Hawthorn Resources : December 2021 Financial Report

Hawthorn Resources Limited

ABN 44 009 157 439

FINANCIAL REPORT

FOR THE HALF YEAR ENDED 31 DECEMBER 2021

THIS REPORT SHOULD BE READ IN CONJUNCTION WITH

THE JUNE 2021 ANNUAL FINANCIAL REPORT AND

THE SEPTEMBER AND DECEMBER 2021 QUARTERLY ACTIVITY STATEMENTS

These reports can be viewed on the Company's website at:

www.hawthornresources.com

Hawthorn Resources Limited

Table of Contents

1	Corporate Directory	3
2	Directors' Report	4
3	Auditor's Independence Declaration	7
4	Financial Statements	8
5	Statement of Profit or Loss and Other
	Comprehensive Income	9
6	Statement of Financial Position	10
7	Statement of Cash Flows	11
8	Statement of Changes in Equity	12
9	Notes to the Financial Statements	13
10	Directors' Declaration	16
11	Independent Auditor's Review Report	17

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Hawthorn Resources Limited

Corporate Directory

Directors

Yijie Li (Chairman and Non-Executive Director)

Mark G Kerr (Managing Director and CEO)

David S Tyrwhitt (Non-Executive Director)

Yongzhong Liao (Non-Executive Director)

Zhensheng Liu (Non-Executive Director)

Brian Thornton (Non-Executive Director)

Company Secretary

Glenn Fowles

Mines Operations Manager

William Lloyd

Chief Financial Officer

Tony Amato

Registered Office and Domicile

Level 2, 90 William Street, Melbourne, Victoria 3000 Australia

Telephone: [phone]

E-mail:[e-mail]

Internet:http://www.hawthornresources.com

Legal Form

A public company - Liability Limited by Shares

Country of Incorporation

Australia

Share Registry

Link Market Services Ltd,

Collins Square Tower Four, 727 Collins Street, Melbourne Victoria 3008, Australia Telephone: [phone] (toll free within Australia)

Auditors

BDO Audit Pty Ltd

Collins Square, Tower Four, Level 18, 727 Collins Street

Melbourne VIC 3008, Australia

Australian Securities Exchange Listing Code

HAW	Ordinary shares

Bankers

National Australia Bank Limited

Level 1, 99 Bell Street

Preston Victoria 3072 Australia

Solicitors

Minter Ellison Lawyers

Rialto Towers, 525 Collins Street

Melbourne Victoria 3000, Australia

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Hawthorn Resources Limited

Directors' Report

The Directors of Hawthorn Resources Limited present their report for the half year ended 31 December 2021.

1 DIRECTORATE

The Directors of the Company in office since 1 July 2021 and up to the date of this Report are:

Mr Yijie Li	Chairman and Non-Executive Director
Mr Mark G. Kerr	Managing Director and CEO
Dr David S Tyrwhitt	Non-Executive Director
Mr Yongzhou Liao	Non-Executive Director
Mr Zhensheng Liu	Non-Executive Director
Mr Brian Thornton	Non-Executive Director

2 REVIEW AND RESULTS OF OPERATIONS

2.1 Objectives

The Company's objective is to increase shareholder wealth through successful exploration and mining development activities whilst providing a safe workplace and ensuring best practice in relation to its environmental obligations.

2.2 Results

During the half year the Company recorded revenues of $5,705 (2020: $79,786) and generated a consolidated total

comprehensive loss from contributing operations of $1,064,785 for the half-year ended 31 December 2021 (2020: loss of $1,776,378).

Statement of Profit or Loss and Other Comprehensive Income

Consolidated comprehensive loss for the half year amounted to $1,064,785 (2020: $1,776,378 loss). Mine costs expensed

for the half year amounted to $153,199 (2020: $Nil). Exploration and evaluation expenditure written off during the half year

amounted to $373,058 (2020: $1,236,114).

Statement of Financial Position

At 31 December 2021, the consolidated entity had cash and cash equivalents on hand of $10,624,938 (30 June 2021: $12,115,231) and trade and other receivables of $131,401 (30 June 2021: $61,956), with net current assets of $8,306,895 (30 June 2021: $9,624,451). Total net assets amount to $12,219,149 (30 June 2021 $13,283,934), including exploration and evaluation assets of $3,714,346 (30 June 2021: $3,461,575).

