Full Year Statutory Accounts

Middle Island Resources Limited (MDI, Middle Island or the Company) is a junior exploration company targeting high quality copper-gold projects in Australia. The company's flagship asset is the Barkly Copper-Gold Super Project, which is prospective for large Iron Oxide Copper Gold (IOCG) and Sediment Hosted Cu-Zn-Pb-Ag (SedH) deposits at Tennant Creek and Barkly in the Northern Territory.

Throughout the year, Middle Island's main focus was the advancement of exploration at Barkly, leading to the commencement of drill testing specific areas, having established a pipeline of targets, which represented the culmination of 2 years' target generation efforts.

MDI also has several exploration projects (granted and pending applications) in the New England Fold within Queensland as part of its project pipeline looking forward beyond the Barkly Super Project. These associated projects are prospective for porphyry copper-gold and epithermal-gold style deposits.

MDI holds an interest (3,448,500 shares) in Tajiri Resources (TSX-V:TAJ) and an Interest (3,333,183 shares) in EMU NL (ASX: EMU). MDI also held an interest in Aurumin Limited (ASX:AUN); in the report period the Company sold its entire interest (listed shares and unlisted options) in AUN.

The Company's strategy is to generate shareholder value via exploration success, complimentary assets acquisition or transactional activity. The focus on transactional activity was heightened during the reporting period. On 2 September 2025, MDI announced an all-scrip acquisition of Konstantin Resources Limited, a company with ~620sqkm of exploration licenses (and applications) in Serbia. Konstantin's exploration portfolio consists mainly three tenement groups across the country, all of which are highly prospective for copper, gold and silver. The transaction, as of the date of this Annual Report, is subject to shareholders approval scheduled in Q4 of the 2025 calender year.

The Barkly Super Project comprises 13 granted Exploration Licences and 2 Exploration Licence Applications covering a total of approximately 6,523km2. The Super Project contains multiple project areas however in the report year the Company focused on two key areas:

• The Barkly Project

• The Georgina Project.

The Barkly tenements extend from outcropping areas near Tennant Creek and the interpreted eastward extensions of prospective Proterozoic stratigraphy that includes the East Tennant Ridge and Burnette Downs Rift corridor beneath shallow to moderate depth Georgina Basin cover in the Northern Territory.

The East Tennant corridor has gained recognition as a priority, largely unexplored, IOCG mineral province and is also considered to be prospective for other styles of mineralisation including "world-class" sediment hosted Cu -Zn-Pb-Ag deposits, like those found in the Mt Inlier to the east.

Figure 1. Barkly Copper-Gold Super Project and exploration target locations.

IOCG Deposits

IOCG deposits have been MDI's primary target to date. Examples of Australian IOCG deposits include Olympic Dam, Prominent Hill, and Carrapateena in South Australia; Ernest Henry in Queensland, and Warrego and Juno located to the west of the Barkly Project at Tennant Creek.

IOCG deposits and alteration surrounding them have elevated levels of iron oxide minerals magnetite and hematite, which give rise to elevated magnetic and gravity (density) signatures that can be mapped readily with geophysical surveys (magnetics and gravity).

The copper-gold mineralisation that makes up the deposits occurs as sulphide minerals with a more restricted aerial extent that can commonly be mapped by other geophysical techniques (IP, EM). The

often-strong geophysical signatures of the alteration and mineralisation lends itself to effective explorations under cover, as exists at Barkly.

Significant examples of 'blind' IOCG deposits discovered beneath substantial sedimentary cover include BHP's Olympic Dam and Oak Dam deposits in South Australia, which are respectively overlain by approximately 400m and 900m of post-mineralisation cover.

Sediment Hosted Cu-Zn-Pb-Ag (SedH) Deposits

The corridor is also considered to be prospective for other styles of mineralisation including large sediment hosted Cu-Zn-Pb-Ag deposits like those found in the Mt Isa Inlier to the east and southern McArthur Basin to the north. Deposit examples include Cannington, Mount Isa, Hilton, George Fisher, Lady Loretta, Century, Walford Creek and McArthur (HYC).

The East Tennant Ridge is fault bound and marks the southern margin to the Burnette Downs rift corridor. Palaeoproterozoic sedimentary strata within the rift grabens and onlapping onto the basement highs include rocks interpreted to be extensions of the super basins that host many of the listed deposits.

