TIDMADT1

RNS Number : 9815M

Adriatic Metals PLC

27 January 2021

Adriatic Metals PLC

('Adriatic Metals' or the 'Company')

QUARTERLY ACTIVITIES REPORT

For the 3 months ended 31 December 2020

HIGHLIGHTS

-- Completed Pre-Feasibility Study for the Vares Silver Project with NPV(8) of US$1,040 and IRR of 113%

   --    Closed US$28 million of fundraising with EBRD and Queens Road Capital 

-- Continued progress with Vares Silver Project permitting with receipt of the Urban Planning Permit for the Veovaca area of the project

   --    Completed the acquisition of Tethyan Resource Corp 
   --    Settled litigation with Sandfire 
   --    Cash balance at 31 December 2020 of GBP29.2m (A$51.8m) 

Adriatic Metals PLC (ASX:ADT, LSE:ADT1) ("Adriatic" or the "Company") is pleased to provide the following Quarterly Activities Report ("QAR") that summarises the progress made and reported during the three months ended 31 December 2020 ("Q4" or the "Quarter").

Paul Cronin, Adriatic's Managing Director and CEO commented:

"The last quarter of 2020 culminated in the successful delivery of several important workstreams including a hugely positive Pre-Feasibility Study for the Vares Silver Project with improved economics in comparison to our 2019 Scoping Study, raising US$28 million of funding from EBRD and Queens Road Capital and completing the acquisition of Tethyan Resource Corp.

The Company is well positioned to build on these achievements during 2021 as we progress the Definitive Feasibility Study for the Vares Silver Project and associated financing and further prove up the potential of the additional exploration ground acquired from Tethyan to diversify and further strengthen the Company's asset portfolio."

1. Pre-Feasibility Study

The Company released an exceptional Pre-Feasibility Study ("PFS") for its wholly owned Vares Silver Project in Bosnia & Herzegovina on 15 October 2020. Highlights included:

   --      US$1,040 million post-tax NPV(8) 
   --      Internal Rate of Return of 113% 
   --      Low upfront capital of US$ 173 million 
   --      1.2 years payback 
   --      Average annual EBITDA of US$ 251 million in years 1-5 

-- 11.1 Mt of Probable Ore Reserves mined over a 14-year mine life, annual throughput of 800 kt

   --      88.5% conversion of Indicated Resources to Ore Reserves at Rupice 
   --      45.3% of revenues from silver and gold 

-- Low environmental impact with underground mining and partial tailings backfill at Rupice, and use of brownfield Veovaca mine site for majority of plant infrastructure

The PFS relies on significantly more robust inputs over 2019 Scoping Study including:

   --      2020 Mineral Resource estimate with improved geological interpretation 
   --      Metallurgical domaining of the orebody 

The Company confirmed, that based on the positive outcome of the PFS, work was immediately commencing on the Definitive Feasibility Study.

2. Financing

On 27 October 2020 the Company announced that it had entered into binding agreements for a US$28 million financing, comprising a US$20 million private placement of 8.5% unsecured convertible debentures (the "Debentures") to Queen's Road Capital Investment Ltd. ("QRC") (TSXV: QRC) and a subscription by the European Bank for Reconstruction and Development ("EBRD") for GBP6.2 million (US$8 million) in ordinary shares of the Company ("Ordinary Shares") at a price of GBP1.175 per share (the "EBRD Subscription").

The EBRD Subscription settlement and completion was subsequently announced on 2 November 2020 raising gross proceeds of GBP6.2 million.

On 1 December 2020 the Company advised it had closed the QRC private placement raising gross proceeds of US$20 million before transaction costs.

3. Vares Project Permitting Approvals

On 19 November 2020, Adriatic announced that it had received the Urban Planning Permit for the Veovaca project area (Open Pit, Plant & Tailings areas) from the Federal Ministry of Spatial Planning. The approval reflects the strong support from government and commercial stakeholders.

