Announcement PDF ABN 38 652 438 385 ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 2024 ANNUAL REPORT for the year ended 30 June 2024 CORPORATE DIRECTORY ..................................................................................................... 1 DIRECTORS’ REPORT........................................................................................................... 2 AUDITOR’S INDEPENDENCE DECLARATION ........................................................................ 21 INDEPENDENT AUDITOR’S REPORT.................................................................................... 22 DIRECTORS’ DECLARATION ............................................................................................... 27 CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME ... 28 CONSOLIDATED STATEMENT OF FINANCIAL POSITION ....................................................... 29 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY........................................................ 30 CONSOLIDATED STATEMENT OF CASH FLOWS ................................................................... 31 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS .................................................. 32 ADDITIONAL SECURITIES EXCHANGE INFORMATION .......................................................... 52 CORPORATE DIRECTORY DIRECTORS AUDITORS Ben Phillips (Executive Chairman) Patrick Holywell (Non-Executive Director) Leonardo Pilapil (Technical Director) Hall Chadwick WA Audit Pty Ltd 283 Rokeby Road Subiaco WA 6008 COMPANY SECRETARY SHARE REGISTRY Arron Canicais Automic Share Registry Level 5, 191 St Georges Terrace Perth WA 6000 REGISTERED OFFICE Unit 10, 85-87 Forrest Street Cottesloe WA 6011 POSTAL ADDRESS PO BOX 156 Bull Creek WA 6149 PRINCIPAL PLACE OF BUSINESS Unit 10, 85-87 Forrest Street Cottesloe WA 6011 CONTACT INFORMATION Tel: + (08) 6255 8625 info@norfolkmetals.com.au 1300 288 664 (Local) +61 2 9698 5414 (International) www.automic.com.au BANKER Australia and New Zealand Banking Group Limited 464 Hay Street, Subiaco WA 6008 SECURITIES EXCHANGE LISTING Australian Securities Exchange (ASX) Level 40, Central Park 152-158 St George's Terrace Perth WA 6000 ASX CODE: NFL and NFLO NORFOLK METALS LIMITED | 2024 ANNUAL REPORT Page 1 DIRECTORS’ REPORT The directors of Norfolk Metals Limited (“Norfolk" or the “Company”) and its subsidiaries, (“the Group”) submit herewith the financial report of the Company for the year ended 30 June 2024. The Company was incorporated on 30 July 2021. In order to comply with the provisions of the Corporations Act 2001, the directors report as follows: DIRECTORS The names and particulars of the directors of the Company in office during the year and until the date of this report are as follows. Directors were in office for the entire year unless otherwise stated. Director Ben Phillips Patrick Holywell Leonardo Pilapil Position Executive Chairman (Appointed 30 July 2021) Non-Executive Director (Appointed 8 October 2021) Technical Director (Appointed 30 July 2021) The name of the secretary in office at any time during or since the end of the year is: Company Secretary Position Arron Canicais Company Secretary (Appointed 19 August 2021) OPERATING RESULTS The Group has incurred a net loss after tax for the year ended 30 June 2024 of $645,949 (2023: $771,491). DIRECTORS’ MEETINGS During the year to 30 June 2024, six (6) meetings of directors were held. Attendances by each director during the year were as follows: Director Ben Phillips Patrick Holywell Leonardo Pilapil Directors’ Meetings Number Eligible to Attend Number Attended 6 6 6 6 5 6 Directors’ other formal business was conducted via circular resolution. INFORMATION ON DIRECTORS Information Directors at the date of this report as follows: Ben Phillips EXECUTIVE CHAIRMAN Mr. Phillips has over 15 years experience in commercial negotiations with a broad spectrum of industries including Oil and Gas, Resources, Medical technology, SaaS and Defence. Mr. Phillips advises departments ranging from R&D and exploration through to production, commercialisation and sales. Mr. Phillips previously held a NonExecutive Director position at Bronson Group BGR:ASX and subsequently Mandrake Resources (ASX:MAN). Mr. Phillips also sits as Non-Executive Director at Many Peaks Minerals Ltd (ASX:MPK) NORFOLK METALS LIMITED | 2024 ANNUAL REPORT Page 2 DIRECTORS’ REPORT Interest in shares and options at the date of this report Directorships held in other listed entities (last 3 years) 1,775,000 Ordinary Shares 2,130,000 Unquoted Options 839,000 NFLO Quoted Options 560,000 Performance Rights Many Peaks Minerals Limited (appointed 1 February 2024) Patrick Holywell NON- EXECUTIVE DIRECTOR Mr Holywell has twenty years of experience in accounting, finance and corporate governance, including employment at Deloitte and Patersons (now Canaccord Genuity) as well as director, company