Announcement PDF SKY METALS LIMITED and its controlled entities A.B.N. 46 098 952 035 INTERIM FINANCIAL REPORT FOR THE HALF-YEAR ENDED 31 DECEMBER 2023 SKY METALS LIMITED AND ITS CONTROLLED ENTITIES CONTENTS Page Directors' Report 1 Lead Auditor’s Independence Declaration 3 Condensed Consolidated Interim Statement of Profit or Loss and Other Comprehensive Income 4 Condensed Consolidated Interim Statement of Financial Position 5 Condensed Consolidated Interim Statement of Changes in Equity 6 Condensed Consolidated Interim Statement of Cash Flows 7 Notes to the Condensed Consolidated Interim Financial Statements 8 Directors' Declaration 16 Independent Auditor's Review Report to the Members of Sky Metals Limited 17 Corporate Directory 19 SKY METALS LIMITED AND ITS CONTROLLED ENTITIES DIRECTORS’ REPORT The Directors of Sky Metals Limited (the 'Company' or 'Sky') present their report together with the condensed consolidated interim financial report and the auditor’s review report thereon for the half-year ended 31 December 2023. Directors The names and particulars of the Directors of the Company at any time during or since the end of the half-year are: Norman Alfred Seckold, Executive Chairman Director since 4 December 2001 Norman Seckold graduated with a Bachelor of Economics degree from the University of Sydney in 1970. He has spent more than 40 years in the full time management of natural resource companies, both in Australia and overseas, including the role of Chairman for a number of publicly listed companies. Mr Seckold is currently Chairman of process technology company Alpha HPA Limited, and Executive Chairman and Executive Director of Nickel Industries Limited a nickel mining and production company operating in Indonesia. Rimas Kairaitis Director since 20 June 2019 Mr Kairaitis is a geologist and mining industry executive with over 25 years’ experience in minerals exploration, resource development and mining company management in gold, base metals and industrial minerals. From 2006-2016 Mr Kairaitis was the founding Managing Director and CEO of Aurelia Metals Limited (ASX: AMI), which he steered from a junior exploration company to a profitable NSW based gold and base metals producer. Mr Kairaitis is also the Managing Director of process technology company Alpha HPA Limited (ASX: A4N). Richard Grant Manners Hill Director since 20 June 2019. Mr Hill is a geologist and solicitor with over 25 years’ experience in the resources sector. He has performed roles as commercial manager and geologist for several mid-cap Australian mining companies and as Director and Chairman for a series of successful ASX-listed companies including a founding Director for Aurelia Metals Limited (ASX:AMI) and Chairman of Genesis Minerals Ltd. He is currently the Chairman of New World Resources Limited (ASX: NWC), and Chairman of Accelerate Resources Limited. In addition to his corporate, commercial and fund raising roles, Mr Hill has practical geological experience as a mine based and exploration geologist in a range of commodities worldwide. Company Secretary Richard Willson Company Secretary since 31 July 2019 Richard is an experienced, Non-Executive Director, Company Secretary and CFO with more than 20 years’ experience predominantly within the resources, technology, and agricultural sectors for both publicly listed and private companies. Richard has a Bachelor of Accounting from the University of South Australia, is a Fellow of CPA Australia, and a Fellow of the Australian Institute of Company Directors. He is a Non-Executive Director of Titomic Limited (ASX:TTT), Clara Resources Limited (ASX:C7A), Orpheus Uranium Limited (ASX:ORP), MedTEC Holdings Ltd, and Unity Housing Company Ltd; and Company Secretary of a number of ASX Listed Companies. 