Exploration Strategy

The Company's Crosswinds Prospect was identified early and stood out by the presence of copper mineralisation at surface and was advanced ahead of the broader project targeting. Ground gravity surveys, IP geophysical surveys and maiden drilling was completed in 2022. It is postulated that the drilling did not test the geophysical anomaly and is still open for future drill testing.

Since 2022, MDI's exploration strategy has been to complete systematic detailed assessment of regional data from surveys (including seismic, aeromagnetic, induced polarization (IP)/resistivity and detailed ground gravity) over its granted Exploration Licences to enable development of structurally focused solid geological interpretations to generate a prioritised target list for the next stage of screening (further geophysics and select drilling).

This strategy resulted in the identification of 55 exploration targets and further detailed geophysics surveys (ground gravity) were completed over eight select targets in 2023 to provide sufficient resolution to resolve drillholes to test those targets.

Drill Targeting

Early in 2024, Middle Island completed modelling of detailed gravity survey data collected or collated across priority targets identified in 2023, which established well-defined density anomalies ('shoots') consistent with the densities, size and geometries of known examples of the target deposit types.

As such, the Company advanced six areas to Prospect status, with well-defined drill targets being the Dino, Pebbles, Wilma Prospect, Redrock, Tumbleweed, and Bedrock Prospects (Figures 1 and 2).

Added to the Crosswinds Prospect, the Company now has a total of seven prospect areas and 40+ targets within the Barkly Super Project currently in its focus for future exploration.

Middle Island identified eight new high priority drill targets for future drilling. The new drill targets are 'blind' beneath post-mineralisation cover, each representing a potentially significant new discovery. Three targets (Figure 3). were drilled in the report period in addition to further surface geochemical surveys and geophysical modelling to advance other targets.

Figure 1. Barkly advanced exploration prospects

Exploration Field Programme

During this report period, the Company completed its 2024 exploration field programs that included soil sampling and a three-hole diamond drill program with hole designs extending to a depth of 600- 650m. The aim of the maiden drilling program within the Georgina Project area (EL32109) was to test the IOCG targets at the Wilma, Pebbles and Dino prospects. The drill program was awarded co-funding from the Northern Territory Government as part of the Resourcing the Territory initiative (refer to Co-funding Grant).

Two holes were completed at the Pebbles and Dino prospects, the third hole at Wilma was aborted in the cover due to ground conditions. While no economic visible sulphides were recorded in the holes, the presence of trace copper sulphides and alteration dispersed in the first hole at the large Pebbles prospect is significant. The drilling has provided significant information that is key to refining the next round of drilling, both at Pebbles, with its encouraging footprint, as well as our expansive list of priority targets across the region. The presence of observed possible MVT style mineralisation in the cover rocks is also an interesting development that opens new possibilities for exploration in shallower target positions and transactions.

In addition to further geophysical modelling of targets, additional field surveys, over the next round of priority targets, that include soil sampling and further ground geophysical surveys (gravity) are also planned.

Co-Funding Grant

Middle Island was awarded the maximum $300,000 in aggregate under two co-funding grants under Round 17 of the Northern Territory Government's Geophysics and Drilling Collaborations ("GDC") program (see ASX release dated 12 June 2024).

The GDC program is a competitive program funded by the Northern Territory Government as part of the Resourcing the Territory initiative, administered by the Northern Territory Geological Survey.

The drilling covered by one grant, within the Georgina Project area (EL32109), was completed in the September quarter and the full funding was received.

The details of the Georgina Project grant was $125,000 (inclusive of GST) towards three diamond drillholes: the first-round test of a spread of IOCG targets at the Wilma, Pebbles and Dino prospects.

The work covered by the second grant was unable to be completed due access constraints due to weather, drill rig availability and timing associated with onset of the northern Australian hot/wet season. The postponement of the Bedrocks drilling resulted in a lapse of the second grant.

