Announcement PDF Estrella Resources Limited and its controlled entities ABN 39 151 155 207 Interim Financial Report For the half year ended 31 December 2021 ESTRELLA RESOURCES LIMITED Contents Page Directors’ Report 3 Auditor’s Independence Declaration 10 Consolidated Statement of Profit or Loss and Other Comprehensive Income 11 Consolidated Statement of Financial Position 12 Consolidated Statement of Changes in Equity 13 Consolidated Statement of Cash Flows 14 Notes to the Financial Statements 15 Directors’ Declaration 19 Independent Auditor’s Review Report 20 Corporate Directory 22 Page 2 ESTRELLA RESOURCES LIMITED DIRECTORS’ REPORT The Directors present their report together with the financial report of Estrella Resources Limited ("the Company") and its wholly owned subsidiaries (together referred hereafter as “the Group” or “the consolidated entity”) for the half-year ended 31 December 2021 and the independent auditors' review report thereon. The Directors of the Company at any time during or since the end of the half-year are: Leslie Pereira Christopher Daws John Kingswood Stephen Brockhurst Neil Hutchison - Non-executive Chairman - Managing Director - Non-executive Director - Non-executive Director - Non-executive Director PRINCIPAL ACTIVITIES The principal activities of the Group during the reporting period were to explore nickel projects in Western Australia. REVIEW OF OPERATIONS Work Summary The focus of fieldwork and studies during the half-year were the Carr Boyd Nickel Project with limited drill targeting work on the Spargoville Nickel Project along with progressing plans to mine the deposit. CARR BOYD NICKEL PROJECT, WA 100% The Company considerably strengthened its exploration efforts at the Carr Boyd Nickel Project over the halfyear utilising one diamond drill rig and one RC rig. Work predominantly involved mapping and drill testing of the Carr Boyd basal contact so as to identify and narrow down exploration targets. Three main areas were identified (Figure 1), including the previously discovered T5 mineralisation. These areas are the T5-Broonhill Pyroxenites, the Mossgiel Pyroxenites and the Gossan Hill Pyroxenites. RC drilling at Broonhill and diamond drilling at Mossgiel identified that the pyroxenites are fertile, carrying nickel sulphides, and hence the basal contacts in those areas are highly prospective for additional massive sulphide discoveries. A total of 11 diamond holes with 3 wedges were drilled for +6,000m of drilling into T5 and Mossgiel. A total of 53 RC holes for +11,000m targeted the T5 and Broonhill Prospects (Table 1). Additional work involving the CSIRO was commenced, looking at classifying and dating the Carr Boyd Intrusion and also looking at the source of the Carr Boyd Deposit and its relationship to the T5 Basal Contact Mineralisation. Page 3 ESTRELLA RESOURCES LIMITED DIRECTORS’ REPORT Figure 1. Working Exploration Model depicting the Carr Boyd Igneous. Paleo-gravity is towards the bottom of the image. This means that Broonhill-T5, Mossgiel and Gossan Hill are likely to be true basal contact positions and therefore highly prospective. Table 1: Drill hole collar and survey details as at the end of the December 2020 Hole CBDD056 CBDD056A CBDD057 CBDD058 CBDD059 CBDD060 CBDD061 CBDD062 CBDD062A CBDD062B CBDD063 CBP044 CBP045 CBP046 CBP047 CBP048 CBP049 CBP050 CBP051 CBP052 CBP053 CBP054 CBP055 CBP056 CBP057 CBP058 Type DD DD RC / DD DD DD RC / DD DD DD DD DD DD RC RC RC RC RC RC RC RC RC RC / DD RC / DD RC RC RC RC Depth 877.5 831.8 606.7 260.2 288.7 741.6 462.6 672.9 540.8 441.8 283.4 336 194 240 240 239 222 288 288 285 582.3 351.6 59 227 203 167 mE 367392.6 367392.6 367370 365265 365266 367372 365560 367414 367414 367414 365354 367759 367189 367229 367244 367245 367277 367246 367254 367307 367296 367294 367175 367221 367222 367201 mN 6672993 6672993 6673580 6670955 6670955 6673580 6670955 6673750 6673750 6673750 6670550 6673129 6673901 6673843 6673752 6673648 6673567 6673511 6673346 6673163 6673123 6672915 6674017 6674015 6674014 6674136 Page 4 mRL 427.3 427.3 431.9 429.6 429.6 431.9 434.5 