Announcement PDF Annual Financial Report for the financial year ended 30 June 2023 1 Table of Contents Directors’ Report 3 Corporate Governance Statement 11 Auditor’s Independence Declaration 12 Consolidated Statement of Profit or Loss and Other Comprehensive Income 13 Consolidated Statement of Financial Position 14 Consolidated Statement of Changes in Equity 15 Consolidated Statement of Cash Flows 16 Notes to the Consolidated Financial Statements 17 Directors’ Declaration 36 Auditor’s Report 37 ASX Additional Information 41 ABN Address Telephone Email Website 84 119 904 880 Level 6, 412 Collins Street Melbourne VIC 3000 +61 2 8073 0574 info@dartmining.com.au www.dartmining.com.au 2 Directors’ Report The Directors of Dart Mining NL (“Dart”) submit their report for the year ended 30 June 2023 and to the date of this report. Operating and Financial Review The twelve months to June 30, 2023 were corporately and operationally a very productive period for Dart. In many ways it was transformational for the company starting with the signing of the farm-in Joint Venture agreement with SQM in July 2022. Milestone achievements upon signing the SQM agreement, included a broad and comprehensive ESG review of our operations, conducted by ERM, who are a globally recognized sustainability and ESG consulting firm. There was very little that we were required to do at the conclusion of the review to meet the operating standards expected of a company in the Mining and Exploration sector. A review of the company’s Work, Health and Safety (WHS) practices and policies was also undertaken. Updated documentation and some minor changes to the various workplace operating environments has broadly lifted our standards up to, and in some cases beyond, those expected of us. WHS cultural procedures and practices were examined and re-emphasised to ensure we created an environment where safety is first and foremost the top priority for our all our employees. More recently Mr. Owen Greenberger joined the company as Head of Exploration in mid 2023. Owen brings a wealth of experience and success as a leader in the company’s quest for meaningful discovery. We successfully executed several exploration programs including LiDAR surveys across our Rushworth gold project, sampling of more Li pegmatites, extensive drilling at the Granite Flat Cu, Au project, and a 3,032m diamond drilling campaign on the Dorchap lithium project. I take this opportunity to sincerely thank all those involved with the company, employees, shareholders, and other stakeholders, over the past twelve months and particularly our Joint Venture (JV) partners at SQM. Corporate Joint Ventures We are in the process of reviewing all the company’s mineral projects and particularly those that the board considers attractive for potential farm-in joint ventures. We will, before the end of calendar year 2023, complete preparation of Information Memorandums on all the relevant projects and then identify suitable partners for these projects. Major mining company exploration pipelines appear to be historically thin at present and we are confident that we will deliver additional JV arrangements for the benefit of shareholders over time. Financial Markets Financial markets have been lack-luster over the last twelve months and volatility has increased. Positive returns have been difficult to achieve. The junior resources sector has been sold down very heavily over this period. The normalization of interest rates, geopolitical events, and a sentiment of de-risking has contributed largely to this outcome. The US dollar strength has been a feature of financial markets throughout the year. Commodity Markets Comment Gold (Au) Sentiment towards gold has been negative for most of the year as interest rate increases bit the market. There is still a strong case for gold going forward and when priced in Australian dollars gold had a stellar year. Lithium (Li) Lithium had a roller coaster year as prices surged in late 2022 only to be hammered in the first half of 2023. There remains a very strong case for Lithium based on demand fundamentals and a slowing supply response from explorers and developers. Base Metals (Cu, Zn, Pb, Mo, W) Base metals have had quite a torrid year also. Copper has held up relatively well, but others have suffered steep declines. US dollar strength has been a major influence, but it sidesteps the fundamentals and demand profile where global inventory levels are very low ahead of arguably strong demand associated with accelerating global electrification. Financial overview Operating results for the year The loss for the consolidated entity after income tax was $912,409 (2022: loss $454,961). This result is consistent with expectations of costs associated with the exploration and development programs budgeted and undertaken that reflect the costs associated with managing the exploration program and