Figure 2. Georgina Project targets drilled in 2024 - dense 'shoots' (red) from gravity 3D inversion

The Queensland projects were generated from reviews of open ground, selected as having potential for porphyry copper-gold and epithermal-gold style deposits. All the tenements have varying evidence of mineralising processes; either historical mine workings, recorded copper or gold occurrences or geophysical anomalies. The projects sit in the New England Fold Belt that hosts major gold ± copper deposits in areas believed to be underexplored. The Company's exploration holdings in the region include three separate project areas with granted 100% owned tenements (Ridgelands, Greenbank and Cockatoo Projects) and other project areas under application pending grant (Figure 4).

Figure 3. New England Fold Belt exploration project locations, Ǫueensland.

Exploration Programme

During this report period, the Company undertook systematic reviews of historical background exploration and landholder data on the Projects generating targets for reconnaissance exploration fieldwork proposed to start in the second half of 2025. This work is ongoing.

The Ridgelands Project review was completed in the second half of the financial year and results published, identifying multiple exploration targets. The primary target at the historical Ridgelands Goldfield stands out, where 1980s exploration defined shallow gold mineralisation (Figure 5) that appears to be open at surface and where there is no record of it having been tested at depth (refer to 13 June ASX release).

Figure 4. Schematic X-section showing shallow historical (1980s) drill results across the Ridgelands Prospect gold mineralised zone (see 13 June ASX release for details).

Your directors submit their report on the consolidated entity (referred to hereafter as the Group) which consists of Middle Island Resources Limited and the entities it controlled at the end of, or during, the year ended 30 June 2025.

The names and details of the Company's directors in office during the year and until the date of this report follow. Each Director was in the office for this entire period unless otherwise stated.

Names, qualifications, experience and special responsibilities

Comes from a legal background specialising in resources and corporate. For over 30 years, before retiring from legal practice, he specialised in the delivery of wide ranging legal, corporate, and commercial advice to listed explorers and miners. Mr Thomas is now a professional director leveraging his legal background whilst delivering the insight of his commercial acumen and business expertise.

For nearly 40 years he has served on the boards of various listed companies including being the founding chairman of both copper producer Sandfire Resources NL (2004) and mineral sands producer Image Resources NL. Other current ASX listed company board positions include being a non-executive director of Image Resources NL (since 19 April 2002) and non-executive chair of Emu NL (since 29 August 2007).

Mr Marwood is a mining engineer and a highly experienced resources executive with more than 30 years of experience. He was instrumental in bringing into production the copper mines at Kipoi (DRC) and Rapu Rapu (Philippines); completing development of the Svartliden gold mine (Sweden) and has managed numerous Feasibility Studies and advanced stage resource projects in Australia, Africa, North America and Asia.

He has worked in senior roles for groups such as Normandy, Dragon Mining, Lafayette, Moto Goldmines Perseus Mining and Tiger Resources. Mr Marwood's involvement has seen growth in several companies with a significant increase in their market capitalisation and by protecting investments through restarting suspended mine projects. He is currently non-executive director of Rokeby Resources Limited (appointed 16 May 2024).

Mr Stewart has been involved with global capital markets for 30 years, with an emphasis on mining and hard assets. His experience includes co-heading a global hard asset desk in New York City for Jefferies C Co, directorships on London listed mining companies, company reorganisation and sale, and various consultancy assignments from funds, investment banks and public and private companies.

Accountant and Tax Professional with a wide range of experience at the Executive level in for-profit and not-for-profits. Currently Mr Raihani has controlling equity positions and directorships in companies involved in real estate sales and management, property development, manufacturing, automotive exports, and tax consultancy, with offices in the UAE, Sydney C Hong Kong. Other current ASX listed company board positions include being a non-executive director of First Au Limited, Forrestania Resources Limited and Voltaic Strategic Resources Limited and Managing Director of Aurumin Limited.

Richie Yang is Managing Director of Sydney/Hong Kong based Vs Capital Group, a corporate finance advisory firm and family office working primarily in the mining resources sector since 2009. Richie has more than 19 years of corporate finance experience working with public and private companies, assisting them with business development and project financing. Richie also held successful CEO and Executive Director roles with numerous ASX listed resource companies. He is currently an Executive Director of Theta Gold Mines Limited (ASX: TGM), a gold mine developer in South Africa managing over 6Moz of gold resource, and an Non-Executive Director of ASX-listed Voltaic Strategic Resources Limited (ASX: VSR), a base metal and critical minerals explorer. Richie holds a Bachelor degree from the University of New South Wales majoring in business economics and finance.

