Announcement PDF Corporate Governance Statement Mont Royal Resources Limited (Company) The Board of Directors of the Company (Board) are committed to achieving and maintaining high standards of performance and corporate governance. The Company supports the 4th Edition of the ASX Corporate Governance Council's Corporate Governance Principles and Recommendations (Recommendations). The Company's practices are largely consistent with the Recommendations. The Board considers that the implementation of a small number of Recommendations is not appropriate, for the reasons set out below in relation to the items concerned. The Board uses its best endeavours to ensure that exceptions to the Recommendations do not have a negative impact on the Company and the best interests of shareholders as a whole. The directors of the Company (Directors, being either Non-Executive Directors or Executive Directors) are responsible to the shareholders for the performance of the Company in both the short and the longer term and seek to balance sometimes competing objectives in the best interests of the Company as a whole. Their focus is to enhance the interests of shareholders and other key stakeholders and to ensure the Company is properly managed. As required by the ASX Listing Rules, the Company's main corporate governance policies and practices are summarised below, having regard to the Recommendations. Details of the Company's corporate governance plan and related documents are available online at www.montroyalres.com/corporategovernance. This corporate governance statement is current as at 25 September 2023 and has been approved by the Board. Page 1 ASX Corporate Governance Principle/Recommendation Comply Particulars of Compliance and If Not Why Not Principle 1 - Lay solid foundations for management and oversight Recommendation 1.1 A listed entity should have and disclose a board charter setting out: (a) the respective roles and responsibilities of its board and management; and (b) those matters expressly reserved to the board and those delegated to management. Yes The Board has adopted a formal charter that details the functions and responsibilities of the Board and management (Board Charter). As provided for in the Board Charter, the Board is responsible for all matters relating to the running of the Company, and more specifically, all matters relating to the policies, practices, management and operations of the Company. In addition to decisions requiring approval pursuant to the respective Committee Charters, the following decisions must be approved by the Board: (a) (b) Directors acquiring or selling shares of the Company; issuing shares of the Company; (c) acquiring, selling or otherwise disposing of property in excess of the amount set out in the Company's approval matrix; (d) founding, acquiring or selling subsidiaries of or any company within the Company, participating in other companies, or dissolving or selling the Company's participation in other companies (including project joint ventures); (e) acquiring or selling patent rights, rights in registered trademarks, licences or other intellectual property rights of the Company; founding, dissolving or relocating branch offices or other offices, plants and facilities; (f) (g) starting new business activities, terminating existing business activities or initiating major changes to the field of the Company's business activities; Page 2 ASX Corporate Governance Principle/Recommendation Comply Particulars of Compliance and If Not Why Not (h) approving and/or altering the annual business plan (including financial planning) for the Company or any part of the Company; (i) taking or granting loans which exceed the amount set out in the Company's approval matrix; (j) granting securities of any type; (k) granting loans to Company officers or employees and taking over guarantees for the Company's officers and employees; (l) entering into agreements for recurring, voluntary or additional social benefits, superannuation agreements or agreements for general wage and salary increases; (m) determining the total amount of bonuses and gratuities for Company officers and employees; (n) determining the appointment, termination, prolongation of employment or amendment to conditions of employment of members of the Board; and (o) granting or revoking a power of attorney or limited authority to sign and/or act on behalf of the Company. The detail of some board functions will be handled through Board Committees as and when the size and scale of operations requires such Committees. However, the Board as a whole is responsible for determining the extent of the powers residing in each Committee and is ultimately responsible for accepting, modifying or rejecting Committee recommendations. Page 3 ASX Corporate Governance Principle/Recommendation Comply Particulars of Compliance and If Not Why Not The MD (as a delegate of the Board) is responsible for the effective leadership and day-to-day operations and administration of the Company. The responsibilities of the Board as a whole, the Chair, individual Directors and the functions delegated to Senior Management are set out in more detail in Part A of the Company's Board Charter, which is available on the Corporate Governance page of the Company's website www.montroyalres.com/corporate-governance. Recommendation 1.2 Yes A listed entity should: (a) (b) undertake appropriate checks before appointing a director or senior executive or putting someone forward for election as a director; and The Board will consider nominations for appointment or election of Directors that may arise from time to time, having regard to the skills and experience required by the Company and procedures outlined in the Company's constitution and the Corporations Act 2001 (Cth). The Company undertakes appropriate checks before appointing a person, or putting forward to shareholders a candidate for election, as a