Annual
Report
2018
CORPORATE DIRECTORY
DIRECTORS
James Brown – Managing Director
Paul Mantell – Executive Director
Allan Buckler – Non-Executive Director
Dan O’Neill – Non-Executive Director
Beng Teik Kuan – Non-Executive Director
Zhao Tong – Non-Executive Director
COMPANY SECRETARY
Damon Cox
REGISTERED OFFICE
Level 2, 23 Barrack Street
Perth WA 6000
Telephone: +61 8 9488 5100
Facsimile: +61 8 9488 5199
Email: cosec@alturamining.com
Website: www.alturamining.com
AUDITORS
PKF Hacketts Audit
Level 6, 10 Eagle Street
Brisbane QLD 4000
SHARE REGISTRY
Link Market Services Limited
Level 12, QV1 Building
250 St George’s Terrace
Perth WA 6000
AUSTRALIAN SECURITIES EXCHANGE
Code: AJM
Contents
1
2
A Letter from the
Managing Director
5
Review of
Operations
13
Directors’
Report
23
Auditors’ Independence
Declaration
25
Financial
Statements
26
Consolidated Statement of
Profit and Loss
27
Consolidated Statement of
Other Comprehensive
Income
28
Consolidated
Balance Sheet
29
Consolidated Statement of
Changes in Equity
30
31
Consolidated Statement of
Cash Flows
Notes to the
Financial Statements
76
Directors'
Declaration
77
Independent Auditor’s
Report to the Members
83
Additional ASX
Information
86
Mineral Resources and
Ore Reserves Statement
ANNUAL REPORT 2018 ALTURA 2
DEAR SHAREHOLDER,
I AM EXTREMELY PROUD
TO BE PRESENTING YOU
WITH THE 2018 ANNUAL
REPORT FOR ALTURA
MINING LIMITED.
The past year has been
transformational for your Company
as we made the move from project
developer to lithium miner.
We are now an integral part of the
supply chain for the lithium ion
battery revolution that is changing
the way we view energy storage.
It is humbling to think that a little
piece of the Altura Lithium Project
could one day end up in the battery
for your mobile phone, laptop,
electric vehicle or the storage
batteries attached to your rooftop
solar system.
On 5 September 2018, Altura
welcomed the Hon Bill Johnston
MLA, Western Australia’s Minister
for Mines and Petroleum,
State and Local Government
representatives, traditional
land owners, Altura employees,
contractors, suppliers, financers
and investors at the official
opening of the Altura Lithium
Project. Guests were given a
guided tour of the project, before
Minister Johnston officially opened
the mine.
Achieving production and sales of
lithium concentrate in just over 18
months from breaking ground is a
remarkable achievement for any
mining project.
Your Company deliberately set an
aggressive timetable and our team
of employees and contractors
stepped up to that challenge.
Moving quickly was critical for us
to be in a strong position to benefit
from the rapidly growing lithium
market.
As at the date of this report,
the Project was continuing its
production ramp-up and I am
confident we will be able to reach
nameplate capacity in coming
months.
Our spodumene concentrate
has proven itself as a quality
product with the plant consistently
delivering at or above the required
technical specifications.
ALTURA ANNUAL REPORT 2018 3
Our focus remains firmly on
the Stage 1 ramp-up. Reaching
nameplate capacity and ensuring
the efficient running of the plant
will be the key to delivering
shareholder value.
During the year we also completed
a Definitive Feasibility Study on
a Stage 2 expansion that would
double production capacity to
approximately 440,000 tonnes.
The results of this study were
extremely positive and showed a
robust return could be delivered
through further investment in
production. In due course, your
Board will make a decision on
pursuing the Stage 2 expansion.
In the meantime we continue with
our regional exploration programs
that have continued to cement
Pilgangoora as a world-class
orebody. In particular, the positive
results from the Southern Ridge
area contributed to an increase in
the Resource and Reserves at the
Project.
We continue to be buoyed by the
long-term outlook for lithium as
the electric revolution gathers
pace. All commodities experience
fluctuations and occasional
volatility in pricing and lithium is
no different.
Given that, we try to remain
focussed on the long-term demand
outlook, which we see as positive,
and ensuring that our production
costs remain globally competitive.
We continue to field enquiries from
potential offtake partners, with
particularly strong demand for our
high-grade lithium coming from
north Asia.
The continued hard work by the
Altura team and the growth in the
company was recognised during
the past 12 months when the
Company was added to the S&P/
ASX 300 index.
The success that Altura has
experienced and will continue
to experience could not have
occurred without the loyal
support of our shareholder
base. There have been several
challenges during the past year,
and we appreciate the support
shareholders have given us.
The Board and management
continue to focus on growing the
business and delivering positive
shareholder value.
I would like to thank my fellow
Board members, the management
and entire Altura team both
in Perth and on site, for their
tremendous efforts.
There is a lot to look forward to
over the next 12 months as we
continue on this exciting journey.
James Brown
Managing Director
ANNUAL REPORT 2018 ALTURA 4
ALTURA ANNUAL REPORT 2018 5
Review of Operations
ANNUAL REPORT 2018 ALTURA 6
Altura Lithium Project
ALTURA MINING LIMITED
IS PLEASED TO PROVIDE
ITS ANNUAL REVIEW OF
OPERATIONS FOR THE
2018 FINANCIAL YEAR.
Altura owns and operates its
world-class Altura Lithium Project
(“Project”) located at Pilgangoora
in the Pilbara region of Western
Australia.
Production and shipment of
quality spodumene concentrate
has recently commenced from the
Project, which boasts a nameplate
production capacity of 220,000
tonnes per annum (tpa).
batteries for electric vehicles and
static storage uses.
The development of the Project
from the breaking of ground,
to production and shipment in
just 18 months is a remarkable
achievement by the Company, and
will allow the delivery of positive
shareholder returns over the
coming years.
With the commencement of
production, Altura is now a key
player in the global lithium market,
and is leveraging the increasing
demand for raw materials for
the manufacturing of lithium ion
PROJECT LOCATION
The Altura Lithium Project is
located approximately 90 km
south of Port Hedland (see map
below), with road access to
the site via the Great Northern
Highway and then Shire roads
and station tracks.
Altura’s two mining lease
tenements are M45/1230 and
M45/1231, and cover a total area
of 394 hectares.
N
PORT HEDLAND
d
a
Ro
rr
a
a
Great N
o
r
t
h
e
r
n
H
ig
hway
g
n
i
p
p
i
P
P
P
o
r
t
E45/5136
H
e
d
l
a
n
d
–
W
Port Hedland
ALTURA
LITHIUM PROJECT
Kalgoorlie
Perth
N o r t h West Coastal Highway
90km
E45/5137
Marble
B
ar Road
E45/5280
E45/2277
itte
n
o
o
m R
o
ad
20km
E45/2287
E45/2287
ALTURA
LITHIUM PROJECT
E45/3488
L45/409
New Camp
Wodgina Airport
Wodgina Mine
M45/1260
M45/1230
E45/2363/1
E45/5348
E45/5347
E45/4894
M45/1231
L45/448
E45/2363-1
ALTURA ANNUAL REPORT 2018
Altura Lithium Project continued
7
PROJECT OVERVIEW
Mining at the Altura Lithium
Project commenced in May 2017
using open pit methods, with the
deposit being characterised by
shallow and thick mineralisation.
Since early exploration and mining
work, the project has developed
mining, processing, logistics and
support infrastructure to mine and
process an average 1.54 million
tonnes per annum (Mtpa) of lithium
ore to produce approximately
220,000 tonnes of lithium
spodumene concentrate annually.
The deposit has a low Life of Mine
(LOM) strip ratio of 2.9:1 providing
Altura with an extremely low
operational mining cost.
PROJECT DEVELOPMENT
Over the past 12 months the
Company has been focused on the
construction and commissioning of
both the mine and process plant,
in preparation for commencement
of Stage 1 production at the Altura
Lithium Project.
procurement, delivery and
construction of numerous major
components including:
• Run-of-Mine (ROM) pad
• Tailings Storage Facility (TSF)
• Power Station
• Crushing and Screening plant
• High Pressure Grind Rolls
(HPGR) and Ball Mill
• Dense Media Separation (DMS)
modules
• Flotation Circuit
• Mine Operations Centre (MOC)
• Water bores and pipelines
• Raw Water Dam and Water
Treatment Plant (Reverse
Osmosis)
• Metallurgy Laboratory
• Product Storage Shed in Port
Hedland (built and owned by
Qube).
Mining operations were also
established, and these comprised:
The following key milestones were
completed in the past 12 months:
• Mobilisation of the mining, drill
and blast fleet
• First crushing of ore in May 2018
• First production of lithium
• Development of the mining pit,
consisting of 3 main areas
concentrate in late July 2018
• Loading and haulage of
• First haulage from the mine
site to the Qube storage facility
in Port Hedland in August 2018
• Formal opening of the Altura
spodumene ore to ROM pad
and ROM stockpiles
• Removal of waste rock to the
waste rock dump
Lithium Project on 5 September
2018
• Construction of workshop and
mining contractor facilities.
haulage of product from the mine
to the Qube storage shed in Port
Hedland commencing a fortnight
later on 8 August 2018.
Stockpiles at the Qube facility
then steadily increased in advance
of the first shipment of lithium
concentrate from Port Hedland.
The first cargo of approximately
5,000 dry metric tonnes departed
the port of Port Hedland on
9 October 2018 on the vessel
“MV Clipper Tenacious” bound
for China, and was purchased by
offtake partner, Lionergy Limited.
FORMAL OPENING
OF THE MINE
Altura was pleased to welcome
the Hon Bill Johnston MLA,
Minister for Mines and Petroleum
to the Altura Lithium Project at
Pilgangoora on 5 September 2018,
as the Minister officially opened
the mine.
The event was attended by State and
Local Government representatives,
traditional land owners, Altura
employees, contractors, suppliers,
financiers and investors.
Altura acknowledges the
contributions of all of these parties in
bringing the Project into production.
OFFTAKE AGREEMENTS
Altura has in place two binding
offtake agreements (BOA) for
a minimum total of 200,000
tonnes of 6% grade spodumene
concentrate per year, representing
more than 90% of current planned
Stage 1 annual production.
The key terms of the BOA’s are:
• First shipment of lithium
concentrate to Altura’s offtake
partner Lionergy in early
October 2018.
The construction phase of the
Project has involved the design,
PRODUCTION AND
FIRST SHIPMENT
Production of coarse concentrate
at the Altura Lithium Project began
on 25 July 2018 with the first
• Minimum of 100,000 dry metric
tonnes (dmt) per annum of 6%
grade spodumene concentrate
ANNUAL REPORT 2018 ALTURA • LOM revenue of A$4.377B and
LOM EBITDA of A$2.473B over
the estimated 13-year mine life
• Capital estimate of
A$118 million (exclusive of
Stage 1 capital costs)
• Payback period of 2.3 years
Importantly, the Company already
has all major statutory approvals
in place which significantly de-
risks the execution of the Stage 2
project.
Altura’s board has endorsed the
findings of the Stage 2 DFS, but
will review the Stage 1 operations
and ramp-up to nameplate
production before making a final
investment decision on Stage 2.
For further information on the
Stage 2 DFS, please refer to the
ASX Release on 30 April 2018.
8
Altura Lithium Project continued
• Term of BOA of 5 years minimum
• Minimum price of US$550 dmt
(FOB) and a maximum price
of US$950 dmt (FOB) for the
first three years of the BOA
(based on Li2O content per
dmt on 6% Li2O)
• Annual pricing to be agreed via
consideration of current market
pricing information, including
but not limited to indices for
spodumene (if available); prices
published or announced by
other companies and movement
in lithium carbonate prices,
subject to the floor and ceiling
price for first three years.
Altura continues to engage with
other potential offtake partners
and is still seeing strong demand
from North Asia.
KEY SUPPLY CONTRACTS
Altura has several key supply
contracts in place for its operations.
MINING
NRW Holdings Limited has a five-
year contract to perform mining,
drilling and blasting services, which
also included the construction
of mining infrastructure prior to
mining commencing.
NRW mines the deposit by
conventional bulk mining methods
utilising hydraulic excavators,
dump trucks and drill and blasting.
Ore is trucked directly from the
blasted faces to the ROM stockpile
and fed to the primary crusher
using front-end loaders.
TRANSPORT AND LOGISTICS
The scope of the work under
the contract involves loading
the product at the mine site
and transporting the product in
side tipping road trains to Port
Hedland.
Qube has also constructed
a dedicated storage shed in
Wedgefield, Port Hedland, and
transports the product to the
port and ship loading using the
patented Rotabox™ system.
POWER GENERATION
Kalgoorlie Power Systems (KPS),
a wholly owned subsidiary of
Pacific Energy Limited, has been
contracted to provide an 11MW
diesel fuelled power station for a
five-year period.
The power station comprises dual
fuel diesel/gas generators that
will allow opportunities for cleaner
and more cost-efficient gas to
be utilised in the future should a
suitable source become available.
STAGE 2 DEFINITIVE
FEASIBILITY STUDY
Altura released a Stage 2 Definitive
Feasibility Study (DFS) in April
2018 with the results showing
that a duplication of the Stage 1
operations and processing plant
would significantly add to the
project’s overall value.
The key outcomes of the DFS were:
• Combined Stage 1 and 2 Project
Net Present Value (NPV) of
$834 million over a 13-year mine
life based on an ore reserve
estimate of 34.2 million tonnes
Qube Holdings Pty Ltd is the
logistics and transport supplier
for the Project.
• Life of Mine (LOM) cash cost of
A$324 per tonne of spodumene
concentrate
ALTURA ANNUAL REPORT 2018 Altura Lithium Project continued
STAGE 2 DFS – KEY RESULTS*
Description
Average Annual Ore Feed to Plant (LOM)
Total Ore Mined
Annual Spodumene Concentrate Production (6% Li2O)
Life of Mine (LOM)
Total Spodumene Concentrate Produced
LOM Strip Ratio
Spodumene Concentrate Average Market Price1
Capital Cost Estimate2
Total Revenue
Project EBITDA3
Total Cash Cost FOB/tonne product4
Net Present Value (NPV)5
Internal Rate of Return (IRR)
Discount Rate
Project payback period
Exchange Rate
9
Units
Mtpa
Mt
tonnes
years
Mt
waste:ore
US$/wmt
A$M
A$M
A$M
A$
A$M
%
%
years
AUD:USD
Results
3.08
34.21
440,000
13
4.75
3:1
690
118
4,377
2,473
324
834.6
62.6
10
2.3
0.7500
1. Price based on FOB forecast equivalent – refer to Market and Pricing section
2. Excluding sustaining capital
3. EBITDA is listed on a real basis
4. Total Cash Cost FOB/tonne product are defined as all cash costs to free on board, excluding royalties, interest, tax and depreciation
5. Net Present Value (NPV) is post-tax nominal basis, at a 10% discount rate
*The Company confirms that all the material assumptions underpinning the Stage 2 DFS continue to apply and have not materially changed.
ANNUAL REPORT 2018 ALTURA 10
Altura Lithium Project continued
UPGRADED ORE
RESERVE AND MINERAL
RESOURCE ESTIMATES
During the year Altura released
two increased revisions to its Ore
Reserve and Mineral Resource
estimates.
Under the latest revision released
in May 2018, the Altura lithium
deposit has:
• An Ore Reserve estimate of
41.1 million tonnes at 1.05%
Li2O (with 432,000 tonnes of
contained Li2O); and
• A Mineral Resource estimate
of 50.5 million tonnes at
1.01% (with 512,000 tonnes of
contained Li2O).
The most recent estimate was
calculated after the completion
of a drill program in the Southern
Ridge Deposit area conducted in
the March quarter 2018.
The increased estimate, which was
not part of the Stage 2 DFS inputs,
has added a minimum of 2 years to
the project.
The Ore Reserve and Mineral
Resource estimation work was
undertaken by geological and mine
engineering services consultants,
Cube Consulting Pty Ltd.
ORE RESERVE ESTIMATE – MAY 2018
JORC
category
Proved
Probable
Total
Cut-off
Li2O
%
Ore
(million
tonnes)
0.43%
0.43%
0.43%
8.3
32.8
41.1
Li2O
(%)
1.14
1.03
1.05
MINERAL RESOURCE ESTIMATE – MAY 2018
JORC
category
Measured
Indicated
Sub-total
Inferred
Total
Cut-off
Li2O
%
Ore
(million
tonnes)
0.40%
0.40%
0.40%
0.40%
0.40%
8.7
38.0
46.7
3.8
50.5
Li2O
(%)
1.12
1.00
1.02
0.92
1.01
Fe2O3
(%)
2.13
1.90
1.95
Fe2O3
(%)
2.14
1.93
1.97
1.80
1.96
Contained
Li2O
(tonnes)
94,000
338,000
432,000
Contained
Li2O
(tonnes)
97,000
380,000
477,000
35,000
512,000
For further information on both the Ore Reserve and Mineral Resource
estimates, please refer to the ASX announcement on 28 May 2018.
COMMUNITY ENGAGEMENT
Over the past 18 months Altura has employed around 1,000
personnel and has contributed to improving public roads and
infrastructure in and around Port Hedland.
The Company has worked alongside local organisations and their
various sponsorship requirements and engaged with various
indigenous communities to provide employment and business
opportunities.
Altura looks forward to continuing its work with local and
indigenous communities.
ALTURA ANNUAL REPORT 2018 11
• The Tabalong coal project in
South Kalimantan in which
Altura holds a 70% interest in
three Mining Permits (“SPK”,
“SCC” and “SP”) and a 56%
interest in two Mining Licences
(“KM” and “MBM”).
In June 2018 Altura divested
its one-third interest in the
Delta coal mine and associated
infrastructure. There was no cash
consideration in the transaction,
and Altura holds no future rights
relating to the Delta coal mine.
Corporate developments
Key corporate developments
during the year included:
PROJECT FUNDING
LOAN NOTE FACILITY
Altura announced in July 2017 that
it had secured a US$110 million
loan note facility to enable the
completion of the construction
and commissioning of the mine
and process plant for the Stage 1
operations.
The key details of the facility are:
• Senior secured loan notes
issued raising a total of
US$110 million
• Leading US and Swiss based
investment management
groups provided the loan note
facility package
• Funding comprised two
tranches with Tranche 1
(approximately US$33 million)
received in early August 2017
and Tranche 2 (US$77 million)
received in late September
2017
In September 2018 the Company
advised that it had entered into
an Amendment Deed with its loan
note holders to be provided with
an additional US$15 million for the
Altura Lithium Project.
The terms of the Amendment Deed
are in line with the existing
US$110 million loan note facility.
WARRANTS AND OPTIONS
The terms of the debt facility
also provided for the issue of
warrants to the loan note holders
participating in the US$110 million
loan note facility.
Unlisted options were also issued
to Jett Capital Partners as part
of their fee arrangements in the
negotiating of the loan note facility.
Both the warrants and options
were approved by shareholders at
the 2017 annual general meeting.
To date, the exercising of these
warrants and options has generated
proceeds of A$9.8 million for the
Company.
SHARE PLACEMENT WITH
INTERNATIONAL FUND MANAGERS
A $26 million share placement
to international institutional
investors, led by Jett Capital
Advisors and Bizzell Capital
Partners Pty Ltd was successfully
completed in October 2017.
S&P/ASX 300 INDEX
Effective from 19 March 2018,
Altura was added to the list of
companies that comprise the S&P/
ASX 300 Index. This follows the
elevation in March 2017 into the
ASX All Ordinaries Index (for the
top 500 companies).
This latest change places Altura in
the top 300 companies listed on the
ASX and reflected the company’s
growing market capitalisation.
INDONESIAN COAL ASSETS
Altura has previously decided to
divest the Indonesian coal assets,
and has been pursuing several
options including their possible
sale or an asset integration with
other similar operations.
