Hawthorn Resources : HAW - 2021 Annual Report

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H A W T H O R N R E S O U R C E S L I M I T E D T E N E M E N T A R E A S

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Hawthorn Resources Limited

Table of Contents

2021 ANNUAL REPORT

CORPORATE DIRECTORY

MANAGING DIRECTOR/CEO REPORT

TENEMENT LIST

ASX - ADDITIONAL SHAREHOLDER INFORMATION

FINANCIAL REPORT - YEAR ENDED 30 JUNE 2021

Directors' Report

Auditor's Independence Declaration

FINANCIAL STATEMENTS AND NOTES

Consolidated Statement of Profit or Loss and Other Comprehensive Income Consolidated Statement of Financial Position

Consolidated Statement of Cash Flows Consolidated Statement of Changes in Equity Notes to the Consolidated Financial Statements Directors' Declaration

Auditor's Independent Report

Annual Report cover photography:

with sole reference to the inside front and inside back cover

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Inside Front Cover Hawthorn Resources Limited tenement areas; Inside Back Cover Hawthorn Resources Limited tenement areas;

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	Hawthorn Resources Limited
	Corporate Directory
Directors
Li, Yijie	Non-Executive Director/ Chairman
Mark Kerr	Managing Director/CEO
David Tyrwhitt	Non-Executive Director
Brian Thornton	Non-Executive Director
Liao, Yongzhong	Non-Executive Director
Liu, Zhensheng	Non-Executive Director

Company Secretary

Mourice Garbutt

Mine Manager

William Lloyd

Financial Officer

Tony Amato

Registered Office and Domicile

Level 2, 90 William Street, Melbourne, Victoria 3000, Australia

Telephone:	[phone]
E-mail:	[e-mail]
Internet:	http://www.hawthornresources.com

Legal Form

A public company - Liability Limited by shares

Country of Incorporation

Australia

Australian Securities Exchange Listing Code

HAW - Ordinary shares

Share Registry

Link Market Services Ltd

Tower 4, 727 Collins Street, Melbourne Victoria 3000, Australia

Telephone:

[phone] (toll free within Australia)

Auditors

BDO Audit Pty Ltd

Collins Square, Tower 4, Level 18, 727 Collins Street, Melbourne, VIC 3008

Bankers

National Australia Bank Limited

Level 1, 99 Bell Street, Preston Victoria 3072, Australia

Solicitors

MinterEllison Lawyers

Rialto Towers, 525 Collins Street, Melbourne Victoria 3000, Australia

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Hawthorn Resources Limited

Managing Director/CEO Report

onlyDear Shareholders

Following the successes achieved in FY 2020 through the winning of gold from the Trousers Legs Mining Joint Venture's Anglo Saxon open-pit mining operations FY 2021 was a year of review and assessment, particularly in relation to the future development of:

1. The Mount Bevan Iron Ore Project; and

2. The Trouser Legs Joint Venture: Underground gold mine project at Anglo Saxon.

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The Mount Bevan Iron Ore Project

The Project is a joint venture with Legacy Iron Ore Limited (ASX Code: LCY') and Hawthorn (ASX Code: 'HAW') on tenement E 29/510 situated 250km north of Kalgoorlie and 100km west of Leonora in the Central Yilgarn region of Western Australia.

During FY 2021 both the Company and LCY reviewed the potential for the development of the established iron ore resource

(*) and exploration for nickel sulphides.

These considerations and subsequent negotiations lead to the announcement post 30 June 2021 on 15 November 2021 of an earn-in agreement between the co-venturers and Hancock Magnetite Holdings Pty Ltd (*)

1. Refer LCY Joint ASX releases 17/12/2013 - Mt Bevan -Significant Resource Upgrade and 15/11/2021 - HANCOCK TO EARN IN TO THE MT BEVAN IRON ORE PROJECT.

As announced on 15 November 2021 the:

• Agreement executed with Hancock Magnetite Holdings Pty Ltd (HMPL), a wholly owned subsidiary of Hancock Prospect- ing Pty Ltd (HPPL) granting HMPL the exclusive right to earn-in to the Mt Bevan iron ore project and form a new joint venture agreement
• HMPL to fund Pre-feasibility Study (PFS)
• Atlas Iron Pty Ltd (Atlas) to be appointed Manager of the new Joint Venture

In terms of the earn-in by HPPL a new joint venture will be established with the principal terms of the earn-in being:

Initial Investment

• HMPL will make an initial investment of $9m to earn a 30% interest in the Project (Initial Investment) with $8m cash being paid to Legacy and Hawthorn in proportion to their interest in the project (Legacy $4.8m and Hawthorn $3.2m) and the remaining $1m as working capital for the new Joint Venture.
• Atlas will be appointed as Manager of the new Joint Venture.
• Upon completion of the Initial Investment, HMPL will hold a 30% interest, Legacy will hold a 42% interest and Hawthorn will hold a 28% interest in the Project.

Stage 1 Earn-in

• HMPL can earn an additional 21% interest in the Project by funding the completion of a PFS.
• Upon completion of the Stage 1 earn-in, HMPL will hold a 51% interest, Legacy will hold a 29.4% interest and Hawthorn will hold a 19.6% interest in the Project.

Joint Venture

• Upon completion of the Stage 1 earn-in, and subject to favourable outcomes from the work completed, additional work programs will be undertaken with the intention of further advancing the Project to a Bankable Feasibility Study.

As noted in the joint ASX release on 15 November 2021 the '…Earn-In Agreement remains subject to the parties reaching agreement on a new joint venture agreement between them within a defined time period and any standard regulatory ap- provals. Legacy and Hawthorn have granted Atlas exclusivity…'

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