Level 2, 23 Barrack Street Perth WA 6000

PO Box Z5369 St. George’s Terrace WA 6831

T +61 8 9488 5100 F +61 8 9488 5199

cosec@alturamining.com alturamining.com

Altura Mining Limited ABN 39 093 391 774

Not for distribution or release in the United States

ASX ANNOUNCEMENT 2 December 2019

PROPOSED DEBT REFINANCING Altura Mining Limited (ASX:AJM) has commenced discussions with potential investors with an aim to refinance its current loan note debt. One of the options for the proposed refinancing is a potential issue of senior secured notes, subject to market and other conditions. In connection with the proposed refinancing, the Company proposes to provide certain investors with a confidential offering memorandum describing the Company and its business. The Company is releasing to the market a copy of the offering memorandum in accordance with Listing Rule 3.10.4 that includes information in relation to its business, results of operations and financial condition. If the proposed re-financing proceeds, the Company will update the market with the material terms as and if they are agreed. Neither this notice nor the attached document constitutes an offer to sell or the solicitation of an offer to buy any securities of the Company. Any securities offered by the Company in the proposed refinancing will not be registered under the United States Securities Act of 1933 or the securities laws of Australia or any other jurisdiction. Any such securities may not be offered or sold in the United States without registration under the US Securities Act or an applicable exemption from such registration requirements. About Altura Mining Limited (ASX: AJM) Altura is a key player in the global lithium market and is leveraging increasing demand for raw materials for manufacturing lithium ion batteries for electric vehicles and static storage uses. Altura owns and operates the world-class Altura Lithium Project at Pilgangoora in WA’s Pilbara, which has a production capacity of 220,000tpa of quality spodumene concentrate. The Company has completed a Definitive Feasibility Study on a potential Stage 2 expansion, with a Final Investment Decision to be taken depending on market conditions, securing funding for the expansion and entering into long-term offtake agreements with customers. For further information: Joe Dowling, Investor Relations Manager (+ 61 428 479 031)

Table of Contents

Page

Forward-Looking Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . viiiPresentation of Financial and Other Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . xiGlossary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . xviSummary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1Risk Factors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11Selected Financial Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46Management’s Discussion and Analysis of Financial Condition and Results of Operations . . . . . . 51Lithium Market Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66Our Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78Australian Legal Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93Our Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 101Principal Shareholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 109Related Party Transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 110Independent Auditors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 215Limitation of Liability of Independent Auditors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 215Index to Financial Statements and Our Consolidated Financial Statements . . . . . . . . . . . . . . . . . F-1Appendix A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-1

i

FORWARD-LOOKING STATEMENTS

Specific statements contained in this offering memorandum are forward-looking statements. Theforward-looking statements can usually be identified by the use of forward-looking terminology such as‘‘believes’’, ‘‘expects’’, ‘‘may’’, ‘‘intends’’, ‘‘will’’, ‘‘shall’’, ‘‘should’’ or ‘‘anticipates’’, or the negativethereof or other variations thereon or comparable terminology, or by discussions of business goals,strategy, plans and intentions, but not all forward-looking statements include these words. Allstatements other than statements of historical fact included in this offering memorandum are forward-looking statements, including statements regarding our future productive levels, capital expenditure,financing, offtake agreements, Stage 2 of the Altura Lithium Mine (‘‘Stage 2’’), future demand forlithium, future lithium prices and other prospective matters. Although we believe these statements arebased upon reasonable current assumptions and expectations, no assurance can be given that the futureresults referred to by the forward-looking statements will be achieved. If one or more of theassumptions underlying our forward-looking statements proves incorrect, then actual results, levels ofactivity, performance and achievements could differ significantly from those expressed in, or implied by,the forward-looking statements contained in this offering memorandum. Therefore, we caution you notto place undue reliance on our forward-looking statements.

Forward-looking statements are subject to risks, uncertainties and other factors that could causeactual results to differ materially from future results expressed or implied by the forward-lookingstatements. These risks, uncertainties and other factors include, among others:

• changes in the demand for, and price of, spodumene concentrate;

• invalidation, revocation or unenforceability of our mining leases, licenses and agreements;

• risks and hazards inherent to the mining industry;

• loss of, or a significant reduction in orders from, any of our customers;

• a downturn of the Chinese or general economy, resulting in lower demand for our spodumeneconcentrate and lower lithium prices;

• inability of our contractors and subcontractors to perform in accordance with their agreementsor our expectations;

• decrease in the growth in demand for electric vehicles;

viii

• development and adoption of new battery technologies that rely on inputs other than lithiumcompounds;

• sustained or material declines in lithium prices;

• depletion and unavailability of our groundwater resources;

• interruptions in the supply of, or increases in the prices for, energy, power and raw materialssuch as electricity, oil fuel and chemicals;

• failure to realize or recover our lithium ore reserve estimates or realize the anticipated life ofthe Altura Lithium Mine;

• disputes with counterparties and other contract-related risks;

• failure to successfully execute certain divestments and relinquishments in the pursuit of ourbusiness strategy;

• unforeseen geological, physical or meteorological conditions, climate change, natural disasters orcyclones;

• inability to complete our planned or future development projects and expansion activities;

• inability to compete with competitors with greater resources;

• failure to obtain additional financing on commercially acceptable terms;

• inability to adjust production in response to changes in demand;

• failure to comply with extensive environmental, health and safety laws and regulations andproduction standards;

• the existence of unresolved native title claims against our mining tenements;

• operational difficulties, occupational and environmental hazards and other risks which coulddamage our reputation or subject us to liability claims;

• failure to satisfy customers’ or governments’ quality standards;

• deterioration of our customers’ credit worthiness and their failure to settle trade and otherreceivables;

• inability to secure effective transportation and infrastructure;

• failure to obtain adequate insurance coverage to cover potential losses, liabilities and damagesrelating to our operations;

• failure to maintain technological competitiveness with other lithium producers;

• inability to attract and retain suitably qualified personnel and management;

• labor disruptions affecting our operations;

• volatility in the U.S. dollar to Australian dollar exchange rate;

• adverse outcomes in legal proceedings against us;

• difficulties in integrating and developing acquired assets or investments;

• inability to protect our intellectual property rights; and

• the other factors identified in the section entitled ‘‘Risk Factors’’ and elsewhere in this offeringmemorandum, all of which we urge prospective investors to consider carefully.

ix

We do not undertake any obligation to release publicly any revisions to such forward-lookingstatements after the date of this offering memorandum to reflect later events or circumstances or toreflect the occurrence of unanticipated events. These cautionary statements should be considered inconnection with any written or oral forward-looking statements that we may issue in the future.

x

PRESENTATION OF FINANCIAL AND OTHER INFORMATION

Presentation of financial information

Our annual and interim consolidated financial statements for each period included in this offeringmemorandum, have been prepared in accordance with Australian Accounting Standards and complywith International Financial Reporting Standards as issued by the International Accounting StandardsBoard (‘‘IFRS’’). Australian Accounting Standards and IFRS differ from generally accepted accountingprinciples in the United States (‘‘U.S. GAAP’’), and those differences may be material to the financialinformation contained in this offering memorandum. Prospective investors should consult with theirown potential advisers as to potential tax, financial and related consequences and for an understandingof the differences between Australian Accounting Standards and IFRS, and U.S. GAAP and how thosedifferences may affect the financial information contained in this offering memorandum. This offeringmemorandum does not include a reconciliation of our financial statements to financial statements thatwould be prepared in accordance with U.S. GAAP.

Our fiscal years end on June 30 of each year, with the next fiscal year beginning July 1. In thisoffering memorandum, references to ‘‘fiscal 2019’’ are to the fiscal year ended June 30, 2019,references to ‘‘fiscal 2018’’ are to the fiscal year ended June 30, 2018 and references to ‘‘fiscal 2017’’are to the fiscal year ended June 30, 2017.

Rounding adjustments

Certain figures included in this offering memorandum have been subject to rounding adjustments.Accordingly, figures shown as totals in certain tables may not be an exact arithmetic aggregation of thenumbers that precede them. Percentage figures included in this offering memorandum have not in allcases been calculated on the basis of such rounded figures but on the basis of such amounts prior torounding. For this reason, certain percentage amounts in this offering memorandum may vary fromthose obtained by performing the same calculations using the figures in the financial statements andour consolidated financial statements. Certain other amounts that appear in this offering memorandummay not sum due to rounding.

Non-GAAP financial measures

Certain ‘‘non-GAAP financial measures’’ (as defined in Regulation G under the Exchange Act)have been included in this offering memorandum. In particular, in this offering memorandum, suchmeasures include:

• ‘‘Cash costs’’, which is a measure of the direct cash costs of producing and selling our product,including all mining, processing, and site administration costs as well as freight to port, porthandling charges and ship loading costs;

• ‘‘EBITDA’’, which we define as the aggregate of our revenue and other income less theaggregate of our net operating expenses and administration and general expenses for therelevant period from continuing operations, on a combined basis (that is, by reference to ourconsolidated financial statements); and

• ‘‘EBITDAX’’, which we define as EBITDA less the non-cash net foreign exchange gain or lossrelating to the revaluation of the US$ funding facility and other US$ denominated funds held bythe Group.

We believe these non-GAAP financial measures are useful supplemental measures to assistmanagement and investors to examine the underlying performance of our business and our ability toservice our debt. Management considers these metrics in measuring our operating performance. Thesenon-GAAP financial measures are not required by or presented in accordance with Australian

xi

Accounting Standards or IFRS and these measures, as we calculate them, may not be comparable tosimilarly titled measures reported by other companies.

For more information on EBITDA and EBTIDAX, including a reconciliation of EBITDA andEBITDAX to net profit (loss) before income tax for fiscal 2019, fiscal 2018, fiscal 2017 and the threemonth periods ended September 30, 2019 and 2018, see ‘‘Selected Financial Information’’. Managementbelieves that EBITDA and EBITDAX provide useful information about the cash generating capacity ofour business, however they have limitations as analytical tools and should not be considered inisolation. Some of these limitations are:

• they do not reflect cash outlays for capital expenditures or contractual commitments;

• they do not reflect changes in, or cash requirements for, working capital;

• they do not reflect the interest expense or cash requirements necessary to service interest orprincipal payments on indebtedness; and

• although depreciation and amortization are non-cash charges, the assets being depreciated oramortized will often have to be replaced in the future and EBITDA and EBITDAX do notreflect cash requirements of such replacements.

Similarly, management believes that cash costs is a useful measure for understanding the potentialprofitability of our operation in isolation from our financing structure, tax position and the capitalinvestment we have made to bring the Altura Lithium Mine into production. However, it excludescertain costs that we must incur to operate our business, including export freight, royalties, explorationand corporate costs, as well as charges that, although they are non-cash, are nevertheless necessary tounderstand the overall economics of our business.

Industry, market data and third party information

We obtained the market and industry data and other statistical information used throughout thisoffering memorandum from our own research, surveys or studies conducted by third parties,independent industry or general publications and other published independent sources. Wecommissioned a report on the global lithium market from Benchmark Mineral Intelligence (‘‘BMI’’), amineral industry consulting firm that compiles market data on a range of minerals and metals. Wereport a number of BMI’s findings, estimates and forecasts in the ‘‘Lithium Market Overview’’ sectionof this offering memorandum. This data has not been independently verified and neither we nor theJoint Lead Managers make any representation as to the accuracy or completeness of this data or theassumptions on which it relies.

The information relating to us included in this offering memorandum has been derived from publicinformation or provided by us. Such publicly available information, except as it relates to us, has notbeen independently verified by us or the Joint Lead Managers. Where we have sourced informationfrom a third party, such as industry publications and surveys that generally state that they haveobtained information from sources believed to be reliable, but do not guarantee the accuracy andcompleteness of such information, we believe that such information has been accurately reproducedand, as far as we are aware and are able to ascertain from such information, no facts necessary for thereview of such information for the purpose for which it was included herein have been omitted whichwould render the reproduced information inaccurate or misleading. While we believe that theseindustry publications and surveys are reliable, none of us or the Joint Lead Managers hasindependently verified such data, and none of us or the Joint Lead Managers make any representationsas to the accuracy of such information.

xii

Ore Reserve and Mineral Resource estimates

In the Australian mining industry, the reporting of Exploration Results, Ore Reserves and MineralResources, are defined in and governed by the Australasian Code for Reporting of Exploration Results,Mineral Resources and Ore Reserves 2012 Edition (the ‘‘JORC Code’’) prepared by the Joint OreReserves Committee of the Australasian Institute of Mining and Metallurgy, Australian Institute ofGeoscientists and Minerals Council of Australia (‘‘JORC’’).

Definitions

Under the JORC Code, unextracted quantities of mineral-bearing materials are divided into threecategories: Exploration Results, Mineral Resources and Ore Reserves.

‘‘Exploration Results’’ include data and information generated by mineral exploration programsthat might be of use to investors but which do not form part of a declaration of Mineral Resources orOre Reserves.

A ‘‘Mineral Resource’’ is a concentration or occurrence of solid material of economic interest in oron the Earth’s crust in such form, grade (or quality) and quantity that there are reasonable prospectsfor eventual economic extraction. The location, quantity, grade (or quality), continuity and othergeological characteristics of a Mineral Resource are known, estimated or interpreted from specificgeological evidence and knowledge, including sampling. Mineral Resources are sub-divided, in order ofincreasing geological confidence in the estimate, into Inferred, Indicated and Measured MineralResources.

• An ‘‘Inferred Mineral Resource’’ is that part of a Mineral Resource for which quantity andgrade (or quality) are estimated on the basis of limited geological evidence and sampling.Geological evidence is sufficient to imply but not verify geological and grade (or quality)continuity. It is based on exploration, sampling and testing information gathered throughappropriate techniques from locations such as outcrops, trenches, pits, workings and drill holes.An Inferred Mineral Resource has a lower level of confidence than that applying to an IndicatedMineral Resource (see below) and must not be converted to an Ore Reserve. It is reasonablyexpected that the majority of Inferred Mineral Resources could be upgraded to IndicatedMineral Resources with continued exploration.

• An ‘‘Indicated Mineral Resource’’ is that part of a Mineral Resource for which quantity, grade(or quality), densities, shape and physical characteristics are estimated with sufficient confidenceto allow application of considerations used to convert Mineral Resources to Ore Reserves, whichinclude, but are not limited to, mining, processing, metallurgical, infrastructure, economic,marketing, legal, environmental, social and governmental factors (‘‘Modifying Factors’’) insufficient detail to support mine planning and evaluation of the economic viability of the deposit.Geological evidence is derived from adequately detailed and reliable exploration, sampling andtesting gathered through appropriate techniques from locations such as outcrops, trenches, pits,workings and drill holes, and is sufficient to assume geological and grade (or quality) continuitybetween points of observation where data and samples are gathered. An Indicated MineralResource has a lower level of confidence than that applying to a Measured Mineral Resourceand may only be converted to a Probable Ore Reserve.

• A ‘‘Measured Mineral Resource’’ is that part of a Mineral Resource for which quantity, grade(or quality), densities, shape and physical characteristics are estimated with confidence sufficientto allow the application of Modifying Factors to support detailed mine planning and finalevaluation of the economic viability of the deposit. Geological evidence is derived from detailedand reliable exploration, sampling and testing gathered through appropriate techniques fromlocations such as outcrops, trenches, pits, workings and drill holes, and is sufficient to confirm

xiii

geological and grade (or quality) continuity between points of observation where data andsamples are gathered. A Measured Mineral Resource has a higher level of confidence than thatapplying to either an Indicated Mineral Resource or an Inferred Mineral Resource. It may beconverted to a Proved Ore Reserve or under certain circumstances to a Probable Ore Reserve.

An ‘‘Ore Reserve’’ is the economically mineable part of a Measured Mineral Resource and/or anIndicated Mineral Resource. Ore Reserve estimates include diluting materials and allowances for losses,which may occur when the material is mined or extracted and are defined by studies at pre-feasibilityor feasibility level as appropriate that include application of Modifying Factors. Such studiesdemonstrate that, at the time of reporting, extraction could reasonably be justified. The reference pointat which Ore Reserves are defined, usually the point where the ore is delivered to the processing plant,must be stated. It is important that, in all situations where the reference point is different, such as for asaleable product, a clarifying statement is included to ensure that the reader is fully informed as towhat is being reported. Ore Reserves are sub-divided, in order of increasing confidence, into ProbableOre Reserves and Proved Ore Reserves.

• A ‘‘Probable Ore Reserve’’ is the economically mineable part of an Indicated Mineral Resource,and in some circumstances, a Measured Mineral Resource. The confidence in the ModifyingFactors applying to a Probable Ore Reserve is lower than that applying to a Proved OreReserve.

• A ‘‘Proved Ore Reserve’’ is the economically mineable part of a Measured Mineral Resource. AProved Ore Reserve implies a high degree of confidence in the Modifying Factors.

Mineral Resources may therefore be viewed as the estimation stage prior to the application of morestringent criteria for definition of an Ore Reserve, such as a rigorously defined cut-off grade and minedesign outlines, along with allowances for dilution and losses during mining. Under this system ofreporting, companies may include in the Mineral Resource category material with a high expectation ofconversion to Ore Reserves, but for which final technical and economic viability has not beendetermined.

U.S. definitions

Historically, the reporting of Ore Reserves and Mineral Resources in Australia under the JORCCode and in the United States under the requirements adopted by the SEC in its Industry Guide 7have differed. Until recently, a principal difference has been the absence in the United States of anyprovision for the reporting of estimates other than Proven or Probable Reserves.

Under the United States requirements as adopted by the SEC in its Industry Guide 7, a ‘‘reserve’’is defined as ‘‘that part of a mineral deposit which could be economically and legally extracted orproduced at the time of the reserve determination.’’

‘‘Proven (Measured) Reserves’’ are defined as reserves for which (a) the quantity is computed fromdimensions revealed in outcrops, trenches, workings or drill holes and grade or quality is computedfrom the results of detailed sampling; and (b) the sites for inspection, sampling and measurement arespaced so closely and the geologic character is so well defined that size, shape, depth and mineralcontent of reserves are well established.

‘‘Probable (Indicated) Reserves’’ are defined as reserves for which quantity and grade or qualityare computed from information similar to that used for Proven (Measured) Reserves, but the sites forinspection, sampling and measurement are farther apart or are otherwise less adequately spaced. Thedegree of assurance, although lower than that for Proven (Measured) Reserves, is high enough toassume continuity between points of observation.

xiv

On October 31, 2018, the SEC adopted comprehensive property discourse rules modernizing U.S.disclosure requirements for companies with material mining operations. The new rules rescind IndustryGuide 7 as of January 1, 2021 and establish a new Subpart 1300 of Regulation S-K, which will requiredisclosure in the SEC filings of mineral resources, mineral reserves and material explorations resultsfrom material mining operations. One of the major changes will permit mining registrants to reportestimates of mineral resources in their SEC filings. The SEC permits mining companies to adopt thenew rules before they become mandatory.

Our Ore Reserve and Mineral Resource estimates

The Ore Reserves and Mineral Resources referred to in this offering memorandum are reported inaccordance with the JORC Code. The successive versions of the JORC Code have been incorporatedinto the listing rules of the ASX (the ‘‘ASX Listing Rules’’). When Ore Reserves and MineralResources are reported under the JORC Code, the Ore Reserve figures (tonnage and grade) areincluded within the Mineral Resource figures (tonnage and grade).

Information contained in this offering memorandum relating to our estimated Ore Reserves andMineral Resources was prepared by our employees and independent consultants. Any informationprepared for the purpose of informing investors or potential investors and their advisors on ourestimated Ore Reserves and Mineral Resources must be based on, and fairly reflect, information andsupporting documentation prepared by a Competent Person. A Competent Person for the purposes ofthe JORC Code is a minerals industry professional who is a Member or Fellow of The AustralasianInstitute of Mining and Metallurgy, or of the Australian Institute of Geoscientists, or of a RecognizedProfessional Organization as included in a list available on the JORC and ASX websites, and must havea minimum of 5 years relevant experience in the style of mineralization or type of deposit underconsideration and in the activity which that person is undertaking.

Estimates of Ore Reserves, Mineral Resources, recoveries and operating costs are expressions ofjudgment based on knowledge, experience and industry practice. The estimates depend on theinterpretation of geological data obtained from drill holes and other sampling techniques, andfeasibility studies that derive estimates of operating costs based on anticipated tonnage, expectedrecovery rates, equipment operating costs and other factors. No assurance can be given that the OreReserves and Mineral Resources presented in this offering memorandum will be recovered at thequantity, quality or yield presented. In addition, investors should not assume that Mineral Resourceestimates are capable of being directly reclassified as Ore Reserves under the JORC Code. Theinclusion of Mineral Resources estimates should not be regarded as a representation that theseamounts can be economically exploited, particularly Inferred Mineral Resources, and investors arecautioned not to place undue reliance on those estimates.

We estimate our lithium ore reserves using various assumptions regarding loss and dilution, drillingdepth and other geotechnical constraints. Our ore reserves are sensitive to the cost and revenueassumptions we use, which means that, all other factors being the same, if the cost assumption is higheror the price assumption is lower, we may estimate lower ore reserves, and if the cost assumption islower or the price assumption is higher, we may estimate more ore reserves.

Ore Reserves and Mineral Resources in this offering memorandum are reported as of June 30,2019.

Independent review

We have engaged Cube Consulting Pty Ltd to review our Ore Reserves and Mineral Resources. Asummary of their findings is included in Appendix A to this offering memorandum.

xv

GLOSSARY

6% spodumene concentrate . . Our sales product, which is a spodumene concentrate containingapproximately 6% lithium, which has become an industry standard.The actual concentration of lithium may vary slightly from shipment toshipment, with corresponding variations in the sales price per tonne.

A$ . . . . . . . . . . . . . . . . . . . . Australian dollar.

AAS . . . . . . . . . . . . . . . . . . . Australian Accounting Standards.

AASB . . . . . . . . . . . . . . . . . . The Australian Accounting Standards Board.

AHA . . . . . . . . . . . . . . . . . . Aboriginal Heritage Act 1972 (WA).

ASIC . . . . . . . . . . . . . . . . . . The Australian Securities and Investments Commission.

ASX . . . . . . . . . . . . . . . . . . . ASX Limited (ACN 008 624 691), the operator of the AustralianSecurities Exchange.

ASX Listing Rules . . . . . . . . The Listing Rules of the ASX.

BMI . . . . . . . . . . . . . . . . . . Benchmark Mineral Intelligence.

Corporations Act . . . . . . . . . Corporations Act 2001 (Cth).

DFS . . . . . . . . . . . . . . . . . . . Definitive Feasibility Study.

DMIRS . . . . . . . . . . . . . . . . Department of Mines, Industry Regulation & Safety.

dmt . . . . . . . . . . . . . . . . . . . Dry metric tonnes. We generally quote production statistics in wetmetric tonnes, while sales are made in dry metric tonnes. As a rule ofthumb, to estimate the dry metric tonne quantity of quantity stated inwet metric tonnes, a discount of approximately 6% is applied to adjustfor moisture content. However, actual moisture content can vary.

DMS . . . . . . . . . . . . . . . . . . Dense media separation.

EBITDA . . . . . . . . . . . . . . . . Earnings before interest, tax, depreciation and amortization.

EBITDAX . . . . . . . . . . . . . . . EBITDA less the non-cash net foreign exchange gain or loss relatingto the revaluation of the US$ funding facility and other US$denominated funds held by the Group.

Environmental Protection Act Environmental Protection Act 1986 (WA).

EPBC Act . . . . . . . . . . . . . . Environmental Protection and Biodiversity Conservation Act 1999 (Cth).

EV . . . . . . . . . . . . . . . . . . . . Electric vehicles.

exploration license . . . . . . . . An area over which the holder has the exclusive right to explore forminerals beneath the surface. An exploration license must beconverted to a Mining Lease for extractive mining to occur. See‘‘Australian Legal Matters.’’

FATA . . . . . . . . . . . . . . . . . . Foreign Acquisitions and Takeovers Act 1975 (Cth).

FOB . . . . . . . . . . . . . . . . . . A delivery term that indicates that the shipment is ‘‘free on board,’’and the price payable for the spodumene concentrate at its port oforigin, excluding shipping arrangements.

Fe2O3 . . . . . . . . . . . . . . . . . . The chemical symbol for iron oxide.

xvi

FSMA . . . . . . . . . . . . . . . . . Financial Services and Markets Act 2000.

Ha . . . . . . . . . . . . . . . . . . . . Hectare.

IASB . . . . . . . . . . . . . . . . . . The International Accounting Standards Board.

IFRS . . . . . . . . . . . . . . . . . . International Financial Reporting Standards.

Indicated Mineral Resource . See ‘‘Presentation of Financial and Other Information—Ore Reserveand Mineral Resource Estimates.’’

Inferred Mineral Resource . . See ‘‘Presentation of Financial and Other Information—Ore Reserveand Mineral Resource Estimates.’’

Issuer . . . . . . . . . . . . . . . . . Altura Lithium Operations Pty Ltd (ABN 65 095 384 491).

JORC . . . . . . . . . . . . . . . . . The Joint Ore Reserves Committee of the Australasian Institute ofMining and Metallurgy, Australian Institute of Geoscientists andMinerals Council of Australia.

JORC Code . . . . . . . . . . . . . The Australasian Code for Reporting of Exploration Results, MineralResources and Ore Reserves 2012 Edition.

KPS Power . . . . . . . . . . . . . . KPS Power Generation, a division of Pacific Energy Limited.

Kt . . . . . . . . . . . . . . . . . . . . Kilo tonne, or one thousand tonnes.

LCE . . . . . . . . . . . . . . . . . . Lithium Carbonate Equivalent units, which is a basis for quotingvolumes of lithium-containing compounds that converts them to thequantity of lithium carbonate that would contain an equivalentquantity of lithium.

Li2O . . . . . . . . . . . . . . . . . . The chemical symbol for lithium oxide.

Measured Mineral Resource . See ‘‘Presentation of Financial and Other Information—Ore Reserveand Mineral Resource Estimates.’’

Mineral Resource . . . . . . . . . See ‘‘Presentation of Financial and Other Information—Ore Reserveand Mineral Resource Estimates.’’

Mining Act . . . . . . . . . . . . . . Mining Act 1978 (WA).

Mining Lease . . . . . . . . . . . . Authorization granted by state mining authorities entitling the holderto mine for and dispose of any minerals on the land in respect ofwhich the Mining Lease is granted. See ‘‘Australian Legal Matters.’’

Mining Regulations . . . . . . . Mining Regulations 1981 (WA).

Minister . . . . . . . . . . . . . . . . In relation to the applicable legislation, the Minister responsible forsuch legislation.

Miscellaneous License . . . . . . Licenses granted for certain purposes directly connected with miningoperations as prescribed in the Mining Regulations 1981 (WA).Miscellaneous licenses can be granted over land the subject of (andcan ‘‘co-exist’’ with) other mining tenements. Miscellaneous licensesprovide access to public roads, accommodation and water supply.Theselicenses are granted for a term of 21 years.

Modifying Factors . . . . . . . . . See ‘‘Presentation of Financial and Other Information—Ore Reserveand Mineral Resource Estimates.’’

xvii

Native Title Act . . . . . . . . . . Native Title Act 1993 (Cth).

NES . . . . . . . . . . . . . . . . . . . National Employment Standard.

NGER . . . . . . . . . . . . . . . . . The National Greenhouse and Energy Reporting legislative regime.

NRW . . . . . . . . . . . . . . . . . . NRW Holdings Limited.

Ore Reserves . . . . . . . . . . . . See ‘‘Presentation of Financial and Other Information—Ore Reserveand Mineral Resource Estimates.’’

Pilbara . . . . . . . . . . . . . . . . The Pilbara region of Western Australia.

PPSA . . . . . . . . . . . . . . . . . . Personal Property Securities Act 2009 (Cth)

Probable Ore Reserve . . . . . . See ‘‘Presentation of Financial and Other Information—Ore Reserveand Mineral Resource Estimates.’’

Proved Ore Reserve . . . . . . . See ‘‘Presentation of Financial and Other Information—Ore Reserveand Mineral Resource Estimates.’’

Qube . . . . . . . . . . . . . . . . . . Qube Holdings Ltd.

ROM . . . . . . . . . . . . . . . . . . Run of mine.

Shanshan . . . . . . . . . . . . . . . Ningbo Shanshan Co., Ltd, a parent company of Shanshan ForeverInternational Co., Limited.

strip ratio . . . . . . . . . . . . . . The ratio of total waste to ore mined of a mining operation.

Tabalong Coal Project . . . . . . A joint venture that consists of five mining tenements in SouthKalimantan, Indonesia.

US$ . . . . . . . . . . . . . . . . . . . U.S. dollar.

U.S. GAAP . . . . . . . . . . . . . . Generally accepted accounting principles in the United States.

USGS . . . . . . . . . . . . . . . . . United States Geological Survey.

wmt . . . . . . . . . . . . . . . . . . . Wet metric tonnes. We generally quote production statistics in wetmetric tonnes, while sales are made in dry metric tonnes. As a rule ofthumb, to estimate the dry metric tonne quantity of a quantity statedin wet metric tonnes, a discount of approximately 6% is applied toadjust for moisture content. However, actual moisture content canvary.

xviii

SUMMARY

This summary highlights selected information appearing elsewhere in this offering memorandum. In addition, certain statements are forward-looking statements that involve risks and uncertainties. See ‘‘Forward-Looking Statements.’’

Overview

We own and operate an integrated lithium mine and processing plant at Pilgangoora in the Pilbararegion of north-west Australia. The operation has a nameplate capacity of 220,000 tonnes of lithium-bearing 6% spodumene concentrate. The plant produced its first commercial shipment in October 2018and we declared commercial production in March 2019. We produced 17,951 wmt of spodumeneconcentrate in October 2019, our highest monthly production to date and effectively achievednameplate capacity. We have offtake agreements with four Chinese buyers covering a minimum of220,000 tonnes of concentrate per year with prices set by reference to market prices of spodumeneconcentrate and specialty lithium chemicals. We have completed a definitive feasibility study into aStage 2 expansion of our mine and processing plant that would double our nameplate capacity.

Altura Mining Limited is listed on the ASX with a market capitalization of A$146.2 million as ofNovember 26, 2019.

The Altura Lithium Mine is located approximately 123 kilometers by road from the town of PortHedland in the Pilbara region. The mine is an open cut operation using conventional bulk miningmethods, including drilling and blasting, employing a fleet of excavators and dump trucks to extract oreand transport it to a Run of Mine (ROM) stockpile at the adjacent processing facility. The orebodiesare close to the surface and have required relatively little pre-stripping and pre-production activity. Weestimate that as of June 30, 2019 we had Ore Reserves of 37.6 million tonnes at an average grade of1.08% of Li2O, and Mineral Resources of 45.7 million tonnes at an average grade of 1.06% of Li2O.These Ore Reserve and Mineral Resource estimates have been compiled in accordance with the JORCCode. See ‘‘Reserves and Resources’’ for important information about these estimates. At currentproduction rates, the estimated life of mine is 24 years.

The processing plant has the capacity to process approximately 1.54 million tonnes of ROM oreper year to produce approximately 220,000 tonnes of 6% spodumene concentrate. The plant includes atwo-stage crushing and dry screening circuit, high pressure grinding roll tertiary crushing, wet screeningplant and dense media separation to produce a coarse spodumene product, with a milling andfloatation circuit to produce a fine spodumene product.

Our product is transported by road to a storage shed in Port Hedland for shipping to ourcustomers.

Third party contractors provide contract mining, power, water treatment, onsite laboratory,transport, accommodation and logistics services.

We have offtake agreements with four Chinese buyers, including an integrated lithium compoundsand battery producer, two lithium compounds producers and a strategic lithium product supplier. Theseagreements have expiry dates ranging from December 2021 to December 2024. Under theseagreements, our customers have agreed to buy minimum quantities of 6% spodumene concentratetotaling 220,000 tonnes per year. Prices are set by reference to market prices for battery grade lithiumchemicals, subject, for an initial period, to a floor price of US$550 per dmt and a ceiling price ofUS$950 per dmt on an FOB basis.

1

At the request of our offtake partners, we have completed a definitive feasibility study for Stage 2of our project, which would involve duplicating the existing processing plant, thereby doubling thenameplate capacity of the project to 440,000 tonnes of concentrate. The DFS calculated that Stage 2would generate an additional A$311 million of discounted pre-tax cash flow at a capital cost ofapproximately A$119 million. These estimates are based on a series of important assumptions that arediscussed in more detail under ‘‘Stage 2 definitive feasibility study.’’ A final investment decision toproceed with Stage 2 depends on, among other things, obtaining financing and securing offtakeagreements with customers.

Key Strengths

We believe that the key strengths of our business include:

Established producer of high quality product—We have been a commercial producer of high quality,chemical grade spodumene concentrate since March 2019. To date, we have made 17 shipmentstotalling 142,000 tonnes of 6% spodumene concentrate. Our product is a concentrate that possessesdesirable qualities, low in deleterious elements such as mica and medium iron content. It has beensuccessfully tested in multiple lithium processing facilities where it has been converted to both lithiumcarbonate and lithium hydroxide. Our customers have found it suitable to integrate into their supplychains. Our consistent quality is reflected in our having conformed to our contract specifications withevery shipment to date.

Low cost producer—Our costs of production are relatively low compared to other hard rock lithiumconcentrate producers. Our orebody is well-defined, compact and close to the surface, which enables usto use conventional, inexpensive bulk-mining methods to recover ore, with low stripping costs. Ourcurrent Ore Reserve is sufficient for 24 years of mining at current rates (although we plan to doubleproduction in Stage 2 of the project). Our processing plant is now achieving near nameplate capacityand our operating costs have steadily declined as a result of our continuous improvement program. Ourcash costs in the quarter ended September 30, 2019 were US$365 per wmt produced, and we continueto work to drive our costs towards the A$356 per wmt produced level estimated for Stage 1 in our DFSfor Stage 2.

Future sales supported by forecast long-term lithium demand—We believe that long-term demand forlithium, driven particularly by the battery industry and the expanding market for electric vehicles, willsupport a strong market for our product over time. Benchmark Mineral Intelligence forecasts pricesstabilizing slightly below current levels before increasing towards the middle of the decade as recentlydeveloped capacity is absorbed and some proposed lithium mining projects are delayed as a result ofthe current lower prices.

Straightforward, reliable processing and logistics—Our processing plant uses straightforward, reliableprocessing technology that is relatively inexpensive to operate and easy to maintain. The compact scaleof our plant reduces complexity and limits the quantity of tailings, while the predominantly mechanicalprocess means that the quantity of reagents required is relatively low. The mine, the plant and thewaste dump and tailings storage facility are in close proximity, reducing materials handling costs.Product is transported on trucks via well-maintained roads to the world class Port Hedland facilities forshipment.

Multiple high-quality offtake partners—Our offtake partners are high quality, well-resourcedparticipants in the global lithium battery supply chain. Three of our four offtake partners have their

2

own processing facilities, while the fourth has a plant under construction, which provides us with ahigher assurance of continuing demand compared to selling to traders. Our offtake partners are:

• GFL International Co., Limited, a subsidiary of Ganfeng Lithium, one of the world’s largestproducers of lithium compounds and lithium metals, which owns two lithium processing plants inJiangxi province and produces both lithium carbonate and lithium hydroxide;

• Lionergy Limited, a lithium and battery materials processor that is constructing a lithiumcarbonate processing plant in Inner Mongolia;

• Guangdong Weihua Corporation, a diversified materials company that owns a lithium processingplant in Sichuan province producing both lithium carbonate and lithium hydroxide; and

• Shandong Ruifu Lithium Industry Co., Ltd, a chemical processor that owns a lithium processingplant in Shandong province producing both lithium carbonate and lithium hydroxide.

While our offtake partners are all based in China, having four customers reduces our reliance onany one of them, and, based on our discussions with other lithium producers, we believe that we have anumber of other potential customers for our product.

Ready-to-build expansion option—We have completed a DFS on Stage 2 of our project, whichinvolves doubling our nameplate capacity by building a second processing plant and adding a night shiftto our mining operation. The second processing plant will substantially replicate our existing plant andwe believe that it represents a low-risk development option that will allow us to further lower costs bygenerating economies of scale. Any decision to proceed with Stage 2 will be demand driven, in that weintend to commit to construction only once we have binding offtake contracts at favorable prices inplace, in addition to arranging funding.

Experienced Board and management—Four of our directors have a combined mining industryexperience of more than 150 years, and this mining experience is complemented by the long careers inengineering and chemical processing of our other two directors. Our directors, including our executivedirectors, have extensive experience both developing and profitably operating mining assets while ourBoard also benefits from the chemicals industry expertise of a senior executive of our shareholder andcooperation partner, Shanshan. As we have transitioned from the construction phase to the operationalphase, we have assembled a seasoned operational and corporate team to efficiently run the project andour company, including a chief financial officer, general manager of operations, general manager ofplanning and resource development and general manager of marketing, each of whom has decades ofindustry experience.

Strategy

Our main strategies include:

Optimizing our operations—Since commencing operations, we have undertaken a concerted programof fault rectification, debottlenecking and process improvement to increase our production and reduceour costs. Since October 2019, we have effectively been operating at nameplate capacity, even thoughwe have not yet completed our program of rectification. As our production has increased, our unitcosts have trended lower. As a result of the insights we have gained, we believe that we will be able toreach an operating level where we are consistently exceeding nameplate capacity in terms of tonnesproduced, grade of production, or both. We have established a projects team that solely focuses oncontinuous improvements to the plant and our processes, and we continue to work with vendors toensure that all plant components are performing at design levels. We expect to apply the insights wehave gained to the construction of Stage 2, which we expect to result in a plant that ramps up to fullproduction with stabilized operating costs more quickly than Stage 1.

3

Building Stage 2—Stage 2 represents an opportunity to double the plant’s capacity and at a lowercost than Stage 1 and reduce unit costs through economies of scale. In addition, many of the risksinvolved in developing Stage 1 of the project are significantly reduced or not present in Stage 2. Inparticular, the plant design is now proven and we can apply insights from the construction and ramp-upof Stage 1. Our mining operation is running efficiently, and mining to date has validated ourunderstanding of the geology. Key infrastructure is already constructed, and capacity can be easilyadded to our logistics operations and power plant. We continue to discuss the expansion with ourcurrent and potential offtake partners, and expect to explore options for them to contribute to the costof construction through debt or equity finance and/or forward sales of production. Our decision toproceed will be driven by the demands of our customers.

Developing our relationships with offtake partners and potential offtake partners—We will continue todevelop our relationships with our current offtake partners including by maintaining regularface-to-face contact to ensure that we understand their needs. We also maintain relationships with arange of other participants in the global lithium supply chain that could potentially be buyers of ourproduct or strategic partners in the future. We believe that maintaining these relationships helpsmitigate the risk of any of our current offtake partners ceasing to buy our product, and it also providesus with insights into the global lithium market and technological developments.

Pursuing exploration options—We control or have farm-in rights over a number of explorationtenements in the Pilbara region and an exploration program to evaluate these tenements in amethodical and measured way. Discovering additional spodumene reserves could enable us to extendthe life of the project beyond its currently estimated 24 years (which would be approximately halved ifwe were to complete Stage 2 in the near future). We have also identified a copper-gold prospect namedCleopatra that we will continue to evaluate over the medium term.

Exploring strategic opportunities—Over time, we expect to explore a range of strategic opportunities,which may include opportunities to participate in other parts of the lithium supply chain, such asinvesting in conversion facilities, or participating in a potential consolidation of the relativelyfragmented market for lithium miners. In the short term, however, we will maintain our focus ondriving operational efficiencies and developing Stage 2.

History

We were incorporated in Canada in 1984 as Link Resources Limited and we listed on theAustralian Securities Exchange in 2001 as Haddington International Resources Limited. We acquiredAustralian Tantalum Limited in 2002, which owned exploration license E45/2287, covering the area onwhich our mine is now located. We began exploring this tenement in 2009, initially prospecting for rareearth elements and lithium. Our first discovery of lithium mineralization occurred in 2009 following asuccessful rock chip sampling program. We changed our name to Altura Mining Limited in 2009.

We declared an initial indicated Mineral Resource in 2011, completed a scoping study for a lithiummine and processing plant in 2012, developed a preliminary feasibility study in April 2016 and adefinitive feasibility study in September 2016. After securing funding and regulatory approval, wecommenced development during 2017.

Over the years, we have held interests in a variety of other mineral exploration and productionassets as well as owning a drilling company. We have largely divested assets other than those related tothe Altura Lithium Mine. However, we continue to own a majority interest in the Tabalong CoalProject, which consists of a number of mining tenements in South Kalimantan, Indonesia with a JORCcompliant coal resource of 13.4 million tonnes of thermal coal. We are seeking to divest this asset.

4

28NOV201905212280

Recent development

On November 20, 2019, we raised A$9.155 million through a non-renounceable rights issue underwhich Altura Mining Limited shareholders were invited to subscribe for 2 shares for every 13 sharesowned at an issue price of A$0.06 per share. Shareholders subscribed for a total of 152,585,610 shares,representing approximately 42.6% of the shares available for subscription. Under ASX listing rules, wemay allocate the shortfall shares within three months of the closing date of the offer, and we will lookto place these shares in coming weeks.

Corporate information

Altura Mining Limited is an ASX listed company domiciled in Australia. Its registered businessaddress is Level 2, 23 Barrack Street, Perth, WA, Australia, 6000. The Company’s telephone numberis +61 8 9488 5100 and its website is located at www.alturamining.com. The information contained on,or accessible through, Altura Mining Limited’s website does not constitute part of this offeringmemorandum.

Corporate structure

The following chart depicts our corporate structure. This structure chart omits a number of directand indirect subsidiaries that are dormant or in the process of winding down their activities, as well asthe entities comprising the Tabalong Coal Joint Venture, which is an asset classified as held for sale.The Tabalong Coal Joint Venture comprises five tenements. We currently own 70% of three of thosetenements, and 56% of the other two.

11.50%

Altura Mining Limited

AlturaMineralsPty Ltd

Lithium Corpora�onUSA

Altura LithiumOpera�ons

Pty Ltd

Altura AsiaPte Ltd

(Singapore)

TabalongCoal JV

100% 100% 100%

5

RISK FACTORS

Risks related to our industry and business

Our business is dependent on the demand for, and the price of, the spodumene concentrate we produce fromour lithium ore mine in Pilgangoora, Western Australia.

Our commodities business is dependent on sales of 6% spodumene concentrate. Fluctuations inthe market price of, and demand for, spodumene concentrate, as well as demand for and the price oflithium products that use spodumene concentrate, such as lithium carbonate (standard and batterygrade), lithium hydroxide, lithium metal, and lithium chloride, directly affect the pricing of thespodumene concentrate we sell.

Demand for, and prices of, lithium products are affected by a number of factors, including demandfor battery applications in electric vehicles, static storage systems and mobile devices, supply of lithiumraw materials, processing capacity, international economic trends, foreign exchange fluctuations, newtechnological developments resulting in product or technological developments, world production levelsand political events. Lithium market prices fluctuate widely depending on these and other factors. See‘‘Lithium Market Overview’’ elsewhere in this offering memorandum.

Under the terms of our offtake agreements, our customers are currently obliged to buy an agreedquantity of concentrate each contract year, but at prices which are not fixed. Instead, prices are set byreference to principles that are designed to reflect the market prices for comparable product, or marketprices for processed lithium, or both, subject, in most cases, to a ceiling price and a floor price. As aresult the prices we receive for our product vary as market prices for lithium fluctuate. See‘‘Management’s Discussion and Analysis of Financial Condition and Results of Operations—Overview—Key income statement items and their drivers—Revenue’’ elsewhere in this offeringmemorandum.

Any sustained downward movement in the price of, or demand for, spodumene concentrate thatwe produce will have a material adverse effect on our revenue. Such conditions could result insignificant decreases in production, which would also materially adversely affect our business, financialcondition and results of operations.

We are dependent on an interest in a single mine and processing plant.

Our spodumene concentrate is sourced entirely from a single mine and processing plant inPilgangoora, Western Australia. As a result, the normal risks inherent in mining and mineral processingoperations discussed below may have a disproportionate effect on our business. Any interruption to ourmining or processing operations may result in an interruption or delay to our revenues, while our costsmay not reduce or may even increase.

11

Our right to explore for and mine lithium ore and produce and sell spodumene concentrate fromthe Altura Lithium Mine is governed by several mining leases and licenses granted by the stategovernment of Western Australia, export licenses granted by the federal government of Australia, nativetitle agreements entered into with representatives of the Njamal and Kariyarra peoples (the native titleholders and claimants) and a pastoral agreement entered into with the Day’s Pastoral Company (thepastoral lease holder). Should our rights or any material term under any of these leases, licenses andagreements be invalidated, revoked or unenforceable for any reason, our ability to mine ore andproduce spodumene concentrate from the Altura Lithium Mine would be materially adversely affected.

Mining is inherently risky and subject to conditions and events beyond our control.

The mining of minerals and the manufacture of mineral products is inherently risky and involvesmany potential hazards that even a combination of experience, knowledge and careful evaluation maynot be able to overcome, including:

• unusual or unexpected geological formations;

• metallurgical and other processing problems;

• inaccurate mineral modeling;

• metal losses;

• environmental hazards;

• power outages;

• remote locations and inadequate infrastructure;

• interruptions to supply due to port conditions;

• community relations problems;

• labor disruptions;

• the availability and retention of skilled personnel;

• non-governmental organization or community activities;

• changes in the regulatory environment;

• industrial accidents;

• periodic interruptions due to inclement or hazardous weather conditions;

• flooding, explosions, fire, rock bursts, cave-ins and landslides;

• mechanical equipment and facility performance problems; and

• the availability of materials and equipment.

Any adverse development resulting from such risks and hazards, which may affect our ability tomine lithium ore or process it into saleable spodumene concentrate from the Altura Lithium Mine,would have a material adverse effect on our business, financial condition and results of operations.

Our limited operating history makes it difficult to evaluate our business and prospects.

We commenced the construction of Stage 1 of the Altura Lithium Mine in May 2017 and declaredcommercial production in March 2019. As a result of our limited operating history, there areuncertainties regarding the consistency and sustainability of our operating results as well as our abilityto continue to increase production and reduce cash costs.

12

The costs, timing and complexities of developing the Altura Lithium Mine, may be significantlyhigher than anticipated, including because the mining property is located in a relatively remote locationand, therefore, the potential economic cost of remediating any issues that may materialize oraddressing any shortfalls that may arise could be substantial. Such factors can add to the cost of minedevelopment, production and operation and/or impair production and mining activities, therebyaffecting our profitability.

Due to our limited operating history, it is difficult to evaluate our prospects, as we may not havesufficient experience in addressing the risks to which operating companies may be exposed. You shouldconsider our prospects in light of the risks and uncertainties that companies with a limited operatinghistory may encounter.

We have only recently achieved commercial production, are not yet operating profitably and have a history ofoperating losses.

We achieved commercial production in March 2019 and our operations are not operating profitably at this stage. We reported a loss after tax of A$17.1 million for the three months ended September 30, 2019 and, as of September 30, 2019, had a net current asset deficiency ofA$177.4 million and A$0.6 million in cash and cash equivalents, while needing to refinance our loan note facility, which had an outstanding principal amount of US$142.9 million as of September 30, 2019, by August 2020. Because of these factors, our independent auditors have indicated in their review report on our September 30, 2019 financial statements that there is material uncertainty that may cast significant doubt about our ability to continue as a going concern. Our ability to continue as a going concern is dependent upon refinancing the loan notes, as well as generating sufficient cash flow from operations or additional financing to meet our obligations.

We currently derive substantially all of our revenues from a limited number of customers based in China, andthe loss of, or a significant reduction in orders from, any of these customers could have a material adverseeffect on our business, financial condition and results of operations.

At present, we derive substantially all of our revenues from sales under take-or-pay offtakeagreements with four China-based customers: Lionergy Limited, GFL International Co., Ltd. (asubsidiary of global lithium producer, Ganfeng Lithium Co., Ltd.), Guangdong Weihua Corporation andShandong Ruifu Lithium Industry Co., Ltd. Due to the geographic concentration of our customers, ourbusiness operations are sensitive to, and would be particularly impacted by, any downturn of theChinese economy, which may result in lower demand for our spodumene concentrate and lower lithiumprices. Although demand in China for lithium has been strong in recent years, there can be noassurance that incentives introduced by the Chinese government, such as subsidies for the purchase ofnew battery electric vehicles, will continue and that this growth will be maintained.

Under our existing offtake agreements, the entire 220,000 tonnes per year of Stage 1 nameplateproduction capacity at our Altura Lithium Mine is currently committed to these four customers. It isalso likely that we will continue to derive a significant portion of our revenue from a relatively smallnumber of customers in the future. If we were to lose any single customer and fail to replace thatcustomer in a timely manner upon satisfactory terms, such loss could have a material adverse effect onour business, financial condition and results of operations.

Our revenues depend on lithium prices, which have been volatile.

Global prices for lithium products, including 6% spodumene concentrate, have been volatile overrecent periods. Market prices for 6% spodumene concentrate reached US$900 per dmt as recently as2018, while more recently, the market has seen prices well below US$600 per dmt. Prices of the lithium

13

chemicals into which spodumene concentrate is converted have displayed similar volatility. There canbe no assurance that this volatility will not continue.

Because 6% spodumene concentrate is our only sales product, the prices we receive for thisproduct have a significant effect on our revenue, cash flow and profitability.

We seek to manage the impact of price volatility through the sale of high quality, low impurityspodumene concentrate and by entering into committed, long term contracts with our offtakecustomers. Our contracts contain a floor price for varying periods of US$550 per dmt, however, ifmarket prices fall below this level, there is a risk that our customers will seek to renegotiate contractterms or fail to abide by contract terms. See ‘‘Our Business—Customers’’ for more information aboutour sales contracts.

We expect that prices for the high quality, chemical grade spodumene concentrate we manufacturewill continue to be influenced by various factors, including worldwide supply and demand as well as thebusiness strategies of major producers. Some of the major producers have increased production, whichaffects overall global supply. In addition, certain market analysts have predicted a significant increaseand potential oversupply in the global lithium supply chain over the next seven years due to thepipeline of new or expanded operations being developed by current and potential competitors.However, in light of the possibility of delays, failure to reach production capacity and withdrawal fromthe market, there is a high degree of uncertainty about the ultimate outcome of the supply response.Sustained or material declines in lithium prices could have a material adverse effect on our business,financial condition and results of operations.

We rely on contractors and subcontractors to conduct aspects of our operations and projects and are exposedto risks related to their activities.

Some aspects of our operations and projects are conducted by contractors and subcontractors, suchas NRW, our mining services contractor, Civmec, our contractor for concrete, civil and otherconstruction services for our processing plant, KPS Power, our power supplier, Qube, our transport andlogistics provider and Cater Care, our accommodation services provider. As a result, our operations aresubject to a number of risks, some of which are outside our control, including:

• negotiating agreements with contractors and subcontractors on acceptable terms;

• reduced control over those aspects of operations which are the responsibility of contractors andsubcontractors;

• failure of contractors and subcontractors to perform under their agreements, including failure tocomply with safety systems and standards;

• failure of contractors and subcontractors to comply with applicable legal and regulatoryrequirements; and

• problems with contractors and subcontractors in connection with management of theirworkforce, labor unrest or other employment issues.

We may incur liability to third parties as a result of the actions of our contractors andsubcontractors. If such contractors, subcontractors and suppliers do not enter into or perform theircontracts in a manner that is consistent with our values and business strategy, we will be exposed toincreased cost, disruption to operations, or another adverse impact that could materially adverselyaffect our financial condition.

We may take over aspects of operations and projects from contractors and subcontractors inresponse to and as a result of these and other factors, which would also expose us to increased costs ordisruption to operations and materially adversely affect our financial condition.

14

Our growth depends upon the continued growth in demand for electric vehicles.

Our lithium product is a critical input in current and next generation high energy density batteriesused in electric vehicle applications. Our success and growth are dependent upon the continuedadoption by consumers of electric vehicles. If the market for electric vehicles does not develop as weanticipate, or develops more slowly than we expect, our business, results of operations, financialcondition and prospects may be affected. The market for electric vehicles is relatively new, rapidlyevolving, and could be affected by numerous external factors, such as:

• government regulations;

• tax and economic incentives;

• rates of consumer adoption, which is driven in part by environmental concerns, as well asperceptions about electric vehicle features (including range per charge), quality, safety,performance and cost;

• competition, including from other types of alternative fuel vehicles, plug-in hybrid electricvehicles, and high fuel-economy internal combustion engine vehicles; and

• volatility in the cost of oil and gasoline.

The development and adoption of new battery technologies that rely on inputs other than lithium compoundscould significantly impact our prospects and future revenues.

Current and next generation high energy density batteries for use in electric vehicles rely onlithium compounds as a critical input. The development and adoption of new battery technologies thatrely on inputs other than lithium compounds could significantly impact our prospects and futurerevenues. Many materials and technologies are being researched and developed with the goal ofmaking batteries lighter, more efficient, faster charging and less expensive, and some of these could beless reliant on lithium compounds. We cannot predict which new technologies may ultimately prove tobe commercially viable and on what time horizon. Commercialized battery technologies that use lesslithium compounds could materially and adversely impact our prospects and future revenues.

Our operations are dependent upon groundwater resources, which are subject to depletion.

Our operations are located in a remote and arid part of Western Australia and, as a result,abundant and convenient sources of water are not readily available. We procure all of the water used inthe mining and processing operations at our Altura Lithium Mine from groundwater resources in andaround our mining areas. Conditions beyond our control may interfere with our water supply sources.Overuse and depletion may limit the availability of groundwater. Additionally, operations at ourfacilities may sometimes be curtailed to comply with groundwater withdrawal restrictions. These factorsmight adversely affect our ability to source water in sufficient quantities to conduct our operations atfull or optimal levels and, as a result, our business, financial condition and results of operations may beadversely affected.

Our lithium production depends on a stable, timely and adequate supply of energy, power and raw materialssuch as electricity, oil fuel and chemicals at commercially reasonable prices.

We depend on the supply of energy, power and raw materials such as electricity, oil fuel andchemicals in order to maintain our production processes. Our production volume and production costsare dependent on our ability to source such materials at acceptable prices and maintain a stable supply.The prices for these chemical raw materials are subject to price volatility attributable to a number offactors which may be beyond our control, including inflation, supplier capacity constraints, generaleconomic conditions, commodity price fluctuations, demand from other industries for the same

15

materials, the availability of complementary and substitute materials, and local and national regulatoryrequirements. Furthermore, there can be no assurance that shortages of energy and other inputs willnot occur in the future or that we will be able to pass on any cost increases in energy or raw materialsto our customers. In particular, increases in energy and raw material prices that we are unable to passonto our consumers will reduce our profit margins. If our margins and profitability decrease, we maysuffer a decrease in our cash flow from operations, which we use to fund our working capital needs andplanned capital and other long term expenditures to pursue development in other areas. If we are ableto adjust our prices and pass on increases in energy and raw material prices to our customers, it mayharm our competitive advantage with respect to the affected products.

Moreover, if the supply of such materials from our existing sources is affected by natural disasters,adverse weather conditions, suppliers’ equipment failures, disruptions in transport or other inclementfactors, we may not be able to locate alternative sources of supply in sufficient quantities, of suitablequality and/or at acceptable prices. Any such events may have a material adverse effect on our business,financial condition and results of operations.

Our lithium Ore Reserve and Mineral Resource estimates are estimates only and may not be recoverable infull.

No assurance can be given that the Ore Reserve and Mineral Resource estimates presented in thisoffering memorandum will be recovered at the quality or yield presented. Our estimates of lithium OreReserves and Mineral Resources included in this offering memorandum are estimates only and arebased on limited samples and interpretations, which may not be representative of realizable tonnes orgrades. We cannot give any assurance that the estimated Ore Reserves presented in this offeringmemorandum will be recovered or that they will be recovered at the quality or yield estimated herein.Furthermore, Ore Reserve estimates which were valid when originally estimated may changesignificantly over time as new information or techniques become available. Failure to achieve ourproduction estimates could have a material adverse effect on our future cash flows, business, results ofoperations and financial condition and may result in write-downs of our investment in mining assetsand increased amortization charges. These production estimates are dependent on, among other things,the accuracy of Ore Reserve estimates, the accuracy of assumptions regarding lithium ore grades andrecovery rates, ground conditions (including hydrology), physical characteristics of lithium ore, thepresence or absence of particular metallurgical characteristics and the accuracy of estimated rates andcosts of mining, haulage and processing. In addition, market fluctuations in the price of lithiumproducts, as well as increased production costs or reduced recovery rates, may render the exploitationof our Ore Reserves uneconomic and may ultimately result in a restatement of Ore Reserves.

Additionally, some of the pegmatites in our ore deposit cross the boundary between our tenementand and the adjacent tenement held by Pilbara Minerals. Our Ore Reserve and Mineral Resourceestimates do not include any mineralization that is not within our tenement, however they do assumethat we will be able to mine into Pilbara Minerals’ tenement in order to access certain deeper sectionsof our ore reserve. In order to economically extract this mineralization, it will be necessary to obtainthe consent of Pilbara Minerals to carry out certain mining activities on its lease, for which noassurance can be given. See ‘‘Our Business—Reserves and resources’’ and ‘‘—Tenements, licenses andapprovals’’.

We are exposed to counterparty and contract-related risks that could materially adversely affect our business,financial condition and results of operations.

We enter into agreements with counterparties relating to the supply of spodumene concentrate andother matters. Our decisions to enter into these agreements are based on our expectations about theongoing viability of our counterparties, assumptions and expectations underlying pricing terms andconditions and commercial terms and other matters. These expectations may prove to be incorrect or

16

our counterparties may dispute key terms of our agreements in ways that we do not anticipate, and theresolution of any such disputes may be costly to pursue or result in a distraction from our primarybusiness operations. Such developments could result in our incurring losses or otherwise not achievinganticipated financial returns, which could have a material adverse effect on our business, financialcondition and results of operations.

We are seeking to execute certain divestments and relinquishments in the pursuit of our business strategy. Wemay not be able to successfully divest or relinquish these assets upon commercially acceptable terms.

We hold controlling stakes in currently undeveloped mining tenements acquired for coaldevelopment in the Republic of Indonesia and Republic of Philippines. We currently intend to divest orrelinquish these interests in their entirety, in line with our business strategy.

We also hold interests in operating entities in Indonesia and holding companies to facilitate andmaintain those operations, which we are also seeking to divest. The sale or closure of those entitiesmay incur net cash outflows in order to finalize any divestment process.

There is no certainty that we will be able to dispose of these interests without the incurrence orretention of certain liabilities following divestment or relinquishment, such as financial payments fortaxes, levies, employee liability and other potential matters of restitution. Moreover, even in caseswhere we have not expressly retained certain liabilities, we may be held liable for past acts, failures toact or liabilities that are different from those foreseen. Accordingly, if we are unable to successfullydivest or relinquish assets upon commercially acceptable terms, this could have a material adverseeffect on our business, financial condition and results of operations.

The Pilbara is subject to unpredictable weather and cyclones that could result in production delays orincreased costs.

The Pilbara, where the Altura Lithium Mine is located, is exposed to adverse weather events,including cyclones. Cyclones are seasonal, occurring during the summer and autumn months withconcentration around the January to March period. The number of cyclones per year is variable butaverages approximately three per season. Cyclones create heavy rain and high winds, which could causethe shutdown of existing mining activities or our storage facilities and the ship-loading facilities at PortHedland, or interruptions to surface road operations, and could result in delays or increased costs forour operations. For example, in March 2019, we were forced to halt production at our Altura LithiumMine for five days due to Cyclone Veronica. Future cyclones or other unpredictable weather eventscould result in production delays or increased costs. Any such severe weather related disruptions thatmay affect our ability to supply our customers could negatively impact our customer relationships, andour business, financial condition and results of operations could be materially and adversely affected.

Eventual closure of our lithium operations may entail costs and risks regarding ongoing monitoring,rehabilitation and compliance with environmental standards.

In the event of our closure of mining operations, we must perform certain procedures to remedyand rehabilitate the environmental and social impact on local communities and the environment.Remediation, rehabilitation, closure and removal of our facilities will incur various costs and are subjectto various risks. The key tasks for mine closures include, but are not limited to: (i) long-termmanagement of permanent engineered structures; (ii) closure in accordance with local or internationalenvironmental standards; (iii) orderly retrenchment of employees and the third-party contractors; and(iv) relinquishment of the site with associated permanent structures and community developmentinfrastructure and programs to new owners. The consequences of a difficult closure include increasedclosure costs, handover delays, ongoing monitoring and environmental rehabilitation costs and damages

17

to our reputation if the desired outcome cannot be achieved. In the event of a difficult closure, ourbusiness, financial condition and results of operations could be materially and adversely affected.

In addition, in order to address mine closure and other geological environmental issues, a miningcompany is required to submit rehabilitation plans and pay rehabilitation deposits to the relevantgovernment authorities under applicable Australian laws and regulations. Non-compliance of applicablerehabilitation plans or a default in paying required rehabilitation deposits may result in a variety ofpenalties and other administrative actions, including inability to proceed with certain administrativeprocedures relating to the approval of an annual report on mining activities, the extension of miningpermits or the application for new mining permits, which might adversely affect our business, financialcondition and results of operation.

We may not be able to successfully complete planned or future development projects and expansion activities,which could materially adversely affect our mining prospects and results of operations.

In order to meet growing industry and worldwide demand for lithium, we have undertaken studiesin respect of substantial capital projects, including the planned Stage 2 expansion of the Altura LithiumMine. These projects are complex undertakings, and there can be no assurance that we will be able tocomplete these projects within our projected budget and schedule or that we will be able to achieve theanticipated benefits. Unforeseen technical or construction difficulties could increase the cost of theseprojects, delay the projects or render them unfeasible. Any significant delay in the completion of anysuch projects or increased related costs could have an adverse effect on our business, financialcondition and results of operations.

We intend to continue pursuing future development activities, which may require significant attention from management and other personnel, as well as high levels of capital expenditure. Although we implement rigorous protocols designed to minimize disruption of our existing operations and ensure the safety of our staff, equipment and shipping customers during such activities, no assurance can be given that such measures will be successful. If the operations of our existing business are disrupted or if we are subject to liability for industrial accidents during future development projects and expansion activities, our business, financial condition and results of operations could be materially adversely affected.

Any of our planned or future activities will also be subject to obtaining relevant regulatory andother approvals, which may impede our ability to proceed with such activities on schedule or at all. Ifwe are unable to obtain necessary regulatory and other approvals it could have a material adverseeffect on our business, financial condition and results of operations.

We face competition in our business.

We compete with a number of other producers of spodumene concentrate for sales to lithiumchemicals processors. Competitive factors include the reliability of production and delivery, productquality and consistency and price. We also compete indirectly with producers of lithium carbonate frombrine. Many of these competitors have significantly more resources than us, including greater resourcesto adopt new technology, achieve greater economies of scale and withstand competitive pressuresincluding extended periods of low prices. In addition, the global lithium compounds and metals industryis dominated by six major vertically integrated suppliers with lithium extraction and processingcapabilities: Livent Corporation, Sociedad Quimica y Minera de Chile S.A., Albemarle Corporation,Tianqi Lithium Corporation, Orocobre Limited and Ganfeng Lithium Co., Ltd., which for the yearended December 31, 2018 accounted for an estimated 78% of the global supply of lithium compoundsas measured by lithium carbon equivalent. We depend on selling our product either to these majorproducers or to smaller processors that compete with the major producers. If the major producers

18

sufficiently expand their resources of lithium source materials, they may no longer need to buy lithiumconcentrate from third parties like us. In addition, if independent processors are unable to competeeffectively against the major producers, they may no longer continue to be an alternative for us ascustomers.

We may be unable to maintain the current levels of production of our spodumene concentrate based ondepletion of our ore reserves.

Subject to any future expansion or other development, production from existing operations at theAltura Lithium Mine will typically decline over the life of the mine and, in the case of a maturing minenearing the end of its life, the risk of the extraction of lithium ore becoming uneconomic increases. Asa result, our ability to maintain our current production or increase our annual production ofspodumene concentrate and generate revenues therefrom will depend significantly upon our ability toexpand lithium ore reserves at our existing mine and discover or acquire new mining assets tosuccessfully bring new mines into production.

Exploration and development of mineral deposits involves significant financial risk. With noguarantee of success, exploration requires significant expenditure to identify mineral deposits in newsites and determine the economic feasibility of extraction from any identified mineral deposit. Whethera mineral deposit will be commercially viable depends on a number of factors, including:

• the particular attributes of the deposit, such as size, grade and proximity to infrastructure;

• prices for mineral products, which are highly cyclical;

• political and social stability and government regulation, including regulations relating to prices,taxes, royalties, land tenure, land use, importing and exporting of minerals; and

• environmental protection.

Even if we identify and acquire an interest in an economically viable orebody, several years mayelapse from the initial stages of development to commercial production. We may incur significantexpenses to locate and establish ore reserves, to develop metallurgical processes and to constructmining and processing facilities. As a result, we cannot provide assurance that our exploration ordevelopment efforts and the related expenditure will result in any new commercial mining operationsor yield new ore reserves to replace or expand current ore reserves.

The feasibility of new lithium and other mineral projects may change over time.

Once new mineral deposits are discovered, it can take a number of years from the initial phases ofdrilling until commercial production, during which the economic feasibility of production may change.Substantial time and expenditures are required to establish new lithium and other ore reserves throughdrilling to confirm appropriate mining and metallurgical processes for optimizing the recovery oflithium and other minerals, obtaining environmental and other licenses, constructing mining facilitiesand other infrastructure as required to mine the ore.

If a new mining area proves not to be economically feasible by the time we are able to exploit it,we may incur substantial losses and take write-downs of its assets. In addition, potential change orcomplications involving metallurgical and other technological processes arising during the life of aproject may result in delays and cost overruns that may render the new mining area not economicallyviable.

19

Our business is capital intensive, the sources of our future financing can be uncertain and our workingcapital can be unstable during certain periods.

We operate in a capital intensive industry that requires substantial capital and other long-termexpenditures, including expenditures for the development of mining and processing facilities and thepurchase of machinery and equipment. To the extent that we expand or add new mining and processingfacilities, we expect to fund the related financial commitments and other capital and operating expensesfrom a combination of cash on hand, cash generated from operations, cash contributions by equityinvestors and offtake partners and debt financing. Our cash flow from operations and access to debtand equity capital markets are subject to a number of variables, including:

• our activity levels;

• margins under our offtake agreements;

• global credit and securities markets; and

• the ability and willingness of lenders and investors to provide capital and the cost of capital.

No assurance can be given that we will be able to generate sufficient cash from our operations orobtain the necessary financing or that such financing will be at interest rates and on other terms thatare reasonable to us or consistent with our expectations. To the extent we cannot finance our expansionat reasonable rates or at all in the future, our business may be harmed. In addition, part of ourexpansions requires us to procure raw materials. As a result, during certain periods we may incurhigher working capital needs that may affect our working capital operation. We cannot assure that wewill not experience any higher working capital needs in the future, and our business, financialcondition, results of operations, prospects and working capital may be materially and adversely affected.

We may not be able to adjust production volume in a timely or cost-efficient manner in response to changes indemand for spodumene concentrate we produce.

During periods of high demand, our ability to increase production capacity is limited, which couldaffect our ability to meet changes in demand for spodumene concentrate from existing and newcustomers. Moreover, we may be unable to complete any planned expansions and projects in time totake advantage of rising demand for spodumene concentrate. When demand exceeds our productioncapacity and we are unable to satisfy customer demand in excess of the existing offtake agreements,then the opportunity to market to and supply new customers may be lost. In addition, operating closeto full capacity may expose us to higher costs, including demurrage fees due to capacity restraints inlogistics systems.

Conversely, operating at significant idle capacity during periods of weak demand may expose us tohigher unit production costs. In addition, efforts to reduce costs during periods of weak demand couldbe limited by fixed costs and labor regulations.

We are subject to extensive environmental, health and safety laws and regulations and production standards,and our compliance with these laws, regulations and standards may be onerous and costly.

Our business and/or operational activities, such as the processing and sale of our spodumeneconcentrate, storage of lithium ore and waste product, transportation and exportation of spodumeneconcentrate and certain other activities are affected by laws and regulations, administrativedeterminations, court decisions and similar constraints, especially the extensive environmental, healthand safety laws and regulations and stringent standards of lithium compounds which are promulgatedby the Australian federal and Western Australian state governments, as well as in China, where ourspodumene concentrate is sold. For example, we are required to obtain and maintain valid licenses andcertificates, including, among other things, those required for the production of our lithium product.

