Announcement PDF ABN 46 098 952 035 SKY METALS LIMITED ANNUAL REPORT AND ITS CONTROLLED ENTITIES FOR THE FINANCIAL YEAR ENDED 30 JUNE 2025 SKY METALS LIMITED and its controlled entities CONTENTS Page Chairman’s Letter 1 Review of Operations 2 Statement of Corporate Governance 11 Directors’ Report 12 Auditor’s Independence Declaration 25 Consolidated Statement of Profit or Loss and Other Comprehensive Income 26 Consolidated Statement of Financial Position 27 Consolidated Statement of Changes in Equity 28 Consolidated Statement of Cash Flows 29 Notes to the Consolidated Financial Statements 30 Consolidated Entity Disclosure Statement 59 Directors’ Declaration 60 Independent Auditor’s Report 61 ASX Additional Information 67 Corporate Directory 69 SKY METALS LIMITED and its controlled entities CHAIRMAN'S LETTER Dear Fellow Shareholders, I am pleased to present the 2025 Annual Report for Sky Metals Limited. Throughout the 2025 financial year, we made strong progress in advancing our flagship Tallebung Tin Project in New South Wales, alongside continued work across our broader portfolio. Tallebung continues to deliver as we progress the project quickly and carefully through successful work programs towards future tin production. Tin remains an essential technology metal, and its global demand continues to rise. This growth is primarily driven by tins essential role in electronics, particularly in AI, semiconductors, solar PV, and electric vehicles (EVs). With global supply remaining constrained, tin prices have remained robust throughout the year, a positive backdrop for SKY as we continue to build our tin-focused portfolio. Our exploration team carried out extensive and successful drilling programs at Tallebung during the year. The project continues to grow in scale and significance. Notably, results from the application of ore sorting technology, which has proven highly effective on Tallebung ore, combined with a successful bulk sampling program, has increased our strong and long-term conviction in the project's economic potential. These milestones further support our view that Tallebung could once again be one of Australia's producing tin mines. In addition, we are encouraged by the metallurgical breakthrough recently achieved at the Doradilla Project. We look forward to advancing this exciting, large-scale opportunity while we remain focused on Tallebung in the coming months as it advances quickly on its very promising near-term development pathway. Looking ahead to 2026, our key priorities include: • • • Launching the next phase of drilling at Tallebung to target both resource growth and definition; Completing scoping and metallurgical studies to progress toward and beyond feasibility studies; and Continuing to progress Tallebung towards near-term and stable tin production to support growing global tin demand. On behalf of the Board, I sincerely thank our shareholders for your continued support and confidence. I would also like to recognise the dedication and hard work of our management, exploration, and operational teams throughout the year. In particular, I extend my personal appreciation to Managing Director Mr. Davies, Non-Executive Directors Mr. Hill and Mr. Kairaitis, and Company Secretary Mr. Willson. Sky Metals remains committed to delivering long-term value through responsible, focused exploration and development anchored by the continued advancement of the Tallebung Tin Project. Yours sincerely Norman A. Seckold Chairman 1 SKY METALS LIMITED and its controlled entities REVIEW OF OPERATIONS Corporate Activities  On 30 September 2024, the Company’s CEO Mr Oliver Davies, was promoted to Managing Director,  On 2 October 2024, the Company issued 1 million shares to the Managing Director,  On 2 October 2024, the Company issued 1 million performance rights to the Managing Director,  On 2 October 2024, 150,000 shares were issued to an employee upon the exercise of employee performance rights,  On 4 November 2024, SKY announced a $6 million placement to institutional, sophisticated and professional investors, including the Company’s directors, at A$0.05 per share to advance the Tallebung Tin Project. The shares were issued in two tranches; 87.6 million shares were issued on 8 November 2024, and 32.4 million shares were issued on 20 December 2024 subsequent to shareholder approval at a meeting of shareholders held on 16 December 2024. The Company’s Directors participated in the placement with shareholder approval,  The Company held its Annual General Meeting on 25 November 2024 with all resolutions carried,  On 4 December 2024, the Company