Announcement PDF LITHIUM AUSTRALIA LIMITED ACN 126 129 413 FINANCIAL REPORT FOR THE HALF-YEAR ENDED 31 DECEMBER 2023 CORPORATE DIRECTORY Directors Simon Linge George Bauk Kristie Young Phil Thick Managing Director and CEO (Appointed Managing Director on 21 August 2023) Non-Executive Chair Non-Executive Director Non-Executive Director Executive Management Stuart Tarrant Chief Financial Officer Joint - Company Secretary Catherine Grant-Edwards Melissa Chapman Registered Office and Principal Place of Business Suite 16 & 17, 79-83 High Street Kew VIC 3101 T: +61 (0) 3 7017 2656 E: info@lithium-au.com Bank National Australia Bank 100 St Georges Terrace Perth WA 6000 Auditors Hall Chadwick WA Audit Pty Ltd (Hall Chadwick) 283 Rokeby Road Subiaco WA 6008 Share Registry Advanced Share Registry 110 Stirling Highway Nedlands WA 6009 T: +61 8 9389 8033 Website www.lithium-au.com Investor Hub https://investorhub.lithium-au.com/ Stock Exchange Listing Lithium Australia Limited securities are listed on Australian Securities Exchange (ASX Codes: LIT, LITOA, LITOB) Lithium Australia Limited ACN: 126 129 413 Page 1 DIRECTORS’ REPORT The Directors present their report on Lithium Australia Limited (“LIT”, “Lithium Australia” or the “Company”) and its controlled entities (the “Group”) for the year half-year ended 31 December 2023. Board of Directors The names and details of the Group’s directors in office during the year and until the date of this report are as follows. Directors were in office for this entire period unless otherwise stated. Simon Linge George Bauk Kristie Young Phil Thick Managing Director & CEO (Appointed Managing Director on 21 August 2023) Non-Executive Chair Non-Executive Director Non-Executive Director Results of operations The operating loss after income tax of the Group for the half-year ended 31 December 2023 was $4,542,545 (31 December 2022: loss of $1,572,090). No dividend has been paid during or is recommended for the financial period ended 31 December 2023. The Group’s working capital surplus, being current assets less current liabilities was $2,418,303 at 31 December 2023 (30 June 2023: working capital surplus of $10,261,445). In the Directors’ opinion, there are reasonable grounds to believe that the Group will be able to pay its debts as and when they become due and payable. REVIEW OF OPERATIONS Battery Recycling Lithium Australia operates a revenue generating battery recycling division through its fully owned subsidiary Envirostream Australia Pty Ltd, Australia’s leading and only battery recycler which processes batteries domestically. Collected batteries are processed at the Company’s state-of-the-art facilities based in Victoria. The Company has secured its future supply for battery collections through strong partnerships, while also benefitting from the Australian government-backed battery recycling scheme, B-cycle, which provides rebates across the collection, sorting, and processing of batteries. Key events during the period include: ▪ 752 tonnes of batteries collected during H1 FY24, increasing 14% relative to H1 FY23 ▪ 345 tonnes of lithium-ion batteries (LIBs) were collected during H1 FY24, increasing 27% relative to H1 FY23 ▪ Recycling revenues of A$2.6m in H1 FY24, increasing 11% relative to H1 FY23 however a decline in global metal prices such as cobalt and nickel reduced Mixed Metal Dust (MMD) revenues ▪ Completed recycling process optimisation work resulting in up to 25% greater MMD yield per tonne of LIBs processed ▪ Productivity and safety improvements made at recycling facilities, including the installation of new fire walls at the Laverton North facility ▪ Significant progress made in relation to signing supply agreements with major EV/ESS manufacturers to secure future LIB supply Lithium Australia Limited ACN: 126 129 413 Page 2 DIRECTORS’ REPORT (Cont.) Patented Technologies Lithium Chemicals Lithium Australia has developed a suite of unique extraction and refining technologies for the recovery of lithium chemicals from un-used fine and low-grade lithium ores. The Company’s LieNA® patented technology has the potential to enhance lithium extraction yields by up to 50% 1 over current market