Annual financial statement
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CAPRICORN METALS LTD ABN 84 121 700 105 FINANCIAL REPORT FOR THE YEAR ENDED 30 JUNE 2025 For personal use only
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Corporate Directory CAPRICORN METALS LTD ABN 84 121 700 105 Page | 1 ABN 84 121 700 105 Directors Mark Clark – Executive Chairman Mark Okeby – Non-Executive Director Myles Ertzen – Non-Executive Director Bernard De Araugo – Non-Executive Director Jillian Irvin – Non-Executive Director Company Secretary William Nguyen Registered Office & Principal Place of Business Level 3, 40 Kings Park Road WEST PERTH WA 6005 Telephone: +61 8 9212 4600 Email: enquiries@capmet.com.au Website: capmetals.com.au Share Registry Automic Pty Ltd Level 2, 191 St Georges Terrace PERTH WA 6000 Telephone: +61 2 9698 5414 or 1300 288 664 Auditors KPMG Perth 235 St Georges Terrace PERTH WA 6000 Securities Exchange Listing Capricorn Metals Ltd shares are listed on the Australian Securities Exchange (ASX). Code CMM For personal use only
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Contents CAPRICORN METALS LTD ABN 84 121 700 105 Page | 2 Directors’ report 3 Remuneration report (Audited) 15 Auditor’s independence declaration 26 Consolidated statement of profit or loss and other comprehensive income 27 Consolidated statement of financial position 28 Consolidated statement of changes in equity 29 Consolidated statement of cash flows 30 Notes to the consolidated financial statements 31 Consolidated entity disclosure statement 67 Directors' declaration 68 Independent auditor’s report 69 For personal use only
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Directors’ report CAPRICORN METALS LTD ABN 84 121 700 105 Page | 3 The Directors submit the financial report of the Consolidated Group (“the Group” or “Capricorn”), consisting of Capricorn Metals Ltd (referred to in these financial statements as “Parent” or “Company”) and its wholly owned subsidiaries for the year ended 30 June 2025 and the audit report thereon, made in accordance with a resolution of the Board. Directors The Directors of the C ompany who held office since 1 July 2024 and up to the date of this report are set out below. Directors were in office for the entire year unless stated otherwise. Mr Mark Clark B.Bus, CA Executive Chairman Appointed 8 July 2019 Mr Clark has over 35 years experience in corporate advisory and public company management. He was a director of successful Australian gold miner Equigold NL (“Equigold”) from April 2003 and was Managing Director from December 2005 until Equigold’s $1.2 billion merger with Lihir Gold Ltd in June 2008. Equigold successfully developed and operated gold mines in both Australia and Ivory Coast. Mr Clark also served as Managing Director of Regis Resources Limited (“Regis”) from May 2009 until November 2016 when he was appointed Executive Chairman . He retired as a director of Regis in October 2018. Mr Clark oversaw the development of Regis’ three operating gold mines at the Duketon Gold Project, which culminated in the project producing well over 300,000 ounces of gold per annum. Mr Clark joined Capricorn Metals in July 2019 and has overseen the successful development and commissioning of the Karlawinda Gold Project and the acquisition and progress of the Mt Gibson Gold Project. Mr Clark is a member of the Chartered Accountants Australia and New Zealand. Mr Clark is not an independent director. During the past three years Mr Clark has not held any other listed company directorships. Mr Mark Okeby LLM Non-Executive Director Appointed 8 July 2019 Mr Okeby began his career in the resources industry in the 1980’ s as a corporate lawyer advising companies on resource project acquisitions, financing, and development. He has a Masters of Law (LLM) and over 35 years’ experience as a director of ASX listed mining and exploration companies. Mr Okeby is currently a director of Red Hill Iron Limited (appointed in 2015) and is also Non-executive Chairman of Peel Mining Limited (appointed in 2022). Previously Mr Okeby has been a d irector of Hill 50 Ltd, Abelle Limited, Metals X Limited, Westgold Resources Limited, Lynas Corp oration Ltd and Regis Resources Limited. Mr Okeby is an independent director. During the past three years Mr Okeby has held the following other listed company directorships: • Non-Executive Chairman of Peel Mining Limited (March 2022 to present) • Non-Executive Director of Red Hill Iron Limited (August 2015 to present) Mr Myles Ertzen B.Sc Grad Dip App Fin Non-Executive Director Appointed 13 September 2019 Mr Ertzen was from 2009 until December 2018 a senior executive at Regis Resources Limited having held project and business development roles, culminating in the role of Executive General Manager – Growth, from which he resigned in December 2018. Prior to Regis, Myles held a number of senior operations roles for gold mining and development companies and has significant experience in the permitting, development and operations of gold projects in Western Australia. Myles has various regulatory and technical qualifications in mining, management and finance. Mr Ertzen is an independent director. During the past three years Mr Ertzen has not held any other listed company directorships. For personal use only
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Directors’ report (Continued) CAPRICORN METALS LTD ABN 84 121 700 105 Page | 4 Mr Bernard De Araugo B.App.Sc (Metallurgy) Non-Executive Director Appointed 26 May 2021 Mr De Araugo is a qualified metallurgist with over 30 years’ experience in mining and processing including senior management and technical roles at several gold mining operations in Australia and overseas. He has held senior leaders hip roles across a range of business disciplines including operations, commercial management and technical functions at Orica Mining Services and leading processing consumables supplier Donhad Pty Ltd where he was an Executive Director for over 12 years. Mr De Araugo is an independent director. During the past three years Mr De Araugo has not held any other listed company directorships. Ms Jillian Irvin B.Sc (Geology) Non-Executive Director Appointed 12 October 2023 Ms Irvin is an experienced geologist with over 25 years’ experience in the Australian mining industry. She has a strong operating background having worked for several Australian gold and base metals companies performing a variety of roles including resource estimation, near mine exploration and mining geology. Ms Irvin is currently the Principal Geologist at Entech, a West Perth based, international mining consultant specialising in resource geology, mining engineering and geotechnical services. Ms Irvin is an independent director. During the past three years Ms Irvin has not held any other listed company directorships. Company Secretary The Company Secretary of the Company during the year and up to the date of this report is set out below. Mr Kim Massey B.Com, CA Company Secretary Resigned 31 December 2024 Mr Massey is a Chartered Accountant with significant experience in financial management and corporate advisory services, particularly in the resources sector, as a corporate advisor and company secretary for a number of ASX and AIM listed companies. Mr William Nguyen B.Com, CA Company Secretary Appointed 1 January 2025 Mr Nguyen is a Chartered Accountant with significant experience in senior financial roles across public companies in the resources sector. Prior to joining Capricorn, he was the Chief Financial Officer and Joint Company Secretary of ASX listed FireFly Metals Ltd, and was previously the Financial Controller of Regis Resources Limited. Committee membership At the date of this report, the Company had an Audit Committee, a Risk Management and Sustainability Committee, and a Remuneration, Nomination and Diversity Committee. The directors acting on the Committee’s during the year were: Director Audit Committee Risk Management and Sustainability Committee Remuneration, Nomination and Diversity Committee M Ertzen Chair B De Araugo Chair Chair J Irvin For personal use only
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Directors’ report (Continued) CAPRICORN METALS LTD ABN 84 121 700 105 Page | 5 Directors’ meetings The number of Board and Committee meetings held and attended by directors during the year were as follows: Director Board Audit Risk Management and Sustainability Remuneration, Nomination and Diversity No. held No. attended No. held No. attended No. held No. attended No. held No. attended M Clark 7 7 - - - - - - M Okeby 7 7 - - - - - - M Ertzen 7 7 2 2 3 3 4 4 B De Araugo 7 7 2 2 3 3 4 4 J Irvin 7 7 2 2 3 3 4 4 Principal Activities The principal activities of Capricorn during the financial year were: Exploration, evaluation, development and production at the Karlawinda Gold Project (“KGP”); and Exploration and evaluation of the Mt Gibson Gold Project (“MGGP”). Strategy/Objectives The Group’s strategy is to be a profitable multi-mine mid-tier gold company that delivers superior returns to shareholders over the long term. The focus of the Company during the year was the operation of the KGP and commencing development of the Karlawinda Expansion Project (“KEP”). In addition, the Company actively pursued its strate gy of developing into a multi operational gold company undertaking an extensive resource drilling programme at the MGGP culminating in an updated mineral resource and ore reserve estimate , completing the 400 -room accommodation village ready for the constru ction phase, and submitting permitting applications to both state and federal authorities. The Company’s objectives are to: Continue operations at KGP by mining and processing ore safely and responsibly; Develop the KEP on time and within budget; Organically increase the reserves and resources of the Company through systematic exploration activity across both the KGP and MGGP tenement packages; Continue the technical, environmental and other studies required to advance the permitting and development of the MGGP; and Actively pursue inorganic growth opportunities. Operating and Financial Review Overview Capricorn Metals Ltd is an Australian based gold producer and exploration company with two distinct project areas located in Western Australia. The KGP is located 65 kilometres south-east of Newman in the Pilbara region of Western Australia. The KGP commenced operations in June 2021 and has a 10-year mine life on current reserves, with the KEP increasing the production capacity to 150,000 ounces per year for the first 8 years post completion . The KGP completed its fourth full year of operations producing 117,076 ounces of gold at an all-in-sustaining-cost (“AISC”) of $1,468 per ounce. The Company’s second project is the MGGP, located in the Mid-West region of Western Australia, 280 kilometres north- east of Perth. Capricorn acquired the MGGP in July 2021 at an acquisition cost of $39.6 million and a 1% net smelter royalty on all minerals produced from the project including gold production in excess of 90,000 ounces. The Company continued an extensive resource drilling programme at MGGP during the year and announced an updated ore reserve estimate of 2.59 million ounces in November 2024. For personal use only
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Directors’ report (Continued) CAPRICORN METALS LTD ABN 84 121 700 105 Page | 6 Financial summary Key financial data 2025 $‘000 2024 $‘000 Change $’000 Change % Sales revenue (i) 505,892 359,834 146,058 41 Cost of sales (excluding D&A) (ii) (209,988) (176,106) (33,882) 19 Other income - 26 (26) (100) Corporate, admin and other costs (22,530) (15,424) (7,106) 46 EBITDA (2) 273,374 168,330 105,044 62 Depreciation & amortisation (D&A) (26,035) (28,723) 2,688 (9) Net finance costs (29,502) (13,920) (15,582) 112 Profit before tax 217,837 125,687 92,150 73 Income tax expense (67,560) (38,549) (29,011) 75 Profit/(loss) after tax 150,277 87,138 63,139 72 Cashflow from operating activities 259,314 158,184 101,130 64 Cash and cash equivalents 355,748 119,917 235,831 197 Borrowings 0 (50,658) (50,658) (100) Net cash 355,748 69,260 286,489 414 Net assets 781,209 309,265 471,944 153 Basic earnings per share (cents per share) 37.08 23.13 13.96 60 (i) Sales revenue includes a non-cash deduction of $22.3 million from hedge accounting revenue adjustments following the adoption of hedge accounting in July 2023 (refer Note 2). (ii) EBITDA is an adjusted measure of earnings before interest (finance income/(expenses)), taxes, depreciation and amortisation. Cost of sales (excluding D&A) and EBITDA are non-IFRS financial information and are not subject to audit. These measures are included to assist investors to better understand the performance of the business. Capricorn achieved a net profit after tax of $1 50.3 million for the full year to 30 June 2025, up from $87.1 million in the previous year, primarily due to a significant increase in spot gold prices achieved throughout the year, driving strong revenue cashflow. EBITDA increased 62% to $273.4 million for the full year to 30 June 2025 as higher gold sales revenue were partially offset by increases in operating and overhead costs. Performance summary Sales Gold sales for the financial year was $527.6 million from the sale of 118,223 ounces of gold at an average realised price of $4,463 per ounce (2024: $359.4 million from 112,853 ounces at $3,185 per ounce). Sales revenue includes a non-cash deduction of $22.3 million from hedge accounting revenue adjustments following the adoption o f hedge accounting in July 2023 (refer Note 2). Cost of sales Cost of sales, excluding depreciation and amortisation, for the year increased by 19% from the previous year to $210.0 million due to higher unit mining rates as the Bibra open pit deepens , the significant increase in material movement ahead of the KEP, and the installation and commissioning of the liquid oxygen and lead nitrate facilities successfully stabilising recovery at 92%. Net finance costs The restructure of the gold forward s in June 2023 led to the adoption of hedge accounting from 1 July 2023 . The remaining gold forwards at that time were valued through the Company’s reserves and are recognised in the profit and loss statement on the designated delivery dates of the contracts. These contracts previously qualified as future inventory sales contracts with the sales value recognised as revenue at the time of sale, also known as the “own use” exemption. In March 2025, the Company announced that it had closed its remaining 55,000-ounce gold forward contracts to provide further exposure to any increase in the A$ gold price. As part of the closure Capricorn also purchased gold put options (for 50% of the volume and maturity as the closed hedge contracts) which gives Capricorn the right (but not the obligation) to sell the previously hedged ounces at a price of A$4,500 per ounce. The cost of reducing the hedge book For personal use only
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Directors’ report (Continued) CAPRICORN METALS LTD ABN 84 121 700 105 Page | 7 and the purchase of gold put options was $147.0 million, and was (other than $7 million paid out of existing cash holdings) funded through the issuance of approximately 17.7 million new fully paid ordinary shares to Capricorn’s debt financier and hedge book counterparty, Macquarie Bank Limited (“Macquarie”). In June 2025, the Capricorn closed its final remai ning gold hedging instrument, a 16,700 -ounce call option, resulting in the Company being fully unhedged. In conjunction with the closure, the Company also purchased 15,000 ounces of gold put options with a strike price of $5,000 per ounce. The cost of the hedge book closure and purchase of put options was $50.0 million, funded from Capricorn’s cash and bullion holdings. Later in June 2025, Capricorn repaid its residual $50.0 million corporate debt to Macquarie, resulting in the Company becoming debt free. The significant increase in gold price during the year resulted in an increase in net finance costs by $15.8 million, bringing the total up to $29.7 million compared to the previous year . These costs are primarily driven by the mark -to-market movements of European Call Options held with Macquarie , which were subsequently closed in June 2025 . The closures of the March 2025 gold forward contracts will be recognised in the profit and loss statement on the designated delivery dates of the contracts. Cashflow Statutory operating cash flow for the year was $259.3 million which delivered a $235.8 million increase (to $355.8 million) in cash and cash equivalents for the year. Key cash flow movements for the year included: Net cash inflow from operations (excluding interest paid) of $265.5 million Net capital raise proceeds of $193.4m $50.0 million repayment for the residual corporate debt $56.7 million cash payments for the hedge book closure $53.4 million on exploration and feasibility activities at KGP and MGGP $29.8 million on the camp construction at the MGGP and early works at the KEP. Net cash The Company had net cash of $355.7 million at the end of the financial year (2024: net cash of $69.3 million) an increase of $286.4 million from the prior year after the $ 56.7 million payment to close the remaining hedge book (2024 : $69.6 million). The Company had no outstanding debt at the end of the financial year (2024: $50 million), having repaid its residual $50.0 million corporate debt to Macquarie prior to its 30 June 2025 maturity. Project summary Karlawinda Gold Project Operations Operating results for the 2025 financial year were as follows: Unit 30 June 2025 30 June 2024 Ore mined BCM (‘000) 2,414 2,023 Waste mined BCM (‘000) 10,887 9,000 Prestrip mined BCM (‘000) 1,841 1,546 Stripping ratio w:o 5.27 5.21 Operating Strip ratio w:o 4.51 4.45 Ore mined Tonnes (‘000) 6,496 5,276 Ore milled Tonnes (‘000) 4,320 4,063 Head grade g/t 0.92 0.97 Recovery % 92 90 Gold production Ounces 117,076 113,007 Cash cost (i) A$/oz $1,224 $1,275 All-in-sustaining-cost (i) A$/oz $1,468 $1,421 (i) Cash cost and all-in sustaining costs (“AISC”) are non -IFRS financial information and not subject to audit. These are comparable measures commonly used in the mining industry and in particular the gold mining industry. The Company calculates cash costs and AISC on a per ounce production basis. For personal use only
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Directors’ report (Continued) CAPRICORN METALS LTD ABN 84 121 700 105 Page | 8 KGP produced 117,076 ounces from its fourth year of operation. This was towards the top end of the annual production guidance range of 1 10,000 – 120,000 ounces . The all-in-sustaining-cost (“AISC”) for the financial year was $1, 468 per ounce which was within the FY25 AISC guidance range for the year of $1,370 - $1,470 per ounce. A total of 15.1 million BCM of material was mined from the Bibra open pit during the year at a waste-to-ore strip ratio of 5.27. Mining focussed on achieving planned pit face positions and advanced pre-stripping ahead of the expansion project. Importantly, mining production rates met the requirements of the KEP ahead of schedule, reducing transitions risks to the expanded project. The processing plant maintained consistent levels of production throughout the year. Additionally, optimisation of the oxygen circuit and lead nitrate systems improved recoveries in the fresh ore to life of mine expectations. Capricorn expects FY26 operations to be consistent with FY25, with gold production guidance of 115,000 – 125,000 ounces at an AISC range of $1,530 - $1,630 per ounce and growth capital of $30 - $40 million. Reserves & Resources In August 2024 the Company announced an annual resource and reserve update for KGP. The updated KGP Ore Reserve Estimate (“ORE”) of 1,428,000 ounces (2023: 1.25 million ounces) was an increase of 333,000 ounces after accounting for mining depletion in the 15 months to 30 June 2024. The updated Mineral Resource Estimate (“MRE”) of 2,252,000 ounces (2023: 2.23 million ounces) was an increase of 176,000 ounces after accounting for mining depletion in the 15 months to 30 June 2024. Karlawinda Expansion Project The Capricorn board approved the expansion of the Karlawinda Gold Project during the year. This Karlawinda Expansion Project (“KEP”) has a budgeted capital investment of $120 million and will incorporate the installation of a new three stage crushing and ball mill circuit to increase total processing capacity to 6.5Mtpa. Once complete, the average annual gold production at the expanded KGP is expected to be in the order of 150,000 ounces. The increased capacity will not require a significant increase in mining fleet or earthmoving volumes. The parallel processing stream offers the flexibility of an independent run -of-mine ( “ROM”) arrangement while maximising the use of the existing infrastructure downstream of the CIL tanks. Existing gas infrastructure is capable of delivering the required increase in power generation. The expansion also includes the construction of additional accommodation capacity which will maximise productivity during the plant construction phase and facilitate the additional personnel re quirements of long -term operations. The installation of a new tailings storage facility ( “TSF”), utilising displaced waste material from the adjacent Berwick deposit will meet the increased project deposition requirements. In July 2025, Capricorn received regulatory approval from the Government of Western Australia Department of Energy Mines, Industry Regulation and Safety ( “DEMIRS”) of Capricorn’s Mining Proposal and Mine Closure Plan (“MPMCP”) covering changes to permit the development of the KEP. This approval allows full development of the KEP, including: All expanded mining activities at Bibra, Southern Corridor and Berwick open pits; Construction and development of Tailing Storage Facility 2 ( “TSF2”), additional ROM pad and extensions to the southern waste dump; Construction works of the expanded processing plant; and Other infrastructure development required for KEP. Capricorn has been advancing the design, procurement and development work on the KEP to the extent possible prior to approval of the MPMC P. This leaves the Company in a strong position to successfully execute the circa 12 -month development and construction project. Advanced development activities at the KEP during the year included: Extension of mining contract with MACA at existing unit rate pricing for a further 5- year term, with a Capricorn option for extension. Construction of the 120-room camp expansion was largely completed; The process plant design scope progressed to approximately 60% complete; and Early clearing and bulk earthworks associated with the project commenced . For personal use only
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Directors’ report (Continued) CAPRICORN METALS LTD ABN 84 121 700 105 Page | 9 Exploration Capricorn wholly owns a 4 ,000 square kilometre tenement package at KGP which includes the greenstone belt hosting the Bibra gold deposit and other significant greenstone areas. The Pilbara region of Western Australia has not had a significant historical exploration focus on gold and as a result very little modern and meaningful gold exploration has been completed outside of the immediate Bibra deposit, the focus of current mining operations. During the year a total of 943 holes for 58,761 metres were drilled across the KGP tenement package. An extensive, regional drilling programme comprising over 32,000m of Aircore and 12,000m of RC drilling was completed during FY25. The exploration prospects targeted during the programme include Badlands, Mission Road, Carnoustie East and Central Zone Shear, all located less than 30 kilometres from the Bibra open pit. Additionally, 6,500m of AC drilling was completed at the newly identified Oakmont and Hazeltine prospects with Mumbakine Well. The drill targets are interpreted to be in similar geological settings prospective for Bibra style and intrusion related mineralisation, and include multiple gravity-high and surface sample anomalies along magnetic corridors with known gold occurrences. A regional gravity survey scheduled for FY26 follows on from on from Capricorn’s 2023 survey which identified geological settings prospective for Bibra style and intrusion related mineralisation leading to multiple early stage greenfields drill targets. The survey will cover 70 kilometres of strike c entred around the recently acquired tenement packages along the highly prospective Pilbara – Yilgarn craton margin and cover Stornoway, Murphys and Deadman Flat prospects scheduled for drilling in FY26. Regional Project Acquisitions In December 2024, the C ompany acquire d the prospective Sylvania Project tenements located contiguous to the Company’s KGP tenure in the Pilbara region (Refer Figure 1 ). The tenements cover approximately 1,740 square kilometres, increasing the Company’s tenement holding to approx imately 3,800 square kilometres and consolidates the Company’s holding of Pilbara craton greenstones in proximity to the highly prospective Pilbara- Yilgarn craton margin. The transaction consideration was $1.5 million, settled through the issue of fully p aid ordinary Capricorn shares, and a 1%-1.5% net smelter royalty on the sale of minerals produced and contingent payments to a maximum of $1.5 million. In January 2025, the Company acquire d the prospective Deadman Flat Project tenements located contiguous to the Company’s KGP tenure in the Pilbara region (Refer Figure 1). The tenements cover approximately 270 square kilometres, increasing the Company’s tenement holding to approximately 4,000 square kilometres and consolidates the Company’s holding of Pilbara craton greenstones in proximity to the highly prospective Pilbara-Yilgarn craton margin. The transaction consideration was $1.5 million, settled through the issue of fully paid ordinary Capricorn shares, and a 1%-1.5% net smelter royalty on the sale of minerals produced and contingent payments to a maximum of 1.5 million. Figure 1: – Deadman Flat Tenements (black) alongside recently acquired Sylvania Project tenements (red) and existing KGP tenements. For personal use only