4. Acquisition of Tethyan Resource Corp.

On 7 October 2020 Adriatic announced that, except for Admission, all conditions to closing had been satisfied in respect of the business combination, pursuant to which Adriatic would acquire all of the common shares of Tethyan Resource Corp. (TSX-V: TETH) ("Tethyan") by way of a court approved plan of arrangement (the "Arrangement").

Adriatic allotted 13,278,937 new ordinary shares pursuant to the Arrangement which were admitted to the Standard Segment of Official List of the Financial Conduct Authority and to trading on the London Stock Exchange's main market for listed securities on 8 October 2020.

Pursuant to the Arrangement, on Admission Adriatic also issued 4,128,633 warrants and 469,779 options to Tethyan warrant holders and Tethyan option holders.

5. Kizevak and Sastavci Drill Results

On 3 December, 2020 Adriatic reported assay results from seven diamond core holes at Kizevak and Adriatic's first drill hole at Sastavci. Kizevak continues to yield thick zones of polymetallic mineralisation, and confirmation drilling at Sastavci has been complemented by the discovery of a separate, large gold bearing structure.

Kizevak Highlights

KZDD-020 intercepted a broad, high-grade zone of mineralisation down dip and outside the historically defined mineralisation:

o 53 metres at 4.2% zinc, 2.0% lead, 21g/t silver and 0.4/t gold from 100 metres, including

-- 18 metres at 9.0% zinc, 4.1% lead, 43g/t silver and 0.6g/t gold

KZDD-018 intercepted two broad and high-grade mineralised zones, demonstrating excellent grade continuity between previously reported, widely spaced holes:

o 22 metres at 4.3% zinc, 1.7% lead, 28g/t silver and 0.4g/t gold from 48m, including

-- 5 metres at 8.4% zinc, 2.9% lead, 59g/t silver and 0.7g/t gold, and

-- 4 metres at 9.4% zinc, 3.6% lead, 57g/t silver and 0.6g/t gold

o 33.5 metres at 3.0% zinc, 1.5% lead, 23g/t silver and 0.2g/t gold from 106m, including

-- 14.4 metres at 5.1% zinc, 2.7% lead, 45g/t silver and 0.2g/t gold

KZDD-017 was collared in mineralisation and intercepted two mineralised zones near surface in an area with no historic drilling:

o 18.5 metres at 2.4% zinc, 0.2% lead from 2m

o 34.5 metres at 2.2% zinc, 1.1% lead, 13g/t silver and 0.1g/t gold from 30.5m, including

-- 7 metres at 4.9% zinc, 2.7% lead, 31g/t silver and 0.2g/t gold

KZDD-021 intercepted a narrow, but high-grade structure along strike to the southeast from KZDD-017:

o 5.9 metres at 4.5% zinc, 2.2% lead, 26g/t silver and 0.3g/t gold from 29.5 metres

Sastavci Highlights

SSDD-002 has confirmed the presence of near surface polymetallic mineralisation reported historically, as well as a newly discovered, broad gold anomalous structure at depth:

o 9 metres at 4.4% zinc, 1.2% lead, 18g/t silver and 0.4g/t gold from 6m, including

-- 1.9 metres at 12.5% zinc, 4.8% lead, 72g/t silver and 1.7g/t gold

o 10 metres at 3.0% zinc, 1.0% lead, 17g/t silver and 0.5g/t gold from 28 metres, including

-- 1.8 metres at 10.7% zinc, 3.8% lead, 64g/t silver and 0.4g/t gold

o 31 metres at 1.3 g/t gold from 279 metres, including

-- 1.0 metre at 13.6 g/t gold

6. Settlement of Sandfire Litigation

On 3 November 2020 Adriatic advised that it had entered into a Deed of Settlement and Release ("the Deed") with Sandfire Resources Limited ("Sandfire") where both parties had agreed to settle the dispute relating to proceeding CIV 1820 of 2020 brought by Sandfire against Adriatic in the Supreme Court of Western Australia, as announced on 31 July 2020 ("Proceedings").

Sandfire agreed to pay Adriatic A$8,649,360.35 in cash for the issue of 4,830,156 Chess Depository Interests in the Company ("Settlement Placement"), pursuant to Sandfire's anti-dilution right under the previously announced Collaboration and Strategic Partnership Deed.

