Announcement PDF AUSQUEST LIMITED ABN 35 091 542 451 FINANCIAL REPORT for the financial year ended 30 June 2024 AusQuest Limited | Contents Corporate Directory................................................................................................................................... 1 Chairman’s Letter ...................................................................................................................................... 2 Directors’ Report ....................................................................................................................................... 3 Auditor’s Independence Declaration....................................................................................................... 23 Independent Auditor’s Report ................................................................................................................ 24 Directors’ Declaration.............................................................................................................................. 28 Financial statements ............................................................................................................................... 29 Consolidated Statement of Profit or Loss and Other Comprehensive Income ................................................................................... 29 Consolidated Statement of Financial Position .......................................................................... 30 Consolidated Statement of Changes in Equity .......................................................................... 31 Consolidated Statement of Cash Flows ..................................................................................... 32 Notes to the Consolidated Financial Statements ...................................................................... 33 Consolidated Entity Disclosure Statement .............................................................................................. 64 Additional securities exchange information ............................................................................................ 65 Tenements ............................................................................................................................................... 68 AusQuest Limited | Corporate Directory Board of Directors Mr Greg Hancock - Chairman and Non-Executive Director Mr Graeme Drew - Managing Director Mr Chris Ellis - Non-Executive Director Company Secretary Mr Henko Vos Registered Office C/- Nexia Perth Level 3, 88 William Street Perth WA 6000 Telephone: +61 8 9463 2463 Website: www.nexia.com.au Corporate Office 8 Kearns Crescent Ardross WA 6153 Telephone: +61 8 9364 3866 Facsimile: +61 8 9364 4892 Website: www.ausquest.com.au Auditors HLB Mann Judd Level 4, 130 Stirling Street Perth WA 6000 Share Registry Automic Pty Ltd Level 5, 126 Phillip Street Sydney NSW 6000 Investor Services: 1300 288 664 General Enquiries: +61 2 9698 5414 Website: www.automicgroup.com.au Securities Exchange Listing Australian Securities Exchange (Home Exchange: Perth, WA) Code: AQD Banker Australia and New Zealand Banking Group 135 Riseley Street Booragoon WA 6154 AusQuest Limited | 1 Chairmans’ Letter Dear Shareholder I am pleased to report that AusQuest successfully completed another year of active, targeted and cost-effective exploration activities across our projects in both Australia and Peru. In dollar terms, these programs were executed at an all-in cost of A$5.2 million, with the contribution from our Strategic Alliance partner South32 being A$2.25 million for the Australian projects. Our strategic goal continues to be the exploration of frontier mineral provinces with a view to making discoveries that would be meaningful to major companies like South32 – and therefore of enormous value to our shareholders. The results of this work are outlined in detail in the Review of Operations Review, but a brief summary of the key achievements is provided below: • The Balladonia Project in Western Australia provided further encouragement for the presence of large-scale Broken Hill Type mineralisation, with its associated base metal prospectivity. This was further reinforced with encouraging geophysics (VTEM) providing targets for drilling next year. • The Morrisey Project in WA also progressed well with further drilling outlining extensive magnetite mineralisation, indicating good scalability, while metallurgical test work highlighted the potential for consistent recoveries. Further work is clearly required but the beginnings of a potential project are emerging. • Pre-drilling exploration work was conducted on the Jubilee Lake and Moora Projects in WA, ahead of planned drilling within the next 12 months, which will be undertaken as part of the Strategic Alliance Agreement (SAA) with South32. • On the business development front, the base metal/gold projects at Mt Davis and Coober Pedy were progressed so they might be put forward for