performance. The technology specifically targets fine and low-grade ores, which are usually disposed of as waste streams, improving mining output, efficiency, sustainability and ultimately profitability for lithium mine operators. Lithium Australia is executing on its strategy to commercialise this technology through joint development partnerships. Key events during the period include: ▪ Landmark joint development agreement (“JDA”) signed with Mineral Resources Limited (ASX: MIN) (“MinRes”) related to disruptive lithium extraction technology LieNA® ▪ Lithium Australia successfully drew down initial funding of A$0.9m from the A$4.5m convertible note issued by MinRes, with funds allocated to agreed JDA activities relating to the LieNA® technology ▪ Subsequent to the half-year period, Lithium Australia confirmed a second drawdown of A$0.8m from the convertible note and appointed Carnac Project Delivery Services as the lead engineer for the demonstration plant engineering study Battery Materials Lithium Australia has over 20 years’ experience in developing lithium ferro phosphate (LFP), a cathode active material used for battery manufacturing, through the Company’s fully owned subsidiary VSPC Pty Ltd. The Company utilises a proprietary production process to manufacture LFP at scale. The same propriety production process is also able to produce lithium manganese ferro phosphate (LMFP), which can reach an energy density 15% to 20% higher than LFP batteries, with minimal difference in the cost of material inputs. The Company aims to commercialise the LFP / LMFP technology through joint development partnerships with relevant global parties. Key events during the period include: ▪ Lithium Australia’s LFP cathode active material shown to match, or exceed, leading competitor products based on testing by NOVONIX ▪ Lithium Australia announced the signing of a memorandum of understanding (MOU) with First Phosphate Corp. (CSE: PHOS), in relation to the potential development of an LFP / LFMP cathode active material manufacturing plant in North America ▪ Progressed business development activities, exploring opportunities to engage with joint development partners for commercialisation Corporate During H1 FY24, the following corporate activities were conducted: ▪ Successfully closed the unmarketable parcel sale facility announced in Q4 FY23 ▪ Announced promotion of Mr. Simon Linge to the Company’s Board as Managing Director, in addition to his ongoing role as Chief Executive Officer (CEO) ▪ Signed binding agreement with Charger Metals NL (ASX: CHR) for the sale of Lithium Australia’s remaining interest in the Lake Johnston Lithium Project for a A$2.0m cash consideration (with sale completed subsequent to the period) ▪ Disposal of non-core listed and unlisted investments totalling cash inflows of A$1.3m. 1 Relates to LieNA®. Assumes existing mine concentrator is 60%: 60% to 90% Li recovery increase assumes LieNA® recovers 75% of lithium units going to tails. Lithium Australia Limited ACN: 126 129 413 Page 3 DIRECTORS’ REPORT (Cont.) Subsequent events ▪ On 11 January 2024, the Company completed the sale of its remaining 30% interest in the Lake Johnston Lithium Project to Charger Metals NL (ASX: CHR) (“Charger”). The sale resulted in a total cash consideration of A$2.0m, consisting of an initial A$0.15m non-refundable exclusivity payment (received during the period to 31 December 2023) and the balance of A$1.85m received on completion. ▪ On 15 January 2024, the Company drew down additional funding from the A$4.5m convertible note, issued by MinRes as part of the joint development agreement entered into on the 7 August 2023. The drawdown of ~A$0.8m, received in January 2024, will cover agreed activities under the agreement from 1 January 2024 until the end of Q3 FY24, with funds allocated to piloting activities and the engineering study relating to the LieNA® technology. ▪ On 1 February 2024, the Group received A$1.2m cash for the research and development (“R&D”) tax incentive rebate from the Australian Tax Office for the 2023 financial year. ▪ As at 26 February 2024, the increase/(decrease) in share price had the following effect on the fair value of