Sandfire and Adriatic also agreed to having the Proceedings dismissed with no order as to costs.

On 24 December 2020 Adriatic advised that the Settlement Placement had completed and the shares had been allotted in the form of CDI's.

7. Summary of Expenditure Incurred

A summary of expenditure made by Adriatic on a consolidated basis during the Quarter in relation to operating and investing activities reported in the Appendix 5B Cash Flow Report is as follows:

 
                                                       GBP'000 
 
       Exploration & Evaluation (capitalised)             1,500 
       Exploration & Evaluation (expensed)                  889 
       Staff costs                                          544 
       Administration and corporate 
        costs                                               998 
       Property, plant and equipment 
        acquisitions                                         83 
       Property, plant and equipment 
        disposals                                           (2) 
       Other - VAT Refunds                                  (9) 
 
       Total                                          GBP 4,003 
 

During the Quarter, the Company also received GBP358k relating to Tethyan's cash balance on acquisition which has been reported in Item 2.5 of the Appendix 5B Cash Flow Report.

8. Payments to Related Parties

During the Quarter, Adriatic paid an aggregate total of GBP105k to Directors, or companies controlled by them, comprised of salaries, fees and reimbursement / recharge of corporate office facilities & associated services used / provided by the Company. This is disclosed in Item 6 of the accompanying Appendix 5B Cash Flow Report.

9. Annual General Meeting

The Company held its Annual General Meeting on 6 November 2020. All resolutions were passed via a Poll. Full details of the results of the Poll were announced by the Company immediately following the meeting.

   10.     Change of Accounting Reference Date 

On 23 November 2020, the Company changed its accounting reference date from 30 June to 31 December to align it with that of its subsidiary companies.

Accordingly, Adriatic has published audited accounts for the year ended 30 June 2020 and will subsequently publish audited accounts for the six months ending 31 December 2020. Thereafter, interim and annual reports will be published each year for the 6 months to 30 June and 12 months to 31 December respectively.

   11.     Tenement Holdings 

In accordance with ASX Listing Rule 5.3.3 please find below the Company's tenements as at 31 December 2020.

