AustChina : Half Yearly Report 31 December 2021

AUSTCHINA HOLDINGS LIMITED

ABN 20 075 877 075

HALF-YEAR REPORT - 31 DECEMBER 2021

DIRECTORS' REPORT

FOR THE HALF-YEAR ENDED 31 DECEMBER 2021

Your directors present their report on AustChina Holdings Limited (referred to hereafter as the 'consolidated entity' or 'group') for the half-year ended 31 December 2021.

DIRECTORS

The following persons were directors of AustChina Holdings Limited during the whole of the half-year and up to the date of this report, unless otherwise stated:

Daniel Chan

George Lam

Andrew MacIntosh

David Morris

Bernard Ripoll

PRINCIPAL ACTIVITIES

During the financial half-year, the principal activity of the Group consisted of exploration and investment in energy and resources.

REVIEW OF OPERATIONS

The profit for the consolidated entity after providing for income tax amounted to $556,546 (2020: loss $711,853).

COVID has not materially impacted the operations of the Group and it is not expected to adversely impact the asset values or future funding of the Group.

Strategic Direction

The Company's key strategic focuses are:

1. Exploration and development of existing coal projects for the creating of longer-term shareholder value.
2. Seek opportunities in the energy sector to produce energy products
3. Seek opportunities in the resources sector, and
4. Acquisition of a suitable project to provide cash flow in the short to medium term.

AustChina's Coal Project

AustChina holds two current exploration permits for coal (EPCs), located near Blackall in Central Queensland. The EPCs (1719 and 1993) comprise a single project-based administration area approved by the Department of Natural Resources, Mines and Energy.

A schedule of the Exploration Permits held on 31 December 2021 by AustChina is provided in Table 1.

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DIRECTORS' REPORT

FOR THE HALF-YEARENDED 31 DECEMBER 2021 (continued)

		OWNERSHIP
TENEMENT	PROJECT NAME	%	DATE GRANTED	EXPIRY DATE
EPC 1719	BARCOO RIVER-BLACKALL RAIL	100	28/07/2010	27/07/2025
EPC 1993	BLACKALL SOUTH CORNER	100	17/03/2010	16/03/2026

Table 1: AustChina Holdings Limited Tenement Portfolio

The potential of the Blackall Coal Project is considered to lie in alternative technologies for the use for the coal on-site to produce products including ammonia, methanol, hydrogen, and energy, with other by-products. The company is looking to take advantage of opportunities within the developing "hydrogen economy". The company's focus is the long-term production of energy products.

On 15 October 2021, AUH announced it had entered into a non-binding Memorandum of Understanding with Fortress Capital Limited to conduct due diligence on a new technology that could enhance AustChina's energy portfolio through the conversion of solid fuels including coal, municipal household and commercial waste, biomass, and other material to generate cleaner environmentally responsible electricity. This process has the potential to reduce carbon emissions and utilise fuel sources such as coal, municipal household and commercial waste that would otherwise go to landfill to produce energy for its own purposes or for sale to the electricity grid.

Due to Covid influenced unavoidable delays in initial proof of concept testing AustChina will, after completion of the due diligence expected in March 2022, determine the applicability of the technology, and optimal application of the technology for the advancement of its energy portfolio.There were no substantive mining production or development activities undertaken during the period.

Investment in Biogas Renewable Energy Sector

AustChina holds 25.12% of Queensland, Australia based bioenergy developer Utilitas Group Pty Ltd, and is well positioned in the bioenergy and bioproducts field in Australia. Utilitas and key project counterparts, have advanced Bankable Feasibility Studies on its top three priority projects Bundaberg, Hunter & Dandenong, and continue to add to its future pipeline of projects.

The 9.5 acre repurposed sewerage treatment plant site, now the Bundaberg bioHub development located in Queensland was successfully fully tenanted and subsequently sold to property developer Smart Capital, unlocking the first bioHub concept that showcases several businesses synergistically operating on the site.

Community support for biogas and related industries has continued to strengthen and is being reflected within local governments and businesses. Initiatives such as the Bundaberg Bioeconomy Conference have had a positive social impact which has extended beyond the Bundaberg region, Utilitas presented and showcased an update at this conference.

The two other priority projects for Utilitas are Dandenong in Victoria and Hunter Valley in New South Wales are tracking into feasibility and are well positioned to secure commercial agreements to shore up project economic viability.

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DIRECTORS' REPORT

FOR THE HALF-YEAR ENDED 31 DECEMBER 2021

(continued)

Investment in Sector Projects Pty Ltd, now Revolver Resources Holdings Limited (ASX: RRR) Through the sale of its subsidiary Surat Gas Pty Ltd which completed on 28 September 2018, AustChina acquired 5% of the issued capital of Sector Projects Pty Ltd (Sector). On 23 September 2021, Sector merged with Dianne Mining Corporation Pty Ltd and listed on the ASX as Revolver Resources Holdings Limited. (Revolver)

Revolver successfully raised $12.7m through the issue of 63,622,633 shares at an issue price of $0.20 AustChina owns 2.5m shares in Revolver.

Revolver's portfolio consists of 2 projects, Project Osprey (formerly owned by Sector) and the Dianne Project.

• The Dianne Project is a near-term production prospect north-west of Cairns comprising 6 mining eases and an exploration permit covering 116km2 Historically, Dianne produced 63,758 tonnes of high-grade copper ore with an average grade of 22.7% Cu.
• The Osprey Project consists of 6 exploration permits north of Mount Isa with established prospectivity for Iron Oxide Copper Gold and Mount Isa style targets covering approximately 765km2

Revolver has continued with its exploration of the Dianne Project through IP electrical geophysical surveying. Revolver reported in December 2021 a series of priority anomalies proximate to the Massive Sulphide Body, potentially representing further concealed untested sulphide mineralisation.

SUBSEQUENT EVENTS OCCURRING AFTER THE BALANCE SHEET DATE

No matters or circumstances have arisen since 31 December 2021 that have significantly affected, or may significantly affect, the operations of the consolidated entity, the results of those operations or the state of affairs of the consolidated entity in future financial years.

SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS

There were no other significant changes in the state of affairs of the consolidated entity during the financial half-year.

AUDITOR'S INDEPENDENCE DECLARATION

A copy of the auditor's independence declaration as required under section 307C of the Corporations Act 2001 is set out on the following page.

This report is made in accordance with a resolution of directors, pursuant to section 306(3)(a) of the Corporations Act 2001.

1. Chan Chairman

15 March 2022

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Auditor's Independence Declaration under section 307C of the Corporations Act 2001

To the Board of Directors of AustChina Holdings Limited

As lead auditor for the review of the financial report of AustChina Holdings Limited and the entities it controlled at the end of the period or from time to time during the period 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:

1. the auditor independence requirements of the Corporations Act 2001 in relation to the review; and
2. any applicable code of professional conduct in relation to the review.

Nexia Brisbane Audit Pty Ltd

Gavin Ruddell

Director

Date: 15 March 2022

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