Announcement PDF ` DALAROO METALS LTD ACN 648 476 699 Financial Statements For the Year Ended 30 June 2023 DALAROO METALS LTD ACN 648 476 699 CONTENTS PAGE Page Corporate Directory 3 Chairman’s Review 4 Directors’ Report 5 Auditor’s Independence Declaration 35 Statement of Profit or Loss and Other Comprehensive Income 36 Statement of Financial Position 37 Statement of Changes in Equity 38 Statement of Cash Flows 39 Notes to the Financial Statements 40 Directors’ Declaration 61 Independent Audit Report 62 ASX Additional Information 66 2 DALAROO METALS LTD ACN 648 476 699 CORPORATE DIRECTORY Directors David Quinlivan – Non Executive Chairman Robert Beeck – Non Executive Director Harjinder Kehal – Managing Director Company secretary John Arbuckle Registered office Suite 1, 346 Barker Road Subiaco WA 6008 Principal place of business Suite 1, 346 Barker Road Subiaco WA 6008 Share register Advanced Share Registry Services Ltd 110 Stirling Highway Nedlands WA 6009 Auditor Crowe Perth Level 5, 45 St Georges Terrace Perth, WA 6000 Solicitors AGH Law Level 1, 50 Kings Park Road West Perth WA 6005 Stock Exchange Listing Dalaroo Metals Ltd is listed on the Australian Securities Exchange. The home exchange is Perth, Western Australia (ASX code: DAL) Website www.dalaroometals.com.au Company Information The Company was incorporated and registered under the Corporations Act 2001 in Western Australia. The Company is domiciled in Australia. 3 DALAROO METALS LTD ACN 648 476 699 CHAIRMAN’S REVIEW Dear Shareholder On behalf of the Board of Dalaroo Metals Ltd (“Dalaroo” or the “Company”), I am pleased to present the Annual Report for the financial year ending 30 June 2023. Our maiden aircore drilling program at the Browns prospect, Lyons River Project has outlined Pb-Zn-Ag mineralisation over strike length of 800m with a significant intersection of 10m @ 1.04% Pb, 0.49% Zn, 2.85g/t Ag from 37m including 1m @ 3.13% Pb from 38m, 0.24% Zn, 5g/t Ag from 38m. This intercept occurs where high grades of base metals and silver mineralisation were identified in surface rock chips of ironstone and locally gossanous rock units returning values of 39.6% Pb, 0.71% Zn, 82g/t Ag. The significant Pb-Zn-Ag, AC results from Browns further confirm that Lyons River has potential to host multiple Pb-Zn discoveries and is emerging as a new BHT / SEDEX deposit setting in Western Australia. Browns represents the second site of Pb-Zn-Ag intersections discovered by Dalaroo in the Gascoyne Province, 5km east of our Four Corners Pb-Zn-Ag prospect. Dalaroo’s successful $180,000 EIS grant will be used to co-fund 50% of the direct diamond drilling cost to drill four deep holes to test the very compelling Browns base metal target covering an area of 2km X 1km once all approvals are in place. At the Goodbody prospect, multiple gold-bearing quartz vein zones have been discovered over 1.5km long trend with gold grades of up to 5.52g/t. These new gold bearing quartz vein zones discovered, correlate well with defined Au-in-soils anomalies defined over strike length of 3km; and are open in all directions. Strong rare earth element (REE) soil and rock chip anomalies delineated with values of 8900ppm, coincide with large thorium highs identified in radiometric imagery. REE and carbonatite targets corresponding to a range of magnetic, thorium and ASTER imagery response have also been outlined at Lyons River. Follow up systematic geochemical sampling programs are underway at Marloo River/View Hill REE prospects as well as at the newly identified REE carbonatite targets. Lithium potential pegmatite swarms of the Thirty Three Supersuite with high LCT fertility extending across a 9km x 6km zone are being targeted in the current phase of exploration. Anomalous values of 114ppm lithium, 1638ppm rubidium, 329ppm niobium, 116ppm tantalum, 182ppm tin across a number of lithium targets at Lyons River highlight prospectivity for lithium deposits. Dalaroo’s exploration programs during the year at its 100% owned Lyons River Project, located within the sought after Gascoyne Province is now shaping up as being highly prospective not only for base metals (Pb-Zn-Ag), vein/shear related gold but also for REE and lithium deposits. A diamond drilling program partly funded by