Annual report
Page 1
Ionic Rare Earths Limited ABN 84 083 646 477 Annual Report - 30 June 2026
Page 2
Ionic Rare Earths Limited Contents 30 June 2026 1 Corporate Directory 2 Managing Director and Chief Executive Officer's report 3 Directors' Report 6 Auditor's Independence Declaration 30 Consolidated statement of profit or loss and other comprehensive income 31 Consolidated statement of financial position 32 Consolidated statement of changes in equity 33 Consolidated statement of cash flows 34 Notes to the Consolidated Financial Statements 35 Consolidated Entity Disclosure Statement 66 Directors' Declaration 68 Independent Auditor's Report to the Members of Ionic Rare Earths Limited 69 Shareholder Information 73
Page 3
Ionic Rare Earths Limited Corporate Directory 30 June 2026 2 Directors Company secretary Brett Lynch – Exec utive Chairman Timothy Harriso n– Managing Director and CEO Maxwel McGarvi e – Non-l Executive D irector Sufian Ahmad – Non-Executive Director James Rutherford – Non-Executive Director Anshu Raghuvanshi Notice of annual general meeting The details of the annual general meeting of Ionic Rare Earths Limited are: 13 November 2026 at 11:00am (AEDT) Registered office and principal place of business Suite 09, Level 5, North Tower 525 Collins Street Melbourne VIC 3000 Telephone: +61 3 9776 3434 Email: investors @ionicre.com Share register Computershare Investor Services Pty Ltd Yarra Falls, 452 Johnston Street Abbotsford VIC 3067 Australia Telephone: 61 3 9415 4000 Auditor BDO Audit Pty Ltd Level 9, Mia Yellagonga Tower 2 5 Spring Street Perth WA 6000 Solicitors Baker & McKenzie Level 19, CBW, 181 William Street Melbourne Victoria 3000 Australia Bankers National Australia Bank Level 1, Gateway Building 177-179 Davy Street Booragoon WA 6154 Stock exchange listing Ionic Rare Earths Limited shares are listed on the Australian Securities Exchange (ASX code: IXR) Website www.ionicre.com Corporate Governance Statement The Directors and management are committed to conducting the business of Ionic Rare Earths Limited in an ethical manner and in accordance with high standards of corporate governance. Ionic Rare Earths Limited has adopted and has substantially complied with the ASX Corporate Governance Principles and Recommendations (Fourth Edition) ('Recommendations') to the extent appropriate to the size and nature of its operations. The Corporate Governance Statement, which sets out the corporate governance practices that were in operation during the financial year, identifies and explains any Recommendations that have been followed, which is approved at the same time as the Annual Report can be found at: https://ionicre.com.au/investor-centre/
Page 4
Ionic Rare Earths Limited Managing Director and Chief Executive Officer's report 30 June 2026 3 Dear IonicRE Shareholders The past year has seen further progress by IonicRE on the repositioning of the Company in the mid and downstream segments of the rare earth value chain. Central to this strategy is progressing the delivery of the Company’s first commercial magnet recycling plant, and ultimately multiple facilities worldwide. IonicRE’s wholly owned Belfast subsidiary, Ionic Technologies has worked hard to reach this point and in doing so has had significant support from key stakeholders in industry and government. A succession of grants and other support from the UK Government culminated in the award in January 2026 of an Offer in Principle for a £12 million (approx. A$23 million) capital grant to support the delivery of a commercial magnet recycling facility in Belfast, Northern Ireland. This is a major commitment from the UK Government, and I would like to sincerely thank all involved for this vote of confidence in our Company. A commercial magnet recycling plant in Belfast Harbour will support employment and investment growth in the regional economy, while giving the UK sovereign capability as it seeks to reduce reliance on imports of critical minerals, as per the UK Government’s November 2025 Critical Minerals Strategy. This ground-breaking facility will produce 400 metric tonnes per annum of high purity (99.5% plus) separated magnet Rare Earth Oxides (REOs), utilising Ionic Technologies’ patented long-loop recycling technology. IonicRE is currently working with the UK’s Department for Business, Innovation, Science and Trade (BIST) (formerly known as the Department for Business and Trade (DBT)) and the Advanced Propulsion Centre UK (APC) to progress the required due diligence needed to access this key funding, along with other key UK government bodies to secure additional funding for the facility. The Company has also progressed discussions with a range of potential strategic and institutional investors to secure the remaining required equity capital for this £85 million project, targeting a Final Investment Decision by the end of the September quarter 2026. As part of this process, the Company is exploring a dual listing on the London Stock Exchange’s Alternative Investment Market (AIM), Europe’s most successful market for growth companies, complementing IonicRE’s existing ASX listing while providing access to a broader pool of international investors in London and Europe. Post-balance date, in July 2026 IonicRE appointed Tenova Advanced Technologies to complete Front-End Engineering Design (FEED) for the Belfast commercial plant. The planning approval process is progressing with strong local stakeholder support following a successful public consultation completed in May 2026 and the public consultation period concluding on 12 June 2026 with no objections. Ionic Technologies aims to submit a full Planning Application with Belfast City Council in the third quarter 2026, in another milestone for the project’s development. In May 2026, a collaboration led by Ionic Technologies and including industry partners Less Common Metals (LCM), GKN and Ford UK successfully demonstrated a first-of-kind supply chain for e-motor magnets, in another step forward in developing UK rare earth supply chains. The project showed that Ionic Technologies can provide a reliable supply of REOs for automotive magnet production, key for the UK’s EV revolution. This model is now being explored in other target markets. Ionic Technologies in July 2025 led an industry consortium which secured £11 million in funding to create a UK rare earth permanent magnet (REPM) supply chain, under the ‘CirculaREEconomy’ project. With industry partners from across the UK and Europe, this collaboration shows the potential for a UK/Europe rare earths circular supply chain. These are exciting times for IonicRE shareholders, and as we cement our position in the UK and Europe, I look forward to providing further updates to the market as we advance on our UK commercialisation drive. US market entry The past year has also seen IonicRE take the significant step of entering the US defence sector, thanks to a partnership with US-based Advanced Magnet Lab (AML).
Page 5
Ionic Rare Earths Limited Managing Director and Chief Executive Officer's report 30 June 2026 4 Announced in May 2026, the agreement requires IonicRE to supply AML with magnet REOs as per AML’s contract with the US Defense Logistics Agency, focused on qualification of domestically produced high-grade sintered NdFeB permanent magnets for defence applications. The partnership has the potential to support increasing requirements from the U.S. Department of War linked to the ramp up of domestically manufactured military drone motors and other critical defence equipment requiring secure, traceable, and domestically sourced rare earth permanent magnets, amid increasing geopolitical instability and need for Western supply of such critical materials. Sales have already commenced under the agreement and IonicRE looks forward to making further inroads into this key market. Plans for a magnet recycling facility in the United States were advanced with the signing in November 2025 of a Memorandum of Understanding with Missouri-based US Strategic Metals (USSM), which has the advantage of a fully permitted, 1,800 acre (728.4 hectare) site in Missouri. A planned facility at the site could produce significant quantities of NdPr (neodymium and praseodymium), and importantly a range of strategic heavy rare earths, Dy (dysprosium) and Tb (terbium), plus host dedicated facilities to recycle SmCo (samarium cobalt) magnets and Y (yttrium) containing ceramics. These heavy REOs are central to those subject to Chinese export controls, thereby providing an important domestic supply source to the US market. The Trump administration has imposed a January 2027 deadline for US companies to cease purchasing rare earths and magnets from China, Russia, Iran or North Korea. With China expected to announce additional export restrictions in November 2026, the need for new ex-China supply is becoming increasingly urgent and IonicRE’s technology can form part of the solution. Also in the United States, in May 2026 IonicRE agreed a Joint Development and Licensing Agreement with Nth Cycle, a critical mineral refining technology company, to enhance end-to-end rare earth refining operations in the United States and globally. Under the agreement, U.S.-based Nth Cycle will provide its proprietary electro-extraction technology for IonicRE’s rare earth recycling and refining operations, establishing the first Western production pathway for both long-loop recycling to high purity REOs, as well as providing the potential to eliminate oxalic acid from the recycling process. This will result in the most resilient and competitive rare earth recycling and refining flowsheet available, reducing costs, external supply dependencies, and carbon footprint. Currently, Western refiners face a hidden dependency on Chinese chemical supply chains in the rare earth refining process, which this partnership between IonicRE and Nth Cycle seeks to address. IonicRE’s Makuutu Heavy Rare Earths Project also has the potential to become a key partner in Western rare earths supply chains, with the Company announcing a strategic review in July 2026 to evaluate the best pathway forward to unlocking value from the Uganda project. Viridion advances Brazil represents another major rare earths market and Viridion, IonicRE’s 50/50 Brazilian joint venture with Viridis Mining & Minerals, made some important progress during fiscal 2026. In July 2025, Viridion was granted land for the construction of a Centre for Rare Earths Innovation, Technology and Recycling (CRITR) in Minas Gerais, an important step in developing South America’s first rare earth refining and recycling hub. A groundbreaking ceremony was held in September 2025, with preliminary designs progressed along with engagement with contractors to support permitting and planning. Refinery design work has also advanced, which is feeding into preliminary discussions with the Viridis team ahead of planned technical work expected on Mixed Rare Earth Carbonate (MREC) produced from Viridis’ Colossus pilot plant at its Rare Earth Research and Processing Centre. Viridion was also successful in progressing to the next phase of assessment under the R$5 billion (~US$900 million) funding program administered by BNDES (Brazilian National Bank for Economic and Social Development) and FINEP (Federal Agency for Funding Authority for Studies and Projects in Brazil). Viridion has continued financing discussions with several groups, while talks are also progressing to develop a Demonstrator program showing the full rare earth magnet chain in Brazil.
Page 6
Ionic Rare Earths Limited Managing Director and Chief Executive Officer's report 30 June 2026 5 Capacity building Building a global industrial business requires increased capacity across all areas of the business. IonicRE has made some key appointments during the past fiscal year, including new senior executives and strategic advisors along with the recent hiring of a Chief Operating Officer – EMEA. The Company has also invested in a laboratory upgrade at the Belfast Demonstration Plant as well as recruiting additional technical staff to support increased activity and in the lead-up to commercial operations. IonicRE’s admission to the OTCQB market in the United States was another step forward in the internationalisation of its investor base, ahead of the planned AIM listing. The Company also completed a successful capital consolidation on a 1 for 30 basis which has resulted in a more effective capital structure for the benefit of shareholders. I would like to thank shareholders for their continued support, along with the invaluable contribution made by my fellow Directors, staff, contractors and partners in our successful international expansion. The tide has turned in rare earth markets with Western governments now deploying capital on building ex-China supply chains, with critical minerals stockpiling, financing and price support agreements all helping address the industry’s current monopolistic structure. The first step is across metals, alloys and magnets, and that bodes well for our recycling technology which becomes central to recycling the waste streams for this new capacity coming on line first. There is an enormous opportunity ahead for IonicRE and after the past year’s advances, fiscal 2027 is set to be a truly landmark year as we finance our first commercial plant, and look to potential replication in the US as part of a global business expansion. Tim Harrison Managing Director and CEO
Page 7
Ionic Rare Earths Limited Directors' Report 30 June 2026 6 The Directors present their report, together with the financial statements, on the consolidated entity (referred to hereafter a s the 'Group') consisting of Ionic Rare Earths Limited (referred to hereafter as the 'Company' or 'parent entity') and the entiti es it controlled at the end of, or during, the year ended 30 June 2026. Directors The following persons were Directors of Ionic Rare Earths Limited during the financial year and up to the date of this report, unless otherwise stated: Brett L ynch – Executive Chairman Timothy Harrison – Managing Director and CEO Maxwell McGarvie – Non-Executive Director Sufian Ahmad – Non-Executive Director James Rutherford – Non-Executive Director Information on Directors Name: Brett L ynch Title: Executive Chairman Qualifications: B.En g (Mining) Experience and expertise: Mr Lynch is a highly experienced international company director and chief executive, with a strong background in mining and mining-related businesses across Australia, Asia and North America and a proven track record in advancing shareholder value. A senior mining engineer and manager, he has more than 30 years’ experience in the global industry, including previous posts with leading resources companies such as MIM Holdings, New Hope Corporation, Orica and VLI, during which time he was responsible for multi-million dollar international operations. Mr Lynch professional qualifications include a Bachelor of Engineering (Mining) (Honours) at the University of Melbourne, a Graduate Diploma of Business (Accounting) at Monash University and a Company Director Diploma from the Australian Institute o f Company Directors. Other current directorships: Consolidated Lithium Metals Inc (TSX: CLM) Resolution Minerals Ltd (RML) Former directorships (last 3 years): Sa yona Mining Limited (SYA) Interests in shares: 5,426,870 ordinar y shares Indirectly 333,333 ordinar y shares Directly Interests in options: 1,283,325 options over ordinar y shares Interests in rights: 1,500,001 performance ri ghts Name: Timoth y Harrison Title: Mana ging Director and CEO Qualifications: B.En g (Chem), Fellow AusIMM Experience and expertise: Mr. Harrison holds a Bachelor of Chemical Engineering degree from Adelaide University and has over 26 years of experience and an extensive and successful track record in the fields of both mineral processing and hydrometallurgy across multiple commodities, including significant battery and technology metals experience. This has involved roles in project development, from process development, through studies and engineering, and commissioning and operations. Mr. Harrison is a Fello w of the Australian Institute for Mining and Metallurgy (AusIMM). Mr. Harrison has been instrumental in driving the development of Ionic Technologies and identifying opportunities for enhanced value creation through downstream refining and magnet recycling. Other current directorships: None Former directorships (last 3 years): Viridis Minin g and Minerals Limited (VMM) Interests in shares: 1,566,667 ordinar y shares Indirectly Interests in options: 209,525 options over ordinar y shares Interests in rights: 1,500,001 performance ri ghts
Page 8
Ionic Rare Earths Limited Directors' Report 30 June 2026 7 Name: Maxwell McGarvie Title: Non-Executive Directo r Qualifications: MBT, MAICD, FAIM Experience and expertise: Mr. McGarvie is a senior mining executive with an extensive portfolio o f technical/managerial appointments in a career exceeding 46 years in mine development, mineral processing, operational and management roles across Australia, Africa and the Middle East. He has had a long and distinguished career in the mining industry, a significant portion of this with Iluka Resources Limited and prior entities, including development roles within its mineral sands operation at Eneabba, Western Australia and a major role in returning the Sierra Rutile mineral sands operation in Sierra Leone (operated by Iluka) to profitable operations following the civil war in that country. Other current directorships: None Former directorships (last 3 years): None Interests in options: 43,176 options over ordinar y shares Interests in rights: 125,000 performance ri ghts Name: Sufian Ahmad Title: Non-Executive Directo r Qualifications: MBA, Post-Graduate Diploma in Commercial and Resources Law, LLB (Hons), Diploma in Financial Planning. Experience and expertise: Mr. Ahmad brings strong legal, business and marketing expertise to the Board with ove r 12 years’ experience in the resource sector in the provision of corporate advisor y services. He is also the founder of Sixty Two Capital, an advisory firm specialising in the growth and funding of emerging ASX companies. Other current directorships: None Former directorships (last 3 years): Batter y Age Minerals Limited (BM8) (formerly known as Pathfinder Resources Limited) Interests in shares: 5,131,065 ordinar y shares Indirectly Interests in options: 360,318 options over ordinar y shares Interests in rights: 125,000 performance ri ghts Name: James Rutherford Title: Non-Executive Director * Qualifications: Graduate of Queen's University Belfast; alumnus of the Royal Belfast Academical Institution (RBAI). Experience and expertise: Mr Rutherford has more than 25 years' experience in investment management and banking, specialising in the global mining and metals sector. Between 1997 and 2013, he served as Senior Vice President at Capital Group, where he was responsible fo r investments in the global mining and metals sector. Prior to this, he was Vice President at HSBC James Capel in New York, covering the Latin American mining and metals industry. Mr Rutherford brings significant financial, capital markets, strategic and corporate governance expertise to the Board. Other current directorships: Ecora Royalties plc Perseus Mining Limited Former directorships (last 3 years): Centamin plc (Non-Executive Chairman until the company’s acquisition by AngloGold Ashanti in 2024) Interests in shares: 177,532 ordinar y shares directly Interests in options: Nil options over ordinar y shares Interests in rights: 475,000 performance rights * Mr Rutherford was appointed as a Non-Executive Director of the Company on 14 September 2026 and accordingly did not serve as a Director during the financial year ended 30 June 2026. 'Other current directorships' quoted above are current directorships for listed entities only and excludes directorships of all other types of entities, unless otherwise stated. Interests in shares: 122,937 ordinar y shares directly
Page 9
Ionic Rare Earths Limited Directors' Report 30 June 2026 8 'Former directorships (last 3 years)' quoted above are directorships held in the last 3 years for listed entities only and excludes directorships of all other types of entities, unless otherwise stated. Meetings of Directors The number of meetings of the Company's Board of Directors ('the Board') held during the year ended 30 June 2026, and the number of meetings attended by each Director were: Full Board Attended Held Brett L ynch 7 7 Tim Harrison 7 7 Maxwell McGarvie 7 7 Sufian Ahmad 6 7 Held: represents the number of meetings held during the time the Director held office. As at the date of this report, the Company did not have audit, remuneration or nomination committees, as the Directors believe the size of the Company does not warrant their existence. Company secretary Mr Mark Licciardo resigned on 16 April 2026 and Anshu Raghuvanshi was appointed Company Secretary on 16 April 2026 as his replacement. The Board thanks Mark for his service to the Company. Anshu is based in Melbourne and is a Corporate Governance Manager and Company Secretary at Acclime. She provides corporate governance and company secretarial support to a portfolio of listed (ASX and NSX) and unlisted companies. With more than 15 years’ experience in company secretarial and legal roles across professional services firms, Anshu brings broad governance expertise spanning diverse industries, including investment management, rare earths development, E-commerce and healthtech. Anshu is a Fellow of the Governance Institute of Australia and holds a Bachelor of Laws. Principal activities The principal activities of the Group during the year were the advancement of its rare earth magnet recycling and supply chain strategy, including progression of funding initiatives in the United Kingdom, advancement of engineering and FEED activities for its planned Belfast magnet rare earth oxide facility, expansion of strategic partnerships in the United States, and continued development of its critical minerals interests in Uganda and Brazil. The Group’s business is conducted from operations located in Australia, the United Kingdom through its 100% owned subsidiary Ionic Technologies International Limited, Uganda thr ough its 60% held interest in Rwenzori Rare Metals Limited, and Brazil through its 50% held joint venture, Viridion. Dividends There were no dividends paid, recommended or declared during the current or previous financial year. Review of operations The loss for the Group after providing for income tax amounted to $14,913,778 (30 June 2025: loss of $11,341,449). IonicRE made significant progress during the reporting period, focused on building a global industrial business based on wholly owned subsidiary Ionic Technologies’ patented rare earth permanent magnet (REPM) recycling technology. Highlights included the significant award in January 2026 of an Offer in Principle for a £12 million (approx. A$23 million) capital grant to support the delivery of a commercial magnet recycling facility in Belfast. In May 2026, a collaboration led by Ionic Technologies and including industry partners Less Common Metals (LCM), GKN and Ford UK successfully demonstrated a first-of-kind supply chain for e-motor magnets, in another step forward in developing UK rare earth supply chains. Ionic Technologies also led an industry consortium which secured £11 million in funding to create a UK REPM supply chain, under the ‘CirculaREEconomy’ project.
