedrilltestedoverthe remainderofthecurrentdrillingseason(expectedto concludeinearlyNovembersubjecttotheonsetofthe wetseason).

AeonMetalsAnnualReport201b/b 11

Regional Exploration

AeonhasanextensivetenementpackagecoveringThe 4,6 Beauchampstargetarea(seeFigure7)isaregional km2withinQueensland.nnorth-westQueensland(see scalegravitationalandmagneticanomalylocated approxi Figure6),thesaWestProjectareaisconsideredtobe mately10kmtothewestofMtsa.tsgeophysicalsigna highlyprospectiveforcopper.Aeonhassixsub-projects turehasclearsimilaritiestootherworld-class OCGdepos withinthisregionthatcomprisefourtenements its prospec includingOlympicDam,ErnestHenryandCarrapateena. tiveforronOxideCopperGold(OCG)targetsandtwo nlateCY202,andwiththesupportofaQueensland forsedimentaryhostedcoppertargets. GovernmentCollaborativeExplorationnitiative(CE)grant

Figure 6: Location of Aeon’s northwest Queensland Exploration Projects

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Directors' Report three diamond drill holes totalling 2,3mweredrilledtotestthe northernanomalyoftheBeauchamps Projectarea. ThedrillingresultsconQrmedthe presenceofalargescaleOCG system,containingcopperandgold mineralisation,albeitofalowtenor. Allthreeholesintersected Protero zoicbasementrockatrelatively shallowdepths,verticallylessthan 125mbelowsurface.Theplanisto follow up this promising start with higherresolutiongeophysical sur veyslaterthisyearasapreludeto planned further target drilling during theCY202explorationseason. nCY2019,Aeonaddedover130km ofpotentialstrikeextentstarting immediately from the eastern boundary of the Walford Creek tenementsthroughacombination oftheFootprintResourcesJVearn-in andadditionaltenement - applica tions.Thesenewtenementholdings, knownastheBasinEdgeProject,lie on the northern margin of a large sedimentary basin bounding fault architecture.Thisstructure isinter

Figure 7: Location of drill holes at the northern end of the Beauchamp Project

AeonMetalsAnnualReport201b/b 13

pretedasacontinuationoftheFishRiverFaultthat Withthe hosts focusnowQrmlyonexpandingregionalexplora theWalfordCreekdeposits.TheidentiQcation - oftion thepro intensityatthesaWestandBasinEdgeProjects,it spectiveMtLesformationundercover,andtheidentiQed isincreasinglyapparentthattheotherprojectswithin presenceofcoppermineralisationapproximatelyextensive 14km tenementpackagecurrentlyheld - byAeoncan totheeastofWalfordCreek,addtothegrowingbody not of alsobeprogressedatthesamerate.naddition,the evidencethatsupportthepostulatedtargetsuccess model. ofWalfordCreekProjectexplorationoverthepast Qveyearsindelineatingasubstantialmineralresourceh Todate,therehasbeennofollow-upexploration under promptedastrategicreassessmentoftheimportanceof takenwithinthistenementpackage.tisnowenvisaged otherprojectareaswhencompetingforfundingwithin thattargetedgeophysicalsurveyswillcommenceinthe alimitedexplorationbudgetframework.Assuch,Aeon vicinityofthemineralisedhorizonsproximaltomain willembarkonastrategicreviewofitsvariousprojectst structures.Asnotedabove,thisisconsistentwiththe establishwhethertheyremaincoreornot.Whereprojects proposedtestingoftheprospectivezonesintheWalford remaincorebutcannotbeaccommodatedwithinexisting dolomite to the immediate east of the Vardy zone of the explorationbudgetsthenseekingtheassistanceofthir WalfordCreekProject. partiesinjointventureisthepreferredapproach.

Figure 8: Basin Edge Project to the east of Walford Creek

14b/bwww.aeonmetals.com.au

Directors' Report

Funding

OCPisbothamajorshareholderof,anddebtprovider PFSbasedontherevisedRowsheet.Thiscommitment to,Aeon.ntheyearsfollowingAeon$sacquisitionofthe onceagainprovidedAeonwithvaluableongoingfunding WalfordCreekProject,OCPhasconsistentlysupported Rexibility. AeoninseekingtoadvancetheWalfordCreekProject On15July201,Aeon$sadvisedinanASXreleasetitled anditsbroaderobjectivestoincreaseshareholdervalue. 24-monthLoanMaturityExtension(thatithadreached Atvarioustimesinthepast,OCPhasbothunderwrit in-principleagreementwithOCPtoextendthetermof tenandparticipatedincapitalraiseswhenfundingwas thedebtfacilitybytwoyearsto17December203,this sourcedfromequityinvestors.Whenequitymarketswere wasconQrmedinanannouncementon24August201. lessfavourable,OCPsteppedintoprovideadebtfacility nconjunctionwiththis,Aeonwasabletosuccessfully whichhasbeenincreasedandextendedonseveral oc raise$9.5millionofnewequityfrominstitutionsand casionssubsequently,therebyallowingAeontoprogress sophisticatedinvestors,includingOCP,andafurther itsexplorationandstudyprogramsuninterrupted.This $0.7millionthroughaSPPonsimilartermsforexisting fundingRexibilityextendedtoAeonbymajorshareholder shareholders. OCPisarareandvaluablerelationshiptopossessfora Thedecisiontoraiseequityversusincreasingdebtwas juniorexplorationcompanyhavingprojectdevelopment precededbyanextensiveengagementprocesswith aspirations. selectedshareholders,brokersandinstitutional inv At30June201,theOCPdebtfacilitystoodatapproxi tors.TheoverwhelmingconsensuswasthatAeon$slong mately$24.8millionincludingcapitalisedinterest.On15 termcapitalstructurewouldbeenhancedbyseekingto April201,AeonadvisedinanASXreleasetitledWalford cultivateabroaderinstitutionalshareholder basep CreekPre-FeasibilityStudyUpdateandNextSteps(that sessingtheQnancialcapacitytounderpinamajorproject ithadreceivedindicative,non-bindingfunding commit developmentdecisioninthefuture. mentsthatwouldallowcompletionoftheproposed

Competent Persons Statements The data in this report that relates to Mineral Resource Estimates for the Walford Creek Deposit is based on information evaluated by Mr Simon Tear who is a Member of The Australasian Institute of Mining and Metallurgy (MAusIMM) and who has sufficient experience relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as Competent Persons as defined in the 2012 Edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (the “JORC Code”). Mr Tear is a Director of H&S Consultants Pty Ltd and he consents to the inclusion in the report of the Mineral Resources in the form and context in which they appear. The information in this report that relates to Exploration Targets and Exploration Results for the Walford Creek Deposit and other northeast Queensland tenements is based on information compiled by Mr Dan Johnson who is a Member of the Australian Institute of Geoscientists and who has sufficient experience relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking 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 (the “JORC Code”). Mr Dan Johnson is a full-time employee of Aeon Metals Limited and consents to the inclusion in the report of the Exploration Targets and Exploration Results in the form and context in which they appear. The information in this report that relates to Exploration Results and Mineral Resources for the southeastern Queensland tenements is based on information compiled by Mr Robin Simpson, a Competent Person who is a Member of the Australian Institute of Geoscientists. Mr Simpson is employed by SRK Consulting (Australasia) Pty Ltd. Mr Simpson 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 Competent Person as defined in the 2012 Edition of the “Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves” (JORC, 2012). Mr Simpson consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.

AeonMetalsAnnualReport201b/b 15

Corporate

toraise$9.5millionatanissuepriceof5.8centsper share.Thesecondtranchewasapprovedbysharehold On25September20,theCompanyannouncedthat erson17September201. OCPAsiaGrouphadagreedtoincreasethelimitonits existingloanfacilitybyupto$3million,onthesame On23August201,theCompanyannouncedithad raised $0.7millionviaaSharePlacementPlanonthe termsastheextendedtranchesdisclosedinnote 19. sametermsastheshareplacementabove. On12March201,theCompanyannouncedthe On24August201,theCompanyannouncedthatithad appointmentofMrFredHessasnterimManaging completedanagreementwithOCPAsiaGrouptoextend DirectorandCEO. thematuritydateonitsexistingloanfacilityby24months On19April201,theCompanyannouncedtheresults (to17December203),onthesametermsastheex ofarevisedupdateintheMineralResourceEstimates tendedtranchesdisclosedinnote19.nconsiderationfor (reportedinaccordancewiththe201JORCCodeand thematurityextension,theCompanyhasagreed - anaddi Guideline)asdisclosedonpage8. tionalcashfeeequivalentto2%ofthetotalfacilitysize. On25June201,theCompanyannouncedtheappoint On17September201,theshareholdersoftheCompamentofMrFredHessasitsnewpermanentManaging nyapprovedtheissueof8,50unvestedloanfunded DirectorandCEO. sharestoDr.FredHess,ManagingDirectorandCEOof theCompany,undertheCompany$sLongTermncentive On30June201,theCompanyannouncedarevised Plan.Theloanfundedshareswhicharegrantedto scopingstudyonitsWalfordCreekproject,therevised HesswillvestuponachievementofspeciQedhurdles. scopingstudyprovidedaninitialoperating-lifeDr ofapproxi mately14yearswithanungeared,real,post-taxNPV(rate Otherthantheitemsnotedabove,therehavenotbeen of8%)of$375millionto$805million. anyadditionalsigniQcantsubsequenteventstonote. TheCoronavirus(Covid-19)pandemicupto30June201 hasnothadasigniQcantimpactfortheCompany.

Financial Position

Future Developments, Prospects and Business Strategies

TheCompany$spriorityistoadvanceWalfordCreek to wardsthedevelopmentofaworldclassbasemetalsmine aswellascontinuetoexploreonpriorityexploration tenements. In order to do this Aeon’s near-term strategy atWalfordCreekincludescompletingaPFS.APFSsets On18December20,theCompanyannouncedreceipt theProjectparameters(plantthroughput, - productout ofR&Dgrantfundsamountingto$1.4million.Thegrant puts,operatingandcapitalcosts,etc)enablingadecision isassociatedwiththeselection,designandoperationof toadvancetowardsaQnalFeasibilityStudyandproject metallurgicalprocessesthatseektoproducehighgrade development.b concentratesconsistentlyandatmaximumrecovery. TheCompanyintendstolodgeafurtherR&Dclaimfor Environmental regulation FY2021. ThenetassetsoftheGroupat30June201were $58.6million(20:$63.million)includingcashof $0.5million(20:$.4million).

explorationundertakenontheCompany$ scom TheQnancialstatementshavebeenpreparedonaThe going binedtenementsinQueenslandtodatehasnotcreated concernbasis,refertonote2. signiQcantenvironmentalissues.However,-environmen talissueswillariseasandwhentheGroupmovesinto Significant Changes in State of Affairs developmentandproductionandtheseissueswillbe thoroughly Otherthanthemattersnotedabovetherehave beenno assessed at the time any mining authority is othersigniQcantchangesinthestateofaairs. sought. Usual measures are undertaken pre and post drillingtoensurethattheenvironmental - impactismin mised.Thisincludesre-contouringandre-seeding aect Events Since the End of the edareasandcappingdrillcollars.Theworkundertaken Financial Year todatehasproducedminimalimpactonthe - environ ment.Noissuesregardingcompliancewereencountered TheCoronavirus(Covid-19)pandemicisongoingand during the reporting period. iscontinuingtodevelopbutisnothavingasigniQcant impactafterthereportingdate. On19July201,theCompanyannouncedthatithadsuc cessfullysecuredcommitmentsfromsophisticatedand professionalinvestorsviaatwo-trancheshareplacement

16b/bwww.aeonmetals.com.au

Indemnification and insurance of officers and auditors

Directors' Report

Directors’ meetings

DuringtheQnancialyearended30June201,eighteen(18) MeetingsoftheBoardofDirectorswereheld.Attendances TheCompanyhasagreedtoindemnifythecurrent - direc byeachDirectorduringtheperiodwereasfollows: tors of the Company against all liabilities to another person Director

Number eligible to attend

Number attended

FredHess

PaulHarris

vanWong

(otherthantheCompanyorarelatedbodycorporate)that mayarisefromtheirpositionasdirectorsoftheCompany, exceptwheretheliabilityarisesoutoftheconductinvolv alackofgoodfaith.Theagreementstipulatesthatthe Companywillmeetthefullamountofanysuchliabilities, includingcostsandexpenses.

TheCompanyhaspaidpremiumstoinsuretheDirectors againstliabilitiesforcostsandexpensesincurredbythem AndrewGreville 18 17 indefendinganylegalproceedingsarisingoutoftheir (i) conductwhileactinginthecapacityofdirector - oftheCom HamishCollins 14 14 pany,otherthanconductinvolvingwilfulbreachofdutyin (i) On 26 March 2021 Mr Collins resigned as a director. relationtotheCompany.Thedirectorshavenotincluded detailsoftheamountofthepremiumpaidinrespectofthe Duringtheperiod,therewere2meetingsoftheAudit Com directors$ liabilityandlegalexpensesinsurancecontract mittee,andbothwereattendedbyallDirectorsthat were assuch disclosureisprohibitedunderthetermsofthe inozceatthetime. contract.TheGrouphasnotpaidoragreedtopay,a premiuminrespectofacontractinsuringagainstaliabilit incurredbyanauditor.

Information on Directors and Company Secretary at the year end Managing Director (appointednterimManagingDirector12March201andpermanentlyfrom25June201), previouslyNon-ExecutiveDirectorfrom2July2019

Qualifications 3 B.Sc.(Hons)Ph.D.UniversityofQueenslandMAusMM

Fred Hess (age 64)

Experience

DrHesshasmorethan40years$experienceinminingprojectdevelopment,operations andseniormanagementacrosstheAsiaPaciQcregion.Hisexperiencecoversopencutan undergroundminedevelopmentandoperationacrossbothbaseandpreciousmetals MostrecentlyFredwasManagingDirectorofPanAustLimited.

Interest in Shares and Options 3 2,50sharesheldbyFredHess;2,50ofthesesharesarefundedby

alimitedrecourseloanandconsideredtobeoptions.