20

We are also required to comply with the restrictions and conditions imposed by variousgovernment authorities in order to conduct our business. If we fail to comply with any of theregulations or to satisfy any of the conditions required for the maintenance of our licenses andcertificates, such licenses and certificates could be temporarily suspended, or even revoked or rejectedupon renewal, or delayed for renewal upon expiry of their original terms, which could materially andadversely affect our business, financial condition and results of operations.

Meanwhile, to comply with the extensive environmental laws and regulations relating to air andwater quality, waste management and public health and safety in Australia, we must obtain approval forenvironmental impact assessment reports and undergo periodic inspection of production facilities byrelevant Australian government authorities to ensure the safety of our equipment. If we fail to obtainsuch environmental approvals or satisfactorily complete any periodic inspections, our operations may besuspended, further conditions may be imposed on our licenses and the relevant authorities may imposea fine or penalty.

Given the magnitude, complexity and continuous amendments to these laws and regulations,compliance therewith may be onerous and may involve substantial financial resources, as well as otherresources to maintain efficient compliance and monitoring systems. The liabilities, costs, obligations andrequirements associated with these laws and regulations may therefore be substantial and may causeinterruptions to our operations. Non-compliance with the laws and regulations applicable to ouroperations may even result in substantial penalties or fines, suspension or revocation of our relevantlicenses or termination of contracts. Such events could impact on our reputation, business, financialcondition and results of operations, all of which could adversely affect our ability to be profitable andattract new customers.

In addition, the environmental, health and safety laws and regulations, administrativedeterminations and court decisions in Australia and other jurisdictions that we are subject to continueto evolve, which may involve stricter standards and enforcement, increased fines and penalties fornon-compliance, more stringent environmental assessments of proposed mines or production facilities,as well as a heightened degree of responsibility for companies and their officers, directors andemployees. Any changes or amendments to such laws or regulations may cause us to incur additionalcapital expenditures, costs that may not be able to be passed on to customers, or other obligations orliabilities, which could decrease our capital and our ability to pursue developments in other areas.

There can be no assurance that we will be able to comply with the relevant environmental laws orto maintain or renew our existing licenses and certificates or obtain future licenses and certificatesrequired for our continued operations on a timely basis or at all. In the event that we fail to complywith applicable laws and regulations or fail to maintain, renew or obtain the necessary licenses orcertificates, our qualification to conduct our various operations may be adversely affected, which mayadversely affect our business, financial condition and results of operations.

Our mining tenements are potentially subject to native title claims by indigenous peoples.

The common law of Australia recognizes a form of native title which, in circumstances where it hasnot been extinguished, is based on the continuing connection of the indigenous inhabitants, inaccordance with their traditional laws and customs, to specific areas of land. Native title is a bundle ofrights, which may include the mere right to pass through an area for hunting or could include the rightto permanently occupy land to the exclusion of all others. When native title is determined to exist, thenative title holders may file an application to the Federal Court of Australia for a determination ofwhat, if any, compensation may be payable for actions that have impacted their native title rights in thepast.

It is possible that, in relation to mining tenements in which we have an interest or will in thefuture acquire such an interest, there may be areas over which legitimate common law native title rights

21

of Aboriginal Australians exist. If native title rights do exist, our ability to gain access to tenements(through obtaining consent of any relevant landowner), or to progress from the exploration phase tothe development and mining phases of operations may be affected which, in turn, may adversely affectour business, financial condition and results of operations.

Our business activities are subject to operational difficulties, occupational and environmental hazards andother risks, which could damage our reputation, subject us to liability claims and result in substantial costs.

Our business activities are exposed to various risks, including operational and transportation-related risks, as well as occupational and environmental hazards. We may experience various types ofoperational difficulties in connection with our production operations. Some of our raw materials andchemicals are hazardous (i.e., toxic or flammable) and their storage and usage in the productionprocess involve inherent risks. Accidents could materially disrupt our production and may give rise topersonal injuries and environmental hazards.

Our operations may also be subject to production difficulties such as capacity constraints,mechanical and system failures, construction and upgrade delays and delays in the delivery ofmachinery and equipment, any of which could cause suspension of production and reduced output.Scheduled and unscheduled maintenance programs may also affect our production output. Anysignificant manufacturing disruption could adversely affect our ability to process and sell spodumeneconcentrate, which could have a material adverse effect on our business, financial condition and resultsof operations.

Due to the nature of our business, we engage in certain inherently risky and hazardous activities,including, among other things, operations at height or on dangerous terrains, underground excavationand construction, use of heavy machinery, handling and discharge of hazardous chemicals such asflammable and explosive materials, and production of spodumene concentrate through facilities. As aresult, we are subject to risks associated with these activities, including, among other things, geologicalcatastrophes, toxic gas and liquid leakages, equipment failures, industrial accidents, fires, explosions andunderground water leakages. These risks and hazards have in some cases resulted in personal injuryand fatal casualties, damage to or destruction of properties or production facilities, and pollution andother environmental damages. Any of these consequences, if significant, could result in businessinterruption, legal liability and damage to our reputation and corporate image. In addition, we may alsobe subject to claims resulting from subsequent use by the customers or other third parties of thefacilities and the product we produced.

We normally seek to lower our exposure to potential claims associated with our business throughcontractual limitations on liability, indemnities from customers, subcontractors and suppliers, andinsurance. These measures, however, may not always be effective due to various factors, many of whichmay be out of our control. The occurrence of any of these risks may harm our business operations andreputation, which could inhibit our ability to take on other contracts or otherwise grow our business.

We may not satisfy customers’ or governments’ quality standards, and we could be subject to damages basedon claims brought against us or lose customers as a result of the failure of our product to meet certain qualitystandards.

Since our product is derived from natural resources, it may contain impurities that may not meetspecific customer or government quality standards. As a result, we may not be able to sell ourspodumene concentrate if we cannot meet such requirements. In addition, customers may imposestricter quality standards on our spodumene concentrate or governments may enact stricter regulationsfor the distribution or use of our spodumene concentrate. Failure to meet such standards couldmaterially adversely affect our business, financial condition and results of operations if we are unable tosell our spodumene concentrate in China or alternative markets or to important customers in such

22

markets. In addition, our cost of production may increase to meet any newly imposed or enactedstandards.

We warrant to our customers that our products conform to mutually agreed product specifications.If a product fails to meet warranted quality specifications, a customer could seek a replacement, therefund of the purchase price or damages for costs incurred as a result of the product failing to meetthe specification.

As with all quality control systems, any failure or deterioration of our quality control systems couldresult in defects in our product, which in turn may subject us to contractual, product liability and otherclaims. Any such claims, regardless of whether they are ultimately successful, could cause us to incursignificant costs, harm our business reputation and result in significant disruption to our operations.Furthermore, if any such claims were ultimately successful, we could be required to pay substantialmonetary damages or penalties, which could have a material adverse effect on our reputation, business,financial condition and results of operations.

We are exposed to credit risk of our customers and failure to collect our trade and other receivables in atimely manner may affect our business, financial condition and results of operations.

Historically, we have not experienced material collection issues in connection with our trade andother receivables as our sales have been made by irrevocable letters of credit. Should the creditworthiness of our customers deteriorate, or should any of our customers fail to settle their trade andother receivables in full for any reason, or should our sales cease to be made by irrevocable letters ofcredit, we may incur impairment losses and our business, financial condition and results of operationscould be materially and adversely affected. In addition, there may be a risk of delay in payment by ourcustomers from their respective credit period, which in turn may also result in an impairment lossprovision. There is no assurance that we will be able to fully recover our trade and other receivablesfrom the customers or that they will settle our trade and other receivables in a timely manner. In theevent that settlements from customers are not made on a timely manner, or at all, our business,financial condition and results of operations may be materially and adversely affected.

Inability to secure effective transportation and infrastructure could have a material adverse effect on ouroperations.

Our production operations are dependent on our access to adequate transportation channels. Werely on a combination of sea and surface transportation both in Australia and overseas to deliver ourproducts to customers. However, there can be no assurance that the existing or planned transportationsystems will be sufficient to meet our transportation requirements. Any shortage, disruption orlimitation of transportation capacity may limit the volume of spodumene concentrate delivered tocustomers and may cause us to accumulate inventories and scale back production. Furthermore, anydisruption to, or decrease in, the availability or capacity in the transportation networks, such as due tonatural disasters, major road accidents, strikes, seasonal congestion during holidays, or any significantrise in transportation costs, could materially and adversely affect our ability to deliver our products tocustomers and have a material adverse effect on our business, financial condition and results ofoperations.

The method and route of transportation of our spodumene concentrate gives rise to a number ofrisks, including road safety, community and environmental risks. In addition, the ability of our transportand logistics provider, Qube Bulk, to transport our spodumene concentrate through the multi-user portfacility in Port Hedland, Western Australia is subject to terms and conditions of the applicable licenses,which must be renewed from time to time and may be subject to negotiation or non-renewal. We mayhave similar dependencies at future mining and processing operations. Inability to secure reliable andcost-effective transportation and other infrastructure, or disruption of these services due to community

23

or political protests, weather-related problems, regulation, strikes, lock-outs or other events could havea material adverse effect on our operations. If transportation for our spodumene concentrate is orbecomes unavailable, our ability to market our spodumene concentrate could suffer. In addition,increases in our transportation costs relative to those of our competitors could make our operationsless competitive and could materially adversely affect our profitability.

Our insurance coverage does not cover all of the potential losses, liabilities and damage related to our existingmining operations and certain risks are uninsured or uninsurable.

Exploration, development and production operations on mineral properties involve numerous risks,including unexpected or unusual geological operating conditions, ground or slope failures, fires, floods,earthquakes, cyclones and other environmental occurrences that could result in damage to ordestruction of mineral properties or production equipment or facilities, personal injury or death,environmental damage, delays in mining caused by industrial accidents or labor disputes, changes in theregulatory environment, monetary losses and possible legal liability. It is not always possible to obtaininsurance against all such risks and we may decide not to insure against certain risks because of highpremiums associated with insuring against those risks or for other reasons. Moreover, insurance againstrisks such as environmental pollution or other hazards as a result of exploration and production is notgenerally available to us or to other companies in the mining industry on acceptable terms.

Although we believe that we maintain adequate insurance to protect against certain risks in suchamounts as we consider reasonable in light of the circumstances surrounding such risks, our insurancewill not cover all potential risks associated with our operations and insurance coverage may notcontinue to be available or may not be adequate to cover any resulting liability. Additionally, there canbe no assurance that we will be able to continue to maintain sufficient insurance coverage for the risksassociated with the operation of our business at commercially reasonable rates. The renewal ofinsurance will be dependent on a number of factors, such as the continued availability of coverage, thenature of risks to be covered, the extent of the proposed coverage and costs involved. The cost of ourinsurance policies could significantly increase as a result of claims made by us or as a result of local orglobal economic conditions that cause insurance to be more expensive.

To the extent that we incur losses not covered by our insurance policies, the funds available for sustaining our current operations and for any future expansion activities will be reduced. Losses from these events may cause us to incur significant costs, including liabilities to our customers, that could have a material adverse effect on our business, financial condition and results of operations.

Our business is vulnerable to downturns in the general economy.

The global financial markets experienced significant disruptions in 2008 and the United States,Europe and other economies went into recession. The recovery from the lows of 2008 and 2009 wasuneven and the global economy has continued to face new challenges, including the escalation of theEuropean sovereign debt crisis in 2011, the slowdown of the Chinese economy since 2012 and thethreatened trade war between the United States and China. There is considerable uncertainty over thelong-term effects of the expansionary monetary and fiscal policies that have been adopted by thecentral banks and financial authorities of some of the world’s leading economies, including the UnitedStates and Europe. There have also been concerns over unrest in the Middle East, which have resultedin volatility in commodity prices and other markets, over the possibility of a war involving Iran, andover the withdrawal of the United Kingdom from the European Union. The above unfavorablefinancial or economic conditions may adversely affect the demand for spodumene concentrate andlithium compounds. Furthermore, concerns over inflation, energy costs, geopolitical issues, theavailability and cost of credit, unemployment, consumer confidence, asset values, capital marketvolatility and liquidity issues may create difficult operating conditions in the future.

24

In addition, the government of China, where each of our customers is currently located, has fromtime to time adjusted its monetary, fiscal and other policies and measures to manage the rate of growthof the economy or control conditions in the general economy or certain industries or markets. As aresult, the general economy in China, the world or in any particular industry in which we operate orwhich we serve may grow at a lower-than-expected rate or even experience a downturn. This in turncould materially and adversely affect our business, financial condition and results of operations.

We may be exposed to liabilities under anti-corruption laws and any determination that we or any of oursubsidiaries has violated any anti-corruption laws could have a material adverse effect on our business.

We may be subject to potential fraud, bribery, corruption and money laundering risks associatedwith the business, employees, third party suppliers and customers in the geographic locations in whichwe operate or transact business. Australian, Chinese, U.S. and other anti-fraud, anti-bribery,anti-corruption and anti-money laundering laws, conventions, regulations and enforcement proceduresand corresponding compliance obligations, have become more stringent in recent years. Our activitiesin these countries create the risk of unauthorized payments or offers of payments by one of ouremployees or agents that could be in violation of applicable anti-corruption laws, even though theseparties are not always subject to our control. We have internal controls, policies and procedures toprotect against such risks and have implemented training and compliance programs for our employeesor agents with respect to these laws. However, we cannot assure you that our controls, policies,procedures and programs will always protect us from potentially improper or criminal acts committedby our employees or agents. In the event that we believe or have reason to believe that our employeesor agents have or may have violated applicable anti-corruption laws, we may be required to investigateor have outside counsel investigate the relevant facts and circumstances. Violations of anti-corruptionlaws or regulations may result in severe criminal or civil sanctions, and we may be subject to otherliabilities, which could negatively affect our business, operating results and financial condition. To ourknowledge, we do not believe we have violated the laws or regulations described above. We cannotassure you, however, that any future investigation will not reveal violations of these laws or regulations.In addition, as we continue to evaluate existing and new anti-corruption laws, regulations or local laws,we may cease conducting business in certain high risk countries where these types of payments mayoften be required to operate. This could significantly affect our revenue if our commodities customerscontinue to pursue new exploration projects in areas where we decide not to conduct business.

If we fail to maintain technological competitiveness with other lithium producers, our future performance andgrowth may be materially adversely affected.

The introduction of new competing technologies by other lithium producers, or the threat of it,means we must continue to make further technological advancements in order to maintaincompetitiveness within the industry. A failure to make continued advances in our business could resultin our competitors being able to exceed our capabilities, reducing our market position and/or materiallyadversely affecting our financial results. In addition, technological developments in lithium chemicalprocessing or battery technology may result in our customers requiring different products to theproduct that we produce. If we fail to effectively address the changing demands of customers and tomaintain competitiveness, our business, financial condition and results of operations could be materiallyadversely affected.

We may be unable to attract and retain suitably qualified personnel or key members of management for ouroperations.

The success of our operations and development projects depend in part on our ability to attractand retain geologists, engineers, metallurgists and other personnel with specialized skill and knowledgeabout the mining industry in the geographic areas in which we operate. Tightening of the labor market

25

in key regions due to a shortage of skilled labor may inhibit our ability to hire and retain suitablyqualified employees. Challenges in recruiting or retaining skilled employees to work at our operationsmay lead to a higher reliance on contractor labor than expected and correspondingly higher costs. Inaddition, a shortage of skilled labor could limit our ability to grow our business or lead to a decline inproductivity and an increase in training costs and adversely affect our safety record. Each of thesefactors could materially impact our revenue and if costs increase or productivity declines, our operatingmargins.

In addition, we depend on the continued employment and performance of our senior executives,key members of management, and other key qualified personnel. If any of these individuals resigns orbecomes unable to continue in his or her present role and is not adequately replaced in a timelymanner, our business operations and our ability to implement our strategies could be materiallydisrupted. The loss of members of senior management or key employees could materially adverselyimpact our business if we are unable to recruit suitable replacements in a timely manner.

Labor disruptions could affect our operations.

We may face industrial relations issues in connection with our employees or those of our servicecontractors, including strikes, work stoppages, work slowdowns, grievances, complaints and claims ofunfair practices or other labor activity. Any such activity could cause production delays, increased laborcosts and adversely impact our ability to fulfill our existing contracts or win new contracts. As a result,our operating results may be materially adversely affected. We generally do not have a unionizedworkforce and instead operate in a system of small individual agreements. If labor action is taken byour employees or those of our service contractors, our business and operating results could bematerially adversely affected.

We are subject to foreign exchange risk.

We operate internationally and are exposed to foreign exchange risk arising from various currency exposures, primarily in respect to the U.S. dollar. Our revenue from sales of spodumene concentrate are received in U.S. dollars, however, a significant portion of our operating expenses, including certain expenses for our current and future initiatives and projects, are incurred in Australian dollars.

Although we may hedge our foreign exposures in the future, we have not historically had a policyof entering into long-term hedging arrangements relating to changes or fluctuations in foreign exchangerates. Accordingly, appreciation of the Australian dollar against the U.S. dollar or prolonged periods ofexchange rate volatility could have a material adverse effect on our business, financial condition andresults of operations. Furthermore, even if we enter into hedging arrangements in the future, there canbe no assurance that we will be successful in managing our exposure to exchange rate fluctuations.

Our directors may face conflicts of interest due to their engagement as directors of other mineral resourcecompanies.

Some of our directors are engaged as directors of other companies involved in the exploration anddevelopment of mineral resources, and situations may arise where these directors will be in directcompetition with us. Such engagement could result in conflicts of interest. Conflicts, if any, will be dealtwith in accordance with the relevant provisions of the Corporations Act and our corporate governancepolicies. Any decision taken by these directors and involving us will be in conformity with their dutiesand obligations to compromise in an equitable way and in good faith with us and these othercompanies. Moreover, these directors are required to declare their interests and to abstain on voting onany question which could give rise to a conflict of interest. Some of the directors and officers of the

26

company may become in the future directors of other companies engaged in the same or other businessventures.

We may be involved from time to time in legal proceedings that, if resolved in a detrimental manner, couldmaterially adversely affect our business, financial condition and results of operations.

We are exposed to potential legal and other claims or disputes in the course of our business,including regulatory investigations and actions by governmental and regulatory agencies, contractualdisputes, property damage disputes and personal liability claims. Our business, financial condition,results of operations and reputation could be materially adversely affected by legal proceedings, theoutcome of which cannot be predicted with certainty.

Information technology disruption could impact operations and cyber security attacks could impact dataprivacy.

We rely on information technology to support the efficient and effective operation of our business.We face a range of risks associated with extended outages of our key information technology systemsand breaches in the security and privacy of digital information which we retain and manage.

Any sustained disruption to the availability and/or the performance of information technologysystems, including those resulting from a cyber-attack, could have a material adverse impact on ouroperations, financial performance and reputation. In addition, a cyber-attack has the potential tocompromise the privacy of digital information retained by us, which could result in increased exposureto litigation, fines and/or reputational damage.

Despite our security measures and those of our third party partners, our information technologyand infrastructure may be vulnerable to attacks by hackers or be breached due to employee or thirdparty error, malfeasance or other disruptions. Any such breach could compromise our networks and theinformation stored there (including our intellectual property) could be accessed, publicly disclosed, lostor stolen. Any such access, disclosure or other loss of information could result in legal claims orproceedings, regulatory penalties, including penalties under privacy laws, and disrupt our operations. Itmay cost us significant money and resources to address these risks and we may fail to address themsuccessfully, materially adversely affecting our business, financial condition and results of operations.

We may be exposed to certain regulatory and financial risks related to climate change.

Growing concerns about climate change may result in the imposition of additional regulations orrestrictions to which we may become subject. Climate changes include changes in rainfall and in stormpatterns and intensities, water shortages, changing sea levels and increasing atmospheric and watertemperatures, among others. Several respected research publications including the IntergovernmentalPanel on Climate Change (IPCC) Fourth Assessment Report and the Australian federal government’sGarnaut Review have highlighted Australia’s particular vulnerability to the impacts of climate change.These publications forecast increased variability in severe weather events, including higher temperaturesleading to longer drought periods, interspersed with storm surges and severe rainfall. We operate in thehot, dry climate of the Pilbara region of Western Australia. Climate change may place increasing stresson groundwater supplies that will not be able to replenish at current rates. While we take an activeapproach to groundwater management at our operations, future groundwater shortages may require thecurtailment of some operations or the costly importation of necessary water. Port facilities could beflooded by storm surges, and our mining and processing facilities could be subject to damage fromheavy rainfall and storm water runoff.

The outcome of any new legislation or regulation in Australia and other jurisdictions in which weoperate and transact business may result in new or additional requirements, additional charges to fundenergy efficiency activities, and fees or restrictions on certain activities. While certain climate change

27

initiatives may result in new business opportunities for us in the area of alternative fuel technologiesand emissions control, compliance with these initiatives may also result in additional costs to us,including, among other things, increased production costs, additional taxes, reduced emissionallowances or additional restrictions on production or operations. Any adopted future climate changeregulations could also negatively impact our ability to compete with companies situated in areas notsubject to such limitations. Even without such regulation, increased public awareness and adversepublicity about potential impacts on climate change emanating from us or our industry could harm us.We may not be able to recover the cost of compliance with new or more stringent laws and regulations,which could adversely affect our business and negatively impact our growth. Furthermore, the potentialimpact of climate change and related regulation on our customers is highly uncertain and there can beno assurance that it will not have an adverse effect on our business, financial condition and results ofoperations.

We may not achieve optimal results in future acquisitions and/or investments or may encounter difficulties inintegrating and developing the acquired assets or investments successfully.

As part of our business strategy, we may increase our mineral resources through acquisitions ofand/or significant investments in companies, products, technologies or resource projects. We do nothave specific timetables for these plans, and we cannot be certain that we will be able to identifyadditional suitable acquisition or investment candidates available for sale at reasonable prices toconsummate any acquisition or investment. Additionally, we may encounter intense competition duringthe expansion process, and we may fail to select or value targets appropriately.

Further, acquisitions and/or investments may involve a number of risks, undisclosed issues or legalliabilities. For example, future acquisitions and/or investments may expose us to potential risks such asfailure to integrate any acquired business or investments into our operations successfully; diversion ofmanagement attention from our existing business; potential loss of our key employees or the keyemployees of any business that we acquire; unanticipated changes in business, industry or generaleconomic conditions that affect the assumptions underlying the acquisition and/or investments; anddecline in the value of acquired assets, companies or assets. These and other risks related to acquiring,integrating and operating acquired assets and companies could cause us not to realize the benefitsanticipated to result from the acquisition of and/or investment in assets or companies, and could have amaterial adverse effect on our ability to grow and on our business, financial condition and results ofoperations.

Our inability to protect our intellectual property rights could have a material adverse effect on our business,financial condition and results of operations.

Protection of our proprietary processes and methods and other technology is important to ourbusiness. Although our existing processes and methods may not be protected or protectable by patents,we generally rely on the intellectual property laws of Australia, as well as licenses and nondisclosureand confidentiality agreements, to protect our intellectual property rights. Additionally, the patent,trade secret and trademark laws of some countries, or their enforcement, may not protect ourintellectual property rights to the same extent as the laws of Australia. Failure to protect ourintellectual property rights may result in the loss of valuable proprietary technologies. If patents areissued to us, those patents may not provide meaningful protection against competitors or againstcompetitive technologies. We cannot assure you that our intellectual property rights will not bechallenged, invalidated, circumvented or rendered unenforceable.

28

With respect to unpatented proprietary manufacturing expertise, continuing technologicalinnovation and other trade secrets necessary to develop and maintain our competitive position, whilewe generally enter into confidentiality agreements with our employees and third parties to protect ourintellectual property, we cannot assure you that our confidentiality agreements will not be breached,that they will provide meaningful protection for our trade secrets and proprietary manufacturingexpertise or that adequate remedies will be available in the event of an unauthorized use or disclosureof our trade secrets or manufacturing expertise. In addition, our trade secrets and know-how may beimproperly obtained by other means, such as a breach of our information technology security systemsor direct theft.

If we fail to successfully enforce our intellectual property rights, our competitive position couldsuffer. We may also be required to spend significant resources to monitor and police our intellectualproperty rights. Similarly, if we were to infringe on the intellectual property rights of others, ourcompetitive position could suffer.

In some instances, litigation may be necessary to enforce our intellectual property rights andprotect our proprietary information, or to defend against claims by third parties that our productsinfringe their intellectual property rights. Any litigation or claims brought by or against us, whetherwith or without merit, could result in substantial costs to us and divert the attention of ourmanagement, which could harm our business, financial condition and results of operations. In addition,any intellectual property litigation or claims against us could result in the loss or compromise of ourintellectual property and proprietary rights, subject us to significant liabilities, require us to seeklicenses on unfavorable terms, prevent us from manufacturing or selling our product, any of whichcould materially adversely affect our business, financial condition and results of operations.

29

SELECTED FINANCIAL INFORMATION

The following tables set forth our selected financial information as of and for the periods ended on thedates indicated below. The selected financial information for Altura Mining Limited has been derived fromour consolidated financial statements as of and for the three months ended September 30, 2019 and thefiscal years ended June 30, 2019, 2018 and 2017. Our consolidated financial statements have been preparedin accordance with Australian Accounting Standards (‘‘AAS’’) and other authoritative pronouncements ofthe Australian Accounting Standards Board (‘‘AASB’’) and comply with AAS as issued by the AASB andInternational Financial Reporting Standards (‘‘IFRS’’) as issued by the International Accounting StandardsBoard (‘‘IASB’’).

Our consolidated financial statements have been audited or reviewed, as applicable, by PKF BrisbaneAudit.

For a discussion and analysis of our historical financial information, see ‘‘Management’s Discussionand Analysis of Financial Condition and Results of Operations.’’ You should read the following financialinformation together with the information in the sections headed ‘‘Presentation of Financial and OtherInformation’’ and ‘‘Risk Factors’’ and the financial statements (including the notes thereto) includedelsewhere in this offering memorandum.

46

Statement of profit and loss

3 months endedSeptember 30, Year ended June 30,

2019 2018 2019 2018 2017

(unaudited)(A$ in thousands)

Continuing operationsRevenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23,312 232 39,399 1,165 1,271Cost of sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (18,149) (264) (31,961) (772) (1,069)

Operating profit / (loss) . . . . . . . . . . . . . . . . . . . . . . . . 5,163 (32) 7,438 393 202

Other incomeSundry income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 105 172 510 331ExpensesAdministrative costs . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,068) (921) (3,344) (3,780) (3,030)Employee benefits expense . . . . . . . . . . . . . . . . . . . . . . (1,226) (1,566) (5,725) (3,690) (2,272)Other expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (52) (47) (188) (188) (167)Profit on sale of subsidiary . . . . . . . . . . . . . . . . . . . . . . 1,202 — — — —

Profit / (loss) before foreign exchange and finance costs 4,023 (2,461) (1,647) (6,755) (4,936)

Net foreign exchange loss . . . . . . . . . . . . . . . . . . . . . . . (6,561) (2,744) (6,466) (6,366) (1,371)

Profit / (loss) before finance costs . . . . . . . . . . . . . . . . (2,538) (5,205) (8,113) (13,121) (6,307)

Finance costsInterest on funding facility . . . . . . . . . . . . . . . . . . . . . . (8,563) — (10,566) — —Amortization of transaction costs . . . . . . . . . . . . . . . . . (5,975) — (7,605) — —Impairment on equity accounted asset . . . . . . . . . . . . . . — — — — (18)Share of net profit / (loss) of equity accounted investee,

net of tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — — — (124)

Profit / (loss) before income tax . . . . . . . . . . . . . . . . . . (17,076) (5,205) (26,284) (13,121) (6,449)

Income tax (expense) / benefit . . . . . . . . . . . . . . . . . . . (21) (54) (287) 408 534

Profit / (loss) from continuing operations . . . . . . . . . . . (17,097) (5,259) (26,571) (12,713) (5,915)

Discontinued operationsLoss from discontinued operations after tax . . . . . . . . . . (7) 1 (142) (104) (250)

Net profit / (loss) for the period . . . . . . . . . . . . . . . . . . (17,104) (5,258) (26,713) (12,817) (6,165)

Profit / (loss) attributable to:Owners of Altura Mining Limited . . . . . . . . . . . . . . . . . (17,114) (5,293) (26,665) (12,880) (6,127)Non-controlling interests . . . . . . . . . . . . . . . . . . . . . . . 10 35 (48) 63 (38)

Loss for the period . . . . . . . . . . . . . . . . . . . . . . . . . . . (17,104) (5,258) (26,713) (12,817) (6,165)

(Loss) per share from continuing and discontinuedoperations attributable to the ordinary equity holdersof the company:

Basic and diluted (loss) per share from continuing anddiscontinued operations . . . . . . . . . . . . . . . . . . . . . . (0.76) (0.29) (1.40) (0.74) (0.45)

Basic and diluted (loss) per share from continuingoperations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (0.76) (0.29) (1.39) (0.73) (0.44)

Basic and diluted (loss) per share from discontinuedoperations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (0.00) (0.00) (0.01) (0.01) (0.01)

47

Balance sheet

As ofSeptember 30, As of June 30,

2019 2019 2018 2017

(unaudited)(A$ in thousands)

Current assetsCash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . 590 9,494 28,761 13,271Trade and other receivables . . . . . . . . . . . . . . . . . . . . . . 7,277 2,149 2,242 3,336Held to maturity investments . . . . . . . . . . . . . . . . . . . . . 78 78 52 52Inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33,532 20,720 1 1Current tax prepaid . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55 73 295 272Other current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . 761 1,155 384 333Assets classified as held for sale . . . . . . . . . . . . . . . . . . . 10,275 9,903 9,271 8,820

Total current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52,568 43,572 41,006 26,085

Non-current assetsFinancial assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,108 1,286 4,018 824Property, plant, equipment and mine properties . . . . . . . 288,002 288,680 222,256 60,203Exploration and evaluation . . . . . . . . . . . . . . . . . . . . . . 3,289 3,265 1,595 1,226Right-of-use asset . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,185 — — —

Total non-current assets . . . . . . . . . . . . . . . . . . . . . . . . 294,584 293,231 227,869 62,253

Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 347,152 336,803 268,875 88,338

Current liabilitiesTrade and other payables . . . . . . . . . . . . . . . . . . . . . . . . (33,281) (40,778) (22,713) (9,198)Borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (192,546) (179,612) — (15,677)Short term provisions . . . . . . . . . . . . . . . . . . . . . . . . . . (1,665) (1,669) (1,158) (842)Lease liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (514) — — —Liabilities classified as held for sale . . . . . . . . . . . . . . . . (1,964) (1,905) (1,846) (1,753)

Total current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . (229,970) (223,964) (25,717) (27,470)

Non-current liabilitiesBorrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — (145,887) —Lease liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,691) — — —Rehabilitation provision . . . . . . . . . . . . . . . . . . . . . . . . . (11,994) (11,994) (3,918) (3,918)

Total non-current liabilities . . . . . . . . . . . . . . . . . . . . . . (13,685) (11,994) (149,805) (3,918)

Total liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (243,655) (235,958) (175,522) (31,388)

Net assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 103,497 100,845 93,353 56,950

EquityContributed equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . 256,355 233,955 192,893 146,556Reserves . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (5,936) (3,320) 3,502 595Accumulated losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . (147,119) (130,005) (103,340) (90,460)

Capital and reserves attributable to owners of AlturaMining Limited . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 103,300 100,630 93,055 56,691

Non-controlling interest . . . . . . . . . . . . . . . . . . . . . . . . . 197 215 298 259

Total equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 103,497 100,845 93,353 56,950

48

Statement of cash flows

3 months endedSeptember 30, Year ended June 30,

2019 2018 2019 2018 2017

(unaudited)(A$ in thousands)

Operating activitiesReceipts from customers . . . . . . . . . . . . . . . . . . . . 18,451 250 48,432 3,069 1,473Payments to suppliers and employees . . . . . . . . . . . (32,220) (1,622) (34,953) (9,345) (7,731)Sundry income . . . . . . . . . . . . . . . . . . . . . . . . . . . — 10 31 38 62Interest received . . . . . . . . . . . . . . . . . . . . . . . . . . 2 33 74 468 319Interest paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (15,927) — — — —Income tax received . . . . . . . . . . . . . . . . . . . . . . . — — — 319 320

Net cash provided by/(used in) operating activities . (29,694) (1,328) 13,584 (5,451) (5,557)

Investing activitiesExpenditure on exploration and evaluation activities (25) (301) (1,198) (1,062) (8,566)Purchase of property, plant, equipment and mine

properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,312) (35,795) (118,618) (126,026) (35,019)Proceeds during commissioning of mine properties . — — 29,463 — —Proceeds from disposal of subsidiaries . . . . . . . . . . 296 — — — —Proceeds from sale of property, plant and

equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 5 44 15 4

Net cash (used in)/provided by investing activities . (1,041) (36,091) (90,309) (127,073) (43,581)

Financing activitiesProceeds from the issue of shares—net of

transaction costs . . . . . . . . . . . . . . . . . . . . . . . . 22,400 — 37,979 34,425 40,309Proceeds from borrowings . . . . . . . . . . . . . . . . . . . — 19,395 19,395 128,615 —Repayment of borrowings . . . . . . . . . . . . . . . . . . . — — — (15,053) —Borrowing costs . . . . . . . . . . . . . . . . . . . . . . . . . . (584) — — — —

Net cash provided by/(used in) financing activities . 21,816 19,395 57,374 147,987 40,309

Net increase/(decrease) in cash and cash equivalentsheld . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (8,919) (18,024) (19,351) 15,463 (8,829)

Cash and cash equivalents at the beginning of year . 9,513 28,779 28,779 13,308 22,132Effect of exchange rate changes on cash holdings in

foreign currencies . . . . . . . . . . . . . . . . . . . . . . . 6 4 85 8 5

Cash and cash equivalents at end of year . . . . . . . . 600 10,759 9,513 28,779 13,308

Non cash investing and financing activitiesShare based payments . . . . . . . . . . . . . . . . . . . . . . — — (125) (34) (70)Interest on loan facility capitalized . . . . . . . . . . . . . — (2,141) (2,141) (17,706) —Transaction fees—borrowings . . . . . . . . . . . . . . . . . — (1,926) (625) (23,982) —

49

EBITDA

The following table sets out our EBITDA and EBITDAX calculations using financial informationderived from our consolidated financial statements for the three month periods ended September 30,2019 and 2018, fiscal 2019, fiscal 2018 and fiscal 2017. EBITDA and EBITDAX are non-GAAPfinancial measures. Please see ‘‘Presentation of Financial and Other Information—Non-GAAP financialmeasures’’ for more information.

3 months endedSeptember 30, Year ended June 30,

2019 2018 2019 2018 2017

(unaudited)(A$ in thousands)

Profit / (loss) from continuing operations . . . . . . . . . . . (17,097) (5,259) (26,571) (12,713) (5,915)Less:Depreciation and amortization . . . . . . . . . . . . . . . . . . . (3,153) (72) (4,201) (287) (250)Finance costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (14,536) 33 (18,116) 447 321Income tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (21) (54) (287) 408 534

EBITDA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 613 (5,166) (3,967) (13,281) (6,520)

Less: Net foreign exchange gain / (loss) . . . . . . . . . . . . . (6,561) (2,744) (6,466) (6,366) (1,371)

EBITDAX . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,174 (2,422) 2,499 (6,915) (5,149)

50

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OFOPERATIONS

In the following section, we discuss our historical results of operations and financial condition as ofand for the fiscal years ended June 30, 2019, 2018 and 2017, which we refer to as fiscal 2019, fiscal 2018and fiscal 2017, and as of and for the three month periods ended September 30, 2019 and 2018, andmanagement’s assessment of the factors that may affect our prospects and performance in future periods.

You should read the following discussion and analysis in conjunction with the financial statementsand the related notes of Altura Mining Limited, together with the selected financial and operating dataappearing elsewhere in this offering memorandum. See ‘‘Presentation of Financial and OtherInformation—Presentation of financial information’’ for important information regarding the basis ofpreparation of our consolidated financial statements. The financial statements of Altura Mining Limitedfor fiscal 2019, fiscal 2018 and fiscal 2017 have been audited by PKF Brisbane Audit and you shouldrefer to the audit reports attached to our consolidated financial statements included herein. Thefinancial statements of Altura Mining Limited for the three month periods ended September 30, 2019and 2018 have been reviewed by PKF Brisbane Audit and you should refer to the review reportsattached to the interim consolidated financial statements included herein.

Certain information contained herein, including information with respect to our plans andexpectations for our business, contains forward-looking statements and involves risks and uncertaintiesthat could cause actual future activities and results of operations to be materially different from thoseset forth in such forward-looking statements. You should consider carefully the factors set forth underthe captions ‘‘Risk Factors’’ and ‘‘Forward-looking statements’’ for a discussion of important factorsthat could cause actual results to differ materially from any forward-looking statements contained inthis offering memorandum.

Overview

We own and operate an integrated lithium mine and processing plant at Pilgangoora in the Pilbararegion of north-west Australia. The operation has a nameplate capacity of 220,000 tonnes of lithium-bearing 6% spodumene concentrate. The plant produced its first commercial shipment in October 2018and we declared commercial production in March 2019. We produced 17,951 wmt of spodumeneconcentrate in October 2019, our highest monthly production to date and achieved 98% of ournameplate capacity. We have offtake agreements with four Chinese buyers covering a minimum of220,000 tonnes of concentrate per year with prices set by reference to market prices of spodumeneconcentrate and specialty lithium chemicals. We have completed a definitive feasibility study into aStage 2 expansion of our mine and processing plant that would double our nameplate capacity.

Altura Mining Limited is listed on the ASX with a market capitalization of A$146.2 million as ofNovember 26, 2019.

Recent development

On November 20, 2019, we raised A$9.155 million through a non-renounceable rights issue underwhich Altura Mining Limited shareholders were invited to subscribe for 2 shares for every 13 sharesowned at an issue price of A$0.06 per share. Shareholders subscribed for a total of 152,585,610 shares,representing approximately 42.6% of the shares available for subscription. Under ASX listing rules, wemay allocate the shortfall shares within three months of the closing date of the offer, and we will lookto place these shares in coming weeks.

51

Key income statement items and their drivers

Revenue

Our principal source of revenue is sales of 6% spodumene concentrate. We sell our concentrateproduction to four customers under offtake agreements that oblige the customer to buy an agreedquantity of concentrate each contract year, but do not fix prices. Instead, prices are set by reference toprinciples that are designed to reflect the market prices for comparable product, or market prices forprocessed lithium, or both, subject, in most cases, to a ceiling price and a floor price. As a result, theprices we receive for our product vary as market prices for lithium fluctuate. Market prices for lithiumgenerally reflect global supply and demand. See ‘‘Lithium Market Overview’’ for a discussion of theglobal market for lithium and the drivers of lithium prices.

The following table summarizes the key terms of our offtake agreements.

Minimum offtake Price floor Price ceilingBuyer per year (dmt) (US$ per dmt) (US$ per dmt) Expiry

Lionergy Limited . . . . . . . . . . . . . . 65,000 550(1) 950(1) September 2023(5)GFL International Co., Limited . . . . 70,000 550(2) 950(2) December 2021(6)Shandong Ruifu Lithium

Industry Co., Ltd . . . . . . . . . . . . . 35,000 550 950 June 2024(7)Guangdong Weihua Corporation . . . 50,000 550(3) 950(4) December 2024(8)

(1) Applies during each of the first three contract years.

(2) Applies during each quarter in the first three contract years (2018, 2019 and 2020).

(3) Applies during the second and subsequent contract years. The price floor for the first contract yearis US$585 (CIF basis) per dmt.

(4) Applies during the second and subsequent contract years. The price ceiling for the first contractyear is US$695 (CIF basis) per dmt.

(5) The parties may mutually agree to extend the term for any agreed period.

(6) The buyer has an option to extend the term for an additional period of 5 years.

(7) The parties may mutually agree to extend the term for an additional period of 3 years.

(8) The parties may mutually agree to extend the term for an additional period of 5 years.

Our contract prices are based a spodumene concentrate containing 6% lithium. In practice, thelithium content of each shipment varies, usually within the range of 5.8% to 6.2%. The price we receiveis adjusted higher or lower to reflect the actual lithium content. While our offtake agreements providea significant level of assurance over our near term revenue, the floor price provisions will terminateover the next few years and the contracts will expire between December 2021 and December 2024. Asa result, our revenue may be exposed to larger fluctuations in market prices, and we will need to agreeon the terms of new contracts with our existing customers or find new buyers after our existingcontracts expire. In addition, if market prices fall below the floor price in our contracts, there is a riskthat our customers will seek to renegotiate contract terms or fail to abide by contract terms. See ‘‘RiskFactors—Our revenues depend on lithium prices, which have been volatile.’’

Our sales contracts are denominated in U.S. dollars, so fluctuations in the US$:A$ exchange rateaffect our revenue in Australian dollar terms.

The other significant driver of our revenue is the volume of concentrate we produce, whichdepends on our ability to mine the quantity and quality of ore we expect and to operate the processingplant at full capacity.

52

While we believe that our orebody is relatively well understood and our mine is relativelystraightforward to operate using conventional mining methods, our mining operations are subject torisks that always apply to mining, including that we will encounter unforseen geological conditions, thatthe grade of the ore will be less than we have estimated and that errors or safety incidents will delayproduction.

Over the past 15 months we have been gradually increasing our processing plant throughput tonameplate production rates by identifying and eliminating bottlenecks and inefficiencies. In October2019, we produced 17,951 wet metric tonnes, which is 98.0% of our nameplate capacity. Ourproduction rate can vary for a variety of reasons, including unforseen fluctuations in the grade of theore, planned shutdowns for routine and preventative maintenance and upgrades and unplannedshutdowns if there are equipment failures or accidents.

Because we have only one mine and one plant, the risks to our financial results of productioninterruptions is enhanced compared to companies with multiple operations.

In addition to our revenue from sales of 6% spodumene concentrate, we have earned smallamounts of revenue from a drilling business in Indonesia. We sold the drilling business in July 2019.We have also been receiving some royalties from time to time from the Mt. Webber iron ore project inWestern Australia as a result of the Company’s sale of its 30% interest in the project to Atlas IronLimited in 2015. It is likely that the royalty receipts will cease in the December 2019 quarter as theiron ore reserves in the area covered by the agreement are exhausted.

Costs

Our costs consist of the cost of sales of our product, operating expenses including administrationcosts, employee benefits expense and other expenses, net foreign exchange losses, finance costs and tax.

Cost of sales

The largest components of our cost of sales are the direct cost of mining and the costs associatedwith operating our processing plant. Our mining costs largely comprise the payments we make to ourmining contractor under the mining services contract. The contract provides for monthly paymentsconsisting of a fixed component and a variable component that reflects the volume of material mined.The contractor is responsible for supplying mining equipment including vehicles and most consumables,including ground engaging tools, explosives and lubricants. The mining contractor also employs andpays mining personnel, who we accommodate at our mining village and fly in and out of Perth at ourexpense.

Prices under the contract are subject to rise and fall provisions, which adjust contract prices forchanges in the cost of key items such as spare parts, explosives and labour.

The costs of operating our processing plant primarily relate to the cost of the workforce weemploy to operate the plant, the cost of maintenance, spare parts and consumables such as reagentsand lubricants and the electricity tariffs that we pay under our electricity supply agreement with KPSPower. The tariffs are variable, in that they are payable per kilowatt hour of electricity consumed,subject to a minimum monthly purchase requirement. The contract price per kilowatt hour can beadjusted during the contract term to reflect changes in input costs including parts and labour.

Also included in the mining and processing costs is diesel fuel, which is supplied to the miningcontractor and the power station operator at our cost.

The mining royalties we pay are also included in cost of sales. We pay a royalty to the WesternAustralian state government of 5% of the gross invoice value of our sales, subject to certain allowabledeductions. We pay a royalty to the Njamal people under our native title agreement of 1% of gross

53

sales. We also pay a royalty to Atlas Iron of 5% of gross sales relating to ore mined from miningtenement M45/1231, which was a term of the agreement under which Atlas Iron transferred its rights tothe tenement to us. We estimate that over the life of the mine, this royalty will equate to approximately2.5% to 3.0% of our gross sales.

We also include non-cash depreciation charges on our mining property, plant and equipment incost of sales. We depreciate our capitalized mine development costs on a unit of production basis. Thismeans that as we mine ore, we incur depreciation charges representing the equivalent portion of themine development asset as the ore represents of our ore reserve. We also incur depreciation charges onour plant and equipment on a straight line basis over their estimated useful lives.

Cost of sales also includes insurance premiums for our plant and operations and the direct costs ofthe drilling business that we sold in July 2019.

Finally, because we only recognize cost of goods sold at the point we sell the product, we make anadjustment to the mining and production costs we incur in a period to reflect the portion of those coststhat related to producing product that was produced in one period but sold in another. We do this bycalculating the difference between our product inventory at the start and end of the period,determining the cost of producing that material and either deducting (in the case of an inventoryincrease) or adding (in the case of an inventory decrease) that cost from or to the cost of goods soldfor the period.

Expenses

We categorize our main corporate costs under ‘‘Administration’’ and ‘‘Employee benefits expense.’’Administration expense reflects the costs of operating our corporate offices, including rent, officeequipment and supplies, travel, ASX and registry costs, directors’ and officers’ insurance premiums andthe fees of professional advisers. Employee benefits expense reflects the salaries of corporate officeemployees, including the executive team, directors’ fees and the costs of our employee share scheme.

Finance costs

Our finance costs largely relate to the outstanding loan notes. We issued US$110 million of secured loan notes in July 2017, and an additional US$15 million in September 2018. The loan notes mature in August 2020. These notes carried a coupon of 14% until January 2019 and 15% thereafter. The terms of the notes permitted us to capitalize the first two interest payments. Accrued interest totaling A$19.8 million had been capitalized as at 30 June 2019.

Before we declared commercial production, we recorded the cost of interest payable tonoteholders as an increase to capitalized project costs and therefore did not record a finance costrelated to that interest. We also capitalized the transaction costs relating to establishing and servicingthe loan notes. After the project began commercial operation, we expensed interest as it accrued andthen became payable to noteholders and also began to amortize the capitalized transaction costs on astraight line basis over the remaining life of the financial instrument.

Finance costs also include waiver fees paid to noteholders in relation to breaches of the financialcovenant contained in the notes.

Tax

The corporate income tax rate in Australia is 30% of taxable income (as defined under the IncomeTax Assessment Act 1936 (Cth)). Taxable income is broadly equivalent to profit before tax, althoughaccounting profit and taxable income can differ in a particular period due to timing and other

54

differences. Subject to certain conditions, taxpayers are entitled to use accumulated losses from pastperiods to offset taxable income in subsequent periods.

Because we have not recorded profits, we have not incurred any income tax liability. AtSeptember 30, 2019, we had accumulated tax losses of approximately A$89 million that we expect to beavailable to offset future profits from the Altura Lithium Mine.

Cash costs

In addition to the income statement items that we present in accordance with AustralianAccounting Standards, we report a measure referred to as cash costs, which is intended to measure thedirect cash costs of producing and selling our product. Cash costs include all mining, processing, siteadministration costs, freight to port, port handling charges and ship loading costs.

We express cash costs as a measure per wet metric tonne (wmt) of product produced.

Cash costs is a useful measure for understanding the potential profitability of our operation inisolation from our financing structure, tax position and the capital investment we have made to bringthe Altura Lithium Mine into production. However, investors should understand that it excludes certaincosts that we must incur to operate our business, including royalties, export freight, exploration andcorporate costs, as well as charges that, although they are non-cash, are nevertheless necessary tounderstand the overall economics of our business. It should not be used as a substitute for profitabilityand cash flow measures calculated in accordance with Australian Accounting Standards, such as grossprofit and cash flows from operating activities.

The following table shows our monthly cash costs per wmt of product since we began commercialproduction:

Apr 19 May 19 Jun 19 Jul 19 Aug 19 Sep 19 Oct 19

Cash costs (US$ wmt) . . . . . . . . . . . . . . . . . . . . . . . . . 448 387 359 397 408 289 330

Segments

We report three operating segments: lithium mining, exploration services and mineral exploration.The mining services segment operated our drilling services business, which was sold in July 2019. Themineral exploration segment earns revenue from royalties from Atlas and the interest earned on fundsraised to carry out exploration activities. Since we began developing the Altura Lithium Mine, thelithium mining segment has represented the overwhelming majority of our revenues, costs, assets andliabilities, and we expect this to continue. See Note 4 to our consolidated financial statements for fiscal2019 for more information on our operating segments.

Critical accounting policies

A number of our accounting policies involve important judgments and estimates that cansignificantly affect our reported results of operations and financial position. The areas that involve ahigh degree of judgment or complexity, or where assumptions and estimates are significant to ourfinancial statements are summarized in note 1(o) to our consolidated financial statements for fiscal2019. Those areas are:

• determination of resources and reserves;

• exploration and evaluation expenditure;

• impairment;

• rehabilitation;

55

• derivatives;

• income taxes;

• share-based payment transactions; and

• mines under construction.

New and proposed accounting standards

A number of new accounting standards, amendments and interpretations to existing standards havebeen published by the Australian Accounting Standards Board that are effective for future periods andwhich we will adopt when they become effective. Of these, we expect AASB 16 Leases to be the onlyone that has a significant effect on our consolidated financial statements.

AASB 16 establishes principles for the recognition, measurement, presentation and disclosure ofleases and supersedes AASB 117 Leases. AASB 16 eliminates the current dual accounting model forleases which distinguishes between on-balance sheet finance leases and off-balance sheet operatingleases. The standard provides a single lessee accounting model, requiring lessees to recognize assetsand liabilities for all leases, unless the lease term is 12 months or less, or the underlying asset is lowvalue. As required, we are adopting this standard for the fiscal year ending June 30, 2020, and it is notreflected in the annual consolidated financial statements included in this offering memorandum.

On adoption of AASB 16, we recognized lease liabilities and corresponding right-of-use assets inrelation to property leases for the warehouse that had previously been classified as operating leases.These liabilities were measured at the present value of the remaining lease payments, discounted at therate of 5%. These re-measurements were classified as adjustments to the related right-of-use assets asat July 1, 2019, the date of initial application. In our income statement, instead of recognizing ourentire rental obligation as an expense, we recognize an amortization expense relating to the right-of-useasset, calculated on a straight line basis over the lease term, together with an interest charge.

Accordingly, we recognized a lease liability of A$2.2 million and a corresponding right of use assetof A$2.2 million as at September 30, 2019. The effect on our income statement for the three monthperiod ended September 30, 2019 was immaterial.

The new standard does not require us to restate prior periods and we do not intend to do so.

Results of operations

Three months ended September 30, 2019 compared to three months ended September 30, 2018

We incurred a net loss of A$17.1 million in the three months ended September 30, 2019, comparedto a net loss of A$5.3 million in the corresponding period in 2018. We achieved an operating profit ofA$5.2 million for the period, however a net foreign exchange loss, interest on our debt andamortization of transaction costs contributed to our loss.

Revenue

Sales revenue for the three months ended September 30, 2019 was A$23.3 million, compared toA$0.2 million in the corresponding period in 2018. We continued to ramp up production, producing15,101 wmt of 6% spodumene concentrate in July 2019, 13,821 wmt in August 2019 and 16,562 wmt inSeptember 2019, for a total of 45,484 wmt for the quarter. We sold 25,601 dmt of concentrate duringthe period, with a further cargo of 11,587 dmt shipping on October 2, 2019.

Sales revenue in the three months ended September 30, 2018 consisted of mining services revenueand royalties. Other revenues in the three months ended September 30, 2019 and 2018 were A$4,000and A$0.1 million, respectively.

56

Cost of sales

Cost of sales for the three months ended September 30, 2019 was A$18.1 million, compared toA$0.3 million in the three months ended September 30, 2018, also reflecting the ramp up of productionand sales. Cost of sales in the three months ended September 30, 2019 included A$25.4 million ofmining and processing costs, A$1.8 million of royalty expenses and A$3.1 million of depreciation andamortization. Reported cost of sales also reflected an adjustment of A$12.5 million because of thehigher period-end product inventory. This is largely a function of the timing of shipments: we shipped acargo of 13,700 dmt on June 19, 2019, resulting in lower July 1 inventory, and a cargo of 11,587 dmt onOctober 2, which material was included in inventory on September 30, 2019.

Cash costs for the three months ended September 30, 2019 were US$365 per wmt.

Expenses

Administration costs were A$1.1 million in the three months ended September 30, 2019, anincrease of A$0.2 million, or 16.0%, compared to A$0.9 million in the corresponding period in 2018.Employee benefits expense was A$1.2 million in the three months ended September 30, 2019, adecrease of A$0.3 million, or 21.7%, compared to A$1.6 million in fiscal 2018. The three months endedSeptember 30, 2019 also included a A$1.2 million gain on the sale of our Indonesian drilling business.

Net foreign exchange loss

We had a net foreign exchange loss of A$6.6 million in the three months ended September 30,2019, an increase of A$3.8 million, or 139.1% compared to A$2.7 million in the corresponding periodin 2018. The losses in each period relate to the impact of adverse movements in the US$:A$ exchangerate on U.S. dollar exposures—principally the Company’s loan notes.

Loss before finance costs and tax

We recorded a loss before finance costs and tax of A$2.5 million in the three months endedSeptember 30, 2019, compared to a loss of A$5.2 million in the corresponding period in 2018.

Finance costs

Finance costs were A$14.5 million in the three months ended September 30, 2019, compared to A$nil in the corresponding period in 2018. These costs relate to the US$110 million of loan notes weissued in July 2017, with an additional US$15 million issued in September 2018. While the AlturaLithium Mine was still in development, we recorded interest payable to noteholders as an increase tocapitalized project costs and therefore did not record a finance cost related to that interest. After theproject began commercial operation, we expensed interest as it became payable to noteholders and alsobegan to amortize the capitalized costs on a straight line basis over the remaining life of the loan.Accordingly, in the three months ended September 30, 2019, we recorded interest of A$8.6 million andamortized transaction costs of A$6.0 million.

Tax

Because we operated at a loss, we did not generate taxable income in the three months endedSeptember 30, 2019 or 2018.

Fiscal 2019 compared to fiscal 2018

We incurred a net loss for the year of A$26.7 million in fiscal 2019, compared to a net loss ofA$12.8 million in fiscal 2018. We commenced production in July 2018, sold our first cargo in October2018 and declared that we had achieved commercial production in March 2019. We achieved a gross

57

profit of A$7.4 million for fiscal 2019, however this was offset by our administration costs andemployee benefits expense (which we incurred on a full year basis) and our finance costs together witha non-cash foreign exchange loss resulted in our loss for the year.

Revenue

Total revenue for fiscal 2019 was A$39.4 million, compared to A$1.2 million in fiscal 2018.Following declaration of commercial production in March 2019 we sold 46,167 dry metric tonnes of 6%spodumene concentrate through to 30 June 2019. Although we started producing concentrate in July2018, we experienced teething issues ramping up the plant to full capacity. The following table showsour monthly production and the approximate percentage it represented of nameplate capacity.

Jul 18 Aug 18 Sep 18 Oct 18 Nov 18 Dec 18 Jan 19 Feb 19 Mar 19 Apr 19 May 19 Jun 19

6% spodumeneconcentrateproduced (wmt) . . . . 463 2,514 4,026 4,463 5,478 7,247 6,364 9,831 10,777 11,116 15,266 16,020

% of nameplatecapacity . . . . . . . . . 3 14 22 25 30 40 35 55 60 62 85 89

We earned mining services revenue of A$0.8 million in each of fiscal 2019 and 2018. We generatedroyalty revenue of A$0.8 million and A$0.4 million in fiscal 2019 and fiscal 2018, respectively. Otherrevenues in fiscal 2019 and 2018 were A$0.2 million and A$0.5 million, respectively, consisting ofpredominantly of interest income and profit on the sale of assets.

Cost of sales

Cost of sales for fiscal 2019 was A$32.0 million, compared to A$0.8 million in fiscal 2018, alsoreflecting the ramp up of production and sales. Cost of sales in fiscal 2019 included A$29.8 million ofmining and processing costs offset by an A$8.9 million increase in product inventory. All productioncosts prior to the declaration of commercial production were recorded as an increase to capitalizedproject costs. Cost of sales included A$6.1 million of royalties paid and A$4.0 million of non-cashdepreciation expense on our mining property and plant and equipment. Mining services drilling costswere A$0.8 million and A$0.7 million in fiscal 2019 and fiscal 2018, respectively.

Expenses

Administration costs were A$3.3 million in fiscal 2019, a decrease of A$0.5 million, or 11.5%,compared to A$3.8 million in fiscal 2018 due to reclassification of certain expenses to cost of sales in2019. Employee benefits expense was A$5.7 million in fiscal 2019, an increase of A$2.0 million, or55.2%, compared to A$3.7 million in fiscal 2018. The increase relates to additional corporate officestaff reflecting the growth and increased complexity of the organization as we completed constructionand moved into production. Other expenses of A$0.2 million in both fiscal 2019 and 2018 relate todepreciation on corporate plant and equipment.

Net foreign exchange loss

We had a net foreign exchange loss of A$6.5 million in fiscal 2019, an increase of A$0.1 million, or1.6% compared to A$6.4 million in fiscal 2018. The losses in each period relate to the impact ofadverse movements in the US$:A$ exchange rate on U.S. dollar exposures, principally our loan notes.

Loss before finance costs and tax

We recorded a loss before finance costs and tax of A$8.1 million in fiscal 2019, compared to a lossof A$13.1 million in fiscal 2018.

58

Finance costs

Finance costs were A$18.2 million in fiscal 2019, compared to A$nil in fiscal 2018. These costsrelate to the US$110 million of loan notes we issued in July 2017, with an additional US$15 millionissued in September 2018. While the Altura Lithium Mine was still in development, we recordedinterest payable to noteholders as an increase to capitalized project costs and therefore did not recorda finance cost related to that interest. After the project began commercial operation, we expensedinterest as it became payable to noteholders and also began to amortize the capitalized costs on astraight line basis over the remaining life of the loan. Accordingly, in fiscal 2019, we recorded interestof A$10.6 million and amortized transaction costs of A$7.6 million.

Tax

Because we operated at a loss, we did not incur income tax in fiscal 2019 or fiscal 2018. Werecorded small adjustments in respect of prior periods in each of fiscal 2019 and fiscal 2018. The fiscal2019 adjustment was to recognize an expense of A$0.3 million and the fiscal 2018 adjustment was torecognize a gain of A$0.4 million.

Fiscal 2018 compared to fiscal 2017

We incurred a net loss for the year of A$12.8 million in fiscal 2018, compared to a net loss ofA$6.2 million in fiscal 2017. We earned a small amount of revenue from mining services through ourdrilling business in both fiscal 2018 and fiscal 2017, however our activities in both periods were largelyfocused on developing the Altura Lithium Mine. Because the project was in development, thedevelopment costs we incurred were capitalized and our net losses largely relate to corporate officecosts, including employee benefits expense and net foreign exchange losses as a result of movements inthe US$:A$ exchange rate.

Revenue

Revenue for fiscal 2018 was A$1.2 million, a decrease of A$0.1 million, or 8.3%, compared toA$1.3 million in fiscal 2017. A$0.8 million of this revenue in both fiscal 2018 and 2017 was derivedfrom our mining services business, which was sold in September 2019. We earned royalty revenue ofA$0.4 million and A$0.5 million in fiscal 2018 and 2017, respectively.

Cost of sales

Cost of sales for fiscal 2018 was A$0.8 million, a decrease of A$0.3 million, or 27.8%, compared toA$1.1 million in fiscal 2017.

Expenses

Administration costs were A$3.8 million in fiscal 2018, an increase of A$0.8 million, or 24.8%,compared to A$3.0 million in fiscal 2017. The increase reflected higher administrative costs as projectdevelopment accelerated and administration requirements grew. Employee benefits expense wasA$3.7 million in fiscal 2018, an increase of A$1.4 million, or 62.4%, compared to A$2.3 million in fiscal2017. The increase relates to additional corporate office staff reflecting the growth and increasedcomplexity of the organization as we completed construction and moved into production. Otherexpenses of A$0.2 million in both fiscal 2018 and fiscal 2017 relate to depreciation on corporate officeplant and equipment.

Net foreign exchange loss

We had a net foreign exchange loss of A$6.4 million in fiscal 2018, an increase of A$5.0 millioncompared to a loss of A$1.4 million in fiscal 2018. The losses in each period relate to the impact ofadverse movements in the US$:A$ exchange rate on U.S. dollar exposures, principally our loan notesand certain cash accounts.

59

Loss before finance costs and tax

We recorded a loss before finance costs and tax of A$13.1 million in fiscal 2018, compared to aloss of A$6.4 million in fiscal 2017.

Finance costs

During fiscal 2018 and fiscal 2017, while the Altura Lithium Mine was still in development, werecorded interest payable to our noteholders as an increase to capitalized project costs and thereforedid not record finance costs.

Tax

We recognized tax benefits as a result of adjustments to prior periods of A$0.4 million in fiscal2018 and A$0.5 million in fiscal 2017.

Liquidity and capital resources

Overview

Our principal uses of cash are to fund our existing operations, including our working capitalrequirements and capital expenditure commitments including expenditure to maintain our miningoperation and processing plant and to fund our exploration program. We anticipate meeting theserequirements primarily from cash on hand (including the proceeds of a A$9.155 million sharenon-renounceable rights issue we completed on November 20, 2019), operating cash flow, and thebalance of the proceeds of this offering after repayment of our existing loan notes. We may fund theadditional capital for Stage 2 from a combination of any of existing cash resources, operating cash flow,the surplus proceeds from this offering, issuing new debt or equity securities or new financing facilities,forward sales of product, and/or sales of our equity.

We funded the development of the Altura Lithium Mine with equity capital and the proceeds of our US$110 million issuance of loan notes issued in September 2017, together with the US$15 million additional tranche issued in September 2018.

We have not paid dividends to our shareholders in the past and do not anticipate paying dividendsin the immediate future.

Cash flows

Our cash flow statements for the three month periods ended September 30, 2019 andSeptember 30, 2018 and fiscal year 2019, fiscal year 2018 and fiscal year 2017 are summarized below.

60

Statement of cash flows

3 months endedSeptember 30, Year ended June 30,

2019 2018 2019 2018 2017

(unaudited)(A$ in thousands)

Operating activitiesReceipts from customers . . . . . . . . . . . . . . . . . . . . 18,451 250 48,432 3,069 1,473Payments to suppliers and employees . . . . . . . . . . . (32,220) (1,622) (34,953) (9,345) (7,731)Sundry income . . . . . . . . . . . . . . . . . . . . . . . . . . . — 10 31 38 62Interest received . . . . . . . . . . . . . . . . . . . . . . . . . . 2 33 74 468 319Interest paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (15,927) — — — —Income tax received . . . . . . . . . . . . . . . . . . . . . . . — — — 319 320

Net cash provided by/(used in) operating activities . (29,694) (1,328) 13,584 (5,451) (5,557)

Investing activitiesExpenditure on exploration and evaluation activities (25) (301) (1,198) (1,062) (8,566)Purchase of property, plant, equipment and mine

properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,312) (35,795) (118,618) (126,026) (35,019)Proceeds during commissioning of mine properties . — — 29,463 — —Proceeds from disposal of subsidiaries . . . . . . . . . . 296 — — — —Proceeds from sale of property, plant and

equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 5 44 15 4

Net cash (used in)/provided by investing activities . (1,041) (36,091) (90,309) (127,073) (43,581)

Financing activitiesProceeds from the issue of shares—net of

transaction costs . . . . . . . . . . . . . . . . . . . . . . . . 22,400 — 37,979 34,425 40,309Proceeds from borrowings . . . . . . . . . . . . . . . . . . . — 19,395 19,395 128,615 —Repayment of borrowings . . . . . . . . . . . . . . . . . . . — — — (15,053) —Borrowing costs . . . . . . . . . . . . . . . . . . . . . . . . . . (584) — — — —

Net cash provided by/(used in) financing activities . 21,816 19,395 57,374 147,987 40,309

Cash flows from operating activities

Before the Altura Lithium Mine entered commercial production, our cash flows from operatingactivities consisted of relatively small inflows from customers of our mining services business, interestand tax refunds, while outflows consisted of payments to suppliers and employers, predominantlyrelating to our mining services business and our corporate office activities. Since we began commercialproduction, our operating cash flow has been dominated by payments to suppliers and employeesinvolved in mining and processing and receipts from customers for our spodumene concentrate product.Cash flows from operating activities were an outflow of A$29.7 million for the three month periodended September 30, 2019 compared to an outflow of A$1.3 million for the three month period endedSeptember 30, 2018. Cash flows from operating activities were an inflow of A$13.6 million for fiscal2019 and outflows of A$5.5 million and A$5.6 million for fiscal 2018 and 2017, respectively.

Cash flows from investing activities

Prior to commercial production, our cash flows from investing activities in recent years weredominated by the capital expenditure to develop and construct our mine and processing plant. We haveused smaller amount of cash flow for exploration and evaluation expenditure. Cash flows from investingactivities were an outflow of A$1.0 million for the three month period ended September 30, 2019

61

compared to an outflow of A$36.1 million for the three month period ended September 30, 2018. Cashflows from investing activities were outflows of A$90.3 million, A$127.1 million and A$43.6 million forfiscal 2019, 2018 and 2017, respectively.

Cash flows from financing activities

We have raised substantial amounts of capital over recent periods to fund development andconstruction of our mine and plant. Cash flows from financing activities were an inflow ofA$21.8 million for the three month period ended September 30, 2019 compared to an inflow ofA$19.4 million for the three month period ended September 30, 2018. Cash flows from financingactivities were inflows of A$57.4 million, A$148.0 million and A$40.3 million for fiscal 2019, 2018 and2017, respectively.

Financing

We have raised significant amounts of both equity and debt capital over recent years to fund ouractivities, principally the development of the Altura Lithium Mine.

Since July 1, 2016, we have raised equity capital as follows:

• In July 2016, we raised A$774,000 at an offer price of A$0.20 per share from an offer to ourexisting shareholders under a share purchase plan following a A$20 million institutionalplacement in June 2016.

• In February 2017 we raised A$41.616 million through an equity placement at an offer price ofA$0.136 per share to J&R Optimum, a Chinese lithium battery producer, as part of a plannedstrategic alliance.

• In October 2017 we raised A$26.025 million through a placement to institutional investors at anoffer price of A$0.19 per share.

• In February 2019, we raised A$24.5 million through a placement to institutional investors at anoffer price of A$0.13 per share.

• In March 2019, we raised A$14 million through a securities purchase plan offer to existingshareholders at an offer price of A$0.13 per share, being the same offer price as the precedinginstitutional placement.

• In August 2019, we raised A$22.4 million in a placement to an existing shareholder, Shanshan,at an offer price of A$0.112 per share. The capital raising was part of a cooperation agreementunder which we anticipate that Shanshan may become a customer.

• In November 2019, we completed a non-renounceable rights issue under which we raisedA$9.155 million from existing shareholders at an offer price of A$0.06 per share. There was ashortfall of 205,177,852 shares in this entitlement offer, which we will look to place in comingweeks.

Since July 1, 2016, we have also raised A$3.141 million from the exercise of unlisted options thatwere issued to Jett Capital as part of its compensation for services as financial adviser in connectionwith our loan notes and a further A$6.657 million from the exercise of unlisted warrants issued to theloan note holders.

Our principal debt financing is a series of privately placed secured loan notes issued by the Issuerand guaranteed by the Guarantor that are currently held by four institutional investors in the UnitedStates. We issued US$110 million of secured loan notes in July 2017, and an additional US$15 millionin September 2018. The notes mature in August 2020. These notes carried a coupon of 14% until

62

January 2019 and 15% thereafter. The loan notes are secured over all of the Issuer’s assets, our sharesin the Issuer, our bank accounts and certain receivables.

The terms of the loan notes include a financial covenant that required us to maintain an annualratio of net debt to EBITDA (as defined in the loan notes) of no more than 2:1 for the quarterlyperiod ending on September 30, 2018 and an annual ratio of 1.5:1 for quarterly periods ending afterSeptember 30, 2018. The calculation of this ratio is based on the current operating quarter resultsadded to the previous 3 operating quarters in order to deliver an annual result.

This covenant was breached in each quarter of fiscal 2019 and again in the first quarter of fiscal2020. To date, note holders have waived these breaches. We have paid a total of US$1.1 million ofwaiver fees as of September 30, 2019. Because of the covenant breaches, as of June 30 andSeptember 30, 2019, we did not hold an unconditional right to defer the settlement of the loan. As aresult, the full balance of the loan notes was recorded as a current liability in our financial statementsfor fiscal 2019 and the three months ended September 30, 2019.