Page 10
Ionic Rare Earths Limited Directors' Report 30 June 2026 9 IonicRE also expanded into the US market, signing agreements with various US companies and gaining traction within the US defence sector. In May 2026, an agreement signed with Advanced Magnet Lab (AML) requires IonicRE to supply AML with magnet REOs as per AML’s contract with the US Defense Logistics Agency, focused on qualification of domestically produced high-grade sintered NdFeB permanent magnets for defence applications. Plans for a magnet recycling facility in the United States were advanced with the signing in November 2025 of a Memorandum of Understanding (MOU) with Missouri-based US Strategic Metals (USSM), which has a fully permitted, 1,800 acre (728.4 hectare) site in Missouri. A planned facility at the site could produce significant quantities of NdPr (neodymium and praseodymium), and importantly a range of strategic heavy rare earths Dy (dysprosium) and Tb (terbium). Additionally the collaboration plans to host dedicated facilities to recycle SmCo (samarium cobalt) magnets and Y (yttrium) containing ceramics. Also in the United States, in May 2026 IonicRE agreed a Joint Development and Licensing Agreement with Nth Cycle, a critical mineral refining technology company, to enhance end-to-end rare earth refining operations in the United States and globally. Under the agreement, Nth Cycle will provide its proprietary elec tro-extraction technology for IonicRE’s rare earth recycling and refining operations, establishing the first Western production pathway for both long-loop recycling to high purity REEs, as well as providing the potential to eliminate oxalic acid from the recycling process. In Brazil, Viridion, the company’s 50/50 joint venture with Viridis Mining & Minerals, further progressed during fiscal 2026. In July 2025, Viridion was granted land for the construction of a Centre for Rare Earths Innovation, Technology and Recycling (CRITR) in Minas Gerais. A groundbreaking ceremony was held in September 2025, with preliminary designs progressed along with engagement with contractors to support permitting and planning. Viridion was also successful in progressing to the next phase of assessment under the R$5 billion (~US$900 million) funding program administered by BNDES (Brazilia n National Bank for Economic and Social Development) and FINEP (Federal Agency for Funding Authority for Studies and Projects in Brazil). IonicRE also successfully completed in December 2025 a capital consolidation on a 1 for 30 basis, as approved by shareholders at the November 2025 Annual General Meeting. The Company also undertook a 1 for 15 Renounceable Rights Issue and Placement, raising $15.6 million including a strategic investment from US-based Argentem Creek Partners. IonicRE upgraded its presence in international financial markets with its ordinary shares gaining approval for trading on the OTCQB Venture Market in the United States under the ticker OTC:IXRRF, effective 21 January 2026. As a result of the loss incurred for the year ended 30 June 2026 and the liquidity at the reporting date, there is a material uncertainty on whether the Group can continue as a going conc ern. The Directors consider that the Group will continue as a going concern, as explained in note 2 to the financial statements. Ionic Technologies (100% IonicRE subsidiary) Ionic Technologies made substantial advances during fiscal 2026 towards the development of a commercial magnet recycling facility in Belfast, Northern Ireland, together with the Co mpany’s international expansion across North and South America, Europe and globally. UK initiatives In July 2025, the “Circu laREEconomy” consortium led by Ionic Technologies was awarded £11 million in funding from the Advanced Propulsion Centre UK (APC) and the UK Government for a first-of-kind UK based REPM supply chain, necessitating the production of high purity, separated REOs from Ionic’s Belfast Demonstration Plant. Commencing from 1 September 2025 and running for three years, Ionic Technologies and its collaboration partners will work with leading German REPM manufacturers to produce the best available sintered magnets for use in e-motors. The consortium includes Ford Technologies Limited, Bentle y Motors Limited, Wrightbus, Less Common Metals, European Metals Recycling Limited, and British Geological Survey. European REPM manufacturers, Vacuumschmelze and GKN
Page 11
Ionic Rare Earths Limited Directors' Report 30 June 2026 10 Powder Metallurgy are expected to produce magnets for the project, manufacturing magnets in Germany to OEM specifications. The project is aligned with the APC’s efforts to support electric drivetrain capability in the UK, with the project serving the e- motor market, promoting capability in permanent magnet synchronous motor technology. Ionic Technologies’ direct allocation as part of the overall program will be approximately £3.1 million over the program. In November 2025, IonicRE welcomed the launch of the UK’s updated “Critical Minerals Strategy,” highlighting the importance of critical minerals to the nation’s economic growth and security. Officially announced by then British Prime Minister Sir Kier Starmer on 22 November 2025, the Strategy targets producing 10% of the UK’s mineral needs domestically and 20% through recycling by 2035. This compares to current domestic production which accounts for 6% of its critical minerals needs. The Strategy also aims to ensure that no more than 60% of the UK’s supply of any one critical mineral is imported from any one country by 2035. Backed by up to £50 million (A$101 million) in new funding, as well as public finance through the National Wealth Fund (£27.8 billion) and UK Exp ort Finance, the Strategy ai ms to reduce the UK’s ov erreliance on foreign impo rts of critic al minerals, protecting the UK from shortages in global shocks and shoring up supply chains. Notably, the Strategy recognised the important role played by Belfast as a critical minerals cluster. Northern Ireland currently hosts several strategic industries for the UK including Ionic Technologies’ Belfast Demonstration Plant for rare earth permanent magnet recycling. The critical minerals sector contributes £1.79 billion to the UK economy and directly supports over 50,000 jobs, highlighting its importance as an emerging growth sector. Figure 1: “CirculaREEconomy” supply chain initiative back by the Advance d Propulsion Centre in £11 million program. In January 2026, a succession of grants and other support from the UK Government culminated in the significant award of an Offer in Principle for a £12 million capital grant to support the delivery of a commercial magnet recycling facility in Belfast, via the UK Government’s DRIVE35 Funding Program.
Page 12
Ionic Rare Earths Limited Directors' Report 30 June 2026 11 DRIVE35 provides capital funding to support the industrialisation of zero-emission vehicle technologies and is funded by the Department for Business, Innovation, Science and Trade (BIST) (formerly known as the Department for Business and Trade (DBT)) and delivered in partnership with the APC and Innovate UK. A commercial magnet recycling plant in Belfast Harbour will s upport employment and investment growth in the regional economy, while giving the UK sovereign capability as it seeks to reduce reliance on foreign imports of critical minerals, as per the UK Government’s “Critical Minerals Strategy.” This ground-breaking facility will produce 400 metric tonnes per annum of high purity (99.5% plus) separated magnet REOs, utilising Ionic Technologies’ patented long-loop recycling technology. In May 2026, a collaboration led by Ionic Technologies and including LCM, GKN and Ford UK, successfully demonstrated a first-of-kind supply chain for e-motor magnets, enabled by Ionic Technologies’ long-loop recycling process. The project provided evidence that REOs produced using Ionic Technologies’ proprietary technology are not only appropriate for use in high-specification magnet supply chains, but also that the long-loop recycling method can enable a UK-orientated holistic supply chain that can deliver magnets equivalent to the existing supply chain. The project was supported via the UK Government’s CLIMATES initiative, which fostered 36 projects supporting circular REE initiatives. Post-balance date, in July 2026 IonicRE appointed Tenova Advanced Technologies to complete Front-End Engineering Design for the commercial plant. The planning approval process is well underway, with a successful public consultation completed in May 2026 and the public consultation period concluding on 12 June 2026 with no objections. Ionic Technologies aims to submit a full Planning Application with Belfast City Council in the third quarter 2026, in another milestone for the project’s development. Figure 2: Circular Supply Chain including roles of Ionic Technologies, LCM, GKN and Ford UK. US entry IonicRE made inroads into the US market in fiscal 2026, securing a number of partnerships to drive growth in the world’s biggest economy.
Page 13
Ionic Rare Earths Limited Directors' Report 30 June 2026 12 In November 2025, IonicRE signed a non-binding MOU with Missouri-based US Strategic Metals (USSM), a vertically integrated, multi-metallic critical minerals platform, at an official ceremony held at the Australian Embassy in Washington, D.C., highlighting the strong corporate commitment to supporting the US-Australia critical minerals partnership. Under the MOU, IonicRE and USSM will pursue opportunities to align rare earth and critical mineral production with multi- metallic downstream processing and supply chain development at USSM’s 1,800 acre (728.4 hectare) fully permitted site in Missouri, USA, starting with the deployment of Ionic Te chnologies’ patented rare earth permanent magnet recycling technology, developing both commercial Neodymium-Iron-Boron (NdFeB) and Samarium-Cobalt (SmCo) magnet recycling capacity. The Missouri recycling facility is expected to produce significa nt quantities of NdPr (neodymium and praseodymium), and importantly a range of strategic heavy rare earths, including those on the list of Chinese restricted rare earth elements, including dysprosium (Dy), terbium (Tb), samarium (Sm), gadolinium (Gd) and holmium (Ho). In addition, the parties will evaluate other heavy rare earth recycling opportunities, including yttrium (Y) within the USA to be located at the USSM site in Missouri. The MOU focuses on producing high purity, separated magnet rare earth oxides (REOs) rapidly in the United States, with future potential expansion to include a wide range of magnet and heavy rare earths from a range of strategically sourced mixed rare earth carbonate (MREC) from target project feeds. The partnership supports the historic critical minerals framework signed on 21 October 2025 by US President Donald J. Trump and Australian Prime Minister Anthony Albanese (“The United States–Australia Framework for Securing of Supply in the Mining and Processing of Critical Minerals and Rare Earths”), aimed at delivering a US-Australia secured supply chain for critical minerals and rare earths, required for defence, advanced manufacturing and renewables. The MOU also supports the Trump Administration’s efforts to secure US leadership in critical minerals and energy by expanding domestic critical mineral production. The United States currently sources 70% of its rare earth imports from China, with the Trump administration ramping up efforts to expand US domestic production of rare earths and other critical minerals to reduce its import dependence. By January 2027, Chinese rare earth content must be completely removed from US weapons systems under existing regulations. In May 2026, IonicRE formed a Joint Development and Licensing Agreement with US-based Nth Cycle, Inc., a critical mineral technology company, to enhance end-to-end rare earth refining operations in the United States and globally. Under the agreement, Nth Cycle will provide its proprietary elec tro-extraction technology for IonicRE’s rare earth recycling and refining operations, establishing the first Western production pathway for both long-loop recycling to high purity REEs as well as providing the potential to eliminate oxalic acid from the recycling process. Patented technology developed by Ionic Technologies leads Western industry in recycling and refining rare earths from pre- consumer magnet swarf and spent magnets, while Nth Cycle is the most advanced critical mineral refiner for black mass and refining technology provider in rare earths, with singular speed and scalability advantages in the supply chain’s “missing midstream.” Together, the two companies will work to replace the precipitation step in IonicRE’s flowsheet with Nth Cycle's electro- extraction closed-loop process, which uses electricity to produce the chemicals—rather than oxalic acid—to convert rare earth recycled feedstocks into high-purity oxides, the solid powders used in magnet metal and alloy production. Unlike conventional refining processes for rare earths, where the precipitating oxalic acid agent is consumed and must be continuously resupplied, the companies’ integrated system eliminates that dependency entirely, while regenerating hydrochloric acid for continuous reuse during processing. The result is the most resilient and competitive rare earth recycling and refining flowsheet available, reducing costs, external supply dependencies and carbon footprint. Also in May 2026, IonicRE signed both binding sales agreements with US-based Advanced Magnet Lab, Inc. (AML) to supply AML with magnet rare earth oxides, specifically Neodymium/Praseodymium oxide (NdPr)2O3 and dysprosium oxide (Dy2O3), under AML’s recently awarded U.S. Defense Logistics Agency (“ DLA”) contract focused on qualification of domestically produced high-grade sintered NdFeB permanent magnets for defence applications. Additionally, both companies signed a non-binding MOU for collaboration on both the supply of magnet REOs and recycling of swarf and pre-consumer waste, representing another important step in IonicRE’s strategy to establish secure, sovereign, and sustainable ex-China rare earth supply chains across the United States and Europe, while expanding the Company’s global refining and magnet recycling footprint.
Page 14
Ionic Rare Earths Limited Directors' Report 30 June 2026 13 The partnership has the potential to support increasing requirements from the US Department of War linked to the ramp up of domestically manufactured m ilitary drone motors and other critical defence equipment requiring secure, traceable, and domestically sourced rare earth permanent magnets, amid increasing geopolitical instability and need for Western supply of such critical materials. Under the program, IonicRE will provide critical magnet REO feedstock to support AML’s innovative PM-Wire™ manufacturing platform, designed to enable scalable, traceable, and high-performance permanent magnet production in the United States. AML’s DLA-supported initiative includes alloy optimisati on, advanced manufacturing development, and integrated supply chain collaboration across Western-aligned partners. AML recently announced the award of a US$2 million contract from the DLA to support qualification activities for domestically produced sintered NdFeB magnets used in defence systems, with IonicRE a key supplier of (NdPr) 2O3 and Dy2O3. Additional to this, IonicRE has started working closely with other US.-based magnet manufacturing companies and aims to add significantly to our customer base across fiscal 2027 and beyond. Brazil partnership In Brazil, Viridion, the company’s 50/50 joint venture with Viridis Mining & Minerals, further progressed during fiscal 2026. In July 2025, Viridion was granted 2,071 square meters of land by the Municipality of Poços de Caldas, Minas Gerais, within an Industrial Zone for the construction of a Centre for Rare Earths Innovation, Technology and Recycling (CRITR). This is an important step in developing South America’s first rare earth refining and recycling hub, aligning with Brazilian national industrial policy, with the CRITR expected to commence preliminary site works in FY2027, subject to financing and regulatory approvals. Viridion received unanimous approval from the Poços de Caldas City Council for the official grant of land, a definitive endorsement by the local government and Mayor. This milestone reflects strong community and government support for Viridion, reinforcing its strategic upside for value addition within Brazil, the state of Minas Gerais, and the local Poços de Caldas economy. A groundbreaking ceremony for the CRITR was held in September 2025 attended by IonicRE Managing Director Tim Harrison along with Viridis and government representatives. Also in July 2025, Viridion wa s successful in pr ogressing to the next ph ase of assessment under the R$5 billion (~US$900 million) strategic minerals funding program administered by BNDES (Brazilian National Bank for Economic and Social Development) and FINEP (Federal Agency for Funding Authority for Studies and Projects in Brazil). Viridion was selected from the initial shortlist as one of the successful companies advancing to progress with a Joint Support Plan (‘PSC’) after high-level meetings with both agencies. Viridion subsequently entered into negotiations to finalise a tailored funding package, expected to include a combination of non-dilutiv e grants, debt financing, and potential equity participation, to accelerate the development of downstream rare earth refining and magnet recycling facilities in Brazil. The JV is collectively working through key inputs to unlock funding and start development activities in Brazil. During the June quarter 2026, preliminary designs were pr ogressed for the CRITR facility, with local engagement with contractors underway to support finalising of applications for permitting and planning. Refinery design work has progressed, which is feeding into preliminary discussions with the Viridis team ahead of planned technical work expected to commence later in 2026 on Mixed Rare Earth Carbonate (MREC) produced from Viridis’ Colossus pilot plant at its Rare Earth Research and Processing Centre (‘CPTR’) in Poços de Caldas. Viridion also has continued discussions with several groups on financing Viridion, including BNDES/FINEP to finalise a tailored funding package, expected to include a combination of non-dilutiv e grants, debt financing, and potential equity participation, to accelerate the development of downstream rare earth refining and magnet recycling facilities in Brazil. Viridion has continued significant engagement with several potential industrial partners and consumers of REPMs in the Brazilian market as part of discussions to develop a Demonstrator program to demonstrate the full magnet rare earth magnet value chain in Brazil.
Page 15
Ionic Rare Earths Limited Directors' Report 30 June 2026 14 Makuutu Heavy Rare Earths Project (60% IXR) Makuutu ranks amongst the world’s largest and most advanced ionic adsorption clay (IAC) deposits, and as such, is a globally strategic resource for near t erm, low capital development, fa cilitating long-term security of magnet and heavy REO supply. The project’s strategic nature in the development of an ex-China rare earths supply chain has come into added focus following Beijing’s imposition of rare earth export controls and resulting supply shortages, particularly of heavy rare earths. Importantly, the Makuutu MREC product basket announced in IonicRE’s Definitive Feasibility Study released in March 2023 demonstrated a basket rich in medium and heavy REOs (~ 45% content) notably able to help offset the elements targeted in China’s export control ban expected to come into force from November 2026. Makuutu is being developed by Rwenzori Rare Metals Limited (“RRM”), a Ugandan private company which owns 100% of the Makuutu Project. IonicRE is a 60% owner of RRM. Post-balance date, in July 2026 IonicRE announced a strategic review of the Project amid strong inbound interest and a global, Western search for new and independent sources of medium and heavy rare earths supply, following significant engagement with US and other Western-aligned interests. The review aims to evaluate opportunities to enhance value creation and accelerate development of Makuutu, a member of the Forum on Resource Geostrategic Engagement (FORGE) (previously the Minerals Security Partnership) as part of IonicRE’s broader strategy to establish an integrated, sustainable rare earth supply chain encompassing mining, refining and recycling operations. The review will consider a range of potential strategic, st ructural and funding alternatives for Makuutu, including the introduction of strategic or government-backed partners, new investment structures, or potential listings in alternative jurisdictions. The Makuutu deposit comprises nine licences covering around 300 square kilometres, located 120 km east of Kampala. The defined mineralisation stretches 37 km long and is situated near high-quality infrastructure. It contains a high proportion of magnet and heavy rare earths, including a near-perfect split of magnet rare earths Nd, Pr, Dy and Tb, required for developing the high intensity permanent magnets required for EVs and offshore wind turbines. A mining licence was awarded in January 2024 for the central Makuutu tenement, representing the first large-scale mining licence issued in Uganda under the 2022 Mining Act. First production of MREC was achieved during the March quarter 2024 at the Makuutu Demonstration Plant, fostering engagement with potential offtakers and strategic partners. Figure 3: Makuutu Stage 1 REO product basket, excluding Sc2O3 (note rounding applied) (ASX: 20 March 2023).
Page 16
Ionic Rare Earths Limited Directors' Report 30 June 2026 15 Figure 4: Makuutu Heavy Rare Earths Project mineral tenements including MLA over a selection of RL00007, TN04741 (red dashed border). Table 1: Makuutu Resource above 200ppm TREO-CeO2 Cut-off Grade (ASX: 15 May 2024). Resource Classification Tonnes (millions) TREO (ppm) TREO- CeO2 (ppm) LREO (ppm) HREO (ppm) CREO (ppm) Sc2O3 (ppm) Indicated 517 650 440 470 170 220 30 Inferred 99 560 380 420 140 190 30 Total 617 630 430 460 160 210 30 Rounding has been applied to 1Mt and 10ppm which may influence averaging calculation. All REO are tabulated in ASX announcement 15 th May 2024 with formulas defining composition of (Light Rare Earth Oxides (“LREO”), Heavy Rare Earth Oxides (“HREO”) and Critical Rare Earth Oxides (“CREO”). Tenement update During the year, RRM progressed a submission on the next Mining Licence Application, TN04741 over the mineralised selection of Retention Licence (RL) 00007 (see Figure 4). Additionally, RRM progressed renewal applications over additional tenements RL00234 and EL00257. Full details are provided below in Table 2.
Page 17
Ionic Rare Earths Limited Directors' Report 30 June 2026 16 Table 1: Makutu Heavy Rare Earths Project Tenement Details. Licence ID Licence Type Application Date Granted Date Expiry / Renewal Date Area (km2) LML00334 Mining 01/09/2022 28/12/2023 27/12/2044 43.78 TN/LML/04741 Mining 23/09/2024 Application in process* Application in process 15.34 RL00007 Retention 27/03/2019 27/11/2019* 25/11/2024 43.39 RL00234 Retention 20/06/2021 06/07/2021 05/07/2024 - Renewal Pending 47.03 EL00257 Exploration 15/07/2021 21/10/2021 20/10/2024 - Renewal Pending 55.51 EL00147 Exploration 19/10/2020 28/12/2020 27/12/2026 30.07 EL00624 Exploration 03/05/2024 03/09/2025 02/09/2029 24.79 EL00616 Exploration 03/05/2024 29/08/2025 a 28/08/2029 5.44 EL00148 Exploration 20/10/2020 28/12/2020 27/12/2026 24.08 EL00450 Exploration 07/05/2024 24/03/2025 b 23/03/2029 24.08 * Renewal approved a. The Ugandan cadastre system requires amendment to no longer relinquish 50% of EL upon renewal – TN relates to EL00147, which RRM retains in full. b. The Ugandan cadastre system requires amendment to no longer relinquish 50% of EL upon renewal – TN relates to EL00148, which RRM retains in full. Significant changes in the state of affairs IonicRE’s wholly owned subsidiary, Ionic Technologies received in January 2026 an Offer in Principle for a £12 million (approx. A$23 million) capital grant to support the delivery of a commercial magnet recycling facility in Belfast. In May 2026, a collaboration led by Ionic Technologies and including industry partners Less Common Metals (LCM), GKN and Ford UK successfully demonstrated a first-of-kind supply chain for e-motor magnets, in another step forward in developing UK rare earth supply chains. Ionic Technologies also led an industry consortium which secured £11 million in funding to create a UK REPM supply chain, under the ‘CirculaREEconomy’ project announced in July 2025. IonicRE also expanded into the US market, signing agreements with various US companies and gaining access to the US defence sector. In May 2026, an agreement signed with Advanced Magnet Lab (AML) requires IonicRE to supply AML with magnet REOs as per AML’s contract with the US Defense Logistics Agency, focused on qualification of domestically produced high-grade sintered NdFeB permanent magnets for defence applications. Plans for a magnet recycling facility in the United States were advanced with the signing in November 2025 of a Memorandum of Understanding (MOU) with Missouri-based US Strategic Metals (USSM), which has a fully permitted, 1,800 acre (728.4 hectare) site in Missouri. A planned facility at the site could produce significant quantities of NdPr (neodymium and praseodymium), and importantly a range of strategic heavy rare earths, which also has potential to host Sm-Co magnet and Y-compound recycling facilities. Also in the United States, in May 2026 IonicRE agreed a Joint Development and Licensing Agreement with Nth Cycle, a critical mineral refining technology company, to enhance end-to-end rare earth refining operations in the United States and globally. Under the agreement, Nth Cycle will provide its proprietary elec tro-extraction technology for IonicRE’s rare earth recycling and refining operations, establishing the first Western production pathway for both long-loop recycling to high purity REEs, as well as providing the potential to eliminate oxalic acid from the recycling process.