corporate overheads associated with statutory and regulatory requirements as a consequence of being listed on the Australian Securities Exchange. The Group’s activities are subject to a number of risks which may impact future financial performance. In order to fund the future growth of the Group’s business it will be necessary for the Board to consider potential capital raising needs thereby creating a funding risk. Mineral exploration is a high-risk business with no guarantee of success. There is no assurance that exploration on any of the exploration tenements, or on any mining tenements that may be acquired in the future, will result in the discovery of a mineral deposit or economically mineable reserves. In the event of a discovery, development of a mine may not prove to be economically viable due to factors outside the Company’s control. There is no guarantee of exploration success and no guarantee of a profitable development of any discovery. Any exploitation of a deposit will involve the need to obtain the necessary licences or clearances from relevant authorities, and renewals of licences and permits, which may require conditions to be satisfied and/or the exercise of discretions by such authorities. It may or may not be possible for such conditions to be satisfied. Exploration and development may be hampered by mining, heritage and environmental legislation, industrial disputes, cost overruns, land claims and compensation and other unforeseen contingencies. 3 Directors’ Report Exploration licences are granted subject to various conditions including, but not limited to, expenditure conditions. Failure to comply with these conditions may expose the licences to forfeiture. All of the licences in which the Company has an interest will be subject to application for renewal from time to time. Renewals are subject to the discretion of the Minister and may include additional or varied work and expenditure commitments and, compulsory relinquishment of areas presently comprising the Company’s tenements. The imposition of new conditions or the inability to meet those conditions may adversely affect the Company’s business and its financial performance and condition. If a licence is not renewed for any reason, the Company may suffer significant damage through loss of the opportunity to develop and discover any mineral resources on that licence. As the Company’s potential earnings may be derived from the sale of base metals and gold, these earnings will be closely related to the prices of these commodities. The sale of these commodities may expose the Company to commodity price and exchange risk rates. The international prices of base metals and gold are denominated in United States Dollars, which may expose the Company to adverse currency and commodity price fluctuations. Information on Directors The names and details of the Company’s Directors in office during the financial year and until the date of this report are as follows. Directors were in office for this entire period unless otherwise stated. Names, qualifications, experience and special responsibilities James Chirnside Chairman / Managing Director Appointed 18 June 2015 James Chirnside has been professionally engaged in financial and commodity markets over a thirty-year period. Since returning to Australia and establishing his own asset management company in 2002, James has been involved in equities investment across the Asia Pacific region. In 1992 James moved to Hong Kong with Regent Fund Management where he was responsible for resources investment as well as the firm’s proprietary activities in base and precious metals. He worked for Investment Bank County NatWest (London) where he traded financial and commodity physical and derivative instruments. James managed the overnight commodity trading desk for Bell Commodities (Melbourne) where mining clients hedged metal production through the London Metal Exchange. During the early part of his career he worked for global commodity trading house Bunge where he traded in a range of food, fiber, steel and metal commodities. Prior to studying at Edith Cowan University in Perth, Western Australia, James worked for Mt Newman Mining in the Pilbara region as a geologist’s assistant. Other current directorships of listed companies WAM Capital Ltd Cadence Capital Ltd Former directorships of listed companies in the last three years IPE Limited Mercantile Investments Ltd Richard Udovenya Non-executive Director (independent) Appointed 6 May 2022 Mr Udovenya is the Principal of the law firm ResourcesLaw International which focusses on natural resources projects in Australia and Africa. Richard has almost 40 years’ legal experience in Australia and New Zealand, and is a director of, and a legal advisor to, a number of Australian and international companies. Other current directorships of listed companies None. Former directorships of listed