the investments held: INVESTMENT SHARE PRICE AT 31 DECMEBER 2023 $0.165 $0.034 $0.055 SHARE PRICE AT 26 FEBRUARY 2024 $0.125 $0.025 $- INCREASE/ (DECREASE) IN SHARE PRICE ($0.040) ($0.009) - INCREASE/ (DECREASE) IN FAIR VALUE Charger Metal (ASX: CHR)1 ($304,000) Evion (ASX: EVG)1 ($110,363) Imagine Lithium (TSX: ILI)2 ($414,363) 1No change in number of shares held. 2 Subsequent to the period end the 500,000 Imagine Lithium shares were disposed of. NUMBER OF SHARES HELD* 7,600,000 12,262,571 - There are no other events subsequent to 31 December 2023 and up to the date of this report that would materially affect the operations of the Group or its state of affairs which have not otherwise been disclosed in this financial report. Unmarketable Parcel Sale Facility In May 2023, Lithium Australia established an unmarketable parcel sale facility (‘UMPSF’) for shareholders who held less than $500 worth of fully paid ordinary shares in the Group. The UMPSF was closed in July 2023 with the final number of shares eligible to be sold being 46,819,251 from a total of 7,253 shareholders. This will benefit the Group, as it reduces the administrative costs associated with maintaining a large number of small shareholdings on the share register. Auditor’s independence declaration Section 307C of the Corporations Act 2001 requires our auditors, Hall Chadwick, to provide the Directors of the Group with an Independence Declaration in relation to the review of the interim financial report. This Independence Declaration is set out on page 5 and forms part of this directors’ report for the half-year ended 31 December 2023. This report is made in accordance with a resolution of the Directors. George Bauk Non-executive Chair Dated at Perth this 27th day of February 2024 Lithium Australia Limited ACN: 126 129 413 Page 4 AUDITOR’S INDEPENDENCE DECLARATION UNDER SECTION 307C OF THE CORPORATIONS ACT 2001 As lead audit Director for the review of the financial statements of Lithium Australia Limited for the half year ended 31 December 2023, I declare that to the best of my knowledge and belief, there have been no contraventions of: • the auditor independence requirements of the Corporations Act 2001 in relation to the review; and • any applicable code of professional conduct in relation to the review. Yours Faithfully, HALL CHADWICK WA AUDIT PTY LTD MARK DELAURENTIS CA Director Dated 27th day of February 2024 Perth, Western Australia Page 5 CONDENSED CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME For the Half-Year Ended 31 December 2023 Half-year ended 31-Dec-2023 Half-year ended 31-Dec-2022 Revenue from continuing operations $ 2,584,792 $ 2,322,779 Cost of sales (2,360,206) (1,718,729) Gross profit 224,586 604,050 Finance income 36,894 30,119 2,215,378 5,876,921 Laboratory/plant expense (322,116) (1,087,426) Employee benefits expense (4,382,591) (3,622,035) Note Other income 2 Selling and distribution expense Administration costs Depreciation and amortisation (431,459) (341,434) (1,104,232) (883,771) (734,099) (1,664,924) (44,926) (8,567) Other expenses - (475,023) Loss before income tax (4,542,565) (1,572,090) - - (4,542,565) (1,572,090) - 700 (3,305,018) 892,027 (7,847,583) (679,363) (4,542,168) (397) (1,566,474) (5,616) (4,542,565) (1,572,090) (7,847,186) (397) (673,747) (5,616) (7,847,583) (679,363) (0.37) (0.14) Finance costs 3 Income tax expense Loss from continuing operations Other comprehensive income Items that may be reclassified subsequently to profit or loss: Exchange differences on translating foreign operation Items that may not be reclassified subsequently to profit or loss: Net fair value gain/(loss) on financial assets Total comprehensive loss for the year Loss for the year attributable to: Members of the controlling entity Non-controlling interest Total comprehensive loss attributable to: Members of the controlling entity Non-controlling interest Basic loss per share (cents per share) The above statement of profit or loss and other comprehensive income should be read in conjunction with the accompanying notes. Lithium Australia Limited ACN: 126 129 413 Page 6 CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION As at 31 December 