Directorships held in other listed entities in the last 3 years 3 ronbarkZincLtd.

AeonMetalsAnnualReport201b/b 17

Non-Executive Chair (appointed17December2014)

Paul Harris (age 53)

Qualifications 3 M.Eng(Mining),UniversityofNewSouthWales 3 B.Comm(Finance),UniversityofNewSouthWales 3 GraduateDiplomainAppliedFinanceandnvestmentsfromtheSecuritiesnstitu of Australia

GraduateoftheAustraliannstituteofCompanyDirectors(GACD)

Experience

MrHarrishasover29years$experienceintheQnancialmarketsandinvestmentbanking morerecentlyadvisingminingcorporatesonstrategy,mergersandacquisitionsandc markets.HismostrecentpositionwasManagingDirector,HeadofMetalsandMiningat Citi,havingpreviouslyworkedformanyyearsatMerrillLynchandBankersTrust.

Interest in Shares and Options 3 4,7685sharesheldbyHollachCapitalPtyLtd(asofthedateofthisreport).

4,750ofthesesharesarefundedbyalimitedrecourseloanandconsideredtobe options(asofthedateofthisReport).174,29sharesheldbyWunullaHoldingsPtyLtd.

Directorships held in other listed entities in the last 3 years 3 AureliaMetalsLtd. Non-Executive Director (appointed1July2016)

Qualifications 3 B.Sc.Hons

Ivan Wong (age 58)

Experience

MrWonghasstrongTbackgroundandover28years$experienceinrunningvarious busi nessesinAustralia.Mr.WongiscurrentlyanExecutiveDirectorofGreatPaciQcFinancia Groupwhichwasestablishedin192.Viaitssubsidiary/relatedcompaniesithasinvolve inmanybusinessoperations/venturessinceestablishment.Currentlyitscorebus mortgageQnance,loanmanagementandpropertymanagement.Previously- ithadbusi nessesinQnancialservices,Tservices,propertyinformation,propertydevelopmenta hotelinvestmentandmanagementservices.

Interest in Shares and Options ). 3 2,50sharesheldbyGreatPaciQcnvestmentPtyLtd(asofthedateofthisreport

3 3

2,50ofthesesharesarefundedbyalimitedrecourseloanandconsideredtobe options(asofthedateofthisReport). 347,061sharesheldbyTeresaYiYinWong. 16,0sharesheldbySLWMineralsCorporationPtyLtd.

Directorships held in other listed entities in the last 3 years None.

18b/bwww.aeonmetals.com.au

Directors' Report

Non-Executive Director (appointed15May20)

Qualifications 3 B.Eng(Mining),UniversityofQueenslandMACD

Andrew Greville (age 58)

Experience

MrGrevilleisaseniorinternationalminingexecutivewithover37years$experiencea trackrecordofsuccess.HisexpertiseisparticularlystrongintheQelds ofbusiness opment,mergersandacquisitions,productmarketingandstrategy.

Interest in Shares and Options 3 2,50sharesheldbyAlgFamilyA/C(asofthedateof

thisreport).2,50of thesesharesarefundedbyalimitedrecourseloanandconsideredtobeoptions ofthedateofthisReport).

Directorships held in other listed entities in the last 3 years 3 RimQrePaciQcMiningLtd 3 TullaResourcesPlc;and 3 NovaRoyaltyCorporation. Company Secretary (appointed29January201)

Qualifications 3 LL.B,UniversityofNewSouthWales 3 BA(Media&Communications),UniversityofNewSouthWales

David Hwang (age 35)

Experience

MrHwangisaPrincipalandCCOofAutomicGroupandisanexperiencedcorporate lawyerspecialisinginlistingsontheASX,equitycapitalmarketsandprovidingadvic corporategovernanceandcomplianceissues.

Interest in Shares and Options 3 NosharesareheldbyDavidHwang. Directorships held in other listed entities in the last 3 years None.

AeonMetalsAnnualReport201b/b 19

Remuneration Report – audited Principles of compensation Thisreportdetailsthenatureandamountofremuneration TheagreementmaybeterminatedatanytimebyDrHess foreachDirectoroftheCompanyandGroupandforkeygivingtotheCompanynotlessthanthreemonthsprior writtennotice. management personnel of the Group.

Allfor non-executiveDirectorsreceivedirectors$feescoupled TheBoardestablishesappropriateremuneration with statutorysuperannuationasrequiredand,when Directorsandremunerationlevelsandincentive struc turesforkeymanagementpersonnel.Keymanagement providingadditionalservicestotheGroup,theyare personnel(KMP)arethosewhohaveauthorityand paidatnormalcommercialratesfortheirwork.Neither non-executiveDirectorsnorkeymanagementpersonnel responsibilityforplanning,directingandcontrolling areentitledtoanyretirementbeneQts. theactivitiesoftheGroup.

Directors$ incentivesharesfundedbylimitedrecourse Compensationlevelshavebeen,andwillbe,setto be loansissued duringtheyearended30June201were inlinewithAustralianmineralexplorationentities of approved equivalentsizeandcomparableoperationsinorder to atthe20AGM.Thegrantofshareswas designed toincentivisetheDirectorsbyparticipatingi attractandretainsuitablyqualiQedandexperienced key future growth and prosperity of the Company through managementpersonnelbutalsohavingregardtothe shareownershipandinrecognitionoftheircontribution prevailingQnancialcapacityoftheCompany.Noexternal to theCompany.TheDirectorswillonlybeneQtfrom remunerationconsultantswereusedduringthe year. thesesharesandtheassociatedloansiftheCompany$s DrHess$salarysincebeingappointedasManagingDirector sharepriceincreasesbeyond25%premiumabovethe andCEOwas$40,perannumplusasuperannuation shareissueprice.TheDirectorswillnotbepermittedto contributionbytheCompany.OtherkeytermsofDrHess$ sellthesesharesatapricelessthantheissuepriceplu agreementincludeanannualcashpaymentofupto3% 25%.Whensold,theloanamountpersharewillberepaid ofbaseremuneration,evaluatedonthedeliveryofthe to the Company. WalfordCreekPFSinthe1sthalfof20(5%),board AllremunerationpaidtoDirectorsandkeymanagement discretion(40%)andasafetytargetofzeroLT$s(10%). personnelisvaluedatcosttotheGroupandisexpensed DrHess$serviceagreementmaybeterminatedatanyor time capitalisedasappropriate. bytheCompanygivingtotheemployeenotlessthanthree months$priorwrittennotice.ntheeventoftermination, Consequences of performance theCompanymustpayDrHessanamountequaltothe on as shareholder wealth remunerationpayableforasmuchofthenoticeperiod nconsideringtheGroup$sperformanceandbeneQtsfor theemployeeisnotsoretained.TheCompanymay- termi shareholderwealth,theBoardhasregardtothefollowin nateDr.Hess$serviceagreementimmediatelyincertain indices inrespectofthecurrentQnancialyearandthe eventsincludingseriousmisconductandmaterial breach previousfourQnancialyears. ofcontract. In thousands of AUD

2021

Netlossattributabletoownersofthecompany $(6,057)

2020 $(5,402)

2019 $(4,015)

2018 $(13,892)

2017 $(8,241)

Dividendspaid Changeinshareprice

20b/bwww.aeonmetals.com.au

$(0.13)

$(0.135)

$0.21

$0.8

Directors' Report

Directors’ and executive officers’ remuneration

DetailsofthenatureandamountofremunerationofeachdirectoroftheCompany,andeachofthenamedCompan executiveandotherkeymanagementpersonneloftheGroupare:

Short-term Salary & fees $

In AUD

Severance pay $

Consultancy fees $

Long-term

Postemployments

Sharebased payments

Leave entitlements $

Superannuation benefits $

Options & rights(vi) $

Performance based on percentage of remuneration

Total $

Directors

Non-executive directors Paul Harris Stephen Lonergan(i) Ivan Wong Fred Hess

(ii)

Andrew Greville(iii)

2020

180,000

–

180,000

2021

218,475(v)

–

294,828

513,303

2020

20,000

–

24,000

–

44,000

2021

–

2020

51,208

–

4,865

–

56,073

2021

59,361

–

5,639

145,944

210,944

2020

51,208

–

4,865

198,585

254,658

2021

41,170

–

3,911

–

45,081

2020

7,659

–

728

–

8,387

–

2021

59,361

–

5,639

145,944

210,944

2020

–

2021

114,919

–

7,661

–

122,580

Executive directors Fred Hess(ii) Hamish Collins

(iv)

Total

2020

400,000

–

1,539

25,000

208,169

634,708

2021

295,652

412,674

–

38,649

294,828

1,041,803

2020

710,075

–

24,000

1,539

35,458

406,754

1,177,826

2021

788,938

412,674

–

61,499

881,544

2,144,655

(i) On 25 November 2019 Mr Lonergan retired as a director. (ii) On 2 July 2019 Mr Hess was appointed a director, on 12 March 2021 appointed Interim Managing Director and CEO and on 25 June 2021 appointed permanent Managing Director and CEO. (iii) On 15 May 2020 Mr Greville was appointed a director. (iv) On 26 March 2021 Mr Collins resigned as a director, options and rights for 2020 have been restated due to an extension of the expiry date. (v) Amount includes compensation for amounts equivalent to superannuation of $21,375 relating to prior years. (vi) Amounts include new and extended options valued using the Black Scholes method and involves no cash outlay from the Company.

Short-termremunerationincludessalariesandfeesandconsultancyfeespaidtonon-executive Directors edrelatedpartiesforservicesprovidedbytheDirector.Theremunerationdisclosedaboverepresentst GroupfortheservicesprovidedbyDirectors.

Details of incentive-based remuneration

On12August20,shareholdersapprovedtheissueof9.0millionfullypaidordinarysharesequallysplitbetweenPaul Harris,vanWong,AndrewGrevilleandHamishCollinsortheirnomineesrespectively,tobefundedbylimitedrec loans.Thesewereissuedat15.centspershareon25August20,therecourseontheloanislimitedtothesharesissued theloansareinterestfreeandrepayableon25August203.naccordancewithAASB2theloansarerequiredtobevalued andaccountedforasoptions.Afairvalueof$914,582wascalculatedusingtheBlackScholesmodelwithinputsof15.cents strikeprice,three-yearperiodtoexpiry,0.27%riskfreeinterestrateand67%volatility.Therearenoperformanceorser conditionsattachedtotheloanotherthandirectorsarenotpermittedtosellthesesharesatapricele plus25%.Thefairvalueoftheincentiveshareswasrecognisedasanexpenseduringtheyearended30June201.

AeonMetalsAnnualReport201b/b 21

Modification of terms of equity-settled share-based payment transactions

On12August20,shareholdersapprovedtheextensionof5.0millionfullypaidordinarysharesequallysplitbetweenPau HarrisandHamishCollins,theexpirydateoftheseshareswereextendedbythreeyearsto18August203.naccordance withAASB2themodiQcationoftermsarerequiredtobevaluedandaccountedforasoptions.Anincreaseinthefai of$297,68wascalculatedusingtheBlackScholesmodelwithinputsof14.5centsstrikeprice,increaseofthreeyearperi odtoexpiry,0.27%riskfreeinterestrateand67%volatility.Therearenoperformanceorserviceconditionsattached loanotherthandirectorsarenotpermittedtosellthesesharesatapricelessthantheissuepriceplus oftheincentiveshareswasrecognisedasanexpenseduringtheyearended30June201.

Noothertermsofequity-settledshare-basedpaymenttransactions(includingoptionsandrightsgrantedascom akeymanagementperson)havebeenalteredormodiQedbytheissuingentityduringthereportingperiodorthepri

Non-executive directors Atthe20AnnualGeneralMeeting,shareholdersapprovedanaggregateamountof$50,tobeavailablefor paymentofnon-executiveDirectors$fees.Thiswasanincreasefromthepreviouslimitof$375,0.

Key Management Personnel transactions

Keymanagementpersons,ortheirrelatedpartiesmadenotransactionsthatweremorefavourablethanthos orwhichmightreasonablybeexpectedtobeavailable,onsimilartransactionstonon-keymanagementpersonn entities on an arm’s length basis.

Equity instruments Incentive Shares (accounted for as options)

ThemovementduringthereportingperiodinthenumberofincentivesharesinAeonMetalsLimitedheld,dir indirectlyorbeneQcially,byeachkeymanagementperson,includingtheirrelatedparties,is: Held at 1 July 2020

Directors

Granted as compensation

(i) HamishCollins

7,50

2,50

PaulHarris

2,50

vanWong

2,50

FredHess

2,50

Other changes

– (9,750)

4,750,000 2,250,000 (2,50)

2,500,000 2,250,000

AndrewGreville

2,50

Total

15,0

Held at 30 June 2021

9,0

11,750,000 (12,50)

(i) On 26 March 2021 Mr Collins resigned as a director.

Theincentivesharesheldbyeachkeymanagementpersonaresubjecttoaholdinglockwherebythatwhensol loanamountpersharewillberepaidtotheCompany.Thesaleoftheabovesharesarenotpermittedatapric thantheissueplacementpriceplus25%. Movements in shares

ThemovementduringthereportingperiodinthenumberofordinarysharesinAeonMetalsLimitedhelddirec indirectlyorbeneQcially,byeachkeymanagementperson,includingtheirrelatedparties,is: Directors

Held at 1 July 2020

(i) HamishCollins

Incentive shares granted

8,4796

2,50 2,6915

2,50

PaulHarris vanWong

Purchases

4,942,152 2,50

(2,50)

2,250,000 2,50

(i) On 26 March 2021 Mr Collins resigned as a director.

22b/bwww.aeonmetals.com.au

18,597,061 2,500,000

2,50

AndrewGreville 32,519

Held at 30 June 2021 –

(10,72986)

18,4706

FredHess

Total

Disposals/ Other

9,0

(13,2986)

28,289,213

Directors' Report

Voting and comments made at the company’s 2020 Annual General Meeting (‘AGM’)

Atthe20AGM,89%ofthevotesreceivedsupportedtheadoptionoftheremunerationreportfortheyearended 30June20.ThecompanydidnotreceiveanyspeciQcfeedbackattheAGMregardingitsremunerationpractices.

