First things first. I am not a tax accountant. This is not financial advice. For a definitive answer, speak to your tax accountant,
not to me.
However.. speaking generally?
In the USA, as I understand it, options through employment schemes are treated as income for tax purposes at the time of acquisition. You would need to check with your accountant vis-a-vis the Australian rules in this scenario.
But that's not what we're looking at here. We're talking about acquiring property (share options, bought on market); and then converting that property, at a price, to a different property.
Capital gains tax, in Australia, is triggered upon the disposal of property. In the case of exercising options, what happens is that you bought those options for a consideration (10 cents in your example); you then exercise that option to purchase Arafura shares at 34 cents per share. The ATO would group those two transactions together: you would have a quantity of Arafura shares, purchased at 44 cents each, with a purchase date of whenever you exercised the options. If you then hold on to those shares, you have an unrealised capital gain or loss. There's no tax implications until the time you sell the shares.
When you sell, the question becomes: has it been more, or less, than twelve months
since the exercising of the options? If it's more, you would get the discounted CGT rate, and be taxed on 50% of the gain. (A capital loss relative to the 44 cent base price would be carried over to whenever you next have a capital gain, and applied against that gain before any discount.) If it's less, you don't get the discount, even if it was more than 12 months since you acquired the options - at least, if my reading of the ATO's rules at
https://www.ato.gov.au/Forms/Guide-to-capital-gains-tax-2022/?anchor=Exercisingrightsoroptionstoacquireshares#Exercisingrightsoroptionstoacquireshares is accurate.
The key thing here is: CGT is only triggered for shares and options purchased on market when those shares or options are disposed of. Exercising options merely converts them into shares with the cost base adjusted to take into account the amount you paid for the options, and the purchase price adjusted to the exercise date.
(20min delay)