Rainbow Rare Earths Limited

("Rainbow" or the "Company")

(LSE: RBW)

28 October 2021

Preliminary Announcement of results for the year ended 30 June 2021

Rainbow Rare Earths Ltd is pleased to announce its preliminary results for the year ended 30 June 2021 ("FY 2021").

The financial information in this release does not constitute the Financial Statements.  The Group's Annual Report, which includes the audit report and audited Financial Statements for the year ended 30 June 2021, will be available on the Company's website at www.rainbowrareearths.com.

Highlights

·      As pressure continues to accelerate around the globe to reach the net-zero goals of the Paris Agreement, we believe Rainbow is well positioned to develop a responsible, independent, rare earths supply chain.

·      Strong and diversified demand for the rare earth elements required for use in permanent magnets, namely Neodymium and Praseodymium ("NdPr"), together with Dysprosium ("Dy") and Terbium ("Tb"), underpinned by key global macroeconomic trends.

·      Rainbow's rare earths basket prices for the Gakara project have risen 64% during FY 2021, significantly outstripping forecast price rises.  The Phalaborwa basket is more highly geared to high value NdPr, with additional economic Dy and Tb credits, and has seen a 67% increase over FY 2021.

·      JORC (2012) compliant inferred mineral resource estimate at the Phalaborwa Project in South Africa of 38.3Mt at 0.43% total rare earth oxide ("TREO").

·      Exclusive rare earths separation technology agreement signed with K-Technologies, Inc.

·      Scope of preliminary economic assessment ("PEA") at Phalaborwa widened to include additional downstream processing step, aiming to deliver separated rare earth oxides directly from the proposed on-site Phalaborwa processing facility.

·      Exploration and trial mining operations at Gakara in Burundi placed on care and maintenance by the Government of Burundi in June 2021 following an initial export ban put in place in March 2021.  Rainbow has focused on a steadfast approach to resolving issues in Burundi to recommence the positive contributions we make to the benefit of all our stakeholders through exploration and trial mining operations at Gakara.

·      Rainbow's Board has been further strengthened by the appointment of Ambassador J. Peter Pham as a Non-executive Director.

·      Strong shareholder support for the business, evidenced by two recent oversubscribed placings - the first in November 2020 to raise £2.56 million and the second completed post year end in October 2021 to raise £6.435 million. As substantial investment was made by TechMet, which counts the U.S. government as a major investor, in the second placement, alongside existing and new global institutional investors.

·      Continued strong safety performance: 0 lost time injuries ("LTIs") in FY 2021 (FY 2020: 0), with 1.1 million LTI-free hours worked since February 2019.

Certain information contained in this announcement would have been deemed inside information for the purposes of Article 7 of Market Abuse Regulation (EU) No 596/2014 ("MAR") which has been incorporated into UK law by the European Union (Withdrawal) Act 2018 until the release of this announcement.

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Notes to Editors:

Rainbow's strategy is to become a globally-significant producer of rare earth metals. Nd/Pr are vital components of the strongest permanent magnets used for the motors and turbines driving the green technology revolution. Analysts are predicting demand for magnet rare earth oxides will grow substantially over the coming years, driven by increasing adoption of green technology, pushing the overall market for Nd/Pr into deficit.

The Phalaborwa Rare Earths Project, located in South Africa, comprises an Inferred Mineral Resource Estimate of 38.3Mt at 0.43% total rare earths oxides ("TREO") contained within gypsum tailings stacked in unconsolidated dumps derived from historic phosphate hard rock mining.  High value Nd/Pr oxide represent 29.1% of the total contained rare earth oxides, with economic Dysprosium and Terbium oxide credits enhancing the overall value of the rare earth basket contained in the stacks.  The rare earths are contained in chemical form in the gypsum dumps, which is expected to deliver a higher-value rare earth carbonate, with lower operating costs than a typical rare earth mineral project.

The Company's Gakara Project in Burundi has produced one of the highest-grade concentrates in the world (typically 54% TREO) through trial mining operations.  The Gakara basket is weighted heavily towards Nd/Pr, which account for over approximately 19.5% of the contained TREO and 85% of the value of the concentrate.