Mr Bartsch is the Company's Chief Executive Officer and is a geologist with 35 years' experience in exploration and operations and most recently was Vice President and Country Manager Australia for Copper Mountain Mining Pty Ltd where he managed all aspects of exploration and pre-development of its Mt Isa Inlier Copper-Gold projects in Queensland, that included the Eva Copper Project. The Project is a cluster of Iron Oxide Copper Gold (IOCG) deposits that Roland managed from early assessment through to a shovel ready project.

Roland brings to MDI a wealth of experience exploring for IOCG deposits and substantial success in his endeavours to date. MDI has a substantial holding in the Barkly Tablelands, 200km east of Tennent Creek, Northern Territory where it's actively exploring for ICOG deposits.

Mr Tieleman is an accountant and corporate administrator with over 40 years' experience in public practice. He has extensive knowledge in matters relating to the operation and administration of listed mining companies in Australia.

Mr Chiappini manages his own consulting firm offering Corporate Advisory, Governance Services, and Non-executive Director services to a variety of ASX and start-up companies. Gabriel Chiappini is a Chartered Accountant with over 20 years' experience as a director, capital markets participant and a governance professional. He is a current member of the Australian Institute of Company Directors and Institute of Chartered Accountants (Australia).

As at the date of this report, the relevant interests of the directors in the securities of Middle Island Resources Limited were:

During the year, the Company received interest of $79,689 (2024: $69,976).

In the current year, exploration grants were received from the Northern Territory Government was

$113,636 (2024: $Nil).

During the year, total exploration expenditure incurred by the Group amounted to $1,108,015 (2024: $$921,933). In line with the Group's accounting policies, all exploration expenditures were written off as they were incurred. A net recovery of $64,405 (2024: A net recovery of $312,323) was also booked in relation to the increase (2024: diminution) in fair value of financial assets held. Other expenditure incurred amounted to $1,185,015 (2024: $1,122,494).

This resulted in an operating loss from continuing operations after income tax for the year ended 30 June 2025 of $2,033,330 (2024: $1,662,093).

At 30 June 2025, cash assets $2,124,951 and realisable investments in quoted securities $272,425) totalled $2,397,376.

No dividends were paid or declared during the year. No recommendation for payment of dividends has been made.

280,388 (2,052,080)

Basic loss per share (cents) (0.79) (0.89)

The board is responsible for ensuring that risks and opportunities are identified on a timely basis, and that activities are aligned with the risks and opportunities identified.

The Group believes that it is crucial for all board members to be a part of this process, and as such, the board has not established a separate risk management committee. Where appropriate, the board enlists the support of other suitably qualified professionals to join board committees.

The board has mechanisms in place to ensure that management's objectives and activities are aligned with the risks identified by the board. These mechanisms include the following:

• Board approval of a strategic plan, which encompasses strategy statements designed

  to meet stakeholders' needs and manage business risk.

• Implementation of board approved operating plans and budgets and board monitoring of progress against these budgets.

• A risk matrix designed to identify and quantify the various risk factors and implement mitigating strategies accordingly.

• Regular review of management's activities and the Company's circumstances.

• Continuing review of capital and resources market sentiment.

• Continuing review of economic trends and circumstances.

Other than as disclosed in this Annual Report, no significant changes in the state of affairs of the Group occurred during the financial year.

Since the end of the reporting period, MDI:

• Middle Island Resources Limited announced that it has entered into a binding share sale and purchase agreement to acquire 100% of Konstantin Resources Limited. The Company will pay the following consideration for 100% of the issued capital in Konstantin:

  1. 475,000,000 Shares ('Consideration Shares');

  2. 60,000,000 options with an exercise price of $0.04 each and an expiry date 3 years after the date of issue ('Consideration Options'); and

  3. 40,000,000 options with an exercise price of $0.06 each and an expiry date 3 years after the date of issue

     This transaction is subject to shareholder holder approval.

• The Company also announced that is received firm commitments to raise $3.4 under a placement. This will be subject to shareholder approval.

No other matters or circumstances have arisen since the end of the year which significantly affected or may significantly affect the operations of the Group, the results of those operations, or the state of affairs of the Group in future financial periods.