These coal assets comprise:
• The Delta coal mine in East
Kalimantan where Altura has a
331/3% interest; and
ANNUAL REPORT 2018 ALTURA 12
ALTURA ANNUAL REPORT 2018 13
Directors' Report
ANNUAL REPORT 2018 ALTURA 14
Directors' Report
YOUR DIRECTORS
HAVE PLEASURE IN
PRESENTING THE ANNUAL
FINANCIAL REPORT OF
ALTURA MINING LIMITED
("ALTURA" OR "THE
COMPANY") AND ITS
CONTROLLED ENTITIES
(“THE GROUP”) FOR
THE FINANCIAL YEAR
ENDED 30 JUNE 2018.
DIRECTORS
The names of the directors in
office at any time during or since
the end of the financial year are:
• Mr James Brown
• Mr Paul Mantell
• Mr Allan Buckler
• Mr Dan O’Neill
• Mr Beng Teik Kuan
• Mr Zhao Tong
COMPANY SECRETARY
The name of the secretary in office
during the financial year and up to
the date of this report is as follows:
• Mr Damon Cox
PRINCIPAL ACTIVITIES
The principal activity of the
Group during the year was the
construction of the mine and
processing plant at Altura’s 100%
owned Pilgangoora Lithium
Project in the Pilbara region of
Western Australia.
OPERATING AND
FINANCIAL REVIEW
focused on the construction and
commencement of operations of
the Altura Lithium Project in the
Pilbara region of Western Australia.
OPERATING RESULTS
The Group’s operating loss after
providing for income tax and
non-controlling interests for the
year ended 30 June 2018 was
$12,816,965 (2017: loss $6,165,006).
The loss in 2018 related to the
Group’s administrative and
corporate costs and a net foreign
exchange loss in the year.
Exploration, commissioning,
evaluation and development costs
of the Pilgangoora Lithium Project
were capitalised during both the
2018 and 2017 financial years.
STRATEGY
The Company’s objective is to
create shareholder value through
the development of profitable
mining operations and other
supplementary mining activities
that deliver strong cash flows for
the Group, and resultant regular
dividends for shareholders.
Altura is focused on achieving
name plate production from its
Altura lithium project, with first
sales due to commence during Q3
of calendar 2018. The Company
has also completed a Definitive
Feasibility Study (DFS) for a Stage
2 expansion of the lithium project,
which it plans to commence as
soon as practical.
The Company also holds coal
assets in Indonesia which it is in
the process of divesting as soon as
reasonably possible.
OVERVIEW
PILGANGOORA LITHIUM
Altura Mining Limited (“AJM”)
is an ASX listed entity that is
During the year Altura continued
with its construction and
commissioning of the mine and
process plant for Stage 1 of the
Pilgangoora Lithium Project.
The major components of the
construction phase included:
• Run-of-Mine (ROM) pad
• Tailings Storage Facility (TSF)
• Power Station
• Crushing and Screening plant
• High Pressure Grind Rolls
(HPGR) and Ball Mill
• Dense Media Separation (DMS)
module
• Flotation Circuit
• Mine Operations Centre
• Water bores and pipelines
• Raw Water Dam and Water
Treatment Plant (Reverse
Osmosis)
• Metallurgy Laboratory
• Product Storage Shed in Port
Hedland (built and owned by
Qube).
Mining operations were also
established, and these comprised:
• Mobilisation of the mining, drill
and blast fleet
• Development of the mining pit,
consisting of 3 main areas
• Loading and haulage of
spodumene ore to ROM pad
and ROM stockpiles
• Removal of waste rock to the
waste rock dump
• Construction of workshop and
mining contractor facilities
Altura has also completed its
Stage 2 Definitive Feasibility Study
(DFS) in April 2018 with the results
ALTURA ANNUAL REPORT 2018 Directors' Report continued
15
confirming the robust economics
of the project.
The key outcomes of the Stage 2
DFS included:
• Duplication of the Stage 1
processing plant to produce
440,000 tpa of 6% Spodumene;
• Post-tax NPV (1) of A$834
million, an IRR of 63% and a
2.3 year pay back;
• Life of Mine (LOM) revenue set
to be A$4.377 billion with LOM
EBITDA (2) of A$2.473 billion
over an estimated mine life of
13 years;
• Estimated capital cost of
$A119 million (exclusive of
Stage 1 capital costs);
• Stage 2 project significantly
de-risked by having all major
statutory approvals, key
personnel and contractors
in place to commence
production; and
• First product from expansion
expected 18 months after Final
Investment Decision.
Subsequent to the release of the
Stage 2 DFS, Altura announced in
May 2018 an increased Ore Reserve
of 41.1 million tonnes at 1.05% Li2O
which adds a minimum of 2 years
to the estimated mine life.
With first production and shipments
due in the second half of calendar
2018, Altura has entered into a
number of important contracts with
key suppliers:
1. A 5-year mining contract
has been signed with NRW.
The deposit will be mined
by conventional bulk mining
methods utilising hydraulic
excavators, dump trucks and
drill and blast coupled to a
ROM stockpile.
2. The logistics and transport
supplier is Qube Holdings
Pty Ltd. The scope includes
loading of the product at the
mine stockyard, transporting
the product in side tipping
road trains to Port Hedland,
construction and operation of
a product storage shed at Port
Hedland, and transport to the
port and ship loading using the
patented Rotabox™ system.
3. Kalgoorlie Power Systems has
been contracted to provide an
11MW diesel fuelled power
station for a 5-year period. The
power station comprises dual
fuel diesel and gas generators
such that opportunities for
cleaner and more cost-efficient
gas may be utilised in the
future should a suitable source
be available.
The Company has in place two
Binding Offtake Agreements
(BOAs) with China based groups
Shaanxi J&R Optimum Energy
Co Ltd and Lionergy Limited, in
which the parties will each take a
minimum of 100,000 tonnes of 6%
Li2O grade spodumene concentrate
annually for an initial 5-year
period. Annual pricing will be
agreed with reference to current
market pricing information,
including but not limited to prices
published or announced by
other companies in the market,
movement in carbonate pricing
and with reference to any indices
that may become available in
the future. For the first 3 years
of the BOAs, there is a floor
price of US$550 per tonne of 6%
spodumene, and there is also a
ceiling price of US$950 per tonne
for the same period, the floor price
being very important from the
Company’s perspective to ensure
that it can repay its loan on the
project in the next three years.
COAL ASSETS
Delta Coal
On 14 June 2018 Altura divested
its one-third investment in the
Delta coal mine and associated
infrastructure. There was no cash
consideration in the transaction.
The Group holds no future rights
relating to the Delta coal mine.
Tabalong Coal
The Tabalong Coal Project
is a premium grade thermal
coal deposit located in South
Kalimantan, Indonesia. The project
consists of five Mining Licences
(IUPs), with all five IUPs granted
for Operation Production. Altura
holds 70% of three IUPs and
56% of the remaining two. The
Company has previously stated its
intention to divest its interests in
Tabalong coal assets. It is pursuing
a number of options for sale of the
coal assets and information has
been made available to a number
of parties under confidentiality
deed arrangements.
Financial position
The net assets of the consolidated
group increased in 2018, with non-
current assets significantly higher
due to the construction phase of
the Lithium Project. During the
year funds were sourced from a
funding facility of US$110 million
and a $26 million placement.
Risk
Development of Altura’s lithium
project is subject to the ability
of the Company and its advisors
to successfully complete
commissioning and ramp up to full
production capacity of the project
in a timely manner.
ANNUAL REPORT 2018 ALTURA 16
Directors' Report continued
The Company is also subject
to movements in international
commodity prices, and being an
Australian based company, foreign
exchange movements.
DIVIDENDS
There were no dividends paid or
declared during the year ended
30 June 2018 (2017: Nil).
SIGNIFICANT CHANGES IN
THE STATE OF AFFAIRS
There were no other significant
changes in the nature of the
Group’s principal activities during
the financial year, other than as
discussed in the financial report
and elsewhere in this Directors
Report.
MATTERS
SUBSEQUENT TO
THE END OF THE
FINANCIAL YEAR
Subsequent to the end of the
financial year, Altura entered
into an amendment deed with
existing Loan Note Holders for
an additional US$15 million of
debt funding as an extension
to the existing debt facility
(see ASX announcement of 11
September 2018). The terms of
the facility are generally in line
with the existing US$110 million
senior secured loan note facility
that was executed in July 2017
(see ASX announcement on 28
July 2017). Altura will use the
additional funds as it ramps-up
production to nameplate capacity
at the Altura Lithium Project,
continued exploration of the
Company’s portfolio of tenements
and ongoing work on the Stage 2
expansion.
FUTURE DEVELOPMENTS,
PROSPECTS AND
BUSINESS STRATEGIES
The Group will focus on completing
the commissioning of the
Pilgangoora Lithium Project
and achieving full commercial
operations as soon as possible.
The Group intends to divest is
interests in the Tabalong coal
projects as soon as practical so it
can focus on its lithium project.
ENVIRONMENTAL
PERFORMANCE
The Group is committed to
achieving a high standard of
environmental performance
and is subject to significant
environmental regulation
form both Commonwealth and
State legislation in Australia to
its mining, development and
exploration activities. The Board of
Directors is responsible for regular
monitoring of environmental
exposures and compliance with
these environmental regulations.
The Group complied with its
environmental performance
obligations during the year.
INFORMATION ON
DIRECTORS
MR JAMES BROWN
(MANAGING DIRECTOR)
Qualifications
Graduate Diploma in Mining from
University of Ballarat.
Experience
Mr Brown is a mining engineer
with over 35 years' experience in
the mining industry in Australia
and Indonesia, including the last
10 years in the chief executive role
at Altura. His mining development
and operations experience
includes the New Acland and
Jeebropilly mines in South East
Queensland, the Adaro and Multi
Harapan Utama operations in
Indonesia and Blair Athol in
the Bowen Basin in Central
Queensland.
Other current directorships in
listed entities
• Sayona Mining Limited
Former directorships in last
three years
• None
Special responsibilities
• Chief Executive Officer
Interests in shares and
performance rights
• 28,518,301 ordinary shares in
Altura Mining Limited
• 2,000,000 performance rights
over shares in Altura Mining
Limited
MR PAUL MANTELL
(EXECUTIVE DIRECTOR)
Qualifications
Bachelor of Commerce from the
University of Queensland and a
Fellow of CPA Australia.
Experience
Mr Mantell is an accountant with
more than 35 years’ corporate
experience in the mining and
associated industries. He has been
involved in all aspects of accounting
and finance, financial reporting,
taxation and administration,
ALTURA ANNUAL REPORT 2018 17
Buckler was appointed a director
in December 2008.
Other current directorships in
listed entities
Directors' Report continued
including the responsibilities of an
ASX listed entity. He has previously
arranged finance for mining and
infrastructure projects both in
Australia and Indonesia and has set
up corporate, administrative and
financial systems to support new and
expanding mining operations. He was
appointed a director in May 2009.
Other current directorships in
listed entities
• Sayona Mining Limited
Former directorships in last
three years
Other current directorships in
listed entities
• None
• None
Special responsibilities
Former directorships in last
three years
• None
Special responsibilities
• Chief Financial Officer
Interests in shares and
performance rights
• 33,503,084 ordinary shares in
Altura Mining Limited
• 1,000,000 performance rights
over shares in Altura Mining
Limited
• Member of the Audit & Risk
Committee (to 20 September
2017)
• Member of the Remuneration
& Nomination Committee
Interests in shares
• 194,839,756 ordinary shares in
Altura Mining Limited
MR DAN O’NEILL (INDEPENDENT
NON-EXECUTIVE DIRECTOR)
Qualifications
Bachelor of Science in geology from
the University of Western Australia.
MR ALLAN BUCKLER
(NON-EXECUTIVE DIRECTOR)
Experience
Qualifications
Certificate in Mine Surveying and
Mining, First Class Mine Managers
Certificate and a Mine Surveyor
Certificate issued by the Queensland
Government’s Department of Mines
Experience
Mr Buckler has over 45 years’
experience in the mining industry
and has taken lead roles in the
establishment of several leading
mining and port operations in
both Australia and Indonesia. Mr
Mr O’Neill was appointed a
director in December 2008. He
has held positions with a number
of Australian and multinational
exploration companies and has
managed exploration programs in
a diverse range of environments
and locations including Botswana,
North America, South East Asia,
North Africa and Australasia.
During his 35 years’ experience, he
has held executive management
positions with ASX listed companies
and has worked on a range of
commodities including diamonds,
gold, base metals, coal, oil and gas.
• Sayona Mining Limited
Former directorships in last
three years
• None
Special responsibilities
• Chairman of the Remuneration
& Nomination Committee
• Member of the Audit & Risk
Committee
Interests in shares
• 13,633,336 ordinary shares in
Altura Mining Limited
MR BENG TEIK KUAN (INDEPENDENT
NON-EXECUTIVE DIRECTOR)
Qualifications
Bachelor of Engineering
(University of Malaya)
Experience
Mr Kuan is an engineer with
considerable experience in bulk
handling and terminal operations,
including responsibility for the
development and management of the
Pulau Laut Coal Terminal in South
Kalimantan, Indonesia. He also has
experience in Indonesia, Malaysia
and Singapore with tin dredging
operations, managing rubber,
palm oil and cocoa processing
factories, and managing palm oil
bulk terminals. He was appointed a
director in November 2007.
Other current directorships in
listed entities
• None
ANNUAL REPORT 2018 ALTURA 18
Directors' Report continued
Former directorships in last
three years
• None
Special responsibilities
Interests in shares
• Nil
COMPANY SECRETARY
• Chairman of the Audit & Risk
MR DAMON COX
Committee
• Member of the Remuneration
& Nomination Committee
Interests in shares
• 21,000,000 ordinary shares in
Altura Mining Limited
MR ZHAO TONG
(NON-EXECUTIVE DIRECTOR)
Qualifications
• Bachelor of Science (Peking
University, China)
Experience
Mr Zhao Tong has over 25 years’
experience in the international
trade of metals and minerals and
has worked for China Shaanxi
Metals and Minerals International
Trade Co. Ltd. Mr Tong has been
the Director of the Lithium Division
of J&R Optimum since October
2016. He was appointed a Director
in March 2017.
Mr Cox is a Chartered Secretary,
and a CPA. He has over 30 years’
experience in various roles
including corporate governance,
compliance, treasury and strategic
policy advice.
REMUNERATION
REPORT (AUDITED)
This report details the nature
and amount of remuneration
for directors and other key
management personnel.
REMUNERATION POLICY AND
LINK TO PERFORMANCE
The Company’s policy is to
remunerate fairly and in line
with companies of similar size,
operations and in the same industry.
Individual remuneration decisions
are made by the Remuneration &
Nomination Committee taking into
account the following factors:
Remuneration packages may
contain the following key
elements:
a) Primary benefits - salary/fees,
bonuses and non-monetary
benefits including the provision
of a motor vehicle;
b) Post-employment benefits
– including superannuation
and prescribed retirement
benefits; and
c) Equity - performance rights
granted under the Long-Term
Incentive Plan as disclosed
in Note 23 to the financial
statements.
None of the Company’s personnel
remuneration packages are
linked directly to the Company’s
profitability or other measure
of performance. The Company
maintains a Long Term Incentive
Plan under which employees may
be granted performance rights and
share options which vest subject
to service conditions being met.
Directors may also be allocated
performance rights and/or options
as an incentive. During the 2018
year, directors were issued with
shares on the vesting of previously
issued performance rights.
• The responsibility of the role;
• Experience of the employee;
PERFORMANCE-BASED
REMUNERATION
Other current directorships in
listed entities
• Past performance and future
expectations; and
• None
•
Industry conditions and trends.
Former directorships in last
three years
• None
Special responsibilities
• Member of the Audit & Risk
Committee (from 20 September
2017)
In order to retain and attract
key management personnel of
sufficient calibre to facilitate the
efficient and effective management
of the Company’s operations,
the Remuneration & Nomination
Committee may seek the advice
of external advisors in connection
with the structure of remuneration
packages.
The Company currently has
performance based remuneration
in place as disclosed in Note 23.
GROUP PERFORMANCE,
SHAREHOLDER WEALTH AND
DIRECTOR AND EXECUTIVE
REMUNERATION
The Group has recorded the
following earnings from continuing
operations over the last five years:
ALTURA ANNUAL REPORT 2018 Directors' Report continued
19
2018
2017
2016
2015
2014
Revenues and sundry income
1,675,168
1,600,959
1,485,611
4,779,039
7,610,019
EBITDA1
NPBT2
NPAT3
(13,279,929)
(6,417,320)
(11,290,052)
(15,861,975)
(5,588,222)
(13,120,803)
(6,448,799)
(30,839,474)
(16,947,795)
(6,530,675)
(12,712,487)
(5,914,752)
(31,618,016)
(17,268,152)
(7,017,662)
Dividends paid
-
-
-
-
-
plus allowances. Two months’
notice of termination by either
party is required, with a separation
allowance equivalent to six
month’s gross salary to be paid if
employment is terminated by the
Company.
Damon Cox, Company Secretary
– the agreement is of no fixed
term and allows for payment of
an annual cash salary, reviewed
each year, and superannuation.
Provision of a motor vehicle is
included. Two months’ notice
of termination by either party
is required, with a separation
allowance equivalent to six
month’s gross salary to be paid if
employment is terminated by the
Company.
1. Earnings before interest, tax, depreciation and amortisation
2.
3.
Net profit before tax
Net profit after tax & minority interest
KEY MANAGEMENT PERSONNEL
(KMP) REMUNERATION POLICY
if employment is terminated by the
Company.
The Remuneration & Nomination
Committee reviews the
remuneration packages of all
directors and key management
personnel on an annual basis.
Remuneration packages are
reviewed and determined with
due regard to relevant market
conditions and individual’s
experience and qualification
and are benchmarked against
comparable industry salaries.
Payment of bonuses and share
based compensation benefits is
discretionary.
EMPLOYMENT CONTRACTS OF
KEY MANAGEMENT PERSONNEL
Contracts of employment are given
to key management personnel at
time of employment. Details are as
follows:
James Brown, Managing Director
– the agreement is of no fixed
term and allows for payment
of a monthly cash salary in US
dollars, reviewed each year, plus
allowances. Three months’ notice
of termination by either party
is required, with a separation
allowance equivalent to one year’s
salary and entitlements to be paid
Paul Mantell, Executive Director
– the agreement is of no fixed
term and allows for payment of
an annual cash salary, reviewed
each year, and superannuation.
Provision of a motor vehicle
or equivalent allowance and
other non-cash benefits is
included. Three months’ notice
of termination by either party
is required, with a separation
allowance equivalent to one
year’s gross salary to be paid if
employment was terminated by
the Company.
Chris Evans, Chief Operating
Officer – the agreement is of
no fixed term and allows for
payment of an annual cash
salary, reviewed each year, and
superannuation. Three months’
notice of termination by either
party is required, with a separation
allowance equivalent to six
month’s gross salary to be paid if
employment was terminated by
the Company.