Chairman's statement

This has been a transformative year for Rainbow, in which we have introduced the exciting, near-term growth opportunity presented by Phalaborwa to our portfolio. The signing of the co-development agreement for this project in South Africa in FY 2021 represented a step change in Rainbow's business model. Not only did it add diversification, but most importantly it provided the potential for us to participate in the downstream stage of rare earth oxide production. As pressure continues to accelerate around the globe to reach the net-zero goals of the Paris Agreement, we believe Rainbow is now well positioned to develop a responsible, independent, Western rare earths supply chain and become a significant producer of Neodymium and Praseodymium. This will enable our business to bridge some of the substantial expected global gap between current supply and mounting demand and provide the building blocks which are essential to the success of the green energy revolution.

Integral to low carbon technologies, the demand for rare earths, and more specifically NdPr, is increasing and we are therefore heavily focused on rapidly bringing the Phalaborwa Project into production. FY 2021 has seen a 78% increase in the price of NdPr oxide, which has continued to rise since the year-end. As the automotive industry continues to shift to electric vehicles and the demand for clean energy further accelerates, the outlook for NdPr becomes ever more compelling, with analysts predicting a fivefold increase in the value of global magnet rare earth oxide consumption by 2030. With rare earth supply still dominated by China, we see significant opportunities to provide an alternative source and are committed to producing the metals in a responsible manner. We believe that our Phalaborwa Project demonstrates this commitment well - by processing the existing gypsum stacks, our aim is to deliver a "green" rare earths project, removing existing environmental liability and redepositing clean, benign gypsum on a new stack.

The year has brought some challenges for the Company - both as a result of the ongoing global pandemic, but also more specifically, the interruptions we are experiencing in Burundi, with the Gakara exploration and trial mining operation on care and maintenance. However, we continue to engage effectively with Government stakeholders and are confident of reaching a resolution. Whilst the situation facing Rainbow in Burundi is disappointing, it has allowed our team to focus on the substantially larger opportunity presented for the near-term development of Phalaborwa, which we see as the immediate catalyst of Rainbow's business model. We remain committed to the positive contributions we are able to make as a Company within our countries of operation and communities through the payment of taxes and royalties, the provision of employment, local investment and the support of local supply chains.

Ensuring a strong governance framework for the business is a priority for Rainbow and we were delighted to further strengthen the Board during FY 2021 with the appointment of Ambassador J. Peter Pham. Peter brings a rich and detailed understanding of African political and economic issues, as well as insights and relationships across Africa and Washington. As the architect of efforts to reform and rebuild US relations with Burundi, Peter's insights will be invaluable to the Company.

On behalf of the Board of Directors, I would like to thank our management team, employees and contractors for their continued dedication to the Company, hard work and determination. I also wish to express gratitude to our shareholders, who have shown strong support for the business, as evidenced by two recent oversubscribed placings - the first in November 2020 to raise £2.56 million and the second completed post year end in October 2021 to raise £6.435 million.

This is a very exciting time for Rainbow as we drive forward with the development of Phalaborwa and I look forward to updating shareholders on further developments as we continue to drive value through the business.

CEO's statement

We have made significant progress with our strategy in FY 2021, which is testament to the commitment of our team in the light of the challenges we are all facing as a result of Covid-19. We have continued to prioritise the health and safety of our employees throughout the global pandemic and adopt a zero-harm policy in our operations, remaining focused on ensuring a safe working environment at all times. I am pleased to report that zero LTIs occurred at Gakara during 2021, leading to a lost time injury frequency rate ("LTIFR ") of 0.00 and a total period exceeding 1.1 million hours LTI-free pilot production since February 2019. This demonstrates our commitment to this fundamental aspect of the business, which we will aim to mirror at other operations going forward. Read more about health and safety in the 2021 Annual Report.

We believe that Phalaborwa provides us with a relatively unique opportunity for the rapid development of a low-capital and -operating cost, high-value rare earths processing facility. We therefore see this asset as the cornerstone of Rainbow's business in the near term and continue to assess similar assets to complement the portfolio.

We have long believed that the essence of Rainbow's business model would come from participating further in downstream processing in order to realise the full value of the underlying rare earth oxides for our stakeholders. Therefore, we have enlarged the scope of the PEA at Phalaborwa to now include an additional downstream processing step. The original flowsheet already planned to produce a mixed rare earth carbonate (rather than simply a mineral concentrate), due to the gypsum stacks being in a "cracked" chemical rather than mineral form. This removes the requirement that most global rare earth projects have of firstly producing a mineral concentrate before undertaking a complex and energy intensive "cracking" process.

