Troy Resources : Half Yearly Report and Accounts 31 December 2021

CONSOLIDATED FINANCIAL REPORT

FOR THE HALF-YEAR ENDED 31 DECEMBER 2021

APPENDIX 4D

RESULTS FOR HALF-YEAR ENDED 31 DECEMBER 2021

Note: Revenue and net profit comparisons are to the half-year ended 31 December 2020.

Revenue and net profit Revenue from ordinary activities Loss from ordinary activities after tax Net loss attributable to members

Down Down Down

88% 31% 31%

3,209 (12,183) (12,183)

Dividend information

No interim dividend has been declared or paid for the period to 31 December 2021.

($0.036) 812,810,631

($0.022) 796,597,022

Additional Appendix 4D disclosure requirements can be found in the Directors' Report and the 31 December 2021 half-year financial statements.

This report is based on the condensed consolidated half-year financial statements for the period to 31 December 2021 which have been reviewed by PricewaterhouseCoopers and are not subject to dispute or qualification. The

Independent Auditors' Review Report is included herein.

This is a half-yearly report and is to be read in conjunction with the 30 June 2021 Annual Report.

Authorised for issue by the Board of Directors.

CONDENSED CONSOLIDATED INTERIM FINANCIAL REPORT

For the half-year ended 31 December 2021

DIRECTORS

Peter Stern (Non-Executive Chairman)

Richard Beazley (Interim Chief Executive Officer & Managing Director)

Andrew Barclay (Non-Executive Director)

COMPANY SECRETARY

Rebecca Broughton

REGISTERED OFFICE

Troy Resources Limited Level 2

5 Ord Street

West Perth WA 6005 Telephone: (61 8) 9481 1277 Facsimile: (61 8) 9226 3598 Email:troy@troyres.com.au Website:www.troyres.com.au

GUYANA OFFICE

Troy Resources Guyana Inc 82 Premniranjan Place Prashad Nagar Georgetown Guyana

Telephone: (592) 231 0798 Facsimile: (592) 219 4761

SHARE REGISTRY

Computershare Investor Services Pty Limited Level 11, 172 St Georges Terrace

Perth WA 6000

GPO Box D182

Perth WA 6840

Telephone: (61 8) 9323 2000

Facsimile: (61 8) 9323 2033

Investor inquiries within Australia: 1300 850 505

Investor inquiries outside Australia (61 3) 9415 5000

BANKERS

National Australia Bank Limited

AUDITORS

PricewaterhouseCoopers

LEGAL REPRESENTATIVE

Thomson Geer

STOCK EXCHANGE

Australian Securities Exchange Fully Paid: TRY

CONTENTS

Directors' Report

Auditor's Independence Declaration

Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income

Condensed Consolidated Statement of Financial Position

Condensed Consolidated Statement of Changes in Equity

Condensed Consolidated Statement of Cash Flows

Notes to the Condensed Consolidated Financial Statements

Directors' Declaration

Independent Auditor's Review Report

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6

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9 10 24 25

The Directors of Troy Resources Limited (the Company or Troy) present their report together with the financial report of Troy and its subsidiaries (Group) for the half-year ended 31 December 2021 (half-year). In order to comply with the provisions of the Corporations Act 2001, the Directors' report as follows:

DIRECTORS

The Directors of the Company during and since the end of the half-year are:

1 The Karouni processing facility was placed in care and maintenance in August 2021. The cash and AISC for the quarter are based upon July 2021 production figures only.

During July 2021, material mined came from the Goldstar and Smarts pit. Mining was expected to continue during August and September at Goldstar with processing of the remaining low grade stockpiles. However, in late June, it was established that both the grade and tonnage of the low grade stockpiles were less than previously estimated and, as a result, the decision was made to suspend mining and commence a period of care and maintenance.

A comprehensive care and maintenance program is in place which includes a defined schedule of weekly and monthly checks on plant and mobile equipment to ensure the integrity and operability of the Company's physical assets are maintained during this period. The main power station has been shutdown to reduce fuel costs, with power now being supplied by portable generators installed at primary locations such as the camp, mill and administration office.