We do not have any outstanding bank facilities.

Capital expenditure

Our capital expenditure over recent periods has largely related to the exploration, developmentand construction of our mine and plant. Pending an investment decision to proceed with Stage 2, weanticipate that our capital expenditure will be at a significantly lower level than the recent past and willmostly relate to maintenance capital expenditure on our mine and plant and exploration and evaluationactivities.

The following table sets out our capital expenditure for the three month period endedSeptember 30, 2019 and fiscal 2019, fiscal 2018 and fiscal 2017.

Three monthsended

September 30, Fiscal year ended June 30,

2019 2019 2018 2017

(A$ in thousands)

Capital expenditure . . . . . . . . . . . . . . . . . 2,620 64,770 164,005 52,937

We have budgeted approximately A$4.3 million for capital expenditure for the remainder of fiscal2020, consisting primarily of upgrades and modifications to our process plant.

Contractual commitments and off-balance sheet liabilities

This section sets out our contractual commitments, contingent liabilities and off-balance sheetliabilities. Apart from these commitments and liabilities, we have not entered into any off-balance sheettransactions or obligations.

63

The following table summarizes our contractual commitments as at June 30, 2019.

Less than More than1 year 1 to 5 years 5 years Total

(A$ in thousands)

Operating lease commitments . . . . . . . . . . . . . . . . . . . . . . . . 853 2,571 — 3,424Capital commitments—property, plant and equipment . . . . . . 978 — — 978Capital commitments—exploration(1)(2) . . . . . . . . . . . . . . . . 425 — — 425

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,256 2,571 — 4,827

(1) We have obligations to perform minimum exploration work and expend minimum amounts on ourwholly owned mining tenements. We expect our obligations for fiscal 2020 to amount toA$425,000. We have not estimated expenditure commitments beyond 12 months for thesetenements because the amounts will depend on our ongoing assessment of operations and, incertain instances, native title negotiations.

(2) In August 2019, we entered into an earn-in agreement with Sayona Mining Limited, an ASX listedjunior lithium project development company, to earn up to a 51% interest in a portfolio of 15exploration tenements in the Pilbara region, mostly in the Pilgangoora district. The agreementrequires us to spend at least A$500,000 within a three year period on exploration expenditure.Spending A$1.5 million would earn us a 51% interest.

In addition to the obligations presented above, one of our subsidiaries has contracted to provide aloan facility of up to US$4 million to a minority partner in the Tabalong Coal Project. The provision ofthe facility is contingent on project milestones being achieved.

Contingent liabilities

At June 30, 2019, we had contingent liabilities under various guarantees and undertakings that weand our bankers issued to the Northern Territory Department of Mines and Energy relating topreviously-held tenements in the Northern Territory. The amounts were not material. We have sinceconfirmed that the tenements have been relinquished and the contingent liabilities no longer exist.

Qualitative and quantitative disclosure about market risk

Our activities expose us to a variety of financial risks: market risk (which includes currency risk,interest rate risk and price risk), credit risk and liquidity risk. We manage these risks in accordancewith our financial risk management policy, which has been approved by the Board. The principal risksare summarized below. More information regarding these risks and how we manage them, includingsensitivity analyses, is contained in note 2—Financial risk management to our consolidated financialstatements for fiscal 2019.

Market risk

Market risk is the risk that changes in market prices, such as foreign exchange rates, securitiesprices and lithium product prices will affect our income or the value of our holdings of financialinvestments.

Foreign currency risk

We are exposed to foreign exchange risk arising from various currency exposures, primarily inrespect to the U.S. dollar. Our revenue is denominated in U.S. dollars and a strengthening of theAustralian dollar against the U.S. dollar has an adverse impact on earnings and cash flow settlement. Inparticular, we receive the proceeds of sales of spodumene concentrate in U.S. dollars.

64

Our liability for interest and principal payments on our current loan notes are denominated in U.S. dollars. Accordingly, a weakening of the Australian dollar against the U.S. dollar would have an adverse impact on earnings and cash flow settlement with respect to these liabilities.

At June 30, 2019, we held funds in foreign currency amounting to US$3,934,000.

We do not currently hedge foreign currency risk, although we may do so in the future.

Price risk

Our largest price risk exposure is to the price we receive for our spodumene concentrate. Underthe pricing mechanisms of our offtake agreements, prices are affected by market prices for bothspodumene concentrate and other lithium products. Substantially all of our revenue is exposed to thisrisk.

We are also exposed to equity securities price risk due to our investment in Lithium Corporation,a junior lithium mining company based in the United States whose shares trade on the over-the-countermarket in the U.S.

Interest rate risk

We have significant borrowings, and will continue to do so in the future. However, we currentlyanticipate that our borrowings will be at fixed interest rates.

Credit risk

Credit risk refers to the risk that a third party will default on its contractual obligations resulting infinancial loss. We have adopted the policy of only dealing with credit worthy counterparties andobtaining sufficient collateral or other security where appropriate, as a means of mitigating the risk offinancial loss from defaults. We generally deliver products to customers only when an appropriate letterof credit is in place covering the customer’s obligation to pay the purchase price.

Liquidity risk

Liquidity risk includes the risk that we will not be able to meet our financial obligations as theyfall due. We could be impacted in the following ways:

• We may not have sufficient funds to settle transactions on the due date;

• We may be forced to sell financial assets at a value which is less than what they are worth; or

• We may be unable to settle or recover a financial asset at all.

We manage liquidity risk by monitoring forecast cash flows.

65

LITHIUM MARKET OVERVIEW

Market and industry data in this section is based on a report we commissioned from BenchmarkMineral Intelligence (‘‘BMI’’), a mineral industry consulting firm that compiles market data on a range ofminerals and metals. This data has not been independently verified and neither we nor any of the JointLead Managers make any representation as to the accuracy or completeness of this data or the assumptionson which it relies.

In particular, prospective investors are cautioned not to place undue reliance on the forecastinformation in this section, including the forecasts of lithium production, demand and prices. Theseforecasts and the assumptions on which they are based are inherently uncertain and subject to a variety ofrisks and other factors that cannot be reliably predicted.

Lithium overview

Lithium is a metal which has physical and chemical properties that make it suitable for a variety ofapplications. The importance of lithium to the global economy has increased in recent years because itis indispensable in the manufacture of lithium-ion batteries. Lithium-ion batteries are used to power avariety of technologies, most notably electric vehicles (‘‘EVs’’). The anticipated growth of the EVmarket is expected to drive increased demand for lithium in coming years.

Lithium does not occur freely in nature, but is present in compounds such as pegmatitic mineralsand salts. As a result, for industrial or commercial use it must be processed into a concentrated andstable chemical compound such as lithium carbonate or lithium hydroxide.

As lithium has historically been rarely traded in its raw state, for clarity and comparability, lithiumreserves, resources and production numbers are generally expressed in Lithium Carbonate EquivalentUnits (‘‘LCE’’).

Global lithium raw material reserves

There are two current commercially viable natural sources of lithium: lithium brines and lithiumhard rock. The vast majority of brine reserves are located in South America, with particular prevalencein Chile and Argentina. Hard rock lithium material can be mined as spodumene, pegmatite, clay orlepidolite. Spodumene is the most commonly mined mineral of hard rock lithium. Australia containsthe largest spodumene reserves of any country. Spodumene is typically sold as a concentrate form.

According to a U.S. Geological Survey (‘‘USGS’’) report published in February 2019, global lithiumreserves total 74 million tonnes LCE and potential global lithium resources total approximately329 million tonnes LCE.

66

27NOV201911030780

Global estimated lithium resource reserves—2018

ChileGlobal AustraliaArgen�na China Others

10.6

42.374.0

14.3

5.3

1.6

Million LCE tonnes

Hard Rock

Hard Rock/ BrineBrine

Source: U.S. Geological Survey, February 2019

Lithium chemicals

Lithium extracted from brine and hard rock sources undergo different types of processing to formlithium chemicals, predominantly lithium hydroxide and lithium carbonate, for commercial uses. Forbattery use, the principal lithium chemicals are lithium carbonate and lithium hydroxide. Lithiumcarbonate can be produced via processing of brine or hard rock raw materials. It can also be furtherprocessed into other lithium chemicals, such as lithium hydroxide for an additional processing cost.Lithium hydroxide can be produced from spodumene hard rock or other ore using a high temperaturechemical process, or converted from lithium carbonate through further processing.

Lithium from hard rock resources typically undergoes a process of concentration at the mine site,in most cases to a 6% lithium content spodumene concentrate material. This material can then beprocessed further to chemical product, or sold as spodumene concentrate.

To date, most of this chemical processing has been undertaken by third parties in China, with verylittle chemical production at the mine site. More recently, however, there has been a move towardsincreased integrated lithium chemical production, particularly from hard rock producers in Australia, asminers seek to capture more of the available margin for their material. This model involves a miningcompany extracting the lithium brine or hard rock material and then undertaking further processing toconvert it to either lithium carbonate or lithium hydroxide. BMI notes that very few miners have thenecessary processing facilities located at their mine sites, with the Mineral Resources/Albermarle JV’splanned Wodgina Lithium Hydroxide Plant being the only project announced in Australia to date thatcould be looked on as coming close to full integration.

67

27NOV201911030648

Lithium process flow overview—Lithium resource extraction to manufactured product by resource type

Li-bearing ore extrac�on

Concentra�on Processing: Calcina�on or roas�ng

Lithium Hydroxide

Lithium Carbonate

Extrac�on of Brine from bores

Evapora�on Processing and purifica�on

Lithium Carbonate Lithium Hydroxide

Resource Extrac�on Beneficia�on Processing Lithium product manufacturing

Hard Rock Resources

Brine Resources

Addi�onal processing step typically required for brine resources to lithium hydroxide

Lithium Chloride Lithium Metal

Lithium Chloride Lithium Metal

Source: Benchmark Mineral Intelligence

Overview of lithium demand

Lithium has historically been used in several end-use sectors, with major applications in themanufacture of glass, ceramics, lubricants and grease. In addition, as noted above, lithium is a key andindispensable raw material in lithium-ion batteries, where it is used in the cathode and electrolyte. BMIexpects lithium-ion battery manufacture to grow sharply in the coming years due to the expectedexpansion of the EV market, in addition to anticipated greater use of battery storage for renewableenergy sources and portable devices such as laptops and mobile phones.

BMI estimates 2018 lithium demand at approximately 268,037 LCE tonnes, split roughly 53:47between demand from the battery sector and other uses. For the battery segment, approximately 54%of this material was consumed as lithium carbonate and 46% as lithium hydroxide.

68

27NOV201908422214

27NOV201908422351

Global lithium supply and breakdown of demand by end use—2018

Other demand

268

Total lithium demand

142

Ba:ery demand

12737%

17%

9%

7%

5%

25%

Other

Lubricant/Grease

Glass & Ceramics

Metallurgy

Air treatment

Medical

65%

32%

3%

Electric Vehicles

Sta�onary grid storage

Other29%

14%

31%

22%

LCO

LFP

NCA

NCM

3%LMO

LMNO

0%Other

2018 ‘000 LCE tonnes

38%

62%

Lithium hydroxide

Lithium carbonate

Note: LTO - Lithium–�tanate, LFP - Lithium iron phosphate, LMNO – Lithium Manganese Nickel Oxide, LMO - Lithium Manganese Oxide , NMC - Lithium Nickel Manganese Cobalt Oxide, NCA - Lithium Nickel Cobalt Aluminium Oxide, LCO -Lithium Cobalt Oxide

Source: Benchmark Mineral Intelligence

BMI projects overall lithium demand to increase by a multiple of 14.4 times to 3,848 Kt LCE from2018 to 2035, mainly driven by demand for batteries in EVs, which BMI projects to account forapproximately 86% of global demand for lithium-ion batteries by 2035. Demand from other uses is alsoprojected to increase from 2018 to 2035, but is expected to comprise a much lower proportion of thelithium demand mix going forward.

Global lithium supply and breakdown of demand by end use—2035

178

3,848

Other demandTotal lithium demand

3,670

Ba:ery demand

36%

16%7%

10%

6%

25%

MedicalGlass & Ceramics

Lubricant/GreaseMetallurgy

Air treatment

Other

86%

4%

8%

NCM

LCO

NCA

LFP1%

OtherLMNO

0%0%

LMO

2035 ‘000 LCE tonnes

10%

30%

60%

Lithium metal

Lithium Carbonate

Lithium hydroxide

11%

86%

Sta�onary grid storage

Electric Vehicles

2%Other

Note: LTO - Lithium–�tanate, LFP - Lithium iron phosphate, LMNO – Lithium Manganese Nickel Oxide, LMO - Lithium Manganese Oxide , NMC - Lithium Nickel Manganese Cobalt Oxide, NCA - Lithium Nickel Cobalt Aluminium Oxide, LCO -Lithium Cobalt Oxide

Source: Benchmark Mineral Intelligence

69

27NOV201908421500

Of the lithium chemicals, lithium hydroxide is projected to become increasingly favored for use inbattery manufacturing, as it is less energy intensive and cheaper to process in the cathode batteryproduction process. BMI expects this trend to continue, especially given the anticipated expansion ofhard rock lithium capacity in the coming years. As such, demand for lithium hydroxide is expected toincrease significantly to become the dominant chemistry for battery production, although BMI expectsthat lithium carbonate will retain a significant role in the market.

Lithium demand by lithium chemical product—2015 to 2035

3.5

3.0

0.0

1.5

0.5

1.0

2.0

2.5

4.0

2027 20332018 2026

Million LCE tonnes

2015 2016 202820242017 2019 2020 2021 2022 2023 2025 2029 20322030 2031 2034 2035

Other - technical and industrial uses

Solid state ba:ery lithium metal

Ba:ery grade - Lithium hydroxide

Ba:ery grade - Lithium Carbonate

Source: Benchmark Mineral Intelligence

Lithium-ion batteries

Growth in the use of lithium-ion batteries in EVs, storage for renewable energy sources andportable devices such as laptops and mobile phones will be the driving factor behind rising demand forlithium.

70

27NOV201908421649

Lithium-ion battery demand forecast by end-use sector—2015 to 2035

600

3,000

2,000

1,200

0

1,000

4,200

2,800

1,800

2,400

200400

4,000

800

3,600

2,600

2,200

1,400

3,2003,400

4,400

3,800

4,600

1,600

203420322026 203020252022

‘000 MWh

20212016 2018 2027 2028 203520332015 2017 20202019 2024 20312023 2029

Downside

Portable Devices

Sta�onary

Upside

Electric Vehicles

Source: Benchmark Mineral Intelligence

Electric vehicles

Global EV sales grew from approximately 0.6 million units to approximately 2.1 million units from2015 to 2018, equating to a penetration rate of approximately 2% of the total motorized vehicle fleet.BMI projects that by 2025, global sales will increase to approximately 12.4 million units at apenetration rate of approximately 11%, before growing to approximately 54.3 million units by 2035 (anapproximate 44% penetration rate).

There are a number of factors underpinning this market growth, including both legislative andtechnical factors. A number of governments publicly support the adoption of EVs over the coming twodecades, through proposals for the banning of internal combustion engine vehicles, or targets forzero-emission vehicle market share matched with subsidies and incentives. BMI expects the criticalmarket globally to be China, due to the size, and expected growth of its vehicle market. The Chinesegovernment has been highly supportive in promoting EVs with incentives including considerablesubsidies and targets for emissions free vehicle sales penetration.

The result of these government initiatives around the world, combined with a general interest inboth preserving the environment and providing desirable products to the public, has been increasedinvestment in EVs from automakers. Most major auto manufacturers are looking to introduce new EVmodels over the next few years, with many having done so already. BMI predicts that the EV marketpenetration will pick up sharply from 2025 as EVs reach cost parity with internal combustion enginevehicles.

Stationary grid storage

Stationary grid storage is increasingly being adopted to enhance grid efficiency and energymanagement. It is useful in managing peak and off-peak electricity demand, which is expected tobecome more prevalent as renewable energy contributes to a larger proportion of the overall powergeneration mix globally going forward. This is due to energy from renewable sources, including windand solar, being subject to fluctuations due to nature and weather conditions, which may result indemand exceeding available supply at times. Through use of battery storage systems, periods of excess

71

27NOV201908421928

supply can be stored or fed back into the central grid to manage future power load requirements andsupplement supply during high demand periods.

Other demand

Demand from other end uses includes consumer electronics and industrial applications. Lithiumchemicals are used in the consumer electronics industry through smartphones, portable devices andlaptops. Industrial applications include ceramics, glass and lubricants, which have historically accountedfor a meaningful portion of global lithium demand. Glass & ceramics is estimated as one of the largestsub-segments for lithium demand and accounted for approximately 19% of the global demand mix in2018. By 2035, demand from glass & ceramics is projected to only account for 1% of the globaldemand mix.

Lithium supply overview

Lithium raw material supply

BMI estimates that lithium production in 2018 amounted to 306 kt LCE accounting for yieldlosses, of which hard rock sources accounted for almost 180 kt LCE, and brine 126 kt LCE. Hard rockproduction is dominated by Australia, while brine supply is concentrated in the ‘Lithium Triangle’ inNorthern Chile and Argentina.

Global lithium production—2018

Canada ZimbabweGlobal

2

Australia BrazilArgen�naChile China

152

PortugalUSA

30

6

306

77

29

5 3 2

Thousand tonnes, LCE

Hard RockBrineHard Rock/Brine

Source: Benchmark Mineral Intelligence

As a result of the exponential demand growth forecast, there are several greenfield and brownfieldlithium capacity expansions planned and underway at present. The charts below outline the keyexpansion projects by region over the period to 2035. There are limited specific capacity expansionannouncements beyond this timeframe, however, it is expected that additional capacity will need to beadded through to 2040.

72

27NOV201908421070

27NOV201908420610

Greenfield lithium capacity forecast to 2035

10,000 10,00025,000

10,000 10,000

35,000 40,000

15,000 15,00020,000 20,00010,000 10,000

5,000

20302023 2035

35,000

135,000 140,000

0 5,000

5,000

5,000

Tibet Summit (Pos)

Galaxy Resource (Pro)

Eramet (HP)

Lithium Americas (HP)

Millennial Lithium (Pos)

LSC (Pos)

Rincón Lithium (Pos)

Neo Lithium (Pos)

Posco (Pos)

NRG (Pos)

Lithium Power Interna�onal (Pos) 30,000 40,000 40,000

30,000

48,000 48,00030,000

30,000 30,000

20352023 2030

90,000

118,000 118,000

Kidman Resources - SQM (Pro)

Core Explora�on Ltd (HP)

Albermarle - Mineral Resources (Pro)

2,000

20,000 20,000

20,000 20,000

15,000

15,000 15,000

20302023 2035

17,000

55,000 55,000

0

Yahua - Lijiagou (Pos)

Chinese Producers (Pos)

Chinese Producers (Prob)

1,000500

10,000

28,500

57,0005,000

27,000

27,000

17,000

17,000

10,000

10,000

20,000

30,000

20302023

5,000

5,000

2035

16,500

127,500

176,000

Cri�cal Elements (Pos)Pure Energy Minerals (Pos)

Galaxy Resources (Pro)

Nemaska Lithium (Pro)

Piedmont Lithium (Pos)

Ioneer (Pos)

Lithium Americas (Pos)

BHE (Pos)

32,000 41,000 45,000

20,000

35,000 35,00052,000

2023 20352030

76,000 80,000

Bacanora Minerals Ltd (Pos)

Sigma (HP)

‘000 LCE tonnes Note: (HP) - Highly probable, (Prob) – Probable, (Pos) – Possible

15,000 32,000 32,00015,00022,000 22,00012,000

18,000 12,0005,000 25,000 25,000

80,000 100,000

6,000

12,00012,000

9,0009,000

9,000231,000

9,000

0

2023 2030 2035

77,500

217,000 3,000

7,000

9,0009,000

7,000

3,500

Birimian Limited - Mali (Pos)

Grupo Mota - Portugal (Pos)

Savannah - Portugal (Pos)

Keliber - Finland (Pos)

Rio Tinto - Serbia (Pos)

Desert Lion Energy - Namibia (Prob)

Birimian Limited (Pos)

Prospect Resources (Pos)

Deutsche Lithium (Pos)

Zim Lithium / Jimbata (Pos)

Source: Benchmark Mineral Intelligence

Brownfield lithium capacity forecast to 2035

13,00025,000 30,000 30,000

21,000

27,00030,000 30,000

2019

60,00060,000

2023

34,000

20352030

52,000

FMC

Orocobre

47,000

110,000 130,000 130,00035,000

50,000

70,000 70,000

200,000

2023 20352019

82,000

2030

160,000

200,000Albemarle SQM

12,000

25,000 25,000 25,0002,000

2,000 2,000 2,000

1,000

1,000 1,0001,000

2030

28,00028,000

2019 2023 2035

15,000

28,000

Arqueana de Minérios e Metals Ltda.

Companhia Brasileira de Li�o

AMG

3,500

23,000 23,000

4,0004,000

4,000 4,000

500

27,000

2019

7,5004,500

2023 2030 2035

27,000

Albemarle

CATL

4,000

12,000

20,000 20,000

5008,500

30,000 30,000 30,00024,000

80,000 80,000 80,000

37,000

37,000 37,000 37,000

17,500

18,000 18,000 18,000

90,000

130,000140,000 140,000

2019

325,00000

2023 2030

0

2035

181,500

307,000325,000

Talison

Galaxy Resource

Pilbara Minerals

Neometals

Altura Mining

Mineral Resources

Tawana Resources

19,000 22,000 22,000 22,000

21,00028,000

38,000 43,00040,000

2019

65,000

2023

50,00060,000

2030 2035

Brines

Minerals

5,000 5,000 5,000 5,000

7,500

15,000 15,000

20302019 20352023

20,000

5,000

12,500

20,000

0

Infinity Lithium

Bikita Minerals

Source: Benchmark Mineral Intelligence

Lithium chemicals supply

The following charts outline BMI’s expectations for medium- and long-term supply and demandbalances for lithium in the period to 2025 and 2035. In the medium term, BMI forecasts a slightmarket surplus in lithium as the rate of ramp up of new supply exceeds the growth in demand.

73

27NOV201908422637

However, the expansion of supply may be constricted by the availability of chemical processing capacity,which will need to be added in order to meet demand for lithium carbonate and hydroxide forbatteries.

It is important to note that much of the new capacity that has been added for chemical processingin recent years in China has not yet proved able to consistently produce battery-grade lithiumchemicals. This is a key bottleneck in the supply chain. Mining facilities with integrated chemicalprocessing capacity are at a distinct advantage as a result.

Medium-term lithium chemicals supply forecast—2019 to 2025

0.0

0.6

0.9

0.5

1.0

1.2

1.3

0.1

0.2

0.3

0.4

0.7

0.8

1.1

20242019

Million LCE tonnes

2020 2021 2022 2023 2025

Demand

Possible additonal tonnes

Con�nued financing additonal tonnes

Probable additonal tonnes

Secondary supply

Opera�onal supply

Source: Benchmark Mineral Intelligence

In the long term, BMI expects the market to enter structural supply deficit with continued newand currently unplanned capacity investment needed. Given that there is no geological restraint onlithium supply, BMI expects that this capacity will be added, but prices will need to remain highenough to incentivise this investment. However, there remain significant risks to this supply ramping upas expecte. For example, several projects included in BMI’s forecasts are yet to obtain funding toenable their development. Supply ramp up from mining developments may also be constrained by theavailability of chemical processing capacity. Furthermore, a significant amount of raw material supply iscurrently ‘locked-up’ in long-term supply arrangements, which may result in a supply shortage fornon-integrated converters. For 2019, BMI believes that substantially all spodumene concentrate capacityglobally is either tied to offtake agreements or fully integrated operations.

74

27NOV201908422491

Long-term lithium chemicals supply forecast—2015 to 2035

1.5

1.0

2.0

3.0

4.0

2.5

0.0

5.0

4.5

5.5

3.5

0.5

20212020

Million LCE tonnes

2015 2016 2017 2018 2019 20352022 2023 2024 2025 2031 2032 20332027 2034 203720362028 2038 2039 20402029 20302026

Demand

Necessary unplanned supply

Con�nued financing additonal tonnes

Possible additonal tonnes

Probable additonal tonnes

Secondary supply

Opera�onal supply

Source: Benchmark Mineral Intelligence

Pricing trends

BMI divides its long-term lithium price forecasts into three main pricing phases, as follows:

2015-2018—Lithium prices have risen sharply since 2015, on the back of rising demand for batteryraw materials and several years of tight supply. There has also been some upward momentum in pricingfrom speculative buying on the back of a perceived ongoing supply shortage. These higher prices havestimulated investment in new green and brownfield capacity expansions, and in 2018 the market was inmoderate oversupply. This saw prices correct in the later part of the year.

2019-2027—BMI forecasts prices to remain under pressure as new supply enters the market, withthe hydroxide price moving lower and lagging carbonate by 3-6 months. Nevertheless, BMI expects thatprices in the period between 2019 and 2022 will be maintained at comparatively high levels by historicalstandards on bullish market sentiment and an ongoing perception of future supply shortages forchemical products.

BMI anticipates that these price levels will continue to stimulate investment in new—mainlygreenfield—capacity, and through 2020 BMI expects the market will be oversupplied. However, pricefalls will be limited by the need to constantly stimulate new investment. BMI anticipates that it is likelythat many projects in their possible and probable categories will be delayed until the market comesback into balance in the 2026-2027 timeframe.

2028-2035—As the forecast period develops the level of visibility for new capacity projects, bothplanned and coming online, is reduced. Nevertheless, based on the pipeline of currently announcedprojects BMI expects the market will begin to tighten again in the period to 2028 as demand surgesahead. However, these projects will have development risks attached to them. BMI expects that apipeline of new currently unannounced projects will begin to come through over the coming decade tomeet this demand and that ultimately prices will settle into a long-term average of around $13,000 pertonne for lithium hydroxide. At this price, investment returns would provide enough incentive forinvestment over the forecast period.

75

27NOV201908423111

27NOV201908421227

6% spodumene concentrate price forecast (US$ per tonne, China CFR)

0

100

200

300

400

500

600

700

800

900

2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040

USD per tonne (Real terms, 2019)

Spodumene 6% Concentrate

Source: Benchmark Mineral Intelligence

Lithium carbonate price forecast (US$ per tonne, battery grade, spot material)

10,00010,50011,00011,50012,00012,50013,00013,50014,00014,50015,00015,50016,00016,50017,00017,50018,000

2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040

USD per tonne (Real terms, 2019)

FOB Antofagasta

CFR Korea

CFR China

FOB North America

CFR Japan

FOB Europe

Source: Benchmark Mineral Intelligence

76

27NOV201908421362

Lithium hydroxide price forecast (US$ per tonne, battery grade, spot material)

10,000

11,000

12,000

13,000

14,000

15,000

16,000

17,000

18,000

19,000

20,000

21,000

2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040

USD per tonne (Real terms, 2019)

FOB Antofagasta

CFR JapanCFR China

CFR KoreaFOB North AmericaFOB Europe

Source: Benchmark Mineral Intelligence

77

OUR BUSINESS

We own and operate an integrated lithium mine and processing plant at Pilgangoora in the Pilbararegion of north-west Australia. The operation has a nameplate capacity of 220,000 tonnes of lithium-bearing 6% spodumene concentrate. The plant produced its first commercial shipment in October 2018and we declared commercial production in March 2019. We produced 17,951 wmt of spodumeneconcentrate in October 2019, our highest monthly production to date and effectively achievednameplate capacity. We have offtake agreements with four Chinese buyers covering a minimum of220,000 tonnes of concentrate per year with prices set by reference to market prices of spodumeneconcentrate and specialty lithium chemicals. We have completed a definitive feasibility study into aStage 2 expansion of our mine and processing plant that would double our nameplate capacity.

The Altura Lithium Mine is located approximately 123 kilometers by road from the town of PortHedland in the Pilbara region. The mine is an open cut operation using conventional bulk miningmethods, including drilling and blasting, employing a fleet of excavators and dump trucks to extract oreand transport it to a Run of Mine (ROM) stockpile at the adjacent processing facility. The orebodiesare close to the surface and have required relatively little pre-stripping and pre-production activity. Weestimate that as of June 30, 2019 we had Ore Reserves of 37.6 million tonnes at an average grade of1.08% of Li2O, and Mineral Resources of 45.7 million tonnes at an average grade of 1.06% of Li2O.These Ore Reserve and Mineral Resource estimates have been compiled in accordance with the JORCCode. See ‘‘Reserves and Resources’’ for important information about these estimates. At currentproduction rates, the estimated life of mine is 24 years.

The processing plant has the capacity to process approximately 1.54 million tonnes of ROM oreper year to produce approximately 220,000 tonnes of 6% spodumene concentrate. The plant includes atwo-stage crushing and dry screening circuit, high pressure grinding roll tertiary crushing, wet screeningplant and dense media separation to produce a coarse spodumene product, with a milling andfloatation circuit to produce a fine spodumene product.

Our product is transported by road to a storage shed in Port Hedland for shipping to ourcustomers.

Third party contractors provide contract mining, power, water treatment, onsite laboratory,transport, accommodation and logistics services.

We have offtake agreements with four Chinese buyers, including an integrated lithium compoundsand battery producer, two lithium compounds producers and a strategic lithium product supplier. Theseagreements have expiry dates ranging from December 2021 to December 2024. Under theseagreements, our customers have agreed to buy minimum quantities of 6% spodumene concentratetotaling 220,000 tonnes per year. Prices are set by reference to market prices for battery grade lithiumchemicals, subject, for an initial period, to a floor price of US$550 per dmt and a ceiling price ofUS$950 per dmt on an FOB basis.

At the request of our offtake partners, we have completed a definitive feasibility study for Stage 2of our project, which would involve duplicating the existing processing plant, thereby doubling thenameplate capacity of the project to 440,000 tonnes of concentrate. The DFS calculated that Stage 2would generate an additional A$311 million of discounted pre-tax cash flow at a capital cost ofapproximately A$119 million and result in a net present value for the entire project of A$835 million.These estimates are based on a series of important assumptions that are discussed in more detail under‘‘Stage 2 definitive feasibility study.’’ A final investment decision to proceed with Stage 2 depends on,among other things, obtaining financing and securing offtake agreements with customers.

78

History

We were incorporated in Canada in 1984 as Link Resources Limited, and we listed on theAustralian Securities Exchange in 2001 as Haddington International Resources Limited. We acquiredAustralian Tantalum Limited in 2002, which owned exploration license E45/2287, covering the area onwhich our mine is now located. We began exploring this tenement in 2009, initially prospecting for rareearth elements and lithium. Our first discovery of lithium mineralization occurred in 2009 following asuccessful rock chip sampling program. We changed our name to Altura Mining Limited in 2009.

We declared an initial indicated Mineral Resource in 2011, completed a scoping study for a lithiummine and processing plant in 2012, developed a preliminary feasibility study in April 2016 and adefinitive feasibility study in September 2016. After securing funding and regulatory approval, wecommenced development during 2017.

Over the years, we have held interests in a variety of other mineral exploration and productionassets as well as a drilling company. We have largely divested assets other than those related to theAltura Lithium Mine. However, we continue to own a majority interest in the Tabalong Coal Project,which consists of a number of mining tenements in South Kalimantan in Indonesia with a JORCcompliant coal resource of 13.4 million tonnes of thermal coal. We are seeking to divest this asset.

Key Strengths

We believe that the key strengths of our business include:

Established producer of high quality product—We have been a commercial producer of high quality,chemical grade spodumene concentrate since March 2019. To date, we have made 17 shipmentstotalling 142,000 tonnes of 6% spodumene concentrate. Our product is a concentrate that possessesdesirable qualities, low in deleterious elements such as mica and medium iron content. It has beensuccessfully tested in multiple lithium processing facilities where it has been converted to both lithiumcarbonate and lithium hydroxide. Our customers have found it suitable to integrate into their supplychains. Our consistent quality is reflected in our having conformed to our contract specifications withevery shipment to date.

Low cost producer—Our costs of production are relatively low compared to other hard rock lithiumconcentrate producers. Our orebody is well-defined, compact and close to the surface, which enables usto use conventional, inexpensive bulk-mining methods to recover ore, with low stripping costs. Ourcurrent Ore Reserve is sufficient for 24 years of mining at current rates (although we plan to doubleproduction in Stage 2 of the project). Our processing plant is now achieving near nameplate capacityand our operating costs have steadily declined as a result of our continuous improvement program. Ourcash costs in the quarter ended September 30, 2019 were US$365 per wmt produced, and we continueto work to drive our costs towards the A$356 per wmt produced level estimated for Stage 1, in ourDFS for Stage 2.

Future sales supported by forecast long-term lithium demand—We believe that long-term demand forlithium, driven particularly by the battery industry and the expanding market for electric vehicles, willsupport a strong market for our product over time. Benchmark Mineral Intelligence forecasts pricesstabilizing slightly below current levels before increasing towards the middle of the decade as recentlydeveloped capacity is absorbed and some proposed lithium mining projects are delayed as a result ofthe current lower prices.

Straightforward, reliable processing and logistics—Our processing plant uses straightforward, reliableprocessing technology that is relatively inexpensive to operate and easy to maintain. The compact scaleof our plant reduces complexity and limits the quantity of tailings, while the predominantly mechanicalprocess means that the quantity of reagents required is relatively low. The mine, the plant and the

79

waste dump and tailings storage facility are in close proximity, reducing materials handling costs.Product is transported on trucks via well-maintained roads to the world class Port Hedland facilities forshipment.

Multiple high-quality offtake partners—Our offtake partners are high quality, well-resourcedparticipants in the global lithium battery supply chain. Three of our four offtake partners have theirown processing facilities, while the fourth has a plant under construction, which provides us with ahigher assurance of continuing demand compared to selling to traders. Our offtake partners are:

• GFL International Co., Limited, a subsidiary of Ganfeng Lithium, one of the world’s largestproducers of lithium compounds and lithium metals, which owns two lithium processing plants inJiangxi province and produces both lithium carbonate and lithium hydroxide;

• Lionergy Limited, a lithium and battery materials processor that is constructing a lithiumcarbonate processing plant in Inner Mongolia;

• Guangdong Weihua Corporation, a diversified materials company that owns a lithium processingplant in Sichuan province producing both lithium carbonate and lithium hydroxide; and

• Shandong Ruifu Lithium Industry Co., Ltd, a chemical processor that owns a lithium processingplant in Shandong province producing both lithium carbonate and lithium hydroxide.

While our offtake partners are all based in China, having four customers reduces our reliance onany one of them, and, based on our discussions with other lithium producers, we believe that we have anumber of other potential customers for our product.

Ready-to-build expansion option—We have completed a DFS on Stage 2 of our project, whichinvolves doubling our nameplate capacity by building a second processing plant and adding a night shiftto our mining operation. The second processing plant will substantially replicate our existing plant andwe believe that it represents a low-risk development option that will allow us to further lower costs bygenerating economies of scale. Any decision to proceed with Stage 2 will be demand driven, in that weintend to commit to construction only once we have binding offtake contracts at favorable prices inplace, in addition to arranging funding.

Experienced Board and management—Four of our directors have a combined mining industryexperience of more than 150 years, and this mining experience is complemented by the long careers inengineering and chemical processing of our other two directors. Our directors, including our executivedirectors, have extensive experience both developing and profitably operating mining assets while ourBoard also benefits from the chemicals industry expertise of a senior executive of our shareholder andcooperation partner, Shanshan. As we have transitioned from the construction phase to the operationalphase, we have assembled a seasoned operational and corporate team to efficiently run the project andour company, including a chief financial officer, general manager of operations, general manager ofplanning and resource development and general manager of marketing, each of whom has decades ofindustry experience.

Strategy

Our main strategies include:

Optimizing our operations—Since commencing operations, we have undertaken a concerted programof fault rectification, debottlenecking and process improvement to increase our production and reduceour costs. Since October 2019, we have effectively been operating at nameplate capacity, even thoughwe have not yet completed our program of rectification. As our production has increased, our unitcosts have trended lower. As a result of the insights we have gained, we believe that we will be able toreach an operating level where we are consistently exceeding nameplate capacity in terms of tonnes

80

produced, grade of production, or both. We have established a projects team that solely focuses oncontinuous improvements to the plant and our processes, and we continue to work with vendors toensure that all plant components are performing at design levels. We expect to apply the insights wehave gained to the construction of Stage 2, which we expect to result in a plant that ramps up to fullproduction with stabilized operating costs more quickly than Stage 1.

Building Stage 2—Stage 2 represents an opportunity to double the plant’s capacity and at a lowercost than Stage 1 and reduce unit costs through economies of scale. In addition, many of the risksinvolved in developing Stage 1 of the project are significantly reduced or not present in Stage 2. Inparticular, the plant design is now proven and we can apply insights from the construction and ramp-upof Stage 1. Our mining operation is running efficiently, and mining to date has validated ourunderstanding of the geology. Key infrastructure is already constructed, and capacity can be easilyadded to our logistics operations and power plant. We continue to discuss the expansion with ourcurrent and potential offtake partners, and expect to explore options for them to contribute to the costof construction through debt or equity finance and/or forward sales of production. Our decision toproceed will be driven by the demands of our customers.

Developing our relationships with offtake partners and potential offtake partners—We will continue todevelop our relationships with our current offtake partners including by maintaining regularface-to-face contact to ensure that we understand their needs. We also maintain relationships with arange of other participants in the global lithium supply chain that could potentially be buyers of ourproduct or strategic partners in the future. We believe that maintaining these relationships helpsmitigate the risk of any of our current offtake partners ceasing to buy our product, and it also providesus with insights into the global lithium market and technological developments.

Pursuing exploration options—We control or have farm-in rights over a number of explorationtenements in the Pilbara region and an exploration program to evaluate these tenements in amethodical and measured way. Discovering additional spodumene reserves could enable us to extendthe life of the project beyond its currently estimated 24 years (which would be approximately halved ifwe were to complete Stage 2 in the near future). We have also identified a copper-gold prospect namedCleopatra that we will continue to evaluate over the medium term.

Exploring strategic opportunities—Over time, we expect to explore a range of strategic opportunities,which may include opportunities to participate in other parts of the lithium supply chain, such asinvesting in conversion facilities, or participating in a potential consolidation of the relativelyfragmented market for lithium miners. In the short term, however, we will maintain our focus ondriving operational efficiencies and developing Stage 2.

Mining operations

The Altura Lithium Mine is located approximately 123 kilometers by road from the town of PortHedland in Australia’s Pilbara region.

81

27NOV201908423239

The following map shows the location of the mine in north Western Australia.

The orebody consists of 15 pegmatite dykes or lodes (pegmatites) over an area approximately 1,600meters long and 550 meters wide. All of the pegmatites outcrop at surface and extend to approximately350 meters from the surface. The pegmatites have an average thickness of 10-15 meters and can rangeup to 60 meters thick.

82

27NOV201908422789

The following figure illustrates our model of the orebody based on our exploration and evaluationdrilling.

83

The pegmatites are composed of a combination of coarse-grained spodumene-bearing pegmatiteand finer grained aplite. Lithium distribution within each of the mineralized pegmatites tends to beheterogeneous.

Mining of the waste and ore is by conventional open cut hard rock bulk mining methods. The oreis drilled and blasted, then excavated using two Hitachi hydraulic excavators. A fleet of six CaterpillarCAT785 130 tonne dump trucks and two CAT777 100 tonne dump trucks carry the ore to a ROMstockpile adjacent to the processing facility.

The relatively compact size and surface proximity of the orebody results in low strippingrequirements. The mine achieved a strip ratio of 3.9 in the 2019 financial year and the DFS for Stage 2estimates a strip ratio of 3.0 over the life of the mine. An external waste dump will store waste rock.The waste dump will be rehabilitated after mining is completed.

We have contracted with NRW, a leading Australian mining services contractor, to undertakemining operations. The current mining contract has an initial term until 1 December 2022 and is basedon fixed and variable price components. The contract also covers all mining operations servicesincluding clear and grub of topsoil, drill and blast, ore and waste mining and coarse reject disposalfrom the process plant.

Mining operations commenced in May 2017 and since July 2018, we have extracted approximately2 million tonnes of ore with an average grade of 1.16 Li2O. The following chart shows our quarterlymining production from July 2018.

Ore minedOre mined Waste mined Strip grade

Quarter ended (wmt) (wmt) ratio (Li2O%)

September 2018 . . . . . . . . . . . . . . . . . . . . 323,539 1,512,840 4.7 1.21December 2018 . . . . . . . . . . . . . . . . . . . . 350,099 1,491,011 4.3 1.19March 2019 . . . . . . . . . . . . . . . . . . . . . . . 404,087 1,426,256 3.5 1.16June 2019 . . . . . . . . . . . . . . . . . . . . . . . . 439,559 1,546,719 3.5 1.10September 2019 . . . . . . . . . . . . . . . . . . . . 476,093 1,484,978 3.1 1.18

Processing

Our processing facility is located adjacent to the mining area. Ore is delivered by dump trucks to aROM pad, where the ore is stacked systematically to enable feed controlled blending to optimize plantperformance. The processing plant uses a series of well-understood, predominantly mechanicalprocesses to produce a marketable spodumene concentrate with an average grade of approximately 6%that our customers that our customers can process into battery grade lithium chemicals.

The processing plant is designed to process up to 1.54 million tonnes of ore per year.

84

27NOV201908422978

The following figure illustrates the process flow of the plant.

A front end loader is used to transfer ore from the ROM stockpile pad to the primary crusher.The ore is crushed to less than 28mm through a modular crushing circuit using a primary jaw crusher,secondary cone crusher and dry vibrating screen. The crushed ore is stockpiled in and around theCrushed Ore Bin (COB), which adds flexibility to the process by delinking the initial crushing circuitfrom the rest of the process. Ore from the COB is then further crushed with high pressure grindingrollers to reduce the particle size to less than 8mm. This product is then wet-screened to separate itinto a feed of particles between 8mm and 1mm for the dense media separation (‘‘DMS’’) process and afines fraction with particle sizes less than 1mm for processing through the fines circuit. We are workingon a process improvement to narrow the band of particle sizes fed into the DMS process.

A classification process removes mica from the DMS feed, which is then processed through atwo-stage DMS process producing a high density on-grade spodumene product and well as mediumdensity middlings and low density reject streams.

Middlings are combined with the fines fraction from the earlier process (with mica removed) forfurther processing through a closed-circuit ball mill and a flotation circuit to upgrade this feed to aconcentrate. This concentrate is subjected to high intensity magnetic separation to reduce iron levelsthen dewatered and stockpiled. The fines concentrate is typically blended with the coarse concentratebefore shipping.

At an annual processing rate of 1.54 million tonnes, the process will discharge approximately0.77 million tonnes of tailings per year. Tailings are pumped via a slurry pipeline at a range of 50-60%

85

solids to a tailings storage facility (‘‘TSF’’). Coarse rejects are transported by truck to the mine wastedumps.

We have constructed the first and second stages of a tailings facility that will ultimately consist of amulti-zoned earthfill embankment construction covering approximately 60 Ha, with the basin areacovering 40 Ha of that area. Stages 1 and 2 are designed to accommodate approximately 17 months oftailings at the current production rate.

We commenced production in July 2018 and declared commercial production in March 2019,meaning that capitalization of operating costs was discontinued, revenues were recognized as income inthe period earned and operating costs began to be attributed to inventory or expensed in the periodincurred. Depreciation of capitalized project development costs also commenced and we have beengradually ramping up production towards nameplate capacity. The nameplate production rate waseffectively achieved in the month of October, 2019 when our monthly production reached 17,951 wmt,approximately 98.0% of nameplate. This followed a process of identifying and eliminating bottlenecksand inefficiencies, lifting throughputs and increasing lithium recovery rates.

The following tables shows our monthly concentrate production since processing began.

Jul 18 Aug 18 Sep 18 Oct 18 Nov 18 Dec 18 Jan 19 Feb 19

Ore processed (wmt) . . . . . . . . . . . . . . . . . . 1,983 31,154 67,241 70,359 78,604 101,110 81,415 165,948Lithium concentrate produced (wmt) . . . . . . . 463 2,514 4,026 4,463 5,478 7,247 6,364 9,831

Mar 19 Apr 19 May 19 Jun 19 Jul 19 Aug 19 Sep 19 Oct 19

Ore processed (wmt) . . . . . . . . . . . . . . 85,750 88,907 120,547 128,337 118,307 126,835 131,388 127,023Lithium concentrate produced (wmt) . . . 10,777 11,116 15,226 16,020 15,101 13,821 16,562 17,951

Infrastructure and logistics

Although Pilgangoora is a remote location, it is located within an extremely active mining province,which means that world-class mining services and logistics facilities are available, and conditions arewell understood.

Accommodation Village

We own and operate a 368 room accommodation village located approximately 20 minutes’ drivefrom the mine. The village consists of accommodation buildings together with a range of facilitiesincluding a kitchen/dining room building, recreational room and bar with an outdoor area, gym, sportsfacilities, laundry and storage buildings. The village has onsite diesel electric generation, water supplyand treatment facility and wastewater and sewerage treatment facilities.

Water

The Altura Lithium Mine requires an estimated 1.13 gigaliters of water per year. The processingplant accounts for more than half of this requirement. The other major uses are mining activities anddust suppression. Groundwater is accessed through a network of bores and pipes, under an approvedGroundwater Well License issued by the Department of Water and Environmental Regulation, WA.Water is also treated and reused from the mine pit dewatering system. The long term average annualrainfall is approximately 330 milliliters. Potential additional water resources for Stage 2 have beenidentified in the Stage 2 definitive feasibility study and have been confirmed by an exploratory drillingcampaign.

86

Power

We have contracted with Pacific Energy KPS Pty Ltd (‘‘KPS Power’’), a subsidiary of PacificEnergy Limited, to supply power to the Altura Lithium Mine under a build, own, operate contractunder which we pay a regular tariff for power supply from a power plant that KPS has built onsite. Thepower plant consists of nine 850kW dual fuel diesel/gas generators plus an additional two 850kW unitsfor redundancy, together with diesel tanks, and all necessary control and distribution equipment. Thegenerators are currently fuelled by diesel, however the dual fuel configuration will allow us to use gasshould a suitable source become available. Under the contract, we have the option to buy the plantduring the life of the contract or at the completion of the term.

Road access

Road access from Port Hedland is via the sealed public Great Northern Highway and thenapproximately 20 kilometers along the largely unsealed Wodgina Access Road. Maintenance of theWodgina Access Road is shared with Pilbara Minerals, which owns and operates a nearby lithium/tantalum mine.

Transport logistics

We contract with Qube Holdings Ltd, a leading Australian logistics provider, to transport ourproduct from the mine to Port Hedland, where it is stored in a dedicated space within a Qubewarehouse. Qube is also contracted to load it onto ships for transportation to our customers. Product isshipped on bulk carriers, typically in 8,000 to 18,000 tonne consignments. Due to the nature of thecontract with Qube, and utilizing Port Hedland Public Berth Number 2 for ship loading, we do nothave to secure our own capacity allocation at Port Hedland.

We have also contracted with Qube to feed ore from the ROM pad to the primary crusher at themining operations.

Reserves and resources

We estimate our Ore Reserves and Mineral Resources in accordance with the JORC Code. Weengaged Cube Consulting Pty Ltd to complete a revised geological wireframe model and Ore Reserveand Mineral Resource estimates based on exploration and mining data up to June 30, 2019. Thecompetent person for the Mineral Resource estimate for the purposes of the JORC Code is StephenBarber, Exploration Manager at Altura. The competent person for the Ore Reserve is Quinton deKlerk, a director and principal consultant of Cube Consulting.

The following table sets out our estimated Ore Reserves as of June 30, 2019 at 0.30% Li2O cut-offgrade.

Tonnes Li2O Fe2O3 Li2OCategory (in millions) (%) (%) Tonnes

Proved . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.2(1) 1.22 1.40 87,000Probable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30.5(2) 1.05 1.29 320,000

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37.6 1.08 1.31 407,000

(1) Proved reserves include 0.5 million tonnes of ore in the ROM stockpiles.

(2) Probable reserves include 0.2 million tonnes of ore in the ROM stockpiles.

87

The following table set out our estimated Mineral Resource as of June 30, 2019 at 0.30% Li2Ocut-off grade. Our Mineral Resource estimates include the quantities classified as Ore Reserves.

Tonnes Li2O Fe2O3Category (in millions) (%) (%) Li2O Tonnes

Measured . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.4 1.23 1.38 91,000Indicated . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34.2 1.03 1.29 353,000Inferred . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.1 0.95 1.41 39,000

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45.7 1.06 1.31 444,000

Our geological data is based on a maximum drill spacing of 40m � 40m, though areas we plan tomine in the first three years have been infill drilled on a 20m � 20m grid. We believe that thegeological model and continuity of the pegmatites is well understood due to surface mapping, drill holetesting and mining operations. Data from the more closely spaced infill drilling was consistent with ourinterpretation of the geology, which supports a moderate to high degree of confidence in the estimatedtonnages.

The modifying factors used to estimate reserves and resources include an assumed gross price for6% spodumene concentrate of US$690 per tonne. This is the forward price used in the Stage 2definitive feasibility study and is based on an average of the long term forward price estimates of sevenforecasters at the time the DFS was finalized. We have applied an exchange rate assumption ofUS$0.75 to each A$1.00.

Appendix A contains a more detailed discussion of our Ore Reserve and Mineral Resourceestimates. As discussed under ‘‘Tenements, licenses and approvals’’, some of the pegmatites in ourdeposit cross the boundary between our tenement and the adjacent tenement of Pilbara Minerals. OurOre Reserve and Mineral Resource estimates do not include any mineralization that is not within ourtenement, however they do assume that we will be able to mine into Pilbara Minerals’ tenement inorder to access certain deeper sections of our Ore Reserve. These Ore Reserves are not scheduled tobe mined within our current five year mine plan.

Exploration program

We have an exploration program primarily focused on identifying additional lithium-bearingpegmatites in the vicinity of the Altura Lithium Mine. Most recently, this program has focused ongeological mapping and sampling within our existing mining tenements (including the M45/1260 mininglease that we hold to the west of our mine). In August 2019, we entered into an earn-in agreementwith Sayona Mining Limited, an ASX listed junior lithium project development company, to earn up toa 51% interest in a portfolio of 15 exploration tenements in the Pilbara region, mostly in thePilgangoora district. The agreement requires us to spend at least A$500,000 on exploration expenditure.Spending A$1.5 million would earn us a 51% interest.

We have also identified a copper/gold anomaly known as the Cleopatra prospect and a copper/gold/silver prospect known as the Hazelby prospect within our E45/2363 exploration tenement severalkilometers east of the Altura Lithium mine. We expect to undertake further exploration work on theseprospects.

88

Customers

We have take-or-pay offtake agreements with four Chinese-based customers, under which ourentire nameplate production capacity is committed for sale for the immediate future. The followingtable summarizes our offtake arrangements.

Minimum offtake Price floor Price ceilingBuyer per year (dmt) (US$ per dmt) (US$ per dmt) Expiry

Lionergy Limited . . . . . . . . . . . . . . 65,000 550(1) 950(1) September 2023(5)GFL International Co., Limited . . . . 70,000 550(2) 950(2) December 2021(6)Shandong Ruifu Lithium

Industry Co., Ltd . . . . . . . . . . . . . 35,000 550 950 June 2024(7)Guangdong Weihua Corporation . . . 50,000 550(3) 950(4) December 2024(8)

(1) Applies during each of the first three contract years.

(2) Applies during each quarter in the first three contract years (2018, 2019 and 2020).

(3) Applies during the second and subsequent contract years. The price floor for the first contract yearis US$585 (CIF basis) per dmt.

(4) Applies during the second and subsequent contract years. The price ceiling for the first contractyear is US$695 (CIF basis) per dmt.

(5) The parties may mutually agree to extend the term for any agreed period.

(6) The buyer has an option to extend the term for an additional period of 5 years.

(7) The parties may mutually agree to extend the term for an additional period of 3 years.

(8) The parties may mutually agree to extend the term for an additional period of 5 years.

Under each of these agreements, pricing is set (within the floor and ceiling prices) either for eachquarter of the contract year or per shipment. The exact pricing basis differs among the contracts, butgenerally they are designed to reflect the market prices for comparable product, or market prices forprocessed lithium chemicals, or both. If we deliver less than the agreed quantities then we may seek tomake up the shortfall through delivery within three months of the end of that contract year oralternatively we will compensate the buyers for the difference (if any) between the price applicable tothat of the shortfall and the higher price the buyer pays the third party.

In addition to our current customers, we are in discussions with a number of other potentialofftake partners. In June 2019, the Chinese group Shanshan, one of the world’s largest integratedsuppliers of lithium battery materials, acquired an 11.8% interest in our shares via an off-markettransaction. We subsequently entered into a subscription and cooperation agreement with ShanshanForever International Co., Limited, a wholly owned subsidiary of Shanshan under which they increasedtheir interest to 19.4% via a share placement, we appointed a Mr. Xiaoyu Dai to our Board and weagreed to cooperate on future strategic matters. Shanshan Forever International Co., Limited is entitledto appoint a Director to our Board as long as its interest does not fall below 12.5% for more than 30consecutive days.

Shanshan and/or one or more of the other potential offtake partners may contract with us forproduction from Stage 2. One or more of these potential partners may also invest in our company tocontribute funds towards the construction of Stage 2. Under its existing offtake agreement, GanfengLithium Co., Ltd. has an option to purchase 50% of our production capacity for Stage 2.

89

Stage 2 definitive feasibility study

In April 2018, we completed a definitive feasibility study for Stage 2, which would double thenameplate production capacity of the Altura Lithium Mine to 440,000 tonnes of concentrate per year.Stage 2 would involve building a new, largely identical processing facility alongside the existing facilityand doubling mining production as well as undertaking associated works such as expanding the tailingsfacility, doubling the capacity of the electricity generator, increasing the capacity of the accommodationcamp and associated civil works.

The conclusions of the definitive feasibility study were based on a number of economic andtechnical assumptions regarding costs of a large number of capital and operating items as well as anassumed long term price for our 6% spodumene concentrate of US$690 per tonne. We used a pre-taxdiscount rate of 10% per annum.

Based on these assumptions, the DFS calculated that Stage 2 would generate an additionalA$311 million of discounted pre-tax cash flow at a capital cost of approximately A$119 million andresult in a net present value for the entire project of A$835 million.

Our Board has conditionally approved the development of Stage 2. A final investment decision willdepend on entering into offtake agreements covering the additional production and securing thenecessary financing.

Tenements, licenses and approvals

Mining leases

We hold three mining leases granted pursuant to the Mining Act 1978 (WA) (‘‘Mining Act’’).Mining Leases M45/1230 and M45/1231, which commenced on August 26, 2016 and cover the area ofour current mine plan, and Mining Lease M45/1260, which commenced on 6 February 2018 and coversan area immediately to the west of M45/1230. Each of these mining leases has a term of 21 years andmay be renewed for a further term of 21 years as of right.

Subject to ongoing compliance with the Mining Act and any tenement conditions to which thelease is subject, a Western Australian mining lease entitles the holder to work and mine the land, takeand remove from the land any minerals and dispose of them, and to do all things necessary toeffectually carry out mining operations in, on or under the land the subject of the mining lease. Amongother tenement conditions, mining leases are subject to the payment of royalties to the WesternAustralian State Government. Royalties are payable at the rate of 5% of the gross invoice value of oursales, subject to certain allowable deductions.

Along the eastern edge of the M45/1231 lease area, mineralization is close to, and in some caseextends over the boundaries of the lease into an adjacent mining lease owned by Pilbara Minerals. Inorder to economically mine this mineralization, it will be necessary to carry out certain mining activitieson Pilbara Minerals’ lease.

Miscellaneous licenses

In addition to our mining leases, we hold five ‘‘miscellaneous’’ licenses in the vicinity. Theselicenses are granted for certain purposes directly connected with mining operations as prescribed in theMining Regulations 1981 (WA). Miscellaneous licenses can be granted over land the subject of (and can‘co-exist’ with) other mining tenements. Miscellaneous licenses provide access to public roads,accommodation and water supply.

These licenses are granted for a term of 21 years.

90

Exploration licenses

We hold a number of exploration licenses in Western Australia. The holder of an explorationlicense granted pursuant to the Mining Act is permitted to enter the land the subject of the license toexplore for minerals with vehicles, machinery and equipment as may be necessary or expedient for thepurpose of exploring for minerals in, on or under the land. The holder of an exploration license may,as of right and while the license continues in force, apply for and, subject to the Mining Act and anytenement conditions on which the exploration license is held, be granted one or more mining leasesover any part or parts of the land the subject of the exploration license.

Native title

Our mine is located on land that is subject to registered native title interests in favor of theNjamal people and two of our miscellaneous licenses are located on land that is subject to registerednative title interests in favor of the Kariyarra People. See ‘‘Australian Legal Matters—Native title andAboriginal heritage law’’ for a discussion of the law in Australia concerning native title.

From the early stages of exploration and mine development, we have been committed to engagingwith local community groups, including the Njamal and Kariyarra Native Title Groups. We arecommitted to indigenous employment and seek to engage local contractors. We have executed NativeTitle Agreements with both the Njamal and Kariyarra Native Title Groups. We hold biannual NativeTitle Implementation Committee meetings with our Njamal partners to ensure the effectiveimplementation of the Native Title Agreement and the continuing alignment of both parties in projectdevelopment and exploration activities.

Safety

Our operations involve heavy machinery, moving vehicles, explosives, industrial scale processingplant and equipment and movements of large amounts of material, all of which represent potentialrisks to the safety of our employees and contractors. We have detailed safety policies and proceduresthat are designed to create a safe working environment and a culture that puts safety first. We had onlyone lost time injury during the construction phase our project and since operations began, as ofNovember 26, 2019, we have had one additional lost time injury.

Environment

We require a number of environmental licenses and approvals from the Western Australia StateGovernment to operate the Altura Lithium Mine. See ‘‘Australian Legal Matters—Environmental lawand approvals’’ for additional background. Our principal licenses and approvals are our:

• Mining Proposal and Mine Closure Plan;

• Native Vegetation Clearing Permit;

• License to take Water;

• Works Approval and Operating Licenses; and

• Project Management Plan.

In order to obtain these licenses and approvals, we were required to undertake detailed studies ofthe potential environmental impact of the Altura Lithium Mine and provide detailed plans about ouroperations and management of environmental issues.

To facilitate and assure compliance with our environmental approvals, we conduct environmentalmonitoring, including water consumption, land clearing, flora and fauna, dust and greenhouse gasmonitoring and report our findings to the Western Australia State Government in an annual

91

environmental report. We also submit a range of other periodic compliance reports to the StateGovernment.

We maintain a comprehensive Environmental Management Plan and a number of environmentalpolicies to direct our compliance with laws and our undertakings and ensure that environmental valuesare protected across the full range of our activities.

The consequences of breaching environmental laws include obligations to remediate damage,financial penalties and forfeiture of licenses and leases. While we believe that our environmentalpolicies, plans and procedures are well-designed and carefully implemented, we cannot assure you thatthey will prevent any breach of environmental laws as a result of our operations.

Indonesian coal assets

We own majority interests in five mining tenements in South Kalimantan in Indonesia thatcomprise the Tabalong Coal Project. We have explored these tenements extensively and identifiedthermal coal resources that we believe could potentially be developed into an open pit thermal coalmine supplying either Indonesian power stations or the seaborne thermal coal market. We haveestimated a JORC coal resource of 13.4 million tonnes of thermal coal.

We intend to divest our interest in the Tabalong Coal Project in order to maintain our focus onthe Altura Lithium Mine. We have granted exclusive due diligence rights to a potential buyer. Theassets are currently classified as held for sale in our financial statements.

We also owned and operated a mining services (drilling) business and hold a 50% interest in awireline and seismic business in Indonesia. In September 2019, we divested the drilling business.

Employees

We employ approximately 20 employees in our Perth corporate office and approximately100 employees who work in the Pilgangoora mining operations on a fly-in/fly-out basis. In addition,approximately 70 contractors are working at the mine site at any one time on a fly-in/fly-out basis.

We believe our relationship with our employees is very positive and productive and there has beenno history of industrial action.

92

AUSTRALIAN LEGAL MATTERS

Our operations are subject to numerous legislative and regulatory requirements under Australianfederal and state laws. The Australian mining industry is highly regulated and is also dependent uponthe grant and maintenance of required approvals, licenses and permits. Complying with these laws andregulations are an important priority for us and we actively manage our responsibilities under therelevant legislative, regulatory and other standards regimes.

Our commitment to these priorities is supported by the comprehensive management systems wehave in place to ensure our operations work within this regulatory regime and, that when necessary, weseek any further approvals, licenses and permits that may be required.

Below is a summary of some of the material legislative and regulatory requirements applicable toour operations.

Mining laws and approvals

We must ensure that all mining tenements required for our activities have been granted under, andare maintained in good standing pursuant to the Mining Act.

Mining Act

The Mining Act regulates the assessment, development and utilization of mineral resources inWestern Australia. In Western Australia, the State owns all minerals on or below the surface of theland, except in certain limited circumstances. Where the State is the owner of the minerals, a miningtenement must be obtained from the Department of Mines, Industry Regulation & Safety (the‘‘DMIRS’’) before ground disturbing exploration activities or mining operations may be undertaken.The main types of tenements granted under the Mining Act are:

Exploration licenses—permitting entry on the land the subject of the exploration license to explorefor minerals with vehicles, machinery and equipment as may be necessary or expedient for the purposeof exploring for minerals in, on or under the land. The holder of an exploration license in which aneconomic discovery has been made may, as of right and during the term of the license, apply for andbe granted one or more mining leases over any part or parts of the land the subject of the explorationlicense, provided the holder has complied with the Mining Act and tenement conditions and obtainedany necessary approvals. No legal or equitable interest in an exploration license can be transferred orotherwise dealt with during the first year of the term of an exploration license without the prior writtenconsent of the Minister for Mines, Industry Regulation & Safety (the ‘‘Minister’’). Any agreementmade in contemplation of a dealing or other transaction of an exploration license is valid provided theagreement expressly provides that Ministerial consent is to be obtained as a condition of the dealing orother transaction.

An exploration license applied for on or after February 10, 2006 will remain in force for an initialperiod of five years from the date of grant. The whole or any part of the land the subject of thegranted exploration license may be extended by one period of five years and then by a further period,or periods, of two years if the Minister is satisfied that a prescribed ground exists. Prescribed groundsinclude where the Minister is satisfied that insufficient work has been carried out due to difficulties ordelays arising from governmental, legal, climatic or heritage reasons, or where the Minister considersthat the land has been unworkable for the whole or a considerable part of any year of the term, orwhere the Minister considers that work carried out justifies further exploration.

Exploration licenses applied for or granted prior to February 10, 2006 remain in force for an initialperiod of five years from the date of grant. The whole or any part of the land the subject of thegranted exploration license may be extended twice by a period of 2 years and then by a further period,or periods, of one year if the Minister is satisfied that a prescribed ground exists.

93

At the end of the sixth year of the initial term of an exploration license applied for or granted onor after February 10, 2006, the registered holder of the license must surrender 40% of the area of theexploration license. At the end of both the third and fourth year of the initial term of an explorationlicense applied for or granted prior to February 10, 2006, the registered holder of the license mustsurrender 50% of the area of the exploration license;

Mining leases—the holder of a mining lease is entitled, subject to the Mining Act, to work andmine the land, take and remove from the land any minerals and dispose of them and do all thingsnecessary to effectively carry out mining operations in, on or under the land the subject of the mininglease. However, the grant of a mining lease does not in itself confer authority to produce minerals.Further approvals are generally required before production may commence, including approvals withrespect to the environmental impact of planned operations. A royalty is required to be paid to theState with respect to all minerals recovered from a mining lease at the rate prescribed for the relevantcommodity in the Mining Regulations 1981 (WA) (the ‘‘Mining Regulations’’). A holder of a mininglease may not transfer or mortgage a legal interest in any part of the land the subject of a mining leasewithout the prior written consent of the Minster or an officer of DMIRS acting with the authority ofthe Minister. This does not prohibit a holder entering into an agreement to sell a mining leasehowever, transfer of title on the register is not possible without ministerial consent. A mining lease isgranted for an initial term of 21 years and the holder may, as of right, renew the lease for a furtherterm of 21 years. Upon receipt of an application, the Minister has the discretion to renew the lease forfurther successive terms not exceeding 21 years;

Miscellaneous licenses—a miscellaneous license may be granted pursuant to the Mining Act overany land (including land the subject of another mining tenement) where the purpose of the license isdirectly connected with mining operations and is for a prescribed purpose under the MiningRegulations (e.g. a road or pipeline). The holder of a miscellaneous license does not have exclusiverights to the land over which the miscellaneous license is granted. A miscellaneous license that isgranted after June 6, 1998 will have an initial term of 21 years, any may be renewed, as of right, for afurther period of 21 years. The Minister may renew the term of a miscellaneous license for furthersuccessive periods of 21 years; and

General purpose lease—a general purpose lease grants to the holder exclusive occupation of theland for permitted purposes directly related to mining operations (e.g. operating of machinery, treatingor depositing tailings). The term of a general purpose lease is 21 years, and it may be renewed, as amatter of right, for a further 21 years. The Minister may renew the term of a general purpose lease forfurther successive periods of 21 years.

The grant of a mining tenement is generally at the discretion of the Minister. Conditions areimposed on the grant of tenements pursuant to the Mining Act. These can include conditions relatingto the environment, payment of annual rent, compliance with minimum expenditure requirements,reporting conditions and a standard schedule of general exclusions and conditions imposed pursuant tothe Mining Act. If any of the tenement conditions are not complied with, the tenement may be subjectto forfeiture.

Native title and Aboriginal heritage law

Native title law

The common law of Australia recognizes a form of native title which, in circumstances where it hasnot been extinguished, is based on the continuing connection of the Aboriginal peoples, in accordancewith their traditional laws and customs, to specific areas of land. Native title is essentially a bundle ofrights which may include the mere right to pass through an area for hunting or could include the rightto permanently occupy land to the exclusion of all others.

94

Native title is governed by the Native Title Act. The Native Title Act sets out the process by whichclaims for native title can be determined. When native title is determined to exist, the native titleholders may file an application to the Federal Court for a determination of what, if any, compensationmay be payable for actions that have impacted their native title rights in the past.

The grant of a mining tenement is an act that may affect native title and (unless the miningtenement is wholly over land over which native title has been determined not to exist or land overwhich native title has been extinguished) will attract the right to negotiate or other applicable ‘‘futureact’’ procedures under the Native Title Act. Native title may in certain circumstances be extinguishedby a grant of an interest in land which is wholly inconsistent with native title rights and interests(e.g. freehold land). Subject to certain exceptions, the right to negotiate procedure under the NativeTitle Act requires a State or Territory to give written notice of its intention to grant a mining tenement.Under the Native Title Act only registered native title parties (i.e. claimants who have passed theregistration test or a registered native title body corporate (as applicable)) are entitled to the right tonegotiate. The State or Territory, any registered native title party and the applicant for the tenementmust negotiate in good faith with a view toward agreeing to terms upon which the tenement can begranted. The applicant for the tenement is usually liable for any compensation that the parties agree topay to the registered native title party. The parties may also agree on conditions that will apply toactivities carried out on the tenement (e.g. in relation to heritage surveys).

If within six months the parties fail to reach an agreement, any party may apply to the AustralianNational Native Title Tribunal for a determination as to whether the tenement may be granted and ifso, the conditions on which it is to be granted.

If further tenements are required, or there are amendments to existing tenements which may affectnative title, then the applicant will need to comply with the right to negotiate process or any otherapplicable ‘future act’ process prior to the relevant grant or amendment.

Aboriginal heritage sites and objects affecting our tenements

Mining tenements in Western Australia are granted subject to a condition on title reminding thetenement holder of its obligation to comply with the requirements of the Aboriginal Heritage Act 1972(WA) (the ‘‘AHA’’). The AHA operates in Western Australia to protect sites, places and objects ofsignificance to Aboriginal people. The AHA establishes a register of sites, although there is norequirement for a site to be registered nor is there any requirement that the site be publiclyacknowledged, in order for it to attract the protection of the AHA. It is an offence to damage, destroyor alter in any way any Aboriginal site, whether or not the offender knew of its existence. However, itis possible to apply for consent to disturb or damage a site and, if such consent is obtained from theMinister for Indigenous Affairs under section 18 of the AHA (on recommendation from the AboriginalCultural Material Committee), the relevant damage or destruction will not be an offence. Whererequired, should land containing Aboriginal sites or objects be proposed for use, we consult with therelevant Aboriginal stakeholders and apply for the required State Government approvals and consents.