Noel Young, Group Financial
Controller – the agreement is
of no fixed term and allows for
payment of an annual cash salary
in US dollars, reviewed each year,
ANNUAL REPORT 2018 ALTURA 20
Directors' Report continued
Cash salary
and fees
$
Name
Short-term benefits
Non-
monetary
benefits
$
Cash
bonus
$
Post
employment
Share based
payments
Superannuation
$
Performance
rights
$
Total
$
Performance
rights as a
percentage
of total
%
2018
Non-executive directors
A Buckler
D O’Neill
B Kuan
Z Tong
Sub total non-
executive directors
Executive directors
J Brown
P Mantell
Other KMP
C Evans
N Young
D Cox
Total for KMP
compensation
Total compensation
2017
Non-executive directors
A Buckler
D O’Neill
B Kuan
Z Tong•
Sub total non-
executive directors
Executive directors
J Brown
P Mantell
Other KMP
C Evans
N Young
D Cox
Total for KMP
compensation
Total
compensation
403,529
325,026
278,863
189,062
145,000
1,341,480
1,633,512
60,000
72,000
54,000
19,000
205,000
413,790
322,000
220,000
226,788
132,500
1,315,078
1,520,078
67,000
79,000
79,000
67,032
292,032
30,000
30,000
30,000
24,657
114,657
-
-
-
-
-
-
-
-
-
-
-
92,601
13,922
-
21,311
28,079
155,913
9,215
10,355
10,355
-
29,925
-
24,999
24,999
12,825
13,775
76,598
1,117
1,117
1,117
-
3,351
107,332
120,472
120,472
91,689
439,965
432,689
216,347
928,820
580,294
211,684
44,385
44,385
515,546
267,583
231,239
949,490 2,523,481
114,657
155,913
106,523
952,841 2,963,446
-
-
-
-
-
-
-
-
-
91,391
12,650
35,000
-
-
35,000
-
75,229
23,353
202,623
5,700
6,840
24,840
-
37,380
-
28,025
24,225
-
12,587
64,837
3,885
3,885
3,885
-
11,655
69,585
82,725
82,725
19,000
254,035
38,852
19,425
544,033
382,100
3,213
7,770
7,770
282,438
309,787
176,210
77,030 1,694,568
35,000
202,623
102,217
88,685 1,948,603
*Mr Zhao Tong joined the Altura Board in March 2017
No termination payments or long service leave payments were made during the year (2017 Nil)
1.0%
0.9%
0.9%
-
46.6%
37.3%
41.1%
16.6%
19.2%
5.6%
4.7%
4.7%
-
-
7.1%
5.1%
1.1%
2.5%
4.4%
-
-
ALTURA ANNUAL REPORT 2018 Directors' Report continued
21
The following shares were issued to directors and key management personnel on the vesting of performance rights
during the year ended 30 June 2018:
J Brown
P Mantell
A Buckler
D O’Neill
BT Kuan
C Evans
N Young
D Cox
Number issued
1,000,000
500,000
100,000
100,000
100,000
400,000
200,000
200,000
2,600,000
Issue date
18/12/17
18/12/17
18/12/17
18/12/17
18/12/17
18/12/17
18/12/17
18/12/17
Value per share
at issue date
$
0.3613
0.3613
0.3613
0.3613
0.3613
0.3613
0.3613
0.3613
PERFORMANCE RIGHTS
In 2014 the Company established a new Long-Term Incentive Plan (LTIP) to assist in the reward and retention of
directors and employees.
A total of 8,100,000 rights were granted in December 2014 to directors (with shareholder approval), key
management personnel and other senior staff. A further 1,450,000 rights were granted to key management
personnel and other senior staff in the year ended 30 June 2016, 1,350,000 in the year ended 30 June 2017 and
another 7,850,000 were granted in the year ended 30 June 2018. The rights awarded during the year were granted
for no consideration. No amount is payable on the vesting of the rights. The rights will vest and automatically
convert to ordinary shares in the Company following the satisfaction of the service conditions.
The following performance rights were on issue to directors and key management personnel as at 30 June 2018:
J Brown
P Mantell
C Evans
N Young
D Cox
Granted number
Vesting 30 Nov 2018
2,000,000
1,000,000
1,000,000
200,000
200,000
4,400,000
2,000,000
1,000,000
1,000,000
200,000
200,000
4,400,000
MEETINGS OF DIRECTORS
The following table sets out the number of directors’ meetings (including meetings of committees of directors)
held during the financial year and the number of meetings attended by each director (while they were a director
or committee member). During the financial year there were 5 Directors’ meetings, 3 Audit & Risk Committee
meetings and 2 Remuneration & Nomination Committee meetings held.
ANNUAL REPORT 2018 ALTURA
22
Directors' Report continued
Directors'
Meetings
Audit & Risk
Committee
Remuneration &
Nomination Committee
Number
eligible to
attend
Number
attended
Number
eligible to
attend
Number
attended
Number
eligible to
attend
Number
attended
J Brown
P Mantell
A Buckler
D O’Neill
B Kuan
Z Tong
5
5
5
5
5
5
5
5
5
4
5
5
-
-
1
3
3
2
-
-
1
2
3
2
-
-
2
2
2
-
-
-
2
2
2
-
INDEMNIFICATION
AND INSURANCE OF
DIRECTORS AND OFFICERS
The Company has entered into
Deeds of Indemnity with all of its
directors in accordance with the
Company’s Constitution. During
the financial year the Company
paid a premium to insure the
directors, officers and managers
of the Company and its controlled
entities. The insurance contract
requires that the amount of the
premium paid is kept confidential.
OPTIONS
At the date of signing this report,
5,784,846 unissued ordinary
shares of Altura Mining Limited
under option were outstanding.
WARRANTS
Under the terms of the US$110
million debt facility announced
on 28 July 2017, the lenders are
to receive a total of 72,644,513
warrants. These were approved
on 22 November 2017 at the
Company’s annual general
meeting and issued on 27
November 2017 at an exercise
price of $0.1260 per warrant with
an expiry date 4 August 2022. At
the date of signing this report,
19,812,140 warrants outstanding.
thousand dollars in accordance
with the instrument.
AUDITOR’S
INDEPENDENCE
DECLARATION
The auditor’s independence
declaration for the year ended
30 June 2018 has been received
and is included on page 23 of the
annual report.
Signed in accordance with a
resolution of the Directors made
pursuant to Section 298(2) of the
Corporations Act 2001.
On behalf of the Directors,
James Brown
Managing Director
Perth, 11 September 2018
PROCEEDINGS ON BEHALF
OF THE COMPANY
No person has applied for leave of
the Court to bring proceedings on
behalf of the Company or intervene
in any proceedings to which the
Company is a party for the purpose
of taking responsibility on behalf of
the Company for all or any part of
those proceedings.
The Company was not party to any
such proceedings during the year.
NON-AUDIT SERVICES
The Company’s auditor, PKF
Hacketts Audit, did not provide any
non-audit services to the Company
during the year ended 30 June
2018.
ROUNDING OF AMOUNTS
The company is of a kind referred
to ASIC Legislative Instrument
2016/191, relating to the
‘rounding off’ of amounts in the
directors’ report and financial
report. Amounts in the directors’
report and financial report have
been rounded off to the nearest
ALTURA ANNUAL REPORT 2018
23
AUDITOR’S INDEPENDENCE DECLARATION
UNDER SECTION 307C OF THE CORPORATIONS ACT 2001
TO THE DIRECTORS OF ALTURA MINING LIMITED
I declare that, to the best of my knowledge and belief, during the year ended 30 June 2018, there
have been:
(a)
no contraventions of the auditor independence requirements of the Corporations Act 2001
in relation to the audit; and
(b)
no contraventions of any applicable code of professional conduct in relation to the audit.
PKF HACKETTS AUDIT
Liam Murphy
Partner
Brisbane, 11 September 2018
13
ANNUAL REPORT 2018 ALTURA
24
ALTURA ANNUAL REPORT 2018 25
Financial Statements
ANNUAL REPORT 2018 ALTURA 26
Altura Mining Limited and Controlled Entities
Consolidated Statement of
Profit and Loss
for the year ended 30 June 2018
Consolidated Statement of Profit and Loss
FOR THE YEAR ENDED 30 JUNE 2018
Continuing operations
Revenue
Cost of sales
Operating profit / (loss)
Other income
Sundry income
Expenses
Administration costs
Employee benefits expense
Other expenses
Foreign exchange gain / (loss)
Impairment on equity accounted asset
Share of net profit / (loss) of equity accounted investee, net of tax
Profit / (loss) before income tax
Income tax (expense) / benefit
Profit / (loss) after income tax from continuing operations
Discontinued operations
Loss from discontinued operations after tax
Net profit / (loss) for the year
Profit / (loss) attributable to:
Owners of Altura Mining Limited
Non‐controlling interest
Note
5(a)
5(c)
5(b)
5(f)
5(d)
5(e)
25
7(a)
3
2018
$’000
1,165
(772)
393
510
(3,780)
(3,690)
(188)
(6,366)
‐
‐
(13,121)
408
(12,713)
(104)
(12,817)
(12,880)
63
(12,817)
2017
$’000
1,271
(1,069)
202
331
(3,030)
(2,272)
(167)
(1,371)
(18)
(124)
(6,449)
534
(5,915)
(250)
(6,165)
(6,127)
(38)
(6,165)
(Loss) per share from continuing and discontinued operations
attributable to the ordinary equity holders of the Company:
Basic and diluted (loss) per share from continuing and discontinuing
operations
Basic and diluted (loss) per share from continuing operations
Basic and diluted (loss) per share from discontinued operations
6
6
6
(0.74)
(0.73)
(0.01)
(0.45)
(0.44)
(0.01)
The above Consolidated Statement of Profit and Loss should be read in conjunction with the accompanying Notes.
14
ALTURA ANNUAL REPORT 2018
27
Altura Mining Limited and Controlled Entities
Consolidated Statement of
Other Comprehensive Income
for the year ended 30 June 2018
FOR THE YEAR ENDED 30 JUNE 2018
Consolidated Statement of Other Comprehensive Income
Profit / (loss) for the year
(12,817)
(6,165)
Note
2018
$’000
2017
$’000
Other comprehensive income / (loss) for the year
Items that may be reclassified to profit and loss
Changes in the fair value of available‐for‐sale financial assets
Exchange differences on translation of foreign controlled entities
13
Other comprehensive income / (loss) for the year, net of tax
Total comprehensive income / (loss) for the year
Total comprehensive income / (loss) attributable to:
Members of the parent entity
Non‐controlling interest
Total comprehensive income / (loss) attributable to members
of the parent entity arises from:
Continuing operations
Discontinued operations
3,194
(1,751)
1,443
(11,374)
(11,413)
39
(11,374)
(10,948)
(465)
(11,413)
(509)
1438
929
(5,236)
(5,221)
(15)
(5,236)
(5,295)
74
(5,221)
The above Consolidated Statement of Other Comprehensive Income should be read in conjunction with the accompanying Notes.
15
ANNUAL REPORT 2018 ALTURA
28
Altura Mining Limited and Controlled Entities
Consolidated
Balance Sheet
for the year ended 30 June 2018
Consolidated Balance Sheet
AS AT 30 JUNE 2018
Current assets
Cash and cash equivalents
Trade and other receivables
Held to maturity investments
Inventories
Current tax prepaid
Other current assets
Assets classified as held for sale
Total current assets
Non‐current assets
Available‐for‐sale financial assets
Property, plant and equipment
Exploration and evaluation
Mine development at cost
Total non‐current assets
Total assets
Current liabilities
Trade and other payables
Borrowings
Short term provisions
Liabilities classified as held for sale
Total current liabilities
Non‐current liabilities
Borrowings
Provisions
Total non‐current liabilities
Total liabilities
Net assets
Equity
Contributed equity
Reserves
Accumulated losses
Capital and reserves attributable to owners of Altura Mining Limited
Non‐controlling interest
Total equity
Note
8
9
11
10
12
3c
13
14
15
16
17
18
19
3c
18
21
22
22
2018
$’000
28,761
2,242
52
1
295
384
9,271
41,006
4,018
694
1,595
221,562
227,869
268,875
22,713
‐
1,158
1,846
25,717
145,887
3,918
149,805
175,522
93,353
192,893
3,502
(103,340)
93,055
298
93,353
2017
$’000
13,271
3,336
52
1
272
333
8,820
26,085
824
850
1,226
59,353
62,253
88,338
9,198
15,677
842
1,753
27,470
‐
3,918
3,918
31,388
56,950
146,556
595
(90,460)
56,691
259
56,950
The above Consolidated Balance Sheet should be read in conjunction with the accompanying Notes.
16
ALTURA ANNUAL REPORT 2018
29
Altura Mining Limited and Controlled Entities
Consolidated Statement of
Changes in Equity
for the year ended 30 June 2018
Consolidated Statement of Changes in Equity
FOR THE YEAR ENDED 30 JUNE 2018
Contributed
equity
Accumulated
losses
Option &
performance
rights reserve
Change in fair
value ‐ market
valuation
Foreign
currency
translation
reserve
Non‐
controlling
interests
Total
$’000
$’000
$’000
$’000
$’000
$’000
$’000
Balance as at 30 June 2016
105,840
(84,333)
233
803
(1,276)
274
21,541
Total comprehensive income for the year
‐
(6,127)
Transactions with owners in their capacity as
owners:
Issue of shares – employee bonus payment
Issue of shares – loan repayment
Contributions of equity, net of transaction
costs
Transfer from share based payment reserve
to equity
Employee share schemes – value of employee
services
Sub‐total
70
773
39,640
233
‐
40,716
‐
‐
‐
‐
‐
‐
Balance as at 30 June 2017
146,556
(90,460)
‐
‐
‐
‐
(233)
162
(71)
162
(509)
1,415
(15)
(5,236)
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
70
773
39,640
‐
162
40,645
294
139
259
56,950
Balance as at 30 June 2017
146,556
(90,460)
162
294
139
259
56,950
Total comprehensive income for the year
‐
(12,880)
Transactions with owners in their capacity as
owners:
Issue of shares ‐ employee bonus payment
Contributions of equity, net of transaction
costs
Transfer from share based payment reserve
to equity
Employee share schemes – value of employee
services
Sub‐total
34
45,947
356
‐
46,337
‐
‐
‐
‐
‐
Balance as at 30 June 2018
192,893
(103,340)
‐
‐
‐
(356)
1,796
1,440
1,602
3,194
(1,727)
39
(11,374)
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
34
45,947
‐
1,796
‐
47,777
3,488
(1,588)
298
93,353
The above Consolidated Statement of Changes in Equity should be read in conjunction with the accompanying Notes.
17
ANNUAL REPORT 2018 ALTURA
30
Consolidated Statement of
Cash Flows
for the year ended 30 June 2018
Altura Mining Limited and Controlled Entities
Consolidated Statement of Cash Flows
FOR THE YEAR ENDED 30 JUNE 2018
Note
Cash flows from operating activities
Receipts from customers
Payments to suppliers and employees
Sundry income
Interest received
Income tax received
Net cash (used in) / provided in operating activities
28(b)
Cash flows from investing activities
Expenditure on exploration and evaluation activities
Purchase of property, plant and equipment
Proceeds from sale of property, plant and equipment
Net cash (used in) / provided by investing activities
Cash flows from financing activities
Proceeds from the issue of shares ‐ net of transaction costs
Proceeds from borrowings
Repayment of borrowings
Net cash provided by / (used in) financing activities
Net increase / (decrease) in cash and cash equivalents held
Cash and cash equivalents at the beginning of year
Effect of exchange rate changes on cash holdings in foreign currencies
Cash and cash equivalents at the end of year
Non cash investing and financing activities
Share based payments
Interest on loan facility capitalised
Transaction fees ‐ borrowings
28(c)
28(c)
28(a)
23
2018
$’000
3,069
(9,345)
38
468
319
(5,451)
(1,062)
(126,026)
15
(127,073)
34,425
128,615
(15,053)
147,987
15,463
13,308
8
28,779
(34)
(17,706)
(23,982)
2017
$’000
1,473
(7,731)
62
319
320
(5,557)
(8,566)
(35,019)
4
(43,581)
40,309
‐
‐
40,309
(8,829)
22,132
5
13,308
(70)
‐
‐
The above Consolidated Statement of Cash Flows should be read in conjunction with the accompanying Notes.
18
ALTURA ANNUAL REPORT 2018
31
Altura Mining Limited and Controlled Entities
Notes to the Financial Statements
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2018
This financial report includes the consolidated financial statements and notes of Altura Mining Limited (the Company) and controlled
entities (‘Consolidated Group’ or ‘Group’). Altura Mining Limited is a company limited by shares, incorporated and domiciled in
Australia, whose shares are publicly traded on the Australian Securities Exchange.
The separate financial statements of the parent entity, Altura Mining Limited, have not been presented within this financial report
as permitted by amendments made to the Corporations Act 2001.
The Group is a for‐profit entity for financial reporting purposes under Australian Accounting Standards. The financial statements were
authorised for issue on 11 September 2018 by the directors of the Company.
1.
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES
a)
Basis of preparation
The financial report is a general purpose financial report that has been prepared in accordance with Australian Accounting
Standards, Australian Accounting Interpretations, other authoritative pronouncements of the Australian Accounting
Standards Board and the Corporations Act 2001.
Compliance with Australian Accounting Standards ensures that the financial statements and notes also comply with
International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”).
The following is a summary of the material accounting policies adopted by the Consolidated Group in the preparation of
the financial report. The financial report has been prepared on an accruals basis. The accounting policies have been
consistently applied, unless otherwise stated.
i)
Going concern principle of accounting
Notwithstanding the Group’s reporting an operating loss after income tax of $12.8 million for the year and
generating negative cash flows from operations of $5.45 million, the financial statements have been prepared on a
going concern basis as the Company’s directors believe that the Group will be able to pay its debts as and when
they fall due and payable.
Given the above, the Group’s ability to continue as a going concern is dependent on achieving forecast production
and sales, the sale of the net Tabalong assets classified as held for sale and the ongoing support of lenders and
shareholders.
Directors are confident that the fully funded Pilgangoora Lithium project will be successfully completed and
commissioned into production for Q3 2018 and is forecast to generate considerable cash flow sufficient to address
the operating losses and achieve positive cash flows from operations. This together with the ongoing support of
lenders and shareholders will ensure the Group is a going concern and will be able to pay its debts as and when
they fall due and payable.
ii) New accounting standards for application in future periods
Accounting Standards issued by the AASB that are not yet mandatorily applicable to the Group, together with an
assessment of the potential impact of such pronouncements on the Group when adopted in future periods, are
discussed below:
AASB 9: Financial Instruments and associated Amending Standards (applicable for annual reporting periods
beginning on or after 1 January 2018).
The Standard will be applicable retrospectively (subject to the provisions on hedge accounting outlined below) and
includes revised requirements for the classification and measurement of financial instruments, revised recognition
and derecognition requirements for financial instruments and simplified requirements for hedge accounting.
19
ANNUAL REPORT 2018 ALTURA
32
Altura Mining Limited and Controlled Entities
Notes to the Financial Statements continued
FOR THE YEAR ENDED 30 JUNE 2018
Notes to the Financial Statements
1.
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)
ii) New accounting standards for application in future periods (continued)
The key changes that may affect the Group on initial application include certain simplifications to the classification
of financial assets, simplifications to the accounting of embedded derivatives, upfront accounting for expected
credit loss, and the irrevocable election to recognise gains and losses on investments in equity instruments that are
not held for trading in other comprehensive income. AASB 9 also introduces a new model for hedge accounting
that will allow greater flexibility in the ability to hedge risk, particularly with respect to hedges of non‐financial
items. Should the entity elect to change its hedge policies in line with the new hedge accounting requirements of
the Standard, the application of such accounting would be largely prospective
The directors do not anticipate that the adoption of AASB 9 will have a material impact on the Group’s financial
instruments, including hedging activity.
AASB 15: Revenue from Contracts with Customers (applicable to annual reporting periods beginning on or after 1
January 2018, as deferred by AASB 2015‐8: Amendments to Australian Accounting Standards – Effective Date of
AASB 15).