2023 31 December 2023 30 June 2023 $ $ Cash and cash equivalents 4,930,666 9,047,417 Trade and other receivables 2,520,270 1,008,355 Note Current assets Inventory Financial assets 4 Assets classified as held for sale Total current assets 778,083 733,745 2,140,757 6,564,460 144,000 - 10,513,776 17,353,977 Non-current assets - 144,000 Intangible assets 4,665,653 4,562,733 Right of use asset 1,231,424 1,210,780 Property, plant and equipment 2,375,637 1,811,817 Total non-current assets 8,272,714 7,729,330 TOTAL ASSETS 18,786,490 25,083,307 2,772,917 2,463,846 Capitalised exploration expenditure Current liabilities Trade and other payables Lease liability 634,337 669,312 Provisions 5 3,746,145 3,959,374 Loans and borrowings 6 942,074 8,095,473 7,092,532 640,493 616,239 11,956 11,833 652,449 628,072 TOTAL LIABILITIES 8,747,922 7,720,604 NET ASSETS 10,038,568 17,362,703 Issued capital 99,835,467 99,796,467 Reserves 1,305,846 3,044,199 Accumulated losses (90,296,022) (84,671,637) Controlling entity interest 10,845,291 18,169,029 Non-controlling interest (806,723) (806,326) TOTAL EQUITY 10,038,568 17,362,703 Total current liabilities Non-current liabilities Lease liability Provisions 5 Total non-current liabilities Equity The above statement of financial position should be read in conjunction with the accompanying notes. Lithium Australia Limited ACN: 126 129 413 Page 7 CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY For the Half-Year Ended 31 December 2023 Issued Capital Share Based Payment Reserve $ Foreign Currency Translation Reserve $ 99,796,467 613,446 38,275 2,392,478 Loss for the year - - - Other comprehensive income Net fair value gain/(loss) on financial assets Effects of exchange rates on foreign currency translation Total comprehensive loss for the period - - 39,000 99,835,467 Half year ended 31 December 2023 $ Balance at 1 July 2023 Transaction with owners directly recording in equity: Issue of shares Exercise of performance rights Expiry of options Issue/amortisation of performance rights Transfer from investment revaluation reserve Balance at 31 December 2023 Other Reserves(a) Accumulated Losses NonControlling Interest Total $ $ (84,671,637) (806,326) 17,362,703 - (4,542,168) (397) (4,542,565) - (3,305,018) (3,305,018) (4,542,168) (397) (3,305,018) (7,847,583) (39,000) (23,461) 523,448 - - 1,105,678 23,461 (1,105,678) - 523,448 - 1,074,433 38,275 193,138 (90,296,022) (806,723) 10,038,568 $ $ (a) Other reserves consist of investment revaluation reserve, equity reserve and convertible note reserve The above statement of changes of equity should be read in conjunction with the accompanying notes. Lithium Australia Limited ACN: 126 129 413 Page 8 CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY For the Half-Year Ended 31 December 2023 Issued Capital Half year ended 31 December 2022 $ Balance at 1 July 2022 Share Based Payment Reserve Foreign Currency Translation Reserve $ $ Other Reserves(a) Accumulated Losses $ $ NonControlling Interest Total $ $ 88,454,942 690,549 38,230 1,132,841 (78,463,886) (639,707) 11,212,969 Loss for the year - - - - (1,566,474) (5,616) (1,572,090) Other comprehensive income Net fair value gain/(loss) on financial assets Effects of exchange rates on foreign currency translation Total comprehensive loss for the year - - 700 700 892,027 892,027 (1,566,474) (5,616) 700 892,027 (679,363) Issue of shares Capital raising costs Issue/amortisation of performance rights Transfer from investment revaluation reserve Options exercised Options converted 13,005,203 (1,664,178) 500 - 19,015 - - 934,666 (396,430) 4,644 885,346 - - 13,939,869 (1,664,178) 19,015 488,916 500 4,644 Balance at 31 December 2022 99,796,467 709,564 38,930 2,567,748 (79,145,014) (645,323) 23,322,372 Transaction with owners directly recording in equity: (a) Other reserves consist of investment revaluation reserve, equity reserve and option reserve. The above statement of changes of equity should be read in conjunction with the accompanying notes. Lithium Australia Limited ACN: 126 129 413 Page 9 CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS For the Half-Year Ended 31 December 2023 Note Half-year ended 31 December 2023 