Announcement PDF ABN 46 098 952 035 SKY METALS LIMITED ANNUAL REPORT AND ITS CONTROLLED ENTITIES FOR THE FINANCIAL YEAR ENDED 30 JUNE 2024 SKY METALS LIMITED CONTENTS Page Chairman’s Letter 1 Review of Operations 2 Statement of Corporate Governance 17 Directors’ Report 18 Auditor’s Independence Declaration 31 Consolidated Statement of Profit or Loss and Other Comprehensive Income 32 Consolidated Statement of Financial Position 33 Consolidated Statement of Changes in Equity 34 Consolidated Statement of Cash Flows 35 Notes to the Consolidated Financial Statements 36 Consolidated Entity Disclosure Statement 65 Directors’ Declaration 66 Independent Auditor’s Report 67 ASX Additional Information 73 Corporate Directory 75 SKY METALS LIMITED CHAIRMAN'S LETTER Dear Fellow Shareholders, I am pleased to report that 2024 was another successful year for the Company with work focussing on advancing SKY’s Tallebung tin project. Highlights for the year included seeing significant advancement of the Tallebung Tin Project as well as the early, successful exploration work at the Company’s new Nariah tin project. SKY’s 2024 exploration efforts were focused on expanding the size of the mineral resources at Tallebung to allow a scoping study to be undertaken to present the economic prospects given the low-cost mining and tin production options available for the project. During the year, the resource at Tallebung has been substantially expanded and the MRE now sits at 15.6Mt @ 0.15% Tin, with work well advanced to continue to increase this resource as it is only limited by the drilling completed to date and open in all directions. SKY continues to be delighted by the work to improve on the low-cost processing options at Tallebung, including the great grade uplift achieved by the Tomra ore sorting process. Work this year has shown this process to be consistent throughout the Tallebung deposit and the mineralisation at Tallebung is ideally suited to this processing. With the ore sorting allowing a significant reduction in overall tonnes requiring processing, this in turn significantly reduces both the likely capex and opex at Tallebung. The advantages of shallow tin mineralisation with tin starting from surface, and combined with the low-cost processing, all strongly improve the potential project economics. The mining history at Tallebung with an existing open pit and infrastructure to site also provides excellent potential to expediate the wider approvals process. The SKY team is already advancing a condensed approvals timeframe and timeline to production with work already in motion on these processes. In addition to the advanced work being undertaken at Tallebung, a maiden drilling program was undertaken at the Nariah tin project with ore grade tin and tungsten intercepted in all holes completed. Exploration work is continuing at Nariah to follow up highly encouraging results to date, with this initial program being used to home in on areas of the highest potential to host large, high-grade tin deposits in the project area. The progress of SKY’s tin portfolio is particularly exciting given the current broader tin market. Demand growth is being driven primarily by tin’s irreplaceable use as solder in electronics with AI, semiconductors, Solar PV and EVs among the growing sectors demanding more tin. Supply for tin continues to be fragile as this year Indonesia, who is responsible for approximately 20% of global tin supply, had tin production reduced to almost zero at the beginning of the calendar year with approval delays and other issues seeing tin production halted. This was among other concerns within the global tin market supply. The fragile supply and growing, irreplaceable demand for tin has seen strong tin prices for much of the last year, greatly encouraging for SKY as we advanced the tin portfolio. Your Board continues to be pleased by the results achieved to date at Tallebung and is excited by the Company’s other prospects. We are all working hard on creating value for our shareholders. I would like to express my sincere thanks to the SKY team including my fellow Directors Mr Hill and Mr Kairaitis, CEO Mr Davies, Company Secretary Mr Willson, and the