This concludes the Remuneration Report which has been audited.

Auditor’s independence declaration

Theauditor$sindependencedeclaration,asrequiredunders307CoftheCorporationsAct201,isincludedonpage24 oftheQnancialreportandformspartoftheDirectors$Reportfortheyearended30June201.

Proceedings on behalf of the Company

NopersonhasappliedforleaveoftheCourttobringproceedingsonbehalfoftheCompanyorintervene inanypr ceedingstowhichtheCompanyisapartyforthepurposeoftakingresponsibilityonbehalfoftheCompanyforal anypartofthoseproceedings.

Non-audit services

Detailsoftheamountspaidorpayabletotheauditorfornon-auditservicesprovidedduringtheQnancialy auditorareoutlinedinnote29totheQnancialstatements.

ThedirectorsaresatisQedthattheprovisionofnon-auditservicesduringtheQnancialyear,bytheaudit anotherpersonorQrmontheauditor$sbehalf),iscompatiblewiththegeneralstandardofindependencefora imposedbytheCorporationsAct201.

Thedirectorsareoftheopinionthattheservices,asdisclosedinnote29totheQnancialstatements, dono misetheexternalauditor$sindependencerequirementsoftheCorporationsAct201forthefollowingreasons

3 3

allnon-auditserviceshavebeenreviewedandapprovedtoensurethattheydonotimpact - theintegr tivityoftheauditor;and

noneoftheservicesunderminethegeneralprinciplesrelatingtoauditorindependence,assetouti CodeofEthicsforProfessionalAccountantsissuedbytheAccountingProfessionalandEthicalStandar includingreviewingorauditingtheauditor$sownwork,actinginamanagementordecision-makingcapaci thecompany,actingasadvocateforthecompanyorjointlysharingeconomicrisksandrewards.

Rounding off

TheCompanyisofakindreferredtoinASCCorporations(RoundinginFinancial/Directors$Reports)nstrument 2016/9andinaccordancewiththatinstrument,amountsintheconsolidatedQnancialstatementsanddirecto reporthavebeenroundedotothenearestthousanddollars,unlessotherwisestated. ThisreportismadeinaccordancewitharesolutionoftheDirectors.

Dr Fred Hess Managing Director Dated at Sydney this 20th day of September 2021

AeonMetalsAnnualReport201b/b 23

DECLARATION OF INDEPENDENCE BY GARETH FEW TO THE DIRECTORS OF AEON METALS LIMITED

As lead auditor of Aeon Metals Limited for the year ended 30 June 2020, I declare that, to the best of my knowledge and belief, there have been:

Independence declaration

1. No contraventions of the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and 2. No contraventions of any applicable code of professional conduct in relation to the audit. This declaration is in respect of Aeon Metals Limited and the entities it controlled during the period.

Tel: +61 2 9251 4100 Fax: +61 2 9240 9821 www.bdo.com.au

Level 11, 1 Margaret St Sydney NSW 2000 Australia

DECLARATION Gareth Few OF INDEPENDENCE BY GARETH FEW TO THE DIRECTORS OF AEON METALS LIMITED AsleadauditorofAeonMetalsLimitedfortheyearended30June201,declarethat,tothebestofmyknowledgeand Director belief,therehavebeen: . 1

Nocontraventionsoftheauditorindependencerequirements Corporationsof Act the 2001inrelationtotheaudit;and

. 2

contraventionsofanyapplicablecodeofprofessionalconductinrelationtotheaudit. BDO No Audit Pty Ltd ThisdeclarationisinrespectofAeonMetalsLimitedandtheentitiesitcontrolledduringtheperiod.

Sydney, 25 September 2020 DECLARATION OF INDEPENDENCE BY GARETH FEW TO THE DIRECTORS OF AEON METALS LIMITED Gareth Few Director As lead auditor

of Aeon Metals Limited for the year ended 30 June 2020, I declare that, to the best of my Audit knowledge BDO Pty Ltd and belief, there have been: Sydney, 20 September 2021

BDO Audit Pty Ltd ABN 33 134 022 870 is a member of a national association of independent entities which are all members of BDO Australia Ltd ABN 77 050 110 275, an Australian company limited by guarantee. BDO Audit Pty Ltd and BDO Australia Ltd are members of BDO International Ltd, a UK company limited by guarantee, and form part of the international BDO network of independent member firms. Liability limited by a scheme approved under Professional Standards Legislation.

Gareth Few Director

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BDO Audit Pty Ltd

Consolidated Financial Statements Consolidated Statement of Financial Position As at 30 June 2021 Note

30 June 2021 $0

30 June 2020 $0

Assets Cashandcashequivalents Tradeandotherreceivables Otherinvestments Prepayments

11 12

527

264 52 73

852

2,814

Total current assets Property,plantandequipment Other assets Explorationandevaluationassets

2,45

183

270 46

34 38

84,10

79,53

Total non-current assets

84,496

80,325

Total assets

85,348

83,139

Liabilities 16 17

Tradeandotherpayables EmployeebeneQts Provisions

Loansandborrowings

754 256

26,772

1,060

24,758

Total current liabilities Loansandborrowings

262

1,702

19 19,04

Total non-current liabilities

–

19,044

Total liabilities

26,772

20,104

Net assets

58,576

63,035

Equity Sharecapital Reserves Accumulatedlosses Total equity attributable to owners of the Company Non-controlling interests Total equity

20 20 108,465

108,465 3,45

2,531

(53,18)

(47,93) 58,600 (24) 58,576

63,057 (22) 63,035

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

AeonMetalsAnnualReport201b/b 25

Consolidated Statement of Profit or Loss and Other Comprehensive Income For the year ended 30 June 2021 Note

30 June 2021 $0 2

Otherincome Administrativeexpenses Impairment loss Otherexpenses

(1,38)

15 (1,4)

(3,150)

8 (2,765)

(1,074)

(6,063)

(5,440)

Financeincome Financecosts 7

Loss before income tax ncometaxexpense

102

(2,156)

Results from operating activities

Net finance income

30 June 2020 $0

6 38

(6,057)

(5,402)

(6,057)

(5,402)

Loss for the period

Other comprehensive income Other comprehensive income for the period, net of tax

–

Total comprehensive loss for the period

(6,057)

(5,402)

Loss attributable to: Owners of the Company Non-controllinginterests (6,05)

(5,37)

Loss for the period

(6,057)

(5,402)

Total comprehensive Loss attributable to: Owners of the Company Non-controllinginterests (6,05)

(5,37)

Total comprehensive Loss for the period

(6,057)

(2)

(27)

(2)

(27) (5,402)

Loss per share Basiclosspershare(centspershare)

22 (0.93)

(0.83)

Dilutedlosspershare(centspershare)

22 (0.93)

(0.83)

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

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Attributable to owners of the Company Share capital $0

Note Balanceat1July2019

Equity Compensation reserve $0

108,465

Accumulated losses $0

2,169

Total $0

NonControlling interests $0

Total equity $0

(42,56)

68,07

68,075

Total comprehensive loss for the period Lossfortheperiod Total comprehensive loss for the period

–

(5,37)

(27)

(5,402)

(5,375)

(27)

(5,402)

Transactions with owners of the Company, recognised directly in equity Contributions by and distributions to owners of the company Issue of options

Totalcontributionsbyand distributions to owners of thecompany

362

Balance at 30 June 2020

108,465

2,531

(47,939)

63,057

(22)

63,035

Balanceat1July20

108,465

2,531

(47,93)

63,057

(2)

63,05

Total comprehensive loss for the period Lossfortheperiod Total comprehensive loss for the period

–

(6,05)

(2)

(6,057)

(6,055)

(2)

(6,057)

Transactions with owners of the Company, recognised directly in equity Contributions by and distributions to owners of the company Issue of options Expiredoptions

20 1,598

Totalcontributionsbyand distributions to owners of thecompany Balance at 30 June 2021

1,598

922 108,465

1,598

676 (67)

3,453

676 (53,318)

1,598 58,600

1,598 (24)

58,576

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

AeonMetalsAnnualReport201b/b 27

Consolidated Financial Statements

Consolidated Statement of Changes in Equity For the year ended 30 June 2021

Consolidated Statement of Cash Flows For the year ended 30 June 2021 Note

30 June 2021 $0

30 June 2020 $0

Cash flows from operating activities 50

Otherincome Cash paid to suppliers and employees (2,43)

Cash used in operations (2,37)

(1,90) 6

nterestreceived Net cash used in operating activities

51 (1,960)

(2,367)

38 (1,871)

Cash flows from investing activities Acquisitionofproperty,plantandequipment

(4)

Paymentsforexplorationactivities(netofgrantsreceived)

(1)

(2,57)

(6,83)

(2,531)

Net cash used in from investing activities

(6,684)

Cash flows from financing activities Proceedsfromborrowings

Net cash from financing activities Net decrease in cash and cash equivalents

4,0

3,000

4,000

(1,89)

Cashandcashequivalentsat1July Cash and cash equivalents at 30 June

3,0

(4,5) 2,45

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

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6,980 527

2,425

Notes to the Consolidated

Financial Statements For the year ended 30 June 2021 1. Corporate Information

TheQnancialstatementsofAeonMetalsLimited(Company$orAeon$)anditscontrolledentities(theGroup$)fort ended30June201wereauthorisedforissueinaccordancewitharesolutionofthedirectorson20September201.

AeonMetalsLimitedistheGroup$sultimateparentcompany,andisacompanylimitedbysharesincorporatedin AustraliawhosesharesarepubliclytradedontheAustralianSecuritiesExchange.

TheprincipalactivityoftheCompanyduringtheyearwasexplorationandevaluationofmineralpermitsinAu TheRegisteredOzceoftheCompanyisLevel5,126PhilipStreet,SydneyNSW20.

2. Basis of preparation Statement of compliance

TheconsolidatedQnancialstatementsaregeneralpurposeQnancialstatementswhichhave beenprepare dancewithAustralianAccountingStandards(AASBs)adoptedbytheAustralianAccountingStandardsBoard andtheCorporationsAct201.TheconsolidatedQnancialstatementscomplywithnternationalFinancialRep Standards(FRS)adoptedbythenternationalAccountingStandardsBoard(ASB).

Basis of Preparation ForthepurposesofpreparingtheQnancialstatements,theCompanyisafor-proQtentity.

TheconsolidatedQnancialstatementshavebeenpreparedonthebasisofhistoricalcost,exceptforther ofcertainnon-currentassetsandQnancialinstruments.Costisbasedonthefairvaluesoftheconsidera exchangeforassets.AllamountsarepresentedinAustraliandollars,unlessotherwisenoted.

New standards and interpretations

TheGrouphasadoptedallthenewandrevisedStandardsandnterpretationsissuedbytheAustralianAcc StandardsBoard(theAASB)thatarerelevanttotheiroperationsandeectiveforthecurrentyearended ThenewandrevisedStandardsandnterpretationsdidnothaveanysigniQcantimpact.

Conceptual Framework for Financial Reporting (Conceptual Framework)

TheGrouphasadoptedtherevisedConceptualFrameworkfrom1July20.TheConceptualFrameworkcontainsnew deQnitionandrecognitioncriteriaaswellasnewguidanceonmeasurementthataectsseveralAccountin butithasnothadamaterialimpactontheconsolidatedentity$sQnancialstatements.

AeonMetalsAnnualReport201b/b 29

Going concern

TheannualconsolidatedQnancialstatementshavebeenpreparedonagoingconcernbasis,whichcontempla continuationofnormalbusinessoperationsandtherealisationofassetsandsettlementofliabiliti courseofbusiness. Duringtheyearended30June201,theGroupincurredanetlossbeforetaxof$6.1million(20:$5.4million)and netcashoutRowfromoperatingandinvestingactivitiesof$4.9million(20:$8.6million).

ThecashRowforecastpreparedfortheassessmentofGoingConcernfactorsinanumberofestimates andassu tionsinrelationtothetimingandquantumofplannedexplorationexpenditure.Theplannedexpenditure needtoraisecapitalduringtheforecastperiodinordertoexecutetheGroup$sstatedaimofprogressingt CreekProject.TheabovemattersgiverisetoamaterialuncertaintythatmaycastsigniQcantdoubtover theGrouptocontinueasagoingconcern. Asat30June201,theGrouphadnetcurrentliabilitiesof$25.9million(June20:assetsof$1.8million)including cashof$0.5million(June20:$.4million).TheDirectorsregularlymonitortheCompany$scashpositiononanongo ingbasisandhavedemonstratedasuccessfultrackrecordofraisingcapitalandfundingwhenrequired. On19July201,theCompanyannouncedthatithadsuccessfullysecuredcommitmentsfromsophisticated - andprofes sionalinvestorsviaatwo-trancheshareplacementtoraise$9.5millionatanissuepriceof5.8centspershare. On23August201,theCompanyannouncedithadraised$0.7millionviaaSharePlacementPlanonthesameterms astheshareplacementabove.

ShouldtheGroupbeunabletoexecutetheforecaststrategy,whichincludesraisingcapital,itmayberequir itsassetsanddischargeitsliabilitiesotherthaninthenormalcourseofbusinessandatamountsdie statedintheQnancialstatements.TheQnancialstatementsdonotincludeanyadjustmentstotherec classiQcationofassetcarryingamountsortheamountofliabilitiesthatmightresultshouldtheGroup continueasagoingconcernandmeetitsdebtsasandwhentheyfalldue.

Basis of measurement

TheconsolidatedQnancialstatementshavebeenpreparedonthehistoricalcostbasisexceptforthefol itemsinthestatementofQnancialposition:

FinancialinstrumentsatfairvaluethroughproQtorlossaremeasuredatfairvalue.

Themethodsusedtomeasurefairvaluesarediscussedfurtherinnote5.

Functional and presentation currency

TheseconsolidatedQnancialstatementsarepresentedinAustraliandollars,whichistheCompany$sfunc

TheCompanyisofakindreferredtoinASCClassOrder2016/9dated1April2016andinaccordancewiththatClass Order,allQnancialinformationpresentedinAustraliandollarshasbeenroundedtothenearestthous otherwise stated.