consideration as part of the SAA in the near future. • In Peru, we began the year engaging with a number of international companies with the idea of forming one or more joint ventures. This process has taken considerable time, including a number of site visits. Although several discussions remain ongoing, the Company determined that, once drill permits are approved, we would consider drilling the targets ourselves. The Cangallo Copper Project is likely to be the first of these with Lantana and Playa Kali to follow. Given the planned programs both in Australia and Peru, AusQuest will generate a significant amount of news-flow in the coming year. We remain suitably funded to deliver a steady pace of exploration activity. We also continue to enjoy a fruitful and professional relationship with South32 and their personnel. Our Agreement was extended in November 2023 for a further two year period. In conclusion, I would like to thank our staff and consultants – led by our Managing Director, Graeme Drew – for their efforts throughout the year. It has been a very busy one and I expect that this will not change in 2025. We all look forward to seeing this effort being rewarded with exploration success, which will in turn be reflected in our share price during the year ahead. I encourage all shareholders to register on our InvestorHub platform to more easily communicate questions and queries. We aim to deliver a 24-hour turnaround on all questions asked. Yours faithfully Greg Hancock Chair AusQuest Limited | 2 Directors’ Report The Directors of AusQuest Limited (“AQD” or the “Company”) herewith submit the financial report of the Company and the entities it controlled (“Group”) for year ended 30 June 2024. In order to comply with the provisions of the Corporations Act 2001, the directors report as follows: Board of Directors The names of directors who held office during the date of this report are as follows. Directors were in office for the entire period unless otherwise stated. Mr Greg Hancock Mr Graeme Drew Mr Chris Ellis Non-Executive Chairman Managing Director Non-Executive Director Company Secretary Henko Vos Principal Activities The principal activity of the Group was mineral exploration throughout Australia and Peru. Review of Operations A review of the Group’s exploration projects and activities during the year is discussed in the Review of Operations included in this Annual Report. The profit of the Group after income tax for the year was $256,727 (2023: profit after tax of $361,982). Changes in state of affairs During the year ended 30 June 2024 there was no significant change in the state of affairs of the Group other than as referred to in the financial statements or notes thereto. Events Occurring after the Reporting Date On 16 September 2024 the Company issued 1,000,000 to an employee under its Equity Incentive Plan. Other than the above, there has been no matter or circumstance that has arisen since the end of the financial year which significantly affected or may significantly affect the operations of the Group, the results of those operations, or the state of affairs in future financial years. Future developments Disclosure of information regarding the likely developments in the operations of the Group in future financial years and the expected results of those operations is likely to result in unreasonable prejudice to the Group. Accordingly, this information has not been disclosed in this report. Safety and environmental regulations The Group is aware of its occupational health and safety and environmental obligations with regard to its exploration activities and ensures that it complies with all regulations when carrying out exploration work. Dividends No dividends were paid or declared since the start of the financial year. No recommendation for the payment of dividends has been made. Proceedings on behalf of the Company No persons have applied for leave pursuant to s.237 of the Corporation Act 2001 to bring, or intervene in, proceedings on behalf of AusQuest Limited. AusQuest Limited | 3 Directors’ Report Information about directors and senior management The names and particulars of the directors of the Company during or since the end of the financial year and up to the date of this report are noted below. Except where indicated, directors have held office during and since the end of the financial year: Greg Hancock BA Econs., BEd Hons. Non-Executive Director and Chairman Greg has had over 25 years’ experience in capital markets practicing in the area of corporate finance. He maintains close links with the stockbroking and investment banking community on behalf of the Company. Directorships held in listed companies over the last three years are as follows: • BMG Resources Ltd – Feb 2017 – current • Golden State Mining Limited – Nov 2018 – current • Cobra Resources PLC – Nov 2018 – current • Group 6 Metals Ltd – Feb 2019 – current • Triangle Energy Limited – Feb 2022 - current Graeme