secretary and CFO roles. He has held roles with various companies particularly in the resources, technology and health sectors. Mr Holywell is a Chartered Accountant, Fellow of the Governance Institute of Australia and Graduate of the Australian Institute of Company Directors. Interest in shares and options at the date of this report Directorships held in other listed entities (last 3 years) 930,000 Unquoted Options 333,333 NFLO Quoted Options Si6 Metals Limited (resigned 12 August 2022) Leonardo Pilapil TECHNICAL DIRECTOR Mr Leo Pilapil has over 30 years’ experience as a Geoscientist and 3 years as a Financial Planner. As a geoscientist, he has held Director Positions for several junior companies in Australia, Africa and Turkey, mainly responsible for technical project evaluations, project acquisitions, project management and business development. Mr Pilapil was responsible for the discovery of the Harlequin Gold Deposit (1Moz) under salt lake conditions in Norseman WA Australia and has also been responsible for the mine extensions and discoveries of several ore deposits in Australia, Africa, Turkey and more recently in Laos PDR. He has developed an expertise in ‘Prospect to Mine’ process through his vast experience in exploration and mining. In the last 18 years, Mr Pilapil has been working as a Geological Consultant for various companies around the world including Aditya Birla (Australia), Alacer Gold Corporation (Turkey), African Uranium (Namibia, Africa) and NIKKI Lao (Laos PDR). In the past 7 years, combining his sound business knowledge, Mr Pilapil established drilling companies in Turkey and Laos PDR servicing several major exploration and mining companies to complement the acquisition of his own personal projects. Interest in shares and options at the date of this report 830,000 Unquoted Options 333,333 NFLO Quoted Options Directorships held in other listed entities (last 3 years) Nil Arron Canicais COMPANY SECRETARY Mr Canicais is the founder of Explorer Corporate Pty Ltd, which specialises in corporate advice and compliance administration to public companies. Mr Canicais has been involved in financial reporting and corporate compliance for over 17 years. Mr Canicais is an associate member of the Institute of Chartered Accountants and Governance NORFOLK METALS LIMITED | 2024 ANNUAL REPORT Page 3 DIRECTORS’ REPORT Institute of Australia. Mr Canicais is currently also Company Secretary and CFO for various ASX listed and unlisted entities. Remuneration Report (Audited) A. Details of remuneration Details of remuneration of the directors and key management personnel (as defined in AASB 124 Related Party Disclosures) of Norfolk Metals Limited are set out in the following table. The key management personnel of Norfolk Metals Limited are the directors as previously described earlier in the Directors’ Report, and other personnel as determined by the Board. The Company does not have any other employees who are required to have their remuneration disclosed in accordance with the Corporations Act 2001. The Board is responsible for determining and reviewing compensation arrangements for the Directors and Executive Officers. The Board assesses the appropriateness of the nature and amount of emoluments of such officers on a yearly basis by reference to relevant employment market conditions with the overall objective of ensuring maximum stakeholder benefit from the retention of a high-quality board and executive team. The expected outcome of this remuneration structure is to retain and motivate Directors and Executive Officers. As part of its Corporate Governance Policies and Procedures, the board has adopted a formal Remuneration Committee Charter and Remuneration Policy. The Board has elected not to establish a remuneration committee based on the size of the organisation and has instead agreed to meet as deemed necessary and allocate the appropriate time at its board meetings. Fees and payments to non‑executive directors reflect the demands which are made on, and the responsibilities of, the directors. Non‑executive directors’ fees and payments are reviewed annually by the Board. The Chair’s fees are determined independently to the fees of non‑executive directors based on comparative roles in the external market. Non‑executive directors do not receive performance-based pay. Additional Fees A Director may also be paid fees or other amounts as the Directors determine if a director performs special duties or otherwise performs services outside the scope of the ordinary duties of a director. A Director may also be reimbursed for out-of-pocket expenses incurred as a result of their directorship or any special duties. The table below shows the 2024 financial year figures for remuneration received by the Company’s key management personnel: Short Term 2024 Ben Phillips Patrick Holywell Leonardo Pilapil Salary & Fees $ Bonus $ 127,500 53,000 104,414 