Havilah Resources : Half Yearly Report and Accounts

HAVILAH RESOURCES LIMITED

ABN 39 077 435 520

INTERIM FINANCIAL REPORT

FOR THE FINANCIAL HALF-YEAR ENDED

31 JANUARY 2022

For further information please see the Havilah website or contact:

Dr Chris Giles: Technical Director

Telephone: [phone]

Website:www.havilah-resources.com.au Email:[e-mail]

ASX CODE: HAV ABN: 39 077 435 520

HAVILAH RESOURCES LIMITED INTERIM FINANCIAL REPORT: FINANCIAL HALF-YEAR ENDED 31 JANUARY 2022

Contents	Page
Directors' Report	2
Auditor's Independence Declaration	9
Consolidated Statement of Profit or Loss and Other Comprehensive Income	10
Consolidated Statement of Financial Position	11
Consolidated Statement of Changes in Equity	12
Consolidated Statement of Cash Flows	13
Notes to the Condensed Consolidated Financial Statements	14
Directors' Declaration	18
Independent Auditor's Review Report to the Members of Havilah Resources Limited	19
Glossary	21
Forward-looking Statements

This Interim Financial Report prepared by Havilah Resources Limited includes forward-looking statements. Forward-looking statements may be identified by the use of 'may', 'will', 'expect(s)', 'intend(s)', 'plan(s)', 'estimate(s)', 'anticipate(s)', 'continue(s)', and 'guidance', or other similar words and may include, without limitation, statements regarding plans, strategies and objectives of management, anticipated production or construction commencement dates and expected costs of production.

Forward-looking statements inherently involve known and unknown risks, uncertainties and other factors that may cause the Group's actual results, performance and achievements to differ materially from any future results, performance or achievements. Relevant factors may include, but are not limited to, changes in commodity prices, foreign exchange fluctuations and general economic conditions, increased costs and demand for production inputs, the speculative nature of exploration and project development, including the risks of obtaining necessary licences and permits and diminishing quantities or grades of reserves, political and social risks, changes to the regulatory framework within which the Group operates or may in the future operate, environmental conditions including extreme weather conditions, recruitment and retention of personnel, industrial relations issues and litigation.

Forward-looking statements are based on the Group and its management's good faith assumptions relating to the financial, market, regulatory and other relevant environments that will exist and affect the Group's business and operations in the future. The Group does not give any assurance that the assumptions on which forward-looking statements are based will prove to be correct, or that the Group's business or operations will not be affected in any material manner by these or other factors not foreseen or foreseeable by the Group or management or beyond the Group's control. Given the ongoing uncertainty relating to the duration and extent of the global COVID-19 pandemic, and the impact it may have on the demand and price for commodities (including copper and gold), on our suppliers and workforce, and on global financial markets, the Group continues to face uncertainties that may impact on its operating activities, financing activities and/or financial results.

Although the Group attempts and has attempted to identify factors that would cause actual actions, events or results to differ materially from those disclosed in forward-looking statements, there may be other factors that could cause actual results, performance, achievements or events not to be as anticipated, estimated or intended, and many events are beyond the reasonable control of the Group. Accordingly, readers are cautioned not to place undue reliance on forward-looking statements. Forward-looking statements in this Interim Financial Report speak only at the date of issue. Subject to any continuing obligations under applicable law or the ASX Listing Rules, in providing this information the Group does not undertake any obligation to publicly update or revise any of the forward-looking statements or to advise of any change in events, conditions or circumstances on which any such statement is based.

ASX CODE: HAV ABN: 39 077 435 520

HAVILAH RESOURCES LIMITED INTERIM FINANCIAL REPORT: FINANCIAL HALF-YEAR ENDED 31 JANUARY 2022

The Directors present their report on Havilah Resources Limited and its subsidiaries (the 'Group') for the financial half-year ended 31 January 2022 (the 'financial half-year'). All monetary amounts are presented in Australian dollars, unless otherwise indicated.

Havilah Resources Limited ('Havilah' or the 'Company') is an Australian public company limited by shares and is listed on the Australian Securities Exchange ('ASX'). It is incorporated and domiciled in Australia. Its registered office is at 107 Rundle Street, Kent Town SA 5067.

