Announcement PDF Heavy Rare Earths Limited ABN 35 648 991 039 Half-year Financial Report - 31 December 2024 Heavy Rare Earths Limited Contents 31 December 2024 Corporate directory Review of operations Directors' report Auditor's independence declaration Statement of profit or loss and other comprehensive income Statement of financial position Statement of changes in equity Statement of cash flows Notes to the financial statements Directors' declaration Independent auditor's review report to the members of Heavy Rare Earths Limited 1 2 3 8 10 11 12 13 14 15 20 21 Heavy Rare Earths Limited Corporate directory 31 December 2024 Directors Mr John Byrne (Non-executive Chairman) Mr Richard Brescianini (Executive Director) Gabriel Chiappini (Non-executive Director) Company secretary Justin Mouchacca Registered office Level 21, 459 Collins Street Melbourne, VIC 3000 Ph: (03) 8630 3321 Principal place of business Level 21, 459 Collins Street Melbourne, VIC 3000 Share register Boardroom Pty Ltd Level 8, 210 George Street Sydney, NSW 2000 Ph: 1300 737 760 (within Australia) Ph: +61 2 9290 9600 Auditor William Buck Audit (Vic) Pty Ltd Level 20, 181 William Street Melbourne, VIC 3000 Stock exchange listing Heavy Rare Earths Limited shares are listed on the Australian Securities Exchange (ASX code: HRE) 2 Heavy Rare Earths Limited Review of operations 31 December 2024 The Company’s exploration focus during the half-year ended 31 December 2024 was as follows: Acquisition of Uranium Exploration Assets in South Australia During the 31 December 2024 half-year period, the Company progressed towards completion of the transaction with Havilah Resources Limited (ASX: HAV; “Havilah”) to acquire a significant portfolio of uranium (U) exploration assets in eastern South Australia. The transaction involves HRE earning an 80% initial interest in the uranium rights on three projects by spending $3 million over three years, including a minimum of $1 million in the first year following completion, on exploration and development activities. Under the Term Sheet, HRE is required to issue to Havilah: (i) 38,000,000 fully paid ordinary shares in HRE (“Consideration Shares”); and (ii) 17,500,000 unlisted options, each with an exercise price of $0.06 and a term of 3 years from their date of issue (“Consideration Options”). The portfolio comprises highly prospective uranium targets on the Radium Hill, Lake Namba-Billeroo and Prospect Hill projects that together comprise a total area of 2,949 km2. They are located in South Australia’s Curnamona Province which hosts two operating in-situ recovery (ISR) uranium mines at Four Mile (Heathgate Resources Pty Ltd) and Honeymoon (Boss Energy Ltd; ASX: BOE; “Boss”), with another on care and maintenance at Beverley, an historic hard-rock uranium operation at Radium Hill, and uranium resources and deposits at several other sites (Figure 1). Initial targets for HRE include extensions of the Radium Hill uranium deposit, the southern extension of the Billeroo Palaeochannel, the southern Namba Palaeochannel, and potential palaeochannels north and east of Prospect Hill. Subsequent to the end of the half-year, completion of the transaction was achieved (refer to ASX announcement 07/01/2025) as conditions precedent were not met as at 31 December 2024. Lake Namba-Billeroo Uranium Project and Prospect Hill Uranium Project, South Australia During the 31 December 2024 half-year period, HRE commenced exploration on its Lake Namba-Billeroo and Prospect Hill projects (refer to ASX announcement 19/12/2024). It involved Perth-based Atlas Geophysics (‘Atlas’) acquiring passive seismic and gravity surveys at both projects to define the location and extent of palaeochannels at a relatively shallow depth (<120 m). Surveys initially focused on the Billeroo Palaeochannel which hosts Boss’s Gould’s Dam uranium resource. The combined length of the Billeroo Palaeochannel being explored by HRE in the current campaign is 30 km (Figure 2). The Company anticipates Atlas will complete the geophysical program during the first quarter of calendar year 2025. 