issued 15 million performance rights to directors, as approved by shareholders at the 2024 AGM,  On 9 December 2024, 6 million unlisted options expired,  On 16 December 2024, a meeting of shareholders was held, and various share and option issues were ratified and approved, including the participation of Directors in the placement announced on 5 November 2024,  On 17 December 2024, 5.5 million unlisted employee performance rights held by the Managing Director and other employees expired,  On 20 December 2024, 10 million unlisted options were issued to brokers and advisors as part of the share placement announced 4 November 2024 as approved by shareholders at the meeting held on 16 December 2024. 2 SKY METALS LIMITED and its controlled entities REVIEW OF OPERATIONS Sky Metals Limited (‘SKY’) is an ASX listed public company focused on the exploration and development of high value mineral resources in Australia. SKY’s project portfolio offers exposure to the tin, gold, copper and base metal markets in the world class mining jurisdiction of NSW. Figure 1: SKY Metals - Project Location Map 3 SKY METALS LIMITED and its controlled entities REVIEW OF OPERATIONS TALLEBUNG PROJECT (EL 6699, SKY 100%) EXPLORATION DRILLING & DEPOSIT EXTENSIONS Sky Metals expanded the geological footprint of the Tallebung Tin Project through a disciplined and progressive exploration effort. Drilling commenced in early FY2025 with RC programs in July and August that reaffirmed widespread mineralisation across multiple structural corridors. A notable milestone was in September when step‑out drilling (specifically TBRC078) returned 11 m @ 1.02% Sn, 77.9 g/t Ag & 0.13% W from 64m—an intercept located ~150 m south of the existing resource footprint. April 2025 saw the initiation of an ambitious multi‑rig RC drilling program. Initially planned for ~70 holes (~8,000 m), the program was expanded mid‑quarter to approximately 150 holes after early high-grade results. By quarter-end, assays were received for 45 of the completed holes; further drilling and assaying remain ongoing into FY2026. Figure 2: Plan showing the location of the drill-holes completed in FY2025 programs, including new assay results in orange, locations of the trenching/bulk sampling sites, and selected previously reported highlight drill intercepts. The boundary of the existing Tallebung MRE is also shown over surface geology 4 SKY METALS LIMITED and its controlled entities REVIEW OF OPERATIONS TRENCHING & SURFACE SAMPLING Surface trenching initiated in December 2024 effectively targeted near-surface mineralisation zones and helped refine geological interpretation and drill targeting. Results released in January 2025 confirmed substantial nearsurface mineralisation, reinforcing Tallebung’s suitability for shallow open-pit mining scenarios. Figure 3: LHS: photo looking down and south-southwest across trench T4, which was completed above drill-hole TBRC034. The trench is approximately 0.5m deep and 1-1.5m wide. The margins of the trench are demarcated, along with the channel made for the channel sample and a quartz-cassiterite (tin) vein cross-cutting the trench. RHS insert shows a closer image of the quartz-cassiterite (tin) vein with the visible cassiterite (tin) being the black/grey zones within the vein (further details are provided in table 3 & 4). BULK SAMPLING & METALLURGICAL TESTWORK A cornerstone of FY2025 operations was the bulk sampling metallurgical program. During the March 2025 quarter, Sky extracted over 70 tonnes of material across four bulk samples—strategically sourced to represent grade variability and deposit extents. These samples were crushed (-40 mm), screened, and processed through TOMRA’s XRT ore sorting technology. Initial full-scale testwork demonstrated extraordinary uplift: tin grades were dramatically enhanced with strong recoveries, while mass was significantly reduced. 5 SKY METALS LIMITED and its controlled entities REVIEW OF OPERATIONS Figure 4: Left – Excavating the bulk sample from trench T7 and loading directly into a waiting truck; Middle – Sample being loaded into the crushing and screening plant in Condobolin, where the sample was crushed to 40mm and screened to separate the -7mm fines; Right – Sample awaiting transport after being loaded into bulk bags for transport to TOMRA Ore Sorting Solutions, Sydney for full-scale ore sorting testwork before downstream concentrating in pilot-scale processing plants at ALS Perth and then ALS Burnie. ORE SORTING VARIABILITY TESTWORK Complementing bulk sorting, earlier TOMRA variability work on drill samples yielded consistent and exceptional results: grade upgrade factors ranged from 4.6× to 6.6×, average tin recovery exceeded 98%, and only 15–24% of feed mass was retained as sorted product. A highlight results was achieved using a double ore storing approach to aggressively ore sort the Tallebung mineralisation which resulted in an impressive 0.10% tin sample upgraded to 4.42% Sn (~44×) with 83% recovery and just 1.9% of mass retained. This result has paved the way for the upcoming bulk sampling testwork procedure to demonstrate further these exceptional results and optimise the ore sorting process. 