Dynamic : Quarterly Activities/Appendix 4C Cash Flow Report

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ASX: DDB

29 July 2022

ASX Announcement

Quarterly Activities Report - June 2022

Dynamic Group Holdings Limited ('Group' or the 'Company') (ASX: DDB) is pleased to provide the following report on its activities.

Key Activities and Highlights

• A$11m contract executed with tier 1 Orlando Drilling Pty Ltd customer
• 2 new Schramm T685 Reverse Circulation drill rigs being finalised for deployment
• Increase in labour charge rates formally agreed with long term clients
• 1 new Epiroc T45 blast hole rig received and deployed in Q4FY22
• Additional blast hole rig to be delivered Q1FY23
• Acquisition of Welldrill finalised in Q1FY23
• 45 drill rigs and around 290 personnel within the group

Snapshot - As at 30 June 2022

Share price (ASX: DDB)	A$0.305	Cash at end of the Quarter1	A$9.4m
Shares2	114,873,844	Net Assets at end of the Quarter1	A$38.7m
Market Cap2	A$35.0m	Net Debt at end of the Quarter1	A$9.1m

Operations

Orlando Drilling Pty Ltd ("Orlando")

Orlando is continuing to successfully provide high quality RC and Diamond Core ("DC") drilling on long term project sites with miners and explorers targeting gold, lithium, nickel, iron ore and various other base metal commodities in Western Australia.

During the quarter Orlando signed a contract with and existing Tier 1 gold customer, to provide Reverse Circulation ("RC") drilling with multiple drill rigs across their mining and exploration project sites within the Goldfields of Western Australia. The approximate value of this contract is A$11m. Initial contract term is two years, with the option for one year extension.

Orlando continues discussions with multiple companies regarding significant new drilling opportunities to combine business segments in providing multi-tiered services for RC, DC and drill and blast at various project sites.

Currently Orlando is short listed on multiple tender processes for longer term projects, with a decision of award expected to be received within Q1FY23.

DYNAMIC GROUP HOLDINGS LIMITED

(ASX:DDB)1DYNAMICGROUPHOLDINGS.COM.AU 54 Achievement Way, Wangara, WA 6065

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Final commissioning is underway for the two newly acquired Schramm T685 RC drill rigs and accompanying fleet vehicles. Deployment of this equipment to project sites is expected to take place shortly. The additional equipment will provide Orlando with a total of seventeen service ready drill rigs.

Figure 1: Pilbara RC drilling project

Figure 2: Schramm 685 on a Goldfields project

Dynamic Drill & Blast Pty Ltd ("Drill & Blast")

Long term drill and blast operations continue at AngloGold Ashtanti Limited's (ASX: AGG) Golden

Delicious project in the Goldfields region of West Australia and Allkem Limited's (ASX: AKE) Mt Cattlin Lithium Spodumene project. Multiple shorter-term projects have also been undertaken

DYNAMIC GROUP HOLDINGS LIMITED

(ASX:DDB)2DYNAMICGROUPHOLDINGS.COM.AU 54 Achievement Way, Wangara, WA 6065

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during the quarter and will continue into Q1 FY23. Customers remain open to agreeing reasonable commercial terms to ensure current pricing pressures within the labour market do not impact long term efficiencies and utilisation of equipment.

Four drills and approximately thirty personnel provided pipeline trench drill and blast services to a tier 1 iron ore producer's project in the Pilbara region of Western Australia during the quarter. Additionally, a two-drill rig construction project owned by the same principal, was successfully completed during Q4FY22 with the drills and personal being immediately re-deployed to existing projects with additional scope.

An additional pipeline drill and blast project commenced in June of Q4FY22, with three drills and approximately seventeen personnel being deployed. The business also deployed two drills and approximately twelve personnel to a longer-term production project in the Goldfields region of Western Australia.

The drill and blast business has received and deployed to the field one new additional Epiroc T45 top hammer drill rig to meet on-going demand in Q4FY22, and another delivery expected to take place during Q1FY23.

Welldrill

The acquisition of Welldrill1 by The Company was completed on 18 of July 2022.