rest of the SKY team for the exceptional work that has been conducted throughout the year. Yours sincerely Norman A. Seckold Chairman 1 SKY METALS LIMITED REVIEW OF OPERATIONS Corporate Activities • On 8 September 2023, the Company exercised the option to acquire 100% of the share capital of Balmain Minerals Pty Ltd, the holder of the Iron Duke Project EL6064. On 22 September 2023, the Company issued 6,841,294 shares and 781,862 options as consideration for the acquisition. • On 9 November 2023, the Company issued 10.8 million performance rights to directors, as approved by shareholders at the 2023 AGM. • On 12 October 2023, the Company issued 18.6 million performance rights to employees. • On 25 October 2023, 1,000,000 unlisted employee options held by CEO Oliver Davies and 500,000 unlisted employee options held by the Company Secretary expired. • On 31 January 2024, 2,000,000 unlisted employee options held by CEO Oliver Davies expired. • On 14 March 2024, SKY announced a $4.2 million placement to institutional, sophisticated and professional investors at A$0.033 per share to advance the Tallebung Tin Project. The shares were issued in two tranches; 106 million shares were issued on 21 March 2024, and 21 million shares were issued on 10 May 2024 subsequent to shareholder approval at a meeting of shareholders held on 2 May 2024. Each of the Company’s Directors participated in the placement with shareholder approval. • On 26 March 2024, 500,000 shares were issued to CEO Oliver Davies upon the exercise of employee performance rights. • On 2 May 2024, a meeting of shareholders was held and ratified and approved various share issues, and the participation of Directors in the placement announced on 14 March 2024. 2 SKY METALS LIMITED 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 REVIEW OF OPERATIONS TALLEBUNG PROJECT (EL 6699, SKY 100%) UPDATED MINERAL RESOURCE ESTIMATE Independent geological consultants, H&S Consultants Pty Ltd (H&SC), were retained to provide an updated Mineral Resource Estimate (MRE) for the Tallebung Tin Project. H&SC compiled the 115 holes drilled at Tallebung to date at time of the estimate (including 85 holes drilled by SKY since 2019) for approximately 19,098 assays in total, to produce the MRE. The MRE was reported in accordance with the 2012 JORC Code and Guidelines and the Inferred and Indicated MRE is shown in Table 1 and further details can be found in SKY ASX Announcement 23 January 2024. Table 1 – Tallebung MRE showing total tonnage, grade and contained metals at a 0.08% Tin cut-off grade. NB: WO3 refers to the Tungsten reported as an oxide as it is likely to be a significant by-product. Additionally, mtu refers to metric tonne units which Tungsten is conventionally reported as, 1 mtu = 10 kg WO3. Resource Category Tonnes Grade Contained Metal Inferred Indicated Mt 10.6 5.00 Tin (%) 0.14 0.16 WO3 (%) 0.03 0.03 Tin (kt) 15.2 7.93 WO3 (mtu) 302,106 131,833 Total 15.6 0.15 0.03 23.13 433,939 EXPLORATION TARGET A new Exploration Target of approximately 23 – 32 Mt at a grade ranging between 0.14 - 0.17 % tin was defined along with the updated MRE estimated above. The potential quantity and grade referred to above as the Exploration Target is conceptual in nature, as there has been insufficient exploration to estimate a Mineral Resource and it is uncertain if further exploration will result in the estimation of a Mineral Resource. SKY will commence drilling of this exploration target in the coming months with at least 20 RC holes and diamond drilling with the aim to expand the MRE and grow confidence in this estimated Exploration Target. Supporting report and further details on the Mineral Resource Estimate and the definition of the Exploration Target are included in SKY ASX Announcement 23 January 2024. TOMRA ORE SORTING UPGRADE Excellent and consistent results were received for the variability testing of TOMRA Ore Sorting, further demonstrating the extremely amenable nature of the Tallebung tin mineralisation for ore sorting. The results show that Tallebung mineralisation was upgraded on average over 5x across the entire deposit. An average of 18% of the sorted mass was in the sorted product, leaving 82% of