Announcement PDF Akora Ltd 30 September 2024 For theResources quarter ended ABN 90 139 847 555 ASX Code: AKO 1 Quarterly Report For the quarter ended 30 September 2024 www.akoravy.com AKORA is developing a highgrade Direct Shipping Ore (DSO) iron ore mine in Madagascar. This will be further developed into serving the steel industry’s accelerating focus on reducing carbon dioxide (greenhouse gas) emissions through decarbonisation. Highlights • Geotechnical and hydrological drilling completed at the Company’s high-grade Bekisopa iron ore Project to support the Pre-Feasibility Study due for completion in Q1 2025. • The road route and design work linking the Company’s Bekisopa and Satrokala projects is progressing with the road route survey completed. • The Satrokala maiden exploratory drilling program was commenced during the Quarter after the environmental permit for early exploration works was approved. For the quarter ended 30 September 2024 2 Bekisopa Iron Ore Project Ownership 100% | Madagascar, Africa AKORA is advancing plans at Bekisopa to produce up to 2 million tonnes per annum (Mtpa) of a +60% iron (Fe) average grade direct shipping ore (DSO) for export to Blast Furnace-Basic Oxygen Furnace (BF-BOF) steelmakers. Bekisopa’s high-grade iron ore may also be upgraded in the future to a +68% Fe concentrate at 75 microns for shipping to Direct Reduced Iron-Electric Arc Furnace (DRI-EAF) steelmakers to make greener steel without coal and considerably less carbon emissions. Bekisopa Geotechnical drilling completed The Bekisopa Stage 1 DSO Project is advancing through the Pre-Feasibility Study (PFS) requirements with strong progress achieved during the quarter. Geotechnical drilling, a key PFS work component, was completed in July and the data returned will serve the mine’s design. Totalling 400m, eight holes were drilled covering the proposed DSO mining pits across the southern, central and northern regions of the project. The geotechnical samples have been delivered to the ALS laboratory in Perth for analysis with assay results expected at the end of November and mineralogy assessment to then follow. The geotechnical program has two main aims; • to provide rock strength data for the mine design team who will be preparing the mining pit shapes for the DSO material; and • to indicate the competency of the iron ore resource to determine if drill and blast, or simple machine ripping will be necessary prior to digging. Preliminary indications are favourable that the DSO resource is of a low competency and that the resource is unlikely to require drill and blast, in turn reducing the complexity and operating costs, and supporting the assumptions of the Bekisopa Scoping Study. Bekisopa Hydrogeology Drilling During the quarter, AKORA also completed a four holes hydrogeology drilling program as part of the PFS. Two of the holes were 150m deep while the other two holes were drilled to a depth of 70m. The program was designed to; • identify water levels and recharge capacity such that the water system can be considered for future operational water requirements; • provide baseline information on location and quality of sub surface water resources to support the environmental management plan; and • determine the presence of sub surface water levels and if they impact the mine pit designs and any requirements for dewatering infrastructure. Preliminary data has identified that sub surface water is present at approximately 30m depth and that sub surface water with reasonable inflows are present at 55m depth. This is very favourable given the DSO pits are not expected to operate below 30m, hence reducing the need for water removal. For the quarter ended 30 September 2024 3 This data also suggests that the sub surface water may provide a feasible solution for the minimal water requirements of the DSO processing phase. The hydrogeological data will be used by the Company’s consultants Wardell Armstrong International to develop site water models and support the Environmental and Social Impact Assessment. Bekisopa Road Route Design An important task in advancing the PFS and moving the project towards commercialisation is developing the product transport logistics requirements for the Bekisopa DSO mine, which entails both the road design and the port shipping requirements. To that point, AKORA has progressed the road route survey works and design. The port workings will be the subject of a future announcement. The road works can be summarised as; • • • • identifying the new road required to link the Bekisopa Project area to the Satrokala