Announcement PDF Australian Rare Earths Limited (ABN 73 632 645 302) Financial Report Half-year ended 31 December 2024 Table of contents Page Directors’ Report ............................................................................................................................ 3 Auditor’s Independence Declaration ..................................................................................................... 8 Statement of Profit or Loss and Other Comprehensive Income .................................................................. 9 Statement of Financial Position ......................................................................................................... 10 Statement of Changes in Equity ........................................................................................................ 11 Statement of Cash Flows ................................................................................................................ 12 Notes to the Financial Statements ..................................................................................................... 13 Directors’ Declaration ................................................................................................................... 20 Independent Auditor’s Review Report ................................................................................................ 21 Corporate directory....................................................................................................................... 23 About this Report This report has been prepared for Australian Rare Earths Limited stakeholders in line with statutory and regulatory obligations. It provides a summary of the Group’s operations, performance and financial position as at and for half year ended 31 December 2024. All references to Australian Rare Earths Limited, AR3, the Group, the Company, we, us, and our, refer to Australian Rare Earths Limited (ABN 73 632 645 302) and its subsidiaries. All dollar figures are in Australian currency unless otherwise stated. All references to half year refer to the six-month period ending 31 December 2024. This report should be read in conjunction with the Group’s Annual Report for the year ended 30 June 2024, and any public announcements made by the Group during the half year ended 31 December 2024 and up to the date of this report. 2 Australian Rare Earths Limited Directors’ Report Directors’ Report The Directors of Australian Rare Earths Limited present this report for the half year ended 31 December 2024 and the Independent Review Report thereon. Directors The following persons were Directors of Australian Rare Earths during the half year and until the date of this report: Angus Barker (Independent Non-Executive Chairman) Pauline Carr (Independent Non-Executive Director) Travis Beinke (Executive Director) Principal Activities Australian Rare Earths is a mineral exploration and development company focused on ionic clay hosted rare earths, and uranium resource opportunities across Australia. There was no significant change in this activity during the half year ended 31 December 2024. Summary of Financial Performance The net loss of the Group for the half year ended 31 December 2024 was $1,609,134 (31 December 2023: $1,659,897) and includes: • Share based payments expense of $120,685 representing the expense for the 6-month period to 31 December 2024, associated with fair value of unlisted options and performance rights issued during the current and prior periods (31 December 2023: $313,115). • Corporate, administration and wages expenses of $1,499,683 (31 December 2023: $1,466,534). The above expense items are offset by: ➢ Interest income of $131,177 (31 December 2023: $262,966). During the reporting period the Group’s net cash position decreased by $2,285,052 from $7,605,032 (30 June 2023) to $5,319,980 (31 December 2024), and the Group has no corporate debt. This decrease in cash was predominantly influenced by cash outflows associated with: • Exploration expenditure of $1,835,546 (31 December 2023: $2,559,982). • Corporate, administration and wages expenditure (net of allocations to exploration assets) of $1,376,667 (31 December 2023 $2,666,728). These outflows were offset by inflows associated with: • • • Interest income receipts of $138,215 (31 December 2023 $272,973). Research and Development tax incentive claim $707,638 (31 December 2023 $Nil). International Partnerships in Critical Minerals Grant funding $750,000 (31 December 2023 $Nil). 