433.6 433.6 433.6 427 429.16 440.213 438.25 436.945 435.656 433.829 434.13 432.31 429.51 429.12 426.5 438.9 441.2 441.2 443.3 Tenement M31/12 M31/12 M31/12 E29/982 E29/982 M31/12 E29/982 M31/12 M31/12 M31/12 E29/982 M31/12 M31/12 M31/12 M31/12 M31/12 M31/12 M31/12 M31/12 M31/12 M31/12 M31/12 E31/726 E31/726 E31/726 E31/726 Prospect Carr Boyd Carr Boyd T5 Mossgiel Mossgiel T5 Mossgiel T5 T5 T5 Mossgiel Carr Boyd T5 T5 T5 T5 T5 T5 T5 Carr Boyd Carr Boyd Carr Boyd T5 T5 T5 T5 ESTRELLA RESOURCES LIMITED DIRECTORS’ REPORT CBP059 CBP060 CBP061 CBP062 CBP063 CBP064 CBP065 CBP066 CBP067 CBP068 CBP069 CBP070 CBP071 CBP072 CBP073 CBP074 CBP075 CBP076 CBP077 CBP078 CBP079 CBP080 CBP081 CBP082 CBP083 CBP084 CBP085 CBP086 CBP087 CBP088 CBP089 CBP090 CBP091 CBP092 CBP093 CBP094 CBP095 CBP096 RC RC RC RC RC RC RC RC RC RC RC RC RC RC RC RC RC RC RC RC RC RC RC RC RC RC RC RC RC RC RC RC RC RC RC RC RC RC 236 95 107 167 181 179 185 77 107 143 215 101 119 150 125 197 257 371 346 281 324 359 317 127 239 239 233 131 131 125 167 191 173 239 125 191 187 83 367260 367183 367232 367289 367300 367290 367248 367299 367377 367463 367463 367310 367374 367443 367597 367649 367709 367729 367481 367533 367528 367729 367738 367689 367732 367819 367857 367758 367779 367799 367821 367866 368987 368988 368635.6 368637.1 368384 368384 6674140 6674383 6674382 6674384 6674386 6674383 6674667 6674629 6674630 6674629 6674630 6674869 6674869 6674869 6674932 6674933 6674933 6674933 6674383 6674625 6674625 6674933 6674930 6675115 6675115 6675116 6675115 6675343 6675265 6675189 6675121 6675120 6676163 6676081 6675878 6675786 6675701 6675591 Page 5 442.6 445 444 443.8 443.8 443.8 446 447.1 447.2 444.8 444.8 444.2 442.6 442 440 442 444 444 440 442 442 444 444 450 450.8 449.7 448.5 444.4 445.6 446.1 445 447.9 431.4 430.9 430.9 429.9 433 432.2 E31/726 E31/726 E31/726 E31/726 E31/726 E31/726 E31/726 E31/726 E31/726 E31/726 E31/726 E31/726 E31/726 E31/726 E31/726 E31/726 E31/726 E31/726 E31/726 E31/726 E31/726 E31/726 E31/726 E31/726 E31/726 E31/726 E31/726 E31/726 E31/726 E31/726 E31/726 E31/726 E31/726 E31/726 E31/726 E31/726 E31/726 E31/726 T5 Broonhill Broonhill Broonhill Broonhill Broonhill Broonhill Broonhill Broonhill Broonhill Broonhill Broonhill Broonhill Broonhill Broonhill Broonhill Broonhill Broonhill Broonhill Broonhill Broonhill Broonhill Broonhill Broonhill Broonhill Broonhill Broonhill Broonhill Broonhill Broonhill Broonhill Broonhill Broonhill Broonhill Broonhill Broonhill Broonhill Broonhill ESTRELLA RESOURCES LIMITED DIRECTORS’ REPORT Figure 2. Location of Carr Boyd relation to commercial centres and other major Ni projects. SPARGOVILLE NICKEL RIGHTS PROJECT, 100% WA The Company has been progressing the potential development of the high grade 5A nickel sulphide deposit during the half-year with Permit of Work application and Exploration Notification being finalised for the extraction of a bulk sample of the 5A ore for metallurgical testing. In light of the recent strength in the nickel market and the positive outlook, the Company has undertaken steps towards commercialisation of the 5A nickel sulphide Mineral Resource with discussions ongoing regarding the treatment of potential high grade nickel sulphide ore recovered from shallow open pit mining. Due to tight constraints of the current land tenure with the proposed mining area the Company has been in discussions with adjacent landholders for the use of their land to allow the full extraction of the identified 5A ore. Previous drilling has highlighted high grade nickel mineralisation very close to surface and a simple pit cut back of the historic 5A mine has strong merit in light of the current nickel market. The 5A nickel sulphide deposit is one of a number of significant nickel sulphide occurrences that make up the Company’s 100% owned Spargoville Nickel Rights Project which was purchased at a time when nickel projects were not in favour and nickel prices were much lower. Page 6 ESTRELLA RESOURCES LIMITED DIRECTORS’ REPORT 5A Nickel Sulphide Deposit October 2019 Mineral Resource Estimate - Min Type (0.5% Ni