6 SKY METALS LIMITED and its controlled entities REVIEW OF OPERATIONS ENVIRONMENTAL & DEVELOPMENT PREPARATIONS Parallel to exploration, Sky installed groundwater monitoring bores, advanced biodiversity and geochemical baseline studies, and commenced pilot metallurgical flowsheet work. These steps underpin de-risking of the future mine permitting and design processes. Figure 5: Left – Weather station installed at Tallebung, RHS – Groundwater monitoring bores installed to continue background environmental and permitting processes to streamline Tallebung mining permitting processes. DORADILLA PROJECT (EL 6258, 100% SKY) POLYMETALLIC MINERALISATION – METALLURGICAL TESTWORK PROGRAM A recent review of historic petrology and metallurgical studies at the Doradilla Tin Deposit confirmed that tin is predominantly hosted in fine cassiterite associated with the Doradilla Tin Target at the south-western end of the ‘DMK’ Line. Importantly, this mineralisation has not previously been evaluated using modern flotation techniques. This represents a promising development for Doradilla. Work is now underway to validate the historic observations and, if confirmed, to trial modern flotation methods to assess the potential for producing a saleable tin concentrate. The program will also seek to establish whether a viable development pathway exists for the Doradilla mineralisation. 7 SKY METALS LIMITED and its controlled entities REVIEW OF OPERATIONS SKY continues to collaborate with leading metallurgical consultants and research institutions, including UNSW, ALS Burnie and ANSTO, together with other independent experts. These groups are working to advance a suite of extraction methodologies targeting rare earth elements, tin, and polymetallic mineralisation along the DMK Line. The objective is to unlock the high-value, widespread mineralisation already recognised at Doradilla. Ongoing work programs include data compilation, targeted geophysical surveys where required, and continued geological studies in partnership with UNSW. NARRIAH PROJECT (EL 9524, 100% SKY) MAIDEN DIAMOND DRILLING PROGRAM During the March Quarter 2024, compilation of historic datasets highlighted strong potential for near-surface tin– tungsten mineralisation at the Conapaira Mining Reserve, consistent with the extensive historical workings across the area. A site visit in the March Quarter included ground-truthing of historical data, geological mapping, and rock-chip sampling. This confirmed widespread historic workings in close proximity to the Erigolia Granite Margin, where preserved roof pendants provided additional geological evidence of prospectivity. Given the favourable geological setting, rock-chip sampling was conducted across outcrops and mine workings. These returned high-grade tin, tungsten, and silver mineralisation along a strike length exceeding 3 km, with results including: • 1.80% Sn, 13.9 g/t Ag & 0.05% Cu (JN240223-05) • 1.50% Sn, 0.26% W & 14.7 g/t Ag (JN240223-04) • 1.20% Sn & 1.77% W (JN240223-10) GEOPHYSICAL MAGNETICS SURVEY In the September Quarter 2024, a large-scale aeromagnetic survey was flown across a +16 km long prospective corridor within the Narriah Project. Results from this survey are being integrated with the high-grade rock-chip results from the Conapaira Mining Reserve to refine drill targeting for large-scale tin and tungsten mineralisation. Notably, most of the hard-rock tin potential across the Narriah Project remains untested by modern exploration. The combination of historic data, recent rock-chip results, and new geophysics will be used to design follow-up drilling aimed at delineating a large-scale, high-grade tin–tungsten system. CULLARIN PROJECT: GOLD–LEAD–ZINC–COPPER (EL 7954, SKY 80%; DVP JV) HUME TARGET – DIAMOND DRILLING AND DHEM Initial drilling at Cullarin successfully validated historical results and confirmed broad zones of high-grade mineralisation. The standout intercept included: • HUD002: 93 m @ 4.24 g/t Au & 1.87% Pb+Zn from 56m Re-assay of historical auger drill pulps also