companies in last three years None. Dean Turnbull Non-executive Director (independent) Appointed 6 March 2023. Dean Turnbull is a geology graduate from the Bendigo College of Advanced Education and has a Postgraduate Honours degree in geology from the Key Centre for Ore Deposit and Exploration Studies (CODES) at the University of Tasmania. Dean has over 30 years’ experience as an exploration and mine geologist specialising in 3D geological and structural modelling, working on detailed geological exploration models across many of Victoria’s major mining centres. Positions previously held have spanned the spectrum from leading grass roots green fields exploration to multirig Resource/Reserve drill outs and resource estimations on large scale underground mining projects. Dean was instrumental in the discovery and subsequent exploration of the Unicorn Porphyry Mo – Cu – Ag project and was the first to recognise and explore the lithium potential of the Dorchap LCT dyke swarm. Dean is a member of Australian Institute of Geoscientists. Other current directorships of listed companies None. Former directorships of listed companies in the last three years None. Carl Swensson Non-executive Director (independent) 4 Directors’ Report Appointed 15 July 2021, resigned 6 March 2023 Mr Swensson is a Geologist with over 40 years of experience in mineral exploration and resource assessment. Other current directorships of listed companies None. Former directorships of listed companies in last three years None. Julie Edwards Company Secretary Appointed 1 July 2015 Julie Edwards was appointed as the Chief Financial Officer of Dart on 8 July 2015. She has had over 20 years’ experience and involvement in the management of accounting and finance functions. She holds a Bachelor of Commerce degree, is a member of CPA Australia, holds a CPA Public Practice Certificate and is a registered Tax Agent. Shareholdings of directors and other key management personnel The interests of each director and other key management personnel, directly and indirectly, in the shares and options of Dart Mining NL at the date of this report are as follows Key management personnel Ordinary shares Options over ordinary shares J Chirnside 685,460 - D Turnbull 242,959 97,223 - R Udovenya - Corporate structure Dart Mining NL is a no liability company limited by shares that is incorporated and domiciled in Australia. Dart Mining NL has prepared a consolidated financial report incorporating Dart Resources Pty Ltd, Mt Unicorn Holdings Pty Ltd and Mt View Holdings Pty Ltd all of which were controlled by the Company (comprising the Group) during the financial year and are included in the financial statements. Principal activities The company continues to pursue its minerals exploration activities in Lithium Li-Cs-Ta pegmatites, orogenic gold, and base metal porphyry targets. Dividend No dividends in respect of the current financial year have been paid, declared or recommended for payment. Summary of shares, options and performance rights on issue At 30 June 2023, the Group has 172,287,226 ordinary shares and 22,206,366 unlisted options and 2,175,000 performance rights on issue. Details of the options are as follows: Number of shares under option Class of shares 3,589,743 Ordinary 13 18 May 2024 6,000,000 Ordinary 13 21 July 2025 6,666,623 Ordinary 18 31 August 2025 5,200,000 Ordinary 13 31 December 2025 750,000 Ordinary 13 11 January 2026 Exercise price (cents) Expiry date Significant changes in state of affairs There were no significant changes in the state of affairs of the Group during the financial year. Significant events after balance date Other than the events described in Note 23 relating to Executive Options and Performance Rights, no matters or circumstances have arisen since the end of the financial year that have significantly affected or may have a significant effect on the financial operations of the Group, the financial performance of those operations or the financial position of the Group in the subsequent financial year. 5 Directors’ Report Future developments, prospects and business strategies The company will continue to advance exploration activities in its three nominated strategies those being; Lithium, Orogenic Gold, and Porphyries. Field work emphasis will be in Lithium exploration in the near term but the company has scheduled additional exploration and development activities for Orogenic Gold and Porphyries over the coming months. As the Group is listed on the Australian Securities Exchange, it is subject to the continuous disclosure requirements of the ASX Listing Rules which require immediate disclosure to the market of information that is likely to have a material effect on the price or value of Dart Mining NL’s securities. The Board of Directors believe they have been compliant with the continuous disclosure requirements throughout the reporting period