Cut-off) Indicated Mineral Resource Type Tonnage Ni Cu Ni Cu kt % % t t Disseminated 37 0.7 0.05 250 20 Matrix/Breccia 20 2.1 0.17 430 30 Semi-massive/Massive 12 8.1 0.63 950 70 Total 69 2.4 0.19 1,630 130 Inferred Mineral Resource Type Tonnage Ni Cu Ni Cu kt % % t t Disseminated 41 0.7 0.10 270 40 Matrix/Breccia 17 2.5 0.13 410 20 Semi-massive/Massive 1 7.6 0.35 60 Total 58 1.3 0.11 730 70 Total Mineral Resource Type Tonnage Ni Cu Ni Cu kt % % t t Disseminated 78 0.7 0.08 520 60 Matrix/Breccia 37 2.3 0.16 840 60 Semi-massive/Massive 13 8.0 0.61 1,000 80 Total 127 1.9 0.15 2,370 190 Competent Person Statement The information in this announcement relating to Exploration Results is based on information compiled by Steve Warriner, who is the Exploration Manager of Estrella Resources, and a member of The Australasian Institute of Geoscientists. Mr. Warriner has sufficient experience relevant to the style of mineralisation and type of deposit under consideration, and to the activity 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 Resource and Ore Reserves”. Mr. Warriner consents to the inclusion in the report of the matters based on his information in the form and context in which it appears. Page 7 ESTRELLA RESOURCES LIMITED DIRECTORS’ REPORT The information in this announcement relating to the Spargoville 5A Mineral Resources is based on information compiled under supervision by Mr Shaun Searle of Ashmore Advisory Pty Ltd, who is a consultant to Estrella Resources, and a member of The Australasian Institute of Geoscientists. Mr Warriner and Mr Searle both have sufficient experience relevant to the style of mineralisation and type of deposit under consideration, and to the activity they are undertaking to qualify as a Competent Person as defined in the 2012 Edition of the “Australasian Code for Reporting of Exploration Results, Mineral Resource and Ore Reserves”. Both Mr. Hutchison and Mr. Searle consent to the inclusion in the report of the matters based on the information in the form and context in which it appears. RESULTS The loss for the half year ended 31 December 2021 attributable to the Group was $1,129,406 (2020: profit $828,404). CORPORATE As at 31 December 2021 the Group had $5,102,954 in cash and the Company had the following securities on issue:  1,177,043,740 fully paid ordinary shares;  239,363,575 listed options exercisable at $0.02 on or before 27 June 2031 July 2023;  5,000,000 unlisted options exercisable at $0.05 on or before 1 June 2022;  10,000,000 unlisted options exercisable at $0.10 on or before 30 June 2022  11,500,000 unlisted options exercisable at $0.03 on or before 20 November 2022; and  16,600,000 unlisted options exercisable at $0.20 on or before 17 November 2023. EVENTS SUBSEQUENT TO REPORTING DATE On 20 January 2022 the Company announced that it had launched a sales process for the Spargoville Nickel Project Rights. The sales process was initiated having received a number of unsolicited approaches to acquire or JV the Project. On 21 January 2022 the Company issued 14,000,000 unquoted options exercisable at $0.06 and expiring 21 January 2025 pursuant to the Company’s Employee Share Option Plan. Other than as outlined above, there are no other events subsequent to the end of the period that would have had a material effect on the company’s financial statements at 31 December 2021. Page 8 ESTRELLA RESOURCES LIMITED DIRECTORS’ REPORT AUDITOR’S INDEPENDENCE DECLARATION The lead auditor’s independence declaration forms part of the directors’ report for the half-year ended 31 December 2021. Signed in accordance with a resolution of directors, pursuant to section 306(3)(a) of the Corporations Act 2001. Christopher Daws Managing Director 8 March 2022 Page 9 RSM Australia Partners Level 32 Exchange Tower, 2 The Esplanade Perth WA 6000 GPO Box R1253 Perth WA 6844 T +61 (0) 8 9261 9100 F +61 (0) 8 9261 9111 www.rsm.com.au AUDITOR’S INDEPENDENCE DECLARATION As lead auditor for the review of the financial report of Estrella Resources Limited for the half-year ended 31 December 2021, I declare that, to the best