Announcement PDF ABN 38 652 438 385 ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 2023 ANNUAL REPORT for the year ended 30 June 2023 CORPORATE DIRECTORY ..................................................................................................... 1 DIRECTORS’ REPORT........................................................................................................... 2 AUDITOR’S INDEPENDENCE DECLARATION ........................................................................ 20 INDEPENDENT AUDITOR’S REPORT.................................................................................... 21 DIRECTORS’ DECLARATION ............................................................................................... 26 CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME ... 27 CONSOLIDATED STATEMENT OF FINANCIAL POSITION ....................................................... 28 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY........................................................ 29 CONSOLIDATED STATEMENT OF CASH FLOWS ................................................................... 30 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS .................................................. 31 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 Unit 10, 85-87 Forrest Street Cottesloe WA 6011 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 | 2023 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 2023. 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 names of the secretaries in office at any time during or since the end of the year are: Company Secretaries 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 2023 of $771,491 (2022: $649,946). DIRECTORS’ MEETINGS During the year to 30 June 2023, 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 MAN:ASX. Mr. Phillips’ current position as a Corporate Executive at Ironside is focused on sourcing, structuring, funding and management requirements for small-cap companies both private and public. Mr. Phillips has worked for Ironside Capital since incorporation having previously held a position at Merchant Corporate Finance. NORFOLK METALS LIMITED | 2023 ANNUAL REPORT Page 2 DIRECTORS’ REPORT Interest in shares and options at the date of this report 1,517,001 Ordinary Shares 2,130,000 Unquoted Options 505,666 NFLO Quoted Options 560,000 Performance Rights Directorships held in other listed entities (last 3 years) Mandrake Resources Limited (resigned 8 March 2021) Patrick Holywell NON- EXECUTIVE DIRECTOR Mr Holywell has over fifteen years of experience in accounting, finance and corporate governance, including employment at Deloitte and Patersons. He is a Chartered Accountant and a Fellow of the Governance Institute of Australia with the last ten years focused on Director/CFO/Company Secretarial roles. He has held roles with various companies particularly in the resources and technology space. Mr Holywell has completed a Bachelor of Commerce at UWA, a Graduate Diploma of Chartered Accounting with the Institute of Chartered Accountants and the Company Directors Course with the Australian Institute of Company Directors. Interest in shares and options at the date of this report 930,000 Unquoted Options Directorships held in other listed entities (last 3 years) Redcastle Resources Limited (appointed 20 November 2019) 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 Directorships held in other listed entities (last 3 years) Nil NORFOLK METALS LIMITED | 2023 ANNUAL REPORT Page 3 DIRECTORS’ REPORT 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 16 years. Mr Canicais is an associate member of the Institute of Chartered Accountants and Governance Institute of Australia. Mr Canicais is currently also Company Secretary and CFO for various ASX listed and unlisted entities. 