Develop Global : Half Year Accounts

Develop Global Limited

ABN 28 122 180 205

Interim Financial Report

for the Half Year ended

31 December 2023

Develop Global Limited

Interim Financial Report

Corporate Directory

DIRECTORS
Michael Blakiston	Non-Executive Chair
Bill Beament	Managing Director
Shirley In't Veld	Non-Executive Director
Justine Magee	Non-Executive Director

COMPANY SECRETARY

Elle Farris

CHIEF FINANCIAL OFFICER

Ben MacKinnon

REGISTERED OFFICE/ PRINCIPAL PLACE OF BUSINESS

234 Railway Parade

West Leederville WA 6007

Australia

Tel: [phone]

Fax: [phone]

ABN

28 122 180 205

WEBSITE

www.develop.com.au

QUOTED SECURITIES

ASX Code: DVP

AUDITORS

BDO Audit (WA) Pty Ltd

Level 9, Mia Yellagonga Tower 2

5 Spring Street

Perth WA 6000

Australia

SHARE REGISTRY

Link Market Services Limited

Level 12, 250 St Georges Terrace

Perth WA 6000

Australia

Tel: [phone]

Fax: [phone]

TABLE OF CONTENTS

Directors' Report -3

Directors' Report Declaration -5 Auditor's Independence Declaration - 6

Consolidated Statement of Profit or Loss and Other Comprehensive Income -7

Consolidated Statement of Financial Position -8

Consolidated Statement of Cash Flows -10

Notes to the Consolidated Financial Statements - 11

Directors' Declaration - 23 Independent Audit's Review Report - 24

2

Develop Global Limited

Interim Financial Report

Directors' Report

The Directors present their report together with the consolidated financial statements of the Group comprising of Develop Global Limited ("Company") and its subsidiaries ("Group") for the half year ended 31 December 2023 and the auditor's report thereon.

Directors

The directors of the Company at any time during or since the end of the financial period are:

Michael Blakiston	Non-Executive Chair
Bill Beament	Managing Director
Shirley In't Veld	Non-Executive Director
Justine Magee	Non-Executive Director

Principal Activities

The principal activities of the Group during the half-year were mineral exploration and development of its projects alongside the operations of its underground mining services division - Develop Mining Services. Key activities during the half-year involved the continued progression towards the development of the Company's Woodlawn project and the acquisition of Essential Metals. The Develop Mining Services Division continued with the ramp-up and progression of the Bellevue contract alongside the establishment of the Tjiwarl Develop JV and the awarding of the Mt Marion Contact.

Review of Operations

During the half year Develop recorded a consolidated loss of $3,697,765 (31 December 2022: $6,399,825). The contract revenue for the half year ended 31 December 2023 was $65,800,203 (31 December 2022: $23,828,708) with $14,864,813 capitalised to Mine Properties and $4,884,011 capitalised to Exploration and Evaluation during the half year to 31 December 2023.

As at 31 December 2023, the Company had 242,615,030 quoted fully paid ordinary shares (30 June 2023: 180,987,603) and 31,915,000 options issued over shares (30 June 2023: 32,008,467).

As at 31 December 2023 the Group held cash reserves of $32,657,325 (30 June 2023: $21,769,145).

Significant changes in State of Affairs

On 6th November 2023, Develop acquired Essential Metals Ltd (Refer Note 11). Essential Metals holds a selection of projects and JV agreements with the most advanced project being the Pioneer Dome Lithium project. The fair value of the exploration assets acquired is $147,901,398 (inclusive of transactions costs). Develop acquired Essential Metals Ltd for $141,346,280 in Ordinary Shares (44,033,109 Ordinary Shares).

During the financial year to date the group entered a 50:50 Joint Venture with the Tjiwarl Contracting Services and commenced ROM Loading work at the Bellevue Gold Project.