revealed multiple untested gold anomalies. These included the Poplar Prospect, where assays returned up to 9.91 g/t Au, yet no follow-up exploration has been conducted. Given the strong potential of these gold prospects, and SKY’s strategic priority to advance its tin portfolio, the Company remains open to partnering with groups that can accelerate exploration and development at Cullarin. SKY is supportive of further work at Cullarin given its location within a proven 25 km mineralised corridor. IRON DUKE PROJECT: COPPER–GOLD (EL 6064 & 9191, 100% SKY) SKY exercised its option to purchase EL 6064 during the prior year, consolidating 100% ownership of the Iron Duke Project. The Project encompasses the Iron Duke Shear Zone, a mineralised structure extending for at least 4 km strike and remaining open to the south. Numerous historic copper workings occur along the zone, including Iron Duke, Christmas Gift, Monarch, Mount Pleasant, and Silver Linings. 8 SKY METALS LIMITED and its controlled entities REVIEW OF OPERATIONS In the June Quarter 2021, SKY completed a maiden drilling program at the Iron Duke Mine, supported by a VTEM survey and DHEM, which identified extensions to high-grade copper–gold mineralisation. An RC and diamond drilling program is planned to further test extensions to the Iron Duke Mine and to systematically evaluate the undrilled Christmas Gift group of historic mines. Project activities continue, including detailed review of geophysics, mining records, historic datasets, and drilling information to refine robust targets for follow-up testing. CALEDONIAN PROJECT: GOLD (EL 8920 & EL 9020, 100% SKY) SKY has completed soil sampling, one phase of aircore drilling, two phases of RC drilling, and two diamond drill holes at the Caledonian Target. A review of SKY’s results alongside historic datasets indicates that the mineralisation is best interpreted as a shallow, sub-horizontal blanket of oxide and supergene gold developed over an oxidised skarn. A shallow aircore program of 38 vertical holes (697 m total) was conducted on 50–100 m spacing across the 600 m × 400 m area of defined mineralisation. Significant groundwater inflows prevented most holes from reaching refusal, limiting the ability to adequately test the shallow oxide–supergene concept. These results are being evaluated alongside previous drilling to refine the exploration strategy and focus on near-surface high-grade mineralisation. SKY has also been notified of plans for a solar farm development in the northern part of EL 8920, which coincides with the Jerrawa Strike. This trend of metallic occurrences is interpreted by SKY as a possible exhalative horizon with potential to host gold–silver and base metal mineralisation. SKY is working with the solar developers to ensure that proposed infrastructure does not impact mineralised zones. A gold soil anomaly already delineated at Jerrawa is scheduled for follow-up in the coming quarters, subject to these ongoing negotiations. GALWADGERE PROJECT: COPPER–GOLD (EL 6320, 100% SKY) In 2021, SKY announced a maiden JORC-2012 Inferred Mineral Resource at Galwadgere of 3.6 Mt @ 0.82% Cu & 0.27 g/t Au, prepared by H&S Consultants using SKY’s 2020 drilling results together with prior exploration data. A follow-up drilling program is scheduled to test extensions to the maiden resource. Soil sampling along strike from the resource has delineated two copper–gold and multi-element pathfinder anomalies. The northern anomaly, covering 200 m × 100 m, is coincident with the historic McDowell’s Mine, while a second anomaly to the south exhibits similar tenor. Both anomalies occur within 3 km of the existing resource and represent high-priority drill targets to support resource growth. KANGIARA PROJECT: GOLD (EL 8400 & EL 8573, SKY 80%; DVP JV) The Kangiara Project, located 30 km north-west of Yass, lies within volcanic and volcaniclastic rocks of the Silurian Douro Group and is prospective for gold and base metals. The Kangiara Mine operated during the early 1900s, producing approximately 40,000 tonnes at grades of 16% Pb, 3% Cu, 5% Zn, 280 g/t Ag, and 2 g/t Au from narrow sulphide veins. Subsequent work by Paradigm Metals defined an Indicated and Inferred Mineral Resource at Kangiara. SKY’s more recent desktop studies have identified additional potential for copper–gold mineralisation at the Crosby Prospect. Field investigations are planned in the coming year to further assess this opportunity. 