31 December 2021 Half Year Financial Report

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Directors

The names of the Company's Directors in office during the half year and until the date of this report are as below. Directors were in office for this entire period unless otherwise stated.

The following role change was announced effective as of 16 December 2021: Myles Fang appointed Executive Director.

Review and results of operations

Financial results

The net results of operations after applicable income tax expense for the half year was a loss of $2,414,472 (2020: $238,482).

Nowa Nowa Iron

The Company has been updating the existing Definitive Feasibility Study (the "DFS") which was completed in 2014, based on the sale of magnetite DSO product (the "Product") to be produced from Nowa Nowa Iron Project (the "Project").

The Project is located 7 km north of the township of Nowa Nowa, Victoria. It is some 320km by road east of Melbourne, and approximately 234km by road west of the Port of Eden (see Figure 1).

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Tenure

In December 2021, Retention Licence RL006488 covering the Project was granted to Gippsland Iron Pty Ltd, a wholly owned subsidiary of the Company.

Figure 2 - Exploration Licence 006183 and Retention Licence 006488

Mineral Resources

A JORC compliant total resource of 9.05 Mt @ 50.8% Fe was estimated by H&S Consultants for the Five Mile deposit (Table 1).

Table 1 - Five Mile Prospect Resource Estimate (40% Fe Cut-Off)1

Mining

In July 2021, the mining study ("Mining Study") completed by Mining One Pty Ltd ("Mining One") identified potential economic open pit operation, considering the extraction of estimated mineral resource and is based on the sale of the Product from the Project.

Mining One conducted pit optimisation which considered measured and indicated material as the base case for the Mining Study. In addition, optimisation considering measured, indicated and inferred material were also conducted, representing a potential upside case for the project.

A mining cost estimate has been developed from first principles by Mining One, based on open pit, conventional drill and blast, truck and excavator flitch mining. The estimate is based on a contractor mining operation with information from operations of similar size and nature from Mining One's internal database.

The Mining Study concluded that under the current assumptions summarised above, the Five Mile Deposit demonstrates potential to be a viable proposition and further study is warranted.

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Directors' Report

Beneficiation Testwork

The Company completed further beneficiation testwork (Testwork) carried out by ALS Metallurgy in July 2021. The objective of this testwork was to determine the product specification of magnetite concentrates produced from Nowa Nowa DSO through wet low intensity magnetic separation (LIMS).

A composite sample was prepared at 50.4% Fe, 15.00% SiO2, 2.59% Al2O3, and 0.03% P, which is in the range of iron content of the proposed DSO products for export from the Five Mile deposit. Drill core samples were collected from drill holes completed by Eastern Resources during resource drilling at Five Mile deposit in 2013. The samples were tested by DTW at grind sizes of 80% passing 106, 75, and 45 micron, with the results summarised below

Table 1. Analysis of DTW magnetite concentrates at 106, 75 and 45 micron grind.

The samples were also treated by wet magnetic separation at grind sizes of 80% passing 45 micron and at 1100 gauss.

Table 2. Analysis of Wet LIMS magnetite concentrates at 45 micron grind.

The Testwork shows high-quality magnetite concentrates could be produced from the Project by conventional wet LIMS.

Proposed Processing and On-Site Infrastructure

The proposed Project operations will process mined ore on site via crushing and screening to produce a magnetite DSO product @ 50% Fe. No on-site beneficiation will be employed which was considered in the DFS in 2014. As such, a magnetic separation plant is not required which will not only reduce the footprint of on-site infrastructure, but it will also reduce initial capital expenditure and operating costs for ore processing.

Port of Eden

The Port of Eden (Port) is located in NSW, approximately 234km from the Project. The Port can accommodate P-Panamax vessels, with the existing conveying and ship loading systems used to export forestry products.

In August 2021, the Company executed a non-binding Memorandum of Understanding with Pentarch Logistics Pty Ltd (Pentarch) to export the Product using the port facilities at the Port of Eden operated by Pentarch. Both parties will enter into negotiations to finalize a binding commercial agreement.

Nowa Nowa Copper

No exploration work was carried out on the Nowa Nowa Copper project. The Company is waiting fora response from the Victorian Department of Jobs, Precincts and Regions (DJPR) for a revised Work Program with respect to a drilling proposal for Nowa Nowa Copper Project EL 006183.

Trigg Hill Lithium Tantalum Project

In August 2021, the Company entered into a binding Heads of Agreement (HOA) with Amery Holdings Pty Ltd (Amery) for an option to acquire a 100% interest in the Trigg Hill Lithium Tantalum Project (Trigg Hill). Trigg Hill is strategically located in the Shaw River district, Pilbara, and is approx. 75km SE of Pilbara's Minerals' (ASX: PLS) wholly-owned Pilgangoora Lithium-Tantalum mine. The Project comprises 1 Exploration Licence Application (ELA 45/5728) with the exception of one excised mining lease (M 45/1267).