3 Australian Rare Earths Limited Directors’ Report Changes in equity The following changes in equity took place during the half-year ended 31 December 2024: • 3,067,837 Shares in aggregate were issued during the period ended 31 December 2024. ➢ 2,041,855 Shares were issued on 3 September 2024 as part of the acquisition of Valrico Resources Pty Ltd. ➢ 672,917 Shares were issued to employees of the Company on 16 October 2024 as part of the FY2024 STI award. ➢ 353,065 Shares were issued to the Managing Director on 13 December 2024 following shareholder approval at the Company’s AGM held on 27 November 2024. • 5,276,383 Performance Rights, in aggregate, were issued to Director’s and employees. • Shareholder approval for the issue of Performance Rights was received at the Company’s Annual General Meeting held on 27 November 2024, comprising: ➢ 4,529,462 Performance rights related to FY2025 following shareholder approval at the Company’s AGM on 27 November 2024. ➢ 746,921 Performance rights related to the former Director’s LTI for the FY2024 year following shareholder approval at the Company’s AGM on 27 November 2024. • During the period a total of 1,600,000 options expired unexercised on 11 December 2024. The expired options were issued with an exercise price of $1.44 on 1 December 2021. Refer Note 14 for further details of the Options and Performance Rights issued during the half year. Dividends There were no dividends paid, recommended or declared during the current or previous reporting period. Review of Operations Koppamurra Project Update The Koppamurra Project comprises six granted exploration licenses in South Australia (EL6509, EL6613, EL6690, EL6691, EL6942 & EL6943) and four granted exploration licenses in Victoria (EL007254, EL7719, EL8208 & EL8254). Australian Government International Partnerships in Critical Minerals Grant During the period, AR3 was awarded a $5 million grant from the Australian Government's International Partnerships in Critical Minerals Program for Koppamurra. AR3 will match the grant funding, bringing the total planned expenditure to $10 million spread over 2025 and 2026. Key deliverables enabled by the grant funding at Koppamurra include: • Metallurgical Testwork and Flowsheet Development: Laboratory-scale metallurgical processing test work to optimise and enhance the Project’s process flowsheet, including heap leach engineering deliverables and equipment selection. • Pre-Feasibility (PFS) Study: Evaluation of the progressive heap leach and rapid rehabilitation flowsheet from the mine through to a Mixed Rare Earth product, including social, environmental, and economic assessments. 4 Australian Rare Earths Limited Directors’ Report • Demonstration Plant Construction: Selection and optimisation of demonstration-scale equipment, along with the construction of process infrastructure based on design inputs from the flowsheet development and PFS. • Demonstration Plant Operation: Full-scale demonstration operation to validate process design, supporting the pathway to commercialisation. Mineral Resource Update The Koppamurra Project achieved significant growth with a 27% increase in its Mineral Resource estimate and a 70% boost in higher-grade subsets. The current Mineral Resource estimate is 236 million tonnes (Mt) at 748 ppm TREO, including a higher-grade subset of 68 Mt grading at over 1000 ppm TREO (ASX 30 September 2024). The current Mineral Resource estimate is set out in the table below (updated September 2024): Drilling Results Infill drilling has identified thicker, higher-grade mineralised areas within the resource, while extensional drilling expanded the Project's geographic extent to include 25 million tonnes of additional resources north of the main resource area. With mineralisation open to the north and south, Koppamurra demonstrates strong potential for continued resource growth and a long-life production profile. AR3 continues to advance a high-grade progressive heap leach and rapid rehabilitation development pathway at Koppamurra. This approach aligns with AR3's commitment to developing a sustainable alternative supply of rare earths essential for the clean energy transition. Key design features and advantages of the progressive heap leach pathway are as follows: Design Features: • High-grade satellite mine sites with temporary heap pads located at the edge of the satellite mine void. • Topsoil and overburden material temporarily set aside for rapid and progressive land rehabilitation after rare earths have been harvested and the clay has been washed. • Water treatment equipment is located proximate to the temporary heap pads to facilitate recycling and reuse of water and reagents. Design Advantages: • Significantly lower capital and operating costs. • Easy expansion and scaling up of production over time across the multi-generational province. 