Tonnes milled during the period were sourced from material mined from Goldstar, as well as the processing of the low grade stockpiles. The mill ceased processing ore in July 2021. Cleaning out of the carbon-in-leach circuit, ball mill, thickener and elution circuits occurred over the period July to September 2021. In September 2021, Troy began to liquidate some of its short shelf-life reagent inventory.

SMARTS UNDERGROUND DEVELOPMENT

During the period to 31 December 2021, the Company completed a Pre-Feasibility Study (PFS) on the Smarts Underground, culminating in the announcement of the 'Maiden Smarts Underground Ore Reserve' on the ASX on 26 July 2021.

This PFS concluded that the Smarts Underground deposit was economically viable based on the parameters incorporated in the evaluation.

Review of the geotechnical and mine design has been ongoing with opportunities for improvement in the stope designs and ventilation system identified.

EXPLORATION

Gem Creek

Exploration activities focussed on the Gem Creek prospect with both reverse circulation (RC) and diamond drilling. Forty nine RC holes were completed for a total of 3,978 metres and an additional three diamond drill holes for a total of 595.5 metres. The drilling was completed in the central block, where gold mineralisation was previously reported within a strong silica altered andesite with disseminated pyrite and stockwork like quartz veins with visible gold. The altered andesite is located between fresh MgO basalt in the footwall and carbonaceous shales in the hanging wall. The completed RC and diamond drilling intersected more of the altered andesite with strong silica alteration, stockwork veining and fine disseminated pyrite.

Barrick Joint Venture

On 1 July 2021, the Company announced that it had entered into an Earn-In Agreement with Barrick Gold Corporation (Barrick) concerning various tenements including the Potaro and Kuribrong targets.

Barrick has advised that initial prospecting, involving mapping and rock chip sampling in drainages cutting through the sand, is exposing complex and varied geology and parallel shear zones. A geological and geochemical screening program is in planning to test the Makapa-Kuribrong Shear Zone, which will comprise Bulk Leach Extractable Gold stream sediment sampling of drainages in areas where drainages penetrate the sand cover, and an aircore drilling program in areas of sand cover to test the bedrock potential.

At the Potaro prospect, field mapping and a rock chip sampling program, designed to ground-truth the existing geologic map interpreted from aeromagnetic data, indicates that the project area contains more complex lithologies than interpreted, including metasediments, felsic volcanics, intermediate to mafic volcanics, and dioritic intrusions. Mapping south of the Bartica-Potaro road is largely complete and this area will be followed up with a Bulk Leach Extractable Gold stream sediment sampling program.

At the Apanachi Prospect, situated to the northwest of the project area, exploration activities consisted of geologic mapping and rock chip sampling, with results pending.

CORPORATE

On 1 July 2021, the Company announced that in connection with the Barrick Earn-In Agreement, Barrick had also subscribed for 39,033,254 fully paid ordinary shares at a price of US$0.0308 per share ($0.041 per share), raising approximately US$1.2 million.

On 18 August 2021, the Company issued 16,213,609 fully paid ordinary shares to a creditor of the Company's wholly owned subsidiary, Troy Resources Guyana Inc., to extinguish $681,477 in trade payable debt.

On 21 September 2021, the Company announced the passing of Mr Ken Nilsson, the Company's CEO and Managing Director.

Mr Richard Beazley was appointed interim CEO and Managing Director whilst the Company completes the partial recapitalisation.

Company Recapitalisation

In late August 2021, the Company entered into voluntary suspension from the Australian Securities Exchange, whilst it considered its financial position in relation to the Karouni processing facility entering into a care and maintenance period.

On both 5 January 2022 and 1 February 2022, the Company announced that it had entered into a series of agreements that will, if approved by shareholders, achieve a recapitalisation of the Company.

The transactions include the conversion of approximately $20.9 million in current debt to equity and the raising of $7.2 million in funds.

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