Announcement PDF Legacy Minerals Holdings Limited ABN 43 650 398 897 Annual Report for the year ended 30 June 2022 (comparative period commences 21 May 2021, incorporation date, to 30 June 2021) Legacy Minerals Holdings Limited Annual Report 30 June 2022 Page 1 Corporate Directory Directors Dr David Carland – Non-Executive Chairman Registered Office 401/54 Miller St Christopher Byrne – CEO & Managing Director North Sydney NSW 2060 Thomas Wall – Executive Director Website Matthew Wall – Non-Executive Director www.legacyminerals.com.au Douglas Menzies - Non-Executive Director Securities Exchange Company Secretary and Chief Financial Officer Australian Securities Exchange (ASX) ASX Code: LGM Ian Morgan Securities Registry Business Office Automic Pty Ltd Level 7, 1 Margaret Street Level 2, 267 St Georges Terrace Sydney NSW 2000 Perth WA 6000 Telephone Telephone +61 02 8005 7107 Email info@legacyminerals.com.au (within Australia): 1 300 288 664 (outside Australia): +61 2 9698 5414 Auditor BDO Audit Pty Ltd 11/1 Margaret St Sydney NSW 2000 Legacy Minerals Holdings Limited Annual Report 30 June 2022 Page 2 Table of Contents Corporate Directory........................................................................................................................................... 2 Table of Contents .............................................................................................................................................. 3 Chairman’s Letter .............................................................................................................................................. 4 Directors’ Report ............................................................................................................................................... 5 Consolidated Statement of Profit or Loss and Other Comprehensive Income ............................................... 35 Consolidated Statement of Financial Position ................................................................................................ 36 Consolidated Statement of Changes in Equity ................................................................................................ 37 Consolidated Statement of Cash Flows ........................................................................................................... 38 Notes to the Financial Statements .................................................................................................................. 39 Directors’ Declaration...................................................................................................................................... 62 Auditor’s Independence Declaration............................................................................................................... 63 Independent Auditor’s Report ........................................................................................................................ 64 Additional Shareholder Information ............................................................................................................... 68 Legacy Minerals Holdings Limited Annual Report 30 June 2022 Page 3 Chairman’s Letter Dear Fellow Shareholder, I am pleased to introduce the second Annual Report of Legacy Minerals Holdings Limited’s (ASX: LGM) since listing on the Australian Securities Exchange (ASX) in September 2021. At our listing, which successfully raised $5.8 million, we committed to use our funds to drill and develop a pipeline of targets prospective for gold, copper and base metal mineralisation. I am pleased to report that in 2021-22, we faithfully pursued this commitment through our drilling campaigns at our Bauloora and Harden Projects. The major results of these campaigns were the high grade and shallow intercepts of gold, silver, and base metal mineralisation at Bauloora where we intercepted 9m at 8.4g/t Au Eq. from 145m and 3m at 7.1g/t Au Eq. from 149m. The Company also delivered multiple high grade gold intercepts at Harden including 5m at 7.06g/t Au from 110m. Recently our focus has been at Bauloora, which is the largest under-explored, low-sulphidation gold-silver epithermal system in NSW. This project alone presents significant growth potential for our Company and the associated increase in shareholder value. At our other tenements, Cobar, Rockley, Fontenoy, and Mulholland, as well as at Bauloora, we also undertook extensive soil programs, rock sampling, rock chip sampling, historical data reviews and digitisation and aerial magnetic and radiometric surveys. During the year, Legacy Minerals also demonstrated its capacity for innovation in its approach to exploration by entering the artificial intelligence exploration alliance with Earth AI at the Mulholland and Fontenoy Projects. We intend to build a strong relationship with Earth AI and believe our unique strategy for such a young company sets us apart from the junior exploration sector on the ASX. The