an EIS grant awarded to Dalaroo for $175,000 has been completed to test large Ni-Cu-PGE*+Au geochemical anomalies covering an area of 2km X 0.5km, coincident with IP anomalies at the Manning prospect, Namban Project. There is potential for magmatic intrusion hosted Ni-CuPGE-Au and or hydrothermal Cu-Au deposits at the Manning prospect, located in the newly emerging West Yilgarn Province. Namban Project tenements are located approximately 150 km to the north of Perth, 90km north of Chalice Mining’s world class Julimar Ni-Cu-PGE Project and adjacent to the mid north regional centre of Moora, extend over a north – south strike distance of approximately 60 kilometres adjacent to the Darling Fault on the western margin of the Archean Yilgarn Craton. Our disciplined and methodical approach to exploration using the latest techniques during the year has delineated a number of exciting prospects at both projects that are worthy of immediate first pass drill testing or follow up drilling and we look forward to actively pursuing our exploration programs in these areas in the year ahead. In closing I would like to thank all our shareholders, employees and contractors for your continued support of Dalaroo throughout the year. Yours sincerely David Quinlivan Chairman 27 September 2023 4 DALAROO METALS LTD ACN 648 476 699 DIRECTORS’ REPORT The directors present their report, together with the financial statements, of Dalaroo Metals Ltd (referred to hereafter as the 'Company' or 'Dalaroo') at the end of, and during, the year ended 30 June 2023. DIRECTORS The following persons were directors of the company during the whole of the reporting year and up to the date of this report, unless otherwise stated: Mr David Quinlivan - Non-Executive Chairman B.App Sci, MinEng, Grad. Dip. Fin Serv, FAusImm, FFINSA, MMICA Mr Quinlivan is a mining engineer with significant mining and executive leadership experience, having held 11 years of service at WMC Resources Limited, followed by a number of high-profile mining development positions. Since 1989, Mr Quinlivan has served as Principal of Borden Mining Services, a mining and consulting services firm, where he has worked on a number of mining projects in various capacities. Currently, Mr Quinlivan is Chairman of Silver Lake Resources (ASX:SLR). Previously, Mr Quinlivan served as Chief Executive Officer of Sons of Gwalia Ltd (post appointment of administrators), Chief Operating Officer of Mount Gibson Iron Ltd, President, Chief Executive Officer of Alacer Gold Corporation, Chairman of Churchill Mining PLC and Non-Executive Director of Ora Banda Mining. Mr Quinlivan is considered to be an independent Director. Mr Quinlivan was appointed as a Director on 5 March 2021. Mr Harjinder Kehal - Managing Director BSc (Hons), MMEE, MAusIMM, HAIG Mr Kehal is a graduate of University of Western Australia and Macquarie University, geologist with over 30 years’ experience in the mineral resources sector in Australia, Chile, India and Vietnam. Mr Kehal has a proven track record in project management and evaluation, feasibility studies, joint venture negotiations and statutory reporting and played a leading role in the discovery of a number of gold and base metal deposits in Western Australia and the Northern Territory, including the 1 million ounce Golden Cities deposit, 600,000 ounce Tooheys Well gold deposit and Erayinia VMS lead-zinc deposit. Currently, Mr Kehal is also Managing Director of public unlisted Serena Minerals Limited. Previous positions include Chief Operating Officer of AXG Mining Ltd and Executive Director and Chairman of Altera Resources Ltd. Mr Kehal was appointed as a Director on 5 March 2021. Mr Robert Beeck - Non-Executive Director MBA, Associate Member of the AusIMM Mr Beeck has over 30 years’ experience in mineral processing operations management in Australia with relation to nickel, diamonds, gold and iron ore. Mr Beeck has held senior roles in mine operations, feasibility studies, engineer design and construction of ore processing and infrastructure projects. Mr Beeck is an associate member of the AusIMM and Master of Business Administration (University of Western Australia). Currently, Mr Beeck is General Manager of API Management, the manager of the joint venture of the West Pilbara Iron Ore Project. Mr Beeck is not considered to be an independent director given he is a Director of Serena Minerals Limited and Shenton Resources Limited, both substantial shareholders of the Company. Mr Beeck was appointed as a Director on 5 March 2021. 