5 Australian Rare Earths Limited Directors’ Report • Environmentally sustainable characteristics, including very low water consumption, reduced power consumption, and rapid, progressive rehabilitation techniques. • Lower gangue/impurity profile with higher rare earth in solution characteristics through column leach, resulting in lower capital and operating costs. Environmental, Social and Governance (ESG) AR3 values transparency and collaboration with stakeholders. During the interim period, the Company continued its active engagement with local landowners and stakeholders through regular meetings to educate and inform the community about the Koppamurra project's responsible environmental management. Northern Queensland Rare Earths Project No exploration activities were conducted over the Company’s Queensland projects during the reporting period. However, tenement application EPM28166 at the Dalrymple Project was granted during the period. Applications are pending for additional exploration tenure covering new areas, including the Forty Mile Scrub, Sandy Tate, and Oaky Valley prospects. These new areas are expected to provide significant opportunities for future exploration and potential resource discoveries. Uranium Projects Overland Project Update The Overland Project comprises three granted exploration licenses in South Australia (EL7001, EL7003, & EL7005). During the period, the Overland project expanded to approximately 4,000 km² following the Farm-In Agreement with private minerals explorer Sheer Gold Pty Ltd (Sheer Gold), announced in November 2024. Under the Farm-In Agreement, AR3 can earn a 100% interest in the sedimentary-hosted uranium rights within Sheer Gold’s EL 6678 by spending $200,000 before 23 September 2025. This strategic transaction adds 990km2 of EL 6678, immediately adjoining AR3’s Overland Uranium Project. This region shows strong potential for In-Situ Recovery (ISR) amenable, sedimentary-hosted uranium deposits. AR3 believes that the paleochannel sediments of the Renmark Group and Murray Group sediments (Eyre and Namba equivalents) offer significant potential for uranium discovery. Drilling Results An inaugural drilling program at the Overland Project began in October 2024 after receiving two approvals for the Exploration Program for Environment Protection and Rehabilitation (EPEPR), opening up approximately 770 km² of the total project area for immediate exploration. Twenty-five Air Core drill holes, totaling 3,271 meters, were drilled in 2024. The initial drilling yielded compelling evidence supporting AR3’s initial geological model for In-Situ Recovery (ISR) amenable, sedimentary-hosted uranium deposits. Drilling intersected thick sequences of the Murray group stratigraphy containing sands and clays, displaying all attributes required for pathways for uranium-bearing groundwaters and for hosting uranium mineralisation. Drilling revealed zones with anomalous gamma responses and elevated pXRF uranium readings. These sequences are effectively bounded by confining clay layers above and below, with multiple zones of permeability identified—ideal settings for ISR amenable uranium deposits. Drilling has also defined a north/south trending palaeovalley setting for the accumulation of thick sequences of Murray group stratigraphy containing sands, clays, and, on the western margin of the palaeovalley, abundant lignite horizons, providing significant potential for hosting uranium mineralisation and high-priority follow-up targets in 2025. 6 Australian Rare Earths Limited Directors’ Report Triggs Bore and Hamilton Creek Prospects AR3 added the Triggs Bore and Hamilton Creek prospects to its uranium portfolio during the period. The Triggs Bore prospect spans 250 km² and features historical drilling that intersected uranium mineralisation within the Eyre Formation sediments, similar to the host of the Four Mile and Honeymoon uranium deposits. The Hamilton Creek prospect covers 200 km² in the Callabonna Sub-basin, with exploration focusing on anomalous downhole gamma responses detected in previous drilling, indicating the potential presence of uranium mineralisation. Significant Changes to the State of Affairs On 3 September 2024 the Company acquired 100% of Valrico Resources Pty Ltd. There have been no other significant changes to the state of affairs of the Group during the reporting period. Events Subsequent to the Reporting Date • On 7 January 2025, AR3 was awarded the Forty Mile Scrub & Sandy Tate Exploration Licences EPM28872 & EPM28901. • On 8 January 2025, AR3 was awarded the Oaky Valley Exploration Licence EPM28902. • On 21 January 2025, AR3 drilling results confirmed a paleovalley setting at Overland. • On 5 February 2025, AR3 received Ministerial consent from the South Australian Government for the right to acquire a 100% interest in the sedimentary-hosted uranium rights of EL6678. • On 22 February 2025, AR3 changed share registry providers. Effective Monday 24 February 2025, Automic Group will maintain the share registries of the Company. The Directors are not aware of any other matter or circumstance that has arisen since 31 December 2024 