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Directors’ report (Continued) CAPRICORN METALS LTD ABN 84 121 700 105 Page | 10 Mt Gibson Gold Project Project Development In December 2023, Capricorn referred the development of the MGGP to the Commonwealth Department of Climate Change, Energy, the Environment and Water ( “DCCEEW”) under the Environmental Protection and Biodiversity Conservation Act 1999 ( “EPBC Act”), based on comprehensive environmental assessment work over the last two and a half years. In June 2024, Capricorn received advice from DCCEEW relating to the assessment of the MGGP referral. As expected, the project will be assessed as a Controlled Acti on via Public Environment Report, with an issue of guidelines for the Report to be completed by Capricorn. The Company has submitted the final Public Environment Report ( “PER”) to the Department of Climate Change, Energy, the Environment and Water (“DCCEEW”). This follows previous receipt of guidelines for the PER and ongoing feedback on the document from DCCEEW. This submission commences the public exposure and final assessment process. Development activities at the MGGP during the year included: Installation of the 400-room accommodation village for the operation has been completed and handed over for the upcoming construction phase; The Process Plant Design scope was advanced, achieving 55% progress, with site layouts finalised and long lead items committed; and MACA has been selected as the preferred mining contractor at MGGP. This outcome validates the Company’s reserve model costing for the project. Capricorn’s strategy is to expedite the accommodation village construction, project design and long lead purchasing in parallel with progressive receipt of development and environmental permits where it is expected to be advantageous to the ultimate development schedule and cost to do so. Reserves & Resources In July 2021 Capricorn announced the acquisi tion of the MGGP located approximately 280 kilometres northeast of Perth in the Mid-West region of WA. At the time of acquisition the project had a JORC 2012 compliant Inferred MRE of 2,083,000 ounces of gold. In November 2024, the Company announced an u pdated ORE for the MGGP. The updated JORC 2012 compliant ORE is 89.8 million tonnes @ 0.9g/t Au for 2.59 million ounces (April 2024: 1.83 million ounces). This ORE is based on a MRE of 150.4 million tonnes @ 0.8g/t Au for 3. 99 million ounces (April 2024: 3.31 million ounces). The ORE was estimated using a A$2,200 per ounce gold price with the reserve pits having a shallow average depth of 18 0 metres, down to a maximum depth of 310 metres and an operating strip ratio of 4.8. The updated ORE is based on updates to the prefeasibility study that indicates the MGGP is a robust, large scale open pit gold mine with gold production averaging 150,000 ounces per annum for the first 15 years, with targeted all-in-sustaining- costs expected to average $1,650 - $1,750 per ounce. In July 2025, the Company announced a maiden underground resource at the MGGP. The updated MRE of 149.2 million tonnes @ 0.9g/t Au for 4.5 million ounces represents an increase of 507,000 ounces on the November 2024 estimate. This includes a 684,000-ounce maiden underground MRE at Orion South and a maiden MRE at the Highway deposit. The quality of the maiden underground resource reinforces Capricorn’s commitment to a strategy of growing the resource, delivering ore reserves and doing the work to include these higher-grade underground zones into the mine plan and ultimately seeing MGGP become a long mine life open pit and underground operation. Exploration During the year a total of 1,424 holes for 135,640 metres were drilled across the MGGP tenement package. Exploration activities at the MGGP focussed on extensional and infill drilling as well as near mine exploration at prospects immediately adjacent to the Mt Gibson trend. Resource drilling has continue d under the Orion and Lexington pits , the Yorktown, Enterprise and Comanche prospects, the Wombat, Saratoga and Aries deposits and the Highway project area, located 6km northwest of the current Mt Gibson mine resource. The primary objective of the drilling campaign was to extend the resource envelope and increase data density in areas classified as Inferred Resources, particularly at Orion and Lexington, where open pit optimisations have demonstrated potential for Reserve growth. Near mine targets have been progressed, with a total of 12,790 (101 holes) metres of RC drilling and 12,472 metres (216 holes) of AC drilling completed across the Mexicola, Big Whiskey, Sundance, Ace High and Gunslinger deposits. Results continue to return highly encouraging interce pts throughout the project areas, underscoring the high prospectivity to host additional near-surface satellite resources as well as major gold discoveries. For personal use only
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Directors’ report (Continued) CAPRICORN METALS LTD ABN 84 121 700 105 Page | 11 During the year, diamond drilling under the Orion and Lexington pits continues to return broad, high grade gold intercepts, demonstrating that mineralisation extends significantly at depth . A total of 11,105 metres (35 holes) of diamond drilling at the Orion Deposit was completed as part of an expanded programme (40,000m). This work followed u p on deeper diamond and RC drilling conducted in FY24, which had previously delivered promising results. A total of 2,348 metres (7 holes) of diamond drilling at the Lexington Deposit was completed. Drilling targeted and explored north plunging mineralisation of previous Capricorn intercepts. Encouragingly current results significantly extend strike length and depth of high-grade mineralisation, highlighting the potential for a high-tenor large scale underground operation. Regional Project Acquisitions In J anuary 2025, the Company acquire d the prospective Mummaloo Project tenements located contiguous to the Company’s MGGP tenure in the Pilbara region (Refer Figure 2 ). The tenements cover approximately 219 square kilometres, within the Yalgoo -Singleton Greenstone Belt, hosting notable Volcanogenic Massive Sulphide deposits. The transaction consideration was $3.5 million, of which the Company paid an initial $100,000 d eposit, with the balance settled with the issue of fully paid ordinary Capricorn shares. In March 2025, the Company acquired the prospective Kings Find Project tenements located contiguous to the Company’s MGGP tenure in the Murchinson region (Refer Figure 2). The tenements cover approximately 54 square kilometres, within the Yalgoo -Singleton Greenstone Belt, hosting notable Volcanogenic Massive Sulphide deposits. The transaction consideration was $1.5 million, of which the Company paid an initial $100,000 deposit, with the balance settled with the issue of fully paid ordinary Capricorn shares, a 1% net smelter royalty on the sale of any minerals extracted from the Kings Find Project area and maximum contingent deferred payments of $1.5 million. In April 2025, the Company acquire d the prospective Ninghan Gold Project tenements located contiguous to the Company’s MGGP tenure in the Murchinson region (Refer Figure 2 ). The tenements cover approximately 77 square kilometres, within the Yalgoo -Singleton Greenstone Belt, hosting notable Volcanogenic Massive Sulphide deposits. The transaction consideration was $1.6 million, of which the Company paid an initial $100,000 deposit, with the balance settled with the issue of fully paid ordinary Capricorn shares, a 1% -1.5% net smelter royalty on the sale of any minerals extracted from the Ninghan Gold Project area tenements and maximum deferred contingent payments of $1.75 million. Figure 2 - Ninghan Gold Project (maroon), MGGP tenure (blue) and recently acquired Mummaloo project tenements (green) & Kings Find Project tenure (magenta) showing initial exploration targets. For personal use only
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Directors’ report (Continued) CAPRICORN METALS LTD ABN 84 121 700 105 Page | 12 Material business risks The material business risks of the Company include: Gold price and foreign exchange currency: The Company is exposed to fl uctuations in the Australian dollar gold price which can impact on revenue streams from operations. To mitigate downside in the gold price, the Board has purchased put options to provide protection against adverse movements in the Australian dollar gold price. Reserves and Resources: The Mineral Resource Estimates and Ore Reserve Estimates for the Company’s assets are estimates only and no assurance can be given that they will be realised. The estimates are determined in accordance with JORC and compiled or reviewed by a qualified competent person. Government regulation: The Company’s mining, processing, development and exploration activities are subject to various laws and statutory regulations governing prospecting, development, production, taxes, royalty payments, labour standards and occupational health, mine safety, toxic substances, land use, water use, communications, land claims of local people and other matters. The Company actively manages these risks by maintaining regular and effective engagement with government and regulatory authorities. No assurance can be given that new laws, rules and regulations will not be enacted or that existing laws, rules and regulations will not be applied in a manner which could have an adverse effect on the group’s fi nancial position and results of operations. Any such amendments to current laws, regulations and permits governing operations and activities of mining and exploration, or more stringent implementation thereof, could have a material adverse impact on the Company. Operating risk : The Company’s gold mining operations are subject to operating risks that could result in decreased production, increased costs & reduced revenues. To manage this risk the Company seeks to attract and retain high calibre employees and implement suitable systems and processes to ensure production targets are achieved. Exploration and development risk: An ability to sustain or increase the current level of production in the longer term is in part dependent on the success of the group’s exploration activities and development projects, and the expansion of existing mining operations. The exploration for, and development of, mineral deposits involves significant risks that even a combination of careful evaluation, experience and knowledge may not eliminate. While the discovery of an ore body may result in substantial rewards, few properties that are explored subsequently have economic deposits of gold identified, and even fewer are ultimately developed into producing mines. Major expenses may be required to locate and establish mineral reserves, to establish rights to mine the ground, to receive all necessary operating permits, to develop metallurgical processes and to construct mining and processing facilities at a particular site. Climate Change: Capricorn acknowledges that climate change effects have the potential to impact our business. The highest priority climate related risks include reduced water availability, extreme weather events, changes to legislation and regulation, reputational risk, and technological and market changes. The group is committed to understanding and proactively managing the impact of climate related risks to our business. This includes integrating climate related risks, as well as energy considerations, into our strategic planning and decision making. Environmental: The Company has environmental liabilities associated with its tenements which arise as a consequence of mining operations, including waste management, tailings management, chemical management, water management and energy efficiency. The Company monitors its ongoing environmental obligations and risks, and implements rehabilitation and corrective actions as appropriate, through compliance with its environmental management system. People risks: The Company seeks to ensure that it provides a safe workplace to minimise risk of harm to its employees and contractors. It achieves this through an appropriate safety culture, safety systems, training and emergency preparedness. Significant changes in state of affairs Other than as set out below and elsewhere in the report, there were no significant changes in the state of affairs. Dividends paid or recommended No dividends were paid or recommended to be paid during the financial year (2024: Nil). For personal use only
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Directors’ report (Continued) CAPRICORN METALS LTD ABN 84 121 700 105 Page | 13 Subsequent events In July 2025, the Company announced that it has entered into a binding Scheme Implementation Deed under which it is proposed that Capricorn will acquire 100% of the securities in Warriedar (ASX:WA8) by way of a Court-approved scheme of arrangement under Part 5.1 of the Corporations Act 2001 (Cth). The proposed acquisition will allow the Company to secure Warriedar’s flagship Golden Range Project (“GRP”), including the Ricciardo gold-antimony deposit and the Fields Find Gold Project, all loc ated 90 kilometres north of the existing Mt Gibson Gold Project ( “MGGP”). The GRP has a significant Mineral Resource Estimate of 2.3Moz AuEq (31Mt at 2.3g/t) , while Capricorn’s existing Western Australian Mineral Resource base is 6.8Moz (247.8Mt at 0.85g/t Au). The consolidation of the approximately 788km2 tenure package provides additional resources, scale and exploration potential of the MGGP, with the Ricciardo Gold Deposit located on existing mining leases and the under explored Fields Find Project. GRP also contains existing infrastructure, including a 0.8mtpa processing plant providing potential low -cost options to augment the MGGP in the medium term. Likely developments There are no likely developments of which the D irectors are aware which could be expected to significantly affect the results of the Group’s operations in subsequent financial years not otherwise disclosed in the Principal Activities and Operating and Financial Review or the Subsequent events sections of the Directors’ Report. Environmental issues The Group’s current activities generally involve disturbance associated with mining activities and exploration drilling programmes in Australia. Mining and exploration operations in Australia are subject to environmental regulation under the laws of the Co mmonwealth and the State of Western Australia. The Group holds various environmental licences issued under these laws, to regulate its mining and exploration activities. All environmental performance obligations are subjected from time to time to Governmen t agency audits and site inspections. The Company is not aware of any material breaches of the Group’s licenses and all mining and exploration activities have been undertaken in compliance with the relevant environmental regulations. Directors’ interests As at the date of this report, the interests of the D irectors in shares and rights of the Company are set out in the table below: Director Number of shares Number of performance rights M Clark 17,372,707 388,649 M Okeby 4,615,385 - M Ertzen 1,600,000 - B De Araugo 74,550 - J Irvin - - Share options Unissued shares At the date of this report, the Company had no unissued shares under listed and unlisted options. Shares issued on exercise of options The Company had no shares issued under options for the year. Performance rights Unissued shares At the date of this report, the Company had the following unissued shares under unvested performance rights. For personal use only
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Directors’ report (Continued) CAPRICORN METALS LTD ABN 84 121 700 105 Page | 14 Vesting date Number outstanding 10 December 2024 20,000 30 June 2025 158,042 1 July 2025 100,000 10 July 2025 16,000 18 September 2025 40,000 10 December 2025 181,412 18 June 2026 60,000 30 June 2026 77,335 1 July 2026 100,000 10 July 2026 16,000 18 September 2026 30,000 10 December 2026 209,268 18 June 2027 60,000 30 June 2027 305,862 1 July 2027 50,000 10 December 2027 176,771 Performance rights holders do not have any right, by virtue of the performance rights to participate in any share issue of the Company or any related body corporate. Details of performance rights granted to directors and other key management personnel during the year are set out in the remuneration report. Indemnification and insurance of directors and officers The Company has established an insurance polic y insuring Directors and officers of the Company against any liability arising from a claim brought by a third party against the Company or its Directors and officers, and against liabilities for costs and expenses incurred by them in defending any legal proceedings arising out of their conduct while acting in their capacity as a Director or officer of the Company, other than conduct involving a wilful breach of duty in relation to the Company. In accordance with a confidentiality clause under the insurance policy, the amount of the premium paid to insurers will not be disclosed. This is permitted under s300(9) of the Corporation Act 2001. No indemnity has been obtained for the auditor of the Group. Auditor independence and non-audit services No fees were paid or payable to KPMG Australia for non-audit services during the year ended 30 June 2025 (2024: Nil). A copy of the auditor’s independence declaration as required under Section 307C of the Corporations Act 2001 for the year ended 30 June 2025 is attached to the Directors’ Report. Proceedings on behalf of the Company No person has applied for leave of court to bring proceedings on behalf of the Company or intervene in any proceedings to which the Company is a party, for the purpose of taking responsibility on behalf of the Company for all or any part of those proceedings. Rounding off The Group is of a kind referred to in ASIC Corporations (Rounding in Financial/Director’s Reports) Instrument 2016/191 and in accordance with that Instrument, amounts in the consolidated financial statements and D irector’s report have been rounded off to the nearest thousand dollars, unless otherwise stated. For personal use only
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Remuneration report (Audited) CAPRICORN METALS LTD ABN 84 121 700 105 Page | 15 This remuneration report for the year ended 30 June 2025 outlines the remuneration arrangements of the Company and the Group in accordance with the requirements of the Corporations Act 2001 (the Act) and its regulations. This information has been audited as required by section 308(3C) of the Act. The report details the nature and amount of remuneration for each Key Managem ent Personnel (“KMP”) of Capricorn Metals Ltd who are defined as those persons having authority and responsibility for planning, directing and controlling the major activities of the Company and Group, directly or indirectly, including any Director (whethe r executive or otherwise) of the parent company. For the purpose of this report, the term “executive” includes the Executive Chairman, senior executives and company secretaries of the Parent and the Group. Remuneration principles The Remuneration, Nominati on and Diversity Committee (“RNDC”) was appointed in June 2021 following the rapid growth of the Group. The R NDC is responsible for formulating the Group’s remuneration policy, setting each Director’s remuneration and reviewing the Executive Chairman’s rem uneration recommendations for KMPs to ensure compliance with the remuneration Policy and consistency across the Group. Recommendations of the RNDC are put to the Board for approval. In determining KMP remuneration the Board aims to ensure remuneration leve ls are set that attract, retain and incentivise executives and directors that are appropriately qualified and of a high calibre. Executives are rewarded with a level and mix of remuneration appropriate to their position, responsibilities and performance in a way that aligns with the Group’s business strategy. For the 2025 financial year the Company has implemented an Executive Remuneration Incentive Plan for Executives which sets out the performance hurdles for both Short Term Incentives (“STI”) and Long Term Incentives (“LTI”). The objectives and principles of the Company’s remuneration policy include: To align the objectives of the KMP’s with the Company’s strategic and business objectives and the creation of shareholder value; To provide competitive and reasonable remuneration to attract and retain high calibre talent; To provide remuneration that is transparent, easily understood and acceptable to shareholders; and To provide remuneration that is structured to have a suitable mix of fixed remuneration and at-risk performance based elements using appropriate STI and LTI components. Executive remuneration levels are reviewed annually by the RNDC to ensure alignment to the market and the Company’s objectives. The Company’s remuneration policy provides for a combination of fixed and variable pay with the following components: Fixed remuneration in the form of base salary, superannuation and benefits; and Variable remuneration in the form of STI’s and LTI’s. The table below provides a summary of the structure of executive remuneration: Fixed Remuneration - Base salary - Superannuation - Other benefits Variable Remuneration - STI (cash bonuses) - LTI (performance rights) For personal use only
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Remuneration report (Audited) (Continued) CAPRICORN METALS LTD ABN 84 121 700 105 Page | 16 The relative proportion of FY25 total remuneration packages split between the fixed and variable remuneration achieved for the executives is shown below: Elements of Remuneration Fixed remuneration Fixed remuneration consists of base remuneration (including fringe benefits tax charges related to employee benefits), as well as employer contributions to superannuation funds and salary sacrifice superannuation contributions. Remuneration levels are rev iewed annually by the RNDC through a process that considers market conditions, individual performance and the overall performance of the Group. Industry remuneration surveys and data are utilised to assist in this process as well as benchmarking against ASX listed companies within the gold mining sector. At the end of the 2025 financial year, executive annual base salaries were: Mark Clark $900,000 Kim Massey (i) $600,000 Paul Criddle (ii) $700,000 Tony Hinkley (iii) $450,000 Shane Clark (iv) $450,000 William Nguyen $380,000 (i) Mr Kim Massey retired effective 31 January 2025 (ii) Mr Paul Criddle resigned as Chief Executive Officer effective 30 June 2025. He remains KMP in the role of Executive General Manager (EGM) Project Development from 1 July 2025. (iii) Mr Tony Hinkley was appointed Chief Operating Officer effective 1 January 2025 (iv) Mr Shane Clark was appointed Chief Development Officer effective 1 January 2025 Short term incentives Under the STI plan, all executives have the opportunity to earn an annual incentive which is delivered in cash if certain financial and non-financial key performance indicators ( “KPI’s”) are met. The STI recognises and rewards annual performance and links the achievement of key short term Company targets with the remuneration received by those executives charged with meeting those targets . STI awards are capped at 100% of the target opportunity which in FY25 was 40% of the fixed remuneration of the executive. Each year the RNDC set KPI targets for executives. For FY25 the KPI’s included: operating targets including gold production and AISC measured against budget; safety, environmental and heritage targets measured against internal objectives; and additions to Company ore reserves net of mining depletion. The Board has the discretion in the event of a significant safety, environment or he ritage incident of not awarding any STI’s in the relevant financial year. A summary of the KPI targets set for FY25 and their respective weightings and achievements are as follows: 55% 100% 55% 48% 39% 49% 16% 17% 25% 21% 15% 29% 28% 27% 41% 36% M Clark K Massey P Criddle T Hinkley S Clark W Nguyen Total fixed remuneration Short term incentives Long term incentives For personal use only