5 DALAROO METALS LTD ACN 648 476 699 DIRECTORS’ REPORT COMPANY SECRETARY Mr John Arbuckle B.Bus, CPA (appointed 1 September 2022) Mr Arbuckle is an accountant with over 30 years’ experience in the resource industry with extensive experience in Company Secretary, Chief Financial Officer and Non-Executive Director roles in ASX listed companies. He has previously held senior financial management roles with CRA Ltd, North Ltd, Anaconda Nickel Ltd and was the Chief Financial Officer of Perilya Ltd and Mt Gibson Iron Ltd before starting his own company secretarial and corporate advisory business. Mr David Peterson B.A (Acc), CPA, FGIA, FCG (resigned 31 August 2022) PRINCIPAL ACTIVITIES During the financial year the principal activities of the company consisted of exploration activities at the company’s exploration tenements situated in Western Australia. There were no other significant changes in these activities during the financial year. RESULTS OF OPERATIONS The net loss for the Company after providing for income tax amounted to $2,472,701 (2022: $2,666,980). The Company continues to undertake exploration and evaluation activities on its tenements located in Western Australia. REVIEW OF OPERATIONS Dalaroo’s Lyons River and Namban projects occupy a large strategic land position totalling 1,140 km2 with scale to host significant sized orebodies located in the Tier 1 jurisdiction of Western Australia (Figure 1). Lyons River in the Gascoyne Region of Western Australia Dalaroo’s Lyons River Project is 100% owned land position of 740 km2 within the Proterozoic Mutherbukin Zone of the Gascoyne Province, located 220km north-east of Carnarvon (Figure 2). Lyons River is prospective for base metals (Pb-Zn-Ag), vein/shear related gold, rare earth element (“REE”) and lithium deposits (Figure 3). Browns Pb-Zn-Ag Dalaroo completed two aircore (AC) drilling programs during July and December 2022 which has outlined new and significant BHT/SEDEX-style Pb-Zn-Ag mineralization at the Browns prospect, Lyons River Project (Figure 4). Browns is one of six Pb-Zn soil geochemical prospects identified from large systematic soil geochemical programs (sample spacing 250 X 50-100m) at Lyons River within a Proterozoic Age basin setting covering an area of 30km by 10km. The Company’s phase 1 AC drill program at the Browns prospect comprising 20 angled AC drill holes for 1,216 metres ranging in depth from 49 to 73 metres in July 2022 was designed to test a very compelling broad Pb-Zn soil and rock chip geochemical anomaly (max 1445ppm Pb, 1080 Zn ppm) covering an area of 2km X 1km, associated with extensive iron-rich and gossanous material at surface. Detailed gravity surveys (200m X 50m spacing), completed by Dalaroo in the second half of 2021, complemented historical surveys by BHP and showed a coincident gravity low suggesting an area of possible deepening basin development at Browns. The northern part of the Browns coincident Pb and Zn soil geochemical anomaly appears to lie at the intersection of two NW-SE striking parallel features identified within the magnetics/gravity data that are interpreted as thrust structures. 6 DALAROO METALS LTD ACN 648 476 699 DIRECTORS’ REPORT Figure 1: Dalaroo Metals projects Location 7 DALAROO METALS LTD ACN 648 476 699 DIRECTORS’ REPORT Figure 2: Lyons River Project location 8 DALAROO METALS LTD ACN 648 476 699 DIRECTORS’ REPORT Figure 3: Lyons River Project in the Gascoyne Province REE and lithium companies and prospects 9 DALAROO METALS LTD ACN 648 476 699 DIRECTORS’ REPORT Figure 4: AC drill rig at Browns prospect Phase 1 AC drill program was successful in intersecting zones of interbedded psammitic to pelitic lithologies together with multiple zones of disseminated base metal sulphides such as galena and sphalerite. The psammitic to pelitic lithologies display varying garnet intensities that appear laterally extensive coupled with the presence of sillimanite infer a large alteration halo is present at Browns. The