When effective, this Standard will replace the current accounting requirements applicable to revenue with a single,
principles‐based model. Apart from a limited number of exceptions, including leases, the new revenue model in
AASB 15 will apply to all contracts with customers as well as non‐monetary exchanges between entities in the same
line of business to facilitate sales to customers and potential customers
The core principle of the Standard is that an entity will recognise revenue to depict the transfer of promised goods
or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in
exchange for the goods or services. To achieve this objective, AASB 15 provides the following five‐step process
identify the contract(s) with a customer;
identify the performance obligations in the contract(s);
determine the transaction price;
allocate the transaction price to the performance obligations in the contract(s); and;
recognise revenue when (or as) the performance obligations are satisfied.
The transitional provisions of this Standard permit an entity to either: restate the contracts that existed in each
prior period presented per AASB 108: Accounting Policies, Changes in Accounting Estimates and Errors (subject to
certain practical expedients in AASB 15); or recognise the cumulative effect of retrospective application to
incomplete contracts on the date of initial application. There are also enhanced disclosure requirements.
AASB 16: Leases (applicable for annual reporting periods beginning on or after 1 January 2019).
When effective, this Standard will replace the current accounting requirements applicable to leases in AASB 117:
Leases and related Interpretations. AASB 16 introduces a single lessee accounting model that eliminates the
requirement for leases to be classified as operating or finance leases.
20
ALTURA ANNUAL REPORT 2018
Altura Mining Limited and Controlled Entities
33
Notes to the Financial Statements continued
FOR THE YEAR ENDED 30 JUNE 2018
Notes to the Financial Statements
1.
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)
ii) New accounting standards for application in future periods (continued)
The main changes introduced by the new Standard include:
recognition of a right‐to‐use asset and liability for all leases (excluding short‐term leases with less than 12
months of tenure and leases relating to low‐value assets;
depreciation of right‐to‐use asset in line with AASB 116: Property, Plant and Equipment in profit or loss
and unwinding of the liability in principal and interest components;
variable lease payments that depend on an index or a rate are included in the initial measurement of the
lease liability using the index or rate at the commencement date;
by applying a practical expedient, a lessee is permitted to elect not to separate non‐lease components
and instead account for all components as a lease; and
additional disclosure requirements.
The transitional provisions of AASB 16 allow a lessee to either retrospectively apply the Standard to comparatives
in line with AASB 108 or recognize the cumulative effect of retrospective applications as an adjustment to opening
equity on the date of initial application.
The Group has operating lease commitments as disclosed in note 33 (c), which are likely to be impacted by the new
standard. At this stage the Group is not able to estimate the impact of the new rules on the Groups financial
statements. The Group will make a detailed assessment of the impact over the next 12 months.
iii)
Impact of standards issued but not yet applied by the Group
The Group has not applied any accounting standards or amendments for the first time for the annual reporting
period commencing 1 July 2017.
iv) Historical cost convention
Except for cash flow information, the financial statements have been prepared on an accruals basis and are based
on historical costs, modified, where applicable, by the measurement at fair value of selected non‐current assets,
financial assets and financial liabilities.
v)
Critical accounting estimates
The preparation of financial statements requires the use of certain critical accounting estimates. It also requires
management to exercise its judgement in the process of applying the Group’s accounting policies. The areas
including a high degree of judgement or complexity, or areas where assumptions and estimates are significant to
the financial statements are disclosed in Note 1n
21
ANNUAL REPORT 2018 ALTURA
34
Altura Mining Limited and Controlled Entities
Notes to the Financial Statements continued
FOR THE YEAR ENDED 30 JUNE 2018
Notes to the Financial Statements (continued)
1.
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)
b)
Carrying value of exploration and evaluation expenditure
The Group has capitalised exploration and evaluation expenditure of $1.595 million as at 30 June 2018 (2017: $1.226
million). This amount is after a transfer to mine development at cost of $932,000 during the year for drilling and analysis,
feasibility study and employee remuneration costs for the lithium project stage 2 DFS and a reclassification of exploration
expenditure to assets held for sale of $361,000. Exploration and evaluation expenditure is capitalised as an intangible
asset until the Company has completed its assessment of the existence or otherwise of recoverable resources. The
ultimate recovery of the carrying value of exploration expenditure is dependent upon the successful development and
commercial exploitation or, alternatively, sale of the interest in the tenements.
Until exploration and evaluation activities have reached a stage where the assessment is complete, including the
forecasting of cash flows to assess the fair value of the expenditure, there is an uncertainty as to the carrying value of the
expenditure.
The Directors are of the opinion that the exploration expenditure is recoverable for the amount stated in the financial
report.
c)
Principles of consolidation
i)
Subsidiaries
The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of Altura Mining
Limited (‘Company’ or ‘Parent Entity’) as at 30 June 2018 and the results of the subsidiaries for the year then ended.
Altura Mining Limited and its subsidiaries together are referred to in this financial report as the Group or
Consolidated Entity.
The Group controls an entity when the Group is exposed to or has rights to variable returns from its involvement
with the entity and has the ability to affect those returns through its power over the entity.
A list of controlled entities is contained in Note 26 to the financial statements. All Australian controlled entities have
a June financial year‐end and all other controlled entities have a December financial year end.
All inter‐company balances and transactions between entities in the Group, including any unrealised profits or
losses, have been eliminated on consolidation. Accounting policies of subsidiaries have been changed where
necessary to ensure consistencies with those policies applied by the Group.
Where controlled entities have entered or left the Group during the year, their operating results have been included
from the date control was obtained or until the date control ceased.
Non‐controlling interests, being that portion of the profit or loss and net assets of subsidiaries attributable to equity
interests held by persons outside the Group, are shown separately within the equity section of the Consolidated
Balance Sheet and in the Consolidated Income Statement. Losses applicable to the non‐controlling interest in a
consolidated subsidiary are allocated against the controlling interest except to the extent that the non‐controlling
interest has a binding obligation and is able to make additional investment to cover the losses. If in future years the
subsidiary reports profits, such profits are allocated to the controlling interest until the non‐controlling interest’s
share of losses previously absorbed by the controlling interest have been recovered.
The acquisition method of accounting is used to account for business combinations by the Group.
22
ALTURA ANNUAL REPORT 2018
Altura Mining Limited and Controlled Entities
35
Notes to the Financial Statements continued
FOR THE YEAR ENDED 30 JUNE 2018
Notes to the Financial Statements (continued)
1.
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)
ii)
Associates
Associates are all entities over which the Group has significant influence but not control or joint control, generally
accompanying a shareholding between 20% and 50% of voting rights. Investments in associates are accounted for
using the equity method of accounting, after initially being recognised at cost. The Group’s investments in associates
includes goodwill identified on acquisition.
The Group’s share of its associates post‐acquisition profit or losses is recognised in profit or loss, and its share of
post‐acquisition other comprehensive income is recognised in other comprehensive income. The cumulative post‐
acquisition movements are adjusted against the carrying amount of the investment. Dividends receivable from
associates are recognised as a reduction in the carrying amount of the investment.
iii) Changes in ownership interests
The Group treats transactions with non‐controlling interests that do not result in a loss of control as transactions
with equity owners of the Group. A change in ownership interest results in an adjustment between the carrying
amounts of the controlling and non‐controlling interests to reflect their relative interests in the subsidiary. Any
difference between the amount of the adjustment to non‐controlling interests and any consideration paid or
received is recognised in a separate reserve within equity attributable to the owners of Altura Mining Limited.
When the Group ceases to have control, joint control or significant influence, any retained interest in the entity is
remeasured to its fair value with the change in carrying amount recognised in profit or loss. This fair value becomes
the initial carrying amount for the purposes of subsequently accounting for the retained interest as an associate,
jointly controlled entity or financial asset. In addition, any amounts previously recognised in other comprehensive
income in respect of that entity are accounted for as if the Group had directly disposed of the related assets or
liabilities. This may mean that amounts previously recognised in other comprehensive income are reclassified to
profit or loss.
If the ownership interest in a jointly controlled entity or an associate is reduced but joint control or significant
influence is retained, only a proportionate share of the amounts previously recognised in other comprehensive
income are reclassified to profit or loss where appropriate.
d)
Business combinations
The acquisition method of accounting is used to account for all business combinations, including business combinations
involving entities or businesses under common control, regardless of whether equity instruments or other assets are
acquired. The consideration transferred for the acquisition of a subsidiary comprises the fair values of the assets
transferred, the liabilities incurred and the equity interests issued by the Group. The consideration transferred also
includes the fair value of any contingent consideration arrangement and the fair value of any pre‐existing equity interest
in the subsidiary. Acquisition related costs are expensed as incurred with the exception of stamp duty. Identifiable assets
acquired and liabilities and contingent liabilities assumed in a business combination are, with limited exceptions,
measured initially at their fair values at the acquisition date.
On an acquisition by acquisition basis, the Group recognises any non‐controlling interest in the acquiree either at fair
value or at the non‐controlling interest’s proportionate share of the acquiree’s net identifiable assets.
The excess of the consideration transferred and the amount of any non‐controlling interest in the acquiree and the
acquisition date fair value of any previous equity interest in the acquiree over the fair value of the Group’s share of the
net identifiable assets acquired is recorded as goodwill. If those amounts are less than the fair value of the net identifiable
assets of the subsidiary acquired and the measurement of all amounts has been reviewed, the difference is recognised
directly in profit or loss as a gain on acquisition of subsidiaries.
Where settlement of any part of cash consideration is deferred, the amounts payable in the future are discounted to their
present value as at the date of exchange. The discount rate used is the entity’s incremental borrowing rate, being the
rate at which a similar borrowing could be obtained from an independent financier under comparable terms and
conditions.
Contingent consideration is classified either as equity or a financial liability. Amounts classified as a financial liability are
subsequently remeasured to fair value with changes in fair value recognised in profit or loss.
23
ANNUAL REPORT 2018 ALTURA
36
Altura Mining Limited and Controlled Entities
Notes to the Financial Statements (continued)
Notes to the Financial Statements continued
FOR THE YEAR ENDED 30 JUNE 2018
1.
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)
e)
Income tax
The charge for current income tax expense is based on the result for the year adjusted for any non‐assessable or
disallowed items. It is calculated using the tax rates that have been enacted or are substantially enacted by the balance
date for each jurisdiction, adjusted by changes in deferred tax assets and liabilities attributable to temporary differences
and to unused tax losses.
Deferred tax is accounted for using the balance sheet liability method in respect of temporary differences arising between
the tax bases of assets and liabilities and their carrying amounts in the financial statements. No deferred income tax will
be recognised from the initial recognition of an asset or liability, excluding a business combination, where there is no
effect on accounting or taxable profit or loss.
Deferred tax is calculated at the tax rates (and laws) that have been enacted, or substantially enacted by the end of the
reporting period and are expected to apply to the period when the asset is realised or liability is settled. Deferred tax is
credited in the income statement except where it relates to items that may be credited directly to equity, in which case
the deferred tax is adjusted directly against equity.
Deferred income tax assets are recognised to the extent that it is probable that future tax profits will be available against
which deductible temporary differences and unused tax losses can be utilised.
The amount of benefits brought to account or which may be realised in the future is based on the assumption that no
adverse change will occur in income taxation legislation and the anticipation that the economic entity will derive sufficient
future assessable income to enable the benefit to be realised and comply with the conditions of deductibility imposed by
the law.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets and
liabilities and when the deferred tax balances relate to the same taxation authority. Current tax assets and tax liabilities
are offset where the Group has a legally enforceable right to offset and intends to settle on a net basis, or to realise the
asset and settle the liability simultaneously.
Altura Mining Limited and some of its wholly‐owned Australian subsidiaries have formed an income tax consolidated
group under the tax consolidation regime. Each entity in the group recognises its own current and deferred tax amounts,
except for any deferred tax liabilities (or assets) resulting from unused tax losses and tax credits, which are immediately
assumed by the parent entity. The current tax liability of each group entity is then subsequently assumed by the parent
entity. The group notified the Australian Tax Office that it had formed an income tax consolidated group to apply from 1
July 2005. The tax consolidated group has entered a tax sharing agreement under which the wholly‐owned entities fully
compensate Altura Mining Limited for any current tax payable assumed and are compensated by Altura Mining Limited
for any current tax receivable and deferred tax assets relating to unused tax losses or unused tax credits that are
transferred to Altura Mining Limited under the tax consolidated legislation.
The amounts receivable/payable under the tax funding agreement are due upon receipt of the funding advice from the
head entity, which is issued as soon as practicable after the end of each financial year. The head entity may also require
payment of interim funding amounts to assist with its obligations to pay tax instalments.
Assets or liabilities arising under tax funding agreements within the tax consolidated entities are recognised as current
amounts receivable from or payable to other entities in the Group.
Any difference between the amounts assumed and amounts receivable or payable under the tax funding agreement are
recognised as a contribution to (or distribution from) wholly‐owned tax consolidated entities.
24
ALTURA ANNUAL REPORT 2018
Altura Mining Limited and Controlled Entities
37
Notes to the Financial Statements (continued)
Notes to the Financial Statements continued
FOR THE YEAR ENDED 30 JUNE 2018
1.
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)
f)
Segment reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the Chief Operating
decision maker. The Chief Operating decision maker, who is responsible for allocating resources and assessing
performance of the operating segments has been identified as the Board of Directors.
g)
Property, plant and equipment
Each class of property, plant and equipment is carried at cost or fair value less, where applicable, any accumulated
depreciation and impairment losses.
Property
Freehold land and buildings are measured on the cost basis.
The carrying amount of land and buildings is reviewed annually by directors to ensure it is not in excess of the recoverable
amount from these assets.
Plant and equipment
Plant and equipment are measured on the cost basis. Subsequent costs are included in the asset’s carrying amount or
recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with
the item will flow to the Group and the cost of the item can be measured reliably. All other repairs and maintenance are
charged to the income statement during the financial period in which they are incurred.
The carrying amount of plant and equipment is reviewed annually to ensure it is not in excess of the recoverable amount
from these assets.
Mine development
Mine development assets include all mining related development expenditure that is not included under land, buildings
and plant and equipment. These capitalised costs are amortised over the life of the mine on a unit of production basis
following the commencement of commercial production.
A regular review is undertaken of each area of interest to determine the appropriateness of continuing to carry forward
mine development costs in relation to that area of interest. Mine development is written down immediately to its
recoverable amount if the carrying value is greater than its estimated recoverable amount (on a CGU basis).
Depreciation
The depreciable amount of all fixed assets excluding freehold land, is depreciated on a straight‐line basis over their useful
lives to the Group commencing from the time the asset is held ready for use. Leased assets are depreciated over the
asset’s useful life or over the shorter of the assets useful life and the lease term if there is no reasonable certainty that
the Group will obtain ownership at the end of the lease term.
The depreciation rates used for each class of depreciable assets are:
Class of Fixed Asset
Plant and equipment
Leased plant and equipment
Mine development
Depreciation Rate
20% ‐ 50%
12.5%
units of production
The asset’s residual values and useful lives are reviewed, and adjusted if appropriate, at each balance date.
An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is
greater than its estimated recoverable amount.
Gains and losses on disposals are determined by comparing proceeds with the carrying amount. These gains and losses
are included in profit or loss.
25
ANNUAL REPORT 2018 ALTURA
38
Altura Mining Limited and Controlled Entities
Notes to the Financial Statements continued
FOR THE YEAR ENDED 30 JUNE 2018
Notes to the Financial Statements (continued)
1.
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)
h)
Exploration and evaluation expenditure
Exploration, evaluation and development expenditure incurred is accumulated in respect of each separately identifiable
area of interest. These costs are only carried forward where the right of tenure for the area of interest is current and to
the extent that they are expected to be recouped through the successful development and commercial exploitation of
the area, or alternatively sale of the area, or where activities in the area have not yet reached a stage that permits
reasonable assessment of the existence of economically recoverable reserves.
Exploration and evaluation expenditure assets acquired in a business combination are recognised at their fair value at the
acquisition date.
Once the technical feasibility and commercial viability of the extraction of mineral resources in an area of interest are
demonstrable, the exploration and evaluation assets attributable to that area of interest are first tested for impairment
and then reclassified to mining development.
Accumulated costs in relation to an abandoned area are written off in full against the result in the year in which the
decision to abandon the area is made.
A regular review is undertaken of each area of interest to determine the appropriateness of continuing to carry forward
costs in relation to that area of interest.
i)
Leases
Leases of property, plant and equipment where substantially all the risks and benefits incidental to the ownership of the
asset, but not the legal ownership that is transferred to entities in the Group, are classified as finance leases.
Finance leases are capitalised at the lease inception date, by recording an asset and a liability at the lower of the amounts
equal to the fair value of the leased property or the present value of the minimum lease payments, including any
guaranteed residual values. Lease payments are allocated between the reduction of the lease liability and the lease
interest expense for the period.
Leased assets are depreciated on a straight‐line basis over the shorter of their estimated useful lives or the lease terms if
there is no reasonable certainty that the Group will obtain ownership at the end of the lease term.
Lease payments for operating leases, where substantially all the risks and benefits remain with the lessor, are charged as
expenses on a straight‐line basis over the period of the lease.
Lease incentives under operating leases are recognised as a liability and amortised on a straight‐line basis over the life of
the lease term.
j)
Impairment of assets
Goodwill and intangible assets that have an indefinite useful life are not subject to amortisation and are tested annually
for impairment or more frequently if events or changes in circumstances indicate that they might be impaired. Other
assets are tested for impairment whenever events or changes in circumstances indicate that the carrying amount may
not be recoverable. An impairment loss is recognised immediately in profit or loss for the amount by which the asset’s
carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs
to sell and value in use.
For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately
identifiable cash inflows which are largely independent of the cash inflows from other assets or groups of assets (cash
generating units, “CGUs”). For the purposes of goodwill impairment testing, CGUs to which goodwill has been allocated
are aggregated so that the level at which impairment is tested reflects the lowest level at which goodwill is monitored for
internal reporting purposes. The goodwill acquired in a business combination, for the purpose of impairment testing, is
allocated to CGUs that are expected to benefit from the synergies of the combination.
Non‐financial assets other than goodwill that suffered impairment are reviewed for possible reversal of the impairment
at the end of each reporting period.
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39
Notes to the Financial Statements continued
FOR THE YEAR ENDED 30 JUNE 2018
Notes to the Financial Statements (continued)
1.
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)
k)
Investments and other financial assets
The Group classifies its financial assets in the following categories: financial assets at fair value through profit or loss,
loans and receivables, held to maturity investment and available‐for‐sale financial assets. The classification depends on
the purpose for which the investments were acquired. Management determines the classification of its investments at
initial recognition and in the case of assets classified as held to maturity, re‐evaluates this designation at the end of each
reporting period.
i)
Financial assets at fair value through profit or loss
Financial assets at fair value through profit or loss are financial assets held for trading. A financial asset is classified
in this category if acquired principally for the purpose of selling in the short term. Assets in this category are
classified as current assets if they are expected to be settled within 12 months, otherwise they are classified as non‐
current.
ii)
Loans and receivables
Loans and receivables are non‐derivative financial assets with fixed or determinable payments that are not quoted
in an active market. They are included in current assets, except for those with maturities greater than 12 months
after the reporting period which are classified as non‐current assets. Loans and receivables are included in current
trade and other receivables and non‐current trade and other receivables (refer to Note 9).
iii) Held‐to‐maturity investments
Held to maturity investments are non‐derivative financial assets with fixed or determinable payments and fixed
maturities that the Group’s management has the positive intention and ability to hold to maturity. If the Group
were to sell other than an insignificant amount of held to maturity financial assets, the whole category would be
tainted and reclassified as available for sale. Held to maturity financial assets are included in non‐current assets,
except for those with maturities less than 12 months from the end of the reporting period, which are classified as
current assets.
iv) Available‐for‐sale financial assets
Available‐for‐sale financial assets, comprising principally listed marketable equity securities, are non‐derivatives
that are either designated in this category or not classified in any of the other categories. They are included in non‐
current assets unless management intends to dispose of the investment within 12 months of the end of the
reporting period. Investments are designated as available‐for‐sale if they do not have fixed maturities and fixed or
determinable payments and management intends to hold them for the medium to long term.
v)
Recognition and de‐recognition
Purchases and sales of financial assets are recognised on trade date, the date on which the Group commits to
purchase or sell the asset. Financial assets are initially recognised at fair value plus transaction costs except where
the financial asset is classified as fair value through profit or loss in which case transaction costs are expensed in
profit or loss. Financial assets are derecognised when the rights to receive cash flows from the financial assets have
expired or have been transferred and the Group has transferred substantially all the risks and rewards of ownership.