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Remuneration report (Audited) (Continued) CAPRICORN METALS LTD ABN 84 121 700 105 Page | 17 Key Performance Indicator Weighting Measure % of KPI achieved Award Production 35% Gold production measured against FY25 published guidance figures (110,000 – 120,000 ounces) 80% 28% Costs 35% AISC measured against FY25 published guidance figures ($1,370 - $1,470 per ounce) 60% 21% Safety, environment & heritage 15% Safety, environment and heritage internal targets 100% 15% Reserve growth 15% Addition to the Company’s reserve base net of depletion through mining 100% 15% Total 100% 79% In assessing the achievement of the KPI’s the Committee made the following assessments: Production – Annual gold production of 11 7,076 ounces was above the mid- point of FY25 guidance of 110,000 -120,000 ounces, and subsequently, the target was achieved, and a 28% weighting was awarded; Costs – AISC of $1,468 per ounce achieved was within FY25 budgeted AISC of $1,370-$1,470 per ounce, and subsequently, the base was achieved, and a 21% weighting was awarded; Safety, environment & heritage – The Company continues its commitment to high standards of safety, environmental performance and heritage obligations , a satisfactory performance was achieved for the year , and a 1 5% weighting was awarded; Reserve growth – The Company’s reserves increased by 30% to 4.0 million ounces. The stretch target was achieved and a 15% weighting was awarded; Based on the above assessment, 79 % of the target opportunity of 40% of fixed remuneration was achieved with the following STI payments made to executives for FY25: Executive Maximum STI opportunity % KPI achieved STI awarded (i) STI awarded Mark Clark 40% of TFR 79% 32% of TFR $284,400 Paul Criddle 40% of TFR 79% 32% of TFR $221,200 Tony Hinkley 40% of TFR 79% 32% of TFR $142,200 Shane Clark 40% of TFR 79% 32% of TFR $142,200 William Nguyen 40% of TFR 79% 32% of TFR $120,080 (i) STIs that are not awarded are deemed to be forfeited. Long term incentives The Board has established the Employee Incentive Plan (“Incentive Plan”) as a means for motivating senior employees to pursue the long-term growth and success of the Group. LTI’s are provided to executives under the Capricorn Performance Rights Plan. Executives are eligible to receive performance rights (being entitlements to shares in Capricorn subject to satisfaction of vesting conditions) as long-term incentives as determined by the Board in accordance with the terms and conditions of the plan. In the 2025 financial year, under the Performance Rights Plan, the number of rights granted to executives range from 70% to 100% of the executives fixed remuneration and is dependent on the individual’s skills, responsibilities and ability to influence financial or other key objectives of the Company. The number of rights granted is calculated by dividing the LTI remuneration dollar amount by the Capricorn share price on the date of the grant. The performance rights issued in FY25 were subject to one performance hurdle being total shareholder return (“TSR”) measured against a benchmark peer group. The following companies were identified by Capricorn to comprise the peer group for LTI purposes from 1 July 2024: For personal use only
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Remuneration report (Audited) (Continued) CAPRICORN METALS LTD ABN 84 121 700 105 Page | 18 Peer Group Alkane Resources Limited Bellevue Gold Limited De Grey Mining Limited Emerald Resources NL Evolution Mining Limited Genesis Minerals Limited Gold Road Resources Limited Northern Star Resources Limited Ora Banda Mining Ltd Pantoro Limited Perseus Mining Limited Ramelius Resources Limited Regis Resources Limited Resolute Mining Limited St Barbara Limited Vault Minerals Limited Westgold Resources Limited West African Resources Limited This peer group provides a broad and representative comparative for Australian investors. The peer group will be adjusted if members are delisted (for reasons other than financial failure) or a company mer ges with or is acquired by another company in the peer group – in which case the resulting company remains in the peer group and the acquired company is removed. The Board has the discretion to adjust the peer group in other circumstances. The proportion of executive rights that vest is dependent on how Capricorn’s TSR compares to the peer group as follows: Relative TSR for Measurement Period Proportion of Performance Rights that will vest Below the 50th percentile 0% At the 50th percentile 50% Between the 50th and 75th percentile Pro-rata between 50% and 100% At and above the 75th percentile 100% The measurement period for: 100% of the performance rights is the 36 -month period commencing on 1 July 2024 and ending on 30 June 2027 (Tranche 1). The following executives were awarded LTI’s during the reporting period: Executive Maximum LTI Opportunity Number of performance rights granted during FY25 Mark Clark 100% 153,272 Tony Hinkley 70% 53,645 Shane Clark 70% 53,645 William Nguyen 70% 45,300 Shareholders approved the issue of performance rights to Mr Clark at the Company AGM in November 202 4. For personal use only
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Remuneration report (Audited) (Continued) CAPRICORN METALS LTD ABN 84 121 700 105 Page | 19 Performance rights that were granted to KMPs as compensation during the current and previous years and which have vested during or remain outstanding at the end of the year are provided as follows: KMP Incentive No. of rights Grant date FV at grant date Test/Vesting date % Vested during the year % forfeited during the year Maximum value yet to vest (ii) M Clark TSR 80,707 29/11/2022 $3.297 30/6/2025 100% 0% - TSR 77,335 29/11/2023 $4.276 30/6/2025 100% 0% - TSR 77,335 29/11/2023 $4.276 30/6/2026 0% 0% $87,084 TSR 153,272 19/11/2024 $6.430 30/6/2027 0% 0% $506,471 K Massey(i) TSR 57,340 4/10/2021 $1.872 30/6/2024 100% 0% - TSR 44,344 19/6/2023 $2.562 30/6/2024 100% 0% - TSR 44,344 19/6/2023 $2.867 30/6/2025 0% 100% - P Criddle Service condition 50,000 20/05/2024 $4.870 01/7/2025 0% 0% $598 Service condition 50,000 20/05/2024 $4.870 01/7/2026 0% 0% $128,248 T Hinkley Service condition 27,391 7/12/2023 $4.340 10/12/2025 0% 0% $35,647 Service condition 32,609 7/12/2023 $4.340 10/12/2026 0% 0% $82,699 TSR 53,645 24/4/2025 $9.150 30/6/2027 0% 0% $275,600 S Clark Service condition 50,000 03/6/2024 $4.620 01/7/2025 0% 0% $588 Service condition 50,000 03/6/2024 $4.620 01/7/2026 0% 0% $166,493 Service condition 50,000 03/6/2024 $4.620 01/7/2027 0% 0% $166,493 TSR 53,645 24/4/2025 $9.150 30/6/2027 0% 0% $275,600 W Nguyen Service condition 60,000 27/5/2024 $4.660 18/6/2026 0% 0% $150,928 Service condition 60,000 27/5/2024 $4.660 18/6/2027 0% 0% $204,328 TSR 45,300 24/4/2025 $9.150 30/6/2027 0% 0% $232,728 Total 1,117,267 (i) Mr Kim Massey retired effective 31 January 2025. His remaining rights are forfeited at this time. (ii) The maximum value of the performance rights yet to vest is determined based on the amount of the grant date fair value that is yet to be expensed. The minimum value of the performance rights yet to vest is nil since the rights will be forfeited if the vesting conditions are not met. The value of rights granted during the year is the fair value of the rights calculated at grant date. The total value of the rights granted during the ye ar is $ 2,381,737. This amount is allocated to remuneration over the vesting period (i.e. in years 1 July 2024 to 30 June 2027). The total performance rights expense recognised for KMP during the year is $ 1,651,991. There were 80,707 performance rights with a grant date 29 November 2022 that vested and were exercised during the year. There were 57,340 performance rights with a grant date 4 October 2021 that vested and were exercised during the year. There were 44,344 performance rights with a grant date 19 June 2023 that vested and were exercised during the year. Options There were no options granted to KMP’s during the current year. There were no movements in options during the year. For personal use only
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Remuneration report (Audited) CAPRICORN METALS LTD ABN 84 121 700 105 Page | 20 Movements in rights over equity instruments The movement during the reporting period in the number of performance rights over ordinary shares in the Company held, direct ly, indirectly or beneficially, by KMP, including their related parties is as follows: Held as at 1 July 2024 Granted as remuneration Exercised Net change other (i) Held as at 30 June 2025 Total vested Exercisable Not exercisable Rights M Clark 316,084 153,272 (80,707) - 388,649 158,042 158,042 230,607 K Massey 146,028 - (101,684) (44,344) - - - - P Criddle 100,000 - - - 100,000 - - 100,000 T Hinkley 60,000 53,645 - - 113,645 - - 113,645 S Clark 150,000 53,645 - - 203,645 - - 203,645 W Nguyen 120,000 45,300 - - 165,300 - - 165,300 Total 892,112 305,862 (182,391) (44,344) 971,239 158,042 158,042 813,197 Unvested rights are forfeited immediately on cessation of employment. Vested rights lapse 30 days after the cessation of employment if the options have not been exercised prior. (i) Net change other refers to rights forfeited on cessation of employment For personal use only
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Remuneration report (Audited) CAPRICORN METALS LTD ABN 84 121 700 105 Page | 21 Non-executive directors Total remuneration for all Non-Executive Directors, last voted upon by shareholders at the 2024 Annual General Meeting, is not to exceed $ 800,000 per annum. Directors’ fees cover all main Board activities and committee memberships. The base fee for a Non-Executive Director is $135,000 per annum excluding superannuation. An additional amount of $15,000 is also paid to the Chairman of each of the Remuneration, Audit and Risk Committees. From time to time, Non-Executive Directors may provide additional services to the Company and in these cases, they are paid fees in line with industry rates. Key management personnel The following table outlines the movements in KMP during the year ended 30 June 2025. Name Position Term as KMP Mr Mark Okeby Non-Executive Director Full Year Mr Myles Ertzen Non-Executive Director Full Year Mr Bernard De Araugo Non-Executive Director Full Year Ms Jillian Irvin Non-Executive Director Full Year Mr Mark Clark Executive Chairman Full Year Mr Kim Massey (i) Chief Executive Officer & Company Secretary To 31 January 2025 Mr Paul Criddle (ii) Chief Operating Officer Chief Executive Officer To 31 December 2024 From 1 January 2025 Mr Tony Hinkley Chief Operating Officer From 1 January 2025 Mr Shane Clark Chief Development Officer From 1 January 2025 Mr William Nguyen Chief Financial Officer & Company Secretary Full Year (i) Mr Kim Massey retired effective 31 January 2025. (ii) Mr Paul Criddle resigned as Chief Executive Officer effective 30 June 2025. He remains KMP from 1 July 2025 as Executive General Manager (EGM) Project Development. Mr Mark Clark , the Company’s Executive Chairman, Mr Paul Criddle , the Company’s EGM Project Development , Mr Tony Hinkley, the Company’s Chief Operating Officer, Mr Shane Clark, the Company’s Chief Development Officer, and Mr William Nguyen, the Company’s Chief Financial Officer are employed under a contract with the following termination provisions: Notice period Payment in lieu of notice Entitlement to options and rights on termination Notice Period by Capricorn: - With or without reason 6 months 6 months (i) - Serious misconduct Nil Nil Notice Period by Executive: 3 months 3 months As above Fundamental change: 1 month 12 months n/a (i) Due to resignation or termination for cause, any unvested rights and options will automatically lapse on the date of the cessation o f employment. For those performance rights or options that have vested, they lapse one (1) month after cessation of employment. These terms can be extended at the Board’s discretion. For personal use only
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Remuneration report (Audited) (Continued) CAPRICORN METALS LTD ABN 84 121 700 105 Page | 22 Remuneration for Key management personnel of the Group during the year ended 30 June 2025 FY2025 Short term benefits Post- employment benefits Long-term benefits Share-based payments Salary and Fees STI Non-Cash Benefits* Superannuation Accrued annual & long service leave # Options & Rights Termination Payments Total Performance Related $ $ $ $ $ $ $ $ % Non-Executive Directors M Okeby 131,250 - - 15,094 - - - 146,344 - M Ertzen 146,250 - - 16,819 - - - 163,069 - B De Araugo 161,250 - - 18,544 - - - 179,794 - J Irvin 131,250 - - 15,094 - - - 146,344 - Executive Directors M Clark 906,125 284,400 5,109 30,000 70,438 528,361 - 1,824,433 44.55% Other Executives K Massey (i) 393,961 - 3,009 30,000 (120,168) (127,135) - 179,667 - P Criddle 612,500 221,200 5,109 32,771 68,896 358,154 - 1,298,630 44.61% T Hinkley (ii) 225,000 142,200 2,534 15,000 24,771 148,366 - 557,871 52.08% S Clark (iii) 225,000 142,200 2,534 15,475 25,298 279,682 690,189 61.13% W Nguyen 347,500 120,080 5,109 30,628 10,418 286,573 - 800,308 50.81% 3,280,086 910,080 23,404 219,425 79,653 1,474,001 - 5,986,649 39.82% * Non-monetary benefits are presented at actual cost plus any fringe benefits tax paid or payable by the Company. # Long term benefits for accrued annual and long service leave are the movements in the provision, net of any leave taken. (i) Mr Massey retired effective 31 January 2025, his remaining rights were forfeited at the time. (ii) Mr Hinkley was appointed Chief Operating Officer effective 1 January 2025. (iii) Mr S Clark was appointed Chief Development Officer effective 1 January 2025. For personal use only
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Remuneration report (Audited) (Continued) CAPRICORN METALS LTD ABN 84 121 700 105 Page | 23 Remuneration for Key management personnel of the Group during the year ended 30 June 20 24 FY2024 Short term benefits Post- employment benefits Long-term benefits Share-based payments Termination Payments Salary and Fees Performance Related Salary and Fees STI Non-Cash Benefits* Superannuation Accrued annual & long service leave # Options & Rights $ $ $ $ $ $ $ $ % Non-Executive Directors M Okeby 131,167 - - 14,428 - - - 145,595 - M Ertzen 129,417 - - 14,236 - - - 143,653 - B De Araugo 138,833 - - 15,272 - - - 154,105 - J Irvin (ii) 86,462 - - 9,511 - - - 95,973 - Executive Directors M Clark (i) 971,500 144,000 5,112 27,500 66,980 422,863 - 1,637,955 34.61% Other Executives K Massey (i) 638,500 96,000 5,112 27,500 28,549 168,775 - 964,436 27.45% P Criddle (iii) 66,988 - 587 7,369 6,093 32,422 - 113,459 28.58% W Nguyen (iv) 10,904 - 182 1,145 1,078 6,588 - 19,897 33.11% 2,173,771 240,000 10,993 116,961 102,700 630,648 - 3,275,073 26.58% * Non-monetary benefits are presented at actual cost plus any fringe benefits tax paid or payable by the Company. # Long term benefits for accrued annual and long service leave are the movements in the provision, net of any leave taken. (i) Mr Clark and Mr Massey elected to receive a portion of their superannuation entitlements above the statutorily required maximum amount as salary. (ii) Ms Irvin commenced on 12 October 2023. (iii) Mr Criddle commenced on 20 May 2024. Share-based payment expenses relate to unissued performance rights pending approval. (iv) Mr Nguyen commenced on 18 June 2024. Share-based payment expenses relate to unissued performance rights pending approval. For personal use only
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Remuneration report (Audited) (Continued) CAPRICORN METALS LTD ABN 84 121 700 105 Page | 24 Movements in share holdings The movement during the reporting period in the number of ordinary shares in the Company held, directly, indirectly or beneficially, by KMP, including their related parties, is as follows: Held as at 1 July 2024 Issued on exercise of options/rights Net change other Held as at 30 June 2025 Non-Executive Directors M Okeby 4,615,385 - - 4,615,385 M Ertzen 1,600,000 - - 1,600,000 B De Araugo 74,550 - - 74,550 J Irvin - - - - Executive Directors M Clark 17,292,000 80,707 - 17,372,707 Other Executives K Massey (i) 2,153,847 101,684 - N/A P Criddle - - - - T Hinkley (ii) - - 1,553,000 1,553,000 S Clark (iii) - - 20,000 20,000 W Nguyen 30,000 - - 30,000 25,765,782 182,391 1,573,000 25,265,642 (i) Mr Kim Massey retired effective 31 January 2025. (ii) Mr Tony Hinkley was appointment Chief Operating Officer effective 1 January 2025. He held 1,553,000 shares at this date. (iii) Mr Shane Clark was appointed Chief Development Officer effective 1 January 2025. He held 20,000 shares at this date. Related Party Transactions with Key Management Personnel Loans to Key Management Personnel and their related parties There were no loans made to any Director, KMP and/or their related parties during the current or prior years. Other transactions with Key Management Personnel No Director has entered into contracts with the Group since the end of the previous financial year and there were no material contracts involving Directors’ interests existing at year end. Transactions between related parties are on usual commercial terms and on conditions no more favourable than those available to other parties unless otherwise state d. Other than the ordinary accrual of personnel expenses at balance date and transactions disclosed above, there are no other amounts receivable from and payable to KMP and their related parties. Company Performance Capricorn aims to align our executive remuneration to our strategic and business objectives and the creation of shareholder wealth. The table below shows measures of the G roup’s financial performance over the last five years as required by the Corporations Act 2001. However, these are not nece ssarily consistent with the measures used in determining the variable amounts of remuneration to be awarded to KMPs, as discussed above. As a consequence, there may not always be a direct correlation between the statutory key performance measures and the variable remuneration awarded. 2021 2022 2023 2024 2025 $’000 $’000 $’000 $’000 $’000 Revenue 110 287,043 320,840 359,834 505,892 Net profit/(loss) after tax (4,765) 89,483 4,399 87,138 150,277 Share price at year-end 1.90 3.13 4.03 4.78 9.55 Dividends paid - - - - - Basic earnings/(loss) per share (1.39) 24.27 1.18 23.13 37.08 Net assets 130,460 247,535 256,537 309,265 781,209 For personal use only
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Remuneration report (Audited) (Continued) CAPRICORN METALS LTD ABN 84 121 700 105 Page | 25 The Board does not consider earnings during the current and previous four financial years when determining, and in relation to, the nature and amount of remuneration of KMP. - END OF AUDITED REMUNERATION REPORT - Signed in accordance with a resolution of the Board of Directors. Mr Mark Clark Executive Chairman Perth, Western Australia 28 August 2025 For personal use only
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KPMG, an Australian partnership and a member firm of the KPMG global organisation of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved. The KPMG name and logo are trademarks used under license by the independent member firms of the KPMG global organisation. Liability limited by a scheme approved under Professional Standards Legislation. Lead Auditor’s Independence Declaration under Section 307C of the Corporations Act 2001 To the Directors of Capricorn Metals Ltd I declare that, to the best of my knowledge and belief, in relation to the audit of Capricorn Metals Ltd for the financial year ended 30 June 2025 there have been: i. no contraventions of the auditor independence requirements as set out in the Corporations Act 2001 in relation to the audit; and ii. no contraventions of any applicable code of professional conduct in relation to the audit. KPMG R Gambitta Partner Perth 28 August 2025 For personal use only
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Consolidated statement of profit or loss and other comprehensive income For the year ended 30 June 2025 CAPRICORN METALS LTD ABN 84 121 700 105 Page | 27 Note 2025 $’000 2024 $’000 Revenue 2 505,892 359,727 Cost of goods sold 3 (234,237) (202,820) Gross profit 271,655 156,907 Other income 2 2 26 Option premium income 2 90 123 Interest income 2 11,632 5,783 Rental Income 2 91 107 11,815 6,039 Personnel costs 3 (8,830) (7,570) Share-based payment expense 29 (6,646) (4,966) Depreciation 3 (492) (513) Amortisation 3 (1,294) (1,496) Administrative expense (3,482) (2,797) Exploration and evaluation expenditure (64) (91) Impairment of exploration and evaluation expenditure (3,510) - Finance costs 4 (41,315) (19,826) Profit before income tax expense 217,837 125,687 Income tax expense 6 (67,560) (38,549) Profit attributable to members of the parent entity 150,277 87,138 Other comprehensive income: Items that may be re-classified to profit or loss: Exchange differences on translation of foreign operations 5 13 Movement in hedge reserve (net of tax) (28,623) (39,264) Other comprehensive gain/(loss) for the year, net of tax (28,618) (39,251) Total comprehensive income for the year attributable to members of the parent entity 121,659 47,887 Earnings per share: Basic profit per share (cents per share) 5 37.08 23.13 Diluted profit per share (cents per share) 5 36.94 23.02 The accompanying notes form part of these financial statements For personal use only
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Consolidated statement of financial position For the year ended 30 June 2025 CAPRICORN METALS LTD ABN 84 121 700 105 Page | 28 Note 2025 $’000 2024 $’000 Current assets Cash and cash equivalents 7 355,748 119,917 Receivables 8 6,209 3,255 Other assets 1,511 1,174 Inventories 9 55,423 16,073 Other financial assets 10 5,095 4,865 Assets classified as held for sale 11 2,500 2,500 Total current assets 426,486 147,784 Non-current assets Inventories 9 101,353 77,909 Other financial assets 10 - 1,294 Plant and equipment 12 149,870 149,951 Right of use assets 13 41,313 39,883 Deferred exploration and evaluation costs 14 185,041 137,028 Mine properties under development 15 54,061 18,819 Deferred waste asset 16 4,200 - Mine properties 16 77,363 50,891 Total non-current assets 613,201 475,775 Total assets 1,039,687 623,559 Current liabilities Trade and other payables 18 70,339 50,293 Income tax payable 3,125 - Lease liabilities 19 10,143 9,633 Borrowings 20 - 50,658 Provisions 21 2,333 2,031 Total current liabilities 85,940 112,615 Non-current liabilities Lease liabilities 19 21,660 23,819 Borrowings 20 - - Provisions 21 55,309 32,762 Other financial liabilities 22 - 97,282 Deferred tax liabilities 23 95,569 47,816 Total non-current liabilities 172,538 201,679 Total liabilities 258,478 314,294 Net assets 781,209 309,265 Equity Issued capital 24 546,936 203,297 Reserves 25 (63,026) (35,786) Retained earnings 26 297,299 141,754 Total equity 781,209 309,265 The accompanying notes form part of these financial statements For personal use only
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Consolidated statement of changes in equity For the year ended 30 June 2025 CAPRICORN METALS LTD ABN 84 121 700 105 Page | 29 Issued capital Retained earnings Foreign currency translation reserve Hedge reserve Share-based payment reserve Total Note $’000 $’000 $’000 $’000 $’000 $’000 Balance as at 1 July 2023 203,422 49,981 (1,055) - 4,189 256,537 Profit for the year - 87,138 - - - 87,138 Other comprehensive income - - 13 (39,264) - (39,251) Total comprehensive income - 87,138 13 (39,264) - 47,887 Issue of shares 24 100 - - - - 100 Cost of capital raised 24 (225) - - - - (225) Share based payments 29 - - - - 4,966 4,966 Transfer 25 - 4,635 - - (4,635) - Balance as at 30 June 2024 203,297 141,754 (1,042) (39,264) 4,520 309,265 Balance as at 1 July 2024 203,297 141,754 (1,042) (39,264) 4,520 309,265 Profit for the year - 150,277 - - - 150,277 Other comprehensive income - - 5 (28,623) - (28,618) Total comprehensive income - 150,277 5 (28,623) - 121,659 Issue of shares 24 351,527 - - - - 351,527 Cost of capital raised 24 (7,888) - - - - (7,888) Share based payments 29 - - - - 6,646 6,646 Transfer 25 - 5,268 - - (5,268) - Balance as at 30 June 2025 546,936 297,299 (1,037) (67,887) 5,898 781,209 The accompanying notes form part of these financial statements For personal use only