Page 18
Ionic Rare Earths Limited Directors' Report 30 June 2026 17 In Brazil, Viridion, the company’s 50/50 joint venture with Viridis Mining & Minerals, was granted land for the construction of a Centre for Rare Earths Innovation, Technology and Recycling (CRITR) in Minas Gerais. A groundbreaking ceremony was held in September 2025, with preliminary designs progressed al ong with engagement with contractors to support permitting and planning. Viridion was also successful in progressing to the next phase of assessment under the R$5 billion (~US$900 million) funding program administered by BNDES (Brazilia n National Bank for Economic and Social Development) and FINEP (Federal Agency for Funding Authority for Studies and Projects in Brazil). IonicRE also successfully completed in December 2025 a capital consolidation on a 1 for 30 basis, as approved by shareholders at the November 2025 Annual General Meeting. The Company also undertook a 1 for 15 Renounceable Rights Issue and Placement, raising $15.6 million including with a strategic investment from US-based Argentem Creek Partners. IonicRE upgraded its presence in international financial markets with its ordinary shares gaining approval for trading on the OTCQB Venture Market in the United States under the ticker OTC:IXRRF, effective 21 January 2026. Post year-end the Company announced a strategic review in July 2026 to evaluate the best pathway forward to unlocking value from IonicRE’s Makuutu Heavy Rare Earth in Uganda, plus that it is exploring a dual listing on AIM (Alternative Investment Market), the London Stock Exchange sub-market for smaller, high-growth companies which is Europe's most successful growth market. There were no other significant changes in the state of affairs of the Group during the financial year. Matters subsequent to the end of the financial year On 27 July 2026, the Company issued 67,413 fully paid ordinary shares as consideration for services received. On 27 July 2026, the Company issued 1,949,999 performance rights under its employee incentive scheme with an expiry date of 30 June 2029. On 13 July 2026 the Company announced it commenced the FEED phase for its Belfast rare earth magnet recycling facility and continued to advance planning and permitting activities in support of the proposed development. On 31 July 2026 the Company announced the commencement of a strategic review of its Makuutu Heavy Rare Earths Project to evaluate potential strategic, funding and development alternatives. No decisions have been made and the review remains ongoing On 5 August 2026 the Company announced a successful $8 Million placement at 0.26 per new share. The placement includes $0.5 Million Company Director participation subject to shareholders approval at the AGM. On 11 August 2026, the Company issued 28,846,155 fully paid ordinary shares as part of the placement, and 251,299 shares as consideration for services received. On 25 August 2026, the Company issued 286,622 fully paid ordinary shares as consideration for services received. On 31 August 2026, the Company lapsed 666,667 Performance rights as the relevant conditions were not met. On 3 September 2026, the Company announced that Ionic Rare Earths USA had entered into a non-binding term sheet with US Strategic Metals to establish a proposed 50:50 joint venture to develop rare earth magnet recycling facilities in Missouri, USA. The proposed joint venture contemplates an initial investment of US$100 million and the licensing of Ionic Technologies' magnet recycling technology. The transaction remains subject to definitive agreements and other conditions precedent and therefore no amounts have been recognised in the financial statements at 30 June 2026. The financial impact of the proposed joint venture cannot presently be reliably estimated. On 11 September 2026, the Company issued 34,922 ordinary shares for services provided. Additionally, 883,332 performance rights vested and were exercised into 883,332 ordinary shares, and five convertible notes were converted into 485,510 ordinary shares. Accordingly, a total of 1,403,764 new ordinary shares were issued. No other matter or circumstance has arisen since 30 June 2026 that has significantly affected, or may significantly affect the Group's operations, the results of those operations, or the Group's state of affairs in future financial years.
Page 19
Ionic Rare Earths Limited Directors' Report 30 June 2026 18 Likely developments and expected results of operations Ionic Rare Earths will continue to progress its downstream operations through the magnet recycling path to commercialisation through the demonstration plant, feasibility studies and supply chain collaboration being undertaken by Ionic Technologies International Limited. In addition, it will advance the Viridion JV to further develop the Brazilian magnet supply chain as well continue its strategi c review of the Makuutu Heavy Rare Earths Project and assess opportunities to optimise the Project’s structure and future development. Business Risks Ionic Rare Earths is exposed to the risk of market, geopolitical, operational and financial risks which may affect the Consolidated Entity’s ability to achieve the financial performance or outcomes disclosed herein. Market Volatility and Geopolitical Risk A significant risk for Ionic Rare Earths is the volatility of rare earth metal prices, which are subject to fluctuations driven by global supply-demand dynamics, geopolitical tensions, and macroeconomic conditions. Changes in these prices can have a substantial impact on the Company’s outlook. Furthermore, rare earth elements are considered to be in the highest risk quartile on criticality indices for western governments, representing both high economic importance and high supply chain risk, making them geopolitically sensitive due to their strategic role in high-tech industries such as defence, renewable energy advanced manufacturing. As a result, export restrictions, tariffs, or tr ade disputes between nations could disrupt the supply chain and hinder Ionic Rare Earths' access to key markets. Operational Risk The successful development of the Ionic Technologies magnet recycling project, progressing the Viridion JV in Brazil in developing new refining and recycling capacity, and the Makuutu project as an economically viable rare earth mine, is central to the Company’s long-term success. At Ionic Technologies, the magnet recycling demonstration plant has validated the technical aspects of the patented process, and engineering studies have defined a high confidence capital and operational cost basis to commercialise the technology in the UK. Additional engineering is required through FEED stage and financing activity is underway, where due diligence on the overall financing of the Project will require support from both Government and western customers and supply chain partners to reach commercialisation. The development of refining and recycling capacity in Brazil will be influenced by market conditions and appetite from both local and western customers to support the development. At Makuutu, geological uncertainties and the complexities invo lved in mining and processing rare earth elements present operational risks that must be carefully managed and derisked through staged activity to enhance overall execution confidence prior to the final investment decision. Strategic Transition The Group is transitioning from a junior exploration and development company to an industrial rare earth recycling business. The transition requires the Group to develop new operational capabilities, infrastructure, processes and commercial relationships, as well as secure the funding required to support its growth plans. There is a risk that the transition may not be achieved as planned, within the anticipated timeframe or at the expected cost. Financial and Capital Risk The Company’s financial position depends on its ability to secure capital for exploration and development activities. Reliance on debt or equity financing exposes the Group to financial risk s, including interest rate fluctuations, market sentiment, and credit availability. There can be no assurance that additional capital or other types of financing will be available if needed for further exploration and/or possible development activities or that, if available, the terms of such financing will be favourable to the Company.
Page 20
Ionic Rare Earths Limited Directors' Report 30 June 2026 19 Environmental Risk Ionic Rare Earths must comply with environmental and climate-related regulations that impact its mining activities. Failure to meet these standards or adapt to changing regulations could affect the Company’s financial performance and require unplanned expenditures. Additionally, stricter requirements from customers or partners may also lead to increased compliance costs. The Company manages these risks through a strong risk management framework and environmental management plans. Tenure Risk The Group’s access to funding directly influences the ability to continue investment at the Makuutu project to satisfy continued access rights under exploration permits and mining licences. Access rights are governed by Ugandan Mining Regulations. If the Group fails to comply with the requirements therein, it may lose access rights or incur material unplanned expenditure, and or loss of the tenement if failing to meet expenditure obligations. Technology Risk The Group has invested in developing magnet recycling technology and has several patents protecting its intellectual property. The Group has produced rare earth oxides at demonstration scal e in its Belfast facility and the Group is subject to risks associated with scale up of technology to commercial scale. The Group’ s ability to achieve the fi nancial performance and outcomes may be materially adversely affected if it fails to achieve its scale up plans. Execution Risk The Company may experience time delays, unforeseen expenses, increased capital costs and other complications while developing its magnet recycling technology, its Viridion joint venture or its Makuutu Project in Uganda. These risks could delay the start of revenue generating activities and increase development costs. Further to the above, the Company depends on key personnel for the success of the business. Personnel Risk In order to deliver on its initiatives, the Company will need to retain and attract suitably qualified personnel to deliver on its plans. The technical aspects of the business require specific skill sets which are in high demand. To address this the Company is exploring mechanisms to reduce the risk profile. Environmental regulation The Company is subject to significant environmental regulation in respect of its exploration activities. It aims to ensure the appropriate standard of environmental care is achieved and in so doing, is aware of all relevant environmental legislation. The Directors of the Company are not aware of any breach of environmental legislation for the year under review. The Directors have considered compliance with the National Greenhouse and Energy Reporting Act 2007 which requires entities to report annual greenhouse gas emissions and energy use. The Directors have assessed that the Company has no current reporting requirements but may be required to report in the future. However, the following disclosure standard will soon become effective. AASB S2 'Climate-related Disclosures' sets out specific climate related disclosures. It applies to entities required to prepare and lodge a financial report with ASIC under Chapter 2M and is effective for different entities based on certain criteria. Based on the Group's size and reporting profile, this mandatory sustainability reporting may be applicable to the Company for the first time for the year ending 30 June 2028. The Group continues to monitor developments in the regulatory framework.
Page 21
Ionic Rare Earths Limited Directors' Report 30 June 2026 20 Remuneration report (audited) The remuneration report details the key management personnel remuneration arrangements for the Group, in accordance with the requirements of the Corporations Act 2001 and its Regulations. Key management personnel ('KMP') are those persons having authority and responsibility for planning, directing and controlling the activities of the entity, directly or indirectly, including all Directors. The remuneration report is set out under the following main headings: ● Principles used to determine the nature and amount of remuneration ● Details of remuneration ● Service a greements ● Share-based compensation ● Additional information ● Additional disclosures relating to KMP Principles used to determine the nature and amount of remuneration The objective of the Group's executive reward framework is to ensure reward for performance is competitive and appropriate for the results delivered. The framework aligns executive reward with the achievement of strategic objectives and the creation of value for shareholders, and it is considered to conform to the market best practice for the delivery of reward. The Board of Directors ('the Board') ensures that executive reward satisfies the following key criteria for good reward governance practices: ● competitiveness and reasonableness; ● acceptabilit y to shareholders; ● performance linka ge / alignment of executive compensation; and ● transparenc y. The Board is responsible for determining and reviewing remuneration arrangements for its Directors and executives. The performance of the Group depends on the quality of its Directors and executives. The remuneration philosophy is to attract, motivate and retain high performance and high quality personnel. The Board has structured an executive remuneration framework that is market competitive and complementary to the reward strategy of the Group. The reward framework is designed to align executive reward to shareholders' interests. The Board has considered that it should seek to enhance shareholders' interests by: ● havin g economic profit as a core component of plan design; ● focusing on sustained growth in shareholder wealth, consisting of dividends and growth in share price, and delivering constant or increasing return on assets as well as focusing the executive on key non-financial drivers of value; and ● attractin g and retaining high calibre executives. Additionally, the reward framework should seek to enhance executives' interests by: ● rewardin g capability and experience; ● reflectin g competitive reward for contribution to growth in shareholder wealth; and ● providin g a clear structure for earning rewards. In accordance with best practice corporate governance, the structure of non-executive Director and executive Director remuneration is separate. Non-executive Directors' remuneration Fees and payments to non-executive Directors reflect the demands and responsibilities of their role. Non-executive Directors' fees and payments are reviewed annually by the Board. The Board may, from time to time, receive advice from independent remuneration consultants to ensure non-executive Directors' fees and payments are appropriate and in line with the market. ASX listing rules require the aggregate non-executive Directors' remuneration be determined periodically by a general meeting. The most recent determination was at the Annual General Meeting held in 2011, where the shareholders approved a maximum annual aggregate remuneration of $400,000. Non-executive Directors have long been encouraged by the Board to hold shares in the Company (purchased by the Director on market). It is considered good governance for Directors to have an equity interest in the Company whose board they serve on. Non-executive directors are also entitled to receive long-term incentives in the form of options, shares or performance rights to increase goal congruence between directors and shareholders.
Page 22
Ionic Rare Earths Limited Directors' Report 30 June 2026 21 Executive remuneration The Group aims to reward executives based on their position and responsibility, with a level and mix of remuneration which has both fixed and variable components. The executive remuneration and reward framework has three components: ● base pa y and non-monetary benefits; ● lon g-term incentives; and ● other remuneration such as superannuation and lon g service leave. The combination of these comprises the executive's total remuneration. Fixed remuneration, consisting of base salary, superannuation and non-monetary benefits, are reviewed annually by the Board based on individual performance, the overall performance of the Group and comparable market remunerations. Executives are given the opportunity to receive their fixed remuneration in a variety of forms including cash and other non- cash benefits. The long-term incentives ('LTI') program is designed to link the achievement of the Company’s targets with the compensation received by the executives charged with meeting those targets. Currently, the Company does not restrict executives from entering into arrangements to protect the value of unvested LTI. However, under the Securities Dealing Policy, members of the Board are required to advise the Company Secretary of any shareholdings including any hedging arrangements. The LTI are share-based payments (options and performance rights). Options, shares or performance rights may be issued to Directors and executives as part of their remuneration to increase goal congruence between executives, directors and shareholders. Actual payments granted to each KMP are determined by the Board who meet periodically. Consolidated entity performance and link to remuneration The variable component of the executives’ remuneration inclu des share options and performance rights. The value of the share options is directly linked to the Company’s share price performance. The performance rights vest on achievement of operational targets set by the Board. Refer to the section 'Additional information' below for details of total shareholders return for the last five years. Use of remuneration consultants No consultants were used during the year. Voting and comments made at the Company's 2025 Annual General Meeting ('AGM') At the 2025 AGM, 85.89% of the votes received supported the adoption of the remuneration report for the year ended 30 June 2025. The Company did not receive any specific feedback at the AGM regarding its remuneration practices. Details of remuneration Amounts of remuneration Details of the remuneration of KMP of the Group are set out in the following tables. The KMP of the Group consisted of the following Directors of Ionic Rare Earths Limited: ● Brett L ynch – Executive Chairman ● Tim Harrison – Managing Director and CEO ● Maxwell McGarvie – Non-Executive Director ● Sufian Ahmad – Non-Executive Director ● Warren Tre gurtha – Chief Financial Officer (Acting)
Page 23
Ionic Rare Earths Limited Directors' Report 30 June 2026 22 Short-term benefits Long-term benefits Share- based payments Cash salary Cash Non- Super- Long service Equity- and fees Bonus2 monetary1 annuation leave settled Total 2026 $ $ $ $ $ $ $ Non-Executive Directors: Maxwell McGarvie 50,000 - 9,340 6,000 - 38,377 103,717 Sufian Ahmad 50,000 - 9,340 - - 38,377 97,717 Executive Directors: Brett Lynch 360,000 100,000 9,340 - - 260,174 729,514 Tim Harrison 375,000 100,000 28,801 15,000 - 260,174 778,975 Other KMP: Warren Tregurtha 262,047 123,744 9,340 - - 54,722 449,854 1,097,047 323,744 66,162 21,000 - 651,823 2,159,777 1. The non-monetary benefit relates to the Directors’ indemnity insurance and annual leave accrual. 2. During the year, certain KMP received discretionary payments relating to salary amounts previously forgone. The payments were n ot contractual obligations and were made at the discretion of the Company. 3. Mr James Rutherford was appointed as a Non-Executive Director on 14 September 2026. As Mr Rutherford was not a Director or key management personnel of the Group during the financial year ended 30 June 2026, he has not been included within the remuneration disclosures contained in this report. Short-term benefits Long-term benefits Share- based payments Cash salary Cash Non- Super- Long service Equity- and fees bonus monetary1 annuation leave settled Total 2025 $ $ $ $ $ $ $ Non-Executive Directors: - - - - - - - Maxwell McGarvie 50,003 - 7,260 5,750 - 32,500 95,513 Sufian Ahmad 50,000 - 7,260 - - 32,500 89,760 Nitin T yagi2 27,741 - 7,260 - - - 35,001 Executive Directors: Brett Lynch 380,000 - 7,260 - - 252,812 640,072 Tim Harrison 380,000 - 7,260 - - 141,689 528,949 Other KMP: Warren Tregurtha3 80,153 - - - - - 80,153 967,897 - 36,300 5,750 - 459,501 1,469,448 1. The non-monetary benefit relates to the Directors’ indemnity insurance. 2. Resigned on 20 January 2025. 3. Appointed on 1 December 2024, remuneration calculated from date of appointment as KMP.
Page 24
Ionic Rare Earths Limited Directors' Report 30 June 2026 23 The proportion of remuneration linked to performance and the fixed proportion are as follows: Fixed remuneration At risk - STI At risk - LTI Name 2026 2025 2026 2025 2026 2025 Non-Executive Directors: Maxwell McGarvie 63% 66% - - 37% 34% Sufian Ahmad 61% 64% - - 39% 36% Nitin Tyagi - 100% - - - - Executive Directors: Brett Lynch 51% 61% 13% - 36% 39% Tim Harrison 54% 73% 14% - 33% 27% Other KMP: Warren Tregurtha 60% 100% 28% - 12% - Service agreements Remuneration and other terms of employment for KMP are formalised in service agreements. Details of these agreements are as follows: Name: Tim Harrison Title: Mana ging Director Agreement commenced: 1 Januar y 2026 Term of agreement: On going Details: Fixed consulting fee of $40,000 per month including super. Termination by either party with six months’ notice. In the event of a change of control, the executive is entitled to 12 months' notice or payment in lieu of notice. Name: Brett L ynch Title: Executive Chairman Agreement commenced: 1 Januar y 2026 Term of agreement: up to 31 December 2026 Details: Fixed consulting fee of $35,000 per month. Termination by either party with three months’ notice. Name: Warren Tre gurtha Title: Chief Financial Officer (Acting) Agreement commenced: 1 November 2021 * Term of agreement: On going Details: Fixed consulting fee of US$15,000 per month. Termination by either party with one months’ notice. * Initial service agreement dated 1 November 2021, although became Acting Chief Financial Officer on 1 December 2024. A new agreement was signed and effective from 1 July 2025. KMP have no entitlement to termination payments in the event of removal for misconduct.
Page 25
Ionic Rare Earths Limited Directors' Report 30 June 2026 24 Share-based compensation Issue of shares There were no shares issued to Directors and other KMP as part of compensation during the year ended 30 June 2026. Options There were no options over ordinary shares issued to Directors and other KMP as part of compensation that were outstanding as at 30 June 2026. Performance rights The terms and conditions of each grant of performance rights over ordinary shares affecting remuneration of Directors and other KMP in this financial year or future reporting years are as follows: Number of Fair value rights per right Name granted * Grant date Expiry date at grant date* Brett Lynch 1,333,333 16 Ma y 2025 21 Ma y 2028 $0.24 666,667 13 March 2024 13 March 2027 $0.59 Tim Harrison 1,333,333 16 Ma y 2025 21 Ma y 2028 $0.24 666,667 13 March 2024 13 March 2027 $0.59 Maxwell McGarvie 166,667 13 March 2024 13 March 2027 $0.59 Sufian Ahmad 166,667 13 March 2024 13 March 2027 $0.59 Warren Tre gurtha 666,666 28 November 2025 28 November 2028 $0.42 * A security consolidation of every 30 pre-consolidation shares into post consolidation share took place during the year. Approved by shareholders at EGM on 28 November 2025. The 30 June 2025 balance was restated accordingly. Performance rights granted carry no dividend or voting rights.
Page 26
Ionic Rare Earths Limited Directors' Report 30 June 2026 25 During the year ended 30 June 2026, 4,133,333 (124,000,000 pre-consolidation) performance rights were granted to KMP and others under the plan. The vesting conditions of the performance rights are: ● 536,667 (16,100,000 pre-consolidation) Performance Rights will vest upon successful achievement of government fundin g to support the commercialisation of the Company’s magnet recycling activities; ● 100,000 (3,000,000 pre-consolidation) Performance Rights will vest upon successfully receipt of strategic investment funding from external parties to advance the Company’s projects; ● 100,000 (3,000,000 pre-consolidation) Performance Rights will vest upon successfully execution of a new joint venture or licensing arrangement to progress the Company’s magnet recycling business; ● 350,000 (10,500,000 pre-consolidation) Performance Rights will vest upon succ essfully completion of a transaction relating to the Company’s interest in the Makuutu Rare Earth Project; ● 83,333 (2,500,000 pre-consolidation) Performance Rights will vest upon successfully securing a significant portion o f required raw material supply for the initial operation of the Belfast facility; ● 83,333 (2,500,000 pre-consolidation) Performance Rights will vest upon successfully progressing offtake negotiations to secure sales commitments for a portion of the Belfast facility’s initial production; ● 133,333 (4,000,000 pre-consolidation) Performance Rights will vest upon successfully securing a site in the United States for a future commercial-scale magnet recycling facility; ● 133,333 (4,000,000 pre-consolidation) Performance Rights will vest upon successfully completion of engineering design work to support a financial investment decision for a commercial magnet recycling plant; ● 133,333 (4,000,000 pre-consolidation) Performance Rights will vest upon successfully obtaining required environmental and regulatory approvals for construction of a commercial magnet recycling facility in the United States; ● 133,333 (4,000,000 pre-consolidation) Performance Rights will vest upon successfully Board approval of a financial investment decision for a commercial-scale magnet recycling facility in the United States; ● 133,333 (4,000,000 pre-consolidation) Performance Rights will vest upon successfully securing a strategic partnership, cornerstone investment, or government funding to support development of a U.S. magnet recycling facility; ● 353,333 (10,600,000 pre-consolidation) Performance Rights w ill vest upon successfully execution of binding feedstoc k supply agreements for a significant portion of the Belfast facility’s planned processing capacity; ● 353,333 (10,600,000 pre-consolidation) Performance Rights will vest upon successful Board approval to proceed with commercialisation of the Belfast magnet recycling facility; ● 353,333 (10,600,000 pre-consolidation) Performance Rights will vest upon successful achievement of production targets for separated REO's at the Belfast demonstration plant; ● 353,333 (10,600,000 pre-consolidation) Performance Rights will vest upon successful deployment of the Company’s magnet recycling technology at an additional location achieving targeted production output; ● 66,667 (2,000,000 pre-cons olidation) Performance Rights will vest upon successf ully securing an offtake agreement relating to the Makuutu Rare Earths Project; ● 200,000 (6,000,000 pre-consolidation) Performance Rights will vest upon successful Board approval of a financial investment decision to progress the Makuutu Project to construction; ● 200,000 (6,000,000 pre-consolidation) Performance Rights will vest upon successful achievement of production targets for mixed rare earth carbonate at the Makuutu demonstration plant; ● 66,667 (2,000 ,000 pre-consolidation) Performance Rights will vest upon successful execution of binding documentation for an equity or debt investment into the Company or the Makuutu Project; ● 66,667 (2,000,000 pre-consolidation) Performance Rights will vest upon successfully securing an offtake or strategic partnership arrangement with Ionic Technologies International Limited; ● 200,000 (6,000,000 pre-consolidation) Performance Rights will vest upon successful Board approval of a financial investment decision to construct a commercial magnet recycling facility. During the year ended 30 June 2025, 2,666,667 (80,000,000 pre-consolidation) performance rights were granted to KMP and others under the plan. The vesting conditions of the performance rights are: ● 666,667 (20,000,000 pre-consolidation) Performance Rights will vest upon successfully securing UK Government funding of £5m or greater, prorated up to £10m, for commercialisation in magnet recycling in Belfast; ● 333,333 (10,000,000 pre-consolidation) Performance Rights w ill vest upon successfully securing strategic investment of greater than US$5million within IRE or subsidiaries / projects; ● 333,333 (10,000,000 pre-consolidation) Performance Rights will vest upon signing magnet and swarf feed suppl y agreements for Belfast facility for greater than 50% of nominated feed capacity; ● 333,333 (10,000,000 pre-consolidation) Performance Rights will vest upon signing REO offtake agreements from the Belfast magnet recycling facility for greater than 20% of proposed production; ● 666,667 (20,000,000 pre-consolidation) Performance Rights will vest upon successfully securing an additional joint venture for establishment of magnet recycling business in target markets; and ● 333,333 (10,000,000 pre-consolidation) Performance Rights will vest upon successful completion of a positive scoping study (Viridion JV) for magnet recycling, IRR > 20%.
