Energy Metals : 2021 Corporate Governance Statement

ENERGY METALS LIMITED

A.B.N. 63 111 306 533

2021 CORPORATE GOVERNANCE STATEMENT

Corporate Governance Statement

It is the responsibility of the Board of Directors of Energy Metals Limited to monitor the business affairs of the Company and to protect the rights and interests of the shareholders. The Board believes that high standards of corporate governance are an essential prerequisite for creating sustainable value for shareholders. This statement outlines the Company's key corporate governance policies and practices in place throughout the financial year ended 31 December 2021. The policies and practices have aimed to ensure the implementation of a strategic business plan and an integrated framework of accountability over the Company's resources, functions and assets.

The Company's most significant governance policies are available on the Company's websitewww.energymetals.net

This Corporate Governance Statement, dated 31 December 2021 and approved by the Board on 14 April 2022.

Corporate Governance Principles and Recommendations 4th Edition issued by ASX Corporate Governance Council

Principal 1: Lay solid foundations for management and oversight

ASX Corporate Governance Council's Recommendation (4th Edition) 1.1:

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

• (a) The respective roles and responsibilities of its board and management; and

• (b) Those matters expressly reserved to the board and those delegated to management.

The Company has and discloses its formal Board Charter athttps://energymetals.net/corporate-corporate-governance/ . Under the Board Charter, the Board is responsible for the direction and strategy of the Company. It makes decisions on overall control process and corporate governance to protect and promote shareholders' interest. The responsibilities of the Board mainly include:

• - Providing strategic direction and establishing goals for management;

• - Monitoring the progress and achievement of these goals;

• - Identifying business risks and ensuring appropriate risk management in place;

• - Approving the appointment of directors and senior executives and their remuneration packages;

• - Overseeing management's implementation of the Company's strategic objectives and their performance;

• - Approving operating budgets and significant capital expenditure and investments;

• - Approving annual and half yearly financial reports.

During the year, the Board's governance priorities and areas of focus included:

• - Oversight and monitoring of employee safety during the COVID-19 pandemic;

• - Review and approve exploration budgets and major work programs in response to the COVID-19 pandemic;

• - Oversight and monitoring of cost reduction programs.

The management is responsible for the day-to-day operations and administration of the Company. The management is also responsible to implement and execute the policies and strategy set by the Board.

The Managing Director (CEO) directly reports to the Chairman on all significant business matters. His responsibilities include (but not limited to):

• - Executing the Board-approved strategy and budgets;

• - Instilling the Code of Conduct;

• - Presenting material business information to the Board to enable it to fulfill its responsibilities.

A listed entity should disclose:

• (a) undertake appropriate checks before appointing a director or senior executive or putting someone forward for election as a director; and

• (b) provide security holders with all material information in its possession relevant to a decision on whether or not to elect or re-elect a director.

The Board is comprised of six non-executive directors and one executive director. Under the acquisition agreement with China General Nuclear Power Group ("CGNPC") in 2009 and the placement agreement with Kang De Investment Group ("Kang De") in 2010, CGNPC and Kang De can nominate four positions and one position on the Board respectively. Kang De has transferred all its equity interest to Ningbo Weisheng Dingxuan Equity Inv Cap Partnership, who thus can nominate a position on EME's board. While five directors are nominated by two largest shareholders, the Board brings an independent judgement on business matters and act in the best interests of shareholders as a whole rather than in the interest of an individual shareholder or other party.

When a candidate is standing for election as a director or a senior executive, detailed biographical details, including their relevant qualifications and experience and the skills, are circulated to the Board for consideration. The Board will conduct appropriate checks into the candidate's background and experience. Confirmation of any other material directorships currently held by the candidate and his/her own interest in the Company's securities is required from the candidate. The newly appointed director holds office only until the next following annual general meeting and is then eligible for election by shareholders.

Under the Constitution of the Company, one third of the Directors, other than the Managing Director, are required to retire from office at each Annual General Meeting to ensure that no Director other than alternate Directors and the Managing Director holds office for more than 3 years.

All material biographical information of the candidate as well as the Board's statement as to whether it supports the election or re-election of the candidate are disclosed in the Notice of the Meeting.

Mr Lindsay Dudfield and Mr Xu Zhe will retire by rotation in 2022 and stand for re-election at the 2022 AGM. Mr Yusheng Cai, who was appointed a director on 25 January 2022, will stand for election. Details of their respective skills and experience are outlined in the Notice of Annual General Meeting 2022. The Board considers that their experience and skills complements and strengthens the Board's existing skills and experience. The re-election of Mr Lindsay Dudfield and Mr Xu Zhe and election of Mr Yusheng Cai are unanimously supported by all other directors.