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. NORFOLK METALS LIMITED | 2023 ANNUAL REPORT 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 Salary & Fees $ Bonus $ 105,000 48,000 93,326 246,326 30,000 30,000 Share-based Payments Options or Other Super- Prescribe Performance benefits annuation d benefits right $ $ $ $ Post-employment - - - 32,947 32,947 32,947 98,841 Total $ 167,947 80,947 126,273 375,167 The table below shows the 2022 financial year figures for remuneration received by the Company’s key management personnel: Short Term 2022 Ben Phillips Patrick Holywell Leonardo Pilapil B. (i) Salary & Fees $ Bonus $ 35,000 20,000 17,000 72,000 - Share-based Payments Options or Other Super- Prescribe Performance benefits annuation d benefits right $ $ $ $ Post-employment - - - 106,350 85,080 70,900 262,330 Total $ 141,350 105,080 87,900 334,330 Directors’ equity holdings Fully paid ordinary shares of Norfolk Metals Limited: Balance at 1 July 2022 No. 2023 Directors Ben Phillips Patrick Holywell Leonardo Pilapil Granted as remuneration No. 1,442,001 1,442,001 NORFOLK METALS LIMITED | 2023 ANNUAL REPORT - Net other change No. 75,000 75,000 At date of resignation No. Balance at 30 June 2023 No. - 1,517,001 1,517,001 Page 5 DIRECTORS’ REPORT Balance at 30 July 2021 or Appointment Date No. Granted as remuneration No. - - 2022 Directors Ben Phillips Patrick Holywell Leonardo Pilapil (ii) Net other change No. Performance rights of Norfolk Metals Limited: Balance at 1 July 2022 No. 2023 Directors Ben Phillips Patrick Holywell Leonardo Pilapil 2022 Directors Ben Phillips Patrick Holywell Leonardo Pilapil Granted as remuneration No. 560,000 560,000 1,442,001 1,442,001 Net other change No. - Balance at 30 July 2021 or Appointment Date No. Granted as remunerati on No. - - - Net other change No. 560,0001 560,000 At date of resignation No. Balance at 30 June 2022 No. - 1,442,001 1,442,001 At date of resignation No. Balance at 30 June 2023 No. - 560,000 560,000 At date of resignation No. Balance at 30 June 2022 No. - 560,000 560,000 Mr Phillips received performance rights as part of the Roger River acquisition. Details located at note 11 within the financial report. 1 NORFOLK METALS LIMITED | 2023 ANNUAL REPORT Page 6 DIRECTORS’ REPORT (iii) Options of Norfolk Metals Limited: Granted as remunerati on No. Balance at 1 July 2022 No. 2023 Directors Ben Phillips Patrick Holywell Leonardo Pilapil 1,800,000 600,000 500,000 2,900,000 330,000 330,000 330,000 990,000 Balance at 30 July 2021 or Appointment Date No. Granted as remunerati on No. Net other change No. - 750,000 600,000 500,000 1,850,000 1,050,000 1,050,000 2022 Directors Ben Phillips Patrick Holywell Leonardo Pilapil C. Net other change No. 505,666 505,666 At date of resignation No. Balance at 30 June 2023 No. - 2,635,666 930,000 830,000 4,395,666 At date of resignation No. Balance at 30 June 2022 No. - 1,800,000 600,000 500,000 2,900,000 Loans to / from key management personnel There were no loans to or from key management personnel in the 2023 financial year. Last financial year the company had an unsecured loan held with Mr Phillips of $22,362. During the last financial year, the loan was forgiven in full. D. Employment Contracts of Directors and Executives The Company will pay Mr Phillips a base salary of $120,000 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 anytime during the term by giving not less than 3 months’ notice. 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. NORFOLK METALS LIMITED | 2023 ANNUAL REPORT Page 7 DIRECTORS’ REPORT VALUE OF INPUT 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. Directors Options FY2023 VALUE OF INPUT Director and Management Options FY2022 $0.0998 $0.1418 100% 100% 4 years 5 years Nil Nil 3.30% $0.30 1.38% $0.25 $0.165 $0.20 98,841 $354,500 Other Related Party Transactions It was noted that Ben Phillips was a related party for the acquisition of Roger River Resources Pty Ltd. Details of the acquisition are located at Note 11 within the financial report. 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 2023 was 15 cents (2022: 13.5 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 2023 2022 (771,491) (649,946) 1.5 cents (6.5) cents END OF REMUNERATION REPORT (AUDITED). REVIEW OF OPERATIONS Norfolk Metals currently holds the Roger River Gold Project in Tasmania and the Orroroo Uranium Project in South Australia. Over the last 12 months the following activities occurred: • Orroroo Project confirmed Uranium mineralization via downhole geophysical survey • Orroroo Project Gravity survey delineates distinct channels within the Walloway Basin • Norfolk progressing all permitting requirements to commence maiden drill program at the Orroroo Project NORFOLK METALS LIMITED | 2023 ANNUAL REPORT Page 8 DIRECTORS’ REPORT • Maiden drill program completed at Roger River Project • Multiple native copper intersects observed at Roger River with copper screening analysis completed • Further surface geochemical work undertaken to define future drill targets at Roger River • Inaugural ESG report published for calendar year 2022 • Norfolk is continually reviewing potential projects, investments and acquisitions Orroroo Uranium Project Throughout 2023 Norfolk completed two geophysical programs within the boundaries of the Orroroo Project permit EL6552. The Company also progressed extensive stakeholder and community engagements throughout the preparation, duration and post completion of these programs. Throughout 2023 Norfolk become proud sponsors of the Orroroo Football and Netball Club, the Orroroo Golf Club and the upcoming 2023 Rural Women’s Day to be held 14 October 2023 in Orroroo. The upcoming milestone for Norfolk shareholders will be the maiden drill program at Orroroo of which the Company has well progressed on all of facets the required permitting. Norfolk board expects to update the shareholders in the imminent future with planning and expectations for the maiden drill program. Reflecting on the success of the two geophysical programs completed in 2023; 27 February 2023 saw Norfolk report the downhole geophysical survey conducted at the Orroroo Project. Spectral Gamma and Prompt Fission Neutron (PFN) well logs recorded have been utilised for further exploration planning. The program was considered immensely successful on completion having confirmed the following: 1. Uranium occurrences in all three target zones (wells) of which the depths are potentially suitable for proven in-situ recovery methods; 2. Uranium peak reported at 650ppm pU3O8 within an interval of 192ppm pU3O8 over 0.5m from 112.59m via PFN in well 7P3 (Figure 1); and, 3. Uranium recorded from this survey at expected target depths obtained from historical holes supports the proposed “oxidised tails or interface zones” of roll-front uranium style mineralisation theory proposed by the Norfolk geology team. 1. Per page 16 of CSA Global’s ISR Project presentation located at: https://www.csaglobal.com/wpcontent/uploads/2019/11/ATA2017_ISR-Projects-Issues-and- Potential_Maxim-Seredkin_May_2017.pdf For additional information in relation to the downhole geophysical survey please see the Company’s announcement from 27 February 2023. NORFOLK METALS LIMITED | 2023 ANNUAL REPORT Page 9 DIRECTORS’ REPORT Figure 1. Norfolk 100% owned EL6552 and EL6814 overlayed on the Walloway Basin sediments showing the initial target area, Linc Energy historical wells and recently confirmed uranium occurrences. The legend also shows the surface footprint of three (3) resources from the Frome Embayment at the same scale as the Walloway Basin e.g. the length of Honeymoon versus Norfolk’s Priority Target Area. This image will assist in giving context to the scale of this opportunity to define a new uranium province of which Norfolk owns 100%. The subsequent gravity survey reported on 6 July 2023 successfully delineated two distinct regional channels (Figure 2) along with potential paleochannel(s) within the Walloway Basin. This program further supports the Company geological model for Orroroo to potentially host sandstone hosted uranium similar to other known South Australian deposits. The delineation of the channels is encouraging progress; specifically, the Western Channel with sandstone hosted uranium potential modelled via three (3) primary datasets being; 1. Historical drilling information (gamma anomalies and stratigraphic records); 2. Recent downhole geophysics of historical wells confirming the presence of uranium; and, 3. Gravity data interpretation. The gravity data suggests two distinct lows with paleochannel potentials existing within the basin, shown as a broader Western Channel and a narrower Eastern Channel. Geological logs and cross sections of available drill NORFOLK METALS LIMITED | 2023 ANNUAL REPORT Page 10 DIRECTORS’ REPORT hole data suggest that the Western channel is a paleochannel characterized by a thick basal sandstone and coal horizon. The Western Channel displays a distinct REDOX Interface with similarities to the Yarramba paleochannel which is host to the Honeymoon uranium deposit. For additional information in relation to the gravity survey and REDOX Interface model please see the Company announcement from 6 July 2023. Figure 2. First Derivative (1VD) gravity survey displaying two distinct channels Roger River Project For the 12-month reporting period to the 30 June 2023 the main objective was to drill test the coincident magnetic and gravity anomalies located along structural splays off the main Roger River Fault. It is an