Page 27
Ionic Rare Earths Limited Directors' Report 30 June 2026 26 During the year ended 30 June 2024, 2,966,667 (89,000,000 pre-consolidation) performance rights were granted to KMP and others under the plan. The vesting conditions of the performance rights are: ● 333,333 Performance Ri ghts will vest on the 12-month anniversary of Brett Lynch’s commencement; ● 391,667 Performance Ri ghts will vest upon successfully securing any offtake for the Makuutu product; ● 458,333 Performance Rights will vest upon the Company's Board making a Financial Investment Decision to progress the Makuutu Project to construction; ● 391,667 Performance Rights will vest upon the Makuutu Dem onstration Plant producing more than 30 tonnes of Mixed Rare Earth Carbonate (MREC) at the target product specification; ● 575,000 Performance Rights will vest upon successfully securing a strategic partnering investment within the Company or Makuutu; ● 391,667 Performance Rights will vest upon successfully securing offtake, or a strategic partnering investment within Ionic Technologies; and ● 425,000 Performance Rights will vest upon Financial Inve stment Decision to progress a commercial magnet recycling plant with Ionic Technologies. Of the 2,966,667 performance rights granted on 13 March 2024, 166,667 lapsed and 333,333 vested during the year ended 30 June 2025. A further 416,667 performance rights vested during the year ended 30 June 2026. The remaining 2,216,667 performance rights continue to be subject to the vesting conditions set out above. Values of performance rights over ordinary shares granted and number of performance rights vested and lapsed for directors and other KMP as part of compensation during the year ended 30 June 2026 are set out below: Value of performance ri ghts Number of performance ri ghts Remuneration consisting of performance rights Granted during the year Exercised during the year Vested during the year Lapsed during the year for the year Name $ $ # # % Brett Lynch 260,174 97,500 166,667 - 36.00% Tim Harrison 260,174 97,500 166,667 - 33.00% Maxwell McGarvie 38,377 24,375 41,667 - 37.00% Sufian Ahmad 38,377 24,375 41,667 - 39.00% Warren Tre gurtha 54,722 - - - 12.00% Additional information The earnings of the Group for the five years to 30 June 2026 are summarised below: 2026 2025 2024 2023 2022 $ $ $ $ $ Loss after income tax (14,913,778) (11,341,449) (21,200,915) (8,538,462) (4,644,087) The factors that are considered to affect total shareholders return ('TSR') are summarised below: 2026 2025 2024 2023 2022 $ $ $ $ $ Share price at financial year end 0.36 0.36 0.30 0.66 1.17 Basic earnings per share (6.96) (6.70) (15.00) (6.60) (3.90)
Page 28
Ionic Rare Earths Limited Directors' Report 30 June 2026 27 Additional disclosures relating to KMP Shareholding The number of shares in the Company held during the financial year by each Director and other members of KMP of the Group, including their personally related parties, is set out below: Balance at Received Balance at the start of as part of Disposals/ the end of the year * remuneration Additions other the year Ordinary shares Brett Lynch 5,155,067 - 274,167 (2,364) 5,426,870 Tim Harrison 1,000,001 - 233,333 - 1,233,334 Maxwell McGarvie 76,191 - 46,746 - 122,937 Sufian Ahmad 4,776,699 - 354,366 - 5,131,065 Warren Tregurtha - - 177,084 - 177,084 11,007,959 - 1,085,696 (2,364) 12,091,291 Option holding The number of options over ordinary shares in the Company held during the financial year by each Director and other members of KMP of the Group, including their personally related parties, is set out below: Balance at Expired/ Balance at the start of forfeited/ the end of the year * Additions** Exercised other the year Options over ordinary shares Brett Lynch 1,175,825 107,500 - - 1,283,325 Tim Harrison 142,858 66,667 - - 209,525 Maxwell McGarvie 38,096 5,079 - - 43,176 Sufian Ahmad 47,619 312,699 - - 360,318 Warren Tregurtha - 177,084 - - 177,084 1,404,399 669,029 - - 2,073,428 Balance at Vested and Vested and the end of exercisable unexercisable the year Options over ordinary shares Brett Lynch 1,283,325 - 1,283,325 Tim Harrison 209,525 - 209,525 Maxwell McGarvie 43,176 - 43,176 Sufian Ahmad 360,318 - 360,318 Warren Tre gurtha 177,084 177,084 2,073,428 - 2,073,428 Performance rights The number of performance rights over ordinary shares in the Company held during the financial year by each Director and other members of KMP of the Company, including their personally related parties, is set out below: Balance at Expired/ Balance at the start of Granted Vested forfeited/ the end of the year * other the year Performance rights Brett Lynch 2,000,001 - (166,667) - 1,833,334 Tim Harrison 2,000,001 - (166,667) - 1,833,334 Maxwell McGarvie 166,667 - (41,667) - 125,000 Sufian Ahmad 166,667 - (41,667) - 125,000 Warren Tregurtha - 666,667 666,667 4,333,336 666,667 (416,667) - 4,583,336
Page 29
Ionic Rare Earths Limited Directors' Report 30 June 2026 28 * A security consolidation of every 30 pre-consolidation shares into post consolidation share took place during the year. Approved by shareholders at EGM on 28 November 2025. The 30 June 2025 balance was restated accordingly. ** The options were either acquired for cash consideration or issued as free-attaching options and were not granted as part of an employee benefit arrangement. Other transactions with KMP and their related parties There were no related party transactions during the year. This concludes the remuneration report, which has been audited. Shares under option Unissued ordinary shares of Ionic Rare Earths Limited under option at the date of this report are as follows: Exercise Number Grant date Expir y date price under option 30 November 2023 * 30 November 2026 $0.9450 666,668 1 May 2024 * 26 June 2028 $0.6000 7,232,261 22 July 2024 * 28 June 2028 $0.6000 3,344,688 31 July 2024 * 28 June 2028 $0.6000 666,667 2 December 2024 * 15 December 2027 $0.3300 6,787,826 1 December 2025 * 30 November 2028 $0.6300 333,333 16 October 2025 * 30 September 2028 $0.7500 34,045,331 53,076,774 * A security consolidation of every 30 pre-consolidation shares into post consolidation share took place during the year. Approved by shareholders at EGM on 28 November 2025. The 30 June 2025 balance was restated accordingly. No person entitled to exercise the options had or has any right by virtue of the option to participate in any share issue of th e Company or of any other body corporate. Shares issued on the exercise of options The following ordinary shares of Ionic Rare Earths Limited were issued during the year ended 30 June 2026 and up to the date of this report on the exercise of options granted: Exercise Number of Date options granted price shares issued 2 December 2024 $0.3300 6,568,573 16 October 2025 $0.7500 889 6,569,462 Shares under performance rights Unissued ordinary shares of Ionic Rare Earths Limited under performance rights at the date of this report are as follows: Exercise Number Grant date Expir y date price under rights 21 March 2024 * 21 March 2027 $0.0000 1,933,333 21 May 2025 21 Ma y 2028 $0.0000 2,000,002 28 November 2025 28 Novembe r 2028 $0.0000 2,566,673 27 July 2026 30 June 2029 $0.0000 1,949,999 8,450,007
Page 30
Ionic Rare Earths Limited Directors' Report 30 June 2026 29 * A security consolidation of every 30 pre-consolidation shares into post consolidation share took place during the year. Approved by shareholders at EGM on 28 November 2025. The 30 June 2025 balance was restated accordingly. No person entitled to exercise the performance rights had or has any right by virtue of the performance right to participate in any share issue of the Company or of any other body corporate. Shares issued on the exercise of performance rights The following ordinary shares of Ionic Rare Earths Limited were issued during the year ended 30 June 2026 and up to the date of this report on the exercise of performance rights granted: Date performance ri ghts granted Expiry date Exercise price Number of shares issued 21 March 2024 * 21 March 2027 $0.0000 533,333 21 May 2025 21 Ma y 2028 $0.0000 666,666 28 November 2025 28 November 2028 $0.0000 100,000 Indemnity and insurance of officers The Company has indemnified the Directors and executives of the Company for costs incurred, in their capacity as a Director or executive, for which they may be held personally liable, except where there is a lack of good faith. During the financial year, the Company paid a premium in respect of a contract to insure the Directors and executives of the Company against a liability to the extent permitted by the Corporations Act 2001. The contract of insurance prohibits disclosure of the nature of the liability and the amount of the premium. Indemnity and insurance of auditor The Company has not, during or since the end of the financial year, indemnified or agreed to indemnify the auditor of the Company or any related entity against a liability incurred by the auditor. During the financial year, the Company has not paid a premium in respect of a contract to insure the auditor of the Company or any related entity. Proceedings on behalf of the Company No person has applied to the Court under section 237 of the Corporations Act 2001 for leave to bring proceedings on behalf of the Company, or to 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 part of those proceedings. Non-audit services There were no non-audit services provided during the financial year by the auditor. Officers of the Company who are former partners of BDO There are no officers of the Company who are former partners of BDO. Auditor's independence declaration A copy of the auditor's independence declaration as required under section 307C of the Corporations Act 2001 is set out immediately after this Directors' report. This report is made in accordance with a resolution of Directors, pursuant to section 298(2)(a) of the Corporations Act 2001. On behalf of the Directors ___________________________ Brett Lynch Chairman 17 September 2026 Melbourne
Page 31
BDO Audit Pty Ltd ABN 33 134 022 870 is a member of a national association of independent entities which are all members of BDO International Ltd, a UK company limited by guarantee, and form part of the international BDO network of independent member firms. Liability limited by a scheme approved under Professional Standards Legislation. Level 9, Mia Yellagonga Tower 2 5 Spring Street Perth, WA 6000 PO Box 700 West Perth WA 6872 Australia Tel: +61 8 6382 4600 Fax: +61 8 6382 4601 www.bdo.com.au DECLARATION OF INDEPENDENCE BY DAVE ANDREWS TO THE DIRECTORS OF IONIC RARE EARTHS LIMITED As lead auditor of Ionic Rare Earths Limited for the year ended 30 June 2026, I declare that, to the best of my knowledge and belief, there have been: 1. No contraventions of the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and 2. No contraventions of any applicable code of professional conduct in relation to the audit. This declaration is in respect of Ionic Rare Earths Limited and the entities it controlled during the year. Dave Andrews Director BDO Audit Pty Ltd P erth 17 September 2026 30
Page 32
Ionic Rare Earths Limited Consolidated statement of profit or loss and other comprehensive income For the year ended 30 June 2026 Consolidated Note 2026 2025 $ $ The above Consolidated statement of profit or loss and other comprehensive income should be read in conjunction with the accompanying notes 31 Revenue Other income 5 1,734,395 2,162,104 Interest revenue 112,990 18,789 Expenses Employee benefits expense 6 (2,907,507) (3,069,144) Depreciation and amortisation expense 6 (845,630) (1,151,332) Share-based payments expense (1,026,710) (697,776) Administration expenses 6 (3,541,565) (1,743,306) Exploration expense 6 (2,317,678) (2,792,765) Research and development expense (220,413) (424,806) Foreign exchange losses (48,799) (5,036) Other expenses 6 (5,842,486) (3,596,898) Finance costs 6 (10,375) (41,279) Loss before income tax expense (14,913,778) (11,341,449) Income tax expense 7 - - Loss after income tax expense for the year attributable to the owners of Ionic Rare Earths Limited (14,913,778) (11,341,449) Other comprehensive income Items that may be reclassified subsequently to profit or loss Foreign currency translation differences (1,768,743) 688,275 Other comprehensive income/(loss) for the year, net of tax (1,768,743) 688,275 Total comprehensive loss for the year attributable to the owners of Ionic Rare Earths Limited (16,682,521) (10,653,174) Cents Cents Basic earnings per share 28 (6.96) (6.70) Diluted earnings per share 28 (6.96) (6.70)
Page 33
Ionic Rare Earths Limited Consolidated statement of financial position As at 30 June 2026 Consolidated Note 2026 2025 $ $ The above Consolidated statement of financial position should be read in conjunction with the accompanying notes 32 Assets Current assets Cash and cash equivalents 8 3,481,238 595,231 Other receivables 461,848 168,453 Inventories 647,613 548,351 Income tax refund due - 52,321 Other assets 765,691 60,789 Total current assets 5,356,389 1,425,145 Non-current assets Investments accounted for using the equity method 9 23,064,992 24,223,908 Intangible assets 11 4,518,837 5,195,824 Plant and equipment 10 2,477,205 1,356,248 Right-of-use assets 10 254,544 326,217 Other assets 35,000 35,000 Total non-current assets 30,350,578 31,137,197 Total assets 35,706,968 32,562,342 Liabilities Current liabilities Trade and other payables 12 2,009,010 1,851,820 Lease liabilities 78,673 131,342 Other financial liabilities 13 - 750,000 Total current liabilities 2,087,683 2,733,162 Non-current liabilities Lease liabilities 162,136 237,044 Other liabilities 19,956 - Total non-current liabilities 182,092 237,044 Total liabilities 2,269,775 2,970,206 Net assets 33,437,193 29,592,136 Equity Issued capital 14 114,671,378 95,086,703 Reserves 15 7,103,830 8,066,073 Accumulated losses (88,338,015) (73,560,640) Total equity 33,437,193 29,592,136
Page 34
Ionic Rare Earths Limited Consolidated statement of changes in equity For the year ended 30 June 2026 The above Consolidated statement of changes in equity should be read in conjunction with the accompanying notes 33 Issued Accumulated Total equity capital Reserves losses Consolidated $ $ $ $ Balance at 1 July 2024 92,130,498 11,697,679 (67,316,913) 36,511,264 Loss after income tax expense for the year - - (11,341,449) (11,341,449) Other comprehensive income for the year, net of tax - 688,275 - 688,275 Total comprehensive income for the year - 688,275 (11,341,449) (10,653,174) Transactions with owners in their capacity as owners: Contributions of equity, net of transaction costs (note 14) 2,761,205 - - 2,761,205 Exercise of performance rights (notes 14 and 15) 195,000 (195,000) - - Share-based payments (note 15) - 275,065 - 275,065 Performance rights (note 15) - 697,776 - 697,776 Options and performance rights expired (note 15) - (5,097,722) 5,097,722 - Balance at 30 June 2025 95,086,703 8,066,073 (73,560,640) 29,592,136 Issued Accumulated Total equity capital Reserves losses Consolidated $ $ $ $ Balance at 1 July 2025 95,086,703 8,066,073 (73,560,640) 29,592,136 Profit after income tax expense for the year - - (14,913,778) (14,913,778) Other comprehensive income for the year, net of tax - (1,768,743) - (1,768,743) Total comprehensive income for the year - (1,768,743) (14,913,778) (16,682,521) Transactions with owners in their capacity as owners: Contributions of equity, net of transaction costs (note 14) 19,340,925 - - 19,340,925 Share-based payments (note 15) - (295,726) - (295,726) Performance rights (note 15) 243,750 913,628 - 1,157,378 Options and performance rights expired (note 15) - - - - Convertible notes issued - 3,000,000 - 3,000,000 Convertible notes converted - (2,675,000) - (2,675,000) Convertible notes expired - (136,403) 136,403 - Balance at 30 June 2026 114,671,378 7,103,830 (88,338,015) 33,437,193
Page 35
Ionic Rare Earths Limited Consolidated statement of cash flows For the year ended 30 June 2026 Consolidated Note 2026 2025 $ $ The above Consolidated statement of cash flows should be read in conjunction with the accompanying notes 34 Cash flows from operating activities Receipt from customers 134,500 - Receipt of government R&D rebate 5 68,402 1,809,911 Receipt of grants 5 1,226,642 1,409,881 Payments to suppliers and employees (13,477,319) (6,295,589) Payment for exploration (1,893,128) (2,792,765) Interest received 98,742 18,789 Interest expense (10,375) (41,279) Net cash used in operating activities 25 (13,852,536) (5,891,052) Cash flows from investing activities Payments for plant and equipment 10 (1,606,294) (37,660) Proceeds/(payment) from financial assets 18 - 1,385,515 Payments for other current assets (252,510) - Net cash from investing activities (1,858,804) 1,347,855 Cash flows from financing activities Proceeds from issue of ordinary shares (net of transaction costs) 14 16,483,138 3,650,191 Proceeds from issue of convertible notes 2,247,187 - Repayment of office lease liabilities (151,094) (120,960) Net cash from financing activities 18,579,231 3,529,231 Net decrease in cash and cash equivalents 2,867,891 (1,013,966) Cash and cash equivalents at the beginning of the financial year 595,231 2,028,820 Effects of exchange rate changes on cash and cash equivalents 18,115 (419,623) Cash and cash equivalents at the end of the financial year 8 3,481,238 595,231
Page 36
Ionic Rare Earths Limited Notes to the Consolidated Financial Statements 30 June 2026 35 Note 1. General information The financial statements cover Ionic Rare Earths Limited as a Group consisting of Ionic Rare Earths Limited and the entities it controlled at the end of, or during, the year. The financial statements are presented in Australian dollars, which is Ionic Rare Earths Limited's functional and presentation currency. Ionic Rare Earths Limited is a listed public company limited by shares, incorporated and domiciled in Australia. Its registered office and principal place of business is: Suite 09, Level 5, North Towe r 525 Collins Street Melbourne VIC 3000 A description of the nature of the Group's operations and its principal activities are included in the Directors' report, which is not part of the financial statements. The financial statements were authorised for issue, in accordance with a resolution of Directors, on 17 September 2026. The Directors have the power to amend and reissue the financial statements. Note 2. Material accounting policy information The accounting policies that are material to the Group are set out below. The accounting policies adopted are consistent with those of the previous financial year, unless otherwise stated. New or amended Accounting Standards and Interpretations adopted The Group has adopted all of the new or amended Accounting Standards and Interpretations issued by the Australian Accounting Standards Board ('AASB') that are mandatory for the current reporting period. The adoption of these Accounting Standards and Interpretations did not have any material impact on the financial performance or position of the Group. The following Accounting Standards and Interpretations have been adopted from 1 July 2025: ● AASB 2023-5 Amendments to Australian Accounting Standards – Lack of Exchangeability Basis of preparation These general purpose financial statements have been prepared in accordance with Australian Accounting Standards and Interpretations issued by the Australian Accounting Standards Board ('AASB') and the Corporations Act 2001, as appropriate for for-profit oriented entities. These financial statements also comply with International Financial Reporting Standards Accounting Standards as issued by the International Accounting Standards Board ('IASB'). Historical cost convention The financial statements have been prepared under the historic al cost convention, except fo r, where applicable, financial assets at fair value through profit or loss (equity shares). Critical accounting estimates The preparation of the financial statements requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applyi ng the Group's accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the financial statements, are disclosed in note 3. Going concern The Group incurred a loss after tax of $14,913,778 (2025: $11,341,449) for the year ended 30 June 2026 and experienced net cash outflows from operating activities of $13,852,536 (2025: $5,891,052). Subsequent to year end, in August 2026, the Company successfully completed a capital raising of $8.0 million (before costs). The Directors have prepared cash flow forecasts which indicate that additional funding will be required during the forecast period to fund planned exploration, project development activities and working capital requirements. The Directors intend to meet these funding requirements through future capital raisings and continue to assess the timing and amount of funding required having regard to the Group's planned activities and available cash resources. These conditions indicate the existence of a material uncertainty that may cast significant doubt on the Group's ability to continue as a going concern and, therefore, that it may be unable to realise its assets and discharge its liabilities in the normal
Page 37
Ionic Rare Earths Limited Notes to the Consolidated Financial Statements 30 June 2026 Note 2. Material accounting policy information (continued) 36 course of business. The Director s believe that the Group will be su ccessful in obtaining addition al funding as required and, accordingly, have prepared the financial report on a going concern basis. The financial report does not include any adjustments relating to the recoverability and classification of recorded asset amounts or to the amounts and classification of liabilities that might be necessary should the Group be unable to continue as a going concern. Should the going concern basis not be appropriate, the entity may have to realise its assets and extinguish its liabilities other than in the ordinary course of business and at amounts different from those stated in the financial report. No allowance for such circumstances has been made in the financial report. Parent entity information In accordance with the Corporations Act 2001, these financial statements present the results of the Group only. Supplementary information about the parent entity is disclosed in note 23. Principles of consolidation The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of Ionic Rare Earths Limited ('Company' or 'parent entity') as at 30 June 2026 and the results of all subsidiaries for the year then ended. Ionic Rare Earths Limited and its subsidiaries together are referred to in these financial statements as the 'Group'. Subsidiaries are all those entities over which the Group has control. The Group controls an entity when the Group 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 to direct the activities of the entity. Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are de-consolidated from the date that control ceases. Intercompany transactions, balances and unrealised gains on transactions between entities in the Group are eliminated. Unrealised losses are also eliminated unless the transaction provides evidence of the impairment of the asset transferred. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the Group. The acquisition of subsidiaries is accounted for using the acquisition method of accounting. A change in ownership interest, without the loss of control, is accounted for as an equity transaction, where the difference between the consideration transferred and the book value of the share of the non-controlling interest acquired is recognised directly in equity attributable to the parent. Where the Group loses control over a subsidiary, it derecognises the assets including goodwill, liabilities and non-controlling interest in the subsidiary together with any cumulative translation differences recognised in equity. The Group recognises the fair value of the consideration received and the fair value of any investment retained together with any gain or loss in profit or loss. Operating segments Operating segments are presented using the 'management approach', where the information presented is on the same basis as the internal reports provided to the Chief Operating Decision Makers ('CODM'). The CODM is responsible for the allocation of resources to operating segments and assessing their performance. Foreign currency translation Foreign currency transactions Foreign currency transactions are translated into the Company's functional currency using the exchange rates prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at financial year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in profit or loss. Foreign operations The assets and liabilities of foreign operations are translated into Australian dollars using the exchange rates at the reporting date. The revenues and expenses of foreign operations are translated into Australian dollars using the average exchange rates, which approximate the rates at the dates of the transact ions, for the period. All resulting foreign exchange differences are recognised in other comprehensive income through the foreign currency reserve in equity. The foreign currency reserve is recognised in profit or loss when the foreign operation or net investment is disposed of.
