Macarthur Minerals : Annual Report to 31 March 2022

For personal use only

MACARTHUR MINERALS LIMITED

ABN 93 103 011 436

ANNUAL REPORT

31 March 2022

ASX: MIO - TSXV: MMS

All amounts are in Australian dollars unless otherwise stated

For personal use only

Annual Report - Year ended 31 March 2022

Contents	Page
Chairman's Letter	1
Corporate Directory	2
Report on Operations	3
Directors' Report	8
Financial Report	21
Corporate Governance	71
Additional ASX Information	72

For personal use only

Chairman's Letter

Dear Fellow Shareholders,

Over the last 12 months, the Company has made excellent progress, as we continue the journey to become one of Australia's next big iron ore producers.

Notwithstanding the challenging market conditions at that time, we have successfully completed the spin out of the Company's Pilbara gold, copper and lithium tenements (Pilbara Assets) where the Company's wholly owned subsidiary Macarthur Lithium Pty Ltd, which holds the Company's Pilbara Assets was converted to a public company and renamed Infinity Mining Limited, undertook an initial public offering (IPO) and admitted to the Official list of ASX on 20 December 2021 and commenced trading under ticker IMI on 22 December 2021.

In the first quarter of 2022, the Company delivered a maiden Ore Reserve and completed the Feasibility Study for its high- grade magnetite Lake Giles Iron Project to which the Feasibility Study confirms an economically viable project, producing 3 million tonnes per annum (dry basis) of high- grade magnetite concentrate over a 25-year mine life.

With the completion of the study process, Macarthur conducted a private placement of A$7.5 million with institutional and sophisticated investors. The proceeds from the offering will be used for working capital purposes and post feasibility study optimisation work as the Company moves into the delivery and financing phase.

As the Company continues to focus on core fundamentals and project delivery, we look forward to sharing the Company's progress with you and I would like to thank our shareholders for their continued and valued support.

Yours faithfully

Cameron McCall

Executive Chairman

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Corporate Directory

Stock Exchange Listing

Macarthur Minerals Limited (the "Company" or "Macarthur Minerals") is an Australian public company and is quoted on the Official List of the TSX Venture Exchange ("TSX-V") (symbol: MMS), on the Australian Securities Exchange ("ASX") (symbol: MIO) and on OTCQB Venture Market ("OTCQB") (symbol: MMSDF). The Company is incorporated in Australia and registered in Queensland.

Directors

Cameron McCall, Executive Chairman (Appointed on 13 May 2022)

Alan Joseph ("Joe") Phillips, CEO (Appointed on 13 May 2022) and Managing Director

Alan Phillips, Non-Executive Director

Andrew Suckling, Independent Director

Daniel Lanskey, Independent Director (resigned 27 October 2021)

Company Secretary

Mima Wirakara

The Registered office and principal place of the business

Suite 1G, Building 1

Kings Row Office Park

40 McDougall Street

MILTON QLD 4064

Australia

Telephone: [phone]
Fax:	[phone]
Email:[e-mail]
Website address:www.macarthurminerals.com
Corporate Governance Statement
https://macarthurminerals.com/about/corporate-
governance/
Canadian Share Registry	Australian Share Registry
Computershare Investor Services Inc.	Computershare Investor Services Inc.
510 Burrard St, 3rd Floor	117 Victoria St, West End
Vancouver, BC V6C 3B9	Brisbane, QLD 4101
Canada		Australia
Website address:www.computershare.com	Website address:www.computershare.com.au

Auditors

RSM Australia Pty Ltd

Oracle Tower, Level 6,

340 Adelaide St, Brisbane QLD 4000

Telephone:	[phone]
Fax:	[phone]

Website address:www.rsm.global/australia/

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For personal use only

Report on Operations

WESTERN AUSTRALIAN IRON ORE PROJECTS

Lake Giles Projects

Macarthur Minerals' Lake Giles Iron Ore Projects ("Lake Giles Projects") are located on mining tenements covering approximately 62 km2, 175 kilometres ("km") northwest of Kalgoorlie in Western Australia. Within the tenements, at least 33 km strike extent of outcropping banded iron formation ("BIF") occurs as low ridges, surrounded by intensely weathered and mostly unexposed granites, basalts and ultramafic rocks.

The Lake Giles Projects are situated in the Yilgarn Region of Western Australia. The Yilgarn Region is host to many significant mineral deposits that have been, or are being, mined for iron ore. The tenements cover the Yerilgee greenstone belt which is some 80 km in length and lies within the Southern Cross Province of the Yilgarn. The Lake Giles Projects are approximately 90 km from the existing Perth Kalgoorlie Railway that has a direct connection to the Port of Esperance in Western Australia, where it is intended that ore from the Projects will be shipped. Export is subject to available capacity, which is not certain. The Lake Giles Projects (comprising the Moonshine Magnetite Project and the Ularring Hematite Project) is located approximately 450 km east northeast of the coastal city of Perth, Western Australia, and approximately 115 km west of the town of Menzies. Exploration at the Ularring Hematite and Moonshine Magnetite Projects has been sufficient to allow the estimation of Mineral Resources for both projects.

Lake Giles Iron Project

On 12 August 2020 Macarthur Minerals released an updated Mineral Resource estimate for the Lake Giles Magnetite Project1. The Mineral Resource estimates includes Measured Resources of approximately 53.9 Mt @ 30.8% Fe, Indicated Resources of 218.7 Mt @ 27.5% Fe and Inferred Resources of 997.0 Mt @ 28.4% Fe.

The resource formed the basis of a Feasibility Study that was released to the market on 11 April 2022. The feasibility study was based on a 3 Mtpa magnetite operation incorporating the Moonshine and Moonshine North magnetite deposits. The Feasibility Study confirms the commercial viability of the Project to produce 3 Mtpa (dry basis) of high-grade magnetite concentrate over a long mine life of 25 years from Proven and Probable Ore Reserves. The key production and financial outcomes are presented in the following table 12.

Table 1. Lake Giles Iron Project - Feasibility Study Production and Financials Summary

Production
Ore mined	236.6 Mt
Waste mined	624.9 Mt
Total mined	861.5 Mt
Strip ratio	2.64
Concentrate produced	74 Mt
Concentrate iron grade	66.1
Plant recovery	31%
Financials	AUDm	USDm
Sales revenue	12,614	8,956
Operating Expenses	8,116	5,672
Initial Capital Expenditure
Construction capex	801.1	568.8
Mining overburden pre-strip	61.6	43.8
Total initial capital	862.7	612.5
Future Capital Expenditure
Sustaining capital	203	144.1
Deferred capital - Tailings	39.8	28.3

1 Refer to the Company's news release dated August 12, 2020, titled "Moonshine Magnetite Resource Upgrade."

2 Refer to the Company's news release dated March 21, 2022, titled "Positive Feasibility Study Results for Lake Giles Iron Project."

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