Announcement PDF INTERIM CONSOLIDATED FINANCIAL STATEMENTS RAREX LIMITED ABN: 65 105 578 756 AND CONTROLLED ENTITIES FINANCIAL STATEMENTS FOR HALF YEAR ENDED 31 DECEMBER 2021 RAREX LIMITED AND CONTROLLED ENTITIES CORPORATE DIRECTORY DIRECTORS AUDITOR Mr John Young Non-Executive Chairman Walker Wayland WA Audit Pty Ltd Level 3, 1 Preston Street Como Western Australia 6152 Mr Jeremy Robinson Managing Director SHARE REGISTRY Mr Shaun Hardcastle Non-Executive Director Mr Cameron Henry Non-Executive Director Automic Registry Services Level 5, 191 St Georges Terrace Perth WA 6000 Australia COMPANY SECRETARY Telephone: 1300 288 664 Ms Oonagh Malone PRINCIPAL PLACE OF BUSINESS & REGISTERED OFFICE Unit 6, 94 Rokeby Road Subiaco Western Australia 6008 Telephone: (08) 6383 6593 Website: www.rarex.com.au ASX CODE: REE RAREX LIMITED AND CONTROLLED ENTITIES TABLE OF CONTENTS DIRECTORS’ REPORT .......................................................................................................................................... 1 AUDITOR’S INDEPENDENCE DECLARATION .................................................................................................... 2 CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME................... 3 CONSOLIDATED STATEMENT OF FINANCIAL POSITION ................................................................................. 4 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY .................................................................................. 5 CONSOLIDATED STATEMENT OF CASH FLOWS............................................................................................... 6 NOTES TO THE FINANCIAL STATEMENTS ......................................................................................................... 7 DIRECTORS’ DECLARATION .............................................................................................................................. 20 INDEPENDENT AUDITOR’S REPORT ............................................................................................................... 21 RAREX LIMITED AND CONTROLLED ENTITIES DIRECTORS’ REPORT The Board of Directors have pleasure in presenting its interim consolidated report of RareX Limited (RareX or the Company) and its controlled entities (the Group or consolidated entity) for the half year ended 31 December 2021. 1. DIRECTORS The names of the Company’s directors in office during the half year and until the date of this report are set out below. Directors were in office for this entire period unless otherwise stated. Mr John Young Mr Jeremy Robinson Mr Shaun Hardcastle Mr Cameron Henry 2. PRINCIPAL ACTIVITIES The principal activities of the Group are mineral exploration and development. No significant change in the nature of these activities occurred during the half year. 3. REVIEW OF OPERATIONS During the half year, the Company continued its exploration programs at the Cummins Range Rare Earths Project, Western Australia, with key points being:    4. Announcement of a major resource upgrade for the Cummins Range Project; Completion of a highly successful 6,000m RC and diamond drill program; and Commencement of a scoping study including metallurgical test work. FINANCIAL RESULTS The loss of the Group for the period ended 31 December 2021 was $3,929,431 (Six months to 31 December 2020: loss of $4,336,711). During the half year, total expenses amounted to $7,154,575 (Six months to 31 December 2020: $4,391,657). Unrestricted cash and cash equivalents amounted to $1,104,378 as at 31 December 2021 (30 June 2021: $4,477,985). 5. EVENTS SUBSEQUENT TO THE END OF THE REPORTING PERIOD There are no matters or circumstances which have arisen since the end of the half year which significantly affected or may significantly affect the operations of the consolidated entity, the results of those operations, or the state of affairs of the consolidated entity in subsequent financial periods, other than:  6. On 10 March 2022, the Company completed a placement to sophisticated and institutional investors via the issue of 111,111,112 ordinary shares at an issue price of $0.09 per share to raise $10,000,000 (before costs). Directors intend to invest a further $650,000 (before costs) on the same terms as the placement which will be issued subject to shareholder approval. AUDITOR’S INDEPENDENCE DECLARATION The auditor’s independence declaration under Section 307C of the Corporations Act 2001 is set out on page 3 and forms part of the Directors’ Report for the half year ended 31 December 2021. This report is made in accordance with a resolution of the Directors. On behalf of the Directors. Jeremy Robinson Managing Director Signed this 16th day of March 2022. 