markets currently remain strong for gold and copper, the commodities on which Legacy Minerals is focussed. The underlying drivers of global political uncertainties and the significant role of copper in the transition to a low-carbon future appear to be for the long-term. We are sincerely grateful to all investors who trusted us with their funds. We acknowledge the support of the pre-listing shareholders, we welcome the incoming shareholders who joined us through the listing and on market during the year and sincerely thank you for your support. With our small but experienced and highly skilled team in place, we are committed to maximising the value of our precious cash resources in achieving our objective. On behalf of the Board, I would like to thank our employees, consultants, contractors, joint lead managers and all our advisers for their efforts and achievements during the year. We are looking forward to another very exciting year ahead. Yours sincerely, David J. Carland Chairman Legacy Minerals Holdings Limited Annual Report 30 June 2022 Page 4 Directors’ Report The directors of Legacy Minerals Holdings Limited (Company or Legacy Minerals) and its subsidiary Legacy Minerals Pty Ltd (LMPL) (together referred to as the Group) present their report, together with the financial statements for the year ended 30 June 2022. Directors The Directors of the Company at any time during or since the end of the financial year are: Dr David Carland (Non-Executive Chairman) PhD (Econometrics), MEc, BEc (Hons), MAICD Appointed 21 June 2021 as a Director David has over 40 years of investment banking and commercial experience in both the private sector and government. He is the Executive Director of Australian Resources Development Limited, a company focused on the provision of specialised advice and assistance on the structuring, financing, and developing of energy and resource projects. He is the former chairman of Rex Minerals Limited (ASX: RXM), and former nonexecutive director of Indophil Resources NL (ASX: IRN) and Polymetals Mining Limited (ASX: PLY). David holds a PhD (Econometrics), MEc, BEc (Hons1) and is a member of the Australian Institute of Company Directors. Christopher Byrne (Managing Director) BsC, BEngs (Hons), M.PM, MAusIMM, MAICD Appointed 21 May 2021 as a Director Chris has a number of years of experience as an engineer and manager in the mining, infrastructure, and logistics sectors in NSW and QLD. In the mining and exploration space he has worked in greenfield and brownfield environments, from early exploration projects through to mine establishment and operations. Chris’s experience has been focused on large and complex project delivery, project management, maintenance and operational support. Outside the mining sector, Chris has lead infrastructure teams in the public sector in the provisioning and delivery of large capital projects. Chris is a Member of AusIMM and the Australian Institute of Company Directors. Matthew Wall (Non-Executive Director) CTE, MCILT Appointed 21 May 2021 as a Director Matthew is a metals and mining specialist with over 35 years of experience in sales, marketing, shipping/logistics, trading, capital raising and risk management. He has held senior management roles with Rio Tinto, EDF Trading and Wood Mackenzie. Matthew has advised a number of small private and junior listed mining companies in Australia and overseas on capital raisings and market development. Matthew is a nonexecutive Director of ASX company Allegiance Coal Limited and he is a Member of the Chartered Institute of Logistics & Transport (CILT). Legacy Minerals Holdings Limited Annual Report 30 June 2022 Page 5 Directors’ Report (continued) Thomas Wall (Executive Director and Exploration Manager) BsC (Hons), MAusIMM Appointed 21 May 2021 as a Director Thomas is a geologist with wide-ranging experience within the resource sector in NSW and WA having previously held senior roles at Peak Gold Mines, New South Resources and Omya Australia. He has demonstrated mining and exploration success across a variety of commodities and deposit styles with particular focus within the Lachlan Fold Belt of NSW. Thomas is a Member of the Australian Institute of Geoscientists (AIG) and Australian Institute of Mining and Metallurgy (AusIMM). Douglas Menzies (Non-Executive Director) DipBA, GradCertIT, BsC (Hons) Appointed 21 May 2021 as a Director Douglas has over 28 years of experience in the mineral exploration and GIS industries including as a consultant. Douglas has experience exploring for porphyry gold-copper and epithermal gold mineralisation in Australia, PNG, Indonesia, Fiji, Laos, Chile, Argentina and Mexico. Douglas is a Member of the Australian Institute of Geoscientists (AIG) and a non-executive Director of ASX company Godolphin Resources Ltd. Company Secretary and Chief Financial Officer Ian Morgan B Bus, M Com Law, Grad Dip App Fin, CA, AGIA, MAICD, F Fin Appointed 21 May 2021 as Company Secretary Ian