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Consolidated statement of cash flows For the year ended 30 June 2025 CAPRICORN METALS LTD ABN 84 121 700 105 Page | 30 Note 2025 $’000 2024 $’000 Cash flows from operating activities Receipts from gold sales 528,209 359,727 Payments to suppliers and employees (271,514) (200,835) Interest received 10,910 5,669 Interest paid (6,178) (6,633) Other income 91 256 Income tax paid (2,204) - Net cash from operating activities 7 259,314 158,184 Cash flows from investing activities Payments for property, plant and equipment (14,284) (16,872) Payments for capitalised exploration expenditure (53,317) (31,982) Payments for mine properties under development (29,848) (16,786) Payment for acquisition of assets (306) - Payments for investments (65) - Net cash used in investing activities (97,820) (65,640) Cash flows from financing activities Proceeds received from the issue of shares 200,000 - Transaction costs from the issue of shares (8,434) - Option Premium income 90 - Repayment of borrowings (50,000) - Payment of lease liabilities (10,601) (9,515) Payments for gold put options (7,775) (5,235) Payments for gold call option closure (48,943) (64,348) Net cash flows used in financing activities 74,337 (79,098) Net increase in cash held 235,831 13,446 Cash and cash equivalent at the beginning of the year 119,917 106,471 Effect of exchange rates on cash holdings in foreign currencies - - Cash and cash equivalents at the end of the year 7 355,748 119,917 The accompanying notes form part of these financial statements For personal use only
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Notes to the consolidated financial statements For the year ended 30 June 2025 CAPRICORN METALS LTD ABN 84 121 700 105 Page | 31 Page Basis of preparation 32 Performance for the year 1. Segment information 33 2. Revenue & other income 34 3. Expenses 35 4. Finance costs 36 5. Earnings per share 37 6. Income tax 37 7. Cash and cash equivalents 38 Assets 8. Receivables 39 9. Inventories 39 10. Other financial assets 40 11. Assets held for sale 42 12. Plant and equipment 42 13. Right of use assets 43 14. Deferred exploration and evaluation costs 44 15. Mine properties under development 45 16. Mine properties 45 17. Impairment of non-financial assets 46 Liabilities 18. Trade and other payables 46 19. Lease liabilities 47 20. Borrowings 48 21. Provisions 48 22. Other financial liabilities 50 23. Deferred tax liabilities 52 Equity 24. Issued capital 53 25. Reserves 54 26. Retained earnings 55 Risk 27. Financial risk management 55 28. Capital management 58 Other Disclosures 29. Share-based payments 59 30. Related parties 63 31. 32. Parent entity disclosures Deed of cross guarantee 64 65 33. Commitments 65 34. Contingencies 65 35. Auditors’ remuneration 65 36. Subsequent events 65 37. New accounting standards and interpretations issued but not yet effective 66 For personal use only
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Notes to the consolidated financial statements (Continued) For the year ended 30 June 2025 CAPRICORN METALS LTD ABN 84 121 700 105 Page | 32 BASIS OF PREPARATION Capricorn Metals Ltd is a for profit company limited by shares, incorporated and domiciled in Australia, whose shares are publicly traded on the Australian Securities Exchange. The Company’s registered office and principal place of business is: Level 3, 40 Kings Park Road WEST PERTH WA 6005 The nature of the operations and principal activities of the Company and its subsidiaries are described in the Directors Report. The consolidated financial statements were authorised for issue by the Board of Directors on 28 August 2025. The consolidated financial statements are general purpose financial statements which : have been prepared in accordance with Australian Accounting S tandards adopted by the Australian Accounting Standards Board (“AASB”) and the Corporations Act 2001. The consolidated financial statements comply with International Financial Reporting Standards adopted by the International Standards Board ; have been prep ared on a historical cost basis except for assets and liabilities and share based payments which are required to be measured at fair value; are presented in Australian dollars with all values rounded to the nearest thousand ($’000) unless otherwise stated in accordance with ASIC Instrument 2016/191; adopts all new, revised and amended Accounting Standards and Interpretations issued by the AASB that are mandatory for the current reporting period (see details below); and Principles of consolidation The consol idated financial statements comprise the financial statements of the Group. A list of controlled entities (subsidiaries) at year end is contained in Note 30. The consolidated financial statements incorporate the financial statements of the Parent and Entities controlled by the Parent (its subsidiaries). The parent controls an entity when it is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity . The financial statements of the subsidiaries are prepared for the same reporting period as the parent entity, using consistent accounting policies. In preparing the consolidated financial statements, all intercompany balances and transactions, income and expenses and profit and losses resulting from intra-group transactions have been eliminated in full. Subsidiaries are fully consolidated from the date on which control is transferred to the Group and cease to be consolidated from the date on which control is transferred out of the Group. Functional and presentation currency The functional currency of each of the Group’s entities is measured using the currency of the primary economic environment in which that entity operates. The consolidated financial statements are presented in Australian Dollars which is the parent entity’s functional and presentation currency. Foreign currency transactions are translated into functional currency using the exchange rates prevailing at the date of the transaction. Foreig n currency monetary items are translated at the year -end exchange rate. Non -monetary items measured at historical cost continue to be carried at the exchange rate at the date of the transaction. Exchange differences arising on the translation of monetary items are recognised in the statement of profit or loss and other comprehensive income. Exchange differences arising on the translation of non-monetary items are recognised directly in equity to the extent that the gain or loss is directly recognised in equity; otherwise the exchange difference is recognised in the statement of profit or loss and other comprehensive income. For personal use only
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Notes to the consolidated financial statements (Continued) For the year ended 30 June 2025 CAPRICORN METALS LTD ABN 84 121 700 105 Page | 33 Key estimate and judgements In the process of applying the Group’s accounting policies, management has made a number of judgements and applied estimates of future events. Judgements and estimates which are material to the financial report are found in the following notes. Note 3 Expenses – Depreciation and amortisation Page 35 Note 9 Inventories Page 39 Note 14 Deferred exploration and evaluation costs Page 44 Note 17 Impairment Page 46 Note 21 Provisions Page 48 Note 22 Valuation of derivatives Page 50 Note 29 Share-based payments Page 59 New standards and interpretations adopted The Group has not elected to early adopt any new or amended standards or interpretations that are issued but not yet effective. The Group has not adopted any new standard and amendments or interpretation to standards from 1 July 2024 which had a material effect on the financial position or performance of the Group. New standards and interpretations issued but not yet effective Refer to Note 37 Notes to the financial statements The notes include information which is required to understand the financial statements and is material to the operations and the financial position and performance of the Group. The notes are organised into the following sections: Performance for the year Assets Liabilities Equity Financial instruments and risk management Other disclosures PERFORMANCE FOR THE YEAR This section focuses on the results and performance of the Group, covering profitability, return to shareholders via earnings per share combined with cash generation. 1. SEGMENT INFORMATION Operating segments are reported in a manner that is consistent with the internal reporting provided to the Board and the executive management team (the chief operating decision makers). The Group has two reportable segments which comprise the Karlawinda Gold Project and the Mt Gibson Gold Project . Unallocated items mainly comprise of corporate administrative costs. For personal use only
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Notes to the consolidated financial statements (Continued) For the year ended 30 June 2025 CAPRICORN METALS LTD ABN 84 121 700 105 Page | 34 Karlawinda Mt Gibson Unallocated Total 30 Jun 2025 30 Jun 2024 30 Jun 2025 30 Jun 2024 30 Jun 2025 30 Jun 2024 30 Jun 2025 30 Jun 2024 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 Revenue Revenue 528,209 359,727 - - - - 528,209 359,727 Hedge Accounting Revenue Adjustments (22,317) - - - - - (22,317) - Other income - - - - 11,815 6,039 11,815 6,039 505,892 359,727 - - 11,815 6,039 517,707 365,766 Result Profit/(loss) before income tax 232,213 141,103 (224) (168) (14,152) (15,248) 217,837 125,687 Finance costs (40,642) (19,525) - 16 (673) (301) (41,315) (19,826) Impairment (3,505) - (5) - - - (3,510) - Depreciation (20,453) (22,434) (304) (165) (486) (508) (21,243) (23,107) Amortisation (5,102) (5,790) - - - - (5,102) (5,790) Assets/Liabilities Segment assets 631,214 474,675 214,521 137,317 193,952 11,567 1,039,687 623,559 Segment liabilities (128,770) (250,481) (26,427) (12,652) (103,281) (51,161) (258,478) (314,294) 2. REVENUE AND OTHER INCOME Accounting policies Gold Sales The Group recognises revenue from gold sales when it satisfies the performance obligation of transferring control of gold inventory to the bank. The Group has determined that this generally occurs when the sales contract has been entered into and the bank has physical possession of the gold, as this is the point at which the bank obtains control of the asset. The transaction price is determined based on the agreed price and the number of ounces delivered. Payment is due upon delivery into the sales contract. Interest Interest revenue is recognised on a proportional basis taking into account the interest rates applicable to the financial assets. Rental Income Rental income is recognised on a straight-line basis over the period of the lease term so as to refl ect a constant periodic return on the property. Other Revenue Other revenue is recognised when it is received or when the right to receive payment is established. All revenue is stated net of the amount of goods and services tax (“GST”). Government Grants Government grants are recognised when there is reasonable assurance that conditions attached to the grant will be complied with and that the grant will be received. For personal use only
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Notes to the consolidated financial statements (Continued) For the year ended 30 June 2025 CAPRICORN METALS LTD ABN 84 121 700 105 Page | 35 Revenue and other income 2025 $’000 2024 $’000 Revenue Gold sales (i) 505,892 359,727 Interest income 11,632 5,783 Option premium income 90 123 Rental income 91 107 Other Income 2 26 517,707 365,766 (i) Includes a non-cash deduction of $22.3m from hedge accounting revenue adjustments referenced in Note 1. These adjustments reflect the fair value movement at the time of early settlement for 12,000 ounces of forward contracts with an original designation date of 30 September 2024 12,000 ounces of forward contracts with an original designation date of 31 December 2024, 10,000 ounces of forward contracts with an original designation date of 31 March 2025, and 10,000 ounces of forward contracts with an original designation date of 30 June 2025. This follows the settlement of 52,000 ounces of gold forward contracts in June 2024, 55,000 ounces of gold forward contracts in March 2025, and the adoption of hedge accounting in July 2023. Gold forward contracts In March 2025, the Company announced that it had closed its remaining 55,000-ounce gold forward contracts. The closure of the gold forwards meant the Company does not have any further gold forward delivery obligations. 3. EXPENSES Accounting policies Costs of production Cash costs of production is a component of costs of goods sold and includes direct costs incurred for mining, milling, laboratory and mine site administration, net of costs capitalised to pre -strip. This category includes movements in the cost of inventory and any net realisable value write downs as well as the direct personnel costs associated with the production of, and sale of the gold. Defined contribution superannuation benefits All employees of the Group, located in Australia, receive defined contribu tion superannuation entitlements, for which the Group pays the fixed superannuation guarantee contribution (currently 11 .5% of the employee’s average ordinary salary) to the employee’s superannuation fund of choice. All contributions in respect of employees’ defined contribution entitlements are recognised as an expense when they become payable. The Group’s obligation with respect to employees’ defined contribution entitlements is limited to its obligation for any unpaid superannuation guarantee contributions at the end of the reporting period. All obligations for unpaid superannuation guarantee contributions are measured at the (undiscounted) amounts expected to be paid when the obligation is settled and are presented as current liabilities in the Group’s statement of financial position. Depreciation Depreciation of mine specific plant, equipment, buildings and infrastructure with useful lives the same or greater than the expected life of mine are charged to the statement of profit and loss and other comprehensive income on a unit -of- production basis over the life of the mine using tonnes of ore milled. Depreciation of other assets with useful life shorter than the life of mine are charged to the statement of comprehensive income over the assets useful life using the straight line method as follows: Furniture and equipment 2 – 5 years Plant and equipment 2 – 10 years Mobile plant and equipment 2 – 5 years Buildings and infrastructure 2 – 10 years The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at the end of the reporting period. An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is greater than its estimated recoverable amount. Gains and losses on disposals are determined by comparing proceeds with the carrying amount. These gains and losses are included in the statement of profit or loss and other comprehensive income. For personal use only
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Notes to the consolidated financial statements (Continued) For the year ended 30 June 2025 CAPRICORN METALS LTD ABN 84 121 700 105 Page | 36 Amortisation Mine properties are amortised on a unit-of-production bases over the run of mine ore included in the life of mine plan. Expenses 2025 $’000 2024 $’000 Costs of goods sold Costs of production (181,437) (156,952) Royalties (28,551) (19,154) Depreciation of mine plant and equipment (20,441) (22,420) Amortisation of mine properties (refer Note 16) (3,808) (4,294) (234,237) (202,820) Personnel costs Salaries and wages (28,129) (23,620) Defined contribution superannuation (2,932) (2,291) Employee bonuses (1,042) (1,090) Other employee benefits expense (2,497) (1,896) Total Personnel costs (34,600) (28,897) Less: Amounts capitalised 7,475 5,189 Less: Amounts included in cost of goods sold 18,295 16,138 (8,830) (7,570) Depreciation Plant and equipment depreciation (refer to Note 12) (14,205) (15,920) Right of use asset depreciation (refer to Note 13) (7,008) (7,187) Total Depreciation (21,213) (23,107) Less: Amounts capitalised 309 174 Less: Amounts included in cost of goods sold 20,412 22,420 (492) (513) Amortisation Mine properties amortisation (refer Note 16) (3,808) (4,294) Financial asset amortisation (refer Note 10) (1,294) (1,496) Total Amortisation (5,102) (5,790) Less: Amounts included in cost of goods sold 3,808 4,294 (1,294) (1,496) Key estimates and judgements – Unit-of-production method of depreciation and amortisation The group uses the unit-of-production basis when depreciating/amortising life -of-mine specific assets which results in a depreciation/amortisation charge proportionate to the depletion of the anticipated remaining life -of-mine production. Each item’s economic life, which is assessed annually, has due regard for both its physical life limita tions and to present assessments of the available resource of the mine property at which it is located. 4. FINANCE COSTS Accounting policies Borrowing costs Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial period of time to get ready for its intended use or sale are capitalised as part of the cost of the asset. All other borrowing costs have been expensed in the period in which they occur. Borrowing costs consist of interest and other costs that an entity incurs in connection with the borrowing of funds. For personal use only
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Notes to the consolidated financial statements (Continued) For the year ended 30 June 2025 CAPRICORN METALS LTD ABN 84 121 700 105 Page | 37 Finance costs 2025 $’000 2024 $’000 Interest on borrowings (3,793) (3,893) Interest on lease liabilities (refer to Note 19) (2,288) (2,809) Unwinding of discount on provisions (refer Note 21) (816) (802) Fair value loss on equity investments (refer Note 10) (621) (214) Fair value loss on gold put options (refer Note 10) (6,925) (3,673) Fair value loss on gold call options (refer Note 22) (24,745) (8,435) Fair value loss on gold forward contracts (refer Note 22) (2,127) - (41,315) (19,826) 5. EARNINGS PER SHARE Accounting policy Basic earnings per share (“BEPS”) is calculated by dividing the income or loss attributable to the members of the Company for reporting period, after exclusion of any costs of servicing equity other than ordinary shares, by the weighted average number of ordinary shares outstanding during the period adjusted for any bonus elements. Diluted earnings per share (“DEPS”) adjusts the figures used in the determination of BEPS to take into account the after - tax effect of interest recognised associated with the dilutive potential ordinary shares and the weighted average number of shares assumed to have been issued for no consideration in relation to dilutive potential ordinary shares adjusted for any bonus elements. Earnings per share 2025 Cents 2024 Cents Basic earnings per share (BEPS) 37.08 23.13 Diluted earnings per share (DEPS) 36.94 23.02 2025 $’000 2024 $’000 Earnings used in calculating BEPS and DEPS Profit attributable to members of the parent entity 150,277 87,138 2025 Number 2024 Number Weighted average number of ordinary shares Weighted average number of ordinary shares used to calculate BEPS 405,235,966 376,764,998 Adjustments for calculation of DEPS: Performance rights 1,600,690 1,691,808 Weighted average number of ordinary shares used to calculate DEPS 406,836,656 378,456,806 There have been no transactions involving ordinary shares between the reporting date and the date of completion of these financial statements which would impact the above calculations. 6. INCOME TAX Accounting policy The charge for current income tax expense is based on the profit for the year adjusted for any non -assessable or disallowed items. It is calculated using tax rates that have been enacted or are substantively enacted by the reporting date. For personal use only
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Notes to the consolidated financial statements (Continued) For the year ended 30 June 2025 CAPRICORN METALS LTD ABN 84 121 700 105 Page | 38 Amounts recognised in profit and loss 2025 $’000 2024 $’000 (a) Tax expense Current tax 5,157 - Deferred tax 62,403 38,549 Total tax expense for the period 67,560 38,549 (b) Numerical reconciliation between tax expense and pre-tax net profit or (loss) Net profit before tax 217,838 125,687 Corporate tax rate applicable 30% 30% Income tax expense on above at applicable corporate rate 65,351 37,706 Increase/(decrease) income tax due to tax effect of: Non-deductible expenses 2,718 1,546 Other assessable income 1 - Movement in unrecognised temporary differences 188 (488) Deductible equity raising costs (698) (215) Income tax expense attributable to entity 67,560 38,549 (c) Amounts charged or (credited) directly to equity Relating to equity raising costs (2,383) 194 Relating to hedge liabilities (12,267) (16,827) (14,650) (16,633) 7. CASH AND CASH EQUIVALENTS Accounting policy Cash and cash equivalents includes cash on hand, deposits held at call with banks, other short -term highly liquid investments with original maturities of three months or less. Cash and cash equivalents 2025 $’000 2024 $’000 Cash at bank 355,748 119,917 Reconciliation of profit after tax to net cash flow from operations: Profit after income tax 150,277 87,138 Adjustments for: Depreciation 20,933 22,933 Amortisation 3,808 5,790 Unwinding of discount on provisions 816 802 Loss on derivatives 33,796 12,108 Impairment of Exploration & Evaluation Assets (3,510) - Fair value loss on financial assets 7,775 214 Share based payment 6,645 5,077 Unrealised foreign exchange gain - 3 Loss on hedging revenue 22,317 - Changes in assets and liabilities Increase in receivables (2,605) (719) Increase in other current assets 406 (737) Increase in inventories (62,795) (29,817) Increase in payables and accruals 15,310 16,008 Increase in provisions 613 835 Increase in deferred tax liabilities 62,403 38,549 Increase in current tax payable 3,125 - Cashflow from operating activities 259,314 158,184 For personal use only
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Notes to the consolidated financial statements (Continued) For the year ended 30 June 2025 CAPRICORN METALS LTD ABN 84 121 700 105 Page | 39 Non-cash investing and financing activities There were five partially non-cash investing and financing activities during the year ended 30 June 2025 (2024: Nil). These consisted of $100k cash payment with $1.4m share issue for the Sylvania Project in December 2024, $100k cash payment with $1.4m share issue for the Deadman F lat Project in January 2025, $100k cash payment with $3.4m share issue for the Mummaloo Project in January 2025, $100k cash payment with $1.4m share issue for the Kings Find Project in March 2025, and $100k cash payment with $1.4m share issue for the Ningh an Project in April 2025. There was one total non -cash investing activity during the year with $140m share issue for the settlement of the remaining 55,000-ounce gold forward contracts. ASSETS This section shows the assets used to generate the Group’s trading performance. 8. RECEIVABLES Accounting policy Receivables include amounts due from customers for services performed in the ordinary course of business. Receivables expected to be collected within 12 months of the end of the reporting period are classified as current assets. Other receivables are initially recognised at fair value and subsequently measured at amortised cost using the effective interest method, less any provision for impairment. The Group applies the simplified approach to measuring expected credit losses, which uses a lifetime expected loss allowance. To measure the expected credit losses, trade receivables have been grouped based on days overdue. Receivables are recognised at amortised cost, less any allowance for expected credit losses. 9. INVENTORIES Accounting policy Gold bullion, gold in circuit and ore stockpiles are physically measured or estimated and valued at the lower of cost and net realisable value. Cost is determined by the weighted average method and comprises direct purchase costs and an appropriate portion of fixed and variable overhead costs, including depreciation and amortisation, incurred in converting ore into gold bullion. Net realisable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and costs of selling the final product, including royalties. Consumable stores are valued at the lower of cost and net realisable value. The cost of consumable stores is measured on a first-in first-out basis at weighted average cost. Inventories expected to be sold (or consumed in the case of stores) within 12 months after the balance sheet date are classified as current assets, all other inventories are classified as non-current. The following balances are carried at cost. Inventories 2025 $’000 2024 $’000 Current Ore stockpiles 47,461 7,455 Gold in circuit 6,179 4,725 Bullion on hand 323 2,571 Consumable stores 1,460 1,322 55,423 16,073 Receivables 2025 $’000 2024 $’000 GST receivable 4,367 2,237 Security deposits 375 311 Fuel tax credit receivable 177 142 Interest receivable 1,209 472 Other receivables 81 93 6,209 3,255 For personal use only