Pb-Zn-Ag mineralized zone at Browns identified during phase 1 drilling, mineralisation remained open to the south and up-dip from LRAC010 (e.g. 10m @ 1.04% Pb, 0.49% Zn, 2.85g/t Ag from 37m including 1m @ 3.13% Pb from 38m, 0.24% Zn, 5g/t Ag from 38m (LRAC010) in Figure 5. This intercept suggests that localized high grades of base metals and silver (e.g. percent levels of Pb) mineralisation identified in surface rock chips of ironstone/ferruginous and locally gossanous rock units and float rock over a strike of approximately 60m (39.6% Pb, 0.71% Zn, 82g/t Ag; (see ASX announcement, 15 November 2022) exist in the subsurface hypogene mineral system at Browns. In December 2022, 16 AC holes totaling 1,153m were drilled at the Browns prospect. In the Phase 2 drilling campaign, known mineralisation in LRAC010 was extended up-dip to the surface oxide zone with the intersection of 21m @ 0.33% Pb, 0.17% Zn, 0.52g/t Ag from 1m (LRAC034). (see ASX announcement, 15 November 2022). Importantly, approximately 150m south of the mineralized units in LRAC010 and LRAC034, thick zones of variably pyritic biotite-quartz gneiss, likely representing metamorphosed shales, were intercepted and found to be enriched in silver, returning 63m @ 1.76g/t Ag from 16m (LRAC032) and 16m @ 1.43g/t Ag from 68m (LRAC033). This extends the footprint of Pb-Zn-Ag mineralized system at Browns to approximately 400m in thickness in its central portion (Figure 6). The location of higher-grade mineralized intercepts supports previous interpretation that BHT/SEDEX mineralizing processes may be related to an oblique NE-trending structure that transects the NW-trending basin stratigraphy. The drilling of bedrock beneath surface geochemical anomalism in southern Browns intersected mostly biotite-quartz-feldspar gneiss and quartzite with sulfide-bearing schists towards end-of-hole LRAC021. The anomalous zinc in geochemical samples is attributed to a secondary enrichment process with the source of metals weakly zinciferous biotite-rich schists intercepted in this zone, which are found to have elevated background zinc contents (up to 804 ppm in LRAC027). 10 DALAROO METALS LTD ACN 648 476 699 DIRECTORS’ REPORT Significantly, the geological transition to more pyritic and phyllosilicate-rich units identified at the southern limits of the tested area (from 80m depth in LRAC021) is interpreted to represent a transition in the premetamorphic protolith stratigraphy to lower energy sedimentary units, considered more prospective for BHT/SEDEX type deposits. Therefore, future investigations will continue to test southwards into this domain, which also coincides with the “trough” structure epicenter interpreted from detailed gravity plus airborne magnetics geophysical data. The significant Pb-Zn AC results from Browns further confirm that Lyons River has potential to host multiple Pb-Zn discoveries and is emerging as a new BHT / SEDEX deposit setting in Western Australia (Figure 5). Browns represents the second site of Pb-Zn-Ag intersections discovered by bedrock drilling in the Mutherbukin Zone, 5km east of the Dalaroo’s Four Corners Pb-Zn-Ag prospect. EIS Grant Approved for Browns Prospect Dalaroo’s application for exploration funding in Round 27 of the Western Australian Government’s Exploration Incentive Scheme (“EIS”) was successful. Dalaroo’s $180,000 EIS grant will be used to co-fund 50% of the direct diamond drilling cost to test its significant Browns Pb-Zn-Ag BHT/SEDEX prospect. Figure 5: Map view of aircore drilling completed at Browns on ground gravity data basemap. Note location of newly reported mineralized intersections and structural interpretation. See Figure -- for annotated cross-section A-B. 11 DALAROO METALS LTD ACN 648 476 699 DIRECTORS’ REPORT Figure 6: Simplified cross section A-B (see Figure 5) displaying selected mineralised drilling intercepts. Goodbody – Gold The Goodbody gold prospect located in the western part of Lyons River Project (Figure 7) was defined in April 2022 from a review of Dalaroo’s soil geochemical sampling with a focus on Pb-Zb targets which was previously completed on a pattern of 250m X 50 to 100m over several campaigns by Serena Minerals Limited (period 2017 to 2021). A peak value of 93ppb Au was returned from