 
                                           Registration number     Licence      Company's    Concession name       Area        Date         Expiry date 
                            Concession                             holder       interest                           (Ha)       granted 
                            document                                            in 
                                                                                license 
                                                                                holder 
------------------------ 
                                                                   Eastern 
            Bosnia and     Concession                              Mining 
             Herzegovina    Agreement      No.:04-18-21389-1/13    d.o.o.            100%    Veovaca1             107.69    12-Mar-2013    11-Mar-2038 
                          -------------  ----------------------  -----------  -----------  -------------------  --------  -------------  --------------- 
                                                                                             Veovaca 2             90.54    12-Mar-2013    11-Mar-2038 
                          -------------  ----------------------  -----------  -----------  -------------------  --------  -------------  --------------- 
                                                                                             Rupice-Jurasevac,     83.19    12-Mar-2013    13-Mar-2038 
                                                                                             Brestic 
                          -------------  ----------------------  -----------  -----------  -------------------  --------  -------------  --------------- 
                                                                   Eastern 
  Annex 3 - Area                           No.:                    Mining 
   Extension                               04-18-21389-3/18        d.o.o.            100%    Rupice - Borovica    452.00    14-Nov-2018    13-Nov-2038 
 --------------------------------------  ----------------------  -----------  -----------  -------------------  --------  -------------  --------------- 
                                                                   Eastern 
                                           No.:                    Mining                    Veovaca - Orti - 
                                           04-18-21389-3/18        d.o.o.            100%    Seliste - Mekuse     132.33    14-Nov-2018    13-Nov-2038 
 --------------------------------------  ----------------------  -----------  -----------  -------------------  --------  -------------  --------------- 
                                                                   Eastern 
  Annex 5 - Area                                                   Mining                    Barice- Smajlova 
   Extension                               (1)                     d.o.o.            100%    Suma-Macak            1,945    (1)            (1) 
 --------------------------------------  ----------------------  -----------  -----------  -------------------  --------  -------------  --------------- 
                                                                   Eastern 
                                                                   Mining                    Droskovac - 
                                           (1)                     d.o.o.            100%    Brezik                  288    (1)            (1) 
 --------------------------------------  ----------------------  -----------  -----------  -------------------  --------  -------------  --------------- 
                                                                   Eastern 
                                                                   Mining                    Borovica - 
                                           (1)                     d.o.o.            100%    Semizova Ponikva        991    (1)            (1) 
 --------------------------------------  ----------------------  -----------  -----------  -------------------  --------  -------------  --------------- 
                                                                   Ras 
                           Exploration                             Metals 
         Serbia             License        310-02-1721/2018-02     doo             10%(2)    Kizevak                1.84    03-Oct-2019    03-Oct-2022 
                          -------------  ----------------------  -----------  -----------  -------------------  --------  -------------  --------------- 
                                                                   Ras 
                                                                   Metals 
  Exploration License                      310-02-1722/2018-02     doo             10%(2)    Sastavci               1.44    12-Mar-2013    03-Oct-2022 
 --------------------------------------  ----------------------  -----------  -----------  -------------------  --------  -------------  --------------- 
  Exploration License                      310-02-1114/2015-02     Taor doo          100%    Kremice                8.54    21-Apr-2016    21-April-2022 
 --------------------------------------  ----------------------  -----------  -----------  -------------------  --------  -------------  --------------- 
                                                                   Deep 
                                                                   Research 
  Exploration License                      310-02-00060/2015-02    doo              0%(2)    Raska (Suva Ruda)     87.17    28-Dec-2015    18-Feb-2022 
 --------------------------------------  ----------------------  -----------  -----------  -------------------  --------  -------------  --------------- 
                                                                   Tethyan 
                                                                   Resources 
  Exploration License                      310-02-1452/2016-02     doo               100%    Bucje                 86.86    14-Feb-2018    14-Feb-2021 
 --------------------------------------  ----------------------  -----------  -----------  -------------------  --------  -------------  --------------- 
 

(1) Concession awarded as announced on 2 September 2020. The Company is the process of obtaining the exploration permit which will have an initial exploration period of 7 years with the possibility of extension for the further 3.5 years.

   (2)     The Company holds an option agreement to acquire 100% of the license holder. 

Authorised by, and for further information please contact:

Paul Cronin

Managing Director & CEO

info@adriaticmetals.com

-ends-

MARKET ABUSE REGULATION DISCLOSURE

The information contained within this announcement is deemed by the Company (LEI: 549300OHAH2GL1DP0L61) to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014. The person responsible for arranging and authorising the release of this announcement on behalf of the Company is Paul Cronin, Managing Director and CEO.

For further information please visit www.adriaticmetals.com , @AdriaticMetals on Twitter, or contact:

 
 Adriatic Metals PLC 
 Paul Cronin / Emma Chetwynd Stapylton   Tel: +44 (0) 7515 357842 
 
 Tavistock Communications Limited 
 Charles Vivian                          Tel: +44 (0) 7977 297903 
 Edward Lee                              Tel: +44 (0) 7736 220565 
 Gareth Tredway                          Tel: +44 (0) 7785 974264 
 
 The Capital Network 
 Julia Maguire/Lelde Smits               Tel: +61 2 8999 3699 
 

ABOUT ADRIATIC METALS

Adriatic Metals Plc (ASX:ADT, LSE:ADT1) is a precious and base metals explorer and developer that owns the world-class Vares Silver Project in Bosnia & Herzegovina and holds licences across the Raska District in Serbia.

The Vares project's captivating economics and impressive resource inventory have attracted Adriatic's highly experienced team, which is expediting exploration efforts to expand the current JORC resource. Results of a recent pre-feasibility study announced on 15 October 2020 indicate a post-tax NPV(8) of US$1,040 million and IRR of 113%. Leveraging its first-mover advantage, Adriatic is rapidly advancing the project into the development phase and through to production with significant cornerstone investment of US$28 million from Queen's Road Capital Investment and European Bank for Reconstruction and Development .