1 SKY METALS LIMITED AND ITS CONTROLLED ENTITIES DIRECTORS’ REPORT Operating and financial review The activities of Sky Metals Limited and its controlled entities (the 'Group') during the half-year ended 31 December 2023 include the following: • Drilling to expand the maiden MRE at the Tallebung Tin Project. • Metallurgical studies which successfully confirmed and improved on the first metallurgical work to produce a saleable tin concentrate from the Tallebung tin mineralisation. • Drilling at the new Narriah Project which successfully intercepted strong tin and tungsten mineralisation in all holes and demonstrated the potential for a large scale tin deposit at the Narriah Project. • Exercised the option to acquire 100% of the share capital of Balmain Minerals Pty Ltd, the holder of the Iron Duke Project EL6064. These activities have substantially progressed the Tallebung Tin Project towards potential development and demonstrated exceptional exploration potential for discovery of large-scale tin systems at the Narriah Project. Financial Position and Performance  The Group recognised a loss for the half year period ended 31 December 2023 of $949,986 (31 December 2022: Loss $724,840). The net assets of the Group at 31 December 2023 were $13,807,548 (30 June 2023: $14,496,711) including cash of $1,120,941 (30 June 2023: $3,835,460).  During the period the Group used a total of $2,646,394 (31 December 2022: $2,520,904) of cash in operating activities and exploration and evaluation activities. Subsequent Events There has not arisen in the interval between the end of the half-year and the date of this report any item, transaction or event of a material and unusual nature likely, in the opinion of the Directors of the Company, to affect significantly the operations of the Group, the results of those operations, or the state of affairs of the Group, in future financial years. Lead auditor’s independence declaration The lead auditor’s independence declaration is set out on page 3 and forms part of the Director’s Report for the six months ended 31 December 2023. Signed at Orange this 12th day of March 2024 in accordance with a resolution of the Board of Directors: Norman A. Seckold Chairman 2 Lead Auditor’s Independence Declaration under Section 307C of the Corporations Act 2001 To the Directors of Sky Metals Limited I declare that, to the best of my knowledge and belief, in relation to the review of Sky Metals Limited for the half-year ended 31 December 2023 there have been: (i) no contraventions of the auditor independence requirements as set out in the Corporations Act 2001 in relation to the review; and (ii) no contraventions of any applicable code of professional conduct in relation to the review. M_INI_01 PAR_SIG_01 KPMG PAR_NAM_01 PAR_POS_01 PAR_DAT_01 PAR_CIT_01 Adam Twemlow Partner Brisbane 12th March 2024 KPMG, an Australian partnership and a member firm of the KPMG global organisation of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved. The KPMG name and logo are trademarks used under license by the independent member firms of the KPMG global organisation. Liability limited by a scheme approved under Professional Standards Legislation. 3 SKY METALS LIMITED AND ITS CONTROLLED ENTITIES CONDENSED CONSOLIDATED INTERIM STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME FOR THE HALF-YEAR ENDED 31 DECEMBER 2023 Notes 31 December 2023 $ 31 December 2022 $ Revenue Other income Expenses Consultancy and administration expenses Depreciation and amortisation expense Employee and director expenses Other expenses Operating loss before finance income 6,000 6,000 (266,805) (72,650) (544,466) (88,664) (966,585) (211,665) (71,716) (392,233) (49,715) (719,329) Finance income Finance expense Net finance income/(expense) 36,242 (19,643) 16,599 13,097 (18,608) (5,511) Loss before tax Income tax expense Loss for the period (949,986) (949,986) (724,840) (724,840) Other comprehensive income for the period, net of tax Total comprehensive loss for the period (949,986) (724,840) Total comprehensive loss attributable to: Owners of the Company Non-controlling interest Total comprehensive loss for the period (949,986) (949,986) (724,840) (724,840) (0.21) (0.22) Earnings per share Basic and diluted loss per share (cents) The above Condensed Consolidated Interim Statement of Profit or Loss and Other Comprehensive Income should be read in conjunction with the accompanying notes 4 SKY METALS LIMITED AND ITS CONTROLLED ENTITIES CONDENSED