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Notes to the consolidated financial statements (Continued) For the year ended 30 June 2025 CAPRICORN METALS LTD ABN 84 121 700 105 Page | 40 Non-Current Ore stockpiles 101,353 77,909 Key estimates and judgements – Inventories Net realisable value tests are performed at each reporting date and represent the estimated forecast sales price of the gold contained in inventories with reference to externally published forecast prices, when it is expected to be realised, less estimated costs to complete production and bring the product to sale in accordance with the approved mine plan which includes the blending of ores. Stockpiles are measured by estimating the number of tonnes added and removed from the stockpile, the number of contained gold ounces based on assay data, and the estimated recovery percentage. Stockpile tonnages are verified by periodic surveys. 10. OTHER FINANCIAL ASSETS Accounting policy The Group’s other financial assets include equity investments, gold call options and gold put options. Recognition and initial measurement All financial assets are initially recognised when the Group becomes party to the contractual provisions of the instrument except trade receivables which are initially recognised when they are originated. A financial asset (excluding trade receivables is initially measured at fair value plus or minus transaction costs that are directly attributable to its acquisition or issue, except where the instruments are classified ‘at fair value through profit or loss’ (“FVTPL”), in which case transaction costs are expensed to profit or loss immediately. Classification and subsequent measurement On initial recognition, a financial asset is classified as measured at: at amortised cost; ‘fair value in other comprehensive income’ (“FVOCI”) – equity investment; or FVTPL. Financial assets are not reclassified subsequent to their initial recognition unless the Group changes its business model for managing financial assets, in which case all affected financial assets are reclassified on the first day of the first reporting period following the changes. A financial asset is measured at amortised costs if it meets both of the following conditions and is not designated as FVTPL: It is held within a business model whose objective is to hold assets to collect contractual cash flows; and Its contractual terms give rise on specified dates to cash flows that are sol ely payments of principal and interest on the principal amount outstanding On initial recognition of an equity investment that is not being held for trading, the Group may irrevocably elect to present subsequent changes to the investment’s fair value in OCI. This election is made on an investment -by-investment basis. All financial assets not measured at amortised cost or FVOCI are measured at FVTPL. This includes all derivative financial assets. On initial recognition, the Group may irrevocably designate a financial asset that otherwise meets the requirements to be measured at amortised cost or at FVOCI as at FVTPL if doing so eliminates or significantly reduces an accounting mismatch that would otherwise arise. Amortised cost Amortised cost is calculated as: the amount at which the financial asset is measured at initial recognition; less principal repayments; plus or minus the cumulative amortisation of the difference, if any, between the amount initially recognised and the maturity amount calculated using the effective interest method; and less any reduction for impairment. The effective interest method is used to allocate interest income or interest expense over the relevant period and is equivalent to the rate that exactly discounts estimated future cash payments or receipts (including fees, transaction costs and other premiums or discounts) through the expected life (or when this cannot be reliably predicted, the contractual term) of the financial instrument to the net carry amount of the financial asset. For personal use only
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Notes to the consolidated financial statements (Continued) For the year ended 30 June 2025 CAPRICORN METALS LTD ABN 84 121 700 105 Page | 41 Revisions to expected future net cash flows will necessitate an adjustment to the carrying value with a consequential recognition of an income or expense in profit or loss. The Group does not designate any interest in subsidiaries, associates or joint venture entities as being subject to the requirements of accounting standards specifically applicable to financial statements. Fair values The carrying amounts and estimated fair values of all the Group’s financial assets recognised in the financial statements are materially the same. The methods and assumptions used to estimate the fair value of the financial assets are disclosed in the respective notes. Derecognition The Group derecognises a financial asset when: the contractual rights to receive the cash flows from the financial asset expire; or it transfers the rights to receive the contractual cash flows in a transaction in which either: - substantially all of the risks and rewards of ownership of the financial asset are transferred; or - the Group neither transfers nor retains substantially all of the risks and rewards of ownership and it does not retain control of the financial asset. Other financial assets 2025 $’000 2024 $’000 Current Gold put options at FVTPL 4,977 4,126 Equity investments at FVTPL 118 739 5,095 4,865 Non-current Gold call options at FVTPL - 1,294 Gold option assets Gold option assets represent the fair value gold call option contracts entered into on 6 January 2020 and gold put option contracts purchased on 14 June 2024. In June 2025, the Company closed its final remaining gold hedging instrument, a 16,700-ounce call option that was set to mature on 30 June 2025. In conjunction with the closure, Capricorn also purchased 15,000 ounces of gold put options at $5,000 per ounce. The cost of the closure and purchase of put options was $50.0 million, paid out of Capricorn’s cash holdings. Gold option assets 2025 $’000 2024 $’000 As at 1 July 5,420 5,354 Additions 7,776 5,235 Amortisation (refer Note 3) (1,294) (1,496) Fair value adjustments (refer Note 4) (6,925) (3,673) As at 30 June 4,977 5,420 Equity investments Equity investments represent the fair value of shares held by the Company in ASX listed Companies. Equity investments 2025 $’000 2024 $’000 As at 1 July 739 953 Fair value adjustments (refer Note 4) (621) (214) As at 30 June 118 739 Fair value of listed shares and assumptions 2025 2024 Evion Group NL (formerly BlackEarth Minerals NL) Fair value per listed share $0.017 $0.018 For personal use only
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Notes to the consolidated financial statements (Continued) For the year ended 30 June 2025 CAPRICORN METALS LTD ABN 84 121 700 105 Page | 42 Closing quoting bid price per share $0.017 $0.018 Latitude 66 Limited (formerly DiscovEx Resources Limited) Fair value per listed share $0.023 $0.200 Closing quoting bid price per share $0.023 $0.200 11. ASSETS HELD FOR SALE Accounting policy Non-current assets, or disposal groups comprising assets and liabilities, are classified as held-for-sale if it is highly probable that they will be recovered primarily through the sale rather than through continuing use. Such assets, or disposal groups, are generally measured at the lower of their carryi ng amount and fair value less costs to sell. Any impairment loss on a disposal group is allocated first to goodwill, and then to the remaining assets, except deferred tax assets, employee benefits assets or investment property, which continue to be measured in accordance with the Group’s other accounting policies. Impairment losses on initial classification as held -for-sale or held -for-distribution and subsequent gains and losses on remeasurement are recognised in profit or loss. Once classified as held-for-sale, intangible assets and property, plant and equipment are no longer amortised or depreciated, and any equity-accounted investee is no longer equity accounted. The held-for-sale property is subject to review and revalued on the basis of independent v aluations. Any revaluation adjustment to the carrying amount is recognised in other comprehensive income and accumulated in equity under the heading of asset revaluation reserve. Assets held for sale 2025 $’000 2024 $’000 Property asset 2,500 2,500 2,500 2,500 The Group intends to dispose of a freely held property asset located in Antanarirvo, Madagascar within the next 12 months. This property of 19,373m 2 containing a number of buildings, including offices, warehouses and villa accommodation, is a unique asset with limited potential buyers. A valuation was completed by Cabinet D’Expertise Audit Techniques Et Conseils Qualities in June 2023 of 9,019,164,000 Ariary which translates to AUD $3,111,449 as at 30 June 2025 (30 June 2024: AUD $3,047,262). Based on the current valuation, the Directors considered the carrying value appropriate for the full year ended 30 June 2025. The fair value of the freehold land was determined based on the market comparable approach that reflects recent transaction prices for similar properties. 12. PLANT AND EQUIPMENT Accounting policy Each class of property, plant and equipment is carried at cost, less, where applicable, any accumulated depreciation and impairment losses. Property Land and Buildings are measured using a cost model in accordance with paragraph 31 of AASB 116 Property, Plant and Equipment. Any revaluation adjustment to the carrying amount of land and buildings i s recognised in other comprehensive income and accumulated in equity under the heading of asset revaluation reserve. Infrastructure, mobile plant and equipment, plant and equipment and furniture and equipment The value of infrastructure, mobile plant and equipment, plant and equipment and furniture and equipment is measured as the cost of the asset, less accumulated depreciation and impairment. The cost of the asset also includes the cost of assembly and replacing parts that are eligible for capitalisa tion, the cost of major inspections and an initial estimate of the cost of dismantling and removing the item from site at the end of its useful life. Capital work in progress (“CWIP”) The value of capital WIP is measured as the cost of the asset less impairment. The cost of the asset also includes the cost of assembly and replacing parts that are eligible for capitalisation, the cost of major inspections and an initial estimate of the cost of dismantling and removing the item from site at the end of its use ful life. For personal use only
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Notes to the consolidated financial statements (Continued) For the year ended 30 June 2025 CAPRICORN METALS LTD ABN 84 121 700 105 Page | 43 Buildings & Infrastructure Plant & Equipment Mobile Plant & Equipment Furniture & Equipment Capital WIP Total Plant and equipment $’000 $’000 $’000 $’000 $’000 $’000 Net carrying amount at 1 July 2023 41,282 95,858 3,262 7,447 5,453 153,302 Additions 1,475 3,822 2,771 791 5,560 14,419 Transfer to mine properties under development - - - - (1,850) (1,850) Depreciation (3,597) (9,585) (1,525) (1,213) - (15,920) Net carrying amount at 30 June 2024 39,160 90,095 4,508 7,025 9,163 149,951 As at 30 June 2024 Cost 51,307 120,639 8,014 10,677 9,163 199,800 Accumulated depreciation (12,147) (30,544) (3,506) (3,652) - (49,849) Net carrying amount at 30 June 2024 39,160 90,095 4,508 7,025 9,163 149,951 Buildings & Infrastructure Plant & Equipment Mobile Plant & Equipment Furniture & Equipment Capital WIP Total Plant and equipment $’000 $’000 $’000 $’000 $’000 $’000 Net carrying amount at 1 July 2024 39,160 90,095 4,508 7,025 9,163 149,951 Additions 5,905 5,154 742 434 1,889 14,124 Depreciation (3,154) (8,492) (1,629) (930) - (14,205) Net carrying amount at 30 June 2025 41,911 86,757 3,621 6,529 11,052 149,870 As at 30 June 2025 Cost 57,212 125,793 8,756 11,111 11,052 213,924 Accumulated depreciation (15,301) (39,036) (5,135) (4,582) - (64,054) Net carrying amount at 30 June 2025 41,911 86,757 3,621 6,529 11,052 149,870 13. RIGHT-OF-USE ASSETS Accounting policy Right-of-use (“ROU”) assets are measured at cost comprising the following: The amount of the initial measurement of the lease liability; Any lease payments made at or before the commencement date less any lease incentives received; Any initial direct costs; Any restoration costs. The right-of-use asset is subsequently depreciated using the straight-line method over the term of the lease. In addition, the right-of-use asset is periodically reduced by impairment losses, if any, and adjusted for remeasurements of the lease liability. Payments associated with short-term leases that have terms of 12 months or less and leases of low-value assets that have a replacement value of less than $5,000 are recognised on a straight -line basis as an expense in profit or loss. Assets arising from a lease are initially measured on a present value basis. Right of use assets 2025 $’000 2024 $’000 As at 1 July 39,883 45,364 Additions to right-of-use assets 8,438 1,706 Depreciation charge for the year (refer to Note 3) (7,008) (7,187) As at 30 June 41,313 39,883 Payments associated with short -term leases and leases of low value assets for the year were $1, 387,000 (2024: $1,045,000). For personal use only
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Notes to the consolidated financial statements (Continued) For the year ended 30 June 2025 CAPRICORN METALS LTD ABN 84 121 700 105 Page | 44 14. DEFERRED EXPLORATION AND EVALUATION COSTS Accounting policy Exploration and evaluation expenditure incurred is capitalised only when that expenditure is attributable to a defined area of interest for which the Group has the rights to explore, evaluate and develop. Tenement acquisition costs are initially capitalised. Costs are only carried forward to the extent that they are expec ted to be recouped through the successful development of the area, sale of the respective areas of interest or where activities in the area have not yet reached a stage, which permits reasonable assessment of the existence of economically recoverable reser ves. Once the technical feasibility and commercial viability of the extraction of mineral resources in an area of interest are demonstrable, exploration and evaluation assets attributable to that area of interest are first tested for impairment and then re classified to mine properties under development. No amortisation is charged during the exploration and evaluation phase. Exploration and evaluation assets are assessed for impairment if: the period for which the right to explore in the area has expired du ring the period or will expire in the near future, and is not expected to be renewed; substantive expenditure on further exploration and evaluation of mineral resources is neither budgeted nor planned; sufficient data exists to determine technical feasibility and commercial viability; and facts and circumstances suggest that the carrying amount exceeds the recoverable amount. For the purposes of impairment testing, exploration and evaluation assets are allocated to cash -generating units (“CGUs”) to which th e exploration activity relates. The CGU is not larger than the area of interest. Deferred exploration and evaluation costs 2025 $’000 2024 $’000 As at 1 July 137,028 105,723 Expenditure for the period 43,523 35,209 Acquisition of tenements 8,000 305 Impairment (i) (3,510) - Transfer to mine properties - (4,209) As at 30 June 185,041 137,028 (i) An impairment loss of $3,510,000 (2024: nil) has been recognised in relation to tenements that were surrendered, relinquished or expired during the year. For the year ended 30 June 2025, no impairment (2024: nil) was recognised in relation to tenements where the Group has no immediate plans to incur substantiative expenditure on further exploration activity. Key estimates and judgements – Exploration and evaluation expenditure Exploration expenditure Tenement acquisition costs are initially capitalised together with other exploration and evaluation expenditure. Costs are only carried forward to the extent that they are expected to be recouped through the successful development of a defined area of int erest for which the Group has the rights to explore, evaluate and develop, the sale of the respective areas of interest or where activities in the area of interest have not yet reached a stage that permits reasonable assessment of the existence of economically recoverable reserves. A regular review is undertaken of each area of interest to determine the appropriateness of continuing to carry forward costs in relation to that area of interest. Planned exploration expenditure Exploration expenditure commitments represent tenement rentals and expenditure requirements that may be required to be met under the relevant legislation should the Group wish to retain tenure on all current tenements in which the Group has an interest. The terms and conditions under which the Group retains title to its various tenements require it to meet tenement rentals and minimum levels of exploration expenditure as gazetted by the Western Australian government, as well as local government rates and taxes. Exploration commitments at reporting date not recognised as liabilities 2025 $’000 2024 $’000 Within one year 5,791 4,008 5,791 4,008 For personal use only
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Notes to the consolidated financial statements (Continued) For the year ended 30 June 2025 CAPRICORN METALS LTD ABN 84 121 700 105 Page | 45 Annual exploration expenditure after one year will be a similar commitment to that within one year, however this amount is increased if new exploration tenements are added to the Group’s portfolio or reduced, if exploration tenements are removed from the Group’s portfolio. 15. MINE PROPERTIES UNDER DEVELOPMENT Accounting policy Mine properties under development represents the cost s incurred in preparing mines for production and includes plant and equipment under construction and operating costs incurred before commercial production commences. These costs are capitalised to the extent they are expected to be recouped through successful exploitation of the related mining leases. Once production commences, these costs are transferred to property, plant and equipment and mine properties, as relevant, and are depreciated and amortised using the units-of-production method based on the estimated economically recoverable reserves to which they relate or are written off if the mine property is abandoned. Mine properties under development 2025 $’000 2024 $’000 As at 1 July 18,819 - Construction Expenditure 35,242 16,969 Transfers from CWIP - 1,850 As at 30 June 54,061 18,819 Construction expenditure relates to the Mt Gibson Gold Project camp construction and the Karlawinda Expansion Project. 16. MINE PROPERTIES Accounting policy Mine properties represent expenditure in respect of exploration, evaluation, feasibility, pre -production operating costs incurred by the Group prior to the commencement of production and rehabilitation assets. All expenditure is carried forward to the exte nt that it is expected to be recouped from future revenues. If additional expenditure is incurred in respect of a mine property after production has commenced such expenditure is carried forward as part of the cost of the mine property if it is expected to be recouped from future revenues otherwise the expenditure is classified as part of the cost of production and expensed as incurred. Mine properties are amortised on a unit-of production basis over the life of the mine using tonnes of ore milled. Deferred Waste Mine Development Rehabilitation Total Mine properties $’000 $’000 $’000 $’000 Net carrying amount at 1 July 2024 - 36,003 14,888 50,891 Additions 4,200 - - 4,200 Transfer from exploration & evaluation 9,778 9,778 Re-measurement 20,502 20,502 Amortisation (refer Note 3) - (2,697) (1,111) (3,808) Net carrying amount at 30 June 2025 4,200 33,306 44,057 81,563 Deferred Waste Mine Development Rehabilitation Total $’000 $’000 $’000 $’000 As at 30 June 2025 Cost 4,200 45,287 49,750 99,237 Accumulated amortisation - (11,981) (5,693) (17,674) Net carrying amount at 30 June 2025 4,200 33,306 44,057 81,563 For personal use only
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Notes to the consolidated financial statements (Continued) For the year ended 30 June 2025 CAPRICORN METALS LTD ABN 84 121 700 105 Page | 46 17. IMPAIRMENT OF NON-FINANCIAL ASSETS Accounting policy At each reporting date, the Group reviews the carrying values of its tangible and intangible assets to determine whether there is any indication that those assets have been impaired. If such an indication exists, the recoverable amount of the assets, being the higher of the asset’s fair value less costs of disposal and value in use, is compared to the asset’s carrying value. Any excess of the asset’s carrying value over its recoverable amount is expensed to the statement of profit or loss and other comprehensive income. Where it is not possible to estimate the recoverable amount of an individual asset, the Group estimates the recoverable amount of the cash-generating unit to which the asset belongs. Total impairment losses recognised in the statement of comprehensive income for the y ear were as follows: Impairment 2025 $’000 2024 $’000 Exploration and evaluation assets 3,510 - 3,510 - Exploration and evaluation assets An impairment loss of $3,510,000 (2024: nil) was recognised in relation to tenements that were surrendered, relinquished or expired during the year. Key estimates and judgements – Determination of mineral resources and reserves The Group estimates its Mineral Resources and Ore Reserves in accordance with the Australasian Code of Reporting for Mineral Resources and Ore Reserves 2012 (the “JORC Code”). The information on mineral resources and ore reserves was prepared by or under supervision of Competent Persons as defined under the JORC Code. The determination of mineral resources and ore reserves impacts the accounting for asset carrying values. There are numerous uncertainties inherent in estimating mineral resources and ore reserves, and assumptions that are valid at the time of estimation may change significantly when new information becomes available. Changes in the forecast prices of commodities, exchange rates, production costs or recovery rates may change the economic status of Reserves and may ultimately result in Reserves being restated. LIABILITIES This section shows the liabilities incurred as a result of the trading activities of the Group. 18. TRADE AND OTHER PAYABLES Accounting policy Trade and other payables are initially recognised at fair value through profit or loss and subsequently measured at amortised cost and represent liabilities for goods and services provided to the Group prior to the end of the financial year that are unpaid and arise when the Group becomes obliged to make future payments in respect of the purchase of these goods and services. Trade and other payable s are presented as current liabilities unless payment is not due within 12 months. Trade and other payables 2025 $’000 2024 $’000 Trade payables 35,794 31,995 Accrued expenses 24,526 11,850 Other payables 10,019 6,448 70,339 50,293 For personal use only
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Notes to the consolidated financial statements (Continued) For the year ended 30 June 2025 CAPRICORN METALS LTD ABN 84 121 700 105 Page | 47 19. LEASE LIABILITIES Accounting policy The nature of the Group’s leasing activities includes contracts for mining services, drilling, haulage, and power generation contracts. Additionally, office leases and office equipment have also been included. At inception of a contract, the Group assesses whether a contract is, or contains, a lease. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. To assess whethe r a contract conveys the right to control the use of an identified asset, the Group uses the definition of a lease in AASB 16. Leases are recognised as a right-of-use asset and a corresponding liability at the date at which the leased asset is available for use by the Group. Each lease payment is allocated between the liability and finance cost. The finance cost is charged to profit or loss over the lease period so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period. The right -of-use asset is depreciated over the shorter of the asset’s useful life and the lease term on a straight-line basis. Liabilities arising from a lease are initially measured on a present value basis. Lease liabilities include the net present value of the following lease payments: Fixed payments (including in-substance fixed payments), less any lease incentives receivable; Variable lease payments that are based on an index or a rate; Amounts expected to be payable by the lessee under residual value guarantees; The exercise price of a purchase option if the lessee is reasonably certain to exercise that option; Payments of penalties for terminating the lease, if the lease term reflects the lessee exercising that option. The lease payments are discounted using the interest rate implicit in the lease. If that rate cannot be determined, the lessee’s incremental borrowing rate is used, being the rate that the lessee would have to pay to borrow the funds necessary to obtain an asset of similar value in a similar economic environment with similar terms and conditions. The lease liability is measured at amortised cost using the effective interest method. It is remeasured when there is a change in future lease payments arising from a change in an index or rate, if there is a change in the Group’s estimate of the amount expected to be payable under a residual value guarantee, if the Group changes its assessment of whether it will exercise a purchase, extension or termination option or if there is a revised in-substance fixed lease payment. Payments associated with short -term leases that have a term of 12 months or less and leases of low -value assets that have a replacement value of $5,000 or less are recognised on a straight-line basis as an expense in profit or loss. Lease liabilities 2025 $’000 2024 $’000 Current Lease liabilities 10,143 9,633 Non-Current Lease liabilities 21,660 23,819 Interest expense in relation to lease liabilities for the year ended 30 June 2025 was $2,288,000 (2024: $2,809,000) (refer to Note 4). Total cash outflows relating to leases during the year were $12,889,000 (2024: $12,322,000) comprising, principal ($10,601,000) and interest ($2,288,000) payments. The Group’s contracts that contain leases that are structured as variable payments are not included in the measurement of lease liabilities under AASB 16. Variable lease payments for the year ended 30 June 2025 totalled $108,818,000 (2024: $108,805,000 ). Payments associated with short -term leases and leases of low value assets for the year were $1,387,000 (2024: $1,045,000). For personal use only