Drew B.Sc.Hons., FAIMM, MASEG Managing Director Graeme has over 40 years’ experience in the exploration industry in Australia and overseas. Prior to co-founding AusQuest Limited he was an Exploration Manager for CRAE and Rio Tinto Exploration Pty Ltd in Western Australia (9 years) and Eastern Australia (4 years). He has wide experience in the search for, and evaluation of, most base and precious metals (notably nickel, copper, gold, uranium, zinc and diamonds). Graeme has developed a passion for the ‘big picture’ and ‘big project’ generation which he strongly believes are the building blocks for successful exploration outcomes. Graeme has held no other directorships in listed companies over the last three years. Christopher Ellis B.Sc.Hons. Non-Executive Director Chris is an experienced mining executive with over 30 years’ experience in geology, exploration, mine planning and project development in Australia and overseas. He was a founding member and Executive Director of Excel Coal Limited which was the subject of a take-over bid by the US coal giant Peabody Energy Inc, and has held senior positions within Shell Coal’s Exploration, BP Coal (London and USA), Agipcoal Australia and the Stratford Joint Venture. Directorships held in listed companies over the last three years are as follows: • Group 6 Metals Ltd - 8 November 2012 - current Henko Vos Company secretary Mr Vos is a member of the Governance Institute of Australia and Chartered Accountants Australia & New Zealand with more than 20 years’ experience working within public practice, specifically within the area of audit and assurance both in Australia and South Africa. He holds similar secretarial roles in various other listed public companies in both industrial and resource sectors. He is a Director of Nexia Perth, a mid-tier corporate advisory and accounting practice. AusQuest Limited | 4 Directors’ Report Directors’ meetings The following table sets out the number of directors’ meetings (including meetings of committees of directors) held during the financial year and the number of meetings attended by each director (while they were a director or committee member). During the financial year 5 board meetings, 2 audit committee meeting and 1 nomination and remuneration committee meeting were held. Board of Directors Directors Greg Hancock Graeme Drew Christopher Ellis Eligible to attend 5 5 5 Attended 5 5 5 Nomination and Remuneration committee Eligible to Attended attend 1 1 1 1 1 1 Audit committee Eligible to attend 2 2 2 Attended 2 2 2 Directors’ shareholdings The following table sets out each director’s relevant interest in shares, debentures, and rights or options in shares or debentures of the Company or a related body corporate as at the date of this report. Directors Greg Hancock Graeme Drew Chris Ellis Fully paid ordinary shares Number 4,586,415 19,323,409 183,712,800 Share options (Unlisted) Number 10,000,000 20,000,000 10,000,000 AusQuest Limited | 5 Directors’ Report Review Of Operations HIGHLIGHTS – YEAR IN REVIEW Australia – Copper, Gold, Zinc, Nickel  Potential for Broken Hill Type (BHT) mineralisation confirmed by wide-spaced drilling at the Balladonia Project. Gravity surveys have commenced along the Tea Tree Trend to prioritise targets for drilling.  At least eight potential massive sulphide and/or graphitic targets defined by a VTEM survey at Balladonia. Ground EM surveys are planned to prioritise targets for drilling.  Thick coarse-grained magnetite confirmed in multiple drill-holes at the Morrisey Project, highlighting the potential for a magnetite resource capable of producing a premium product (>70% Fe). Davis Tube Recovery (DTR) test work is underway.  Drilling at the Latham Ni-Cu-PGE prospect (Moora Project) planned to commence in Q4 2024 to locate prospective host rocks inferred from earlier soil sampling and magnetic modelling results. Peru – Copper-Gold  Permits received for drilling at the Cangallo Porphyry Copper Prospect. A total of 20 drill pads have been sited to test beneath surface copper anomalies and target areas identified beneath the cover.  The Lantana Porphyry Copper Prospect was advanced to the drilling stage, with permit applications for 19 drill pads to be submitted. A large-scale (~2km x 1km) porphyry copper (+/- gold) target was defined by highly anomalous copper values at surface (19 samples >1.0% Cu).  The identification of copper mineralisation within outcropping mantos (Fe) at Playa Kali upgraded this Project to drill status. Multiple magnetic targets have been defined for drill testing.  