Critical accounting judgements, estimates and assumptions

ThepreparationoftheQnancialstatementsrequiresmanagementtomakejudgements,estimatesandassu thataectthereportedamountsintheQnancialstatements.Managementcontinuallyevaluatesitsju estimatesinrelationtoassets,liabilities,contingentliabilities,revenueandexpenses. Management ments,estimatesandassumptionsonhistoricalexperienceandonothervariousfactors,includingexpect futureevents,managementbelievestobereasonableunderthecircumstances.Theresultingaccountingj andestimateswillseldomequaltherelatedactualresults.Thejudgements,estimatesandassumption signiQcantriskofcausingamaterialadjustmenttothecarryingamountsofassetsandliabilities(refer notes)withinthenextQnancialyeararediscussedbelow.

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Notes to the consolidated financial statements

Coronavirus (COVID-19) pandemic

JudgementhasbeenexercisedinconsideringtheimpactsthattheCoronavirus(COVD-19)pandemichashad,ormay have,ontheGroupbasedonknowninformation.Thisconsiderationextendstothenatureoftheproductsan oered,customers,supplychain,stazngandgeographicregionsinwhichtheGroupoperates.Otherthandelayin completingthePFStheredoesnotcurrentlyappeartobeeitheranysigniQcantimpactupontheQnancialsta oranysigniQcantuncertaintieswithrespecttoeventsorconditionswhichmayimpacttheGroupunfavour reportingdateorsubsequentlyasaresultoftheCoronavirus(COVD-19)pandemic. Share-based payment transactions

TheGroupmeasuresthecostofequity-settledtransactionswithemployeesbyreferencetothefairvalueo instrumentsatthedateatwhichtheyaregranted.ThefairvalueisdeterminedbyusingeithertheBinomi Scholesmodeltakingintoaccountthetermsandconditionsuponwhichtheinstrumentsweregranted.The estimatesandassumptionsrelatingtoequity-settledshare-basedpaymentswouldhavenoimpactonthec amountsofassetsandliabilitieswithinthenextannualreportingperiodbutmayimpactproQtorlossan to note 20 for further information. Exploration and evaluation costs

ExplorationandevaluationcostshavebeencapitalisedonthebasisthattheGroupwillcommence commerc tioninthefuture,fromwhichtimethecostswillbeamortisedinproportiontothedepletionoftheminera Keyjudgementsareappliedinconsideringcoststobecapitalisedwhichincludesdeterminingexpenditure relatedtotheseactivitiesandallocatingoverheadsbetweenthosethatareexpensedandcapitalis areonlycapitalisedthatareexpectedtoberecoveredeitherthroughsuccessfuldevelopmentorsaleof mininginterest.Factorsthatcouldimpactthefuturecommercialproductionatthemineincludetheleve andresources,futuretechnologychanges,whichcouldimpactthecostofmining,futurelegalchangesandchang commodityprices.Totheextentthatcapitalisedcostsaredeterminednottoberecoverableinthefutur writtenointheperiodinwhichthisdeterminationismade. Recovery of deferred tax assets

DeferredtaxassetsarerecognisedfordeductibletemporarydierencesonlyiftheGroupconsidersitispro futuretaxableamountswillbeavailabletoutilisethosetemporarydierencesandlosses.b

3. Significant accounting policies

Theaccountingpoliciessetoutbelowhavebeenappliedconsistentlytoallperiodspresentedinthesec QnancialstatementsandhavebeenappliedconsistentlybyGroupentities.

Basis of consolidation Transactions eliminated on consolidation

ntercompanytransactions,balancesandunrealisedgainsontransactionsbetweenentitiesintheGroupa Unrealisedlossesarealsoeliminatedunlessthetransactionprovidesevidenceoftheimpairmentofthe Accountingpoliciesofsubsidiarieshavebeenchangedwherenecessarytoensureconsistencywiththepolici by the Group. Subsidiaries

SubsidiariesareentitiescontrolledbytheGroup.TheGroupcontrolsanentitywhenitisexposedto,orhas variablereturnsfromitsinvolvementwiththeentityandhastheabilitytoaectthosereturnsthrou theentity.TheQnancialstatementsofsubsidiariesareincludedintheconsolidatedQnancialstateme onwhichcontrolcommencesuntilthedateonwhichcontrolceases. Acquisitions

Theacquisitionofsubsidiariesisaccountedforusingtheacquisitionmethodofaccounting.Achangeinowners withoutthelossofcontrol,isaccountedforasanequitytransaction,wherethedierencebetween theconsid ferredandthebookvalueoftheshareofthenon-controllinginterestacquiredisrecogniseddirectlyinequi to the parent. Loss of control

WhentheGrouplosescontroloverasubsidiary,itderecognisestheassetsandliabilitiesof- thesubsidi edNCandothercomponentsofequity.AnyresultinggainorlossisrecognisedinproQtorloss.Anyinterestret theformersubsidiaryismeasuredatfairvaluewhencontrolislost.

AeonMetalsAnnualReport201b/b 31

Non-controlling interests

NCaremeasuredattheirproportionateshareoftheacquiree$sidentiQablenetassetsattheacquisiti intheGroup$sinterestinasubsidiarythatdonotresultinalossofcontrolareaccountedforasequityt

Share capital Ordinary shares

ncrementalcostsdirectlyattributabletotheissueofordinaryshares,netofanytaxeects,arerecognised fromequity.

Property, plant and equipment (i) Recognition and measurement

temsofproperty,plantandequipmentaremeasuredatcostlessaccumulateddepreciationandaccumulatedi losses.

fsigniQcantpartsofanitemofproperty,plantandequipmenthavedierentusefullives,theyareaccountedf separateitems(majorcomponents)ofproperty,plantandequipment. Anygainorlossondisposalofanitemofproperty,plantandequipmentisrecognisedinproQtorloss. (ii) Subsequent expenditure

SubsequentexpenditureiscapitalisedonlywhenitisprobablethatthefutureeconomicbeneQtsassocia expenditurewillRowtotheGroup. (iii) Depreciation

Depreciationiscalculatedtowrite-othecostofproperty,plantandequipmentlesstheirestimatedres usingthestraight-linebasisovertheirestimatedusefullivesandisgenerallyrecognisedinproQtorlo aredepreciatedovertheshorteroftheleasetermandtheirusefullivesunlessitisreasonablycerta will obtain ownership by the end of the lease term. Thedepreciationratesusedforeachclassofdepreciableassetsare:

3 3 3 3

Computerequipment

20%67

Miningandexplorationequipment 5%67 Plantandequipment

5%0

Motorvehicles

10%25

Depreciationmethods,usefullivesandresidualvaluesarereviewedateachreportingdateandadjuste

Exploration and evaluation expenditure

Explorationandevaluationcosts,includingthecostsofacquiringlicences,arecapitalisedasexplorati assetsonanareaofinterestbasis.Costsincurredbeforetheentityhasobtainedthelegalrightstoexp recognisedinproQtorloss.

Explorationandevaluationassetsareonlyrecognisediftherightsoftheareaofinterestarecurrenta

3 3

theexpendituresareexpectedtoberecoupedthroughsuccessfuldevelopmentandexploitationofth ofinterest;or

activitiesintheareaofinteresthavenotatthereportingdate,reachedastagewhichpermitsare assessmentoftheexistenceorotherwiseofeconomicallyrecoverablereservesandactiveandsigniQ operationin,orinrelationto,theareaofinterestarecontinuing.

Explorationandevaluationassetsareassessedforimpairmentifsuzcientdataexiststo- determinetec ityandcommercialviabilityandfactsandcircumstancessuggestthatthecarryingamountexceedstherec amount.Forthepurposeofimpairmenttesting,explorationandevaluationassetsareallocatedtocash-ge towhichtheexplorationactivityrelates.Thecashgeneratingunitshallnotbelargerthantheareaofin

Oncethetechnicalfeasibilityandcommercialviabilityoftheextractionofmineralresourcesinanareao demonstrable,explorationandevaluationassetsattributabletothatareaofinterestareQrsttes andthenreclassiQedfromexplorationandrevaluationexpendituretominingpropertyanddevelopmenta property,plantandequipment.

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(i) Non-derivative financial assets

Notes to the consolidated financial statements

Impairment

FinancialassetsnotclassiQedasatfairvaluethroughproQtorloss,includinganinterest - inanequity-a ee,areassessedateachreportingdatetodeterminewhetherthereisobjectiveevidenceofimpairment ObjectiveevidencethatQnancialassetsareimpairedincludes:

3 3 3 3 3 3

defaultordelinquencybyadebtor;

restructuringofanamountduetotheGroupontermsthattheGroupwouldnotconsiderotherwise; indicationsthatadebtororissuerwillenterbankruptcy; adversechangesinthepaymentstatusofborrowersorissuers; thedisappearanceofanactivemarketforasecurity;or

observabledataindicatingthatthereismeasurabledecreaseinexpectedcashRowsfromagroupofQnanci

Foraninvestmentinanequitysecurity,objectiveevidenceofimpairmentincludesasigniQcantorprolonge itsfairvaluebelowitscost.TheGroupconsidersadeclineof20%tobesigniQcantandaperiodofninemonthstob prolonged. (ii) Financial assets measured at amortised cost

TheGroupconsidersevidenceofimpairmentfortheseassetsmeasuredatbothanindividualassetandaco level.AllassetsareindividuallyassessedforspeciQcimpairment.

Animpairmentlossiscalculatedasthedierencebetweenanasset$scarryingamountandthepresentvalu estimatedfuturecashRowsdiscountedattheasset$soriginaleectiveinterestrate.Lossesarerecogn lossandreRectedinanallowanceaccount.WhentheGroupconsidersthattherearenorealisticprospect oftheasset,therelevantamountsarewritten-o.ftheamountofimpairmentlosssubsequentlydecreases decreasecanberelatedobjectivelytoaneventoccurringaftertheimpairmentwasrecognised,thenthep recognisedimpairmentlossisreversedthroughproQtorloss.

Borrowings

Loansandborrowingsareinitiallyrecognisedatthefairvalueoftheconsiderationreceived,netoftran Theyaresubsequentlymeasuredatamortisedcostusingtheeectiveinterestmethod.

Finance Costs

Financecostsattributabletoqualifyingassetsarecapitalisedaspartoftheasset.AllotherQnanceco theperiodinwhichtheyareincurred.

Employee benefits (i) Short-term employee benefits

Short-termemployeebeneQtsareexpensedastherelatedserviceisprovided.Aliabilityisrecognisedfort expectedtobepaidiftheGrouphasapresentlegalorconstructiveobligationtopaythisamountasaresul serviceprovidedbytheemployeeandtheobligationcanbeestimatedreliably. (ii) Share-based payment transactions

Thegrant-datefairvalueofequity-settledshare-basedpaymentawardsgrantedtoemployeesisgenerallyre asanexpense,withacorrespondingincreaseinequity,overthevestingperiodoftheawards.Theamountrecog asanexpenseisadjustedtoreRectthenumberofawardsforwhichtherelatedserviceandnon-marketperfo conditionsareexpectedtobemet,suchthattheamountultimatelyrecognisedisbasedonthenumberofawa meettherelatedserviceandnon-marketperformanceconditionsatthevestingdate.Forshare-basedpaym withnon-vestingconditions,thegrant-datefairvalueoftheshare-basedpaymentismeasuredtoreRectsu andthereisnoadjustmentfordierencesbetweenexpectedandactualoutcomes. (iii) Other long-term employee benefits

TheGroup$snetobligationinrespectoflong-termemployeebeneQtsistheamountoffuturebeneQtthatemploye earnedinreturnfortheirserviceinthecurrentandpriorperiods.ThefuturebeneQtcalculatedisdiscou itspresentvalue.RevisionstothiscalculatedvaluearerecognisedinproQtorlossintheperiodinwhich

AeonMetalsAnnualReport201b/b 33

Provisions

ProvisionsaredeterminedbydiscountingtheexpectedfuturecashRowsatapre-taxratethatreRectscur assessmentsofthetimevalueofmoneyandtherisksspeciQctotheliability.Theunwinding - ofthediscounti ognisedasQnancecost. Site restoration

naccordancewiththeGroup$spublishedenvironmentalpolicyandapplicablelegalrequirements,aprovisi restorationinrespectofcontaminatedland,andtherelatedexpense,isrecognisedwhenthelandiscont

Right-of-use assets

Theconsolidatedentityhaselectednottorecognisearight-of-useassetandcorrespondingleaseliabil leaseswithtermsof12monthsorlessandleasesoflow-valueassets.Leasepaymentsontheseassetsareexpen proQtorlossasincurred.

Finance income FinanceincomeisrecognisedasitaccruesinproQtorloss,usingtheeectiveinterestmethod.

Income tax

ncometaxexpensecomprisescurrentanddeferredtax.tisrecognisedinproQtorlossexcepttotheextentt relatestoabusinesscombination,oritemsrecogniseddirectlyinequityorinOC. (i) Current tax

Currenttaxcomprisestheexpectedtaxpayableorreceivableonthetaxableincomeorlossfor- theyearanda menttotaxpayableorreceivableinrespectofpreviousyears.tismeasuredusingtaxratesenactedorsubs enactedatthereportingdate.Currenttaxalsoincludesanytaxarisingfromdividends. Currenttaxassetsandliabilitiesareosetonlyifcertaincriteriaaremet. (ii) Deferred tax

Deferredtaxisrecognisedinrespectoftemporarydierencesbetweenthecarryingamountsofassetsandlia Qnancialreportingpurposesandtheamountsusedfortaxationpurposes.Deferredtaxisnotrecognisedfor

3 3 3

temporarydierencesontheinitialrecognitionofassetsorliabilitiesinatransaction thatisno nationandthataectsneitheraccountingnortaxableproQtorloss;

temporarydierencesrelatedtoinvestmentsinsubsidiaries,associatesandjointarrangementst theGroupisabletocontrolthetimingofthereversalofthetemporarydierencesanditisprobablet notreverseintheforeseeablefuture;and taxabletemporarydierencesarisingontheinitialrecognitionofgoodwill.