In June, Rainbow released a maiden JORC (2012) compliant mineral resource estimate for Phalaborwa of 38.3Mt at 0.43% TREO, which exceeded original expectations of 35Mt from the gypsum stacks. Importantly, 29% of the total contained rare earth oxides comprise high-value NdPr oxide, the essential metals for permanent magnets powering the green revolution. In addition to this, we were pleased to see economic Dysprosium and Terbium oxide credits, which enhance the overall value of the rare earth basket contained in the stacks.

We were particularly excited by the highly positive initial test work results received from ANSTO Minerals, which were published in May and support our view that Phalaborwa can be developed as a low capital intensity project with operating costs near the bottom of the global rare earth cost curve. As this project entails the processing of gypsum waste residue resulting from historic phosphoric acid production, it carries significant environmental advantages, with anticipated lower energy and reagent requirements than a traditional rare earths project. As with Gakara, Phalaborwa benefits from the fact that the gypsum stacks contain low levels of radioactive elements, which are not expected to pose a problem in the processing circuit. All these factors combined confirm our belief that Phalaborwa represents a very exciting, environmentally sound, fast-track development opportunity for Rainbow.

The signing of our exclusive rare earths separation technology agreement with K-Technology in September represented another positive moment for the business. We believe that it provides Rainbow with a significant competitive advantage and that the intellectual property ("IP") is ideally suited to Phalaborwa, where it would enable us to focus on the separation of only the most valuable rare earth oxides within the basket. In addition to the anticipated capex and opex savings that could be achieved using this technology, when compared to a traditional separation circuit, it will enable Rainbow to participate efficiently in the downstream separation process, allowing us to capture the full rare earth oxide price for our material. We are also excited to be in a position to utilise the technology to secure an interest in other rare earth phosphogypsum opportunities in the region, where we believe tremendous value can be unlocked.

However, the year has not been without its complications. In April 2021, the Company received notification from the Government of Burundi of a temporary suspension on the export of concentrate from Gakara. Subsequently, shortly before year end, the Company received notification of a temporary suspension of exploration, trial mining and processing operations at Gakara. During this Government-mandated suspension, operating costs in Burundi have been minimised, with the vast majority of staff placed on suspension, such that the ongoing situation is not having a significant impact on the Company's cash flow forecasts. Whilst the exploration and trial mining operation remains on care and maintenance, we continue to take a steadfast approach to resolving these issues and recommencing the positive contributions we make in Burundi to the benefit of all our stakeholders.

We enhanced our senior project development team in 2021 through the appointments of Chris le Roux and Charles Graham who work closely with Rainbow's Technical Director, Dave Dodd. With their combined wealth of experience, they will be instrumental in the successful delivery of Phalaborwa.

Given its unique nature, it is our belief that Phalaborwa will be capable of reaching production of mixed rare earth carbonate faster than any other rare earth development project globally. Therefore, with continued strong progress being made at this project, coupled with the favourable supply/demand fundamentals in the rare earths market outlook, I remain confident that Rainbow is optimally positioned to become a globally-significant producer of rare earth metals, supplying the building blocks for the green revolution.

Operations report

Phalaborwa

Located in South Africa, Phalaborwa comprises two gypsum stacks which contain an inferred mineral resource estimate of 38.3Mt at 0.43% TREO derived from historic phosphate hard rock mining. High-value NdPr oxides represent 29.1% of the TREO, which is believed to represent one of the largest weightings of any project in the world. In addition to this, there are economic Dysprosium and Terbium oxide credits which enhance the overall value of the rare earth basket contained in the stacks.

The Company has made strong progress towards the delivery of the Phalaborwa Project since signing the Joint Venture agreement in November 2020 for a total consideration of US$750,000. This has included the publication of initial metallurgical test work results in May and the announcement of a maiden JORC mineral resource estimate in June 2021.

Contained in a "cracked" chemical form in the gypsum stacks, a mixed rare earth carbonate can be produced without the need to first produce a mineral concentrate and then "crack" it prior to separation of individual rare earth oxides. This removes a complex and costly stage in the standard process for a typical rare earth mineral project, enabling the Company to deliver a higher-value carbonate with lower operating costs. The expected cost benefits are also enhanced by the fact that the gypsum stacks will not require hard-rock mining (including waste stripping), or energy intensive crushing and grinding of the primary ore source.