Half-year ended 31 December 2022 $ $ Cash flows from operating activities Receipts from customers 3,774,503 2,222,736 Payments to suppliers and employees (9,451,812) (8,532,583) Proceeds from Government grants and tax incentives 605,817 1,003,204 Interest received 36,894 28,737 Interest and other costs of finance paid (42,898) - (5,077,496) (5,277,906) (822,066) (555,145) 35,824 811 Payment for intangible assets (393,614) (426,452) Proceeds from sale of financial assets 1,167,616 811,928 Net cash used in operating activities Cash flows from investing activities Purchase of property, plant and equipment Proceeds from sale of property, plant and equipment Proceeds from disposal of interest in tenements 150,000 2,000,000 Payments for other financial assets - (53,745) Net cash from investing activities 137,760 1,777,397 Proceeds from financial liabilities 919,393 - Payments for lease liabilities (103,676) (142,918) Proceeds from issue of shares - 13,025,703 Payments for capital raising costs - (744,869) Transaction costs related financing activities - (7,912) 815,717 12,130,004 Net (decrease)/(increase) in cash held (4,124,019) 8,629,495 Cash and cash equivalents at the beginning of the period 9,047,417 4,848,069 7,268 8,175 4,930,666 13,485,739 Cash flows from financing activities Net cash from financing activities Effects of exchange rates on consolidation of foreign subsidiary Cash and cash equivalents at the end of the period The above statement of cash flows should be read in conjunction with the accompanying notes. Lithium Australia Limited ACN: 126 129 413 Page 10 NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS For the year ended 30 June 2023 (Cont.) These consolidated financial statements and notes represent those of Lithium Australia Limited and its controlled entity (“Lithium Australia” or the “Group”). Lithium Australia Limited is a public liability company, incorporated and domiciled in Australia. The Group is a for-profit entity for financial reporting purposes under Australian Accounting Standards. The financial statements for the period ended 31 December 2023 were approved and authorised for issue by the Board of Directors on 27 February 2024. 1. Statement of significant accounting policies The following is a summary of the material accounting policies adopted by the Group in the preparation of the financial report. The accounting policies have been consistently applied, unless otherwise stated. Basis of Preparation The half-year financial report is a general-purpose financial statement, which has been prepared in accordance with the requirements of the Corporations Act 2001, applicable Accounting Standards including AASB 134 “Interim Financial Reporting” and other mandatory professional reporting requirements. Compliance with Australian Accounting Standards ensures that the financial statements and notes also comply with International Financial Reporting Standards. The half-year financial report has been prepared on a historical cost basis, except where applicable for financial assets that have been measured at fair value. Cost is based on the fair value of the consideration given in exchange for assets. The company is domiciled in Australia and all amounts are presented in Australian dollars, unless otherwise noted. For the purpose of preparing the half-year financial report, the half-year has been treated as a discrete reporting period. The half year financial report does not include all notes of the type normally included within the annual financial report and therefore cannot be expected to provide as full an understanding of the financial performance, financial position and financing and investing activities of the Group as the full financial report. It is recommended that this financial report be read in conjunction with the annual financial report of Lithium Australia Limited as at 30 June 2023 and any public announcements made by the Group during the half-year in accordance with continuous disclosure requirements arising under the Corporations Act 2001 and the ASX Listing Rules. The half-year financial statements have been prepared in accordance with the accounting policies adopted in the Group’s