CONSOLIDATED INTERIM STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER 2023 Notes 31 December 2023 $ 30 June 2022 $ Current assets Cash and cash equivalents Trade and other receivables Total current assets 1,120,941 11,546 1,132,487 3,835,460 24,271 3,859,731 Non-current assets Investments Exploration and evaluation expenditure Property, plant and equipment Other non-current assets 232 12,548,867 500,310 310,981 231 10,783,490 575,358 295,901 Total non-current assets 13,360,390 11,654,980 Total assets 14,492,877 15,514,711 Current liabilities Trade and other payables Lease liability Employee benefits payable Total current liabilities 216,707 59,576 82,263 358,546 527,747 64,787 72,037 664,571 Non-current liabilities Lease liability Total non-current liabilities 326,783 326,783 353,429 353,429 Total liabilities 685,329 1,018,000 13,807,548 14,496,711 77,545,864 231 816,454 (64,555,001) 13,807,548 - 77,238,006 231 614,083 (63,373,829) 14,478,491 18,220 13,807,548 14,496,711 5 4 Net assets Equity Issued capital Fair value reserve Option premium reserves Accumulated losses Total equity attributable to equity holders of the Company Non-controlling interest Total equity 6 7 7 The above Condensed Consolidated Interim Statement of Financial Position should be read in conjunction with the accompanying notes 5 SKY METALS LIMITED AND ITS CONTROLLED ENTITIES CONDENSED CONSOLIDATED INTERIM STATEMENT OF CHANGES IN EQUITY FOR THE HALF-YEAR ENDED 31 DECEMBER 2023 Total Noncontrolling interest Total equity $ $ $ $ 1,470,079 (54,986,194) 20,540,242 18,220 20,558,462 - - (724,840) (724,840) - (724,840) - - (724,840) (724,840) - (724,840) 6 6 7 - (368,754) 368,754 - - - 7 74,056,357 143,850 1,245,175 (55,342,280) 143,850 19,959,252 18,220 143,850 19,977,472 77,238,006 614,314 (63,373,829) 14,478,491 18,220 14,496,711 - - (949,986) (949,986) - (949,986) - - (949,986) (949,986) - (949,986) 6 7 7 307,858 - 10,998 (69,450) 69,450 307,858 10,998 - - 307,858 10,998 - 7 - 260,823 - 260,823 - 260,823 Notes Balance at 1 July 2022 Total comprehensive income for the period Loss for the period Total comprehensive loss for the period Transactions with owners recorded directly in equity Share issue Share issue costs Expired options Share options – share based payments Balance at 31 December 2022 Balance at 1 July 2023 Total comprehensive income for the period Loss for the period Total comprehensive loss for the period Transactions with owners recorded directly in equity Share issue Options issued Expired options Share options – share based payments Acquisition of remaining noncontrolling interest Balance at 31 December 2023 10 Issued capital Fair value & option reserve Accumulated losses $ $ 74,056,357 - - (300,636) (300,636) (18,220) (318,856) 77,545,864 816,685 (64,555,001) 13,807,548 - 13,807,548 The above Condensed Consolidated Interim Statement of Changes in Equity should be read in conjunction with the accompanying notes 6 SKY METALS LIMITED AND ITS CONTROLLED ENTITIES CONDENSED CONSOLIDATED INTERIM STATEMENT OF CASH FLOWS FOR THE HALF-YEAR ENDED 31 DECEMBER 2023 31 December 2023 $ 31 December 2022 $ 6,000 (745,730) (739,730) 36,242 (19,643) (723,131) 6,000 (656,231) (650,231) 13,097 (18,608) (655,742) (1,923,263) (1,545) (15,080) (1,939,888) (1,865,162) (4,292) (3,880) (1,873,334) (51,500) (51,500) (50,000) (50,000) Net decrease in cash and cash equivalents Cash and cash equivalents at the beginning of the financial period (2,714,519) 3,835,460 (2,579,076) 4,597,338 Cash and cash equivalents at the end of the financial period 1,120,941 2,018,262 Cash flows from operating activities Cash receipts in the course of operations Cash payments in the course of operations Cash used in operations Interest received Interest paid Net cash used in operating activities Cash flows from investing activities Payments for exploration and evaluation expenditure Payments for plant and equipment Payments for investments in security deposits Net cash used in investing activities Cash flows from financing activities Lease Payments Net cash used in financing activities The above Condensed Consolidated Interim