When securities classified as available‐for‐sale are sold, the accumulated fair value adjustments recognised in other
comprehensive income and reclassified to profit or loss as gains and losses from investment securities.
vi)
Subsequent measurement
Loans and receivables are carried at amortised cost using the effective interest method.
Available‐for‐sale financial assets, financial assets at fair value through profit or loss and held to maturity
investments are subsequently carried at fair value. Gains or losses arising from changes in the fair value of the
‘financial assets at fair value through profit or loss’ category are presented in profit or loss within other income or
other expenses in the period in which they arise. Dividend income from financial assets at fair value through profit
or loss is recognised in profit or loss as part of revenue from continuing operations when the Group’s right to receive
payments is established.
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ANNUAL REPORT 2018 ALTURA
40
Altura Mining Limited and Controlled Entities
Notes to the Financial Statements continued
FOR THE YEAR ENDED 30 JUNE 2018
Notes to the Financial Statements (continued)
1.
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Investment in shares in unlisted companies, which do not have a quoted market price and whose fair value cannot
be reliably measured, are classified as available‐for‐sale and are measured at cost. Gains or losses are recognised in
profit or loss when the investments are derecognised or impaired.
vii)
Impairment
The Group assess at the end of each reporting period whether there is objective evidence that a financial asset or
group of financial assets is impaired. A financial asset or a group of financial assets is impaired and impairment
losses are incurred only if there is objective evidence of impairment as a result of one or more events that occurred
after the initial recognition of the asset (a ‘loss event’) and that loss event (or events) has an impact on the estimated
future cash flows of the financial asset or group of financial assets that can be reliably estimated. In the case of
equity securities classified as available‐for‐sale, a significant or prolonged decline in the fair value of a security below
its cost is considered as an indicator that the securities are impaired. If any such evidence exists for available‐for‐
sale financial assets, the cumulative loss, measured as the difference between the acquisition cost and the current
fair value, less any impairment loss on that financial asset previously recognised in profit or loss, is reclassified from
equity and recognised in profit or loss. Impairment losses recognised in profit or loss on equity instruments classified
as available‐for‐sale are not reversed through profit or loss.
If there is evidence of impairment for any of the Group’s financial assets carried at amortised cost, the loss is
measured as the difference between the asset’s carrying amount and the present value of estimated future cash
flows, excluding future credit losses that have not been incurred. The cash flows are discounted at the financial
asset’s original effective interest rate. The loss is recognised in profit or loss.
l)
Borrowing costs
Borrowing costs directly attributable to the acquisition, construction or production of assets that necessarily take a
substantial period of time to prepare for their intended use or sale, are added to the cost of those assets, until such time
as the assets are substantially ready for their intended use or sale.
All other borrowing costs are recognised as an expense in the period in which they are incurred.
m) Employee benefits
i) Wages and salaries, annual leave and sick leave
Liabilities for employee benefits for wages, salaries, annual leave and accumulating sick leave that are expected to
be settled within 12 months of the reporting date represent present obligations resulting from employees’ services
provided to the reporting date and are calculated at undiscounted amounts based on wage and salary rates that
the Group expects to pay as at reporting date including related on costs, such as superannuation, workers
compensation, insurance and payroll tax and are included in trade and other payables. Non‐accumulating, non‐
monetary benefits such as housing and cars are expensed by the Group as the benefits are used by the employee.
Employee benefits payable later than 12 months have been measured at the present value of the estimated future
cash outflows to be made for those benefits. In determining the liability, consideration is given to employee salary
and wage increases and the probability that the employee may satisfy any vesting requirements. Those cash flows
are discounted using market yields with terms to maturity that match the expected timing of cash flows attributable
to employee benefits.
ii)
Long service leave
The Group’s net obligation in respect of long term service benefits is the amount of future benefit that employees
have earned in return for their service to the reporting date. The obligation is calculated using expected future
increases in wages and salary rates including related on costs and expected settlement dates and is discounted
using an appropriate discount rate.
The current liability for long service leave represents all unconditional obligations where employees have fulfilled
the required criteria and also those where employees are entitled to a pro rata payment in certain circumstances
and is included in the current provisions. The non‐current provision for long service leave includes the remaining
long service leave obligations.
28
ALTURA ANNUAL REPORT 2018
Altura Mining Limited and Controlled Entities
41
Notes to the Financial Statements continued
FOR THE YEAR ENDED 30 JUNE 2018
Notes to the Financial Statements (continued)
1.
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)
iii)
Superannuation
Contributions made by the Group to defined contribution superannuation funds are recognised as an expense in
the period in which they are incurred.
iv)
Equity‐settled compensation
The Group operates an employee share ownership plan. Share‐based payments to employees are measured at the
fair value of the instruments issued and amortised over the vesting periods. Share‐based payments to non‐
employees are measured at the fair value of goods or services received or the fair value of the equity instruments
issued, if it is determined the fair value of the goods or services cannot be reliably measured and are recorded at
the date the goods or services are received. The corresponding amount is recorded to the option reserve. The fair
value of options is determined using the Black‐Scholes pricing model. The number of shares and options expected
to vest is reviewed and adjusted at the end of each reporting period such that the amount recognised for services
received as consideration for the equity instruments granted is based on the number of equity instruments that
eventually vest.
n)
Significant accounting estimates and judgements
The Directors evaluate estimates and judgements incorporated into the financial report based on historical knowledge
and best available current information. Estimates assume a reasonable expectation of future events and are based on
current trends and economic data, obtained both externally and within the Group. The resulting accounting estimates,
will, by definition, seldom equal the related actual results. Management has identified the following significant accounting
policies for which significant judgements, estimates and assumptions are made.
i)
Significant accounting estimates and assumptions
Critical accounting estimates and judgements
Following is a summary of the key assumptions concerning the future, and other key sources of estimation and
accounting judgements at reporting date that have not be disclosed elsewhere in these financial statements.
a.
Determination of coal resources and reserves
The Company estimates its coal ore resources and reserves based on information compiled by Competent
Persons defined in the Australasian Code for Reporting Exploration Results, Mineral Resources and Ore
Reserves (December 2012), which is prepared by the Joint Ore Reserves Committee (“JORC”) of the
Australasian Institute of Mining and Metallurgy, Australian Institute of Geoscientists and Minerals Council of
Australia, known as the JORC Code. Reserves determined in this way are used in the calculation of
depreciation, amortisation and impairment charges, the assessment of mine lives and for forecasting the
timing of the payment of rehabilitation costs.
The amount of reserves that may actually be mined in the future and the Company’s estimate of reserves
from time to time in the future may vary from current reserve estimates.
b.
Exploration and evaluation expenditure
The application of the Group’s accounting policy for exploration and evaluation expenditure requires
judgement in determining whether it is likely that future economic benefits are likely, which may be based on
assumptions about future events or circumstances. Estimates and assumptions may change if new
information becomes available. If after expenditure is capitalised information becomes available suggesting
that the recovery of expenditure is unlikely, the amount capitalised is written off in the Consolidated
Statement of Profit or Loss in the period when the new information becomes available.
c.
Impairment
The Group assess impairment by evaluation of conditions and events specific to the Company that may be
indicative of impairment triggers. Goodwill is assessed for impairment at each reporting period. Recoverable
amounts of relevant assets are reassessed using the higher of fair value less costs to sell and value in use
calculations which incorporate various key assumptions.
29
ANNUAL REPORT 2018 ALTURA
42
Altura Mining Limited and Controlled Entities
Notes to the Financial Statements continued
FOR THE YEAR ENDED 30 JUNE 2018
Notes to the Financial Statements (continued)
1.
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)
n)
Significant accounting estimates and judgements (continued)
d.
Rehabilitation
The calculation of the provisions for rehabilitation and the related mine development assets rely on estimates
of the cost to rehabilitate an area which is currently disturbed based on legislative requirements and future
costs. The costs are estimated on the basis of a mine closure plan. Cost estimates take into account
expectations about future events including the mine lives, the time of rehabilitation expenditure, regulations,
inflation and discount rates. When these expectations change in the future, the provision and where
applicable, the mine development assets are recalculated in the period in which they change.
e.
Derivatives
The fair value of financial instruments must be estimated for recognition and measurement purposes.
The fair value of financial instruments traded in active markets such as available‐for‐sale securities is based
on quoted market prices at the reporting date. The quoted market price used for financial assets held by the
Group is the current bid price.
The fair value of financial instruments that are not traded in an active market are determined using valuation
techniques that use observable market data at the reporting date where it is available.
f.
Income taxes
The Group is subject to income taxes in Australia and jurisdictions where it has foreign operations. Significant
judgement is required in determining the provision for income taxes. There are transactions and calculations
undertaken during the ordinary course of business for which the ultimate tax determination is uncertain. The
Group estimates its tax liabilities based on the Group’s understanding of the tax law. Where the final tax
outcome of these matters is different from the amounts that were initially recorded, such differences will
impact the current and deferred income tax assets and liabilities in the period in which such determination is
made.
g.
Share‐based payment transactions
From time to time the Company has issued options to directors and employees. The Company measures fair
value of share‐based payments using the Black‐Scholes Pricing Model, using the assumptions detailed in Note
23. This formula takes into account the terms and conditions under which the instruments were granted.
h. Mines under construction
Expenditure is transferred from ’Exploration and evaluation assets’ to ’Mine Development’ which is a sub‐
category of ’Mine properties’ once the work completed to date supports the future development of the
property and such development receives appropriate approvals.
After transfer of the exploration and evaluation assets, all subsequent expenditure on the construction,
installation or completion of infrastructure facilities is capitalised in ’Mine Development’. Development
expenditure is net of proceeds from the sale of spodumene concentrate extracted during the development
phase to the extent that it is considered integral to the development of the mine. Any costs incurred in testing
the assets to determine if they are functioning as intended, are capitalised, net of any proceeds received from
selling any product produced while testing. Where these proceeds exceed the cost of testing, any excess is
recognised in the statement of profit or loss and other comprehensive income. After production starts, all
assets included in ‘mine development’ are then transferred to ’producing mines’ which is also a sub‐category
of ’mine properties’.
30
ALTURA ANNUAL REPORT 2018
Altura Mining Limited and Controlled Entities
Notes to the Financial Statements (continued)
FOR THE YEAR ENDED 30 JUNE 2018
Altura Mining Limited and Controlled Entities
43
Notes to the Financial Statements continued
FOR THE YEAR ENDED 30 JUNE 2018
Notes to the Financial Statements (continued)
1.
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)
1.
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)
n)
Significant accounting estimates and judgements (continued)
o) Non‐current assets (or disposal groups) held for sale and discontinued operations
d.
Rehabilitation
e.
Derivatives
f.
Income taxes
The calculation of the provisions for rehabilitation and the related mine development assets rely on estimates
of the cost to rehabilitate an area which is currently disturbed based on legislative requirements and future
costs. The costs are estimated on the basis of a mine closure plan. Cost estimates take into account
expectations about future events including the mine lives, the time of rehabilitation expenditure, regulations,
inflation and discount rates. When these expectations change in the future, the provision and where
applicable, the mine development assets are recalculated in the period in which they change.
The fair value of financial instruments must be estimated for recognition and measurement purposes.
The fair value of financial instruments traded in active markets such as available‐for‐sale securities is based
on quoted market prices at the reporting date. The quoted market price used for financial assets held by the
Group is the current bid price.
The fair value of financial instruments that are not traded in an active market are determined using valuation
techniques that use observable market data at the reporting date where it is available.
The Group is subject to income taxes in Australia and jurisdictions where it has foreign operations. Significant
judgement is required in determining the provision for income taxes. There are transactions and calculations
undertaken during the ordinary course of business for which the ultimate tax determination is uncertain. The
Group estimates its tax liabilities based on the Group’s understanding of the tax law. Where the final tax
outcome of these matters is different from the amounts that were initially recorded, such differences will
impact the current and deferred income tax assets and liabilities in the period in which such determination is
made.
g.
Share‐based payment transactions
h. Mines under construction
From time to time the Company has issued options to directors and employees. The Company measures fair
value of share‐based payments using the Black‐Scholes Pricing Model, using the assumptions detailed in Note
23. This formula takes into account the terms and conditions under which the instruments were granted.
Expenditure is transferred from ’Exploration and evaluation assets’ to ’Mine Development’ which is a sub‐
category of ’Mine properties’ once the work completed to date supports the future development of the
property and such development receives appropriate approvals.
After transfer of the exploration and evaluation assets, all subsequent expenditure on the construction,
installation or completion of infrastructure facilities is capitalised in ’Mine Development’. Development
expenditure is net of proceeds from the sale of spodumene concentrate extracted during the development
phase to the extent that it is considered integral to the development of the mine. Any costs incurred in testing
the assets to determine if they are functioning as intended, are capitalised, net of any proceeds received from
selling any product produced while testing. Where these proceeds exceed the cost of testing, any excess is
recognised in the statement of profit or loss and other comprehensive income. After production starts, all
assets included in ‘mine development’ are then transferred to ’producing mines’ which is also a sub‐category
of ’mine properties’.
Non‐current assets (or disposal groups) are classified as held for sale if their carrying amount will be recovered principally
through a sale transaction rather than through continuing use and a sale is considered highly probable. They are measured
at the lower of their carrying amount and fair value less costs to sell, except for assets such as deferred tax assets, assets
arising from employee benefits, financial assets and investment property that are carried at fair value and contractual
rights under insurance contracts, which are specifically exempt from this requirement.
An impairment loss is recognised for any initial or subsequent write‐down of the asset (or disposal group) to fair value
less costs to sell. A gain is recognised for any subsequent increases in fair value less costs to sell of an asset (or disposal
group), but not in excess of any cumulative impairment loss previously recognised. A gain or loss not previously
recognised by the date of the sale of the non‐current asset (or disposal group) is recognised at the date of derecognition.
Non‐current assets (including those that are part of a disposal group) are not depreciated or amortised while they are
classified as held for sale. Interest and other expenses attributable to the liabilities of a disposal group classified as held
for sale continue to be recognised.
Non‐current assets classified as held for sale and the assets of a disposal group classified as held for sale are presented
separately from the other assets in the balance sheet. The liabilities of a disposal group classified as held for sale are
presented separately from other liabilities in the balance sheet
A discontinued operation is a component of the entity that has been disposed of or is classified as held for sale and that
represents a separate major line of business or geographical area of operations, is part of a single co‐ordinated plan to
dispose of such a line of business or area of operations, or is a subsidiary acquired exclusively with a view to resale. The
results of discontinued operations are presented separately in the statement of profit or loss.
p)
Provisions
Provisions are recognised when the Group has a legal or constructive obligation, as a result of past events, for which it is
probable that an outflow of resources will be required to settle the obligation and the amount has been reliably
estimated.
i)
Rehabilitation costs
Provision is made for the Group’s estimated liability arising under specific legislative requirements and the
conditions of its exploration permits and mining leases for future costs expected to be incurred in restoring mining
areas of interest. The estimated liability is based on the restoration work required using existing technology as a
result of activities to date. The liability includes the cost of reclamation of the site, including infrastructure removal
and land fill costs. An asset is created as part of the mine development asset, to the extent that the development
relates to future production activities, which is offset by a current and non‐current provision for rehabilitation.
q)
Cash and cash equivalents
Cash and cash equivalents include cash on hand, deposits held at call with banks, other short‐term highly liquid
investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of
changes in value, net of bank overdrafts.
30
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ANNUAL REPORT 2018 ALTURA
44
Altura Mining Limited and Controlled Entities
Notes to the Financial Statements continued
FOR THE YEAR ENDED 30 JUNE 2018
Notes to the Financial Statements (continued)
1.
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)
r)
Revenue
Revenue is measured at the fair value of the consideration received or receivable. Amounts disclosed as revenue are net
of returns, trade allowances, rebates and amounts collected on behalf of third parties.
The Group recognises revenue when the amount of revenue can be reliably measured and it is probable that future
economic benefits will flow to the entity. Revenue is recognised in the profit or loss as follows:
i)
Sale of goods
Revenue from the sale of bulk commodities is recognised when the significant risks and rewards of ownership of
the goods have passed to the buyer and can be measured reliably. Risks and rewards are considered passed to the
buyer at the time of delivery, usually on a Free On Board (“FOB”) basis.
ii)
Royalty revenue
Royalties are recognised as revenue when the right to receive payment is established.
iii) Dividends
Dividends are recognised as revenue when the right to receive payment is established.
iv)
Interest
Interest income from a financial asset is accrued on a time basis, by reference to the principal outstanding and at
the effective interest rate applicable, which is the rate that exactly discounts the estimated future cash receipts
through the expected life of the financial asset to that asset’s net carrying amount.
v)
Services
Revenue from the rendering of a service is recognised upon the delivery of the service to the customer.
s)
Goods and services tax (GST)
Revenues, expenses and assets are recognised net of the amount of GST, except where the amount of GST incurred is not
recoverable from the relevant taxation authorities. In these circumstances the GST is recognised as part of the cost of
acquisition of the asset or as part of an item of the expense. Receivables and payables in the balance sheet are shown
inclusive of GST.
Cash flows are presented in the statement of cash flows on a gross basis, except for the GST component of investing and
financing activities, which are disclosed as operating cash flows.
t)
Foreign operations
The financial performance and position of foreign operations whose functional currency is different from the Group’s
presentation currency are translated as follows:
assets and liabilities are translated at exchange rates prevailing at balance sheet date; and
income and expenses are translated at monthly average exchange rates for the period.
Exchange differences arising on translation of foreign operations are transferred directly to the Group’s foreign currency
translation reserve as a separate component of equity. These differences are recognised in the income statement upon
disposal of the foreign operation.
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ALTURA ANNUAL REPORT 2018
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45
Notes to the Financial Statements continued
FOR THE YEAR ENDED 30 JUNE 2018
Notes to the Financial Statements (continued)
1.
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)
u)
Foreign currency transactions and balances
The functional currency of each of the Group’s entities is measured using the currency of the primary economic
environment in which the entity operates. The consolidated financial statements are presented in Australian dollars which
is the parent entity’s functional and presentation currency.
Foreign currency transactions are translated into functional currency using the exchange rates prevailing at the date of
the transaction. Foreign currency monetary items are translated at the period end exchange rate. Non‐monetary items
measured at historical cost continue to be carried at the exchange rate at the date when fair values were determined.
Exchange differences arising on the translation of monetary items are recognised in the income statement, except where
deferred in equity as a qualifying cash flow or net investment hedge.
Exchange differences arising on the translation of non‐monetary items are recognised directly in equity to the extent that
the gain or loss is directly recognised in equity, otherwise the exchange difference is recognised in the income statement.
v)
Goodwill and intangibles
Goodwill represents the excess of the cost of an acquisition over the fair value of the Group’s share of the net identifiable
assets of the acquired subsidiary or associate at the date of acquisition. Goodwill on acquisitions of subsidiaries is included
in intangible assets. Goodwill on acquisitions of associates is included in investments in associates. Goodwill is not
amortised, it is tested for impairment at each reporting date or more frequently if events or changes in circumstances
indicate that it might be impaired and is carried at cost less accumulated impairment losses. Gains and losses on the
disposal of an entity include the carrying amount of goodwill relating to the entity sold.