Page 38
Ionic Rare Earths Limited Notes to the Consolidated Financial Statements 30 June 2026 Note 2. Material accounting policy information (continued) 37 Revenue - other income Grant income Grant income is recognised when there is reasonable assurance that the entity will comply with the conditions attached to the grant and the grant income will be received. IonicTech claims 60% of the expenses paid during the quarter, following the end of that quarter and only receives the grant money once the bills are paid. Grant income is initially recognised at the fair value of the grant received or receivable. If the grant is conditional, recogn ition is deferred until the conditions are met. Government grants are recognised in accordance with the specific requirements of accounting standards applicable to government grants and presented as other income in the statement of profit or loss and other comprehensive income. Research and development tax incentive The research and development tax incentive ('RDTI') represents a refundable tax offset that is available on eligible research and development expenditure incurred by the Group. The RDTI is considered to be a form of government assistance and the accounting policy adopted is analogous to accounting for government grants. The RDTI is recognised at fair value where there is a reasonable assurance that the incentive will be received and the Group will comply with all attached conditions. The RDTI relating to expenses is recognised as incurred at the point of time in profit or loss. Other income Other income is recognised when it is received or when the right to receive payment is established. Interest Interest revenue is recognised as interest accrues using the effective interest method. This is a method of calculating the amortised cost of a financial asset and allocating the interest income over the relevant period using the effective interest rate, which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to the net carrying amount of the financial asset. Research and development costs Research costs are expensed in the period in which they are incurred. Development costs will be capitalised if and when: it is probable that the project will be a success considering its commercial and technical feasibility; the Group is able to use or sell the asset; the Group has sufficient resources and intent to complete the development; and its costs can be measured reliably. Income tax The income tax expense or benefit for the period is the tax payable on that period's taxable income based on the applicable income tax rate for each jurisdiction, adjusted by the changes in deferred tax assets and liabilities attributable to temporary differences, unused tax losses and the adjustment recognised for prior periods, where applicable. Deferred tax assets and liabilities are recognised for temporary differences at the tax rates expected to be applied when the assets are recovered or liabilities are settled, based on those tax rates that are enacted or substantively enacted, except for: ● when the deferred income tax asset or liability arises from the initial recognition of goodwill or an asset or liability in a transaction that is not a business combination and that, at the time of the transaction, affects neither the accounting no r taxable profits; or ● when the taxable temporary difference is associated with interests in subsidiaries, associates or joint ventures, and the timing of the reversal can be controlled and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it is probable that future taxable amounts will be available to utilise those temporary differences and losses. The carrying amount of recognised and unrecognised deferred tax assets are reviewed at each reporting date. Deferred tax assets recognised are reduced to the extent that it is no long er probable that future taxable profits will be available for the carrying amount to be recovered. Previously unrecognised deferred tax assets are recognised to the extent that it is probable that there are future taxable profits available to recover the asset.
Page 39
Ionic Rare Earths Limited Notes to the Consolidated Financial Statements 30 June 2026 Note 2. Material accounting policy information (continued) 38 Deferred tax assets and liabilities are offset only where there is a legally enforceable right to offset current tax assets against current tax liabilities and deferred tax assets against deferred tax liabilities; and they relate to the same taxable authority on either the same taxable entity or different taxable entities which intend to settle simultaneously. Ionic Rare Earths Limited (the 'head entity') and its wholly -owned Australian subsidiaries have formed an income tax consolidated group under the tax consolidation regime. The head entity and each subsidiary in the tax consolidated group continue to account for their own current and deferred tax amounts. The tax consolidated group has applied the 'separate taxpayer within group' approach in determining the appropriate amount of taxes to allocate to members of the tax consolidated group. Current and non-current classification Assets and liabilities are presented in the Statement of financial position based on current and non-current classification. An asset is classified as current when: it is either expected to be realised or intended to be sold or consumed in the Group's normal operating cycle; it is held primarily for the purpose of trading; it is expected to be realised within 12 months after t he reporting period; or the asset is cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least 12 months after the reporting period. All other assets are classified as non-current. A liability is classified as current when: it is either expected to be settled in the Group's normal operating cycle; it is hel d primarily for the purpose of trading; it is due to be settled within 12 months after the reporting period; or there is no right at the end of the reporting period to defer the settlement of the liability for at least 12 months after the re porting period. All oth er liabilities are classified as non-current. Deferred tax assets and liabilities are always classified as non-current. Cash and cash equivalents Cash and cash equivalents includes cash on hand, deposits held at call with financial institutions, other short-term, highly liquid investments with original maturities of three months or less that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value. Inventories Finished goods are stated at the lower of cost and net realisable value on a 'first in first out' basis. Cost comprises of purchase and delivery costs, net of rebates and discounts received or receivable. Net realisable value is the estimated selling price in the ordinary course of business less the estimated costs of completion and the estimated costs necessary to make the sale. Joint arrangements The Group is a party to a joint arrangement when there is a contractual arrangement that confers joint control over the relevant activities of the arrangement to the Group and at least one other party. Joint control is assessed under the same principles as control over subsidiaries. The Group classifies its interests in joint arrangements as either: (a) Joint ventures: where the Group has ri ghts to only the net assets of the joint arrangement, (b) Joint operations: where the Group has both the ri ghts to assets and obligations for the liabilities of the joint arrangement. During the year, the Group reassessed the nature of its interest in a previously classified associate. Following this assessment, and consistent with the requirements of AASB 128 Investments in Associates and Joint Ventures , the investment has been reclassified as a joint venture. The change in classification reflects updated conclusions regarding the rights and obligations of the parties under the relevant contractual arrangements, which indicate that decisions about the relevant activities now require the unanimous consent of the parties sharing control. As a result of this change, the investment continues to be accounted for using the equity method. The reclassification did not result in any adjustment to the carrying amount of the investment at the date of reassessment.
Page 40
Ionic Rare Earths Limited Notes to the Consolidated Financial Statements 30 June 2026 Note 2. Material accounting policy information (continued) 39 The Group accounts for its interests in joint ventures in the same manner as investments in associates (i.e. using the equity method – refer above). Any premium paid for an investment in a joint venture above the fair value of the Group's share of the identifiable assets, liabilities and contingent liabilities acquired is capitalised and included in the carrying amount of the investment in joint venture. Where there is objective evidence that the investment in a joint venture has been impaired the carrying amount of the investment is tested for impairment in the same way as other non-financial assets. In accordance with AASB 11 Joint Arrangements, the Group is required to apply all of the principles of AASB 3 Business Combinations when it acquires an interest in a joint operation that constitutes a business as defined by AASB 3. Investments and other financial assets Investments and other financial assets are initially measured at fair value. Transaction costs are included as part of the initial measurement, except for financial assets at fair value through profit or loss. Such assets are subsequently measured at either amortised cost or fair value depending on their classification. Classification is determined based on both the business model within which such assets are held and the contractual cash flow characteristics of the financial asset unless an accounting mismatch is being avoided. Financial assets are derecognised when the rights to receive cash flows have expired or have been transferred and the Group has transferred substantially all the risks and rewards of ownership. When there is no reasonable expectation of recovering part or all of a financial asset, its carrying value is written off. Financial assets at fair value through profit or loss Financial assets not measured at amortised cost or at fair value through other comprehensive income are classified as financial assets at fair value through profit or loss. Typically, such financial assets will be either: (i) held for trading, where they are acquired for the purpose of selling in the short-term with an intention of making a profit, or a derivative; or (ii) designated as such upon initial recognition where permitted. Fair value movements are recognised in profit or loss. Impairment of financial assets The Group recognises a loss allowance for expected credit losses on financial assets which are either measured at amortised cost or fair value through other comprehensive income. The measurement of the loss allowance depends upon the Group's assessment at the end of each reporting period as to whether the financial instrument's credit risk has increased significantly since initial recognition, based on reasonable and supportable information that is available, without undue cost or effort to obtain. Where there has not been a significant increase in exposure to credit risk since initial recognition, a 12-month expected credit loss allowance is estimated. This represents a portion of the asset's lifetime expected credit losses that is attributable to a default event that is possible within the next 12 months. Where a financial asset has become credit impaired or where it is determined that credit risk has increased significantly, the lo ss allowance is based on the asset's lifetime expected credit losses. The amount of expected credit loss recognised is measured on the basis of the probability weighted present value of anticipated cash shortfalls over the life of the instrument discounted at the original effective interest rate. For financial assets mandatorily measured at fair value through other comprehensive income, the loss allowance is recognised in other comprehensive income with a corresponding expense through profit or loss. In all other cases, the loss allowance reduces the asset's carrying value with a corresponding expense through profit or loss. Property, plant and equipment Plant and equipment is stated at historical cost less accumulated depreciation and impairment. Historical cost includes expenditure that is directly attributable to the acquisition of the items. Depreciation is calculated on a straight-line basis to write of f the net cost of each item of property, plant and equipment (excluding land) over their expected useful lives as follows: Buildings 40 years Leasehold improvements 3-10 years Plant and equipment 3-7 years The residual values, useful lives and depreciation methods are reviewed, and adjusted if appropriate, at each reporting date.
Page 41
Ionic Rare Earths Limited Notes to the Consolidated Financial Statements 30 June 2026 Note 2. Material accounting policy information (continued) 40 Leasehold improvements are depreciated over the unexpired period of the lease or the estimated useful life of the assets, whichever is shorter. An item of property, plant and equipment is derecognised upon disposal or when there is no future economic benefit to the Group. Gains and losses between the carrying amount and the disposal proceeds are taken to profit or loss. Right-of-use assets A right-of-use asset is recognised at the commencement date of a lease. The right-of-use asset is measured at cost, which comprises the initial amount of the lease liability, adjusted for, as applicable, any lease payments made at or before the commencement date net of any lease incentives received, any initial direct costs incurred, and, except where included in the cost of inventories, an estimate of costs expected to be incurred for dismantling and removing the underlying asset, and restoring the site or asset. Right-of-use assets are depreciated on a straight-line basis over the unexpired period of the lease or the estimated useful life of the asset, whichever is the shorter. Where the Group expects to obtain ownership of the leased asset at the end of the lease term, the depreciation is over its estimated useful life. Right-of use assets are subject to impairment or adjusted for any remeasurement of lease liabilities. The Group has elected not to recognise a right-of-use asset and corresponding lease liability for short-term leases with terms of 12 months or less and leases of low-value assets. Lease payments on these assets are expensed to profit or loss as incurred. Intangible assets Intangible assets acquired separately are initially recognised at cost. Finite life intangible assets are subsequently measured at cost less amortisation and any impairment. The gains or losses recognised in profit or loss arising from the derecognition of intangible assets are measured as the difference between net disposal proceeds and the carrying amount of the intangible asset. The method and useful lives of finite life intangible assets are reviewed annually. Changes in the expected pattern of consumption or useful life are accounted for prospectively by changing the amortisation method or period. Patents Significant costs associated with patents, trademarks and licences are deferred and amortised on a straight-line basis over the period of their expected benefit, being their finite life of 20 years. The 20-year useful life reflects management’s assessment of the expected economic life of the underlying intellectual property and the anticipated period over which the related commercialisation activities are expected to generate economic benefits. Exploration and evaluation expenditure Exploration and evaluation costs are written off in the year they are incurred apart from acquisition costs, including costs such as the earn-in payments relating to the Makuutu project, which are carried forward where right of tenure of the area of interest is current and they are expected to be recouped through sale or successful development and exploitation of the area of interest or, where exploration and evaluation activities in the area of interest have not reached a stage that permits reasonable assessment of the existence of economically recoverable reserves. Where an area of interest is abandoned or the Directors decide that it is not commercial, any accumulated acquisition costs in respect of that area are written off in the financial year the decision is made. Each area of interest is also reviewed at t he end of each financial year and accumulated costs written off to the extent that they will not be recoverable in the future. Amortisation is not charged on costs carried forward in respect of areas of interest in the development phase until production commences. Impairment of non-financial assets Non-financial assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the asset's carrying amount exceeds its recoverable amount. Recoverable amount is the higher of an asset's fair value le ss costs of disposal and value-in-use. The value-in-use is the present value of the estimated future cash flows relating to the asset using a pre-tax discount rate specific to the asset or cash-generating unit to which the asset belongs. Assets that do not have independent cash flows are grouped together to form a cash-generating unit.
Page 42
Ionic Rare Earths Limited Notes to the Consolidated Financial Statements 30 June 2026 Note 2. Material accounting policy information (continued) 41 Trade and other payables Trade and other payables represent liabilitie s for goods and services prov ided to the Group prior to the end of the financial year and which are unpaid. Due to their short-term nature they are measured at amortised cost and are not discounted. The amounts are unsecured and are usually paid within 30 days of recognition. Lease Liabilities A lease liability is recognised at the commencement date of a leas e. The lease liability is initia lly recognised at the present value of the lease payments to be made over the term of the lease, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the Group's incremental borrowing rate. Lease payments comprise of fixed payments less any lease incentives receivable, variable lease payments that depend on an index or a rate, amounts expected to be paid under residual value guarantees, exercise price of a purchase option when the exercise of the option is reasonably certain to occur, and any anticipated termination penalties. The variable lease payments that do not depend on an index or a rate are expensed in the period in which they are incurred. Lease liabilities are measured at amortised cost using the effective interest method. The carrying amounts are remeasured if there is a change in the following: future lease payments arising from a change in an index or a rate used; residual guarantee; lease term; certainty of a purchase option and termination penalt ies. When a lease liability is remeasured, an adjustment is made to the corresponding right-of use asset, or to profit or loss if the carrying amount of the right-of-use asset is fully written down. Employee benefits Share-based payments Equity-settled and cash-settled share-based compensation benefits are provided to employees. Equity-settled transactions are awards of shares, options over shares and performance rights that are provided to employees in exchange for the rendering of services. Cash-settled transactions are awards of cash for the exchange of services, where the amount of cash is determined by reference to the share price. The cost of equity-settled transactions are measured at fair value on grant date. Fair value is independently determined using either the Binomial or Black-Scholes option pricing model that takes into account the exercise price, the term of the option, the impact of dilution, the share price at grant date and expected price volatility of the underlying share, the expected dividend yield and the risk free interest rate for the term of the option, together with non-vesting conditions that do not determine whether the Group receives the services that entitle the employees to receive payment. No account is taken of any other vesting conditions. The cost of equity-settled transactions are recognised as an expense with a corresponding increase in equity over the vesting period. The cumulative charge to profit or loss is calculated based on the grant date fair value of the award, the best estimate of the number of awards that are likely to vest and the expired portion of the vesting period. The amount recognised in profit or loss for the period is the cumulative amount calculated at each reporting date less amounts already recognised in previous periods. The cost of cash-settled transactions is initially, and at each reporting date until vested, determined by applying either the Binomial or Black-Scholes option pricing model, taking into consideration the terms and conditions on which the award was granted. The cumulative charge to profit or loss until settlement of the liability is calculated as follows: ● during the vesting period, the lia bility at each reporting date is the fair value of the awar d at that date mu ltiplied by the expired portion of the vestin g period. ● from the end of the vesting period until settlement of the aw ard, the liability is the full fair value of the liabi lity at th e reporting date. All changes in the liability are recognised in profit or loss. The ultimate cost of cash-settled transactions is the cash paid to settle the liability. Market conditions are taken into consideration in determining fair value. Therefore any awards subject to market conditions are considered to vest irrespective of whether or not that market condition has been met, provided all other conditions are satisfied.
Page 43
Ionic Rare Earths Limited Notes to the Consolidated Financial Statements 30 June 2026 Note 2. Material accounting policy information (continued) 42 If equity-settled awards are modified, as a minimum an expense is recognised as if the modification has not been made. An additional expense is recognised, over the remaining vesting period, for any modification that increases the total fair value of the share-based compensation benefit as at the date of modification. If the non-vesting condition is within the control of the Group or employee, the failure to satisfy the condition is treated as a cancellation. If the condition is not within the control of the Group or employee and is not satisfied during the vesting perio d, any remaining expense for the award is recognised over the remaining vesting period, unless the award is forfeited. If equity-settled awards are cancelled, it is treated as if it has vested on the date of cancellation, and any remaining expens e is recognised immediately. If a new replacement award is substituted for the cancelled award, the cancelled and new award is treated as if they were a modification. Fair value measurement Assets and liabilities measured at fair value are classified into three levels, using a fair value hierarchy that reflects the significance of the inputs used in making the measurements. Classifications are reviewed at each reporting date and transfers between levels are determined based on a reassessment of the lowest level of input that is significant to the fair value measurement. For recurring and non-recurring fair value measurements, external valuers may be used when internal expertise is either not available or when the valuation is deemed to be significant. External valuers are selected based on market knowledge and reputation. Where there is a significant change in fair value of an asset or liability from one period to another, an analysis is undertaken, which includes a verification of the major inputs applied in the latest valuation and a comparison, where applicable, with external sources of data. Issued capital Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax, from the proceeds. Earnings per share Basic earnings per share Basic earnings per share is calculated by dividing the profit attributable to the owners of Ionic Rare Earths Limited, excluding any costs of servicing equity other than ordinary shares, by the weighted average number of ordinary shares outstanding during the financial year, adjusted for bonus elements in ordinary shares issued during the financial year. Diluted earnings per share Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into account the after income tax effect of interest and other financing costs associated with 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. Comparative figures When required by accounting standards comparative figures have been adjusted to conform to changes in the presentation for the current financial year. New Accounting Standards and Interpretations not yet mandatory or early adopted Australian Accounting Standards and Interpretations that have recently been issued or amended but are not yet mandatory, have not been early adopted by the Group for the annual reporting period ended 30 June 2026. The Group does not expect these amendments to have a material impact on the amounts recognised in prior periods or will affect the current or future periods. The main standards are listed below: ● AASB 18 Presentation and Disclosure in Financial Statements ● AASB 2014-10 Sale or contribution of assets between investor and its associate or joint venture
Page 44
Ionic Rare Earths Limited Notes to the Consolidated Financial Statements 30 June 2026 43 Note 3. Critical accounting judgements, estimates and assumptions The preparation of the financial statements requires management to make judgements, estimates and assumptions that affect the reported amounts in the financial statements. Management continually evaluates its judgements and estimates in relation to assets, liabilities, contin gent liabilities, revenue and expenses. Management bases it s judgements, estimates and assumptions on historical experience and on other various factors, including expectations of future events, management believes to be reasonable under the circumstances. The resulting accounting judgements and estimates will seldom equal the related actual results. The judgements, estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities (refer to the respective notes) within the next financial year are discussed below. Joint arrangements For all joint arrangements structured in separate vehicles the Group must assess the substance of the joint arrangement in determining whether it is classified as a joint venture or joint operation. This assessment requires the Group to consider whether it has rights to the joint arrangement’s net assets (in wh ich case it is classified as a joint venture), or rights to a nd obligations for specific assets, liabilities, expenses, and revenues (in which case it is cla ssified as a joint operation). Factors the Group must consider include: (a) Structure; (b) Le gal form; (c) Contractual a greement; and (d) Other facts and circumstances. Upon consideration of these factors, the Group has determined that its joint arrangements structured through separate vehicles give it rights to the net assets and are therefore classified as joint ventures. Treatment of expenditure on the Makuutu project Management has applied judgement in the treatment of expenditure incurred on the Makuutu Project in Uganda (see further details on the investment in note 9). Expenditure incurred in order to acquire the project has been capitalised as an initial cost of an investment in joint venture (being Rwenzori Rare Metals Limited (‘RRM”)) representing the Group’s 60% interest in RRM. In addition, exploration expenditure incurred during 30 June 2023 increased the Group’s interest to 60% which has been capitalised as a further investment in RRM. Management has determined that the Company has joint control as they do not have control over the management direction and control over the activities and operations of the Makuutu project. The Group assesses at each reporting date whether there is objective evidence that its investment in the joint venture is impaired in accordance with AASB 128 Investments in Associates and Joint Ventures. In performing this assessment, management considers the underlying exploration and evaluation asset held by the joint venture and evaluates indicators of impairment with reference to AASB 6 Exploration for and Evaluation of Mineral Resources. This assessment includes consideration of the status of rights of tenure, planned and budgeted exploration expenditure, the results of exploration activities and whether facts and circumstances suggest that the carrying amount of the investment may not be recoverable. During the earn-in period, contributed expenditure incurred is deemed to be capitalised exploration and evaluation expenditure, as opposed to contributions towards the joint venture. Once an earn-in milestone has been met, expenditure is transferred from capitalised exploration and evaluation expenditure to investment in joint venture. Exploration and evaluation costs Exploration and evaluation costs are written off in the year they are incurred apart from acquisition costs (including costs such as the earn-in payments relating to the Makuutu project) which are carried forward where right of tenure of the area of interest is current and are expected to be recouped through sale or successful development and exploitation of the area of interest or, where exploration and evaluation activities in the area of interest have not reached a stage that permits reasonable assessment of the existence of economically recoverable reserves. The future recoverability of exploration and evaluation expenditure is dependent on a number of factors, including whether the Group decides to exploit the related lease itself, or, if not, whether it successfully recovers the related exploration and evaluation assets through sale. Factors that could impact the future recoverability include the level of reserves and resources, future technological changes, which could impact the cost of mining, future legal changes (including changes to environmental restoration obligations) and changes to commodity prices.