1 RAREX LIMITED AND CONTROLLED ENTITIES CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME FOR THE HALF YEAR ENDED 31 DECEMBER 2021 Notes Consolidated 6 months 6 months ended 31 ended 31 December December 2021 2020 $ $ Income Other income 3 890,845 54,946 Gain on disposal of subsidiary 4(a) 334,389 - Profit from sale of tenements 4(b) 2,000,000 - 3,225,234 54,946 Administration expenses (662,385) (303,269) Consultants & management expenses (727,182) (166,891) (58,597) (12,760) Finance costs (11,818) (2,588) Legal expenses (41,197) (24,805) (488,804) (900,405) (2,992,728) (1,322,747) - (1,164,936) 2,529 (7,705) (1,633,752) (485,551) Total Income Expenses Depreciation, amortisation and impairment expense 5 Share based payments expense 19 Exploration expenses Acquisition of tenements 6 Foreign exchange (loss)/gain Loss on revaluation of financial assets Share of loss from associate 11 (35,609) - Exploration and evaluation asset expensed 9 (505,032) - Total expenses (7,154,575) (4,391,657) Loss from continuing operations before income tax expense (3,929,341) (4,336,711) - - (3,929,341) (4,336,711) (3,274) 8,133 (3,932,615) (4,328,578) (0.88) cents (1.16) cents Income tax expense Loss from continuing operations after income tax expense Other comprehensive income Exchange rate differences on translating foreign operations Total comprehensive loss attributable to owners of the parent Loss per share - basic and diluted The above Consolidated Statement of Profit or Loss and Other Comprehensive Income is to be read in conjunction with the accompanying notes 3 RAREX LIMITED AND CONTROLLED ENTITIES CONSOLIDATED STATEMENT OF FINANCIAL POSITION FOR THE HALF YEAR ENDED 31 DECEMBER 2021 Consolidated 31 December 2021 30 June 2021 $ $ Notes ASSETS Current Assets Cash and cash equivalents 7 1,104,378 4,477,985 Trade and other receivables 1,226,399 227,303 Total Current Assets 2,330,777 4,705,288 Non-current Assets Exploration & evaluation assets 9 - 505,032 Financial assets at fair value 10 2,023,867 3,657,619 Investment in associate 11 1,964,391 - 101,716 114,431 349,353 380,630 Total Non-current Assets 4,439,327 4,657,712 TOTAL ASSETS 6,770,104 9,363,000 1,106,724 668,948 106,907 73,226 78,982 71,220 1,292,613 813,394 282,554 314,060 282,554 314,060 TOTAL LIABILITIES 1,575,167 1,127,454 NET ASSETS 5,194,937 8,235,546 Plant and equipment Right of use asset 12 LIABILITIES Current Liabilities Trade and other payables 13 Provisions Lease liability 14 Total Current Liabilities Non-Current Liabilities Lease liability 14 Total Non-Current Liabilities EQUITY Contributed equity 15 36,592,832 36,189,630 Reserves 16 6,905,362 6,419,832 (38,303,257) (34,373,916) 5,194,937 8,235,546 Accumulated losses TOTAL EQUITY The above Consolidated Statement of Financial Position is to be read in conjunction with the accompanying notes. 4 RAREX LIMITED AND CONTROLLED ENTITIES CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE HALF YEAR ENDED 31 DECEMBER 2021 CONSOLIDATED Notes At 1 July 2021 Ordinary Shares Options Reserve Share Based Payments Reserve (Accumulated Losses) Total Equity $ Foreign Currency Translation Reserve $ $ $ $ $ 36,189,630 6,163,712 257,083 (963) (34,373,916) 8,235,546 Currency translation differences (3,274) Total comprehensive income for the period, net of tax (3,274) (3,929,341) (3,929,341) Transactions with owners in their capacity as owners Share issues 15 406,250 406,250 Transaction costs 15 (3,048) (3,048) Share based payments 19 - - 488,804 At 31 December 2021 36,592,832 6,163,712 745,887 (4,237) (38,303,257) 5,194,937 At 1 July 2020 29,605,193 4,775,912 83,840 (2,022) (28,112,741) 6,350,182 Currency translation differences 488,804 8,133 Total comprehensive income for the period, net of tax 8,133 (4,336,711) (4,336,711) Transactions with owners in their capacity as owners Share issues 4,177,098 4,177,098 Transaction costs (218,964) (218,964) Share based payments At 31 December 2020 19 26,405 874,000 33,589,732 5,649,912 900,405 83,840 The above Consolidated Statement of Changes in Equity is to be read in conjunction with the accompanying notes. 