last annual financial statements for the year ended 30 June 2023. Going Concern The financial report has been prepared on the going concern basis, which contemplates the continuity of normal business activity and the realisation of assets and the settlement of liabilities in the ordinary course of business. During the half year ended 31 December 2023, the Group incurred a loss of $4,542,565 (31 Dec 2022: $1,572,090) and net cash outflows from operating and investment activities of $4,939,736 (31 Dec 2022: $3,500,509 net cash outflows). As at balance date the Group had a working capital surplus of $2,418,303 (30 June 2023: $10,261,445 surplus). The Directors have prepared a cash flow forecast, which indicates that the Company will have sufficient cash flows to meet all commitments and working capital requirements for the 12-month period from the date of signing this financial report. Based on the cash flow forecasts and other factors referred to above, the Directors are satisfied that the going concern basis of preparation is appropriate. The financial report has therefore been prepared on a going concern basis, which assumes continuity of normal business activities and realisation of assets and settlement of liabilities in the ordinary course of business. 2. Other Revenue Government grants and tax incentives Tenement sale option fees Reversal of provision Miscellaneous income Lithium Australia Limited ACN: 126 129 413 Half-year ended 31 Dec 2023 $ 2,012,286 150,000 53,092 2,215,378 Half-year ended 31 Dec 2022 $ 1,135,013 3,000,000 1,715,000 26,908 5,876,921 Page 11 NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS For the year ended 30 June 2023 (Cont.) 3. Finance Costs Financial liabilities not measured at FVTPL Financial liabilities at FVTPL Total Finance Costs 4. Half-year ended 31 Dec 2022 $ 8,567 8,567 31 Dec 2023 $ 6,564,460 (1,167,616) 48,931 (3,305,018) 2,140,757 30 June 2023 $ 5,423,470 80,000 1,000,000 (818,363) 8,934 870,419 6,564,460 Financial Assets Listed and unlisted asset carrying value at the beginning of the period Acquisitions during the period / year Consideration on disposal of interest in tenements Disposals during the period / year Costs associated with disposals Fair value adjustments during the period / year Listed and unlisted asset carrying value at the end of the period 5. Half-year ended 31 Dec 2023 $ 22,245 22,681 44,926 Provisions Employees entitlements Remediation (i) Rehabilitation provision (ii) Current Non-Current (i) (ii) 31 December 2023 $ 405,032 3,328,069 25,000 3,758,101 3,746,145 11,956 3,758,101 30 June 2023 $ 618,138 3,328,069 25,000 3,971,207 3,959,374 11,833 3,971,207 Envirostream Australia Pty Ltd, a subsidiary of the Group, has been served writs in regard to statements of claims concerning damage caused by a fire at 31 Colbert Road, Campbellfield, Victoria, on 19 January 2019. It is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a best estimate has been made of the amount of the obligation. These claims are currently being managed by Envirostream’s insurance Group and the Group expects some or all of the provision to be reimbursed. The Group has not recognised a separate asset and will only do so when the reimbursement is virtually certain. The Group’s rehabilitation programs for two areas at its Ravensthorpe Project. As at 31 December 2023, the Company estimates the cost of the rehabilitation programs to be $25,000. Lithium Australia Limited ACN: 126 129 413 Page 12 NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS For the year ended 30 June 2023 (Cont.) 6. Loans and Borrowings Financial liability at FVTPL (i) (i) 31 December 2023 $ 942,074 30 June 2023 $ - On 7 August 2023, the Group entered a joint development agreement (“Agreement”) related to disruptive lithium extraction technology LieNA®, with leading ASX-listed mining company Mineral Resources Ltd (“MinRes”). Under the Agreement, MinRes will solely fund the development and operation of a pilot plant and an engineering study for a demonstration plant up to the total budgeted cost of A$4.5 million and will also supply the required raw materials to support the extraction process at no cost to Lithium