the mass to be rejected. The sorting product consistently contained approximately 99% of the tin with no tin detected in the waste for all but one sample (Table 2). Crucially, TOMRA ore sorting not only increases the tin grade but also greatly reduces the tonnes to be processed to produce a saleable tin concentrate from the Tallebung tin mineralisation. There are a number of significant advantages of this reduction in mass for any potential mining operation. The sorted mass is reduced to only one fifth of the mass on average, with a much higher tin grade, this means: • • • Reduced Capex as only one fifth of sorted mass requires processing in a dedicated processing plant, Opex of any mining operation will also be a fraction of any operation without ore sorting, Excellent environmental outcomes including: – A small fraction of the water will be required to produce saleable tin concentrates, – A small fraction of the power will be required to produce saleable tin concentrates tin, – Reduced mine footprint including smaller waste emplacements such as tailings dams. The samples selected for the ore sorting variability testwork were selected from a variety of lodes across the deposit, including near surface and at depth, as well as along the entire strike of the deposit (Figure 2). The purpose of the testwork was to identify if there were any areas within the Tallebung deposit that were either better suited to ore sorting or where ore sorting was found less be effective. All areas were discovered to be consistently and exceptionally amenable to ore sorting. The results of the testwork are consistent throughout the deposit, demonstrating a strong upgrade in all cases with no tin detected in the ore sorting waste. As such, TOMRA ore sorting continues to demonstrate an exceptional potential to establish Tallebung strongly as a very low-cost potential tin mining operation. 4 SKY METALS LIMITED REVIEW OF OPERATIONS Figure 2: Tallebung Tin Project – Plan showing extent of the current Exploration Target along with the drillholes sampled for the TOMRA variability study testwork shown in yellow. TOMRA ore sorting shows a consistent 3-6x upgrade across the entire deposit, increasing average grade from 0.15% Tin to over 0.70% Tin. 5 SKY METALS LIMITED REVIEW OF OPERATIONS Table 2: Tallebung Tin Project – Results table for the TOMRA ore sorting variability testwork showing significant 4.6 - 6.6 times increase in tin grade and 1/5 reduction in mass for around 99% recovery of tin on average. Sample TBD005: 206-232m TBD008: 152-169m TBD006: 25-35m TBD005: 222m Feed Size Mass Sorted Product Waste Accepted Product Head Grade Product Grade Upgrade Waste Grade Tin Recovery mm kg kg kg % % Tin % Tin x % Tin % 8-32 158 26 132 16% 0.17 1.10 6.6 <0.01 99.1 8-32 100.3 19.3 81 19% 0.14 0.70 5.1 <0.01 98.6 8-32 43.2 10.5 32.7 24% 1.15 5.31 4.6 0.07 98.7 8-32 73.4 10.8 62.6 15% 0.21 1.38 6.5 <0.01 99.3 These results were from samples collected from four wide-diameter PQ diamond drillholes, namely TBD005-TBD008. The samples were then sent to TOMRA Ore Sorting Solutions in Sydney and crushed to down into -32mm grains. The sample was then split into 8-32mm fraction for sorting and a <8mm fines fraction which was too fine to be sorted effectively and retained as fines for follow up Dense Medium Separation (DMS) testwork. The 8-32mm fraction was then sorted with TOMRA’s XRT ore sorter into a product and waste. (NB: TOMRA’s XRT sensor measures and sorts the samples based on the relative density of the samples. As tin is almost 3 times denser than the waste material, the denser-tin-bearing sample is ejected as the product while the less dense and, therefore, tin-poor sample, is the waste). The TOMRA ore sorting results combined with the shallow, open pit Tallebung tin resource and simple gravity processing of the tin, all contribute to establish Tallebung as a potential low-cost tin mining operation. SOUTHERN RESOURCE EXTENSION PROGRAM Later in the year, SKY commenced a drilling program aiming to increase the MRE towards the estimated Exploration Target of approximately 23 – 32 Mt at a grade ranging between 0.14 - 0.17 % tin defined from the drilling completed and remains