Deferredtaxassetsarerecognisedforunusedtaxlosses,unusedtaxcreditsanddeductibletemporarydie theextentthatitisprobablethatfuturetaxableproQtswillbeavailableagainstwhichtheycanbeuse assetsarereviewedateachreportingdateandarereducedtotheextentthatitisnolongerprobablet taxbeneQtwillberealised;suchreductionsarereversedwhentheprobabilityoffuturetaxableproQtsim

Deferredtaxismeasuredatthetaxratesthatareexpectedtobeappliedtotemporarydierenceswhenthe usingtaxratesenactedorsubstantivelyenactedatthereportingdate.

ThemeasurementofdeferredtaxreRectsthetaxconsequencesthatwouldfollowfromthemannerinwhichth expects,atthereportingdate,torecoverorsettlethecarryingamountofitsassetsandliabilities.For thecarryingamountofinvestmentpropertymeasuredatfairvalueispresumedtoberecoveredthroughsal Group has not rebutted this presumption. Deferredtaxassetsandliabilitiesareosetonlyifcertaincriteriaaremet.

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Notes to the consolidated financial statements

Goods and services tax

Revenue,expensesandassetsarerecognisednetoftheamountofgoodsandservicestax(GST),exceptwheretheamou ofGSTincurredisnotrecoverablefromthetaxationauthority.nthesecircumstances,theGSTisrecognisedasp costofacquisitionoftheassetoraspartoftheexpense.

ReceivablesandpayablesarestatedwiththeamountofGSTincluded.ThenetamountofGSTrecoverablefrom,or payableto,theATOisincludedasacurrentassetorliabilityonthebalancesheet.

CashRowsareincludedinthestatementofcashRowsonagrossbasis.TheGSTcomponentsofcashRowsarisingfrom investingandQnancingactivitieswhicharerecoverablefrom,orpayableto,theATOareclassiQedasoperatin

Earnings per share

TheGrouppresentsbasicanddilutedearningspersharedataforitsordinaryshares.Basicearningspersh calculatedbydividingtheproQtorlossattributabletoordinaryshareholdersoftheCompanybytheweigh number of ordinary shares outstanding during the period. Diluted earnings per share is determined by adjusting the proQtorlossattributabletoordinaryshareholdersandtheweightedaveragenumberofordinaryshares adjustedforownsharesheld,fortheeectsofalldilutivepotentialordinaryshares,whichcompriseofth

Segment Reporting Determination and presentation of operating segments

AnoperatingsegmentisacomponentoftheGroupthatengagesinbusinessactivitiesfromwhichitmayearnre andincurexpenses,includingrevenuesandexpensesthatrelatetotransactionswithanyof - theGroup$sot nents.Alloperatingsegments$operatingresultsarereviewedregularlybytheGroup$sManaging Directorto cisionsaboutresourcestobeallocatedtothesegmentandtoassessitsperformance,andforwhichdiscre informationisavailable.

SegmentresultsthatarereportedtotheManagingDirectorincludeitemsdirectlyattributabletoase thosethatcanbeallocatedonareasonablebasis.Unallocateditemscomprisemainlycorporateassets(pr Company$sheadquarters),headozceexpenses,andincometaxassetsandliabilities.

Segmentcapitalexpenditureisthetotalcostincurredduringtheperiodtoacquireproperty,plantande intangible assets other than goodwill.

4. New standards and interpretations not yet adopted

Anumberofnewstandardsandamendmentstostandardsareeectiveforannualperiodsbeginningafter1July 201,andhavenotbeenappliedinpreparingtheseconsolidatedQnancialstatements.Noneofthenewstandard amendmentstostandardsareexpectedtohaveamaterialeectontheGroup.TheGroupdoesnotplantoadop these standards early.

5. Determination of fair values

AnumberoftheGroup$saccountingpoliciesanddisclosuresrequirethedeterminationoffairvalue,forbot andnon-Qnancialassetsandliabilities.Fairvalueshavebeendeterminedformeasurementand/ordisclos basedonthefollowingmethods.Whenapplicable,furtherinformationabouttheassumptionsmadeindeterm valuesisdisclosedinthenotesspeciQctothatassetorliability.

Investments in equity and debt securities

ThefairvalueofQnancialassetsatfairvaluethroughproQtorlossandheld-to-maturityinvestmentsisd referencetotheirquotedclosingbidpriceatthereportingdate.Thefairvalueofheld-to-maturity invest minedfordisclosurepurposesonly.

AeonMetalsAnnualReport201b/b 35

Share-based payment transactions

Thefairvalueofemployeeshareoptionsandwarrants,includingsharesissuedtoDirectorsandemployeesas ismeasuredusingtheBlack-Scholesformula.Measurementinputsincludesharepriceonmeasurementdate,e priceoftheinstrument,expectedvolatility(basedonweightedaveragehistoricvolatilityoftheCompany$s adjustedforchangesexpectedduetopubliclyavailableinformation),weightedaverageexpectedlifeofthei (basedonhistoricalexperienceandgeneraloptionholderbehaviour),expecteddividends,andtherisk-freei (basedongovernmentbonds).Serviceandnon-marketperformanceconditionsattachedtothetransactionsa takenintoaccountindeterminingfairvalue.

Financial liabilities

ThefairvalueoflimitedrecoursenotesisdeterminedbasedondiscountedcashRowsandanappropriateee interest rate.

6. Operating segments

TheGroup$sonlyoperationisexplorationformineralsinQueensland,Australia.TheGroup$sBoardreviewsth QnancialstatementsonamonthlybasiswhicharepreparedonthesamebasisastheseQnancialstatement

TheGroup$soperationsareallbasedinonegeographicsegment,beingQueensland,AustraliaandtheGroup$soper areintheexplorationandevaluationphase,soithasnoproductsorservicesnoranymajorcustomers.

7. Finance income and finance costs recognised in profit or loss 2021

2020

nterestincome

6 38

8. Other expenses 2021

2020

EmployeebeneQtsexpense Superannuationexpense Sharebasedpayments

(1,0)

(658) (67)

(54)

(1,598)

(362) (2,765)

(1,074)

9. Expenses by nature 2021 $0 EmployeebeneQtsexpenseincludingsuperannuation Depreciationexpense Consultancyexpense Impairment loss Sharebasedpayments Otherexpenses

(1,67)

(712) (68)

(81)

(1,37)

(45) (1,4)

(3,150) (1,598)

(362) (715) (6,05)

36b/bwww.aeonmetals.com.au

2020 $0

(792) (5,42)

2021

2020

Income tax recognised in profit Current tax expense Current year Deferredtaxexpense Totalincometaxexpense

Reconciliation of effective tax rate Lossfortheyear Totaltaxexpense Lossexcludingtax

TaxusingtheCompany$sdomestictaxrateof26.0percent(20:7.5percent) Non-assessableincome Lossesnotbroughttoaccount

(6,057)

(5,402)

(6,057)

(5,402) (1,574)

(1,486) 403

1,7

1,53

Unrecognised deferred tax assets Deductibletemporarydierences Taxlosses

(20,59)

(21,38) 23,140

2,8 2,548

1,50

Notes to the consolidated financial statements

10. Income tax

From1July2019AeonMetalsLimited,asheadentity,anditssubsidiarieselectedtoformataxconsolidatedgroup.

Thedeductibletemporarydierencesandtaxlossesdonotexpireundercurrenttaxlegislation.Deferredt havenotbeenrecognisedinrespectoftheseitemsbecauseitisnotprobablethatfuturetaxableproQtwi againstwhichtheGroupcanutilisethebeneQtstherefrom.

11. Cash and cash equivalents 2021

2020

$0 527 2,45

527 2,45

Bankbalances

Refertonote24forfurtherinformationonQnancialinstruments.

12. Trade and other receivables 2021 $0

2020

Other debtors GSTreceivable

183

50 214 183

264

Refertonote24forfurtherinformationonQnancialinstruments.

AeonMetalsAnnualReport201b/b 37

13. Other Investments 2021 Current investments $0

2020 $0

52 53

Termdeposit

Thetermdeposithadanaverageinterestrateof1.4%(20:6)andmaturesin1month. Refertonote24forfurtherinformationonQnancialinstruments.

14. Property, plant and equipment

In thousands of AUD

Computer equipment

Mining and exploration equipment

Plant and equipment

Motor vehicles

Property improvements

Total

Cost Balanceat1July2019 Additions/(Disposals)

458 1

78 1 132

171

924 2

Balanceat30June20

459

79 132

171

926

Balanceat1July20 Additions/(Disposals)

85 3

459

79 1 132

171

926 4

Balanceat30June201

459

80 132

171 930

Depreciation Balanceat1July2019 Charge for the year Disposals

(75)

Balanceat30June20

(80)

Balanceat1July20 Charge for the year Disposals

(80)

Balanceat30June201

(83)

(258)

(39)

(5)

(1)

(41)

(28)

(8)

(29)

(47) (47)

(81) (50)

(592) (50)

(592)

(16)

(32) (31)

(2)

(16)

(29) (3)

(51)

(5)

(8) (5)

(4) (120)

(21)

(68) (71)

(60)

Carry amounts At1July2019

200 39

21 143

413

At30June20

160 32

121 34

At1July20

160 32

121 34

At30June201

128

100

270

38b/bwww.aeonmetals.com.au

2021

2020

Balanceat1July Additions,includingcapitalisedinterestandfees R&Dclaimreceived Impairment losses

79,53

Balanceat30June

84,10

75,4 6,729

9,30

(1,358)

(1,645) (1,4)

(3,150) 79,53

Notes to the consolidated financial statements

15. Exploration and evaluation of assets

Recoverabilityofthecarryingamountofexplorationandevaluationassetsisdependentonthesuccessful andcommercialexploitationorsaleoftherespectiveareasofinterest. ncludedinadditionsisanamountof$2,7140(:5)relatingtocapitalisedinterestandfees,thisrepre sented10%ofinterestandfees.

Theimpairmentlossof$1,40(2:35)relatestoallotherexplorationandevaluationassetsexceptfor WalfordCreek,thisisduetoWalfordCreekbeingthemainfocusoftheCompany.Whilsttheseassets havebeenim paireditisstilltheintentionoftheCompanytofurthertheseprojectsinthefuture.

16. Trade and other receivables 2021

2020

Tradepayables Accruedexpenses

614 140

1,27 431

754 1,702

Refertonote24forfurtherinformationonQnancialinstruments.

17. Employee Benefits 2021 $0 Salariesandwagesaccrued Liabilityforannualleave Liabilityforlongserviceleave Liabilityforsuperannuation TotalemployeebeneQtcurrent

2020 $0

86 3

47 188 20 1

262

256

43 130

AeonMetalsAnnualReport201b/b 39

18. Provisions Site restoration $0

Total $0

Balanceat1July20 Provisionsmadeduringtheyear Provisionsusedduringtheyear Provisionsreversedduringtheyear

Balanceat30June201

Site restoration $0 Current Non-current

Total $0

Site Restoration

Aprovisionof$50,wasmadeinrespectoftheGroup$sobligationsinrespectofenvironmentalremediation.Therequir workiscompletedthroughouttheyearonanongoingbasis.Therehasbeennochangetotheprovisioninthecurre TheprovisionhasbeencapitalisedtotheExplorationandEvaluationassetsatNote15.

19. Loans and borrowings 2021

2020

Current Limitedrecoursenotes

24,758 24,758

Non-current Limitedrecoursenotes

19,04 19,04

Refertonote24forfurtherinformationonassetspledgedassecurityandQnancingarrangements. Refertonote24forfurtherinformationonQnancialinstruments.

Reconciliation of movement in loans and borrowings 2021 $0 Outstandingat1July Newloanduringtheyear Accruedinterestandfeesduringtheyear

19,04

Oustandingat30June

24,758

40b/bwww.aeonmetals.com.au

2020 $0 12,790

3,0

4,0 2,714

2,54 19,04

Notes to the consolidated financial statements

Year Ended 30 June 2021

On25September20,theCompanyannouncedthatOCPAsiaGrouphadagreedtoincreasethelimitonitsexisting loanfacilitybyupto$3million. On25July201,theCompanyannouncedthatithasreachedanin-principleagreementwithOCPAsiaGrouptoextend thematuritydateonitsexistingloanfacilityby24months(to17December203).

TheCompanyhasaccruedinterestof$2,7140duringtheyearended30June201.Thesetransactionshavebeen capitalisedagainsttheexplorationandevaluationassetsinaccordancewithAASB123(Borrowingcosts)whi borrowingcostsdirectlyattributabletotheproductionofaqualifyingasset,toformpartofthecostofth Year Ended 30 June 2020 On18March20,thecompanyannouncedthatOCPhadagreedtoadvanceafurthercashloanof$4,0witha repaymentdateof17December201. On30March20,thecompanyannouncedthatOCPhadagreedtoextendtherepaymentdateofthefacilityto 17December201.

TheCompanyhasaccruedinterestof$1,7230andwaschargedafacilityextensionfeeof$531,0duringtheyear ended30June20.Thesetransactionshavebeencapitalisedagainsttheexplorationandevaluationassetsinacc withAASB123(Borrowingcosts)whichrequiresborrowingcostsdirectlyattributabletotheproductionofaquali toformpartofthecostoftheasset.

Terms and debt repayment schedule Termsandconditionsofoutstandingloansareasfollows: 2021

Currency Limitedrecoursenotes

AUD

Nominal Interest Rate

Face value $0

12.0%

Year of maturity Dec201

Total interest-bearing liabilities

2020

Carrying amount $0

Face value $0

Carrying amount $0

24,758

19,04

24,758

19,044

TheamortisedcostofthenoteswascalculatedusingadiscountedcashRowbasedonaneectiveinterestr

20. Capital and reserves Share capital 2021 No. of ordinary shares (thousands)

2020

Onissueat1July 67,50 Sharesissuedforcash ncentivesharesissuedforservices 14,0 Transferbetweenreservesfromexerciseofwarrants

108,465

Onissueat30June

108,465

691,70

No. of ordinary shares (thousands) 673,0

$0 108,465

4,50 67,50

108,465

AeonMetalsAnnualReport201b/b 41

Ordinary shares

TheCompanydoesnothaveauthorisedcapitalorparvalueinrespectofitsissuedshares.Allissuedsharesa

Theholdersofordinarysharesareentitledtoreceivedividendsasdeclaredfromtimetotimeandareent votepershareatmeetingsoftheCompany.AllsharesrankequallywithregardstotheCompany$sresidualass Issuance of ordinary shares for the year to 30 June 2021 Date

No. of shares issued

12 August 2020

Price per share $ 0.16

14,0

Total consideration $

Purpose Sharebasedpayment*

14,0 *

Incentive shares – recorded in equity compensation reserve (see below).

