2021 Corporate Governance Statement – 29 October 2021

AUSTPAC RESOURCES N.L.

ACN 002 264 057

Level 5,

37 Pitt Street SYDNEY NSW 2000 GPO Box 5297 SYDNEY NSW 2001

Telephone: [phone]

Facsimile: ([phone]

Email: [e-mail] www.austpacresources.com

CORPORATE GOVERNANCE STATEMENT

This statement has been approved by the Board of the Company. The statement has been prepared as at 27th October 2021 with reference to the 4th Edition of the ASX Corporate Governance Council's Corporate Governance Principles and Recommendations.

PRINCIPLE 1: LAY SOLID FOUNDATIONS FOR MANAGEMENT AND OVERSIGHT

RECOMMENDATION 1.1

A listed entity should have and disclose a board charter setting out:

1. the respective roles and responsibilities of its board and management; and
2. those matters expressly reserved to the board and those delegated to management.

The Board of Directors has been charged by shareholders with overseeing the affairs of the Company to ensure that they are conducted appropriately and in the interests of all shareholders. The Board defines the strategic goals and objectives of the Group, as well as broad issues of policy and establishes an appropriate framework of Corporate Governance within which the Board members and management must operate. The Board reviews and monitors management and the Group's performance. The Board has also taken responsibility for establishing control and accountability systems/processes and for monitoring senior executive performance and implementation of strategy.

The roles and responsibilities of the Board have been set out in a Board charter which is available on the Company's website. Amongst other things the Board charter sets out the role and responsibility of the chair of the Board.

The Board has specifically identified the following matters for which it will be responsible:

1. reviewing and determining the Company's strategic direction and operational policies;
2. review and approve business plans, budgets and forecasts;
3. overseeing management's implementation of the Company's strategic objectives;
4. appoint and remunerate the Chief Executive Officer;
5. review performance of the Chief Executive Officer;
6. approve acquisition and disposal of assets;
7. approve operating budgets, capital, development and other large expenditures;
8. ensuring that the Company has in place and appropriate risk management framework and compliance culture;
9. oversee the integrity of the Company's control and accountability systems;
10. oversee the Company's processes for making timely and balanced disclosure of all material information concerning it that a reasonable person would expect to have a material effect on the price or value of the Company's shares;
11. reporting to shareholders;
12. ensure compliance with environmental, taxation, Corporations Act and other laws and regulations; and
13. monitoring the effectiveness of the Company's governance practices.

The Board delegates operational authority to the Chief Executive Officer who is charged with the day to day running and administration of the Company consistent with the strategic objectives and policies as set down by the Board. Within this framework, the Chief Executive Officer is directly accountable to the Board for the performance of the management team/ external consultants.

RECOMMENDATION 1.2

A listed entity should:

1. undertake appropriate checks before appointing a person, or putting forward to security holders a candidate for election, as a Director; and
2. provide security holders with all material information in its possession relevant to a decision whether or not to elect or re-elect a Director.

The Company does undertake checks before it appoints a person, or puts forward to shareholders a new candidate for election, as a Director. These checks include references as to the person's character, experience and education. The Company does not presently check criminal records or the bankruptcy history for potential new Board members however may consider such checks where necessary or appropriate in the future.

The Company will include all material information in its possession relevant to a decision whether or not to elect or re-elect a Director in the relevant Notice of Meeting. Information relating to each of the Directors is also provided on the Company's website.

RECOMMENDATION 1.3

A listed entity should have a written agreement with each Director and senior executive setting out the terms of their appointment.

The Company has established written agreements with each of its non-executive directors which set out the terms of their appointment.

Directors are not appointed for a fixed term but are subject to re-election by shareholders at least every three years in accordance with the Constitution of the Company.

A Director appointed to fill a casual vacancy or as an addition to the Board, only holds office until the next annual general meeting of shareholders and must then retire. After providing for the foregoing, one-third of the remaining Directors (excluding a Managing Director) must also retire at each annual general meeting of shareholders.

Prior to their appointment potential directors participate in induction initiatives and are advised of the time commitment envisaged. They are also advised or remuneration entitlements, their right to seek independent legal advice at the expense of the Company (subject to the Chairman's approval) indemnity and insurance arrangements, and their confidentiality obligations.

The Company does maintain written agreements with each of its senior executives which set out a description of their position, duties and responsibilities and the terms of their appointment.

RECOMMENDATION 1.4

The Company Secretary of a listed entity should be accountable directly to the Board, through the chair, on all matters to do with the proper functioning of the board.

The Company Secretary has been appointed on the basis that he will be accountable directly to the Board, through the chair, on all matters to do with the proper functioning of the Board.

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All Directors of the board have access to the Company Secretary who is appointed by the Board. The Company Secretary reports to the Chairman, in particular to matters relating to corporate governance.

RECOMMENDATION 1.5

A listed entity should:

1. have and disclose a diversity policy;
2. through its board or a committee of the board30 set measurable objectives for achieving gender diversity in the composition of its board, senior executives and workforce generally; and
3. disclose in relation to each reporting period:
4. 1. the measurable objectives set for that period to achieve gender diversity;
   2. the entity's progress towards achieving those objectives; and
   3. either:
   4. 1. the respective proportions of men and women on the board, in senior executive positions and across the whole workforce (including how the entity has defined "senior executive" for these purposes); or
      2. if the entity is a "relevant employer" under the Workplace Gender Equality Act, the entity's most recent "Gender Equality Indicators", as defined in and published under that Act.31

The Company has established a Diversity Policy which is available on the Company's website.