is a member of Chartered Accountants Australia and New Zealand and the Governance Institute of Australia, with over 35 years of experience. Ian provides secretarial and advisory services to a range of companies, including holding the position of Company Secretary and CFO for other listed public companies. Nature of Operations and Principal Activities Legacy Minerals has been involved in the acquisition and exploration of gold and copper projects in the prospective New South Wales (NSW) Lachlan Fold Belt (LFB) since 2017. The Company wholly owns 1,528km2 of granted and pending exploration licence applications in the LFB spanning five projects. The LFB, also known as the Lachlan Orogen, is a region considered to be a premier exploration and mining district and home to one of the largest gold mines in Australia, Cadia Valley NSW (Newcrest). Legacy Minerals has a straightforward exploration strategy: to drill and develop a pipeline of prospective targets for gold and copper mineralisation. The work conducted on the tenements has defined drill ready prospects across the Legacy Minerals portfolio. Legacy Minerals’ projects contain numerous untested geochemical, geophysical and geological targets. These afford the Company multiple opportunities for gold and copper discoveries; commodities which are currently enjoying favourable market conditions. Highlights of the projects include: • • • drill-ready targets that provide immediate opportunities for gold and copper discoveries; projects with a prime position in the LFB targeting porphyry-related Cu-Au, Cobar-type, and low sulphidation epithermal-style systems; and high grade and shallow exploration targets that present an opportunity for near term resource definition. There were no significant changes in the nature of the activities of the Company during the financial year. Dividends There were no dividends paid or declared by the Company to members during or since the end of the financial year. Legacy Minerals Holdings Limited Annual Report 30 June 2022 Page 6 Directors’ Report (continued) Review of Operations and Outlook Across six wholly-owned projects in New South Wales, Legacy Minerals (ASX: LGM) is targeting porphyry related, low-sulphidation epithermal, Cobar-type, volcanic-hosted massive sulphide (VHMS), Renison style tin, and low sulphide quartz vein mineralisation styles. The portfolio of projects provides the Company with significant exposure in the Lachlan Fold Belt, a mineral province that hosts several world-class, tier-one ore bodies. BAULOORA PROJECT The Bauloora Project exhibits one of the largest zones of low sulphidation, epithermal-style alteration and mineralisation in NSW. The project hosts numerous targets with shallow high-grade Au-Ag occurrences which includes the Mee Mar Prospect with veins out-cropping over 2km and rock samples up to 39.1g/t Au and 464g/t Ag. Historically the largest operating mine, the Mt Felstead Mine operated until 1915 and was drill tested this year as a priority target. FIGURE 1: BAULOORA PROJECT LOCATION Legacy Minerals Holdings Limited Annual Report 30 June 2022 Page 7 Directors’ Report (continued) FIGURE 2: BAULOORA EPITHERMAL OVERVIEW AND ANOMALOUS GOLD ZONE RC Drilling Program During the reporting period, Legacy Minerals’ exploration activity at Bauloora was highlighted by high-grade zinc, lead, gold and silver assay results from a reverse circulation (RC) drilling program. Drilling focused on the Mt Felstead Prospect, where breccia and vein hosted zinc and lead sulphides have been intersected. Mt Felstead is the first of several high priority target areas Legacy Minerals has tested with drilling at Bauloora. The campaign returned assays of up to 29.3% Zn + Pb, 8.9g/t Au and 99.3g/t Ag. These results are very encouraging as they extend previously intercepted high-grade mineralisation. They also indicate the possibility of a widening of the breccia zone with depth or the potential for discrete high-grade shoots within the broader mineralised fault. Legacy Minerals Holdings Limited Annual Report 30 June 2022 Page 8 Directors’ Report (continued) FIGURE 3: M T FELSTEAD PROSPECT PLAN VIEW SHOWING COMPLETED DRILL HOLES RC drill assays and logging defined a mineralised breccia dipping approximately 85o to the west, with parallel mineralised veins striking north-south. Mineralisation has been defined in drilling to 170m depth along a 450m strike length. Mineralisation is open down dip and along strike, where rock chip sampling has defined outcropping mineralisation for 670m. The main zone of mineralisation intercepted at Mt Felstead occurred as a steeply dipping lenticular zone, or ore shoot, developed in a fault breccia. Sphalerite, galena, chalcopyrite, tetrahedrite and gold is hosted in quartz, chalcedony, calcite, chlorite, fluorite and lesser barite bearing veins. Host rocks are variably silicified rhyodacite tuffs, with sericite alteration observed in association with shearing and chlorite alteration