Cash Flow

During the half-year, the consolidated entity's cash and cash equivalents decreased by $1,490,293 (31 December 2020: $16,096,965) with operations expenditure of $861,588 (2020: $704,153). Payments for exploration and development expenditure amounted to $628,705 (2020: $1,629,825).

2.3 Corporate Activities

Funding

Issued Securities

2.3.1 ASX Quoted Ordinary fully paid shares:

As at 31 December 2021, and as at the date of this report, the number of ordinary shares on issue is represented by 333,515,613 ordinary fully paid shares (30 June 2021: 333,515,613).

2.3.2 Non-Quoted Performance Rights

As at 31 December 2021 and as at the date of this report the number of Performance Rights subject to achievement of performance milestones is NIL (30 June 2021: NIL).

Net Asset Backing per Share

As at 31 December the Net Asset Backing per one ordinary fully paid share:

December 2021	$0.0366
June 2021	$0.0398

2.4 Dividends

The Company has not paid a dividend during the period nor has proposed a dividend.

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Hawthorn Resources Limited

Directors' Report

2.5	Earnings per Share
		Dec 2021	Dec 2020
	Basic (loss) / earnings per share	($0.00306)	($0.00534)
	Diluted (loss) / earnings per share	($0.00306)	($0.00534)

2.6 Exploration and Mining Operations

The Company provided updates and information about its exploration and mining operations that have occurred during the half-year ended 31 December 2021 by way of ASX releases on the following dates:

1. 30 July 2021 - Edjudina drilling update - Tenement M 31 481 o 8 September 2021 - Market Update - Trouser Legs Mining JV o 1 November 2021 - September 2021 Quarterly Activities Reports o 15 November 2021 - Hancock to earn in to the Mt Bevan project o 31 January 2021 - HAW - December 2021 Quarterly Report

Other than the information contained in these releases and the additional disclosure referenced in section 2.8 ("Subsequent Events") below, there is no other material information for these operations.

2.7 COVID-19 Pandemic

On 30 January 2020 the World Health Organisation ("WHO") declared a Public Health Emergency of International Concern in relation to the coronavirus (COVID-19) pandemic, subsequently characterising COVID-19 as a pandemic affecting worldwide. The Australian Federal and State governments introduced legislation to help control the spread of the COVID- 19 virus, impacting how work places operated. The Western Australia state government introduced a State of Emergency in March 2020, limiting movement within the state, and also between WA and other states. The Victorian state government introduced a State of Disaster placing further restrictions upon workplaces in Victoria.

Judgement has been exercised in considering the impacts that the measures undertaken to limit the impacts of the COVID- 19 pandemic has had, or may have, on the Company based on known information. This consideration extends to the nature of the Company's operations, supply chain, staffing and geographic regions in which the Company operates. Other than as addressed in specific notes in this report, there does not currently appear to be either any significant impact upon the financial statements or any significant uncertainties with respect to events or conditions which may impact the Company unfavourably as at the reporting date or subsequently as a result of the Coronavirus (COVID-19) pandemic.

2.8 Subsequent Events

As announced in the ASX release on 14 February 2022 entitled "Company Update", the Company Secretary, Mourice Garbutt, retired and Glenn Fowles was appointed in his position.

In addition to advising the change of Company Secretary, this release provided an update about the gold activities of the Trouser Legs Mining JV. This update noted the agreement between the JV and Golden Mile Milling to process an initial run of 50,000 tonnes of stockpiled low-grade ore at the Lakewood mill in Kalgoorlie. A parcel of 27,580 dry metric tonnes was initially processed, and a second parcel of 22,000 tonnes has recently been processed. The processed ore is expected to generate revenues for the joint venture, and it is expected to be cash flow positive.

Other than the above, there have not been any matters or circumstances, other than those referred to in the financial statements or referred to elsewhere in this Directors' Report, that have arisen since the end of the financial half-year, 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.

2.9 Environmental Regulation

The Company, as an exploration / mining entity, is subject to both State and Federal legislation - in particular the Mining Act WA 1978, as amended 2010, covering Environmental; Hydrological; Geotechnical and O H & S matters as referred to under the Act.

The Company is not aware of any material breaches of any of these environmental related regulations.

2.10 Health & Safety

The Board, CEO and senior management team are committed to creating a positive environment for the health and wellbeing of the Company's employees and anyone affected by our operations, including contractors and visitors.

3 AUDITOR'S INDEPENDENCE DECLARATION

The auditor's independence declaration as required under Section 307C of the Corporations Act 2001 is attached to this Report.

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