Project area; detailing any possible road upgrades from the Satrokala Project area to the RN7 National highway; considering alternative road options along this path; detailing the engineering and developing the quantities and costs for constructing and upgrading the roads; and • detailing the permitting pathway and Government and Community engagement requirements for the road works. The road route field work was completed in late June 2024 and the road route findings are detailed in Figure 1, with the engineering detail currently being developed. A further update and report on the road design and considerations is expected in August 2024. All road design information will be incorporated into the Bekisopa PFS. Figure 1: Proposed Bekisopa mine to port transport route. For the quarter ended 30 September 2024 4 Satrokala Project Ownership 100% | Madagascar AKORA’s Satrokala Iron Ore Project has emerged as a significant prospect after a recent magnetic survey1 identified a major anomaly up to 10km long and 2km wide, making it some 66% larger than the Company’s more advanced Bekisopa Iron Ore Project. Maiden Exploration Drilling A maiden drill program planned 10 x 100m holes and began at Satrokala in July. Five holes totalling 501.7m have since been drilled to test several of the magnetic anomalies running north to south along the 10km of strike length. All five holes appear to have intercepted potential mineralisation. While assaying is still being completed, the drill core looks similar to the nearby Bekisopa ‘green steel’ fresh rock. However, the magnetic susceptibility readings are comparably lower than Bekisopa. Drilling is planned to resume once the geology, grade and mineralogy of the drill core is better understood. Figure 2. Satrokala drill plan and the associated ground magnetic survey results. 1 Refer ASX Announcement 20 March 2024. For the quarter ended 30 September 2024 5 Four holes (SATD01, SATD02, SATD03 and SATD05) were oriented at a dip of 50 degrees, either to the east or west, to drill into the magnetic anomaly (locations in Table 1). One hole (SATD04) was drilled vertically at 90 degrees into a wider and steeper dipping anomaly to test the depth and continuity of the potential mineralisation. Drill hole orientation and positioning to the magnetic anomalies are shown in Figure 3 below. Figure 3. Ground magnetic survey results cross section showing drill holes SATD03 to SATD05. Drillhole_ID UTM_x UTM_y Inclination Azimuth Length SATD01 571,197 7,571,043 -50 66 100.3 SATD02 571,198 7,571,485 -50 246 100.3 SATD03 569,357 7,569,277 -50 76 100.3 SATD04 568,960 7,569,194 -90 0 100.5 SATD05 569,691 7,569,361 -50 76 100.3 Table1. Drill hole locations, inclinations and depths. Drilling locations SATD01 to SATD04 were in country rock that has a brown to grey-coloured soil with minimal iron mineralisation / scree on surface, as observed at drill location SATD03 (Figure 4). The last drill hole completed, hole SATD05, was in the more typical red ferruginous soils like that observed in the weathered zone at the company’s nearby and more advanced Bekisopa Iron Ore Project. The first few metres of drill core of hole SATD05 look to contain some typical weathered iron mineralisation. Figure 5 shows images of drill hole SATD05’s location and the weathered magnetic minerals on the surface. For the quarter ended 30 September 2024 Figure 4. Drilling at SATD03 and looking to the east showing the location of drill pad SATD05 on the nearby ridge. Figure 5. Satrokala drill hole SATD05 showing weathered red ferruginous soil and nearby magnetic mineralisation. 6 For the quarter ended 30 September 2024 7 Figure 6. Drill core from drill hole SATD03 showing possible fine disseminated mineralisation at depth. Each drill hole showed a minimal weathered zone as expected from the ground magnetic intensity readings and then wide intercepts of reasonably continuous possible disseminated mineralisation. Figure 6 above shows the drill core sections from drill hole SATD03, from 71 to 86m downhole. The field portable magnetic susceptibility measurements were lower than expected for the degree of apparent mineralisation, compared to similar Bekisopa core sections, which could imply that minerals other than highly magnetic magnetite may be present. There were also some sulphides noted, like pyrite and pyrrhotite (being a less magnetic iron sulphide), and observed in some drill core sections. Figure 7 overleaf shows the early geological interpretation from drill holes SATD01 and SATD02 on the eastern side of the project, with each drill hole