Page 45
Ionic Rare Earths Limited Notes to the Consolidated Financial Statements 30 June 2026 Note 3. Critical accounting judgements, estimates and assumptions (continued) 44 To the extent that capitalised exploration and evaluation expenditure is determined not to be recoverable in the future, profits and net assets will be reduced in the period in which this determination is made. Share-based payment 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 is determined by using either the Binomial, Black-Scholes model or current share price (where there are non-market conditions) taking into account the terms and conditions upon which the instruments were granted. The accounting estimates and assumptions relating to equity-settled share-based payments would have no impact on the carrying amounts of assets and liabilities within the next annual reporting period but may impact profit or loss and equity. Estimation of useful lives of assets The Group determines the estimated useful lives and related depreciation and amortisation charges for its property, plant and equipment and finite life intangible assets. The useful lives could change significantly as a result of technical innovations o r some other event. The depreciation and amortisation charge will increase where the useful lives are less than previously estimated lives, or technically obsolete or non-strategic assets that have been abandoned or sold will be written off or written down. Impairment of non-financial assets The Group assesses impairment of non-financial assets at each reporting date by evaluating conditions specific to the Group and to the particular asset that may lead to impairment. If an impairment trigger exists, the recoverable amount of the asset is determined. This involves fair value less costs of disposal or value-in-use calculations, which incorporate a number of key estimates and assumptions. Note 4. Operating segments Identification of reportable operating segments During the year, the Group revised its internal reporting structure and identified three operating segments for the purposes of monitoring performance and allocating resources: Exploration Operations, Magnet Recycling Operations and Corporate. This represents a change from the prior year, in which the Group was considered to operate as a single segment, being Exploration Operations. These operating segments are recognised on both a business line and geographical basis, reflecting the manner in which the Group's operations are managed and resources are allocated. As the Group is in a development phase, revenue generation is currently limited and not material. Although the Chief Operating Decision Makers ('CODM') revi ews activities across these three segments, the information provided to the CODM continues to be primarily focused on expenditure levels, project development progress and funding requirements. The CODM does not receive discrete financial information such as segment revenue, segment profit or loss, or segment assets and liabilities, but rather consolidated results. As a result, the Group does not prepare, and the CODM does not review, detailed financial results at a segment level. In accordance with AASB 8 Operating Segments, numerical segment disclosures have not been presented in these annual financial statements, as the information reviewed by the CODM is consistent with the consolidated results disclosed. Geographical information During the year, the Company conducted its activities across three geographic locations, being Australia, Uganda,and United Kingdom. (2025: Australia, Uganda and United Kingdom)
Page 46
Ionic Rare Earths Limited Notes to the Consolidated Financial Statements 30 June 2026 Note 4. Operating segments (continued) 45 Other income Geographical non-current assets 2026 2025 2026 2025 $ $ $ $ Australia - 754,094 289,544 450,898 United Kingdom 1,734,395 1,408,010 6,996,042 6,462,391 Uganda - - 23,064,992 24,223,908 1,734,395 2,162,104 30,350,578 31,137,197 Note 5. Other income Consolidated 2026 2025 $ $ Research and development rebate 491,116 2,160,135 Net fair value loss on financial assets (note 18) - (1,530,485) Government grants 1,108,779 1,059,657 Other income 134,500 472,797 Other income 1,734,395 2,162,104 Government grants During the financial year ending 30 June 2026, Ionic Technologies International Limited (IOT) derived income via the Innovation Funding Service portal (GOV.UK) from a number of different projects namely Critical Materials for Magnets/Feasibility, APC26: Industrialising Net–Zero Automoti ve, Critical Materials for Magnets/Supply Chain, Project – Climates: Supply Chain Innovations for Rare Earths strand 2 / Reevaluate and Project - Climates: Supply Chain Innovations for Rare Earths / Magnostic. These projects are funded by Innovate UK, a non-departmental public body sponsored by the Department for Business, Innovation, Science and Trade (BIST) (which incorporates the formerly known Department for Science, Innovation and Technology (DSIT)). During the year $1,108,779 (£ 560,599) (2025: $1,059,657 (£505,562)) was received from the grant funding.
Page 47
Ionic Rare Earths Limited Notes to the Consolidated Financial Statements 30 June 2026 46 Note 6. Expenses Consolidated 2026 2025 $ $ Loss before income tax includes the following specific expenses: Depreciation Leasehold improvements 16,608 31,973 Plant and equipment 429,393 598,536 Furniture, fittings and equipment 58,364 107,325 Land and buildings right-of-use assets 52,930 126,276 Total depreciation 557,295 864,110 Amortisation Patents 288,335 287,222 Total amortisation 288,335 287,222 Total depreciation and amortisation 845,630 1,151,332 Employee benefits expense Salaries and wages expenses 2,465,134 2,626,656 Directors' benefit expense (excluding executives) 351,206 371,408 Defined contribution superannuation expense 91,167 71,080 Total employee benefits expense 2,907,507 3,069,144 Administration expenses Office operating lease rentals 281,126 173,138 Office operating and maintenance 683,659 430,957 Accounting and tax services 295,967 408,211 ESG expenses 9,116 11,690 Conferences 36,558 15,032 Publications 301,822 146,892 Other 1,933,317 557,386 Total administration expenses 3,541,565 1,743,306 Exploration expense Uganda - Makuutu 2,317,678 2,792,765 Finance costs Interest and finance charges paid/payable on lease liabilities 10,375 34,997 Other finance charges - 6,282 Finance costs expensed 10,375 41,279 Other expenses Consultants 3,315,914 2,033,862 Legal fees 369,525 127,459 Travel and accommodation 874,992 442,457 Insurance 150,845 200,421 Promotion 197,939 189,240 Operating other 933,271 603,459 5,842,486 3,596,898
Page 48
Ionic Rare Earths Limited Notes to the Consolidated Financial Statements 30 June 2026 47 Note 7. Income tax Consolidated 2026 2025 $ $ Numerical reconciliation of income tax expense and tax at the statutory rate Loss before income tax expense (14,913,778) (11,341,449) Tax at the statutory tax rate of 25% (3,728,444) (2,835,362) Tax effect amounts which are not deductible/(taxable) in calculating taxable income: Share-based payments 256,678 174,444 Exploration expenditure 579,419 698,191 Net fair value gain/loss on financial assets - unrealised 289,729 (73,393) Government grants exempt from tax - (452,478) Other 903,092 1,240,244 (1,699,526) (1,248,354) Current year tax losses not recognised 1,699,526 1,248,354 Income tax expense - - Consolidated 2026 2025 $ $ Tax losses not recognised Unused tax losses for which no deferred tax asset has been recognised 26,988,560 22,632,918 Potential tax benefit @ 25% 6,747,140 5,658,230 Consolidated 2026 2025 $ $ Deferred tax assets not recognised Deferred tax assets not recognised comprises temporary differences attributable to: Transaction costs arising on shares issued 355,644 264,823 Prepayments (7,032) (1,758) Timing differences (other than tax losses and capital losses) not brought to account (399,658) (275,405) Other 43,968 10,542 Accruals 7,079 1,798 Total deferred tax assets not recognised - - The above potential tax benefit, which excludes tax losses, for deductible temporary differences has not been recognised in the Statement of financial position as the recovery of this benefit is uncertain. Other than to offset deferred tax liabilities the Group has not recognised tax losses arising in Australia of $ 26,988,560 and capital losses of $8,924,336 (2025: $22,632,918 and capital loss es of $8,924,336) that may be available for offset against future taxable profits of the companies in which the losses arose. The potential benefit of carried forward losses will only be obtained if assessable income is derived of a nature and, of an amount sufficient to enable the benefit from the deductions to be realised or the benefit can be utilised by the Company provided that: (i) the provisions of deductibilit y imposed by law are complied with; (ii) the Group satisfies the continuity of ownership test from the period the losses were incurred to the time they are to be utilised; and (iii) no chan ge in tax legislation adversely affect the realisation or the benefit from the deductions.
Page 49
Ionic Rare Earths Limited Notes to the Consolidated Financial Statements 30 June 2026 48 Note 8. Cash and cash equivalents Consolidated 2026 2025 $ $ Current assets Cash at bank 3,481,238 437,536 Term deposit - 157,695 3,481,238 595,231 Note 9. Investments accounted for using the equity method An amount of $23,064,992 (2025: $24,223,908) has been presented in the financial statements as an Investment in Joint Venture. This represents amounts incurred to acquire an interest in Rwenzori Rare Metals Limited ('RRM') which holds 100% of the Makuutu Rare Earths Project. This includes the amounts set out below. Reclassification due to reassessment: The Group’s interest in RRM was previously accounted for as an associate. During the year, the Group revisited its assessment of the rights and obligations relating to this investment. Although there were no changes to the contractual arrangements or other underlying facts and circumstances, the reassessment confirmed that key decisions over RRM’s relevant activities require approval from more than 75% of vo ting rights, meaning the Group cannot unilaterally direct these activities, as the Group controls 60% of the voting rights, and such decisions must therefore be made jointly by the parties sharing control. Accordingly, the investment has been reclassified from an associate to a joint venture in accordance with AASB 11. As both associates and joint ventures are accounted for under the equity method, there has been no change to the balances recognised in the financial statements or the disclosure requirements under AASB 12 and AASB 128. Consolidated 2026 2025 $ $ Non-current assets Non-current assets Investment in Joint Venture - Rwenzori Rare Metals Limited (RRM) 23,064,992 24,223,908 Reconciliation Reconciliation of the carrying amounts at the beginning and end of the current and previous financial year are set out below: Opening carrying amount 24,223,908 23,930,338 Exchange difference (1,158,916) 293,570 Closing carrying amount 23,064,992 24,223,908 Interests in Joint Ventures Interests in Joint Ventures are accounted for using the equity method of accounting. Information relating to Joint Ventures that are material to the Group are set out below: Ownership interest Principal place of business / 2026 2025 Name Countr y of incorporation % % Rwenzori Rare Metals Limited U ganda 60.00% 60.00%
Page 50
Ionic Rare Earths Limited Notes to the Consolidated Financial Statements 30 June 2026 Note 9. Investments accounted for using the equity method (continued) 49 Summarised financial information 2026 2025 $ $ Subscription for initial 20% interest in Rwenzori Rare Metals Limited 148 148 US$100,000 paid to Rare Earth Elements Africa Pty Ltd 148,035 148,035 29,179,517 fully paid shares issued to Rare Earth Elements Africa Pty Ltd 233,436 233,436 100,000,000 fully paid shares issued to Southern Cross Mining Pty Ltd 800,000 800,000 50,000,000 options (exercise price of $0.005) issued to SCM 325,000 325,000 Expenditure on exploration and evaluation for additional 11% interest 954,689 954,689 Expenditure on exploration and evaluation for additional 15% interest 1,166,337 1,166,337 Expenditure on exploration and evaluation for additional 5% interest 498,210 498,210 Expenditure on exploration and evaluation for additional 5% interest 16,384,749 16,384,749 Expenditure on exploration and evaluation for award of mining license 1,611,837 1,611,837 US$375,000 Paid to Rare Earth Elements Africa Pty Ltd 546,367 546,367 Movement in foreign exchange 396,184 1,555,100 23,064,992 24,223,908 2026 2025 $ $ Summarised Statement of financial position Current assets 33,084 742,261 Non-current assets 2,683,227 2,397,604 Total assets 2,716,311 3,139,865 Current liabilities 201,243 93,284 Total liabilities 201,243 93,284 Net assets 2,515,068 3,046,581 Summarised Statement of profit or loss and other comprehensive income Revenue - - Expenses (7,511,860) (1,788,537) Loss before income tax (7,511,860) (1,788,537) Income tax expense - - Loss after income tax (7,511,860) (1,788,537) Other comprehensive income - - Total comprehensive Loss (7,511,860) (1,788,537) Reconciliation of the Group's carrying amount Group's share in % 60% 60% Group's share in $ 1,509,041 1,827,945 Fair Value uplift 3,704,962 3,704,962 Contributions/foreign exchange movement 17,850,919 18,691,001 Closing carrying amount 23,064,922 24,223,908
Page 51
Ionic Rare Earths Limited Notes to the Consolidated Financial Statements 30 June 2026 50 Note 10. Plant and equipment Consolidated 2026 2025 $ $ Non-current assets Leasehold improvements - at cost 150,131 152,806 Less: Accumulated depreciation (140,461) (64,239) 9,670 88,567 Plant and equipment - at cost 3,912,881 3,600,786 Less: Accumulated depreciation (2,703,471) (2,487,552) 1,209,410 1,113,234 Furniture, fittings and equipment - at cost 480,798 502,051 Less: Accumulated depreciation (405,968) (347,604) 74,830 154,447 Assets under construction – at cost 1,183,294 - Property, Plant and Equipment 2,477,205 1,356,248 Right-of-use Assets Lease-at cost 286,427 631,385 Less: Accumulated depreciation (31,883) (305,167) 254,544 326,218 Total Property, Plant and Equipment 2,731,749 1,682,466 Reconciliations Reconciliations of the wri tten down values at the beginni ng and end of the current and prev ious financial year are set out below: Leasehold improvements Plant and equipment Furniture, fittings and equipment Assets under construction Right- of-use Total Consolidated $ $ $ $ $ $ Balance at 1 July 2024 118,322 1,574,532 246,866 - 452,493 2,392,213 Additions - 37,660 - - - 37,660 Disposals - (25,958) - - - (25,958.00) Exchange differences 2,218 133,903 14,906 - - 151,027.00 Write off of assets - (8,367) - - - (8,367.00) Depreciation expense (31,973) (598,536) (107,325) - (126,275) (864,110) Balance at 30 June 2025 88,567 1,113,234 154,447 - 326,218 1,682,466 Additions - 827,820 8,548 1,183,294 - 2,019,662 Disposals (60,896) (223,112) (20,423) - - (304,431) Lease Modification - - - - (18,744) (18,744) Exchange differences (1,393) (79,139) (9,377) - - (89,909) Depreciation expense (16,608) (429,393) (58,365) - (52,929) (557,295) Balance at 30 June 2026 9,670 1,209,410 74,830 1,183,294** 254,544* 2,731,749
Page 52
Ionic Rare Earths Limited Notes to the Consolidated Financial Statements 30 June 2026 Note 10: Property Plant and Equipment (continued) 51 * During the year, the Company relocated its business premises in Melbourne, resulting in a modification of its lease arrangement. In accordance with AASB 16, the lease liability was remeasured and the corresponding right-of-use asset adjusted to reflect the revised lease terms arising from the change of address. **Assets under construction primarily comprise costs incurred in relation to the development of the Group's Belfast commercial rare earth magnet recycling facility. Note 11. Intangible assets Consolidated 2026 2025 $ $ Non-current assets Patents - at cost 5,524,002 6,063,163 Less: Accumulated amortisation/foreign exchange impact (1,005,165) (867,339) 4,518,837 5,195,824 Reconciliations Reconciliations of the wri tten down values at the beginni ng and end of the current and prev ious financial year are set out below: Patents Consolidated $ Balance at 1 Jul y 2024 4,990,354 Exchange differences 492,692 Amortisation expense (287,222) Balance at 30 June 2025 5,195,824 Additions 33,577 Exchange differences (422,229) Amortisation expense (288,335) Balance at 30 June 2026 4,518,837 Note 12. Trade and other payables Consolidated 2026 2025 $ $ Current liabilities Trade payables 1,711,185 1,456,488 Accruals 151,967 335,693 Other payables 145,858 59,639 2,009,010 1,851,820 Refer to note 17 for further information on financial instruments.
Page 53
Ionic Rare Earths Limited Notes to the Consolidated Financial Statements 30 June 2026 52 Note 13. Other financial liabilities Consolidated 2026 2025 $ $ Current liabilities Funds received in advance for Convertible notes - 750,000 Other financial liabilities correspond to funds received in advance for convertible notes which required shareholder approval before being issued. Shareholder approval was received at the EGM on 7 July 2025, upon which the convertible notes were then issued. The convertible notes are convertible into shares on the date determined by the holder and automatically convert into shares on 15 June 2027 if they haven’t converted earlier. The conversion price is the lower of 0.9 cents per share and a 20% discount to the 15-business day volume weighted average price of shares traded on ASX prior to conversion. They are not redeemable. During the 2026 financial year 107 of these convertible notes were converted. Note 14. Issued capital Consolidated 2026 2025 2026 2025 Shares Shares $ $ Ordinar y shares - fully paid 226,608,362 175,580,859 114,671,378 95,086,703 Movements in ordinary share capital
Page 54
Ionic Rare Earths Limited Notes to the Consolidated Financial Statements 30 June 2026 Note 14. Issued capital (continued) 53 Details Date Shares Issue price $ Balance 1 Jul y 2024 161,043,370 92,130,498 Shares issued 22 Jul y 2024 1,282,051 $0.39 500,000 Share based payments 2 December 2024 1,414,290 $0.21 297,001 Share placement 2 December 2024 6,828,571 $0.21 1,434,000 Share placement 3 December 2024 66,667 $0.21 14,000 Share purchase plan 23 December 2024 3,645,996 $0.21 765,659 Exercise of performance ri ghts 28 Januar y 2025 333,333 $0.00 195,000 Shares issued 21 Ma y 2025 80,866 $0.24 19,408 Shares issued 22 Ma y 2025 885,715 $0.21 186,000 Transaction costs - $0.00 -454,863 Balance 30 June 2025 175,580,859 95,086,703 Share based payments (options exercised) 8 Jul y 2025 23,810 $0.33 7,857 Share based payments (options exercised) 9 Jul y 2025 59,048 $0.33 19,486 Convertible notes converted 11 Jul y 2025 3,240,740 $0.27 875,000 Convertible notes converted 18 Jul y 2025 1,851,852 $0.27 500,000 Share based payments (options exercised) 18 Jul y 2025 133,333 $0.33 44,000 Convertible notes converted 25 Jul y 2025 3,703,704 $0.27 1,000,000 Share based payments (options exercised) 25 Jul y 2025 3,251,904 $0.33 1,073,129 Convertible notes converted 1 Au gust 2025 92,593 $0.27 25,000 Share based payments (options exercised) 1 Au gust 2025 772,751 $0.33 255,008 Share based payments (options exercised) 8 Au gust 2025 524,651 $0.33 173,135 Share based payments (options exercised) 18 Au gust 2025 16,667 $0.33 5,500 Convertible notes converted 22 Au gust 2025 277,778 $0.27 75,000 Share based payments (options exercised) 22 Au gust 2025 59,524 $0.33 19,643 Convertible notes converted 29 Au gust 2025 92,593 $0.27 25,000 Share based payments (options exercised) 29 Au gust 2025 133,333 $0.33 44,000 Share based payments (options exercised) 18 September 2025 297,619 $0.33 98,214 Shares issued 19 September 2025 241,885 $0.48 116,105 Share based payments (options exercised) 29 September 2025 258,333 $0.33 85,250 Share based payments (options exercised) 30 September 2025 5,951 $0.33 1,965 Shares issued 16 October 2025 32,538,790 $0.48 15,616,282 Convertible notes converted 17 October 2025 185,185 $0.27 50,000 Share based payments (options exercised) 17 October 2025 913,788 $0.33 301,550 Shares issued to service providers 17 October 2025 185,895 $0.48 89,229 Performance Rights Vesting 29 October 2025 416,667 $0.00 243,750 Share based payments (options exercised) 3 November 2025 83,333 $0.33 27,500 Share based payments (options exercised) 28 November 2025 5,952 $0.33 1,964 Shares Issued 1 December 2025 26,134 $0.42 10,976 Shares issued to service providers 23 Januar y 2026 62,364 $0.47 29,311 Share based payments (options exercised) 27 Januar y 2026 12,239 $0.33 4,017 Shares issued to service providers 6 Februar y 2026 416,666 $0.46 191,666 Share based payments (options exercised) 16 Februar y 2026 556 $0.75 417 Shares issued to service providers 2 March 2026 416,666 $0.41 170,833 Share based payments (options exercised) 2 March 2026 16,334 $0.33 5,250 Share based payments (options exercised) 2 March 2026 333 $0.75 250 Shares issued to service providers 20 March 2026 88,338 $0.34 30,035 Shares issued to service providers 23 April 2026 41,303 $0.30 12,391 Shares issued to service providers 28 Ma y 2026 42,889 $0.36 15,440 Convertible notes converted 28 Ma y 2026 536,002 $0.23 125,001 Transaction costs (1,946,724) Equity Settled capital raising cost reserve 162,245 Balance 30 June 2026 226,608,362 114,671,378 On 5 December 2025, the Company completed a share consolidation in the ratio of 30 shares to convert to one ordinary share with approval of the shareholders on 28 November 2025, the opening balances have been restated.