9 SKY METALS LIMITED and its controlled entities REVIEW OF OPERATIONS No Material Changes Sky Metals confirms that it is not aware of any new information or data that would materially affect the information included in market announcements and that all material assumptions and technical parameters in the market announcements continue to apply and have not materially changed. Competent Person Statement The information in this report that relates to Exploration Results is based on information compiled by Mr. Oliver Davies, who is a Member of the Australasian Institute of Geoscientists. Mr. Oliver Davies is an employee of Sky Metals Limited and has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2012 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves.’ Mr. Davies consents to the inclusion in this report of the matters based on his information in the form and context in which it appears. Tenement Summary Holder Tarago Exploration Pty Ltd (DVP sub) Ochre Resources Pty Ltd (DVP sub) Ochre Resources Pty Ltd (DVP sub) Aurum Metals Pty Ltd (SKY sub) Aurum Metals Pty Ltd (SKY sub) Cuprum Aurum Pty Ltd (SKY sub) Balmain Minerals Pty Ltd (SKY sub) Balmain Minerals Pty Ltd (SKY sub) Stannum Pty Ltd (SKY sub) Stannum Pty Ltd (SKY sub) Stannum Pty Ltd (SKY sub) Stannum Pty Ltd (SKY sub) Stannum Pty Ltd (SKY sub) Equity Licence ID Grant Date Expiry Date Units Area Comment Cullarin Project, SKY: DVP JV Kangiara Project, SKY: DVP JV Renewal submitted Kangiara Project, SKY: DVP JV 80% EL7954 19-6-2012 19-6-2028 51 144 km2 80% EL8400 20-10-2015 20-10-2026 52 147 km2 80% EL8573 23-5-2017 23-5-2029 17 48 km2 100% EL8920 5-12-2019 5-12-2025 65 183 km2 Caledonian Project 100% EL9120 30-3-2021 30-3-2027 50 141 km2 Caledonian Project 2 100% EL6320 12-10-2004 12-10-2026 14 41 km Galwadgere Project - agreement with preIPO Burrendong Minerals Ltd 100% EL6064 21-3-2003 20-3-2028 5 15 km2 Iron Duke Project 100% EL9191 8-6-2021 8-6-2027 60 174 km2 Iron Duke Project 100% EL6258 21-6-2004 21-6-2026 38 113 km2 Doradilla Project 100% EL6699 10-1-2007 10-1-2027 14 41 km2 Tallebung Project 100% EL9524 8-2-2023 08-02-2029 92 262 km2 Narriah Project 100% EL9779 15-05-2031 101 287 km2 Narriah Project 100% ELA6926 - 177 514 km2 Tallebung Project – Application Granted on 5-7-2024 Applied for on 3-7-2024 Table 1: Tenement Summary. 10 SKY METALS LIMITED and its controlled entities STATEMENT OF CORPORATE GOVERNANCE The Board is committed to maintaining the highest standards of Corporate Governance. Corporate Governance is about having a set of core values and behaviours that underpin the Company's activities and ensure transparency, fair dealing and protection of the interests of stakeholders. The Company has reviewed its corporate governance practices against the Corporate Governance Principles and Recommendations (4th edition) published by the ASX Corporate Governance Council. The 2025 Corporate Governance Statement was approved by the Board on 19 August 2025 and reflects the corporate governance practices throughout the 2025 financial year. A description of the Company’s current corporate governance practices is set out in the Company’s Corporate Governance Statement, which can be viewed at https://www.skymetals.com.au/corporate-governance/ 11 SKY METALS LIMITED and its controlled entities DIRECTORS’ REPORT The Directors present their report together with the consolidated financial statements of the Group comprising of Sky Metals Limited (‘the Company’) and its subsidiaries for the financial year ended 30 June 2025 and the auditor’s report thereon. 1. Directors The names and particulars of the Directors of the Company at any time during or since the end of the financial year are: Norman Alfred Seckold, 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, Executive Chairman of Nickel Industries Limited a nickel mining and production company operating in Indonesia, and Fulcrum Lithium Limited, and a Non-Executive Director of Uvre Limited. Oliver Davies, Managing Director Director since 30 September 2024 Mr Davies joined SKY as a geologist in 2019. He was appointed to Exploration Manager in 2021, then to CEO in early 2022 and subsequently to Managing Director in September 2024. Prior to SKY, Mr Davies was in exploration and operational roles with Evolution Mining and Alkane Resources in NSW and Qld. Mr Davies has worked closely on several successful NSW discoveries including Evolution Mining’s significant expansion of the Lake Cowal gold resource and with Alkane’s regional exploration success at Tomingley and Boda. Rimas Kairaitis Director since 20 June 2019 Mr Kairaitis is a minerals industry executive with over 25 years’ experience in minerals exploration, project development, mineral processing and company management in gold, base metals industrial minerals and speciality materials. 