3 Heavy Rare Earths Limited Review of operations 31 December 2024 Figure 1: Location of HRE project areas and uranium deposits1 in the Curnamona Province of eastern South Australia 1 Data sources: - Boss Energy Ltd (ASX: BOE) Annual Report 2024. - Marmota Limited (ASX: MEU) ASX announcement 26/10/2023: “Marmota to grow Junction Dam uranium resource”. - SARIG SA Geodata MINDEP Database https://drillhole.pir.sa.gov.au/MineralDepositDetails.aspx?DEPOSIT_NO=962. - Wilson T 2015. Uranium and uranium mineral systems in South Australia – Third edition, Report Book 2015/00011. Department of State Development, South Australia, Adelaide. - World Nuclear Association: https://world-nuclear.org/information-library/appendices/australia-s-uranium-mines. 4 Heavy Rare Earths Limited Review of operations 31 December 2024 Figure 2: Lake Namba-Billeroo Project showing location of Billeroo Palaeochannel passive seismic/gravity survey areas. Radium Hill Uranium-Rare Earth Project, South Australia At HRE’s Radium Hill Project, there is considerable potential to discover extensions of uranium mineralization north-east of the main mine lode system. In addition to earning an initial 80% interest in the uranium rights at Radium Hill, HRE’s transaction with Havilah incorporates said rights to rare earths (REE) and scandium (Sc). During the 31 December 2024 half-year period the Company reported assay results from sampling of mineralization from historic dumps, both within the historic Radium Hill Mine site lease, which is excluded from HRE’s Radium Hill project, and from lode extensions which are in the project area. All samples collected showed high concentrations of U, REE and Sc (Table 1), confirming historic observations by early explorers and scientists. 5 Heavy Rare Earths Limited Review of operations 31 December 2024 Table 1: Radium Hill reference sample assays ID U3O8 ppm U3O8 % V2O5 ppm Sc2O3 ppm TREO ppm TREO % RH-A 59 0.006 7034 1081 1602 0.16 RH-B 2476 0.25 7712 468 10853 1.09 RH-C 4233 0.42 4713 391 14800 1.48 RH-1 5684 0.57 6819 606 12171 1.22 RH-2 16273 1.63 10604 452 36371 3.64 Whilst highly encouraging, these results are not purported to be representative of the mineralization in the region, which would require systematic sampling, including drilling and/or costeaning, to reach any firm conclusions. However, the associated metal results are sufficiently encouraging to warrant detailed follow up and inclusion in the project’s future assay protocols and metallurgical treatment considerations. Perenjori Uranium Project, Western Australia The Company’s 100 per cent-owned Perenjori project is located 190 kilometres east-south-east of the port city of Geraldton. The project shows potential to host “calcrete-type” uranium and ion adsorption-type rare earths in palaeochannels on Archaean granitic basement. Virtually no exploration for these deposit types is evident from historic reports. Work in 2024 by HRE successfully delineated the location and depth of an inferred major palaeochannel system in the project area, and soil sampling verified previously-reported surface uranium anomalism associated with an 8-kilometre-long airborne radiometric anomaly (refer to ASX announcement 19/06/2024). No work was carried out at Perenjori during the December 2024 half-year period but the Company has scheduled field work (passive seismic and soil sampling) for the first quarter of calendar year 2025. Corporate During the 31 December 2024 half-year period the Company announced that it received firm commitments for a two-tranche placement to raise $1,200,000 (before costs) at an issue price of $0.03 per share (“Placement”), being a 15.1% discount to the Company’s 15-day volume weighted average price (“VWAP”) and a 11.4% discount to the 30-day VWAP to the close of trading on Friday 18 October 2024. The Placements were completed during the half-year period to 31 December 2024 and $1,200,000 was received. In addition to the Placement, the Company completed a non-renounceable entitlement offer to existing shareholders of one (1) share for every two (2) shares held in the Company (“Entitlement Offer”) at an issue price of $0.03 per share, raising $1.26 million (before costs) and issued 42,137,633 shares. The Entitlement Offer was fully underwritten by Cygnet Capital Pty Ltd (“Cygnet”) and Taylor Collison Limited (“Taylor Collison”), with each of Cygnet and Taylor Collison underwriting 50% of the Entitlement Offer. Cowalinya Rare Earth Project, Western Australia The Company’s 100 per cent-owned Cowalinya project is located approximately 110 kilometres north-north-east of the port city of Esperance. During the December 2024 half-year period, the Company reported a very substantial growth in Inferred Mineral Resources for Cowalinya to 159 million tonnes @ 870 ppm (Table 2). This result represents material increases in resource tonnes (468%), grade (39%), and contained rare earths (690%) on the project’s maiden Mineral Resources reported in 2022. Significantly, the valuable magnet rare earth component of the Mineral Resources has also increased from 25% to 28% which is at the high-end for Australian clay-hosted resources. 6 Heavy Rare Earths Limited Review of operations 31 December 2024 Table 2: Summary Estimate of Mineral Resources for Cowalinya Rare Earth Project. JORC RESOURCE CLASS Inferred TONNES (Mt) TREO (ppm) MAGNET REOs (ppm) MAGNET REOs/TREO Sc2O3 (ppm) 159 870 242 28% 32 TREO = La2O3+CeO2+Pr6O11+Nd2O3+Sm2O3+Eu2O3+Gd2O3+Tb4O7+Dy2O3+Ho2O3+Er2O3+Tm2O3+Yb2O3+Lu2O3+Y2O3 Magnet REOs = Pr6O11+Nd2O3+Tb4O7+Dy2O3 Reported above a cut-off grade of 400 ppm TREO-CeO2 The average total thickness of the three interpreted mineralised layers in weathered saprolite that comprise the Mineral Resources is nearly 15 metres and the top of the predominant mineralisation lies about 15 metres below surface. The shallow, weathered and near horizontal nature of the mineralisation may allow broad-scale free-dig mining and excavation with equipment such as scrapers and continuous miners. 7 Heavy Rare Earths Limited Directors' report 31 December 2024 The directors present their report, together with the financial statements, on the Company for the half-year ended 31 December 2024. Directors The following persons were directors of the Company during the half-year period and up to the date of this report, unless otherwise stated: Mr John Byrne (Non-executive Chairman) Mr Richard Brescianini (Executive Director) Mr Gabriel Chiappini (Non-executive Director) appointed 31 January 2025 Mr Ryan Skeen (Non-executive Director) resigned 31 January 2025 Principal activities The principal activities of the Company during the period consisted of exploration activities for uranium at the Company’s areas of interest located in South Australia and Western Australia. Main Business activities include: - Exploring, developing and operating mineral resource projects with a focus on rare earth elements (REEs), including the Cowalinya Project in the Norseman-Esperance region of Western Australia. - Completing the acquisition of its 80% interest in the uranium rights on three projects held by Havilah Resource Limited and commencing exploration activities on these projects. - Conducting a review on potential business development opportunities capable of enhancing the portfolio and driving shareholder returns. Review of operations The loss for the Company after providing for income tax amounted to $797,599 (31 December 2023: loss of $861,729). Financial performance The loss for the half-year period amounted to $797,599 (31 December 2023: loss of $861,729). Financial Position The Company's net assets increased by $1,791,790 to $2,522,320 as at 31 December 2024. The increase in net assets was a result of the capital raise during the half-year period. Significant changes in the state of affairs On 21 October 2024 the Company announced it has entered into a binding Term Sheet with Havilah Resources Limited (ASX: HAV; “Havilah”) to acquire a significant portfolio of uranium exploration assets in the uranium rich Curnamona Province of eastern South Australia (‘Acquisition’). The transaction involves HRE earning an 80% initial interest in the uranium rights on three projects by spending $3 million over three years, including a minimum of $1 million in the first year following completion of the Acquisition, on exploration and development activities. Under the Term Sheet and subject to satisfying the conditions precedent, HRE is required to issue to Havilah: i 38,000,000 fully paid ordinary shares in HRE (“Consideration Shares”); and ii 17,500,000 unlisted options, each with an exercise price of $0.06 and a term of 3 years from their date of issue (“Consideration Options”). Havilah will be free-carried until the completion of a bankable feasibility study (“BFS”) on any uranium deposit discovered. Following completion of a BFS, Havilah will have the right to contribute its pro-rata share of all future expenditure, or otherwise dilute to a 1.5% net smelter royalty (“NSR”) on production from that uranium deposit. As at 31 December 2024, the conditions precedent to completion of the Acquisition were not met. The Company also announced that it had received firm commitments for a two-tranche placement to raise $1,200,000 (before costs) at an issue price of $0.03 per share (“Placement”), being a 15.1% discount to the Company’s 15-day volume weighted average price (“VWAP”) and a 11.4% discount to the 30-day VWAP to the close of trading on Friday 18 October 2024. 8 Heavy Rare Earths Limited Directors' report 31 December 2024 In addition to the Placement, the Company announced that it was proposing, subject to shareholder approval, to undertake a non-renounceable entitlement offer to existing shareholders of one (1) share for every two (2) shares held in the Company (“Entitlement Offer”) at an issue price of $0.03 per share, to raise up to $1,264,000 (before costs). The Entitlement Offer was fully underwritten by Cygnet and Taylor Collison Limited (“Taylor Collison”), with each of Cygnet and Taylor Collison underwriting 50% of the Entitlement Offer respectively. On 11 November 2024 the Company issued 16,000,000 fully paid ordinary shares (Shares) pursuant to the Placement with an issue price of $0.03 (3 cents) per share, raising $480,000. On 28 November 2024, the Company sought shareholder approval for the Acquisition at its Annual General Meeting of shareholders. This was approved by the shareholders. On 29 November 2024, the Company announced a fully underwritten non-renounceable pro rata offer to Eligible Shareholders of 42,137,575 New Shares at an issue price of $0.03 per New Share on the basis of 1 (one) New Share for every 2 (two) Existing Shares held to raise approximately $1.26 million before issue costs (Entitlement Offer). On 23 December 2024 the Company issued 42,137,633 Shares pursuant to the Entitlement Offer raising $1,264,129 (before costs) and 24,000,000 Shares to settle the second tranche of the Placement, raising $840,000 before costs. The Company also issued 9,621,099 Shares to settle outstanding Directors fees and consultant liabilities with an issue price of $0.03 (3 cents) per share. There were no other significant changes in the state of affairs of the Company during the financial half-year. Matters subsequent to the end of the financial half-year On 7 January 2025 the Company announced that it had completed the acquisition of its interest in the Uranium rights for the Acquisition and issued the 38,000,000 Consideration Shares and 17,500,000 Consideration Options. The Company also issued 10,000,000 Shares pursuant to Introductory fee for the Acquisition. On 31 January 2025, Mr Gabriel Chiappini was appointed Non-executive Director and Mr Ryan Skeen resigned. No other matter or circumstance has arisen since 31 December 2024 that has significantly affected, or may significantly affect the Company's operations, the results of those operations, or the Company's state of affairs in future financial years. Environmental regulation The Company holds participating interests in a number of exploration tenements. The various authorities granting such tenements require the tenement holder to comply with the terms of the grant of the tenement and all directions given to it under those terms of the tenement. To the best of the Directors' knowledge, the Company has adequate systems in place to ensure compliance with the requirements of all environmental legislation described above and are not aware of any breach of those requirements during the Half-year period and up to the date of the Directors' report. Auditor's independence declaration A copy of the auditor's independence declaration as required under section 307C of the Corporations Act 2001 is set out immediately after this directors' report. This report is