and to the date of this report. Environmental regulation The economic entity holds participating interests in a number of exploration tenements. The various authorities granting such tenements require the tenement holder to comply with the terms of the grant of the tenement and all directions given to it under those terms of the tenement. There have been no known breaches of the tenement conditions and no such breaches have been notified by any government agencies during either the year ended 30 June 2023 or at the date of this report. Directors Meetings The number of Directors meetings held during the year and the numbers of meetings attended by each Director and Committee member were as follows: Board of Directors Directors Held Entitled to attend Attended J Chirnside 13 13 13 R Udovenya 13 13 13 D Turnbull 5 5 5 C Swensson 8 8 7 There were no meetings held by the remuneration and nomination committee and audit and risk committee. Indemnification and insurance of directors and officers The Company has entered into Deeds of Indemnity with the Directors and Officers of the Company, indemnifying them against certain liabilities and costs to the extent permitted by law. The Company has also agreed to pay a premium in respect of a contract insuring the directors and officers of the Company. Full details of the cover and premium are not disclosed as the insurance policy prohibits the disclosure. Proceedings on behalf of the Company No persons have applied for leave of a Court to bring proceedings on behalf of the Company or intervene in any proceedings to which the Company is a party for the purpose of taking responsibility on behalf of the Company for all or any part of those proceedings. The Company was not a party to any such proceedings during the year. Non-audit services The directors are satisfied that the provision of non-audit services during the year by the auditor (or by another person or firm on the auditor’s behalf) is compatible with the general standards of independence for auditors imposed by the Corporations Act 2001. Auditor independence declaration The auditor’s independence declaration for the year ended 30 June 2023 has been received and is included in this report. 6 Directors’ Report Remuneration Report – Audited This remuneration report, which forms part of the Directors’ report, sets out information about the remuneration of the Group’s directors and other key management personnel for the financial year ended 30 June 2023. The prescribed details for each person covered by this report are detailed below. Details of Directors and other Key Management Personnel Directors and other key management personnel of the Group during and since the end of the financial year are as follows: Directors J Chirnside (appointed 18 June 2015) R Udovenya (appointed 6 May 2022) D Turnbull (appointed 6 March 2023) Remuneration philosophy The Board of Directors of Dart Mining NL is responsible for determining and reviewing compensation arrangements for the Directors, the Managing Director and other key management personnel after consideration is given to the recommendations of the Company’s Remuneration and Nomination Committee. The Remuneration and Nomination Committee’s policy is to ensure that a remuneration package properly reflects the person’s duties and responsibilities, with the overall objective of ensuring maximum stakeholder benefit from the retention of a high quality Board and executive team. The Board of the Company reviews and adopts or amend the recommendations of the Remuneration and Nomination Committee as proposed. The officers of the Company are given the opportunity to receive their base emolument in a variety of forms, including cash, fringe benefits such as motor vehicles and incentive rights. It is intended that the manner of payment chosen will be optimal for the recipient without creating undue cost to the Group. To assist in achieving these objectives, the Board’s objective is to link the nature and amount of Directors and other key management personnel emoluments to the Company’s financial and operational performance. It is the Board’s policy that employment contracts are entered into with all senior executives. At the date of this report, executive remuneration is set at levels approved by the Board. Remuneration, Group performance and shareholder wealth The development of remuneration policies and structure are considered in relation to the effect on Group performance and shareholder wealth. They are designed by the Board to align Director and Executive behaviour with improving Group performance and ultimately shareholder wealth. The performance of the consolidated entity for five years to 30 June 2023 are summarised below: Year Ended 30 June 2023 2022 2021 Loss attributable to owners of the (912,408) (454,941) (790,839) company The factors that are considered to affect total shareholders return (“TSR”) are summarised below: Year Ended 30 June 2023 2022 2021 Share’s Price in cents 0.041 0.05 0.14 Dividends Declared Nil Nil Nil EPS in cents (0.6) (0.4) (0.9) 2020 (552,450) 2019 (893,381) 2020 0.11 Nil (1) 2019 0.08 Nil (2) Non-executive director remuneration Objective The Board seeks to set aggregate remuneration at a level which provides the Company with the ability to attract and retain directors of the highest calibre at a cost that is acceptable to shareholders Structure The Constitution and the ASX Listing Rules specify that the aggregate remuneration of Non-executive Directors shall be determined from time to time by a general meeting of the Company’s shareholders. An amount not exceeding the sum determined is then divided between the directors as agreed whilst maintaining a surplus amount that can be attributed to additional Non-executive Directors should they be appointed at any time. The latest determination was sought and granted at the Company’s AGM on 2 October 2012 whereby shareholders approved an aggregate remuneration of $475,000 per year. The amount of aggregate remuneration sought to be approved by shareholders and the manner in which it is apportioned amongst directors is reviewed annually. The Board considers advice from external consultants as well as the fees paid to Non-executive Directors of comparable companies when undertaking the annual review process. Each Non-executive Director receives a fee for being a Director of the Group. Directors who are called upon to perform extra services beyond the Director’s ordinary duties or who are members of Board Committees may be paid additional fees for those services. The remuneration of Non-executive Directors for the financial year ended 30 June 2023 is detailed in this report. The Board has implemented these guaranteed levels of remuneration which are not dependent on performance in order to ensure the Group’s ability to retain quality personnel. Employment Agreements are entered into with Executive Directors and specified executives. Remuneration structure 7 Directors’ Report In accordance with best practice corporate governance, the structure of non-executive and executive director remuneration is separate and distinct. Senior executive remuneration Objective The Board aims to reward Executives with a level and mix of remuneration commensurate with their position and responsibilities within the Company and so as to: • reward Executives for Company, business unit and individual performance against targets set by reference to appropriate benchmarks; • align the interests of Executives with those of shareholders; • link reward with the strategic goals and performance of the Company; and • ensure total remuneration is competitive by market standards. Structure In determining the level and make-up of executive remuneration, the Board obtained independent advice from external consultants on market levels of remuneration for comparable executive roles. It is the Board’s policy that employment contracts are entered into with all senior executives. Service contracts Service contracts were entered into with Executive Directors and Specified Executives. Managing Director The terms of an employment agreement with the MD, James Chirnside, issued on 19 June 2015 include inter alia: • A fixed remuneration package of $220,000 plus superannuation per annum, and director’s fees of $35,000 plus Superannuation whilst engaged as a director of Dart Mining NL. Other Key Management Personnel All other KMP have rolling contracts with standard termination provisions as follows: Notice period Payment in lieu of notice Treatment of STI on termination Resignation 1 - 3 months 1 - 3 months Unvested awards forfeited Termination for cause 1 month 1 month Unvested awards forfeited. Claw back of deferred STI payments at the Board’s discretion Termination in cases of disablement, redundancy or notice without cause 3 months 3 months Claw back of deferred STI payments at the Board’s discretion Remuneration Summary Short term benefits Salaries, fees and leave 2023 Executive Directors James Chirnside Cash bonus Share- Termination based payments payments Post-employment benefits Non- Superannuation monetary benefits $ $ $ 240,000 - - Total Percentage of share-based payments Options/ Incentive rights $ $ $ 25,200 209,567 - $ % 474,767 44% Non-executive Directors Richard Udovenya 33,333 - - 3,500 27,000 - 63,833 42% Dean Turnbull 8,186 - - 860 - - 9,045 0% Carl Swensson 1. 