the now named Goodbody Central target. Rock chip sampling at Goodbody was carried out by Audalia Resources Limited (ASX: ACP) during 2014 to 2015 1 & 2, with anomalous Au results of 0.40g/t, 0.32g/t, 3.17g/t, and 6.25g/t returned from low-lying ferruginous quartz vein outcrops at the now named Goodbody West target. Figure 7: Location of Goodbody prospect in relation to additional gold and base metal prospects and interpreted regional structures within Dalaroo Metals’ Lyons River Project area. Overlaid on greyscale Total Magnetic Intensity (TMI) 1VD base map. 12 DALAROO METALS LTD ACN 648 476 699 DIRECTORS’ REPORT Dalaroo completed infill and step-out soil sampling at the Goodbody gold prospect, outlining a 3km long trend comprises three higher strength anomalous zones (>10 ppb Au), forming separate sub-targets within the Goodbody prospect; Goodbody West, Goodbody Central, and Goodbody East (Table 1). (Figure 8). Table 1: Summary features of discrete Au anomalies (targets) within the Goodbody prospect. Target Goodbody West Goodbody Central Goodbody East >10 ppb Au-in-soil anomaly strike length >250 metres >200 metres >200 metres Peak Au-in-soil value Peak Au rock chip value 54 ppb 93 ppb 24 ppb 6.25g/t untested untested The anomalous Au-in-soil footprint displays an apparent east-west orientation, sub-parallel to the local structural-stratigraphic trends and major WNW-striking regional shear zones in the district, which transect the Lyons River Project and wider Gascoyne Province (Figure 7). The Geological Survey of Western Australia interpret such structures to represent major crustal shear zones and tectonic boundaries. New gold mineralisation in outcropping quartz veins was discovered at the Goodbody West and Goodbody Central target areas proximal to previously reported Au-anomalous soil samples of 54 ppb Au and 93 ppb Au, respectively. The extent of auriferous veins in the Goodbody West area are confirmed over a strike length of 200m, remaining open in all directions. Similarly at Goodbody Central, the extent of Au anomalous rock chip sampled veins span 140m strike and remain open. The combined footprint of mineralized rock chips from these two target areas is approximately 1.5km within the broader Goodbody prospect defined over a strike length of 3km (Figure 8). The sampled quartz veins are typically 5-30cm thick and are comprised of mainly quartz with minor biotite and, locally, ferruginous oxide phases. They form sub-parallel to the pervasive structural fabric within foliation planes and commonly contain internal breccia zones consisting of Fe-oxide and silica-rich matrices surrounding fragmented quartz vein clasts. The samples were composed of entirely vein material, the adjacent wall rocks, or a combination of both. At the Goodbody West target, gold concentrations of up to 1.42g/t and 5.52g/t (Figure 2) have been returned from a particular set of quartz veins hosted within a metasedimentary rock package of pelitic schists and siliceous cherts and iron stones/BIF-style units. Historic rock chip sampling of quartz veins in this area returned up to 6.25g/t Au. In the Goodbody Central target area, pelitic schists are the dominant host rocks but zones of iron-oxide rich siliceous vein breccias and quartz-biotite altered wall rocks are also prevalent results of 0.48g/t Au. At this locality, muscovite and tourmaline bearing quartz veins have also been found to be mineralized with results of 0.16g/t Au. It is noted that high-strength soil anomalies and multiple rock chip assays of up to 5.52g/t Au returned from Dalaroo sampling associated with the Goodbody West, Central and East targets spatially coincide with the location of intersections between interpreted WNW-striking structures and NNE-trending structures (Figure 2). Conceptually, structural intersection zones represent potentially intensified deformation areas that may be associated with favourable sites of hydrothermal fluid movement and gold mineralisation. As such, the Goodbody Au targets are considered worthy of follow-up exploration work. 13 DALAROO METALS LTD ACN 648 476 699 DIRECTORS’ REPORT Figure 8: Location of recent rock chip samples (triangles) within the Goodbody gold prospect area. The Goodbody West to Goodbody Central