KGL Resources : 2021 Sustainability Report

For personal use only

IMPORTANT INFORMATION

The KGL Resources Limited's Sustainability Report for 2021 provides a summary of the Company's sustainability performance and non-financial material risks for the financial year 1 January 2021 to 31 December 2021, unless otherwise stated.

When referring to KGL Resources in this report, we are referring to:

• KGL Resources (ABN 52 082 658 080), which is listed on the Australian Securities Exchange (ASX) under the code KGL.
• The Jervois Base Metal Project located on four Mineral Leases (ML 30180, ML 30182, ML
  30829 and ML 32277) with operations being undertaken within Exploration Licence - EL 25429. This Exploration Licence is held by Jinka Minerals Ltd, an unlisted public company acquired in 2011 and a subsidiary of KGL Resources.
• Exploration, drilling, excavation of test pits and geotechnical investigations being performed by Jervois Operations Pty Ltd (formerly Kentor Minerals NT Pty Ltd) at the Jervois Project.

KGL do not currently seek third-party assurance of reports outside of the annual report and non- financial data. An internal review was conducted on the sustainability report's contents to assess the accuracy and validity and to identify any material errors or omissions.

This report includes forward-lookingnon-financial statements. For details on our financial performance and more around our governance structure, please refer to our Annual Report for the year ended 31 December 2021 available on our website.

The Annual Report 2021 is also to be referred to for information regarding the risks and uncertainties that could cause our financial results to differ materially.

All financial figures are quoted in Australian dollars, unless otherwise noted. Due to rounding, some figures and percentages may not add up to the total figure or 100%.

Additional information about KGL is available on our website - www.kglresources.com.au

onlyuseABOUT THIS REPORT

We are pleased to present our inaugural annual

S stainability Report for the period 1 January 2021 to 31 December 2021 (Reporting Period). The scope covers the activities and approach of KGL Resources Ltd (KGL or the Company), its key subsidiaries,

including Jinka Minerals Ltd and its wholly owned personalsubsidiary, Jervois Operations Pty Ltd. The scope therefore reflects where KGL and its entities have

operational control.

Accordingly, the following activities and operations are included within this scope and reporting boundary:

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While KGL owns several other Exploration Licences (see page 7), minimal activities have been undertaken on these and therefore this Sustainability Report focuses primarily on the Jervois Project.

Please see the About Us section on our website (www.kglresources.com.au) for more information about KGL's activities.

This Sustainability Report focuses on the context and approach we have taken to identify and manage the material Environmental, Social and Governance (ESG) topics associated with our exploration and feasibility activities at the Jervois Project, considering that we are in the exploration and development phase of the mineral extraction lifecycle.

Furthermore, we outline our progress in developing credible controls and processes to mitigate, and where feasible, enhance the benefits or value across these three ESG pillars.

We are committed to building on our sustainability reporting platform set through this report. Year-on- year we will collect, interpret, and publish data to support our progress being made against our sustainability objectives and targets. We will also align our sustainability and ESG reporting approach with relevant international guidelines and frameworks that suit a company of our size as we advance in the construction and operational stages of our Project.

We welcome any feedback you may have on this Sustainability Report through engaging with us at info@kglresouces.com.au.

onlyWelcome to KGL's inaugural Sustainability Report where we share the progress we have made in identifying and ma aging our Environment, Social and Governance (ESG) risks. We need to be fully cognisant of the ESG risks to ensure that we can provide effective stewardship over these matters as we responsibly advance our activities and operations at the Jervois Project. We recognise the

usevalue in making a significant commodity like copper available for further benefit accrual across the supply chain. To do this, our top priority is ensuring we have the correct management systems and governance processes in place.

To ensure we focus our attention in the correct areas, we completed a materiality assessment to identify our most important sustainability topics and prioritised these

topics based on internal and external stakeholder input. personalThrough the identification of our key material ESG risks, we were able to integrate key sustainability metrics and

commitments into the Company's corporate strategy to e sure that we are effectively managing the risks and opportunities presented by these material topics.

As the business matures from exploration to development and then into operations, we will ensure

ur systems and processes evolve to make sure they remain relevant and drive continuous improvement. As with most organisations around the world, the KGL ope ations were impacted by the global COVID-19 pandemic.

In addition to validating the mineral resource model, drilling, excavation of test pits and geotechnical investigation work has provided essential information to enable the design, construction and rehabilitation requirements of the tailings storage facility (TSF) and waste rock dumps and to determine the potential for

Forcontamination by these facilities.

KGL's performance in 2021 served to demonstrate the resilience of the business and our commitment to establishing a solid platform to positively support our sustainability commitments and aspirations.

4 | Sustainability Report 2021

While I am extremely proud of all our achievements, noteworthy sustainability outcomes in 2021 included:

• KGL's continued focus on health and safety was reflected in the way in which our COVID-19 controls were effectively implemented at our operations. The health and safety of our people is our first priority. Our people are our most valuable assets and their safety and health is our greatest responsibility.
• Working alongside our key stakeholders to identify those areas of sustainability that are important to them and our business, including the development of our first set of high-level sustainability objectives, targets and performance measures;
• Our commitment to the environment and our operations was demonstrated by receiving approval of our Mining Management Plan from the Northern Territory government, thus supporting our next steps into construction;
• The appointment of three key executive positions with outstanding experience to guide KGL through the next stages of construction and operation; and
• Reflecting KGL's approach to water stewardship, we received approval of water licenses and proceeded with the design of the water borefield and water management system to ensure water availability to accommodate the Project's needs.

These outcomes illustrate how sustainability is being actively embedded throughout our business as we progress from exploration and feasibility into mine operations.

In summary, our operations reflect the importance placed on ESG to achieve our strategic objectives and our ability to deliver sustainable value for all our stakeholders. KGL's financial and operational success will be underpinned by effective Environmental, Social and Governance practices and by the support of the people upon who's land we operate.