There have been no material changes to the assumptions underpinning the forecast financial information derived from the production target in the 15 October 2020 announcement and these assumptions continue to apply. There have been no material changes to the assumptions and technical parameters on the updated Mineral Resource Estimate announced on 1 September 2020 and these assumptions continue to apply.

Adriatic Metals acquired TSX-listed Tethyan Resource Corp in 2020, to advance the former Kizevak and Sastavci polymetallic mines in the Raska District, southern Serbia.

COMPETENT PERSONS' REPORT

The information in this report which relates to Exploration Results is based on, and fairly represents, information compiled by Mr Philip Fox, who is a member of the Australian Institute of Geoscientists (AIG). Mr Fox is a consultant to Adriatic Metals PLC, and has sufficient experience relevant to the style of mineralisation and type of deposit under consideration and to the activity 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 Fox consents to the inclusion in this report of the matters based on that information in the form and context in which it appears.

The information in this report which relates to Metallurgical Results is based on, and fairly represents, information compiled by Mr Philip King of Wardell Armstrong. Mr King and Wardell Armstrong are consultants to Adriatic Metals plc and Mr King has sufficient experience in metallurgical processing of the type of deposits under consideration and to the activity 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 King is a Fellow of the Institute of Materials, Minerals & Mining (which is a Recognised Professional Organisation (RPO) included in a list that is posted on the ASX website from time to time), and consents to the inclusion in this report of the matters based on that information in the form and context in which it appears.

Rule 5.5

Appendix 5B

Mining exploration entity or oil and gas exploration entity

quarterly cash flow report

 
 Name of entity 
-------------------------------------------------- 
 ADRIATIC METALS PLC 
 ABN             Quarter ended ("current quarter") 
------------    ---------------------------------- 
 624 403 163     31 DECEMBER 2020 
                ---------------------------------- 
 
 
 Consolidated statement of cash              (a) Current     (b) Year to 
  flows                                        quarter      date (6 months) 
                                               GBP'000          GBP'000 
 1.     Cash flows from operating 
         activities 
 1.1    Receipts from customers                        0                  0 
 1.2    Payments for 
        (a) exploration & evaluation 
         (if expensed)                             (889)              (889) 
        (b) development                                0                  0 
        (c) production                                 0                  0 
        (d) staff costs                            (544)              (811) 
        (e) administration and corporate 
         costs                                     (998)            (1,594) 
        Dividends received (see note 
 1.3     3)                                            0                  0 
 1.4    Interest received                              0                  1 
        Interest and other costs of 
 1.5     finance paid                                  0                  0 
 1.6    Income taxes paid                              0                (2) 
        Government grants and tax 
 1.7     incentives                                    0                  0 
 1.8    Other - VAT refund                             9               (21) 
                                            ------------  ----------------- 
        Net cash from / (used in) 
 1.9     operating activities                    (2,422)            (3,316) 
-----  -----------------------------------  ------------  ----------------- 
 
 2.     Cash flows from investing 
         activities 
 2.1    Payments to acquire: 
        (a) entities                                   0                  0 
        (b) tenements                                  0                  0 
        (c) property, plant and equipment           (83)              (116) 
        (d) exploration & evaluation 
         (if capitalised)                        (1,500)            (3,180) 
        (e) investments                                0                  0 
        (f) other non-current assets                   0                  0 
 2.2    Proceeds from the disposal 
         of: 
        (a) entities                                   0                  0 
        (b) tenements                                  0                  0 
        (c) property, plant and equipment              2                  2 
        (d) investments                                0                  0 
        (e) other non-current assets                   0                  0 
        Cash flows from loans to other 
 2.3     entities                                      0                  0 
        Dividends received (see note 
 2.4     3)                                            0                  0 
        Other (Tethyan's cash balance 
 2.5     on acquisition)                             358                358 
                                            ------------  ----------------- 
        Net cash from / (used in) 
 2.6     investing activities                    (1,223)            (2,936) 
-----  -----------------------------------  ------------  ----------------- 
 