Welldrill is a WA-based water well drilling business having serviced tier-1 client base including BHP, the WA Government, the Department of Water and Environmental Regulation and OZ Minerals for over 20 years.

Dynamic Managing Director Mark Davis said: "This acquisition is transformational for Dynamic and provides a critical third limb to our existing drill and blast, and exploration and resource definition drilling services. We are excited at the opportunities ahead as we continue to execute on our growth strategy and expand into synergistic service offerings. We are particularly excited to have Tim Westcott join the Dynamic executive management team and help us execute on this growth strategy."

The Company welcomes all Welldrill personnel to the group and we look forward to sharing updates of Welldrill's success and contribution to the broader group.

1 Welldrill consists of two entities: PDC Drilling Pty Ltd; and Delmoss Nominees Pty Ltd

DYNAMIC GROUP HOLDINGS LIMITED

(ASX:DDB)3DYNAMICGROUPHOLDINGS.COM.AU 54 Achievement Way, Wangara, WA 6065

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Figure 3: Welldrill drilling fleet in the field

Corporate

Financial Summary

The Company is in a strong financial position with cash and cash equivalents of A$9.4 million and trade receivables of A$11.8 million.

Cash inflows from operating activities for the quarter was A$23.5 million, due mainly to receipts from customers.

Cash outflows from operating activities for the quarter was approximately A$20.6 million representing payment of employment and operating costs.

In addition there were cash outflows from investing activities of $2.2 million, due to acquisition of additional Property, Plant & Equipment, as well as cash outflows from investing activities of $2.1 million made to the vendors of Orlando Drilling Pty Ltd as part of a post completion cash adjustment in accordance with the Share Purchase Agreement ($1.5 million of this payment was made to directors and key management personnel of the Company who were appointed as part of the transaction).

The Company made operating activity payments of A$294,850 to related parties and their associates. These payments relate to the remuneration agreements for the Managing Director, Executive Director, Non-Executive Directors and key management personnel.

Pursuant to ASX listing rule 4.7C.2, the Company advises the proposed use of funds contained in section 1.7 of Dynamic's Prospectus in comparison to the actual use of funds following admission of Dynamic to the official list of the ASX:

DYNAMIC GROUP HOLDINGS LIMITED

(ASX:DDB)4DYNAMICGROUPHOLDINGS.COM.AU 54 Achievement Way, Wangara, WA 6065

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Use of Funds	Prospectus Amount	Actual to Date
Cost of the Offers	A$482,000	A$438,000
Purchase of additional plant and	A$2,833,000	A$1,770,327
equipment
Repayment of Debt	A$500,000	A$500,000
Working	Capital/Corporate	A$1,958,000	A$1,424,317
overheads
Total		A$5,773,000	A$3,978,524

The Company confirms that it expects to utilise the funds raised under its Prospectus in accordance with the use of funds statement and the key business objectives underlying the expected use of funds remain intact.

Expiry of Escrow Restrictions

The Company advises that, in accordance with Listing Rule 3.10A, the follow securities will cease to be escrowed on 6 August 2022:

• 23,173,191 fully paid ordinary shares which are currently classified as ASX restricted securities
• 5,667,600 unlisted options exercisable at $0.30 on or before 25 June 2023 which are currently classified as ASX restricted securities
• 750,000 unlisted options exercisable at $0.25 on or before 30 July 2023 which are currently classified as ASX restricted securities
• 3,277,900 Performance Rights which are currently classified as ASX restricted securities
• 37,500,000 fully paid ordinary shares which are currently subject to voluntary escrow

The Company will apply for the quotation of the fully paid ordinary shares which are currently classified as ASX restricted securities within 5 business days after the end of the escrow period in accordance with Listing rule 2.8.5.

-ENDS-

This announcement has been authorised by the Board of Dynamic Group Holdings Limited.

Company Secretary	Investor and Media Enquiries:
James Bahen	Cameron Gilenko / Michael Weir
Dynamic Group Holdings Ltd	Citadel-MAGNUS
[e-mail]	[phone] / [phone]
[phone]

DYNAMIC GROUP HOLDINGS LIMITED

(ASX:DDB)5DYNAMICGROUPHOLDINGS.COM.AU 54 Achievement Way, Wangara, WA 6065

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