The Barkly Copper-Gold Super Project has been progressed from the focus being advancement of exploration targeting and planning to the commencement of drill testing of the more advanced numerous priority targets.

Middle Island Resources Limited announced that it has entered into a binding share sale and purchase agreement to acquire 100% of Konstantin Resources Limited ('Konstantin'). Konstantin is an Australian unlisted public company that owns 100% of Konstantin Resources d.o.o. which has 14 exploration and mining licences, comprising approximately 620km2 in Serbia across the Western Tethyan Belt (together, the Project) (Acquisition).

Concurrent to the Konstantin acquisition, the Company has received firm commitments to raise $3.4m under a placement through issue 200m shares at $0.017 per share ('Placement') which represents a discount of 14% to the VWAP during August. The net funds raised will provide capacity to further fund the Company's Australian exploration assets (Barkley NT and Ridgelands Qld) and accelerate the exploration program for Konstantin together with general working capital.

The Company will continue to review projects with a view to identifying potential value add mineral asset acquisitions or grassroots project generation.

The Group is subject to significant environmental regulation in respect to its activities.

The Group aims to ensure the appropriate standard of environmental care is achieved, and in doing so,

that it is aware of, and is in compliance with, all environmental legislation. The directors of the Company are not aware of any breach of environmental legislation for the year under review.

The information provided in this remuneration report has been audited as required by section 308(3C) of the Corporations Act 2001.

The remuneration policy of Middle Island Resources Limited is intended to align key management personnel objectives with shareholder and business objectives by providing a fixed remuneration component and offering, variously, short-term and long-term securities incentives. The board's policy is to design remuneration with a view to attracting and retaining suitable key management personnel to run and manage the Group.

The remuneration policy setting the terms and conditions for the executive directors and other senior executives, was developed by the board and evolves as circumstances require. All executives receive a base salary (based on factors such as experience), superannuation, and possibly a package of equity incentives in the Company. The board reviews each executive package as and when it considers it appropriate to do so in accordance with its remuneration policy and by reference to the Group's fiscal wherewithal, performance, the executive's performance and comparable information from industry sectors and other listed companies operating in similar circumstances. The board may exercise discretion in relation to approving incentives, bonuses and options. The policy is to design remunerative packages that reward executives for performance which is aligned to producing results in long-term growth in shareholder wealth. The result can be that shareholder sentiment is tested in general meeting, or in deference to expressed and perceived shareholder sentiment, otherwise proposed and preferred remunerative emoluments are not put to shareholders and thus not provided to employees.

Superannuation guarantee contributions, as required to be paid by Commonwealth legislation (11.5% for the 2025 financial year), are paid to all employees (including directors), however directors are not entitled to receive other retirement benefits.

All remuneration paid to directors and executives is "valued" at the cost to the Group and expensed. Options, when granted, are to be ascribed a "fair value" in accordance with Australian Accounting Standards using a methodology such as Black-Scholes. The board does not accept that the "fair value" necessarily represents market or realisable value. Rather, the board uses a commonly accepted methodology purely for the purposes of complying with the Australian Accounting Standards.

The board's policy is to remunerate non-executive directors at market rates for comparable companies, for time, commitment and responsibilities. The board determines payments to the non-executive directors and reviews their remuneration annually, based on market practice, duties, special exertion services and accountability. Independent external advice is sought as and when required. The maximum aggregate annual amount of fees that can be paid to non-executive directors is, subject to change with the approval of shareholders in general meeting, currently set at $300,000. Non-executive directors fees are not linked to the performance of the Group. However, to align directors' interests with shareholder interests, the directors are encouraged to hold shares in the Company, and subject to

shareholder approval in general meeting, may be offered participation in incentive equity arrangements.

The Group policy allows the use of performance-based remuneration, to attract and motivate employees, including options. Employee share plans will be implemented when considered necessary. Where utilised, equity remuneration may be issued but not vest until certain hurdles have been met or if vested ab initio may be subject to divestment, where the hurdles/triggers are directed at advancing the Company.

No direct relationship exists between key management personnel remuneration and Group performance (including shareholder wealth).

The Company's AGM poll results showed that approximately 98.58% votes were cast in favour of its remuneration report for the 2025 financial year.