To determine whether there are Aboriginal heritage sites or objects, to which the AHA applies, onits tenements we ensure sufficient and appropriate assessments and consultation have been conducted,usually including the completion of archaeological and ethnographic heritage surveys. No sites requiringsection 18 approval have been identified within the Altura Lithium Mine area.

The AHA is currently the subject of a major review by the Western Australian State Government.The State Government has concluded the second consultation phase of the review of the AHA and isnow moving to prepare legislation which will see a new and modern Aboriginal Heritage regime thataims to strike a balance between protecting Aboriginal culture and economic development. Draftreplacement legislation for the AHA will be released in early 2020 as part of the third phase of thereview.

95

Under the Aboriginal and Torres Strait Islander Heritage Protection Act 1984 (Cth), it is an offencefor us to conduct exploration, operational or expansion activities which contravene a declaration by theCommonwealth Minister of the Environment and Energy in relation to an area or object of particularsignificance to Aboriginal people. As of the date of this offering memorandum, we are not aware ofany Ministerial declaration that affects our activities.

Environmental law and approvals

Environmental law

Environmental law in Western Australia is derived from five sources: common law, statute,subsidiary legislation, policies and administration guidelines and international law. The environmentalimpacts of mining activities in Western Australia are principally regulated through the Mining Act, theEnvironmental Protection Act 1986 (WA) (the ‘‘Environmental Protection Act’’) and the EnvironmentalProtection and Biodiversity Conservation Act 1999 (Cth) (the ‘‘EPBC Act’’), although a number ofmaterial obligations also arise under other State and Commonwealth legislation.

Prior to commencing mining activities, it is generally a requirement that a company have processesin place to manage and minimize the environmental impact of those mining activities. If a proposedindustrial, mining or infrastructure activity may have a significant impact on the environment, prior tocommencing operations, the company should refer a proposal in respect of that activity to the StateEnvironmental Protection Authority (the ‘‘EPA’’) for a decision on whether the activity requiresenvironmental assessment. If the EPA decides to assess the proposal to determine the likely impact onthe environment, the company must undertake an environmental impact assessment and submit anyfurther documents requested by the EPA during the assessment process. The impacts of the proposalwill be reviewed by the EPA and the EPA will prepare a report and recommendations to the StateEnvironment Minister. If satisfied that the proposed mining activity may be conducted, the StateEnvironment Minister will subsequently issue a Ministerial approval and statement of conditionsregulating the manner in which the company conducts the mining activity (which is binding on thecompany).

While the proposal for the relevant mining activity is being assessed by the EPA, all other decisionmakers (including the Department of Water and Environmental Regulation and the Department ofMines, Industry Regulation and Safety) are prohibited from issuing approvals until the StateEnvironment Minister’s decision is made. It is an offence under the EPA to conduct the mining activitythe subject of the proposal prior to the Minister issuing a decision on the proposal. An exception tothis is ‘minor and preliminary works’ approved by the EPA which can be undertaken while the proposalis undergoing EPA assessment.

The relevant mining activity may also require referral to the Commonwealth Minister of theEnvironment and Energy under the EPBC Act if it is an action that may have a significant impact on amatter of national environmental significance (a ‘‘controlled action’’). The Commonwealth Minister ofthe Environment and Energy will consider the referral documentation and any public submissions, anddecide on whether the proposed activity is a ‘controlled action’ requiring environmental assessment. Ifthe Minister decides that an approval is required, an environment assessment is carried out.

The Commonwealth Government may also accredit the environmental impact assessmentprocedures of the State Government for EPBC Act purposes. This is intended to avoid duplication ofenvironmental assessment procedures at both State and Commonwealth level. However, theCommonwealth Government may request additional information from the company with respect to therelevant mining activity. Each jurisdiction will also independently determine whether to grant approvalfor the activity (i.e. there is no accreditation of decision making). If the Commonwealth Minister of theEnvironment and Energy is satisfied that the activity may be conducted, the Minister will grantapproval subject to conditions that are binding on the company.

96

The Environmental Protection Act also requires works approvals and licenses to construct andoperate ‘prescribed premises’ (as defined in Schedule 1 of the Environmental ProtectionRegulations 1987 (WA)) that may result in an emission or contribute to environmental harm that wouldotherwise be in contravention of that Act. Failure to comply with the conditions in a Ministerialapproval, or with conditions in a works approval or license, may lead to monetary penalties or criminalliability (with up to five years imprisonment) in addition to various court orders or other enforcementaction. Similar consequences, however with greater monetary penalties, arise with respect to failure tocomply with the conditions of an EPBC Act approval.

The Mining Act and the conditions imposed under the mining tenements (as well as otherapprovals and licenses) require mining companies to ensure that upon cessation of their activities onthe tenements, the mine is rehabilitated, as far as possible, to its pre-mining condition or an alternativeagreed land use. Many conditions are standard to all mining tenements and usually require a proposalbe submitted to the Environment Branch of the Western Australian Department of Mines, IndustryRegulation and Safety for management under the Mining Act or the Department of Jobs, Tourism,Science and Innovation for management under the relevant state agreement act. Under the MiningRehabilitation Fund Act 2012 (WA) and the Mining Rehabilitation Fund Regulations 2013 (WA), holdersof mining tenements with an estimated minimum rehabilitation liability of A$50,000 are required to payan annual, non-refundable amount into the Mining Rehabilitation Fund based on the nature of theactivity being undertaken and the area of disturbance. Failure to comply with these conditions mayresult in forfeiture of the tenure or a fine in lieu of forfeiture.

The National Greenhouse and Energy Reporting (‘‘NGER’’) legislative regime establishes a singlenational reporting framework for energy and emissions reporting and for managing emissions. Annualreporting of greenhouse gas emissions, energy production and energy consumption for facilities underthe ‘‘operational control’’ of a ‘‘corporate group’’ is required where specified thresholds are exceeded.Thresholds apply to ‘‘facilities’’ (being, in essence, an activity or series of activities involving greenhousegas emissions, production or consumption of energy that form a single entity or are declared as a‘‘facility’’) and ‘‘corporate groups’’. Reports are made to the Clean Energy Regulator by the‘‘controlling corporation’’. The NGER regime also contains the direct action safeguard mechanism thatapplies to ‘‘designated large facilities’’ with emissions over 100,000 tonnes of carbon dioxide equivalent(‘‘CO2-e’’) in a financial year. Emissions baselines represent the reference point against which futureemissions performance will be measured under the safeguard mechanism. A safeguard facility mustkeep its net emissions levels at or below its baseline. Altura reported into NGERs this financial year.Our operations do not trigger the direct safeguard mechanism, but may do so in the future. Inparticular, there is a prospect that the 100,000 tonnes CO2-e threshold may be revised in the event of afuture change in government.

Environmental approvals required for our operations

We have to date obtained numerous key licenses and approvals in accordance with theEnvironmental Protection Act, the Mining Act, the Rights in Water and Irrigation Act 1914 (WA) andother applicable legislation. All of our operations are currently working under the requiredenvironmental approvals. Further approvals will be required in relation to expansions or newdevelopment. We will apply for such further licenses and approvals as and when they are required.

Australian income tax

Altura Mining Limited and some of its wholly owned Australian subsidiaries have formed anincome tax consolidated group (the ‘‘Tax Consolidated Group’’), which was created with effect fromJuly 1, 2005 under the tax consolidation regime.

97

Altura Mining Limited, as head company of the Tax Consolidated Group, is liable in the firstinstance for all of the Australian income tax liabilities of the Tax Consolidated Group. The Companywill be subject to Australian income tax at the current corporate rate of 30% in respect of the taxableincome of the Tax Consolidated Group. The Tax Consolidated Group’s taxable income will take intoaccount matters including sales income, interest, hedging profits, rent and royalties, as well as allowabledeductions such as operating expenses and the depreciation of plant or equipment.

Each entity in the Group recognizes its own current and deferred tax amounts, except for anydeferred tax liabilities (or assets) resulting from unused tax losses and tax credits, which areimmediately assumed by the parent entity. The current tax liability of each Group entity is thensubsequently assumed by the parent entity. The tax consolidated group has entered a tax sharingagreement under which the wholly-owned entities fully compensate Altura Mining Limited for anycurrent tax payable assumed and are compensated by Altura Mining Limited for any current taxreceivable and deferred tax assets relating to unused tax losses or unused tax credits that aretransferred to Altura Mining Limited under the tax consolidated legislation.

The amounts receivable/payable under the tax funding agreement are due upon receipt of thefunding advice from the head entity, which is issued as soon as practicable after the end of eachfinancial year. The head entity may also require payment of interim funding amounts to assist with itsobligations to pay tax installments.

Assets or liabilities arising under tax funding agreements within the Tax Consolidate Group arerecognized as current amounts receivable from or payable to other entities in the Group. Anydifference between the amounts assumed and amounts receivable or payable under the tax fundingagreement are recognized as a contribution to (or distribution from) wholly-owned tax consolidatedentities.

Occupational health and safety legislation

Health and safety in Australia is currently governed by a number of legislative instruments,covering both state and federal jurisdictions.

A number of legislative reviews relating to harmonization of safety provisions across Australia arecurrently underway. In Western Australia, a bill that will implement the national model laws is currentlyexpected to be introduced into parliament in late 2019 or early 2020, with the bill currently expected tobecome law in mid-2020. The proposed changes will impose more onerous obligations on businessesoperating in Western Australia, and one of the most significant changes will be the new positive‘corporate officer’ duties related to board members, directors, executives and senior managers.Importantly, when the new laws are enacted, there will be no grace period and immediate compliancewill be required. Maximum penalties were previously increased in Western Australia in October 2018,and some penalties will increase further when the new laws are introduced.

The principal legislation that currently applies in Western Australia in relation to our operationsincludes:

• the Occupational Safety and Health Act 1984 (WA) and associated regulations;

• the Mines Safety and Inspection Act 1994 (WA) and associated regulations; and

• the Dangerous Goods Safety Act 2004 (WA) and associated regulations.

At a high level, these laws require that employers must, so far as is practicable, provide andmaintain a working environment in which that employer’s employees are not exposed to hazards.

The Department of Mines, Industry Regulation and Safety (the ‘‘DMIRS’’) is responsible for theregulation and administration of safety provisions pertaining to Western Australia’s resources industry

98

and Major Hazard Facilities sectors. A Dangerous Goods License on behalf of Altura Mining Limitedfor the storage of 385,000kL of diesel was approved by the DMIRS in June 2017.

Workplace and industrial relations

Australia has comprehensive laws governing employment at both state and federal levels that coverminimum terms and conditions, privacy, discrimination, superannuation, long service leave, relationswith unions, collective bargaining and other matters.

The terms and conditions of employment and industrial relations obligations of most employers,including the Guarantor, are regulated at the federal level under the Fair Work Act 2009 (Cth) (‘‘FairWork Act’’). The Fair Work Act has been in operation since July 1, 2009. After approximately ten yearsof operating under this regime, we are experienced at managing the potential issues which arise for usunder it, which include:

• National Employment Standards (‘‘NES’’)—the NES are 10 minimum conditions of employmentthat apply to all employees in Australia. These standards cover issues such as hours of work,entitlement to (paid and unpaid) annual leave, personal/carers’ leave, and parental leave, accessto flexible working arrangements and public holidays and entitlements to written notice oftermination and redundancy payments (in certain situations);

• Modern Awards and Enterprise Agreements—Some employees in Australia will be covered by aModern Award and/or an Enterprise Agreement. A Modern Award may apply to an employeedepending on the industry they work in and their level of seniority. For instance, the MiningIndustry Award 2010 applies to many employees working within the industry, but not to seniormanagement. Modern awards establish a safety net of terms and conditions of employment thatare broader than the NES. Further, employers and employees may enter into Enterpriseagreements, which are collective agreements that apply to employer(s) and certain employees.Any group of employees may enter into an enterprise agreement, even those not covered by amodern award. If the group of employees are also covered by modern award(s), the enterpriseagreement may either displace or operate in conjunction with the modern award(s), but theenterprise agreement must leave employees ‘better off overall’ than they would have been underthe applicable award. Enterprise agreements and awards can operate alongside common lawcontracts of employment, although the contracts must only supplement (and not undercut) theterms and conditions under the award or enterprise agreement.

• Good faith bargaining—during a period of bargaining for a new enterprise agreement, we aresubject to good faith bargaining obligations. A period of bargaining can only be commenced ifwe agree to bargain, or where the relevant union or group of employees obtains a MajoritySupport Determination that requires us to bargain. These principles do not force an employer toenter into any particular agreement, or to agree to any specific terms or conditions ofemployment, but they do regulate how the parties can and cannot negotiate (for example, byattending meetings, and providing timely responses to issues raised);

• Union right of entry—a union official may enter premises and exercise rights while on thepremises, for the purposes contained in the Fair Work Act and subject to satisfying conditions, ifthere is an employee who works at that premises who is eligible for membership with that union;and

• Abolition of individual statutory agreements—since January 1, 2010 it has not been possible toenter into individual statutory employment agreements; the only options are enterpriseagreements or unregistered, common law contracts (and, in some cases, individual flexibilityagreements).

99

The aspect of the Fair Work Act which has the most potential to constrain our ability, or theability of our contractors, to complete development projects on time and on budget is the ability forprotected industrial action to be taken by employees, which can be organized by unions, for thepurpose of advancing claims during bargaining for enterprise agreements, provided certainpre-conditions are met (importantly, including that bargaining is taking place and that there is noin-term enterprise agreement covering the relevant employees). Taking action against an employee thatengages in protected industrial action exposes employers to unlawfully taking adverse action under theFair Work Act. Adverse action occurs where an employer takes certain action against an employee,such as dismissing them, altering their position to their prejudice, or discriminating against them,because they have exercised a workplace right, which can include participating in protected industrialaction. However, there are certain forms of employer response action that are lawful (for example,locking out striking employees), and employers are expressly prohibited from paying employees whotake industrial action.

The Fair Work Act generally ‘covers the field’, that is, it overrides state and territory laws thatcover the same subject matter. However, certain matters are expressly excluded from the scope of thisregime, including workers’ compensation, long service leave and equal opportunity and discrimination.

Foreign Investment Review Board

The Foreign Investment Review Board is a non-statutory body established in 1976 to advise theAustralian government on foreign investment policy and its administration. The Australian ForeignAcquisitions and Takeovers Act 1975 (Cth) (‘‘FATA’’) provides that, subject to certain exemptions andmonetary thresholds, a foreign person or company may not acquire an interest in ‘‘Australian land’’(which can include acquisitions of an interest in a company that owns interests in ‘‘Australian land’’)unless prior notification of the proposed acquisition is given to the Treasurer of the Commonwealth ofAustralia (the ‘‘Treasurer’’) and the Treasurer confirms in writing that the Commonwealth of Australiahas no objections to the acquisition (‘‘FIRB approval’’).

Depending on the level and nature of foreign ownership of the Guarantor’s shares from time totime, the Guarantor may be a ‘‘foreign person’’ as defined in the FATA. If the Guarantor is a ‘‘foreignperson’’ and depending on the availability of certain exemptions, the Guarantor (including allsubsidiaries of the Guarantor) may be required to obtain FIRB approval for any future acquisitions ofmining tenements and other leases or licenses of Australian land. If the Treasurer considers anyacquisition requiring FIRB approval to be contrary to the national interest, then the Treasurer maypermit the Guarantor to proceed with that acquisition subject to certain conditions or prohibit theGuarantor from proceeding with that acquisition.

However, a reference to the acquisition of an interest in Australian land in the FATA does notinclude a reference to the acquisition of an interest in Australian land from the Commonwealth, Stateor Territory governments of Australia, unless the acquisition is being made by a foreign person who isalso classified as a ‘‘foreign government investor’’. Therefore, where a mining tenement is granted tothe Guarantor (or a subsidiary of the Guarantor) by a State or Territory government, this will notconstitute an acquisition of Australian land for the purposes of the FATA and will not require FIRBapproval unless the Guarantor has sufficient foreign government ownership to fall within the FATAdefinition of ‘‘a foreign government investor.’’

The scope of the FATA is not limited to acquisitions of ‘‘Australian land’’ and also applies toacquisitions of other interests relating to Australia, such as interests in Australian businesses andentities. Therefore, the application of the FATA may extend to other corporate transactions undertakenby the Company which are unrelated to mining tenements.

100

OUR MANAGEMENT

Board of Directors

The directors of Altura Mining Limited are:

Name Age Position(s)

James Brown . . . . . . . . . . . . . . . . . . 56 Managing DirectorPaul Mantell . . . . . . . . . . . . . . . . . . . 62 Executive DirectorAllan Buckler . . . . . . . . . . . . . . . . . . 72 Non-Executive DirectorDan O’Neill . . . . . . . . . . . . . . . . . . . 67 Non-Executive DirectorBeng Teik Kuan . . . . . . . . . . . . . . . . 75 Non-Executive DirectorXiaoyu Dai . . . . . . . . . . . . . . . . . . . . 42 Non-Executive Director

James Brown—Mr. Brown is a mining engineer with over 35 years’ experience in the miningindustry in Australia and Indonesia, including the last 10 years in the chief executive role at Altura. Hismining development and operations experience includes the New Acland and Jeebropilly mines inSouth East Queensland, the Adaro and Multi Harapan Utama operations in Indonesia and Blair Atholin the Bowen Basin in Central Queensland. Prior to his role at Altura, Mr. Brown spent 22 years atNew Hope Corporation.

Mr. Brown holds a Graduate Diploma in Mining from the University of Ballarat.

Paul Mantell—Mr. Mantell is an accountant with over 35 years’ corporate experience in themining and associated industries. This included 28 years at New Hope Corporation, with the last 12years as the company’s Chief Financial Officer. He has been involved in all aspects of accounting andfinance, financial reporting, taxation and administration, including the responsibilities of an ASX listedentity. He has previously arranged finance for mining and infrastructure projects both in Australia andIndonesia and has set up corporate, administrative and financial systems to support new and expandingmining operations. He was appointed a director in May 2009.

Mr. Mantell holds Bachelor of Commerce from the University of Queensland and is a Fellow ofCPA Australia.

Allan Buckler—Mr. Buckler has over 45 years’ experience in the mining industry and has takenlead roles in the establishment of several leading mining and port operations in both Australia andIndonesia. Mr. Buckler was appointed a director in December 2008.

Mr. Buckler holds a Certificate in Mine Surveying, a Certificate in Mining, a First Class MineManagers Certificate and a Mine Surveyor Certificate issued by the Queensland Government’sDepartment of Mines.

Dan O’Neill—Mr. O’Neill is an exploration geologist and founding director of current lithiumproducer Orocobre Limited (ASX:ORE). Mr. O’Neill has held positions with a number of Australianand multinational exploration companies and has managed exploration programs in a diverse range ofenvironments and locations including Botswana, North America, South East Asia, North Africa andAustralasia. During his 35 years’ experience, he has held executive management positions with ASXlisted companies and has worked on a range of commodities including diamonds, gold, base metals,coal, oil and gas. Mr. O’Neill was appointed a director in December 2008.

Mr. O’Neill holds a Bachelor of Science in geology from the University of Western Australia.

Beng Teik Kuan—Mr. Kuan is a mechanical engineer with considerable experience in bulkhandling and terminal operations, including responsibility for the development and management of thePulau Laut Coal Terminal in South Kalimantan, Indonesia. He also has experience in Indonesia,

101

Malaysia and Singapore with tin dredging operations, managing rubber, palm oil and cocoa processingfactories, and managing palm oil bulk terminals. He was appointed a director in November 2007.

Mr. Kuan holds a Bachelor of Engineering from the University of Malaya.

Xiaoyu Dai—Mr. Xiaoyu Dai has 21 years’ experience in chemicals industry, spanning variouscommodities, specialties and operations in China, Africa, Germany, Singapore, Japan and Korea. Heheld senior executive roles with extensive operational experience in both petro and fine chemicalsleading companies, including previous roles as head of alpha olefins, fatty alcohol in Sasol China,Managing Director of Rockwood Lithium China, and senior consultant of Shanshan Inc. Since 1 July2019, he works as General Manager of Shanshan Forever Lithium Co., Ltd.

Mr. Dai holds a Master of Business Administration from Nanjing University, China.

Executive Officers

The executive officers who are not directors, as well as the key managers of Altura Mining Limitedas of the date of this offering memorandum are as follows:

Name Age Position(s)

James Brown . . . . . . . . . . . . . . . . . . 56 Chief Executive OfficerPaul Mantell . . . . . . . . . . . . . . . . . . 62 Executive DirectorRod Wheatley . . . . . . . . . . . . . . . . . 45 Chief Financial OfficerJohn Fraser . . . . . . . . . . . . . . . . . . . 62 General Manager OperationsEric Kiely . . . . . . . . . . . . . . . . . . . . . 55 General Manager Planning and

Resource DevelopmentAlex Cheeseman . . . . . . . . . . . . . . . . 40 General Manager MarketingLynne Cantwell . . . . . . . . . . . . . . . . 49 Human Resource ManagerJoe Dowling . . . . . . . . . . . . . . . . . . . 59 Investor Relations ManagerDamon Cox . . . . . . . . . . . . . . . . . . . 57 Company Secretary

James Brown—Chief Executive Officer. See above under Board of Directors for a description ofMr. Brown’s experience and qualifications.

Paul Mantell—Executive Director. See above under Board of Directors for a description ofMr. Mantell’s experience and qualifications.

Rod Wheatley—Chief Financial Officer. Mr. Wheatley is a CPA qualified accountant with 20 years’experience in various senior finance roles across the mining and oil and gas industry. He has experiencein a range of commodities in both Australia and internationally and across all phases of mining fromexploration through to development and into production.

John Fraser—General Manager Operations. Mr. Fraser is a metallurgist with more than 30 years’experience in the mining industry in Africa and Australia. He has extensive processing and operationalmanagement experience in copper, nickel, gold and mineral sands. He has spent the last 10 yearsworking on the development of greenfield processing plant facilities, managing operational readiness,commissioning, ramp up and process optimization.

Eric Kiely—General Manager Planning and Resource Development. Mr. Kiely has over 30 years’experience in the mining industry with senior roles in mine planning and technical roles, andoperational time in gold, coal and iron ore. He was the General Manager Resource Planning andDevelopment with Rio Tinto Iron Ore responsible for the mining technical functions including geology,geotechnical, metallurgy, hydrogeology and mine planning.

102

Alex Cheeseman—General Manager Marketing. Mr. Cheeseman has 20 years’ experience across arange of industries and resource sectors, in both project and operation environments. He commencedwith Altura managing the development project contracts and supply chain and later assumedresponsibility for shipping and delivery to offtake partners. Mr. Cheeseman is now focused onmarketing.

Lynne Cantwell—Human Resources Manager. Ms. Cantwell has over 18 years’ human resourcesexperience providing Human Resources support and leadership covering a broad range of functions atan operational and corporate level within the resources industry.

Joe Dowling—Investor Relations Manager. Mr. Dowling has more than 30 years’ experience infinance and communications. He started his career as a journalist before completing a Master’s degreein Commerce and moving into senior corporate communications management positions in the financeand resources sectors. He is responsible for investor relations and corporate communications.

Damon Cox—Company Secretary. Mr. Cox is a Chartered Secretary, and CPA. He has over30 years’ experience in various roles including corporate governance, compliance, treasury and strategicpolicy advice. Mr. Cox has held the role of Company Secretary with Altura since 2008.

Board practices

The governing body of Altura Mining Limited is the board of directors (the ‘‘Board’’).

Pursuant to the Company’s Constitution, its Board must consist of at least three directors and nomore than nine directors. The Company’s Constitution also requires that directors, other than theManaging Director, offer themselves for re-election by shareholders every three years at the annualgeneral meeting, with those directors who have served the longest being subject to re-election first. TheCompany’s Constitution does not specify a maximum term for which a director may hold office. Therole of Chairman at Board meetings is rotated between the non-executive directors.

The Board’s role is to protect and enhance long-term shareholder value; and provide strategicdirection for the Company, establish goals for management and monitor the achievement of thosegoals. The responsibilities of the Board include:

• supervising the Company’s framework of control and accountability systems to enable risk to beassessed and managed;

• appointing and remove the Managing Director of the Company;

• ratify the appointing and/or removal of the Company Secretary;

• providing input into and final approval of management’s development of corporate strategy andperformance objectives;

• reviewing and ratifying systems of risk management and internal compliance and control, codesof conduct, and legal compliance;

• monitoring senior management’s performance and implementation of strategy;

• ensuring appropriate resources are available to senior management;

• approving and monitoring the progress of major capital expenditure, capital management, andacquisitions and divestitures;

• approving the annual budget;

• monitoring the financial performance of the Company;

• approving and monitoring financial and other reporting;

103

• overall corporate governance of the Company, including conducting regular reviews of thebalance of responsibilities within the Company to ensure division of functions remainappropriate to the needs of the Company;

• liaising with the Company’s external auditors and Audit & Risk Committee;

• monitoring the environmental performance of the Company;

• monitoring the employee and community relations policy; and

• monitoring the Company’s safety and health policy.

Matters reserved to the Board include: supervising the company’s framework of control andaccountability systems; appointment and removal of the Managing Director and Company Secretary;approval of management’s development of corporate strategy and performance objectives; ratifyingsystems of risk management and internal compliance and control, codes of conduct and legalcompliance; monitoring senior management’s performance and implementation of strategy and ensuringappropriate resources are available; approving and monitoring financial and other reporting; andoverall corporate governance of the Company, including conducting regular reviews of the balance ofresponsibilities within the Company to ensure that the division of functions remains appropriate.Matters which exceed the materiality threshold as defined in the statement of board and managementfunctions on the Company’s website may not be delegated.

The non-executive directors are responsible for reviewing and challenging executive performance.

The Managing Director is responsible for running the affairs of the Company under delegatedauthority from the Board and implementing the policies and strategy set by the Board.

The role of management is to support the Managing Director and implement the running of thegeneral operations and financial business of the Company, in accordance with the delegated authorityof the Board. Management is responsible for reporting all matters which fall within the materialitythreshold at first instance to the Managing Director or if the matter concerns the Managing Directorthen directly to one of the Independent Directors, as appropriate.

The Board comprises four non-executive directors, one executive director, and a managingdirector. The Board does not currently intend to invite any other Company executives to join theBoard. The Board regularly reviews the independence of directors and has determined that Messrs BTKuan and Dan O’Neill are independent directors.

The Board meets at regular intervals, as deemed necessary, to appropriately discharge its dutiesand fulfill its responsibilities and held 9 meetings during FY19. When necessary, additional meetingsare convened to deal with specific issues that require attention before the next scheduled meeting.

Board Committees

The Board has established a number of committees to assist in the execution of its duties and toallow detailed consideration of complex issues. Current committees of the Board are theRemuneration & Nomination Committee and Audit & Risk Committee. Each is comprised entirely ofnon-executive directors. The Board regularly reviews committee structure and membership.

Each committee has its own written charter setting out its role and objectives, responsibilities,composition, structure, membership requirements, and the manner in which the committee is tooperate. Each of these charters is reviewed on a regular basis and is available in the CorporateGovernance section on the Group’s website. All matters determined by committees are submitted tothe full Board as recommendations for Board determination. Minutes of committee meetings are tabledat the subsequent Board meeting. Additional requirements for specific reporting by the committees tothe Board are addressed in the charter of the individual committees.

104

Remuneration & Nomination Committee

The Remuneration & Nomination Committee must consist of at least three non-executive directors(including the Chairman, if any, of the Company). The Remuneration & Nomination Committeeconsists of Messrs. Dan O’Neill (Chairman), BT Kuan and Allan Buckler.

The Remuneration & Nomination Committee operates in accordance with its charter which isavailable in the Corporate Governance section of the Group’s website. The Remuneration &Nomination Committee’s objectives and responsibilities are to review and make recommendations tothe Board on:

• the terms and conditions of the employment of executive directors and other senior executives;

• policies for the remuneration of executive directors and other senior executives;

• the remuneration of directors;

• the performance of executive directors and other senior executives, including setting goals andobjectives and remuneration for the coming year and reviewing his/her achievements;

• policies for obtaining professional indemnity and directors’ and officers’ insurance policies;

• the Committee Charter;

• policies and processes for satisfactory succession planning for the roles of executive directors andother senior executives of the Company;

• the composition and effectiveness of the Board taking into account the Company’s current andfuture strategic direction.

The Remuneration & Nomination Committee Charter states that the Remuneration & NominationCommittee shall have direct access to the Company’s auditors and senior managers, and the ability toconsult independent experts as appropriate to discharge its functions, at the cost of the Company.

Audit & Risk Committee

The Audit & Risk Committee must consist of at least three non-executive directors, with anindependent director, who is not the Chairman of the Board, as the Chairman of the AuditCommittee & Risk Committee. The Audit & Risk Committee is comprised of three non-executivedirectors, being Messrs. BT Kuan (Chairman), Dan O’Neill and Allan Buckler. The Audit & RiskCommittee members are financially literate and have an appropriate understanding of the industries inwhich the Group operates. The Audit & Risk Committee meets and reports to the Board.

A copy of the Audit & Risk Committee Charter is available in the Corporate Governance sectionon the Group’s website. The Audit & Risk Committee’s responsibilities are to:

• assist the Board of each company in the Group to discharge its responsibility for externallyreporting financial information, and ensuring financial integrity and credibility of that reporting;

• ensure that management has in place a process to identify and manage business risks;

• seek to improve the quality of financial reporting, control systems and corporate governance ofthe Group;

• oversee internal and external audit functions;

• monitor and ensure that Altura has established processes to comply with all applicable laws,regulations and company policies.

105

The Audit & Risk Committee obtains regular reports from management, the external auditors andany project teams under its charter. The Audit & Risk Committee has full and open access to all of theGroup’s books and records and to management, staff and the external auditors of the Group. TheAudit & Risk Committee is entitled to consult independent experts if it considers it necessary in orderto fulfill its responsibilities.

The Board is responsible for satisfying itself annually, or more frequently as required, thatmanagement has developed and implemented a sound system of risk management and internal control.Detailed work on this task is delegated to the Audit & Risk Committee and reviewed by the full Board.

The Audit & Risk Committee is responsible for ensuring there are adequate policies in placerelating to risk management, compliance and internal control systems. The Audit & Risk Committeemonitors the Group’s risk management by overseeing management’s actions in the evaluation,management, monitoring, and reporting of material operational, financial, compliance, and strategicrisks. In providing this oversight, the committee takes responsibility for:

• monitoring corporate risk assessment and the internal controls instituted;

• monitoring the establishment of an appropriate internal control framework, includinginformation systems, and considering enhancements;

• reviewing Group-wide objectives in the context of the above mentioned categories of corporaterisk;

• reviews external audit programs/reports to ensure that where deficiencies in controls orprocedures have been identified, appropriate remedial action is taken by management; and

• monitoring the systems in place to prevent, detect and investigate fraud.

The committee ensures that there is an effective risk management system and that significant ormaterial business risks are reported to the Board.

Code of Conduct

We seek to conduct our business in a manner that recognizes and adheres to all relevant laws andregulations and meets high standards with respect to honesty and integrity. In order to meet thiscommitment, the Board has adopted a code of conduct for directors to promote ethical businessconduct, compliance with laws and regulations, high standards of professional behavior and to avoidconflicts of interest. The Code of Conduct is set out in the Corporate Governance section on theGroup’s website. The Board considers that the Code of Conduct reflects the practices necessary andappropriate to maintain confidence in the Group’s integrity and to take into account the directors’ legalobligations and the expectations of the Group’s stakeholders. The code applies to directors, managersand employees. It covers compliance with the law, conflicts of interest, corporate opportunities,confidentiality, intellectual property, safe work practices, alcohol and drug usage, equal opportunity andoutside employment.

The Group has established a Securities Trading Policy which outlines the restrictions, closedperiods, and processes required when directors, the Managing Director, and key management personneltrade company securities. The policies discussed in this paragraph are available in the CorporateGovernance section on the Group’s website.

The Group has also established an Anti-Corruption Policy to promote compliance with theCriminal Code Amendment (Bribery of Foreign Public Officials) Act 1999 (AU), which creates an offenceof bribery.

106

ASX Corporate Governance Principles and Recommendations

The ASX has published Corporate Governance Principles and Recommendations for ASX-listedcompanies. Compliance with the Corporate Governance Principles and Recommendations is notmandatory for AX-listed companies, however, if companies do not comply, they are required to discloseto the ASX the matters in which they are not complying. In our last corporate governance statement,we disclosed that we do not comply with the following ASX Recommendations:

Recommendation 1.3—A listed entity should have a written agreement with each director andsenior executive setting out the terms of their appointment.

All senior executives have written employment contracts. We do not have written agreements withnon-executive directors setting out their terms of employment.

Recommendation 1.4—The company secretary of a listed entity should be accountable directly tothe board, through the chair, on all matters to do with the proper functioning of the board.

The company secretary formally reports to executive management, however all directors have fulland open access to the company secretary. In addition, we do not have a permanent chair (seerecommendation 2.5).

Recommendation 1.5—A listed entity should have a diversity policy which includes requirementsfor the board or a relevant committee of the board to set measurable objectives for achieving genderdiversity and to assess annually both the objectives and the entity’s progress in achieving them.

We do not have a separate Board approved policy on diversity. However a number of matterstypically covered by such a policy have been included in the Code of Conduct. In particular, the Coderecognizes the diversity of the Company’s workforce and the commitment to equal opportunity for itsemployees. The Code further supports diversity through its statements on discrimination andharassment.

We have internal human resources policies promoting diversity and equal employment opportunity.The Company has not set measurable objectives for achieving gender diversity.

We continue to recruit and manage employees on the basis of competence and performance,irrespective of their backgrounds and individual circumstances.

Recommendation 2.4—A majority of the board of a listed entity should be independent directors.

Altura does not meet this recommendation since only two of the six directors are independent.

Recommendation 2.5—The chair of the board of a listed entity should be an independent directorand, in particular, should not be the same person as the CEO of the entity.

At this point our evolution, we do not consider it necessary to have a permanent board chairman,with the role at Board meetings being rotated between the non-executive directors.

Employment agreements

Compensation and other terms of employment for the executive directors, other key managementpersonnel and other executives are formalized in service agreements. These service agreements set outthe salary and superannuation benefits of employment, as well as basic terms and conditions ofemployment and the Company’s code of conduct. Generally, under the terms of these agreements, weor the employee may terminate the employment at any time upon giving between three and 12 monthsof written notice.

107

Compensation of directors and executive officers

Information regarding the compensation of our directors and our key management personnel infiscal 2019 and fiscal 2018 is contained in the remuneration report included in our directors’ reports forthe respective fiscal years, which are included elsewhere in this offering memorandum. Theremuneration report includes a summary of our policies in connection with executive remuneration andour equity-based remuneration plans, among other matters.

108

PRINCIPAL SHAREHOLDERS

As of November 26, 2019, the following shareholders held 5% or more of our voting shares(excluding nominee record holders holding shares on behalf of multiple beneficial owners):

Registered Shareholders Number of Shares Interest%

Shanshan Forever International Co., Ltd . . . . . . . . . . . . . 451,361,249 18.21Allan Buckler . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 359,738,505 14.52MT Smith . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 213,239,925 8.61

The directors and executive officers held an aggregate of 470,738,163 shares in Altura MiningLimited as of November 26, 2019, which represented 19.00% of the total shares then outstanding.

109

RELATED PARTY TRANSACTIONS

We will, from time to time, enter into contracts or other business relationships with one or more of our affiliates.

Transactions within the wholly-owned group

The wholly-owned group includes the ultimate parent entity in the wholly-owned group, andwholly-owned controlled entities. The ultimate parent entity in the wholly-owned group is AlturaMining Limited.

During the year the parent entity provided financial assistance to its wholly owned and controlledentities by way of intercompany loans. The loans are unsecured, interest free and have no fixed term ofrepayment. Sales and purchases between related parties within the Group have been eliminated uponconsolidation. There were no further sales or purchases from wholly-owned related parties during thefinancial year.

Transactions with other related parties

On February 5, 2019 Mr. Allan Buckler, a director of the Group, provided an unsecured loan viahis controlled entity Katsura Holdings Pte Ltd. The facility provided was for A$15 million at an interestrate of 10% per annum. The loan facility converted into Securities issued to the nominee of Katsura atthe rate of two (2) shares and one (1) option for every A$0.26 loaned by Katsura (these being thesame terms as under the Placement) on the basis that the amount lent to the Company would haveotherwise been utilized by Katsura to subscribe for Shares and Options in the Placement itself. Thefacility was converted to shares on 26 March 2019 after shareholder approval.

Details of the conversion of the loan facility were as follows:

• Loan amount A$15,000,000

• Interest at 10% pa A$201,370

• Total amount A$15,201,370

• 13 cents per share and 1 option for every 2 shares subscribed

• Shares issued 116,933,615

• Options issued 58,466,808

In August 2019, we entered into an earn-in agreement with Sayona Mining Limited, which isdiscussed above under ‘‘Our Business—Reserves and resources—Exploration program’’. Sayona MiningLimited is a related party because our Chief Executive Officer and Managing Director, Mr. JamesBrown, and our non-executive directors, Mr. Allan Bucker and Mr. Dan O’Neill, are eachnon-executive directors of Sayona Mining Limited.

110

INDEPENDENT AUDITORS

Our consolidated financial statements for fiscal 2019, fiscal 2018 and fiscal 2017 included in thisoffering memorandum have been audited by PKF Brisbane Audit.

Our interim consolidated financial statements for the three month period ended September 30,2019 included in this offering memorandum has been reviewed by PKF Brisbane Audit.

LIMITATION OF LIABILITY OF INDEPENDENT AUDITORS

The liability of PKF Brisbane Audit in relation to the performance of it professional services toAltura Mining Limited and its subsidiaries is limited by the Chartered Accountants Australia and NewZealand Professional Standards Scheme approved by the Professional Standards Council pursuant tothe Professional Standards Act 1994 (NSW) (the ‘‘Accountants Scheme’’). The Accountants Schemelimits the liability of PKF Brisbane Audit, depending on the nature of the services and the fee for theservices. The liability of PKF Brisbane Audit for its assurance work in relation to the financialstatements included in this offering memorandum and other services provided would likely be limitedto A$2,000,000.

The Accountants Scheme does not limit liability for breach of trust, fraud or dishonesty.

215

INDEX TO FINANCIAL STATEMENTS AND OUR CONSOLIDATED FINANCIAL STATEMENTS

Altura Mining Limited—Financial statements for the three months ended September 30, 2019Directors’ report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-5Auditors’ independence declaration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-11Consolidated statement of profit and loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-12Consolidated statement of other comprehensive income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-13Consolidated balance sheet . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-14Consolidated statement of changes in equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-15Consolidated statement of cash flows . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-16Notes to the financial statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-17Directors’ declaration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-28Independent auditor’s review report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-29

Altura Mining Limited—Financial statements for the year ended June 30, 2019Directors’ report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-31Auditors’ independence declaration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-44Consolidated statement of profit and loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-45Consolidated statement of other comprehensive income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-46Consolidated balance sheet . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-47Consolidated statement of changes in equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-48Consolidated statement of cash flows . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-49Notes to the financial statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-50Directors’ declaration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-94Independent auditor’s report to the members . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-95

Altura Mining Limited—Financial statements for the year ended June 30, 2018Directors’ report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-100Auditors’ independence declaration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-109Consolidated statement of profit and loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-110Consolidated statement of other comprehensive income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-111Consolidated balance sheet . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-112Consolidated statement of changes in equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-113Consolidated statement of cash flows . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-114Notes to the financial statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-115Directors’ declaration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-160Independent auditor’s report to the members . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-161

F-1

Altura Mining Limited

ABN 39 093 391 774

INTERIM FINANCIAL REPORT

For the three months ended 30 September 2019

This interim financial report is for the three months ended 30 September 2019 and does not include all the notes of the type normally included in an annual financial report. Accordingly, this report is to be read in conjunction with the Company’s Annual Report for the year ended 30 June 2019 and any public announcements made by Altura Mining Limited ABN 39 093 371 774 during the period in accordance with the continuous disclosure requirements of the Corporations Act 2001.

F-2

CONTENTS

Page

Corporate Directory .................................................................................... 1

Directors’ Report ........................................................................................ 2

Auditor’s Independence Declaration ........................................................... 8

Consolidated Statement of Profit and Loss .................................................. 9

Consolidated Statement of Other Comprehensive Income ......................... 10

Consolidated Balance Sheet ...................................................................... 11

Consolidated Statement of Changes in Equity ........................................... 12

Consolidated Statement of Cash Flows ..................................................... 13

Notes to the Financial Statements ............................................................. 14

Directors’ Declaration............................................................................... 25

Independent Auditor’s Review Report ...................................................... 26

F-3

1

Corporate Directory

DIRECTORS

James Brown - Managing Director Paul Mantell - Executive Director Allan Buckler - Non-Executive Director Dan O’Neill - Non-Executive Director Beng Teik Kuan - Non-Executive Director Xiaoyu Dai - Non-Executive Director

COMPANY SECRETARY

Damon Cox

REGISTERED OFFICE

Level 2, 23 Barrack Street PERTH WA 6000 Telephone: +61 8 9488 5100

Email: cosec@alturamining.com Website: www.alturamining.com

AUDITORS

PKF Brisbane Audit Level 6, 10 Eagle Street Brisbane QLD 4000

SHARE REGISTRY

Link Market Services Limited Level 12, QV1 Building

250 St George’s Terrace Perth WA 6000

AUSTRALIAN SECURITIES EXCHANGE

Code: AJM, AJMOB

F-4

Altura Mining Limited and Controlled Entities

2

Directors’ Report FOR THE THREE MONTHS ENDED 30 SEPTEMBER 2019

Your directors have pleasure in presenting the interim financial statements of Altura Mining Limited (“Altura” or “the Company”) and its controlled entities ("the Group") for the three months ended 30 September 2019. The previous corresponding period of financial performance is the three months ended 30 September 2018 and of financial position is as at 30 June 2019. The directors report as follows:

DIRECTORS

The names of the directors in office at any time during the interim period or since the end of the period are:

Mr James Brown Mr Paul Mantell Mr Allan Buckler Mr Dan O’Neill Mr Beng Teik Kuan Mr Xiaoyu Dai (appointed 10 September 2019)

PRINCIPAL ACTIVITIES

The principal activity of the Group during the period was the mining, processing and sale of lithium ore at Altura’s 100% owned Altura Lithium Project in the Pilbara region of Western Australia.

OPERATING AND FINANCIAL REVIEW

Overview

Altura Mining Limited (“AJM”) is an ASX listed entity that is focused on the operations of the Altura Lithium Project at Pilgangoora in Western Australia. The Company also has an interest in a coal project in Indonesia, which is in the process of being divested.

Operating Results

The Group’s operating loss after providing for income tax for the three-month period ended 30 September 2019 was $17,104,749 (2018: loss $5,258,745). The loss in the current period was principally related to the amortisation of transaction costs, interest expense and a net foreign exchange loss.

Strategy

The Group’s objective is to create shareholder value through the development of profitable mining operations and other supplementary mining activities that deliver strong cash flows for the Group and resultant regular dividends for shareholders.

The Group is focused on consistently achieving nameplate production from its Altura Lithium Project and adding additional committed customers for the supply of spodumene concentrate. The Group has also completed a Definitive Feasibility Study (DFS) for a Stage 2 expansion of the lithium project, which it plans to commence subject to market conditions.

Altura Lithium Project

During the three months to 30 September 2019, the Group achieved record production from its Pilgangoora lithium mine, moving steadily towards nameplate production rates, driving down unit costs and delivering healthy cash margins on sales.

The Pilgangoora lithium mine recorded total production of 45,484 wmt for the period, driven by increased ore production, higher grade and improved plant throughputs. Unit costs for the period reduced to US$365/wmt produced.

F-5

Altura Mining Limited and Controlled Entities

3

Directors’ Report (continued) FOR THE THREE MONTHS ENDED 30 SEPTEMBER 2019

Table 1 – Mining and Process Quantities

Units Sept Qtr

2018 Dec Qtr

2018 Mar Qtr

2019 Jun Qtr 2019

Sept Qtr 2019

Change (%)

Ore mined wmt 323,539 350,099 404,087 439,559 476,093 8.3

Waste mined wmt 1,512,840 1,491,011 1,426,256 1,546,719 1,484,978 -4.0

Total material mined bcm 625,881 625,008 622,929 675,726 670,842 -0.7

Ore mined grade Li20 % 1.21 1.19 1.16 1.10 1.18 7.3

Ore processed wmt 98,135 256,931 251,200 337,786 376,530 11.5 Lithium concentrate produced wmt 7,379 25,794^ 29,627 42,402 45,484 7.3

Includes low-grade material produced during commissioning. This material would require re-processing and /or blending in order to be included in

saleable product Mining Total material movements in the period remained close to record levels and included a strong increase in ore mined and a reduction in waste mining as operations focused on ore development. Ore production increased by 8.3% to a record 476kt as mine design and operations were optimised. Mine production benefited from the introduction of a night shift for one week in three from August to provide consistent supply of fresh ore to the mill. A second excavator also was brought into operations to enable multiple dig faces to be opened to increase material movement efficiency and secure continued access to higher grade ore. The grade of ore mined increased by 7.3% to 1.18% Li2O as mining operations accessed higher grade segments of the pegmatite ore bodies. Processing Processing performance improved significantly during the period with ore processed increasing to a record 376,530 tonnes. Head grade averaged 1.13% Li2O during the period and reached 1.17% in the month of September. The increase in plant throughput through the period was due to improved asset utilisation and process reliability despite a three-day planned maintenance shut down in the first week of July, a staged maintenance of individual plant modules during August and a 35-hour total plant shutdown in September. Plant utilisation increased to 90% during the period, with the processing feed rate rising to 191 dry metric tonnes (“dmt”)/hr, only slightly below nameplate capacity of 193 dmt/hr. Feed rates moved above 200 dmt/hr in September 2019. The coarse product circuit performed in line with expectations over the period, producing 24,639 wmt. The fines circuit was affected by unplanned maintenance in August, with total fines production of 20,845 wmt. New measures were implemented to stabilise fines circuit operations and increase recoveries, resulting in a significant increase in fines production in the month of September. Comminution consultants have been engaged to assist with optimisation of the grinding circuit and site evaluation of alternative flotation reagents is ongoing, both designed to improve lithia recovery and product quality.

F-6

Altura Mining Limited and Controlled Entities

4

Directors’ Report (continued) FOR THE THREE MONTHS ENDED 30 SEPTEMBER 2019

Figure 1 – Altura Spodumene Concentrate Production

ROM and Product Stocks Current ROM and crushed ore stocks as at the end of September 2019 totalled 540,513 wmt of which 300,140 wmt is at a grade greater than 1.20% Li2O, providing sufficient stock to blend and feed the process plant. Concentrate product stocks as at the end of September totalled 30,387 wmt distributed between site product stockpiles and the Wedgefield storage facility. The product stock of 30,387 wmt is inclusive of a cargo of 12,500 wmt that commenced loading in late September which equates to effective stored stock of 17,887 wmt. During the period contractor Qube Bulk hauled 44,407 wmt to the storage facility from the mine site. Marketing and Shipping In the three months to September 2019, Altura shipped three cargoes totalling 25,601 dmt. A further shipment totalling 11,587 dmt commenced loading during September and sailed from Port Hedland on 2 October 2019. All of the cargoes are of premium quality and highly regarded by shippers, offtake partners, product converters and end chemical users. The shipments continue to be in line with product and previously shipped specifications and exhibit attractive properties for converters, particularly the low mica levels of 0.5%. The average realised price for the period was US$599 dmt (CIF to mainland China basis SC6). Health, Safety and Environment (HSE) The Company’s safety record has continued to be positive with zero Lost Time Injuries recorded for the period. Since the beginning of construction, the operation has recorded just one Lost Time Injury. in March 2018, reflecting the Company’s strong focus on ensuring safe operating practices. Corporate Developments Capital Raising On 23 July 2019 Altura announced that it had signed a subscription and cooperation agreement with Shanshan Forever International Co., Limited. The agreement raised A$22.4 million in proceeds, which were received on 7 August 2019. Under the terms of the agreement Shanshan is entitled to appoint a director to the Altura board, provided that their relevant interest in Altura shares does not fall below 12.5 per cent for more than 30 consecutive days

0

2000

4000

6000

8000

10000

12000

14000

16000

18000

Jul-18 Aug-18 Sep-18 Oct-18 Nov-18 Dec-18 Jan-19 Feb-19 Mar-19 Apr-19 May-19 Jun-19 Jul-19 Aug-19 Sep-19

Spodumene Production (WMT)

F-7

Altura Mining Limited and Controlled Entities

5

Directors’ Report (continued) FOR THE THREE MONTHS ENDED 30 SEPTEMBER 2019

Offtakes On 9 July 2019 Altura announced that it had entered into a new offtake agreement with Shandong Ruifu Lithium Industry Co., Ltd for 35,000 tonnes per annum (tpa). At the same time Altura advised that it had reached agreement with Shaanxi J&R Optimum Energy Co., Ltd for the termination of the remaining 50,000 tpa under that offtake agreement. On 1 August 2019 Altura announced that it had entered into a new offtake agreement with Guangdong Weihua Corporation for 50,000 tpa. At the same time Altura advised that it had reached agreement with Lionergy Limited to reduce its tonnage from 100,000 tpa to 65,000 tpa. Altura has offtake commitments for its entire nameplate production capacity which are summarised below:

Offtake Partner Tonnage BOA Term / Expiry

Lionergy Limited 65,000 dmt September 2023 GFL International Co., Limited 70,000 dmt December 2021 Shandong Ruifu Lithium Industry Co., Ltd 35,000 dmt June 2024 Guangdong Weihua Corporation 50,000 dmt December 2024

Total 220,000 dmt

All the BOAs have a floor price of US$550 per tonne of 6% spodumene, with a ceiling price of US$950 per tonne. Loan Note Facility The Group breached the financial covenant on the loan note facility (Note 4) for the quarter. The respective covenant is based on an annual net debt to EBITDA ratio. The calculation of this ratio is based on the current operating quarter results added to the previous three operating quarters in order to deliver an annual result. For quarterly reporting periods after 30 September 2018 the net debt to defined EBITDA ratio shall not exceed the ratio of 1.5:1. As at 30 September 2019 the Group did not hold an unconditional right to defer settlement of the loan and the loan was therefore required to be reclassified as current on this basis. During the period, half-yearly interest totalling $15.9 million was paid to the Company’s debt providers, with the next half yearly interest payment being due in February 2020. Altura notes that its loan is due for repayment in August 2020 and is working with its advisors Azure Capital to complete its facility refinancing. Sayona Tenements Agreement Altura announced on 8 August 2019 that it had signed an Earn-in Agreement with lithium project developer Sayona Mining Limited over its Pilbara lithium tenements. Sayona Mining Limited is a related party due to common directors. Under the Agreement, Altura will spend $1.5 million on exploration across the project portfolio over a three-year period to earn a 51% interest, with Sayona retaining the remaining project interest. Sayona will retain the right to contribute to project evaluation and development in the future to participate in the upside potential. The tenement package subject to the Agreement consists of some 1,806 km2 and significantly expands Altura’s existing Pilbara tenement holding. The proximity of the tenements to Altura’s existing mining and processing infrastructure will significantly enhance the development potential of any discoveries. Zinciferous Agreement Altura signed a Cornerstone Investment Framework Agreement with Zinciferous Limited in July 2019. The agreement, which is non-binding, provides a potential opportunity for Altura to participate in the downstream processing of lithium in a newly constructed lithium conversion facility in China. Zinciferous is an unlisted Australian public company which holds an option to acquire up to an 80% interest in the newly constructed Tianyuan Lithium Carbonate Plant together with certain spodumene concentrate supply and lithium chemical offtake rights. The potential cornerstone investment could lead to downstream processing exposure and further lithium concentrate offtakes. The

F-8

Altura Mining Limited and Controlled Entities

6

Directors’ Report (continued) FOR THE THREE MONTHS ENDED 30 SEPTEMBER 2019

Divestment of Assets Tabalong Coal Asset The Tabalong Coal Project is a premium grade thermal coal deposit located in South Kalimantan, Indonesia. The project consists of five Mining Licences (IUPs) IUPs granted for Operation Production. Altura holds 70% of three IUPs and 56% of the remaining two. The Company has previously stated its intention to divest its interests in Tabalong coal assets. It is pursuing various options for sale of the coal assets and information has been made available to a number of parties under confidentiality deed arrangements. Sale of subsidiary Asset In July 2019 the Company sold its wholly owned subsidiary PT Asiadrill Bara Utama (ABU) a cash amount of US$200,000 (A$296,000). ABU was a dormant company and not treated as a discontinued operation, therefore the sale has an immaterial impact on the Groups financial statements. Exploration and Development Updated Resource and Reserves Altura undertook the annual review of the Minerals Resource and Ore Reserve Estimates during the period and it was finalised for release on 9 October 2019. The revised Mineral Resource Estimate totalled 45.7 million tonnes at 1.06% Li2O for 483,000 tonnes of contained Li2O, including 7.4 million tonnes in the Measured category (see Table 2 below). The Revised Ore Reserve Estimate of 37.6 million tonnes at 1.08% Li2O and 407,000 tonnes of contained Li2O, including 7.2 million tonnes in the Proved category (see Table 3 below). The revised estimates reflected ore depletion during the past 12 months of mining, a reduction in cut-off grade and improved mining methods which reduced dilution and eliminated marginal ore at resource boundaries.

Table 2 – Mineral Resource Estimate (0.30% Li2O Cut-off Grade) – 30 June 2019

JORC Category Cut-off Li2O% Tonnes (Mt) Li2O% Fe2O3% Li2O Tonnes

Measured 0.30 7.4 1.23 1.38 91,000

Indicated 0.30 34.2 1.03 1.29 353,000 Measured & Indicated 0.30 41.6 1.07 1.31 444,000 Inferred 0.30 4.1 0.95 1.41 39,000 Total 0.30 45.7 1.06 1.32 483,000

Table 3 – Ore Reserve Estimate (0.30% Li2O Cut-off Grade) – 30 June 2019

JORC Category Cut-off Li2O% Tonnes (Mt) Li2O% Fe2O3% Li2O Tonnes

Proved 0.30% 7.2 1.22 1.40 87,000 Probable 0.30% 30.5 1.05 1.29 320,000 Total 0.30% 37.6 1.08 1.31 407,000

MATTERS SUBSEQUENT TO THE END OF THE PERIOD Capital Raising

Subsequent to the end of the reporting period, the Company undertook a capital raising comprising a non-renounceable Entitlement Offer of two new fully paid ordinary shares for every thirteen existing fully paid ordinary shares at $0.06 per share to raise A$21.55 million.

The Entitlement Offer period closed on Friday 15 November 2019. The total amount raised was $9.155 million with shareholder subscribing for a total of 152,585,610 shares, leaving a shortfall of 205,177,852 shares. Under the terms of the Entitlement Offer the Directors may allocate the shortfall shares at their discretion within three months of the closing date of the offer. The Company intends to approach a variety of parties to provide them with the opportunity to take up the shortfall shares at the offer price of $0.06 per share.

F-9

Altura Mining Limited and Controlled Entities

7

Directors’ Report (continued)

FOR THE THREE MONTHS ENDED 30 SEPTEMBER 2019 ROUNDING OF AMOUNTS The Company is an entity to which ASIC Corporations Instrument 2016/191 applies and, accordingly, amounts in the financial statements have been rounded to the nearest thousand dollars. AUDITOR’S INDEPENDENCE DECLARATION The auditor’s independence declaration for the three months ended 30 September 2019 has been received and is included on page 8 of the report. Signed in accordance with a resolution of the directors. On behalf of the Directors, James Brown Director Brisbane, 26 November 2019

mememeeeeeeemememeeeemeeeeeemeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeees ss ssss ssss ss ssssssssssssssssssss Brrrrrrrrrrrrrrrrrrrowowoooooowowowowoooooowowoooooowwooooowooooooooooooooooooooooooooooooooooooo n

F-10

AUDITOR’S INDEPENDENCE DECLARATIONUNDER SECTION 307C OF THE CORPORATIONS ACT 2001

TO THE DIRECTORS OF ALTURA MINING LIMITED

I declare that, to the best of my knowledge and belief, during the three months ended 30 September 2019, there have been:

(a) no contraventions of the auditor independence requirements of the Corporations Act 2001 in relation to the review; and

(b) no contraventions of any applicable code of professional conduct in relation to the review.

PKF BRISBANE AUDIT

LIAM MURPHYPARTNER

BRISBANEDATE: 26 NOVEMBER 2019

F-11

Altura Mining Limited and Controlled Entities

9

Consolidated Statement of Profit and Loss FOR THE THREE MONTHS ENDED 30 SEPTEMBER 2019

Note September 2019

$’000 September 2018

$’000 Continuing operations

Revenue 3(a) 23,312 232 Cost of sales 3(c) (18,149) (264)

Operating profit / (loss) 5,163 (32)

Other income

Sundry income 3(b) 4 105 Expenses

Administration costs (1,068) (921) Employee benefits expense 3(g) (1,226) (1,566) Other expenses 3(d) (52) (47) Profit on sale of subsidiary 3(f) 1,202 -

Profit / (Loss) before foreign exchange and finance costs 4,023 (2,461) Net foreign exchange (loss) 3(e) (6,561) (2,744) (Loss) before finance costs (2,538) (5,205) Finance costs Interest on funding facility (8,563) - Amortisation of transaction costs (5,975) - (Loss) before income tax (17,076) (5,205)

Income tax expense (21) (54) Net (Loss) after income tax for the period from continuing operations (17,097) (5,259)

Discontinued operations

Profit / (loss) of discontinued operations after tax 7(b) (7) 1 Net profit / (loss) for the period (17,104) (5,258)

Net profit / (loss) attributable to:

Owners of Altura Mining Limited (17,114) (5,293) Non-controlling interest 10 35

(17,104) (5,258)

(Loss) per share from continuing and discontinued operations attributable to the ordinary equity holders of the company: Cents Cents

Basic and diluted (loss) per share from continuing and discontinued operations (0.76) (0.29)

Basic and diluted (loss) per share from continuing operations (0.76) (0.29)

Basic and diluted (loss) per share from discontinued operations (0.00) (0.00)

The above Consolidated Statement of Profit and Loss should be read in conjunction with the accompanying Notes.

F-12

Altura Mining Limited and Controlled Entities

10

Consolidated Statement of Other Comprehensive Income FOR THE THREE MONTHS ENDED 30 SEPTEMBER 2019

September 2019

$’000 September 2018

$’000 Net profit / (loss) after income tax (17,104) (5,258) Other comprehensive income / (loss) Items that may be reclassified to profit and loss:

Changes in the fair value of financial assets (178) (1,429) Exchange differences on translation of foreign controlled entities (2,466) (1,068)

Other comprehensive (loss) for the period, net of tax (2,644) (2,497)

Total comprehensive (loss) for the period (19,748) (7,755)

Total comprehensive (loss) attributable to:

Members of the parent entity (19,730) (7,786) Non-controlling interest (18) 31

(19,748) (7,755) Total comprehensive (loss) attributable to members:

Continuing operations (19,343) (7,492) Discontinued operations (387) (294)

(19,730) (7,786)

The above Consolidated Statement of Other Comprehensive Income should be read in conjunction with the accompanying Notes.

F-13

Altura Mining Limited and Controlled Entities

11

Consolidated Balance Sheet AS AT 30 SEPTEMBER 2019

Note 30 September

2019 $’000

30 June 2019

$’000 Current assets

Cash and cash equivalents 590 9,494 Trade and other receivables 5 7,277 2,149 Held to maturity investments 78 78 Inventories 13 33,532 20,720 Current tax prepaid 55 73 Other current assets 761 1,155 Assets classified as held for sale 7 10,275 9,903

Total current assets 52,568 43,572 Non-current assets

Financial assets 8 1,108 1,286 Property, plant and equipment 11 288,002 288,680 Exploration and evaluation 10 3,289 3,265 Right-of-use asset 1(i) 2,185 -

Total non-current assets 294,584 293,231

Total assets 347,152 336,803

Current liabilities Trade and other payables 6 33,281 40,778 Borrowings 4 192,546 179,612 Short term provisions 1,665 1,669 Lease liabilities 1(i) 514 - Liabilities classified as held for sale 7 1,964 1,905

Total current liabilities 229,970 223,964

Non-current liabilities Borrowings 4 - - Rehabilitation Provision 9 11,994 11,994 Lease liabilities 1(i) 1,691 -

Total non-current liabilities 13,685 11,994

Total liabilities 243,655 235,958

Net assets 103,497 100,845

Equity Contributed equity 15 256,355 233,955 Reserves (5,936) (3,320) Accumulated losses (147,119) (130,005)

Capital and reserves attributable to owners of Altura Mining Limited 103,300 100,630

Non-controlling interest 197 215

Total equity 103,497 100,845

The above Consolidated Balance Sheet should be read in conjunction with the accompanying Notes.

F-14

Altura Mining Limited and Controlled Entities

12

Consolidated Statement of Changes in Equity FOR THE THREE MONTHS ENDED 30 SEPTEMBER 2019

The above Consolidated Statement of Changes in Equity should be read in conjunction with the accompanying Notes.

Contributed Equity

Accumul-ated

losses

Option/ Perform-

ance rights reserve

Change in fair value - financial

assets

Foreign currency translat-

ion reserve

Non-controll-

ing interests

TOTAL

$’000 $’000 $’000 $’000 $’000 $’000 $’000 Balance as at 1 July 2018 192,893 (103,340) 1,602 3,488 (1,588) 298 93,353 Total comprehensive income for the period

- (5,293) - (1,429) (1,064) 31 (7,755)

Transactions with owners in their capacity as owners:

Issue of shares – employee bonus payment - - - - - - -

Employee performance rights issued - - - - - - - Shares issued - - - - - - - Costs of capital raised - - - - - - - Amortisation of performance rights - - 572 - - - 572 Sub-Total - - 572 - 572

Balance as at 30 September 2018 192,893 (108,633) 2,174 2,059 (2,652) 328 86,170 Balance as at 1 July 2019 233,955 (130,005) - 756 (4,076) 215 100,845 Total comprehensive income for the period

- (17,114) - (178) (2,438) (18) (19,748)

Transactions with owners in their capacity as owners:

Issue of shares 22,400 - - - - - 22,400 Employee performance rights issued - - - - - - - Amortisation of performance rights - - - - - - - Sub-Total 22,400 - - - - - 22,400

Balance as at 30 September 2019 256,355 (147,119) - 578 (6,514) 197 103,497

F-15

Altura Mining Limited and Controlled Entities

13

Consolidated Statement of Cash Flows FOR THE THREE MONTHS ENDED 30 SEPTEMBER 2019

September 2019

$’000 September 2018

$’000 Cash flows from operating activities

Receipts from customers 18,451 250 Payments to suppliers and employees (32,220) (1,622) Sundry income - 10 Interest received 2 33 Interest paid (15,927) -

Net cash provided by / (used in) operating activities (29,694) (1,328) Cash flows from investing activities

Purchase of property, plant and equipment and mine properties (1,312) (35,795) Expenditure on exploration and evaluation (25) (301) Proceeds from disposal of subsidiaries 296 - Proceeds from sale of property, plant and equipment - 5

Net cash provided by / (used in) investing activities (1,041) (36,091) Cash flows from financing activities

Proceeds for the issue of shares 22,400 - Proceeds from borrowings - 19,395 Borrowing costs (584) - Net cash provided by / (used in) financing activities 21,816 19,395

Net increase / (decrease) in cash and cash equivalents held (8,919) (18,024) Cash and cash equivalents at the beginning of year 9,513 28,779

Effect of exchange rates on cash holdings in foreign currencies 6 4 Cash and cash equivalents at the end of period 600 10,759

Reconciliation of cash and cash equivalents at the end of period

Cash and cash equivalents per balance sheet 590 10,737

Cash in assets classified as held for sale 10 22

Cash balance as per statement of cash flows above 600 10,759

Non cash investing and financing activities Interest on loan facility capitalised - (2,141) Borrowing costs – capitalised - (1,926)

The above Consolidated Statement of Cash Flows should be read in conjunction with the accompanying Notes.

F-16

Altura Mining Limited and Controlled Entities

14

Notes to the Financial Statements FOR THE THREE MONTHS ENDED 30 SEPTEMBER 2019

1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES

Statement of compliance The interim financial report is a general purpose financial report prepared in accordance with the Corporations Act 2001 and AASB 134 Interim Financial Reporting. The interim report covers the consolidated financial statements of the consolidated entity comprising Altura Mining Limited (the Company) and its controlled entities (the Group). The interim report does not include notes of the type normally included in an annual financial report and should be read in conjunction with the most recent annual financial report for the year ended 30 June 2019 of the Company and any public announcements made during the interim reporting period in accordance with the continuous disclosure requirements of the Corporations Act 2001. The interim financial statements were authorised for issue on 26 November 2019 by the directors of the Company. Basis of preparation The Company is a company of the kind referred to in ASIC Corporations Instrument 2016/191, and in accordance with that Instrument amounts in the directors’ report and the interim financial report are rounded off to the nearest thousand dollars, unless otherwise indicated. Accounting policies The same accounting policies and methods of computation adopted in the preparation of the interim financial report are consistent with those adopted and disclosed in the Group’s annual financial report for the year ended 30 June 2019, except for those described below.

(i) Changes in Accounting Policies Applied by the Group

AASB 16: Leases This note explains the impact of the adoption of AAAB 16 Leases on the Group’s financial statements and discloses the new accounting policies that have been applied from 1 July 2019. The Group has adopted AASB retrospectively from 1 July 2019 but has not restated comparatives for the 2019 reporting period, as permitted under the specific transitional provisions in the standard. The reclassifications and the adjustments arising from the new leasing rules are therefore recognised in the opening balance sheet on 1 July 2019. (a) Adjustments recognised on adoption of AASB 16 On adoption of AASB 16, the group recognised lease liabilities in relation to leases which had previously been classified as operating leases “under the principles of AASB 117 Leases. These liabilities were measured at the present value of the remaining lease payments, discounted using the lessee’s incremental borrowing rate as of 1 July 2019. The weighted average lessee’s incremental borrowing rate applied to the lease liabilities on 1 July 2019 was 5%. The Company did not previously have any lease classified as finance leases therefore no adjustment required. The remeasurements to the lease liabilities were recognised as adjustments to the related right-of-use assets immediately after the date of initial application.

September 2019 $’000

Operating lease commitments disclosed as at 30 June 2019 2,582 Discounted using the lessee’s incremental borrowing rate at the date of initial application 2,327

Lease liability recognised as at 1 July 2019 2,327 Of which are: Current lease liabilities 503 Non-current lease liabilities 1,824

2,327

F-17

Altura Mining Limited and Controlled Entities

15

Notes to the Financial Statements (continued) FOR THE THREE MONTHS ENDED 30 SEPTEMBER 2019

1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued) AASB 16: Leases (continued) The associated right-of-use assets for property leases were measured on a retrospective basis as if the new rule had always been applied. Other right-of-use assets were measured at the amount equal to the lease liability, adjusted by the amount of any prepaid or accrued lease payments relating to that lease recognised in the balance sheet as at 30 June 2019. There were no onerous lease contracts that would have required an adjustment to the right-of-use assets at the date of initial application. The recognised right-of-use assets relate to the following types of assets:

30 September 2019 $’000

Properties 2,185 The change in accounting policy affected the following items in the balance sheet on 1 July 2019:

Right-of-use assets – increase by $2,327,000 Lease liabilities – increase by $2,327,000

There was no impact on retained earnings on 1 July 2019. i) Impact on segment disclosure and earning per share

Adjusted EBITDA, segment assets and segment liabilities for 30 September 2019 all increase as a result of the change in accounting policy. Lease liabilities are now included in the segment liabilities, whereas finance lease liabilities were previously excluded from segment liabilities. The following segment was affected by the change in policy:

Adjusted EBITDA $000’s

Segment Assets $’000

Segment Liabilities

$’000

Lithium mining 150 2,185 2,205 Earnings per share increased by 0.01 per share for the three months to 30 September 2019 as a result of adoption of AASB 16. ii) Practical expedients applied In applying AASB 16 for the first time, the group has used the following practical expedients permitted by the standard

The use of a single discount rate to a portfolio of leases with reasonably similar characteristics Reliance on previous assessments on whether leases are onerous The accounting for operating lease with a remaining term of less than twelve months as at 1 July 2019 as short-term

leases the exclusion of initial direct cots for the measurement of the right-of-use asset at the date of the initial application, and

The use of hindsight in determining the lease term where the contract contains a lease at the date of the initial application. Instead, for contracts entered into before the transition date the group has relied on its assessment made applying AASB 117 Interpretation 4 Determining whether an arrangement contains a Lease

(b) The Group’s leasing activities and how these are accounted for

The Group lease various offices and a warehouse. Rental contracts are typically made for fixed terms but may have extension options as described in ii) below. Lease terms are negotiated on an individual basis and contain a wide range of different terms and conditions. The lease agreements do not impose any covenants, but leased assets may not be used as security for borrowing purposes. Until the 2019 financial year, leases of property, plant and equipment were classified as either finance or operating leases. Payments made under operating leases (net of any incentive received from the lessor) were charged to the profit or loss on a straight-line basis over the period of the lease.