intercepting potential mineralisation down hole to 100m. For the quarter ended 30 September 2024 8 Figure 7. Geological interpretation from drill holes SATD01 and SATD02, looking from the east. Cautionary Note A cautionary note is mandated by the ASX and of good practice given the Company wishes to advise the reader of the preliminary findings of the drilling program but recognises that assay and mineral analysis has not yet occurred. The potential mineralisation, as evident visually from the fresh drill core, depicts that of iron mineralisation as further supported by the underlying ground magnetic survey results previously reported. The type of mineralisation, its nature and any comment on abundance is not being speculated at this early stage. “Visual estimates of mineral abundance should never be considered a proxy or substitute for laboratory analyses where concentrations or grades are the factor of principal economic interest. Visual estimates also potentially provide no information regarding impurities or deleterious physical properties relevant to valuations.” The Company will update the market when laboratory analytical results become available for these samples. For the quarter ended 30 September 2024 9 Corporate Cash Position AKORA Limited held cash reserves at the end of quarter of approximately $1.129 million. Shareholder Information As at 30 September 2024, the Company had 686 shareholders and 120,487,376 ordinary fully paid shares on issue with the top 20 shareholders holding 58.32% of the total issued capital. ASX Additional Information ASX Listing Rule 5.3.1: Exploration and Evaluation Expenditure spend during the quarter was $1,419,018. Full details of exploration activity during the quarter are set out in this report. ASX Listing Rule 5.3.2: The Company confirms that there was no mine production and development activities during the quarter. ASX Listing Rule 5.3.5: Payment to related parties of the Company during the quarter was $107,276 in cash. A description of and explanation for payments to related parties and their associates per Section 6.1 of the Appendix 5B following this Quarterly Activities Report is set out in the table below: Director Remuneration Current Quarter Managing Director fees 62,499 Non-Executive Director fees 35,000 Superannuation 9,777 Total 107,276 Board and Senior Management Graeme Hunt Paul Bibby Matthew Gill Shane Turner Jason Whittle Non-executive Chairman Managing Director & Chief Executive Office Non-executive Director Chief Financial Officer & Company Secretary General Manager - Development For the quarter ended 30 September 2024 10 ASX Announcements during the quarter The following announcements were lodged on the ASX Market Announcements Platform during the quarter: Date Description 15 July 2024 15 July 2024 31 July 2024 8 August 2024 15 August 2024 3 September 2024 12 September 2024 Change in substantial holding Project Update – Bekisopa and Satrokala Iron Ore Projects 30 June 2024 Quarterly Activities & Cashflow Report Satrokala Iron Ore Project First Exploratory Drilling Update Satrokala Iron Ore Project First Exploratory Drilling Revised Akora & Madagascar Ministry of Mines Present at ADU Perth Half Yearly Report and Accounts These announcements are available for viewing on the Company’s website www.akoravy.com. Other details Head Office 12 Anderson Street West Ballarat Vic 3350 Phone: +61 419 449 833 Website: www.AKORAvy.com This announcement is authorised by the Board. For further information contact: Paul Bibby Managing Director AKORA Resources + 61 (0) 419 449 833 paul.bibby@AKORAvy.com Matthew Lindh Corporate Advisor Harbury Advisory Pty Ltd + 61 (0) 432 363 933 mlindh@harbury.com.au Gareth Quinn Investor Relations Republic PR + 61 (0) 417711108 gareth@republicpr.com.au The Company confirms that it is not aware of any information or data that materially affects the information included in the relevant market announcement and all material assumptions and technical parameters underpinning the estimates in the Original Announcement continue to apply and have not materially changed. For the quarter ended 30 September 2024 11 Competent Persons’ Statement The information in this statement that relates to Exploration Targets and Exploration Results is based on information compiled by Mr Jannie Leeuwner – BSc (Hons) Pr.Sci.Nat. MGSSA and is a full-time employee of Vato Consulting LLC. Mr. Leeuwner is a registered Professional Natural Scientist (Pr.Sci.Nat. - 400155/13) with the South African Council for Natural Scientific Professions (SACNASP). Mr. Leeuwner has