Statement of Cash Flows should be read in conjunction with the accompanying notes 7 SKY METALS LIMITED AND ITS CONTROLLED ENTITIES NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS FOR THE HALF-YEAR ENDED 31 DECEMBER 2023 NOTE 1 - REPORTING ENTITY Sky Metals Limited (“Sky” or the 'Company') is a company domiciled in Australia. The condensed consolidated interim financial statements of the Company as at and for the half-year ended 31 December 2023 comprise the Company and its subsidiaries (together referred to as the 'Group'). The Group is a for-profit entity, primarily engaged in identifying and evaluating mineral resources opportunities in New South Wales. The consolidated financial statements of the Group as at and for the year ended 30 June 2023 are available upon request from the Company's registered office at 2 Hawthorn Place, Orange, NSW, 2800 or at www.skymetals.com.au NOTE 2 - BASIS OF PREPARATION (a) Statement of compliance The condensed consolidated interim financial statements are general purpose financial statements prepared in accordance with the requirements of the Corporations Act 2001 and Accounting Standard AASB 134 Interim Financial Reporting. The condensed consolidated interim financial statements do not include full disclosures of the type normally included in an annual financial report. Accordingly, this report is to be read in conjunction with the annual report as at and for the year ended 30 June 2023 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 and the ASX Listing Rules. These condensed consolidated interim financial statements were approved by the Board of Directors on 12 March 2024. (b) Going concern The condensed consolidated interim financial statements have been prepared on a going concern basis, which contemplates the realisation of assets and settlement of liabilities in the ordinary course of business. The Group recognised a loss for the half year period ended 31 December 2023 of $949,986 (31 December 2022: Loss $724,840). The net assets of the Group at 31 December 2023 were $13,807,548 (30 June 2023: $14,496,711) including cash of $1,120,941 (30 June 2023: $3,835,460). During the period the Group used a total of $2,646,394 (31 December 2022: $2,520,904). of cash in operating activities and exploration and evaluation activities. The Group’s main activity is exploration and as such it does not presently have a source of operating income, rather it is reliant on equity raisings or funds from other external sources to fund its activities. The Directors have prepared cash flow forecasts that support the ability of the Group to continue as a going concern for the period of at least 12 months from the date of the directors’ declaration. These cash flow projections include significant ongoing expenditure on exploration and evaluation and assume the Group receives sufficient additional funding from shareholders or other parties. If such funding is not achieved, the group plans to reduce expenditure in line with available funding. These conditions give rise to a material uncertainty that may cast significant doubt upon the Group’s ability to continue as a going concern. The ongoing operation of the Group is dependent upon the Group raising additional funding from shareholders or other parties and the Group reducing expenditure in line with available funding. In the event that the Group does not obtain additional funding and reduce expenditure in line with available funding, the achievement of which is inherently uncertain until secured or realised, it may not be able to continue its operations as a going concern and therefore may not be able to realise its assets and extinguish its liabilities in the ordinary course of operations and at the amounts stated in the interim financial report. No allowance for such circumstances has been made in the financial report. 