5 6,111 (32,449,452) 6,880,143 RAREX LIMITED AND CONTROLLED ENTITIES CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE HALF YEAR ENDED 31 DECEMBER 2021 Consolidated 6 months to 31 December 2021 6 months to 31 December 2020 $ $ Notes CASH FLOWS USED IN OPERATING ACTIVITIES Payments to suppliers and employees (3,579,698) (1,831,430) 898 5,896 Interest paid (11,818) (2,588) Other income 15,637 50,108 (3,574,981) (1,778,014) (1,968) (104,353) (170,677) (582,468) Refund of tenement security deposit 10,000 - Cash disposed on loss of control of subsidiary (2,796) - Payment to acquire option - (50,000) Payment of tenement deposit - (10,000) (165,441) (746,821) - 3,670,150 Proceeds from exercise of options 406,250 - Costs of share issue (3,048) (228,132) Reduction in finance lease liabilities (36,381) (3,155) NET CASH FLOWS FROM FINANCING ACTIVITIES 366,821 3,438,863 NET (DECREASE)/INCREASE IN CASH AND CASH EQUIVALENTS (3,373,601) 914,028 Cash and cash equivalents at beginning of period 4,477,985 3,425,058 (6) (21) 1,104,378 4,339,065 Interest received NET CASH FLOWS USED IN OPERATING ACTIVITIES CASH FLOWS USED IN INVESTING ACTIVITIES Payments for property, plant and equipment Payments to acquire tenements NET CASH FLOWS USED IN INVESTING ACTIVITIES CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from share issue Effect of movement in exchange rate CASH AND CASH EQUIVALENTS AT END OF PERIOD 7 The above Consolidated Statement of Cash Flows is to be read in conjunction with the accompanying notes. 6 RAREX LIMITED AND CONTROLLED ENTITIES NOTES TO ACCOUNTS FOR THE HALF YEAR ENDED 31 DECEMBER 2021 1. CORPORATE INFORMATION The consolidated financial report of RareX Limited (“the Company”) for the half year ended 31 December 2021 was authorised for issue in accordance with a resolution of the Directors on 16th March 2022. RareX Limited is a company incorporated in Australia and limited by shares which are publicly traded on the Australian Securities Exchange. The principal activities during the year of the entities within the consolidated entity were mineral exploration and development. 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The general purpose consolidated financial statements for the interim half year reporting period ended 31 December 2021 have been prepared in accordance with Australian Accounting Standard 134 Interim Financial Reporting and the Corporations Act 2001, as appropriate for ‘for-profit’ orientated entities. Compliance with AASB 134 ensures compliance with International Financial Reporting Standard IAS 34 Interim Financial Reporting. This interim consolidated financial report does not include all notes of the type normally included in an annual financial report and therefore cannot be expected to provide a full understanding of the financial performance, financial position and financing and investing activities of the entity as the full financial report. Accordingly, these financial statements are to be read in conjunction with the annual report for the year ended 30 June 2021 and any public announcements made by the Company during the interim reporting period in accordance with the continuous disclosure requirements of the Corporations Act 2001. The principal accounting policies adopted are consistent with those of the previous financial year and corresponding interim reporting period, except for the policies stated below. (a) Basis of Preparation In the half year ended 31 December 2021, the Directors have reviewed all of the new and revised Standards and Interpretations issued by the Australian Accounting Standards Board (‘AASB’) that are relevant to the Group’s operations and effective for annual reporting periods commencing on or after 1 July 2021. The Group has adopted all the new or amended Accounting Standards and Interpretations issued by the AASB that are mandatory for the current reporting period. It has been determined by the Directors that there is no impact, material or otherwise, of the new and revised Standards and Interpretations on the Group and, therefore, no change is necessary to accounting policies. Future effects of the implementation of these standards will depend on future details. Any new, revised or amending Accounting Standards or Interpretations that are not yet mandatory have not been early adopted by the Group. Going concern As at 31 December 2021, the Group had working capital of $1,038,164 (30 June 2021: $3,891,894) and returned a loss attributable to owners of $3,932,615 (31 December 2020: $4,328,578). The ability of the Group to continue as a going concern is dependent upon the future successful raising of the necessary funding through disposal of assets, equity and/or debt and the successful exploitation of the Group’s tenements. The Directors believe it is appropriate to prepare the Financial Statements on a going concern basis as the Group has sufficient funds available to meet its committed and required expenditure over the following year. These Financial Statements have been prepared on the basis that the Group can meet its commitments as and when they fall due and can therefore continue normal business activities and the realisation of its assets and settlement of its liabilities can occur in the ordinary course of business. 