investigation to determine the possible structural control of mineralization and location of coarse native copper which may represent (and possibly be used as a vector to locate) a porphyry copper system that may indicate massive sulfide mineralization. During the reporting period, Norfolk conducted the following exploration activities (Figure 3): • • • • Received and evaluated the results for the 121 orientation soil samples Completed 3 diamond drill holes totaling 885.2 metres Conducted sizing sample analysis with ALS Completed a soil sampling survey around the A2 Anomaly NORFOLK METALS LIMITED | 2023 ANNUAL REPORT Page 11 DIRECTORS’ REPORT Figure 3. Composite image incorporating work completed in the reporting period NORFOLK METALS LIMITED | 2023 ANNUAL REPORT Page 12 DIRECTORS’ REPORT Soil Orientation Program Five orientation lines were designed over the 5 identified geophysical targets. The orientation lines were designed approximately perpendicular to the splay structures coming off the Roger River Fault. A total of 121 samples were collected for the soil orientation line study. Assay results for copper and gold for the soil orientation lines over the 5 geophysical targets are shown in Figure 3. Copper values greater than 250ppm were identified in samples across multiple orientation lines. The anomalous values appear to closely correlate to the interpreted positions of the splays, in particular Anomalies 2 & 4. This may suggest that the splays may have been ‘active’ and possibly acted as a pathway for hydrothermal fluids. To further investigate, a soil program has been completed to extend the initial orientation soil line over the A2 target. Diamond Drilling Norfolk completed 3 holes for a total of 885.20m. The 3 holes were drilled to test the coincident magnetic and gravity anomalies along the fault splay from the main deep seated Roger River Fault structure. 22RRD-001 The first drillhole 22RRD-001 (drilled to 318.0m) was located in prospect A2 and targeted a coincident magnetic and gravity anomaly defined from surface geophysical surveys. The target was conceptual in nature and the drill hole was designed to better resolve the source of key geophysical units within the project area. Native copper was observed over discrete zones from 58.50m to 145.40m downhole depths. Native copper occurs as disseminations (1-3%) in the host rock (basalt) as well as disseminations in later quartz-carbonate veins overprinting the host rock. The narrow veins that contain native copper are commonly sub-parallel to the core axis (the hole path). Photo 1: 22RRD-001 Altered magnetic basalt with native copper in quartz carbonate veins at approximately 145m depth. There appears to be strong alteration near the basalt and sediment contact (147.5m downhole) with magnetite potassium and hematite assemblage around silica-carbonate veins containing native copper. The intercalated basalt/sediment units (175.90m to 192.20m downhole) shows dense potassic-epidote-silica veins with disseminated pyrite. Some of the clasts within the sediments demonstrate flattening and suggest that compression/faulting could possibly be creating dilational zones. These type of dilational zones promote deformation with fractal opening that may allow mineralised fluids to accumulate. Within the sedimentary units (209.60m to 318.0m EOH), several strongly laminated massive pyrite veins were observed. The veins are up to 4mm in thickness. It has been suggested that the magnetic anomaly is represented by the magnetic basalt units and the gravity anomaly is possibly represented by the thick dense sedimentary units. NORFOLK METALS LIMITED | 2023 ANNUAL REPORT Page 13 DIRECTORS’ REPORT The highest Cu grades obtained from the analysis for 22RRD-001 have been tabulated below. HOLE ID FROM TO LENGTH (m)* GRADE 22RRD-001 53.20 54.75 1.55 0.06 58.50 59.75 1.25 0.12 144.60 145.40 0.80 0.18 Cu Table 1: 22RRD-001 Highest Cu grade intersections It has been recognized that the native copper is not pervasive throughout the core and has been strongest along the narrow quartz-carbonate veins as disseminated copper. However, it was also recognized that the coarse native copper may not be best represented in the assays using the standard fractions applied by the laboratory for the analysis. Consequently, a sizing study was completed to form the basis of Standard Practice for future reference. As previously mentioned, the narrow veins in 22RRD-001 that contain native copper are commonly sub-parallel to the core axis (the hole path). Therefore, it may be possible that a hole drilled perpendicular to 22RRD-001 may intersect more vein sets with more significant grades. 