Australia. Lithium Australia will contribute its patented LieNA® technology, which has the potential to enhance lithium extraction yields by up to 50% over current market performance and will manage the pilot plant’s production process. The Company, via its wholly owned subsidiary LieNA Pty Limited, entered into a convertible note deed with a ‘Purchase Price’ of $4,500,000. The $4,500,000 will be paid following draw down notices issued to MinRes. The note matures on 31 January 2025. Prior to maturity date, the investor may elect to convert the note at the earlier of full drawdown of $4,500,000 or the project meeting specified milestones. Upon conversion, the full $4,500,000 converts into 50% of the shares on issue in LieNa Pty Ltd at the date of the conversion notice. At 31 December 2023, $919,393 has been received in cash (31 December 2022: Nil). 7. Operating segments Lithium Australia has identified its operating segments based on internal reports that are reviewed and used by the Board of Directors (chief operating decision makers) in assessing performance and determining the allocation of resources. Lithium Australia is managed primarily on the basis of operation and technology development which includes Lithium Chemicals, Battery Materials and Battery Recycling. Operating segments are considered to have similar economic characteristics. Types of reportable segments: (i) Battery Recycling (via wholly owned subsidiary Envirostream Australia Pty Limited) The research and development of processing technology for mixed-battery recycling, as well as the sale of recovered energy metals is reported in this segment. The Group, shreds and recycles all types of end-of-life batteries at its Melbourne facilities. Its proprietary process involves recovery of energy metals as a mixed metal dust (‘MMD'), which is then exported for further refining. (ii) Battery Materials (via wholly owned subsidiary VSPC Pty Limited) The research and development of advanced, world-leading battery materials including lithium ferro phosphate (‘LFP’) and lithium manganese ferro phosphate (’LMFP’). (iii) Lithium Chemicals The research and development of a suite of extraction and refining technologies for the recovery of lithium chemicals from various materials, including spodumene, lithium micas and end of life lithium-ion batteries. Lithium Australia Limited ACN: 126 129 413 Page 13 NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS For the year ended 30 June 2023 (Cont.) 7. Operating segments (Continued) Half-year ended 31 December 2023 Battery Recycling $ Battery Materials $ Battery Chemicals $ Unallocated Total $ $ Total Income 2,584,792 - - - 2,584,792 EBITDA Depreciation & amortisation expense (1,280,863) (278,377) (1,559,240) 812,389 (302,778) 509,611 (109,387) (109,387) (3,222,573) (152,944) (3,375,517) (3,800,434) (734,099) (4,534,533) - - - (8,032) (8,032) (1,559,240) 509,611 (109,387) (3,383,549) (4,542,565) EBIT Net finance income Reportable segment profit/(loss) before income tax 31 December 2023 Total segment assets Segment liabilities Acquisition of assets* Battery Recycling $ Battery Materials $ 6,075,485 5,503,100 840,243 2,069,186 325,406 468,381 Battery Chemicals $ 3,527,931 942,378 - Unallocated Total $ $ 7,113,888 1,977,038 - 18,786,490 8,747,922 1,308,624 *Acquisitions include property, plant and equipment and intangibles. Half-year ended 31 December 2022 Battery Recycling $ Battery Materials $ Battery Chemicals $ Unallocated Total $ $ Total Income 2,322,779 - - - 2,322,779 EBITDA Depreciation & amortisation expense EBIT Net finance income Reportable segment profit/(loss) before income tax 837,475 (592,462) 245,013 - (944,480) (867,648) (1,812,128) - 18,046 18,046 - 160,241 (204,814) (44,573) 21,552 71,282 (1,664,924) (1,593,642) 21,552 245,013 (1,812,128) 18,046 (23,021) (1,572,090) 30 June 2023 Total segment assets Segment liabilities Acquisition of assets* Battery Recycling $ 5,085,623 5,433,190 483,167 Battery Materials $ 871,466 341,230 415,528 Battery Chemicals $ 3,922,751 5,192 - Unallocated Total $ $ 15,203,467 1,940,992 151,545 25,083,307 7,720,604 1,050,239 *Acquisitions include property, plant and equipment and intangibles. Lithi