284,914 - Share-based Payments Options or Other Super- Prescribe Performance benefits annuation d benefits right $ $ $ $ NORFOLK METALS LIMITED | 2024 ANNUAL REPORT Post-employment - - - - Total $ 127,500 53,000 104,414 284,914 Page 4 DIRECTORS’ REPORT The table below shows the 2023 financial year figures for remuneration received by the Company’s key management personnel: Short Term 2023 Ben Phillips Patrick Holywell Leonardo Pilapil B. (i) Salary & Fees $ Bonus $ 105,000 48,000 93,326 246,326 30,000 30,000 - - - 32,947 32,947 32,947 98,841 Total $ 167,947 80,947 126,273 375,167 Directors’ equity holdings Fully paid ordinary shares of Norfolk Metals Limited: 2024 Directors Ben Phillips Patrick Holywell Leonardo Pilapil Balance at 1 July 2023 No. 2023 Directors Ben Phillips Patrick Holywell Leonardo Pilapil Granted as remuneration No. 1,517,001 1,517,001 Balance at 1 July 2022 No. (ii) Share-based Payments Options or Other Super- Prescribe Performance benefits annuation d benefits right $ $ $ $ Post-employment - Granted as remuneration No. 1,442,001 1,442,001 - Performance rights of Norfolk Metals Limited: Balance at 1 July 2023 No. 2024 Directors Ben Phillips Patrick Holywell Leonardo Pilapil Granted as remuneration No. 560,000 560,000 NORFOLK METALS LIMITED | 2024 ANNUAL REPORT - Net other change No. 257,999 257,999 Net other change No. 75,000 75,000 Net other change No. - At date of resignation No. Balance at 30 June 2024 No. - 1,775,000 1,775,000 At date of resignation No. Balance at 30 June 2023 No. - 1,517,001 1,517,001 At date of resignation No. Balance at 30 June 2024 No. - 560,000 560,000 Page 5 DIRECTORS’ REPORT Balance at 1 July 2022 No. 2023 Directors Ben Phillips Patrick Holywell Leonardo Pilapil (iii) 560,000 560,000 2024 Directors Ben Phillips Patrick Holywell Leonardo Pilapil 2023 Directors Ben Phillips Patrick Holywell Leonardo Pilapil Granted as remunerati on No. 2,635,666 930,000 830,000 4,395,666 Balance at 1 July 2022 No. 1,800,000 600,000 500,000 2,900,000 Net other change No. - Options of Norfolk Metals Limited: Balance at 1 July 2023 No. C. Granted as remunerati on No. Granted as remunerati on No. - Net other change No. 333,334 333,333 333,333 1,000,000 Net other change No. 330,000 330,000 330,000 990,000 505,666 505,666 At date of resignation No. Balance at 30 June 2023 No. - 560,000 560,000 At date of resignation No. Balance at 30 June 2024 No. - 2,969,000 1,263,333 1,163,333 5,395,666 At date of resignation No. Balance at 30 June 2023 No. - 2,635,666 930,000 830,000 4,395,666 Loans to / from key management personnel There were no loans to or from key management personnel in the 2023 and 2024 financial years. D. Employment Contracts of Directors and Executives The Company will pay Mr Phillips a base salary of $138,000 per annum (exclusive of superannuation and GST). The executive service agreement continues on a rolling term until it is terminated in accordance with its terms. The Company or Mr Phillips may terminate the executive services Agreement at any time during the term by giving not less than 3 months’ notice. NORFOLK METALS LIMITED | 2024 ANNUAL REPORT Page 6 DIRECTORS’ REPORT E. Share-based payments Equity-settled share-based payments to employees and others providing similar services are measured at the fair value of the equity instruments at the grant date. The fair value determined at the grant date of the share-based payments is expensed on a straight-line basis over the vesting period, based on the Company’s estimate of equity instruments that will eventually vest with a corresponding increase in equity. ITEM Fair value per instrument Expected volatility Implied option life Expected dividend yield Risk free rate Exercise Share Price Underlying share price at grant date Total Fair Value F. VALUE OF INPUT Directors Options FY2023 $0.0998 100% 4 years Nil 3.30% $0.30 $0.165 98,841 Other Related Party Transactions There were no other transactions with related parties in the 2023 and 2024 financial years. G. Results and Dividends Remuneration is not linked to past group performance but rather towards generating future shareholder wealth through share price performance. Norfolk Metals listed on 22 March 2022 at 20 cents per share and the share price as at 30 June 2024 was 13 cents (2023: 15 cents). The Company has recorded a loss each financial year to date as it carries out exploration activities on its tenements. No dividends have been paid. Net Profit/(loss) attributable to equity holders of the Company Dividends paid Change in share price 2024 2023 (645,949) (771,491) (0.2) cents 1.5 cents END OF REMUNERATION REPORT (AUDITED). NORFOLK METALS LIMITED | 2024 ANNUAL REPORT Page 7 DIRECTORS’ REPORT REVIEW OF OPERATIONS Norfolk Metals currently holds the Orroroo Uranium Project in South Australia and the Roger River Gold Project in Tasmania. Over the last 12 months the following activities occurred: ORROROO URANIUM