 3.     Cash flows from financing 
         activities 
        Proceeds from issues of equity 
         securities (excluding convertible 
 3.1     debt securities)                         11,055             12,208 
        Proceeds from issue of convertible 
 3.2     debt securities                               0                  0 
        Proceeds from exercise of 
 3.3     options                                     108                108 
        Transaction costs related 
         to issues of equity securities 
 3.4     or convertible debt securities            (280)              (280) 
 3.5    Proceeds from borrowings                  14,957             14,957 
 3.6    Repayment of borrowings                        0                  0 
        Transaction costs related 
 3.7     to loans and borrowings                   (768)              (768) 
 3.8    Dividends paid                                 0                  0 
        Other (Pre-acquisition loan 
 3.9     to Tethyan)                                   0              (727) 
                                            ------------  ----------------- 
        Net cash from / (used in) 
 3.10    financing activities                     25,072             25,498 
-----  -----------------------------------  ------------  ----------------- 
 
 4.     Net increase / (decrease) 
         in cash and cash equivalents 
         for the period 
        Cash and cash equivalents 
 4.1     at beginning of period                    7,727              9,692 
        Net cash from / (used in) 
         operating activities (item 
 4.2     1.9 above)                              (2,422)            (3,316) 
        Net cash from / (used in) 
         investing activities (item 
 4.3     2.6 above)                              (1,223)            (2,936) 
        Net cash from / (used in) 
         financing activities (item 
 4.4     3.10 above)                              25,072             25,498 
        Effect of movement in exchange 
 4.5     rates on cash held                           95                311 
                                            ------------  ----------------- 
        Cash and cash equivalents 
 4.6     at end of period                         29,249             29,249 
-----  -----------------------------------  ------------  ----------------- 
 
 
 5.    Reconciliation of cash and           (c) Current   (d) Previous 
        cash equivalents                      quarter        quarter 
        at the end of the quarter             GBP'000        GBP'000 
        (as shown in the consolidated 
        statement of cash flows) to 
        the related items in the accounts 
 5.1   Bank balances                             29,249          7,727 
 5.2   Call deposits                                  0              0 
 5.3   Bank overdrafts                                0              0 
 5.4   Other (provide details)                        0              0 
                                           ------------  ------------- 
       Cash and cash equivalents 
        at end of quarter (should 
 5.5    equal item 4.6 above)                    29,249          7,727 
----  -----------------------------------  ------------  ------------- 
 
 
 6.      Payments to related parties of the entity           (e) Current 
          and their associates                                  quarter 
                                                                GBP'000 
         Aggregate amount of payments to related 
          parties and their associates included in 
 6.1      item 1                                                      105 
                                                            ------------- 
 6.2     Aggregate amount of payments to related                        0 
          parties and their associates included in 
          item 2 
------  --------------------------------------------------  ------------- 
 Note: if any amounts are shown in items 6.1 or 6.2, your quarterly 
  activity report must include a description of, and an explanation 
  for, such payments 
 
 
 7.    Financing facilities               (f) Total facility      (g) Amount 
        Note: the term "facility'          amount at quarter    drawn at quarter 
        includes all forms of financing           end                 end 
        arrangements available to               GBP'000             GBP'000 
        the entity. 
        Add notes as necessary for 
        an understanding of the sources 
        of finance available to the 
        entity. 
 7.1   Loan facilities                                14,957              14,957 
                                         -------------------  ------------------ 
 7.2   Credit standby arrangements                         0                   0 
                                         -------------------  ------------------ 
 7.3   Other (please specify)                              0                   0 
                                         -------------------  ------------------ 
 7.4   Total financing facilities                     14,957              14,957 
                                         -------------------  ------------------ 
 
       Unused financing facilities available at 
 7.5    quarter end                                                            0 
                                                              ------------------ 
 7.6   Include in the box below a description of each facility 
        above, including the lender, interest rate, maturity date 
        and whether it is secured or unsecured. If any additional 
        financing facilities have been entered into or are proposed 
        to be entered into after quarter end, include a note providing 
        details of those facilities as well. 
----  -------------------------------------------------------------------------- 
 Funding from Queens Road Capital Investment Limited - $20m 
  USD (GBP14,957k), 8.5% interest, unsecured convertible debentures, 
  maturity date December 2024. For further details see announcement 
  dated 27 October 2020. 
 