Year Ended 30 June 2021 14,0sharesweregrantedtoemployeesanddirectorsasincentiveforservices,theseshareswereprovided throughalimitedrecourseloanarrangement. Year Ended 30 June 2020 4,50sharesweregrantedtoemployeesanddirectorsasincentiveforservices,theseshareswereprovided throughalimitedrecourseloanarrangement.

Equity compensation reserve

Theequitycompensationreserverecordsthefairvalueofincentivesharesandwarrantsissued.Whenanop warrantexpires,oritisexercised,thefairvalueoftheaectedinstrumentistransferredtoretainedea

Share based payments Description of the share-based payment arrangements Year Ended 30 June 2021

On4August20,.millionfullypaidordinaryshares,throughlimitedrecourseloansprovidedbythecompany,were extendedbythreeyearsto4August203.naccordancewithAASB2themodiQcationoftermsarerequired - tobeval uedandaccountedforasoptions.Anincreaseinthefairvalueofwas $94,0 calculatedusingtheBlackScholesmod

On12August20,14.millionordinaryshareswerepurchasedbyparticipantsintheCompany$sSharencentivePlan throughlimitedrecourseloansprovidedbythecompany.Thelimitedrecourseloansarelimitedtosharesi interestfreeandrepayablewithin3years.Thefairvalueofthesesharesof$915,0wascalculatedusingtheBlack Scholesmodel. On12August20,5.millionfullypaidordinaryshares,throughlimitedrecourseloansprovidedbythecompany,were extendedbythreeyearsto18August203.naccordancewithAASB2themodiQcationoftermsarerequiredtobevalued andaccountedforasoptions.Anincreaseinthefairvalueof$298,0wascalculatedusingtheBlackScholesmodel. On14August20,.5millionfullypaidordinaryshares,throughlimitedrecourseloansprovidedbythecompany,were extendedbythreeyearsto18August203.naccordancewithAASB2themodiQcationoftermsarerequiredtobevalued andaccountedforasoptions.Anincreaseinthefairvalueof$15,0wascalculatedusingtheBlackScholesmodel. On14August20,1.5millionfullypaidordinaryshares,throughlimitedrecourseloansprovidedbythecompany,were extendedbythreeyearsto8February204.naccordancewithAASB2themodiQcationoftermsarerequiredtobevalued andaccountedforasoptions.Anincreaseinthefairvalueof$136,0wascalculatedusingtheBlackScholesmodel.

42b/bwww.aeonmetals.com.au

Notes to the consolidated financial statements

Year Ended 30 June 2020

On20August2019,.millionordinaryshareswerepurchasedbyaparticipantintheCompany$sSharencentivePlan throughalimitedrecourseloanprovidedbythecompany.Thelimitedrecourseloanislimited-tosharesiss estfreeandrepayablewithin3years.Thefairvalueofthesesharesof$84,0wascalculatedusingtheBlackScholes Modelasat30June20.ThesharesarenotabletobesolduntilspeciQcconditionsaresatisQed.

On18December2019,3.5millionordinaryshareswerepurchasedbyparticipantsintheCompany$sSharencentive Planthroughlimitedrecourseloansprovidedbythecompany.Thelimitedrecourseloansarelimitedtosha areinterestfreeandrepayablewithin3years.Thefairvalueofthesesharesof$278,0wascalculatedusingtheBla ScholesModelasat30June20.ThesharesarenotabletobesolduntilspeciQcconditionsaresatisQed.

FromtimetotimetheCompanymayissuesharestoemployeespursuanttotheCompany$sEmployee - Sharencen tivePlanwhicharefundedbyinterestfreeloansfromtheCompany,withrecourseontheseloansbeinglimite sharesissued.naccordancewithAASB2theloansprovidedtotheemployeesandsharesissuedarerequiredt valuedasoptions.

Thenumberandweightedaverageexercisepricesofsharesfundedbylimitedrecourseloansandvaluedasopt as follows: No. of incentive shares (thousands)

Weighted average exercise price $

No. of incentive shares (thousands)

Weighted average exercise price $

2021

2020

Outstandingat1July Granted during the year Expiredduringtheyear Exercisedduringtheyear

26,10

Outstandingat30June

34,60

14,0 (5,60)

0.16 0.16 21,60

0.16 26,10

0.16 0.17 4,50

(0.16) 0.16

Inputs for measurement of grant date fair values

Thefollowinginputswereusedinthemeasurementofthefairvaluesatgrantdateoftheshare-basedpaymen

Numberofincentiveshares Grant date Fairvalueatgrantdate Sharepriceatgrantdate Exerciseprice Expectedvolatility Expectedlife Risk-free interest rate Dividendyield

Employee incentive shares

Director incentive shares

Employee incentive shares

Director incentive shares

2021

2020

5,10 12 Aug 2020 $0.65 15.0cents 15.cents 67% 3years 0.27% 0%

9,0 12 Aug 2020 $0.65 15.0cents 15.cents 67% 3years 0.27% 0%

1,0 20 Aug 2019 $0.84 17.0cents 15.2cents 71% 3years 0.7% 0%

3,50 18Dec2019 $0.79 17.0cents 17.0 cents 71% 3years 0.7% 0%

TheexpectedsharepricevolatilityhasbeencalculatedbasedonAeonMetalsLimited$shistoricalsharepri

AeonMetalsAnnualReport201b/b 43

21. Reconciliation of cash flows from operating activities and non-cash financing activities 2021 Note

2020

Cash flows from operating activities Lossfortheyear Adjustments for: Depreciation mpairmentofexplorationandevaluationassets Share-basedpayments

(6,057) 14 15 20

(5,402) 68

1,4

3,150 1,598

362

(3,247)

(1,809) 48

Changeintradeandotherreceivables Change in prepayments ReclassiQcationofexplorationcosts Change in trade and other payables ChangeinprovisionsandemployeebeneQts

(50)

(15)

(1) 89

94 747 6

Netcashusedinoperatingactivies

(130) 30

(2,367)

(1,87)

22. Earnings per share Basic and diluted earnings per share

Thecalculationofbasicanddiluted(optionshavenodilutiveaect)earningspershareat30June201wasbasedon thelossattributabletoordinaryshareholdersof$6,05(2:4)andaweightedaveragenumberof ordinarysharesoutstandingof690,42(:75)calculatedasfollows: Loss attributable to ordinary shareholders (basic and diluted) 2021

2020

Lossfortheyear

(6,05)

(5,402)

Lossattributabletoordinaryshareholders

(6,05)

(5,402)

Weighted average number of ordinary shares (basic and diluted) 2021 thousands

2020 thousands

ssuedordinarysharesat1July Eectofsharesissued

651,49

Weightedaveragenumberofordinarysharesat30June

651,49

2021 2020 centspershare centspershare Basicanddilutedlosspershare

44b/bwww.aeonmetals.com.au

0.93

0.83

Notes to the consolidated financial statements

23. Operating Leases

Attheendofthereportingperiod,thefutureminimumleasepaymentsundernon-cancellableoperatingleas payable as follows. 2021

2020

$0 15

Lessthanoneyear BetweenoneandQveyears MorethanQveyears

TheGroupleasesfourpremisesunderoperatingleases.Ofthesefourleases,twoleasesareonamonth-to-mont basis.Therentalpaymentsoftheseleasestotal$10,permonth.Oneotherleaseisunderasix-monthcontract, expiringinSeptember201,therentalpaymentonthisleaseis$70permonth.Theremainingleaseisundera 12-monthcontractwhichexpiresinDecember201.Therentalpaymentonthisleaseis$2,0permonth.

TodeterminetheoperatingleaseclassiQcation,theGroupconsideredthatthelandtitledidnotpass,t thelandlordforthebuildingisincreasedtomarketrentatregularintervals,andtheentitydoesnot residualvalueofthebuilding.Accordingly,itwasjudgedthatsubstantiallyalltherisksandrewardsoft withthelandlord.Basedonthesequalitativefactorsitwasconcludedthattheleasesareoperatingl

24. Financial instruments Financial risk management TheGroup$sQnancialassetsconsistmainlyofdepositswithbanks.

Credit risk

CreditriskistheriskofQnanciallosstotheGroupifacounterpartytoaQnancialinstrumentfailstome obligations.

TheGroupdoesnothaveanymaterialcreditriskexposuretoanysinglereceivableorgroupofreceivablesunde instrumentsenteredintobytheentity,otherthandepositswithAustralianregulatedbanksandtradean Exposure to credit risk

ThecarryingamountofQnancialassetsrepresentsthemaximumcreditexposure.Themaximumexposuretocredi at the end of the reporting period was as follows: Carrying amount 2021 Note nterestbearinginvestments Tradeandotherreceivables Cashandcashequivalents

2020

$0 52 264 53

12 11 183

527 2,45

763

2,741

AeonMetalsAnnualReport201b/b 45

Impairment losses 2021 $0

2020 $0

183

264

183

264

Neitherpastduenorimpaired Pastdue130days Pastdue3190days Past due 91 + days

Basedonhistoricdefaultrates,theGroupbelievesthatnoimpairmentallowanceisnecessary inrespect ablesnotpastdueorpastduebyupto30days.

Liquidity risk

LiquidityriskistheriskthattheGroupwillencounterdizcultyinmeetingtheobligationsassociatedw liabilitiesthataresettledbydeliveringcashoranotherQnancialasset.TheGroup$sapproachtomanagi ensure,asfaraspossible,thatitwillalwayshavesuzcientliquiditytomeetitsliabilitieswhendue,und andstressedconditions,withoutincurringunacceptablelossesorriskingdamagetotheGroup$sreputat

TheGroupmanagedliquidityriskbymonitoringforecastcashRowsandensuringthatadequatecashinoperat accountsismaintained.TheGrouphasaccesstoa$30,creditcardfacility(20:$3,).At30June201the undrawnamountis$30,(2:). At30June201theGrouphaspayablesof$1,702(:54)duewithin3months. Exposure to liquidity risk

ThefollowingaretheremainingcontractualmaturitiesofQnancialliabilitiesatthereportingdate.Th grossandundiscounted,includeestimatedinterestpaymentsandexcludetheimpactofnettingagreemen 30 June 2021 Contractual cash flows Carrying Amount $0

Total $0

2 months or less $0

2–12 months $0

1–2 years $0

2–5 years $0

More than 5 years $0

2–5 years $0

More than 5 years $0

Liabilities (i) Limitedrecoursenotes Tradepayables

24,758

26,10 1,702

26,40

1,702

27,86

1,702

26,10

30 June 2020 Contractual cash flows Carrying Amount $0

Total $0

2 months or less $0

2–12 months $0

1–2 years $0

Liabilities (i) Limitedrecoursenotes Tradepayables

19,04 19,78

(i)

2,647 754

2,647

23,401

754

754 754 2,647

26,160,000 of the contractual cash flow payable in 2 to 12 months relates to a limited recourse loan secured over the assets of Aeon Walford Creek Limited.

46b/bwww.aeonmetals.com.au

Notes to the consolidated financial statements

Market risk

Marketriskistheriskthatchangesinmarketprices,suchasinterestratesandequitypriceswillaectt incomeorthevalueofitsholdingsofQnancialinstruments.TheBoardmonitorsinterestratesandequit regularlyreviewscashRowrequirements.

TheGrouphasnoexposuretocurrencyRuctuationsandconsidersitsexposuretointerestratesandequit minimal.

Interest rate risk Profile

AttheendofthereportingperiodtheinterestrateproQleoftheGroup$sinterest-bearing - Qnancialinst ported to the management of the Group was as follows: Interest rate

Carrying amount

Interest rate

Carrying amount

2021

2020

Fixed rate instruments (i) Financialliabilities

12%

24,758

12%

19,04

24,758

19,04

Variable rate instruments Financialassets Amortisedcost

0.34% 0.13%

529 53 1.0%

2,45 52 1.62%

582 2,47

(i) The coupon rate on the limited recourse loan is 12% p.a. however the effective interest rate has been determined to be 13% at the date of entering into the agreement.

Fair value sensitivity analysis for fixed-rate instruments

TheGroupdoesnotaccountforanyQxed-rateQnancialassetsorliabilitiesatfairvaluethroughproQtorlo achangeininterestratesatthereportingdatewouldnotaectproQtorloss. Cashflow sensitivity analysis for variable rate instruments

Achangeof10basispointsininterestratesattheendofthereportingperiodwouldhaveincreased/(decreas tyandproQtorlossbytheamountsshownbelow.Thisanalysisassumesthatallothervariables,inparticul currencyrates,remainconstant. Variable rate instruments 2021 $0 10bpincrease 10bpdecrease

2020 $0

22 (2)

40 (40)

Capital Management

TheBoard$spolicyistomaintainastrongcapitalbasesoastomaintaininvestor,creditorandmarketconQ sustainfuturedevelopmentofthebusiness.

TheBoardensurescostsarenotincurredinexcessofavailablefundsandasrequiredwillseektoraisead fund-ingthroughissuesofsharesforthecontinuationoftheGroup$soperations.Therewerenochangesinthe ap-proachtocapitalmanagementduringtheyear. NeithertheGroupnoranyofitssubsidiariesaresubjecttoexternallyimposedcapitalrequirements.