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Notes to the consolidated financial statements (Continued) For the year ended 30 June 2025 CAPRICORN METALS LTD ABN 84 121 700 105 Page | 48 20. BORROWINGS Accounting policy Interest bearing borrowings are initially measured at fair value, net of directly attributable transaction costs. After initial recognition, interest-bearing borrowings are subsequently measured at amortised cost using the effective interest rate method. Borrowings which are due to be settled within 12 months after the balance sheet date are included in current borrowings in the balance sheet even though the original term was for a period longer than 12 months or an agreement to refinance, or to reschedule payments, on a long -term basis is complete d after the balance sheet date and before the financial statements are authorised for issue. Other borrowings to be settled more than 12 months after the balance sheet date are included in non-current borrowings in the balance sheet. Borrowings 2025 $’000 2024 $’000 Current Bank loans - 50,658 Borrowings comprise of a mounts drawn down on an original Project Loan Facility of $100 million with Macquarie Bank Limited (“Macquarie”). The facility accrues interest at the bank bill rate plus 3% and was repayable in various instalments over a term ending 30 June 2025 however, voluntary repayments can be made in accordance with the facility agreement. In July 2022 the Company arranged with Macquarie Bank to convert the project loan facility to a general -purpose corporate loan facility with a single bullet repayment in June 2025. Capricorn held the option to elect to repay (part or full) the loan at any time without penalty. In June 2025, the Company repaid its residual $50 million corporate debt to Macquarie Bank Limited prior to its 30 June 2025 maturity. There is no remaining debt held by the Company. 21. PROVISIONS Accounting policy Provisions are determined by discounting the expected future cash flows at a pre -tax rate that reflects current market assessments of time value of money and the risks specific to the liability. A provision for site rehabilitation is recognised in respect of the estimated cost of rehabilitation and restoration of the areas disturbed by mining activities up to the reporting date, but not yet rehabilitated. Rehabilitation provision A provision for rehabilitation is recognised in respect of the estimated costs of rehabilitation of the areas that remain disturbed by mining activities up to the reporting date. When the liability is initially recorded, the estimated cost is capitalised by increasing the carrying amount of the related mining assets. At each reporting date the rehabilitation is remeasured to reflect any changes in discount and inf lation rates and timing of amounts to be incurred. Additional disturbances or changes in rehabilitation costs will be recognised as addition s or changes to the corresponding asset and rehabilitation provision, prospectively from the date of change. Where t he carrying value of the related asset has been reduced to nil either through amortisation or impairment, changes to estimated costs are recognised immediately in the statement of profit or loss and other comprehensive income. Short-term employee benefits Provision is made for the Group’s obligation for short-term employee benefits. Short-term employee benefits are benefits (other than termination benefits) that are expected to be settled wholly before 12 months after the end of the annual reporting period in which the employees render the related service, including wages, salaries and annual leave entitlements. Short-term employee benefits are measured at the (undiscounted) amounts expected to be paid when the obligation is settled. The Group’s obligations for short-term employee benefits such as wages, salaries and annual leave are recognised as a part of current trade and other payables in the statement of financial position. The Group’s obligations for employees’ long service leave entitlements are recognised as provisions in the statement of financial position. For personal use only
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Notes to the consolidated financial statements (Continued) For the year ended 30 June 2025 CAPRICORN METALS LTD ABN 84 121 700 105 Page | 49 Other long-term employee benefits Provision is made for employees’ long service leave entitlements not expected to be settled wholly within 12 months after the end of the annual reporting period in which the employees render the related service. Other long -term employee benefits are measured at the present value of the expected future payments to be made to employees. Expected future payments incorporate anticipated future wage and salary levels , durations of service and employee departures and are discounted at rates determined by reference to market yields at the end of the reporting period on corporate bonds that have maturity dates that approximate the terms of the obligations. Any remeasurem ents for changes in assumptions of obligations for other long-term employee benefits are recognised in profit or loss in the periods in which the changes occur. The Group’s obligations for long -term employee benefits are presented as non -current provisions in its statement of financial position, except where the Group does not have an unconditional right to defer settlement for at least 12 months after the end of the reporting period, in which case the obligations are presented as current provisio ns. Provisions 2025 $’000 2024 $’000 Current Annual leave 2,333 1,821 Rehabilitation - 210 2,333 2,031 Non-Current Long service leave 1,175 775 ROU asset demobilisation 1,369 785 Rehabilitation 52,765 31,202 55,309 32,762 Provision for rehabilitation 2025 $’000 2024 $’000 As at 1 July 31,412 29,397 Provisions raised during the year - - Provisions used during the year 35 - Provisions remeasured during the year (i) 20,502 1,213 Unwinding of the discount (refer Note 4) 816 802 As at 30 June 52,765 31,412 (i) The Karlawinda rehabilitation provision was remeasured during the year, with an increase of $ 7.8m. The provision increase was predominantly caused by the future cost of rehabilitating the additional integrated waste landforms created by the expanded and accelerated Karlawinda operations. At the Mt Gibson Gold Project, the rehabilitation provision was remeasured during the year, with an increase of $12.7m. The r emeasurement considered all drilling and disturbance completed at the project during the year, including drilling completed on previously rehabilitated landforms. As a result, the entire of the affected landforms were reincluded in the provision estimate. Key estimates and judgements – Rehabilitation provision The Group assesses site rehabilitation liabilities on an annual basis. The provision recognised is based on an assessment of the estimated cost of closure and reclamation of the areas using internal information concerning environmental issues in the exploration and previously mined areas, discounted to present value. Significant estimation is required in determining the provision for site rehabilitation as there are many factors that may affect the timing and ultimate cost to rehabilitate sites where mining and/or exploration activities have previously taken place. These factors include: future development/exploration activity; changes in the costs of goods and services required for restoration activity; and changes to the legal and regulatory framework. These factors may result in future actual expenditure differing from the amounts currently provided. For personal use only
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Notes to the consolidated financial statements (Continued) For the year ended 30 June 2025 CAPRICORN METALS LTD ABN 84 121 700 105 Page | 50 22. OTHER FINANCIAL LIABILITIES Accounting policy The Group’s other financial liabilities include gold call options and gold forwards. Recognition and initial measurement All financial liabilities are initially recognised when the Group becomes party to the contractual provisions of the instrument. A financial liability is initially measured at fair value plus or minus transaction costs that are directly attributable to its acquisition or issue, except where the instruments are classified ‘at fair value through profit or loss’ (“FVTPL”), in which case transaction costs are expensed to profit or loss immediately. Classification and subsequent measurement Financial liabilities are classified as measured at amortised cost or FVTPL . A financial liability is classified as FVTPL if it is classified as held for trading, it is a derivative or it is designated as such on initial recognition. Financial liabilities at FVTPL are measured at fair value and net gains and losses, including any interest expense, are recognised in profit or loss. Other financial liabilities are su bsequently measured at amortised cost using the effective interest method. Interest expense and foreign exchange gains and losses are recognised in profit or loss. Any gain or loss on derecognition is also recognised in profit or loss. Amortised cost Amortised cost is calculated as: the amount at which the financial liability is measured at initial recognition; less principal repayments; plus or minus the cumulative amortisation of the difference, if any, between the amount initially recognised and the maturity amount calculated using the effective interest method; and less any reduction for impairment. The effective interest method is used to allocate interest income or interest expense over the relevant period and is equivalent to the rate that exactly discounts estimated future cash payments or receipts (including fees, transaction costs and other premiums or discounts) through the expected life (or when this cannot be reliably predicted, the contractual term) of the financial instrument to the net carry amount of the financial liability. Revisions to expected future net cash flows will necessitate an adjustment to the carrying value with a consequential recognition of an income or expense in profit or loss. The Group does not designate any interest in sub sidiaries, associates or joint venture entities as being subject to the requirements of accounting standards specifically applicable to financial statements. Fair values The carrying amounts and estimated fair values of all the Group’s financial liabilities recognised in the financial statements are materially the same. The methods and assumptions used to estimate the fair value of the financial liabilities are disclosed in the respective notes. Derecognition The Group derecognises a financial liability whe n its terms are modified and the cash flows of the modified liability are substantially different, in which case a new financial liability based on the modified terms is recognised at fair value . On derecognition of a financial liability, the difference be tween the carrying amount extinguished and the consideration paid (including any non-cash assets transferred or liabilities assumed) is recognised in the profit or loss. Financial liabilities are derecognised where the related obligations are either discharged, cancelled or expire. The difference between the carrying value of the financial liability extinguished or transferred to another party and the fair value of consideration paid, including the transfer of non-cash assets or liabilities assumed, is recognised in profit or loss. Hedge accounting The Group designates certain financial liabilities as hedging instruments to hedge the variability in cash flows associated with highly probable forecast transactions arising from changes in the gold price. At inception of designated hedging relationships, the Grou p documents the risk management objective and strategy for undertaking the hedge. The Group also documents the economic relationship between the hedged item and the hedging For personal use only
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Notes to the consolidated financial statements (Continued) For the year ended 30 June 2025 CAPRICORN METALS LTD ABN 84 121 700 105 Page | 51 instrument, including whether the changes in cash flows of the hedged item and hedg ing instrument are expected to offset each other. Cashflow hedges When a financial liability is designated as a cash flow hedging instrument, the effective portion of changes in the fair value of the financial liability is recognised in OCI and accumulated in the hedging reserve. The effective portion of changes in the fair value of the financial liability that is recognised in OCI is limited to the cumulative change in fair value of the hedged item, determined on a present value basis, from inception of the hedge. Any ineffective portion of changes in the fair value of the financial liability is recognised immediately in profit or loss. The amount accumulated in the hedging reserve and the cost of hedging reserve is reclassified to profit or loss in the same period or periods during which the hedged expected future cash flows affect profit or loss. If the financial liability no longer meets the criteria for hedge accounting or the hedging instrument is sold, expires, is terminated or is exercised, then hedg e accounting is discontinued prospectively. When hedge accounting for cash flow hedges is discontinued, the amount that has been accumulated in the hedging reserve remains in equity until, for a hedge of a transaction resulting in the recognition of a non -financial item, it is included in the non -financial item’s cost on its initial recognition or, for other cash flow hedges, it is reclassified to profit or loss in the same period or periods as the hedged expected future cash flows affect profit or loss. If the hedged future cash flows are no longer expected to occur, then the amounts that have been accumulated in the hedging reserve and the cost of hedging reserve are immediately reclassified to profit or loss. The company has adopted hedge accounting from 1 July 2023. Other financial liabilities 2025 $’000 2024 $’000 Non-current Gold call options at FVTPL - 22,361 Gold forwards at FVTPL - 74,921 - 97,282 Gold call options Gold call option liability refers to the fair value of the gold call option contract entered into on 6 January 2020. The contract involves the sale of 16,700 ounces at a strike price of $2,260 per ounce and an expiry date of 30 June 2025. Subsequent measurement of the gold call option contracts is at fair value at balance date with any changes in the fair value immediately recognised in the profit or loss. Gold call options 2025 $’000 2024 $’000 As at 1 July 22,361 13,926 Fair value adjustments (refer Note 4) 24,745 8,435 Closure of gold call options (47,106) - As at 30 June - 22,361 In June 2025, the Company closed its final remaining gold hedging instrument, a 16,700 -ounce call option. The cost of the closure was $47.1 million, paid out of Capricorn’s cash holdings. This movement has been reflected by a reduction in the gold call option liability. Gold forwards Gold forward liability refers to the fair value of the remaining gold forwar d contracts at year end which expire at various dates up until 31 December 2026. Gold forwards 2025 $’000 2024 $’000 As at 1 July 74,921 83,177 Fair value adjustments 65,333 56,092 Closure of gold forward contracts (140,254) (64,348) As at 30 June - 74,921 For personal use only
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Notes to the consolidated financial statements (Continued) For the year ended 30 June 2025 CAPRICORN METALS LTD ABN 84 121 700 105 Page | 52 In March 2025, the Company closed its remaining 55,000-ounce gold forward contracts at a cost of $138.1 million. This movement has been reflected by a reduction in the gold hedge liability. The Company has no remaining gold forward contracts. The Company holds a hedge reserve balance of which will reduce and be recognised in the statement of comprehensive income at the original contract delivery dates. 23. DEFERRED TAX LIABILITIES Accounting policy Deferred tax is accounted for using the balance sheet liability method in respect of temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements. No deferred income tax will be recognised from the initial recognition of an asset or liability, excluding a business combination, where there is no effect on accounting or taxable profit or loss. Deferred tax is calculated at the tax rates that are expected to apply to the period when the asset is realised or liability is settled. Deferred tax is credited in profit and loss except where it relates to items that may be credited directly to equity, in which case the deferred tax is adjusted directly against equity. Deferred revenue tax assets are recognised to the extent that it is probable that future tax profits will be available against which deductible temporary differences can be utilised. Deferred tax assets and liabilities 2025 $’000 2024 $’000 (a) Recognised deferred tax assets and liabilities 30% 30% Deferred tax liabilities Prepayments 56 80 Exploration and mine properties 65,574 44,060 Inventory 12,934 8,766 Plant and equipment 36,416 39,646 ROU Assets 12,393 11,965 Gross deferred tax liabilities 127,373 104,517 Set-off of deferred tax assets (31,805) (56,701) Net deferred tax liabilities 95,569 47,816 Deferred tax assets Employee provisions 1,052 779 Other provisions and accruals 78 135 Derivative assets and liabilities 2,410 30,231 Rehabilitation provision 15,829 9,424 ROU Lease Liabilities 9,952 10,271 Blackhole previously expensed 5 1 Blackhole equity raising costs 2,479 96 Tax losses - 5,730 Other - 34 Gross deferred tax assets 31,805 56,701 Set-off of deferred tax liabilities (31,805) (56,701) Net deferred tax assets - - (b) Reconciliation of deferred tax, net: Opening balance at 1 July – net deferred tax liabilities (47,816) (25,900) Income tax expense recognised in profit or loss (62,403) (38,549) Income tax (expense)/benefit recognised in equity 14,650 16,633 Closing balance at 30 June – net deferred tax liabilities (95,569) (47,816) Key estimates and judgements – Deferred tax assets Judgement is required in determining whether deferred tax assets are recognised on the balance sheet. Deferred tax assets, including those arising from unutilised tax losses, require management to assess the likelihood that the Group will generate taxable earnings in future periods, in order to utilise recognised deferred tax assets. For personal use only
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Notes to the consolidated financial statements (Continued) For the year ended 30 June 2025 CAPRICORN METALS LTD ABN 84 121 700 105 Page | 53 Estimates of future taxable income are based on forecast cash flows from operations and the application of existing tax laws in Australia. To the extent th at future cash flows and taxable income differ significantly from estimates, the ability of the Group to realise the net deferred tax assets recorded at the reporting date could be impacted. Additionally, future changes in tax laws in Australia could limit the ability of the Group to obtain tax deductions in future periods. Tax consolidation The Company and its wholly-owned Australian resident entities became part of a tax -consolidated group on 1 July 2016. As a consequence, all members of the tax-consolidated group are taxed as a single entity from that date. The head entity within the tax consolidated group is Capricorn Metals Limited. The head entity, in conjunction with other members of the tax -consolidated group, have entered into a tax funding arrangement which sets out the funding obligations of members of the tax-consolidated group in respect of tax amounts. Any current tax liabilities (or assets) and deferred tax assets arising from unused tax losses of the subsidiaries are assumed by the head entity and are recognised by the Company as intercompany receivables (or payables). Contribut ions to fund the current tax liabilities are payable as per the tax funding arrangement and reflect the timing of the head entity’s obligation to make payments for tax liabilities to the relevant tax authorities. The Company recognises deferred tax assets arising from unused tax losses of the tax-consolidated group to the extent that it is probable that future taxable profits of the tax-consolidated group will be available against which asset can be utilised. Any subsequent period adjustment to deferred tax assets arising from unused tax losses as a result of revised assessments of the probability of recoverability is recognised by the head entity only. The head entity in conjunction with other members of the tax -consolidated group has also entered into a tax sharing agreement. The tax sharing agreement provides for the determination of the allocation of income tax liabilities between the entities should the head entity default on its tax payment obligations. No amounts have been recognised in the financial statements in respect of this agreement as payment of any amounts under the tax sharing agreement is considered remote. EQUITY This section outlines how the Group manages its capital. 24. ISSUED CAPITAL Accounting policy Issued and paid up capital is recognised at the fair value of the consideration received by the Company. Any transaction costs arising on the issue of ordinary shares are recognised directly in equity as a reduction of the share proceeds received. 2025 2024 Issued capital $’000 $’000 Ordinary shares - issued and fully paid 546,935 203,297 Movement in ordinary shares on issue Number of Shares $’000 As at 1 July 2023 375,958,175 203,422 Issue of shares on exercise of performance rights (i) 1,547,077 - Issue of shares on project deliverable bonus (ii) 22,779 100 Transaction costs - (31) Share Issue costs – Tax - (194) As at 30 June 2024 377,528,031 203,297 As at 30 June 2024 377,528,031 203,297 Issue of shares on exercise of performance rights (iii) 1,286,211 - Issue of shares on project deliverable bonus (iv) 22,779 100 Issue of shares on acquisitions (v) 1,188,597 9,300 Issued for cash(vi) 33,333,334 200,000 For personal use only