Goodwill is allocated to cash generating units (“CGUs”) for the purpose of impairment testing. The allocation is made to
those CGUs or groups of CGUs that are expected to benefit from the business combination in which the goodwill arose.
w)
Financial liabilities and equity
Non‐derivative financial liabilities (including trade and other payables and interest‐bearing liabilities excluding financial
guarantees) are initially recognised at fair value, net of transaction costs incurred and subsequently measured at
amortised cost using the effective interest rate method. Financial liabilities are derecognised when the obligation
specified in the relevant contract is discharged, cancelled or expires. The difference between the carrying amount of the
financial liability derecognised and the consideration paid and payable is recognised in profit or loss.
All non‐derivative financial liabilities are classified as current liabilities unless there is an unconditional right to defer
settlement of the liability for at least 12 months after the reporting date.
An equity instrument is any contract that evidences a residual interest in the assets of the Group after deducting all of its
liabilities. Costs directly attributable to the issue of new shares or options are shown as a deduction from the equity
proceeds, net of any income tax benefit. Costs directly attributable to the issue of new shares or options associated with
the acquisition of a business are included as part of the purchase consideration.
x)
Comparative figures
When required by Accounting Standards, comparative figures have been adjusted to conform to changes in presentation
for the current financial year.
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ANNUAL REPORT 2018 ALTURA
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Altura Mining Limited and Controlled Entities
Notes to the Financial Statements continued
FOR THE YEAR ENDED 30 JUNE 2018
Notes to the Financial Statements (continued)
1.
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)
y)
Inventories
Consumable stores
Inventories of consumable supplies and spare parts expected to be used in the supply of services are valued at cost.
Bulk commodities
Bulk commodity stockpiles are physically surveyed or estimated and valued at the lower of cost or net realisable value.
Net realisable value is the estimated selling price in the ordinary course of business, less estimated costs of completion
and costs of selling final product. Cost is determined by the weighted average method and comprises direct purchase
costs and an appropriate portion of fixed and variable overhead costs, including depreciation and amortisation, incurred
in converting materials into finished goods.
z)
Fair value measurement
When an asset or liability, financial or non‐financial, is measured at fair value for recognition or disclosure purposes, the
fair value is based on the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction
between market participants at the measurement date; and assumes that the transaction will take place either: in the
principal market; or in the absence of a principal market, in the most advantageous market.
Fair value is measured using the assumptions that market participants would use when pricing the asset or liability,
assuming they act in their economic best interest. For non‐financial assets, the fair value measurement is based on its
highest and best use. Valuation techniques that are appropriate in the circumstances and for which sufficient data are
available to measure fair value, are used, maximising the use of relevant observable inputs and minimising the use of
unobservable inputs.
Assets and liabilities measured at fair value are classified, into three levels, using a fair value hierarchy that reflects the
significance of the inputs used in making the measurements. Classifications are reviewed each reporting date and
transfers between levels are determined based on a reassessment of the lowest level input that is significant to the fair
value measurement.
For recurring and non‐recurring fair value measurements, external valuers may be used when internal expertise is either
not available or when the valuation is deemed to be significant. External valuers are selected based on market knowledge
and reputation. Where there is a significant change in fair value of an asset or liability from one period to another, an
analysis is undertaken, which includes a verification of the major inputs applied in the latest valuation and a comparison,
where applicable, with external sources of data.
aa) Deferred mining cost
During the commercial production stage of open pit operations, production stripping costs comprises the accumulation
of expenses incurred to enable access to the ore body (coal or iron ore) and includes direct removal costs and machinery
and plant running costs.
Production stripping costs are capitalised as part of an asset if it can be demonstrated that it is probable that future
economic benefits will be realised, the costs can be reliably measured and the entity can identify the component of the
ore body for which access has been improved. The asset is called “stripping activity asset”.
The stripping asset is amortised on a systematic basis, over the expected useful life of the identified component of the
ore body that becomes more accessible as a result of the stripping activity. The units of production method shall be
applied.
Production stripping costs that do not satisfy the asset recognition criteria are expensed.
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ALTURA ANNUAL REPORT 2018
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47
Notes to the Financial Statements continued
FOR THE YEAR ENDED 30 JUNE 2018
Notes to the Financial Statements (continued)
2.
FINANCIAL RISK MANAGEMENT
The Group’s principal financial instruments comprise receivables, payables, loans, finance leases, cash and short term deposits.
These activities expose the Group to a variety of financial risks: market risk (which includes currency risk, interest rate risk and
price risk), credit risk and liquidity risk. The Group manages these risks in accordance with the Group’s financial risk
management policy. The Group uses different methods and assumptions to measure and manage different types of risks to
which it is exposed at each balance date.
The Board reviews and approves policies for managing each of the Group’s financial risk areas. The Group holds the following
financial instruments:
FINANCIAL ASSETS
Cash and cash equivalents
Trade and other receivables
Held to maturity investments
Available‐for‐sale investments
FINANCIAL LIABILITIES
Trade and other payables
Borrowings
a) Market risk
2018
$’000
28,761
2,242
52
4,018
35,073
22,713
145,887
168,600
2017
$’000
13,271
3,336
52
824
17,483
9,198
15,677
24,875
Market risk is the risk that changes in market prices such as foreign exchange rates, securities prices and coal prices will
affect the Group’s income or the value of its holdings of financial investments.
i)
Foreign currency risk
The Group operates internationally and is exposed to foreign exchange risk arising from various currency exposures,
primarily in respect to the US dollar. Revenue is denominated in US dollars and a strengthening of the Australian
dollar against the US dollar has an adverse impact on earnings and cash flow settlement. In particular, on
commencement of sales from Altura Lithium, revenue from sales of spodumene will be received in US dollars.
Liabilities for some loans are denominated in currencies other than the Australian dollar and a weakening of the
Australian dollar against other currencies has an adverse impact on earnings and cash flow settlement. In particular,
Altura Lithium’s loan for construction and commissioning of the mine is in US dollars (US$126 million), and therefore
repayment of the loan will be made in US dollars.
The Group’s overseas subsidiaries have a US dollar functional currency. This exposes the Group to foreign exchange
fluctuations upon conversion to AUD.
At 30 June 2018, the Group held funds in foreign currency amounting to US$382,000 (2017: US$366,000)
The Group does not currently enter into any hedging arrangements.
35
ANNUAL REPORT 2018 ALTURA
48
Altura Mining Limited and Controlled Entities
Notes to the Financial Statements continued
FOR THE YEAR ENDED 30 JUNE 2018
Notes to the Financial Statements (continued)
2.
FINANCIAL RISK MANAGEMENT (continued)
Foreign currency risk sensitivity analysis
At 30 June 2018, the effect on profit and equity as a result of changes in the value of the Australian dollar to the US
dollar that management considers to be reasonably possible, with all other variables remaining constant is as
follows:
Change in profit
—
—
Improvement in AUD to USD by 11%
Decline in AUD to USD by 11%
Change in equity
—
—
Improvement in AUD to USD by 11%
Decline in AUD to USD by 11%
2018
$’000
2017
$’000
704
(704)
704
(704)
(403)
403
(403)
403
ii)
Price risk
The Group is exposed to coal price risk and equity securities price risk. The Group currently does not have any
hedges in place against the movements in the spot price of coal.
The Group's equity investments are publicly traded on the United States of America OTCBB and are not quoted on
any market Index. The table below summarises the impact of increases/decreases in the value on the Group's equity
investments as at balance date. The analysis is based on the assumption that the equity pricing had
increased/decreased by 10% with all other variables held constant and all the Group's equity instruments moved
according to the historical correlation with the index.
Change in profit
—
—
Increase in equity value by 10%
Decrease in equity value by 10%
Change in equity
—
—
Increase in equity value by 10%
Decrease in equity value by 10%
2018
$’000
‐
‐
402
(402)
2017
$’000
‐
‐
82
(82)
iii)
Interest rate risk
At balance date the Group’s debt was fixed rate. For further details on interest rate risk refer to Note 18.
Interest rate sensitivity analysis
At 30 June 2018, the effect on profit and equity as a result of changes in the interest rate that management
considers to be reasonably possible, with all other variables remaining constant would be as follows:
Change in profit
—
—
Increase in interest rate by 1%
Decrease in interest rate by 1%
Change in equity
—
—
Increase in interest rate by 1%
Decrease in interest rate by 1%
2018
$’000
(1,450)
1,450
(1,450)
1,450
2017
$’000
200
(200)
(200)
200
Term deposits have been treated as a floating rate due to the short term nature of the deposits.
36
ALTURA ANNUAL REPORT 2018
Altura Mining Limited and Controlled Entities
Notes to the Financial Statements (continued)
FOR THE YEAR ENDED 30 JUNE 2018
2.
FINANCIAL RISK MANAGEMENT (continued)
Foreign currency risk sensitivity analysis
At 30 June 2018, the effect on profit and equity as a result of changes in the value of the Australian dollar to the US
dollar that management considers to be reasonably possible, with all other variables remaining constant is as
follows:
ii)
Price risk
The Group is exposed to coal price risk and equity securities price risk. The Group currently does not have any
hedges in place against the movements in the spot price of coal.
The Group's equity investments are publicly traded on the United States of America OTCBB and are not quoted on
any market Index. The table below summarises the impact of increases/decreases in the value on the Group's equity
investments as at balance date. The analysis is based on the assumption that the equity pricing had
increased/decreased by 10% with all other variables held constant and all the Group's equity instruments moved
according to the historical correlation with the index.
iii)
Interest rate risk
At balance date the Group’s debt was fixed rate. For further details on interest rate risk refer to Note 18.
At 30 June 2018, the effect on profit and equity as a result of changes in the interest rate that management
considers to be reasonably possible, with all other variables remaining constant would be as follows:
Change in profit
Change in equity
Improvement in AUD to USD by 11%
Decline in AUD to USD by 11%
Improvement in AUD to USD by 11%
Decline in AUD to USD by 11%
—
—
—
—
—
—
—
—
—
—
—
—
Change in profit
Increase in equity value by 10%
Decrease in equity value by 10%
Change in equity
Increase in equity value by 10%
Decrease in equity value by 10%
Interest rate sensitivity analysis
Change in profit
Increase in interest rate by 1%
Decrease in interest rate by 1%
Change in equity
Increase in interest rate by 1%
Decrease in interest rate by 1%
2018
$’000
2017
$’000
704
(704)
704
(704)
(403)
403
(403)
403
2018
$’000
‐
‐
402
(402)
2018
$’000
(1,450)
1,450
(1,450)
1,450
2017
$’000
‐
‐
82
(82)
2017
$’000
200
(200)
(200)
200
Term deposits have been treated as a floating rate due to the short term nature of the deposits.
Altura Mining Limited and Controlled Entities
49
Notes to the Financial Statements continued
FOR THE YEAR ENDED 30 JUNE 2018
Notes to the Financial Statements (continued)
2.
FINANCIAL RISK MANAGEMENT (continued)
b)
Credit risk
Credit risk refers to the risk that a third party will default on its contractual obligations resulting in financial loss to the
Consolidated Group. The Consolidated Group has adopted the policy of only dealing with credit worthy counterparties
and obtaining sufficient collateral or other security where appropriate, as a means of mitigating the risk of financial loss
from defaults.
The carrying amount of financial assets recorded in the financial statements, net of any provisions for losses, represents
the Company's maximum exposure to credit risk.
c)
Liquidity risk
Liquidity risk includes the risk that the Group will not be able to meet its financial obligations as they fall due. The Group
will be impacted in the following ways:
i) Will not have sufficient funds to settle transactions on the due date;
ii) Will be forced to sell financial assets at a value which is less than what they are worth; or
iii) May be unable to settle or recover a financial asset at all.
The Group manages liquidity risk by monitoring forecast cash flows.
d)
Financial instrument composition and maturity analysis
The tables below reflect the undiscounted contractual settlement terms for financial instruments of a fixed period of
maturity, as well as management’s expectations for the settlement period for all other financial instruments. As such the
amounts may not reconcile to the balance sheet.
Consolidated Group
Financial assets:
Cash & cash
equivalents
Trade and other
receivables
Available for sale
investments
Receivables non‐
current
Total financial
assets
Financial liabilities:
Trade & sundry
payables
Borrowings
Total financial
liabilities
Weighted
average
effective
interest rate
2017
2018
%
%
Floating
interest rate
Within 1 year
Fixed interest rate maturing
Over 5 years
1 to 5 years
Non‐interest
bearing
Total
2018
$’000
2017
$’000
2018
$’000
2017
$’000
2018
$’000
2017
$’000
2018
$’000
2017
$’000
2018
$’000
2017
$’000
2018
$’000
2017
$’000
1.00
1.5
28,761
13,271
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
28,761
13,271
‐
14%
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
52
52
‐
‐
‐
‐
‐
‐
‐
52
52
‐
‐
‐
‐
‐
‐
‐
‐
‐ 145,887
‐ 145,887
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
28,761
13,271
2,242
3,336
2,242
3,336
4,018
824
4,018
824
‐
‐
‐
‐
‐
52
‐
52
6,260
4,160
35,073
17,483
22,713
9,189
22,713
9,198
‐
15,677 145,887
15,677
22,713
24,875 168,600
24,875
Term deposit
1.00
1.70
36
37
ANNUAL REPORT 2018 ALTURA
50
Altura Mining Limited and Controlled Entities
Notes to the Financial Statements continued
FOR THE YEAR ENDED 30 JUNE 2018
Notes to the Financial Statements (continued)
2.
FINANCIAL RISK MANAGEMENT (continued)
Trade and sundry payables are expected to be paid as follows:
Less than 6 months
More than 6 months
e)
Fair value measurements
i)
Fair value hierarchy
2018
$’000
22,713
‐
22,713
2017
$’000
9,198
‐
9,198
The Group uses various methods in estimating the fair value of financial instruments. AASB 13 Fair Value Measurement
requires disclosure of fair value measurements by level in accordance with the following fair value measurement
hierarchy:
a) Quoted prices (unadjusted) in active markets for identical assets or liabilities (level 1)
b)
Inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly
(as prices) or indirectly (derived from prices) (level 2); and
Inputs for the asset or liability that are not based on observable market data (unobservable inputs) (level 3)
c)
The following table presents the Group’s financial assets and financial liabilities measured and recognised at fair value at
30 June 2018 and 30 June 2017.
2018
Assets
Listed investments
Total assets
2017
Assets
Listed investments
Total assets
ii)
Valuation techniques
Level 1
$’000
Level 2
$’000
Level 3
$’000
Total
$’000
4,018
4,018
824
824
‐
‐
‐
‐
‐
4,018
‐
4,018
‐
‐
824
824
The fair value of financial instruments traded in active markets is based on quoted market prices at the end of the
reporting period. The quoted market price used for financial assets and liabilities held by the Group is the closing
price. These instruments are included in level 1.
Specific valuation techniques used to value financial instruments include:
The use of quoted market prices or dealer quotes for similar instruments;
Other techniques, such as discounted cash flow analysis, are used to determine the fair value for the
remaining financial instruments.
38
ALTURA ANNUAL REPORT 2018
Altura Mining Limited and Controlled Entities
51
Notes to the Financial Statements continued
FOR THE YEAR ENDED 30 JUNE 2018
Notes to the Financial Statements (continued)
3.
DISCONTINUED OPERATIONS
a)
Description
During the reporting period the board has made several information packages available to various groups for the purpose
of attracting offers for the sale of the Tabalong tenements in Kalimantan, Indonesia. The board considers that the
presentation of the Tabalong Group as held for sale confirms its intent to dispose of these assets.
Financial information relating to the discontinued operation for the period to the date of disposal is set out below.
b)
Financial performance and cash flow information of discontinued operations
The financial performance and cash flow information presented are for the period ending June 2018.
2018
$’000
2017
$’000
Revenue
Expenses
Loss before income tax
Loss after income tax of discontinued operation
Loss on sale of joint ventures before income tax
Loss from discontinued operations after income tax
Net cash (outflow) from financing activities
Net decrease in cash generated by the division
c)
Carrying amounts of assets and liabilities classified as held for sale
The carrying amounts of assets and liabilities as at 30 June 2018 were:
Cash
Other receivables *
Property, plant and equipment
Exploration at cost
Total assets of disposal group held for sale
Other payables
Borrowings ^
Total liabilities of disposal group held for sale
‐
(250)
(250)
(250)
‐
(250)
(38)
(38)
‐
(104)
(104)
(104)
‐
(104)
(21)
(21)
17
2,796
5
6,453
9,271
234
1,612
1,846
^ These funds were advanced by the minority shareholder in the Tabalong coal project in accordance with the loan
agreement. The facility has no defined repayment term.
* These unsecured amounts are due from a minority party in the Tabalong coal project. Their recoverability is dependent
on the commercial exploitation of certain mining tenements in the project. The timing of which is currently unknown, and
as such the amounts have not been discounted. No losses are expected on these amounts.
39
ANNUAL REPORT 2018 ALTURA
52
Altura Mining Limited and Controlled Entities
Notes to the Financial Statements continued
FOR THE YEAR ENDED 30 JUNE 2018
Notes to the Financial Statements (continued)
4.
SEGMENT INFORMATION
The Group reports the following operating segments to the chief operating decision maker, being the Board of Directors of
Altura Mining Limited, in assessing performance and determining the allocation of resources. Unless otherwise stated, all
amounts reported to the Board are determined in accordance with accounting policies that are consistent to those adopted in
the annual financial statements of the Group.
The coal mining segment derives its revenue from coal sold to customers. As the Group's investment in coal is equity accounted,
no revenue from this activity is included in this segment note. The lithium mining segment is currently under construction and
upon completion it will derive its revenue from the sale of lithium to customers. The exploration services segment provides a
range of drilling services to its customers, predominately mining and exploration companies. The mineral exploration segment
revenue comprises royalties received and interest earned on funds raised to carry out the exploration activities.
An internally determined service rate is set for all intersegment transactions. All such transactions are eliminated on
consolidation of the Group’s financial statements.
Coal
mining
$’000
Lithium
mining
$’000
Exploration
services
$’000
Mineral
exploration
$’000
Eliminations
Total
$’000
$’000
‐
‐
‐
‐
‐
‐
‐
‐
‐
771
457
94
1,322
‐
447
‐
447
‐
‐
(94)
(94)
771
904
‐
1675
‐
1675
‐
(524)
(12,597)
‐
(13,121)
‐
2018
Revenue
External sales
Other income
Other segments
Total segment revenue
Unallocated revenue
Total consolidated revenue
Segment result
Other segments
Unallocated expenses net of unallocated
revenue
Profit / (loss) before income tax and finance
costs
Finance costs
Income tax revenue/(expense)
Profit / (loss) after income tax
Profit / (loss) from discontinued
operations
Net profit / (loss) for the year
Assets and liabilities
Segment assets
Unallocated assets
Total assets
Segment liabilities
Unallocated liabilities
Total liabilities
‐
236,968
1,442
21,195
‐
170,670
998
2,018
Other segment information
Capital expenditure
Exploration expenditure
Depreciation and amortisation
‐
‐
‐
162,075
‐
‐
‐
‐
97
134
369
190
40
‐
(13,121)
‐
408
(12,713)
(104)
(12,817)
‐
‐
‐
‐
‐
259,605
9,271
268,876
173,676
1,846
175,522
162,209
369
287
ALTURA ANNUAL REPORT 2018
Altura Mining Limited and Controlled Entities
53
Notes to the Financial Statements continued
FOR THE YEAR ENDED 30 JUNE 2018
Notes to the Financial Statements (continued)
4.