7 RAREX LIMITED AND CONTROLLED ENTITIES NOTES TO ACCOUNTS FOR THE HALF YEAR ENDED 31 DECEMBER 2021 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) (b) Changes in accounting policies The accounting policies adopted in the preparation of the interim consolidated financial statements are consistent with those followed in the preparation of the Group’s annual financial statements for the year ended 30 June 2021. The Group has adopted all mandatory new and amended standards and interpretations applicable for the current period. The adoption of these standards and interpretations had no material impact on these financial statements or on the financial position or performance of the Group. The Group has not elected to early adopt any other new standards or amendments that are issued but not yet effective. Certain amounts in the comparative financial statements have been reclassified to conform to the current period presentation. (c) Basis of consolidation The half year consolidated financial statements comprise the financial statements of RareX Limited and its controlled subsidiaries. (d) Exploration and Evaluation Expenditure Assets Exploration and evaluation costs are accumulated and accounted for separately on an area of interest basis. An area of interest is represented by an exploration project, which may include multiple tenements within a single geographic region. For each area of interest, the Company makes an election regarding its treatment of exploration and evaluation expenditure (including the costs of tenement acquisitions) and whether it will be charged to the income statement as incurred, under the expense category “exploration expenditure” (or other appropriate expense category), or capitalised as an exploration and evaluation asset, or a combination thereof. An exploration and evaluation asset can only be recognised in relation to an area of interest if the following conditions are satisfied: a) b) the rights to tenure of the area of interest are current; and at least one of the following conditions is also met: i. the exploration and evaluation expenditures are expected to be recouped through successful development and exploitation of the area of interest, or alternatively, by its sale; and ii. exploration and evaluation activities in the area of interest have not at the end of the reporting period reached a stage which permits a reasonable assessment of the existence or otherwise of economically recoverable reserves, and active and significant operations in, or in relation to, the area of interest are continuing. Capitalised exploration and evaluation expenditures are recorded as an exploration asset at cost less impairment charges. All capitalised exploration and evaluation expenditure are monitored for indicators of impairment. Where an impairment indicator is identified, an assessment is performed for each area of interest to which the exploration and evaluation expenditure is attributed. To the extent that capitalised expenditure is not expected to be recovered it is charged to the income statement. (e) 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 consolidated entity 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. 8 RAREX LIMITED AND CONTROLLED ENTITIES NOTES TO ACCOUNTS FOR THE HALF YEAR ENDED 31 DECEMBER 2021 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) 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 Consolidated Statement of Profit or Loss and Other Comprehensive Income as incurred. (f) Lease liabilities A lease liability is recognised at the commencement date of a lease. The lease liability is initially 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 penalties. 