Details of the remuneration of the directors and the key management personnel of the Group are set out in the following table.

Rudolf Tieleman

2025

2024

1. The Company's Constitution makes provision for the payment to directors who perform "extra" or "special services". During the year, the "disinterested" board members (and in Mr Stewart's absence) agreed to remunerate Mr Stewart for special exertion services to be provided for the period ended 30 June 2025 (exclusive of his non-executive director's fees).

2. On 7 April 2025, Mr Thomas and Mr Stewart resigned from the Company with Mr Raihani and Mr Yang being appointed as Non-Executive Director.

The Group did not employ the services of any remuneration consultants during the financial year ended 30 June 2025.

• Term of agreement is effective from 1 April 2024. The agreement can be terminated by either the Company or Mr Bartsch giving four months' written notice (shorter notice periods apply in the event breach of contract by either party). Other than statutory entitlements, no benefits are payable on termination.

  Rudolf Tieleman, Company Secretary from 1 November 2021:

• Term of agreement - Commenced 1 November 2021 and continues until terminated in writing by either party.

• A monthly retainer of $8,333.34 for two days worked per week (with any additional work performed being chargeable at $120 per hour) is payable until either the Company or Mr Tieleman gives one month's written notice (shorter notice periods apply in the event breach of contract by either party). No benefits are payable on termination other than contractual entitlements accrued to the date of termination.

Messrs Thomas, Raihani, Yang and Marwood did not have a service agreement in place during the year save to the extent the constitution comprises the same.

Options may be issued to key management personnel as part of their remuneration. The Group has a formal policy in relation to the key management personnel limiting their exposure to risk in relation to the securities which actively discourages key management personnel from granting mortgages over securities held in the Group.

There were no loans to key management personnel during the year.

During both the current and the comparative year, Mr Stewart was paid the amounts detailed above in the Remuneration Report for the provision of special exertion services provided to the Group. The amounts paid were assessed as being less than that which would have been payable on arms' length commercial terms.

End of audited section

During the year, the Company held seven meetings of directors. The attendance of directors at meetings of the board and committees were:

A - Number of meetings attended.

B - Number of meetings held during the time the director held office during the year.

* - Not a member of the relevant committee.

Other than as set out above or elsewhere in this annual report, no options have been granted over unissued shares or interests of any controlled entity within the Group during or since the end of the reporting period.

During or since the financial year, in accordance with each director's Deed of Indemnity, Insurance and Access with Middle Island Resources Limited, the Group has paid premiums insuring all the directors of Middle Island Resources Limited against all liabilities incurred by the director acting directly or indirectly as a director of the Company to the extent permitted by law, including legal costs incurred by the director in defending proceedings, provided that the liabilities for which the director is to be insured do not arise out of conduct involving a wilful breach of the director's duty to the Company or a contravention of sections 182 or 183 of the Corporations Act 2001.

The total amount of insurance contract premiums paid is $35,546.

The entity's auditor, Elderton Audit Pty Ltd or any of its associated entities, have not been retained to provide any non-audit services during the year.

No person has applied to the Court under section 237 of the Corporations Act 2001 for leave to bring proceedings on behalf of the Company, or to 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.

No proceedings have been brought or intervened in on behalf of the Company with leave of the Court under section 237 of the Corporations Act 2001.

A copy of the auditor's independence declaration as required under section 307C of the Corporations Act 2001 is set out on page 21.

Perth, 26 September 2025

To those charged with governance of Middle Island Resources Limited

As auditor for the audit of Middle Island Resources Limited for the year ended 30 June 2025, I declare that, to the best of my knowledge and belief, there have been:

• no contraventions of the independence requirements of the Corporations Act 2001 in relation to the audit; and

• no contraventions of any applicable code of professional conduct in relation to the audit.

This declaration is in respect of Middle Island Resources Limited and the entities it controlled during the year.

Director Perth

26 September 2025

CONSOLIDATED ENTITY DISCLOSURE STATEMENT AND CORPORATE GOVERNANCE STATEMENT

Middle Island Resources Limited reviews its corporate governance practices against the Corporate Governance Principles and Recommendations (4th edition) published by the ASX Corporate Governance Council.