mineralized quartz vein zones are hosted within a 1.5km stretch within the broader 3km long Goodbody Au soil anomaly. Overlaid on greyscale Total Magnetic Intensity (TMI)1VD basemap and satellite imagery. REE & Li Potential Dalaroo’s Lyons River Project is dominated by rocks of the Proterozoic Age Durlacher Suite which hosts known REE deposits and mineralisation in the Gascoyne Province, including the Yangibana, Yin/Sabre and Mick Well Projects. Assessment of Dalaroo’s existing detailed airborne magnetics/radiometric dataset has defined local thorium highs coincident with magnetic lows adjacent to major structures, a signature that is deemed prospective by other REE explorers in the Gascoyne region. Dalaroo’s REE targets for the initial rock chip sample program utilised Landsat 8 scene data to outline areas of ironstones with a spectral response similar to those observed at Yangibana and Yin. Dalaroo completed its inaugural rock chip sampling program for REE. A total of 45 rock chip samples collected were analysed for a multi-element REE suite (Figure 9). Encouraging anomalous Total Rare Earth Oxides (TREO) results included: • • • • DM003034 – 1536 ppm (0.15%) TREO DM003008 – 554ppm TREO DM003033 – 449 ppm TREO LR804 – 432ppm TREO 14 DALAROO METALS LTD ACN 648 476 699 DIRECTORS’ REPORT Figure 9: Photo of REE enriched ironstone outcrop (sample DM003034 – 0.15% TREO) at Lyons River Marloo REE and Li Potential At Marloo River, an initial soil sampling campaign (100m x 250m sample spacing) has revealed zones of elevated REEs (up to 1278 ppm TREO) and Li (up to 93.5 ppm; Figure 10). These anomalies are associated with feldspar-muscovite-quartz-dominant pegmatites with locally biotite-rich zones, that have intruded a micaceous pelitic schist package, likely of sedimentary rock origin. Within the vicinity of soil samples containing >1000 ppm TREO and >90 ppm Li, an outcropping feldsparbiotite-rich pegmatite body was rock chip sampled (sample 2310AR_002) and returned assay values of 0.89% TREO and 215 ppm Li. In the northern extents of the Marloo River prospect area, a single soil line extension revealed 842 ppm TREO in soils that remains open to the west and east (Figure 10). Pegmatite outcrops extending over hundreds of metres have also been observed in this area. View Hill Lithium Potential Dalaroo’s lithium anomalous rock chip results targets are located approximately 22km south-west of the Yinnetharra Lithium Project. The Yinnetharra Lithium Project was recently acquired by Delta Lithium Ltd (ASX: DLI) for an initial purchase price consideration of $15 million, following significant drill intersections that included 23m @ 1.02% Li2O (ASX: RDT -See ASX: Announcement from 12 September 2022). Pegmatites in the Yinnetharra district form part of the intrusive Thirty Three Supersuite (“TTS”), which comprises granite, granitic pegmatites (microcline-muscovite-tourmaline) and rare-metal pegmatites. The recent field mapping has confirmed that the granites and pegmatites of the TTS have also intruded the host stratigraphy of the Lyons River Project tenements. 15 DALAROO METALS LTD ACN 648 476 699 DIRECTORS’ REPORT Figure 10: Marloo River anomalous lithium and TREO soil/rock chip geochemistry results. Selective reconnaissance rock chip sampling completed at View Hill of the granitic pegmatites has demonstrated whole rock geochemistry that is considered high fertility for LCT-type pegmatites associated with Li mineralization (Figure 11). Assays from the pegmatite swarm that extends across a 9km X 6km area have returned highly anomalous values of 114 ppm Li, 1638 ppm Rb, 187 ppm Nb and 182 ppm Sn. Rock chip sampling of pegmatites in other targeted pegmatite swarm areas, west of View Hill, has returned significant Ta and Nb values of 116 ppm and 329 ppm respectively with anomalous Rb of 904 ppm. A strong REE soil anomaly which coincides with a large 2km strike length north-west striking high thorium anomaly observed in radiometrics imagery data now highlights a third REE target at the Lyons River Project, in addition to the Marloo River and Gamma areas delineated during the 2022 field season. Systematic first pass orientation soil geochemical sampling has only been completed on three lines with a total of 207 samples