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. (g) Critical Accounting Estimates and Judgements The directors evaluate estimates and judgements incorporated into the financial statements based on historical knowledge and best available current information. Estimates assume a reasonable expectation of future events and are based on current trends and economic data, obtained both externally and within the Group. Key estimates (i) Impairment – general The Group assesses impairment at the end of each reporting period by evaluation of conditions and events specific to the Group that may be indicative of impairment triggers. Where impairment has been triggered, assets are written down to their recoverable amounts. (ii) Options and Share Based Payments value The options and share based payments issued by the Group during the half year (refer Note 19) have been valued by the Directors using the Monte Carlo model based on the inputs shown at Note 19. (iii) Tenement acquisition costs The Directors have elected to expense certain tenement acquisition costs in relation to the Cummins Range Rare Earths Project as disclosed in Note 6. (h) New Standards and Interpretations In the half year ended 31 December 2021, the Directors have reviewed all of the new and revised Standards and Interpretations issued by the AASB that are relevant to the Group’s operations and effective for annual reporting periods commencing on or after 1 July 2021. It has been determined by the Directors that there is no impact, material or otherwise, of the new and revised Standards and Interpretations on the Group and, therefore, no change is necessary to accounting policies. Future effects of the implementation of these standards will depend on future details. Any new, revised or amending Accounting Standards or Interpretations that are not yet mandatory have not been early adopted by the Group. 9 RAREX LIMITED AND CONTROLLED ENTITIES NOTES TO ACCOUNTS FOR THE HALF YEAR ENDED 31 DECEMBER 2021 3. OTHER INCOME Consolidated 6 months 6 months ended 31 ended 31 December December 2021 2020 $ $ Interest received 684 4,838 - 50,108 Stamp duty refund 170,677 - R&D Grant credit 703,847 - Rental Income 15,637 - 890,845 54,946 Australian government cash flow boost 4. (a) GAIN/(LOSS) ON DISPOSAL OF SUBSIDIARY Cosmos Exploration Ltd (“Cosmos") was divested from the Group during the half-year ended 31 December 2021. RareX received $315,000 cash in settlement of the loan balance and 10 million shares in the separated Cosmos company. The 10 million shares are valued at the issue price of $0.20 per share and has been recognised as an investment from 1 December 2021. Rarex holds 28.57% of the issued share capital and, per AASB 128 Investments in Associates, is classified as an associate as it holds more than 20% of the voting rights. Consequently, the investment in Cosmos has been accounted for under an equity accounting basis and the financial statements recognises Rarex’s share of Cosmos’s post divestment loss. The gain on the disposal of Cosmos is calculated as follows: $ Net gain on disposal 334,389 On the 30 November 2021, the Entity disposed of its 100% interest in Cosmos. Cosmos contributed $434,966 loss to the Group’s consolidated profit from ordinary activities during the period. Cosmos reported an operating loss for the half-year ended 31 December 2021 of $572,989. The Balance Sheet of Cosmos at disposal is as follows: $ Cash and cash equivalents 5,069,211 Trade and other receivables 35,176 Total current assets 5,104,387 Total assets 5,104,387 Trade and other payables 345,481 Loans 315,354 Provisions 8,390 IPO share application funds received 4,769,371 Total current liabilities 5,438,776 Total liabilities 5,438,776 Nets assets/(liabilities) (334,389) 10 RAREX LIMITED AND CONTROLLED ENTITIES NOTES TO ACCOUNTS FOR THE HALF YEAR ENDED 31 DECEMBER 2021 (b) PROFIT/(LOSS) FROM SALE OF TENEMENTS $ Shares at fair value (10 million Cosmos shares @ $0.20) 2,000,000 As the Group had previously expensed its exploration expenditure on the tenements spun out to Cosmos and had no capitalised exploration and expenditure asset for these tenements, the fair value of the entire consideration received of 10 million Cosmos shares has been brought to account as a profit from the sale of the tenements. On disposal of its subsidiary Cosmos, RareX sold 6 of its tenements relating to the Orange East and Byro East projects to Cosmos and consideration was received in shares. 5. EXPENSES Consolidated 6 months 6 months ended 31 ended 31 December December 2021 2020 $ $ Depreciation of property, plant & equipment 6. 