Cannindah Resources : Annual Report to shareholders

For personal use only

CANNINDAH RESOURCES LIMITED

ABN 35 108 146 694

ANNUAL REPORT

FOR THE YEAR ENDED 30 JUNE 2021

For personal use only

CONTENTS

ANNUAL FINANCIAL REPORT CORPORATE GOVERNANCE STATEMENT MINERAL RESOURCES STATEMENT TENEMENT STATEMENT SHAREHOLDER INFORMATION CORPORATE DIRECTORY

Page

1

42

48

48

49

50

For personal use only

CANNINDAH RESOURCES LIMITED

ABN 35 108 146 694

ANNUAL FINANCIAL REPORT

for the year ended 30 June 2021

1

For personal use only

CANNINDAH RESOURCES LIMITED

DIRECTORS' REPORT

The Directors present their report, together with the financial statements, on the Consolidated Entity (referred to hereafter as the 'Consolidated Entity' or Group) consisting of Cannindah Resources Limited (referred to hereafter as the 'Company', 'Parent Entity' or 'Cannindah Resources') and the entities it controlled for the year ended 30 June 2021.

Directors

The following persons were Directors of Cannindah Resources Limited during the whole of the financial year and up to the date of this report, unless otherwise stated:

Thomas J Pickett (Executive Chairman)

Geoffrey J Missen (Independent Non-Executive Director)

Simon Beams (Non-Executive Director)

Principal activities

During the financial year the principal activities of the Consolidated Entity consisted of mineral exploration, evaluation and progressing development of its various mineral projects.

Dividends

There were no dividends paid or declared during the current or previous financial year.

Operating and Financial review

The profit for the Consolidated Entity after providing for income tax amounted to $4,113,622 (2020: loss $1,373,642). The surplus arose from the calculation of the benefit received by the Group from the agreement with lender Aquis Finance Pty Ltd to settle the loan agreement before the due date by the issue of 190 million shares in the Company. The agreement to pay out the loan was approved by shareholders at the 16 April 2021 Extraordinary General Meeting. Further details are provided at Note 13 to the financial statements.

Corporate Strategy

The Company's goal, like most other small capital exploration companies, is to preserve shareholder wealth and grow the value of the flagship asset with prudent exploration methods. In the 2021 financial year, the Company's key focus was to reorganise its capital structure, attract investors to support the ongoing funding of the company and to expand its exploration activities at its Cannindah and Piccadilly projects to bring them to drill ready status as soon as soon as possible

The Company's corporate activities include the review of opportunities for expansion through acquisitions and mergers and through potential diversification opportunities to take advantage of positive market sentiments. At the date of this report, no investments have been undertaken.

Operations Report

Exploration Projects

During the period, the Group expanded its exploration activities by:

• Gaining access to historical data on the Piccadilly project through the acquisition of PGMH
• Conducting further desktop reviews and field work on the Piccadilly project to plan out additional exploration including trenching and sampling culminating in a new drilling program towards the end of the financial year aimed at consolidating the knowledge gained from the reviews.
• Successfully applied for the renewal of the existing EPM's 18322 and 16198 and applying for new ground adjacent to the current tenements.
• Followed up a detailed analysis of the Mt Cannindah project conducted early in the second half of the financial year with the planning of a 1,450m diamond drill program which commenced in August 2021. Initial results from the drilling were released to the ASX on 28 September 2021.

Financial

At 30 June 2022, the Company had cash on hand of $1,291,780 (2020: $39,227). During the year the Group acquired and restructured PMH and also negotiated the early payout of the $5.8 million debt with Aquis Finance Pty Ltd. These actions left the company debt free with attractive assets with which to attract new investors. In this regard, the Company issued a further 46.4 million shares in placements to raise $2.375 million in cash before transaction costs from December 2020 to March 2021.

2

For personal use only

CANNINDAH RESOURCES LIMITED

DIRECTORS' REPORT

Future Strategy

The Cannindah Resources Board and Management will continue to focus on developing the exploration potential of both its Piccadilly Gold Mine and its surrounding EPM's and its Mt Cannindah Project. It has commenced this process by undertaking drilling campaigns at both projects early in the 2022 financial year.

The Board will also continue to seek to take advantage of additional corporate opportunities that are evaluated from time to time.

Environmental Regulation

The Consolidated Entity's operations are subject to significant environmental regulation under Commonwealth and State legislation in relation to the discharge of hazardous waste and minerals arising. The Consolidated Entity holds all necessary Environmental Authorities in accordance with the Environmental Protection Act 1994 and such other environmental approvals as may be stipulated under State laws to enable it to operate within its Mining Leases and the various exploration tenements it holds.

Information on Directors

Thomas J Pickett

LLB, Grad Cert App Fin

Executive Chairman.

Mr Pickett holds a Bachelor of Law and was admitted as a solicitor of the Supreme Court of Queensland in 1996. Mr Pickett has broad experience in the mining industry and has held a number of corporate roles in the mining and finance industries.

Mr Pickett was Chairman of Dynasty Resources Limited from 2011 to September 2015, was a Non- Executive Director of Discovery Resources Limited (ASX: DIS) which completed a transaction to become Aquis Entertainment Limited (ASX: AQS) in August 2015 and was a Non-Executive Director of Red Gum Resources Limited (ASX: RGX) from May 2015 until January 2016 when the Company completed a transaction to become MCS Services Limited (ASX: MSG). He was a director of CuDeco Ltd (ASX: CDU) from 2002 to 2005. He was a director of Piccadilly Gold Mine Holdings Limited and Diversified Mining Pty Ltd, which are privately held exploration entities, resigning in 2015.

Geoffrey J Missen

FCA, GAICD

Non-Executive Director and Chairman of the Audit and Risk Committee

Mr Missen is a Chartered Accountant with over 25 years' experience providing clients with tax, accounting and business advice. He has been a Partner of The MBA Partnership since its inception in 2001. His client base is diverse and centres on small to medium enterprises. Mr Missen has an interest in providing specialist advice to his clients and enjoys developing strategies to help clients meet their goals. He is an active board member, currently serving on a number of boards in the public, private and not-for-profit sectors.

Mr Missen is a graduate of Victoria University, the Wharton School of Business at the University of Pennsylvania, Cambridge University, Harvard Business School and the Chicago Booth Business School. He is a Fellow of the Chartered Accountants in Australia and New Zealand and a Graduate Member of The Australian Institute of Company Directors (GAICD).

Dr. Simon D Beams (appointed 2 September 2019)

PhD (Geology) BSc Hons (First Class)

Non-Executive Director

Dr Beams has been a Geologist since 1975. For the past 32 years he has been Managing Director and Principal Geologist of Terra Search Pty Ltd where he has been directly involved in many mineral exploration and evaluation programs across Northern Australia, leading to mineral discoveries and some mines, primarily base metals and gold but including uranium, phosphate, magnetite & oil shale amongst others. In 2016, Simon was awarded the John Campbell Miles Medal by the Queensland Divisions of the Geological Society of Australia and the Australian Institute of Geosciences for contributions to economic geology, exploration technology and mineral discovery in Queensland.

3