sufficient experience which is relevant to the style of mineralisation and type of deposits under consideration and the activity being undertaken to qualify as a Competent Person as defined in the Note for Mining Oil & Gas Companies, June 2009, of the London Stock Exchange and the 2012 Edition of the ‘Australian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’ (JORC Code). Mr. Leeuwner consents to the inclusion of the information in this release in the form and context in which it appears. The information in this report that relates to Mineral Processing and related scientific and technical information, is based on, and fairly represents information compiled by Mr Paul Bibby. Mr Bibby is a Metallurgist and Managing Director of AKORA Resources Limited (AKO), as such he is a shareholder in AKORA Resources Limited. Mr Bibby is a Fellow of the Australasian Institute of Mining and Metallurgy (FAusIMM). Mr Bibby has sufficient experience which is relevant to the styles of mineralisation and its processing under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the JORC Code. Mr Bibby consents to the inclusion in this report of the matters based on his information in the form and context in which it appears including analytical, test data and mineral processing results. The data in this report that relates to Mineral Resource Estimates and Exploration Targets for the Bekisopa deposits is based on information evaluated by Mr Simon Tear who is a Member of The Australasian Institute of Mining and Metallurgy (MAusIMM) and who has sufficient experience relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2012 Edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (the “JORC Code”). Mr Tear is a Director of H&S Consultants Pty Ltd and he consents to the inclusion in the report of the Mineral Resource in the form and context in which they appear. For the quarter ended 30 September 2024 12 Tenement Interests As at 30 September 2024, the Company had interests in the following tenements (as required by Listing Rule 5.3.3). There were no changes in the Company’s interests in tenements during the quarter. Project Location Tenement Number Blocks Bekisopa PR Madagascar, Africa 10430 64 100% Bekisopa PR Madagascar, Africa 27211 128 100% Bekisopa PR Madagascar, Africa 35827 32 100% Bekisopa PRE Madagascar, Africa 3757 16 100% Samelahy PR Madagascar, Africa 6595 98 100% Samelahy PR Madagascar, Africa 13011 33 100% Samelahy PR Madagascar, Africa 21910 3 100% Tratramarina East PR Madagascar, Africa 16635 144 100% Tratramarina East PR Madagascar, Africa 16637 48 100% Tratramarina East PR Madagascar, Africa 17245 160 100% Tratramarina West PRE Madagascar, Africa 18379 16 100% Tratramarina West PRE Madagascar, Africa 18891 48 100% Current Interest For the quarter ended 30 September 2024 Mineral Resources and Ore Reserves AKORA’s Resource at 30 September 2024 13 For the quarter ended 30 September 2024 Table 1. Bekisopa MRE Direct Shipping Ore Zone Notes 1. Mineral Resources are limited by an optimised open pit shell based on appropriate technical and economic parameters. 2. Mineral Resources are not Ore Reserves until they have demonstrated economic viability based on a Pre-Feasibility Study or 1. Feasibility Study. 2. Mineral Resources are reported inclusive of any Ore Reserves. 3. Mineral Resources have been classified in accordance with the guidelines of the JORC Code (2012) by Richard Ellis, an 4. independent Competent Person as defined by JORC. 5. The Mineral Resource estimate has not been affected by any known environmental, permitting, legal, title, taxation, sociopolitical, marketing or any other relevant issues. 6. All figures are rounded to reflect the relative accuracy of the estimate, and apparent errors may occur due to rounding. Upgraded Bekisopa DSO Resource, ASX Announcement 3 June 2024. 14 For the quarter ended 30 September 2024 15 Company Profile Iron ore for tomorrow’s steel making AKORA Resources (ASX: AKO) is an Australian resources company focused on the development of four high-grade iron ore projects in Madagascar. The Company’s flagship Bekisopa Iron Ore Project has a 194.7 million tonne (mt) Inferred JORC Resource (ASX Announcement 11 April 2022) with very low impurities able to produce a premium-priced +68% Fe concentrate. Direct Reduced Iron-Electric Arc Furnace (DRI-EAF) technology which is used to make greener steel without coal and considerably less carbon emissions requires iron ore grades of at least 67%. To generate cash in the near-term, AKORA is advancing plans at Bekisopa to produce up to 2Mt per annum