Metallurgical test work results published, in May 2021, have confirmed that the gypsum stacks are amenable to simple, direct leaching with low-cost sulphuric or hydrochloric acid without pre-treatment, at ambient temperature and pressure. The mineral resource estimate and metallurgical test work results received to date have also confirmed that the gypsum stacks are homogenous in nature, with minimal geological uncertainty, substantially de-risking the project.

The low levels of radioactive elements present in the stacks reinforce the view that Phalaborwa will be well suited to a simplified processing flow sheet, with anticipated lower energy and reagent requirements than a traditional project. Further metallurgical test work continues at ANSTO Minerals in Australia, focused upon optimisation of leach recovery, acid consumption and initial selective recovery of the rare earths from the leach solution to design an optimised processing circuit for recovery of a mixed rare earth carbonate.

The Company plans to complete the PEA for Phalaborwa in H2 2021. This will compare a conventional route to produce a Cerium-depleted mixed rare earth carbonate versus an alternative flowsheet that bypasses the carbonate stage and delivers three higher value products, comprising NdPr oxide, Tb oxide and Dy oxide. The results will then guide the direction for development of a feasibility study.

Further downstream processing to separate and purify individual oxides is anticipated to deliver the following benefits compared to a traditional flowsheet:

·      The enhanced flowsheet is expected to be capable of delivering a higher value product, delivering the full value of the separated rare earth metal oxides. By comparison, Rainbow's Gakara Project has produced a high-grade mineral concentrate, which has been sold to China for further downstream beneficiation/processing, realising approximately 30% of the contained rare earths metal oxide value. The traditional flowsheet at Phalaborwa would produce a mixed rare earth carbonate, realising approximately 60% - 65% of the contained metal oxide value. This compares to 100% of the metal oxide value we could achieve by going further downstream to produce separated individual oxides.

·      Capital and operating expenditure cost savings are expected compared to the initial traditional flowsheet to produce a mixed rare earth carbonate for further processing in a dedicated separation facility.

·      Only the high value rare earths will be separated and recovered (Nd, Pr, Tb and Dy, which represent 95% of the Phalaborwa rare earths basket value), thereby enabling the Company to capture the full benefit of additional value from downstream processing without superfluous capital and operating expenditure which would be needed to separate all the individual rare earth elements present in the stacks.

Located in an established mining town in the Limpopo province of South Africa, Phalaborwa benefits from all the associated skilled labour availability and supporting industry (such as the local production of sulphuric acid, which will likely be a key reagent for the project). Sasol's pilot plant remains on site, alongside the Phosphoric Acid Plant equipment. Existing infrastructure includes a high voltage switchyard (providing access to Eskom grid power), machine shops, workshops, laboratory buildings, administration offices, acid storage and ammonia tanks, boilers and rail sidings.

Rare earths separation technology agreement

Post year end, Rainbow entered into an exclusive IP licensing agreement with K-Technologies, Inc. ("K-Tech") in September 2021 to use its rare earths separation technology in the SADC^[1] region.

·      The IP is suitable for use in the downstream separation of REEs into separated REOs or carbonates in phosphogypsum applications.

·      The process achieves the separation of REO in fewer stages with greater flexibility leading to capital and operating expenditure savings.

·      The process eliminates the use of toxic and highly flammable solvents and diluents with significant environmental and safety advantages.

·      Individual rare earths are targeted in solution, removing the requirement to separate a full spectrum of REOs, creating substantial efficiencies in a processing circuit.

In the case of Phalaborwa, K-Tech could develop the IP to target the specific REOs of value within the asset's gypsum stacks (NdPr, Dy and Tb), generating cost savings and simplifying the separation process.

Gakara

Gakara, which is located in Western Burundi, approximately 20km south-southeast of Bujumbura, has produced one of the highest-grade concentrates in the world at 54% TREO. Trial mining and processing, carried out at the operation since 2017, have demonstrated the deposit's amenability to simple open pit mining and low-cost gravity separation from ore sourced from high-grade stockwork vein systems across the licence area.

The Company received notification from the Government of Burundi in April 2021 of a temporary suspension on the export of concentrate, and subsequently the suspension of exploration, trial mining and processing operations in June 2021. Operations were therefore placed on care and maintenance, with the majority of local staff being placed on suspension and short-term cash requirements in Burundi minimised. Due to Gakara's stage of development, which remains in the exploration and trial mining phase, this development is not expected to have a material impact on the Company's short term cash flow projections, which envisage an ongoing investment programme in Burundi. Rainbow's operating subsidiary, Rainbow Mining Burundi SM ("RMB") holds approximately 420 tonnes of concentrate available for export which is expected to provide funding for the re-commencement of operations once permitted.