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Notes to the consolidated financial statements (Continued) For the year ended 30 June 2025 CAPRICORN METALS LTD ABN 84 121 700 105 Page | 54 Issue of shares on hedge closure (vii) 17,721,519 142,127 Transaction costs - (10,271) Share Issue costs – Tax - 2,383 As at 30 June 2025 431,080,471 546,936 (i) During the 2024 financial year 1,547,077 performance rights were exercised for nil value to employees in accordance with the shareholder approved Performance Rights Plan. (ii) On 1 December 2023, 22,779 shares with a fair value of $4.39 a share were issued in consideration as a deliverable bonus to Tetris Environmental Pty Ltd for the Mt Gibson Gold Project. (iii) During the 2025 financial year 1,286,211 performance rights were exercised for nil value to employees in accordance with the shareholder approved Performance Rights Plan. (iv) On 17 February 2025, 22,779 shares with a fair value of $4.39 a share were issued in consideration as a deliverable bonus to Tetris Environmental Pty Ltd for the Mt Gibson Gold Project. (v) During the 2025 financial year 1,188,597 shares were issued on acquisitions. Of this, 228,391 shares were issued for the Sylvania Gold Project with a fair value of $6.57 a share, 428,340 shares were issued for the Mummaloo Project with a fair value of $7.94 a share, 194,485 shares were issued for the Deadman Flat Project with a fair value of $7.13 a share, 176,381 shares were issued for the Kings Find Project with a fair value of $7.94 a share, and 161,000 shares were issued for the Ninghan Gold Project with a fair value of $9.32 a share. (vi) During the 2025 financial year 33,333,334 shares were issued on 7 November 2024 for the development of the Mt Gibson Gold Project and the KGP Expansion Project with a fair value of $6.00 a share. (vii) During the 2025 financial year 17,721,519 shares were issued on 18 March 2025 for the g old hedge closure with a fair value of $8.02 a share. There are no preference shares on issue. The holders of ordinary shares are entitled to receive dividends and the proceeds on winding up of the parent entity in proportion to the number of shares held. At shareholders’ meetings each ordinary share is entitled to one vote when a poll is called, otherwise each shareholder has one vote on a show of hands. The Company does not have authorised capital or par value in respect of its shares. 25. RESERVES Share-based payment reserve Foreign currency translation reserve Hedge Reserve Total Reserves Reserves $’000 $’000 $’000 $’000 As at 1 July 2023 4,189 (1,055) - 3,134 Share-based payment transactions (refer note 29) 4,966 - - 4,966 Translation movement for the year - 13 - 13 Hedge Reserve (ii) - - (39,264) (39,264) Transfers (i) (4,635) - - (4,635) As at 30 June 2024 4,520 (1,042) (39,264) (35,786) Share-based payment transactions (refer note 29) 6,646 - - 6,646 Translation movement for the year - 5 - 5 Hedge Reserve (ii) - - (28,623) (28,623) Transfers (i) (5,268) - - (5,268) As at 30 June 2025 5,898 (1,037) (67,887) (63,026) (i) Transfer refers to options and performance rights that were either exercised, forfeited or expired in current and previous periods that have been transferred to retained earnings (refer to Note 26). (ii) Hedge Reserve reflects the mark-to-market changes in the fair value of the hedging derivatives (net of tax). The remaining hedge reserve balance will be recognised in the profit and loss statement on the designated delivery dates of the contracts. For personal use only
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Notes to the consolidated financial statements (Continued) For the year ended 30 June 2025 CAPRICORN METALS LTD ABN 84 121 700 105 Page | 55 Share-based payments reserve The share -based payments reserve is used to record the value of share -based payments including options and performance rights to Directors, employees, including KMPs, as part of their remuneration. Foreign currency translation reserve The foreign currency translation reserve records exchange differences arising on translation of foreign controlled subsidiaries. Hedge reserve The hedge reserve is used to reflect the effective portion of the accumulated changes in the fair value of the gold hedge liability. 26. RETAINED EARNINGS Retained earnings 2025 $’000 2024 $’000 As at 1 July 141,754 49,981 Profit for the year 150,277 87,138 Transfers (i) 5,268 4,635 As at 30 June 297,299 141,754 (i) Transfers refers to options and performance rights that were either forfeited or expired in the current period that have been transferred from reserves (refer to Note 25). RISK This section of the notes discusses the Group’s exposure to various risks and shows how these could affect the Group’s financial position and performance. 27. FINANCIAL RISK MANAGEMENT In common with other businesses, the Group is exposed to risks that arise from its use of financial instruments . The Group’s key financial instruments co mprise cash and cash equivalents, trade and other receivables , gold option assets, trade and other payables, lease liabilities, gold call options, gold forwards and borrowings. In March 2025, the Company announced that it had closed its remaining gold forw ard contracts to provide further exposure to any increase in the A$ gold price. The closure of the gold forwards means the Company does not have any remaining hedging delivery obligations. This note describes the Group’s objectives, policies and processes for managing those risks and the methods used to measure them. Further quantitative information in respect of those risks is presented throughout these financial statements. There have been no substantive changes in the Group’s exposure to financial instrument risks, its objectives, policies and processes for managing those risks or the methods used to measure them from previous periods unless otherwise stated in this note. The Board has overall responsibility for the determination of the Group’s risk management objectives and policies. The Group’s risk management policies and objectives are designed to minimise the potential impacts of these risks on the Group where such impacts may be material. The overall objective of the Board is to set policies that seek to reduce risk as far as possible without unduly affecting the Group’s competitiveness and flexibility. Categories of financial instruments 2025 $’000 2024 $’000 Financial assets Cash and cash equivalents 355,748 119,917 Receivables 6,209 3,255 Equity investments 118 739 Gold call options - 1,294 Gold put options 4,977 4,126 367,052 129,331 For personal use only
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Notes to the consolidated financial statements (Continued) For the year ended 30 June 2025 CAPRICORN METALS LTD ABN 84 121 700 105 Page | 56 Financial liabilities Trade and other payables 70,339 50,293 Lease liabilities 31,803 33,452 Borrowings - 50,658 Gold call options - 22,361 Gold forwards - 74,921 102,142 231,685 Market risk Foreign currency risk The Group is exposed to fluctuations in foreign currencies arising from the sale and purchase of goods and services in currencies other than the Group’s functional and presentation currency. The Group’s revenue is derived from the sale of gold in Australian dollars and costs are mainly incurred in Australian dollars although as gold is globally traded in US dollars, the Group is exposed to foreign currency risk. The Group hedges its gold ounces in Australian dollars, which provides for some coverage of foreign currency risk. The Group is occasionally exposed to foreign currency risk when l ong lead items are purchased in a currency other than Australian dollars. The Group maintains all of its cash in Australian dollars and does not currently hedge these purchases. As a result of subsidiary companies being registered in Madagascar, the Group 's statement of financial position can be affected by movements in the AUD/Ariary exchange rates. The Group does not seek to hedge this exposure given there are minimal operations in these foreign subsidiaries and therefore minimal risk as a result of any changes in foreign currency. In the reporting period, the Group was not exposed to material financial risks of changes in foreign currency exchange rates. Interest rate risk At the reporting date, the interest rate profile of the Group’s interest-bearing financial instruments was: Interest-bearing financial instruments 2025 $’000 2024 $’000 Fixed rate instruments Term deposits 375 311 Lease liabilities (31,803) (33,452) (31,428) (33,141) Variable rate instruments Cash and cash equivalents 355,748 119,917 Borrowings - (50,658) 355,748 69,259 Fair value sensitivity analysis for fixed rate instruments The Group does not account for any fixed rate financial assets and liabilities at fair value through profit or loss. Therefore, a change at reporting date would not affect profit or loss. Cash flow sensitivity analysis for variable rate instruments A change of 2 00 basis points ( 2024: 200 basis points) in interest rates at the reporting date would have increased/(decreased) equity and profit or loss by the amounts shown below. This analysis assumes that all other variables remain constant. 2025 2024 200bp 200bp 200bp 200bp increase decrease increase decrease Interest-bearing financial instruments $’000 $’000 $’000 $’000 Variable rate instruments 7,115 (7,115) 1,385 (1,385) For personal use only
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Notes to the consolidated financial statements (Continued) For the year ended 30 June 2025 CAPRICORN METALS LTD ABN 84 121 700 105 Page | 57 Commodity price risk The Group’s exposure to commodity price risk is from the fluctuation s in the prevailing market prices of gold produced from its operating mine. The Group manages its exposure to movements in the gold price through the use of gold put options (refer Note 10) , gold call options and gold forward s (refer Note 22) and its sold gold call option con tract (refer Note 22). The following table reflects the impact on equity relating to the gold forwards of a $100 change in the spot price of gold as at 30 June 2025 (2024: $100). There were no remaining gold forwards at 30 June 2025. 2025 2024 $100 $100 $100 $100 Increase decrease increase decrease $’000 $’000 $’000 $’000 Gold forwards - - (5,500) 5,500 The following table reflects the impact on profit or loss relating to the gold call options and the gold put options of a $100 change in the spot price of gold as at 30 June 202 5 (2024: $100). There were no remaining gold call options at 30 June 2025. 2025 2024 $100 $100 $100 $100 Increase decrease increase decrease $’000 $’000 $’000 $’000 Gold call options - - (1,670) 1,670 Gold put options (6,925) 4,977 (3,117) 5,200 Credit risk Credit risk is the risk of financial loss to the Group if the counterparty to a financial instrument fails to meet its contractual obligation. Credit risk arises from cash and cash equivalents and gold bullion awaiting settlement. The Group deals with creditworthy counterparties as a means of mitigating the risk of financial loss from defaults. Cash holdings are with Commonwealth Bank of Australia and Macquarie Bank Limited, Australian banks regulated by APRA with a short -term S&P rating of A-1+ and A-1, respectively. The Group has determined that it current has no significant exposure to credit risk as at reporting date given banks have investment grade credit ratings. Liquidity risk Liquidity risk arises from the possibility that the Group might encounter difficulty in settling its debts or otherwise meeting its obligations related to financial liabilities. The Group manages liquidity risk by monitoring forecast cash flows and ensuring that adequate facilities are maintained. Financial liability maturity analysis Carrying amount liabilities Total contractual cash flows <6 months 6-12 months 1-2 years 2-5 years >5 years 2025 $’000 $’000 $’000 $’000 $’000 $’000 $’000 Trade and other payables 70,339 70,339 70,339 - - - - Lease liabilities 31,803 38,083 6,330 5,526 5,106 12,466 8,655 102,142 108,422 76,669 5,526 5,106 12,466 8,655 Carrying amount liabilities Total contractual cash flows <6 months 6-12 months 1-2 years 2-5 years >5 years 2024 $’000 $’000 $’000 $’000 $’000 $’000 $’000 Trade and other payables 50,293 50,293 50,293 - - - - Lease liabilities 33,452 40,838 5,829 5,827 9,943 8,419 10,820 Borrowings 50,658 54,556 2,607 51,949 - - - Gold forwards 74,921 74,921 - - 42,921 32,000 - 209,324 220,608 58,729 57,776 52,864 40,419 10,820 For personal use only
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Notes to the consolidated financial statements (Continued) For the year ended 30 June 2025 CAPRICORN METALS LTD ABN 84 121 700 105 Page | 58 Financial instruments measured at fair value The financial instruments recognised at fair value in the statement of financial position have been analysed and classified using a fair value hierarchy reflecting the significance of the inputs used in making the measurements. The fair value hierarchy consists of the following levels: Level 1: quoted prices in active markets for identical assets or liabilities; Level 2: inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (as prices) or indirectly (derived from prices); and Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs). Included within Level 1 of the hierarchy are the Evion Group NL (formerly BlackEarth Minerals NL) and Latitude 66 Limited (formerly DiscovEx Resources Limited) shares listed on the Australian Securities Exchange. The fair value of these financial assets has been based on the closing quoted bid prices at the end of the reporting period, excluding transaction costs. Included within Level 2 of the hierarchy is the gold put options, gold call options and the gold forwards. The fair value of the gold put options, the gold call options and the gold forwards was based on valuation techniques that employ the use of market observable inputs. The most frequently applied valuation techniques include forward pricing and swap models using present value calculations. The models incorporate various inputs including t he credit quality of counterparties, foreign exchange spot and forward rates, and spot and forward rate curves of the underlying commodity. The changes in counterparty credit risk had no material effect on the gold put options, gold call options or the gold forwards recognised at fair value. No transfers between the levels of the fair value hierarchy occurred during the current or previous reporting period. The Directors consider that the carrying value of all financial assets and financial liabilities are recognised in the consolidated financial statements approximate to their fair value. 28. CAPITAL MANAGEMENT Risk management The Board controls the capital of the Group in order to ensure that the Group can fund its operations and continue as a going concern so that they can maximise shareholder value and benefits to other stakeholders. The Board effectively manages the Group’s capital by assessing the Group’s financial risks and adjusting its capital structure in response to changes in these risks and in the market. These responses include the management of debt levels, distributions to shareholders and share issues. Total capital is equity, as shown in the statement of financial position. The Group is not subject to any externally imposed capital requirements. There have been no changes in the strategy adopted by the Board to control the capital of the Group since the prior year. OTHER DISCLOSURES This section provides information on items which require disclosure to comply with Australian Standards and other regulatory requirements. Assets Liabilities 2025 $’000 2024 $’000 2025 $’000 2024 $’000 Level 1 118 739 - - Level 2 4,977 4,126 - (97,282) Level 3 - - - - 5,095 4,865 - (97,282) For personal use only
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Notes to the consolidated financial statements (Continued) For the year ended 30 June 2025 CAPRICORN METALS LTD ABN 84 121 700 105 Page | 59 29. SHARE BASED PAYMENTS Accounting policy The Group provides benefits to employees (including Directors) of the Group in the form of share -based payment transactions, whereby employees render services in exchange for shares or rights over shares (‘equity -settled transactions’). The cost of these equity -settled transactions with employees is measure d by reference to the fair value at the date at which they are granted. The fair value of options is determined by an internal valuation using a Black -Scholes option pricing model. The fair value of performance rights determined by consideration of the Com pany’s share price at the grant date and consideration of the specific market vesting conditions applicable to the performance rights. The cost of equity-settled transactions is recognised, together with a corresponding increase in equity, over the period in which the performance conditions are fulfilled, ending on the date on which the relevant employees become fully entitled to the award (“Vesting Date”). The cumulative expense recognised for equity-settled transactions at each reporting date until vesting date reflects - the extent to which the vesting period has expired and - the number of rights that, in the opinion of the Directors of the Company, will ultimately vest. This opinion is formed based on the best available information at reporting date. No adjustment is made for the likelihood of market performance conditions being met as the effect of these conditions is included in the determination of fair value at grant date. No expense is recognised for awards that do not ultimately vest, except for awa rds where vesting is conditional upon a market condition. Where an equity-settled award is cancelled, it is treated as if it had vested on the date of cancellation, and any expense not yet recognised for the award is recognised immediately. However, if a n ew award is substituted for the cancelled award and designated as a replacement award on the date that it is granted, the cancelled and new award are treated as if they were a modification of the original award. Plans The Company has an Incentive option pl an and a Performance rights plan ( collectively “the Plans”) which were last approved by shareholders on 10 November 2019 and 29 November 2023 respectively. The objectives of the Plans are to assist with the recruitment, reward, retention and motivation of eligible employees of the Group. In accordance with the Plans the B oard, on advice from the Remuneration, Nomination and Diversity Committee may issue eligible employees with options or performance rights to acquire shares in the future at a determined fixed exercise price on grant of the options or performance rights. The vesting of the options and performance rights are subject to service conditions and performance criteria as outlined below. Total expenses arising from share-based payment transactions recognised during the period were as follows: 2025 2024 Recognised share-based payments expense $’000 $’000 Performance rights expense 6,646 4,966 Performance rights The following table outlines the number and movements in Performance rights during the year: For personal use only
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Notes to the consolidated financial statements (Continued) For the year ended 30 June 2025 CAPRICORN METALS LTD ABN 84 121 700 105 Page | 60 2025 2024 Performance rights Number of Rights Number of Rights Outstanding as at 1 July 1,691,808 1,963,732 Issued from prior year - 216,400 Granted during the year 1,313,293 1,181,753 Forfeited during the year (118,200) (123,000) Exercised during the year (1,286,211) (1,547,077) Outstanding at end of the year 1,600,690 1,691,808 Exercisable as at 30 June 178,042 - Financial year 2022 In October 2021 , 279,818 Performance rights were granted to KMP, Mr Kim Massey and Mr Paul Thomas under the Group’s Performance Rights Plan, 50% of the rights vested on 30 June 2023 whilst the remaining rights vested on 30 June 2024. In December 2021: - 249,000 Performance rights were issued to employees under the Group’s Performance Rights Plan. A third of the rights vested on 10 December 2022, another third on 10 December 2023 , 7,000 shares were forfeited, and the remaining rights vested on 10 December 2024; - In December 2021, 1,032,000 Performance rights were issued to employees under the Group’s Performance Rights Plan. 50% of the rights vest ed on 10 December 2023, 274,000 shares w ere forfeited, and the remaining rights vested on 10 December 2024; and - In December 2021 40,000 P erformance rights were issued to employees under the Group’s Performance Rights Plan. All of the rights vested on 10 December 2024, however 20,000 rights remain unissued at 30 June 2025. The performance conditions for Issues 1, and 4 of the FY2022 Performance rights was the Company’s relative total shareholder return (“TSR”) measured against the TSR’s of 12 comparator mining companies and continued e mployment with the Company for the performance period. The performance condition for Issues 3 , 3 and 4 of the FY2022 Performance rights was continued employment with the Company for the performance period. The fair value of the Performance rights granted during Financial year 2022 was $6,948,177. The fair value at the grant date was estimated using a Monte Carlo simulation (Issue 1), and a Black Scholes option pricing model (Issue 2, 3 & 4). The table below details the terms and conditions of the grants and the assumptions used in estimating the fair value: Item Issue 1 Issue 2 Issue 3 Issue 4 Grant date 4 Oct 2021 10 Dec 2021 10 Dec 2021 10 Dec 2021 Value at grant date $2.18 $3.10 $3.10 $3.10 Exercise price nil nil nil nil Dividend yield 0% 0% 0% 0% Risk free rate 0.05% - 0.27% 1.32% 1.32% 1.32% Volatility 50% 72% - 106% 72% - 106% 106% Performance period (yrs) 2.00 - 3.00 1.00 - 3.00 2.00 - 3.00 3.00 Test date 30/6/23 & 30/06/24 10/12/22, 10/12/23 & 10/12/24 10/12/23 & 10/12/24 10/12/24 Remaining performance period (yrs) nil nil nil nil Weighted average fair value $1.83 $3.10 $3.10 $3.10 For personal use only
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Notes to the consolidated financial statements (Continued) For the year ended 30 June 2025 CAPRICORN METALS LTD ABN 84 121 700 105 Page | 61 In December 2024, 139,909 Oct 2021 (Issue 1) Performance rights were exercised. In December 2024 76,000 Dec 2021 (Issue 2) Performance rights were exercised. In December 2024, 294,000 Dec 2021 (Issue 3) Performance rights were exercised. In December 2024, 20,000 Dec 2021 (Issue 4) Performance rights were exercised. In January 2025, 54,000 Dec 2021 (Issue 3) Performance rights were exercised. In June 2025, 11,000 Dec 2021 (Issue 3) Performance rights were exercised. In December 2024, 10 ,000 Dec 21 (Issue 2 ) Performance rights were forfeited due to the resignation of employees in accordance with the Performance Rights Plan. There are 20,000 Performance rights remaining from Financial year 2022. Financial year 2023 In November 2022, 161,414 Performance rights were issued to KMP, Mr Clark under the Group’s Performance Rights Plan. 50% of the rights vested on 30 June 2024 and the remaining rights will vest on 30 June 2025. During FY23, 216,400 Performance rights were granted to KMP, Mr Kim Massey and Mr Paul Thomas under the Group’s Performance Rights Plan. 50% of the rights vested on 30 June 2024 and the remaining rights due to vest on 30 June 2025 were forfeited. The performance condition for the FY2023 Performance rights was continued employment with the Company for the performance period. The fair value of the Performance rights granted during Financial year 2023 was $2,947,423. The fair value at the grant date was estimated using a Monte Carlo simulation (Issue 1 and 2). The table below details the terms and conditions of the grants and the assumptions used in estimating the fair value: Item Issue 1 Issue 2 Grant date 29 Nov 2022 19 Jun 2023 Value at grant date $4.21 $4.23 Exercise price Nil nil Dividend yield 0% 0% Risk free rate 3.18% 4.14% Volatility 50% 50% Performance period (yrs) 2.00 - 3.00 2.00 - 3.00 Test date 30/06/24 & 30/06/25 30/06/24 & 30/06/25 Remaining performance period (yrs) nil 0.03 Weighted average fair value $3.25 $2.72 In December 2024, 80,707 Nov 2022 (Issue 1) Performance rights were exercised. In December 2024, 108,200 Jun 2023 (Issue 2) Performance rights were exercised. In December 2024, 108,200 Jun 2023 (Issue 2) Performance rights were forfeited due to the resignation of employees in accordance with the Performance Rights Plan. There are 80,707 Performance rights remaining from Financial year 2023. Financial year 2024 In December 2023, 383 ,067 Performance rights were issued to employees under the Group’s Performance Rights Plan. 50% of the rights will vest on 10 December 2025 and the remaining rights will vest on 10 December 2026. In November 2023, 154,670 Performance rights were issued to KMP, Mr Clark under the Group’s Performance Rights Plan. 50% of the rights vested on 30 June 2025 and the remaining rights will vest on 30 June 2026. In December 2023, 120,000 Performance rights were issued to employees under the Group’s Performance Rights Plan. 42% of the righ ts vested on 18 September 2024, 33% of the rights will vest on 18 September 2025, and the remaining rights will vest on 18 September 2026. In December 2023, 32,000 Performance rights were issued to employees under the Group’s Performance Rights Plan. 50% of the rights will vest on 10 July 2025 and the remaining rights will vest on 10 July 2026. For personal use only
