SensOre : Half-year report 2021

For personal use only

Half-Year Report 2021

SensOre Ltd.

ABN 16 637 198 531

ASX: S3N

Condensed Consolidated Financial Statements for the half-year ended 31 December 2021

For personal use only

FORWARD‐LOOKING STATEMENTS

Certain information contained in this report, including any information on SensOre Ltd's (SensOre or the Company) plans or future financial or operating performance and other statements that express management's expectations or estimates of future performance, constitute forward‐looking statements. Forward‐looking statements can generally be identified by the use of forward‐looking words, such as 'expect', 'anticipate', 'likely', 'intend', 'should', 'could', 'may', 'predict', 'plan', 'propose', 'will', 'believe', 'forecast', 'estimate', 'target' and other similar expressions. Indications of, and guidance or outlook on, future earnings or financial position or performance are also forward‐ looking statements. Forward‐looking statements are provided as a general guide only and should not be relied on as an indication or guarantee of future performance.

Forward‐looking statements are based on a number of estimates and assumptions that, while considered reasonable by management at the time, are subject to significant business, economic and competitive uncertainties. SensOre cautions that such statements involve known and unknown risks, uncertainties and other factors that may cause the actual financial results, performance or achievements of SensOre to be materially different from the Company's estimated future results, performance or achievements expressed or implied by those forward‐looking statements. These factors include: the inherent risks involved in exploration and development of mineral properties, financing risk, changes in economic conditions, changes in the regulatory environment and other government actions, changes in other factors, such as business and operational risk management, many of which are beyond the control of SensOre. There can be no assurance that actual outcomes will not differ materially from these statements.

Past performance information given in this report is given for illustrative purposes only and is not necessarily a guide to future performance. No representation or warranty is made by any person as to the likelihood of achievement or reasonableness of any forward‐looking statements, forecast financial information or other forecast. Nothing contained in this report is, or shall be relied upon as, a promise, representation, warranty or guarantee as to the past, present or future performance of SensOre.

Except as required by applicable regulations or by law, SensOre does not undertake any obligation to publicly update, review or release any revisions to any forward‐looking statements to reflect new information, future events or circumstances after the date of this report.

Nothing in this report should be construed as either an offer to sell or a solicitation to buy or sell SensOre securities.

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CONTENTS

DIRECTORS' REPORT	1
AUDITOR'S INDEPENDENCE DECLARATION	8
INDEPENDENT AUDITOR'S REVIEW REPORT	9
DIRECTORS DECLARATION	11
CONDENSED CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME	12
CONDENSE CONSOLIDATED STATEMENT OF FINANCIAL POSITION	13
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY	14
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS	15
NOTES TO THE FINANCIAL STATEMENTS	16
1.	SIGNIFICANT ACCOUNTING POLICIES...............................................................................................................................................................	16
2.	SEGMENT INFORMATION ................................................................................................................................................................................	18
3.	REVENUE AND OTHER INCOME .......................................................................................................................................................................	18
4.	LOSS FOR THE PERIOD .....................................................................................................................................................................................	19
5.	TRADE AND OTHER RECEIVABLES ....................................................................................................................................................................	20
6.	OTHER ASSETS .................................................................................................................................................................................................	20
7.	PROPERTY, PLANT AND EQUIPMENT ...............................................................................................................................................................	20
8.	EXPLORATION AND EVALUATION ASSETS ........................................................................................................................................................	21
9.	TECHNOLOGY AND INTELLECTUAL PROPERTY ASSETS.....................................................................................................................................	22
10.	TRADE AND OTHER PAYABLES .........................................................................................................................................................................	23
11.	PROVISIONS .....................................................................................................................................................................................................	23
12.	RIGHT‐OF‐USE ASSETS AND LEASE LIABILITIES.................................................................................................................................................	24
13.	ISSUED CAPITAL ...............................................................................................................................................................................................	25
14.	NON‐CONTROLLING INTEREST.........................................................................................................................................................................	25
15.	EARNINGS PER SHARE......................................................................................................................................................................................	26
16.	CONTINGENT LIABILITIES .................................................................................................................................................................................	27
17.	CASH FLOW INFORMATION .............................................................................................................................................................................	27
18.	FINANCIAL AND RISK MANAGEMENT ..............................................................................................................................................................	28
19.	SHARE‐BASED PAYMENTS ................................................................................................................................................................................	29
20.	COMMITMENTS ...............................................................................................................................................................................................	30
21.	EVENTS ARISING SINCE THE END OF THE REPORTING PERIOD ........................................................................................................................	31
22.	DIVIDENDS .......................................................................................................................................................................................................	32
GLOSSARY OF ABBREVIATIONS AND DEFINED TERMS	33
CORPORATE DIRECTORY	34

DIRECTORS' REPORT

For personal use only

The directors of SensOre Ltd. (SensOre or the Company) present the financial report of the Company and its subsidiaries (the Group) for the half‐year ended 31 December 2021 and the review report thereon.