Directors

The names of the Directors of the Company during the financial half-year and up to the date of this Directors' Report are set out below:

Mr Simon Gray (Executive Director - Chairman)

Mr Victor Previn (Independent Non-Executive Director)

Dr Christopher Giles (Executive Director - Technical Director)

Directors were in office for the entire period.

Company Secretary

Mr Simon Gray.

Principal Activities

The principal activities of the Group during the financial half-year were exploration for and evaluation of mineral resources (predominantly copper, gold, cobalt and iron ore) in South Australia and advancing the West Kalkaroo gold open pit towards development. The objective is to translate exploration success into shareholder value by developing the JORC Ore Reserves and Mineral Resources into profitable operating mines and/or via sale or farm-out with suitable well-funded partners.

The Group's activities during the financial half-year are outlined in the Review of Operations below.

Environmental Sustainability

Havilah subscribes to the principle of sustainability across all of its operations. This includes minimising disturbance to the natural environment to the maximum extent practicable and where possible, helping to improve environmental outcomes through judicious conservation initiatives. Havilah's ESG (environmental, social and governance) credentials can be foundon the Company's website.

COVID-19 Pandemic

Havilah is abiding by all official directives, and continues to closely monitor the impacts of the COVID-19 pandemic on the health and wellbeing of its personnel, contractors and stakeholders. It has in place protocols and response plans to minimise the potential transmission of COVID-19, including rapid antigen testing of all visitors to site. However, there are no guarantees that in the future further travel restrictions and border closings, stay-at-home and quarantine notices, or lockdowns will not be imposed by government, as events continue to unfold relating to the COVID-19 pandemic, its variants and available vaccines.

Since the Company's tenements are in northeastern South Australia, it was able to continue drilling during the financial half-year largely unimpeded by COVID-19 restriction, excepting for free access to Broken Hill for supplies and drilling equipment repairs. The field team operates out of Havilah's exploration basecamp on Kalkaroo Station or hired premises at Cockburn, which are both remote and relatively isolated locations, with minimal external contact.

The COVID-19 pandemic continues to highlight to the Board the importance of regional supply chain security for strategic and critical minerals (including copper, cobalt, molybdenum, rare earth elements, tin and tungsten) that are necessary for national economic and security interests.

Business Strategies and Prospects, Likely Developments and Expected Results of Operations

The Review of Operations sets out information on the business strategies and prospects for future financial years, refers to likely developments in operations and the expected results of those operations in future financial years. Information in the Review of Operations is provided to enable shareholders to make an informed assessment about the business strategies and prospects for future financial years of the Group. Other than the matters included in this Directors' Report or elsewhere in this Interim Financial Report, information about other likely developments in the Group's operations and the expected results of those operations have not been included. Details that could give rise to likely material detriment to Havilah, for example, information that is confidential, commercially sensitive or could give a third party a commercial advantage has not been included.

Review of Operations

The Board of Directors remains committed to maximising returns to shareholders through judicious management of the Group's multi-commodity mineral portfolio in South Australia. The Board's strategy is to maximise the fair value of the Group's mineral portfolio either by production, sale or farm-out with suitable well-funded partners. The Board will not entertain any proposal that, in its view, does not assist Havilah to reach this goal.

ASX CODE: HAV ABN: 39 077 435 520

HAVILAH RESOURCES LIMITED INTERIM FINANCIAL REPORT: FINANCIAL HALF-YEAR ENDED 31 JANUARY 2022

Kalkaroo Copper-Gold-Cobalt Project (HAV 100% ownership)

Kalkaroo is Havilah's flagship mineral project, located approximately 400 kilometres ('km') northeast of Adelaide and 90 km northwest of the regional mining centre of Broken Hill with its skilled mining workforce. It lies approximately 55 km north of the Transcontinental railway line and Barrier Highway. The project comprises a 100.1 million tonne ('Mt') JORC Ore Reserve (Proved 90.2 Mt; Probable 9.9 Mt) at a copper equivalent grade of 0.89% that is capable of supporting a large-scale open pit mining operation over at least 13 years. The Group has already secured the required mining permits for the Kalkaroo project (Mining Leases and Miscellaneous Purposes Licences). It also owns the surrounding 534 km2 Kalkaroo Station pastoral lease, a non-mineral asset on which the Kalkaroo project is located, thus reducing land access risks for the project.