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Notes to the consolidated financial statements (Continued) For the year ended 30 June 2025 CAPRICORN METALS LTD ABN 84 121 700 105 Page | 62 The performance condition for the FY2024 Performance rights was continued employment with the Company for the performance period. The fair value of the Performance rights granted during Financial year 2024 was $5,115,576. The fair value at the grant date was estimated using a Monte Carlo simulation (Issue 2), and a Black Scholes option pricing model for the remaining Issues. The table below details the terms and conditions of the grants and the assumptions used in estimating the fair value: Item Issue 1 Issue 2 Issue 3 Issue 4 Grant date 7 Dec 2023 29 Nov 2023 7 Dec 2023 7 Dec 2023 Value at grant date $4.34 $4.276 $4.34 $4.34 Exercise price Nil Nil Nil Nil Dividend yield 0% 0% 0% 0% Risk free rate 3.75% 3.98% 3.75% 3.75% Volatility 50% 47% 44% 68% Performance period (yrs) 2.01 - 3.01 2.00 - 3.00 0.78 - 2.78 1.59 - 2.59 Test date 10/12/25 & 10/12/26 30/6/25 & 30/6/26 18/9/24, 18/9/25 & 18/9/26 10/7/25 & 10/7/26 Remaining performance period (yrs) 0.45 - 1.45 0 - 1.00 0.22 - 1.22 0.03 - 1.03 Weighted average fair value $4.34 $3.26 $4.34 $4.34 In November 2024, 50,000 Dec 2023 Performance rights were exercised by employees. There are 639,737 Performance rights remaining from financial year 2024. Financial year 2025 In December 2024, 432,395 Performance rights were issued to employees under the Group’s Performance Rights Plan. 100% of the rights vested on 31 October 2024. In May 2024, 100,000 Performance rights were issued to KMP, Mr Paul Criddle under the Group’s Performance Rights Plan. 50% of the rights will vest on 1 July 2025 and the remaining rights will vest on 1 July 2026. In June 2024, 120,000 Performance rights were issued to KMP, Mr William Nguyen under the Group’s Performance Rights Plan. 50% of the rights will vest on 18 June 2026 and the remaining rights will vest on 18 June 2027. In June 2024, 170,000 Performance rights were issued to employees under the Group’s Performance Rights Plan. 1 2% of the rights vested on 30 September 2024, 29% of the rights will vest on 1 July 2025, 29% of the rights will vest on 1 July 2026 and the remaining rights will vest on 1 July 2027. In November 2024 , 153,272 Performance rights were issued to KMP, Mr Clark under the Group’s Performance Rights Plan. 100% of the rights will vest on 30 June 2027. In December 2024, 184,384 Performance rights were issued to employees under the Group’s Performance Rights Plan. 4% of the rights will vest on 10 December 2026, and the remaining rights will vest on 10 December 2027. In April 2025, 152,590 Performance rig hts were issued to KMP, Mr William Nguyen, Mr Shane Clark and Mr Anthony Hinkley under the Group’s Performance Rights Plan. 100% of the rights will vest on 30 June 2027. The performance condition for the FY2025 Performance rights was continued employment with the Company for the performance period. The fair value of the Performance rights granted during Financial year 2025 was $7,622,680. The fair value at the grant date was estimated using a Monte Carlo simulation (Issue 5 and 7), and a Black Scholes option pricing model for the remaining Issues. The table below details the terms and conditions of the grants and the assumptions used in estimating the fair value: For personal use only
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Notes to the consolidated financial statements (Continued) For the year ended 30 June 2025 CAPRICORN METALS LTD ABN 84 121 700 105 Page | 63 Item Issue 1 Issue 2 Issue 3 Issue 4 Issue 5 Issue 6 Issue 7 Grant date 31 Oct 2023 20 May 2024 18 Jun 2024 3 Jun 2024 19 Nov 2024 10 Dec 2024 24 Apr 2025 Value at grant date $6.360 $4.870 $4.700 $4.620 $6.430 $6.930 $9.150 Exercise price Nil Nil Nil Nil Nil Nil Nil Dividend yield 0% 0% 0% 0% 0% 0% 0% Risk free rate 4.19% 4.20% 4.20% 4.20% 4.08% 3.75% 3.28% Volatility 59% 40% 65% 40% 45% 59% 45% Performance period (yrs) 1.00 1.12-2.12 2.00 - 3.00 0.33- 2.08 2.00 2.00 - 3.00 3.00 Test date 31/10/24 1/7/25 & 1/7/26 18/6/26 & 18/6/27 30/9/24, 1/7/25, 1/7/26 & 1/7/27 1/7/24 10/12/26 &10/12/27 30/6/27 Remaining performance period (yrs) - 0 - 1.00 0.97 - 1.97 0-2.00 2.00 1.45 – 2.45 2.00 Weighted average fair value $6.360 $4.870 $4.700 $4.620 $4.503 $6.930 $7.001 In December 2024, 432,395 Oct 2024 Performance rights were exercised by employees. In September 2024, 20,000 Jun 2024 (Issue 4) Performance rights were exercised. There are 860,246 Performance rights remaining from Financial year 2025. Key estimates and judgements – Share based payments The Group measures the cost of equity -settled transactions with employees by reference to the fair value of the equity instruments at the date at which they are granted. The fair value of options is determined by an internal valuation using a Black -Scholes option pricing model, using the assumptions detailed in Note 24. The fair value of performance rights is determined by the share price at the dat e of valuation and consideration of the probability of the market vesting condition being met. 30. RELATED PARTY DISCLOSURES Key Management Personnel Remuneration KMP remuneration has been included in the Remuneration Report section of the Directors Report for current KMP only. Total remuneration paid to current and former KMP of the Group 2025 $ 2024 $ Short term benefits 3,280,086 2,858,521 Other service fees 910,080 220,000 Non-cash benefits 23,404 16,104 Post-employment benefits 219,425 144,461 Annual leave 79,653 141,607 Share based payments 1,651,991 834,676 Termination payments - - 6,164,639 4,215,369 Ultimate Parent Capricorn Metals Ltd is the ultimate parent entity of the Group. Controlled Entities The consolidated financial statements include the financial statements of the Parent and the subsidiaries set out in the following table: For personal use only
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Notes to the consolidated financial statements (Continued) For the year ended 30 June 2025 CAPRICORN METALS LTD ABN 84 121 700 105 Page | 64 Ownership (%) Subsidiaries Country Principal activity 2025 2024 Mining Services SARL Madagascar Exploration Services 100% 100% St Denis Holdings SARL Madagascar Commercial Property 100% 100% MGY Mauritius Ltd Mauritius Investment Holding 100% 100% Malagasy Graphite Holdings Ltd Australia Investment Holding 100% 100% Greenmount Resources Pty Ltd Australia Production 100% 100% Crimson Metals Pty Ltd Australia Exploration 100% 100% Metrovex Pty Ltd Australia Exploration 100% 100% The subsidiaries noted above are all controlled entities and are dependent on the parent entity for financial support. Transactions with Related Parties As at 30 June 2025 , the net loans from the Parent to its subsidiaries total s $291,972,000 (2024: $130,897,000). This is made up of loans to subsidiaries o f $299,702,000 (2024: $138,627,000) with a provision for impairment of $ 7,730,000 (2024: $7,730,000). Subsidiaries Loan Provision for impairment Carrying value $’000 $’000 $’000 Mining Services SARL 452 (452) - MGY Mauritius Ltd 3,000 (463) 2,537 Malagasy Graphite Holdings Ltd 6,815 (6,815) - Greenmount Resources Pty Ltd 172,526 - 172,526 Crimson Metals Pty Ltd 116,888 - 116,888 Metrovex Pty Ltd 21 - 21 299,702 (7,730) 291,972 There are no other transactions between related parties within the Group. 31. PARENT ENTITY DISCLOSURES The following information has been extracted from the books and records of the parent and has been prepared in accordance with Australian Accounting Standards. Statement of financial position 2025 $’000 2024 $’000 Assets Current assets 190,104 7,394 Non-current assets 327,203 162,663 Total Assets 517,307 170,057 Liabilities Current liabilities 6,940 2,347 Non-current liabilities (2,100) (5,150) Total Liabilities 4,840 (2,803) Shareholders’ equity Issued capital 546,935 203,297 Reserves 5,899 4,520 Accumulated losses (40,367) (34,958) Total Shareholders’ Equity 512,467 172,859 For personal use only
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Notes to the consolidated financial statements (Continued) For the year ended 30 June 2025 CAPRICORN METALS LTD ABN 84 121 700 105 Page | 65 Statement of comprehensive income 2025 $’000 2024 $’000 Net loss attributable to members of the parent entity (10,676) (12,042) Other comprehensive income for the period - - Total comprehensive loss for the year attributable to members of the parent entity (10,676) (12,042) The Parent entity has not entered into any contractual commitments for the acquisition of property plant and equipment at the date of this report. 32. DEED OF CROSS GUARANTEE Capricorn Metals Ltd and its subsidiaries are parties to a Deed of cross guarantee under which each company guarantees the debts of the others. By entering into the deed, the wholly owned entities have been relieved from the requirement to prepare a financial report and Directors’ report under ASIC Corporations (Wholly -owned Companies) Instrument 2016/785 issued by the Australian Securities and Investments Commission. Capricorn Metals Ltd Greenmount Resources Pty Ltd Crimson Metals Pty Ltd Metrovex Pty Ltd Malagasy Graphite Holding Pty Ltd The above companies represent a ‘closed group’ for the purpose of the Legislative instrument, and as there are no other parties to the Deed of cross guarantee that are controlled by Capricorn Metals Ltd, they also represent the ‘extended closed group’. The Consolidated Balance Sheet and the Consolidated Income Statement is consistent with the closed group. 33. COMMITTMENTS The Group has physical gold delivery commitments and exploration expenditure commitments which are disclosed in Notes 2 and 14 respectively. 34. CONTINGENT LIABILITIES As at 30 June 2025 Capricorn Metals Ltd has bank guarantees totalling $375,000 (2024: $311,000), refer to Note 8. As at 30 June 2025 the Group has a $1.2 million (2024: $2 million) Bank Guarantee Facility with Macquarie under the existing Project Loan Facility in relation to the lateral pipeline that links Goldfields Gas Pipeline to the KGP. 35. AUDITORS REMUNERATION Amount payable to KPMG Australia 2025 $ 2024 $ Audit and review of financial statements – Group 180,000 160,000 Audit and review of financial statements – controlled entities - - Audit and review of financial statements – controlled entities 180,000 160,000 Amounts payable to other audit firms for the audit and review of the financial reports of subsidiary companies was $ nil (2024: $nil). 36. SUBSEQUENT EVENTS There were no material events arising subsequent to 30 June 2025, to the date of this report which may significantly affect the operations of the Group, the results of those operations and the state of affairs of the Group in the future other than: For personal use only
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Notes to the consolidated financial statements (Continued) For the year ended 30 June 2025 CAPRICORN METALS LTD ABN 84 121 700 105 Page | 66 Proposal for acquisition of Warriedar Resources Ltd In July 2025, the Company announced that it had entered into a binding Scheme Implementation Deed under which it is proposed that Capricorn will acquire 100% of the securities in Warriedar (ASX:WA8) by way of a Court-approved scheme of arrangement under Part 5.1 of the Corporations Act 2001 (Cth). Under the scheme, Warriedar shareholders will receive 1 new Capricorn share for every 62 Warriedar shares held. Based on Capricorn’s closing price of A$9.60 per share on 23 July 2025, the transaction implies a value of approximately A$0.155 per Warriedar share. The proposed acquisition will allow the Company to secure Warriedar’s flagship Golden Range Project (GRP), including the Ricciardo gold-antimony deposit and the Fields Find Gold Project, all located 90 kilometres north of the existing Mt Gibson Gold Project (MGGP). The GRP has a significant Mineral Resource Estimate of 2.3Moz AuEq (31Mt at 2.3g/t), while Capricorn’s existing Western Australian Mineral Resource base is 6.8Moz (247.8Mt at 0.85g/t Au). 37. NEW ACCOUNTING STANDARDS AND INTERPRETATIONS ISSUED BUT NOT YET EFFECTIVE The following standards, amendments to standards and interpretations have been identified as those which may impact the entity in the period of initial application. They are available for early adoption at 30 June 2025 but have not been applied in preparing this financial report. Except where noted, the Group has evaluated the impact of the new standards and interpretations listed below and determined that the changes are not likely to have a material impact on its financial statements. AASB 18 Presentation and Disclosure in Financial Statements Application Daste of Standard: 1 January 2027 Application date for Group: 1 July 2028 AASB 18 replaces AASB 101 and is effective for annual periods beginning on or after 1 January 2027. The Group expects presentation and disclosure changes only with no impact on recognition or measurement. For personal use only
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Consolidated entity disclosure statement For the year ended 30 June 2025 CAPRICORN METALS LTD ABN 84 121 700 105 Page | 67 Type of Entity Country of Incorporation Jurisdiction of Tax Residency Equity Interest (%) Capricorn Metals Ltd Body corporate Australia Australia N/A Greenmount Resources Pty Ltd Body corporate Australia Australia 100 Crimson Metals Pty Ltd Body corporate Australia Australia 100 Metrovex Pty Ltd Body corporate Australia Australia 100 Malagasy Graphite Holdings Ltd Body corporate Australia Australia 100 Mining Services SARL Body corporate Madagascar Australia 100 St Denis Holdings SARL Body corporate Madagascar Australia 100 MGY Mauritius Ltd Body corporate Mauritius Australia 100 Key assumptions and judgements – Consolidated entity disclosure statement Determination of Tax Residency Section 295 (3A) of the Corporations Acts 2001 requires that the tax residency of each entity which is included in the Consolidated Entity Disclosure Statement (CEDS) be disclosed. In context of an entity which was an Australian resident , “Australian resident” has the meaning provided in the Income Tax Assessment Act 1997. The determination of tax residency involves judgem ent as the determination of tax residency is highly fact dependent and there are currently several different interpretations that could be adopted, and which could give rise to a different conclusion on residency. In determining tax residency, the consolidated entity has applied the following interpretations: Australian tax residency The consolidated entity has applied current legislation and judicial precedent, including having regard to the Commissioner of Taxation’s public guidance in Tax Ruling TR 2018/5. For personal use only
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Directors’ declaration CAPRICORN METALS LTD ABN 84 121 700 105 Page | 68 1. In the opinion of the Directors of Capricorn Metals Ltd: (a) The consolidated financial statements , notes and additional disclosures included in the directors’ report designated as audited of the Company and Group, are in accordance with the Corporations Act 2001 and: (i) comply with Australian Accounting Standards and the Corporations Regulations 2001; and (ii) give a true and fair view of the financial position as at 30 June 2025 and of the performance for the year ended on that date of the Company and Group. (b) The consolidated entity disclosure statement as at 30 June 2025 set out on page 67 to the consolidated financial report is true and correct, (c) There are reasonable grounds to believe that the Company and Group will be able to pay its debts as and when they become due and payable, and (d) At the date of this declaration there are reasonable grounds to believe that the members of the extended closed group identified in Note 32 will be able to meet any obligations or liabilities to which the re are, or may become, subject by virtue of the deed of cross guarantee described in Note 32. 2. The Directors have been given the d eclarations required by Section 295A of the Corporations Act 2001 from the Executive Chairman and Chief Financial Officer for the financial year ended 30 June 2025. 3. The Directors draw attention to the notes to the consolidated financial statements, which i nclude a statement of compliance with International Financial Reporting Standards. This declaration is made in accordance with a resolution of the Board of Directors and is signed for and on behalf of the Directors by: Mr Mark Clark Executive Chairman Perth, Western Australia 28 August 2025 For personal use only
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KPMG, an Australian partnership and a member firm of the KPMG global organisation of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved. The KPMG name and logo are trademarks used under license by the independent member firms of the KPMG global organisation. Liability limited by a scheme approved under Professional Standards Legislation. Independent Auditor’s Report To the shareholders of Capricorn Metals Ltd Report on the audit of the Financial Report Opinion We have audited the Financial Report of Capricorn Metals Ltd (the Company). In our opinion, the accompanying Financial Report of the Company gives a true and fair view, including of the Group’s financial position as at 30 June 2025 and of its financial performance for the year then ended, in accordance with the Corporations Act 2001, in compliance with Australian Accounting Standards and the Corporations Regulations 2001. The Financial Report comprises: • Consolidated statement of financial position as at 30 June 2025; • Consolidated statement of profit or loss and other comprehensive income, Consolidated statement of changes in equity, and Consolidated statement of cash flows for the year then ended; • Consolidated entity disclosure statement and accompanying basis of preparation as at 30 June 2025; • Notes, including material accounting policies; and • Directors’ Declaration. The Group consists of the Company and the entities it controlled at the year end or from time to time during the financial year. Basis for opinion We conducted our audit in accordance with Australian Auditing Standards. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the Financial Report section of our report. We are independent of the Group in accordance with the Corporations Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional Accountants (including Independence Standards) (the Code) that are relevant to our audit of the Financial Report in Australia. We have fulfilled our other ethical responsibilities in accordance with these requirements. Kay Audit Matters Key Audit Matters are those matters that, in our professional judgement, were of most significance in our audit of the Financial Report of the current period. This matter was addressed in the context of our audit of the Financial Report as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on this matter. For personal use only
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Valuation and classification of ore stockpiles (A$148,814,000) Refer to Note 9 Inventories in the Financial Report The key audit matter How the matter was addressed in our audit The valuation and classification of ore stockpiles is a key audit matter because: • Significant judgement is required to be exercised by the Group in assessing the value and classification of ore stockpiles which will be used to produce gold bullion in the future. Significant audit effort is required by us in evaluating and challenging the key assumptions within the Group’s assessment of net realisable value and estimated timing of processing into gold bullion; and • Ore stockpiles represent 14% of total assets of which the majority is non-current increasing the judgement associated with forecast assumptions. The Group’s assessment is based on a model which estimates future revenue expected to be derived from gold contained in the ore stockpiles, less future processing costs, to convert stockpiles into gold bullion. We placed particular focus on those assumptions listed below which impact the valuation and classification of ore stockpiles: • Future processing costs of ore stockpiles including potential cost increases; • The estimated quantity of gold contained within the ore stockpiles; • Future gold prices expected to prevail when the gold from existing ore stockpiles is processed and sold; and • Estimated timing of conversion of ore stockpiles into gold bullion, which drives the classification of ore stockpiles as current or non-current assets. Assumptions are forward looking or not based on observable data and are therefore inherently judgemental to audit. We involved our senior audit team members in assessing this key audit matter. Our procedures included: • We assessed the appropriateness of the Group’s accounting policies against the requirements of the accounting standard; • Assessing the methodology applied by the Group in determining the value of ore stockpiles against the requirements of the accounting standards; • Testing the accuracy of calculations in the model used to determine the value of ore stockpiles; • Assessing the key assumptions in the Group’s model used to determine the value of ore stockpiles by: – Comparing future processing costs to previous actual costs, and for consistency with the Group’s latest life of mine plan; – Comparing the estimated quantity of gold contained within stockpiles to the Group’s internal geological survey results and historical trends. We assessed the scope and competence of the Group’s internal expert involved in preparing the geological survey results; – Comparing future expected gold prices to published external analysts’ data for prices expected to prevail in the future. • Critically evaluating the Group’s classification of ore stockpiles as current or non-current by assessing the estimated timing of processing the stockpiles against the Group’s latest life of mine plan and the historical operating capacity of the Group’s processing plants; and • Assessing the disclosures in the Group’s financial report, using our understanding obtained from our testing, against the requirements of accounting standards. For personal use only
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Other Information Other Information is financial and non-financial information in Capricorn Metals Ltd’s annual reporting which is provided in addition to the Financial Report and the Auditor’s Report. The Directors are responsible for the Other Information. The Other Information we obtained prior to the date of this Auditor’s Report was the Director’s Report. The Chairman’s letter to shareholders, Company Highlights, ESG Report, Reserves & Resources report and ASX additional information are expected to be made available to us after the date of the Auditor’s Report. Our opinion on the Financial Report does not cover the Other Information and, accordingly, we do not and will not express an audit opinion or any form of assurance conclusion thereon, with the exception of the Remuneration Report and our related assurance opinion. In connection with our audit of the Financial Report, our responsibility is to read the Other Information. In doing so, we consider whether the Other Information is materially inconsistent with the Financial Report or our knowledge obtained in the audit, or otherwise appears to be materially misstated. We are required to report if we conclude that there is a material misstatement of this Other Information, and based on the work we have performed on the Other Information that we obtained prior to the date of this Auditor’s Report we have nothing to report. Responsibilities of the Directors for the Financial Report The Directors are responsible for: • Preparing the Financial Report in accordance with the Corporations Act 2001, including giving a true and fair view of the financial position and performance of the Group, and in compliance with Australian Accounting Standards and the Corporations Regulations 2001; • Implementing necessary internal control to enable the preparation of a Financial Report in accordance with the Corporations Act 2001, including giving a true and fair view of the financial position and performance of the Group, and that is free from material misstatement, whether due to fraud or error; and • Assessing the Group and Company’s ability to continue as a going concern and whether the use of the going concern basis of accounting is appropriate. This includes disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless they either intend to liquidate the Group and Company or to cease operations, or have no realistic alternative but to do so. For personal use only
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Auditor’s responsibilities for the audit of the Financial Report Our objective is: • To obtain reasonable assurance about whether the Financial Report as a whole is free from material misstatement, whether due to fraud or error; and • To issue an Auditor’s Report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Australian Auditing Standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error. They are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of the Financial Report. A further description of our responsibilities for the audit of the Financial Report is located at the Auditing and Assurance Standards Board website at: https://www.auasb.gov.au/media/bwvjcgre/ar1_2024.pdf. This description forms part of our Auditor’s Report. Report on the Remuneration Report Opinion In our opinion, the Remuneration Report of Capricorn Metals Ltd for the year ended 30 June 2025, complies with Section 300A of the Corporations Act 2001. Directors’ responsibilities The Directors of the Company are responsible for the preparation and presentation of the Remuneration Report in accordance with Section 300A of the Corporations Act 2001. Our responsibilities We have audited the Remuneration Report included in pages 15 to 25 of the Directors’ report for the year ended 30 June 2025. Our responsibility is to express an opinion as to whether the Remuneration Report complies in all material respects with Section 300A of the Corporations Act 2001, based on our audit conducted in accordance with Australian Auditing Standards. KPMG R Gambitta Partner Perth 28 August 2025 For personal use only