proximal to quartz-carbonate veins. The high-grade Ag-Au assay results returned at Mt Felstead appear to indicate a metal zonation within the mineralisation, a characteristic of carbonate base-metal Ag-Au systems. Legacy Minerals Holdings Limited Annual Report 30 June 2022 Page 9 Directors’ Report (continued) Metallurgical Test Work Legacy Minerals undertook metallurgical test work at the Mt Felstead Prospect, with exceptional gold, silver, lead and zinc metal recoveries announced in Q3 CY2022. Three metallurgical samples consisting of a total of 111.5kg of percussion RC material were analysed at ALS Ltd in Perth and included separate representative samples of massive, semi-massive and veined sulphide mineralisation from Mt Felstead. The parameters of initial test work included a grind size of 80% passing 75μm and four-stage rougher stage flotation using standard reagents producing a bulk concentrate. The testing aimed to determine the mineral grades (cumulative grade) and recoveries (cumulative recovery) of the samples. The flotation process used is a standard mineral beneficiation process for processing minerals. It involves circuits of crushing and grinding whereby the minerals of value are concentrated and separated from minerals of no value. This separation is achieved by taking advantage of mineral hydrophobicity differences. Rougher flotation is usually the first stage of the flotation process where the maximum amount of the valuable mineral is concentrated at a coarse particle size. The preliminary flotation test work produced a bulk concentrate containing gold, silver, zinc and lead mineralisation in one product. Legacy Minerals is investigating the potential that separate concentrate products for the minerals can be produced using gravity separation, leaching and the floatation processes described above, where commonly an initial lead flotation stage is followed by a dedicated zinc flotation stage. Mt Felstead Prospect rougher flotation concentration stages one to four Legacy Minerals Holdings Limited Annual Report 30 June 2022 Page 10 Directors’ Report (continued) GA-IP and Rock Chipping Survey Legacy Minerals completed a large 81km, 50m line spaced gradient array induced polarisation (GA-IP) survey at Bauloora covering the Mee-Mar vein system, which returned rock samples of up to 39.1g/t Au and 464g/t Ag. The GA-IP encompassed the northern section of a 4km by 2km zone of elevated gold-in-rock chip samples (>0.1g/t Au). The survey defined a large area which exhibits elevated chargeability and resistivity responses over the 2km strike. Zones of elevated chargeability and resistivity were found proximal to interpreted and known veins and mineralisation within the Bethungra and Cowcumbala Volcanics. FIGURE 4: BAULOORA P ROJECT GEOCHEMISTRY AND DRILLING HIGHLIGHTS Legacy Minerals Holdings Limited Annual Report 30 June 2022 Page 11 Directors’ Report (continued) ROCKLEY PROJECT The Rockley Project is situated within the highly prospective Ordovician Macquarie Arc, which hosts the Cadia Valley, Northparkes and Cowal orebodies and is coincident with the Lachlan Transverse Zone. Assessment by the Geological Survey of NSW found that the Rockley Project covers some of the most prospective ground for porphyry-related Cu-Au mineralisation in the Rockley-Gulgong volcanics. FIGURE 5: ROCKLEY P ROJECT MAGNETICS AND REGIONAL DEPOSITS Geochemical Activity Legacy Minerals announced results from rock samples collected during geological mapping at Rockley with anomalous gold and copper values associated with quartz veined and brecciated Ordovician mafic-ultramafic rocks reported. An initial reconnaissance field mapping and rock chip sampling program was completed in January 2022. The work identified quartz vein, malachite and azurite bearing rocks associated with basalt and faulting. The setting is analogous to the Racecourse Deposit, 15km to the south-east and hosted within Rockley-Gulgong volcanics. Historically, gossanous rubble above the Racecourse Deposit returned assays up to 0.56% Cu, Legacy Minerals Holdings Limited Annual Report 30 June 2022 Page 12 Directors’ Report (continued) 220ppm Pb, 420ppm Zn and 7ppm Ag. At Racecourse, a significant drill intercept of 920m @ 0.3% Cu from 110m including a higher grade of 156m @ 0.48% Cu from 504m was recently reported. Legacy Minerals took a total of 40 rock chip samples across the northern Rockley Project area. The area has extensive copper and gold mineralisation as well as important pathfinder metal assemblages typical of porphyry copper-gold systems. Notably, rock chip 2899 reported 10ppm Mo, 4,950ppm Cu, 60ppb Au, 9.7ppm Ag, 479ppm As and 394ppm Pb. The work indicated that a major copper-gold mineralised source may be present within the project area where there has been no previous drilling, systematic geochemical sampling or detailed geophysical surveying. FIGURE 6: ROCKLEY GEOCHEMISTRY AND REGIONS OF INTEREST Legacy Minerals Holdings Limited