Page 55
Ionic Rare Earths Limited Notes to the Consolidated Financial Statements 30 June 2026 Note 14. Issued capital (continued) 54 On 9 October 2025, the Company completed a Renounceable Rights offer followed by a placement; 32,538,790 fully paid ordinary shares at $0.48 per share, raising $15.6M before cost s. As part of the offer and placement, investors received one free attaching listed option for every share subscribed, with an exercise price of $0.75 before 30 September 2028. Ordinary shares Ordinary shares entitle the holder to participate in any divi dends declared and any proceeds attributable to shareholders should the Company be wound up, in proportions that consider both the number of shares held and the extent to which those shares are paid up. The fully paid ordinary shares have no par value and the Company does not have a limited amount of authorised capital. On a show of hands every member present at a meeting in person or by proxy shall have one vote and upon a poll each share shall have one vote. Share buy-back There is no current on-market share buy-back. Capital risk management The Group's objectives when managing capital is to safeguard its ability to continue as a going concern, so that it can provide returns for shareholders and benefits for other stakeholders and to maintain an optimum capital structure to reduce the cost of capital. The Group is not exposed to any externally imposed capital requirements. The capital risk management policy remains unchanged from the 30 June 2025 Annual Report. Note 15. Reserves Consolidated 2026 2025 $ $ Forei gn currency reserve 814,299 2,583,041 Share-based payments reserve 5,964,531 5,346,629 Convertible note equity reserve * 325,000 136,403 7,103,830 8,066,073 * On 7 July 2025, the Company issued 120 convertible notes for $3,000,000 after shareholder approval. The convertible notes are not redeemable and convert automatically into shares on 15 June 2027 if they haven’t been converted earlier. The Company issued 7,142,857 (after consolidation) options to the investors of the convertible notes for no payment. The options are exercisable at $0.33 each and expire on 15 December 2027. Since date of issue 107 convertible notes have been converted. Foreign currency reserve The reserve is used to recognise exchange differences arising from the translation of the financial statements of foreign operations to Australian dollars. It is also used to recognise gains and losses on hedges of the net investments in foreign operations. Share-based payments reserve The reserve is used to recognise the value of equity benefits provided to employees and Directors as part of their remuneration under an Employee Share Plan; Directors on terms determined by the Board and approved by shareholders, and other parties as part of their compensation for services. Convertible note equity reserve The reserve is used to recognise the value of options on issue, not granted as a means of a share-based payment.
Page 56
Ionic Rare Earths Limited Notes to the Consolidated Financial Statements 30 June 2026 Note 15. Reserves (continued) 55 Movements in reserves Movements in each class of reserve during the current and previous financial year are set out below: Foreign currency Share-based payments Convertible note equity Total Consolidated $ $ $ $ Balance at 1 July 2024 1,894,766 9,666,510 136,403 11,697,679 Foreign currency translation 688,275 - - 688,275 Share-based payments (options) - 275,065 - 275,065 Performance rights - 697,776 - 697,776 Performance rights exercised - (195,000) - (195,000) Options and performance rights expired - (5,097,722) - (5,097,722) Balance at 30 June 2025 2,583,041 5,346,629 136,403 8,066,073 Foreign currency translation (1,768,743) - - (1,768,743) Performance rights - 913,628 - 913,628 Options and performance rights exercised - (295,726) - (295,726) Convertible notes issued - - 3,000,000 3,000,000 Convertible notes converted - - (2,675,000) (2,675,000) Convertible notes expired - - (136,403) (136,403) Balance at 30 June 2026 814,298 5,964,531 325,000 7,103,830 Note 16. Dividends There were no dividends paid, recommended or declared during the current or previous financial year. Note 17. Financial instruments Financial risk management objectives The Group's activities expose it to a variety of financial risks: market risk (including foreign currency risk and interest rate risk), credit risk and liquidity risk. The Group's overall risk management program focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the financial performance of the Group. The Group uses different methods to measure different types of risk to which it is exposed. These methods include sensitivity analysis in the case of interest rate, foreign exchange and other price risks. Risk management is carried out by senior finance executives ('finance') under policies approved by the Board of Directors ('the Board'). These policies include identification and analysis of the risk exposure of the Group and appropriate procedures, controls and risk limits. Finance identifies and evaluates financ ial risks within the Group's operating units. Finance reports to the Board on a monthly basis. Market risk Foreign currency risk The Group undertakes certain transactions denominated in foreign currency and is exposed to foreign currency risk through foreign exchange rate fluctuations. The Group is exposed to currency risk on purchases that are denominated in a currency other than the respective functional currencies of Group entities, primarily the United Sates Dollar (USD) and Great Britian pound (GBP). Foreign exchange risk arises from future commercial transactions and recognised financial assets and financial liabilities denominated in a currency that is not the Company's functional currency. The risk is measured using sensitivity analysis and cash flow forecasting. The Group has not entered into any derivative financial instruments to hedge such transactions and anticipated future receipts or payments that are denominated in a foreign currency.
Page 57
Ionic Rare Earths Limited Notes to the Consolidated Financial Statements 30 June 2026 Note 17. Financial instruments (continued) 56 The Group’s investments in its subsidiaries are not hedged as those currency positions are considered to be long term in nature. The carrying amount of the Group's foreign currency denominated financial assets and financial liabilities at the reporting date were as follows: Assets Liabilities 2026 2025 2026 2025 Consolidated $ $ $ $ Pound Sterlin g 408,362 185,053 1,490,784 372,924 AUD stren gthened AUD weakened Consolidated - 2026 % change Effect on profit before tax Effect on equity % change Effect on profit before tax Effect on equity Pound Sterling 10% - 108,242 (10%) - (120,269) AUD strengthened AUD weakened Consolidated - 2025 % change Effect on profit before tax Effect on equity % change Effect on profit before tax Effect on equity Pound Sterling 10% - 18,787 10% - (20,875) Interest rate risk Interest rate risk is the risk that changes in interest rates w ill affect the Group’s income. The objective of interest rate ri sk management is to manage and control risk exposures within acceptable parameters, while optimising any return. As the Group has interest bearing assets, the Group’s income and operating cash flows are exposed to changes in market interest rates. The assets are short term interest bearing deposits. The Group does not have any policy in place and no financial instruments are employed to mitigate interest rate risks. As at the reporting date, the Group had the following financial assets exposed to Australian and English variable interest rate risk: 2026 2025 Balance Balance Consolidated $ $ Financial assets - cash at bank Australia 3,467,768 418,854 United Kingdom 2,831 176,377 United States of America 10,639 - Net exposure to cash flow interest rate risk 3,481,238 595,231 The Group has no interest bearing liabilities and is therefore not exposed to interest rate risks. The following sensitivity analysis is based on the interest rate risk exposures in existence at the end of the reporting period. The 1% sensitivity is based on reasonable possible change over the financial year using the observed range for the historic 2 years. At 30 June, if interest rates had moved, as illustrated in the table below, with all variables held constant, post tax profit and equity would have been affected as follows:
Page 58
Ionic Rare Earths Limited Notes to the Consolidated Financial Statements 30 June 2026 Note 17. Financial instruments (continued) 57 Consolidated - 2026 Basis points chan ge Effect on profit after tax Effect on equit y Basis points chan ge Effect on profit after tax Effect on equit y +/- 1% (100 basis points) 100 20,288 20,288 (100) (20,288) (20,288) Consolidated - 2025 Basis points change Effect on profit after tax Effect on equity Basis points change Effect on profit after tax Effect on equity +/- 1% (100 basis points) 100 5,952 5,952 (100) (5,952) (5,952) Credit risk Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the Group. The Group has a strict code of credit, including obtaining agency credit information, confirming references and setting appropriate credit limits. The Group obtains guarantees where appr opriate to mitigate credit risk. The maximum exposure to credit risk at the reporting date to recognised financial assets is the carrying amount, net of any provisions for impairment o f those assets, as disclosed in the Statement of financial position and notes to the financial statements. The Group does not hold any collateral. The Group trades only with recognised, creditworthy third parties, and as such collateral is not requested nor is it the Group’s policy to securitise its trade and other receivables. Liquidity risk Vigilant liquidity risk management requires the Group to maintain sufficient liquid assets (mainly cash and cash equivalents) to be able to pay debts as and when they become due and payable. The Group manages liquidity risk by maintaining adequate cash reserves by continuously monitoring actual and forecast cash flows and matching the maturity profiles of financial assets and liabilities. Remaining contractual maturities The following tables detail the Group's remain ing contractual maturity for its financia l instrument liabilities. The tables hav e been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the financial liabilities are required to be paid. The tables include both interest and principal cash flows disclosed as remaining contractual maturities and therefore these totals may differ from their carrying amount in the Statement of financial position. 1 year or less Between 1 and 2 years Between 2 and 5 years Over 5 years Remaining contractual maturities Consolidated - 2026 $ $ $ $ $ Non-derivatives Non-interest bearing Trade payables 1,711,932 - - - 1,711,932 Other payables 145,858 - - - 145,858 Other financial liabilities - - - - - Interest-bearing - fixed rate Lease liability 78,673 162,136 - - 240,809 Total non-derivatives 1,936,463 162,136 - - 2,098,599
Page 59
Ionic Rare Earths Limited Notes to the Consolidated Financial Statements 30 June 2026 Note 17. Financial instruments (continued) 58 1 year or less Between 1 and 2 years Between 2 and 5 years Over 5 years Remaining contractual maturities Consolidated - 2025 $ $ $ $ $ Non-derivatives Non-interest bearing Trade payables 1,456,488 - - - 1,456,488 Other payables 59,639 - - - 59,639 Other financial liabilities 750,000 - - - 750,000 Interest-bearing - fixed rate Lease liabilit y 131,342 237,044 - - 368,386 Total non-derivatives 2,397,469 237,044 - - 2,634,513 Fair value of financial instruments Unless otherwise stated, the carrying amounts of financial instruments reflect their fair value. Note 18. Fair value measurement The Group had no assets or liabilities measured at fair value as at 30 June 2026. During the prior year, the Group disposed of its investment in Viridis Mining and Minerals Ltd, which had been classified as a financial asset measured at fair value through profit or loss ("FVTPL"). Accordingly, there are no fair value hierarchy disclosures required for the current year. Note 19. Key management personnel disclosures Compensation The aggregate compensation made to Directors and other members of key management personnel of the Group is set out below: Consolidated 2026 2025 $ $ Short-term emplo yee benefits 1,507,954 1,004,197 Post-employment benefits - 5,750 Share-based payments 651,823 459,501 2,159,777 1,469,448 Note 20. Remuneration of auditors The BDO entity performing the audit of the Group transitioned from BDO Audit (WA) Pty Ltd to BDO Audit Pty Ltd on 6 August 2024. The disclosures include amounts received or due and receivable by BDO Audit (WA) Pty Ltd, BDO Audit Pty Ltd and their respective related entities. During the financial year the following fees were paid or payable for services provided by BDO, the auditor of the Company: Consolidated 2026 2025 $ $ Audit services - BDO Audit or review of the financial statements 65,050 85,310
Page 60
Ionic Rare Earths Limited Notes to the Consolidated Financial Statements 30 June 2026 59 Note 21. Contingent liabilities On 21 April 2022, the Company completed the acquisition of Seren Technologies Limited, now called Ionic Technologies International Limited, (IonicTech) from Seren AG, Professor Peter Nockemann and Professor Martin Atkins (Sellers). Obligations outstanding pursuant to this acquisition are: (a) pay the Sellers 25% of any licence fee received by the Company from a third party to use the technology for magnet recycling or rare earth separation technology (Milestone 1 Payment), to a maximum of US$1,500,000. (b) Upon reaching commercial production for a magnet recycling plant or rare earth separation and refining plant developed using the technology and designed for a scale exceeding 100 tonne per annum Rare Earth Oxide equivalent production capacity or greater (Milestone 2) pay the Sellers US$1,500,000 less the total Milestone 1 Payments paid to the Sellers (Milestone 2 Payment). Note 22. Related party transactions Parent entity Ionic Rare Earths Limited is the parent entity. Subsidiaries Interests in subsidiaries are set out in note 24. Joint ventures Interests in joint ventures are set out in note 9. Key management personnel Disclosures relating to key management personnel are set out in note 19 and the remuneration report included in the Directors' report. Transactions with related parties There were no transactions with related parties during the current and previous financial year. Receivable from and payable to related parties There were no trade receivables from or trade payables to related parties at the current and previous reporting date. Loans to/from related parties There were no loans to or from related parties at the current and previous reporting date. Note 23. Parent entity information Set out below is the supplementary information about the parent entity. Statement of profit or loss and other comprehensive income Parent 2026 2025 $ $ Loss after income tax (11,319,515) (9,885,410) Total comprehensive loss (11,319,515) (9,885,410)
Page 61
Ionic Rare Earths Limited Notes to the Consolidated Financial Statements 30 June 2026 Note 23. Parent entity information (continued) 60 Statement of financial position Parent 2026 2025 $ $ Total current assets 3,804,723 637,984 Total non-current assets 28,403,109 30,828,643 Total assets 32,207,832 31,466,627 Total current liabilities 633,950 2,546,641 Total non-current liabilities 162,136 - Total liabilities 796,086 2,546,641 Net assets 31,411,746 28,919,986 Equity Issued capital 114,671,378 95,086,703 Foreign currency reserve 650,255 2,914,436 Share-based payments reserve 5,964,531 5,341,955 Convertible note equity reserve * 325,000 136,403 Accumulated losses (90,199,418) (74,559,511) Total equity 31,411,746 28,919,986 Guarantees entered into by the parent entity in relation to the debts of its subsidiaries The parent entity had no guarantees in relation to the debts of its subsidiaries as at 30 June 2026 and 30 June 2025. Contingent liabilities The parent entity had no other contingent liabilities as at 30 June 2026 and 30 June 2025 than mentioned on note 21. Capital commitments - Property, plant and equipment The parent entity had no capital commitments for property, plant and equipment as at 30 June 2026 and 30 June 2025. Material accounting policy information The accounting policies of the parent entity are consistent with those of the Group, as disclosed in note 2, except for the following: ● Investments in subsidiaries are accounted for at cost, less an y impairment, in the parent entity. ● Investments in joint ventures are accounted for at cost, less any impairment, in the parent entity. ● Dividends received from subsidiaries are recognised as other income by the parent entity and its receipt may be an indicator of an impairment of the investment.