The Company understands that the primary concerns of the Government relate to the pricing of the rare earth mineral concentrate sold by RMB. Rainbow notes that this was addressed comprehensively in an independent report, dated 26 July 2019, commissioned by the World Bank at the request of the Government and compiled by SRK Consulting. This report, accepted by the Government in 2020, concluded that:

·      The price paid by ThyssenKrupp, the multinational industrial group, for the Gakara rare earth mineral concentrate, which is established on the basis of internationally recognised pricing, is commercial and forms a reliable foundation for the computation of royalties payable to the Government.

·      The export grades of each shipment are independently verified as accurate by two internationally recognised laboratories (ALS Laboratories in Canada and Baotou Research Institute of Rare Earths in China) and have been correctly reported to the Government for each shipment from Gakara to date.

·      That Rainbow is a "model company for new market entrants".

·      Prior to the suspension of trial mining at the end of June, 641 tonnes of concentrate were produced at Gakara in FY 2021, representing a 77% increase on 363 tonnes produced in FY 2020. This growth was driven by additional trial mining areas to the east of the existing Murambi operations, opened up in early March 2021 following the commissioning of a new excavator and expanded fleet of haulage trucks.

The Company continues to engage constructively with the Ministry and other stakeholders to resolve this issue and allow exploration activities including trial mining operations and exports to recommence.

Financial Review

Profit and loss

Despite the impact of the export ban limiting sales, revenue in FY 2021 was 51% higher than realised in FY 2020 with 350 tonnes of concentrate sold at an average realised price of US$1,825/t compared to 275 tonnes at US$1,535/t. With 420 tonnes of concentrate on hand at 30 June 2021, with an estimated sale value of US$3,000/t, the impact of strengthening production and rare earth prices is not fully reflected in the income statement for the year.

As the Company remains in an exploration and evaluation stage at Gakara, US$0.4 million of costs associated with trial mining and processing, net of associated revenue and movements in the stockpile of finished concentrate, have been capitalised to exploration and evaluation assets in the year (FY 2020: US$1.1 million). Depreciation charged in the year relating to the Gakara mining fleet totalling US$0.3 million (FY 2020: US$0.2 million) was also capitalised. In the prior year a gross loss was reported, reflecting the mining and processing costs incurred in July and August 2019, prior to a strategic review which recognised that the Gakara asset is not in commercial production. The reduction in losses both recognised in the income statement and capitalised in the year reflects the improved performance of the trial mining and processing activities at Gakara.

Administration expenses in FY 2021 totalled US$2.7 million compared to US$2.1 million in FY 2020. The increase in the current year relates primarily to share option charges of US$0.5 million, with options issued to the new executive management team and non-executive directors. Prior to the issue of options in January 2021, no options had been issued since 2017, with all costs associated with issued share options fully expensed at 30 June 2020. Depreciation included in the income statement in the year totalled US$37k mainly relating to right of use assets.

Finance income of US$0.4 million (FY 2020: US$0.9 million) relates primarily to foreign exchange gains on movements primarily between the Burundian Franc ('BIF') and US dollars, the functional currency of the Group. Finance costs of US$0.5 million (FY 2020 US$0.2 million) include US$0.4 million of costs associated with the US$0.9 million bridge loan from Pipestone Capital Inc, in which George Bennett, CEO, has a beneficial interest, together with costs of a loan with the Group's bank in Burundi, FinBank.

The corporation tax rate in Burundi is 30%, however no taxable profits were earned during the period. In the absence of taxable profit, a minimum tax is charged calculated as 1% of revenue, totalling US$2k in the year (FY 2020: US$9k).

Balance sheet

At 30 June 2021, a total of US$9.8 million of exploration and evaluation assets were included on the balance sheet (at 30 June 2020: US$7.6 million). Exploration and evaluation assets totalling US$2.2 million were capitalised during the year including:

·      US$0.75 million consideration for the Phalaborwa earn-in agreement, of which US$0.25 million was settled in cash, US$0.25 million settled in shares and US$0.25 million (to be settled in cash or shares at the election of Bosveld Phosphates (Pty) Limited, remains in creditors at the year end);

·      US$0.4 million of other costs relating to the Phalaborwa asset, principally relating to the costs of resource definition and metallurgical test work for the material in the gypsum stacks;

·      US$0.7 million of costs related to the trial mining and processing operations at Gakara, including US$0.3 million of associated depreciation for the mining fleet, as explained above; and

·      US$0.4 million of other costs relating to Gakara including regional exploration work and costs associated with the mining licence.