of my knowledge and belief, there have been no contraventions of: (i) the auditor independence requirements of the Corporations Act 2001 in relation to the review; and (ii) any applicable code of professional conduct in relation to the review. RSM AUSTRALIA PARTNERS Perth, WA Dated: 8 March 2022 ALASDAIR WHYTE Partner THE POWER OF BEING UNDERSTOOD AUDIT | TAX | CONSULTING RSM Australia Partners is a member of the RSM network and trades as RSM. RSM is the trading name used by the members of the RSM network. Each member of the RSM network is an independent accounting and consulting firm which practices in its own right. The RSM network is not itself a separate legal entity in any jurisdiction. RSM Australia Partners ABN 36 965 185 036 Liability limited by a scheme approved under Professional Standards Legislation CONSOLIDATED STATEME NT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME FOR THE HALF-YEAR ENDED 31 DECEMBER 202 1 31 December 2021 $ Interest Income 31 December 2020 $ 1,260 1,076 - 1,411,511 Personnel costs and director fees (205,310) (125,992) Legal Fees (19,517) (9,188) Exploration costs written off (6,155) - Consulting fees (303,507) (106,767) Share Based Payments (359,802) (156,411) Depreciation (60,611) (13,362) Finance costs (23,114) (152,650) (43,816) (128,647) (LOSS) / PROFIT BEFORE INCOME TAX (1,129,406) 828,404 Income tax benefit (1,129,406) 828,404 - - (1,129,406) 828,404 Basic (loss) / earnings per share (cents) (0.10) 0.11 Diluted (loss) / earnings per share (cents) (0.10) 0.08 Gain on disposal of tenements Other expenses (LOSS) / PROFIT FOR THE PERIOD Other Comprehensive Loss TOTAL COMPREHENSIVE (LOSS) / INCOME FOR THE PERIOD The consolidated statement of profit or loss and other comprehensive Income should be read in conjunction with the attached notes to the financial statements. Page 11 CONSOLIDATED STATEME NT OF FINANCIAL POSI TION AS AT 31 DECEMBER 20 21 Note Current Assets Cash and cash equivalents Trade and other receivables Financial assets at fair value through profit or loss Total Current Assets 31 December 2021 $ 30 June 2021 $ 5,102,954 554,688 3,548,908 261,338 83,214 5,740,856 65,662 3,875,908 464,915 15,150,887 15,615,802 21,356,658 392,477 11,152,025 11,544,502 15,420,410 Current Liabilities Trade and other payables Provisions Borrowings Total Current Liabilities 800,475 179,530 185,387 1,165,392 1,058,171 275,326 69,695 1,403,192 Total Liabilities Net Assets 1,165,392 20,191,266 1,403,192 14,017,218 34,360,409 1,504,986 (15,674,129) 20,191,266 27,535,256 1,026,685 (14,544,723) 14,017,218 Non-Current Assets Plant & equipment Exploration and evaluation expenditure Total Non-Current Assets Total Assets Equity Share capital Reserves Accumulated losses Total Equity 2 3 3 The consolidated statement of financial position should be read in conjunction with the attached notes to the financial statements. Page 12 CONSOLIDATED STATEME NT OF CHANGES IN EQUITY FOR THE HALF-YEAR ENDED 31 DECEMBER 2021 Issued Capital Accumulated Losses Option Reserve Convertible Note Reserve Total Equity $ $ $ $ $ 17,905,893 (14,492,107) 535,880 58,000 4,007,666 - 828,404 828,404 - - 828,404 828,404 Transactions with owners, in their capacity as owners Shares issued Options issued Share based payment Share issue costs Total transactions with owners, in their capacity as owners 5,457,541 (315,940) - 20,000 156,411 - - 5,457,541 20,000 156,411 (315,940) 5,141,601 - 176,411 - 5,318,012 Balance at 31 December 2020 23,047,494 (13,663,703) 712,291 58,000 10,154,082 Balance at 1 July 2021 Balance at 1 July 2015 Comprehensive Comprehensive loss loss 27,535,256 (14,544,723) 968,684 58,000 - (1,129,406) (1,129,406) - - 14,017,217 +73034551129406 746 (1,129,406) (1,129,406) Options issued Share based payment Share issue costs 7,650,204 (825,051) - 359,802 118,500 - 7,650,204 359,802 (706,551) Total transactions with owners, in their capacity as owners 6,825,153 - 478,302 - 7,303,455 Balance at 31 December 2021 34,360,409 (15,674,129) 1,446,986 58,000 20,191,266 Balance at 1 July 2020 Comprehensive loss Profit for the period