Discussions (including site visits) continued throughout the year with parties who expressed interest in the Company’s copper projects. Discussions are ongoing. Corporate  The Strategic Alliance Agreement (SAA) with a wholly-owned subsidiary of South32 Limited (South32) was extended for a further two-year period until December 2025. The SAA remains focused on developing highpotential exploration opportunities in Australia primarily targeting copper, zinc and nickel. AusQuest Limited | 6 Directors’ Report Figure 1: AusQuest Project Locations in Australia and Peru. REVIEW OF PROJECTS AUSTRALIA BASE METALS: COPPER, GOLD, ZINC and NICKEL AusQuest controls approximately 3,700km² of exploration title within Australia – 3,300km² within Western Australia (WA), 250km² within Queensland (QLD) and 165km² in South Australia (SA). Four of the seven projects (Balladonia, Morrisey, Moora and Jubilee) are currently subject to the Strategic Alliance Agreement (SAA) with a wholly-owned subsidiary of South32 Limited (South32), while three (Hamilton, Mt Davis and Coober Pedy) are 100%-owned by AusQuest (Figure 1). Balladonia Base Metal Project (AQD 100% subject to SAA) The Balladonia Project covers an area of 1,224km² and is located ~50km south of the Nova-Bollinger nickel-copper deposit within the Fraser Range region of WA. Exploration results have indicated the potential for multiple mineralisation styles with many potential targets identified, including areas that are prospective for nickel and copper mineralisation similar to the Nova deposit as well as iron-oxide copper-gold (IOCG) and Broken Hill Type (BHT) deposits similar to those found in the Eastern Succession (NW Queensland) and in NSW. More recently, the potential for rare earth elements (REE) associated with carbonatite intrusions has also been recognised. Wide-spaced regional drilling has confirmed the presence of highly prospective stratigraphy (thin banded iron formation (BIF) and garnetiferous quartzites), allowing comparisons to be made with the geological setting of largescale base metal deposits in north-west Queensland and at Broken Hill. Interpretation of geochemical data from the drilling program showed that potassic (K) alteration (sodium (Na) depletion) within the host stratigraphy is associated with anomalous lead values (>100ppm Pb), making it a key proximity indicator for base metal mineralisation. Drill-holes 23BDDD019 at Tea Tree and 23BDDD021 at Tea Tree North were identified as being the closest drill-holes to possible BHT mineralisation based on the alteration parameters. Both holes have magnetic and gravity targets nearby that have not been tested by drilling. AusQuest Limited | 7 Directors’ Report Figure 2: Balladonia Project showing BHT target areas and VTEM targets for follow-up ground surveys. Exploration for BHT mineralisation at Balladonia will now be focused on the Tea Tree Trend (>20km strike length), where detailed gravity surveys have commenced to help prioritise targets ahead of further drilling (Figure 2). The drilling program also highlighted the potential for more carbonatite intrusions, suggesting that there could be potential for rare earth elements (REE) in the area. Previous shallow drilling intersected anomalous REEs which may be related to carbonatite intrusive activity. During the year, a helicopter-borne electromagnetic survey (VTEM) was completed, highlighting at least eight bedrock conductors that may reflect massive sulphide and/or graphitic source rocks. The conductors are discrete in nature (~200m to 1,000m in length) and have anomalous late-time VTEM responses indicative of strong conductors (Figure 2). Ground EM surveys are planned to confirm the conductivity, depth and shape of these conductors to help prioritise targets ahead of possible drill testing in 2025. The Company continues to be encouraged by the results at Balladonia, which suggest a highly prospective region for the discovery of large-scale base metal and possibly rare earth element deposits. Morrisey Magnetite Project (100% AQD subject to SAA) The Morrisey Project, which covers an area of ~1,000km², is located within the Mid-West Mining District ~170km from the Port of Geraldton in WA. Reconnaissance drilling completed in 2022 to test magnetic targets intersected coarse-grained magnetite mineralisation at two prospects (Sandfly and Waterfall). Beneficiation test-work showed that a premium iron product (>70% Fe) could be produced from this material. AusQuest Limited | 8 Directors’ Report During the year, Reverse Circulation (RC) drilling was completed at three prospects, confirming the presence of magnetite mineralisation at both Waterfall and Bilga South. At the Waterfall prospect, a total of 15 holes for 3,060m were completed along sections ~150m apart with drill-holes at 100m intervals to assess the continuity of mineralisation. Iron grades averaging 22% -35% Fe were recorded within banded iron formation (BIF) over thicknesses up to 116 metres with low levels of deleterious material (aluminium, sulphur and phosphorous) (Figure 3). Figure 3: Waterfall Prospect – gravity image showing location of RC drill-holes and significant Fe assays. Petrographic work on selected samples across the prospect confirmed the coarse-grained nature of the magnetite (up to 2mm) with grains having sharp boundaries and internal fractures, suggesting