AeonMetalsAnnualReport201b/b 47

Fair Value versus carrying amounts

ThefairvaluesofQnancialassetsandliabilities,togetherwiththecarryingamountsshowninthestate position are as follows: 2021

Note

Carrying amount $0

2020 Carrying amount $0

Fair value $0

Assets carried at fair value 53

264

nterestbearinginvestments

Tradeandotherreceivables

12 183

183

Cashandcashequivalents

527

527 2,45

2,45

763

2,741

Liabilities carried at amortised cost Tradeandotherpayables Limitedrecoursenotes

16 19

(1,702)

(754)

(24,758)

(19,04)

(26,40)

(19,78)

25. Commitments and contingencies Therearenocontractualcommitmentsorcontingentliabilitiesat30June201(:Nil).

26. Related parties Key management personnel compensation Thekeymanagementpersonnelcompensationcomprised: 2021

2020

$0 Short-termemployeebeneQts Severancepay Consulting fees Long-termemploymentbeneQts Post-emplymentbeneQts Sharebasedpayments

78,93

710,5 412,67 24,0 1,539 61,49

2,1465

81,54

35,48 406,75 1,7826

Thecompensationdisclosedaboverepresentsanallocationofthekeymanagementpersonnel$sestimatedco fromtheGroupinrelationtotheirservicesrenderedtotheGroup.

Key management personnel and director transactions

Therewerenorelatedpartytransactionsduringtheyearotherthantransactionswithkeymanagementp part of their remuneration.

48b/bwww.aeonmetals.com.au

Significant subsidiaries Country of incorporation

2021 %

2020 %

Parent entity: AeonMetalsLimited

Australia

Significant subsidiaries: AussieNQResourcesPtyLtd SLWQueenslandPtyLtd AeonWalfordCreekLtd AeonsaExplorationPtyLtd AeonMontoExplorationPtyLtd AeonWalfordExplorationPtyLtd

Australia Australia Australia Australia Australia Australia

100 60 100 100 100 100

28. Events Since the End of the Financial Year

Notes to the consolidated financial statements

27. Group entities

TheCoronavirus(Covid-19)pandemicisongoingandiscontinuingtodevelopbutisnothavingasigniQcantimpact the reporting date.

On19July201,theCompanyannouncedthatithadsuccessfullysecuredcommitmentsfromsophisticatedand professionalinvestorsviaatwo-trancheshareplacementtoraise$9.5millionatanissuepriceof5.8centspers Thesecondtranchewasapprovedbyshareholderson17September201. On23August201,theCompanyannouncedithadraised$0.7millionviaaSharePlacementPlanonthesameterms astheshareplacementabove.

On24August201,theCompanyannouncedthatithadcompletedanagreementwithOCPAsiaGrouptoextendthe maturitydateonitsexistingloanfacilityby24months(to17December203),onthesametermsastheextended tranchesdisclosedinnote19.nconsiderationforthematurityextension,theCompanyhasagreedanadditio feeequivalentto2%ofthetotalfacilitysize. On17September201,theshareholdersoftheCompanyapprovedtheissueof8,50unvestedloanfunded sharestoDr.FredHess,ManagingDirectorandCEOoftheCompany,undertheCompany$sLongTermncentivePlan. TheloanfundedshareswhicharegrantedtoDr.HesswillvestuponachievementofspeciQedhurdles.

Otherthantheitemsnotedabove,therehavenotbeenanyadditionalsigniQcantsubsequenteventston

AeonMetalsAnnualReport201b/b 49

29. Auditors’ remuneration 2021

2020

Audit and review of financial statements AuditorsoftheCompanyBDOandrelatednetworkQrms Group Controlled entities and joint operations 68,50

60, 5,0

TotalauditandreviewofQnancialstatements

5,0

73,50

65,0

32,51

31,69 30,

30, 62,531

61,9

Non-audit services AuditorsoftheCompanyBDOandrelatednetworkQrms Taxationcomplianceservices R&Dcomplianceservices Totalnon-auditservices Total services provided by BDO and related network firms

136,031

126,696

On31July20,theCompanyannouncedthatBDOEastCoastPartnershiphadresignedasauditorandBDOAuditPty Ltdhadbeenappointed.

30. Parent entity disclosures Asat,andthroughout,theQnancialyearended30JunetheparententityoftheGroupwasAeonMetalsLimited. 2021

2020

Results of the parent entity Lossfortheyear Othercomprehensiveincome

(5,93)

(4,250)

Total comprehensive income for the year

(5,935)

(4,250)

Financial position of parent entity at year end Current assets Non-currentassets 84,2

849 80,9

Totalassets

85,271

82,907

Current liabilities Non-currentliabilities 26,95

Totalliabilities

26,95

19,5

Net assets

58,576

62,912

2,80

951 19,04

Total equity of parent entity comprising: Sharecapital Reserves Accumulatedlosses Total equity

50b/bwww.aeonmetals.com.au

108,465

108,465 3,45 (53,42)

2,531 (48,03)

58,576

62,912

Directors’ Declaration ntheopinionofthedirectorsofAeonMetalsLimited(theCompany(): a)

theconsolidatedQnancialstatementsandnotessetoutonpages25to50andtheremunerationreporto 20to23areinaccordancewiththeCorporationsAct201including: (i)

givingatrueandfairviewoftheGroup$sQnancialpositionasat30June201andofitsperformanceforthe yearendedonthatdate;and

(ii) complyingwithAustralianAccountingStandardsandtheCorporationsRegulations201;and b)

therearereasonablegroundstobelievethattheCompanywillbeabletopayitsdebtsasandwhenthe due and payable.

TheDirectorsdrawattentiontoNote2totheconsolidatedQnancialstatements,whichincludes astate ancewithnternationalFinancialReportingStandards.

TheDirectorshavebeengiventhedeclarationsrequiredbySection295AoftheCorporationsAct201fromthe ManagingDirector(whoperformedthedutiesofthechiefexecutiveozcerandchiefQnancialozcer)fortheQnanci yearended30June201. SignedinaccordancewitharesolutionoftheDirectors.

Dr Fred Hess Managing Director Dated at Sydney this 20th day of September 2021

AeonMetalsAnnualReport201b/b 51

DECLARATION OF INDEPENDENCE BY GARETH FEW TO THE DIRECTORS OF AEON METALS LIMITED

As lead auditor of Aeon Metals Limited for the year ended 30 June 2020, I declare that, to the best of my knowledge and belief, there have been:

Independent Auditor’s Report

Tel: +61 2 9251 4100 Fax: +61 2 9240 9821 www.bdo.com.au

Level 11, 1 Margaret St Sydney NSW 2000 Australia

INDEPENDENT AUDITOR’S REPORT

Gareth Few ofAeonMetalsLimited Tothemembers Director

Report on the Audit of the Financial Report Opinion

BDO Audit Pty Ltd Wehave audited theQnancialreportofAeonMetalsLimited(theCompany)anditssubsidiaries(theGroup),which

comprisestheconsolidatedstatementofQnancialpositionasat30June201,theconsolidatedstatementofpr lossandothercomprehensiveincome,theconsolidatedstatementofchangesinequityandtheconsolidat Sydney, 25 September 2020 ofcashRowsfortheyearthenended,andnotestotheQnancialreport,includingasummaryofsigniQcantaccoun DECLARATION OFdirectors$ INDEPENDENCE BY GARETH FEW TO THE DIRECTORS OF AEON METALS LIMITED policiesandthe declaration. nouropiniontheaccompanyingQnancialreportoftheGroup,isinaccordance Corporations withthe Act 2001,including: (i)

GivingatrueandfairviewoftheGroup$sQnancialpositionasat30June201andofitsQnancialperformancefor

As lead of Aeon Metals Limited theauditor yearended onthat date; and for the year ended 30 June 2020, I declare that, to the best of my and Australian belief, there Accounting have been:Standards (ii) knowledge Complyingwith Corporations andthe Regulations 2001. 1. No contraventions of the auditor independence requirements of the Corporations Act 2001 in Basis for opinion relation to the audit; and

WeconductedourauditinaccordancewithAustralianAuditingStandards.Ourresponsibilitiesunderth are described Auditor’s inany theresponsibilities for theof audit of the Financial Reportsection ofour Weare 2. further No contraventions of applicable code professional conduct in relation to report. the audit. independentoftheGroupinaccordanceCorporations withthe Act 2001andtheethicalrequirementsoftheAccounting ProfessionalandEthicalStandardsBoard$ Code sAPES of 10Ethics for Professional Accountants (including Independence Standards) (theCode)isthat arerelevant toourLimited auditofand thethe Qnancial report inAustralia. have alsofulQlled This declaration in respect of Aeon Metals entities it controlled during We the period. ethicalresponsibilitiesinaccordancewiththeCode. WeconQrmthattheindependencedeclarationrequired Corporations bythe Act 2001,whichhasbeengiventothedirectors oftheCompany,wouldbeinthesametermsifgiventothedirectorsasatthetimeofthisauditor$sreport.

Webelievethattheauditevidencewehaveobtainedissuzcientandappropriatetoprovideabasisforour

Gareth Few Director

52b/bwww.aeonmetals.com.au

BDO Audit Pty Ltd

Level 11, 1 Margaret St Sydney NSW 2000 Australia

Material uncertainty related to going concern

Independent auditor’s report

Tel: +61 2 9251 4100 Fax: +61 2 9240 9821 www.bdo.com.au

WedrawattentiontoNote2intheQnancialreportwhichdescribestheeventsand/orconditionswhichgive theexistenceofamaterialuncertaintythatmaycastsigniQcantdoubtaboutthegroup$sabilitytoconti concernandthereforethegroupmaybeunabletorealiseitsassetsanddischargeitsliabilitiesinthen business.OuropinionisnotmodiQedinrespectofthismatter.

Key audit matters

Keyauditmattersarethosemattersthat,inourprofessionaljudgement,wereofmostsigniQcanceinourau Qnancialreportofthecurrentperiod.ThesematterswereaddressedinthecontextofourauditoftheQnan DECLARATION OF INDEPENDENCE GARETH FEW TO THE DIRECTORS OF AEON METALS LIMITED as awhole,andin forming ouropinionBY thereon, and wedo not provide aseparate opinion onthese matters.nadd tothematterdescribed Material inthe uncertainty related to going concernsection,wehavedeterminedthematters describedbelowtobethekeyauditmatterstobecommunicatedinourreport.

As lead auditor of Aeon Metals Limited for the year ended 30 June 2020, I declare that, to the best of my knowledge and belief, there have been:

Exploration and evaluation assets

KeyNo audit matter How theindependence matter was addressed in our audit 1. contraventions of the auditor requirements of the Corporations Act 2001 in relation to the audit; and Explorationandevaluation Toaddressthekeyauditmatter,ourauditproceduresincluded:

assets a key audit matter 2. Noare contraventions of any applicable code ofthe professional conduct inpolicy relation to the audit. Group$saccounting torecognise explorationand 3 Evaluating due to:

evaluationassetsusingthecriteriainAASB6; ThesigniQcanceofthe theGroup$stenementlicencestoassesstherightstotenur 3 Reviewing This declaration is evaluation in respect of Aeon Metals Limited and the entities it controlled during the period. exploration and arecurrent; activitiestotheGroup$s 3 TestingasampleoftheGroup$sadditionstoareasofinterestforthe businessandthecarrying yearandagreeingadditionstounderlyingrecordsincludingcapitalise valueoftheseassets,being interestandborrowingcosts; the largest group of assets 3 Analysingmanagement$sassessmentoftherecoverabilityofassets onthebalancesheet;and throughsuccessfuldevelopmentandexploitationoftheareasof ThesigniQcanceofmanagement$s interest,orbytheirsale,byevaluatingtheGroup$sdocumentationof estimates and assumptions plannedactivitiesincludingtenementsexpenditurecommitmentsas regardingtherecoverabilityof theapprovedworkprogramsissuedbytheQLDDepartmentofNatural carryingvaluesinaccordance Resources,MinesandEnergy; withAASB6. 3 EvaluatinginternalbudgetsandcashRowprojectionsforconsistency Gareth Few Detailsoftheexplorationand withmanagement$sstatedintentionsforcontinuingexplorationand Director evaluationassetsaredisclosed evaluationactivitiesintheareasofinterestandcriticallyasses inNote15. feasibilityoftheseintentionswithregardtoavailablecash; . 3 HoldingdiscussionswithManagementregardingtheirassessmentofth BDO Audit Pty Ltd futurerecoverablevalueoftheexplorationandevaluationexpendit

Sydney, 25 September 2020

3 3

TogetherwithBDOvaluationspecialists,assessthereasonablenessof discountrateappliedbymanagementfortheimpairmentmodel;and

Considermanagement$sconclusionontheimpairmentofnon-core exploration&evaluationassetsandrecalculatingtheimpairmentlos recognised.

AeonMetalsAnnualReport201b/b 53

Tel: +61 2 9251 4100 Fax: +61 2 9240 9821 www.bdo.com.au

Level 11, 1 Margaret St Sydney NSW 2000 Australia

Other information

Thedirectorsareresponsiblefortheotherinformation.Theotherinformationcomprisestheinformatio theQnancialreportfortheyearended30June201,butdoesnotincludetheQnancialreportandourauditor$srep thereon,whichweobtainedpriortothedateofthisauditor$sreport,andtheAnnualReporttoShareholde expectedtobemadeavailabletousafterthatdate.

OuropinionontheQnancialreportdoesnotcovertheotherinformationandwedonotexpressanyformofassu conclusionthereon.

nconnectionwithourauditoftheQnancialreport,ourresponsibilityistoreadtheotherinformationan consider whether theotherinformation ismaterially inconsistent with theQnancial reportorourkno DECLARATION OF INDEPENDENCE BY GARETH FEW TO THE DIRECTORS OF AEON METALS LIMITED in the audit or otherwise appears to be materially misstated.

f,basedontheworkwehaveperformedontheotherinformationthatweobtainedpriortothedateofthisau report,weconcludethatthereisamaterialmisstatementofthisotherinformation,wearerequiredtor As lead auditor of Aeon Metals Limited for the year ended 30 June 2020, I declare that, to the best of Wehavenothingtoreportinthisregard.

my knowledge and belief, there have been:

WhenwereadtheAnnualReporttoShareholders,ifweconcludethatthereisamaterialmisstatementthe required tocommunicate theauditor matter tothedirectors andwillrequest thatitisAct corrected. 1. No contraventions of the independence requirements of the Corporations 2001 in fitisnotco seektohavethematterappropriatelybroughttotheattentionofusersforwhomourreportisprepared.

relation to the audit; and

2. No contraventions any applicable of professional Responsibilities of the of directors for thecode Financial Report conduct in relation to the audit.