Total comprehensive loss for the period Loss for the period Total comprehensive loss for the period Transactions with owners, in their capacity as owners Shares issued Page 13 - CONSOLIDATED STATEME NT OF CASH FLOWS FOR THE HALF-YEAR ENDED 31 DECEMBER 2021 31 December 2021 $ 31 December 2020 $ CASH FLOWS FROM OPERATING ACTIVITIES Payments to suppliers and employees Interest received Interest paid NET CASH USED IN OPERATING ACTIVITIES (746,825) 1,260 (745,565) (371,516) 1,076 (3,000) (373,440) CASH FLOWS FROM INVESTING ACTIVITIES Payments for exploration expenditure Payments for investments Payments for plant and equipment Proceeds from sale of exploration rights NET CASH USED IN INVESTING ACTIVITIES (4,066,294) (56,015) (133,048) (4,255,357) (2,378,492) (50,000) (354,871) 1,243,906 (1,539,457) CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from issue of shares Proceeds from issue of options Repayment of borrowings Costs of issue of shares NET CASH PROVIDED BY FINANCING ACTIVITIES 7,341,219 (786,251) 6,554,968 5,446,702 20,000 (50,000) (339,653) 5,077,049 Net increase in cash held Cash at the beginning of the financial period 1,554,046 3,548,908 3,164,152 36,479 CASH AT THE END OF THE FINANCIAL PERIOD 5,102,954 3,200,631 The consolidated statement of cash flows should be read in conjunction with the attached notes to the financial statements. Page 14 NOTES TO THE FINANCI AL STATEMENTS 1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES BASIS OF PREPARATION The half-year consolidated financial statements are a general purpose financial report which has been prepared in accordance with the requirements of the Corporations Act 2001 and Australian Accounting Standard AASB 134: Interim Financial Reporting. The consolidated half-year financial report does not include all of the information required for a full annual financial report. The half-year financial report is to be read in conjunction with the most recent annual financial report for the year ended 30 June 2021. This report must also be read in conjunction with any public announcements made by Estrella Resources Limited and its controlled entities during the half-year. The financial statements have been prepared on an accruals basis and are based on historical costs, modified, where applicable, by the measurement at fair value of certain non-current assets, financial assets and financial liabilities. The financial statements are presented in Australian dollars which is the Company’s functional and presentation currency. These interim financial statements were authorised for issue on 8 March 2022. (B) USE OF ESTIMATES AND JUDGEMENTS The preparation of financial statements requires management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised and in any future periods affected. (C) ACCOUNTING POLICIES The same accounting policies and methods of computation have been followed in this interim financial report as were applied in the most recent annual financial statements. (D) NEW AND REVISED STANDARDS AND AMENDMENTS THEREOF AND INTERPRETATIONS EFFECTIVE FOR THE CURRENT HALF-YEAR THAT ARE RELEVANT TO THE CONSOLIDATED ENTITY The adoption of all the new and revised Standards and Interpretations has not resulted in any changes to the consolidated entity’s accounting policies and has no effect on the amounts reported for the current or prior half-years. Any new, revised or amending Accounting Standards or Interpretations that are not yet mandatory have not been early adopted. Page 15 NOTES TO THE FINANCI AL STATEMENTS 2. EXPLORATION AND EVALUATION EXPENDITURE Exploration and evaluation assets Balance at the beginning of period Exploration costs capitalised Disposal of tenements Balance at the end of reporting period 31 December 2021 $ 30 June 2021 $ 11,152,025 3,998,862 15,150,887 4,586,994 6,843,764 (278,733) 11,152,025 The ultimate recoupment of balances carried forward in relation to areas of interest still in the exploration or valuation phase is dependent on successful development, and commercial exploitation, or alternatively sale of the respective areas. The Company