they should be easy to separate from the other minerals using magnetic separation methods. Davis Tube Recovery (DTR) test work was initiated on 96 composite drill samples (6m-10m composites) in order to understand potential recoveries and product grades that could be produced through beneficiation. Results from this test work are expected early Q4 2024, which will help determine the future work priorities for the project, including drilling. The BIF at Waterfall extends over a strike length of at least 750 metres, with the mineralisation open in all directions. The mineralisation has a relatively shallow easterly dip (~30 to 45°) and occurs at shallow depths (<50 metres) on most drilled sections. RC drilling at the Bilga South (1 hole/228m) and Toola (2 holes/362m) prospects also intersected magnetite but with a finer grain-size, and within mafic host rocks. Composite samples from the initial drill-hole at Bilga South were also submitted for DTR test work. AusQuest Limited | 9 Directors’ Report Jubilee Lake Nickel-Copper-PGE Project (100% AQD subject to SAA) The Jubilee Lake Project covers an area of ~350km² and is located within a large flood basalt terrane approximately 500km east of Kalgoorlie in WA. Mafic/ultramafic intrusions associated with the Rodona Shear are considered prime targets for nickel-copper-PGE sulphide deposits, similar to those found at the giant Norilsk deposits in Russia, and more locally at Nebo-Babel (Oz Minerals) and possibly at Nova-Bollinger (IGO). During the year, tenements were rationalized to retain all key areas of interest. The Company remains hopeful that heritage clearance surveys will be possible during FY 2025 to enable drilling to commence. Moora Nickel-Copper Project (100% AQD subject to SAA) The Moora Project, which covers an area of ~570km², is located ~150km north of Perth (WA) within the Jimperding Metamorphic Belt that hosts the Julimar nickel-copper-PGE deposit. Detailed magnetic and gravity surveys at Moora have outlined potential mafic/ultramafic intrusions with similarities to the Gonneville Intrusion that hosts the mineralisation at Julimar. During the year, soil sampling over the Latham Intrusion supported the presence of ultramafic host rocks beneath the gabbro intersected by the first round of drilling (2023), as inferred by computer modelling of the magnetic and gravity data. An RC drilling program (2 holes/~500m) to test beneath the gabbro has been designed and is expected to be completed during Q4 2024 (Figure 4). The ultramafic host rocks within the Gonneville Intrusion at Julimar are known to be strongly magnetic, suggesting that similar magnetic rock types within the Latham intrusion should be high-priority targets for discovering nickelcopper-PGE mineralisation. Figure 4: Latham Prospect – magnetics, gravity and surface geochemical responses plus proposed drill sites. AusQuest Limited | 10 Directors’ Report Hamilton Copper Project (AQD 100%) The Hamilton Project, which covers an area of ~250km², is located in north-west Queensland, ~120km south of the Cannington mine. Wide-spaced drilling of magnetic and gravity targets in this area has provided evidence for “near-miss” situations for the discovery of Iron Oxide-Copper-Gold (IOCG) mineralisation. The Project covers a belt of magnetic rocks that extends over a strike length of approximately 30km under Eromanga Basin cover, which is approximately 200m thick. Numerous magnetic targets within this belt have not been tested by drilling. A review of the Company’s drilling database has highlighted at least one magnetic target at the Hamilton South prospect, within an area of strong potassic, calcic and iron alteration in basement rocks, that has not been tested by drilling. An application to renew the two Exploration Licences for a further two-year period was submitted to Government. A response is pending. Mt Davis Lead-Zinc-Copper Project (AQD 100%) The Mt Davis Project, which is located ~180km NNE of Wiluna in WA, covers an area of ~380km² along the northern margin of the Earaheedy Basin. Evidence suggests that the project contains similar stratigraphy to Rumble Resource’s prospect on the southern side of the Basin, where extensive strataform lead, zinc (+/- copper) mineralisation has been discovered below the Frere Iron Formation. A detailed VTEM Max survey (~1,050km) was completed over key target areas in July 2024 to identify base metal targets for testing (Figure 5). The survey was part-funded (50%) under the WA Government’s “Co-Funded Geophysics Program”. Figure 5: Mt Davis Project showing VTEM Survey relative to inferred locations of the Frere Iron Formation AusQuest Limited | 11 Directors’ Report Coober Pedy Copper-Gold Project (AQD 100%) The Coober Pedy Project, which covers an area of ~170km², is located ~100km NW of the Prominent Hill Copper Gold deposit in SA. The project sits on the north-eastern margin of the Gawler Craton in a similar geological setting to known IOCG