open in all directions (SKY: ASX Announcement 23 January 2024). This drilling program will be designed to propel the Tallebung project towards announcing mining studies to show the specifics around the potential low-cost tin mining operation at the Tallebung Tin Project. The program targeted the southern and central areas of the historic Tallebung Tin Mining Field where the majority of the historic hardrock workings are located (Figure 3). The focus is on converting a further portion of the Exploration Target into a ‘critical mass’ MRE of inferred and indicated resources. The resource expansion drilling program started with exploring for extensions to the Tallebung deposit, south of the existing resource envelope. The southernmost hole in this drilling program was hole TBRC078 which has discovered high-grade tin mineralisation well beyond the previous extents of past drilling, results included: TBRC078: 11m @ 1.02% Sn, 77.9g/t Ag & 0.13% W from 64m TBRC078 is a 150m step out along strike from the previous extent of drilling at Tallebung, as shown in Figure 3. This hole has not only successfully expanded the large footprint of tin mineralisation at Tallebung, but also has shown the significant potential for broad, high-grade tin mineralisation outside of the footprint of the existing tin resources. Follow up drilling will be completed to quickly expand on this exceptional result. 6 SKY METALS LIMITED REVIEW OF OPERATIONS SOUTHERN AND CENTRAL INFILL DRILLING The drilling then proceeded immediately north to infill and expand on past results on the southern extent of the Tallebung tin deposit. Results received showed that these holes successfully intercepted further strong tin mineralisation. Figure 3: Tallebung Tin Project – Plan showing the current boundary of the MRE outlined in the dashed red line with new intercepts shown in yellow. Highlight intercepts from past drilling are also shown and new planned holes are shown in red, recently drilled diamond holes with assays still pending are in orange. TBRC081-TBRC085 followed these holes and were drilled to infill results around and within the southern lead where previous drilling had intercepted strong tin mineralisation. These holes successfully intercepted further strong tin mineralisation (Figure 2); highlight results included: TBRC083: 27m @ 0.18% Sn, 20.5g/t Ag & 0.02% W from 80m, including; 4m @ 0.82% Sn, 0.04% W & 11.8g/t Ag from 81m. TBRC084: 11m @ 0.38% Sn & 69.0g/t Ag from 53m, including; 1m @ 1.13% Sn, 118g/t Ag, 0.04% W & 0.30% Cu from 61m. 7 SKY METALS LIMITED REVIEW OF OPERATIONS TBRC085: 20m @ 0.15% Sn, 0.02% W & 5.69g/t Ag from 30m, including; 2m @ 0.89% Sn, 0.03% W & 23.0g/t Ag from 30m. 9m @ 0.40% Sn, 57.1g/t Ag & 0.04% W from 63m, including; 1m @ 1.66% Sn, 372g/t Ag, 0.29% W & 0.04% Cu from 63m. The multiple lodes successfully intercepted in most of these drillholes shows the strong tin mineralisation tested by these holes and will aid in adding significant additional tonnes into the indicated resources categories, vital for future mining studies. Figure 4: Tallebung Tin Project – Cross-section showing the new results in TBRC083, TBRC084 and TBRC085. The section is underneath the southern edge of the historic southern lead open pit and strong grades have been intercepted here with very little waste between the tin vein packages showing a strongly mineralised zone. NORTHERN EXPANSION DRILLING A series of holes, TBRC094, TBRC095 and TBRC096 were drilled to infill drilling between historic holes to the south and two modern diamond drillholes to the north (the previously the northernmost drilling at Tallebung, TD001 and TD002; Figure 1). These holes all successfully intercepted further tin mineralisation. Highlight results included: TBRC094: 12m @ 0.15% Sn, 6.82g/t Ag & 0.04% W from 25m, including; 1m @ 1.14% Sn & 0.53% W from 34m TBRC095: 21m @ 0.15% Sn, 26.3g/t Ag & 0.04% W from 0m, including; 1m @ 1.16% Sn, 0.34% W & 39.6g/t Ag from 4m. 8 SKY METALS LIMITED REVIEW OF OPERATIONS To explore and extend the deposit to the north, TBRC097 and TBRC098 were drilled over 170m further north than any previous drilling of the Tallebung deposit. These holes have established that the tin