Capital structure:

• On 3rd July 2023, the Company announced the proposed acquisition of Essential Metals by scheme of arrangement alongside an ANREO and a capital raise of $50 million at a price of $3.20/share. A total of 44,033,109 shares were issued under the scheme of arrangement and 15,625,000 under the capital raise/ANREO.
• On the 29th November 2023 21,724 share rights were issued to Michael Blakiston in lieu of the director fees owed to him for the July 2023 to Dec 2023 period.
• On the 6th and 14th November 2023, the group issued 922,886 and 180,028 shares respectively in lieu of payment to suppliers.
• During the period 642,083 rights were issued to employees as part of the short term incentive plan and 3,609,453 rights and 855,000 options as part of the longer term incentive plan.
• During the half year 245,883 options and 620,521 rights were converted to shares.

In the opinion of the Directors, there were no other significant changes in the state of affairs of the Group that occurred during the half year under review.

3

Develop Global Limited

Interim Financial Report

Directors' Report

Capital:

At the date of this report, The Group's current capital on issue is:

Ordinary shares	Number
DVP*	242,653,581
Unlisted performance rights
DVPAV	4,380,064
Unlisted share rights
DVPAAI	21,724
Unlisted options - share based payments
DVPAAA	14,000,000
DVPAAB	14,000,000
DVPAY	1,400,000
DVPAAC	200,000
DVPAAG	2,215,000
DVPAAJ	100,000

* 1,376,358 subject to escrow until 4 November 2024.

Events after the Reporting Period

There has not arisen in the interval between the end of the half year and the date of this report any item, transaction, or event of a material and unusual nature likely, in the opinion of the Directors of the Group, to significantly affect the operations of the Group, the results of those operations, or the state of affairs of the Group, in future financial years other than disclosed above.

Rounding of amounts

The company is of a kind referred to in Corporations Instrument 2016/191, issued by the Australian Securities and Investments Commission, relating to 'rounding-off'. Amounts in this report have been rounded off in accordance with that Corporations Instrument to the nearest dollar.

4

Develop Global Limited

Interim Financial Report

Directors' Report Declaration

Directors' Report Declaration

A copy of the Auditor's Independence Declaration as required under section 307C of the Corporations Act 2001 is set out on page 6.

Signed in accordance with a resolution of the Board of Directors.

BILL BEAMENT

Managing Director

Dated this 6th day of March 2024

5

Tel: [phone]	Level 9
Fax: [phone]	Mia Yellagonga Tower 2
www.bdo.com.au	5 Spring Street
	Perth, WA 6000
	PO Box 700 West Perth WA 6872
	Australia

DECLARATION OF INDEPENDENCE BY JARRAD PRUE TO THE DIRECTORS OF DEVELOP GLOBAL LIMITED

As lead auditor for the review of Develop Global Limited for the half-year ended 31 December 2023, I declare that, to the best of my knowledge and belief, there have been:

1. No contraventions of the auditor independence requirements of the Corporations Act 2001 in relation to the review; and
2. No contraventions of any applicable code of professional conduct in relation to the review.

This declaration is in respect of Develop Global Limited and the entities it controlled during the period.

Jarrad Prue

Director

BDO Audit (WA) Pty Ltd

Perth

6 March 2024

1

BDO Audit (WA) Pty Ltd ABN 79 112 284 787 is a member of a national association of independent entities which are all members of BDO Australia Ltd ABN 77 050 110 275, an Australian company limited by guarantee. BDO Audit (WA) Pty Ltd and BDO Australia Ltd are members of BDO International Ltd, a UK company limited by guarantee, and form part of the international BDO network of independent member firms. Liability limited by a scheme approved under Professional Standards Legislation.

