Sheffield Resources Limited Annual Report 2023

Notes to the Consolidated Financial Statements for the year ended 30 June 2023 16. Reserves (continued) The table lists the inputs to the model for the options issued during the year: Number 480,000 421,271 Expiry date 30 November 2026 1 December 2027 Grant date 22 November 2022 22 November 2022 Vesting date 22 November 2022 30 June 2025 Exercise price $0.84 $0.59 Dividend yield 0% 0% Expected volatility 70% 70% Risk-free interest rate 3.355% 3.225% Expected life of options 3.42 years 4.42 years Grant date share price $0.59 $0.59 Fair value at grant date per option $0.27 $0.31 480,000 options issued with vesting date of 22 November 2022 were fully expensed during the year. 421,271 options issued with a vesting date of 30 June 2025 will be expensed over the vesting period. The expected life of an option is based on historical data and is not necessarily indicative of exercise payments that may occur. The expected volatility reflects the assumption that the historical volatility is indicative of future trends, which may also not necessarily be the actual outcome. The weighted average contractual remaining life of the share options outstanding as at 30 June 2023 is 2.44 years (2022: 2.82 years). Movement in options 2023 2022 Number under options Weighted average exercise price Number under options Weighted average exercise price Movement in options Outstanding at the beginning of the year 2,140,000 $0.55 960,000 $0.65 Granted during the year 901,271 $0.72 1,180,000 $0.46 Outstanding at the end of the year 3,041,271 $0.60 2,140,000 $0.55 Exercisable at the end of the year 1,920,000 $0.54 1,440,000 $0.55 Employee incentive plan The Employee Incentive Plan was established to enable employees of the Group to be issued with performance rights entitling each participant to a fully paid ordinary share. The performance rights issued for nil consideration are issued in accordance with the terms and conditions approved at a General Meeting by shareholders and in accordance with performance criteria established by the Directors. The objective of the Employee Incentive Plan is to assist in the recruitment, reward, retention and motivation of employees of the Group. Employees do not possess any rights to participate in the Employee Incentive Plan as participation is solely determined by the Directors. Performance rights convert to one fully paid ordinary share in Sheffield at an exercise price of nil upon meeting certain non-market-based performance conditions. The performance rights do not provide any dividend or voting rights and are not quoted on the Australian Securities Exchange. If an employee ceases to be employed by the Group within the period, the unvested performance rights will be forfeited. 54 Sheffield Resources Limited Annual Report 2023

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