made in accordance with a resolution of directors, pursuant to section 306(3)(a) of the Corporations Act 2001. On behalf of the directors ___________________________ Mr John Byrne Non-executive Chairman 13 March 2025 9 Lead Auditor’s Independence Declaration under Section 307C of the Corporations Act 2001 To the directors of Heavy Rare Earths Limited As lead auditor for the review of Heavy Rare Earths Limited for the half-year ended 31 December 2024, I declare that, to the best of my knowledge and belief, there have been: — no contraventions of the auditor independence requirements as set out in the Corporations Act 2001 in relation to the review; and — no contraventions of any applicable code of professional conduct in relation to the review. William Buck Audit (Vic) Pty Ltd ABN 59 116 151 136 J. C. Luckins Director Melbourne, 13 March 2025 Level 20, 181 William Street, Melbourne VIC 3000 +61 3 9824 8555 William Buck is an association of firms, each trading under the name of William Buck across Australia and New Zealand with affiliated offices worldwide. Liability limited by a scheme approved under Professional Standards Legislation. vic.info@williambuck.com williambuck.com.au Heavy Rare Earths Limited Statement of profit or loss and other comprehensive income For the half-year ended 31 December 2024 31 December Note 2024 $ 31 December 2023 *Restated $ 10,328 21,222 Expenses Corporate and administrative expenses Employment expenses Exploration expenditure Share based payment expense (391,102) (211,910) (204,915) - (329,860) (119,970) (422,166) (10,955) Loss before income tax expense (797,599) (861,729) - - (797,599) (861,729) - - (797,599) (861,729) Cents Cents Revenue Interest Income Income tax expense Loss after income tax expense for the half-year attributable to the owners of Heavy Rare Earths Limited Other comprehensive income for the half-year, net of tax Total comprehensive income for the half-year attributable to the owners of Heavy Rare Earths Limited Basic earnings per share Diluted earnings per share 8 8 (1.04) (1.04) The above statement of profit or loss and other comprehensive income should be read in conjunction with the accompanying notes 11 (1.26) (1.26) Heavy Rare Earths Limited Statement of financial position As at 31 December 2024 Note 31 December 2024 30 June 2024 $ $ Assets Current assets Cash and cash equivalents Trade and other receivables Total current assets 2,782,234 61,150 2,843,384 957,586 63,055 1,020,641 Total assets 2,843,384 1,020,641 Current liabilities Trade and other payables Employee benefits Total current liabilities 321,064 321,064 274,303 15,808 290,111 Total liabilities 321,064 290,111 2,522,320 730,530 9,273,508 955,323 (7,706,511) 6,684,119 955,323 (6,908,912) 2,522,320 730,530 Liabilities Net assets Equity Issued capital Reserves Accumulated losses 5 Total equity The above statement of financial position should be read in conjunction with the accompanying notes 12 Heavy Rare Earths Limited Statement of changes in equity For the half-year ended 31 December 2024 Issued capital $ Balance at 1 July 2023 Share based Accumulated payment losses Total equity $ $ $ 6,683,971 944,368 (2,238,104) 5,390,235 - - (3,362,524) (3,362,524) 6,683,971 944,368 (5,600,628) 2,027,711 Loss after income tax expense for the half-year Other comprehensive income for the half-year, net of tax - - (861,729) - (861,729) - Total comprehensive income for the half-year - - (861,729) (861,729) 150 - 10,955 - 150 10,955 6,684,121 955,323 (6,462,357) 1,177,087 Adjustment for change in accounting policy (Note 3) Balance at 1 July 2023 - restated Transactions with owners in their capacity as owners: Contributions of equity, net of transaction costs Share-based payments Balance at 31 December 2023 Issued capital $ Share based Accumulated payment losses Total equity $ $ $ Balance at 1 July 2024 6,684,119 955,323 (6,908,912) 730,530 Issue of Tranche 1 Placement Shares Issue of Rights Issue Entitlement Shares Issue of Tranche 2 Placement Shares Issue of shares for settlement of Director and Consultant Fees Cost of Share Issues 480,000 1,264,129 720,000 288,633 (163,373) - - 480,000 1,264,129 720,000 288,633 (163,373) Balance at 1 July 2024 9,273,508 955,323 (6,908,912) 3,319,919 Loss after income tax expense for the half-year Other comprehensive income for the half-year, net of tax - - (797,599) - (797,599) - Total comprehensive income for the half-year - - (797,599) (797,599) 9,273,508 955,323 (7,706,511) 2,522,320 Balance at 31 December 2024 The above statement of changes in equity should be read in conjunction with the accompanying notes 13 Heavy Rare Earths Limited Statement of cash flows For the half-year ended 31 December 2024 31 December Note 2024 $ 31 December 2023 *Restated $ Cash flows from operating activities Payments to suppliers and employees (inclusive of GST) Payments for exploration expenditure Interest received (246,859) (349,500) 10,328 (433,227) (409,060) 21,222 Net cash used in operating activities (586,031) (821,065) - - 2,464,129 (53,450) 150 - Net cash from financing activities 2,410,679 150 Net increase/(decrease) in cash and cash equivalents Cash and cash equivalents at the beginning of the financial half-year 1,824,648 957,586 (820,915) 2,124,052 Cash and cash equivalents at the end of the financial half-year 2,782,234 1,303,137 Net cash from investing activities Cash flows from financing activities Proceeds from issue of shares Payments for capital raising costs 5 The above statement of cash flows should be read in conjunction with the accompanying notes 14 Heavy Rare Earths Limited Notes to the financial statements 31 December 2024 Note 1. General information The financial statements cover Heavy Rare Earths Limited as an individual entity. The financial statements are presented in Australian dollars, which is Heavy Rare Earths Limited's functional and presentation currency. Heavy Rare Earths Limited is a listed public company limited by shares, incorporated and domiciled in Australia. Its registered office and principal place of business is: Level 21, 459 Collins Street Melbourne, VIC 3000 Ph: (03) 8630 3321 A description of the nature of the Company's operations and its principal activities are included in the directors' report, which is not part of the financial statements. The financial statements were authorised for issue, in accordance with a resolution of directors, on 13 March 2025. Note 2. Significant accounting policies These general purpose financial statements for the interim half-year reporting period ended 31 December 2024 have been prepared in accordance with Australian Accounting Standard AASB 134 'Interim Financial Reporting' and the Corporations Act 2001, as appropriate for for-profit oriented entities. Compliance with AASB 134 ensures compliance with International Financial Reporting Standard IAS 34 'Interim Financial Reporting'. These general purpose financial statements do not include all the notes of the type normally included in annual financial statements. Accordingly, these financial statements are to be read in conjunction with the annual report for the year ended 30 June 2024 and any public announcements made by the Company during the interim reporting period in accordance with the continuous disclosure requirements of the Corporations Act 2001. The accounting policies adopted are consistent with those of the previous financial year and corresponding interim reporting period, except for the policies stated below. Going Concern The financial report has been prepared on the going concern basis, which assumes continuity of normal business activities and the realisation of assets and the settlement of liabilities in the ordinary course of business. For the half-year ended 31 December 2024, the Company incurred a net loss of $797,599 (31 December 2023: loss of $861,729), net cash outflows from operating activities of $586,031 (31 December 2023; outflows of $821,065) and had a cash balance as at 31 December 2024 of $2,782,234 (30 June 2024: $957,586). Notwithstanding the above, the Directors determined that the use of the going concern basis of accounting is appropriate in preparing the financial report. The assessment of the going concern assumption is based on the Company’s cash flow projections and application of a number of judgements and estimates, resulting in the conclusion of a range of reasonably possible scenarios. Accordingly, the financial report has been