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 reporting periods. This report is signed in accordance with a resolution of the Board of Directors. Angus Barker Non-Executive Chairman Dated this 13th day of March 2025 7 Australian Rare Earths Limited Auditor’s Independence Declaration Auditor’s Independence Declaration 8 Australian Rare Earths Limited Statement of Profit or Loss and Other Comprehensive Income Statement of Profit or Loss and Other Comprehensive Income (For the half-year ended 31 December 2024) CONSOLIDATED GROUP NOTES 31 December 31 December 2024 2023 $ $ REVENUE Other income 3 131,177 262,966 Depreciation (38,216) (34,168) Right-of-use asset amortisation (75,406) (55,860) Exploration expenditure expensed (6,321) (53,186) (669,374) (856,694) EXPENSES Employee benefits expense Share based payments expense 14 (120,685) (313,115) Other expenses 4 (830,309) (609,840) (1,609,134) (1,659,897) LOSS BEFORE INCOME TAX EXPENSE Income tax benefit LOSS FOR THE PERIOD Other comprehensive income TOTAL COMPREHENSIVE LOSS ATTRIBUTABLE TO MEMBERS OF THE PARENT ENTITY (1,609,134) - (1,609,134) (1,659,897) - (1,659,897) EARNINGS PER SHARE Cents Cents Basic and diluted loss per share (1.02) (1.24) The accompanying notes form part of the financial statements. 9 Australian Rare Earths Limited Statement of Financial Position Statement of Financial Position (As at 31 December 2024) CONSOLIDATED GROUP NOTES ASSETS 31 December 30 June 2024 2024 $ $ CURRENT ASSETS Cash and cash equivalents 5 5,319,980 7,605,032 Trade and other receivables 7 199,859 812,262 Other current assets 99,809 120,140 Total current assets 5,619,648 8,537,434 194,301 174,301 NON-CURRENT ASSETS Restricted cash – bank guarantees for exploration bonds Exploration and evaluation expenditure 8 16,271,776 14,171,743 Property, plant and equipment 9 332,315 367,836 Right-of- use assets 12 471,114 513,401 Total non-current assets 17,269,506 15,227,281 TOTAL ASSETS 22,889,154 23,764,715 CURRENT LIABILITIES Trade and other payables 10 599,832 502,473 Contract Liability 11 750,000 - Lease Liability 12 145,249 135,960 65,769 535,102 1,560,850 1,173,535 460,190 507,794 5,780 4,249 465,970 512,043 2,026,820 1,685,578 20,862,334 22,079,137 Employee benefits Total current liabilities NON-CURRENT LIABILITIES Lease Liability 12 Employee benefits Total non-current liabilities TOTAL LIABILITIES NET ASSETS EQUITY Issued capital 13 31,019,821 30,750,364 Reserves 14 2,329,830 2,827,265 Retained losses (12,487,317) (11,498,492) TOTAL EQUITY 20,862,334 22,079,137 The accompanying notes form part of the financial statements. 10 Australian Rare Earths Limited Statement of changes in equity Statement of Changes in Equity (For the half-year ended 31 December 2024) Issued Capital $ Retained Losses $ Reserves $ Total $ 30,575,403 (8,382,207) 2,700,012 24,893,208 Shares issued during the year 200,000 - - 200,000 Transaction costs – placement (25,039) - - (25,039) Fair value of performance rights issued during the year - - 31,941 31,941 Fair value of options issued during the year - - 427,921 427,921 Transfer of share based payments reserve to retained earnings for lapses - 332,609 (332,609) - 174,961 332,609 127,253 634,823 - (3,448,894) - (3,448,894) (11,498,492) 2,827,265 22,079,137 BALANCE AT 1 JULY 2023 Transactions with owners Total loss for the period BALANCE AT 30 JUNE 2024 30,750,364 Issued Capital $ Retained Losses $ Reserves $ Total $ 30,750,364 (11,498,492) 2,827,265 22,079,137 Shares issued during the year 274,019 - - 274,019 Transaction costs – placement (4,562) - - (4,562) Expenses of performance rights vested during the period - - 64,229 64,229 Expenses of options vested during the period - - 58,645 58,645 Transfer of share based payments reserve to retained earnings for lapses - 620,309 (620,309) - 269,457 620,309 (497,435) 392,331 - (1,609,134) - (1,609,134) (12,487,317) 2,329,830 20,862,334 BALANCE AT 1 JULY 2024 Transactions with owners Total loss for the period BALANCE AT 31 DECEMBER 2024 31,019,821 The accompanying notes form part of the financial statements. 11 Australian Rare Earths Limited Statement of Cash Flows Statement of Cash Flows (For the half-year ended 31 December 2024) CONSOLIDATED GROUP 31 December 31 December 2024 2023 $ $ (1,376,667) (2,666,728) Interest received 138,215 272,973 Proceeds from research and development tax concessions 707,638 - (530,814) (2,393,755) (1,835,546) (2,559,982) (570,000) - Grant funding received 750,000 - Payment for plant and equipment (2,696) (71,621) Movement in restricted cash (20,000) (25,500) (1,678,242) (2,657,103) (71,434) (31,832) (4,562) (24,864) (75,996) (56,696) Net decrease in available cash held (2,285,052) (5,107,554) Available cash at beginning of period 7,605,032 14,981,232 AVAILABLE CASH AT THE END OF THE PERIOD 5,319,980 9,873,678 CASH FLOW FROM OPERATING ACTIVITIES Payments to suppliers and employees NET CASH USED IN OPERATING ACTIVITIES CASH FLOWS FROM INVESTING ACTIVITIES Payments for exploration expenditure Payments for Acquisition of Valrico Resources NET CASH USED IN INVESTING ACTIVITIES CASH FLOWS FROM FINANCING ACTIVITIES Repayment of lease liability Payments for the costs of capital raising NET CASH USED IN FINANCING ACTIVITIES The accompanying notes form part of the financial statements. 