The Board has a staged strategic plan to develop the Kalkaroo deposit, commencing with a lower capital expenditure operation that initially focuses on mining the comparatively shallow and soft oxidised gold and native copper ore at West Kalkaroo. The proposed West Kalkaroo gold open pit is located at the very western (and upper) part of the Kalkaroo deposit, where it is planned to produce 80,000-90,000 ounces of gold and 5,000 tonnes of native copper (near pure copper metal) over an initial 3-4 year period. This open pit design has the flexibility for extension to the east for several more years in oxidised ore and ultimately to transition to the much larger and longer-term Kalkaroo copper sulphide project.

During the financial half-year Havilah's management team focussed on several key pre-development tasks that directly advanced progress of the proposed West Kalkaroo open pit gold mine as summarised below.

• 1. Final South Australian government approvals

  Key to the regulatory approvals process is acceptance of the Program for Environment Protection and Rehabilitation ('PEPR') document by the Department for Energy and Mining ('DEM'). The West Kalkaroo PEPR document was lodged during March 2021 and first substantive feedback was received from the DEM during August 2021. Since then, Havilah's management team and an environmental consultant have worked to systematically address all points raised by the DEM. Several additional consultant's reports and reviews of groundwater and the tailing storage facility have been requested. To date no issues have been raised that would inhibit development of the mining operation in its presently proposed form.

  At this time, Havilah has largely completed the revised West Kalkaroo PEPR document that addresses all of the DEM's feedback points. Two key consultant reports remain outstanding, one that peer reviews a consultant's tailings storage facility design report and another that evaluates Havilah's capability to execute on its mining development plans. Havilah plans to re-lodge the PEPR document within the next two months, subject to timely delivery of the outstanding consultant's reports. This should lead to final approval for go-ahead of the West Kalkaroo gold open pit mining operation during 2022. This represents a major investment of time and money by Havilah, which in the end will ensure that the mining operation meets world's best practice mining regulations and ESG (Environmental, Social and Governance) standards.

• 2. Mining contractor

  Havilah continues to engage in discussions with reputable mining contractors. To this end Havilah has provided key scheduling, haulage and other logistical details to mining contractors with the view to receiving firm mining cost estimates that can be used in the West Kalkaroo financial model. There is a large amount of barren overburden to remove at West Kalkaroo to access the ore, hence any incremental reduction in mining rates and adoption of the most efficient mining technologies could result in material cost savings.

• 3. Financial model and mining study

  Havilah's senior mine planning engineer and consultants have continued to refine the West Kalkaroo mine design and financial model using updated cost inputs. Favouring the economics are the soft, easy to mine overburden and the mostly gravity recoverable free gold. RPM Global Asia Limited (who prepared the original Kalkaroo pre-feasibility financial model) is completing an updated mining study, which integrates all new technical work completed for West Kalkaroo over the past 3 years. Completion of this study is awaiting receipt of firm mining cost estimates from contractors, which can then be incorporated into the final financial model.

• 4. Project financing

  Havilah's management team continues to investigate suitable financing options for West Kalkaroo. The present intention is to seek maximum project debt financing to minimise dilution of its current 100% Kalkaroo project equity interest. From discussions so far, it is apparent that finalisation of project financing arrangements are critically dependent on receipt of final South Australian government approvals and completion of a high quality feasibility study. Havilah continues to remain receptive to alternative investor financing options that would allow quicker ramp-up of copper production following removal of overburden and exposure of the large copper sulphide orebody.

Development of the open pit gold mine at West Kalkaroo is subject to a final investment decision by the Havilah Board during 2022, which is contingent on successful conclusion of the key tasks listed above amongst others.

ASX CODE: HAV ABN: 39 077 435 520

HAVILAH RESOURCES LIMITED INTERIM FINANCIAL REPORT: FINANCIAL HALF-YEAR ENDED 31 JANUARY 2022

Mutooroo Copper-Cobalt-Gold Project (HAV 100% ownership)

Mutooroo is Havilah's second advanced stage copper-cobalt project that is located within commuting distance of Broken Hill, and 16 km south of the Transcontinental railway line and Barrier Highway. It contains 195,000 tonnes of copper, 20,200 tonnes of cobalt and 82,100 ounces of gold in Measured, Indicated and Inferred JORC Mineral Resources. As such, Mutooroo is one of the largest and highest-grade sulphide cobalt deposits associated with copper in Australia.