deposits in the region. Magnetic and gravity data, together with results from wide-spaced historic drilling, have highlighted the possibility of IOCG mineralisation occurring in this area. A detailed gravity survey has been planned and is expected to be completed late September/early October2024 to identify targets for drilling. Cover in this area is less than 100m thick. New Opportunities and Project Generation (Australia) The Company continues to undertake project generation studies across Australia, targeting new base metal (copper, zinc and nickel) opportunities for consideration under the SAA. PERU: COPPER-GOLD AusQuest controls ~310km² of exploration title within southern Peru – one of the world’s most prominent destinations for international copper exploration (Figure 6). Detailed aeromagnetic data acquired by the Company has been used to identify prospective areas for porphyry copper and/or IOCG deposits that are likely to occur beneath the extensive cover in the south of the country. Figure 6: Peru - Project locations in relation to major copper mines and new developments in southern Peru During the year, a search for joint venture partners was initiated with the aim of more rapidly advancing the Company’s Projects. A number of interested parties have reviewed AusQuest’s data and completed site visits - discussions are continuing. All current projects in Peru are 100%-owned by AusQuest. AusQuest Limited | 12 Directors’ Report Drill permitting at several prospects is being completed to enable drilling to take place when and if agreements with joint venture partners are finalised. If no reasonable offers are received, the Company is planning to drill selected porphyry copper and IOCG targets in its own right. Cerro de Fierro Copper Project (AQD 100%): The Cerro de Fierro Project is located in southern Peru ~150km SE of the Mina Justa copper deposit (~475Mt @ 0.68% Cu), which is being developed by the Marcobre Joint Venture. Exploration within the project area has located widespread copper anomalism at surface related to potential ironoxide copper-gold (IOCG) and/or porphyry copper systems that are likely to occur within the area. Drilling to date has intersected sub-economic copper grades in many drill-holes as well as identifying alteration and pathfinder geochemistry that supports the potential of the area to host multiple mineralised systems. During the year, the Lantana porphyry copper prospect was advanced by further mapping and sampling which identified mineralised intrusive porphyry dykes containing anomalous copper with pathfinder elements also supporting the possibility of nearby porphyry copper mineralisation. Lantana is now considered a high-priority copper target due to the large scale of the prospect (~2km x 1km), the widespread occurrences of highly anomalous copper (30 samples >0.5% Cu including 19 >1.0% Cu) and molybdenum (25 samples >5ppm Mo up to 77ppm Mo) values located marginal to outcropping lithocaps, and evidence of potential fluid pathways which suggest proximity to a mineralised porphyry (Figure 7). Figure 7: Lantana Porphyry Prospect showing anomalous Cu, Mo and Bi values and planned drill sites. A drilling program to test the Lantana Porphyry Copper Prospect has been designed and permitting for access and drill pad construction initiated. Approvals are expected in H1 2025. AusQuest Limited | 13 Directors’ Report A review of the Company’s Iron-Oxide Copper-Gold (IOCG) drilling database identified an untested area along strike from copper-gold mineralisation intersected in drill-hole CDFDD003. An RC drilling program (4 holes for 1,012m) was subsequently completed, confirming the continuity of copper mineralisation across the area, but at grades similar to those reported from earlier drilling. Results from several of the drill-holes indicate that mineralisation may be improving with depth, highlighting a possible connection with deep magnetic targets (at ~500m depth) to the north which remain untested. Cangallo Copper Project (AQD 100%) The Cangallo Project is located approximately 20km west of the Company’s Cerro de Fierro Project, within the same E-W structural corridor that is thought to control the emplacement of potential porphyry copper systems in the region. The tenements cover an area of ~ 40km² and are located 10km from the coast, close to infrastructure. Geological mapping and rock-chip sampling has identified a partially exposed copper (+/- gold) porphyry system within a large-scale (5km x 2km) caldera-like structure which contains extensive colluvial and younger sediment cover. Detailed geological mapping and further surface sampling was completed during the year, identifying several phases of intrusive diorites, areas of intense veining (quartz) and narrow porphyritic dykes. Anomalous copper and molybdenum values (up to 0.64% Cu and 42ppm Mo) are widespread across the prospect, with the most anomalous samples occurring in areas of more intense veinin