12 Australian Rare Earths Limited Notes to the Financial Statements Notes to the Financial Statements (For the half-year ended 31 December 2024) NOTE 1 – STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES Basis of Preparation These general purpose interim financial statements for the half-year reporting period ended 31 December 2024 have been prepared in accordance with the requirements of the Corporations Act 2001 and Australian Accounting Standards including AASB 134: Interim Financial Reporting. Compliance with Australian Accounting Standards ensures that the financial statements and notes also comply with International Financial Reporting Standards. This interim financial report is intended to provide users with an update on the latest annual financial statements of Australian Rare Earths Limited and its controlled entities (the Group). As such, it does not contain information that represents relatively insignificant changes occurring during the half-year within the Group. It is therefore recommended that this financial report be read in conjunction with the annual financial statements of the Group for the year ended 30 June 2024, together with any public announcements made during the halfyear. Significant Accounting Policies The interim financial statements have been prepared in accordance with the same accounting policies adopted in the Group’s last annual financial statements for the year ended 30 June 2024 unless otherwise stated. New or amended Accounting Standards and Interpretations adopted The consolidated entity 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. There was no impact of the adoption of new standards during the period. Any new or amended Accounting Standards or Interpretations that are not yet mandatory have not been early adopted. NOTE 2 – SEGMENT REPORTING For management purposes, the Group is organised into one main business and geographic segment, which involves exploration for mineral deposits in Australia. All of the Group’s activities are interrelated, and no discrete financial information is reported to the Board (Chief Operating Decision Makers) as a single segment. Accordingly, all significant operating decisions are based upon analysis of the Group as one segment. The financial results from the segment are equivalent to the financial statement of the Group as a whole. NOTE 3 – OTHER INCOME CONSOLIDATED GROUP Interest received 31 December 2024 31 December 2023 $ $ 131,177 262,966 131,177 262,966 13 Australian Rare Earths Limited Notes to the Financial Statements NOTE 4 – OTHER EXPENSES CONSOLIDATED GROUP 31 December 2024 31 December 2023 $ $ Compliance 78,638 45,259 Legal, insurance and registry 288,307 119,404 Office, website & marketing expenses 72,335 61,626 Corporate Consultants 97,022 104,457 Public Relations 93,174 77,464 Travel related expenses 93,174 100,992 Other expenses 107,659 100,638 830,309 609,840 NOTE 5 – CASH AND CASH EQUIVALENTS CONSOLIDATED GROUP 31 December 2024 30 June 2024 $ $ Cash at bank and cash on hand 5,319,980 7,605,032 TOTAL AVAILABLE CASH AT BANK AND ON HAND 5,319,980 7,605,032 NOTE 6 – RESTRICTED CASH CONSOLIDATED GROUP 31 December 2024 30 June 2024 $ $ Bank guarantees in relation to rehabilitation obligations 130,000 110,000 Bank guarantees in relation to lease liabilities 64,301 64,301 194,301 174,301 Bank guarantees in relation to exploration rehabilitation obligations and are held by the South Australian Department for Energy and Mines for rehabilitation obligations on five South Australian tenements ($110,000) and the Victorian Department of Jobs, Precincts and Regions for two Victorian tenement ($20,000). Bank guarantees relate to Lease guarantees provided as security for property leases for head office ($38,801) and regional warehouse facilities ($25,500). 