8 SKY METALS LIMITED AND ITS CONTROLLED ENTITIES NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS FOR THE HALF-YEAR ENDED 31 DECEMBER 2023 NOTE 2 - BASIS OF PREPARATION (CONT’D) (c) Use of estimates and judgements The preparation of the condensed consolidated interim financial statements requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised and in any future periods affected. In particular, information about significant areas of estimation uncertainty and critical judgements in applying accounting policies that have the most significant effect on the amount recognised in the consolidated financial statements are described in:    Note 2(b) - Going concern Note 5 - Exploration and evaluation expenditure Note 7 – Share based payments NOTE 3 - MATERIAL ACCOUNTING POLICIES The accounting policies applied in these interim financial statements are the same as those applied in the Group’s consolidated financial statements as at and for the year-ended 30 June 2023. NOTE 4 – PROPERTY, PLANT AND EQUIPMENT Motor vehicles Office equipment Plant and equipment Right of use asset Net book value 31 December 30 June 2023 $ 2023 $ 62,370 18,350 61,872 357,718 500,310 81,874 21,734 73,536 398,214 575,358 81,874 122,138 Disposals (491) - Depreciation (19,013) (40,264) Net book value 62,370 81,874 Office Equipment Carrying amount at beginning of period Additions Depreciation Net book value 21,734 1,544 (4,928) 18,350 23,324 5,804 (7,394) 21,734 Plant & Equipment Carrying amount at beginning of period Additions Disposals Depreciation Net book value 73,536 (11,055) (609) 61,872 65,925 23,472 (15,861) 73,536 Motor Vehicles Carrying amount at beginning of period 9 SKY METALS LIMITED AND ITS CONTROLLED ENTITIES NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS FOR THE HALF-YEAR ENDED 31 DECEMBER 2023 NOTE 4 – PROPERTY, PLANT AND EQUIPMENT (CONT’D) 31 December 2023 $ Right of use asset Carrying amount at beginning of period Depreciation Net book value 30 June 2023 $ 398,214 (40,496) 357,718 479,207 (80,993) 398,214 NOTE 5 - EXPLORATION AND EVALUATION EXPENDITURE EL 6699 Tallebung EL 6258 Doradilla EL 9524 Narriah EL 6320 Galwadgere EL 7954 Cullarin EL 8400 & EL 8573 Kangiara EL 8920 Caledonian EL 6064 Iron Duke EL9048 Tirrana EL 9120 Murrum EL 9191 Albert EL 9200 Emmaville EL9210 Gilgai Net book value 5,185,978 5,394,802 257,954 600,000 1,069,246 40,887 - 3,775,792 5,296,678 12,834 600,000 1,062,003 36,183 - 12,548,867 10,783,490 EL 6699 Tallebung Carrying amount at beginning of period Additions Net book value 3,775,792 1,410,186 5,185,978 2,640,904 1,134,888 3,775,792 EL 6258 Doradilla Carrying amount at beginning of period Additions Net book value 5,296,678 98,124 5,394,802 3,923,338 1,373,340 5,296,678 EL 9524 Narriah Carrying amount at beginning of period Additions Net book value 12,834 245,120 257,954 12,834 12,834 EL 6320 Galwadgere Carrying amount at beginning of period Additions Write Down Net book value 600,000 213 (213) 600,000 1,881,784 8,593 (1,290,377) 600,000 10 SKY METALS LIMITED AND ITS CONTROLLED ENTITIES NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS FOR THE HALF-YEAR ENDED 31 DECEMBER 2023 NOTE 5 - EXPLORATION AND EVALUATION EXPENDITURE (CONT’D) 31 December 2023 $ 30 June 2023 $ EL 7954 Cullarin Carrying amount at beginning of period Additions Write Down Net book value 7,211 (7,211) - 5,768,440 219,767 (5,988,207) - EL 8400 & EL 8573 Kangiara Carrying amount at beginning of period Additions Write Down Net book value 942 (942) - 168,646 9,623 (178,269) - EL 8920 Caledonian Carrying amount at beginning of period Additions Write Down Net book value 18,752 (18,752) - 519,194 30,404 (549,598) - EL 6064 Iron Duke Carrying amount at beginning of period Additions Net book value 1,062,003 7,243 1,069,246 1,026,812 35,191 1,062,003 EL9048 Tirrana Carrying amount at beginning of period Additions Written Off Net book value - 3,270 (3,270) - EL 9120 Murrum Carrying amount at beginning of period Additions Written Off Net book value - 6,612 (6,612) - EL 9191 Albert Carrying amount at beginning of period Additions Net book value 36,183 4,704 40,887 28,231 7,952 36,183 11 SKY METALS LIMITED AND ITS CONTROLLED ENTITIES NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS FOR THE HALF-YEAR ENDED 31 DECEMBER 2023 NOTE 5 - EXPLORATION AND EVALUATION EXPENDITURE (CONT’D) 31 December 2023 $ 30 June 2023 $ EL 9200 Emmaville Carrying amount