DIRECTORS

The names of directors in office during the period and up to the date of this report are:

Robert Peck

Richard Taylor

Robert Rowe

Nicholas Limb

Adrian Manger

Anthony O'Sullivan

REVIEW OF OPERATIONS & PRINCIPAL ACTIVITIES

SensOre combines its geoscience Data Cube and its proprietary target generation and validation technology (Discriminant Predictive Targeting®, DPT®) with its team's geosciences expertise to discover economically viable mineral deposits efficiently, sustainably and at pace for clients and for itself. SensOre's big data approach means that the Company generates new target knowledge across large areas and working with clients allows SensOre to commercialise this knowledge.

The generation and validation of AI‐enhanced deposit predictions (AI‐Target(s)) is at the core of SensOre's business. SensOre structures its operations into three business divisions to leverage AI‐Target opportunities:

• Exploration
  Using its technology and intellectual property (IP) assets, the Company has built a tenement portfolio of wholly‐ owned and joint ventured tenement assets in Western Australia with the aim of discovering in‐demand resources through systematic exploration and evaluation. SensOre adopts a 'project generator' model, maintaining multiple projects and, where required, amplifying its reach by sharing exploration costs through joint ventures.
• Exploration Services
  SensOre works with a select number of exploration and mining companies as clients to offer AI‐enhanced targeting and prospectivity mapping and to leverage SensOre's knowledge over large areas. In doing so, SensOre aims to renew exploration pipelines and improve discovery success rates for its clients and partners.
• Technology
  To enhance its Exploration performance and expand its Exploration Services, SensOre invests in the continuous improvement of its technology & IP assets (including DPT, Data Cube, AGLADS®, iFertile®, iDeposit® and the SensOre Discoveries Database).

Exploration projects

SensOre manages several subsidiaries that hold its exploration targets.

SensOre holds an interest in a number of tenement packages directly via wholly‐owned subsidiaries and via agreements with third parties. As indicated, a number of the SensOre Group projects are still in the application phase.

SensOre Yilgarn Ventures (SYV)

100% SYV:

• 8 Mile Well (10 of the 11 tenements have been granted)
• Boodanoo
• Mogul Well
• Tea Well East (application)

SYV joint ventures:

• Moonera (farm‐in 80%)
• Maynards Dam (farm‐in 70% subject to a potential 10% buyback in favour of Torque Metals Ltd (Torque))
• Marloo (farm‐in 70%)

SensOre Half‐Year Financial Statements 2021

1

DIRECTORS' REPORT

For personal use only

SensOre Exploration Holdings (SEH)

• Sandstone Road (farm‐in 85%)

SensOre Battery Minerals (SBM)

• Auralia (earn‐in interest up to 70%)
• Jenkins (application)
• Scorpion (application)

Yilgarn Exploration Ventures (YEV) (60% SensOre, 40% ASX‐listed DGO Gold Limited)

Operated under a Shareholders' Agreement (SHA) in partnership with DGO Gold Limited (DGO), YEV was the first of SensOre's Group companies to house its AI‐Targets. Under the YEV SHA, DGO has an exclusive option to call four additional gold AI‐Targets into YEV. YEV's projects, outlined below, are held directly and under farm‐in agreements.

100% YEV interest:

• Christmas Well
• Providence Bore
• Tea Well

YEV joint ventures:

• Balagundi (farm‐in 80%) and Central Balagundi (farm‐in 80%)
• Desdemona North (farm‐in to 75%)
• Grace (farm‐in to 75%)
• Meekatharra (Tea Well) (farm‐in 85%)
• Mt Magnet North (farm‐in 85%)
• North Darlot (farm‐in 85%)

Since establishment of the joint venture, YEV has undertaken significant exploration across its asset portfolio to test its AI‐Targets and generate further information for technology validation purposes, including drilling (air core, reverse circulation and diamond), geophysical surveys and extensive sampling for geochemical analysis.

New farm‐in projects

During the half‐year ended 31 December 2021 and up to the date of this report, the Group entered into the following agreements:

• SBM entered into a farm‐in agreement with CGM (WA) Pty Ltd (CGM) in relation to the Auralia project. Under the agreement, SBM may earn up to 70% interest in the Auralia project by expending $5 million over two earn‐in phases (51% by expending $1.5 million in two years and a further 19% by expending $3.5 million over an additional two years). CGM can elect to contribute after the first phase. The agreement covers the following tenements: E69/3636, E69/3637 and E69/3700.
• YEV entered into a farm‐in agreement with Great Southern Gypsum Limited (GSG) in relation to the Grace project. Under the agreement, YEV may acquire an interest of up to 75% by expending $3 million within four years of the conditions precedent satisfaction date (50/50 joint venture establishment once $1.5 million is expended). The agreement covers the following tenements: E70/5253, M70/1384 and P70/1750. On 31 January 2022, YEV notified GSG that conditions precedent had been satisfied and paid $30,000 to the tenement holder in accordance with the terms of the agreement.
• SYV entered into a farm‐in agreement with Monger Exploration Pty Ltd (MEX) in relation to the Marloo project. Under the agreement, SYV may acquire an interest of up to 70% by expending $800,000 within four years of the conditions precedent satisfaction date. The agreement covers tenement E15/1498. Notice of satisfaction of conditions precedent is required on or before 4 April 2022.

SensOre Half‐Year Financial Statements 2021

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