SEGMENT INFORMATION (continued)
Coal
mining
$’000
Lithium
mining
$’000
Exploration
services
$’000
Mineral
exploration
$’000
Eliminations
Total
$’000
$’000
‐
‐
‐
‐
‐
‐
‐
‐
768
9
178
955
‐
825
‐
825
‐
‐
(178)
(178)
768
834
‐
1602
‐
1602
(142)
‐
(1,123)
(5,184)
‐
(6,449)
‐
2017
Revenue
External sales
Other income
Other segments
Total segment revenue
Unallocated revenue
Total consolidated revenue
Segment result
Other segments
Unallocated expenses net of unallocated
revenue
Profit / (loss) before income tax and finance
costs
Finance costs
Income tax revenue / (expense)
Profit / (loss) after income tax
Profit / (loss) from discontinued
operations
Net profit / (loss) for the year
Assets and liabilities
Segment assets
Unallocated assets
Total assets
Segment liabilities
Unallocated liabilities
Total liabilities
‐
59,353
1,461
18,704
15,677
11,965
1,175
818
Other segment information
Capital expenditure
Exploration expenditure
Depreciation and amortisation
‐
‐
‐
47,529
‐
‐
190
‐
240
470
855
95
41
‐
(6,449)
‐
534
(5,915)
(250)
(6,165)
79,518
8,820
88,338
29,635
1,753
31,388
48,189
855
335
‐
‐
‐
‐
‐
ANNUAL REPORT 2018 ALTURA
54
Altura Mining Limited and Controlled Entities
Notes to the Financial Statements continued
FOR THE YEAR ENDED 30 JUNE 2018
Notes to the Financial Statements (continued)
4.
SEGMENT INFORMATION (continued)
Geographical segments
The Group’s geographical segments are determined based on the location of the Group’s assets.
Capital expenditure
Exploration expenditure
Depreciation and amortisation
162,209
229
188
‐
140
99
‐
‐
‐
2018
Revenue
External sales
Other income
Other segments
Total segment revenue
Unallocated revenue
Total revenue
Segment assets
Unallocated assets
Total assets
Segment liabilities
Unallocated liabilities
Total liabilities
2017
Revenue
External sales
Other income
Other segments
Total segment revenue
Unallocated revenue
Total revenue
Segment assets
Unallocated assets
Total assets
Segment liabilities
Unallocated liabilities
Total liabilities
Australia
$’000
Indonesia
$’000
Other
$’000
Eliminations
$’000
‐
447
‐
447
771
457
94
1,322
‐
‐
‐
‐
‐
‐
(94)
(94)
256,489
2,899
217
25,239
148,293
144
Australia
$’000
Indonesia
$’000
Other
$’000
Eliminations
$’000
‐
825
‐
825
768
9
178
955
‐
‐
‐
‐
‐
‐
(178)
(178)
77,790
1,478
250
12,694
16,852
89
Total
$’000
771
904
‐
1,675
‐
1,675
259,605
9,271
268,876
173,676
1,846
175,522
162,209
369
287
Total
$’000
768
834
‐
1,602
‐
1,602
79,518
8,820
88,338
29,635
1,753
31,388
48,189
855
335
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
Capital expenditure
Exploration expenditure
Depreciation and amortisation
48,189
967
164
‐
158
171
‐
‐
‐
The Group has a number of customers to whom it provides services. The Group supplies three external customers in the services
segment who account for 35% (US$324,000), 11% (US$101,000) and 8% (US$72,000) of external revenue (2017: 60%).
42
ALTURA ANNUAL REPORT 2018
Altura Mining Limited and Controlled Entities
55
Notes to the Financial Statements continued
FOR THE YEAR ENDED 30 JUNE 2018
Notes to the Financial Statements (continued)
5.
PROFIT / (LOSS) FROM ORDINARY ACTIVITIES
(a)
Revenue
Revenue from services
Revenue from royalties
Total sales revenues from ordinary activities
(b)
Other revenues
Interest received from other corporations
Profit on sale of assets
Other revenue
Total other revenues from ordinary activities
Total revenue
(c)
Cost of sales
Drilling costs
Depreciation of plant & equipment
Total cost of sales
(d)
Other expenses
Depreciation of plant & equipment
Other expenses
Loss on sale of assets
Total other expenses from ordinary activities
(e)
Foreign exchange gain / (loss)
Net unrealised foreign exchange loss #
Total foreign exchange gain / (loss)
# The net unrealised foreign exchange loss relates to the revaluation of the
US$110 funding facility and other US$ denominated funds held by the Group.
(f)
Employee benefits expense
Employee share scheme expense
Bonus paid by way of issue of shares to directors and staff
Other employee benefits expense
Total employee benefits expense
2018
$’000
772
393
1,165
447
48
15
510
2017
$’000
768
503
1,271
321
9
1
331
1,675
1,602
673
99
772
189
‐
‐
189
6,366
6,366
1,796
34
1,860
3,690
827
242
1,069
93
8
66
167
1,371
1,371
162
70
2,040
2,272
43
ANNUAL REPORT 2018 ALTURA
56
Altura Mining Limited and Controlled Entities
Notes to the Financial Statements continued
FOR THE YEAR ENDED 30 JUNE 2018
Notes to the Financial Statements (continued)
6.
EARNINGS / (LOSS) PER SHARE
(a) Basic earnings / (loss) per share
From continuing operations, attributable to the ordinary equity holders of the
Company
From discontinued operations
Total basic earnings per share attributable to the ordinary equity
holders of the Company
(b) Diluted earnings / (loss) per share
From continuing operations, attributable to the ordinary equity holders of the
Company
From discontinued operations
Total basic earnings per share attributable to the ordinary equity
holders of the Company
(c) Weighted average number of ordinary shares used as the denominator in
calculating the basic and diluted earnings per share.
As at 30 June 2018, there were 8,200,000 management performance rights
outstanding, these potential ordinary shares would reduce the loss per share
from continuing ordinary operations on conversion, and hence these potential
ordinary shares are not dilutive.
(d) Earnings used in the calculation of basic earnings per share reconciles to net
profit in the income statement as follows:
Net profit / (loss)
Less ‐ profit /(loss) from discontinued operations
Earnings used in the calculation of basic EPS
2018
cents per share
2017
cents per share
(0.73)
(0.01)
(0.74)
(0.73)
(0.01)
(0.74)
(0.44)
(0.01)
(0.45)
(0.44)
(0.01)
(0.45)
2018
number
2017
number
1,743,518,956
1,358,286,271
2018
$’000
2017
$’000
(12,803)
(77)
(12,880)
(5,958)
(169)
(6,127)
44
ALTURA ANNUAL REPORT 2018
Altura Mining Limited and Controlled Entities
57
Notes to the Financial Statements continued
FOR THE YEAR ENDED 30 JUNE 2018
Notes to the Financial Statements (continued)
7.
INCOME TAX EXPENSE
(a)
The components of tax expense comprise:
Current Tax
Current year
Adjustments in respect of prior periods
Deferred Tax
Current year deferred tax
Total income tax expense / (benefit) per income statement
(b)
Income tax expense / (benefit) is attributable to:
Profit / (loss) from continuing operations
Profit / (loss) from discontinued operations
(c)
The prima facie tax on profit / (loss) before income tax is reconciled to the
income tax as follows:
Profit / (loss) from continuing operations
Profit / (loss) from discontinued operations
Profit / (loss) before tax
Income tax calculated at the Australian rate of 27.5%
Increase in income tax due to:
Non‐deductible expenses
Share compensation costs
Effect of current year tax losses not recognised
Under / (over) provision in prior year
Difference in overseas tax rates
Income tax expense / (benefit)
2018
$’000
2017
$’000
‐
(408)
‐
(408)
(408)
‐
(408)
(13,121)
(104)
(13,225)
(3,637)
413
503
2,721
(408)
‐
(408)
‐
(534)
‐
(534)
(534)
‐
(534)
(6,449)
(250)
(6,699)
(1,842)
1,083
64
666
(534)
29
(534)
Deferred tax assets arising from tax losses are only recognised to the extent that
there are equivalent deferred tax liabilities. The remaining tax losses have not
been recognised as an asset because recovery of the losses is not regarded as
probable:
Tax losses not recognised ‐ revenue at 27.5%
12,016
9,503
(d)
Tax consolidation system
Legislation to allow groups, comprising a parent entity and its Australian resident wholly‐owned entities, to elect to
consolidate and be treated as a single entity for income tax purposes was substantively enacted on 21 October 2002.
Altura Mining Limited and certain of its wholly‐owned Australian subsidiaries are eligible to consolidate for tax purposes
and have elected to form an income tax group under the Tax Consolidation Regime effective 1 July 2005. The
implementation of the tax consolidation group was formally recognised by the ATO on 22 July 2005 with start date for
income tax consolidation 1 July 2005 and Altura Mining Limited as the head entity of the group.
Entities within the tax‐consolidated group have entered into a tax‐sharing agreement with the head entity. Under the
terms of this agreement, Altura Mining Limited and each of the entities in the tax consolidated group has agreed to pay
a tax equivalent payment to or from the head entity, based on standalone tax payer basis. Such amounts are reflected
in amounts receivable from or payable to other entities in the tax consolidated group.
45
ANNUAL REPORT 2018 ALTURA
58
Altura Mining Limited and Controlled Entities
Notes to the Financial Statements continued
FOR THE YEAR ENDED 30 JUNE 2018
Notes to the Financial Statements (continued)
8.
CASH AND CASH EQUIVALENTS
Cash at bank and on hand
28,761
13,271
2018
$’000
2017
$’000
9.
TRADE AND OTHER RECEIVABLES
CURRENT
Trade and other receivables
Provision for doubtful debts
3,323
(1,081)
2,242
4,410
(1,074)
3,336
2018 Consolidated
2017 Consolidated
0‐30
days
$000
1,732
2,825
31‐60
days
$000
61
43
61‐90
days
$000
54
38
90+
days
$000
395
430
As at 30 June 2018, $510,000 (2017, $511,000) trade receivables were past due.
10.
INVENTORIES
Consumables and stores – at cost
11. HELD TO MATURITY INVESTMENTS
Term deposits
The term deposits are held to their maturity of less than one year and carry a weighted
average fixed interest rate of 1.0% (2017: 1.5%). Due to their short term nature their
carrying value is assumed to approximate their fair value. Information about the
Group’s exposure to credit risk is disclosed in Note 2.
2018
$’000
1
1
52
52
Total
$000
2,242
3,336
2017
$’000
1
1
52
52
46
ALTURA ANNUAL REPORT 2018
Altura Mining Limited and Controlled Entities
59
Notes to the Financial Statements continued
FOR THE YEAR ENDED 30 JUNE 2018
Notes to the Financial Statements (continued)
12. OTHER CURRENT ASSETS
Financial assets (security deposits)
Prepayments
13. AVAILABLE‐FOR‐SALE FINANCIAL ASSETS
Listed investments at fair value
Carried forward from previous year
Changes in fair value
Total listed investments at fair value
2018
$’000
118
266
384
824
3,194
4,018
2017
$’000
128
205
333
1,333
(509)
824
In November 2012 the Group acquired a 14.7% interest in Lithium Corporation,
Nevada USA by way of a non‐brokered private placement. Lithium Corporation is
quoted on the US OTCBB (Over The Counter Bulletin Board).
14. PROPERTY, PLANT AND EQUIPMENT
2018
Gross carrying amount
Balance at 30 June 2017
Additions
Exchange difference
Disposals
Balance at 30 June 2018
Accumulated depreciation
Balance at 30 June 2017
Depreciation expense
Exchange difference
Disposals
Balance at 30 June 2018
Net book value
as at 30 June 2018
Motor
vehicles
Office
equipment
Plant and
equipment
Exploration
Total
$’000
$’000
$’000
$’000
$’000
1,001
2
21
(90)
934
689
71
19
(90)
689
245
737
50
7
‐
794
605
65
11
‐
681
113
7,192
82
171
‐
7,445
6,953
90
173
‐
7,216
229
298
‐
1
‐
299
131
61
‐
‐
192
107
9,228
134
200
(90)
9,472
8,378
287
203
(90)
8,778
694
47
ANNUAL REPORT 2018 ALTURA
60
Altura Mining Limited and Controlled Entities
Notes to the Financial Statements continued
FOR THE YEAR ENDED 30 JUNE 2018
Notes to the Financial Statements (continued)
14. PROPERTY, PLANT AND EQUIPMENT (continued)
Motor
vehicles
Office
equipment
Plant and
equipment
Exploration
Total
$’000
$’000
$’000
$’000
$’000
2017
Gross carrying amount
Balance at 30 June 2016
Additions
Exchange difference
Disposals
Balance at 30 June 2017
Accumulated depreciation
Balance at 30 June 2016
Depreciation expense
Exchange difference
Disposals
Balance at 30 June 2017
Net book value
as at 30 June 2017
713
339
(18)
(33)
1,001
686
56
(21)
(32)
689
312
616
132
(10)
(1)
737
565
66
(25)
(1)
605
132
7,342
‐
(150)
‐
7,192
6,894
190
(131)
‐
6,953
239
15. EXPLORATION AND EVALUATION
Exploration and evaluation expenditure at cost:
Carried forward from previous year
Transfer to mine development costs
Incurred during the year
Transferred to assets classified as held for sale
Written off during the year
Total exploration and evaluation expenditure
The recovery of expenditure carried forward is dependent upon the discovery of
commercially viable mineral and other natural resource deposits, their development
and exploitation, or alternatively their sale.
The Company's title to certain mining tenements is subject to Ministerial approval and
may be subject to successful outcomes of native title issues.
108
190
‐
‐
298
108
23
‐
‐
131
167
8,779
661
(178)
(34)
9,228
8,253
335
(177)
(33)
8,378
850
2018
$’000
2017
$’000
1,226
(932)
1,662
(361)
1,595
‐
1,595
14,394
(15,459)
8,382
(6,092)
1,226
‐
1,226
48
ALTURA ANNUAL REPORT 2018
Altura Mining Limited and Controlled Entities
Notes to the Financial Statements (continued)
FOR THE YEAR ENDED 30 JUNE 2018
14. PROPERTY, PLANT AND EQUIPMENT (continued)
Motor
vehicles
Office
equipment
Plant and
equipment
Exploration
Total
$’000
$’000
$’000
$’000
$’000
2017
Gross carrying amount
Balance at 30 June 2016
Additions
Disposals
Exchange difference
Balance at 30 June 2017
Accumulated depreciation
Balance at 30 June 2016
Depreciation expense
Exchange difference
Disposals
Balance at 30 June 2017
Net book value
as at 30 June 2017
713
339
(18)
(33)
1,001
686
56
(21)
(32)
689
312
616
132
(10)
(1)
737
565
66
(25)
(1)
605
132
7,342
(150)
‐
‐
7,192
6,894
190
(131)
‐
6,953
239
15. EXPLORATION AND EVALUATION
Exploration and evaluation expenditure at cost:
Carried forward from previous year
Transfer to mine development costs
Incurred during the year
Transferred to assets classified as held for sale
Written off during the year
Total exploration and evaluation expenditure
The recovery of expenditure carried forward is dependent upon the discovery of
commercially viable mineral and other natural resource deposits, their development
and exploitation, or alternatively their sale.
The Company's title to certain mining tenements is subject to Ministerial approval and
may be subject to successful outcomes of native title issues.
108
190
‐
‐
298
108
23
‐
‐
131
167
8,779
661
(178)
(34)
9,228
8,253
335
(177)
(33)
8,378
850
2018
$’000
2017
$’000
1,226
(932)
1,662
(361)
1,595
‐
1,595
14,394
(15,459)
8,382
(6,092)
1,226
‐
1,226
Altura Mining Limited and Controlled Entities
61
Notes to the Financial Statements continued
FOR THE YEAR ENDED 30 JUNE 2018
Notes to the Financial Statements (continued)
16. MINE DEVELOPMENT AT COST
Mine development costs:
Carried forward from previous year
Transfer from exploration and evaluation
Incurred during the year
Total mine development costs
17. TRADE AND OTHER PAYABLES
Trade payables and accruals
18. BORROWINGS
Current borrowings
Interest bearing
Vendor loan #
Total current borrowings
Non‐current borrowings
Interest bearing ^
Opening Balance
Loan notes issued
Interest capitalised
Exchange rate differences
Transaction costs
Total non‐current borrowings
2018
$’000
2017
$’000
59,353
932
161,277
221,562
‐
15,459
43,894
59,353
22,713
22,713
9,198
9,198
‐
‐
15,677
15,677
‐
141,075
17,706
11,088
(23,982)
145,887
‐
‐
‐
‐
‐
‐
# The vendor loan totalling $15.677 million was repaid in January 2018.
^ On 27 July 2017, loan notes were issued to lenders Magy LLC, Pala Investments Limited and CarVal Investors LLC (the facility).
The interest rate is 14% p.a. for the first 18 months of the loan and 15% pa thereafter. The loan is for a 3‐year term expiring
in August 2020. No repayments other than interest are due until the loan termination date. The loan is secured over all of
Altura Lithium Operations (ALO) assets, shares in ALO, AJM bank accounts and certain AJM receivables.
The Company has the option to capitalise Interest payments into the facility. Accrued interest $17.7 million has been
capitalised to the end of the period.
Under the terms of the facility, the Company is required to comply with the following financial covenants:
For periods ending on 30 September 2018, the Company shall ensure that the net debt to defined EBITDA ratio
shall not exceed the ratio of 2:1.
For quarterly reporting periods after the 30 September 2018 the net debt to defined EBITDA ratio shall not
exceed the ratio of 1.5:1.
No breaches have been reported.
48
49
ANNUAL REPORT 2018 ALTURA
62
Altura Mining Limited and Controlled Entities
Notes to the Financial Statements continued
FOR THE YEAR ENDED 30 JUNE 2018
Notes to the Financial Statements (continued)
19. SHORT TERM PROVISIONS
Employee benefits
Movements in provisions
Short term employee benefits
Opening balance
Provision increase / (decrease)
Expense incurred
Balance at year end
The aggregate employee entitlement liability recognised and included in the financial
statements is as follows:
Provision for employee entitlements:
Current
Total
20. CURRENT TAXATION & DEFERRED TAX LIABILITIES & ASSETS
(a)
Liabilities
Current
Income tax paid / payable
Non‐Current
Deferred tax liability comprises:
Unrealised foreign exchange gain
Tax allowances relating to exploration
Property, plant & equipment
Other
(b)
Assets
Non‐Current
Deferred assets comprise:
Provisions
Revenue losses
Revenue losses not recognised
Property, plant and equipment
Unrealised foreign exchange loss
Other
50
2018
$’000
2017
$’000
1,158
1,158
842
563
(247)
1,158
842
842
847
200
(205)
842
1,158
1,158
842
842
‐
‐
‐
4,918
6,961
9
11,888
1,399
22,204
(11,014)
‐
124
(825)
11,888
1,586
4,560
‐
6
6,152
254
15,154
(9,503)
6
‐
241
6,152
ALTURA ANNUAL REPORT 2018
Altura Mining Limited and Controlled Entities
Notes to the Financial Statements (continued)
FOR THE YEAR ENDED 30 JUNE 2018
Altura Mining Limited and Controlled Entities
63
Notes to the Financial Statements continued
FOR THE YEAR ENDED 30 JUNE 2018
Notes to the Financial Statements (continued)
21. REHABILITATION PROVISION
Non‐current provision
Rehabilitation and demobilisation
Movements in provisions
Rehabilitation and demobilisation
Opening balance
Provision increase/(decrease)
Expense incurred
Balance at year end
2018
$’000
2017
$’000
3,918
3,918
3,918
‐
‐
3,918
3,918
3,918
‐
3,918
‐
3,918
The aggregate employee entitlement liability recognised and included in the financial
Directors have reviewed the rehabilitation provision and are confident that inputs
into the current calculation can be relied upon. Refer to Note 1n (a) and Note 1p (i)
for accounting policies in relation to the rehabilitation provision.