Havilah is undertaking a PFS on the Mutooroo project as a proposed 1 million tonne per annum throughput copper and cobalt producer, based on current JORC Measured Resources, initially from an open cut mine that transitions to a longer-term underground mining operation. The present drilling campaign is designed to boost open pit resources to sustain an initial 5-year open pit mining operation.

Seven reverse circulation ('RC') drillholes were completed at Mutooroo during the financial half-year(refer to ASXannouncement of 17 January 2022). This drilling confirmed the presence of 1-5 metre thicknesses of copper-cobalt massive sulphide lode, consistent with historical records of the sulphide lodes in cross-cuts in the mine workings in the vicinity, with encouraging grades of copper-cobalt mineralisation including:

•  Drillhole MTRC232 - 5 metres of 1.01% copper, 0.12% cobalt and 0.09 g/t gold (including 3 metres of 1.67% copper, 0.19% cobalt and 0.12 g/t gold) from 66 metres downhole; and

•  Drillhole MTRC233 - 5 metres of 1.7% copper, 0.18% cobalt and 0.13 g/t gold (including 2 metres of 2.13% copper, 0.22% cobalt and 0.19 g/t gold) from 95 metres downhole.

The drilling is part of the Mutooroo PFS with the primary objective to test for shallow, open pit copper-cobalt sulphide resources along strike from the existing Mutooroo resource and conceptual open pit design and below the shallow oxidised copper ore that was exploited via several historic mine shafts.

Commencement of 2022 exploration drilling is awaiting delivery of a new more powerful compressor, which has been delayed by shipping transport bottlenecks associated with the COVID-19 pandemic.

Grants Basin, Maldorky and Grants Iron Ore Projects (HAV 100% ownership)

Havilah has previously reported an iron ore Exploration Target* at Grants Basin of 3.5-3.8 billion tonnes of 24-28% iron(refer to ASX announcement of 5 April 2019). The western end of this Exploration Target crops out as a solid body of iron ore at least 270 metres thick from surface.

Havilah was not able to commence a 64 hole RC resource delineation drilling program during 2021, as planned, due to COVID-19 related delays. It still plans to carry out this drilling program during 2022 to convert a portion of the western end Exploration Target to a maiden JORC Mineral Resource, initially targeting at least 0.5 billion tonnes of iron ore.

* Note that the potential quantity and grade of the Exploration Target is conceptual in nature, there has been insufficient exploration to estimate a Mineral Resource and it is uncertain if further exploration will result in the estimation of a Mineral Resource.

Exploration Strategy

One of the Company's important assets is its ~16,000 km2 under-explored tenement holding in the Curnamona Craton, that is prospective for a variety of commodities including several strategic and critical minerals such as copper, cobalt, molybdenum, rare earth elements, tin and tungsten. Exploration for new economic discoveries leveraging off the Group's large prospective tenement holding and utilising Havilah's extensive knowledge base is a key objective.

Mutooroo West Copper-Cobalt-Gold Prospect (HAV 100% ownership)

The Mutooroo West prospect lies 4 km northwest of Mutooroo and like Mutooroo was mined by early prospectors for copper during the early 1900's after discovery of an outcropping copper stained gossan.

In the first drilling for over 50 years, during the financial half-year Havilah completed 6 RC drillholes to test for shallow copper-cobalt mineralisation near the base of oxidation, up-dip and along strike from the MEPL (Mines Exploration Pty Ltd) diamond drillholes and specifically testing a priority one AEM (airborne electromagnetic) bedrock conductor(referto ASX announcement of 29 November 2021,pages 4-7). The Mutooroo West sulphide lode was intersected in all drillholes at the expected position. The results indicate potentially economic grades of copper-cobalt-gold mineralisation within a mostly narrow lode at the depths intersected, of similar tenor to the earlier MEPL drilling. It is considered that the RC drillholes have given a fair test of the Mutooroo West lode position for shallow economic copper-cobalt-gold mineralisation over the 200 metres of strike drilled.

The strong AEM conductor is not fully explained by this RC drilling and may indicate potential for a wider sulphide lode at depth, which may be followed up at a later date. Further drilling at Mutooroo West is not planned until a number of other high priority targets identified within the Mutooroo Project Area have been drilled.