Annual Report 30 June 2022 Page 13 Directors’ Report (continued) Geophysical Activity Legacy Minerals engaged Thomson Airborne to complete a detailed 440 line km aerial magnetic and radiometric survey, on 100m line spacing, across the northern and southern Rockley project areas. The survey provided the Company with a more defined data set than the available Government data. The Company engaged the GeoDiscovery group to conduct the initial processing of the data with targeting reports and final interpretations expected in Q3 CY2022. The primary porphyry target area at Rockley occurs in the northern part of the Project and comprises a number of intriguing zones of elevated and depressed magnetic and radiometric potassium responses within Ordovician volcanics. A highly prospective target zone of approximately 1.5km2 has never been drill tested. Legacy Minerals Holdings Limited Annual Report 30 June 2022 Page 14 Directors’ Report (continued) HARDEN PROJECT The Harden Project encompasses several historical high-grade gold mines that were the largest hard-rock mines in a mineral district that produced >460,000oz Au from alluvial and hard rock mining. The mines produced a combined total of ~75,000oz Au at an average grade of 28.6g/t Au – all before 1919. There are two main strikes of mine in the tenement area: the historical Harden Gold Mine corridor and McMahons Reef Gold Mine corridor. Overview of the Harden Exploration Licences Diamond Drilling Program In early 2022, Legacy Minerals completed a diamond drilling program at Harden which was designed to test previously identified down-plunge targets. Eight holes were drilled in this program for a total of 1,714m, including 1,288.5m diamond core and 425.5m mud-rotary pre-collar. Visible gold was identified in two holes including being intersected in core from hole HN0013 at 194m. The Company experienced some delays during this program. A drill rig engine failure occurred, causing an extended delay to drilling in January. A second diamond rig was mobilised to complete drilling while the first rig was repaired. During this delay, Legacy Minerals reviewed the program and added two diamond holes to further test the down plunge potential of the historical workings and the significant gold grades previously intercepted. Broad assay delays in the industry, as well as delays arising from the additional quality control and assurance processes undertaken by the Company to ensure accuracy in reporting gold assays were also experienced. Legacy Minerals Holdings Limited Annual Report 30 June 2022 Page 15 Directors’ Report (continued) Maiden RC Drilling Program The diamond drilling followed Legacy Minerals’ maiden 1,550m RC drilling program at Harden, the first drilling conducted below the Harden Gold Mine in more than 100 years. Legacy Minerals’ initial campaign was designed to test extensions of high-grade gold mineralisation historically mined at the Harden Gold Mine. Mineralisation was historically reported to occur in quartz veining in association with pyrite and minor amounts of galena, sphalerite and arsenopyrite. Legacy Minerals delivered exceptional results from this campaign, with high grades, strike and widths seen in drillholes increasing the Company’s knowledge of the mineral system. Wide zones up to 15m of quartzsericite-pyrite alteration associated with shearing have been identified at the targets similar in style to what was intersected in previously drilled holes. The extent of the mineralisation through these broad zones expanded both the scale and potential size of the system. The high-grade interval in RC21HN005 of 5m at 7.06g/t Au from 110m is associated with quartz veining, within a zone of strong sericite-pyrite alteration and shearing. The interval correlates well with the modelled unstoped ground of the historical Harden Gold Mine. The intersection in hole RC21HN006 occurs 50m up dip of RC21HN005 and displays similar mineralised zones. Broad zones of gold mineralisation were intercepted between 120m and 141m. Mineralisation is open along strike and down dip. DP-DP Survey Legacy Minerals returned encouraging results of a Dipole-Dipole Induced Polarisation (DP-DP) geophysical survey at Harden. A total of 9 lines of DP-DP surveyed over the historical mine corridor with the survey lines orientated SW-NE with lines equally spaced 100m apart with 50m spaced dipoles. The survey delivered several highly chargeable anomalies coincident with known historical workings. Legacy Minerals Holdings Limited Annual Report 30 June 2022 Page 16 Directors’ Report (continued) COBAR PROJECT Legacy Minerals has control of 45km of strike over major faulting immediately neighbouring the Peak Gold Mines within the Cobar Basin, one of Australia’s most prolific base and precious metals production regions. Across the tenement, shallow transported cover has resulted in a large, shallow, unexplored search space prospective for Cobar-type mineralisation. The tenements contain