over the first five years of a 60% Fe average grade direct shipping ore (DSO) (ASX Announcement 14 November 2023) for shipping to Blast Furnace-Basic Oxygen Furnace (BF-BOF) steelmakers. The Company confirms that it is not aware of any new information or data that materially affects the above and that all material assumptions and technical parameters underpinning the estimates in the relevant market announcement continue to apply and have not materially changed. For the quarter ended 30 September 2024 16 Appendix 5B Mining exploration entity or oil and gas exploration entity quarterly cash flow report Name of entity AKORA Resources Limited ABN Quarter ended (“current quarter”) 90 139 847 555 30 September 2024 Consolidated statement of cash flows Current quarter $A’000 1. Cash flows from operating activities 1.1 1.2 Receipts from customers Payments for (a) exploration & evaluation (b) development (c) production (d) staff costs (e) administration and corporate costs Dividends received (see note 3) Interest received Interest and other costs of finance paid Income taxes paid Government grants and tax incentives Other (Cash Boost from Commonwealth Government) Net cash from / (used in) operating activities 1.3 1.4 1.5 1.6 1.7 1.8 1.9 2. Cash flows from investing activities 2.1 Payments to acquire or for: (a) entities (b) tenements (c) property, plant and equipment (d) exploration & evaluation (e) investments (f) other non-current assets Proceeds from the disposal of: (a) entities (b) tenements (c) property, plant and equipment (d) investments (e) other non-current assets Cash flows from loans to other entities Dividends received (see note 3) 2.2 2.3 2.4 Year to date (9-months) $A’000 - - (107) (263) (417) (927) 7 17 (363) (1,327) (1,419) (2,396) For the quarter ended 30 September 2024 Consolidated statement of cash flows 2.5 2.6 Other Net cash from / (used in) investing activities 3. Cash flows from financing activities 3.1 Proceeds from issues of equity securities (excluding convertible debt securities) Proceeds from issue of convertible debt securities Proceeds from exercise of options Transaction costs related to issues of equity securities or convertible debt securities Proceeds from borrowings Repayment of borrowings Transaction costs related to loans and borrowings Dividends paid Other (provide details if material) Net cash from / (used in) financing activities 3.2 3.3 3.4 3.5 3.6 3.7 3.8 3.9 3.10 4. Net increase / (decrease) in cash and cash equivalents for the period 4.1 Cash and cash equivalents at beginning of period Net cash from / (used in) operating activities (item 1.9 above) Net cash from / (used in) investing activities (item 2.6 above) Net cash from / (used in) financing activities (item 3.10 above) Effect of movement in exchange rates on cash held Cash and cash equivalents at end of period 4.2 4.3 4.4 4.5 4.6 5. Reconciliation of cash and cash equivalents 17 Current quarter $A’000 Year to date (9-months) $A’000 (1,419) (2,396) 3,811 (272) - 3,539 2,911 1,314 (363) (1,327) (1,419) (2,396) 3,539 (1) 1,129 Current quarter $A’000 1,129 Previous quarter $A’000 at the end of the quarter (as shown in the consolidated statement of cash flows) to the related items in the accounts 5.1 5.2 5.3 5.4 5.5 Bank balances Call deposits Bank overdrafts Other US dollar accounts Cash and cash equivalents at end of quarter (should equal item 4.6 above) 2 1,122 9 2,883 5 1,129 19 2,911 For the quarter ended 30 September 2024 18 6. Payments to related parties of the entity and their associates 6.1 6.2 Current quarter $A'000 Aggregate amount of payments to related parties and their associates included in item 1 Aggregate amount of payments to related parties and their associates included in item 2 107 - Note: Salaries and superannuation for directors. Note: if any amounts are shown in items 6.1 or 6.2, your quarterly activity report must include a description of, and an explanation for, such payments. 7. Financing facilities Note: the term “facility’ includes all forms of financing arrangements available to the entity. Total facility amount at quarter end $A’000 Amount drawn at quarter end $A’000 Add notes as necessary for an understanding of the sources of finance available to the entity. 