Develop Global Limited

Interim Financial Report

Consolidated Statement of Profit or Loss and Other Comprehensive

Income for the Half Year Ended 31 December 2023

		31 December	31 December
		2023	2022
	Note	$	$
Revenue from customers	2	65,800,203	23,828,708
Other Income		955,012	450,052
Profit on Sale of PPE		-	2,013,801
Directors, employees, and consultants' expenses		(31,151,504)	(14,687,892)
Raw Material and Consumables		(21,021,928)	(9,809,113)
Share based payments	10	(4,773,245)	(536,811)
Transport Costs		(948,308)	(678,859)
Finance Costs		(1,475,567)	(1,754,205)
Depreciation and Amortisation expenses		(9,605,556)	(3,130,015)
Other Expenses		(1,476,872)	(2,095,491)
Loss before income tax		(3,697,765)	(6,399,825)
Income tax expense		-	-
Loss after income tax expense		(3,697,765)	(6,399,825)
Other comprehensive income/(loss)
Items that will not be reclassified to profit or loss
Changes in fair value of equity instruments at fair
value through other comprehensive income		(100,000)	-
Other comprehensive income/(loss) for the period,
net of income tax		(100,000)	-
Total Comprehensive income/(loss)		(3,797,765)	(6,399,825)
Profit/(Loss) attributable to
Owners of Develop Global Ltd		(3,805,818)	(6,399,825)
non-controlling interest		108,053	-
Total Comprehensive Profit/(Loss) attributable		(3,697,765)	(6,399,825)
to:
Owners of Develop Global Ltd		(3,905,818)	(6,399,825)
non-controlling interest		108,053	-
		(3,797,765)	(6,399,825)
Loss per share for the half year attributable to
the owners of the Group
Basic loss per share (cents)		(1.77)	(3.94)

The above Consolidated Statement of Profit or Loss and Other Comprehensive Income should be read in conjunction with the accompanying notes.

7

Develop Global Limited			Interim Financial Report
Consolidated Statement of Financial Position as at 31 December 2023
		31 December	30 June
		2023	2023
	Note	$	$
Assets
Current assets
Cash and cash equivalents		32,657,325	21,769,145
Trade and other receivables	3	26,853,620	7,171,254
Inventories		6,619,879	6,046,058
Other assets		2,395,764	1,877,907
Total current assets		68,526,588	36,864,364
Non-current assets
Property, plant, and equipment	5	58,058,250	44,166,114
Right of use assets		24,277,504	26,554,179
Exploration and evaluation expenditure	4	216,636,684	63,848,275
Mine properties	6	83,131,455	68,266,641
Intangibles		2,523,711	2,523,711
Other assets		3,600,080	3,577,000
Total non-current assets		388,227,684	208,935,920
Total assets
	456,754,272	245,800,284
Liabilities
Current liabilities
Trade and other payables		20,815,865	20,079,287
Lease liabilities	7	13,361,185	11,837,506
Borrowings	7	3,611,362	-
Employee benefits		3,196,557	2,417,257
Provisions	8	11,856,071	4,753,163
Total current liabilities		52,841,040	39,087,213
Non-current liabilities
Lease liabilities	7	11,499,178	16,075,642
Borrowings	7	5,488,020	-
Employee benefits		177,938	142,738
Provisions		17,445,179	16,518,525
Contract liabilities		24,689,238	24,359,867
Total non-current liabilities		59,299,553	57,096,772
Total liabilities
	112,140,593	96,183,985
Net assets
	344,613,679	149,616,299
Equity
Issued capital	9	424,125,339	228,283,584
Reserves	9,10	127,862,672	125,009,281
Accumulated losses		(207,482,384)	(203,676,566)
Total Equity attributable to Owners		344,505,626	149,616,299
Non-Controlling Interest		108,053	-
Total equity		344,613,679	149,616,299

The above Consolidated Statement of Financial Position should be read in conjunction with the accompanying notes.