14 Australian Rare Earths Limited Notes to the Financial Statements NOTE 7 – TRADE AND OTHER RECEIVABLES CONSOLIDATED GROUP 31 December 2024 30 June 2024 $ $ Research and development tax incentive 117,023 707,638 GST receivable 60,203 74,954 Other receivable 22,633 29,670 199,859 812,262 NOTE 8 – EXPLORATION AND EVALUATION EXPENDITURE CONSOLIDATED GROUP 31 December 2024 30 June 2024 $ $ 16,271,776 14,171,743 14,171,743 10,172,163 762,929 - Amounts capitalised during the period 1,454,127 4,707,218 R&D Tax Incentive (117,023) (707,638) 16,271,776 14,171,743 Costs carried forward in respect of areas of interest in: Exploration and evaluation at cost Movements in carrying amounts: Balance at the beginning of the period Acquisition Balance at the end of the period During the six-month period to 31 December 2024, $14,675 of equipment depreciation was included in the amount capitalised as exploration and evaluation expenditure (31 December 2023: $12,168). The Group completed a transaction to acquire 100% of shares in Valrico Resources Pty Ltd, on 3rd September 2024. The acquisition was settled through a combination of cash payments and issuance of the Group’s shares to the selling party. Management assessed the transaction as to whether it is an asset acquisition or business combination under AASB 3 Business Combinations and employed the optional concentration test and concluded that substantially all the fair value of the gross assets acquired are concentrated in a group of similar identifiable assets and hence the transaction is not a business combination. 15 Australian Rare Earths Limited Notes to the Financial Statements NOTE 9 – PROPERTY, PLANT AND EQUIPMENT CONSOLIDATED GROUP 31 December 2024 30 June 2024 $ $ Plant and Equipment at cost 521,720 519,024 Accumulated depreciation (189,405) (151,188) 332,315 367,836 367,836 291,724 Additions 2,695 150,373 Depreciation (38,216) (74,261) Balance at the end of the period 332,315 367,836 Movements in carrying amounts: Balance at the beginning of the period NOTE 10 – TRADE AND OTHER PAYABLES CONSOLIDATED GROUP 31 December 2024 30 June 2024 $ $ Trade payables 526,378 315,761 Other creditors and accruals 73,454 186,712 599,832 502,473 NOTE 11 – CONTRACT LIABILITY Contract Liability CONSOLIDATED GROUP 31 December 2024 30 June 2024 $ $ 750,000 - 750,000 - At 31 December 2024 the Company had received $750,000 in grant funding from the Australian Government. The use of the funding is tied to evaluation works for the Koppamurra project. The contract liability will incrementally be reduced as the evaluation works are undertaken in line with relevant accounting standards. 16 Australian Rare Earths Limited Notes to the Financial Statements NOTE 12 – RIGHT-OF-USE ASSETS AND LEASE LIABILITIES CONSOLIDATED GROUP 31 December 2024 30 June 2024 $ $ Current 145,249 135,960 Non-current 460,190 507,794 605,439 643,754 773,148 740,029 (302,034) (226,628) 471,114 513,401 Lease Liabilities Right-of-use assets Right-of-use assets – Office/Warehouse leases Accumulated depreciation The Group has lease contracts for commercial office space in Adelaide, commercial office/warehouse space and accommodation in Naracoorte in South Australia, and a car park lease in Adelaide. The Adelaide office space has a five year term (commenced 1 July 2023), with an option to extend for a further three years. The Naracoorte office/warehouse lease has a term of five years (commenced 1 September 2023), with an option to extend for a further three years. The car park lease in Adelaide has a three year term (commenced 1 September 2021), with an option to extend by a further five years. The option to extend the lease by five years was taken in September 2024. NOTE 13 – ISSUED CAPITAL 31 December 2024 $ 30 June 2024 $ 158,989,727 (30 June 24: 155,921,890) fully paid ordinary shares 31,019,821 30,750,364 Six months ended 31 December 2024 Number of Shares 31 December 2024 $ (a) issued and paid up capital Fully paid ordinary shares 158,989,727 31,019,821 Movements in fully paid shares Balance as at 1 July 2024 155,921,890 30,750,364 Share issue to Employees and KMP 1,025,982 129,073 Shares issued for Valrico Resources Acquisition 2,041,855 140,384 158,989,727 31,019,821 Balance as at 31 December 2024 17 Australian Rare Earths Limited Notes to the Financial Statements NOTE 14 – RESERVES Six months to 31 December 2024 $ Year ended 30 June 2024 $ 2,329,830 2,827,265 Opening Balance 2,827,265 2,700,012 Options vested 58,645 427,921 Performance rights vested 64,229 31,941 Lapsed Options (620,309) (332,609) Closing Balance 2,329,830 2,827,265 Share based payment reserve Movement associated with share based payments during the period: The share based payments reserve records items recognised as an expense on the valuation of Options or performance rights. Refer Note 14 for further details regarding the movement in Options during the reporting period. An amount of $120,685 has been included in profit and loss under ‘share based payments expense’ for the sixmonth period ended 31 December 2024 (31 December 2023: $313,115) relating to the fair value of options and performance rights issued during the current and prior periods. Weighted average exercise prices are as follows for the reporting period presented: Options Six months ended 31 December 2024 Number of Options 31 December 2024 $ Weighted average exercise price per option Opening Balance - 1 July 2024 29,371,480 2,795,324 $0.53 - 58,645 $0.44 Lapsed (1,6