PROJECT • Maiden drill campaign completed successfully delineating uranium mineralisation in 10 of 17 holes drilled • Exploration continued with land access engagements, geophysics and subsequent drill program(s) planning • Maiden Drilling Campaign, Radiation Safety Report and all required Rehabilitation Works as well as compliance reporting have been completed at Orroroo ROGER RIVER GOLD PROJECT • Soil study completed with successful reanalysis of historical samples • Tenure evaluation and relocation of maiden drilling diamond drill core to Mineral Resources Tasmania storage facility CORPORATE • Norfolk completed two placements for a cumulative total of A$1,415,746 • Annual Environmental Social and Governance report published • Norfolk continues to evaluate project acquisitions and investments as they are sourced and presented to the board • Strong financial position with circa $3.1M cash at year end Orroroo Uranium Project The primary achievements for Norfolk during the year ending June 30th 2024, have been the targeting, planning, local access, additional funding, drill permitting and maiden drill program execution at Orroroo. Local Stakeholder Access On the 5th of October 2023 the Company announced successfully executing Land Access Agreements (Agreements) with seven (7) freehold landowners within EL6552. These Agreements had been prepared in order to facilitate the maiden drilling program (Program). The planned Program was to consist of up to twenty (20) RAB (rotary mud) holes up to one hundred and sixty metres (160m) deep within the approved area(s) and pending roadside approvals. Targeting and Planning On the 9th of November 2023 the Company released a “Mineralisation Targeting & Maiden Drill Program” presentation outlining the planning of the Company. The Company noted the uranium source rocks appear to NORFOLK METALS LIMITED | 2024 ANNUAL REPORT Page 8 DIRECTORS’ REPORT be part of the Adelaidean Basement on the western edge of the modern-day creeks. Possible uranium source rocks could be granites or units such as the Brighton Limestone known to contain levels of uranium. Drill Permitting Approvals Norfolk received all necessary approvals to commence drilling late November 2023. A formal approval letter was received from the South Australian Department of Energy and Mining (DEM) for the proposed Exploration Program for Environment Protection and Rehabilitation (EPEPR) confirming that Norfolk’s maiden drill program can commence on EL6552 (the Orroroo Project). This milestone approval was the major catalyst for the mobilisation of associated contractors to Orroroo. The approvals were the accumulation of over a year of continuous engagement with the primary stakeholders and landowners of Orroroo and EL6552. Maiden Drill Program Execution The maiden drill program was completed over two phases (Phase 1 and Phase 2) due to the Christmas holiday break. On the 21st of December 2023, the Company announced the initial results of the first twelve (12) holes with a subsequent five (5) holes drilled after Christmas being announced on the 7 th of February 2024. Figure 1. Targeting and planning for prospective uranium source and target locations NORFOLK METALS LIMITED | 2024 ANNUAL REPORT Page 9 DIRECTORS’ REPORT Figure 2. Uranium *peak grade occurrences delineated by Norfolk Metals via Phase 1 drilling and February 2023 downhole geophysical survey *peak grade(s) noted are the direct detection of pU308 over a 0.02m interval by Prompt Fission Neutron downhole logging within a composite intersection with a cut-off grade greater than 100ppm pU308. See previous ASX announcement from 27 th February 2023 regarding uranium value reported at Well 7P3 (650ppm pU308). The 21st of December 2023 announcement noted that towards the completion of drilling at Target areas 1,2 and 4, (see Figure 1.) the second hole at Target 4 (ORMR007) was tested with a Prompt Fission Neutron (PFN) tool across the horizon of elevated gamma returning a value of 147ppm pU308 over 0.36m with a peak reading of 796ppm pU308 (see Figure 2.). This was a positive reconfirmation of the previously reported uranium occurrence via spectral gamma logging of historical Linc Energy drill holes (see ASX announcement on 27th February 2023). Norfolk expanded Phase 1 of the maiden drill program further afield from the initial targets testing the previously released regional REDOX model of the Walloway Basin (see announcement 6 th July 2023) within the approved drilling areas of EL6552. Two (2) of five (5) holes drilled returned very encouraging results with peak values of 453ppm pU308 at ORMR008 and 538ppm pU308 at ORMR009 (see Figure 2.) NORFOLK METALS LIMITED | 2024 ANNUAL REPORT Page 10 DIRECTORS’ REPORT Figure 3. Orroroo Project Regional Cross Section * Please note that some drill holes deliberately omitted for illustration only (scale) On the 7th of February 2024, Norfolk advised that Phase 2 