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. 12 SKY METALS LIMITED and its controlled entities DIRECTORS’ REPORT Directors’ and Executives’ Remuneration For details on the amount of remuneration for each Director, refer to the Remuneration Report below. 2. 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 Non-Executive Chairman of Clara Resources Limited (ASX:C7A), a Non-Executive Director of MedTEC Holdings Ltd, and Unity Housing Company Ltd; and Company Secretary of a number of ASX Listed Companies. 3. Directors’ Meetings The number of Directors’ meetings and number of meetings attended by each of the Directors (while they were a Director) of the Company during the financial year are: Board Meetings Held Attended 6 6 5 5 6 6 6 6 Director Norman A. Seckold Oliver Davies Rimas Kairaitis Richard G.M. Hill The Board met informally frequently throughout the year. 4. Principal Activities The principal activities of the Group during the course of the financial year was the exploration for tin, copper gold and gold and the investigation of projects involving those activities with the objective of identifying, developing and exploiting economic mineral deposits. Those activities were undertaken in New South Wales, Australia. There were no significant changes in the nature of the activities of the Group during the financial year. 5. Operating and financial review Review of Operations A review of operations of the Group during the year ended 30 June 2025 is provided in the ‘Review of Operations’ commencing on page 2 of this annual report. 13 SKY METALS LIMITED and its controlled entities DIRECTORS’ REPORT 5. Operating and financial review (Cont’d) Financial Review The consolidated loss after income tax attributable to members of the Company for the financial year ended 30 June 2025 was $3,150,526 (2024: $2,027,828). Business risks The prospects of the Group in progressing its exploration projects may be affected by a number of factors. These factors are similar to most exploration companies moving through the exploration phase and attempting to get projects into development. Some of these factors include: Risk Future capital needs Exploration and development Environmental Description The Group does not currently generate cash from its operations given their stage of development. The Group will therefore require additional funding to meet its corporate expenses and continue exploration and potentially move from the exploration phase to the development phases of its projects. Whilst the Group has a strong track record of raising new capital to fund its activities, there is no certainty that the Group will be successful in raising additional capital on acceptable terms in the future that is sufficient to fund its exploration, feasibility, or development costs at those times. The results of the exploration activities may be such that the estimated resources are insufficient to justify the financial viability of the projects. The Group undertakes extensive exploration and product quality testing prior to establishing JORC compliant resource estimates and to (ultimately) support mining feasibility studies. There is a risk that its mineral deposits may not be commercially viable subject to factors outside of the Group’s control including development costs, changes in mineralisation, consistency and reliability of ore grades and commodity prices. All phases of mining and exploration present environmental risks and hazards. The Group’s operations are subject to environmental regulations pursuant to a variety of state and municipal laws and regulations. Environmental legislation provides for, among other things, restrictions and prohibitions on spills, releases or emissions of various substances produced in association with mining operations. Compliance with such legislation can require significant expenditures and a breach may result in the imposition of fines and penalties, some of which may be material. Environmental legislation is evolving in a manner expected to result in stricter standards and enforcement, larger fines and liability and potentially increased capital expenditures and operating costs. Environmental assessments of proposed projects carry a heightened degree of responsibility for companies and directors, officers, and employees. 14 Mitigant The Group actively monitors and manages its liquidity position through cash flow forecasting to ensure, as far as possible, that it will have sufficient liquidity to meet its obligations when they are due, under both normal and stres