at beginning of period Additions Write Down Net book value - 15,361 9,514 (24,875) - EL 9210 Gilgai Carrying amount at beginning of period Additions Write Down Net book value - 7,214 7,482 (14,696) - The ultimate recoupment of exploration and evaluation expenditure is dependent on the successful development and commercial exploitation, or alternatively sale of the respective areas of interest. NOTE 6 - ISSUED CAPITAL 6 Months to 31 December 2023 Number $ 6 Months to 31 December 2022 Number $ Ordinary shares, fully paid at start of period 454,556,796 77,238,006 376,783,470 74,056,357 Acquisition of remaining NCI Less cost of issue Balance at end of period 6,841,294 461,398,090 307,858 77,545,864 376,783,470 74,056,357 On 22 September 2023, the Company issued 6,841,294 shares as consideration for the acquisition of 100% of the share capital of Balmain Minerals Pty Ltd. Refer Note 10. Fully paid ordinary shares carry one vote per share and carry the right to dividends. 12 SKY METALS LIMITED AND ITS CONTROLLED ENTITIES NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS FOR THE HALF-YEAR ENDED 31 DECEMBER 2023 NOTE 7 - RESERVES 31 December 2023 $ Fair value reserve Balance at start of period Net change in fair value of financial assets Balance at end of the period 30 June 2023 $ 231 231 231 231 Option premium reserve Balance at start of period 614,083 1,469,848 Vesting of Employee Performance Rights 226,772 273,943 Vesting of Director Performance Rights 34,051 - Vesting of Options issued to Diversified Minerals Pty Ltd (Note 10) 10,998 - Vesting of Broker Options - 83,402 Lapsed Performance Rights - (363,480) (69,450) (844,356) - (5,274) 816,454 614,083 Lapsed Options Forfeiture of Performance Rights Balance at end of the period The option premium reserve is used to recognise the grant date fair value of options issued but not exercised separately within equity. During the period to 31 December 2023, share based payment expense of $260,824 was recorded in the profit and loss. The expense includes vesting of director and employee performance rights during the period ended 31 December 2023 and vesting of share based payments issued in prior reporting periods. On 22 September 2023, the Company issued 980,392 options as consideration for the acquisition of 100% of the share capital of Balmain Minerals Pty Ltd. Refer Note 10. On 11 October 2023, the Company issued 18.6 million performance rights to employees. The Performance Rights convert to ordinary fully paid shares in SKY at no cost when the following performance criteria are met;  6.85 million performance rights vest upon the achievement of various non-market conditions that relates to operational KPIs within various timeframes, up to 1 June 2025, and  3.85 million performance rights vest upon the achievement of a market condition that relates to SKY’s 5 day VWAP share price reaching 6 cents before 1 December 2025 (tranche 1), and  3.95 million performance rights vest upon the achievement of a market condition that relates to SKY’s 5 day VWAP share price reaching 9 cents before 1 December 2026 (tranche 2), and  3.95 million performance rights vest upon the achievement of a market condition that relates to SKY’s 5 day VWAP share price reaching 12 cents before 1 December 2025 (tranche 2). The fair value of the non-market based performance rights was $267,150. The performance rights were valued using the Company’s share price of $0.039 at the grant date 11 October 2023. The fair value of the market based performance rights was $361,810. The performance rights were valued using a Monte Carlo simulation model. The model inputs were the Company’s share price of $0.039 at the grant date 11 October 2023, a volatility factor of 85% based on historical share price performance and a risk-free interest rate of 4.04% for tranche 1 and 3.99% for tranche 2 and tranche 3, based on the 2 year government bond rate for tranche 1 and 2 year government bond rate for tranche 2 and tranche 3. The recipient of the above performance rights must remain in SKY employ or under SKY contract at the time of achieving the above performance criteria. 