Emmerson Resources : Half Year Financial Report, 31 December 2022

ABN 53 117 086 745

HALF-YEAR FINANCIAL REPORT

31 DECEMBER 2022

PO Box 1156

ASX CODENedlands WA 6909

Telephone: +61 (08) 9389 8033

ERM

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EMMERSON RESOURCES LIMITED

DIRECTORS' REPORT

The Directors of Emmerson Resources Limited and its controlled entities ("Company" or "Emmerson" or "consolidated entity") submit their report for the half-year ended 31 December 2022. In order to comply with the provisions of the Corporations Act 2001, the directors report as follows:

DIRECTORS

The names of the Company's directors in office during the half-year and until the date of this report are as follows:

Andrew McIlwain, Non-executive Chairman

Rob Bills, Managing Director and Chief Executive Officer Allan Trench, Non-executive Director

Alan Tate, Non-executive Director

REVIEW AND RESULTS OF OPERATIONS

Operating Results for the Half-year

The net loss for the half-year ended 31 December 2022 was $685,669 compared to the half-year ended 31 December 2021 of $758,593.

Total revenue and other income increased from $63,997 in the half-year ended 31 December 2021 to $205,919 for the half-year ended 31 December 2022, predominantly due to increased interest income earned and management and consulting fees received.

Expenses increased from $822,590 in the half-year ended 31 December 2021 to $891,588 for the half- year ended 31 December 2022, predominately due to an increase in Employee benefits expense as a result of higher employee head count.

Financial Position

Available cash at the end of the half-year was $7,075,196 (30 June 2022: $8,962,413).

Net assets and total equity at 31 December 2022 were $25,011,201 (30 June 2022: $25,589,582).

Cash and assets utilised by the Company for the period continued to be focused on exploration activities in Tennant Creek and New South Wales, consistent with the Company's business objectives. The Directors believe the Company is in a good financial position to continue its exploration endeavors.

REVIEW OF OPERATIONS

About Emmerson Resources - that has a track record of discovery plus an emerging gold royalty business.

Emmerson Resources Limited (Emmerson or the Company) continues to deliver to our strategy of:

• Discovering the next generation of copper, gold, cobalt and bismuth mineralisation through the application of innovative exploration utilising new technologies and systematic science-based exploration.
• Creating an emerging gold royalty business through advancing discoveries for inclusion in the Tennant Creek Mining joint venture.

Emmerson has a commanding land position in the Tennant Creek Mineral Field (TCMF), one of Australia's highest-grade gold and copper districts. The region has produced over 5.5Moz of gold and 470,000t of copper from deposits including Warrego, White Devil, Orlando, Gecko, Chariot and Golden Forty. Emmerson has added to this endowment with high-grade gold discoveries at Edna Beryl, Mauretania and more recently, at Golden Forty North. In addition, Emmerson has discovered high grade copper, gold, cobalt and bismuth at its 100% owned Hermitage project within the Northern Project Area (NPA). These discoveries are the first in the TCMF for over two decades.

The recent rush of new tenement applications by both major and junior explorers in TCMF not only highlights the prospectivity of the region for copper and gold but also to Emmerson's strategic 1,700km2 land holding, and proprietary knowledge gained through focussed exploration activities in the field over the past 12 years.

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EMMERSON RESOURCES LIMITED

DIRECTORS' REPORT

Emmerson is also exploring across four early-stagegold-copper projects in NSW, identified (with our strategic alliance partner Kenex/Duke Exploration ASX:DEX) from the application of 2D and 3D predictive targeting models - aimed at increasing the probability of discovery. Duke can earn up to 10% (to pre BFS) of any project generated providing certain success milestones are met.

The highly prospective Macquarie Arc in NSW hosts more than 80Moz gold and 13Mt copper with these resources heavily weighted to areas of outcrop or limited cover. The Company's four exploration projects contain many attributes of the known deposits within the Macquarie Arc but remain underexplored due to historical impediments, including overlying cover (farmlands and younger rocks) and a lack of effective historic exploration.

The Company's view remains that discovery of new mineral deposits provides the best uplift in value for junior companies, which combined with an emerging royalty business provides a low-risk path to self- funding.