F-18

Altura Mining Limited and Controlled Entities

16

Notes to the Financial Statements (continued) FOR THE THREE MONTHS ENDED 30 SEPTEMBER 2019

1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued) AASB 16: Leases (continued) From 1 July 2019, lease are recognised as a right-of-use asset and a corresponding liability at the date at which the leased asset is available for use by the Group. Each lease payment is allocated between the liability and finance cost. The finance cost is charged to profit or loss over the lease period so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period. The right-of-use asset is depreciated over the shorter of the assets useful life and the lease term on a straight-line basis. Assets and liabilities arising from a lease are initially measured on a present value basis. Lease liabilities include the net present value of the following lease payments.

Fixed payments (including in-substance fixed payments), less any lease incentives receivable Variable lease payment that are based on an index or a rate Amounts expected to be payable by the lessee under residual value guarantees The exercise price of a purchase option if the lessee is reasonably certain to exercise that option, and Payments of penalties for terminating the lease, if the lease term reflects the lessee exercising that option

The lease payments are discounted using the interest rate implicit in the lease. If that rate cannot be determined, the lessee’s incremental borrowing rate is used, being the rate that the lessees would have to pay to borrow the funds necessary to obtain an asset of similar value in a similar economic environment with similar terms and conditions. Right-of-use assets are measured at cost comprising the following:

The amount of the initial measurement of lease liability Any lease payments made at or before the commencement date less any lease incentives received Any initial direct costs, and Restoration costs

Payments associated with short-term leases and leases of low-value assets are recognised on a straight-line basis as an expense in profit or loss. Short term leases are lease with a lease term of 12 months or less. Low -value assets comprise IT equipment.

(ii) Going Concern Principle of Accounting Notwithstanding the Group’s reporting an operating loss after tax of $17.10m (30 September 2018: loss of $5.26m) for the three months ended 30 September 2019 and recording a net current asset deficiency of $177.40m (30 June 2019: $180.39m) as at 30 September 2019 and the consolidated entity having $0.59m (30 June 2019: $9.49m) of cash available while needing to refinance a loan note facility of $192.34m by August 2020, the financial statements have been prepared on a going concern basis as the Company’s directors believe that the Group will be able to pay its debts as and when they fall due and payable. Given the above, the Group’s ability to continue as a going concern is dependent on achieving forecast production and sales and the successful refinancing of the loan note facility by the due date. Directors are confident that the fully funded Altura Lithium project is forecast to generate considerable cash flow sufficient to address the operating losses and achieve positive cash flows from operations. This together with the ongoing support of lenders and shareholders will ensure the Group is a going concern and will be able to pay its debts as and when they fall due and payable. Notwithstanding the position outlined above, if commercial production and sale of lithium cannot be achieved at forecast levels, and the loan facility cannot be successfully refinanced by the due date, there is a material uncertainty as to whether the Group will be able to continue as a going concern and, therefore whether it will realise its assets and extinguish its liabilities in the normal course of business and at the amounts stated in the financial statements No adjustments have been made relating to the recoverability and classification of recorded asset amounts or to the amounts and classification of liabilities that might be necessary should the Group not continue as a going concern.

F-19

Altura Mining Limited and Controlled Entities

17

Notes to the Financial Statements (continued) FOR THE THREE MONTHS ENDED 30 SEPTEMBER 2019

2. SEGMENT INFORMATION

The Group’s primary segment reporting format is business segments as the Group’s risks and returns are affected predominantly in the products and services produced.

Lithium mining

$’000

Exploration services

$’000

Mineral exploration

$’000

Eliminations

$’000

Total

$’000 Three months to 30 September 2019 Revenue

External sales 22,567 745 - - 23,312 Other income - 2 2 - 4 Other segments - 1,000 - (1,000) -

Total segment revenue 22,567 1,747 2 (1,000) 23,316

Unallocated revenue -

Total consolidated revenue 23,316 Segment result (4,504) 291 1,675 - (2,538) Unallocated segments net of unallocated revenue

-

Profit before income tax and finance costs (2,538) Finance costs (14,538) Income tax expense (21)

Net loss for the period from continuing operations

(17,097)

Loss from discontinued operations (7) Net profit / (loss) for the period (17,104)

Assets and liabilities

Segment assets 333,682 1,024 2,171 - 336,877 Unallocated assets - - - - 10,275

Total assets 347,152

Segment liabilities 238,298 879 2,514 - 241,691 Unallocated liabilities - - - - 1,964

Total liabilities 243,655

F-20

Altura Mining Limited and Controlled Entities

18

Notes to the Financial Statements (continued) FOR THE THREE MONTHS ENDED 30 SEPTEMBER 2019

2. SEGMENT INFORMATION (continued)

Lithium mining

$’000

Exploration services

$’000

Mineral exploration

$’000

Eliminations

$’000

Total

$’000 Three months to 30 September 2018 Revenue

External sales - 253 - - 253 Other income - 50 33 - 83 Other segments - 24 - (24) -

Total segment revenue - 327 33 (24) 336

Unallocated revenue -

Total consolidated revenue 336 Segment result - (468) (4,737) - (5,205) Unallocated segments net of unallocated revenue

-

Loss before income tax and finance costs (5,205) Finance costs -

Income tax benefit (54) Net loss for the period from continuing operations

(5,260)

Loss from discontinued operations 1 Net loss for the period (5,258)

Assets and liabilities

Segment assets 266,073 1,511 7,157 - 274,741 Unallocated assets - - - - 9,507

Total assets 284,248

Segment liabilities 191,656 988 2,113 - 194,757 Unallocated liabilities - - - - 1,894

Total liabilities 196,651

F-21

Altura Mining Limited and Controlled Entities

19

Notes to the Financial Statements (continued) FOR THE THREE MONTHS ENDED 30 SEPTEMBER 2019

30 September

2019 $’000

30 September 2018

$’000 3. PROFIT / (LOSS) FROM ORDINARY ACTIVITIES

(a) Revenue Revenue from sales of product 22,567 - Revenue from exploration services 155 253 Revenue from royalties 590 (21) Total revenues from ordinary activities 23,312 232

(b) Sundry income Interest received from other corporations 2 34 Profit on sale of assets 2 71 Total sundry income 4 105

(c) Cost of sales Mining and processing costs 25,409 - Royalty expenses 1,782 - Depreciation and amortisation 3,101 25 Product inventory movement (12,495) - Mining services drilling costs 352 239 Total cost of sales 18,149 264

(d) Other expenses Depreciation – plant & equipment 52 47 Total depreciation 52 47

(e) Net foreign exchange loss

The net foreign exchange loss relates to the revaluation of the US$ funding facility and other US$ denominated funds held by the Group Profit on sale of subsidiary In July 2019 the Company sold its wholly owned subsidiary PT Asiadrill Bara Utama (ABU) a cash amount of US$200,000 (A$296,000). ABU was a dormant company, therefore the sale has an immaterial impact on the Groups financial statements and is not disclosed as a discontinued operation.

(f)

(g) Employee benefits expense Employee share scheme expense - 572 Other employee benefits expense 1,226 994 Total employee benefits expense 1,226 1,566

F-22

Altura Mining Limited and Controlled Entities

20

Notes to the Financial Statements (continued) FOR THE THREE MONTHS ENDED 30 SEPTEMBER 2019

30 September

2019 $’000

30 June 2019

$’000 4. BORROWINGS

Current borrowings Loan note facility 192,341 179,100 Other 205 512 Total current borrowings 192,546 179,612 Reconciliation of loan note facility Opening Balance 179,100 145,887 Loan notes issued ^ - 21,661 Interest capitalised - 2,141 Exchange rate differences 7,968 10,036 Amortisation of transaction costs 5,273 7,031 Transaction costs incurred - (7,656) Total borrowings – loan note facility 192,341 179,100 ^ On 27 July 2017, loan notes were issued to lenders Magy LLC, Pala Investments Limited and CarVal Investors LLC (the facility). On 10 September 2018 the facility was extended providing additional funding under the same terms and conditions as the original facility. The loan notes are available for trade and the current loan note holders are Magy LLC, CarVal Investors LLC, Nomura Corporate Funding Americas, LLC and Clearwater Capital Partners Fund V, L.P. The interest rate was 14% p.a. for the first 18 months of the loan and 15% pa thereafter. The loan is for a 3-year term expiring in August 2020. No payments other than interest are due until the loan termination date. The loan is secured over all Altura Lithium Operations (ALO) assets, shares in ALO, AJM bank accounts and certain AJM receivables. Transaction costs capitalised are amortised over the remaining life of the financial instrument.

Under the terms of the facility, the Company is required to comply with the following financial covenants:

For quarterly reporting periods after the 30 September 2018 the net debt to defined EBITDA ratio shall not exceed the ratio of 1.5:1.

The Group breached the financial covenant for each quarter during the 2019 financial year and the September 2019 quarter. As at 30 September 2019 the Group did not hold an unconditional right to defer settlement of the loan and the loan was due for repayment in August 2020. Therefore the loan was therefore required to be reclassified as currents on this basis.

30 September 2019

$’000

30 June 2019

$’000 5. TRADE AND OTHER RECEIVABLES

Trade and other receivables 7,414 3,195 Provision for doubtful debts (137) (1,046)

Total trade & other receivables 7,277 2,149 6. TRADE AND OTHER PAYABLES

Trade payables and accruals 17,896 18,920 Accrued interest on loan note facility 4,851 12,248 Prepaid revenue 10,534 9,610

Total trade & other payables 33,281 40,778

F-23

Altura Mining Limited and Controlled Entities

21

Notes to the Financial Statements (continued)

FOR THE THREE MONTHS ENDED 30 SEPTEMBER 2019 7. DISCONTINUED OPERATIONS

(a) Description During the reporting period the Directors have made further information packages available to various groups for the purpose of attracting offers for the sale of the Tabalong tenements, Kalimantan. Currently formal offers have been received and are under review by management. The Directors consider that the presentation of the Tabalong Group as held for sale confirms its intention to dispose of these assets in the next 12 months.

(b) Financial performance and cash flow information of discontinued operations

The financial performance and cash flow information presented are for the three months ended 30 September 2019.

30 September 2019

30 September 2018

$'000 $'000 Revenue - - Expenses (7) 1 Loss before income tax (7) 1

Loss after income tax of discontinued operation (7) 1

Loss from discontinued operations after income tax (7) 1 Net cash (outflow) from financing activities (12) 3 Net decrease in cash generated by the division (12) 3

(c) Carrying amounts of assets and liabilities

30 September 2019

30 June 2019

$'000 $'000 Cash 10 19 Other receivables * 2,533 2,899 Property, plant and equipment 487 5 Exploration at cost 7,245 6,980

Total assets 10,275 9,903

Other payables 199 206 Borrowings ^ 1,765 1,699

Total liabilities 1,964 1,905

^ These funds were advanced by the minority shareholder in the Tabalong coal project in accordance with the loan agreement. The facility has no defined repayment term.

* These unsecured amounts are due from a minority party in the Tabalong coal project. Their recoverability is dependent on the commercial exploitation of certain mining tenements in the project. The timing of which is currently unknown, and as such the amounts have not been discounted. No losses are expected on these amounts.

F-24

Altura Mining Limited and Controlled Entities

22

Notes to the Financial Statements (continued) FOR THE THREE MONTHS ENDED 30 SEPTEMBER 2019

8. FINANCIAL ASSETS

30 September

2019 $’000

30 June 2019

$’000 Non-current Financial assets

Financial assets 1,108 1,286 Reconciliation of the fair values at the beginning and end of the current and previous period are set out below

Opening fair value 1,286 4,018 Changes in fair value (178) (2,732)

Closing fair value 1,108 1,286

The adoption of AASB 9 Financial Instruments has no impact on the Group’s comparative profit, other comprehensive income and reserves. As described in Note 1, the adoption of AASB 9 has resulted in a change in the classification of the Group’s investment portfolio, although this has not impacted the value of these investments.

9. REHABILITATION PROVISION

30 September

2019 $’000

30 June 2019

$’000 Non-current provision Rehabilitation and demobilisation 11,994 11,994 11,994 11,994

Movements in provisions Rehabilitation and demobilisation

Opening balance - 3,918 Provision increase/(decrease) - 8,076 Expense incurred - -

Total provision 11,994 11,994

Directors have reviewed the rehabilitation provision and are confident that inputs into the current calculation can be relied upon.

30 September 2019

$’000

30 June 2019

$’000 10. EXPLORATION AND EVALUATION

Exploration and evaluation expenditure at cost: Carried forward from previous year 3,265 1,595 Transfer to mine development costs - - Incurred during the year 288 2,218 Transfer to Held for sale (265) (548)

3,289 3,265 Written off during the year - -

Total exploration and evaluation expenditure 3,289 3,265

The recovery of expenditure carried forward is dependent upon the discovery of commercially viable mineral and other natural resource deposits, their development and exploitation, or alternatively their sale. The Company's title to certain mining tenements is subject to Ministerial approval and may be subject to successful outcomes of native title issues.

F-25

Altura Mining Limited and Controlled Entities

23

Notes to the Financial Statements (continued) FOR THE THREE MONTHS ENDED 30 SEPTEMBER 2019

11. PROPERTY, PLANT, EQUIPMENT AND MINE PROPERTIES

Property plant and equipment

$’000

Mine properties in production

$’000

Mine properties in development

$’000

Total

$’000 September 2019 Gross carrying amount Balance at 30 June 2019 10,120 290,342 - 300,462

Additions - 2,331 - 2,331 Increase/(decrease) in provision for rehabilitation # - - - -

Transfers - - - - Exchange difference 37 - - 37 Disposals (4,756) - - (4,756)

Balance at 30 September 2019 5,401 292,673 - 298,074 Accumulated depreciation Balance at 30 June 2019 7,876 3,906 - 11,782

Depreciation expense 52 2,959 - 3,011 Exchange difference 35 - - 35 Disposals (4,756) - - (4,756)

Balance at 30 September 2019 3,207 6,865 - 10,072 Net book value as at 30 September 2019 2,194 285,808 - 288,002

Property plant and

equipment $’000

Mine properties in production

$’000

Mine properties in development

$’000

Total

$’000 June 2019 Gross carrying amount Balance at 30 June 2018 9,472 - 221,562 231,034

Additions 455 6,293 55,804 62,552 Increase/(decrease) in provision for rehabilitation # - 8,076 - 8,076

Transfers 1,393 275,973 (277,366) - Exchange difference 290 - - 290 Disposals (1,490) - - (1,490)

Balance at 30 June 2019 10,120 290,342 - 300,462 Accumulated depreciation Balance at 30 June 2018 8,778 - - 8,778

Depreciation expense 307 3,906 - 4,213 Exchange difference 280 - - 280 Disposals (1,489) - - (1,489)

Balance at 30 June 2019 7,876 3,906 - 11,782 Net book value as at 30 June 2019 2,244 286,436 - 288,680

12. DIVIDENDS

The Company has not paid a dividend during the period and no interim dividend is recommended. (2018: $0)

F-26

Altura Mining Limited and Controlled Entities

24

Notes to the Financial Statements (continued) FOR THE THREE MONTHS ENDED 30 SEPTEMBER 2019

30 September

2019 $’000

30 June 2019

$’000 13. INVENTORIES

Consumables stores – at cost 4,878 5,746 Product and processing stock – at cost 28,654 14,974 33,532 20,720

14. SUBSEQUENT EVENTS

Subsequent to the end of the reporting period, the Company undertook a capital raising comprising a non-renounceable Entitlement Offer of two new fully paid ordinary shares for every thirteen existing fully paid ordinary shares at $0.06 per share to raise A$21.55 million. The Entitlement Offer period closed on Friday 15 November 2019. The total amount raised was $9.155 million with shareholder subscribing for a total of 152,585,610 shares, leaving a shortfall of 205,177,852 shares. Under the terms of the Entitlement Offer the Directors may allocate the shortfall shares at their discretion within three months of the closing date of the offer. The Company intends to approach a variety of parties to provide them with the opportunity to take up the shortfall shares at the offer price of $0.06 per share.

15. CONTINGENT LIABILITIES AND COMMITMENTS There have been no material changes to the contingent liabilities and commitments as reported at 30 June 2019.

16. CONTRIBUTED EQUITY

Issued capital

30 September 2019 30 June 2019 Number $’000 Number $’000 Fully paid ordinary shares issued 2,325,462,506 256,355 2,125,462,476 233,955 Balance at the beginning of the financial year 2,125,462,476 233,955 1,819,866,474 192,893

Issue of shares on vesting of performance rights - - 8,000,000 2,944 Share placement # 200,000,000 22,400 297,596,002 38,687 Exercise of warrants and unlisted options 30 - - - Share issue costs - - - (569)

Balance at the end of the financial period 2,325,462,506 256,355 2,125,462,476 233,955

Fully paid ordinary shares carry one vote per share and carry the rights to dividends. Ordinary shares have no par value. # Placement of 200.000,000 shares on 7 August 2019 to Shanshan Forever International Co., Limited at an issue price of 11.2 cents per share

17. KEY MANAGEMENT PERSONNEL

Details of the Group’s Key Management Personnel Compensation arrangements are provided in the Remuneration Report and the Notes to the Financial Statements contained in the Group’s Annual Report for the year ended 30 June 2019.

18. RELATED PARTIES

Altura announced on 8 August 2019 that it had signed an Earn-in Agreement with lithium project developer Sayona Mining Limited over its Pilbara lithium tenements. Sayona Mining Limited is a related party due to common directors. Under the Agreement, Altura will spend $1.5 million on exploration across the project portfolio over a three-year period to earn a 51% interest, with Sayona retaining the remaining project interest. Sayona will retain the right to contribute to project evaluation and development in the future to participate in the upside potential. The tenement package subject to the Agreement consists of some 1,806 km2 and significantly expands Altura’s existing Pilbara tenement holding. The proximity of the tenements to Altura’s existing mining and processing infrastructure will significantly enhance the development potential of any discoveries.

F-27

Altura Mining Limited and Controlled Entities

25

Directors’ Declaration The directors declare that: 1. The financial statements and notes as set out on pages 9 to 24 are in accordance with the Corporations Act 2001 and:

(a) comply with the Accounting Standard AASB134 Interim Financial Reporting and the Corporations Regulations 2001; and

(b) give a true and fair view of the financial position as at 30 September 2019 and of the performance for the three-month period ended on that date of the consolidated entity;

2. In the director’s opinion there are reasonable grounds to believe that the Company will be able to pay its debts as and when

they become due and payable. This declaration is made in accordance with a resolution of the Board of Directors. On behalf of the directors, James Brown Director Brisbane, 26 November 2019

memememememmmmmemememmemmemmmememmemmmemmmmemmememmememmemememememmemeemmememmmeememeemeemeeeeeeeeeeeeeees BrBrBrrrBrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrowooooooooooooooooooooooooooooooooooooooooooooooooooooooooo n

F-28

INDEPENDENT AUDITOR’S REVIEW REPORTTO THE MEMBERS OF ALTURA MINING LIMITED

Conclusion

We have reviewed the accompanying financial report of Altura Mining Limited (“the Company”), which comprises the consolidated balance sheet as at 30 September 2019, the consolidated statement of profit and loss, the consolidated statement of other comprehensive income, consolidated statement of changes in equity and consolidated statement of cash flows for the three months ended 30 September 2019 and 30 September 2018, a statement of accounting policies, other selected explanatory notes, and the directors’ declaration of the consolidated entity, comprising the company and the entities it controlled at the period end or from time to time during the period.

Based on our review, which is not an audit, we have not become aware of any matter that makes us believe that the financial report of Altura Mining Limited is not in accordance with the Corporations Act 2001 including:

(a) giving a true and fair view of the consolidated entity’s financial position as at 30 September 2019 and of its financial performance for the three months ended on 30 September 2019 and 30 September 2018;and

(b) complying with the Australian Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Regulations 2001.

Emphasis of matter

Without modifying our opinion, we draw attention to Note 1 of the financial report which indicates that the consolidated entity incurred a loss after tax of $17.10m (30 September 2018: loss of $5.26m) for the three months ended 30 September 2019 and recording a net current asset deficiency of $177.40m (30 June 2019: $180.39m)as at 30 September 2019. As at 30 September 2019, the consolidated entity had $0.59m (30 June 2019: $9.49m)of cash available while needing to refinance a loan note facility of $192.34 million by August 2020. These conditions, along with other matters as set forth in Note 1, indicate the existence of a material uncertainty that may cast significant doubt about the consolidated entity’s ability to continue as a going concern and therefore, the consolidated entity may be unable to realise its assets and discharge its liabilities in the normal course of business.

Independence

In conducting our review, we have complied with the independence requirements of the Corporations Act 2001.In accordance with the Corporations Act 2001, we have given the directors of the company a written Auditor’s Independence Declaration.

F-29

Directors’ Responsibility for the Financial Report

The directors of the company are responsible for the preparation of the financial report that gives a true and fair view in accordance with the Australian Accounting Standards and the Corporations Regulations 2001 and for such internal control as the directors determine is necessary to enable the preparation of the financial report that is free from material misstatement, whether due to fraud or error.

Auditor’s Responsibility

Our responsibility is to express a conclusion on the financial report based on our review. We conducted our review in accordance with Auditing Standard on Review Engagements ASRE 2410 Review of a Financial Report Performed by the Independent Auditor of the Entity, in order to state whether, on the basis of the procedures described, we have become aware of any matter that makes us believe that the financial report is not in accordance with the Corporations Act 2001 including: giving a true and fair view of the consolidated entity’s financial position as at 30 September 2019 and its performance for the three months ended on 30 September 2019 and 30 September 2018, and complying with Australian Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Regulations 2001. As the auditor of Altura Mining Limited, ASRE 2410 requires that we comply with the ethical requirements relevant to the audit of the annual financial report.

A review of a financial report consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with Australian Auditing Standards and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

PKF BRISBANE AUDIT

LIAM MURPHYPARTNER

BRISBANEDATE: 26 NOVEMBER 2019

F-30

DIRECTORS' REPORT

Your directors have pleasure in presenting the annual financial report of Altura Mining Limited ("Altura" or "the Company") and its controlled entities (“the Group”) for the financial year ended 30 June 2019.

DIRECTORS

The names of the directors in office during the financial year and up to the date of this report are as follows:

• Mr James Brown• Mr Paul Mantell• Mr Allan Buckler• Mr Dan O’Neill• Mr Beng Teik Kuan• Mr Zhao Tong (resigned 18 April 2019)• Mr Xiaoyu Dai (appointed 10 September 2019)

COMPANY SECRETARY

The name of the secretary in office during the financial year and up to the date of this report is as follows:

• Mr Damon Cox

PRINCIPAL ACTIVITIES

The principal activity of the Group during the year was the commissioning and then mining, processing and sale of lithium ore at the Altura Lithium Project in the Pilbara region of Western Australia.

OPERATING AND FINANCIAL REVIEW

OVERVIEW

Altura Mining Limited (“AJM”) is an ASX listed entity that is focused on mining operations and exploration at the Altura Lithium Project at Pilgangoora in Western Australia. The Company

also has an interest in a coal project in Indonesia, which is in the process of being divested.

The focus of the AJM group entities is directed towards the following deliverables:

• Safe, efficient and profitable operation of its 100% owned Altura Lithium project located in the Pilbara region of Western Australia for the benefit of shareholders;

• Consistent sales of premium spodumene concentrate to reliable and sustainable offtake partners;

• Evaluation of Altura’s vast exploration tenement portfolio to add value to the existing operations via increase of Ore Reserve and Mineral Resource inventory;

• Increasing shareholder value by the expansion of the Altura Lithium Project via a prudent and timely delivery of the planned Stage 2 operation expansion.

REVIEW OF OPERATIONS

ALTURA LITHIUM PROJECT

Key focus has been on the delivery of the Altura Lithium Project during the past financial year. The project commenced production in July 2018 and shipped its first cargo of premium spodumene concentrate in October 2018. Following the initial commissioning and ramp up in H1 FY 2019 the Company was able to declare Commercial Production on 13 March 2019. The project is one of the key new global lithium concentrate suppliers and has established an upstream supply position aligned with Tier 1 suppliers of battery pre-cursor products.

AJM owns and operates the Altura Lithium Project located in the Pilgangoora district in north-west Western Australia. The project is located approximately 100 kilometres south of the major raw material export centre of Port Hedland. The Company exploits lithium enriched pegmatites via open pit methods. Mineralised pegmatite ore is

ALTURA ANNUAL REPORT 201916

F-31

DIRECTORS' REPORT CONTINUED

then fed to the process plant for beneficiation with spodumene concentrate being produced for sale to North Asian customers. Shipping of product is via the public user facility at the port of Port Hedland.

The Company owns and operates the process plant (with exception of the diesel power generators) and utilises a mining contractor for removal of waste and ore. Contract product haulage is also employed at the operations.

The process plant consists of both DMS (Dense Medium Separation) and Floatation in order to maximise resource recovery from the raw ore feed. Since the declaration of Commercial Production, the process plant has generally operated between 80–90% of nameplate both in throughput, output

and overall lithium metal recovery. The process plant is only the second combined DMS and Flotation lithium concentrate plant operating globally. Product contribution is generally 60% coarse product from the DMS circuits and 40% fines from the floatation circuits.

During the past year 77,680 dmt (dry metric tonnes) of spodumene concentrate was shipped via 11 separate cargoes dispatched from Port Hedland. The weighted average grade of the product cargoes was 5.94% Li20 and is enhanced by low mica, low iron and optimal moisture with all cargoes well within offtake specifications. Table 1 (below) details the mining and process quantities from the past year.

Table 1 – Mining and process quantities

Units Q1 FY19 Q2 FY 19 Q3 FY19 Q4 FY19 Total FY19

Ore mined wmt 323,539 350,099 404,087 439,559 1,517,284

Waste mined wmt 1,512,840 1,491,011 1,426,256 1,546,719 5,976,826

Total material mined bcm 625,881 625,008 622,929 675,726 2,549,544

Ore processed wmt 98,135 256,931 251,200 337,786 944,052

Strip ratio waste:ore 4.7 4.3 3.5 3.5 3.9

Ore mined grade Li2O % 1.21 1.19 1.16 1.10 1.16

Lithium concentrate produced wmt 7,379 25,794* 29,627 42,402 105,202

Lithium concentrate shipped dmt - 24,419 14,770 38,491 77,680

*Includes 6,427 tonnes of low-grade material produced during commissioning, this material would require re-processing and/or blending in order to be included in saleable product.

The ramp up of the project has provided some challenges but has generally shown significant improvement month on month for the past year. The process plant output is considered stable with further continuous improvement

initiatives being undertaken to deliver nameplate annual product output of 220,000 tonnes. The ramp up in production over the past year is represented in Figure 1 (below).

ANNUAL REPORT 2019 ALTURA 17

F-32

OPERATING RESULTS

The Group’s operating loss after providing for income tax and non-controlling interests for the year ended 30 June 2019 was $26,712,731 (2018: loss $12,816,965). The loss in 2019 related to the Group’s commencement of mining operations, administrative and corporate costs, depreciation and a net foreign exchange loss in the year (both of which are non-cash costs) and financing charges.

However, a positive EBITDA of $9,381,000 was achieved in fourth quarter, the first complete quarter of Commercial Production.

Commercial operations commenced in March 2019 at the Group’s Altura Lithium Project. Exploration, evaluation and development costs are assessed in accordance with the Group’s accounting policies. It should be noted that all costs prior to Commercial Production have been capitalised. These costs include operating costs and the cost of finance.

Key operational achievements in the first quarter of Commercial Production include:

• Continuing focus on safety with zero lost time injuries (LTI);

• Production of 42,402 wet metric tonnes (wmt) of spodumene concentrate (versus March quarter 29,627 wmt);

• Sales of 38,635 dry metric tonnes (dmt) of high-quality lithium concentrate via 5 cargoes, with all sales in line with offtake specifications:

• Impressive average operating cash cost of US$392 wmt produced (FOB basis);

• Coarse and fines circuits successfully decoupled following plant modification delivering significant improvements in coarse concentrate production and stabilising fines concentrate production.

STRATEGY

The Company’s objective is to create shareholder value through the development of profitable mining operations and other supplementary mining activities that deliver strong cash flows for the Group, and resultant regular dividends for shareholders.

Altura is focused on achieving the path to nameplate production from the Altura Lithium Project and adding additional commitments for the

DIRECTORS' REPORT CONTINUED

Figure 1 – Altura Spodumene Concentrate Production AFY 2018–19

18,000

16,000

14,000

12,000

10,000

8,000

6,000

4,000

2,000

-

Spod

umen

e co

ncen

trat

e (w

mt)

Jul 18 Nov 18Sep 18 Jan 19 Mar 19 May 19Aug 18 Dec 18Oct 18 Feb 19 Apr 19 Jun 19

ALTURA ANNUAL REPORT 201918

F-33

supply of spodumene concentrate. The Company has also completed a Definitive Feasibility Study (DFS) for a Stage 2 expansion of the lithium project, which it plans to commence as soon as practical subject to market conditions.

The Company also holds coal assets in Indonesia which it is in the process of divesting as soon as reasonably possible.

ALTURA LITHIUM

During the year Altura continued with its commissioning and operation of the mine and process plant for Stage 1 of the Altura Lithium Project at Pilgangoora in Western Australia.

Key developments in the commissioning and operation of the mine and process plant have included the following:

• First production of coarse concentrate in July 2018.

• First haulage of product to the Qube storage facility in Port Hedland in August 2018.

• Official opening of the mine in September 2018.

• First shipment of product in October 2018.

• First production of fines concentrate in December 2018.

• Modifications to tailings thickener completed in January 2019.

• Formal declaration of commercial production in March 2019.

• Modifications completed in April 2019 to decouple plant modules allowing production to continue in selected plant modules whilst other sections are under maintenance.

The Company has diversified its customer base and now has in place four Binding Offtake Agreements (BOAs) with China based groups for the supply of 6% Li2O grade spodumene concentrate. Annual pricing will be agreed with reference to current market pricing information, including but not limited to prices published or announced by other companies in the market, movement in carbonate pricing and with reference to any indices that may become available in the future. All BOAs have a floor price of US$550 per tonne of 6% spodumene, and there is also a ceiling price of US$950 per tonne.

Altura’s current lithium offtake commitments are summarised below:

DIRECTORS' REPORT CONTINUED

Offtake partner Tonnage BOA term/expiry

Lionenergy Limited 65,000 dmt September 2023

GFL International Co., Limited 70,000 dmt December 2021

Shandong Ruifu Lithium Industry Co., Ltd 35,000 dmt June 2024

Guangdong Weihua Corporation 50,000 dmt December 2024

Total 220,000 dmt

COAL ASSETS

Tabalong Coal

The Tabalong Coal Project is a premium grade thermal coal deposit located in South Kalimantan, Indonesia. The project consists of five (5) Mining Licences (IUPs), with all five (5) IUPs granted

for Operation Production. Altura holds 70% of three IUPs and 56% of the remaining two. The Company has previously stated its intention to divest its interests in Tabalong coal assets. It is pursuing a number of options for sale of the coal assets and information has been made available to a number of parties under confidentiality deed arrangements.

ANNUAL REPORT 2019 ALTURA 19

F-34

FINANCIAL POSITION

The net assets of the Group increased in 2019, with non-current assets significantly higher due to the construction of the Lithium Project. During the year funds were sourced from an additional US$15 million under the loan facility, a US$11 million prepayment on future cargoes to Ganfeng, a A$24.5 million placement and a A$14 million securities purchase plan offering.

RISK

Development of Altura’s lithium project is subject to the ability of the Company to successfully ramp up to full production capacity and comparable sales from the project in a timely manner.

The Company is also subject to movements in international commodity prices and foreign exchange movements on its US$ revenue and debt.

DIVIDENDS

There were no dividends paid or declared during the year ended 30 June 2019 (2018: Nil).

SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS

There were no other significant changes in the nature of the Group’s principal activities during the financial year, other than as discussed in the financial report and elsewhere in this Directors Report.

MATTERS SUBSEQUENT TO THE END OF THE FINANCIAL YEAR

Subsequent to the end of the financial year, Altura has entered into the following agreements:

SUBSCRIPTION AND COOPERATION AGREEMENT

On 23 July 2019 Altura announced that it had signed a subscription and cooperation agreement with Shanshan Forever International Co., Limited. The agreement raised A$22.4 million in proceeds, which were received on 7 August 2019. Under the terms

of the agreement Shanshan is entitled to appoint a director to the Altura board, provided that their relevant interest in Altura shares does not fall below 12.5 per cent for more than 30 consecutive days.

NEW OFFTAKE AGREEMENTS

On 9 July 2019 Altura announced that it had entered into a new offtake agreement with Shandong Ruifu Lithium Industry Co., Ltd for 35,000 tonnes per annum (tpa). At the same time Altura advised that it had reached agreement with Shaanxi J&R Optimum Energy Co., Ltd for the termination of the remaining 50,000 tpa under that offtake agreement.

On 1 August 2019 Altura announced that it had entered into a new offtake agreement with Guangdong Weihua Corporation for 50,000 tpa. At the same time Altura advised that it had reached agreement with Lionergy Limited to reduce its tonnage from 100,000 tpa to 65,000 tpa.

LOAN NOTE FACILITY

The Group breached the financial covenant on the loan note facility (Note 17) for each quarter during the year, the respective covenant is based on an annual net debt to EBITDA ratio, the calculation of this ratio is based on the current operating quarter results added to the previous 3 operating quarters in order to deliver an annual result. For quarterly reporting periods after the 30 September 2018 the net debt to defined EBITDA ratio shall not exceed the ratio of 1.5:1.

As at 30 June 2019 the Group did not hold an unconditional right to defer settlement of the loan, and the loan was therefore required to be reclassified as current on this basis. Subsequent to the year end, the Group received a full written waiver of the financial breach from the lenders.

FUTURE DEVELOPMENTS, PROSPECTS AND BUSINESS STRATEGIES

The Group will focus on attaining nameplate production of Stage 1 of the Altura Lithium Project and deliver the Stage 2 expansion as dictated by market conditions. The Group intends to divest its

DIRECTORS' REPORT CONTINUED

ALTURA ANNUAL REPORT 201920

F-35

Interests in shares and options

30,088,301 ordinary shares in Altura Mining Limited

385,000 options over ordinary shares in Altura Mining Limited

MR PAUL MANTELL (EXECUTIVE DIRECTOR)

Qualifications

Bachelor of Commerce from the University of Queensland and a Fellow of CPA Australia

Experience

Mr Mantell is an accountant with more than 35 years’ corporate experience in the mining and associated industries. He has been involved in all aspects of accounting and finance, financial reporting, taxation and administration, including the responsibilities of an ASX listed entity. He has previously arranged finance for mining and infrastructure projects both in Australia and Indonesia and has set up corporate, administrative and financial systems to support new and expanding mining operations. He was appointed a director in May 2009.

Other current directorships in listed entities

None

Former directorships in last 3 years

None

Special responsibilities

None

Interests in shares and options

35,273,084 ordinary shares in Altura Mining Limited

385,000 options over ordinary shares in Altura Mining Limited

interests in the Tabalong Coal Project as soon as practical so it can focus on the Altura Lithium Project.

ENVIRONMENTAL PERFORMANCE

The Group is committed to achieving a high standard of environmental performance and is subject to significant environmental regulation form both Commonwealth and State legislation in Australia to its mining, development and exploration activities. The Board of Directors is responsible for regular monitoring of environmental exposures and compliance with these environmental regulations. The Group complied with its environmental performance obligations during the year.

INFORMATION ON DIRECTORS

MR JAMES BROWN (MANAGING DIRECTOR)

Qualifications

Graduate Diploma in Mining from University of Ballarat

Experience

Mr Brown is a mining engineer with over 35 years' experience in the mining industry in Australia and Indonesia, including the last 10 years in the chief executive role at Altura. His mining development and operations experience includes the New Acland and Jeebropilly mines in South East Queensland, the Adaro and Multi Harapan Utama operations in Indonesia and Blair Athol in the Bowen Basin in Central Queensland.

Other current directorships in listed entities

Sayona Mining Limited

Former directorships in last 3 years

None

Special responsibilities

Chief Executive Officer

DIRECTORS' REPORT CONTINUED

ALTURA ANNUAL REPORT 201922

F-36

MR ALLAN BUCKLER (NON-EXECUTIVE DIRECTOR)

Qualifications

Certificate in Mine Surveying and Mining, First Class Mine Managers Certificate and a Mine Surveyor Certificate issued by the Queensland Government’s Department of Mines

Experience

Mr Buckler has over 45 years’ experience in the mining industry and has taken lead roles in the establishment of several leading mining and port operations in both Australia and Indonesia. Mr Buckler was appointed a director in December 2008.

Other current directorships in listed entities

Sayona Mining Limited

Former directorships in last 3 years

None

Special responsibilities

Member of the Audit & Risk Committee (from 18 April 2019)

Member of the Remuneration & Nomination Committee

Interests in shares and options

311,773,371 ordinary shares in Altura Mining Limited

58,466,808 options over ordinary shares in Altura Mining Limited

MR DAN O’NEILL (INDEPENDENT NON-EXECUTIVE DIRECTOR)

Qualifications

Bachelor of Science in geology from the University of Western Australia

Experience

Mr O’Neill was appointed a director in December 2008. He has held positions with a number of Australian and multinational exploration companies and has managed exploration programs in a diverse range of environments and locations including Botswana, North America, South East Asia, North Africa and Australasia. During his 35 years’ experience, he has held executive management positions with ASX listed companies and has worked on a range of commodities including diamonds, gold, base metals, coal, oil and gas.

Other current directorships in listed entities

Sayona Mining Limited

Former directorships in last 3 years

None

Special responsibilities

Chairman of the Remuneration & Nomination Committee

Member of the Audit & Risk Committee

Interests in shares

13,633,336 ordinary shares in Altura Mining Limited

MR BENG TEIK KUAN (INDEPENDENT NON-EXECUTIVE DIRECTOR)

Qualifications

Bachelor of Engineering (University of Malaya)

Experience

Mr Kuan is an engineer with considerable experience in bulk handling and terminal operations, including responsibility for the development and management of the Pulau Laut Coal Terminal in South Kalimantan, Indonesia. He also has experience in Indonesia, Malaysia and Singapore with tin dredging operations, managing rubber, palm oil and cocoa processing factories,

DIRECTORS' REPORT CONTINUED

ANNUAL REPORT 2019 ALTURA 23

F-37

and managing palm oil bulk terminals. He was appointed a director in November 2007.

Other current directorships in listed entities

None

Former directorships in last 3 years

None

Special responsibilities

Chairman of the Audit & Risk Committee

Member of the Remuneration & Nomination Committee

Interests in shares and options

23,000,000 ordinary shares in Altura Mining Limited

1,000,000 options over ordinary shares in Altura Mining Limited

MR ZHAO TONG (NON-EXECUTIVE DIRECTOR –RESIGNED 18 APRIL 2019)

Qualifications

Bachelor of Science (Peking University, China)

Experience

Mr Zhao Tong has over 25 years’ experience in the international trade of metals and minerals and has worked for China Shaanxi Metals and Minerals International Trade Co. Ltd. Mr Tong has been the Director of the Lithium Division of J&R Optimum since October 2016. He was appointed a Director in March 2017.

Other current directorships in listed entities

None

Former directorships in last 3 years

None

Special responsibilities

Member of the Audit & Risk Committee (until 18 April 2019)

Interests in shares

Nil

MR XIAOYU DAI (NON-EXECUTIVE DIRECTOR – APPOINTED 10 SEPTEMBER 2019)

Qualifications

Master of Business Administration (Nanjing University, China)

Experience

Mr Xiaoyu Dai has 21 years’ experience in chemicals industry, spanning various commodities, specialties and operations in China, Africa, Germany, Singapore, Japan and Korea. He held senior executive roles with extensive operational experience in both petro and fine chemicals leading companies, including previous roles as head of alpha olefins, fatty alcohol in Sasol China, Managing Director of Rockwood Lithium China, and senior consultant of Shanshan Inc. Since 1 July 2019, he works as General Manager of Shanshan Forever Lithium Co., Ltd.

Other current directorships in listed entities

None

Former directorships in last 3 years

None

Special responsibilities

None

Interests in shares

Nil

DIRECTORS' REPORT CONTINUED

ALTURA ANNUAL REPORT 201924

F-38

COMPANY SECRETARY

MR DAMON COX

Mr Cox is a Chartered Secretary, and a CPA. He has over 30 years’ experience in various roles including corporate governance, compliance, treasury and strategic policy advice.

REMUNERATION REPORT (AUDITED)

This report details the nature and amount of remuneration for directors and other key management personnel.

REMUNERATION POLICY AND LINK TO PERFORMANCE

The Company’s policy is to remunerate fairly and in line with companies of similar size, operations and in the same industry. Individual remuneration decisions are made by the Remuneration & Nomination Committee taking into account the following factors:

• The responsibility of the role;• Experience of the employee;• Past performance and future expectations; and• Industry conditions and trends.

In order to retain and attract key management personnel of sufficient calibre to facilitate the efficient and effective management of the Company’s operations, the Remuneration & Nomination Committee may seek the advice of external advisors in connection with the structure of remuneration packages.

2019 2018 2017 2016 2015

Revenues and sundry income 39,571,130 1,675,168 1,600,959 1,485,611 4,779,039

EBITDA1 (3,967,691) (13,279,929) (6,417,320) (11,290,052) (15,861,975)

NPBT2 (26,283,568) (13,120,803) (6,448,799) (30,839,474) (16,947,795)

NPAT3 (26,571,019) (12,712,487) (5,914,752) (31,618,016) (17,268,152)

Dividends paid - - - - -

1. EBITDA = Earnings before interest, tax, depreciation and amortisation2. NPBT = Net profit before tax3. NPAT = Net profit after tax and minority interest

Remuneration packages may contain the following key elements:

a) Primary benefits – salary/fees, bonuses and non-monetary benefits including the provision of a motor vehicle;

b) Post-employment benefits – including superannuation and prescribed retirement benefits; and

c) Equity – performance rights granted under the Long-Term Incentive Plan as disclosed in Note 22 to the financial statements.

None of the Company’s personnel remuneration packages are linked directly to the Company’s profitability or other measure of performance. The Company maintains a Long-term Incentive Plan under which employees may be granted performance rights and share options which vest subject to service conditions being met. Directors may also be allocated performance rights and/or options as an incentive. During the 2019 year, two executive directors were issued with shares on the vesting of previously issued performance rights.

PERFORMANCE-BASED REMUNERATION

The Company currently has performance-based remuneration in place as disclosed in Note 22.

GROUP PERFORMANCE, SHAREHOLDER WEALTH AND DIRECTOR AND EXECUTIVE REMUNERATION

The Group has recorded the following earnings from continuing operations over the last five years:

DIRECTORS' REPORT CONTINUED

ANNUAL REPORT 2019 ALTURA 25

F-39

DIRECTORS' REPORT CONTINUED

KEY MANAGEMENT PERSONNEL REMUNERATION POLICY

The Remuneration & Nomination Committee reviews the remuneration packages of all directors and key management personnel on an annual basis. Remuneration packages are reviewed and determined with due regard to relevant market conditions and individual’s experience and qualification and are benchmarked against comparable industry salaries.

Payment of bonuses and share based compensation benefits is discretionary.

EMPLOYMENT CONTRACTS OF KEY MANAGEMENT PERSONNEL

Contracts of employment are given to key management personnel at time of employment. Details are as follows:

James Brown, Managing Director – the agreement is of no fixed term and allows for payment of a monthly cash salary in US dollars, reviewed each year, plus allowances. Three months’ notice of termination by either party is required, with a separation allowance equivalent to one year’s salary and entitlements to be paid if employment is terminated by the Company.

Paul Mantell, Executive Director – the agreement is of no fixed term and allows for payment of an annual cash salary, reviewed each year, and superannuation. Provision of a motor vehicle or equivalent allowance and other non-cash benefits is included. Three months’ notice of termination by either party is required, with a separation allowance equivalent to one year’s gross salary to be paid if employment was terminated by the Company.

Phil Robinson, Chief Operating Officer – the agreement is of no fixed term and allows for payment of an annual cash salary, reviewed each year, and superannuation. Two months’ notice of termination by either party is required, with a minimum separation allowance equivalent to one month’s gross salary to be paid if employment was terminated by the Company. Mr Robinson was

appointed the Chief Operating Officer in February 2019 and resigned in August 2019.

Chris Evans, Chief Operating Officer – the agreement is of no fixed term and allows for payment of an annual cash salary, reviewed each year, and superannuation. Three months’ notice of termination by either party is required, with a separation allowance equivalent to six month’s gross salary to be paid if employment was terminated by the Company. Mr Evans resigned in February 2019.

Noel Young, Group Financial Controller – the agreement is of no fixed term and allows for payment of an annual cash salary, reviewed each year, and superannuation. Two months’ notice of termination by either party is required, with a separation allowance equivalent to six month’s gross salary to be paid if employment is terminated by the Company.

Damon Cox, Company Secretary – the agreement is of no fixed term and allows for payment of an annual cash salary, reviewed each year, and superannuation. Provision of a motor vehicle is included. Two months’ notice of termination by either party is required, with a separation allowance equivalent to six month’s gross salary to be paid if employment is terminated by the Company.

ALTURA ANNUAL REPORT 201926

F-40

Short-term benefitsPost

employmentShare based

payments

Total $

Performance rights as a

percentage of total

%Name

Cash salary

and fees $

Cash bonus

$

Bonus shares

$

Non-monetary

benefits $

Super-annuation

$Termination

payments

Performance rights

$2019Non-executive directorsA Buckler 72,000 - - - 6,840 - - 78,840 -D O’Neill 84,000 - - - 7,980 - - 91,980 -B Kuan 84,000 - - - 7,980 - - 91,980 -Z Tong1 57,399 - - - - - - 57,399 -Sub total non-executive directors

297,399 - - - 22,800 - - 320,199

Executive directorsJ Brown 436,278 - - 98,334 - - 265,000 799,612 33.1%P Mantell 325,025 - - 14,214 24,999 - 132,500 496,738 26.7%Other KMPP Robinson2 267,771 - 124,850 - 22,924 - 39,750 455,295 8.7%C Evans3 191,151 - - - 22,144 62,716 132,500 408,511 32.4%N Young 180,000 - - 3,848 17,100 - 26,500 227,448 11.7%D Cox 150,000 - - 20,371 14,250 - 26,500 211,121 12.6%Total for KMP compensation

1,550,225 - 124,850 136,768 101,417 62,716 622,750 2,598,726

Total compensation

1,847,624 - 124,850 136,768 124,217 62,716 622,750 2,918,925

2018Non-executive directorsA Buckler 67,000 30,000 - - 9,215 - 1,117 107,332 1.0%D O’Neill 79,000 30,000 - - 10,355 - 1,117 120,472 0.9%B Kuan 79,000 30,000 - - 10,355 - 1,117 120,472 0.9%Z Tong1 67,032 24,657 - - - - - 91,689 -Sub total non-executive directors

292,032 114,657 - - 29,925 - 3,351 439,965 -

Executive directorsJ Brown 403,529 - - 92,601 - - 432,689 928,820 46.6%P Mantell 325,026 - - 13,922 24,999 - 216,347 580,294 37.3%Other KMPC Evans3 278,863 - - - 24,999 - 211,684 515,546 41.1%N Young 189,062 - - 21,311 12,825 - 44,385 267,583 16.6%D Cox 145,000 - - 28,079 13,775 - 44,385 231,239 19.2%Total for KMP compensation

1,314,480 - - 155,913 76,598 - 949,490 2,523,481

Total compensation

1,633,512 114,657 - 155,913 106,523 - 952,841 2,963,446

1. Mr Tong joined the Altura Board in March 2017 and resigned in April 20192. Mr Robinson was appointed Chief Operating Officer in February 20193. Mr Evans resigned in February 2019

No long service leave payments were made during the year (2018 Nil)

DIRECTORS' REPORT CONTINUED

ANNUAL REPORT 2019 ALTURA 27

F-41

The following shares were issued to directors and key management personnel on the vesting of performance rights during the year ended 30 June 2019:

Number issued Issue date Value per share at issue date ($)

J Brown 2,000,000 20/02/19 0.1325

P Mantell 1,000,000 20/02/19 0.1325

C Evans 1,000,000 20/02/19 0.1325

P Robinson 300,000 20/02/19 0.1325

P Robinson 500,000 11/10/18 0.2497

N Young 200,000 20/02/19 0.1325

D Cox 200,000 20/02/19 0.1325

5,200,000

DIRECTORS' REPORT CONTINUED

PERFORMANCE RIGHTS

In 2014 the Company established a new Long-Term Incentive Plan (LTIP) to assist in the reward and retention of directors and employees.

A total of 8,100,000 rights were granted in December 2014 to directors (with shareholder approval), key management personnel and other senior staff. A further 1,450,000 rights were granted to key management personnel and other senior staff in the year ended 30 June 2016, 1,350,000 in the year ended 30 June 2017 and another 7,850,000 were granted in the year ended 30 June 2018. No performance rights were granted in the year ended 30 June 2019. The rights awarded during these years were granted for no consideration. No amount is payable on the vesting of the rights. The rights will vest and automatically

convert to ordinary shares in the Company following the satisfaction of the service conditions.

There were no performance rights on issue to directors and key management personnel as at 30 June 2019.

MEETINGS OF DIRECTORS

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 there were 9 Directors’ meetings, 4 Audit & Risk Committee meetings and 3 Remuneration & Nomination Committee meetings held.

Directors' Meetings

Audit & Risk Committee

Remuneration & Nomination Committee

Eligible to attend Attended Eligible to attend Attended Eligible to attend Attended

J Brown 9 9 - - - -

P Mantell 9 9 - - - -

A Buckler 9 8 1 1 3 2

D O’Neill 9 8 4 4 3 3

B Kuan 9 9 4 4 3 3

Z Tong 7 6 3 3 - -

ALTURA ANNUAL REPORT 201928

F-42

INDEMNIFICATION AND INSURANCE OF DIRECTORS AND OFFICERS

The Company has entered into Deeds of Indemnity with all of its directors in accordance with the Company’s Constitution. During the financial year the Company paid a premium to insure the directors, officers and managers of the Company and its controlled entities. The insurance contract requires that the amount of the premium paid is kept confidential.

OPTIONS

Under the terms of the Placement and the Securities Purchase Plan undertaken during the year ended 30 June 2019, a total of 148,798,009 listed options were issued with an exercise price of $0.20 cents per option and an expiry date of 28 February 2022. At the date of signing this report, there were 148,797,979 listed options outstanding.

At 30 June 2019, there were also 5,784,846 unlisted options over ordinary shares of Altura Mining Limited outstanding. These unlisted options expired on 25 September 2019.

WARRANTS

Under the terms of the US$110 million debt facility announced on 28 July 2017, the lenders received a total of 72,644,513 warrants. These were approved on 22 November 2017 at the Company’s annual general meeting and issued on 27 November 2017 at an exercise price of $0.1260 per warrant with an expiry date 4 August 2022. At the date of signing this report, there were 19,812,140 warrants outstanding.

PROCEEDINGS ON BEHALF OF THE COMPANY

No person has applied for leave of the Court to bring proceedings on behalf of the Company or intervene in any proceedings to which the Company is a party for the purpose of taking responsibility on

behalf of the Company for all or any part of those proceedings.

The Company was not party to any such proceedings during the year.

NON-AUDIT SERVICES

The Company’s auditor, PKF Brisbane Audit, did not provide any non-audit services to the Company during the year ended 30 June 2019.

ROUNDING OF AMOUNTS

The company is of a kind referred to ASIC Legislative Instrument 2016/191, relating to the ‘rounding off’ of amounts in the directors’ report and financial report. Amounts in the directors’ report and financial report have been rounded off to the nearest thousand dollars in accordance with the instrument.

AUDITOR’S INDEPENDENCE DECLARATION

The auditor’s independence declaration for the year ended 30 June 2019 has been received and is included on page 30 of the annual report.

Signed in accordance with a resolution of the Directors made pursuant to Section 298(2) of the Corporations Act 2001.

On behalf of the Directors,

James Brown Director

Brisbane, 30 September 2019

DIRECTORS' REPORT CONTINUED

ANNUAL REPORT 2019 ALTURA 29

F-43

AUDITOR’S INDEPENDENCE DECLARATION UNDER SECTION 307C OF THE CORPORATIONS ACT 2001

TO THE DIRECTORS OF ALTURA MINING LIMITED I declare that, to the best of my knowledge and belief, during the year ended 30 June 2019, there have been no contraventions of: (a) the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and (b) any applicable code of professional conduct in relation to the audit. PKF BRISBANE AUDIT LIAM MURPHY PARTNER 30 SEPTEMBER 2019 BRISBANE

ALTURA ANNUAL REPORT 201930

F-44

CONSOLIDATED STATEMENT OF PROFIT AND LOSSFOR THE YEAR ENDED 30 JUNE 2019

Note 2019 $’000

2018 $’000

Continuing operations

Revenue 5(a) 39,399 1,165 Cost of sales 5(c) (31,961) (772)

Gross profit 7,438 393 Other income

Sundry income 5(b) 172 510

Expenses Administration costs (3,344) (3,780) Employee benefits expense 5(f) (5,725) (3,690) Other expenses 5(d) (188) (188)

Profit / (loss) before foreign exchange and finance costs (1,647) (6,755) Net foreign exchange loss 5(e) (6,466) (6,366)

Profit / (loss) before finance costs (8,113) (13,121)

Finance costs Interest on funding facility (10,566) - Amortisation of transaction costs (7,605) -

Profit / (loss) before income tax (26,284) (13,121)

Income tax (expense) / benefit 7(a) (287) 408 Profit / (loss) after income tax from continuing operations (26,571) (12,713) Discontinued operations

Loss from discontinued operations after tax 3 (142) (104)

Net profit / (loss) for the year (26,713) (12,817)

Profit / (loss) attributable to:

Owners of Altura Mining Limited (26,665) (12,880) Non-controlling interest (48) 63

(26,713) (12,817)

(Loss) per share from continuing and discontinued operations attributable to the ordinary equity holders of the Company:

Basic and diluted (loss) per share from continuing and discontinuing operations 6 (1.40) (0.74)

Basic and diluted (loss) per share from continuing operations 6 (1.39) (0.73) Basic and diluted (loss) per share from discontinued operations 6 (0.01) (0.01)

The above Consolidated Statement of Profit and Loss should be read in conjunction with the accompanying Notes.

ALTURA ANNUAL REPORT 201932

F-45

CONSOLIDATED STATEMENT OF OTHER COMPREHENSIVE INCOMEFOR THE YEAR ENDED 30 JUNE 2019

Note 2019 $’000

2018 $’000

Profit / (loss) for the year (26,713) (12,817) Other comprehensive income / (loss) for the year Items that may be reclassified to profit and loss

Changes in the fair value of financial assets 13 (2,732) 3,194 Exchange differences on translation of foreign controlled entities (2,522) (1,751)

Other comprehensive income / (loss) for the year, net of tax (5,254) 1,443 Total comprehensive income / (loss) for the year (31,967) (11,374)

Total comprehensive income / (loss) attributable to:

Members of the parent entity (31,885) (11,413) Non-controlling interest (82) 39

(31,967) (11,374)

Total comprehensive income / (loss) attributable to members of the parent entity arises from:

Continuing operations (31,229) (10,948) Discontinued operations (656) (465)

(31,885) (11,413)

The above Consolidated Statement of Other Comprehensive Income should be read in conjunction with the accompanying Notes.

ANNUAL REPORT 2019 ALTURA 33

F-46

CONSOLIDATED BALANCE SHEETAS AT 30 JUNE 2019

Note 2019 $’000

2018 $’000

Current assets Cash and cash equivalents 8 9,494 28,761 Trade and other receivables 9 2,149 2,242 Held to maturity investments 11 78 52 Inventories 10 20,720 1 Current tax prepaid 73 295 Other current assets 12 1,155 384 Assets classified as held for sale 3c 9,903 9,271

Total current assets 43,572 41,006

Non-current assets Financial assets 13 1,286 4,018 Property, plant, equipment and mine properties 14 288,680 222,256 Exploration and evaluation 15 3,265 1,595

Total non-current assets 293,231 227,869

Total assets 336,803 268,875

Current liabilities Trade and other payables 16 40,778 22,713 Borrowings 17 179,612 - Short term provisions 18 1,669 1,158 Liabilities classified as held for sale 3c 1,905 1,846

Total current liabilities 223,964 25,717

Non-current liabilities Borrowings 17 - 145,887 Rehabilitation provision 20 11,994 3,918

Total non-current liabilities 11,994 149,805

Total liabilities 235,958 175,522

Net assets 100,845 93,353

Equity Contributed equity 21 233,955 192,893 Reserves 21 (3,320) 3,502 Accumulated losses (130,005) (103,340)

Capital and reserves attributable to owners of Altura Mining Limited 100,630 93,055 Non-controlling interest 215 298

Total equity 100,845 93,353

The above Consolidated Balance Sheet should be read in conjunction with the accompanying Notes.

ALTURA ANNUAL REPORT 201934

F-47

CONSOLIDATED STATEMENT OF CHANGES IN EQUITYFOR THE YEAR ENDED 30 JUNE 2019

The above Consolidated Statement of Changes in Equity should be read in conjunction with the accompanying Notes.

Contributed equity

$’000

Accumulated losses

$’000

Option & performance rights reserve

$’000

Change in fair value - market

valuation

$’000

Foreign currency

translation reserve

$’000

Non-controlling interests

$’000

Total

$’000

Balance as at 30 June 2017 146,556 (90,460) 162 294 139 259 56,950

Total comprehensive income for the year - (12,880) - 3,194 (1,727) 39 (11,374) Transactions with owners in their capacity as owners:

Issue of shares – employee bonus payment 34 - - - - - 34

Contributions of equity, net of transaction costs 45,947 - - - - - 45,947

Transfer from share based payment reserve to equity 356 - (356) - - - -

Employee share schemes – value of employee services - - 1,796 - - - 1,796

Sub-total 46,337 - 1,440 - - - 47,777

Balance as at 30 June 2018 192,893 (103,340) 1,602 3,488 (1,588) 298 93,353

Balance as at 30 June 2018 192,893 (103,340) 1,602 3,488 (1,588) 298 93,353

Total comprehensive income for the year - (26,665) - (2,732) (2,488) (83) (31,967) Transactions with owners in their capacity as owners:

Issue of shares – employee bonus payment 125 - - - - 125

Contributions of equity, net of transaction costs 38,118 - - - - 38,118

Transfer from share based payment reserve to equity 2,819 - (2,819) - - - -

Employee share schemes – value of employee services - - 1,217 - - - 1,217

Sub-total 41,062 (26,665) (1,602) (2,732) (2,488) (83) 7,492

Balance as at 30 June 2019 233,955 (130,005) - 756 (4,076) 215 100,845

ANNUAL REPORT 2019 ALTURA 35

F-48

CONSOLIDATED STATEMENT OF CASH FLOWSFOR THE YEAR ENDED 30 JUNE 2019

Note 2019 $’000

2018 $’000

Cash flows from operating activities

Receipts from customers * 48,432 3,069 Payments to suppliers and employees (34,953) (9,345) Sundry income 31 38 Interest received 74 468 Income tax received - 319

Net cash provided by / (used in) in operating activities 27(b) 13,584 (5,451) Cash flows from investing activities

Expenditure on exploration and evaluation activities (1,198) (1,062) Purchase of property, plant, equipment and mine properties (118,618) (126,026) Proceeds during commissioning of mine properties * 29,463 - Proceeds from sale of property, plant and equipment 44 15

Net cash (used in) / provided by investing activities (90,309) (127,073) Cash flows from financing activities

Proceeds from the issue of shares - net of transaction costs 37,979 34,425 Proceeds from borrowings 27(c) 19,395 128,615 Repayment of borrowings 27(c) - (15,053)

Net cash provided by / (used in) financing activities 57,374 147,987 Net increase / (decrease) in cash and cash equivalents held (19,351) 15,463 Cash and cash equivalents at the beginning of year 27(a) 28,779 13,308 Effect of exchange rate changes on cash holdings in foreign currencies 85 8 Cash and cash equivalents at the end of year 27(a) 9,513 28,779

Non cash investing and financing activities Share based payments 22 (125) (34) Interest on loan facility capitalised (2,141) (17,706) Transaction fees - borrowings (625) (23,982)

* Receipts from customers include sales of spodumene concentrate from the date of commercial production in March 2019. Shipments of spodumene concentrate prior to commercial production are recorded in proceeds during commissioning of mine properties. The above Consolidated Statement of Cash Flows should be read in conjunction with the accompanying Notes.

ALTURA ANNUAL REPORT 201936

F-49

NOTES TO THE FINANCIAL STATEMENTS

This financial report includes the consolidated financial statements and notes of Altura Mining Limited (the Company) and controlled entities (‘Consolidated Group’ or ‘Group’). Altura Mining Limited is a company limited by shares, incorporated and domiciled in Australia, whose shares are publicly traded on the Australian Securities Exchange. The separate financial statements of the parent entity, Altura Mining Limited, have not been presented within this financial report as permitted by amendments made to the Corporations Act 2001. The Group is a for-profit entity for financial reporting purposes under Australian Accounting Standards. The financial statements were authorised for issue on 30 September 2019 by the directors of the Company. 1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES

a) Basis of preparation

The financial report is a general purpose financial report that has been prepared in accordance with Australian Accounting Standards, Australian Accounting Interpretations, other authoritative pronouncements of the Australian Accounting Standards Board and the Corporations Act 2001. Compliance with Australian Accounting Standards ensures that the financial statements and notes also comply with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”). The following is a summary of the material accounting policies adopted by the Consolidated Group in the preparation of the financial report. The financial report has been prepared on an accruals basis. The accounting policies have been consistently applied, unless otherwise stated. i) Going concern principle of accounting

Notwithstanding the Group’s reporting a net loss after income tax of $26.7 million for the year, net current asset deficiency of $180.3m and loan note facility of $179.1m due August 2020, the financial statements have been prepared on a going concern basis as the directors believe that the Group will be able to pay its debts as and when they fall due and payable. The Group’s ability to continue as a going concern is dependent on achieving forecast production and sales and the successful refinancing of the loan note facility by the due date.

Directors are confident that the Altura Lithium Project will:

1. Continue to successfully generate considerable cash flow sufficient to address the operating losses and achieve positive cash flows from operations. Should this not be the case the Group will be required to raise additional working capital. The Directors are confident additional working capital can be secured as required based on the following:

The strong support of new and existing shareholders including:

in August 2019 the Group successfully raised A$22.4 million via an equity placement in February and March 2019, the Group successfully raised A$38.7 million via an equity placement and securities purchase plan

Supportive off-take parties as evidenced by the signing in November 2018 of a US$11 million prepayment on future sales

2. Successfully refinance the loan note facility before the maturity date due to the ongoing support of the

existing lenders. The Company has appointed Azure Capital to assist the company in its facility refinancing.

Notwithstanding the position outlined above, if production and sales cannot be achieved at forecast levels, and the loan facility cannot be successfully refinanced by the due date, there is a material uncertainty as to whether the Group will be able to continue as a going concern and, therefore whether it will realise its assets and extinguish its liabilities in the normal course of business and at the amounts stated in the financial statements. No adjustments have been made relating to the recoverability and classification of recorded asset amounts or to the amounts and classification of liabilities that might be necessary should the Group not continue as a going concern.

ANNUAL REPORT 2019 ALTURA 37

F-50

1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)

ii) New accounting standards for application in future periods A number of new standards, amendments and interpretations to existing standards have been published by the Australian Accounting Standards Board (AASB) that are effective for future periods and which the Group will adopt when they become effective. None of these are expected to have a significant effect on the consolidated financial statements of the Group, except:

AASB 16 Leases: (effective for 30 June 2020 reporting period) AASB 16 establishes principles for the recognition, measurement, presentation and disclosure of leases and supersedes AASB 117 Leases. AASB 16 eliminates the current dual accounting model for lessees which distinguishes between on-balance sheet finance leases and off-balance sheet operating leases. The standard provides a single lessee accounting model, requiring lessees to recognise assets and liabilities for all leases, unless the lease term is 12 months or less or the underlying asset has a low value. The accounting for lessors will not significantly change. This standard will primarily affect accounting for the Group’s operating leases. AASB 16 Leases is effective for annual reporting periods beginning on or after 1 January 2019. The Group is not required to adopt this new standard until the annual reporting period ending 30 June 2020 and has not adopted it in the current financial report. The Group is finalising its assessment of the potential impact of the application of AASB 16 on its financial statements, including the potential impact of the various transition provisions available to the Group. At present, the Group anticipates to adopt the modified retrospective approach in the year ending 30 June 2020 and will not restate comparative amounts. As the Group has non-cancellable operating lease commitments of $3,424,000, the impact of the new standard will result in a material right of use asset and lease liability measured at net present value, with the difference recorded in retained earnings on application. Due to the complexity involved in calculating the impact of AASB 16, management have not yet finalised this assessment, therefore no quantification of the impact has been made. Calculation complexity has been impacted by key judgements, including the incremental borrowing rate used to discount lease assets and liabilities and the uncertainties surrounding lease terms including potential rights of renewals (renewals are assessed on a lease by lease basis).

ii) Impact of new and amended standards adopted by the Group – changes in accounting policies

There were two new standards adopted during the year being AASB 9 Financial Instruments and AASB 15 Revenue from Contracts with Customers. The new accounting policies that have been applied from 1 July 2018 are detailed below in Note 1(k) and Note 1(r) respectively.

iii) Historical cost convention Except for cash flow information, the financial statements have been prepared on an accruals basis and are based on historical costs, modified, where applicable, by the measurement at fair value of selected non-current assets, financial assets and financial liabilities.

iv) Critical accounting estimates

The preparation of financial statements requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the Group’s accounting policies. The areas including a high degree of judgement or complexity, or areas where assumptions and estimates are significant to the financial statements are disclosed in Note 1(n).

NOTES TO THE FINANCIAL STATEMENTS CONTINUED

ALTURA ANNUAL REPORT 201938

F-51

NOTES TO THE FINANCIAL STATEMENTS CONTINUED

1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)

b) Carrying value of exploration and evaluation expenditure

The Group has capitalised exploration and evaluation expenditure of $3.265 million as at 30 June 2019 (2018: $1.595 million). This amount includes additions of $2.2 million during the year for drilling and analysis, feasibility study and employee remuneration costs for the lithium project stage 2 DFS and a reclassification of exploration expenditure to assets held for sale of $548,000. Exploration and evaluation expenditure is capitalised as an intangible asset until the Company has completed its assessment of the existence or otherwise of recoverable resources. The ultimate recovery of the carrying value of exploration expenditure is dependent upon the successful development and commercial exploitation or, alternatively, sale of the interest in the tenements. Until exploration and evaluation activities have reached a stage where the assessment is complete, including the forecasting of cash flows to assess the fair value of the expenditure, there is an uncertainty as to the carrying value of the expenditure. The Directors are of the opinion that the exploration expenditure is recoverable for the amount stated in the financial report.

c) Principles of consolidation

i) Subsidiaries

The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of Altura Mining Limited (‘Company’ or ‘Parent Entity’) as at 30 June 2019 and the results of the subsidiaries for the year then ended. Altura Mining Limited and its subsidiaries together are referred to in this financial report as the Group or Consolidated Entity. The Group controls an entity when the Group is exposed to or has rights to variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. A list of controlled entities is contained in Note 25 to the financial statements. All Australian controlled entities have a June financial year-end and all other controlled entities have a December financial year end. All inter-company balances and transactions between entities in the Group, including any unrealised profits or losses, have been eliminated on consolidation. Accounting policies of subsidiaries have been changed where necessary to ensure consistencies with those policies applied by the Group.