ThedirectorsoftheCompanyareresponsibleforthepreparationoftheQnancialreportthatgivesatruea inaccordancewithAustralianAccountingStandardsandtheCorporationsAct201andforsuchinternalcont This declaration is in respect of Aeon Metals Limited and the entities it controlled during the period. directorsdetermineisnecessarytoenablethepreparationoftheQnancialreportthatgivesatrueand freefrommaterialmisstatement,whetherduetofraudorerror.

npreparingtheQnancialreport,thedirectorsareresponsibleforassessingtheabilityofthegrouptoconti concern,disclosing,asapplicable,mattersrelatedtogoingconcernandusingthegoingconcernbasisofaccount thedirectorseitherintendtoliquidatetheGrouportoceaseoperations,orhasnorealisticalternati

Auditor’s responsibilities for the audit of the Financial Report

OurobjectivesaretoobtainreasonableassuranceaboutwhethertheQnancialreportasawholeisfreef misstatement,whetherduetofraudorerror,andtoissueanauditor$sreportthatincludesouropinion.Re assuranceisahighlevelofassurance,butisnotaguaranteethatanauditconductedinaccordancewitht Gareth Few Auditing Standardswillalwaysdetectamaterialmisstatementwhenitexists.Misstatementscanarise error andareconsideredmaterialif,individuallyorintheaggregate,theycouldreasonablybeexpectedto Director economicdecisionsofuserstakenonthebasisofthisQnancialreport.

AfurtherdescriptionofourresponsibilitiesfortheauditoftheQnancialreportislocatedattheAudit andAssuranceStandardsBoardwebsite http:/www.( auasb.gov.au/Home.aspx)at: https:/www.auasb.gov.au/admin/Qle/ BDO Audit Pty Ltd content102/c3/ar1_202.pdf . Thisdescriptionformspartofourauditor$sreport.

Sydney, 25 September 2020

54b/bwww.aeonmetals.com.au

Level 11, 1 Margaret St Sydney NSW 2000 Australia

Report on the Remuneration Report Opinion on the Remuneration Report

Independent auditor’s report

Tel: +61 2 9251 4100 Fax: +61 2 9240 9821 www.bdo.com.au

WehaveauditedtheRemunerationReportincludedinthedirectors$reportundertheheadingRemunerati fortheyearended30June201. nouropinion,theRemunerationReportofAeonMetalsLimited,fortheyearended30June201,complieswithsection 30Aofthe Corporations Act 2001.

Responsibilities

DECLARATION OF INDEPENDENCE BY GARETHfor FEW THE DIRECTORS OF AEON METALS LIMITED The directorsof the Companyareresponsible theTO preparation andpresentation ofthe RemunerationRe inaccordancewithsection30AoftheCorporationsAct201.Ourresponsibilityistoexpressanopiniononthe RemunerationReport,basedonourauditconductedinaccordancewithAustralianAuditingStandards. BDO Audit Pty Ltd of As lead auditor

Aeon Metals Limited for the year ended 30 June 2020, I declare that, to the best of my knowledge and belief, there have been: 1. No contraventions of the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and 2. No contraventions of any applicable code of professional conduct in relation to the audit.

Gareth Few Director

This declaration is in respect of Aeon Metals Limited and the entities it controlled during the period.

Sydney, 20 September 2021

Gareth Few Director

BDO Audit Pty Ltd Sydney, 25 September 2020

AeonMetalsAnnualReport201b/b 55

Additional Information Additional information, required by the Australian Securities Exchange Limited Listing Rules and not disclosed elsewhere in this report, is set out below.

Substantial Shareholders

Thenamesofsubstantialholdersandthenumberofsharesinwhicheachhasarelevantinterestasdisclo substantialshareholders$noticesgiventotheCompanyasat30September201,areasfollows: Shareholder

Number

OCP Group 382,401

Equity Securities (as at 30 September 2021) Thenumberofholdersofeachclassofequitysecuritiesisasfollows: Ordinary Shares (AML)2,348

Voting Rights

AtaGeneralMeetingofshareholders,inrespectofshares,onevotepermemberonashowofhandsandonevotep share on a poll.

Distribution of Equity Security Holders (as at 30 September 2021) Category

Holders (Fullypaidordinaryshares)

1,0

125 1,05

30 5,01

385 10,

1,095 10,9

43 Total

56b/bwww.aeonmetals.com.au

2,348

Holders of Unmarketable Parcels (as at ASX closing on 30 September 2021)

Thenumberofshareholdersholdinglessthatamarketableparcelofordinarysharesbasedonamarketpric ofis63.

Securities Exchange TheCompanyislistedontheAustralianStockExchange.ThehomeexchangeisSydney.

Other Information AeonMetalsLimited,incorporatedanddomiciledinAustralia,isapubliclistedcompanylimitedbyshares.

Top 20 Shareholders (as at 30 September 2021) Number of Ordinary Shares held

Shareholder

Percentage of Capital held

CSThirdNomineesPtyLimited<HSBCCustNomAULtd13A/C>

44.608

WashingtonHSoulPattinsonAndCompanyLimited

30,74182

3.54

BlissnvestmentManagementPtyLtd

25,341860

2.921

HSBCCustodyNominees(Australia)Limited

19,873

2.93

SLWMineralsCorporationPtyLimited

16,0

1.844

SosawillPtyLtd<SosawillSuperFundA/C>

14,7028

1.695

Frere&AssociatesPtyLimited<DerickFrereSuperFundA/C>

14,038

1.617

L&MGroupLimited

13,0469

1.503

AverillHoldingsPtyLimited<AverillSuperFundA/C>

1,693870

1.348

LouiseMareeCollins

10,72986

1.237

Back9nvestmentManagementPtyLtd<SantanaNo2nvestmentsA/C>

9,4231

1.086

MoyaPtyLtd<JaamA/C>

8,04519

0.927

SLGAustraliaPtyLimited

7,90352

0.919

Back9nvestmentManagementPtyLtd<SantanaNo1nvestmentsA/C>

6,5910

0.760

CSFourthNomineesPtyLimited<HSBCCustNomAULtd1A/C>

5,807

0.643

BurlockHoldingsPtyLtd<FoxPensionFundA/C>

5,071

0.635

HollachCapitalPtyLimited

4,7685

0.550

BurlockHoldingsPtyLtd<FoxSuperannuationFundA/C>

4,3071

0.511

CiticorpNomineesPtyLimited

4,183

0.482

MrFrancescoPaulVioli&MrsLorraineVioli<VioliSuperFundA/C>

387,0219

3,508

Total securities of Top 20 Holdings

603,242,583

Total of securities

867,618,041

0.407 70.765%

On-market buy-back Thereisnocurrenton-marketbuy-back.

AeonMetalsAnnualReport201b/b 57

Mining Tenements Asat1October201,theCompanyanditssubsidiariesheldthefollowinginterestsinminingtenements: Tenement

Location

EPM18359

SouthofGeorgetown,Qld

10%

EPM1902

WestofMonto,Qld

10%

EPM189

Mount Isa West 80%

SummitResources(Aust)PtyLtd

20%

EPM1342

MountsaSouth

80%

SummitResources(Aust)PtyLtd

20%

EPM134

MountsaSouth

80%

SummitResources(Aust)PtyLtd

20%

EPM13682

MountsaSouth

80%

SummitResources(Aust)PtyLtd

20%

EPM1420

Walford Creek

EPM1423

MountsaSouth

72%

SummitResources(Aust)PtyLtd &CentaurusMetalsLtd

18%

Interest held

Joint Venture Partner

10%

EPM1469

MountsaNorth

80%

SummitResources(Aust)PtyLtd

20%

EPM1472

ConstanceRange

80%

PaciQcMinesLtd

20%

EPM1482

MountsaSouth

80%

SummitResources(Aust)PtyLtd

20%

EPM1485

Walford Creek

EPM14935

ConstanceRange

80%

PaciQcMinesLtd

20%

EPM156

MountsaSouth

80%

SummitResources(Aust)PtyLtd

20%

EPM159

MountsaSouth

10%

EPM1852

Walford Creek 10%

EPM18769

Mount Isa West 10%

EPM2690

Walford Creek

EPM2631

Walford Creek

EPM2731

Walford Creek 10%

EPM2731

Walford Creek 10%

EPM2751

Walford Creek 10%

EPM14628

NorthwestofMonto,Qld

10%

EPM1592

NorthwestofMonto,Qld

10%

EPM170

NorthwestofMonto,Qld

10%

EPM1702

NorthwestofMonto,Qld

10%

EPM1706

WestofMonto,Qld

10%

EPM27604

NorthwestofMonto,Qld

10%

EPM2753

NorthofMountsa

10%

EPM27435

Mount Isa West 10%

EPM27436

Mount Isa West 10%

EPM2743

Mount Isa West 10%

EPM274

Mount Isa West 10%

EPM2745

Mount Isa West 10%

MDL513

MountsaNorth

10%

58b/bwww.aeonmetals.com.au

10%

10% Farm In

FootprintResourcesPtyLtd

Additional Information

Mineral Resources

TheCompany$sMineralResourcesaredisclosedelsewhereinthisReportandastheCompanyisnotengagedinm thesehavenotbeensubjecttoanymaterialchangessincetheywereannounced.

TheCompany$sgovernancearrangementsandinternalcontrolsinplace,withrespecttoitsestimatesofMin Resourcesandtheestimationprocess,areasfollows:

Governance and Internal controls

TheCompanymaintainsthoroughQAQCprotocolsforconductingexploration,sitepractice,sampling,safety,moni andrehabilitation,whicharedocumentedintheCompany$svariousstandardoperatingprocedures.

Drillingmethodsvaryaccordingtothenatureoftheprospectunderevaluation.Thesecanincludeauger,ai reversecirculationdrillingforunconsolidatedformations;toreversecirculation(hammer)anddiamondc &NQ)forhardrockformations.Resourceestimationsarebasedondownholegeochemicalassayingand ontheinterpre ofthatdatabasedonrobustgeologicalmodels.Assaysamplesarecollectedpredominantlyoveronemetrei throughallmineralisedzonesbutcanbeselectivelyassayedoverbarrengeologicaldomains.Theresourcew combinesthegeochemicalassayresultswiththeloggedgeology.

QAQCcontrolsforallacquireddataisundertakenbybothCompanygeologistsandviaexternallaboratorych

Assaysamplesareacquiredbyvariousmethodsdependingonthedrillingtechniquebeingadopted.RCsamples acquiredbyathree-tierri^esplitterorconesplitteratthedrillsiteormaybespearsampledifthesampl situationatWalford,itisgenerallythecasethatthedrillingmethodcovertstoHQTripleTubecoredril recoveriesparticularlythroughmineralisedzones.Thecoreisoriented,wherepossible,byReRexACT3toolandst datarecordedinthedatabase.

Diamondcoreiscutinhalfandthehalf-corecrushedandassayedpredominantlyoveronemetreintervals.nca wheremetallurgicalsampleisrequired,half-coreisputasideforthislatertestingandaquartercutcore analysedinthisinstance.Thecuttingandsamplingofhalfcoreisstatisticallyconsideredmoreaccuratet samplingquartercore.

Anappropriateanalyticalmethodusinga4-aciddigestwithCPQnishhasbeenadoptedovertherecentdrillca Allabovegraderesultsfromthe4-aciddigestareanalysedforCu,Pb,Zn,SandAgbyAH/OEmethod.Thismethodfor higherprecisionusesamulti-aciddigestincludingHydroRuoric,Nitric,PerchloricandHydrochloricacids.tisa inductivelyCoupledPlasmaOptical(Atomic)EmissionSpectrometry.Allassayinghasbeencarriedoutbyanaccre assayinglaboratoryinMountsa,TownsvilleorBrisbane,Queensland.AeonhasanextensiveandrigorousQAQC programmethatincorporatesindustrystandardblanks,externalcommercialreferencestandardmateria duplicates.Atthelaboratory,laboratoryduplicatesaretakenandsecondarylabchecksundertaken.Allt assaydataisstatisticallyvalidatedbothbythelaboratoriesownQAQCmethodsandbytheCompanyunderta independentreviews.

AlldrillholecollarsareDGPS-surveyedbyanexternaloperator,afteraninitialpick-upbyhand-heldGPSbycompa employees.Downholedirectionalsurveysarecompletedusuallyevery30mdownholebythendependentDrilling Company during drilling.

Drillholesampleloggingcapturesasuiteoflithological,alteration,mineralogicalandstructuraldata downhole.TheQelddataiscapturedviadigitalinputontoalaptopandsecuredontheon-sitedatabase.Foll datavalidationin-housethedataisthensentforositesecuredatastorageandcrosscheckingbyanexter managerwhosesystemundertakesconQrmatorydatabasevalidation.

Drillplansandsectionsgeneratedfromthedrillingareusedtoconstrainwireframemineralisationmodels resourceestimationsaremade.ResourceestimationsforWalfordCreekhavebeencalculatedbyanindepen third-partyconsultant,SimonTearofH&SConsultantsPtyLtdandhavebeenreportedunder . JORC201rules

AeonMetalsAnnualReport201b/b 59

Officers and offices Company Secretary

ASX Code

DavidHwang(LL.B,BA)

AML

Principal Registered Office

Website

C/O Automic Pty Ltd Level5,12630PhillipStreet SydneyNSW20

http:/www. aeonmetals.com.au

Ph:(07)5438

Location of Share Registry Boardroom Pty Limited Grosvenor Place Level12,5GeorgeStreet SydneyNSW20 Ph: 02 9290 9600

60b/bwww.aeonmetals.com.au

Corporate Governance Statement TheCorporategovernancestatement whichwillbeapprovedatthesame timeastheAnnualReportcanbe found at http://www.aeonmetals. com.au/about-us/#corporategovernace

Additional Information Design & Production > APM Graphics Management > 1800 806 930

AeonMetalsAnnualReport201b/b 61

aeonmetals.com.au