The 2025 Corporate Governance Statement was approved by the board on 26 September 2025.

A description of the Group's current corporate governance practices is set out in the Group's Corporate

Governance Statement which can be viewed at https://www.middleisland.com.au.

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 30 JUNE 2025

1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The principal accounting policies adopted in the preparation of the financial statements are set out below. The financial statements are for the consolidated entity consisting of Middle Island Resources Limited and its subsidiaries. The financial statements are presented in Australian currency. Middle Island Resources Limited is a company limited by shares, domiciled and incorporated in Australia. The financial statements were authorised for issue by the directors on 26 September 2025. The directors have the power to amend and reissue the financial statements.

1. Basis of preparation

   These general-purpose financial statements have been prepared in accordance with Australian Accounting Standards and Interpretations issued by the Australian Accounting Standards Board and the Corporations Act 2001. Middle Island Resources Limited is a for-profit entity for the purpose of preparing the financial statements.

   1. Compliance with IFRS

      The consolidated financial statements of the Middle Island Resources Limited Group also comply with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB).

   2. New and amended standards adopted by the Group

      The Group has adopted all the new, revised or amending Accounting Standards and Interpretations issued by the AASB that are relevant to its operations and effective for the current annual reporting period. The Group did not have to change its accounting policies or make retrospective adjustments as a result of adopting these standards.

   3. New standards and interpretations not yet adopted

      Certain new accounting standards and interpretations have been published that are not mandatory for 30 June 2025 reporting periods and have not been early adopted by the Group. The Group's assessment of the impact of these new standards and interpretations is that they are not expected to have a material impact on the entity in the current or future reporting periods and on foreseeable future transactions.

   4. Historical cost convention

      These financial statements have been prepared under the historical cost convention, except for certain financial assets and liabilities measured at fair value.

   5. Going concern

      The financial statements have been prepared on the going concern basis, which contemplates the continuity of normal business activities and the realisation of assets and settlement of liabilities in the normal course of business.

      As disclosed in the financial statements, the Group incurred a loss of $2,052,080 and had net operating cash outflows of $2,038,453. These conditions indicate a material uncertainty that may cast significant doubt about the Group's ability to continue as a going concern.

      The ability of the entity to continue as a going concern is dependent on securing additional capital raising activities to continue its operational and exploration activities.

      Should the entity not be able to continue as a going concern, it may be required to realise its assets and

      discharge its liabilities other than in the ordinary course of business, and at amounts that differ from those stated in the financial statements and that the financial report does not include any adjustments relating to the recoverability and classification of recorded asset amounts or liabilities that might be necessary should the entity not continue as a going concern.

2. Principles of consolidation
   1. Subsidiaries

      The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of Middle Island Resources Limited ("Company" or "parent entity") as at 30 June 2025 and the results of all subsidiaries for the year then ended. Middle Island Resources Limited and its subsidiaries together are referred to in these financial statements as the Group or the consolidated entity.

      Subsidiaries are all entities (including special purpose entities) over which the Group has the power to govern the financial and operating policies, generally accompanying a shareholding of more than one-half of the voting rights. The existence and effect of potential voting rights that are currently exercisable or convertible are considered when assessing whether the Group controls another entity.

      Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are de-consolidated from the date that control ceases. A list of controlled entities is disclosed in Note 21 to the financial statements.

      The acquisition method of accounting is used to account for business combinations by the Group. Intercompany transactions, balances and unrealised gains on transactions between Group companies are eliminated. Unrealised losses are also eliminated unless the transaction provides evidence of the impairment of the asset transferred. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the Group.

      Non-controlling interests in the results and equity of subsidiaries are shown separately in the consolidated statement of profit or loss and other comprehensive income, statement of changes in equity and statement of financial position respectively.

   2. Changes in ownership interests

      The Group treats transactions with non-controlling interests that do not result in a loss of control as transactions with equity owners of the Group. A change in ownership interest results in an adjustment between the carrying amounts of the controlling and non-controlling interests to reflect their relative interests in the subsidiary. Any difference between the amount of the adjustment to non-controlling interests and any consideration paid or received is recognised in a separate reserve within equity attributable to owners of Middle Island Resources Limited.