Where controlled entities have entered or left the Group during the year, their operating results have been included from the date control was obtained or until the date control ceased. Non-controlling interests, being that portion of the profit or loss and net assets of subsidiaries attributable to equity interests held by persons outside the Group, are shown separately within the equity section of the Consolidated Balance Sheet and in the Consolidated Statement of Profit and Loss. Losses applicable to the non-controlling interest in a consolidated subsidiary are allocated against the controlling interest except to the extent that the non-controlling interest has a binding obligation and is able to make additional investment to cover the losses. If in future years the subsidiary reports profits, such profits are allocated to the controlling interest until the non-controlling interest’s share of losses previously absorbed by the controlling interest have been recovered. The acquisition method of accounting is used to account for business combinations by the Group.

ii) Associates

Associates are all entities over which the Group has significant influence but not control or joint control, generally accompanying a shareholding between 20% and 50% of voting rights. Investments in associates are accounted for using the equity method of accounting, after initially being recognised at cost. The Group’s investments in associates includes goodwill identified on acquisition. The Group’s share of its associates post-acquisition profit or losses is recognised in profit or loss, and its share of post-acquisition other comprehensive income is recognised in other comprehensive income. The cumulative post-acquisition movements are adjusted against the carrying amount of the investment. Dividends receivable from associates are recognised as a reduction in the carrying amount of the investment.

ANNUAL REPORT 2019 ALTURA 39

F-52

iii) Changes in ownership interests

The Group treats transactions with non-controlling interests that do not result in a loss of control as transactions with equity owners of the Group. A change in ownership interest results in an adjustment between the carrying amounts of the controlling and non-controlling interests to reflect their relative interests in the subsidiary. Any difference between the amount of the adjustment to non-controlling interests and any consideration paid or received is recognised in a separate reserve within equity attributable to the owners of Altura Mining Limited. When the Group ceases to have control, joint control or significant influence, any retained interest in the entity is remeasured to its fair value with the change in carrying amount recognised in profit or loss. This fair value becomes the initial carrying amount for the purposes of subsequently accounting for the retained interest as an associate, jointly controlled entity or financial asset. In addition, any amounts previously recognised in other comprehensive income in respect of that entity are accounted for as if the Group had directly disposed of the related assets or liabilities. This may mean that amounts previously recognised in other comprehensive income are reclassified to profit or loss. If the ownership interest in a jointly controlled entity or an associate is reduced but joint control or significant influence is retained, only a proportionate share of the amounts previously recognised in other comprehensive income are reclassified to profit or loss where appropriate.

d) Business combinations The acquisition method of accounting is used to account for all business combinations, including business combinations involving entities or businesses under common control, regardless of whether equity instruments or other assets are acquired. The consideration transferred for the acquisition of a subsidiary comprises the fair values of the assets transferred, the liabilities incurred and the equity interests issued by the Group. The consideration transferred also includes the fair value of any contingent consideration arrangement and the fair value of any pre-existing equity interest in the subsidiary. Acquisition related costs are expensed as incurred with the exception of stamp duty. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are, with limited exceptions, measured initially at their fair values at the acquisition date. On an acquisition by acquisition basis, the Group recognises any non-controlling interest in the acquiree either at fair value or at the non-controlling interest’s proportionate share of the acquiree’s net identifiable assets. The excess of the consideration transferred and the amount of any non-controlling interest in the acquiree and the acquisition date fair value of any previous equity interest in the acquiree over the fair value of the Group’s share of the net identifiable assets acquired is recorded as goodwill. If those amounts are less than the fair value of the net identifiable assets of the subsidiary acquired and the measurement of all amounts has been reviewed, the difference is recognised directly in profit or loss as a gain on acquisition of subsidiaries. Where settlement of any part of cash consideration is deferred, the amounts payable in the future are discounted to their present value as at the date of exchange. The discount rate used is the entity’s incremental borrowing rate, being the rate at which a similar borrowing could be obtained from an independent financier under comparable terms and conditions. Contingent consideration is classified either as equity or a financial liability. Amounts classified as a financial liability are subsequently remeasured to fair value with changes in fair value recognised in profit or loss.

1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)

NOTES TO THE FINANCIAL STATEMENTS CONTINUED

ALTURA ANNUAL REPORT 201940

F-53

1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)

e) Income tax

The charge for current income tax expense is based on the result for the year adjusted for any non-assessable or disallowed items. It is calculated using the tax rates that have been enacted or are substantially enacted by the balance date for each jurisdiction, adjusted by changes in deferred tax assets and liabilities attributable to temporary differences and to unused tax losses. Deferred tax is accounted for using the balance sheet liability method in respect of temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements. No deferred income tax will be recognised from the initial recognition of an asset or liability, excluding a business combination, where there is no effect on accounting or taxable profit or loss. Deferred tax is calculated at the tax rates (and laws) that have been enacted, or substantially enacted by the end of the reporting period and are expected to apply to the period when the asset is realised or liability is settled. Deferred tax is credited in the income statement except where it relates to items that may be credited directly to equity, in which case the deferred tax is adjusted directly against equity. Deferred income tax assets are recognised to the extent that it is probable that future tax profits will be available against which deductible temporary differences and unused tax losses can be utilised. The amount of benefits brought to account or which may be realised in the future is based on the assumption that no adverse change will occur in income taxation legislation and the anticipation that the economic entity will derive sufficient future assessable income to enable the benefit to be realised and comply with the conditions of deductibility imposed by the law. Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets and liabilities and when the deferred tax balances relate to the same taxation authority. Current tax assets and tax liabilities are offset where the Group has a legally enforceable right to offset and intends to settle on a net basis, or to realise the asset and settle the liability simultaneously. Altura Mining Limited and some of its wholly-owned Australian subsidiaries have formed an income tax consolidated group under the tax consolidation regime. Each entity in the Group recognises its own current and deferred tax amounts, except for any deferred tax liabilities (or assets) resulting from unused tax losses and tax credits, which are immediately assumed by the parent entity. The current tax liability of each Group entity is then subsequently assumed by the parent entity. The Group notified the Australian Tax Office that it had formed an income tax consolidated group to apply from 1 July 2005. The tax consolidated group has entered a tax sharing agreement under which the wholly-owned entities fully compensate Altura Mining Limited for any current tax payable assumed and are compensated by Altura Mining Limited for any current tax receivable and deferred tax assets relating to unused tax losses or unused tax credits that are transferred to Altura Mining Limited under the tax consolidated legislation. The amounts receivable/payable under the tax funding agreement are due upon receipt of the funding advice from the head entity, which is issued as soon as practicable after the end of each financial year. The head entity may also require payment of interim funding amounts to assist with its obligations to pay tax instalments. Assets or liabilities arising under tax funding agreements within the tax consolidated entities are recognised as current amounts receivable from or payable to other entities in the Group. Any difference between the amounts assumed and amounts receivable or payable under the tax funding agreement are recognised as a contribution to (or distribution from) wholly-owned tax consolidated entities.

f) Segment reporting Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker. The chief operating decision maker, who is responsible for allocating resources and assessing performance of the operating segments has been identified as the Board of Directors.

NOTES TO THE FINANCIAL STATEMENTS CONTINUED

ANNUAL REPORT 2019 ALTURA 41

F-54

1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)

g) Property, plant, equipment and mine properties Each class of property, plant and equipment is carried at cost or fair value less, where applicable, any accumulated depreciation and impairment losses. Property Freehold land and buildings are measured on the cost basis. The carrying amount of land and buildings is reviewed annually by directors to ensure it is not in excess of the recoverable amount from these assets. Plant and equipment Plant and equipment are measured on the cost basis. Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. All other repairs and maintenance are charged to the income statement during the financial period in which they are incurred. The carrying amount of plant and equipment is reviewed annually to ensure it is not in excess of the recoverable amount from these assets. Mine Properties Mine properties consist of two categories being mine properties in production and mine development. Mine development expenditure relates to costs incurred to access a mineral resource. It represents those costs incurred after the technical and commercial viability of extracting the mineral resource has been demonstrated and an identified mineral reserve is being prepared for production (but is not yet in production). Development expenditure is capitalised as either a tangible or intangible asset depending on the nature of the costs incurred. Capitalisation of development expenditure ceases once the mining property is capable of commercial production, at which point it is transferred into the relevant category of property, plant, equipment and mine properties depending on the nature of the asset and depreciated over the useful life of the asset. Development expenditure includes the direct costs of construction, pre-production costs, borrowing costs incurred during the construction phase, reclassified exploration and evaluation assets (acquisition costs) and subsequent development expenditure on the reclassified areas of interest. These costs are not amortised, the carrying value is assessed for impairment whenever the facts and circumstances suggest that the carrying amount of the asset may exceed the recoverable amount. Mine properties in production includes all development expenditure incurred once a mine property is in commercial production and is immediately expensed to the Statement of Profit and Loss except where it is probable that future economic benefits will flow to the Group, in which case it is capitalised as mine properties in production. Amortisation is provided on a unit of production basis which results in an amortisation charge proportional to the depletion of the economically recoverable mineral resources (comprising proven and probable mineral reserves). A regular review is undertaken to determine the appropriateness of continuing to carry forward costs in relation to that area of interest. An impairment exists when the carrying value of mine properties exceeds its estimated recoverable amount. The asset is then written down to its recoverable amount and the impairment losses are recognised in profit or loss. These assets include all operating mine related assets that are not included under land, buildings and plant and equipment. Depreciation The depreciable amount of all property plant and equipment assets excluding freehold land, is depreciated on a straight-line basis over their useful lives to the Group commencing from the time the asset is held ready for use. Assets classified as mine properties in production are depreciated using the units of production method for the life of the mine. Leased assets are depreciated over the asset’s useful life or over the shorter of the assets useful life and the lease term if there is no reasonable certainty that the Group will obtain ownership at the end of the lease term.

NOTES TO THE FINANCIAL STATEMENTS CONTINUED

ALTURA ANNUAL REPORT 201942

F-55

1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)

g) Property, plant, equipment and mine properties (continued)

The depreciation rates used for each class of depreciable assets are:

Class of Fixed Asset Depreciation Rate Plant and equipment 20% - 50% Leased plant and equipment 12.5% Mine properties units of production

The asset’s residual values and useful lives are reviewed, and adjusted if appropriate, at each balance date. An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is greater than its estimated recoverable amount. Gains and losses on disposals are determined by comparing proceeds with the carrying amount. These gains and losses are included in profit or loss.

h) Exploration and evaluation expenditure Exploration, evaluation and development expenditure incurred is accumulated in respect of each separately identifiable area of interest. These costs are only carried forward where the right of tenure for the area of interest is current and to the extent that they are expected to be recouped through the successful development and commercial exploitation of the area, or alternatively sale of the area, or where activities in the area have not yet reached a stage that permits reasonable assessment of the existence of economically recoverable reserves. Exploration and evaluation expenditure assets acquired in a business combination are recognised at their fair value at the acquisition date. Once the technical feasibility and commercial viability of the extraction of mineral resources in an area of interest are demonstrable, the exploration and evaluation assets attributable to that area of interest are first tested for impairment and then reclassified to mining development. Accumulated costs in relation to an abandoned area are written off in full against the result in the year in which the decision to abandon the area is made. A regular review is undertaken of each area of interest to determine the appropriateness of continuing to carry forward costs in relation to that area of interest.

i) Leases Leases of property, plant and equipment where substantially all the risks and benefits incidental to the ownership of the asset, but not the legal ownership that is transferred to entities in the Group, are classified as finance leases. Finance leases are capitalised at the lease inception date, by recording an asset and a liability at the lower of the amounts equal to the fair value of the leased property or the present value of the minimum lease payments, including any guaranteed residual values. Lease payments are allocated between the reduction of the lease liability and the lease interest expense for the period. Leased assets are depreciated on a straight-line basis over the shorter of their estimated useful lives or the lease terms if there is no reasonable certainty that the Group will obtain ownership at the end of the lease term. Lease payments for operating leases, where substantially all the risks and benefits remain with the lessor, are charged as expenses on a straight-line basis over the period of the lease. Lease incentives under operating leases are recognised as a liability and amortised on a straight-line basis over the life of the lease term.

NOTES TO THE FINANCIAL STATEMENTS CONTINUED

ANNUAL REPORT 2019 ALTURA 43

F-56

1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)

j) Impairment of assets Goodwill and intangible assets that have an indefinite useful life are not subject to amortisation and are tested annually for impairment or more frequently if events or changes in circumstances indicate that they might be impaired. Other assets are tested for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised immediately in profit or loss for the amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs to sell and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash inflows which are largely independent of the cash inflows from other assets or groups of assets (cash generating units, “CGUs”). For the purposes of goodwill impairment testing, CGUs to which goodwill has been allocated are aggregated so that the level at which impairment is tested reflects the lowest level at which goodwill is monitored for internal reporting purposes. The goodwill acquired in a business combination, for the purpose of impairment testing, is allocated to CGUs that are expected to benefit from the synergies of the combination. Non-financial assets other than goodwill that suffered impairment are reviewed for possible reversal of the impairment at the end of each reporting period.

k) Financial assets

This note explains the impact of the adoption of AASB 9 Financial Instruments on the Group’s financial statements and discloses the new accounting policies that have been applied from 1 July 2018. AASB 9 replaces AASB 139 and addresses the classification, measurement and recognition of financial assets and liabilities, introduces new rules for hedge accounting and a new impairment model for financial assets. The Group notes the following impacts from the adoption of the new standard on 1 July 2018. Adoption of AASB 9 has resulted in the reclassification of the following financial instruments:

Category Previously AASB 139 Currently AASB 9 Cash and cash equivalents Loans and receivables Amortised cost Trade and other receivables Loans and receivables Amortised cost Financial assets Financial assets at fair value

through OCI Financial assets at fair value through OCI

Trade and other payables Other financial liabilities Other financial liabilities Loans and borrowings Other financial liabilities Other financial liabilities

AASB 9 replaces the ‘incurred loss’ model in AASB 9 with an ‘expected credit loss’ (ECL) model. The new impairment model applies to the Group in relation to financial assets classified at amortised cost, being the Group’s trade receivables. Based on the Group’s assessment of historical provision rates, there is no material financial impact on the impairment provisions on adoption of this standard and no adjustment to retained earnings is required. For the current period, the Group has elected to measure loss allowances on trade receivables using a life-time expected loss model. The Group has also used the practical expedient of a provisions matrix using a single loss rate approach to approximate the expected credit losses. These provisions are considered representative across all business and geographical segments of the Group based on historical credit loss experience. The standard requires that for financial liabilities designated at fair value through profit or loss (FVTPL) any change in fair value arising as a consequence of a change in the company’s own credit risk should be recognised in other comprehensive income rather than profit or loss. The new hedge accounting rules have no impact on the Group’s financial statements. Following adoption of AASB 9 on 1 July 2018, there is no material impact on the Group’s financial position and no restatement is required.

Investment in shares in unlisted companies, which do not have a quoted market price and whose fair value cannot be reliably measured, are classified as available-for-sale and are measured at cost. Gains or losses are recognised in profit or loss when the investments are derecognised or impaired.

NOTES TO THE FINANCIAL STATEMENTS CONTINUED

ALTURA ANNUAL REPORT 201944

F-57

1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)

l) Impairment

The Group assess at the end of each reporting period whether there is objective evidence that a financial asset or group of financial assets is impaired. A financial asset or a group of financial assets is impaired and impairment losses are incurred only if there is objective evidence of impairment as a result of one or more events that occurred after the initial recognition of the asset (a ‘loss event’) and that loss event (or events) has an impact on the estimated future cash flows of the financial asset or group of financial assets that can be reliably estimated. In the case of equity securities classified as available-for-sale, a significant or prolonged decline in the fair value of a security below its cost is considered as an indicator that the securities are impaired. If any such evidence exists for available-for-sale financial assets, the cumulative loss, measured as the difference between the acquisition cost and the current fair value, less any impairment loss on that financial asset previously recognised in profit or loss, is reclassified from equity and recognised in profit or loss. Impairment losses recognised in profit or loss on equity instruments classified as available-for-sale are not reversed through profit or loss. If there is evidence of impairment for any of the Group’s financial assets carried at amortised cost, the loss is measured as the difference between the asset’s carrying amount and the present value of estimated future cash flows, excluding future credit losses that have not been incurred. The cash flows are discounted at the financial asset’s original effective interest rate. The loss is recognised in profit or loss.

m) Borrowing costs

Borrowing costs directly attributable to the acquisition, construction or production of assets that necessarily take a substantial period of time to prepare for their intended use or sale, are added to the cost of those assets, until such time as the assets are substantially ready for their intended use or sale. All other borrowing costs are recognised as an expense in the period in which they are incurred.

n) Employee benefits i) Wages and salaries, annual leave and sick leave

Liabilities for employee benefits for wages, salaries, annual leave and accumulating sick leave that are expected to be settled within 12 months of the reporting date represent present obligations resulting from employees’ services provided to the reporting date and are calculated at undiscounted amounts based on wage and salary rates that the Group expects to pay as at reporting date including related on costs, such as superannuation, workers compensation, insurance and payroll tax and are included in trade and other payables. Non-accumulating, non-monetary benefits such as housing and cars are expensed by the Group as the benefits are used by the employee. Employee benefits payable later than 12 months have been measured at the present value of the estimated future cash outflows to be made for those benefits. In determining the liability, consideration is given to employee salary and wage increases and the probability that the employee may satisfy any vesting requirements. Those cash flows are discounted using market yields with terms to maturity that match the expected timing of cash flows attributable to employee benefits.

ii) Long service leave The Group’s net obligation in respect of long term service benefits is the amount of future benefit that employees have earned in return for their service to the reporting date. The obligation is calculated using expected future increases in wages and salary rates including related on costs and expected settlement dates and is discounted using an appropriate discount rate. The current liability for long service leave represents all unconditional obligations where employees have fulfilled the required criteria and also those where employees are entitled to a pro rata payment in certain circumstances and is included in the current provisions. The non-current provision for long service leave includes the remaining long service leave obligations.

NOTES TO THE FINANCIAL STATEMENTS CONTINUED

ANNUAL REPORT 2019 ALTURA 45

F-58

1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)

iii) Superannuation

Contributions made by the Group to defined contribution superannuation funds are recognised as an expense in the period in which they are incurred.

iv) Equity-settled compensation The Group operates an employee share ownership plan. Share-based payments to employees are measured at the fair value of the instruments issued and amortised over the vesting periods. Share-based payments to non-employees are measured at the fair value of goods or services received or the fair value of the equity instruments issued, if it is determined the fair value of the goods or services cannot be reliably measured and are recorded at the date the goods or services are received. The corresponding amount is recorded to the option reserve. The fair value of options is determined using the Black-Scholes pricing model. The number of shares and options expected to vest is reviewed and adjusted at the end of each reporting period such that the amount recognised for services received as consideration for the equity instruments granted is based on the number of equity instruments that eventually vest.

o) Significant accounting estimates and judgements The Directors evaluate estimates and judgements incorporated into the financial report based on historical knowledge and best available current information. Estimates assume a reasonable expectation of future events and are based on current trends and economic data, obtained both externally and within the Group. The resulting accounting estimates, will, by definition, seldom equal the related actual results. Management has identified the following significant accounting policies for which significant judgements, estimates and assumptions are made. i) Significant accounting estimates and assumptions

Critical accounting estimates and judgements Following is a summary of the key assumptions concerning the future, and other key sources of estimation and accounting judgements at reporting date that have not be disclosed elsewhere in these financial statements. a. Determination of resources and reserves

The Company estimates its ore resources and reserves is based on information compiled by Competent Persons defined in the Australasian Code for Reporting Exploration Results, Mineral Resources and Ore Reserves (December 2012), which is prepared by the Joint Ore Reserves Committee (“JORC”) of the Australasian Institute of Mining and Metallurgy, Australian Institute of Geoscientists and Minerals Council of Australia, known as the JORC Code. Reserves determined in this way are used in the calculation of depreciation, amortisation and impairment charges, the assessment of mine lives and for forecasting the timing of the payment of rehabilitation costs. The amount of reserves that may actually be mined in the future and the Company’s estimate of reserves from time to time in the future may vary from current reserve estimates. The current Life of Mine (LOM) for the Altura Lithium Project is 26 years.

b. Exploration and evaluation expenditure The application of the Group’s accounting policy for exploration and evaluation expenditure requires judgement in determining whether it is likely that future economic benefits are likely in that area of interest, which may be based on assumptions about future events or circumstances. Estimates and assumptions may change if new information becomes available. If after expenditure is capitalised information becomes available suggesting that the recovery of expenditure is unlikely, the amount capitalised is written off in the Consolidated Statement of Profit and Loss in the period when the new information becomes available.

NOTES TO THE FINANCIAL STATEMENTS CONTINUED

ALTURA ANNUAL REPORT 201946

F-59

1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)

o) Significant accounting estimates and judgements (continued)

c. Impairment

The Group assess impairment by evaluation of conditions and events specific to the Company that may be indicative of impairment triggers. Goodwill is assessed for impairment at each reporting period. Recoverable amounts of relevant assets are reassessed using the higher of fair value less costs to sell and value in use calculations which incorporate various key assumptions.

d. Rehabilitation

The calculation of the provisions for rehabilitation and the related mine development assets rely on estimates of the cost to rehabilitate an area which is currently disturbed based on legislative requirements and future costs. The costs are estimated on the basis of a mine closure plan. Cost estimates take into account expectations about future events including the mine lives, the time of rehabilitation expenditure, regulations, inflation and discount rates. When these expectations change in the future, the provision and where applicable, the mine development assets are recalculated in the period in which they change.

e. Derivatives The fair value of financial instruments must be estimated for recognition and measurement purposes. The fair value of financial instruments traded in active markets such as available-for-sale securities is based on quoted market prices at the reporting date. The quoted market price used for financial assets held by the Group is the current bid price. The fair value of financial instruments that are not traded in an active market are determined using valuation techniques that use observable market data at the reporting date where it is available.

f. Income taxes The Group is subject to income taxes in Australia and jurisdictions where it has foreign operations. Significant judgement is required in determining the provision for income taxes. There are transactions and calculations undertaken during the ordinary course of business for which the ultimate tax determination is uncertain. The Group estimates its tax liabilities based on the Group’s understanding of the tax law. Where the final tax outcome of these matters is different from the amounts that were initially recorded, such differences will impact the current and deferred income tax assets and liabilities in the period in which such determination is made. Deferred income tax assets are recognised to the extent that it is probable that future tax profits will be available against which deductible temporary differences and unused tax losses can be utilised.

g. Share-based payment transactions From time to time the Company has issued options to directors and employees. The Company measures fair value of share-based payments using the Black-Scholes Pricing Model, using the assumptions detailed in Note 22. This formula takes into account the terms and conditions under which the instruments were granted.

NOTES TO THE FINANCIAL STATEMENTS CONTINUED

ANNUAL REPORT 2019 ALTURA 47

F-60

1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued) o) Significant accounting estimates and judgements (continued)

h. Mines under construction

Expenditure is transferred from ’Exploration and evaluation assets’ to ‘Mine properties in development’ which once the work completed to date supports the future development of the property and such development receives appropriate approvals. After transfer of the exploration and evaluation assets, all subsequent expenditure on the construction, installation or completion of infrastructure facilities is capitalised in ’Mine properties in development’. Development expenditure is net of proceeds from the sale of spodumene concentrate extracted during the development phase to the extent that it is considered integral to the development of the mine. Any costs incurred in testing the assets to determine if they are functioning as intended, are capitalised, net of any proceeds received from selling any product produced while testing. Where these proceeds exceed the cost of testing, any excess is recognised in the statement of profit or loss and other comprehensive income. After production starts, all assets included in ‘Mine properties in development’ are then transferred to ’Mine properties in production’ which is also a sub-category in ‘Property, plant, equipment and mine properties’. In March 2019, the Altura Lithium Project recorded in ‘Mine properties in development’ was deemed to have reached commercial production and transferred to ‘Mine properties in production’. Judgement was involved in this determination.

p) Non-current assets (or disposal groups) held for sale and discontinued operations Non-current assets (or disposal groups) are classified as held for sale if their carrying amount will be recovered principally through a sale transaction rather than through continuing use and a sale is considered highly probable. They are measured at the lower of their carrying amount and fair value less costs to sell, except for assets such as deferred tax assets, assets arising from employee benefits, financial assets and investment property that are carried at fair value and contractual rights under insurance contracts, which are specifically exempt from this requirement. An impairment loss is recognised for any initial or subsequent write-down of the asset (or disposal group) to fair value less costs to sell. A gain is recognised for any subsequent increases in fair value less costs to sell of an asset (or disposal group), but not in excess of any cumulative impairment loss previously recognised. A gain or loss not previously recognised by the date of the sale of the non-current asset (or disposal group) is recognised at the date of derecognition. Non-current assets (including those that are part of a disposal group) are not depreciated or amortised while they are classified as held for sale. Interest and other expenses attributable to the liabilities of a disposal group classified as held for sale continue to be recognised. Non-current assets classified as held for sale and the assets of a disposal group classified as held for sale are presented separately from the other assets in the balance sheet. The liabilities of a disposal group classified as held for sale are presented separately from other liabilities in the balance sheet.

A discontinued operation is a component of the entity that has been disposed of or is classified as held for sale and that represents a separate major line of business or geographical area of operations, is part of a single co-ordinated plan to dispose of such a line of business or area of operations, or is a subsidiary acquired exclusively with a view to resale. The results of discontinued operations are presented separately in the statement of profit or loss.

NOTES TO THE FINANCIAL STATEMENTS CONTINUED

ALTURA ANNUAL REPORT 201948

F-61

1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)

q) Provisions

Provisions are recognised when the Group has a legal or constructive obligation, as a result of past events, for which it is probable that an outflow of resources will be required to settle the obligation and the amount has been reliably estimated. i) Rehabilitation costs

Provision is made for the Group’s estimated liability arising under specific legislative requirements and the conditions of its exploration permits and mining leases for future costs expected to be incurred in restoring mining areas of interest. The estimated liability is based on the restoration work required using existing technology as a result of activities to date. The liability includes the cost of reclamation of the site, including infrastructure removal and land fill costs. An asset is created as part of the mine development asset, to the extent that the development relates to future production activities, which is offset by a current and non-current provision for rehabilitation.

r) Cash and cash equivalents Cash and cash equivalents include cash on hand, deposits held at call with banks, other short-term highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value, net of bank overdrafts.

s) Revenue This note explains the impact of the adoption of AASB 15 Revenue from Contracts with Customers on the Group’s financial statements and discloses the new accounting policies that have been applied from 1 July 2018. AASB 15 addresses the recognition of revenue. It replaces the previous revenue recognition guidance in AASB 118 Revenue and AASB 111 Construction Contracts. The new standard is based on the principle that revenue is recognised when control of a good and service transfers to a customer. The Group adopted AASB 15 from 1 July 2018 which resulted in changes in accounting policies relating to the recognition of revenue. Management have reviewed each of the Group’s revenue streams under the five-step model outlined in AASB 15 and concluded adoption of AASB 15 has no material impact on revenue recognition. Therefore, there is no requirement to restate revenue reported in prior periods. The details of the review process are outlined below. Accounting policies have been amended to ensure that the five-step method is applied consistently to revenue recognition processes across the Group. To assess the impact of AASB 15 on the Group, each contract type was analysed, with the five-step method applied to assess the impact on revenue recognition. The five-step method for recognising revenue from contracts with customers involves consideration of the following: 1. Identifying the contract with the customer 2. Identifying performance obligations 3. Determining the transaction price 4. Allocating the transaction price to distinct performance obligations 5. Recognising revenue. The following is a summary of the revenue recognition for each revenue stream: (a) Mining services revenue – revenue from mining services provided by the Group is recognised at a point in time upon delivery of the service to the customer, in accordance with the terms of the contract to provide services. (b) Royalty revenue – revenue from royalties are recognised at a point in time when entitlement to a royalty is established in accordance with the terms of the agreement. (c) Sales of product – revenue from the sale of product is recognised at a point in time, being when the Group delivers the product to the buyer. In accordance with the contract, delivery is deemed to occur when the product passes the ship’s rail in the port of shipment. At this point, the performance obligation per the off-take agreement (contract) is satisfied relating to the delivery of product. A variable consideration of 5% of the total invoice is recognised as revenue to the extent that it is highly probable that a significant reversal in the amount of cumulative revenue recognised will not occur.

NOTES TO THE FINANCIAL STATEMENTS CONTINUED

ANNUAL REPORT 2019 ALTURA 49

F-62

35

1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)

t) Goods and services tax (GST) Revenues, expenses and assets are recognised net of the amount of GST, except where the amount of GST incurred is not recoverable from the relevant taxation authorities. In these circumstances the GST is recognised as part of the cost of acquisition of the asset or as part of an item of the expense. Receivables and payables in the balance sheet are shown inclusive of GST. Cash flows are presented in the statement of cash flows on a gross basis, except for the GST component of investing and financing activities, which are disclosed as operating cash flows.

u) Foreign operations The financial performance and position of foreign operations whose functional currency is different from the Group’s presentation currency are translated as follows:

assets and liabilities are translated at exchange rates prevailing at balance sheet date; and income and expenses are translated at monthly average exchange rates for the period.

Exchange differences arising on translation of foreign operations are transferred directly to the Group’s foreign currency translation reserve as a separate component of equity. These differences are recognised in the income statement upon disposal of the foreign operation.

v) Foreign currency transactions and balances The functional currency of each of the Group’s entities is measured using the currency of the primary economic environment in which the entity operates. The consolidated financial statements are presented in Australian dollars which is the parent entity’s functional and presentation currency. Foreign currency transactions are translated into functional currency using the exchange rates prevailing at the date of the transaction. Foreign currency monetary items are translated at the period end exchange rate. Non-monetary items measured at historical cost continue to be carried at the exchange rate at the date when fair values were determined. Exchange differences arising on the translation of monetary items are recognised in the income statement, except where deferred in equity as a qualifying cash flow or net investment hedge. Exchange differences arising on the translation of non-monetary items are recognised directly in equity to the extent that the gain or loss is directly recognised in equity, otherwise the exchange difference is recognised in the income statement.

w) Goodwill and intangibles Goodwill represents the excess of the cost of an acquisition over the fair value of the Group’s share of the net identifiable assets of the acquired subsidiary or associate at the date of acquisition. Goodwill on acquisitions of subsidiaries is included in intangible assets. Goodwill on acquisitions of associates is included in investments in associates. Goodwill is not amortised, it is tested for impairment at each reporting date or more frequently if events or changes in circumstances indicate that it might be impaired and is carried at cost less accumulated impairment losses. Gains and losses on the disposal of an entity include the carrying amount of goodwill relating to the entity sold. Goodwill is allocated to cash generating units (“CGUs”) for the purpose of impairment testing. The allocation is made to those CGUs or groups of CGUs that are expected to benefit from the business combination in which the goodwill arose.

x) Financial liabilities Non-derivative financial liabilities other than financial guarantees are subsequently measured at amortised cost. Gains or losses are recognised in profit or loss through the amortisation process and when the financial liability is derecognised.

y) Comparative figures When required by Accounting Standards, comparative figures have been adjusted to conform to changes in presentation for the current financial year.

NOTES TO THE FINANCIAL STATEMENTS CONTINUED

ALTURA ANNUAL REPORT 201950

F-63

NOTES TO THE FINANCIAL STATEMENTS CONTINUED

1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)

z) Inventories

Consumables stores Inventories of consumable supplies and spare parts expected to be used in the supply of services are valued at cost. Product and processing stock Product and processing stock stockpiles are physically surveyed or estimated and valued at the lower of cost or net realisable value. Net realisable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and costs of selling final product. Cost is determined by the weighted average method and comprises direct purchase costs and an appropriate portion of fixed and variable overhead costs, including depreciation and amortisation, incurred in converting materials into finished goods. Finished goods consists of spodumene product ready for transport or shipment.

aa) Fair value measurement When an asset or liability, financial or non-financial, is measured at fair value for recognition or disclosure purposes, the fair value is based on the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date; and assumes that the transaction will take place either: in the principal market; or in the absence of a principal market, in the most advantageous market. Fair value is measured using the assumptions that market participants would use when pricing the asset or liability, assuming they act in their economic best interest. For non-financial assets, the fair value measurement is based on its highest and best use. Valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, are used, maximising the use of relevant observable inputs and minimising the use of unobservable inputs.

Assets and liabilities measured at fair value are classified, into three levels, using a fair value hierarchy that reflects the significance of the inputs used in making the measurements. Classifications are reviewed each reporting date and transfers between levels are determined based on a reassessment of the lowest level input that is significant to the fair value measurement. For recurring and non-recurring fair value measurements, external valuers may be used when internal expertise is either not available or when the valuation is deemed to be significant. External valuers are selected based on market knowledge and reputation. Where there is a significant change in fair value of an asset or liability from one period to another, an analysis is undertaken, which includes a verification of the major inputs applied in the latest valuation and a comparison, where applicable, with external sources of data.

NOTES TO THE FINANCIAL STATEMENTS CONTINUED

ANNUAL REPORT 2019 ALTURA 51

F-64

2. FINANCIAL RISK MANAGEMENT

The Group’s principal financial instruments comprise receivables, payables, loans, finance leases, financial asset at fair value through other comprehensive income, cash and short term deposits. These activities expose the Group to a variety of financial risks: market risk (which includes currency risk, interest rate risk and price risk), credit risk and liquidity risk. The Group manages these risks in accordance with the Group’s financial risk management policy. The Group uses different methods and assumptions to measure and manage different types of risks to which it is exposed at each balance date. The Board reviews and approves policies for managing each of the Group’s financial risk areas. The Group holds the following financial instruments:

2019

$’000 2018

$’000 FINANCIAL ASSETS

Cash and cash equivalents 9,494 28,761 Trade and other receivables 2,149 2,242 Held to maturity investments 78 52 Other financial assets 1,286 4,018

13,007 35,073

FINANCIAL LIABILITIES

Trade and other payables (note 16) 40,778 22,713 Borrowings 179,612 145,887

220,390 168,600

a) Market risk

Market risk is the risk that changes in market prices such as foreign exchange rates, securities prices and coal prices will affect the Group’s income or the value of its holdings of financial investments. i) Foreign currency risk

The Group operates internationally and is exposed to foreign exchange risk arising from various currency exposures, primarily in respect to the US dollar. Revenue is denominated in US dollars and a strengthening of the Australian dollar against the US dollar has an adverse impact on earnings and cash flow settlement. In particular, sales of spodumene concentrate are received in US dollars. Liabilities for some loans are denominated in currencies other than the Australian dollar and a weakening of the Australian dollar against other currencies has an adverse impact on earnings and cash flow settlement. In particular, Altura Lithium’s loan for construction and commissioning of the mine is in US dollars (US$143 million), and therefore repayment of the loan will be made in US dollars. The Group’s overseas subsidiaries have a US dollar functional currency. This exposes the Group to foreign exchange fluctuations upon conversion to AUD. At 30 June 2019, the Group held funds in foreign currency amounting to US$3,934,000 (2018: US$382,000) The Group does not currently enter into any hedging arrangements.

NOTES TO THE FINANCIAL STATEMENTS CONTINUED

ALTURA ANNUAL REPORT 201952

F-65

2. FINANCIAL RISK MANAGEMENT (continued)

Foreign currency risk sensitivity analysis At 30 June 2019, the effect on profit and equity as a result of changes in the value of the Australian dollar to the US dollar that management considers to be reasonably possible, with all other variables remaining constant is as follows: 2019

$’000 2018

$’000 Change in profit

— Improvement in AUD to USD by 11% 1,317 704 — Decline in AUD to USD by 11% (1,317) (704)

Change in equity

— Improvement in AUD to USD by 11% 1,317 704 — Decline in AUD to USD by 11% (1,317) (704)

ii) Price risk The Group is exposed to equity securities price risk. The Group currently does not have any hedges in place against the movements in the spot price. The Group's equity investments are publicly traded on the United States of America OTCBB and are not quoted on any market Index. The table below summarises the impact of increases/decreases in the value on the Group's equity investments as at balance date. The analysis is based on the assumption that the equity pricing had increased/decreased by 10% with all other variables held constant and all the Group's equity instruments moved according to the historical correlation with the index. 2019

$’000 2018

$’000 Change in profit

— Increase in equity value by 10% - - — Decrease in equity value by 10% - -

Change in equity

— Increase in equity value by 10% 129 402 — Decrease in equity value by 10% (129) (402)

iii) Interest rate risk

At balance date the Group’s debt was held at a fixed rate. For further details on interest rate risk refer to Note 17. Interest rate sensitivity analysis At 30 June 2019, the effect on profit and equity as a result of changes in the interest rate that management considers to be reasonably possible, with all other variables remaining constant would be as follows: 2019

$’000 2018

$’000 Change in profit

— Increase in interest rate by 1% (1,987) (1,450)— Decrease in interest rate by 1% 1,987 1,450

Change in equity

— Increase in interest rate by 1% (1,987) (1,450)— Decrease in interest rate by 1% 1,987 1,450 Term deposits have been treated as a floating rate due to the short-term nature of the deposits.

NOTES TO THE FINANCIAL STATEMENTS CONTINUED

ANNUAL REPORT 2019 ALTURA 53

F-66

2. FINANCIAL RISK MANAGEMENT (continued)

b) Credit risk

Credit risk refers to the risk that a third party will default on its contractual obligations resulting in financial loss to the Group. The Group has adopted the policy of only dealing with credit worthy counterparties and obtaining sufficient collateral or other security where appropriate, as a means of mitigating the risk of financial loss from defaults. The carrying amount of financial assets recorded in the financial statements, net of any provisions for losses, represents the Company's maximum exposure to credit risk.

c) Liquidity risk Liquidity risk includes the risk that the Group will not be able to meet its financial obligations as they fall due. The Group will be impacted in the following ways: i) Will not have sufficient funds to settle transactions on the due date; ii) Will be forced to sell financial assets at a value which is less than what they are worth; or iii) May be unable to settle or recover a financial asset at all. The Group manages liquidity risk by monitoring forecast cash flows.

d) Financial instrument composition and maturity analysis

The tables below reflect the undiscounted contractual settlement terms for financial instruments of a fixed period of maturity, as well as management’s expectations for the settlement period for all other financial instruments. As such the amounts may not reconcile to the balance sheet.

The Group

Weighted average effective

interest rate

Floating interest rate

Fixed interest rate maturing

Total Within 1 year 1 to 5 years Over 5 years Non-interest bearing

2019 %

2018 %

2019 $’000

2018 $’000

2019 $’000

2018 $’000

2019 $’000

2018 $’000

2019 $’000

2018 $’000

2019 $’000

2018 $’000

2019 $’000

2018 $’000

Financial assets:

Cash & cash equivalents

1% 1% 9,494 28,761 - - - - - - - - 9,494 28,761

Trade and other receivables

- - - - - - - - - 2,149 2,242 2,149 2,242

Financial assets - - - - - - - - - 1,286 4,018 1,286 4,018

Term deposit 1% 1% - - 78 52 - - - - - - 78 52

Total financial assets

9,494 28,761 78 52 - - - - 3,435 6,260 13,007 35,073

Financial liabilities:

Trade & other payables

- - - - - - - - - - 40,778 22,713 40,778 22,713

Borrowings 15% 14% - - - - 179,612 145,887 - - - - 179,612 145,887

Total financial liabilities

- - - - 179,612 145,887 - - 40,778 22,713 220,390 168,600

NOTES TO THE FINANCIAL STATEMENTS CONTINUED

ALTURA ANNUAL REPORT 201954

F-67

2. FINANCIAL RISK MANAGEMENT (continued)

2019

$’000 2018

$’000 Trade and other payables are expected to be paid as follows:

Less than 6 months (note 16) 36,523 22,713 More than 6 months (note 16) 4,255 -

40,778 22,713

e) Fair value measurements

i) Fair value hierarchy The Group uses various methods in estimating the fair value of financial instruments. AASB 13 Fair Value Measurement requires disclosure of fair value measurements by level in accordance with the following fair value measurement hierarchy: a) Quoted prices (unadjusted) in active markets for identical assets or liabilities (level 1) b) Inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly

(as prices) or indirectly (derived from prices) (level 2); and c) Inputs for the asset or liability that are not based on observable market data (unobservable inputs) (level 3) The following table presents the Group’s financial assets and financial liabilities measured and recognised at fair value at 30 June 2019 and 30 June 2018.

2019 Level 1 $’000

Level 2 $’000

Level 3 $’000

Total $’000

Assets

Listed investments 1,286 - - 1,286

Total assets 1,286 - - 1,286

2018

Assets

Listed investments 4,018 - - 4,018

Total assets 4,018 - - 4,018

ii) Valuation techniques

The fair value of financial instruments traded in active markets is based on quoted market prices at the end of the reporting period. The quoted market price used for financial assets and liabilities held by the Group is the closing price. These instruments are included in level 1.

Specific valuation techniques used to value financial instruments include:

The use of quoted market prices or dealer quotes for similar instruments; Other techniques, such as discounted cash flow analysis, are used to determine the fair value for the remaining financial instruments.

NOTES TO THE FINANCIAL STATEMENTS CONTINUED

ANNUAL REPORT 2019 ALTURA 55

F-68

3. DISCONTINUED OPERATIONS

a) Description During the reporting period the board has made several information packages available to various groups for the purpose of attracting offers for the sale of the Tabalong tenements in Kalimantan, Indonesia. The board considers that the presentation of the Tabalong Group as held for sale confirms its intent to dispose of these assets. Financial information relating to the discontinued operation for the period to the date of disposal is set out below.

b) Financial performance and cash flow information of discontinued operations The financial performance and cash flow information presented are for the year ending 30 June 2019.

2019 $’000

2018 $’000

Revenue - - Expenses (142) (104)

Loss before income tax (142) (104) Loss after income tax of discontinued operation (142) (104) Loss from discontinued operations after income tax (142) (104)

Net cash Inflow/(outflow) from financing activities 2 (21) Net increase/(decrease) in cash generated by the division 2 (21)

c) Carrying amounts of assets and liabilities classified as held for sale

The carrying amounts of assets and liabilities as at 30 June 2019 were:

Cash 19 Other receivables * 2,899 Property, plant and equipment 5 Exploration at cost 6,980

Total assets of disposal group held for sale 9,903

Other payables 206 Borrowings ^ 1,699

Total liabilities of disposal group held for sale 1,905

^ These funds were advanced by the minority shareholder in the Tabalong coal project in accordance with the loan agreement. The facility has no defined repayment term. * These unsecured amounts are due from a minority party in the Tabalong coal project. Their recoverability is dependent on the commercial exploitation of certain mining tenements in the project. The timing of which is currently unknown, and as such the amounts have not been discounted. No losses are expected on these amounts.

NOTES TO THE FINANCIAL STATEMENTS CONTINUED

ALTURA ANNUAL REPORT 201956

F-69

4. SEGMENT INFORMATION

The Group reports the following operating segments to the chief operating decision maker, being the Board of Directors of Altura Mining Limited, in assessing performance and determining the allocation of resources. Unless otherwise stated, all amounts reported to the Board are determined in accordance with accounting policies that are consistent to those adopted in the annual financial statements of the Group. The lithium mining segment was previously under construction and since commercial production was achieved in March 2019, has derived its revenue from the sale of spodumene concentrate to customers. The exploration services segment provides a range of drilling services to its customers, predominately mining and exploration companies. The mineral exploration segment revenue comprises royalties received and interest earned on funds raised to carry out the exploration activities. An internally determined service rate is set for all intersegment transactions. All such transactions are eliminated on consolidation of the Group’s financial statements.

Lithium mining $’000

Exploration services

$’000

Mineral exploration

$’000

Eliminations

$’000

Total

$’000 2019 Revenue

External sales 37,802 1,597 - - 39,399 Other income 2 115 55 - 172 Other segments - 1,333 - (1,333) -

Total segment revenue 37,804 3,045 55 (1,333) 39,571

Unallocated revenue -

Total consolidated revenue 39,571

Segment result 6,290 (1,018) (6,919) - (1,647)

Other segments Unallocated expenses net of unallocated revenue

-

Profit / (loss) before income tax and finance costs

(1,647)

Finance costs (24,637) Income tax revenue/(expense) (287)

Profit / (loss) after income tax (26,571) Profit / (loss) from discontinued operations

(142)

Net profit / (loss) for the year (26,713)

Assets and liabilities

Segment assets 321,925 1,253 3,722 - 326,900 Unallocated assets 9,903

Total assets 336,803

Segment liabilities 232,331 1,002 719 - 234,052 Unallocated liabilities 1,906

Total liabilities 235,958

Other segment information

Capital expenditure 66,535 76 10 - 66,621 Exploration expenditure 1,670 - - - 1,670 Depreciation and amortisation 3,883 128 190 - 4,201

NOTES TO THE FINANCIAL STATEMENTS CONTINUED

ANNUAL REPORT 2019 ALTURA 57

F-70

4. SEGMENT INFORMATION (continued)

Lithium mining $’000

Exploration services

$’000

Mineral exploration

$’000

Eliminations

$’000

Total

$’000 2018 Revenue

External sales - 771 - - 771 Other income - 457 447 - 904 Other segments - 94 - (94) -

Total segment revenue - 1,322 447 (94) 1,675

Unallocated revenue -

Total consolidated revenue 1,675

Segment result - (524) (6,231) - (6,755)

Other segments - Unallocated expenses net of unallocated revenue

-

Profit / (loss) before income tax and finance costs

(6,755)

Finance costs (6,366) Income tax revenue / (expense) 408

Profit / (loss) after income tax (12,713) Profit / (loss) from discontinued operations

(104)

Net profit / (loss) for the year (12,817)

Assets and liabilities

Segment assets 236,968 1,442 21,195 - 259,605 Unallocated assets 9,271

Total assets 268,876

Segment liabilities 170,670 998 2,018 - 173,676 Unallocated liabilities 1,846

Total liabilities 175,522

Other segment information

Capital expenditure 162,075 - 134 - 162,209 Exploration expenditure - - 369 - 369 Depreciation and amortisation - 97 190 - 287

NOTES TO THE FINANCIAL STATEMENTS CONTINUED

ALTURA ANNUAL REPORT 201958

F-71

4. SEGMENT INFORMATION (continued)

Geographical segments The Group’s geographical segments are determined based on the location of the Group’s assets.

2019 Australia $’000

Indonesia $’000

Other $’000

Eliminations $’000

Total $’000

Revenue External sales 37,802 1,597 - - 39,399 Other income 57 115 - - 172 Other segments - 1,333 - (1,333) -

Total segment revenue 37,859 3,045 - (1,333) 39,571

Unallocated revenue -

Total revenue 39,571

Segment assets 325,509 1,258 133 - 326,900 Unallocated assets 9,903

Total assets 336,803

Segment liabilities 232,862 1,002 188 - 234,052 Unallocated liabilities 1,906

Total liabilities 235,958

Capital expenditure 66,621 - - - 66,621 Exploration expenditure 1,527 143 - - 1,670 Depreciation and amortisation 4,070 131 - - 4,201

2018 Australia $’000

Indonesia $’000

Other $’000

Eliminations $’000

Total $’000

Revenue External sales - 771 - - 771 Other income 447 457 - - 904 Other segments - 94 - (94) -

Total segment revenue 447 1,322 - (94) 1,675

Unallocated revenue -

Total revenue 1,675

Segment assets 256,489 2,899 217 - 259,605 Unallocated assets 9,271

Total assets 268,876

Segment liabilities 25,239 148,293 144 - 173,676 Unallocated liabilities 1,846

Total liabilities 175,522

Capital expenditure 162,209 - - - 162,209 Exploration expenditure 229 140 - - 369 Depreciation and amortisation 188 99 - - 287

The Group has a number of customers to whom it provides spodumene product and exploration services. The mining group supplies two external customers in this segment who account for 52% (US$13,800,000) and 30% (US$7,850,000) of mining group’s external revenue (2018: Nil) The exploration services group supplies two external customers in this segment who account for 61% (US$348,000) and 12% (US$68,000) of external revenue (2018: 46%).

NOTES TO THE FINANCIAL STATEMENTS CONTINUED

ANNUAL REPORT 2019 ALTURA 59

F-72

2019

$’000 2018 $’000

5. PROFIT / (LOSS) FROM ORDINARY ACTIVITIES (a) Revenue Revenue from sales of product 37,802 - Revenue from mining services 792 772 Revenue from royalties 805 393 Total sales revenues from ordinary activities 39,399 1,165

(b) Other revenues Interest received 55 447 Profit on sale of assets 115 48 Other revenue 2 15 Total other revenues from ordinary activities 172 510

(c) Cost of sales Mining and processing costs 29,849 - Royalty expenses 6,103 - Depreciation and amortisation 4,013 99 Product inventory movement (8,850) - Mining services drilling costs 846 673 Total cost of sales 31,961 772

(d) Other expenses Depreciation of plant & equipment 188 188 Total other expenses from ordinary activities 188 188

(e) Net foreign exchange loss

The net foreign exchange loss is unrealised and relates to the revaluation of the US$ funding facility and other US$ denominated funds held by the Group.

(f) Employee benefits expense Employee share scheme expense 1,217 1,796 Bonus paid by way of issue of shares to directors and staff 125 34 Other employee benefits expense 4,383 1,860

Total employee benefits expense 5,725 3,690

NOTES TO THE FINANCIAL STATEMENTS CONTINUED

ALTURA ANNUAL REPORT 201960

F-73

6. EARNINGS / (LOSS) PER SHARE

2019 cents per share

2018 cents per share

(a) Basic earnings / (loss) per share From continuing operations, attributable to the ordinary equity holders of the Company (1.39) (0.73)

From discontinued operations (0.01) (0.01) Total basic earnings per share attributable to the ordinary equity holders of the Company

(1.40) (0.74)

(b) Diluted earnings / (loss) per share

From continuing operations, attributable to the ordinary equity holders of the Company (1.39) (0.73)

From discontinued operations (0.01) (0.01)

Total basic earnings per share attributable to the ordinary equity holders of the Company

(1.40) (0.74)

2019 number

2018 number

(c) Weighted average number of ordinary shares used as the denominator in calculating the basic and diluted earnings per share. 1,912,252,661 1,743,518,956

2019 $’000

2018 $’000

(d) Earnings used in the calculation of basic earnings per share reconciles to net profit in the income statement as follows:

Net profit / (loss) (26,566) (12,803) Less - profit /(loss) from discontinued operations (99) (77)

Earnings used in the calculation of basic EPS (26,665) (12,880)

NOTES TO THE FINANCIAL STATEMENTS CONTINUED

ANNUAL REPORT 2019 ALTURA 61

F-74

2019

$’000 2018 $’000

7. INCOME TAX EXPENSE (a) The components of tax expense comprise: Current Tax Current year - - Adjustments in respect of prior periods 287 (408) Deferred Tax Current year deferred tax - - Total income tax expense / (benefit) per income statement 287 (408)

(b) Income tax expense / (benefit) is attributable to: Profit / (loss) from continuing operations 287 (408) Profit / (loss) from discontinued operations - - 287 (408)

(c) The prima facie tax on profit / (loss) before income tax is reconciled to the

income tax as follows:

Profit / (loss) from continuing operations (26,284) (13,121) Profit / (loss) from discontinued operations (142) (104) Profit / (loss) before tax (26,426) (13,225)

Income tax calculated at the Australian rate of 30% (2018 - 27.5%) (7,928) (3,637) Increase in income tax due to: Non-deductible expenses 1,327 413 Share compensation costs 403 503 Effect of current year tax losses not recognised 6,199 2,721 Under / (over) provision in prior year 286 (408)

Income tax expense / (benefit) 287 (408)

Deferred tax assets arising from tax losses are only recognised to the extent that

there are equivalent deferred tax liabilities. The remaining tax losses have not been recognised as an asset because recovery of the losses is not regarded as probable:

Tax losses not recognised - revenue at 30% (2018 - 27.5%) 20,442 12,016

(d) Tax consolidation system

Legislation to allow groups, comprising a parent entity and its Australian resident wholly-owned entities, to elect to consolidate and be treated as a single entity for income tax purposes was substantively enacted on 21 October 2002. Altura Mining Limited and certain of its wholly-owned Australian subsidiaries are eligible to consolidate for tax purposes and have elected to form an income tax group under the Tax Consolidation Regime effective 1 July 2005. The implementation of the tax consolidation group was formally recognised by the ATO on 22 July 2005 with start date for income tax consolidation 1 July 2005 and Altura Mining Limited as the head entity of the group. Entities within the tax-consolidated group have entered into a tax-sharing agreement with the head entity. Under the terms of this agreement, Altura Mining Limited and each of the entities in the tax consolidated group has agreed to pay a tax equivalent payment to or from the head entity, based on standalone tax payer basis. Such amounts are reflected in amounts receivable from or payable to other entities in the tax consolidated group.

NOTES TO THE FINANCIAL STATEMENTS CONTINUED

ALTURA ANNUAL REPORT 201962

F-75

2019

$’000 2018 $’000

8. CASH AND CASH EQUIVALENTS

Cash at bank and on hand 9,494 28,761

9. TRADE AND OTHER RECEIVABLES

Current Trade and other receivables 3,195 3,323 Provision for doubtful debts (1,046) (1,081) 2,149 2,242

0-30

days $000

31-60 days $000

61-90 days $000

90+ days $000

Total $000

2019 Consolidated 1,847 104 - 198 2,149 2018 Consolidated 1,732 61 54 395 2,242

As at 30 June 2019, $302,000 (2018 $510,000) trade receivables were past due.

2019 $’000

2018 $’000

10. INVENTORIES

Consumables stores – at cost 5,746 1 Product and processing stock – at cost 14,974 - 20,720 1

Movement in product and processing stock inventory of $8.85m as a result of production activity following the declaration of commercial production from March 2019 has been allocated against mining and processing costs in the determination of cost of sales. Additional costs have been allocated to inventory from mine development costs on the determination of commercial production.

11. HELD TO MATURITY INVESTMENTS

Term deposits 78 52 78 52

The term deposits are held to their maturity of less than one year and carry a weighted average fixed interest rate of 1.0% (2018: 1.0%). Due to their short-term nature their carrying value is assumed to approximate their fair value. Information about the Group’s exposure to credit risk is disclosed in Note 2.

NOTES TO THE FINANCIAL STATEMENTS CONTINUED

ANNUAL REPORT 2019 ALTURA 63

F-76

2019

$’000 2018 $’000

12. OTHER CURRENT ASSETS

Financial assets (security deposits) 58 118 Prepayments 1,097 266 1,155 384

13. FINANCIAL ASSETS

Listed investments at fair value Carried forward from previous year 4,018 824 Changes in fair value (2,732) 3,194

Total listed investments at fair value 1,286 4,018

In November 2012 the Group acquired a 14.7% interest in Lithium Corporation, Nevada USA by way of a non-brokered private placement. Lithium Corporation is quoted on the US OTCBB (Over The Counter Bulletin Board).

14. PROPERTY, PLANT, EQUIPMENT AND MINE PROPERTIES

Property plant and

equipment $’000

Mine properties in production

$’000

Mine properties in development

$’000

Total

$’000 2019 Gross carrying amount Balance at 30 June 2018 9,472 - 221,562 231,034

Additions 455 6,293 55,804 62,552 Increase/(decrease) in provision for rehabilitation # - 8,076 - 8,076

Transfers 1,393 275,973 (277,366) - Exchange difference 290 - - 290 Disposals (1,490) - - (1,490)

Balance at 30 June 2019 10,120 286,424 - 300,462 Accumulated depreciation Balance at 30 June 2018 8,778 - - 8,778

Depreciation expense 307 3,906 - 4,213 Exchange difference 280 - - 280 Disposals (1,489) - - (1,489)

Balance at 30 June 2019 7,876 3,906 - 11,782 Net book value as at 30 June 2019 2,244 286,436 - 288,680

# An increase or decrease is created to mine development asset from any movement in provision for rehabilitation costs to the extent that the movement in provision relates to future production activities

NOTES TO THE FINANCIAL STATEMENTS CONTINUED

ALTURA ANNUAL REPORT 201964

F-77

14. PROPERTY, PLANT, EQUIPMENT AND MINE PROPERTIES (continued)

Property plant and

equipment $’000

Mine properties in production

$’000

Mine properties in development

$’000

Total

$’000 2018 Gross carrying amount Balance at 30 June 2017 9,228 - 59,353 68,581

Additions 134 - 162,209 162,343 Exchange difference 200 - - 200 Disposals (90) - - (90)

Balance at 30 June 2018 9,472 - 221,562 231,034 Accumulated depreciation Balance at 30 June 2017 8,378 - - 8,378

Depreciation expense 287 - - 287 Exchange difference 203 - - 203 Disposals (90) - - (90)

Balance at 30 June 2018 8,778 - - 8,778 Net book value as at 30 June 2018 694 - 221,562 222,256

2019 $’000

2018 $’000

15. EXPLORATION AND EVALUATION

Exploration and evaluation expenditure at cost: Carried forward from previous year 1,595 1,226 Transfer to mine development costs - (932) Incurred during the year 2,218 1,662 Transferred to assets classified as held for sale (548) (361)

3,265 1,595 Written off during the year - -

Total exploration and evaluation expenditure 3,265 1,595

The recovery of expenditure carried forward is dependent upon the discovery of commercially viable mineral and other natural resource deposits, their development and exploitation, or alternatively their sale. The Company's title to certain mining tenements is subject to Ministerial approval and may be subject to successful outcomes of native title issues.

NOTES TO THE FINANCIAL STATEMENTS CONTINUED

ANNUAL REPORT 2019 ALTURA 65

F-78

2019

$’000 2018 $’000

16. TRADE AND OTHER PAYABLES

Trade payables and accruals 18,920 22,713 Accrued interest on loan note facility 12,248 - Prepaid revenue # 9,610 - 40,778 22,713

# In November 2018, Jiangxi Ganfeng Lithium Co. Ltd provided a prepayment of US$11 million for the future supply of spodumene concentrate. The repayment is made as shipments are completed by returning 30% of the proceeds received. The prepayment is forecast to be completed during the third quarter of FY 2020.

17. BORROWINGS

Current borrowings Loan note facility 179,100 - Other 512 -

Total current borrowings 179,612 145,887

Non-current borrowings Loan note facility - 145,887

Total non-current borrowings - 145,887

Total borrowings 179,612 145,887 Reconciliation borrowings - loan note facility

Opening balance 145,887 - Loan notes issued^ 21,661 141,075 Interest capitalised 2,141 17,706 Exchange rate differences 10,036 11,088 Amortisation of transaction costs 7,031 - Transaction costs incurred (7,656) (23,982)

Total borrowings – loan note facility 179,100 145,887

^ On 27 July 2017, loan notes were issued to lenders Magy LLC, Pala Investments Limited and CarVal Investors LLC (the facility). On 10 September 2018 the facility was extended providing additional funding under the same terms and conditions as the original facility. The loan notes are available for trade and the current loan note holders are Magy LLC, CarVal Investors LLC, Nomura Corporate Funding Americas, LLC and Clearwater Capital Partners Fund V, L.P. The interest rate was 14% p.a. for the first 18 months of the loan and 15% pa thereafter. The loan is for a 3-year term expiring in August 2020. No payments other than interest are due until the loan termination date. The loan is secured over all Altura Lithium Operations (ALO) assets, shares in ALO, AJM bank accounts and certain AJM receivables. The Company had the option to capitalise the first two interest payments into the facility until 6 February 2019. Accrued interest of $19.8 million has been capitalised to the end of the year. Transaction costs capitalised are amortised over the remaining life of the financial instrument. As part of the transfer of costs from mine development at cost to mine properties – production on achievement of commercial production, $5.1m was transferred to the loan note facility as transaction costs. These transaction costs were initially recorded to mine development but instead relate to transaction costs incurred on recognition of the loan note facility. There was no impact to profit or loss.

NOTES TO THE FINANCIAL STATEMENTS CONTINUED

ALTURA ANNUAL REPORT 201966

F-79

17. BORROWINGS (continued)

Under the terms of the facility, the Company is required to comply with the following financial covenants:

For periods ending on 30 September 2018, the Company shall ensure that the net debt to defined EBITDA ratio shall not exceed the ratio of 2:1. For quarterly reporting periods after the 30 September 2018 the net debt to defined EBITDA ratio shall not exceed the ratio of 1.5:1.

The Group breached the financial covenant for each quarter during the year. As at 30 June 2019 the Group did not hold an unconditional right to defer settlement of the loan, and the loan was therefore required to be reclassified as currents on this basis. Subsequent to the year end, the Group received a full written waiver of the financial breach from the lenders.

2019 $’000

2018 $’000

18. SHORT TERM PROVISIONS

Employee benefits 1,669 1,158 1,669 1,158

Movements in provisions Short term employee benefits

Opening balance 1,158 842 Provision increase / (decrease) 1,247 563 Expense incurred (736) (247)

Balance at year end 1,669 1,158

The aggregate employee entitlement liability recognised and included in the financial statements is as follows:

Provision for employee entitlements:

Current 1,669 1,158 Total 1,669 1,158

19. CURRENT TAXATION & DEFERRED TAX LIABILITIES & ASSETS

(a) Liabilities Current Income tax paid / payable - - Non-Current Deferred tax liability comprises: Tax allowances relating to exploration 949 4,918 Property, plant & equipment 28,563 6,961 Other 59 9 29,571 11,888 (b) Assets Non-Current Deferred assets comprise: Provisions 4,083 1,399 Revenue losses 42,486 22,204 Revenue losses not recognised (20,442) (11,014) Unrealised foreign exchange loss 2,651 124 Other 793 (825) 29,571 11,888

NOTES TO THE FINANCIAL STATEMENTS CONTINUED

ANNUAL REPORT 2019 ALTURA 67

F-80

2019

$’000 2018 $’000

20. REHABILITATION PROVISION

Non-current provision Rehabilitation and demobilisation 11,994 3,918 11,994 3,918

Movements in provisions Rehabilitation and demobilisation

Opening balance 3,918 3,918 Provision increase/(decrease) 8,076 - Expense incurred - -

Balance at year end 11,994 3,918

Directors have reviewed the rehabilitation provision and are confident that inputs into the current calculation can be relied upon. Refer to Note 1n (d) and Note 1p (i) for accounting policies in relation to the rehabilitation provision.

21. CONTRIBUTED EQUITY

Issued capital 2,125,462,476 (2018: 1,819,866,474) ordinary shares issued and fully paid 233,955 192,893

2019 2018 Number $’000 Number $’000 Fully paid ordinary shares

Balance at the beginning of the financial year 1,819,866,474 192,893 1,541,678,000 146,556 Issue of shares to directors and staff # - - 150,000 34 Issue of shares on vesting of performance rights ## 8,000,000 2,944 3,800,000 356 Shares issued in lieu of loan note fees - - 74,644,513 11,521 Share placement / securities purchase plan ### 297,596,002 38,687 136,973,685 26,025 Exercise of Warrants and Unlisted Options - - 64,620,276 9,799 Share issue costs - (569) - (1,398)

Balance at the end of the financial year 2,125,462,476 233,955 1,819,866,474 192,893

Fully paid ordinary shares carry one vote per share and carry the rights to dividends. Ordinary shares have no par value # Nil shares were issued to directors and other key management personnel in 2019 (30 June 2018: nil). ## 5,200,000 shares were issued to directors and other key management personnel in 2019 on the vesting of performance rights (30 June 2018: 2,600,000). ### The Company conducted a share placement and securities purchase plan offering during February and March 2019 at an issue price of 13.0 cents per share. A total of 297.596 million shares were issued as follows: - Placement of 69.528 million shares to institutional and sophisticated investors on 13 February 2019. - Securities purchase plan issue of 107.594 million shares to existing eligible shareholders on 20 March 2019. - Further placement of 120.474 million shares on 26 March 2019 to related parties (following shareholder approval). Fully paid ordinary shares carry one vote per share and carry the rights to dividends. Ordinary shares have no par value.

NOTES TO THE FINANCIAL STATEMENTS CONTINUED

ALTURA ANNUAL REPORT 201968

F-81

21. CONTRIBUTED EQUITY (continued)

Option and performance rights reserve Movements in option and performance rights reserve

2019 $’000

2018 $’000

Opening balance 1,602 162 Share based payment expense following the issue of performance rights 1,217 1,796 Performance rights exercised and transferred to contributed equity (2,819) (356)

Balance at year end - 1,602

The option and performance rights reserve records items recognised as expenses on the valuation of share options and performance rights. Foreign currency translation reserve Movements in foreign currency translation reserve Opening balance (1,588) 139

Foreign currency translation differences (2,488) (1,727) Balance at year end (4,076) (1,588)

The foreign currency translation reserve records exchange differences arising on translation of a foreign controlled subsidiary. Fair value reserve Movements in fair value reserve Opening balance 3,488 294

Change in fair value of financial assets (2,732) 3,194 Balance at year end 756 3,488

The change in fair value reserve records valuation differences arising on the market valuation of financial assets at fair value through other comprehensive income. Refer to note 13 for reconciliation of movements in the year. Capital management Capital consists of ordinary share capital, retained earnings, reserves and net debt. The Board's policy is to maintain a strong capital base in order to maintain investor, creditor and market confidence and to sustain future development of the business. There were no changes to the consolidated entity's approach to capital management during the year. Other than obtaining consent from existing loan note holders, neither the Company nor any of its subsidiaries are subject to externally imposed capital requirements. The Board effectively manages the Group’s capital by assessing the Group’s financial risks and adjusting its capital structure in response to changes in these risks and in the market. These responses include the management of debt levels and by share issues. Please refer to note 17 for further details of the loan facility.

NOTES TO THE FINANCIAL STATEMENTS CONTINUED

ANNUAL REPORT 2019 ALTURA 69

F-82

22. SHARE BASED PAYMENTS

a) Performance Rights In 2014 the Company approved a Long-Term Incentive Plan (LTIP) under which employees and directors of the Group may be issued on a discretionary basis with performance rights over ordinary shares of Altura Mining Limited. The purpose of this plan is to:

assist in the reward, retention and motivation of employees and directors; align the interests of employees and directors more closely with the interests of shareholders by providing an opportunity for employees and directors to receive an equity interest in the form of rewards; and provide employees and directors with the opportunity to share in any future growth in value of the Company.

The Performance Rights lapse when employment ceases with Altura Mining Limited. The Performance Rights have been granted for no consideration, and no amount is payable on the vesting or exercising of the Performance Rights. All rights subject to the LTIP carry no rights to dividends and no voting rights, until converted into ordinary shares. There were no outstanding Performance Rights granted under the LTIP as at 30 June 2019.

b) Bonus shares

2019 $’000

2018 $’000

During the year, the Company had the following share based payments expenses:

Performance rights (Note 21) 1,217 1,796 Bonus shares 125 34

1,342 1,830

23. KEY MANAGEMENT PERSONNEL COMPENSATION

a) Names and positions held of key management personnel in office at any time

during the financial year are: Directors James Brown Managing Director Paul Mantell Executive Director Allan Buckler Non-Executive Director Dan O’Neill Non-Executive Director BT Kuan Non-Executive Director Zhao Tong Non-Executive Director (resigned 18 April 2019) Key Management Personnel Phil Robinson Chief Operating Officer (appointed in February 2019, resigned August 2019) Chris Evans Chief Operating Officer (resigned in February 2019) Noel Young Group Financial Controller Damon Cox Company Secretary

b) Key management personnel remuneration

Short-term employee benefits 2,109,242 1,904,082 Long-term employee benefits - - Post-employment benefits 124,217 106,523 Termination benefits 62,716 - Share based payments 622,750 952,841 2,918,925 2,963,446

NOTES TO THE FINANCIAL STATEMENTS CONTINUED

ALTURA ANNUAL REPORT 201970

F-83

23. KEY MANAGEMENT PERSONNEL COMPENSATION (continued)

c) Performance Rights

Number of performance rights held by key management personnel The number of performance rights in the Company held during the financial year by each director of Altura Mining Limited and other key management personnel of the Group, including their personally related parties, are set out below.

2019

Balance at the start of

the year

Granted as compensation

Shares issued/ rights lapsed

Balance at the end of the year

Vesting 30 Nov 2019

J Brown 2,000,000 - 2,000,000 - - P Mantell 1,000,000 - 1,000,000 - - A Buckler - - - - - D O’Neill - - - - - B Kuan - - - - - Z Tong - - - - - C Evans # 1,000,000 - 1,000,000 - - P Robinson ^ 800,000 - 800,000 - - N Young 200,000 - 200,000 - - D Cox 200,000 - 200,000 - -

# C Evans resigned as Chief Operating Officer effective from February 2019 ^ P Robinson appointed Chief Operating Officer effective February 2019

2018

Balance at the start of

the year

Granted as compensation

Shares issued/ rights lapsed

Balance at the end of the year

Vesting 30 Nov 2018

J Brown 1,000,000 2,000,000 (1,000,000) 2,000,000 2,000,000 P Mantell 500,000 1,000,000 (500,000) 1,000,000 1,000,000 A Buckler 100,000 - (100,000) - - D O’Neill 100,000 - (100,000) - - B Kuan 100,000 - (100,000) - - Z Tong - - - - - C Evans 400,000 1,000,000 (400,000) 1,000,000 1,000,000 N Young 200,000 200,000 (200,000) 200,000 200,000 D Cox 200,000 200,000 (200,000) 200,000 200,000

Details of performance rights awarded as compensation and shares issued on the vesting of the rights, together with terms and conditions of the rights, can be found in the Directors’ Report and under this note.