drilling had been completed with a further 5 holes drilled across EL6552, taking the total number of holes completed in the maiden program to seventeen (17). Phase 2 of the program sought to test the palaeochannel model at the Wongway Creek Target (Formerly Target 1) where suitable drill access was available. A total of three (3) holes were drilled along the river traverse of the Wongway Creek Target testing both upstream and downstream regions. One (1) hole was drilled downstream of the No Name Creek Target (formerly Target 3) as well as the Rankin Rd Target (formerly Target 4). The completion of the maiden drill program has successfully delineated uranium in ten (10) of the seventeen (17) holes providing data for the Company to further develop a geological model of the Walloway Basin (Figure 3). Most importantly, the program interpreted a uranium bearing floodplain (see Figures 3. and 4.) intersected upstream of Wongway Creek which gives Norfolk confidence in the palaeochannel model and future exploration efforts can be planned accordingly. NORFOLK METALS LIMITED | 2024 ANNUAL REPORT Page 11 DIRECTORS’ REPORT Figure 4. Phase 1 and Phase 2 Drill Location Plan and cross section reference Continued Exploration The completion and interpretation of the maiden drill program at Orroroo further increased the understanding and potential of the project while providing valuable data along with additional district scale targets concluding the below: • Orroroo project value proposition as a potential new uranium district known as the Walloway Basin in Australia's favoured uranium state has been further proven and de-risked; • Norfolk has embarked on the future planning and approvals for Orroroo with a focus on the potential close proximity of a uranium-bearing floodplains to the floodplain interpreted near the Wongway target while remaining aware of the district scale opportunities; and, • Future planning utilising various geophysical techniques and stakeholder engagements will endeavour to ensure flexibility in follow-up drill program(s). Subsequent to Period End Throughout July 2024 Norfolk completed a site visit to Orroroo with additional geologists for interpretation of the region, Drilling Campaign Radiation Safety Report and all required Rehabilitation Works. NORFOLK METALS LIMITED | 2024 ANNUAL REPORT Page 12 DIRECTORS’ REPORT Roger River Gold/Copper Project, Tasmania Exploration Activities During the year ending June 30th 2024, Norfolk was continuing the work to obtain a better understanding of the copper and gold mineralisation at Roger River to guide the next exploration phase. The Company completed determining if all of the preferred historical soil samples (not sampled for Cu) over the White Water and A2 Prospects could be re-submitted for Cu (multi-elements) analysis. The Company finalised the program submitting 148 historical pulp soil samples along with 98 new surface samples collected on a 200 x 100m grid around A2 covering an area of approximately 1.2km x 1.5km (see Figure 5.) for multi-element analyses to ALS in Burnie, Tasmania. Subsequently, Norfolk was able to receive, interpret and map the results of the soil study. The results show a continuous Cu anomaly around A4 and A5 prospects located along the interpreted fault splay from the RRF (see Figure 6). This anomalous trend has coincident Pb Zn and Mo anomalies. The RRF also shows a strong continuous As anomaly over the 4km strike length (see Figure 7). Gold mineralisation is mainly associated with iron and arsenic minerals such as pyrite and arsenopyrite. During the oxidation process the arsenic is the more mobile element, moves further away from the source and therefore becomes a useful geochemical pathfinder for gold mineralisation. Figure 5. Soil study new and historical sample locations NORFOLK METALS LIMITED | 2024 ANNUAL REPORT Page 13 DIRECTORS’ REPORT Figure 6 and Figure 7: Respectively displaying a Cu soil contour within the interpreted splays and the As soil contour as a continuous anomaly over the RRF structure. Norfolk continues to liaise and engage with Mineral Resources Tasmania regarding the tenure size and exploration budget(s) of the permits held at Roger River and surrounds. Subsequent to Period End Norfolk was recently onsite completing the required works to package and label all diamond drill core stored at the previously tenanted residence in Smithton to have the core shipped to Mineral Resources Tasmania storage facility. Corporate Update Placements from for a cumulative total of A$1,415,746 On the 22nd of November 2023 the Company confirmed it has received firm commitments from professional and sophisticated investors for a strategic placement to raise A$1,000,000 via the issue of 5,000,000 fully paid ordinary shares the Company at an issue price of A$0.20 per Placement Share. The Placement was firmly oversubscribed with several current major shareholders corner