1 25,147 - - 2,640 18,600 - 46,388 40% 306,666 - - 32,200 255,167 - 594,033 36% Carl Swensson resigned on 6 March 2023 8 Short term benefits Salaries, fees and leave Cash bonus Non- Superannuation monetary benefits $ $ $ 195,000 - - 26,250 - - Richard Udovenya 4,637 - Denis Clarke 10,000 - 2022 Share- Termination based payments payments Post-employment benefits Total Percentage of share-based payments Options/ Incentive rights $ $ $ 19,500 70,326 - 2,625 - - - 464 - - 1,000 1 $ % Executive Directors James Chirnside 284,826 25% 28,875 0% - 5,101 0% - 11,000 0% - 1,704 (16%) - 331,505 13% Non-executive Directors Carl Swensson Luke Robinson 25,625 - - 2,563 (26,484) 261,512 - - 26,151 43,842 1. Performance rights are in credit as they expired during the year on the director’s resignation and were therefore credited to the expense. Employee options The following table summarises the value of remuneration options and performance rights granted, exercised or lapsed during the year: Grantee Number Grant date Expiry date Exercise price (cents) Fair value at grant date (cents) Vesting date J Chirnside 725,000 11 Feb 2021 11 Feb 2024 nil 18 31 Dec 2020 J Chirnside 725,000 11 Feb 2021 11 Feb 2024 nil 10 15 Sept 2023 J Chirnside 725,000 11 Feb 2021 11 Feb 2024 nil 18 31 Dec 2023 J Chirnside 1,300,000 21 July 2022 21 July 2025 13 2.1 21 July 2022 J Chirnside 1,300,000 21 July 2022 21 July 2025 13 2.1 21 March 2023 J Chirnside 1,300,000 21 July 2022 21 July 2025 13 2.1 21 Nov 2023 J Chirnside 833,333 6 Dec 2022 31 Dec 2025 13 2.4 6 Dec 2022 J Chirnside 833,333 6 Dec 2022 31 Dec 2025 13 2.4 6 Aug 2023 J Chirnside 833,334 6 Dec 2022 31 Dec 2025 13 2.4 6 April 2024 R Udovenya 200,000 21 July 2022 21 July 2025 13 2.1 21 July 2022 R Udovenya 200,000 21 July 2022 21 July 2025 13 2.1 21 March 2023 R Udovenya 200,000 21 July 2022 21 July 2025 13 2.1 21 Nov 2023 6 Dec 2022 R Udovenya 200,000 6 Dec 2022 31 Dec 2025 13 2.4 R Udovenya 200,000 6 Dec 2022 31 Dec 2025 13 2.4 6 Aug 2023 2.4 6 April 2024 R Udovenya 200,000 6 Dec 2022 31 Dec 2025 13 These options and incentive rights are not quoted, not transferrable and may be exercised at any time after vesting date. 9 Directors’ Declaration This directors’ report is signed in accordance with a resolution of directors made pursuant to s.298(2) of the Corporations Act 2001. _____________________ James Chirnside Chairman Melbourne 28 September 2023 10 Corporate Governance Statement The Board of Directors of Dart Mining NL (the Company) is responsible for establishing the corporate governance framework of the Group having regard to the ASX Corporate Governance Council (CGC) published guidelines as well as its corporate governance principles and recommendations. The Board guides and monitors the business and affairs of the Company on behalf of the shareholders by whom they are elected and to whom they are accountable. The Company’s corporate governance statement for 2023 is located on the Company’s website at www.dartmining.com.au – about us – Corporate Policy. 11 AUDITOR’S INDEPENDENCE DECLARATION UNDER SECTION 307C OF THE CORPORATIONS ACT 2001 TO THE DIRECTORS OF DART MINING NL I declare that, to the best of my knowledge and belief, during the year ended 30 June 2023 there have been: (i) no contraventions of the auditor independence requirements as set out in the Corporations Act 2001 in relation to the audit; and (ii) no contraventions of any applicable code of professional conduct in relation to the audit. MORROWS AUDIT PTY LTD A.M. FONG Director Melbourne: 28 September 2023 Consolidated Statement of Profit or Loss and Other Comprehensive Income For the financial year ended 30 June 2023 Consolidated Group 2023 2022 $ $ Note Continuing operations Revenue 4 457,930 274,238 - 23,373 Cost of sales (24,145) (20,352) Consultancy fees (114,560) (15,864) Professional fees (201,540) (157,380) Employee benefits expense (239,972) (156,640) Share based payments (358,393) (43,842) Depreciation expense (40,895) (22,779) Office expenses (24,818) (43,369) Profit (loss) on sale of assets Finance expenses Administrative expenses Travel related expenses Expenses (6,676) (4,361) (320,728) (269,866) (38,611) (18,097) (1,370,339) (729,179) Profit/(loss) before income tax expense 5 (912,408) (454,941) Income tax expense 6 - - (912,408) (454,941) Profit/(loss) for the year Other comprehensive income Other comprehensive income for the year Total comprehensive income for the year - - (912,408) (454,941) (912,408) (454,941) - - (912,408) (454,941) Attributable to: Net profit/(loss) attributable to Members of the parent entity Non-controlling interests Total comprehensive income Earnings per share From continuing and discontinued operations Basic earnings per share (cents) 9 (0.6) (0.4) Diluted earnings per share (cents) 9 (0.6) (0.4) The accompanying notes form part of these financial statements 13 Consolidated Statement of Financial Position As at 30 June 2023 Consolidated 30 June 2023 Note $ 30 June 2022 $ 10 190,624 375,691 Trade and other receivables 11 1,994,568 77,536 Other assets 15 67,686 65,813 2,252,878 519,040 2,497,866 ASSETS Current assets Cash and cash equivalents Total current assets Non-current assets Property, plant and equipment 13 2,647,056 Other non-current assets 15 126,263 114,211 Deferred exploration and evaluation costs 14 17,3