mineralisation extends well north of the previous drilling, extending the deposit by over 170m along strike in the north and confirming the deposit remains open along strike and both to the east and west. Results included: TBRC097: 5m @ 0.17% Sn from 110m, including; 2m @ 0.39% Sn & 0.03% W from 110m. Finally, drilling was completed to infill south of the southern lead open pit and test for mineralisation under the central open pit with TBRC100, TBRC101 and TBRC102. Results included: TBRC100: 11m @ 0.19% Sn, 14.8g/t Ag & 0.03% W from 30m, including; 1m @ 0.85% Sn, 72, 0.05% W & 72.2g/t Ag from 35m. 6m @ 0.17% Sn & 0.30% Zn from 123m. 1m @ 0.88% Sn, 0.07% W & 1.23% Zn from 128m. This RC program has successfully expanded the mineralisation at Tallebung, as well as discovered further higher-grade areas very close to surface, bolstering the existing resources. The results will have significant impact on future mine scheduling and SKY will now quickly move to infill the exceptional, high-grade tin mineralisation intercepted in TBRC078 on the southern edge of the current drilling at Tallebung. NEXT STEPS Follow up drilling is planned to quickly build on the discovery of the high-grade tin mineralisation on the southern margin of the current drilling, intercepted in TBRC078. Figure 3 shows the planned locations of these approved drillholes. NARRIAH PROJECT (EL 9524, SKY 100%) MAIDEN DIAMOND DRILLING PROGRAM SKY completed a maiden drilling program of six diamond drill holes, RED001-RED006, for a total of 498.05m to test under the historic workings in the Restdown Mining Area. Numerous historic shafts and small open pits with at least 6 areas of historic workings have now been discovered by SKY in the Restdown Mining Area, namely the Arctic, Restdown, Greenland, Iceland, North Pole and Tex Prospects (Figure 5 & 6). SKY’s maiden drilling program targeted the most developed areas of historic workings with RED001 & RED002 drilled under the historic Arctic Tin Mine, RED003 & RED004 drilled under the historic Tex Tungsten Mine, RED005 drilled under the historic Restdown Tin Mine and, finally, RED006 was drilled to test extensions to the historic Greenland Tin Mine (Figure 5 & 6). Highlight results included: RED001: 13.1m @ 0.14% Sn & 0.18% W from 17.7m including; 0.35m @ 0.92% Sn & 5.28% W from 20m and; 0.8m @ 1.25% Sn from 30m. RED005: 13m @ 0.14% Sn from 17m. RED003: 8.25m @ 0.13% Sn from 19.4m including; 0.3m @ 2.37% Sn from 24.8m 9 SKY METALS LIMITED REVIEW OF OPERATIONS Figure 5: Narriah Project – Plan showing recent drilling and locations of the numerous historic mine workings in the Restdown Mining Area with sand cover predominating across the area and most locations of rock outcropping coincide with historic tin and tungsten mines. 10 SKY METALS LIMITED REVIEW OF OPERATIONS Figure 6: Narriah Project – Schematic long section of the Restdown Mining Area showing sand cover predominating across the area with the recent drill intercepts under the areas of the tin and tungsten mines where the underlying rock is exposed at surface. CONAPAIRA GEOLOGICAL MAPPING AND ROCK CHIP SAMPLING A compilation of historic data showed strong potential for near surface tin-tungsten mineralisation at the Conapaira Mining Reserve. This was further evidenced by the extensive historic workings in the area. A site visit for ground-truthing historic data, geological mapping and rock chip sampling was completed and discovered extensive workings throughout the mining reserve and widespread evidence for these workings occurring in close proximity to the Erigolia Granite Margin (Figures 3 & 4). Evidence for the close proximately to the granite margin included exposed and preserved roof pendants. Given the prospective position of these historic workings, rock chip samples were taken of areas of outcrop and mine workings. These rock chip samples successfully identified high-grade tin, tungsten and silver mineralisation over a strike length of more than 3km (Figure 3), results included: – – – 1.80% tin, 13.9g/t silver & 0.05% copper (jn240223-05); 1.50% tin, 0.26% tungsten & 14.7g/t silver (jn240223-04); 1.20% tin & 1.77% tungsten (jn240223-10). 