NOTES TO THE FINANCIAL STATEMENTS CONTINUED

ANNUAL REPORT 2019 ALTURA 71

F-84

23. KEY MANAGEMENT PERSONNEL COMPENSATION (continued)

d) Share holdings

Number of shares held by key management personnel The number of shares in the Company held during the financial year by each director of Altura Mining Limited and other key management personnel (KMP) of the Group, including their personally related parties, are set out below.

Balance at start

of the year Purchased /

(sold) Vesting of

performance rights

Placement & Share Purchase

Plan

Balance at the end of the year

2019

J Brown 28,518,301 (1,200,000) 2,000,000 770,000 30,088,301 P Mantell 33,503,084 - 1,000,000 770,000 35,273,084 A Buckler 194,839,756 - - 116,933,615 311,773,371 D O’Neill 13,633,336 - - - 13,633,336 B Kuan 21,000,000 - - 2,000,000 23,000,000 Z Tong - - - - - C Evans # 1,000,000 (1,500,000) 1,000,000 - 500.000 P Robinson ^ 200,000 - 800,000 - 1,000,000 N Young 17,574,411 - 200,000 867,390 18,641,801 D Cox 1,675,000 - 200,000 - 1,875,000

J Brown 27,518,301 - 1,000,000 - 28,518,301 P Mantell 33,003,084 - 500,000 - 33,503,084 A Buckler 177,293,692 17,446,064 100,000 - 194,839,756 D O’Neill 14,433,336 (900,000) 100,000 - 13,633,336 B Kuan 20,900,000 - 100,000 - 21,000,000 C Evans 1,400,000 (800,000) 400,000 - 1,000,000 N Young 17,174,411 - 200,000 - 17,574,411 D Cox 1,475,000 - 200,000 - 1,675,000 # C Evans resigned as Chief Operating Officer effective from January 2019

^ P Robinson appointed Chief Operating Officer effective from February 2019 24. INVESTMENTS IN OTHER ENTITIES

a) Joint operations Altura Mining Limited holds no interests in any joint operations or ventures.

NOTES TO THE FINANCIAL STATEMENTS CONTINUED

2018

ALTURA ANNUAL REPORT 201972

F-85

25. INTERESTS IN SUBSIDIARIES

The consolidated financial statements incorporate the assets, liabilities and results of the following wholly-owned subsidiaries in accordance with the accounting policy described in Note 1:

Country of incorporation Ownership interest

Name of entity

2019 %

2018 %

Altura Lithium Operations Pty Ltd Australia 100 100 Altura Drilling Pty Ltd Australia 100 100 Altura Minerals Pty Ltd Australia 100 100 Minvest Australia Pty Ltd Australia 100 100 Minvest International Corporation Mauritius 100 100 Altura Asia Pte Ltd Singapore 100 100 Altura Mining Philippines Inc. * Philippines 40 40 PT Asiadrill Bara Utama Indonesia 100 100 PT Altura Indonesia Indonesia 100 100 PT Minvest Mitra Pembangunan Indonesia 100 100 PT Cakrawala Jasa Pratama Indonesia 100 100 PT Minvest Jasatama Teknik Indonesia 100 100 PT Cybertek Global Utama Indonesia 100 100

* Altura Mining Limited through its wholly owned subsidiary, Altura Asia Pte Ltd holds 40% direct equity in Altura Mining Philippines Inc. This entity is considered a subsidiary as the Group has full economic and management rights. The consolidated financial statements incorporate the assets, liabilities and results of the following subsidiaries with non-controlling interests in accordance with the accounting policy described in Note 1:

Country of incorporation

Principal activities Parent ownership interest

Non-controlling interest

Name of entity 2019

% 2018

% 2019

% 2018

% PT Velseis Indonesia * Indonesia Mining services 50 50 50 50 PT Jasa Tambang Pratama # Indonesia Mining and exploration 70 70 30 30 PT Cahaya Permata Khatulistiwa # Indonesia Mining and exploration 70 70 30 30 PT Suryaraya Permata Cemerlang # Indonesia Mining and exploration 70 70 30 30 PT Suryaraya Cahaya Khatulistiwa # Indonesia Mining and exploration 70 70 30 30 PT Suryaraya Cahaya Cemerlang # Indonesia Mining and exploration 70 70 30 30 PT Suryaraya Permata Khatulistiwa # Indonesia Mining and exploration 70 70 30 30 PT Suryaraya Pusaka # Indonesia Mining and exploration 70 70 30 30 PT Kodio Multicom Indonesia Mining and exploration 56 56 44 44 PT Marangkayu Bara Makarti Indonesia Mining and exploration 56 56 44 44

Altura Mining Limited, Altura Lithium Operations Pty Ltd and Altura Minerals Pty Ltd are included within the tax consolidation group. # Altura Mining Limited through its wholly owned subsidiary, Altura Asia Pte Ltd holds 70% direct equity in these seven entities. * Altura Mining Limited through its wholly owned subsidiary, Minvest International Corporation holds 50% direct equity in PT Velseis Indonesia. This entity is considered a subsidiary as the Group has full management rights.

NOTES TO THE FINANCIAL STATEMENTS CONTINUED

ANNUAL REPORT 2019 ALTURA 73

F-86

25. INTERESTS IN SUBSIDIARIES (continued)

Summarised financial information Summarised financial information of the subsidiaries with non-controlling interests that are material to the consolidated entity are set out below: PT Velseis

Indonesia PT Suryaraya

Pusaka PT Kodio Multicom

PT Marangkayu Bara Makarti

$’000 $’000 $’000 $’000 2019 Summarised statement of financial position

Current assets 557 180 1,063 1,061 Non-current assets 341 1,685 915 1,792

Total assets 898 1,865 1,978 2,853 Current liabilities 270 - 1 5 Non-current liabilities (25) 1,262 876 1,720

Total liabilities 245 1,262 877 1,725

Net assets 653 603 1,101 1,128

Summarised statement of profit or loss and other comprehensive income

Revenue 793 - - - Expenses 802 - 3 5

Profit / (loss) before income tax expense (9) - (3) (5) Income tax expense / (benefit) - - - -

Profit / (loss) after income tax expense (9) - (3) (5)

Other comprehensive income 34 (6) (17) (15)

Total comprehensive income 25 (6) (20) (20)

Statement of cash flows Net cash from operating activities 89 1 - - Net cash used in investing activities - - - - Net cash used in financing activities - - - -

Net increase / (decrease) in cash and cash equivalents 89 1 - -

Other financial information Profit attributable to non-controlling interests 12 (2) (9) (9)

Accumulated non-controlling interest at the end of reporting period 297 (3) 11 23

NOTES TO THE FINANCIAL STATEMENTS CONTINUED

ALTURA ANNUAL REPORT 201974

F-87

25. INTERESTS IN SUBSIDIARIES (continued)

PT Velseis

Indonesia PT Suryaraya

Pusaka PT Kodio Multicom

PT Marangkayu Bara Makarti

$’000 $’000 $’000 $’000 2018 Summarised statement of financial position

Current assets 613 171 1,008 1,007 Non-current assets 300 1,599 867 1,700

Total assets 913 1,770 1,875 2,707 Current liabilities 216 - 1 5 Non-current liabilities 74 1,197 828 1,627

Total liabilities 290 1,197 829 1,632

Net assets 623 573 1,046 1,075

Summarised statement of profit or loss and other comprehensive income

Revenue 710 - - - Expenses 530 (1) (12) (20)

Profit / (loss) before income tax expense 180 1 12 20 Income tax expense / (benefit) - - - -

Profit / (loss) after income tax expense 180 1 12 20

Other comprehensive income 23 (4) (12) (11)

Total comprehensive income 203 (3) - 9

Statement of cash flows Net cash from operating activities (4) 1 - - Net cash used in investing activities - - - - Net cash used in financing activities - - - -

Net increase / (decrease) in cash and cash equivalents (4) 1 - -

Other financial information Profit attributable to non-controlling interests 101 1 - 4

Accumulated non-controlling interest at the end of reporting period 285 (1) 19 32

NOTES TO THE FINANCIAL STATEMENTS CONTINUED

ANNUAL REPORT 2019 ALTURA 75

F-88

26. RELATED PARTIES

Transactions within the wholly-owned Group The wholly-owned Group includes the ultimate parent entity in the wholly-owned Group, and wholly-owned controlled entities. The ultimate parent entity in the wholly-owned Group is Altura Mining Limited. During the year the parent entity provided financial assistance to its wholly owned and controlled entities by way of intercompany loans. The loans are unsecured, interest free and have no fixed term of repayment. Sales and purchases between related parties within the Group have been eliminated upon consolidation. There were no further sales or purchases from wholly-owned related parties during the financial year. Transactions other related parties During the year, Mr Allan Buckler a director of the Group provided an unsecured loan via his controlled entity Katsura Holdings Pte Ltd. The facility provided was for $15 million at an interest rate of 10% per annum. The loan facility converted into Securities to the nominee of Katsura at the rate of two (2) Shares and one (1) Option for every A$0.26 loaned by Katsura (these being the same terms as under the Placement) on the basis that the amount lent to the Company would have otherwise been utilised by Katsura to subscribe for Shares and Options in the Placement itself. The facility was provided on 5 February 2019 and was converted to shares on 26 March 2019 after shareholder approval. Details of the conversion of the loan facility was as follows:

o Loan amount $15,000,000 o Interest at 10% pa $201,370 o Total amount $15,201,370 o 13 cents per share and 1 option for every 2 shares subscribed o Securities issued

Shares 116,933,615 Options 58,466,808

27. NOTES TO STATEMENT OF CASH FLOWS

a) For the purpose of the statement of cash flows, cash includes cash on hand and in banks, and investments in money market instruments, net of outstanding bank overdrafts. Cash at the end of the financial year as shown in the statements of cash flows is reconciled to the related items in the balance sheet as follows:

2019 $’000

2018 $’000

Cash at bank and on hand (Note 8) 9,494 28,761 Cash in assets classified as held for sale 19 18 Cash per statement of cash flows 9,513 28,779

Reconciliation to Statement of Cash Flows For the purposes of the Statement of Cash Flows, cash and cash equivalents comprise the following at 30 June:

Cash at bank and on hand 9,513 28,779 Short-term deposits - - Cash at bank and on hand 9,513 28,779

NOTES TO THE FINANCIAL STATEMENTS CONTINUED

ALTURA ANNUAL REPORT 201976

F-89

2019 $’000

2018 $’000

27. NOTES TO STATEMENT OF CASH FLOWS (continued)

b) Reconciliation of operating profit / (loss) after income tax to net cash used in operating activities

Operating loss after income tax (26,713) (12,817)

Adjustments for non-cash income and expense items:

2019 $’000

2018 $’000

Option and share pricing 1,217 1,796

Bonus paid by way of issue of shares to directors and staff 125 34 Loan facility fees 7,605 - Depreciation of property, plant and equipment 4,201 287 Interest expensed 10,566 - Foreign currency exchange rate movement 8,620 2,815 (Increase) / decrease in current tax prepaid - 127

Changes in assets and liabilities:

(Increase) / decrease in receivables 93 1,094 (Decrease) / increase in other creditors and accruals 18,065 948 Increase in inventories (9,935) - (Increase) / decrease in deposits and prepayments (771) (51) Increase / (decrease) in current provisions 511 316

Net cash used in operating activities 13,584 (5,451)

c) Net debt reconciliation

Net debt Cash and cash equivalents 9,513 28,779 Borrowings – repayable within one year (512) - Borrowings – repayable after one year (179,100) (145,887) Net debt (170,099) (117,108)

Cash and liquid investments 9,513 28,779 Gross debt - fixed interest rate (179,612) (145,887) Gross debt - variable interest rate - - Net debt (170,099) (117,108)

Cash and cash equivalents

Borrowings due within 1 year

Borrowings due after 1 year

Total

Net debt as at 30 June 2018 28,779 - (145,887) (117,108) Cash flows (19,351) (512) (19,520) (39,383) Foreign exchange adjustments 85 - (10,036) (9,951) Other non-cash movements - - (3,657) (3,657) Net debt as at 30 June 2019 9,513 (512) (179,100) (170,099)

d) Acquisition of entities The Group did not acquire any interest in entities during the year.

NOTES TO THE FINANCIAL STATEMENTS CONTINUED

ANNUAL REPORT 2019 ALTURA 77

F-90

2019 $’000

Parent

2018 $’000

Parent 28. PARENT ENTITY DISCLOSURE

(a) Summary of financial information

The individual financial statements for the parent entity show the following aggregate amounts:

Balance sheet Current assets 1,960 14,999 Total assets 141,950 113,063 Current liabilities 523 447 Total liabilities 523 447 Net assets 141,427 112,616

Equity Contributed equity 233,955 192,893 Reserves - 1,602 Retained profits / (accumulated losses) (92,528) (81,879) Total shareholder equity 141,427 112,616

Loss for the year (10,649) (35,597) Total comprehensive loss for the year (10,649) (35,597) (b) Contingent liabilities Contingent liabilities are disclosed in Note 31. (c) Contractual commitments No later than one year 55 93 Later than one year and not later than five years 3 58 Later than five years - - 58 151

2019 $’000

2018 $’000

29. AUDITORS’ REMUNERATION

Amount paid or payable for the audit or review of the financial report 122 121 122 121

NOTES TO THE FINANCIAL STATEMENTS CONTINUED

ALTURA ANNUAL REPORT 201978

F-91

30. SUBSEQUENT EVENTS

Subscription and Cooperation Agreement On 23 July 2019 Altura announced that it had signed a subscription and cooperation agreement with Shanshan Forever International Co., Limited. The agreement raised A$22.4 million in proceeds, which were received on 7 August 2019. Under the terms of the agreement Shanshan is entitled to appoint a director to the Altura board, provided that their relevant interest in Altura shares does not fall below 12.5 per cent for more than 30 consecutive days. New Offtake Agreements On 9 July 2019 Altura announced that it had entered into a new offtake agreement with Shandong Ruifu Lithium Industry Co., Ltd for 35,000 tonnes per annum (tpa). At the same time Altura advised that it had reached agreement with Shaanxi J&R Optimum Energy Co., Ltd for the termination of the remaining 50,000 tpa under that offtake agreement. On 1 August 2019 Altura announced that it had entered into a new offtake agreement with Guangdong Weihua Corporation for 50,000 tpa. At the same time Altura advised that it had reached agreement with Lionergy Limited to reduce its tonnage from 100,000 tpa to 65,000 tpa. Loan Note Facility The Group breached the financial covenant on the loan note facility (Note 17) for each quarter during the year, the respective covenant is based on an annual net debt to EBITDA ratio, the calculation of this ratio is based on the current operating quarter results added to the previous 3 operating quarters in order to deliver an annual result. For quarterly reporting periods after the 30 September 2018 the net debt to defined EBITDA ratio shall not exceed the ratio of 1.5:1.

As at 30 June 2019 the Group did not hold an unconditional right to defer settlement of the loan, and the loan was therefore required to be reclassified as current on this basis. Subsequent to the year end, the Group received a full written waiver of the financial breach from the lenders.

31. CONTINGENT LIABILITIES Details and estimates of maximum amounts of contingent liabilities for which no provision is included in the financial statements are as follows:

2019 $’000

2018 $’000

The bankers of the Group and parent entity have issued undertakings and guarantees to the DME (Northern Territory Department of Mines and Energy) and various other entities.

78 53

A subsidiary of the Group has entered into a conditional loan agreement No losses are anticipated in respect of any of the above contingent liabilities.

NOTES TO THE FINANCIAL STATEMENTS CONTINUED

ANNUAL REPORT 2019 ALTURA 79

F-92

32. COMMITMENTS

In order to maintain an interest in the mining and exploration tenements in which the Group is involved, the Group is committed to meeting the conditions under which the tenements were granted and the obligations of any joint venture agreements. The timing and amount of exploration expenditure commitments and obligations of the Group are subject to the minimum expenditure commitments required by the relevant State Departments of Minerals and Energy, and may vary significantly from the forecast based upon the results of the work performed which will determine the prospectivity of the relevant area of interest. One of the Group's subsidiaries has contracted to provide up to a US$4 million facility to a minority party in the Tabalong coal project. The provision of the facility is contingent on project milestones being achieved. The facility will be repaid in accordance with the loan agreement between the parties. The likelihood of this proceeding is highly probable. a) Exploration work

The Company has certain obligations to perform minimum exploration work and expend minimum amounts on its wholly owned mining tenements. Obligations for the next 12 months are expected to amount to $425,000 (2018: $388,600). No estimate has been given of expenditure commitments beyond 12 months for its wholly owned tenements as this is dependent on the Directors’ ongoing assessment of operations and, in certain instances, native title negotiations.

b) Asset acquisitions

The Group has the following commitments for asset acquisitions at 30 June 2019.

2019 $’000

2018 $’000

Capital expenditures contracted for at the balance sheet date but not recognised in the financial statements

Property, plant and equipment 978 - Mine development at cost - 5,577

978 5,577

c) Operating leases

The Group has entered into operating leases for spodumene storage at Wedgefield, office premises in Perth, Western Australia and in Jakarta and Balikpapan in Indonesia. The Group also has operating leases in relation to certain office equipment.

The commitment in respect of these leases is: No later than one year 853 254 Later than one year and not later than five years 2,571 58 Later than five years - -

3,424 312

NOTES TO THE FINANCIAL STATEMENTS CONTINUED

ALTURA ANNUAL REPORT 201980

F-93

DIRECTORS' DECLARATION

In the Directors’ opinion:

(a) The financial statements and notes set out on pages 17 to 65 are in accordance with the Corporations Act 2001 and:

a. comply with Accounting Standards and the Corporations Regulations 2001; and b. give a true and fair view of the consolidated entity’s financial position as at 30 June 2019 and its performance for the

financial year ended on that date; (b) the financial statements and notes also comply with International Financial Reporting Standards as set out in Note 1; (c) there are reasonable grounds to believe that the Company will be able to pay its debt as and when they become due and

payable. The Directors have been given the declarations by the Chief Executive Officer and the Chief Financial Officer required under section 295A of the Corporations Act 2001. This declaration is made in accordance with a resolution of the directors.

James Brown Director Brisbane, 30 September 2019

32 to 80

ANNUAL REPORT 2019 ALTURA 81

F-94

INDEPENDENT AUDITOR’S REPORT

TO THE MEMBERS OF ALTURA MINING LIMITED Report on the Financial Report Opinion We have audited the accompanying financial report of Altura Mining Limited (the company), which comprises the consolidated balance sheet as at 30 June 2019, the consolidated statement of profit and loss, the consolidated statement of other comprehensive income, the consolidated statement of changes in equity and the consolidated statement of cash flows for the year then ended, notes comprising a summary of significant accounting policies and other explanatory information, and the directors’ declaration of the company and the consolidated entity comprising the company and the entities it controlled at the year’s end or from time to time during the financial year. In our opinion, the financial report of Altura Mining Limited is in accordance with the Corporations Act 2001, including:

i) Giving a true and fair view of the consolidated entity’s financial position as at 30 June 2019

and of its performance for the year ended on that date; and

ii) Complying with Australian Accounting Standards and the Corporations Regulations 2001. Basis for Opinion We conducted our audit in accordance with Australian Auditing Standards. Those standards require that we comply with relevant ethical requirements relating to audit engagements and plan and perform the audit to obtain reasonable assurance about whether the financial report is free from material misstatement. Our responsibilities under those standards are further described in the Auditor’s Responsibility section of our report. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Emphasis of matter Without modifying our opinion, we draw attention to Note 1 of the financial report which indicates that the consolidated entity incurred a loss after tax of $26.7m (2018: loss of $12.8m) and a negative current asset deficiency of $180.3m (2018: surplus of $15.3m). At year-end the consolidated entity had $9.5m (2018: $28.8m) of cash available while needing to refinance a loan note facility of $179.1 million by August 2020. These conditions, along with other matters as set forth in Note 1, indicate the existence of a material uncertainty that may cast significant doubt about the consolidated entity’s ability to continue as a going concern and therefore, the consolidated entity may be unable to realise its assets and discharge its liabilities in the normal course of business. The financial report of the consolidated entity does not include any adjustments in relation to the recoverability and classification of recorded asset amounts or to the amounts and classification of liabilities that might be necessary should the consolidated entity not continue as a going concern. Independence We are independent of the consolidated entity in accordance with the Corporations Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional Accountants (the code) that are relevant to our audit of the financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code.

ALTURA ANNUAL REPORT 201982

F-95

Key Audit Matters Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial report of the current period. These matters was addressed in the context of our audit of the financial report as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. For the matters below, our description of how our audit addressed these matters is provided in that context.

1. Altura Lithium Project Mine Assets – Recognition and Measurement Why significant How our audit addressed the key audit matter As at 30 June 2019 mine assets relating to the Altura Lithium Project of $277.4 million have been capitalised and subsequently transferred to a depreciating asset from the date of commercial production as disclosed in Note 14. The consolidated entity’s accounting policy in respect of the Altura Lithium Project Mine Assets is detailed in Note 1.

The Altura Lithium Project Mine Assets – recognition and measurement is a key audit matter due to:

the significance of the balance (being 85% of total assets); and

the level of judgement applied in determining the treatment of mine development expenditure in accordance with AASB 116 Property, Plant and Equipment.

In particular, judgement exists around:

whether the conditions for capitalisation are satisfied;

whether commercial production was achieved; whether depreciation rates applied are

appropriate; whether disclosure is appropriate; and whether facts and circumstances indicate that

the mine assets should be tested for impairment.

The evaluation of the recoverable amount of the asset requires significant judgement in determining the key assumptions supporting the expected future cash flows of the Altura Lithium Project Mine Assets.

In assessing this key audit matter, we involved senior audit team members who understand the industry.

Our audit procedures included, amongst others:

obtaining a project management report and holding discussions with the directors and management to confirm that the mine project is operating as forecasted;

obtaining a schedule of costs capitalised and testing on a sample basis, expenditure on the mine site, including construction, installation and / or completion of infrastructure facilities capitalised during the year and ensuring costs capitalised during the year comply with the recognition and measurement criteria of AASB 116 for qualifying assets;

obtaining evidence to confirm management’s assessment that commercial production was achieved from 1 March 2019, including but not limited to the review of nameplate capacity, review of production reports, interviews with mine operations team and review of capital expenditure budgets;

reviewing the transfer of mine development expenditure to a depreciating mine asset;

obtaining supporting documentation including external reports to validate the LOM (Life of Mine) 26 year period over which the mine asset is depreciated;

performing a physical inspection of the mine site, including mine site tour and observation of mine site assets capitalised. This inspection and observation was conducted by senior members of the engagement team;

interviews with staff on mine, including the authorised mining licensee; and

assessing whether any facts or circumstances existed to suggest impairment testing was required.

ANNUAL REPORT 2019 ALTURA 83

F-96

2. Borrowings – Loan Note Facility – Classification, Measurement and Disclosure Why significant How our audit addressed the key audit matter As at 30 June 2019 the consolidated entity held a loan note facility of $179.1 million as described in Note 17. The consolidated entity’s accounting policy in respect of the loan note facility is detailed in Note 1.

Borrowings - Loan Note Facility – Classification, Measurement and Disclosure is a key audit matter due to:

the significance of the balance (being 75.9% of total liabilities); and

the level of complexity and judgement applied in determining the correct treatment in accordance with AASB 132 Financial Instruments: Presentation, AASB 9 Financial Instruments and AASB 123 Borrowing Costs.

In particular, complexity and judgement exists around:

whether the loan note is classified as a financial liability, rather than an equity instrument;

which particular transactions costs, if any, are able to be capitalised;

which interest costs, if any, are able to be capitalised;

which foreign currency costs, if any, are able to be capitalised;

whether the impact of debt covenant breaches on the loan classification has been appropriately disclosed; and

management’s plan and the consolidated entity’s capacity concerning the repayment of the borrowing facility.

In assessing this key audit matter, we involved senior audit team members who understand such financial instruments. We also obtained external advice where appropriate.

Our audit procedures included, amongst others:

obtaining and reviewing loan agreements, subscription deeds and warrant deeds relating to the loan note facility;

obtaining a schedule of costs capitalised and testing on a sample basis, costs capitalised during the year. This included an assessment of the costs capitalised to ensure they meet the appropriate criteria of the standards;

obtaining technical advice concerning the application of relevant accounting standards;

reviewing management’s position papers and accounting policies regarding treatment in accordance with relevant accounting standards;

reviewing the debt covenant breaches incurred during the year with reference to the loan agreement, to ensure the impact on loan note classification and related disclosure is appropriate; and

reviewing management’s forecasted plans for repayment and assessment of the consolidated entity’s ability to repay the facility by the maturity date.

ALTURA ANNUAL REPORT 201984

F-97

Other Information The Directors are responsible for the other information. The other information comprises the information included in the consolidated entity’s Annual Report, but does not include the financial report and our auditor’s report thereon. Our opinion on the financial report does not cover the other information and we do not express any form of assurance conclusion thereon. In connection with our audit of the financial report, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial report or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard. Directors’ Responsibilities for the Financial Report The Directors of the company are responsible for the preparation of the financial report that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal control as the Directors determine is necessary to enable the preparation of the financial report that gives a true and fair view and is free from material misstatement, whether due to fraud or error. In Note 1, the Directors also state, in accordance with Australian Accounting Standard AASB 101 Presentation of Financial Statements, that the financial report complies with International Financial Reporting Standards. In preparing the financial report, the Directors are responsible for assessing the consolidated entity’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using a going concern basis of accounting unless the Directors either intend to liquidate the consolidated entity or to cease operations, or have no realistic alternative but to do so. Auditor’s Responsibilities for the Audit of the Financial Report Our responsibility is to express an opinion on the financial report based on our audit. Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Australian Auditing Standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individual or in aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of this financial report. As part of an audit in accordance with Australian Auditing Standards, we exercise professional judgement and maintain professional scepticism throughout the audit. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial report. The procedures selected depend on the auditor’s judgement, including assessment of the risks of material misstatement of the financial report, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation of the financial report that gives a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the Directors, as well as evaluating the overall presentation of the financial report. We conclude on the appropriateness of the Directors’ use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions

ANNUAL REPORT 2019 ALTURA 85

F-98

that may cast significant doubt on the consolidated entity’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial report or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the consolidated entity to cease to continue as a going concern. We evaluate the overall presentation, structure and content of the financial report, including the disclosures, and whether the financial report represents the underlying transactions and events in a manner that achieves fair presentation. We obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the consolidated entity to express an opinion on the financial report. We are responsible for the direction, supervision and performance of the audit. We remain solely responsible for our audit opinion. We communicate with the Directors regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. The Auditing Standards require that we comply with relevant ethical requirements relating to audit engagements. We also provide the Directors with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards. From the matters communicated with the Directors, we determine those matters that were of most significance in the audit of the financial report of the current period and are therefore key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication. Report on the Remuneration Report We have audited the Remuneration Report included in the directors’ report for the year ended 30 June 2019. The Directors of the company are responsible for the preparation and presentation of the Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on the Remuneration Report, based on our audit conducted in accordance with Australian Auditing Standards. Opinion In our opinion, the Remuneration Report of Altura Mining Limited for the year ended 30 June 2019, complies with section 300A of the Corporations Act 2001. PKF BRISBANE AUDIT LIAM MURPHY PARTNER 30 SEPTEMBER 2019 BRISBANE, AUSTRALIA

ALTURA ANNUAL REPORT 201986

F-99

Directors' Report

YOUR DIRECTORS HAVE PLEASURE IN PRESENTING THE ANNUAL FINANCIAL REPORT OF ALTURA MINING LIMITED ("ALTURA" OR "THE COMPANY") AND ITS CONTROLLED ENTITIES (“THE GROUP”) FOR THE FINANCIAL YEAR ENDED 30 JUNE 2018.

DIRECTORS

The names of the directors in office at any time during or since the end of the financial year are:

• Mr James Brown• Mr Paul Mantell• Mr Allan Buckler• Mr Dan O’Neill• Mr Beng Teik Kuan• Mr Zhao Tong

COMPANY SECRETARY

The name of the secretary in office during the financial year and up to the date of this report is as follows:

• Mr Damon Cox

PRINCIPAL ACTIVITIES

The principal activity of the Group during the year was the construction of the mine and processing plant at Altura’s 100% owned Pilgangoora Lithium Project in the Pilbara region of Western Australia.

OPERATING AND FINANCIAL REVIEW

OVERVIEW

Altura Mining Limited (“AJM”) is an ASX listed entity that is

focused on the construction and commencement of operations of the Altura Lithium Project in the Pilbara region of Western Australia.

OPERATING RESULTS

The Group’s operating loss after providing for income tax and non-controlling interests for the year ended 30 June 2018 was $12,816,965 (2017: loss $6,165,006). The loss in 2018 related to the Group’s administrative and corporate costs and a net foreign exchange loss in the year.

Exploration, commissioning, evaluation and development costs of the Pilgangoora Lithium Project were capitalised during both the 2018 and 2017 financial years.

STRATEGY

The Company’s objective is to create shareholder value through the development of profitable mining operations and other supplementary mining activities that deliver strong cash flows for the Group, and resultant regular dividends for shareholders.

Altura is focused on achieving name plate production from its Altura lithium project, with first sales due to commence during Q3 of calendar 2018. The Company has also completed a Definitive Feasibility Study (DFS) for a Stage 2 expansion of the lithium project, which it plans to commence as soon as practical.

The Company also holds coal assets in Indonesia which it is in the process of divesting as soon as reasonably possible.

PILGANGOORA LITHIUM

During the year Altura continued with its construction and

commissioning of the mine and process plant for Stage 1 of the Pilgangoora Lithium Project.

The major components of the construction phase included:

• Run-of-Mine (ROM) pad

• Tailings Storage Facility (TSF)

• Power Station

• Crushing and Screening plant

• High Pressure Grind Rolls (HPGR) and Ball Mill

• Dense Media Separation (DMS) module

• Flotation Circuit

• Mine Operations Centre

• Water bores and pipelines

• Raw Water Dam and Water Treatment Plant (Reverse Osmosis)

• Metallurgy Laboratory

• Product Storage Shed in Port Hedland (built and owned by Qube).

Mining operations were also established, and these comprised:

• Mobilisation of the mining, drill and blast fleet

• Development of the mining pit, consisting of 3 main areas

• Loading and haulage of spodumene ore to ROM pad and ROM stockpiles

• Removal of waste rock to the waste rock dump

• Construction of workshop and mining contractor facilities

Altura has also completed its Stage 2 Definitive Feasibility Study (DFS) in April 2018 with the results

14 ALTURA ANNUAL REPORT 2018

F-100

Directors' Report continued

confirming the robust economics of the project.

The key outcomes of the Stage 2 DFS included:

• Duplication of the Stage 1 processing plant to produce 440,000 tpa of 6% Spodumene;

• Post-tax NPV (1) of A$834 million, an IRR of 63% and a 2.3 year pay back;

• Life of Mine (LOM) revenue set to be A$4.377 billion with LOM EBITDA (2) of A$2.473 billion over an estimated mine life of 13 years;

• Estimated capital cost of $A119 million (exclusive of Stage 1 capital costs);

• Stage 2 project significantly de-risked by having all major statutory approvals, key personnel and contractors in place to commence production; and

• First product from expansion expected 18 months after Final Investment Decision.

Subsequent to the release of the Stage 2 DFS, Altura announced in May 2018 an increased Ore Reserve of 41.1 million tonnes at 1.05% Li2O which adds a minimum of 2 years to the estimated mine life.

With first production and shipments due in the second half of calendar 2018, Altura has entered into a number of important contracts with key suppliers:

1. A 5-year mining contract has been signed with NRW. The deposit will be mined by conventional bulk mining methods utilising hydraulic excavators, dump trucks and drill and blast coupled to a ROM stockpile.

2. The logistics and transport supplier is Qube Holdings Pty Ltd. The scope includes loading of the product at the mine stockyard, transporting the product in side tipping road trains to Port Hedland, construction and operation of a product storage shed at Port Hedland, and transport to the port and ship loading using the patented Rotabox™ system.

3. Kalgoorlie Power Systems has been contracted to provide an 11MW diesel fuelled power station for a 5-year period. The power station comprises dual fuel diesel and gas generators such that opportunities for cleaner and more cost-efficient gas may be utilised in the future should a suitable source be available.

The Company has in place two Binding Offtake Agreements (BOAs) with China based groups Shaanxi J&R Optimum Energy Co Ltd and Lionergy Limited, in which the parties will each take a minimum of 100,000 tonnes of 6% Li2O grade spodumene concentrate annually for an initial 5-year period. Annual pricing will be agreed with reference to current market pricing information, including but not limited to prices published or announced by other companies in the market, movement in carbonate pricing and with reference to any indices that may become available in the future. For the first 3 years of the BOAs, there is a floor price of US$550 per tonne of 6% spodumene, and there is also a ceiling price of US$950 per tonne for the same period, the floor price being very important from the Company’s perspective to ensure that it can repay its loan on the project in the next three years.

COAL ASSETS

Delta Coal

On 14 June 2018 Altura divested its one-third investment in the Delta coal mine and associated infrastructure. There was no cash consideration in the transaction. The Group holds no future rights relating to the Delta coal mine.

Tabalong Coal

The Tabalong Coal Project is a premium grade thermal coal deposit located in South Kalimantan, Indonesia. The project consists of five Mining Licences (IUPs), with all five IUPs granted for Operation Production. Altura holds 70% of three IUPs and 56% of the remaining two. The Company has previously stated its intention to divest its interests in Tabalong coal assets. It is pursuing a number of options for sale of the coal assets and information has been made available to a number of parties under confidentiality deed arrangements.

Financial position

The net assets of the consolidated group increased in 2018, with non-current assets significantly higher due to the construction phase of the Lithium Project. During the year funds were sourced from a funding facility of US$110 million and a $26 million placement.

Risk

Development of Altura’s lithium project is subject to the ability of the Company and its advisors to successfully complete commissioning and ramp up to full production capacity of the project in a timely manner.

15ANNUAL REPORT 2018 ALTURA

F-101

Directors' Report continued

The Company is also subject to movements in international commodity prices, and being an Australian based company, foreign exchange movements.

DIVIDENDS

There were no dividends paid or declared during the year ended 30 June 2018 (2017: Nil).

SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS

There were no other significant changes in the nature of the Group’s principal activities during the financial year, other than as discussed in the financial report and elsewhere in this Directors Report.

MATTERS SUBSEQUENT TO THE END OF THE FINANCIAL YEAR

Subsequent to the end of the financial year, Altura entered into an amendment deed with existing Loan Note Holders for an additional US$15 million of debt funding as an extension to the existing debt facility (see ASX announcement of 11 September 2018). The terms of the facility are generally in line with the existing US$110 million senior secured loan note facility that was executed in July 2017 (see ASX announcement on 28 July 2017). Altura will use the additional funds as it ramps-up production to nameplate capacity at the Altura Lithium Project, continued exploration of the Company’s portfolio of tenements and ongoing work on the Stage 2 expansion.

FUTURE DEVELOPMENTS, PROSPECTS AND BUSINESS STRATEGIES

The Group will focus on completing the commissioning of the Pilgangoora Lithium Project and achieving full commercial operations as soon as possible. The Group intends to divest is interests in the Tabalong coal projects as soon as practical so it can focus on its lithium project.

ENVIRONMENTAL PERFORMANCE

The Group is committed to achieving a high standard of environmental performance and is subject to significant environmental regulation form both Commonwealth and State legislation in Australia to its mining, development and exploration activities. The Board of Directors is responsible for regular monitoring of environmental exposures and compliance with these environmental regulations. The Group complied with its environmental performance obligations during the year.

INFORMATION ON DIRECTORS

MR JAMES BROWN (MANAGING DIRECTOR)

Qualifications

Graduate Diploma in Mining from University of Ballarat.

Experience

Mr Brown is a mining engineer with over 35 years' experience in the mining industry in Australia and Indonesia, including the last

10 years in the chief executive role at Altura. His mining development and operations experience includes the New Acland and Jeebropilly mines in South East Queensland, the Adaro and Multi Harapan Utama operations in Indonesia and Blair Athol in the Bowen Basin in Central Queensland.

Other current directorships in listed entities

• Sayona Mining Limited

Former directorships in last three years

• None

Special responsibilities

• Chief Executive Officer

Interests in shares and performance rights

• 28,518,301 ordinary shares in Altura Mining Limited

• 2,000,000 performance rights over shares in Altura Mining Limited

MR PAUL MANTELL (EXECUTIVE DIRECTOR)

Qualifications

Bachelor of Commerce from the University of Queensland and a Fellow of CPA Australia.

Experience

Mr Mantell is an accountant with more than 35 years’ corporate experience in the mining and associated industries. He has been involved in all aspects of accounting and finance, financial reporting, taxation and administration,

16 ALTURA ANNUAL REPORT 2018

F-102

Directors' Report continued

including the responsibilities of an ASX listed entity. He has previously arranged finance for mining and infrastructure projects both in Australia and Indonesia and has set up corporate, administrative and financial systems to support new and expanding mining operations. He was appointed a director in May 2009.

Other current directorships in listed entities

• None

Former directorships in last three years

• None

Special responsibilities

• Chief Financial Officer

Interests in shares and performance rights

• 33,503,084 ordinary shares in Altura Mining Limited

• 1,000,000 performance rights over shares in Altura Mining Limited

MR ALLAN BUCKLER (NON-EXECUTIVE DIRECTOR)

Qualifications

Certificate in Mine Surveying and Mining, First Class Mine Managers Certificate and a Mine Surveyor Certificate issued by the Queensland Government’s Department of Mines

Experience

Mr Buckler has over 45 years’ experience in the mining industry and has taken lead roles in the establishment of several leading mining and port operations in both Australia and Indonesia. Mr

Buckler was appointed a director in December 2008.

Other current directorships in listed entities

• Sayona Mining Limited

Former directorships in last three years

• None

Special responsibilities

• Member of the Audit & Risk Committee (to 20 September 2017)

• Member of the Remuneration & Nomination Committee

Interests in shares

• 194,839,756 ordinary shares in Altura Mining Limited

MR DAN O’NEILL (INDEPENDENT NON-EXECUTIVE DIRECTOR)

Qualifications

Bachelor of Science in geology from the University of Western Australia.

Experience

Mr O’Neill was appointed a director in December 2008. He has held positions with a number of Australian and multinational exploration companies and has managed exploration programs in a diverse range of environments and locations including Botswana, North America, South East Asia, North Africa and Australasia. During his 35 years’ experience, he has held executive management positions with ASX listed companies and has worked on a range of commodities including diamonds, gold, base metals, coal, oil and gas.

Other current directorships in listed entities

• Sayona Mining Limited

Former directorships in last three years

• None

Special responsibilities

• Chairman of the Remuneration & Nomination Committee

• Member of the Audit & Risk Committee

Interests in shares

• 13,633,336 ordinary shares in Altura Mining Limited

MR BENG TEIK KUAN (INDEPENDENT NON-EXECUTIVE DIRECTOR)

Qualifications

Bachelor of Engineering (University of Malaya)

Experience

Mr Kuan is an engineer with considerable experience in bulk handling and terminal operations, including responsibility for the development and management of the Pulau Laut Coal Terminal in South Kalimantan, Indonesia. He also has experience in Indonesia, Malaysia and Singapore with tin dredging operations, managing rubber, palm oil and cocoa processing factories, and managing palm oil bulk terminals. He was appointed a director in November 2007.

Other current directorships in listed entities

• None

17ANNUAL REPORT 2018 ALTURA

F-103

Directors' Report continued

Former directorships in last three years

• None

Special responsibilities

• Chairman of the Audit & Risk Committee

• Member of the Remuneration & Nomination Committee

Interests in shares

• 21,000,000 ordinary shares in Altura Mining Limited

MR ZHAO TONG (NON-EXECUTIVE DIRECTOR)

Qualifications

• Bachelor of Science (Peking University, China)

Experience

Mr Zhao Tong has over 25 years’ experience in the international trade of metals and minerals and has worked for China Shaanxi Metals and Minerals International Trade Co. Ltd. Mr Tong has been the Director of the Lithium Division of J&R Optimum since October 2016. He was appointed a Director in March 2017.

Other current directorships in listed entities

• None

Former directorships in last three years

• None

Special responsibilities

• Member of the Audit & Risk Committee (from 20 September 2017)

Interests in shares

• Nil

COMPANY SECRETARY

MR DAMON COX

Mr Cox is a Chartered Secretary, and a CPA. He has over 30 years’ experience in various roles including corporate governance, compliance, treasury and strategic policy advice.

REMUNERATION REPORT (AUDITED)

This report details the nature and amount of remuneration for directors and other key management personnel.

REMUNERATION POLICY AND LINK TO PERFORMANCE

The Company’s policy is to remunerate fairly and in line with companies of similar size, operations and in the same industry. Individual remuneration decisions are made by the Remuneration & Nomination Committee taking into account the following factors:

• The responsibility of the role;

• Experience of the employee;

• Past performance and future expectations; and

• Industry conditions and trends.

In order to retain and attract key management personnel of sufficient calibre to facilitate the efficient and effective management of the Company’s operations, the Remuneration & Nomination Committee may seek the advice of external advisors in connection with the structure of remuneration packages.

Remuneration packages may contain the following key elements:

a) Primary benefits - salary/fees, bonuses and non-monetary benefits including the provision of a motor vehicle;

b) Post-employment benefits – including superannuation and prescribed retirement benefits; and

c) Equity - performance rights granted under the Long-Term Incentive Plan as disclosed in Note 23 to the financial statements.

None of the Company’s personnel remuneration packages are linked directly to the Company’s profitability or other measure of performance. The Company maintains a Long Term Incentive Plan under which employees may be granted performance rights and share options which vest subject to service conditions being met. Directors may also be allocated performance rights and/or options as an incentive. During the 2018 year, directors were issued with shares on the vesting of previously issued performance rights.

PERFORMANCE-BASED REMUNERATION

The Company currently has performance based remuneration in place as disclosed in Note 23.

GROUP PERFORMANCE, SHAREHOLDER WEALTH AND DIRECTOR AND EXECUTIVE REMUNERATION

The Group has recorded the following earnings from continuing operations over the last five years:

18 ALTURA ANNUAL REPORT 2018

F-104

Directors' Report continued

KEY MANAGEMENT PERSONNEL (KMP) REMUNERATION POLICY

The Remuneration & Nomination Committee reviews the remuneration packages of all directors and key management personnel on an annual basis. Remuneration packages are reviewed and determined with due regard to relevant market conditions and individual’s experience and qualification and are benchmarked against comparable industry salaries.

Payment of bonuses and share based compensation benefits is discretionary.

EMPLOYMENT CONTRACTS OF KEY MANAGEMENT PERSONNEL

Contracts of employment are given to key management personnel at time of employment. Details are as follows:

James Brown, Managing Director – the agreement is of no fixed term and allows for payment of a monthly cash salary in US dollars, reviewed each year, plus allowances. Three months’ notice of termination by either party is required, with a separation allowance equivalent to one year’s salary and entitlements to be paid

if employment is terminated by the Company.

Paul Mantell, Executive Director – the agreement is of no fixed term and allows for payment of an annual cash salary, reviewed each year, and superannuation. Provision of a motor vehicle or equivalent allowance and other non-cash benefits is included. Three months’ notice of termination by either party is required, with a separation allowance equivalent to one year’s gross salary to be paid if employment was terminated by the Company.

Chris Evans, Chief Operating Officer – the agreement is of no fixed term and allows for payment of an annual cash salary, reviewed each year, and superannuation. Three months’ notice of termination by either party is required, with a separation allowance equivalent to six month’s gross salary to be paid if employment was terminated by the Company.

Noel Young, Group Financial Controller – the agreement is of no fixed term and allows for payment of an annual cash salary in US dollars, reviewed each year,

plus allowances. Two months’ notice of termination by either party is required, with a separation allowance equivalent to six month’s gross salary to be paid if employment is terminated by the Company.

Damon Cox, Company Secretary – the agreement is of no fixed term and allows for payment of an annual cash salary, reviewed each year, and superannuation. Provision of a motor vehicle is included. Two months’ notice of termination by either party is required, with a separation allowance equivalent to six month’s gross salary to be paid if employment is terminated by the Company.

2018 2017 2016 2015 2014

Revenues and sundry income 1,675,168 1,600,959 1,485,611 4,779,039 7,610,019

EBITDA1 (13,279,929) (6,417,320) (11,290,052) (15,861,975) (5,588,222)

NPBT2 (13,120,803) (6,448,799) (30,839,474) (16,947,795) (6,530,675)

NPAT3 (12,712,487) (5,914,752) (31,618,016) (17,268,152) (7,017,662)

Dividends paid - - - - -

1. Earnings before interest, tax, depreciation and amortisation

2. Net profit before tax

3. Net profit after tax & minority interest

19ANNUAL REPORT 2018 ALTURA

F-105

Directors' Report continued

Short-term benefitsPost

employmentShare based

payments

Total $

Performance rights as a

percentage of total

%Name

Cash salary and fees

$

Cash bonus

$

Non-monetary

benefits $

Superannuation $

Performance rights

$

2018Non-executive directorsA Buckler 67,000 30,000 - 9,215 1,117 107,332 1.0%D O’Neill 79,000 30,000 - 10,355 1,117 120,472 0.9%B Kuan 79,000 30,000 - 10,355 1,117 120,472 0.9%Z Tong 67,032 24,657 - - - 91,689 -Sub total non-executive directors

292,032 114,657 - 29,925 3,351 439,965

Executive directorsJ Brown 403,529 - 92,601 - 432,689 928,820 46.6%P Mantell 325,026 - 13,922 24,999 216,347 580,294 37.3%Other KMPC Evans 278,863 - - 24,999 211,684 515,546 41.1%N Young 189,062 - 21,311 12,825 44,385 267,583 16.6%D Cox 145,000 - 28,079 13,775 44,385 231,239 19.2%Total for KMP compensation

1,341,480 - 155,913 76,598 949,490 2,523,481

Total compensation 1,633,512 114,657 155,913 106,523 952,841 2,963,4462017Non-executive directorsA Buckler 60,000 - 5,700 3,885 69,585 5.6%D O’Neill 72,000 - 6,840 3,885 82,725 4.7%B Kuan 54,000 - 24,840 3,885 82,725 4.7%Z Tong• 19,000 - - - - 19,000 -Sub total non-executive directors

205,000 - - 37,380 11,655 254,035 -

Executive directorsJ Brown 413,790 - 91,391 - 38,852 544,033 7.1%P Mantell 322,000 - 12,650 28,025 19,425 382,100 5.1%Other KMPC Evans 220,000 35,000 - 24,225 3,213 282,438 1.1%N Young 226,788 - 75,229 - 7,770 309,787 2.5%D Cox 132,500 - 23,353 12,587 7,770 176,210 4.4%Total for KMP compensation

1,315,078 35,000 202,623 64,837 77,030 1,694,568 -

Total compensation

1,520,078 35,000 202,623 102,217 88,685 1,948,603 -

*Mr Zhao Tong joined the Altura Board in March 2017

No termination payments or long service leave payments were made during the year (2017 Nil)

20 ALTURA ANNUAL REPORT 2018

F-106

Directors' Report continued

The following shares were issued to directors and key management personnel on the vesting of performance rights during the year ended 30 June 2018:

Number issued Issue date

Value per share at issue date

$

J Brown 1,000,000 18/12/17 0.3613

P Mantell 500,000 18/12/17 0.3613

A Buckler 100,000 18/12/17 0.3613

D O’Neill 100,000 18/12/17 0.3613

BT Kuan 100,000 18/12/17 0.3613

C Evans 400,000 18/12/17 0.3613

N Young 200,000 18/12/17 0.3613

D Cox 200,000 18/12/17 0.3613

2,600,000

PERFORMANCE RIGHTS

In 2014 the Company established a new Long-Term Incentive Plan (LTIP) to assist in the reward and retention of directors and employees.

A total of 8,100,000 rights were granted in December 2014 to directors (with shareholder approval), key management personnel and other senior staff. A further 1,450,000 rights were granted to key management personnel and other senior staff in the year ended 30 June 2016, 1,350,000 in the year ended 30 June 2017 and another 7,850,000 were granted in the year ended 30 June 2018. The rights awarded during the year were granted for no consideration. No amount is payable on the vesting of the rights. The rights will vest and automatically convert to ordinary shares in the Company following the satisfaction of the service conditions.

The following performance rights were on issue to directors and key management personnel as at 30 June 2018:

Granted number Vesting 30 Nov 2018

J Brown 2,000,000 2,000,000

P Mantell 1,000,000 1,000,000

C Evans 1,000,000 1,000,000

N Young 200,000 200,000

D Cox 200,000 200,000

4,400,000 4,400,000

MEETINGS OF DIRECTORS

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 there were 5 Directors’ meetings, 3 Audit & Risk Committee meetings and 2 Remuneration & Nomination Committee meetings held.

21ANNUAL REPORT 2018 ALTURA

F-107

Directors' Report continued

INDEMNIFICATION AND INSURANCE OF DIRECTORS AND OFFICERS

The Company has entered into Deeds of Indemnity with all of its directors in accordance with the Company’s Constitution. During the financial year the Company paid a premium to insure the directors, officers and managers of the Company and its controlled entities. The insurance contract requires that the amount of the premium paid is kept confidential.

OPTIONS

At the date of signing this report, 5,784,846 unissued ordinary shares of Altura Mining Limited under option were outstanding.

WARRANTS

Under the terms of the US$110 million debt facility announced on 28 July 2017, the lenders are to receive a total of 72,644,513 warrants. These were approved on 22 November 2017 at the Company’s annual general meeting and issued on 27 November 2017 at an exercise price of $0.1260 per warrant with an expiry date 4 August 2022. At

the date of signing this report, 19,812,140 warrants outstanding.

PROCEEDINGS ON BEHALF OF THE COMPANY

No person has applied for leave of the Court to bring proceedings on behalf of the Company or intervene in any proceedings to which the Company is a party for the purpose of taking responsibility on behalf of the Company for all or any part of those proceedings.

The Company was not party to any such proceedings during the year.

NON-AUDIT SERVICES

The Company’s auditor, PKF Hacketts Audit, did not provide any non-audit services to the Company during the year ended 30 June 2018.

ROUNDING OF AMOUNTS

The company is of a kind referred to ASIC Legislative Instrument 2016/191, relating to the ‘rounding off’ of amounts in the directors’ report and financial report. Amounts in the directors’ report and financial report have been rounded off to the nearest

thousand dollars in accordance with the instrument.

AUDITOR’S INDEPENDENCE DECLARATION

The auditor’s independence declaration for the year ended 30 June 2018 has been received and is included on page 23 of the annual report.

Signed in accordance with a resolution of the Directors made pursuant to Section 298(2) of the Corporations Act 2001.

On behalf of the Directors,

James Brown Managing Director

Perth, 11 September 2018

Directors' Meetings

Audit & Risk Committee

Remuneration & Nomination Committee

Number eligible to

attendNumber attended

Number eligible to

attendNumber attended

Number eligible to

attendNumber attended

J Brown 5 5 - - - -

P Mantell 5 5 - - - -

A Buckler 5 5 1 1 2 2

D O’Neill 5 4 3 2 2 2

B Kuan 5 5 3 3 2 2

Z Tong 5 5 2 2 - -

22 ALTURA ANNUAL REPORT 2018

F-108

13

AUDITOR’S INDEPENDENCE DECLARATION UNDER SECTION 307C OF THE CORPORATIONS ACT 2001

TO THE DIRECTORS OF ALTURA MINING LIMITED I declare that, to the best of my knowledge and belief, during the year ended 30 June 2018, there have been: (a) no contraventions of the auditor independence requirements of the Corporations Act 2001

in relation to the audit; and (b) no contraventions of any applicable code of professional conduct in relation to the audit. PKF HACKETTS AUDIT Liam Murphy Partner Brisbane, 11 September 2018

23ANNUAL REPORT 2018 ALTURA

F-109

Consolidated Statement of

Profit and Lossfor the year ended 30 June 2018

26 ALTURA ANNUAL REPORT 2018

F-110

Consolidated Statement of

Other Comprehensive Incomefor the year ended 30 June 2018

27ANNUAL REPORT 2018 ALTURA

F-111

Consolidated

Balance Sheetfor the year ended 30 June 2018

28 ALTURA ANNUAL REPORT 2018

F-112

Consolidated Statement of

Changes in Equityfor the year ended 30 June 2018

29ANNUAL REPORT 2018 ALTURA

F-113

Consolidated Statement of

Cash Flowsfor the year ended 30 June 2018

30 ALTURA ANNUAL REPORT 2018

F-114

Notes to the Financial Statements

31ANNUAL REPORT 2018 ALTURA

F-115

Notes to the Financial Statements continued

32 ALTURA ANNUAL REPORT 2018

F-116

Notes to the Financial Statements continued

33ANNUAL REPORT 2018 ALTURA

F-117

Notes to the Financial Statements continued

34 ALTURA ANNUAL REPORT 2018

F-118

Notes to the Financial Statements continued

35ANNUAL REPORT 2018 ALTURA

F-119

Notes to the Financial Statements continued

36 ALTURA ANNUAL REPORT 2018

F-120

Notes to the Financial Statements continued

37ANNUAL REPORT 2018 ALTURA

F-121

Notes to the Financial Statements continued

38 ALTURA ANNUAL REPORT 2018

F-122

Notes to the Financial Statements continued

39ANNUAL REPORT 2018 ALTURA

F-123

Notes to the Financial Statements continued

40 ALTURA ANNUAL REPORT 2018

F-124

Notes to the Financial Statements continued

41ANNUAL REPORT 2018 ALTURA

F-125

Notes to the Financial Statements continued

42 ALTURA ANNUAL REPORT 2018

F-126

Notes to the Financial Statements continued

43ANNUAL REPORT 2018 ALTURA

F-127

Notes to the Financial Statements continued

44 ALTURA ANNUAL REPORT 2018

F-128

Notes to the Financial Statements continued

45ANNUAL REPORT 2018 ALTURA

F-129

Notes to the Financial Statements continued

46 ALTURA ANNUAL REPORT 2018

F-130

Notes to the Financial Statements continued

47ANNUAL REPORT 2018 ALTURA

F-131

Notes to the Financial Statements continued

48 ALTURA ANNUAL REPORT 2018

F-132

Notes to the Financial Statements continued

49ANNUAL REPORT 2018 ALTURA

F-133

Notes to the Financial Statements continued

50 ALTURA ANNUAL REPORT 2018

F-134

Notes to the Financial Statements continued

51ANNUAL REPORT 2018 ALTURA

F-135

Notes to the Financial Statements continued

52 ALTURA ANNUAL REPORT 2018

F-136

Notes to the Financial Statements continued

53ANNUAL REPORT 2018 ALTURA

F-137

Notes to the Financial Statements continued

54 ALTURA ANNUAL REPORT 2018

F-138

Notes to the Financial Statements continued

55ANNUAL REPORT 2018 ALTURA

F-139

Notes to the Financial Statements continued

56 ALTURA ANNUAL REPORT 2018

F-140

Notes to the Financial Statements continued

57ANNUAL REPORT 2018 ALTURA

F-141

Notes to the Financial Statements continued

58 ALTURA ANNUAL REPORT 2018

F-142

Notes to the Financial Statements continued

59ANNUAL REPORT 2018 ALTURA

F-143

Notes to the Financial Statements continued

60 ALTURA ANNUAL REPORT 2018

F-144

Notes to the Financial Statements continued

61ANNUAL REPORT 2018 ALTURA

F-145

Notes to the Financial Statements continued

62 ALTURA ANNUAL REPORT 2018

F-146

o

o

oo

Notes to the Financial Statements continued

63ANNUAL REPORT 2018 ALTURA

F-147

Notes to the Financial Statements continued

64 ALTURA ANNUAL REPORT 2018

F-148

Notes to the Financial Statements continued

65ANNUAL REPORT 2018 ALTURA

F-149

Notes to the Financial Statements continued

66 ALTURA ANNUAL REPORT 2018

F-150

Notes to the Financial Statements continued

67ANNUAL REPORT 2018 ALTURA

F-151

Notes to the Financial Statements continued

68 ALTURA ANNUAL REPORT 2018

F-152

Notes to the Financial Statements continued

69ANNUAL REPORT 2018 ALTURA

F-153

Notes to the Financial Statements continued

70 ALTURA ANNUAL REPORT 2018

F-154

Notes to the Financial Statements continued

71ANNUAL REPORT 2018 ALTURA

F-155

Notes to the Financial Statements continued

72 ALTURA ANNUAL REPORT 2018

F-156

Notes to the Financial Statements continued

73ANNUAL REPORT 2018 ALTURA

F-157

Notes to the Financial Statements continued

74 ALTURA ANNUAL REPORT 2018

F-158

Notes to the Financial Statements continued

75ANNUAL REPORT 2018 ALTURA

F-159

Directors' Declaration

76 ALTURA ANNUAL REPORT 2018

F-160

INDEPENDENT AUDITOR’S REPORT

TO THE MEMBERS OF ALTURA MINING LIMITED Report on the Financial Report Opinion We have audited the accompanying financial report of Altura Mining Limited (the company), which comprises the consolidated balance sheet as at 30 June 2018, the consolidated statement of profit and loss, the consolidated statement of other comprehensive income, the consolidated statement of changes in equity and the consolidated statement of cash flows for the year then ended, notes comprising a summary of significant accounting policies and other explanatory information, and the directors’ declaration of the company and the consolidated entity comprising the company and the entities it controlled at the year’s end or from time to time during the financial year. In our opinion, the financial report of Altura Mining Limited is in accordance with the Corporations Act 2001, including:

i) Giving a true and fair view of the consolidated entity’s financial position as at 30 June 2018

and of its performance for the year ended on that date; and

ii) Complying with Australian Accounting Standards and the Corporations Regulations 2001. Basis for Opinion We conducted our audit in accordance with Australian Auditing Standards. Those standards require that we comply with relevant ethical requirements relating to audit engagements and plan and perform the audit to obtain reasonable assurance about whether the financial report is free from material misstatement. Our responsibilities under those standards are further described in the Auditor’s Responsibility section of our report. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Independence We are independent of the consolidated entity in accordance with the Corporations Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional Accountants (the code) that are relevant to our audit of the financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code. Key Audit Matters Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial report of the current period. These matters was addressed in the context of our audit of the financial report as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. For the matters below, our description of how our audit addressed these matters is provided in that context.

77ANNUAL REPORT 2018 ALTURA

F-161

1. Mine Development Assets – Recognition and Measurement Why significant How our audit addressed the key audit matter As at 30 June 2018 mine development expenditure relating to the Pilgangoora Lithium Project of $221.562 million has been capitalised and is disclosed in Note 16. The consolidated entity’s accounting policy in respect of mine development assets is detailed in Note 1.

The mine development assets – recognition and measurement is a key audit matter due to:

the significance of the balance (being 82.4% of total assets); and

the level of judgement applied in determining the treatment of mine development expenditure in accordance with AASB 116 Property, Plant and Equipment.

In particular, judgement exists around:

whether the conditions for capitalisation are satisfied; and

whether facts and circumstances indicate that the mine development assets should be tested for impairment.

The evaluation of the recoverable amount of the asset requires significant judgement in determining the key assumptions supporting the expected future cash flows of the Pilgangoora Lithium Project.

In assessing this key audit matter, we involved senior audit team members who understand the industry.

Our audit procedures included, amongst others:

obtaining a project management report and holding discussions with the directors and management to confirm that the mine development project remains on budget with time and resources;

obtaining a schedule of costs capitalised and testing on a sample basis, expenditure on the mine site, including construction, installation and / or completion of infrastructure facilities capitalised during the year;

performing a physical inspection of the mine site, including mine site tour and physical observation of mine site construction assets capitalised. This inspection and observation was conducted by all senior members of the engagement team;

interviews with staff on mine, including the authorised mining licensee;

ensuring costs capitalised during the year comply with the recognition and measurement criteria of AASB 116 for qualifying assets; and

assessing whether any facts or circumstances existed to suggest impairment testing was required.

78 ALTURA ANNUAL REPORT 2018

F-162

2. Borrowings – Loan Note Facility – Recognition and Measurement Why significant How our audit addressed the key audit matter As at 30 June 2018 the consolidated entity held a loan note facility of $145.887 million (2017: $- million) as described in Note 18. The consolidated entity’s accounting policy in respect of the loan note facility is detailed in Note 1.

Borrowings - loan note facility – recognition and measurement is a key audit matter due to:

the significance of the balance (being 83.1% of total liabilities); and

the level of complexity and judgement applied in determining the correct treatment in accordance with AASB 132 Financial Instruments: Presentation, AASB 9 Financial Instruments and AASB 123 Borrowing Costs.

In particular, complexity and judgement exists around:

whether the loan note is classified as a financial liability, rather than an equity instrument;

which particular transactions costs, if any, are able to be capitalised;

which interest costs, if any, are able to be capitalised;

which foreign currency costs, if any, are able to be capitalised; and

management’s plan and the consolidated entity’s capacity concerning the repayment of the borrowing facility.

In assessing this key audit matter, we involved senior audit team members who understand such financial instruments. We also obtained external advice where appropriate.

Our audit procedures included, amongst others:

obtaining and reviewing loan agreements, subscription deeds and warrant deeds relating to the loan note facility;

obtaining a schedule of costs capitalised and testing on a sample basis, costs capitalised during the year. This included an assessment of the costs capitalised to ensure they meet the appropriate criteria of the standards;

obtaining technical advice concerning the application of relevant accounting standards;

reviewing management’s position papers and accounting policies regarding treatment in accordance with relevant accounting standards; and

reviewing management’s forecasted plans for repayment and assessment of the consolidated entity’s ability to repay the facility by the maturity date.

79ANNUAL REPORT 2018 ALTURA

F-163

3. Funding and Liquidity Why significant How our audit addressed the key audit matter As detailed in note 1(a)(i), the consolidated entity recorded an operating loss after tax of $12.82m (2017: loss of $6.16m) and cash outflows from operations of $5.45m (2017: outflows of $5.56m). At year-end the consolidated entity had $28.76m (2017: $13.27m) of cash available for future expenditure. The consolidated entity has prepared a forecast which demonstrates that there will be sufficient funding to operate for a period that is not less than twelve months beyond the date these financial statements are approved. The forecast takes into account the available cash on hand at year-end, combined with the forecast cash inflows from operations (successful production and sale of product), cash outflows flows from investing (completion of the mine development asset) and cash inflows from financing (continued support from financiers / shareholders). Given the judgement involved and audit effort involved in reviewing the forecast cash flows from operations, we have included the going concern assumption as a key audit matter.

In assessing this key audit matter, we have evaluated management’s plans for future actions in relation to its going concern assessment, whether the outcome of these plans is likely to improve the situation and whether management’s plans are feasible in the circumstances. This included evaluating the consolidated entity’s latest cash flow forecast for a period that is not less than 12 months beyond the date of the financial statements are approved. We have considered whether there are indicators that the consolidated entity may face a liquidity shortfall and assessed the resulting implications by:

Understanding and challenging the reasonableness of key assumptions used by the consolidated entity in their cash flow forecast for a period that is not less than 12 months beyond the date of these financial statements are approved;

Performing sensitivity analysis to determine the robustness of the cash flow forecast and the impact of changing key assumptions; and

Assessing the adequacy of the disclosures made by management in the consolidated financial statements.

Other Information Other information is financial and non-financial information in the annual report of the consolidated entity which is provided in addition to the Financial Report and the Auditor’s Report. The directors are responsible for Other Information in the annual report. We have obtained all the other information prior to the date of this Auditor’s Report, which includes the letter from the Managing Director, Directors’ Report, Corporate Governance Statement and Shareholder Information. Our opinion on the Financial Report does not cover the Other Information and, accordingly, the auditor does not and will not express an audit opinion or any form of assurance conclusion thereon, with the exception of the Remuneration Report. In connection with our audit of the Financial Report, our responsibility is to read the Other Information. In doing so, we consider whether the Other Information is materially inconsistent with the Financial Report or our knowledge obtained in the audit, or otherwise appears to be materially misstated. We are required to report if we conclude that there is a material misstatement of this Other Information in the Financial Report and based on the work we have performed on the Other Information that we obtained prior the date of this Auditor’s Report we have nothing to report. Directors’ Responsibilities for the Financial Report The Directors of the company are responsible for the preparation of the financial report that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal control as the Directors determine is necessary to enable the preparation of the financial report that

80 ALTURA ANNUAL REPORT 2018

F-164

gives a true and fair view and is free from material misstatement, whether due to fraud or error. In Note 1, the Directors also state, in accordance with Australian Accounting Standard AASB 101 Presentation of Financial Statements, that the financial report complies with International Financial Reporting Standards. In preparing the financial report, the Directors are responsible for assessing the consolidated entity’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using a going concern basis of accounting unless the Directors either intend to liquidate the consolidated entity or to cease operations, or have no realistic alternative but to do so. Auditor’s Responsibilities for the Audit of the Financial Report Our responsibility is to express an opinion on the financial report based on our audit. Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Australian Auditing Standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individual or in aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of this financial report. As part of an audit in accordance with Australian Auditing Standards, we exercise professional judgement and maintain professional scepticism throughout the audit. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial report. The procedures selected depend on the auditor’s judgement, including assessment of the risks of material misstatement of the financial report, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation of the financial report that gives a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the Directors, as well as evaluating the overall presentation of the financial report. We conclude on the appropriateness of the Directors’ use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the consolidated entity’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial report or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the consolidated entity to cease to continue as a going concern. We evaluate the overall presentation, structure and content of the financial report, including the disclosures, and whether the financial report represents the underlying transactions and events in a manner that achieves fair presentation. We obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the consolidated entity to express an opinion on the financial report. We are responsible for the direction, supervision and performance of the audit. We remain solely responsible for our audit opinion. We communicate with the Directors regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

81ANNUAL REPORT 2018 ALTURA

F-165

The Auditing Standards require that we comply with relevant ethical requirements relating to audit engagements. We also provide the Directors with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards. From the matters communicated with the Directors, we determine those matters that were of most significance in the audit of the financial report of the current period and are therefore key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication. Report on the Remuneration Report We have audited the Remuneration Report included in the directors’ report for the year ended 30 June 2018. Opinion In our opinion, the Remuneration Report of Altura Mining Limited for the year ended 30 June 2018, complies with section 300A of the Corporations Act 2001. Responsibilities The directors of the Company are responsible for the preparation and presentation of the Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on the Remuneration Report, based on our audit conducted in accordance with Australian Auditing Standards. PKF HACKETTS AUDIT LIAM MURPHY PARTNER 11 SEPTEMBER 2018 BRISBANE, AUSTRALIA

82 ALTURA ANNUAL REPORT 2018

F-166

APPENDIX A

SUMMARY

We engaged Cube Consulting Pty Ltd, an independent mining consulting company (Cube), toprovide geological resource modelling in relation to the Altura Lithium Mine based on exploration andmining data compiled up to and including 30 June 2019, resulting in a Mineral Resource Estimate andOre Reserve Estimate based on an updated geological model and input parameters.

Mineral Resource Estimate

Cube assisted Altura in preparing the updated Mineral Resource estimation. Table 1-1 below showsa Measured and Indicated Resource of 41.6 Mt at an average grade of 1.07% Li2O at a 0.30% cut-off.The Mineral Resources are contained in a three dimensional block model created for the entire projectarea.

Table 1-1 Mineral Resource Estimates at 0.30% Li2OCut-off as of 30 June 2019

TonnesJORC Category (Mt) Li2O% Fe2O3 Li2O Tonnes

Measured . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.4 1.23 1.38 91,000Indicated . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34.2 1.03 1.29 353,000Measured & Indicated . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41.6 1.07 1.31 444,000Inferred . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.1 0.95 1.41 39,000

The estimation methodology employed by Cube is Localised Uniform Conditioning (LUC). Themodel has been depleted above the topographical surface and the Mineral Resource is estimated belowthe 30 June 2019 surface. The Mineral Resource is only reported for ore that is on Altura tenements.

Using the above model and relevant input parameters, a mining model was developed for use inpit optimisation, design and production scheduling.

Ore Reserve Estimate

Open pit optimisation studies were undertaken using the input parameters associated with thelarger, 3.08 Mtpa throughput ore treatment facility, based on a Plant Duplication Study completed inApril 2018. The recently updated Mineral Resource block model formed the basis of this work. A planview of this final pit design is shown in Figure 1-1.