22RRD-002 Drill hole 22RRD-002 was drilled to test Target A1a over a coincident magnetic and gravity anomaly. Only the magnetic bodies were modelled due to the lack of gravity data points necessary to construct a model body. The hole was drilled to a depth of 220m and mainly intersected unmineralized sedimentary units on top of the hole (down to 51.50m) and fresh vesicular/propylitic basalt to the end of the hole. The basaltic units were non-magnetic and no significant mineralisation was observed. Therefore, no samples were submitted for analysis. The basalt units observed in 22RRD-002 appear to be lower in the basalt sequence to the basalt units observed in RRD-001. The hole did not reconcile with the anomalies identified from the magnetic model. 22RRD-003 Drill hole 22RRD-003 was drilled to test the magnetic anomaly A1b near the junction of the interpreted splay and the main Roger River Fault down to 342.70m. The target was also conceptual in nature and the drill hole was designed to test the source of key magnetic feature and its association with possible mineralization. Native copper was observed over discrete zones from 102.0m to 137.80m downhole depths. Native copper occurs as clast in wall rock (<1%), as disseminations (1-3%) in the host rock (basalt) as well as disseminations (<1%) in later quartz-carbonate veins overprinting the host rock. NORFOLK METALS LIMITED | 2023 ANNUAL REPORT Page 14 DIRECTORS’ REPORT Photo 2. 22RRD-03 159.20m-160.80m depth contains dense silica+carbonate veins, up to 1-3% native copper There appears to be stronger copper mineralization (1-3%) from 212.4m to 216.4m downhole where copper has been observed consistently along the basalt fractures. The interbedded sediment units (263.05m to 338.90m) partly hematitic, shows dense potassic-epidote-silica veins with minor disseminated pyrite (<1%). The highest Cu assays obtained from 22RRD-003 have been tabulated below: HOLE ID FROM TO LENGTH (m)* GRADE INCLUDES % Cu LENGTH Cu 22RRD-003 213.60 216.00 2.40 0.15 0.7 0.416 Table 2: 22RRD-002 Highest Cu grade intersections Again, the native copper is not pervasive throughout the core and is reflected by the assay results. However, from the sizing study (see below), there is a possibility of underestimating the grade due to the coarse nature of the copper minerals and the size/weight of the samples analysed. NORFOLK METALS LIMITED | 2023 ANNUAL REPORT Page 15 DIRECTORS’ REPORT Sample Sizing Analysis Norfolk conducted geochemical analysis study on the maiden drilling program to better understand the distribution of the native copper and determine the best suited analytical method to represent the grades in the core. In all sample intervals, the native copper observed in the whole/uncut drill core is not as pervasive in the basalt wall rock. Consequently, the visually concentrated copper in each sample interval is from the narrow veinlets resulting in 0.05% to 0.18% Cu assays. However, to get a better understanding of the possible variability that the coarse native Cu may cause in the assay results, selected pulverized samples were re-homogenized and resent for Cu screening analysis using 50g (original sample 25g) aqua regia 4-acid digest. This provided larger sample size for duplicates with each sample being analysed four times via aqua regia and four acids for Cu. The main differences in the analytical methods were as follows: 1. The original analysis (ME – MS 61r) was based on core samples pulverised but not sieved down to 0.25g sample mass (analysed for 61 elements using 4-acid digest with ICP-MS Finish). 2. The second analysis ME-ICP44 was analysed using homogenised samples (not screened) pulverised down to 50g sample mass (analysed for 44 elements using 4-acid digest with ICP Finish). 3. The third method involved initially screening the samples (0.5kg homogenised sample) passing through -75 microns to determine the coarse fractions and then analysing the total sample mass. The screening method relies on separating all the metal contained in the sample pulp on top of a 75micron screen analysing it in its entirety and also analysing the minus fraction and bringing this into the calculations for Cu Total. It was concluded from the study that the larger the mass