Page 62
Ionic Rare Earths Limited Notes to the Consolidated Financial Statements 30 June 2026 61 Note 24. Interests in subsidiaries The consolidated financial statements incorporate the assets, liabilities and results of the following subsidiary in accordance with the accounting policy described in note 2: Ownership interest Principal place of business / 2026 2025 Name Country of incorporation % % Ionic (Brazil) Pty Ltd Australia 100.00% 100.00% Ionic (UK) Pty Ltd Australia 100.00% 100.00% Ionic (USA) Pty Ltd Australia 100.00% - Ionic Technologies International Limited United Kin gdom 100.00% 100.00% Ionic Technologies (Belfast) Limited United Kin gdom 100.00% - Ionic Rare Earths USA, Inc Unites States of America 100.00% - Note 25. Reconciliation of loss after income tax to net cash used in operating activities Consolidated 2026 2025 $ $ Loss after income tax expense for the year (14,913,778) (11,341,449) Adjustments for: Depreciation and amortisation 845,630 1,151,332 Net fair value loss on financial assets - 1,530,485 Share-based payments 1,026,710 697,776 Foreign exchange differences (1,089,718) (5,036) Change in operating assets and liabilities: (Increase)/decrease in other receivables 293,395 (94,371) Decrease in inventories (99,262) 521,900 Decrease in prepayments (72,704) 110,368 Increase in trade and other payables 157,190 1,537,943 Net cash used in operating activities (13,852,536) (5,891,052) Note 26. Non-cash investing and financing activities Consolidated 2026 2025 $ $ Shares issued - exercise of performance rights 243,750 195,000
Page 63
Ionic Rare Earths Limited Notes to the Consolidated Financial Statements 30 June 2026 62 Note 27. Changes in liabilities arising from financing activities Lease liabilities Consolidated $ Balance at 1 July 2024 489,346 Net cash used in financing activities (120,960) Balance at 30 June 2025 368,386 Net cash from financing activities (151,094) Acquisition of leases 23,516 Balance at 30 June 2026 240,808 Note 28. Earnings per share Consolidated 2026 2025 $ $ Loss after income tax attributable to the owners of Ionic Rare Earths Limited (14,913,778) (11,341,449) Number Number Weighted average number of ordinary shares used in calculating basic earnings per share 214,127,554 169,159,941 Weighted average number of ordinary shares used in calculating diluted earnings per share 214,127,554 169,159,941 Cents Cents Basic earnings per share (6.96) (6.70) Diluted earnings per share (6.96) (6.70) The weighted average number of ordinary shares for 2025 has been restated for the effect of the share consolidation (30 for 1) completed in December 2025, in accordance with AASB 133 'Earnings per share'. 53,076,774 (2025: 2,500,000) options, 8,050,007 (2025: 5,133,334) performance rights, 13 (2025: Nil) convertible notes over ordinary shares are not included in the calculation of diluted earnings per share because they are anti-dilutive for the year ended 30 June 2026. These options, performance rights and convertible notes could potentially dilute basic earnings per share in the future. Note 29. Share-based payments Options The establishment of the Ionic Rare Earths Limited Employee Share Option Plan ('Plan') was approved by shareholders at the Annual General Meeting held on 24 November 2021. The Plan is designed to provide long-term incentives to Directors, senior executives, employees and certain contractors to deliver l ong term shareholder returns. Participation in the Plan is at the Board’s discretion and no individual has a contractual right to participate in the plan or to receive guaranteed benefits. In addition, under the Plan, the Board determines the terms of the options including exercise price, expiry date and vesting conditions, if any. There is NIL options under the Plan as at 30 June 2026 (2025: Nil). During the financial year, the following options were granted to consultants for their services provided to the Company and not under the Plan 1,844,961 (2025: 1,166,667). Total expense arising from the issue of options recognised during the year was $nil ,(2025: Nil). The following consultant options were on issue at reporting date:
Page 64
Ionic Rare Earths Limited Notes to the Consolidated Financial Statements 30 June 2026 Note 29. Share-based payments (continued) 63 2026 Balance at Balance at Exercise the start of the end of Grant date Expiry date price the year Granted Exercised Expired the year 26 Nov 2024 15 Dec 2027 $0.3300 1,166,667 - (500,000) - 666,667 10 Sep 2025 30 Sep 2028 $0.7500 - 1,511,628 - - 1,511,628 28 Nov 2025 30 Nov 2028 $0.6300 - 333,333 - - 333,333 1,166,667 1,844,961 (500,000) - 2,511,628 Weighted average exercise price $0.4840 $0.7280 $0.3300 $0.6220 * A security consolidation of every 30 pre-consolidation shares into post consolidation share took place during the year. Approved by shareholders at EGM on 28 November 2025. The 30 June 2025 balance was restated accordingly. The weighted average remaining contractual life of options outstanding at the end of the financial year was 1.96 years (2025: Nil years). For the options granted during the current financial year, the valuation model inputs used to determine the fair value at the grant date, are as follows: Share price Exercise Expected Dividend Risk-free Fair value Grant date Expiry date at grant date price volatility yield interest rate at grant date 10/09/2025 30/09/2028 $0.540 $0.750 100.00% - 3.85% $0.309 28/11/2025 28/11/2028 $0.420 $0.630 100.00% - 3.85% $0.234 Performance Share Rights During the year ended 30 June 2026, 4,133,333 (124,000,000 pre-consolidation) performance rights were granted. The vesting conditions of the performance rights are:
Page 65
Ionic Rare Earths Limited Notes to the Consolidated Financial Statements 30 June 2026 Note 29. Share-based payments (continued) 64 ● 536,667 (16,100,000 pre-consolidation) Performance Rights will vest upon successful achievement of government funding to support the commercialisation of the Company’s magnet recycling activities; ● 100,000 (3,000,000 pre-consolidation) Performance Rights will vest upon successfully receipt of strategic investment funding from external parties to advance the Company’s projects; ● 100,000 (3,000,000 pre-consolidation) Performance Rights will vest upon successfully execution of a new joint venture or licensing arrangement to progress the Company’s magnet recycling business; ● 350,000 (10,500,000 pre-consolidation) Performance Rights will vest upon succ essfully completion of a transaction relating to the Company’s interest in the Makuutu Rare Earth Project; ● 83,333 (2,500,000 pre-consolidation) Performance Rights will vest upon successfully securing a significant portion o f required raw material supply for the initial operation of the Belfast facility; ● 83,333 (2,500,000 pre-consolidation) Performance Rights will vest upon successfully progressing offtake negotiations to secure sales commitments for a portion of the Belfast facility’s initial production; ● 133,333 (4,000,000 pre-consolidation) Performance Rights will vest upon successfully securing a site in the United States for a future commercial-scale magnet recycling facility; ● 133,333 (4,000,000 pre-consolidation) Performance Rights will vest upon successfully completion of engineering design work to support a financial investment decision for a commercial magnet recycling plant; ● 133,333 (4,000,000 pre-consolidation) Performance Rights will vest upon successfully obtaining required environmental and regulatory approvals for construction of a commercial magnet recycling facility in the United States; ● 133,333 (4,000,000 pre-consolidation) Performance Rights will vest upon successfully Board approval of a financial investment decision for a commercial-scale magnet recycling facility in the United States; ● 133,333 (4,000,000 pre-consolidation) Performance Rights will vest upon successfully securing a strategic partnership, cornerstone investment, or government funding to support development of a U.S. magnet recycling facility; ● 353,333 (10,600,000 pre-consolidation) Performance Rights w ill vest upon successfully execution of binding feedstoc k supply agreements for a significant portion of the Belfast facility’s planned processing capacity; ● 353,333 (10,600,000 pre-consolidation) Performance Rights will vest upon successful Board approval to proceed with commercialisation of the Belfast magnet recycling facility; ● 353,333 (10,600,000 pre-consolidation) Performance Rights will vest upon successful achievement of production targets for separated REO's at the Belfast demonstration plant; ● 353,333 (10,600,000 pre-consolidation) Performance Rights will vest upon successful deployment of the Company’s magnet recycling technology at an additional location achieving targeted production output; ● 66,667 (2,000,000 pre-cons olidation) Performance Rights will vest upon successf ully securing an offtake agreement relating to the Makuutu Rare Earths Project; ● 200,000 (6,000,000 pre-consolidation) Performance Rights will vest upon successful Board approval of a financial investment decision to progress the Makuutu Project to construction; ● 200,000 (6,000,000 pre-consolidation) Performance Rights will vest upon successful achievement of production targets for mixed rare earth carbonate at the Makuutu demonstration plant; ● 66,667 (2,000 ,000 pre-consolidation) Performance Rights will vest upon successful execution of binding documentation for an equity or debt investment into the Company or the Makuutu Project; ● 66,667 (2,000,000 pre-consolidation) Performance Rights will vest upon successfully securing an offtake or strategic partnership arrangement with Ionic Technologies International Limited; ● 200,000 (6,000,000 pre-consolidation) Performance Rights will vest upon successful Board approval of a financial investment decision to construct a commercial magnet recycling facility. Set out below are summaries of performance rights granted under the plan: 2026 Balance at Expired Balance at Exercise the start of Forfeited the end of Grant date Expir y date price the year Granted Exercised Vested the year 21/03/2024 21/03/2027 $0.0000 2,466,667 - - (416,660) 2,050,007 21/05/2025 20/05/2028 $0.0000 2,666,667 - - - 2,666,667 28/11/2025 27/11/2028 $0.0000 - 3,333,333 - - 3,333,333 28/11/2025 27/11/2028 $0.0000 - 800,000 - (800,000) - 5,133,334 4,133,333 - (1,216,660) 8,050,007
Page 66
Ionic Rare Earths Limited Notes to the Consolidated Financial Statements 30 June 2026 Note 29. Share-based payments (continued) 65 During the year ended 30 June 2025, 2,666,667 (80,000,000 pre-consolidation) performance rights were granted. The vesting conditions of the performance rights are: ● 666,667 (20,000,000 pre-consolidation) Performance Rights will vest upon successfully securing UK Government funding of £5m or greater, prorated up to £10m, for commercialisation in magnet recycling in Belfast; ● 333,333 (10,000,000 pre-consolidation) Performance Rights w ill vest upon successfully securing strategic investment of greater than US$5million within IRE or subsidiaries / projects; ● 333,333 (10,000,000 pre-consolidation) Performance Rights will vest upon signing magnet and swarf feed suppl y agreements for Belfast facility for greater than 50% of nominated feed capacity; ● 333,333 (10,000,000 pre-consolidation) Performance Rights will vest upon signing REO offtake agreements from the Belfast magnet recycling facility for greater than 20% of proposed production; ● 666,667 (20,000,000 pre-consolidation) Performance Rights will vest upon successfully securing an additional joint venture for establishment of magnet recycling business in target markets; and ● 333,333 (10,000,000 pre-consolidation) Performance Rights will vest upon successful completion of a positive scoping study (Viridion JV) for magnet recycling, IRR > 20%. 2025 Balance at Expired Balance at Exercise the start of Forfeited the end of Grant date Expiry date price the year * Granted Exercised Other the year 30/06/2022 30/06/2025 $0.0000 110,000 - - (110,000) - 30/06/2022 30/06/2025 $0.0000 113,333 - - (113,333) - 13/03/2024 13/03/2027 $0.0000 2,966,667 - (333,333) (166,667) 2,466,667 16/05/2025 21/05/2028 $0.0000 - 2,666,667 - - 2,666,667 3,190,000 2,666,667 (333,333) (390,000) 5,133,334 * A security consolidation of every 30 pre-consolidation shares into one post consolidation share took place during the year. Approved by shareholders at EGM on 28 November 2025. The 30 June 2025 balance was restated accordingly. Total expense arising from the issue of performance rights recognised during the year was $782,960 (2025: $697,776). For the performance rights granted during the current financial year, the valuation model inputs used to determine the fair value at the grant date, are as follows: Share price Exercise Expected Dividend Risk-free Fair value Grant date Expiry date at grant date price volatility yield interest rate at grant date 28/11/2025 13/03/2027 $0.4200 $0.0000 - - - $0.4200 Note 30. Events after the reporting period On 27 July 2026, the Company issued 67,413 fully paid ordinary shares as consideration for services received. On 27 July 2026, the Company issued 1,949,999 performance rights under its employee incentive scheme with an expiry date of 30 June 2029. On 13 July 2026 the Company announced it commenced the FEED phase for its Belfast rare earth magnet recycling facility and continued to advance planning and permitting activities in support of the proposed development. On 31 July 2026 the Company announced the commencement of a strategic review of its Makuutu Heavy Rare Earths Project to evaluate potential strategic, funding and development alternatives. No decisions have been made and the review remains ongoing On 5 August 2026 the Company announced a successful $8 Million placement at 0.26 per new share. The placement includes $0.5 Million Company Director participation subject to shareholders approval at the AGM. On 11 August 2026, the Company issued 28,846,155 fully paid ordinary shares as part of the placement, and 251,299 shares as consideration for services received.
Page 67
Ionic Rare Earths Limited Consolidated Entity Disclosure Statement As at 30 June 2026 66 On 25 August 2026, the Company issued 286,622 fully paid ordinary shares as consideration for services received. On 31 August 2026, the Company lapsed 666,667 Performance rights as the relevant conditions were not met. On 3 September 2026, the Company announced that Ionic Rare Earths USA had entered into a non-binding term sheet with US Strategic Metals to establish a proposed 50:50 joint venture to develop rare earth magnet recycling facilities in Missouri, USA. The proposed joint venture contemplates an initial investment of US$100 million and the licensing of Ionic Technologies' magnet recycling technology. The transaction remains subject to definitive agreements and other conditions precedent and therefore no amounts have been recognised in the financial statements at 30 June 2026. The financial impact of the proposed joint venture cannot presently be reliably estimated. On 11 September 2026, the Company issued 34,922 ordinary shares for services provided. Additionally, 883,332 performance rights vested and were exercised into 883,332 ordinary shares, and five convertible notes were converted into 485,510 ordinary shares. Accordingly, a total of 1,403,764 new ordinary shares were issued. No other matter or circumstance has arisen since 30 June 2026 that has significantly affected, or may significantly affect the Group's operations, the results of those operations, or the Group's state of affairs in future financial years. Place formed / Ownership interest Entit y name Entity type Country of incorporation % Tax residency Ionic Rare Earths Limited Bod y corporate Australia - Australia * Ionic (Brazil) Pty Ltd Bod y corporate Australia 100.00% Australia * Ionic (UK) Pty Ltd Bod y corporate Australia 100.00% Australia * Ionic (USA) Pty Ltd Bod y corporate Australia 100.00% Australia * Ionic Technologies International Limited Body corporate United Kingdom 100.00% Foreign - United Kingdom Forei gn - United Ionic Technologies (Belfast) Limited Bod y corporate United Kin gdom 100.00% Kin gdom Ionic Rare Earths USA, Inc Body corporate United States 100.00% United States of America of America * Ionic Rare Earths Limited (the 'head entity') and its wholly-owned Australian subsidiaries have formed an income ta x consolidated group under the tax consolidation regime. Basis of preparation Consolidated Entity Disclosure Statement (CEDS) has been prepared in accordance with the Corporations Act 2001, reflecting the amendments to section 295(3A)(vi) and (vii) which clarify the definition of foreign resident as being an entity that is treated as a resident of a foreign country under the tax laws of that foreign country. The CEDS includes certain information for each entity that was part of the consolidated entity at the end of the financial year in accordance with AASB 10 Consolidated Financial Statements. Determination of tax residency Section 295(3B)(a) of the Corporation Acts 2001 defines Australian resident as having the meaning in the Income Tax Assessment Act 1997. The determination of tax residency involves judgement as there are currently several different interpretations that could be adopted, and which could give rise to a different conclusion on residency. Section 295 (3A)(a)(vii) requires the determination of tax residency in a foreign jurisdiction to be based on the law of the foreign jurisdiction relating to foreign income tax. 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 Tax Commissioner's public guidance in Tax Ruling TR 2018/5.
Page 68
Ionic Rare Earths Limited Consolidated Entity Disclosure Statement As at 30 June 2026 67 Foreign tax residency Where necessary, the consolidated entity has used independent tax advisers in foreign jurisdictions to assist in determining tax residency in those foreign jurisdictions and ensure compliance with applicable foreign tax legislation. Partnerships and Trusts Section 295(3B)(b) and (c) of the Corporation Acts 2001 clarify that an Australian resident for the purposes of these disclosures includes a partnership with at least one member of which is an Australian resident within the meaning of the Income Tax Assessment Act 1997 and a resident trust estate under the meaning in Division 6 of the Income Tax Assessment Act 1936. For the purposes of the CEDS, Public Company Share Trust is determined to be an Australian resident trust estate within the meaning of Division 6 of Part III of the Income Tax Assessment Act 1936. XYZ Partnership is also determined to be an Australian resident because one of its partners is an Australian tax resident.
Page 69
Ionic Rare Earths Limited Directors' Declaration 30 June 2026 68 In the Directors' opinion: ● the attached financial statements and notes comply with the Corporations Act 2001, the Accounting Standards, the Corporations Regulations 2001 and other mandatory professional reporting requirements; ● the attached financial statements and notes comply with International Financial Reporting Standards Accounting Standards as issued by the International Accounting Standards Board as described in note 2 to the financial statements; ● the attached financial statements and notes give a true and fair view of the Group's financial position as at 30 June 2026 and of its performance for the financial year ended on that date; ● there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable; and ● the information disclosed in the attached consolidated entity disclosure statement is true and correct. The Directors have been given the declarations required by section 295A of the Corporations Act 2001. Signed in accordance with a resolution of Directors made pursuant to section 295(5)(a) of the Corporations Act 2001. On behalf of the Directors ___________________________ Brett Lynch Chairman 17 September 2026 Melbourne
Page 70
BDO Audit Pty Ltd ABN 33 134 022 870 is a member of a national association of independent entities which are all members of B DO International Ltd, a UK company limited by guarantee, and form part of the international BDO network of independent member firms . Liability limited by a scheme approved under Professional Standards Legislation. Level 9, Mia Yellagonga Tower 2 5 Spring Street Perth, WA 6000 PO Box 700 West Perth WA 6872 Australia Tel: +61 8 6382 4600 Fax: +61 8 6382 4601 www.bdo.com.au INDEPENDENT AUDITOR'S REPORT To the members of Ionic Rare Earths Limited Report on the Audit of the Financial Report Opinion We have audited the financial report of Ionic Rare Earths Limited (the Company) and its subsidiaries (the Group), which comprises the consolidated statement of financial position as at 30 June 2026, the consolidated statement of profit or loss and other comprehensive income, the consolidated statement of changes in equity and the consolidated statement of cash flows for the year then ended, and notes to the financial report, including material accounting policy information, the consolidated entity disclosure statement and the directors’ declaration. In our opinion the accompanying financial report of the Group, is in accordance with the Corporations Act 2001, including: (i) Giving a true and fair view of the Group’s financial position as at 30 June 2026 and of its financial performance for the year ended on that date; and (ii) Complying with Australian Accounting Standards and the Corporations Regulations 2001. Basis for opinion We conducted our audit in accordance with Australian Auditing Standards. 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 auditor independence requirements of 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 audits of the financial report of public interest entities in Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code. We confirm that the independence declaration required by the Corporations Act 2001, which has been given to the directors of the Company, would be in the same terms if given to the directors as at the time of this auditor’s report. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Material uncertainty related to going concern We draw attention to Note 2 in the financial report which describes the events and/or conditions which give rise to the existence of a material uncertainty that may cast significant doubt about the group’s ability to continue as a going concern and therefore the group may be unable to real ise its assets and discharge its liabilities in the normal course of business. Our opinion is not modified in respect of this matter. 69
Page 71
Key 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. These matters were 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 these matters. In addition to the matter described in the Material uncertainty related to going concern section, we have determined the matters described below to be the key audit matters to be communicated in our report. Carrying value of investment in Joint Venture Ke y audit matter How the matter was addressed in our audit As at 30 June 2026, Ionic held a 60% interest in Rwenzori Rare Metals Limited (“RRM”) which holds a 100% interest in the Mukuutu Rare Earth Elements Project in Uganda as disclosed in Note 9 of the Financial Report. At each reporting period, the value of this equity accounted investment is assessed for indicators of impairment. If indicators of impairment exist, the recoverable amount needs to be determined. The carrying value of the investment in RRM is a key audit matter due to the significant judgement involved in accounting for the Group’s interest and assessing whether indicators of impairment exist that may affect the recoverability of the investment. Ou r procedures included, but were not limited to: • Evaluating management’s assessment of joint control over RRM and the accounting for the interest as an investment in a joint venture, including the terms relevant to the Group’s earn-in interest; • Confirming the Group’s percentage ownership and evaluating the calculation of the carrying value of the investment at the reporting date, including movements during the year; • Assessing management’s impairment indicator assessment with reference to AASB 128 and AASB 136; • Evaluating the status and tenure of the underlying exploration licences and areas of interest, including whether any adverse changes had been identified; • Evaluating commodity price movements, project progress and funding plans relevant to the Makuutu Project to identify potential indicators of impairment; • Reviewing budgets, Board papers, ASX announcements to identify evidence of adverse changes or funding constraints that may impact the recoverability of the investment; and • Assessing the adequacy of the related disclosures in Note 3 and Note 9 of the Financial Report. 70
Page 72
Other information The directors are responsible for the other information. The other information comprises the information in the Group’s annual report for the year ended 30 June 2026, but does not include the financial report and the auditor’s report thereon. Our opinion on the financial report does not cover the other information and we do not express any form of assurance conclusion thereon. In connection with our audit of the financial report, our responsibility is to read the other information and, in doing so, 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. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard. Responsibilities of the directors for the Financial Report The directors of the Company are responsible for the preparation of: a) the financial report that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and b) the consolidated entity disclosure statement that is true and correct in accordance with the Corporations Act 2001, and for such internal control as the directors determine is necessary to enable the preparation of: i) the financial report that gives a true and fair view and is free from material misstatement, whether due to fraud or error; and ii) the consolidated entity disclosure statement that is true and correct and is free of misstatement, whether due to fraud or error. In preparing the financial report, the directors are responsible for assessing the ability of the group to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the Group or to cease operations, or has no realistic alternative but to do so. Auditor’s responsibilities for the audit of the Financial Report Our objectives are 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 the Australian Auditing Standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and 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 this 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 (http://www.auasb.gov.au/Home.aspx) at: https://www.auasb.gov.au/media/bwvjcgre/ar1_2024.pdf This description forms part of our auditor’s report. 71
Page 73
Report on the Remuneration Report O pinion on the Remuneration Report We have audited the Remuneration Report included in pages 20 to 28 of the directors’ report for the year ended 30 June 2026. In our opinion, the Remuneration Report of Ionic Rare Earths Limited, for the year ended 30 June 2026, complies with section 300A of the Corporations Act 2001. 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 responsibility is to express an opinion on the Remuneration Report, based on our audit conducted in accordance with Australian Auditing Standards. B DO Audit Pty Ltd D ave Andrews D irector Perth, 17 September 2026 72
Page 74
Ionic Rare Earths Limited Shareholder Information 30 June 2026 73 The shareholder information set out below was applicable as at 31 August 2026. Distribution of equitable securities Analysis of number of equitable security holders by size of holding: Ordinary shares Options over ordinary shares Performance rights over ordinary shares % of total % of total % of total Number shares Number shares Number shares of holders issued of holders issued of holders issued 1 to 1,000 468 0.09 506 0.32 - - 1,001 to 5,000 3,500 3.50 430 2.21 - - 5,001 to 10,000 1,207 3.49 185 2.34 - - 10,001 to 100,000 1,890 22.76 235 14.93 6 416,669 100,001 and over 315 70.16 83 80.20 19 8,916,670 7,380 100.00 1,439 100.00 25 9,333,339 Holding less than a marketable parcel 1,093 - - - - - E quity security holders Twenty largest quoted equity security holders The names of the twenty largest security holders of quoted equity securities are listed below: Ordinar y shares % of total shares Number held issued HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED 21,118,966 8.25 CITICORP NOMINEES PTY LIMITED 18,146,831 7.09 BNP PARIBAS NOMINEES PTY LTD <IB AU NOMS RETAILCLIENT> 8,887,639 3.47 BNP PARIBAS NOMS PTY LTD 8,103,715 3.16 U BS NOMINEES PTY LTD 6,219,275 2.43 WINGADEE INVESTMENTS PTY LTD <ARALUEN A/C> 5,000,000 1.95 BOND STREET CUSTODIANS LIMITED <DEONEI - V13669 A/C> 4,498,298 1.76 MRS IFRAH NISHAT 4,325,943 1.69 SIDOTI CAPITAL PTY LTD <D SIDOTI A/C> 3,717,000 1.45 JGM PROPERTY INVESTMENTS PTY LTD 3,541,667 1.38 KINETIC WEALTH ADVISERS PTY LTD 3,350,001 1.31 BNP PARIBAS NOMINEES PTY LTD <CLEARSTREAM> 2,478,651 0.97 MA RKOVIC FAMILY NO 2 PTY LTD 1,778,334 0.69 CIRCUMFERENCE CAPITAL CT PTY LTD <CIRCUMFERENCE CAPITAL A/C> 1,690,394 0.66 MR PAUL ROBERT BOOTHMAN 1,650,000 0.64 AEI #1 LLC 1,481,482 0.58 DHALIWAL SUPER PTY LTD <DHALIWAL SUPER FUND A/C> 1,435,694 0.56 FINCLEAR SERVICES PTY LTD <SUPERHERO SECURITIES A/C> 1,250,396 0.49 TIMEL HOLDINGS PTY LTD <TMH HOLDINGS A/C> 1,233,334 0.48 MR IAN MORTON + MRS DEBORAH MORTON <DEBIAN SUPER FUND A/C> 1,130,965 0.44 1 01,038,585 39.46
Page 75
Ionic Rare Earths Limited Shareholder Information 30 June 2026 74 Unquoted equity securities Number Numbe r on issue of holders 30 November 2026, $0.63 option (UO9) 333,333 1 30 November 2026, $0.945 option (OP6) 666,668 2 15 December 2027, $0.33 options (OP7) 6,787,826 134 26 June 2028, $0.60 options (UO4) 7,232,261 25 26 June 2028, $0.60 options (UO5) 4,011,355 28 Pe rformance rights 9,333,339 28 Convertible notes 13 2 Substantial holders Holding Balance %IC Argentem Creek Opportunities Fund LP 16,308,829 6.4% Voting rights The voting rights attached to ordinary shares are set out below: Ordinary shares On a show of hands every member present at a meeting in person or by proxy shall have one vote and upon a poll each share shall have one vote. There are no other classes of equity securities. Schedule of Mining Tenements Held Project Location Country Type of Concession Percentage Held Makuutu LML00334 Uganda Large-Scale Mining License 60% Makuutu TN/LML/04741 U ganda Large-Scale Mining License 60% Makuutu RL00007 Uganda Retention Licence 60 % Ma kuutu RL00234 Uganda Retention Licence 60 % Ma kuutu EL00257 Uganda Exploration 60 % Ma kuutu EL00147 Uganda Exploration 60 % Ma kuutu EL00624 Uganda Exploration 60 % Ma kuutu EL00616 Uganda Exploration 60 % Ma kuutu EL00148 Uganda Exploration 60 % Ma kuutu EL00450 Uganda Exploration 60 %