11 SKY METALS LIMITED REVIEW OF OPERATIONS Figure 3: Narriah Project – LHS – Plan view with an aerial photo of the Conapaira Mining Reserve showing the location of historic mine working and shafts and results of SKY’s rock chip sampling. RHS – Regional magnetics showing the mineralising 16km long Erigolia Granite within SKY’s EL9524 and the location of the Restdown and Conapaira Mining Reserves near the margin of the mineralising Erigolia Granite. NEXT STEPS These rock chip results show that the Conapaira Mining Reserve is very prospective for large-scale and high-grade tin and tungsten mineralisation. Furthermore, the potential hard rock tin mineralisation remains untested by previous workers. To better target the exciting potential at the Narriah Project, SKY will now complete geophysical surveys, including magnetic and radiometric surveys, to accurately delineate the underlying geology in the area under the alluvial and aeolian sand cover over the project area. The results of the geophysical surveys will be combined with the thorough compilation of the historic data and the rock chip results to target follow up drilling, aiming to discover a large-scale and high-grade tin-tungsten deposit. 12 SKY METALS LIMITED REVIEW OF OPERATIONS DORADILLA PROJECT (EL 6258, SKY 100%) POLYMETALLIC MINERALISATION – METALLURGICAL TESTWORK PROGRAM Recent review of historic petrology and metallurgical testwork at the Doradilla Tin Deposit identified that the tin is hosted in fine cassiterite in the vicinity of the Doradilla Tin Target on the southwest end of the ‘DMK’ Line. Additionally, this mineralisation has not been tested for concentration via modern flotation methods. This represents an encouraging development at Doradilla. Work is underway to begin to confirm the historic findings and, if these are confirmed, to test modern flotation methods to concentrate the tin. This work will aim to evaluate if it is possible to produce a saleable tin concentrate using these methods on the Doradilla mineralisation and, subsequently, if there are viable pathways to mine economically at Doradilla. SKY is continuing to work with engaged metallurgical consultants, UNSW, ALS Burnie and ANSTO, along with other experts, to continue to develop the broad range of methods available to extract the REE, tin and polymetallic mineralisation on the DMK Line to unlock the high-value, widespread mineralisation discovered at Doradilla. This work will include ongoing data compilations, targeted geophysical surveys as required and continuing geological studies by SKY in partnership with UNSW. CULLARIN PROJECT: GOLD-LEAD-ZINC-COPPER (EL 7954, SKY 80%; DVP JV) HUME TARGET – DIAMOND DRILLING AND DHEM Diamond drilling completed at the Hume Target in 2021 highlighted the potential of the high-grade, gold-lead-zinc-copper mineralisation at depth at Hume. HUD031 intercepted intervals of massive sulphides and strong base metal mineralisation, deeper than any previous drilling at Hume. Results included: HUD031: 32m @ 5.09% Pb+Zn, 0.15% Cu, 6g/t Ag from 420m including; 6m @ 8.93% Pb+Zn, 0.51% Cu, 18g/t Ag, 0.13g/t Au from 446m SKY was encouraged by these thicker intervals of mineralisation at the Hume Target. In 2023, SKY re-entered HUD030 and extended the hole to intercept the Hume Structure 100m below HUD031. Previously, HUD030 had been drilled to 303.6m in 2021 to test for extensions to the strong base metal mineralisation intercepted in HUD005 (6m @ 1.28% Cu & 12.44% Pb+Zn). HUD030 was extended and drilled on to 702.4m. Geological logging and modelling of HUD030 indicated that the hole had drilled through an interpreted moderately west dipping fault named the Eastern Fault. Although the hole intercept multiple zones of intense sericite-silica-pyrite alteration, results were subdued. The assay results and advances in the geological understanding of the Hume Target from this drilling will be studied by SKY geologists to identify any further targets for expanding the gold-rich, polymetallic mineralisation at the Cullarin Project. SKY is looking at a number of new approaches to delineate and target further mineralisation at Cullarin. These will aim to highlight prospective areas for discovering more of the high-grade