58,597 12,760 58,597 12,760 ACQUISITION OF TENEMENTS There have been no new acquisitions in the period. In the previous year, the Directors elected to expense the following costs in relation to the acquisition of the Cummins Range Rare Earths Project to the Consolidated Statement of Profit or Loss and Other Comprehensive Income: Consolidated 6 months 6 months ended 31 ended 31 December December 2021 2020 $ $ 7. Deferred consideration – cash - 500,000 Deferred – fair value of RareX Ltd shares issued - 500,000 Stamp duty - 164,936 - 1,164,936 CASH AND CASH EQUIVALENTS Consolidated 31 December 30 June 2021 2021 $ $ Cash at bank 8. 1,104,378 4,477,985 1,104,378 4,477,985 FINANCIAL ASSETS For all financial instruments held as at 31 December 2021, the carrying value approximates fair value. 11 RAREX LIMITED AND CONTROLLED ENTITIES NOTES TO ACCOUNTS FOR THE HALF YEAR ENDED 31 DECEMBER 2021 9. EXPLORATION AND EVALUATION ASSETS Consolidated 31 December 30 June 2021 2021 $ $ Cummins Range Rare Earths Project Opening balance - 1,151,014 Stamp duty on acquisition of tenement - 13,922 Less: Acquisition costs expensed (Note 5) - (1,164,936) Closing balance - - Opening balance 505,032 505,032 Less: Exploration and evaluation asset expensed (505,032) - - 505,032 Hong Kong Gold Project Closing balance During the period, the Company purchased, for $1, the 70% interest in the Hong Kong Gold Project it had previously sold to Pacton Gold Inc in 2018 resulting in the Group now having a 100% ownership and control of the Hong Kong Gold Project. In accordance with the Group’s accounting policy, the Directors have decided to fully expense the acquisition cost of the 30% interest in the Hong Kong Gold Project which it had carried forward since 2018 at cost. 10. FINANCIAL ASSETS AT FAIR VALUE Consolidated 31 December 30 June 2021 2021 $ $ Financial assets at fair value through profit or loss Non-Current Shares in listed corporations, at fair value 11. - Kincora Copper Ltd (4,983,333, shares) 592,933 1,283,537 - Canada Rare Earth Corp (24,579,658 shares) 1,430,934 2,374,082 Investment in Atlas Management Sarl (20% interest) 507,084 507,084 Less: Impairment (507,084) (507,084) 2,023,867 3,657,619 INVESTMENT IN ASSOCIATE In accordance with AASB 128, the Group has recognised its initial investment in Cosmos Exploration Ltd less its share of Cosmos’ post divestment loss. At disposal of subsidiary, RareX have sold their tenements (6) to Cosmos and consideration was received by shares Consolidated 31 December 30 June 2021 2021 $ $ Cosmos Exploration Ltd (10,000,000 shares) Less : Share of Cosmos’ post divestment loss for the period 12 2,000,000 - (35,609) - 1,964,391 - RAREX LIMITED AND CONTROLLED ENTITIES NOTES TO ACCOUNTS FOR THE HALF YEAR ENDED 31 DECEMBER 2021 12. RIGHT OF USE ASSET Consolidated 31 December 30 June 2021 2021 $ $ 13. Opening balance 380,360 - Additions 12,637 406,171 Depreciation (43,644) (25,541) 349,353 380,630 TRADE AND OTHER PAYABLES Consolidated 31 December 30 June 2021 2021 $ $ Trade and other payables Accrued Expenses Stamp duty payable on Cummins Range acquisition 14. 1,087,295 269,394 19,429 228,877 - 170,677 1,106,724 668,948 LEASE LIABILITIES Consolidated 31 December 30 June 2021 2021 $ $ Current liability 78,982 71,220 Non-current liability 282,554 314,060 436,539 385,280 Within 1 year 78,932 71,220 1-2 years 87,195 78,931 2-5 years 270,412 235,129 - - 436,539 385,280 Maturity Over 5 years Consolidated 31 December 30 June 2021 2021 $ $ Opening balance 385,280 - Initial recognition of new lease 12,637 406,171 Interest (11,818) 6,939 Principal (28,542) (27,830) 357,557 385,280 13 RAREX LIMITED AND CONTROLLED ENTITIES NOTES TO ACCOUNTS FOR THE HALF YEAR ENDED 31 DECEMBER 2021 15. CONTRIBUTED EQUITY Consolidated 31 December 30 June 2021 2021 $ $ Ordinary shares 36,592,832 36,189,630 36,592,832 36,189,630 Fully paid ordinary shares carry one vote per share and carry the right to dividends. Movement in ordinary shares on issue 6 months ended 31 December 2021 Number of shares As at beginning of period: 435,343,204 36,189,630 354,652,568 29,605,193 16,250,000 406,250 13,150,000 560,150 - - 7,462,687 500,000 - - 4,000,000 200,000 - - 29,100,000 2,910,000 - - 900,000 90,000 - - 277,949 33,354 - - 25,000,000 2,750,000 - - 800,000 84,000 Less: Transaction costs - (3,048) - (543,067) As at end of the period: 451,593,204 36,592,832 435,343,204 36,189,630 Shares issued on exercise of options Fair value of shares issued for part consideration for acquisition of Cummins Range Rare Earths Project Issue of shares to Directors Shares issued via placement Shares issued via placement - Directors Fair value of equity settled transaction Shares issued via placement Fair value of shares issued to consultant 16. $ 12 months ended 30 June 21 Number of shares $