Further investment for property, plant and equipment was also made at Gakara, with US$0.7 million of additions to expand capacity of the mining fleet and improve performance at the pilot plant, including dealing with known bottlenecks to allow for further growth in trial mining production.

Inventory at 30 June 2021 totalled US$0.9 million (at 30 June 2020: US$0.2 million). The significant growth in available for sale concentrate in Burundi from US$0.1 million to US$0.7 million resulted from the build up in concentrate resulting from the export ban imposed by the Government of Burundi in April 2021. In addition, consumables representing spare parts for the mining fleet and plant were in transit from South Africa to Burundi at the year-end and are included in stock.

Trade and other receivables totalled US$0.4 million at 30 June 2021 (30 June 2020: US$0.9 million). A total of US$0.6 million receivables from a placing undertaken in June 2020 were received in July 2020, driving down the overall balance at the current year-end. The remainder of trade and other receivables primarily relates to tax receivables in Burundi. The US$0.3 million royalty receivable was impaired to US$0.2 million at 30 June 2021 to reflect uncertainty in the recovery of this balance. In addition, following a tax audit in Burundi, an amount of reverse VAT was found not to have been paid from the period between 2017 and 2019, and has been provided for at 30 June 2021, of which US$0.2 million will be recoverable.

Trade and other payables totalled US$1.0 million at 30 June 2021 (30 June 2020: US$0.7 million). Trade payables were US$0.2 million lower than at 30 June 2020, reflecting standard trading terms for all suppliers. The increase includes US$0.3 million accrued for the results of the Burundi tax audit for 2017-19 noted above and US$0.25 million for the final consideration payment due for the Phalaborwa earn-in agreement noted above.

The Company had borrowings of US$1.9 million at 30 June 2021 (30 June 2020: US$1.7 million). The movement reflects monthly repayments against the FinBank loan in Burundi, off-set by interest accrued on the Pipestone loan noted above and a revaluation of the warrants initially issued in lieu of interest on the original loan in February 2020.

Cashflow

Net cash in the 12 months to 30 June 2021 decreased by US$0.2 million (FY 2020: increase of US$0.7 million). Financing inflows totalled US$4.3 million (FY 2020: US$5.9 million), as set out below. These were invested US$2.7 million (FY 2020: US$2.4 million) in tangible and intangible assets associated with the Phalaborwa and Gakara Projects and US$1.9 million (FY 2020: US$2.8 million) to fund operating activities.

Financing

In order to fund ongoing capital and operating cost requirements, the Company raised a net US$4.6 million (FY 2020 US$5.1 million) via the issue of new equity during the year as set out below:

·      In November 2020 an equity placing raised net proceeds of US$3.4 million with new and existing shareholders at a price of 6 pence per share via the issue of 42.7 million shares.

·      Between December 2020 and April 2021, Australian Special Opportunity Fund, LP exercised options over 10.5 million shares at an exercise price of 5.28p per share, raising gross cash proceeds of US$763k.

In addition, during the year the Company drew and repaid a short-term bridge loan from related parties totalling US$0.3 million and settled US$0.3 million of interest and capital against the FinBank loan in Burundi.

In February 2020 Pipestone Capital Inc, in which George Bennett, the Company's CEO, has a beneficial interest, provided a US$1 million bridging loan to the Group.  In June 2020 the loan was refinanced with US$75k settled via the issue of ordinary shares.  From December 2020 the loan has been further refinanced, bearing interest, with US$84k interest accruing in the year.

At 30 June 2021, the Group had US$0.6 million of available cash. Subsequent to the year end, in October 2021, the Company has raised a further US$8.8 million via the issue of 42.9 million shares at a price of 15 pence per share (including US$2.0 million representing 10 million shares to be issued subject to shareholder approval at the AGM). The Group's reasonably plausible downside scenario cash flow forecasts demonstrate that the Group will have US$2.2 million available at 31 December 2022, excluding the conditional US$2.0 million funds raised and before any discretionary expenditure.

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

For the year ended 30 June 2021

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

As at 30 June 2021