Director. Candidates are assessed through interviews, meetings and background and reference checks (which may be conducted both by external consultants and by Directors) as appropriate. provide security holders with all material information in its possession relevant to a decision on whether or not to elect or re-elect a director. The Company gives shareholders all material information in its possession relevant to the decision whether or not to elect or re-elect a Director, either in the notice of meeting and explanatory statement for the relevant meeting of shareholders which addresses the election or re-election of the Director, or by including in the notice a clear reference to the location on the Company's website, Annual Report or other document lodged with ASX where the information can be found. Recommendation 1.3 Yes Under Part A clause 2.4 of the Board Charter, the Company must have a Page 4 ASX Corporate Governance Principle/Recommendation Comply Particulars of Compliance and If Not Why Not written agreement with each Director and senior executive setting out the terms of their appointment. A listed entity should have a written agreement with each director and senior executive setting out the terms of their appointment. Each Non-Executive Director receives a letter formalising their appointment and outlining the material terms of their appointment. The Non-Executive Directors of the Company have not been appointed for a fixed term. Each Non-Executive Director has signed a letter of appointment. Each Executive Director and each senior executive have signed an executive service agreement setting out their duties, obligations and remuneration. The Company Secretary has entered into a consultancy agreement with the Company setting out their role, responsibilities and remuneration. Recommendation 1.4 Yes The company secretary of a listed entity should be accountable directly to the board, through the chair, on all matters to do with the proper functioning of the board. Recommendation 1.5 A listed entity should: Partially As set out in Part A clause 5 of the Board Charter, the Company Secretary is accountable to the Board, through the Chair, on all governance matters and reports directly to the Chair as the representative of the Board. The Company Secretary has primary responsibility for ensuring that the Board processes and procedures run efficiently and effectively. The Company Secretary is Shaun Menezes (appointed 6 August 2018), whose qualifications and experience are stated in the Company’s latest Annual Report. The Company recognises the positive advantages of a diverse workplace and is committed to: (a) creating a working environment conducive to the appointment of well-qualified employees, Senior Management and Board Page 5 ASX Corporate Governance Principle/Recommendation (a) have and disclose a diversity policy; (b) through its board or a committee of the board, set measurable objectives for achieving gender diversity in the composition of its board, senior executives and workforce generally; and (c) Comply candidates; and (b) the measurable objectives set for that period to achieve gender diversity; (ii) the entity's progress towards achieving those objectives; and (iii) either: (A) the respective proportions of men and women on the board, in senior executive positions and across the whole workforce (including how the entity has defined "senior executive" for these purposes); or (B) if the entity is a "relevant employer" under the Workplace Gender Equality Act, the entity's most recent "Gender Equality Indicators", as defined in and published under the Act. Recommendation 1.6 identifying ways to promote a corporate culture which embraces diversity. The Board has adopted a diversity policy, but due its size and stage of development does not disclose at the end of each reporting period, the measurable objectives for achieving gender diversity set by the board or a relevant committee of the board is in accordance with the entity’s diversity policy and its progress. disclose in relation to each reporting period: (i) Particulars of Compliance and If Not Why Not The Board monitors the extent to which the level of diversity within the Company is appropriate on an ongoing basis and periodically considers measure to improve it. The Board will further consider the establishment of objectives for achieving gender diversity as the Company develops and its circumstances change. Yes The Board regularly monitors its performance and the performance of the Directors and Board committees throughout the year. This may occur Page 6 ASX Corporate Governance Principle/Recommendation Comply through an internal review led by the Chair, or be performed with the assistance of external advisers as considered appropriate. The Chair also speaks to Directors individually regarding their role and performance as a Director. A listed entity should: (a) have and disclose a process for periodically evaluating the performance of the board, its committees and individual directors; and (b) disclose for each reporting period whether a performance evaluation has been undertaken in accordance with that process during or in respect of that period. Recommendation 1.7 A listed entity should: (a) (b) have and disclose a process for evaluating the performance of its senior executives at least once every reporting period; and disclose for each reporting period whether a performance evaluation has been undertaken in accordance with that process during or in respect of that period. Particulars of Compliance and If Not Why Not An informal performance evaluation review with respect to the Board and the individual Directors was undertaken during the year. Yes In accordance with the Company's Performance Evaluation Policy, all senior executives are subject to an annual performance evaluation. Each year, senior executives will establish a set of performance targets. These targets are