7.1 7.2 7.3 7.4 Loan facilities Credit standby arrangements Other (Convertible Notes) Total financing facilities 7.5 7.6 Unused financing facilities available at quarter end Include in the box below a description of each facility above, including the lender, interest rate, maturity date and whether it is secured or unsecured. If any additional financing facilities have been entered into or are proposed to be entered into after quarter end, include a note providing details of those facilities as well. $A’000 8. Estimated cash available for future operating activities 8.1 8.2 8.3 8.4 8.5 8.6 8.7 Net cash from / (used in) operating activities (item 1.9) (Payments for exploration & evaluation classified as investing activities) (item 2.1(d)) Total relevant outgoings (item 8.1 + item 8.2) Cash and cash equivalents at quarter end (item 4.6) Unused finance facilities available at quarter end (item 7.5) Total available funding (item 8.4 + item 8.5) Estimated quarters of funding available (item 8.6 divided by item 8.3) 363 1,419 1,782 1,129 1,129 0.63 Note: if the entity has reported positive relevant outgoings (ie a net cash inflow) in item 8.3, answer item 8.7 as “N/A.” Otherwise, a figure for the estimated quarters of funding available must be included in item 8.7. For the quarter ended 30 September 2024 8.8 19 If item 8.7 is less than 2 quarters, please provide answers to the following questions: 8.8.1 Does the entity expect that it will continue to have the current level of net operating cash flows for the time being and, if not, why not? 8.8.2 8.8.3 Answer. No. The Company expenditure on exploration, at both Bekisopa and Satrokala, is completed and the required PFS field work, including hydrology and Geotech drilling, has been completed during Q2 and Q3 2024. Planned work over the next two quarters will be focussed on collating and reporting for the PFS due for release in Q1 2025. Has the entity taken any steps, or does it propose to take any steps, to raise further cash to fund its operations and, if so, what are those steps and how likely does it believe that they will be successful? Answer. No. Does the entity expect to be able to continue its operations and to meet its business objectives and, if so, on what basis? Answer. Yes. Reduced expenditure as stated above in response to 8.8.1. Note: where item 8.7 is less than 2 quarters, all of questions 8.8.1, 8.8.2 and 8.8.3 above must be answered. Compliance statement 1 2 This statement has been prepared in accordance with accounting standards and policies which comply with Listing Rule 19.11A. This statement gives a true and fair view of the matters disclosed. Date: 31 October 2024 Authorised by: Board of Directors (Name of body or officer authorising release – see note 4) Notes 1. This quarterly cash flow report and the accompanying activity report provide a basis for informing the market about the entity’s activities for the past quarter, how they have been financed and the effect this has had on its cash position. An entity that wishes to disclose additional information over and above the minimum required under the Listing Rules is encouraged to do so. 2. If this quarterly cash flow report has been prepared in accordance with Australian Accounting Standards, the definitions in, and provisions of, AASB 6: Exploration for and Evaluation of Mineral Resources and AASB 107: Statement of Cash Flows apply to this report. If this quarterly cash flow report has been prepared in accordance with other accounting standards agreed by ASX pursuant to Listing Rule 19.11A, the corresponding equivalent standards apply to this report. 3. Dividends received may be classified either as cash flows from operating activities or cash flows from investing activities, depending on the accounting policy of the entity. 4. If this report has been authorised for release to the market by your board of directors, you can insert here: “By the board.” If it has been authorised for release to the market by a committee of your board of directors, you can insert here: “By the [name of board committee – e.g. Audit and Risk Committee].” If it has been authorised for release to the market by a disclosure committee, you can insert here: “By the Disclosure Committee.” 5. If this report has been authorised for release to the market by your board of directors and you wish to hold yourself out as complying with recommendation 4.2 of the ASX Corporate Governance Council’s Corporate Governance Principles and Recommendations, the board should have received a declaration from its CEO and CFO that, in their opinion, the financial records of the entity have been properly maintained, that this report complies with the appropriate accounting standards and gives a true and fair view of the cash flows of the entity, and that their opinion has been formed on the basis of a sound system of risk management and internal control which is operating effectively.