 
 8.    Estimated cash available for future operating         (h) GBP'000 
        activities 
       Net cash from / (used in) operating activities 
 8.1    (Item 1.9)                                                (2,422) 
 8.2   Capitalised exploration & evaluation (Item                 (1,500) 
        2.1(d)) 
 8.3   Total relevant outgoings (Item 8.1 + Item                  (3,922) 
        8.2) 
 8.4   Cash and cash equivalents at quarter end                    29,249 
        (Item 4.6) 
 8.5   Unused finance facilities available at quarter                   0 
        end (Item 7.5) 
 8.6   Total available funding (Item 8.4 + Item                    29,249 
        8.5) 
       Estimated quarters of funding available 
 8.7    (Item 8.6 divided by Item 8.3)                                7.5 
----  ---------------------------------------------------- 
 8.8   If Item 8.7 is less than 2 quarters, please provide answers 
        to the following questions: 
       1. Does the entity expect that it will continue to have 
        the current level of net operating cash flows for the 
        time being and, if not, why not? 
      ------------------------------------------------------------------- 
       Answer: 
      ------------------------------------------------------------------- 
       2. Has the entity taken any steps, or does it propose 
        to take any steps, to raise further cash to fund its operations 
        and, if so, what are those steps and how likely does it 
        believe that they will be successful? 
      ------------------------------------------------------------------- 
       Answer: 
      ------------------------------------------------------------------- 
       3. Does the entity expect to be able to continue its operations 
        and to meet its business objectives and, if so, on what 
        basis? 
      ------------------------------------------------------------------- 
       Answer: 
      ------------------------------------------------------------------- 
 

Compliance statement

1 This statement has been prepared in accordance with accounting standards and policies which comply with Listing Rule 19.11A.

   2        This statement gives a true and fair view of the matters disclosed. 
   Date:                     26 January 2021 
   Authorised by:       Audit and Risk Committee 

(Name of body or officer authorising release - see note 4)

Notes

1. This quarterly cash flow report and the accompanying activity report provide a basis for informing the market about the entity's activities for the past quarter, how they have been financed and the effect this has had on its cash position. An entity that wishes to disclose additional information over and above the minimum required under the Listing Rules is encouraged to do so.

2. If this quarterly cash flow report has been prepared in accordance with Australian Accounting Standards, the definitions in, and provisions of, AASB 6: Exploration for and Evaluation of Mineral Resources and AASB 107: Statement of Cash Flows apply to this report. If this quarterly cash flow report has been prepared in accordance with other accounting standards agreed by ASX pursuant to Listing Rule 19.11A, the corresponding equivalent standards apply to this report.

3. Dividends received may be classified either as cash flows from operating activities or cash flows from investing activities, depending on the accounting policy of the entity.

4. If this report has been authorised for release to the market by your board of directors, you can insert here: "By the board". If it has been authorised for release to the market by a committee of your board of directors, you can insert here: "By the [name of board committee - eg Audit and Risk Committee]". If it has been authorised for release to the market by a disclosure committee, you can insert here: "By the Disclosure Committee".

5. If this report has been authorised for release to the market by your board of directors and you wish to hold yourself out as complying with recommendation 4.2 of the ASX Corporate Governance Council's Corporate Governance Principles and Recommendations, the board should have received a declaration from its CEO and CFO that, in their opinion, the financial records of the entity have been properly maintained, that this report complies with the appropriate accounting standards and gives a true and fair view of the cash flows of the entity, and that their opinion has been formed on the basis of a sound system of risk management and internal control which is operating effectively.

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January 27, 2021 02:00 ET (07:00 GMT)