conducts impairment testing on an annual basis when indicators of impairment are present at the reporting date. 3. SHARE CAPITAL & RESE RVES Issued capital Option reserve Convertible note reserve (a) (b) 31 December 2021 $ 34,360,409 1,446,968 58,000 30 June 2021 $ 27,535,256 968,685 58,000 Shares 1,005,696,722 144,668,333 11,678,685 15,000,000 1,177,043,740 $ 27,535,256 7,233,417 116,787 300,000 (825,051) 34,360,409 (a) Reconciliation of movement during the period: Opening balance on 1 July 2021 Placement of ESRO underwritten options Conversion of convertible note during the period Option conversions during the period Share issue costs Closing balance on 31 December 2021 31 December 2021 $ 968,684 478,302 1,446,986 (b) Movement in option reserve Opening balance on 1 July 2021 Share based payment during the period Closing Balance on 31 December 2021 (c) Outstanding Share Options As at 31 December 2021 the company had the following share options outstanding: Expiry Date and Price OPTIONS EXP 1/06/22 @ $0.05 OPTIONS EXP 30/06/21 @0.10 OPTIONS EXP 20/11/22 @ $0.03 OPTIONS EXP 17/11/23 @0.20 OPTIONS EXP 31/07/23 @ $0.02 Type Unlisted Option Unlisted Option Unlisted Option Unlisted Option Listed Option Page 16 Number 5,000,000 10,000,000 11,500,000 16,600,000 239,363,575 282,463,575 NOTES TO THE FINANCI AL STATEMENTS 4. SHARE BASED PAYMENTS The share based payment expense for the period is for options issued during the period and vesting of options issued in previous reporting periods 31 December 2021 31 December 2020 $ $ Options issued to employees and consultants 148,802 156,411 Options issued to corporate advisors (a) 211,000 - Options issued to underwriters (b) 118,500 - Options a) Options issued to corporate advisors During the reporting period, 10,000,000 options were issued to Henslow Pty Ltd pursuant to a corporate advisory agreement. Grant Date/entitlement Unlisted options issued for corporate broking services Number of Instruments 10,000,000 Grant Date 1/7/2021 Fair value per instrument $ 0.0211 Value $ 211,000 b) Options issued to underwriters During the reporting period, 5,000,000 options were issued to Henslow Pty Ltd pursuant to an underwriting agreement. Grant Date/entitlement Unlisted options issued for underwriting services Number of Instruments 5,000,000 Grant Date 6/7/2021 Fair value per instrument $ 0.0237 Value $ 118,500 The options issued during the period were calculated using the Hoadley’s Trinomial Barrier option pricing model with the following inputs: Options granted Expected volatility (%) Risk free interest rate (%) Weighted average expected life of options (years) Expected dividends Option exercise price ($) Share price at grant date ($) 195% 0.06%/0.07% 0.9 – 1.0 $0.05/$0.10 $0.046 / $0.047 5. SEGMENT INFORMATION AASB 8 requires operating segments to be identified on the basis of internal reports about components of the consolidated entity that are regularly reviewed by the chief operating decision maker in order to allocate resources to the segment and to assess its performance. Page 17 NOTES TO THE FINANCI AL STATEMENTS The consolidated entity operates in one segment, being exploration for mineral resources. This is the basis on which internal reports are provided to the Directors for assessing performance and determining the allocation of resources within the consolidated entity. The consolidated entity operates in Australia. 6. CONTINGENT ASSETS AND LIABILITIES In the opinion of the directors, there were no significant changes in contingent assets or liabilities during the period ended 31 December 2021. 7. COMMITMENTS In the opinion of the directors, there were no significant changes in commitments during the period ended 31 December 2021. 8. EVENTS SUBSEQUENT TO REPORTING DATE On 20 January 2022 the Company announced that it had launched a sales process for the Spargoville Nickel Project Rights. The sales process was initiated having received a number of unsolicited approaches to acquire or JV the Project. On 21 January 2022 the Company issued 14,000,000 unquoted options exercisable at $0.06 and expiring 21 January 2025 pursuant to the Company’s Employee Share Option Plan. Other than as outlined above there are no other events subsequent to the end of the period that would have a material effect on the company’s financial statements at 31 December 2021. 