8

Develop Global LimitedInterim Financial Report

Consolidated Statement of Changes in Equity for the Half year ended

31 December 2023

			Share Based	Asset	Non-
		Issued	Compensation	Revaluation	Controlling	Accumulated
		Capital	Reserve	Reserve	Interest	Losses	Total Equity
	Note	$	$	$	$	$	$
Balance at 30 June
2022		202,081,283	128,215,812	-	-	(185,743,026)	144,554,069
Loss for the period		-	-	-	-	(6,399,825)	(6,399,825)
Total comprehensive
loss for the period		-	-	-	-	(6,399,825)	(6,399,825)
Transactions with
owners in their
capacity as owners:
Issue of securities	9	630,300	-	-	-	-	630,300
Security issue costs	9	(45,279)	-	-	-	-	(45,279)
Share based payments
Expensed	10	-	728,004	-	-	-	728,004
Share based payments
Exercised	9,10	70,590	(70,590)	-	-	-	-
Share based payments
Expired	10	-	(191,193)	-	-	-	(191,193)
Options exercised	10	424,411	-	-	-	-	424,411
Issue of securities -
Purchase of Premium
Group		7,726,611	-	-	-	-	7,726,611
Balance at 31
December 2022		210,887,916	128,682,033	-	-	(192,142,851)	147,427,098
Balance at 30 June
2023		228,283,584	125,009,281	-	-	(203,676,566)	149,616,299
Loss for the period		-	-	(100,000)	108,053	(3,805,818)	(3,797,765)
Total comprehensive
loss for the period		-	-	(100,000)	108,053	(3,805,818)	(3,797,765)
Transactions with
owners in their
capacity as owners:
Issue of securities	9	53,503,581	-	-	-	-	53,503,581
Security issue costs	9	(1,068,901)	-	-	-	-	(1,068,901)
Performance rights
Expensed	10	-	4,342,921	-	-	-	4,342,921
Performance rights
Exercised	9,10	1,894,802	(1,894,802)	-	-	-	-
Performance rights
Expired	10	-	-	-	-	-	-
Options Expensed	10	-	505,272	-	-	-	505,272
Options Exercised	9	165,994	-	-	-	-	165,994
Issue of securities -
Acquisition of Essential
Metals Ltd	11	141,346,280	-	-	-	-	141,346,280
Balance at 31
December 2023		424,125,339	127,962,672	(100,000)	108,053	(207,482,384)	344,613,679

The above Consolidated Statement of Changes in Equity should be read in conjunction with the accompanying notes.

9

Develop Global Limited

Interim Financial Report

Consolidated Statement of Cash Flows for the Half Year Ended 31 December 2023

	31 December	31 December
	2023	2022
Note	$	$
Cash flows from operating activities
Receipts from customers	50,696,835	21,729,191
Payments to suppliers and employees	(58,811,391)	(23,809,218)
Interest received	807,763	310,948
Interest paid	(1,090,128)	(367,676)
Net cash used in operating activities	(8,396,921)	(2,136,755)
Cash flows from investing activities
Payment for purchases of plant and equipment	(7,620,843)	(3,804,388)
Proceeds from sale of plant and equipment	1,001	2,500,000
Payment for exploration and evaluation
expenditure	(3,632,095)	(10,676,645)
Payment for Mine Properties	(13,025,457)
Payment for purchase of Heron Resources Ltd	-	(448,238)
Payment for purchase of Premium Group	-	(812,244)
Net Cash acquired from the purchase of Essential
Metals Ltd	2,642,482	-
Payment for other assets	(1,000,000)	(238,934)
Net cash used in investing activities	(22,634,912)	(13,480,449)
Cash flows from financing activities
Proceeds from issue of securities	49,970,683	630,300
Proceeds from conversion of options into shares	267,377	423,674
Capital raising costs	(819,912)	(86,487)
Repayments of lease liabilities	(7,498,135)	(1,920,357)
Net cash (used in) provided by financing
activities	41,920,013	(952,870)
Net increase (decrease) in cash and cash
equivalents	10,888,180	(16,570,074)
Cash and cash equivalents at the beginning of the
period	21,769,145	43,206,524
Cash and cash equivalents at the end of the
period	32,657,325	26,636,450

The above Consolidated Statement of Cash Flows should be read in conjunction with the accompanying notes.

10