mineralisation already intercepted across the project. IRON DUKE PROJECT: COPPER-GOLD 100% SKY (EL6064 & 9191) This year, SKY exercised the option to purchase EL6064 – Iron Duke Project and SKY now holds 100% of the Iron Duke Project. The Iron Duke Project covers the Iron Duke Shear Zone which is at least 4km in strike and open to the south. Several historic copper mines occur along the Iron Duke Shear Zone including the Iron Duke, Christmas Gift, Monarch, Mount Pleasant and Silver Linings mines, along with several unnamed copper workings and shafts. In the 2021, SKY completed a maiden drilling program at the Iron Duke Mine, in conjunction with a VTEM survey and DHEM, to identify extensions to the high-grade copper-gold mineralisation along the Iron Duke Shear Zone (SKY:ASX Announcement 2nd June 2021). An RC and diamond drilling program is planned to test for further extensions to the Iron Duke mine and test the previously undrilled historic mines at the Christmas Gift Workings (comprising of the Christmas Gift, Monarch, Mount Pleasant and Silver Linings mines). This program was delayed due to extremely wet ground condition preventing access to the area. Currently, this program is planned for the following year after a detailed review of the geophysics, mining records, historic data and previous drilling to develop robust targets for further drill testing and expansion of the Iron Duke mineralisation. 13 SKY METALS LIMITED REVIEW OF OPERATIONS CALEDONIAN PROJECT: GOLD 100% SKY (EL8920 & EL9020) SKY has now completed a soil sampling program, a phase of AC drilling, two phases of RC drilling and two diamond drill holes at the Caledonian Target. A review of SKY’s and historic results indicates the Caledonian gold mineralisation likely represents a shallow, sub-horizontal blanket of oxide and supergene gold mineralisation developed over an oxidised skarn. SKY completed a shallow aircore (AC) drilling program over the area consisting of 38 vertical AC holes for a total of 697m on 50-100m spacing over the 600m x 400m area of mineralisation defined by the previous drilling, soil sampling and costeaning. Due to significant ground waters intercepted by the AC drilling, preventing all but 4 of the 38 holes drilled from reaching refusal, SKY does not consider the target concept of a shallow, sub-horizontal blanket of oxide and supergene gold mineralisation to have been effectively tested. These results will be evaluated, along with the previous drilling, to direct SKY to further shallow high-grade oxide gold mineralisation in the target area. SKY has been informed of the proposed development of a solar farm on the northern area of EL8920. This area covers the Jerrawa Strike which is a trend of metallic occurrences that SKY interprets to be an exhalative horizon with strong potential to host gold-silver and base metal mineralisation. SKY is continuing to work with the solar farm developers to ensure that the solar farm will not be developed over significant mineralisation. The work to date has delineated a gold soil anomaly which SKY plans to follow up, pending ongoing negotiations with the Solar Farm developers. GALWADGERE PROJECT: COPPER-GOLD 100% SKY (EL6320) SKY and Burrendong Minerals Ltd (BIG) have entered into to a purchase agreement for the divestment of SKY’s non-core Galwadgere Project. Galwadgere, EL6320, will be purchased outright with $600,000 worth of BML shares on the successful IPO of BML within a year from the commencement of the agreement. Burrendong Minerals has a portfolio of projects centred on the area around the Galwadgere Project including the Commonwealth Deposit. BML aims to list on the ASX with an IPO planned in the coming months with this portfolio of projects proximal and complimentary to the Galwadgere Project in NSW. The divestment of the non-core Galwadgere Project allows SKY to remain focused on developing SKY’s core assets. KANGIARA PROJECT: GOLD 80% SKY (EL8400 & EL8573; DVP JV) The Kangiara Project (EL8400, EL8573) is located 30km northwest of Yass in the Southern Tablelands of New South Wales (Figure 4). The project contains volcanic/volcaniclastic rocks of the Silurian Douro Group considered prospective for gold an