      When the Group ceases to have control, any retained interest in the entity is remeasured to its fair value with the change in carrying amount recognised in profit or loss. The fair value is the initial carrying amount for the purposes of subsequently accounting for the retained interest as an associate, jointly controlled entity or financial asset. In addition, any amounts previously recognised in other comprehensive income in respect of that entity are accounted for as if the group had directly disposed of the related assets or liabilities. This may mean that amounts previously recognised in other comprehensive income are reclassified to profit or loss.

      If the ownership interest in a jointly controlled entity or associate is reduced but joint control or significant influence is retained, only a proportionate share of the amounts previously recognised in other comprehensive income are reclassified to profit or loss where appropriate.

3. Segment reporting

   An operating segment is defined as a component of an entity that engages in business activities from which it may earn revenues and incur expenses, whose operating results are regularly reviewed by the entity's chief operating decision maker to make decisions about resources to be allocated to the segment and assess its performance, and for which discrete financial information is available.

   Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker. The chief operating decision maker, who is responsible for allocating resources and assessing performance of the operating segments, has been identified as the full Board of Directors.

4. Foreign currency translation
   1. Functional and presentation currency

      Items included in the financial statements of each of the Group's entities are measured using the currency of the primary economic environment in which the entity operates ('the functional currency'). The consolidated financial statements are presented in Australian dollars, which is Middle Island Resources Limited's functional and presentation currency.

   2. Transactions and balances

      Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in profit or loss. They are deferred in equity if they are attributable to part of the net investment in a foreign operation.

   3. Group companies

      The results and financial position of all the Group entities (none of which has the currency of a hyperinflationary economy) that have a functional currency different from the presentation currency are translated into the presentation currency as follows:

      • assets and liabilities for each statement of financial position presented are translated at the closing rate at the date of that statement of financial position;

      • income and expenses for each statement of profit or loss and other comprehensive income are translated at average exchange rates (unless that is not a reasonable approximation of the cumulative effect of the rates prevailing on the transaction dates, in which case income and expenses are translated at the dates of the transactions); and

      • all resulting exchange differences are recognised in other comprehensive income.

        On consolidation, exchange differences arising from the translation of any net investment in foreign entities, and of borrowings and other financial instruments designated as hedges of such investments, are recognised in other comprehensive income. When a foreign operation is sold or any borrowings forming part of the net investment are repaid, the associated exchange differences are reclassified to profit or loss, as part of the gain or loss on sale.

5. Revenue recognition Sale of commodities

   Revenue from sales is recognised when the Group satisfies its performance obligations under its contract by transferring such goods to the customer's control. Control is generally determined to be when the customer has the ability to direct the use of and obtain substantially all of the remaining benefits from that good.

   Interest

   Interest revenue is recognised on a time proportionate basis that considers the effective yield on the financial assets.

   Other income

   All other income is recognised when the right to receive other income is established. All revenue is stated net of the amount of goods and services tax.

6. Government grants

   Grants from the government, including exploration incentives, are recognised at their fair value where there is a reasonable assurance that the grant will be received, and the Group will comply with all attached conditions. Grants relating to expense items are recognised as income over the periods necessary to match the grant to the costs it is compensating. Grants relating to assets are credited to deferred income at fair value and are credited to income over the expected useful life of the asset on a straight-line basis.

7. Income tax

The income tax expense or revenue for the year is the tax payable on the current year's taxable income based on the applicable income tax rate for each jurisdiction adjusted by changes in deferred tax assets and liabilities attributable to temporary differences and to unused tax losses.

The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the end of the reporting period in the countries where the Company operates and generates taxable income. Management periodically evaluates positions taken in tax returns with respect to situations in which applicable tax regulation is subject to interpretation and considers whether it is probable that a taxation authority will accept an uncertain tax treatment. The Company measures its tax balances either based on the most likely amount or the expected value, depending on which method provides a better prediction of the resolution of the uncertainty.

Deferred income tax is provided in full, using the liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the consolidated financial statements. However, the deferred income tax is not accounted for if it arises from initial recognition of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting nor taxable profit or loss. Deferred income tax is determined using tax rates (and laws) that have been enacted or substantially enacted by the reporting date and are expected to apply when the related deferred income tax asset is realised, or the deferred income tax liability is settled.