Our emerging gold royalty business in Tennant Creek, is underpinned by a strategic alliance with our partner, the Tennant Consolidated Mining Group (TCMG). Whereby TCMG have purchased a CIL mill and are scheduled to relocate it to the TCMF in 2023. This alliance consists of both Exploration (EEJV) and Mining Joint Ventures (SMJV), with the mining and processing within the JV areas undertaken by TCMG in return for Emmerson receiving a free carried, 6% royalty on production. Under the terms of the SMJV, the minimum production royalty is a guaranteed 6% of 60,000oz of gold or the equivalent cash payment of any shortfall at the expiration of the earn-in period.

Under the Exploration Joint ventures, Emmerson are the managers and operators and TCMG must complete exploration funding of $10.5m over a five-year period across the Northern and Southern project areas (NPA and SPA) to earn a 75% interest.

In addition, Emmerson can earn a direct 40% equity interest in any major mine discovery within the JV areas (Major Mine discovery is defined as >250,000oz gold equivalent).

TCMG continue to finalise plans for the establishment of the centralised CIL mill at Nobles Nob, adjacent to the SPA at Tennant Creek (Figure 1). Once established, this mill will unlock the value contained across many of these stranded, high-grade gold deposits, including those currently subject to the SMJV which include: Chariot, Mauretania, Black Snake and Malbec West. Given the recent success in exploration, it is anticipated that over time more projects (and royalties) will be added to the SMJV.

TCMG are a privately owned gold and copper focused resource company that has also acquired tenements and projects from other parties in the TCMF. They intend to undertake detailed mining studies with the ultimate goal of developing a portfolio of resources that will provide feed to its centralised CIL processing facility in Tennant Creek.

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EMMERSON RESOURCES LIMITED

DIRECTORS' REPORT

Figure 1: Map of the Emmerson Tennant Creek Project showing the Northern Project Area (NPA), and Southern Project Area (SPA), which is covered by the Exploration (EEJV) and Small Mines (SMJV). Yellow dots are potential small mines and/or remnant resources. Noting that Emmerson retains 100% of the Jasper Hills, Hermitage, North and Northern Star and Edna Beryl projects.

Note:

• Quoted production from major historical deposits after Ahmad, M. and Munson, T.J. (2013). Geology
  and mineral resources of the Northern Territory, Special Publication 5, p. 9:37.
• • For Chariot mine and Malbec West mine, quoted production from Giants Reef Mill Reconciled
    Production to end of month September 2005 (internal report).

HERMITAGE PROJECT (100% EMMERSON) - DISCOVERY OF HIGH-GRADE GOLD, COPPER, COBALT AND BISMUTH

Hermitage is one of a cluster of 100% Emmerson owned prospects on granted mining leases that occurs within the northern corridor at Tennant Creek. These prospects incorporate North Star, Jasper Hills, Katherine Star and Northern Star in mining lease (ML 30177) and, Edna Beryl Thrace, and Macedon in MLC705 (Figure 1).

The mineralisation encountered at Hermitage is hosted in multiple, east-west striking, structurally controlled, ironstone (hematite-magnetite) bodies that are steeply north plunging and remain open in all directions (Figures 2 & 3). The cross sectional (surface expression) of these tabular to pipelike ironstones are on scale with some of the major historical deposits in the TCMF. With the largest deposit being Warrego (1.5Moz gold and 173,000t copper) that has cross sectional dimensions of only 200m by 50m, but with significant down plunge continuity of over 600m.

The discovery RC drill hole (HERC003) at Hermitage intersected 116m at 3.4% copper and 0.88g/t gold (ASX: 28 March 2022). This was followed up by an angled diamond drill hole (HERCDD010) which intersected 94.4m of 2.74% copper, 5.58g/t gold, 17.88g/t silver and 0.44% bismuth including 21.6m at 25.9g/t gold, 74.89g/t silver, 4.11% copper and 1.83% bismuth, with some zones up to 0.33% cobalt (ASX: 17 August 2022). The addition of cobalt and bismuth to the gold and copper adds to the inventory of future facing metals relevant to battery, superconductor, magnet, and 3D printing sectors.

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