9. INTEREST IN CONTROLL ED ENTITIES The consolidated financial statements incorporate the assets, liabilities and the results of the following subsidiaries in accordance with the accounting policy described in note 1: Controlled entities Country of incorporation Percentage owned Percentage owned 31 December 2021 30 June 2021 WA Nickel Pty Ltd Australia 100% 100% Carr Boyd Nickel Pty Ltd Australia 100% 100% Chile 100% 100% Estrella Resources (Chile) SpA 10. DIVIDENDS No dividend has been declared or paid during the half-year ended 31 December 2021. The Directors do not recommend the payment of a dividend in respect of the half-year ended 31 December 2021. Page 18 DIRECTORS’ DECLARATION In the opinion of the Directors of Estrella Resources Limited: (a) The attached financial statements and notes: (i) comply with Accounting Standard AASB 134 ‘Interim Financial Reporting’, the Corporations Act 2001, the Corporations Regulations 2001 and other mandatory professional reporting requirements; and (ii) give a true and fair view of the consolidated entity’s financial position as at 31 December 2021 and of the consolidated entity’s performance, for the half-year ended on that date. (b) there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable. Signed in accordance with a resolution of directors made pursuant to section 303(5)(a) of the Corporations Act 2001. Christopher Daws Managing Director 8 March 2022 Page 19 RSM Australia Partners Level 32, Exchange Tower, 2 The Esplanade Perth WA 6000 GPO Box R1253 Perth WA 6844 T +61 (0) 8 9261 9100 F +61 (0) 8 9261 9111 www.rsm.com.au INDEPENDENT AUDITOR’S REVIEW REPORT TO THE MEMBERS OF ESTRELLA RESOURCES LIMITED Report on the Half-Year Financial Report We have reviewed the accompanying half-year financial report of Estrella Resources Limited which comprises the statement of financial position as at 31 December 2021, the statement of profit or loss and other comprehensive income, statement of changes in equity and statement of cash flows for the half-year ended on that date, notes comprising a summary of significant accounting policies and other explanatory information and the directors’ declaration of the consolidated entity comprising the company and the entities it controlled at the half-year end or from time to time during the half-year. Directors’ Responsibility for the Half-Year Financial Report The directors of the company are responsible for the preparation of the half-year financial report that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal control as the directors determine is necessary to enable the preparation of the half-year financial report that is free from material misstatement, whether due to fraud or error. Auditor’s Responsibility Our responsibility is to express a conclusion on the half-year financial report based on our review. We conducted our review in accordance with Auditing Standard on Review Engagements ASRE 2410 Review of a Financial Report Performed by the Independent Auditor of the Entity, in order to state whether, on the basis of the procedures described, we have become aware of any matter that makes us believe that the half-year financial report is not in accordance with the Corporations Act 2001 including: giving a true and fair view of the consolidated entity’s financial position as at 31 December 2021 and its performance for the half-year ended on that date; and complying with Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Regulations 2001. As the auditor of Estrella Resources Limited, ASRE 2410 requires that we comply with the ethical requirements relevant to the audit of the annual financial report. A review of a half-year financial report consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with Australian Auditing Standards and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audi