ASX Corporate Governance Council's Recommendation (4th Edition) 1.3:

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

On appointment to the Board, all non-executive directors enter into a service agreement with the Company in the form of a letter of appointment. The appointment letters are between the Company and the directors personally. The letter summarises the Board policies and terms of appointment, including compensation relevant to the office of director, the requirement to disclose the director's interests and any matters which could affect the director's independence. Remuneration and other terms of employment for the Executive Director and other Senior Executives are formalised in service agreements or employment agreements. Material terms of contracts of directors and senior executives are disclosed in the Remuneration Report every year.

ASX Corporate Governance Council's Recommendation (4th Edition) 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 is accountable directly to the Board, through the chair on all matters related to the proper functioning of the Board. The Company Secretary communicates with all directors on a regular basis and has the direct access to the chair for all matters related to the proper functioning of the board.

• (a) have and disclose a diversity policy;

• (b) through its board or a committee of the board, set measurable objectives for achieving gender diversity in the composition of its board, senior executives and workforce generally; and

• (c) disclose in relation to each reporting period:

  • (1) the measurable objectives set for that period to achieve gender diversity;

  • (2) the entity's progress towards achieving those objectives; and

  • (3) either:

    • (i) 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

    • (ii) if the entity is a "relevant employer" under the Workplace Gender Equality Act, the entity's most recent "Gender Equality Indicators", as defined and published under the Act.

The Company has not complied with the above Recommendation as it does not have a formal diversity policy, nor does it establish measurable objectives for achieving gender diversity and annually reviewing those objectives.

However, the Company acknowledges the importance of diversity and recognizes the benefit brought to the business. During its business practice, the Company encourages and promotes a fair and open environment to all staff regardless of gender, age, ethnicity, marital, religion and so on. Discrimination and harassment are not acceptable in the workplace.

With the current size of the Company (less than 5 full time employees) and its level of activity, the Board does not consider it appropriate to formalize a diversity policy or establish measureable objectives for gender diversity. Every candidate suitably qualified for a position has an equal opportunity of appointment regardless of gender, age, ethnicity or cultural background.

The proportion of women within the whole organization, in senior executive positions and women on the Board as at the date of this report are:

Number	Percentage
Number of women employees in the whole organization	2	50%
Number of women in senior executive positions	1	50%
Number of women on the Board	1	14%

ASX Corporate Governance Council's Recommendation (4th Edition) 1.6：

A listed entity should:

• (a) have and disclose a process for periodically evaluating the performance of the board, its committees and individual directors; and

• (b) disclose, for each reporting period, whether a performance evaluation was undertaken in the reporting period in accordance with that process during or in respect of that period.

The Company has a formal process to evaluate the performance of the Executive Director but not the Board or other non-executive directors. The non-executive Chairman who generally review the performance of the Executive Director by considering actual financial and operational results with the approved targets. With the current size of the Company and its level of activity, the Board does not consider it appropriate to have formal process to evaluate individual directors. During the year a performance evaluation was undertaken on the executive director, with no performance evaluations undertaken on the Non-executive directors.

Name	Age	Position and Period of Office Held	Special Expertise
Yusheng Cai	53	Non-executive Chairman appointed 25	Engineering, Resource Industry
January 2022
Shuqing Xiao	41	Managing Director for 4 years	Geologist, Resource Industry
Lindsay Dudfield	65	Non-executive Director for 11 years;	Geologist, Resource Industry,
Corporate Management
Zhe Gao	48	Non-executive Director for 3 years	Finance and Corporate
Management
Jan Macpherson	67	Non-executive Director for 5 years	Legal & Corporate Management
Zhe Xu	45	Non-executive Director for 2 year	Engineering & Uranium research
Jun Zhou	50	Non-executive Director for 1 year	Financial Management
4

• (a) have and disclose a process for periodically evaluating the performance of its senior executives at least once every reporting period; and

• (b) disclose for each reporting period, whether a performance evaluation has been undertaken in the reporting period in accordance with that process during or in respect of that period.

The Company has a formal process to evaluate the performance of its senior executives. The Chairman of the Board reviews the performance of the CEO and the Company Secretary according to their job responsibilities. The Managing Director evaluate the performance of other senior executives. Evaluation meetings are held at the year-end where both parties will discuss performance during the year against the pre-set targets. The performance evaluation was undertaken during the year.

Principal 2: Structure the board to be effective and add value

ASX Corporate Governance Council's Recommendation (4th Edition) Recommendation 2.1:

The board of a listed entity should:

• (a) have a nomination committee;

• (b) 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,

The Company does not have a nomination committee. When a new director appointment is to be made the remaining board members seek a candidate with relevant industry experience and who is willing to serve on the Board. The Board will assess the candidate's knowledge and experience before approving the appointment. The newly appointed director stands for election by shareholders at the next annual general meeting. At every Annual General Meeting one third of the Directors (except the alternate directors and Managing Director) must retire and sit for re-election.

ASX Corporate Governance Council's Recommendation (4th Edition) Recommendation 2.2:

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

Skills and experience of each director are disclosed in the Directors' Report in the Company's annual report. The Directors of the Company in office at the date of this statement are: