Sunstone Metals Annual Report 22

Your Directors present their report on Sunstone Metals Ltd (“Sunstone” or “Company”), and the entities it controlled (“Consolidated Entity” or “Group”) for the financial year ended 30 June 2022. Directors The following persons were Directors of Sunstone Metals Ltd at all times during the financial year and up to the date of this report, unless otherwise stated: Mr Graham Ascough Non-Executive Chairman Mr Malcolm Norris CEO & Managing Director Mr Stephen Stroud Non-Executive Director Principal activities During the period the principal activities of the Group consisted of mineral exploration and evaluation. Dividends No dividends were paid or recommended to be paid to members during the financial period. Review of operations Refer to the Operating Review contained in the Annual Report for further discussion regarding the Company’s operations. A summary of consolidated other income and results is set out below: 2022 $ 2021 $ Revenue and other income 100,060 333,466 Profit/(loss) before income tax (2,870,279) 3,224,218 Income tax expense – – Profit/(loss) attributable to members of Sunstone Metals Limited (2,866,269) 3,228,929 Profit/(loss) attributable to non-controlling interests (4,010) (4,711) Earnings per share 2022 cents 2021 cents Basic earnings per share (0.1) 0.1 Financial Performance During the year ended 30 June 2022 the Group incurred a loss of $2,870,279 (2021: profit of $3,224,218). While normal expenses are generally in line with prior year, the loss is largely due to non-cash share based payments expense for employee performance rights of $938,806 and net fair value loss on financial assets at fair value through profit or loss of $359,378 due to decrease in share price for the equities Sunstone hold in Copperstone Resources AB (“Copperstone”), United Lithium Corp and NewPeak Metals Ltd. In the prior year the profit was primarily related to an increase in the fair value of the investment in Copperstone shares. Financial Position The Company’s non-current assets increased from $31,923,061 at 30 June 2021 to $42,982,704 at 30 June 2022 primarily due to expenditure incurred on the Bramaderos and El Palmar Projects in Ecuador, offset by the sale of 51,042,774 shares held in Copperstone and the reclassification of the balance of shares held in Copperstone as a current asset. The Company’s current assets increased significantly from $12,210,099 at 30 June 2021 to $25,830,656 at 30 June 2022 due to cash received from a placement and Share Purchase Plan in April and May 2022 as well as the reclassification of the Copperstone shares to a current asset. At the end of the financial period, the Group had cash balances of $23,997,222 (2021 $12,171,240) and net assets of $66,369,314 (2021: $43,336,675). Total liabilities amounted to $2,444,046 (2021: $796,484) and included trade, other payables, lease liabilities and provisions. During the year, the Company had an increase in contributed equity of $21,633,583, after fees, for the placement and Share Purchase Plan in April and May 2022. Directors’ Report continued 16 Sunstone Metals Limited Annual Report 2022 SUNSTONE METALS LIMITED ANNUAL REPORT 2022

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