numerous high priority geophysical and geochemical anomalies for follow up. FIGURE 7: COBAR TENEMENT MAGNETICS AND REGIONAL MINING AND EXPLORATION COMPANIES Legacy Minerals, in participation with Geoscience Australia and the Geological Survey of NSW, also completed 1,050km of flight lines covering 78% of the project area. The processing and interpretation of this aeromagnetic data identified 21 high priority targets. Importantly, the data demonstrated the continuity of major structures through both tenements. These structures are a ‘key ingredient’ to facilitate the emplacement of Cobar-type mineralisation. Legacy Minerals Holdings Limited Annual Report 30 June 2022 Page 17 Directors’ Report (continued) The detailed aeromagnetic data highlighted several priority aerial electromagnetic (AEM) targets previously identified through the survey. The Yarrawonga prospect has been highlighted as an area of significant interest. Interpreted major faulting nearby identified AEM anomalies, zones of elevated IP chargeability and anomalous surface geochemistry including gold in lag up to 1.5g/t Au. Soil Geochemistry Program During the reporting period, soil programs were undertaken across the Woggle, Kidman, Yarrawonga, and Hillview Prospect areas and were completed in Q3 CY2022. Approximately 3,500 samples have been collated and submitted for assays. This area is east of the large Cobar Basin forming Myrt Fault where previous geological mapping by the Company has identified areas of strike extensive quartz veining. The identified quartz veining is interpreted as along strike of the Langtons Prospect held by Aurelia (ASX: AMI). Soil sampling continued over priority AEM targets. A ground magnetics survey was partially completed over the Woggle Prospect in February before 3D modelling in preparation for drill testing. FIGURE 8: COBAR PROJECT PLANNED GEOCHEMISTRY AREA AND GEOPHYSICAL TARGETS Legacy Minerals Holdings Limited Annual Report 30 June 2022 Page 18 Directors’ Report (continued) FONTENOY PROJECT The Fontenoy Project exhibits an 8km long zone of Au and Cu anomalism defined in soil sampling and drilling. The southern 3.5km extent of this zone is covered by shallow quaternary cover which had limited drill testing that resulted in encouraging Au-Cu intercepts. Significant drill intersects included: 79m at 0.27% Cu from 1.5m, 22m at 0.34% Cu and 0.67g/t Au, and 58m at 0.2% Cu from 2m. FIGURE 9: FONTENOY PROJECT GEOLOGY AND SIGNIFICANT DRILLING MULHOLLAND PROJECT In December 2021, Legacy Minerals was granted the 194km2 Mulholland tenement for a period of three years. Mulholland is 35km south-east of Bourke, NSW, on the boundary of the Lachlan and Thompson Orogens, in a terrain which has demonstrable prospectivity for large and high-grade skarn mineralisation including tin, copper, tungsten, nickel, gold and zinc. Legacy Minerals Holdings Limited Annual Report 30 June 2022 Page 19 Directors’ Report (continued) Mulholland includes known skarns and untested magnetic and geochemical anomalies suspected of being related to Sn-Cu-W skarn and Ni bearing serpentinites. The Project covers several significant drill ready Ni and Sn-W prospects, in a prospective land position 500m south-east of Sky Metals’ (ASX: SKY) emerging SnCu 3KEL prospect and less than 3km from the Sn-Cu Doradilla Prospect. FIGURE 10: MULHOLLAND PROJECT OVERVIEW Legacy Minerals Holdings Limited Annual Report 30 June 2022 Page 20 Directors’ Report (continued) CORPORATE Legacy Minerals commenced trading on the Australian Securities Exchange (ASX) on 13 September 2021 following an Initial Public Offering which raised $5.8M. The Company issued 29 million shares at an issue price of $0.20 per share. Strategic Exploration Alliance Entered with Earth AI Legacy Minerals signed an Exploration Alliance Agreement with Earth AI covering its Fontenoy and Mulholland tenements. The Exploration Alliance allows for a co-funding model, whereby Earth AI will contribute up to AUD$4.5M of total exploration costs across the tenements over a two-year period, with an option to extend for a further year. Subject to a qualifying drilling intersection being subsequently identified on any tenement, Earth AI is entitled to a net smelter return royalty up to 3% in connection with a to be agreed upon area surrounding the discovery. Earth AI is a vertically integrated metals exploration company based in San Francisco, USA. The Company’s NSW-based operations are at Young, 15km from Fontenoy. Earth AI plans to implement its artificial intelligence deposit targeting system to generate drill targets across the Company’s tenements. Legacy Minerals is under no obligation to explore, develop or mine any of the tenements during the period of the Strategic Alliance. However, after the second anniversary of the Royalty Trigger Date, if no mineral resource has been defined and the combined annual exploration development and mining expenditure in the Area of Interest falls below USD$2