stoning the raise to further solidify the top holders position and Company share structure. During the reporting period, Norfolk completed a second placement to strategic professional and sophisticated investors to raise $415,746.45 (before costs) through the issue of 2,771,643 fully paid ordinary shares at an issue price of A$0.15 per New Share under capacity of ASX Listing Rule 7.1. NORFOLK METALS LIMITED | 2024 ANNUAL REPORT Page 14 DIRECTORS’ REPORT ESG Report The Company’s second Environmental, Social, and Governance (ESG) report was published for stakeholders with an overview of how the Company has integrated ESG considerations into its operations. This report includes updates on Norfolk’s actions and efforts on the ESG topics that were deemed most material to the Company’s sustainable success. The reporting period for this report is Calendar Year 2023 (CY23 or Reporting Period). This report has been facilitated by Norfolk’s ESG Advisors, Automic ESG, based on the organisational boundary of Norfolk Metals Limited. Norfolk committed to ESG reporting prior to listing on the ASX. Norfolk Metals ESG reporting framework incorporates the following Standards: United Nations Sustainable Development Goals (SDGs), Global Reporting Initiative (GRI), and the Taskforce on Climate-related Financial Disclosures (TCFD). The report can be viewed on the Company website under the Sustainability tab. Competent Persons Statement The information in this Annual Report that relates to exploration results, is based on, and fairly represents, information and supporting documentation prepared by Mr Leo Pilapil, a competent person who is a member of the Australasian Institute of Mining and Metallurgy. Mr Pilapil has a minimum of five years’ experience which is 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 Joint Ore Reserves Committee Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves. Mr Pilapil is a related party of the Company, being the Technical Director, and holds securities in the Company. Mr Pilapil has consented to the inclusion in this Annual Report of the matters based on his information in the form and context in which it appears. PRINCIPAL ACTIVITIES Norfolk is an exploration Company with projects prospective for uranium in South Australia (Orroroo Project) and gold in Tasmania (Roger River Project). SIGNIFICANT EVENTS AFTER THE BALANCE DATE At the time of this report there were no events subsequent to the reporting date that required disclosure. DISCLOSURE OF BUSINESS STRATEGIES AND PROSPECTS – MATERIAL BUSINESS RISKS The material business risks faced by the company that are likely to have an effect on the financial prospects of the company are disclosed below and how the company manages these risks include: Tenure Risk: The Company’s Tenements are subject to the applicable mining acts and regulations in South Australia and Tasmania, pursuant to which mining, and exploration tenements are subject to periodic renewal. The renewal of the term of a granted tenement is also subject to the discretion of the relevant Minister. There is no guarantee that current or future tenements or future applications for production tenements will be approved. Renewal conditions may include increased expenditure and work commitments or compulsory relinquishment of areas of the tenements comprising the Company’s Projects. The imposition of new conditions or the inability to meet those conditions may adversely affect the operations, financial position or performance of the Company. There can be no guarantee that a renewal will be approved. If the Company is unable to secure a renewal for these Tenements this may impact the Company’s exploration plans for the Projects and may adversely impact the Company or the value of its Shares. Prior to any development on any of its properties, the Company must receive licences from appropriate governmental authorities. NORFOLK METALS LIMITED | 2024 ANNUAL REPORT Page 15 DIRECTORS’ REPORT There is no certainty that the Group will hold all licences necessary to develop or continue operating at any particular property. The Company considers the likelihood of tenure forfeiture to be moderate given the laws and regulations governing exploration in South Australia and Tasmania and the ongoing expenditure being budgeted by the Company. However, the consequences of forfeiture or involuntary surrender of a granted tenement for reasons beyond the control of the Company could be considered significant. Similarly, the rights to mining tenure carry with them various obligations which the holder is required to comply with in order to ensure the continued good standing of the licence and, specifically, obligations in regard to minimum expenditure levels and responsibilities in respect of the environment and safety. To assist with the Company’s obligations, Norfolk has hired the services of consultants to continuously monitor the status and repo