collected at 100m intervals (Figure 11). REE & Carbonatite targets A detailed review by a consultant geophysicist of a range of datasets held and acquired, including detailed magnetics, radiometrics (thorium) and ASTER, have outlined 27 targets with potential for REE and carbonatites (Figures 12). Dalaroo has commenced its exploration field work and the planned field work is anticipated to define drill targets and expected to be completed during the September 2023 Quarter. It will comprise: • • • Geological reconnaissance and rock chip sampling of REE/carbonatite targets Systematic soil geochemical program of target areas Geophysical surveys 16 DALAROO METALS LTD ACN 648 476 699 DIRECTORS’ REPORT Figure 11: Lyons River Project – Marloo River and location of anomalous TREO geochemical results, and View Hill with location of samples indicating fertile pegmatite and granite areas. Next Steps at Lyons River Browns – Pb-Zn-Ag Dalaroo proposes to carry out Induced Polarisation (IP) geophysical surveys supported with additional close-spaced surface geochemical sampling in the next phase of exploration. The goal of these surveys will be the delineation of a mineralized body at depth that possesses not just the surface geochemical signature, but also the geophysical properties, characteristic of a significant BHT/SEDEX deposit in the Browns prospect area. EIS co-funded diamond drilling is proposed to better understand the geological transition to more pyritic and phyllosilicate-rich units identified at the southern limits of the AC drill tested area interpreted to represent a transition in the pre-metamorphic protolith stratigraphy to lower energy sedimentary units, considered more prospective for BHT/SEDEX type deposits. The Company plans to drill four deep diamond core holes (Figures 5 & 6) and the EIS-funded drilling will test a highly prospective and a very compelling Pb-Zn-Ag Browns base metal target covering an area of 2km X 1km where shallow AC drilling has delineated Pb-Zn-Ag mineralisation with results of 10m @ 1.04% Pb, 0.49% Zn, 2.85g/t Ag from 37m. 17 DALAROO METALS LTD ACN 648 476 699 DIRECTORS’ REPORT Figure 12: Lyons River Project – New REE carbonatite targets, Marloo River, Gamma and View Hill REE prospects defined in 2022. LCT fertile pegmatite swarm covering 9km by 6km in the south-eastern part of the project and lithium anomalies outlined by Dalaroo. Goodbody – gold target The Company intends to extend targeted rock chip sampling to the full 3km length of the Goodbody Au soil anomaly zone, including newly identified mineralized vein systems at the Goodbody West and Central targets. AC drilling is proposed to test the drill defined targets at Goodbody once approvals are in place. REE Potential Exploration programs planned include completion of its systematic soil geochemical programs at View Hill and extension soil geochemical programs at Marloo River prospect where a REE soil/rock target has been delineated with peak value of 0.89% TREO (Figure 11). In addition, at Marloo River, detailed mapping and representative rock chip sampling of pegmatites will be completed across the prospect area. Whole rock geochemistry of the various pegmatite bodies and any significant internal zonation may then be assessed for a potentially large-scale rare metal mineralization system at Marloo River. First pass drilling programs are proposed to test targets at Marloo River. Results from the systematic soil geochemical and rock chip sampling at View Hill will guide the next phase of exploration activities including drill testing. 18 DALAROO METALS LTD ACN 648 476 699 DIRECTORS’ REPORT Lithium potential targets In the View Hill pegmatite zone, regional scale north-south oriented 100m-spaced soil sampling transects will assess geochemical zonation and, therefore, trends in fertility and rare metal/Li prospectivity across the large 9km X 6km area. It is expected that definition of such geochemical trends will aid in vectoring towards high-grade rare metal mineralization at the deposit scale. Pegmatites in the adjacent Yinnetharra district form part of the intrusive Thirty Three Supersuite (“TTS”), which comprises granite, granitic pegmatites (microcline-muscovite-tourmaline) and rare-metal pegmatites. Field