As with the previous Ore Reserve Estimate (see ASX Release 28 May 2018), it is assumed in thislatest Ore Reserve that mining may take place on the adjacent Pilbara Minerals tenement to the east tofacilitate accessing of deeper Ore Reserves on the Altura tenement. Only ore that is contained withinthe Altura tenements is included in the Ore Reserve Estimate.

There is a reasonable expectation that mining across the tenement boundary will be able to takeplace. This assumption is supported by ongoing discussions between the two parties which as yet havenot been finalised. The ore that would be subject to any potential mining is outside of Altura’s 5 YearMine Plan and if required further deferment is possible with variations to the Life of Mine schedulingsequence.

The mining on the Pilbara Minerals side of the tenement boundary has been dealt with on aconservative basis in the estimation of these Ore Reserves, in that all mining costs are assumed to bepaid by Altura. Furthermore, no economic value has been allocated to potential Ore Reserves on thePilbara Minerals tenement, which are therefore also excluded from the reporting of the Ore Reserves.

A-1

Based on the updated mine design and associated cut-off grade, an updated Ore Reserve estimatewas reported according to the guidelines set by the JORC Code 2012 Edition. A summary of theupdated Ore Reserve estimate is shown in Table 1-2

Table 1-2 Ore Reserve Estimate at 0.30% Li2OCut-off as of 30 June 2019

TonnesJORC Category (Mt) Li2O% Fe2O3% Li2O Tonnes

Proved . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.2 1.22 1.40 87,000Probable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30.5 1.05 1.29 320,000Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37.6 1.08 1.31 407,000

A-2

27NOV201908420905

These estimated Ore Reserves occur within an open pit containing a total of 142.7 Mt of wastematerial for a waste to ore (tonnes) strip ratio of 3.8:1 and a total open pit size of 179.7 Mt.

Figure 1-1 Pilgangoora Final Pit Design

A-3

JORC CODE, 2012 EDITION—TABLE 1

Section 1 Sampling Techniques and Data

(Criteria in this section apply to all succeeding sections.)

Criteria JORC Code explanation Commentary

Sampling techniques • Nature and quality of sampling (eg • The Pilgangoora deposit wascut channels, random chips, or sampled by collecting outcrop rockspecific specialised industry standard chips; samples were also collectedmeasurement tools appropriate to the from reverse circulation or RCminerals under investigation, such as (chip) and diamond drilling or DDdown hole gamma sondes, or (core).handheld XRF instruments, etc). • Drilling for assay samples wasThese examples should not be taken undertaken on a regular spacedas limiting the broad meaning of grid (average 40m � 40m) and ansampling. infill grid in places (average

• Include reference to measures taken 20m � 20m). All potential oreto ensure sample representivity and intervals and their contacts intothe appropriate calibration of any barren wall rock were sampled.measurement tools or systems used. • RC drill hole samples were

• Aspects of the determination of collected in one metre (1m)mineralisation that are Material to intervals from the beginning to endthe Public Report. of each hole. Each 1m sample was

split directly using a rig-mounted• In cases where ‘industry standard’ riffle splitter and then collectedwork has been done this would be into a uniquely numbered calicorelatively simple (eg ‘reverse bag. The remaining material forcirculation drilling was used to each 1m interval was collectedobtain 1 m samples from which 3 kg directly off the cyclone into awas pulverised to produce a 30 g numbered plastic bag and kept nearcharge for fire assay’). In other cases the drill site for geological logging.more explanation may be required,such as where there is coarse gold • DD used a HQ diameter triplethat has inherent sampling problems. tube core barrel; the core wasUnusual commodities or removed from the tube and thenmineralisation types (eg submarine transferred to 4x1m HQ core trays.nodules) may warrant disclosure of The core was marked up anddetailed information. logged in the core trays. Sample

lengths were determined by thegeologist, based upon the natureand location of the mineralisationlogged in the core. Half coresample cut from mineralised zoneswas sent for assay analysis.

• Mineralisation was initiallydetermined visually and confirmedby geological logging andgeochemical assaying.

A-4

Criteria JORC Code explanation Commentary

Drilling techniques • Drill type (eg core, reverse • Drilling from 2010-13, includedcirculation, open-hole hammer, rotary both RC (chip) and DD (core).air blast, auger, Bangka, sonic, etc) This work was undertaken usingand details (eg core diameter, triple Altura’s PRD2000 multipurpose rigor standard tube, depth of diamond rated at 1120 cfm @ 350psi. Thetails, face-sampling bit or other type, RC drilling used a 5.2’’’’(132mm)whether core is oriented and if so, by face sampling hammer, thewhat method, etc). diamond drilling used HQ (63.5mm

internal) coring. The RC holeswere sampled from the surface. DDholes were pre-collared to 3m andthen coring commenced. No coreorientation was undertaken.

• In April 2016, DD was carried outby DDH1, who supplied a SandvikUDR 1200 (PQ3 size core; 85mmcore diameter) truck mounted rig.No core orientation wasundertaken.

• In June to October 2016, RCdrilling was undertaken with fourRC drill rigs. Strike Drillingsupplied a truck mounted rig SD02/KWL700 (143mm hammer bit). MtMagnet Drilling (MMD) supplied aRC450 Hydco track mounted rig(146mm hammer bit); MMDDR24/UDR259 track mounted rig(140mm hammer bit); and MMDMP1300 multipurpose truckmounted rig (146mm hammer bit).When required all the RC rigsutilised auxiliary compressors foradditional air pressure.

• In May to July 2017, RC drillingwas undertaken using two RC drillrigs. Mt Magnet Drilling (MMD)supplied a RC450 Hydco trackmounted rig (146mm hammer bit);and MMD MP1300 multipurposetruck mounted rig (146mm hammerbit). When required the RC rigsutilised auxiliary compressors foradditional air pressure.

A-5

Criteria JORC Code explanation Commentary

• In February to March 2018, RCdrilling was undertaken using a RCdrill rig. Mt Magnet Drilling(MMD) supplied a RC450 Hydcotrack mounted rig (146mm hammerbit). When required the RC rigutilised an auxiliary boostercompressor for additional airpressure.

Drill sample recovery • Method of recording and assessing • No direct recovery measurementscore and chip sample recoveries and of RC samples were performed.results assessed. Sample recovery at the rig is

visually estimated and recorded for• Measures taken to maximise sample loss per sample interval.recovery and ensure representativenature of the samples. • Representative drill chips for each

2m interval were collected by the• Whether a relationship exists between Rig Geologist during loggingsample recovery and grade and carried out from 2010-16.whether sample bias may haveoccurred due to preferential loss/gain • Representative drill chips for eachof fine/coarse material. 1m interval were collected by the

Rig Geologist during the 2017-18logging.

• RC sample recovery was maximisedby stopping drilling at the metreinterval and air-flushing the cyclonecontents through the splitter tomaximise recovery.

• HQ core was recovered in nominal3m drill runs (or intervals) andmarked by the drillers core block.The core was later marked by theRig Geologist in 1m intervals andthe drill core recovery wasmeasured.

• Diamond drilling was targeted atmaximum core recovery of greaterthan or equal to 95%.

• The assay results of duplicate RCand twinned diamond drill holesamples do not show a sample biaswhich may have been caused by thepreferential loss/gain of fine/coarsematerial within the mineralisedpegmatites.

A-6

Criteria JORC Code explanation Commentary

Logging • Whether core and chip samples have • All RC and DD holes were loggedbeen geologically and geotechnically by Rig Geologists.logged to a level of detail to support • Representative drill chips for eachappropriate Mineral Resource 1m or 2m interval in the RC holesestimation, mining studies and were collected by the Rigmetallurgical studies. Geologist. The drill chips from

• Whether logging is qualitative or these intervals were dry and wetquantitative in nature. Core (or sieved and then lithologicallycostean, channel, etc) photography. logged. The RC logging undertaken

on the 1m or 2m intervals• The total length and percentage of documented the lithology, colour,the relevant intersections logged. texture, alteration and

mineralisation of each intervalusing Altura Mining’s standardisedlogging codes.

• A representative sample for each1m (2017-18) or 2m (2010-16)interval was placed in chip trays forfuture reference.

• The DD logging undertaken on thecore intervals documented thelithology, colour, texture, alterationand mineralisation of each intervalusing Altura Mining’s standardisedlogging codes. Geological contacts(or boundaries) were accuratelylogged. A representative samplewas placed in core trays for futurereference.

• All DD holes were measured forrock-quality designation or RQDand structural data (for example,joints, faults/fractures and naturalbreaks) was measured and logged.

• The RC and DD logging wasconsidered quantitative in nature.

• All of the chip and core trays werephotographed (full length of eachhole) for future reference purposes.

• All recovered RC and DDintersections were logged.

A-7

Criteria JORC Code explanation Commentary

Sub-sampling • If core, whether cut or sawn and • RC samples were normally dry. Iftechniques and whether quarter, half or all core water was present, it was expelledsample preparation taken. (if possible) from the hole before

sample was collected.• If non-core, whether riffled, tubesampled, rotary split, etc and whether • RC samples for 1m intervals weresampled wet or dry. split using a riffle splitter mounted

on each RC rig to provide a• For all sample types, the nature, 1/8th sample.quality and appropriateness of thesample preparation technique. • The split samples were stored in

numbered calico sample bags. The• Quality control procedures adopted sample numbers used in each drillfor all sub-sampling stages to hole were recorded by the Rigmaximise representivity of samples. Geologist.

• Measures taken to ensure that the • Diamond core was 1⁄2 or 1⁄4 cut (forsampling is representative of the in check sampling and metallurgicalsitu material collected, including for purposes) with sampling from theinstance results for field duplicate/ same side where possible.second-half sampling.

• Sample preparation for both RC• Whether sample sizes are appropriate chips and DD core, required thatto the grain size of the material being the whole sample was crushed tosampled. 2mm, then rotary divided and a

500g (approximate) sample waspulverised to �75 microns. A 0.2gsplit was then sent directly to amicrowave-assisted dissolution. HFacid MAD’s are performed insealed vessels at temperatures up to200�C and pressures up to 20 Bar.Digests were controlled withrespect to microwave power, vesseltemperature and vessel pressure toachieve reproducible digestionconditions across a wide range ofsample materials.

• Samples collected in 2017 weresorted, weighed, dried andpulverised to nominal 90% <75umusing Labtech Essa LM5 pulveriser.

• Samples in 2018 were sorted,weighed, dried and pulverised usinga routine 5-minute grind time todeliver Intertek’s required qualityspecification of P85 75um.

A-8

Criteria JORC Code explanation Commentary

• Random duplicate samples foranalyses were taken from most ofthe pegmatite intersections. Therange between the original andduplicate sample data was onaverage 10-15%.

• Each laboratory also inserted itsown check samples in each assaybatch.

• The drill sample sizes wereconsidered appropriate to representthe spodumene mineralisation,based on the average size ofspodumene crystals (up to 50cm)and the thickness and overallconsistency of mineralisation withinthe pegmatite hosts.

Quality of assay data • The nature, quality and • Initial samples up until June 2011and laboratory tests appropriateness of the assaying and were dispatched to Ultra Trace

laboratory procedures used and Laboratories in Perth.whether the technique is considered • All subsequent sample submissionspartial or total. up to October 2016 were sent to

• For geophysical tools, spectrometers, LabWest in Perth.handheld XRF instruments, etc, the • Both laboratories are NATAparameters used in determining the (National Association of Testinganalysis including instrument make Authorities, Australia) certified.and model, reading times,calibrations factors applied and their • Li (ppm), Al2O3%, CaO%,derivation, etc. Fe2O3%, K2O%, MgO%, MnO%,

Na2O%, P2O5%, SO3% and TiO2%• Nature of quality control procedures were assayed using microwaveadopted (eg standards, blanks, assisted HF acid digest with anduplicates, external laboratory ICP-OES finish, while Be (ppm),checks) and whether acceptable levels Cs (ppm), Nb (ppm), Rb (ppm), Snof accuracy (i.e. lack of bias) and (ppm), Ta (ppm), Th (ppm) Uprecision have been established. (ppm) and W (ppm) were digested

with an ICP-MS finish. Thistechnique is considered an effectivefor whole rock determination.

A-9

Criteria JORC Code explanation Commentary

• The Certified Reference Materials(CRM) rate used by LabWest was 2in every 24 samples and 7 CRM’s(2 lithium ores, 1 rock, 1 soil, 3pegmatites) were used. Internal labsplits (post-crushing) were done on1 in 40 samples and pulp repeatswere inserted at the rate of 1 in 24samples. LabWest randomlyinserted in-house standards tocheck their internal QC sampling.

• Random, blind re-submission ofpulps from LabWest to an externallab (Ultra Trace) for check assayingwas carried out.

• In 2017, the samples weresubmitted to SGS Australia’sLaboratory in Perth. This lab isNATA certified encompassingISO17025.

• Two analyses methods were used bySGS.

• The first method used by SGS wasthe determination of elements bySodium Peroxide Fusion with ICPfinish. Each sample was fused withsodium peroxide in a zirconiumcrucible and the melt was leachedwith hydrochloric acid and made tovolume. The solution from thedigest was presented to anICP-OES for the quantification ofLi (ppm) and Fe (ppm).

• The second method used by SGSwas the determination of Elementsby Borate Fusion with XRF finish.Each sample was fused in aplatinum crucible using lithiummetaborate / tetraborate flux andthe resultant glass bead wasirradiated with X-Rays and theelements of interest werequantified. These elements were Al(ppm), Ca (ppm), Fe (ppm), K(ppm), Mn (ppm), Na (ppm), P(ppm), Si (ppm) and Ti (ppm).

A-10

Criteria JORC Code explanation Commentary

• SGS used the following QCprotocol: Blanks 1:50 (Reagentblank); Standards (CRM) 2:50;Repeats 1:50 (re-weigh fromoriginal assay packet); Duplicates5% (sub-sampled at preparationstage from fine reject and analysedtogether at end of batch).

• SGS used 9 CRM’s.

• In 2018, the samples weresubmitted to Intertek GenalysisLaboratory in Perth which isISO17025 accredited.

• The method used by Intertek wasthe determination of elements bySodium Peroxide Fusion with ICPfinish. Each sample was fused withsodium peroxide in a zirconiumcrucible and the melt was leachedwith hydrochloric acid and made tovolume. The solution from thedigest was presented to anICP-OES for the quantification ofAl (%), Ca (%), Fe (%), K (%), Li(%), Mn (%), Si (%) and Ti (%);Rb (%) was reported using a MSfinish.

• The quality control protocolsemployed by Intertek made use ofcontrol blanks (reagent blanks),checks (pulp duplicates) andreference materials which may becertified reference materials.Normally blanks were employed inat least 1% of the samples andchecks and reference materialsabout 4% of the samples.

• Intertek used 7 CRM’s.

A-11

Criteria JORC Code explanation Commentary

• Field duplicates were randomlyinserted by the drilling offsiderwhen mineralised pegmatites wereintersected. The position of eachduplicate sample was logged by theRig Geologist. The general practicewas to include a duplicate samplein every intersected pegmatite. Theduplicate samples were submittedalong with the remaining chipsamples.

• During the 2017 and 2018 drillprograms, the Rig Geologist alsoadded a blank (industrial sand) andCRM standard in addition to theduplicate samples collected in thefield.

• In August 2017, Altura requestedan external laboratory check ofsamples pulps stored by SGS and aset of CRM standards. This workwas carried out by IntertekGenalysis which is ISO17025accredited.

• The analyses methods used byIntertek were identical to thoseused by SGS.

• The quality control protocolsemployed by Intertek made use ofcontrol blanks (reagent blanks),checks (pulp duplicates) andreference materials which may becertified reference materials.Normally blanks were employed inat least 1% of the samples andchecks and reference materialsabout 4% of the samples.

• Intertek used 7 CRM’s.

• The QC samples used by Alturaplus laboratory splits and internalstandards have indicated theassaying shows acceptable levels ofaccuracy and precision.

A-12

Criteria JORC Code explanation Commentary

• No geophysical tools, spectrometersor hand-held XRF instrumentswere used in determining any ofthe assay data included in thisresource.

Verification of • The verification of significant • Drill hole geological andsampling and intersections by either independent or geotechnical logging wasassaying alternative company personnel. undertaken on site by qualified Rig

Geologists during the various drill• The use of twinned holes. programs in 2010-13 and 2016-18.• Documentation of primary data, data • All completed RC and DD holes

entry procedures, data verification, were logged.data storage (physical and electronic)protocols. • A complete dataset of lithology logs

plus photos of the chip trays and• Discuss any adjustment to assay the diamond core have beendata. examined and confirm the observed

pegmatite mineralisation intervalscorrespond with the assay data.

• A large selection of the RC chipsand DD core was also viewed onsite at Pilgangoora.

• Some significant intersections fromthe 2010-13 RC programs weretwinned by a nine-hole DDprogram in April 2016 to confirmthe thickness of the pegmatiteintersections. This information wasused as a check in the November-December 2016 resource estimationwork.

• Assay data was provided by thevarious laboratories as certifieddata files.

• All survey, lithology and assay datawas input to Excel spreadsheetsthat were exported to Datashed.Data validation and cross-checkingwas conducted using manual checksand an automated verificationfunction.

A-13

Criteria JORC Code explanation Commentary

• Lithium assay data were initiallyrecorded as Li (ppm). It is standardindustry practice to present lithiumresults as Li2O%. This is done byapplying a conversion factor—theLi (ppm) was divided by 10,000 andthat result was then multiplied by2.153 to calculate the Li2O%.

Location of data points • Accuracy and quality of surveys used • All drill hole collars from 2010-13to locate drill holes (collar and and 2016 were surveyed by Heyhoedown-hole surveys), trenches, mine Surveys, Geraldton, WA using aworkings and other locations used in Trimble R6 RTK GPS system withMineral Resource estimation. an accuracy of +/� 0.02m in the

horizontal and +/� 0.03m in the• Specification of the grid system used. vertical relative to control station• Quality and adequacy of topographic Pilg1. Pilg1 was established by R6

control. RTK GPS using SSM KM3 MarbleBar38 (horizontal) and SSM R610(vertical).

• The grid co-ordinates used wereMap Grid of Australia (MGA) andGDA94 Zone 50. AHD elevationsuse the Ausgeoid98 Geodic model.

• The drill hole collars from 2017-18were surveyed by Altura Surveypersonnel using a Leica GS10/AS10Base station and LeicaGS16/GS14/CS20 RTK Rover set.

• The collars were located byRTK GPS to an accuracy of+/�0.02m (X/Y/Z).

• The Grid System used by Altura onsite is MGA Zone 50K.

• Topographic control supplied byAltura Survey was collated fromcombined RTK GPS point data,Original LiDAR data and recentUAV Aerial data. Surface levelsover the entire area of concernsupplied by Altura Surveydepartment are accurate to+/�0.10m.

A-14

Criteria JORC Code explanation Commentary

• The nature of the topography issuch that the current number ofsurvey points and their accuracy isconsidered adequate for thetopographic control used for allcompleted exploration work andresource/ reserve estimation work.

• Down hole surveys were completedon selected RC holes and theirtwinned DD holes over the extentof the Pilgangoora resource area.The 2010-13 surveys werecompleted by Down Hole Surveysof Perth, WA using a GyroSmarttool. The 2016-18 down holesurveys were completed using aReflex Ez-Shot camera.

Data spacing and • Data spacing for reporting of • Previously RC holes were drilled ondistribution Exploration Results. a nominally spaced 40m � 40m

grid pattern covering the strike• Whether the data spacing and extent of the Pilgangoora pegmatitedistribution is sufficient to establish zone.the degree of geological and gradecontinuity appropriate for the Mineral • In 2017, RC holes were drilled onResource and Ore Reserve estimation an infill 20m � 20m grid pattern inprocedure(s) and classifications the areas planned to be minedapplied. during the first three years of

production.• Whether sample compositing hasbeen applied. • The 2018 RC holes were drilled on

a 40m � 40m grid pattern to infillprevious drilling.

• Both grid patterns are consideredadequate spacing for establishinggeological and grade continuityboth along strike and down dip.From outcrop mapping and costeanexposures, the pegmatite dykesexhibit consistency over distancesexceeding 20-40m and dataacquired from drill holes at thisspacing is considered adequate forthe definition of resource andreserve estimations in accordancewith the JORC code.

• No sample compositing has beenapplied within the resource area.

A-15

Criteria JORC Code explanation Commentary

Orientation of data in • Whether the orientation of sampling • The strike of the pegmatite dykes isrelation to geological achieves unbiased sampling of between 010-030oNNE and thestructure possible structures and the extent to general dip is 25-45oESE and

which this is known, considering the occasionally up to 55-75oESE. Mostdeposit type. of the RC holes were drilled at

�60o dip on azimuths between 270o• If the relationship between the and 300o, which enabled accurate

drilling orientation and the measurement of the true width oforientation of key mineralised the mineralisation and unbiasedstructures is considered to have sampling.introduced a sampling bias, thisshould be assessed and reported if • A set of vertical RC holes werematerial. drilled along the eastern tenement

boundary plus in some other areas,including the southern end of thedeposit. These holes also achievedunbiased sampling.

• All ore zones occur inside theintersected pegmatites.

Sample security • The measures taken to ensure sample • The chain of custody for samplingsecurity. procedures and sample analysis was

managed by the Rig Geologists andField Technicians during the variousdrilling campaigns.

• Sample material was geologicallylogged and the numbered calicosample bags were then collectedfrom designated pegmatiteintervals. These intervals weredetermined by the Rig Geologisteither at the time of drilling or atthe completion of a drill hole.

• Three to four calico sample bagswere placed in larger bags forsample transport and then storedon site temporarily while a samplebatch (for a group of drill holes)was prepared. The total number ofsamples was checked on site by sitepersonnel prior to beingtransportation to Port Hedland.

A-16

Criteria JORC Code explanation Commentary

• Initial samples were delivered byToll-Ipec to Ultra Trace inCannington, Perth and latersamples were delivered by RegalTransport to LabWest in Malaga,Perth. The 2017 samples weredelivered by Regal Transport toSGS in Perth. The 2018 sampleswere delivered by RGR Transportto Intertek in Perth. Staff from thevarious laboratories checked thesample bags and totals for eachsample batch before commencingsample preparation.

• Remaining DD core and RC chipsamples collected for the drill holelibrary and are stored in securefacilities on site.

• Assay pulps for all assayed samplesare retained in permanent storageby Altura.

Audits or reviews • The results of any audits or reviews • A review of sampling techniquesof sampling techniques and data. used in 2010-13 and a thorough

drill hole data review wasundertaken by Ravensgate inSeptember 2015 and then byHyland Geological and MiningConsultants (HGMC) in August2016.

• The sampling methods used in theperiod from June to October 2016;May to July 2017 and February toMarch 2018 complied with industrystandards.

• In August 2017 Altura conductedan internal QAQC review of thesampling techniques used and datacollected from May to July.

A-17

Section 2 Reporting of Exploration Results

(Criteria listed in the preceding section also apply to this section.)

Criteria JORC Code explanation Commentary

Mineral tenement and • Type, reference name/number, • The deposit lies within theland tenure status location and ownership including M45/1230 and M45/1231 mining

agreements or material issues with tenements which were granted onthird parties such as joint ventures, 26 August 2016.partnerships, overriding royalties, • Mining tenement M45/1260 whichnative title interests, historical sites, adjoins the western boundary of thewilderness or national park and M45/1230 tenement was granted onenvironmental settings. 6 February 2018.

• The security of the tenure held at the • These are owned 100% by Alturatime of reporting along with any Lithium Operations Pty Ltd (aknown impediments to obtaining a wholly owned subsidiary of Alturalicence to operate in the area. Mining Limited).

• All tenements covering the depositare in good standing and there isno known impediment to obtaininga license to operate.

Exploration done by • Acknowledgment and appraisal of • There has been no exploration forother parties exploration by other parties. lithium completed on this ground

by other parties.

Geology • Deposit type, geological setting and • Altura’s Pilgangoora lithium projectstyle of mineralisation. occurs at the southern end of a

structurally controlled zone ofpegmatite intrusive dykes within thesynformal Pilgangoora greenstonebelt. The pegmatite dykes arehosted within amphibolites whichhave a mafic and ultramaficvolcanic origin.

• A total of 15 mineralisedpegmatites have been identified andthese generally strike 010-030�NNEand dip 25-45�ESE. The dykesrange in thickness from 1-64m andare usually 8-14m thick.

• The mineralised pegmatites arewithin a north-northeast (NNE)trending zone which isapproximately 1600m long, 550mwide and up to 450m deep.

A-18

Criteria JORC Code explanation Commentary

• The mineralised pegmatites arelocated approximately 2-3km eastof a granite contact. There areseveral barren pegmatites located inthe zone between the granitecontact and the mineralisedpegmatite zone. Note—the granitecontact and barren pegmatites wereidentified via sterilisation drillingcarried out in 2016 for proposedinfrastructure and waste dumpareas.

• Significant mineralisation in each ofthe pegmatites is confined tolithium and rubidium (almostwholly reporting in spodumene andmuscovite respectively) withrelatively low values for tin andtantalum or other associatedminerals.

Drill hole Information • A summary of all information • Significant results were lastmaterial to the understanding of the reported in the stipulated format inexploration results including a an ASX announcement released ontabulation of the following 10/04/18.information for all Material drill • Drilling results were also reportedholes: to the ASX on 02/03/2011,

• easting and northing of the drill 15/03/2011, 09/05/2011, 16/06/2011,hole collar 05/07/2011, 03/08/2011, 21/11/2011,

08/05/2012, 03/10/2012, 22/06/2015,• elevation or RL (Reduced 22/09/2016, 21/11/16, 30/01/17,Level—elevation above sea level 24/10/17 and 13/03/18.in metres) of the drill hole collar

• A staged series of drilling programs• dip and azimuth of the hole commencing in August 2010 and• down hole length and extending through to March 2013

interception depth covered a majority of the pegmatitefield with 290 drill holes. There• hole length. were 282 RC holes (including four

• If the exclusion of this information is water bore holes) totalling 24,649mjustified on the basis that the and eight diamond core drill holesinformation is not Material and this totalling 1,387.9m completed duringexclusion does not detract from the that period.understanding of the report, the • In April 2016, DD work comprisedCompetent Person should clearly of 9 holes totalling 854m.explain why this is the case.

A-19

Criteria JORC Code explanation Commentary

• A total of 246 RC holes werecompleted from June-October 2016,totalling 41,070m. A total of 139RC holes (25,233m) were drilled inthe main deposit area and 107 RCsterilisation holes (15,837m) werecompleted within the areasdesignated for infrastructure, wastedumps, tailings storage facility andother associated surfaceinstallations.

• In May to July 2017, 189 RC holeswere completed totalling 8,369m.

• In February to March 2018, 47 RCholes totalling 4,883m werecompleted.

• During the period from 2010-18, atotal of 17 DD holes (2,241.9m)and 764 RC holes (78,971m) havebeen completed.

Data aggregation • In reporting Exploration Results, • No weighting or averagingmethods weighting averaging techniques, techniques were used on samples or

maximum and/or minimum grade assays prior to reportingtruncations (eg cutting of high Exploration Results.grades) and cut-off grades are usually • There has been no cutting of highMaterial and should be stated. grade intercepts as the nature of

• Where aggregate intercepts spodumene distribution inincorporate short lengths of high pegmatite lenses and the evidencegrade results and longer lengths of of continuity from drill assay resultslow grade results, the procedure used is sufficient to accept higher gradefor such aggregation should be stated values that are consistent betweenand some typical examples of such the intercepts.aggregations should be shown in • No metal equivalent values aredetail. reported.

• The assumptions used for anyreporting of metal equivalent valuesshould be clearly stated.

A-20

Criteria JORC Code explanation Commentary

Relationship between • These relationships are particularly • The drill holes were drilled at rightmineralisation important in the reporting of angles (300�) or slightly obliquewidths and intercept Exploration Results. (270�) to the strike of thelengths pegmatite dykes. In the main• If the geometry of the mineralisation Pilgangoora deposit area the grid

with respect to the drill hole angle is base line was oriented due north.known, its nature should be reported. In the eastern area initial drilling

• If it is not known and only the down was on a 030�orientated grid; thishole lengths are reported, there orientation was also used in latershould be a clear statement to this drilling, including the drillingeffect (eg ‘down hole length, true completed in 2016-18.width not known’). • Most drill holes were angled at

�60� and some vertical (�90�)holes were also drilled. Themineralised dykes regularly diparound 35� (range between 25-45�);reported thicknesses are about10-15% greater than true thickness.

• Calculated true widths were notreported however are correctlyaccounted for in 3D modelling.

Diagrams • Appropriate maps and sections (with • A copy of the pegmatite lodes andscales) and tabulations of intercepts drill hole locations are shown inshould be included for any significantdiscovery being reported These should

Figures 2 and 4 of Altura’s ASX Announcement dated 9 October

include, but not be limited to a plan 2019.view of drill hole collar locations andappropriate sectional views.

Balanced reporting • Where comprehensive reporting of all • Balanced reporting of intersectionExploration Results is not results has been provided inpracticable, representative reporting of Altura’s ASX Announcement datedboth low and high grades and/or 9 October 2019 and all previouswidths should be practiced to avoid announcements of Altura.misleading reporting of ExplorationResults.

Other substantive • Other exploration data, if meaningful • Preliminary metallurgical studiesexploration data and material, should be reported show that a spodumene concentrate

including (but not limited to): grading over 6.00 Li2O% can begeological observations; geophysical produced.survey results; geochemical survey • 283 density measurements haveresults; bulk samples—size and been completed on diamond drillmethod of treatment; metallurgical core.test results; bulk density, groundwater,geotechnical and rock characteristics; • RQD measurements andpotential deleterious or preliminary hardness tests.contaminating substances.

A-21

Criteria JORC Code explanation Commentary

• Assays to date have not indicatedany potential deleterious orcontaminating substances.

Further work • The nature and scale of planned • Future infill drilling programs needfurther work (eg tests for lateral to be carried within the remainderextensions or depth extensions or of the proposed mining area.large-scale step-out drilling). • Closely spaced ‘grade control’

• Diagrams clearly highlighting the drilling of pegmatites is carried outareas of possible extensions, during mining.including the main geological • The assay results of the ‘gradeinterpretations and future drilling control’ drilling were comparedareas, provided this information is with the exploration and infillnot commercially sensitive. drilling results to quantify the

estimated lithium grades.

A-22

Section 3 Estimation and Reporting of Mineral Resources

(Criteria listed in section 1, and where relevant in section 2, also apply to this section.)

Criteria JORC Code explanation Commentary

Database integrity • Measures taken to ensure that data • Lithology data were logged in thehas not been corrupted by, for field pro-forma spread sheets.example, transcription or keying • Lab submission sheets wereerrors, between its initial collection digitally recorded in the same way.and its use for Mineral Resourceestimation purposes. • Assay data were received from the

laboratory in an electronic format• Data validation procedures used. and are imported directly intoDataShed, a standard databasesystem, which completed intervalchecks to ensure there were nodata overlaps or duplicates.

• All data were validated by Alturapersonnel prior to transmission toCube Consulting Pty Ltd (Cube), inPerth, Western Australia, whocompleted the Mineral ResourceEstimate (MRE) work inNovember-December 2016, August-September 2017, April-May 2018and June-July 2019.

• Any errors recorded from thevarious validation processes weremanually checked and correlatedback to the original database. Ifnecessary, field checks were madeto confirm validation issues.

Site visits • Comment on any site visits • The Competent Person Stephenundertaken by the Competent Person Barber made numerous visits toand the outcome of those visits. Altura’s Lithium Project from July

2016 to June 2019.• If no site visits have been undertakenindicate why this is the case. • During his time on site in 2016-19

he was responsible for thecoordination of the drillingprogram, management andvalidation of the drilling database,plus he also provided assistance tothe logging and sampling of the RCholes when required.

A-23

Criteria JORC Code explanation Commentary

Geological • Confidence in (or conversely, the • The geology of the intrusiveinterpretation uncertainty of) the geological pegmatite system is relatively

interpretation of the mineral deposit. simple. Confidence in thegeological interpretation is high as• Nature of the data used and of any infill drilling and the introduction

assumptions made. of deeper drilling has confirmed• The effect, if any, of alternative the size and position of the

interpretations on Mineral Resource previously interpreted pegmatiteestimation. lodes.

• The use of geology in guiding and • The distribution of Li2O and othercontrolling Mineral Resource attributes estimated within theestimation. pegmatite bodies is more complex.

Cube believes that the geological• The factors affecting continuity both continuity and volume controls areof grade and geology. well established where the drilling

is at a nominal 20m � 20m (infill)and 40m � 40m (regular) holespacings.

• The data used to establish thegeological model consisted ofsurface outcrop mapping, downhole geological logging of primarilyRC drill chips, structural data andfield observations. Numerous faultswere identified through aerialphotography, field observations, pitwall and pit floor mapping. Thesefaults were incorporated in themodelling of the various pegmatitebodies.

• Alternative geological models ofthe pegmatite bodies may in placesbe possible especially where drilldata is more widely spaced. Cubewould not expect a material effecton volume or grade resulting fromsuch alternative interpretations.

• Geology has been the primary basisfor the interpretation of themineralised volume which is basedsolely on the logged rock type‘pegmatite’.

A-24

Criteria JORC Code explanation Commentary

• Within the simple geometry of thegeological pegmatite units thegrades of estimated attributes varydue to geochemical factors, thegeothermal gradient and fluidcirculation pathways whichdetermine the depositionalconcentration of Li2O and othergrade attributes estimated withinthe pegmatite volume.

Dimensions • The extent and variability of the • Mineralisation is contained withinMineral Resource expressed as length 15 individual pegmatite intrusive(along strike or otherwise), plan lodes which occur as a set ofwidth, and depth below surface to stacked lodes generally strikingthe upper and lower limits of the 010-030oNNE and dippingMineral Resource. 25-45oESE. The pegmatite lodes

extend over 1600m north/south,extending from surface to amaximum of 450m below thetopographical surface, andoutcropping over an area 550m(east-west) wide. Mineralisation ispresent at surface for some lodeswith most mineralised lodes startingfrom within 10m of surface.

Estimation and • The nature and appropriateness of • The 2019 MRE used surfacemodelling techniques the estimation technique(s) applied outcrop mapping, the existing

and key assumptions, including interpretation of pegmatite lodetreatment of extreme grade values, 3DMs as a guideline, re-loggingdomaining, interpolation parameters information of existing RC drilland maximum distance of holes and various newly interpretedextrapolation from data points. If a faults to re-interpret the pegmatitecomputer assisted estimation method bodies and reflects the currentwas chosen include a description of structural understanding of thecomputer software and parameters deposit. 15 Pegmatite bodies wereused. interpreted during the 2019 MRE.

• The availability of check estimates, • The 3DM wireframes have beenprevious estimates and/or mine generated using LeapFrog� implicitproduction records and whether the modelling and these wireframesMineral Resource estimate takes have been used to select the dataappropriate account of such data. to be used and to constrain the

estimated block volumes.• The assumptions made regardingrecovery of by-products.

A-25

Criteria JORC Code explanation Commentary

• Estimation of deleterious elements or • The interpretation of pegmatiteother non-grade variables of volumes was based on theeconomic significance (eg sulphur for geological logging only and allacid mine drainage characterisation). grade data within each of the

pegmatite geological units has been• In the case of block model used in the estimation.interpolation, the block size inrelation to the average sample • Estimation of Li2O%, Fe2O3%,spacing and the search employed. MnO%, Rb ppm Al2O3%, SiO2%,

CaO%, MgO%, Cs ppm, Ta ppm,• Any assumptions behind modelling of Be ppm and K2O% wasselective mining units. undertaken.

• Any assumptions about correlation • Drill intervals falling within thebetween variables. wire framed pegmatite lodes were

• Description of how the geological coded in the database. Compositesinterpretation was used to control the of each grade item were thenresource estimates. generated using the Surpac

‘‘best-fit’’ method. On the basis of• Discussion of basis for using or not sample size, local grade variability,using grade cutting or capping. selectivity assumption

• The process of validation, the (5mEW � 5mNS � 3mRL) andchecking process used, the selected estimation methodology,comparison of model data to drill Cube have chosen to use 1m downhole data, and use of reconciliation hole composites for this estimation.data if available. This composite size provides

maximum resolution for modellingof local grade variability while stillallowing for robust characterisationof the spatial structure (i.e. thevariograms). No grade control datawas used during the estimation.

• Due to the nature of themineralisation no estimationdomains were found to containextreme outlier grade values, andtherefore no grade capping wasundertaken. Based on the statisticalcharacteristics of the key gradeitems and the proposed use of theresulting block model, Cubedecided to undertake gradeestimation using the non-linearLocalised Uniform Conditioning(‘‘LUC’’) method within majorpegmatite domains, which canprovide small block estimates(5mEW � 5mNS � 3mRL) fromrelatively wide spaced data.

A-26

Criteria JORC Code explanation Commentary

• The LUC estimates were carriedout for Li2O and Fe2O3 and wereimplemented using the Isatis�software package before beingtransferred into a Surpac� blockmodel. LUC was undertaken in aselection of the largest pegmatitedomains, with those deemed toosmall and poorly informed for LUCbeing estimated using OrdinaryKriging (OK) at a20mEW � 20mNS � 6mRL‘Panel’ block size.

• Al2O3, SiO2, K2O, CaO, MnO,MgO, Cs, Ta, Be and Rb wereestimated using Ordinary kriginginto a Panel size block model(20mEW � 20mNS x6mRL). Nograde capping was deemednecessary for the five deleteriouselements with a low COV for mostof the pegmatite domains. Theestimates were subsequentlyimported into the SMU size blockmodel (5mEW � 5mNS � 5mRL).The average element rade gradewas assigned to smaller domains.

• No consideration has been madewith respect to by-products.

• Statistical analysis shows that theseven variables being estimated arenot sufficiently well correlated forthe use of multivariate estimationmethods and so each variable wasestimated independently.

A-27

Criteria JORC Code explanation Commentary

• Block size for grade estimation waschosen in consultation with Alturaand with due regard to dataspacing, orebody geometry, andpractical mining considerations. Theestimation Panel size used was20mEW � 20mNS � 6mRL. AnSMU block size of5mEW � 5mNS � 3mRL waschosen (no rotation) for use in thelocalisation process. This SMUblock size conforms to theproposed mining flitch height. Thedata spacing would be consideredtoo wide for such a small block sizeif conventional linear estimationmethods were used. However, Cubehas used the LUC method in majordomains, which is intendedspecifically for estimating the gradedistribution of smaller blocks usingrelatively wide spaced data points.

• The OK estimates were validatedby comparing the informingcomposite grade with the estimateper well informed domains, andswath plots were generated.

• The LUC models were validated bycomparing global declusteredcomposite data to the estimates perestimation domain, on a semi-localbasis by the use of swath plots andfinally by visual cross-sectional and3D observations of the modelledblock grades against the informingdrill data.

Moisture • Whether the tonnages are estimated • Tonnages were assigned on a dryon a dry basis or with natural density basis.moisture, and the method ofdetermination of the moisturecontent.

Cut-off parameters • The basis of the adopted cut-off • The selection of mineralisedgrade(s) or quality parameters domains has used geological factorsapplied. only, represented by a logged

pegmatite interpretation. No gradecut-off was used to determine themineralised volume.

A-28

Criteria JORC Code explanation Commentary

• The Mineral Resource has beenreported above a 0.3% Li2O cut-offto appropriately reflect the tonnesand grade of estimated blocks thatwill meet the proposedbeneficiation process. The proposedbeneficiation process requires afeed grade of a consistent 1.00%Li2O within a relatively smalltolerance. The tonnes and grade ofthe deposit are relatively insensitiveto cut-offs in the range 0.3 to 0.5%Li2O as shown in the grade tonnagecurve of the deposit.

Mining factors or • Assumptions made regarding possible • This MRE has been undertaken onassumptions mining methods, minimum mining the assumption of open pit mining

dimensions and internal (or, if methods, the choice of SMU sizeapplicable, external) mining dilution. (5mEW � 5mNS � 3mRL) wasIt is always necessary as part of the based on the scale of miningprocess of determining reasonable equipment proposed for use, theprospects for eventual economic current flitch height as well asextraction to consider potential orebody geometry.mining methods, but the assumptions • The Mineral Resources reportedmade regarding mining methods and have been limited to thoseparameters when estimating Mineral estimated blocks within theResources may not always be optimised pit shell.rigorous. Where this is the case, thisshould be reported with an • A determination of the reasonableexplanation of the basis of the prospects for eventual economicmining assumptions made. extraction by open pit mining

methods has been made bydetermining an optimal pit shellbased on 1.5 � base price($US690/t Spodumene Concentrate[6%Li2O] gross price). Thisinflation of the base price isconsidered within reasonablepossible future fluctuations of thelithium concentrate price based onrecent and past trends.

A-29

Criteria JORC Code explanation Commentary

• As with the previous Ore ReserveEstimate (see ASX Release 28 May2018), it is assumed in this latestOre Reserve that mining may takeplace on the adjacent PilbaraMinerals tenement to the east tofacilitate accessing of deeper OreReserves on the Altura tenement.Only ore that is contained withinthe Altura tenements is included inthe Ore Reserve Estimate.

• There is a reasonable expectationthat mining across the tenementboundary will be able to take place.This assumption is supported byongoing discussions between thetwo parties which as yet have notbeen finalised. The ore that wouldbe subject to any potential miningis outside of Altura’s 5 Year MinePlan and if required furtherdeferment is possible withvariations to the Life of Minescheduling sequence.

• The mining on the Pilbara Mineralsside of the tenement boundary hasbeen dealt with on a conservativebasis in the estimation of these OreReserves, in that all mining costsare assumed to be paid by Altura.Furthermore, no economic valuehas been allocated to potential OreReserves on the Pilbara Mineralstenement, which are therefore alsoexcluded from the reporting of theOre Reserves.

A-30

Criteria JORC Code explanation Commentary

Metallurgical factors • The basis for assumptions or • The selection of the 15 mineralisedor assumptions predictions regarding metallurgical domains estimated has made no

amenability. It is always necessary as assumptions or predictionspart of the process of determining regarding metallurgical amenability.reasonable prospects for eventual • The metallurgical test workeconomic extraction to consider undertaken by Altura for the DFSpotential metallurgical methods, but 2016 has confirmed to a high levelthe assumptions regarding of confidence the amenability ofmetallurgical treatment processes and the ore to beneficiation.parameters made when reportingMineral Resources may not always be • Stage 1 production commenced inrigorous. Where this is the case, this July 2018 and Altura has shippedshould be reported with an 81kt of Spodumene [6% Li2O]explanation of the basis of the concentrate to customers. Thismetallurgical assumptions made. confirms the ability of the plant to

produce concentrate from the orefeed.

Environmental factors • Assumptions made regarding possible • No assumptions have been madeor assumptions waste and process residue disposal regarding possible waste and

options. It is always necessary as part process residue disposal options.of the process of determining • There are currently no knownreasonable prospects for eventual material environmental issueseconomic extraction to consider the concerning the extraction orpotential environmental impacts of disposal of waste or tailingsthe mining and processing operation. materials.While at this stage the determinationof potential environmental impacts,particularly for a greenfields project,may not always be well advanced,the status of early consideration ofthese potential environmental impactsshould be reported. Where theseaspects have not been considered thisshould be reported with anexplanation of the environmentalassumptions made.

A-31

Criteria JORC Code explanation Commentary

Bulk density • Whether assumed or determined. If • In total 283 bulk densityassumed, the basis for the measurements were carried outassumptions. If determined, the using the Archimedes Method onmethod used, whether wet or dry, the 100.7 representative linear metresfrequency of the measurements, the from pegmatite dyke and wastenature, size and representativeness of rock material acquired from eightthe samples. DD holes. The DD holes were

collared at representative locations• The bulk density for bulk material distributed throughout themust have been measured by pegmatite lodes. The DD coremethods that adequately account for results provide a source ofvoid spaces (vugs, porosity, etc), competent rock bulk density datamoisture and differences between for material below 4m to a depth ofrock and alteration zones within the over 100m. There is very littledeposit. oxide or transitional weathered

• Discuss assumptions for bulk density rock within the project area withestimates used in the evaluation pegmatite dykes frequentlyprocess of the different materials. outcropping.

• On balance Cube believe that thereis sufficient data to allow theassignment of average values to theMRE block model but not enoughto allow a spatially representativeestimation of bulk density. Cubehas used assumed bulk densityvalues based on an interpretedweathering surface separating freshfrom weathered material.

Classification • The basis for the classification of the • The geological model andMineral Resources into varying continuity of the pegmatite lodes isconfidence categories. currently well understood due to

the surface mapping and drill hole• Whether appropriate account has testing. The stability of thebeen taken of all relevant factors interpretation with the introduction(i.e. relative confidence in tonnage/ of infill drilling supports agrade estimations, reliability of input moderate to high confidence in thedata, confidence in continuity of estimated tonnage.geology and metal values, quality,quantity and distribution of the • Grade continuity is less welldata). understood and variability within

each pegmatite lode and between• Whether the result appropriately individual pegmatite lodes occurs.reflects the Competent Person’s view Confidence in the estimated gradeof the deposit. continuity is a direct function of

information density and ischaracterised by geostatisticalmodelling parameters.

A-32

Criteria JORC Code explanation Commentary

• The geostatistical characteristics ofthe mineralisation (Li2O gradedistribution) can be summarised asmoderately low relative nugget(20-35%) and maximum ranges ofbetween 50 and 110m.Approximately equal proportions ofthe variance are distributedbetween the first and secondstructures of the variogram models.

• The deposit is drilled tested at avariable spacing ranging from20m � 20m at near surface centralportions to 40m � 40m at theperipheral and deeper parts. Thereis a reasonable expectation thatlocally estimated grades may varywhen closer spaced data is available(grade control mining drill holedata for example). The various drillcampaigns have demonstrated thatat the mining scale, continuityvariations may be seen where theexploration drilling has not resolvedthe lode complexity.

• The MRE has been classified asMeasured, Indicated or Inferredbased on geological continuity,assay data representivity and a setof summary estimation qualityparameters including the averagedistance from informing compositedata and the theoretical slope ofregression (true to estimatedblocks) parameter.

A-33

Criteria JORC Code explanation Commentary

• Estimated pegmatite with anaverage distance from compositedata of 30m or less has beenclassified as Measured. This resultsin the Measured blocks having anaverage distance of 20m tocomposite data globally, and anaverage global slope of regressionof 0.5. Estimated pegmatite with anaverage distance from compositedata of 50m or less has beenclassified as Indicated. This resultsin the Indicated blocks having anaverage distance of 30m tocomposite data globally, and anaverage global slope of regressionof 0.3. Estimated pegmatiteclassified as Inferred has anaverage distance to composite dataof 70m and a slope of regression of0.06.

• The reported Mineral Resourceshave been limited at depth using a‘‘reasonable expectations’’optimisation shell generated using1.5 � base price ($US690/tSpodumene Concentrate [6%Li2O]gross price). This optimisationimposes a depth limit on theestimated Mineral Resource of�86mRL which is approximately360m below the topographicalsurface.

• The Mineral Resource estimateappropriately reflects the view ofthe Competent Person.

Audits or reviews • The results of any audits or reviews • No independent audits or reviewsof Mineral Resource estimates. have been undertaken on the June

2019 MRE.

A-34

Criteria JORC Code explanation Commentary

Discussion of relative • Where appropriate a statement of the • The relative accuracy of theaccuracy/ confidence relative accuracy and confidence level Mineral Resource Estimate is

in the Mineral Resource estimate reflected in the classification andusing an approach or procedure reporting of the Mineral Resourcedeemed appropriate by the in accordance with the guidelines ofCompetent Person. For example, the the 2012 JORC Code.application of statistical or • No statistical or geostatisticalgeostatistical procedures to quantify studies have been undertaken tothe relative accuracy of the resource quantify the relative accuracy of thewithin stated confidence limits, or, if estimate.such an approach is not deemedappropriate, a qualitative discussion • The material factors relevant to theof the factors that could affect the confidence limits implied in therelative accuracy and confidence of classification include the samplethe estimate. data density represented in the

block model attribute as average• The statement should specify whether distance to composite data and theit relates to global or local estimates, summary parameter of estimationand, if local, state the relevant quality ‘‘slope of regression of truetonnages, which should be relevant to to estimated blocks’’. In generaltechnical and economic evaluation. blocks estimated by composite dataDocumentation should include within 30m average distance haveassumptions made and the been classified as Measured, thoseprocedures used. within 50m as Indicated. Blocks

• These statements of relative accuracy estimated with more distaland confidence of the estimate composite data within the appliedshould be compared with production depth limit are classified asdata, where available. Inferred.

• The Measured and IndicatedMineral Resources globally havebeen estimated with data that is onaverage within 30m of the blockwell within the ranges of modelledvariograms. Those MineralResources classified as Inferredhave been estimated with data thatis on average within 70m of theblock, at the maximum range of themodelled variograms.

• There are a couple of areas oflower confidence in the Indicatedcategory due to lack of drill holeinformation, and they are mainlybetween Northing 7,668,280m to7,668,420m and between Northing7,668,320m to 7,668,420, whereadditional drilling will be requiredto increase confidence in theseareas.

A-35

Criteria JORC Code explanation Commentary

• Due to the Altura drilling locatedat the eastern lease boundary,testing the deeper parts of thepegmatite lodes there is minimalextension of the estimation pastdata in the Inferred Resources.

• The introduction of close spacedgrade control drilling will vary theestimated SMU block grades, thevariations within the Measured andIndicated Mineral Resource areexpected to have a low impact onthe economic viability of theproject over a medium term.

• The block model estimate is a localresource estimate which has a blocksize chosen at the expected ‘‘SMU’’selection size. The localisationmethod used results in a modelconsisting of SMU sized blocks witha unique grade assigned suitable fortechnical and economic evaluation.

• As of 30 June 2019, a total of1,517,284 tonnes at 1.16% Li2O wasmined for the past twelve months,which was reconciled against themodel estimate of 1,705,513 tonnesat 1.11% Li2O. Since thecommencement of mining 1,770,080tonnes at 1.13% Li2O has beenmined, which reconciles against themodel estimate of 1,970,897 tonnesat 1.10% Li2O. This reconciliationhas resulted in a change of SMU tomatch the mining recovery.

A-36

Section 4 Estimation and Reporting of Ore Reserves

(Criteria listed in section 1, and where relevant in sections 2 and 3, also apply to this section.)

Criteria JORC Code explanation Commentary

Mineral Resource • Description of the Mineral Resource • The resource model used as theestimate for estimate used as a basis for the basis for this Ore Reserves updateconversion to Ore conversion to an Ore Reserve. was compiled by Cube Consulting,Reserves based on the latest available drilling• Clear statement as to whether the information. The model was

Mineral Resources are reported estimated by Localised Uniformadditional to, or inclusive of, the Ore Conditioning methods with anReserves. assumption of mining selectivity

dimensions of5mEW � 5mNS � 3mRL. Theresource model estimation isdiscussed in detail in Section 3 ofthis Table.

• The Mineral Resources reportedare inclusive of the Ore Reservesreported here.

Site visits • Comment on any site visits • A site visit was attended by theundertaken by the Competent Person Competent Person, Mr Quinton deand the outcome of those visits. Klerk in January 2017. During the

site visit Mr de Klerk met with key• If no site visits have been undertaken operational personnel, view theindicate why this is the case. proposed infrastructure sites, the

pit location relative to the naturalterrain as well as the mining campand surrounding generalinfrastructure and regional setting.

A-37

Criteria JORC Code explanation Commentary

Study status • The type and level of study • A Feasibility Study (FS) wasundertaken to enable Mineral completed in 2016 and wasResources to be converted to Ore accompanied by a maiden Ore

Reserve estimate with an updated• Reserves. Ore Reserve reported in October2017. In April 2018 the Stage 2• The Code requires that a study to atDefinitive Feasibility Study (Stage 2least Pre-Feasibility Study level hasDFS) was completed. This latestbeen undertaken to convert Mineralstudy is the basis of theResources to Ore Reserves. Suchassumptions used in this update.studies will have been carried out

and will have determined a mine • Key changes to the basis of thisplan that is technically achievable estimate compared to the Octoberand economically viable, and that 2017 Ore Reserves include:material Modifying Factors have beenconsidered. • the updated Mineral Resource;

• the processing throughputincrease from 1.54 Mtpa to3.08Mtpa

• The project has progressedpast the Stage 1 study stage ofdevelopment with constructionof the major infrastructurehaving commenced.

• The crushing circuit has beencommissioned and first orecrushed.

• Full commissioning of Stage 1completed in July 2018

• Mining has been ramping upover the past 12 months

Cut-off parameters • The basis of the cut-off grade(s) or • The Ore Reserves are reported at aquality parameters applied. 0.3% Li2O cut-off, which is the

same cut-off used in the reportingof the Mineral Resources. Thiscut-off which is above thetheoretical economic cut-off hasbeen selected to provide a +1.0%Li2O feed grade to the processingplant.

A-38

Criteria JORC Code explanation Commentary

Mining factors or • The method and assumptions used • The following processes areassumptions as reported in the Pre-Feasibility or consistent with those reported in

Feasibility Study to convert the the Ore Reserves estimate MayMineral Resource to an Ore Reserve 2018 and updated assumptions are(i.e. either by application of also sourced from the Stage 2 DFSappropriate factors by optimisation or (2018):by preliminary or detailed design). • An open pit optimisation was

• The choice, nature and completed. Slope designappropriateness of the selected criteria, processing recoveriesmining method(s) and other mining were applied in the pitparameters including associated optimisation process togetherdesign issues such as pre-strip, with mining, processing,access, etc. transport and sales cost

estimates, and revenue• The assumptions made regarding projections to form the basisgeotechnical parameters (eg pit for pit designs and subsequentslopes, stope sizes, etc), grade control mining and processingand pre-production drilling. schedules.

• The major assumptions made and • A conventional open pit mineMineral Resource model used for pit method was chosen as theand stope optimisation (if basis of the Stage 2 DFS. Oreappropriate). is exposed at surface requiring

minimal pre- stripping and• The mining dilution factors used.pre-production mining

• The mining recovery factors used. activities.• Any minimum mining widths used. • A small-scale mining fleet,

utilising 200t excavators• The manner in which Inferredmatched with 140t rear dumpMineral Resources are utilised intrucks, was selected usingmining studies and the sensitivity ofcontract mining services.the outcome to their inclusion.

• Inter-ramp slope angles of 58�• The infrastructure requirements ofwere used based onthe selected mining methods.geotechnical guidance providedby Peter O’Brien and Assocs.A ramp width of 24m based onthe selected truck size. Theresulting overall slope angleson the final pit range from 45�to 58� in fresh rock and 29� to46� in oxide material,depending on ramp locationand natural flat areas mostly inthe footwall areas.

A-39

Criteria JORC Code explanation Commentary

• Major assumptions for pitoptimisation include: 0.3%Li2O cut-off grade; oreproduction rate of 3.08Mtpa;80% recovery of Li2O as 6%Spodumene concentrate; Grossprice of US$690/t Conc.;overall processing cost ofA$18.04/t ore; and wastemining cost at surface ofA$3.20/t mined.

• Mine design criteria, used fordetailed pit design, include:

• 6m blast bench heightmined in 2 � 3m flitches;

• minimum mining width of38m applied betweencutbacks and 16m at thebase of stages;

• ramp width of 24m and10% gradient suited to the140t dump trucks.

• Mining Infrastructure waslimited to ROM pad, haulroads, workshops andother buildings for aContract miningoperation.

• The updated resource model isa recoverable resourceestimate, taking into accountestimation of dilution and orelosses in the estimation basedon a selective mining unit andas such no further factors ofmining dilution or ore losseshave been applied in theestimation of the OreReserves.

A-40

Criteria JORC Code explanation Commentary

Metallurgical factors • The metallurgical process proposed • Stage 1 commenced production inor assumptions and the appropriateness of that July 2018 and has been progressing

process to the style of mineralisation. towards nameplate capacity andsteady state production. Since• Whether the metallurgical process is production has commenced Altura

well-tested technology or novel in has shipped 81kt of Spodumenenature. [6% Li2O] concentrate. Therefore,

the core assumptions and results of• The nature, amount andthe metallurgical process andrepresentativeness of metallurgicalrecovery have been sourced fromtest work undertaken, the nature ofthe FS for the LOM and thethe metallurgical domaining appliedfollowing comments remainand the corresponding metallurgicalun-changed from those stated inrecovery factors applied.the previous estimate:

• Any assumptions or allowances made• The process flow sheet wasfor deleterious elements.

developed by DRA based on• The existence of any bulk sample or metallurgical test work by

pilot scale test work and the degree NAGROM and ALSto which such samples are undertaken in 2016.considered representative of the

• Comminution test workorebody as a whole.indicates rock of moderate

• For minerals that are defined by a hardness, resistant to failure byspecification, has the ore reserve compression and highlyestimation been based on the abrasive.appropriate mineralogy to meet the

• Beneficiation test work hasspecifications?indicated a process route toproduce coarse and finefractions of Spodumeneconcentrate at 6% Li2O.

• The pegmatite ore is plannedto be processed using crushingand screening includingHPGR, followed by upflowclassifier and dense mediaseparation (DMS). The coarseDMS concentrate product willgo directly to final productwhile the fine fraction will becombined with the DMSmiddling fraction andprocessed through anothercircuit using grinding andflotation to produce a fineflotation concentrate that willalso go to final product.

• All technologies proposed areproven and well tested witheasily sourced components.

A-41

Criteria JORC Code explanation Commentary

• Samples used for metallurgicaltest work were sourced from 9holes distributed evenly acrossthe deposit to derive anaverage recovery of 80% asused in the pit optimisation.

• Potential deleterious elementshave been observed at lowconcentration in the test worksamples (e.g. Iron averaging0.8% Fe2O3 in head grade toapproximately 1.1% Fe2O3 infloat concentrate post Magsepand 0.08% in DMSconcentrate post Magsep).

• The Ore Reserve has beenproduced based on a 6% Li2OSpodumene Concentrate.

Environmental • The status of studies of potential • Environmental studies have beenenvironmental impacts of the mining conducted over the project area.and processing operation. Details of Mining/processing activitieswaste rock characterisation and the associated with the Project are notconsideration of potential sites, status expected to have significant impactsof design options considered and, on the environment.where applicable, the status of • Flora and fauna surveys have beenapprovals for process residue storage conducted over the project area.and waste dumps should be reported. There were no threatened

ecological communities, rare floraor conservation significant faunahabitats identified within theproject area.

• Geochemical testing of waste rockindicates that the waste rock isgenerally benign in nature andthere are not expected to be anyenvironmental impacts from longterm waste rock storage.

• Current geochemical testing oftailings indicates that the processresidues are neutralising.

A-42

Criteria JORC Code explanation Commentary

• In early drilling from 2010 throughto early 2013 there were noreported occurrences of fibrousmaterial during this drilling. In2016 much more intensive andbroader spaced drilling was carriedout and intermittent intersectionsof fibrous material were recorded.The Perth laboratory of SGSEnvironmental were provided witha sample of the fibrous materialand it was identified as Chrysotile.

• A Mining Proposal and MineClosure Plan (REG ID 63674) wasapproved for the Project by theDepartment of Mines, IndustryRegulation and Safety (DMIRS) on21 February 2017.

• A Native Vegetation ClearingPermit (NVCP) was granted for theProject by DMIRS on 20 October2016 (CPS 7246/1).

• A Project Management Plan (PMP)was approved for the Project byDMIRS on 27 February 2017.

• Altura has an approved license totake water (5C) for the Project(GWL182856 (2).

• A Works Approval (W6036/2017/1)for the Project’s process plant,Tailings Storage Facility (TSF) anda mobile crushing and screeningfacility was approved by theDepartment of Water andEnvironmental Regulation(DWER) on 7 July 2017.

• An Operating Licence(L4432/1989/14) amendment toinclude the bulk material loadingand unloading of spodumeneconcentrate was approved for theProject by DWER on 12 April2018.

A-43

Criteria JORC Code explanation Commentary

Infrastructure • The existence of appropriate • The Project is located in the Westinfrastructure: availability of land for Pilbara region of Western Australiaplant development, power, water, where good infrastructure istransportation (particularly for bulk available for mining projects.commodities), labour, • A sealed highway provides accessaccommodation; or the ease with from Port Hedland to within 20kmwhich the infrastructure can be of the Project area. The 20km ofprovided, or accessed. Wodgina Access Road is currently

being upgraded for the traffic load.

• Water requirements for processingcan be serviced from the waterresources within the mine area, asper Altura’s approved water license.

• Power is produced on site usingdiesel generators.

• Product is shipped via PortHedland located 90km to the north.

• The site operates on a fly-in fly-outbasis based at an existing villagewithin 20km to house operationspersonnel whilst on site.

Costs • The derivation of, or assumptions • The changes to the costs associatedmade, regarding projected capital with the estimation of the Orecosts in the study. Reserves and as such the following

commentary is based on a• The methodology used to estimate combination of the Stage 1 DFSoperating costs. and the Stage 2 DFS. The Stage 2

plant is a duplication of the Stage 1• Allowances made for the content ofplant and as such costs are baseddeleterious elements.on actuals and current contracts.

• The derivation of assumptions made• Stage 1 is still ramping up toof metal or commodity price(s), for

nameplate capacity and the unitthe principal minerals and co-costs have not reached steadyproducts.state—as such for the LOM the

• The source of exchange rates used in costs used are from the Stage 2the study. DFS

• Derivation of transportation charges. • Stage 1 has been in productionsince July 2018.• The basis for forecasting or source of

treatment and refining charges,penalties for failure to meetspecification, etc.

• The allowances made for royaltiespayable, both Government andprivate.

A-44

Criteria JORC Code explanation Commentary

Revenue factors • The derivation of, or assumptions • Spodumene pricing was based onmade regarding revenue factors forecasts from seven independentincluding head grade, metal or forecasters.commodity price(s) exchange rates, • Spodumene revenue factors were:transportation and treatment charges,penalties, net smelter returns, etc. • Variable head grade averaging

1.05% Li2O over 15 years of• he derivation of assumptions made the mine lifeof metal or commodity price(s), forthe principal metals, minerals and • Processing recoveries appliedco-products. at 80%.

• Spodumene price of US$690/tfor 6% Li2O content

• Exchange rate of 0.75AUD:USD

• Transportation charge ofA$32.05/wet tonne

• Port charge of A$4.00/wettonne

• State royalty of 5%

• Native title royalty of 1%

• Other Royalties of 3.5%

Market assessment • The demand, supply and stock • The following comments relating tosituation for the particular this section:commodity, consumption trends and • The Stage 1 Project has beenfactors likely to affect supply and in operation since June 2018demand into the future. with Stage 2 awaiting approval

• A customer and competitor analysis from the Altura boardalong with the identification of likely • Altura has supplied regularmarket windows for the product. exports since Q4 2018, Altura’s

• Price and volume forecasts and the customers report verybasis for these forecasts. favourably on the product,

which is consistently high in• For industrial minerals the customer lithium, low in impurities andspecification, testing and acceptance at an optimal moisture contentrequirements prior to a supply for handling/logistics andcontract. downstream processing.

• Altura has three existingofftake partners committing acombined minimum of 205,000dry metric tonnes per annum.Altura is in advanceddiscussions with a number ofother entities for furtherofftake and tradingopportunities.

A-45

Criteria JORC Code explanation Commentary

Economic • The inputs to the economic analysis • Economic analysis undertaken asto produce the net present value part of the Stage 2 DFS(NPV) in the study, the source and demonstrated economic viability.confidence of these economic inputs This is further supported by theincluding estimated inflation, fact that Stage 1 has beendiscount rate, etc. producing since July 2018.

• NPV ranges and sensitivity to • The fundamentals of this updatedvariations in the significant Ore Reserve estimate give noassumptions and inputs. reason to expect less favourable

economic outcomes than estimatedin the Stage 2 DFS and as such theeconomic viability has beenconfirmed.

Social • The status of agreements with key • Stakeholder support has beenstakeholders and matters leading to strong during property acquisitionsocial licence to operate. and through the permitting process.

Agreements are in place withLandholders and Native Titleparties.

Other • To the extent relevant, the impact of • With the exception of thethe following on the project and/or discussion on the tenementon the estimation and classification boundary, the following discussionof the Ore Reserves: points are unchanged from those

reported previously:• Any identified material naturallyoccurring risks. • No material naturally occurring

risks have been identified.• The status of material legalagreements and marketing • The Company has grantedarrangements. mining leases for M45/1230,

M45/1231 and M45/1260• The status of governmental covering sufficient area for theagreements and approvals critical to open pit, plant and otherthe viability of the project, such as infrastructure. A Miningmineral tenement status, and Proposal was submitted togovernment and statutory approvals. DMIRS on 14 SeptemberThere must be reasonable grounds to 2016. There no apparentexpect that all necessary Government impediments to obtaining allapprovals will be received within the government approvals requiredtimeframes anticipated in the for the project.Pre-Feasibility or Feasibility study.Highlight and discuss the materiality • The Company has signedof any unresolved matter that is Native Title and Landholderdependent on a third party on which Agreements in place.extraction of the reserve is contingent.

A-46

Criteria JORC Code explanation Commentary

• As with the previous Ore ReserveEstimate (see ASX Release 28 May2018), it is assumed in this latestOre Reserve that mining may takeplace on the adjacent PilbaraMinerals tenement to the east tofacilitate accessing of deeper OreReserves on the Altura tenement.Only ore that is contained withinthe Altura tenements is included inthe Ore Reserve Estimate.

• There is a reasonable expectationthat mining across the tenementboundary will be able to take place.This assumption is supported byongoing discussions between thetwo parties which as yet have notbeen finalised. The ore that wouldbe subject to any potential miningis outside of Altura’s 5 Year MinePlan and if required furtherdeferment is possible withvariations to the Life of Minescheduling sequence.

• The mining on the Pilbara Mineralsside of the tenement boundary hasbeen dealt with on a conservativebasis in the estimation of these OreReserves, in that all mining costsare assumed to be paid by Altura.Furthermore, no economic valuehas been allocated to potential OreReserves on the Pilbara Mineralstenement, which are therefore alsoexcluded from the reporting of theOre Reserves.

Classification • The basis for the classification of the • Proved Ore Reserves wereOre Reserves into varying confidence determined from Measuredcategories. Resource material and Probable

Ore Reserves were determined• Whether the result appropriately from Indicated Resource materialreflects the Competent Person’s view as per the guidelines.of the deposit.

• These results reflect the Competent• The proportion of Probable Ore Person’s view of the deposit.Reserves that have been derived fromMeasured Mineral Resources (if any).

Audits or reviews • The results of any audits or reviews • No external reviews or audits haveof Ore Reserve estimates. been undertaken on the Ore

Reserves

A-47

Criteria JORC Code explanation Commentary

Discussion of relative • Where appropriate a statement of the • The following commentary basedaccuracy/ relative accuracy and confidence level on the Stage 2 DFS and Oreconfidence in the Ore Reserve estimate using an Reserves estimate remains valid for

approach or procedure deemed the Ore Reserves stated here:appropriate by the Competent Person. • The Ore Reserve is theFor example, the application of outcome of additionalstatistical or geostatistical procedures exploration drilling and theto quantify the relative accuracy of Stage 2 DFS. That has takenthe reserve within stated confidence into account geological,limits, or, if such an approach is not metallurgical, geotechnical,deemed appropriate, a qualitative process engineering and miningdiscussion of the factors which could engineering considerations. Itaffect the relative accuracy and has a nominal accuracyconfidence of the estimate. of + 15% / �10%.

• The statement should specify whether • The Project has a NPV whichit relates to global or local estimates, makes it robust in terms ofand, if local, state the relevant cost variations. It is sensitive totonnages, which should be relevant to price variations fortechnical and economic evaluation. Spodumene, and recovery ofDocumentation should include the ore from within the pit.assumptions made and theprocedures used. • All estimates are based on

local costs in Australian• Accuracy and confidence discussions dollars.should extend to specific discussionsof any applied Modifying Factors that • There are no knownmay have a material impact on Ore undisclosed areas ofReserve viability, or for which there uncertainty.are remaining areas of uncertainty at

• The project has now been inthe current study stage.production (Stage 1) since July

• It is recognised that this may not be 2018 and as such the physicalpossible or appropriate in all and cost assumptions havecircumstances. These statements of been validated through actualrelative accuracy and confidence of production metricsthe estimate should be compared

• In the opinion of the Competentwith production data, wherePerson, the material costs andavailable.modifying factors used in thegeneration of the Ore Reserves arereasonable.

A-48