The Company is committed to an inclusive workplace that embraces and promotes diversity. The Company believes that in principle the promotion of diversity on its Board and within the organisation generally is good practice.

The Company considers that diversity refers to all the characteristics that make individuals different from each other. It includes characteristics or factors such as religion, race, ethnicity, language, gender, sexual orientation, disability, age or any other area of potential difference. The Company's policy is to recruit and manage its employees on the basis of their competence, performance and potential, regardless of the individual's background or points of difference.

The Company is committed to promoting a culture of diversity in the workplace by:

• recruiting and managing on the basis of an individual's competence and performance;
• respecting the unique attributes that each individual brings to the workplace;
• fostering an inclusive and supportive culture to enable people to develop to their full potential;
• taking action where appropriate to prevent / stop bullying, discrimination or harassment;
• rewarding and remunerating fairly;
• offering flexible work practices which recognise that employees may have different domestic responsibilities throughout their career;
• maintaining policies and procedures to provide employees at all levels of the Company with guidelines for behaviour.

The Board acknowledges the benefits of and will seek to achieve diversity during the process of employment at all levels where appropriate given the size of the Company and the nature and extent of its operations and without detracting from the principal criteria for selection and promotion of people to work within the Company based on merit. Accordingly the Company has not established measurable objectives or number targets for achieving gender diversity.

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At 30 June 2021 there were no women on the Board of the Company. The Company currently engages 1 woman as part of its corporate team.

RECOMMENDATION 1.6

A listed entity should:

1. have and disclose a process for periodically evaluating the performance of the Board, its committees and individual Directors; and
2. disclose for each reporting period whether a performance evaluation has been undertaken in accordance with that process during or in respect of that period.

The Company has adopted a Performance Evaluation Statement which provides an overview of the Company's approach to performance evaluation of the Board, its Committees and individual Directors.

The Board is responsible for evaluating its performance under the direction of the Chairman with reference to the achievement of corporate objectives.

The review process involves consideration of all of the Board's key areas of responsibility and accountability and is based on an amalgamation of factors including capability, skill levels, understanding of industry complexities, risks and challenges, and value adding contribution to the overall management of the business.

The Board believes that this approach is appropriate given its size and the nature of the Company's operations.

The Board has not undertaken a formal performance evaluation during the current reporting year.

RECOMMENDATION 1.7

A listed entity should:

1. have and disclose a process for evaluating the performance of its senior executives at least once every reporting period; and
2. disclose for each reporting period whether a performance evaluation has been undertaken in accordance with that process during or in respect of that period.

The Board reviews and establishes the company's performance objectives and measures based on qualitative and quantitative factors. The objectives established become the performance targets for the Chief Executive Officer. The performance of the Chief Executive Officer is assessed by the full Board against these pre-determined performance objectives.

No formal performance evaluation of the Chief Executive Officer was undertaken for the year ended 30 June 2021 as the Board works closely with the Chief Executive Officer on all key matters relating to interests received from parties in relation to the development of the Zinc Recovery Program and collating information for the Company's Federal Court Application and monitors his performance through this process. The performance of the Chief Executive Officer is also monitored by Board review of regular reports provided regarding the group's financial and operational reports.

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PRINCIPLE 2: STRUCTURE THE BOARD TO BE EFFECTIVE AND ADD VALUE

RECOMMENDATION 2.1

The Board of a listed entity should:

1. have a nomination committee which:
2. 1. has at least three members, a majority of whom are independent Directors, and
   2. is chaired by an independent director;

and disclose

1. 1. the charter of the committee
   2. the members of the committee; and
   3. as at the end of each reporting period, the number of times the committee met throughout the period and the individual attendances of the members at those meetings; or
2. if it does not have a nomination committee, disclose that fact and the processes it employs to address Board succession issues and to ensure that the Board has the appropriate balance of skills, knowledge, experience, independence and diversity to enable it to discharge its duties and responsibilities effectively

Due to the size of the Company and the number of Board members, the Board does not have a formal nomination committee. New Directors a r e selected according to the needs of the Company at that time, the composition, and the balance of experience on the Board as well as the strategic direction of the Company. Where a vacancy arises or it is considered appropriate to vary the composition of the Board of Directors, the full Board generally participates in any review of the Board's composition and the qualifications and experience of candidates. Directors are selected upon the basis of their specialist skills and business background so as to provide an appropriate mix of skills, perspective and business experience.

At each annual general meeting, the following Directors retire:

1. one third of Directors (excluding the Managing Director);
2. Directors appointed by the Board to fill casual vacancies or otherwise; and
3. Directors who have held office for more than three years since the last general meeting at which they were elected.

RECOMMENDATION 2.2

A listed entity should have and disclose a board skills matrix setting out the mix of skills that the board currently has or is looking to achieve in its membership.

The Company has not prepared a formal Board skills matrix setting out the mix of skills that the board currently has or is looking to achieve in its membership.

The composition of the Board is reviewed from time to time taking into account the length of service on the Board, age, qualification and experience, any requirements of the Company's constitution, and in light of the needs of the Company and direction of the Company, together with such other criteria considered desirable for composition of a balanced Board and the overall interests of the Company.

Details of each Directors experience and length of service can be in the Company's Financial Report on an annual basis.

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