aligned to overall business goals and the Company's requirements of the position. An informal assessment of progress is carried out throughout the year. A full evaluation of an executive's performance against the agreed targets takes place annually. This will normally occur in conjunction with goal setting for the coming year. As the Company is committed to continuous improvement and the development of its people, the results of the evaluation form the basis of the executive's development plan. Performance pay components of executives' packages are also dependent on the outcome of the evaluation. Page 7 ASX Corporate Governance Principle/Recommendation Comply Particulars of Compliance and If Not Why Not Principle 2 – Structure the board to be effective and add value Recommendation 2.1 The Board of a listed entity should: (a) have a nomination committee which: (i) has at least three members, a majority of whom are independent directors; and (ii) is chaired by an independent director, and disclose: (b) (iii) the charter of the committee; (iv) the members of the committee; and (v) as at the end of each reporting period, the number of times the committee met throughout the period and the individual attendances of the members at those meetings; or No The Company recognises that Recommendation 2.1 of the Recommendations suggests the establishment of a Nomination Committee and associated Charter. However, in view of the small size of the Company's Board, the Board in its entirety (with abstentions from relevant Directors where there is a conflict of interest) acts effectively as Nomination Committee and there is no need to further subdivide it. As such, a Nomination Committee is an unnecessary measure for the Company. The Board as a whole reviews the size, structure and composition of the Board including competencies and diversity, in addition to reviewing Board succession plans and continuing development. if it does not have a nomination committee, disclose that fact and the processes it employs to address board succession issues and to ensure that the board has the appropriate balance of skills, knowledge, experience, independence and diversity to enable it to discharge its duties and Page 8 ASX Corporate Governance Principle/Recommendation Comply Particulars of Compliance and If Not Why Not responsibilities effectively. Recommendation 2.2 A listed entity should have and disclose a board skills matrix setting out the mix of skills and diversity that the board currently has or is looking to achieve in its membership. Yes The Board is structured to facilitate the effective discharge of its duties and to add value through its deliberations. It seeks to achieve a Board composition with a balance of diverse attributes relevant to the Company's operations and markets, including skills sets, background, gender, geography and industry experience. In addition to those general skills expected for Board membership, the following skills have also been identified as being necessary such as operational management, exploration and geology, mining engineering, project delivery, finance, corporate governance, equity capital markets, legal, and commercial negotiations. The Board is comfortable with the skills matrix represented by the current Board. A profile of each Director setting out their skills, experience and period of office is set out in the Directors' Report of the latest Annual Report. Page 9 ASX Corporate Governance Principle/Recommendation Recommendation 2.3 Comply Yes Particulars of Compliance and If Not Why Not As at 30 June 2023, the Board consisted of: A listed entity should disclose: Name Role Independent? Date appointed (a) the names of the directors considered by the board to be independent directors; Gary Lawler Non-Executive Chairman Yes 15 October 2018 (b) if a director has an interest, position or relationship of the type described in Box 2.3 (Factors relevant to assessing the independence of a director) but the board is of the opinion that it does not compromise the independence of the director, the nature of the interest, position or relationship in question and an explanation of why the board is of that opinion; and Ronnie Beevor Yes 25 March 2023 No 26 March 2018 (c) Peter Ruse Non-Executive Director Executive Director Gary Lawler and Ronnie Beevor are regarded as independent NonExecutive Directors. Peter Ruse is not considered independent on the basis that he is the Executive Director. Despite this, the Board believes that he is able, and does make, quality and independent judgments in the best interest of the Company on all relevant issues before the Board. the length of service of each director. The Board assesses the independence of Directors annually, or more frequently if circumstances require. A copy of the definition of independence adopted by the Company is annexed to the Board Charter at Annexure A, available on the Company's "Corporate Governance" page of the Company's website at www.montroyalres.com/corporate-governance/. Recommendation 2.4 A majority of the board of a listed entity should be Yes As show in the table at Recommendation 2.3 above, a majority of the Board is independent, with 2 of the 3 Directors being independent. Page 10 ASX Corporate Governance Principle/Recommendation Comply Particulars of Compliance and If Not Why Not independent directors. Recommendation 2.5 Yes The chair of the board of a listed entity should be an independent director and, in particular, should not be the same person as the CEO of the entity. The roles of Chair of the Board and Managing Director/CEO are separate and distinct. Gary Lawler is the Non-Executive Chair of the Company and Peter Ruse is the Executive Director. Gary Lawler, who was appointed as Non-Executive Chair on 15 October 2018, is considered independent on the basis that his shareholding in the Company does not exceed 5%. His qualifications and experience are stated in