prepared on the basis that the Group can continue normal business activities and meet its commitments as and when they fall due, and the realisation of assets and liabilities in the ordinary course of business. New or amended Accounting Standards and Interpretations adopted The Company has adopted all of the new or amended Accounting Standards and Interpretations issued by the Australian Accounting Standards Board ('AASB') that are mandatory for the current reporting period. The adoption of these Accounting Standards and Interpretations did not have any significant impact on the financial performance or position of the Company. Any new or amended Accounting Standards or Interpretations that are not yet mandatory have not been early adopted. 15 Heavy Rare Earths Limited Notes to the financial statements 31 December 2024 Note 3. Restatement of comparatives Change in accounting policy During the year ended 30 June 2024, the Company changed its accounting policy relating to the capitalisation of tenement acquisition costs and all associated expenditures incurred, in accordance with AASB 6 Exploration and Evaluation of Mineral Resources. The Company concluded that it is more appropriate to expense all costs associated with the exploration and evaluation activities undertaken. In accordance with AASB 108 Accounting Policies, Changes in Accounting Estimates and Errors, the consolidated entity has retrospectively applied the aforementioned change in accounting policy and therefore comparative information presented herein has been restated. Statement of profit or loss and other comprehensive income Consolidated 31 December 31 December 2023 2023 $ $ $ Reported Adjustment Restated Revenue Sundry income 21,222 - 21,222 Expenses Corporate and administrative expenses Employment expenses IPO Costs Other exploration costs Share based payment (329,860) (119,970) (30,102) (10,955) (392,064) - (329,860) (119,970) (452,730) (422,166) (10,955) Loss before income tax expense (469,665) (392,064) (861,729) - - - (469,665) (392,064) (861,729) - - - (469,665) (392,064) (861,729)_ Cents Reported (0.69) (0.69) Cents Adjustment (0.58) (0.58) Cents Restated (1.27) (1.27) Income tax expense Loss after income tax expense for the Half-year attributable to the owners of Heavy Rare Earths Limited Other comprehensive income for the Half-year, net of tax Total comprehensive income for the Half-year attributable to the owners of Heavy Rare Earths Limited Basic earnings per share Diluted earnings per share 16 Heavy Rare Earths Limited Notes to the financial statements 31 December 2024 Note 3. Restatement of comparatives (continued) Consolidated Statement of Cash Flows 31 December 31 December 2023 2023 $ $ $ Reported Adjustment Restated Cash flows from operating activities Payments for exploration and evaluation Payments to suppliers and employees (inclusive of GST) Interest received (433,227) 21,222 (409,060) - (409,060) (433,227) 21,222 Net cash used in operating activities (412,005) (409,060) (821,065) Cash flows from investing activities Payments for exploration and evaluation (409,060) 409,060 - Net cash used in investing activities (409,060) 409,060 - Cash flows from financing activities Proceeds from issue of shares Share issue transaction costs 150 - - 150 - Net cash from financing activities 150 - 150 Net decrease in cash and cash equivalents Cash and cash equivalents at the beginning of the Half-year (820,915) 2,124,052 - (820,915) 2,124,052 Cash and cash equivalents at the end of the Half-year 1,303,137 - 1,303,137 Note 4. Operating segments The Company has identified its operating segments based on the investment decisions of the board and used by the chief operating decision makers in assessing performance and in determining the allocation of resources. The Company operates in one segment being the evaluation and exploration of heavy rare earths and resources in Australia. Note 5. Equity - issued capital 31 December 31 December 2024 30 June 2024 2024 30 June 2024 Shares Shares $ $ Ordinary shares - fully paid 160,033,882 17 68,275,150 9,273,508 6,684,119 Heavy Rare Earths Limited Notes to the financial statements 31 December 2024 Note 5. Equity - issued capital (continued) Movements in ordinar