13 SKY METALS LIMITED AND ITS CONTROLLED ENTITIES NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS FOR THE HALF-YEAR ENDED 31 DECEMBER 2023 NOTE 7 – RESERVES (CONT’D) On 9 November 2023, the Company issued 10.8 million performance rights to directors, as approved by shareholders at the 2023 AGM. The Performance Rights convert to ordinary fully paid shares in SKY at no cost when the following performance criteria are met;  3.6 million performance rights vest upon SKY’s 5 day VWAP share price reaching 6 cents before 1 December 2025 (tranche 1), and  3.6 million performance rights vest upon SKY’s 5 day VWAP share price reaching 9 cents before 1 December 2026 (tranche 2), and  3.6 million performance rights vest upon SKY’s 5 day VWAP share price reaching 12 cents before 1 December 2025 (tranche 3). The fair value of the market based performance rights was $361,810. The performance rights were valued using a Monte Carlo simulation model. The model inputs were the Company’s share price of $0.042 at the grant date 30 October 2023, a volatility factor of 83% based on historical share price performance and a risk-free interest rate of 4.46% for tranche 1 and 4.44% for tranche 2 and tranche 3, based on the 2 year government bond rate for tranche 1 and 2 year government bond rate for tranche 2 and tranche 3. The recipient of the above performance rights must remain in SKY employ or under SKY contract at the time of achieving the above performance criteria. NOTE 8 - SUBSEQUENT EVENTS There has not arisen in the interval between the end of the half-year and the date of this report any item, transaction or event of a material and unusual nature likely, in the opinion of the Directors of the Company, to affect significantly the operations of the Group, the results of those operations, or the state of affairs of the Group, in future financial years. NOTE 9 - OPERATING SEGMENTS The Group has identified its operating segments based on the internal reports that are reviewed and used by the board of directors (the chief operating decision makers) in assessing performance and determining the allocation of resources. The Group is managed primarily on a geographical basis which involves the exploration of minerals in New South Wales, Australia. Operating segments are determined on the basis of financial information reported to the board which is at the consolidated entity level. Accordingly, management currently identifies the Group as having only one operating segment, being mineral exploration. The financial results from this segment are equivalent to the financial statements of the consolidated Group as a whole. 14 SKY METALS LIMITED AND ITS CONTROLLED ENTITIES NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS FOR THE HALF-YEAR ENDED 31 DECEMBER 2023 NOTE 10 – ACQUISTION OF REMAINING NON-CONTROLLING INTEREST While the Group controlled Balmain Minerals Pty Ltd since June 2020, it held 0% of the equity and accordingly net assets of $18,220 was assigned to non-controlling interests. On 8 September 2023, the Group exercised the option to purchase all fully paid ordinary shares in the capital of Balmain Minerals Pty Limited as per the Binding Terms Sheet dated 9 June 2020 between Sky Metals Limited and Diversified Minerals Pty Ltd. The Group have met the exercise conditions as defined in the Binding Terms Sheet by incurring exploration expenditure in excess of $150,000 on the Iron Duke tenement EL6064. On 22 September 2023, to satisfy the exercise of the option in accordance with the Terms Sheet, the Group has:  issued 6,841,294 of fully paid ordinary shares in the capital of SKY to Diversified Minerals Pty Ltd for the Balmain Minerals Pty Ltd shares, at a deemed issue price equal to the 5-day volume weighted average price of the SKY Shares over the 5 days in which trading in SKY shares occurs on ASX prior to the Settlement Date.  issued Diversified Minerals Pty Ltd options in SKY exercisable into fully paid ordinary shares in SKY. The number of Consideration Options was calculated by dividing $50,000 by the exercise price $0.0639. The options have an expiry date 2 years from the is