the Company's latest Annual Report, which is available at www.montroyalres.com/investor-centre/. A copy of the definition of independence adopted by the Company is annexed to the Company's Board Charter at Annexure A, available on the Company's "Corporate Governance" page of the Company's website at www.montroyalres.com/corporate-governance/. Recommendation 2.6 A listed entity should have a program for inducting new directors and for periodically reviewing whether there is a need for existing directors to undertake professional development to maintain the skills and knowledge needed to perform their role as directors effectively. Yes It is the policy of the Board to ensure that the Directors and Senior Management of the Company are equipped with the knowledge and information they need to discharge their responsibilities effectively and that individual and collective performance is regularly and fairly reviewed. As referred to in Part D of the Board Charter, new directors go through an induction process which includes meeting with key executives, tours of the premises, an induction package and presentations. The Company allocates an annual budget to encourage Directors to participate in training and development programs for their professional development. Page 11 ASX Corporate Governance Principle/Recommendation Comply Particulars of Compliance and If Not Why Not Principle 3 – Instil a culture of acting lawfully, ethically and responsibly Recommendation 3.1 Yes A listed entity should articulate and disclose its values. Recommendation 3.2 A listed entity should: (a) (b) have and disclose a code of conduct for its directors, senior executives and employees; and ensure that the Board or a committee of the Board is informed of any material breaches of that code. Yes The Board has approved a statement of values and charges the Directors with the responsibility of inculcating those values across the Company. A copy of the Company's statement of values is available on the "Corporate Governance" page of the Company's website, www.montroyalres.com/corporate-governance/. The Company seeks to encourage and develop a culture which will maintain and enhance its reputation as a valued corporate citizen of the countries where it operates and an employer which personnel enjoy working for. The Company has established a Code of Conduct that sets out the principles covering appropriate conduct in a variety of contexts and outlines the minimum standards of behaviour expected from its Directors and employees. The Code of Conduct sets out policies in relation to various corporate and personal behaviour including safety, discrimination, respecting the law, anti-corruption, interpersonal conduct and conflict of interest. While the Code of Conduct seeks to prescribe standards of behaviour for all Company personnel to observe, it does not, and understandably cannot, identify every ethical issue that an individual might face. The Code of Conduct's objective is to provide a framework for decisions and actions in relation to ethical conduct in employment, to safeguard the Company's reputation and to make clear the consequences of breaching the Code of Conduct. Page 12 ASX Corporate Governance Principle/Recommendation Comply Particulars of Compliance and If Not Why Not A copy of the Company's Code of Conduct is available on the "Corporate Governance" page of the Company's website, www.montroyalres.com/corporate-governance/. Page 13 ASX Corporate Governance Principle/Recommendation Recommendation 3.3 Comply Yes A listed entity should: (a) have and disclose a whistleblower policy; and (b) ensure that the Board or a committee of the Board is informed of any material incidents reported under that policy. Recommendation 3.4 have and disclose an anti-bribery and corruption policy; and (b) ensure that the Board or a committee of the Board is informed of any material breaches of that policy. The Board has adopted a whistleblower protection policy to ensure concerns regarding unacceptable conduct including breaches of the Company's code of conduct can be raised on a confidential basis, without fear of reprisal, dismissal or discriminatory treatment. The purpose of this policy is to promote responsible whistle blowing about issues where the interests of others, including the public, or of the organisation itself are at risk. A copy of the Company's whistleblower policy is available on the "Corporate Governance" page of the Company's website, www.montroyalres.com/corporate-governance/. Yes A listed entity should: (a) Particulars of Compliance and If Not Why Not The Board has a zero-tolerance approach to bribery and corruption and is committed to acting professionally, fairly and with integrity in all business dealings. The Board has adopted an anti-bribery and anti-corruption policy for the purpose of setting out the responsibilities in observing and upholding the Company's position on bribery and corruption provide information and guidance to those working for the Company on how to recognise and deal with bribery and corruption issues. A copy of the Company's anti-bribery and corruption policy is available on the "Corporate Governance" page of the Company's website, www.montroyalres.com/corporate-governance/. Principle 4 – Safeguard the integrity of corporate reports Recommendation 4.1 Partially As a consequence of the size and composition of the Company’s Board (comprising two non-executive directors and one executive director) the Page 14 ASX Corporate Governance Principle/Recommendation The board of a listed entity should: (a) Particulars of Compliance and If Not Why Not Board does not have a stand-alone audit committee. have an audit committee which: (i) has at least three members, all of whom are non-executive directors and a majority of whom are independent directors; and The Board as a whole has responsibilities typically assumed by an audit committee, including but not limited to: (a) verifying and safeguarding the integrity of the Company's stakeholder reporting; (ii) is chaired by an independent director, who is not the chair of the board, (b) reviewing and recommending approval to the Board of the audited annual and half-yearly financial reports; and disclose: (iii) the charter of the committee; (iv) the relevant qualifications and experience of the members of the committee; and (v) (b) Comply in relation to each reporting period, the number of times the committee met throughout the period and the individual attendances of the members at those meetings; or if it does not have an audit committee, disclose that fact and the processes it employs that independently verify and safeguard the integrity of its corporate reporting, including the processes for the appointment and removal of the external auditor and the rotation of the audit engagement partner. (c) reviewing the appointment of the external auditor, their independence and performance, the audit fee, any questions of their resignation or dismissal and assessing the scope and adequacy of the external audit and making appropriate recommendations to the full Board; and (d) performing a risk management function (refer to Recommendation 7.1 for further details). Information on the Company's procedures for the selection and appointment of the external auditor and the rotation of external audit partners is set out in the Policy on Selection, Appointment and Rotation of External Auditors, which is available on the Company's website, www.montroyalres.com/corporate-governance/. Page 15 ASX Corporate Governance Principle/Recommendation Recommendation 4.2 Comply Yes The board of a listed entity should, before it approves the entity's financial statements for a financial period, receive from its CEO and CFO a declaration that, in their opinion, the financial records of the entity have been properly maintained and that the financial statements comply with the appropriate accounting standards and give a true and fair view of the financial position and performance of the entity and that the opinion has been formed on the basis of a sound system of risk management and internal control which is operating effectively. Particulars of Compliance and If Not Why Not Under the Company's Risk Management Policy, which is available on the "Corporate Governance" page of the Company's website, www.montroyalres.com/corporate-governance/, the Executive Director and CFO will provide a written declaration of assurance that in their opinion, the financial records of the Company for any financial period have been properly maintained, comply with the appropriate accounting standards and give a true and fair view of the financial position and performance of the Company and has been formed on the basis of a sound system of risk management and internal control which is operating effectively. For the current and any future accounting and reporting periods, Executive Director and CFO declarations will be obtained in relation to the issue of all of the Company's financial statements. In addition declarations have been provided for all financial statements and reports required by the ASX Listing Rules, including but not limited to the Company's Appendix 5B (Quarterly Reports) for the quarters during the ended 30 June 2023, Half-year Report for the half year ended 31 December 2022, and its Annual Report for the year ended 30 June 2023. Recommendation 4.3 A listed entity should disclose its process to verify the integrity of any periodic corporate report it releases to the market that is not audited or reviewed by an external auditor. Yes When preparing reports for release to the market including the quarterly activity and cash flow reports, these reports shall be prepared and reviewed by the Executive Director before being presented to the Board for review and approval. Such reports shall not be released to market without this review and approval process by executive management and the Board. Page 16 ASX Corporate Governance Principle/Recommendation Comply Particulars of Compliance and If Not Why Not Principle 5 – Make timely and balanced disclosure Recommendation 5.1 A listed entity should have and disclose a written policy for complying with its continuous disclosure obligations under ASX Listing Rule 3.1. Yes The Company has established a Continuous Disclosure Policy which is designed to guide compliance with ASX Listing Rule disclosure requirements, and to ensure that all Directors, senior executives and employees of the Company understand their responsibilities under the policy. The Continuous Disclosure Policy is available on the "Corporate Governance" page of the Company's website, www.montroyalres.com/corporate-governance/. The Continuous Disclosure Policy: (a) raises awareness of the Company's obligations under the continuous disclosure regime; (b) establishes a process to ensure that information about the Company which may be market sensitive and which may require disclosure is brought to the attention of the Chairman, being the person/s primarily responsible for ensuring the Company complies with its continuous disclosure obligations, in a timely manner and is kept confidential; and (c) sets out the obligation of Directors, officers and employees of the Company to ensure that the Company complies with its continuous disclosure obligations. The Board has designated the MD and/or Chair of the Board as the person primarily responsible for ensuring that the Continuous Disclosure Policy is implemented and that all relevant information is disclosed as required. Page 17 ASX Corporate Governance Principle/Recommendation Comply Particulars of Compliance and If Not Why Not In accordance with the Company's Continuous Disclosure Policy, all information provided to ASX for release to the market is also posted to the Company's website. Recommendation 5.2 Yes A listed entity should ensure that its B