1,158
1,158
842
842
22. CONTRIBUTED EQUITY
Issued capital
1,819,866,474 (2017: 1,541,678,000) ordinary shares issued and fully paid
192,893
146,556
Fully paid ordinary shares
Balance at the beginning of the financial year
Issue of shares to directors and staff #
Issue of shares on vesting of performance rights ##
Share purchase plan
Shares issued in lieu of loan note fees
Share placement
Exercise of Listed Options
Exercise of Warrants and Unlisted Options
Share issue costs
2018
Number
1,541,678,000
150,000
3,800,000
‐
72,644,513
136,973,685
‐
64,620,276
‐
$’000
146,556
34
356
‐
11,521
26,025
‐
9,799
(1,398)
2017
Number
1,222,459,902
450,000
3,600,000
3,869,000
‐
306,000,000
5,299,098
‐
‐
$’000
105,840
70
233
773
‐
41,616
105
‐
(2,081)
Balance at the end of the financial year
1,819,866,474
192,893
1,541,678,000
146,556
‐
‐
‐
On 31 July 2017, the Company completed its loan funding facility. As part of this funding facility, 72.6 million shares
were issued at an issue price of 15.86 cents per share.
On 12 October 2017, the Company completed a placement of shares in which 136.97 million shares were issued at
an issue price of 19.0 cents per share.
During the period warrants and options that were issued as part of the funding facility were exercised. The
Company completed the following issue shares.
o On 30 November 2017, 122.5 million shares were issued at an issue price of 19.0 cents per share, 1 million
shares were issued at an issue price of 26.5 cents per share and 19.812 million shares were issued at an
issue price of 12.6 cents per share
19. SHORT TERM PROVISIONS
Employee benefits
Movements in provisions
Short term employee benefits
Opening balance
Provision increase / (decrease)
Expense incurred
Balance at year end
statements is as follows:
Provision for employee entitlements:
Current
Total
20. CURRENT TAXATION & DEFERRED TAX LIABILITIES & ASSETS
(a)
Liabilities
Current
Income tax paid / payable
Non‐Current
Deferred tax liability comprises:
Unrealised foreign exchange gain
Tax allowances relating to exploration
Property, plant & equipment
Other
(b)
Assets
Non‐Current
Deferred assets comprise:
Provisions
Revenue losses
Revenue losses not recognised
Property, plant and equipment
Unrealised foreign exchange loss
Other
2018
$’000
2017
$’000
1,158
1,158
842
563
(247)
1,158
842
842
847
200
(205)
842
‐
‐
4,918
6,961
9
11,888
1,399
22,204
(11,014)
‐
124
(825)
11,888
‐
1,586
4,560
‐
6
6,152
254
15,154
(9,503)
6
‐
241
6,152
o On 12 December 2017, 2 million shares were issued at an issue price of 26.6 cents per share and 33.02
o
o
million shares were issued at an issue price of 12.6 cents per share
21 December 2017, 2.6 million shares were issued at an issue price of 26.67 cents per share
15 January 2018, 2.75 million shares were issued at an issue price of 26.65 cents per share and 3.44
million shares were issued at an issue price of 26.65 cents per share
50
51
# No shares were issued to directors and other key management personnel in 2018 (2017 nil).
## 2,600,000 shares were issued to directors and other key management personnel in 2018 (2017 2,600,000).
Fully paid ordinary shares carry one vote per share and carry the rights to dividends. Ordinary shares have no par value.
ANNUAL REPORT 2018 ALTURA
64
Altura Mining Limited and Controlled Entities
Notes to the Financial Statements continued
FOR THE YEAR ENDED 30 JUNE 2018
Notes to the Financial Statements (continued)
22. CONTRIBUTED EQUITY (continued)
Reserves
Movements in option and performance rights reserve
Opening balance
Share based payment expense following the issue of performance rights
Performance rights exercised and transferred to accumulated losses
Balance at year end
2018
$’000
162
1,796
(356)
1,602
2017
$’000
233
162
(233)
162
The option and performance rights reserve records items recognised as expenses on the valuation of share options and
performance rights.
The foreign currency translation reserve records exchange differences arising on translation of a foreign controlled subsidiary.
The change in fair value reserve records valuation differences arising on the market valuation of available for sale financial
assets. Refer to note 13 for reconciliation of movements in the year.
Capital management
The Board's policy is to maintain a strong capital base in order to maintain investor, creditor and market confidence and to
sustain future development of the business. There were no changes to the consolidated entity's approach to capital
management during the year. Neither the Company nor any of its subsidiaries are subject to externally imposed capital
requirements. The Board effectively manages the Group’s capital by assessing the Group’s financial risks and adjusting its capital
structure in response to changes in these risks and in the market. These responses include the management of debt levels and
by share issues.
52
ALTURA ANNUAL REPORT 2018
Altura Mining Limited and Controlled Entities
65
Notes to the Financial Statements continued
FOR THE YEAR ENDED 30 JUNE 2018
Notes to the Financial Statements (continued)
23. SHARE BASED PAYMENTS
a)
Performance Rights
In 2014 the Company approved a Long‐Term Incentive Plan (LTIP) under which employees and directors of the Group may
be issued on a discretionary basis with performance rights over ordinary shares of Altura Mining Limited.
The purpose of this plan is to:
assist in the reward, retention and motivation of employees and directors;
align the interests of employees and directors more closely with the interests of Shareholders by providing an
opportunity for employees and directors to receive an equity interest in the form of Awards; and
provide employees and directors with the opportunity to share in any future growth in value of the Company.
The Performance Rights lapse when employment ceases with Altura Mining Limited. The Performance Rights have been
granted for no consideration, and no amount is payable on the vesting or exercising of the Performance Rights. All rights
subject to the LTIP carry no rights to dividends and no voting rights, until converted into ordinary shares.
The Company had the following Performance Rights granted under the LTIP as at 30 June 2018:
Number
500,000
7,500,000
200,000
Issue date
Vesting date
30 March 2017
First shipment of ore
18 December 2017
30 November 2018
21 February 2018
30 November 2018
b)
Bonus shares
During the year 150,000 shares were issued to staff for no consideration.
During the year, the Company had the following share based payments
expenses:
Performance rights (Note 23b)
Bonus shares
2018
$’000
1,796
34
1,830
2017
$’000
162
70
232
53
ANNUAL REPORT 2018 ALTURA
66
Altura Mining Limited and Controlled Entities
Notes to the Financial Statements (continued)
Notes to the Financial Statements continued
FOR THE YEAR ENDED 30 JUNE 2018
24. KEY MANAGEMENT PERSONNEL COMPENSATION
a) Names and positions held of key management personnel in office at any time during the financial year are:
Directors
James Brown
Paul Mantell
Allan Buckler
Dan O’Neill
BT Kuan
Zhao Tong
Managing Director
Executive Director
Non‐Executive Director
Non‐Executive Director
Non‐Executive Director
Non‐Executive Director
Key Management Personnel
Chris Evans
Noel Young
Damon Cox
Chief Operating Officer
Group Financial Controller
Company Secretary
b)
Key management personnel remuneration
Short‐term employee benefits
Long‐term employee benefits
Post‐employment benefits
Termination benefits
Share based payments
2018
$
1,904,082
‐
106,523
‐
952,841
2,963,446
2017
$
1,757,701
‐
102,217
‐
88,685
1,948,603
54
ALTURA ANNUAL REPORT 2018
Altura Mining Limited and Controlled Entities
Notes to the Financial Statements (continued)
FOR THE YEAR ENDED 30 JUNE 2018
67
Notes to the Financial Statements continued
24. KEY MANAGEMENT PERSONNEL COMPENSATION (continued)
c)
Performance Rights
Number of performance rights held by key management personnel
The number of performance rights in the Company held during the financial year by each director of Altura Mining Limited
and other key management personnel of the Group, including their personally related parties, are set out below.
2018
J Brown
P Mantell
A Buckler
D O’Neill
B Kuan
Z Tong
C Evans
N Young
D Cox
2017
J Brown
P Mantell
A Buckler
D O’Neill
B Kuan
Z Tong
C Evans
N Young
D Cox
Balance at
the start of
the year
Granted as
compensation
Shares issued/
rights lapsed
Balance at
the end of
the year
Vesting
30 Nov
2018
1,000,000
2,000,000
(1,000,000)
2,000,000
2,000,000
500,000
100,000
100,000
100,000
‐
400,000
200,000
200,000
Balance at
the start of
the year
2,000,000
1,000,000
200,000
200,000
200,000
‐
800,000
400,000
400,000
1,000,000
(500,000)
1,000,000
1,000,000
‐
‐
‐
‐
(100,000)
(100,000)
(100,000)
‐
‐
‐
‐
‐
‐
‐
‐
‐
1,000,000
(400,000)
1,000,000
1,000,000
200,000
200,000
(200,000)
(200,000)
200,000
200,000
200,000
200,000
Granted as
compensation
Shares issued/
rights lapsed
Balance at
the end of
the year
Vesting
30 Nov
2017
‐
‐
‐
‐
‐
‐
‐
‐
‐
(1,000,000)
1,000,000
1,000,000
(500,000)
(100,000)
(100,000)
(100,000)
500,000
500,000
100,000
100,000
100,000
100,000
100,000
100,000
‐
‐
‐
(400,000)
(200,000)
(200,000)
400,000
400,000
200,000
200,000
200,000
200,000
Details of performance rights awarded as compensation and shares issued on the vesting of the rights, together with
terms and conditions of the rights, can be found in the Directors’ Report and under Note 23(b).
55
ANNUAL REPORT 2018 ALTURA
68
Altura Mining Limited and Controlled Entities
Notes to the Financial Statements continued
FOR THE YEAR ENDED 30 JUNE 2018
Notes to the Financial Statements (continued)
24. KEY MANAGEMENT PERSONNEL COMPENSATION (continued)
d)
Share holdings
Number of shares held by key management personnel
The number of shares in the Company held during the financial year by each director of Altura Mining Limited and other
key management personnel (KMP) of the Group, including their personally related parties, are set out below.
Balance at start
of the year
Purchased /
(sold)
Vesting of
performance
rights
Other changes
Balance at the
end of the year
2018
J Brown
P Mantell
A Buckler
D O’Neill
B Kuan
Z Tong
C Evans
N Young
D Cox
2017
J Brown
P Mantell
A Buckler
D O’Neill
B Kuan
C Evans
N Young
D Cox
27,518,301
33,003,084
177,293,692
14,433,336
20,900,000
‐
1,400,000
17,374,411
1,475,000
26,518,301
32,503,084
177,193,692
14,333,336
20,800,000
1,041,000
17,174,411
1,275,000
‐
‐
17,446,064
(900,000)
‐
‐
(800,000)
‐
‐
‐
‐
‐
‐
‐
(41,000)
‐
‐
1,000,000
500,000
100,000
100,000
100,000
‐
400,000
200,000
200,000
1,000,000
500,000
100,000
100,000
100,000
400,000
200,000
200,000
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
28,518,301
33,503,084
194,839,756
13,633,336
21,000,000
‐
1,000,000
17,574,411
1,675,000
27,518,301
33,003,084
177,293,692
14,433,336
20,900,000
1,400,000
17,374,411
1,475,000
25.
INVESTMENTS IN OTHER ENTITIES
a)
Joint operations
Altura Mining Limited holds no interests in any joint operations or ventures.
b)
Interests are held in the following associated companies:
Name
Principal activities
Country of
incorporation
Ownership
interest
Carrying amount
of investment
Unlisted:
Evora Mining Inc.*
Merida Mining Pte. Ltd.*
Coal Mining
Holding and Investment
British Virgin Islands
Singapore
2018
%
0%
0%
2017
%
33⅓
33⅓
2018
$’000
2017
$’000
‐
‐
‐
‐
‐
‐
* Evora Mining Inc. is the ultimate controlling entity of PT Binamitra Sumberata, the owner and operator of the Delta coal
mining tenements. The Group divested its 33⅓% investment in Evora Mining Inc. and Merida on 14th June 2018. The
impact to profit and loss was a gain on sale of $1.
56
ALTURA ANNUAL REPORT 2018
Altura Mining Limited and Controlled Entities
Notes to the Financial Statements (continued)
FOR THE YEAR ENDED 30 JUNE 2018
Altura Mining Limited and Controlled Entities
69
Notes to the Financial Statements continued
FOR THE YEAR ENDED 30 JUNE 2018
Notes to the Financial Statements (continued)
24. KEY MANAGEMENT PERSONNEL COMPENSATION (continued)
26.
INTERESTS IN SUBSIDIARIES
The consolidated financial statements incorporate the assets, liabilities and results of the following wholly‐owned subsidiaries
in accordance with the accounting policy described in Note 1:
Name of entity
Altura Lithium Operations Pty Ltd
Altura Drilling Pty Ltd
Altura Minerals Pty Ltd
Minvest Australia Pty Ltd
Minvest International Corporation
Altura Asia Pte Ltd
Altura Mining Philippines Inc. *
PT Asiadrill Bara Utama
PT Altura Indonesia
PT Minvest Mitra Pembangunan
PT Cakrawala Jasa Pratama
PT Minvest Jasatama Teknik
PT Cybertek Global Utama
Country of
incorporation
Ownership interest
Australia
Australia
Australia
Australia
Mauritius
Singapore
Philippines
Indonesia
Indonesia
Indonesia
Indonesia
Indonesia
Indonesia
2018
%
100
100
100
100
100
100
40
100
100
100
100
100
100
2017
%
100
100
100
100
100
100
40
100
100
100
100
100
100
* Altura Mining Limited through its wholly owned subsidiary, Altura Asia Pte Ltd holds 40% direct equity in Altura Mining
Philippines Inc. This entity is considered a subsidiary as the Group has full economic and management rights.
The consolidated financial statements incorporate the assets, liabilities and results of the following subsidiaries with non‐
controlling interests in accordance with the accounting policy described in Note 1:
Country of
incorporation
Principal activities
Parent ownership
interest
Non‐controlling
interest
Name of entity
PT Velseis Indonesia *
PT Jasa Tambang Pratama #
PT Cahaya Permata Khatulistiwa #
PT Suryaraya Permata Cemerlang #
PT Suryaraya Cahaya Khatulistiwa #
PT Suryaraya Cahaya Cemerlang #
PT Suryaraya Permata Khatulistiwa #
PT Suryaraya Pusaka #
PT Kodio Multicom
PT Marangkayu Bara Makarti
Indonesia
Indonesia
Indonesia
Indonesia
Indonesia
Indonesia
Indonesia
Indonesia
Indonesia
Indonesia
Mining services
Mining and exploration
Mining and exploration
Mining and exploration
Mining and exploration
Mining and exploration
Mining and exploration
Mining and exploration
Mining and exploration
Mining and exploration
2018
%
50
70
70
70
70
70
70
70
56
56
2017
%
50
70
70
70
70
70
70
70
56
56
2018
%
50
30
30
30
30
30
30
30
44
44
2017
%
50
30
30
30
30
30
30
30
44
44
Altura Mining Limited, Altura Lithium Operations Pty Ltd and Altura Minerals Pty Ltd are included within the tax consolidation
group.
# Altura Mining Limited through its wholly owned subsidiary, Altura Asia Pte Ltd holds 70% direct equity in these seven entities.
* Altura Mining Limited through its wholly owned subsidiary, Minvest International Corporation holds 50% direct equity in PT
Velseis Indonesia. This entity is considered a subsidiary as the Group has full management rights.
56
57
d)
Share holdings
Number of shares held by key management personnel
The number of shares in the Company held during the financial year by each director of Altura Mining Limited and other
key management personnel (KMP) of the Group, including their personally related parties, are set out below.
Balance at start
Purchased /
Vesting of
Other changes
of the year
(sold)
performance
Balance at the
end of the year
2018
J Brown
P Mantell
A Buckler
D O’Neill
B Kuan
Z Tong
C Evans
N Young
D Cox
2017
J Brown
P Mantell
A Buckler
D O’Neill
B Kuan
C Evans
N Young
D Cox
27,518,301
33,003,084
177,293,692
14,433,336
20,900,000
‐
1,400,000
17,374,411
1,475,000
26,518,301
32,503,084
177,193,692
14,333,336
20,800,000
1,041,000
17,174,411
1,275,000
17,446,064
(900,000)
(800,000)
(41,000)
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
rights
1,000,000
500,000
100,000
100,000
100,000
‐
400,000
200,000
200,000
1,000,000
500,000
100,000
100,000
100,000
400,000
200,000
200,000
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
28,518,301
33,503,084
194,839,756
13,633,336
21,000,000
‐
1,000,000
17,574,411
1,675,000
27,518,301
33,003,084
177,293,692
14,433,336
20,900,000
1,400,000
17,374,411
1,475,000
25.
INVESTMENTS IN OTHER ENTITIES
a)
Joint operations
Altura Mining Limited holds no interests in any joint operations or ventures.
b)
Interests are held in the following associated companies:
Name
Principal activities
Country of
incorporation
Ownership
interest
Carrying amount
of investment
Unlisted:
Evora Mining Inc.*
Coal Mining
British Virgin Islands
Merida Mining Pte. Ltd.*
Holding and Investment
Singapore
2018
%
0%
0%
2017
%
33⅓
33⅓
2018
$’000
2017
$’000
‐
‐
‐
‐
‐
‐
* Evora Mining Inc. is the ultimate controlling entity of PT Binamitra Sumberata, the owner and operator of the Delta coal
mining tenements. The Group divested its 33⅓% investment in Evora Mining Inc. and Merida on 14th June 2018. The
impact to profit and loss was a gain on sale of $1.
ANNUAL REPORT 2018 ALTURA
70
Altura Mining Limited and Controlled Entities
Notes to the Financial Statements continued
FOR THE YEAR ENDED 30 JUNE 2018
Notes to the Financial Statements (continued)
26.
INTERESTS IN SUBSIDIARIES (continued)
Summarised financial information
Summarised financial information of the subsidiaries with non‐controlling interests that are material to the consolidated entity
are set out below:
PT Velseis
Indonesia
$’000
PT Suryaraya
Pusaka
$’000
PT Kodio
Multicom
$’000
PT Marangkayu
Bara Makarti
$’000
2018
Summarised statement of financial position
Current assets
Non‐current assets
Total assets
Current liabilities
Non‐current liabilities
Total liabilities
Net assets
Summarised statement of profit or loss and other
comprehensive income
Revenue
Expenses
Profit / (loss) before income tax expense
Income tax expense / (benefit)
Profit / (loss) after income tax expense
Other comprehensive income
Total comprehensive income
Statement of cash flows
Net cash from operating activities
Net cash used in investing activities
Net cash used in financing activities
Net increase / (decrease) in cash and cash equivalents
Other financial information
Profit attributable to non‐controlling interests
Accumulated non‐controlling interest at the end of
reporting period
613
300
913
216
74
290
623
710
530
180
‐
180
23
203
(4)
‐
‐
(4)
101
285
171
1,599
1,770
‐
1,197
1,197
573
‐
(1)
1
‐
1
(4)
(3)
1
‐
‐
1
(1)
(1)
1,008
867
1.875
1
828
829
1,046
‐
(12)
12
‐
12
(12)
‐
‐
‐
‐
‐
‐
19
1,007
1,700
2,707
5
1,627
1,632
1,075
‐
(20)
20
‐
20
(11)
9
‐
‐
‐
‐
4
32
58
ALTURA ANNUAL REPORT 2018
Altura Mining Limited and Controlled Entities
71
Notes to the Financial Statements continued
FOR THE YEAR ENDED 30 JUNE 2018
Notes to the Financial Statements (continued)
26.
INTERESTS IN SUBSIDIARIES (continued)
PT Velseis
Indonesia
$’000
PT Suryaraya
Pusaka
$’000
PT Kodio
Multicom
$’000
PT Marangkayu
Bara Makarti
$’000
447
244
691
201
73
274
417
483
396
87
‐
87
(11)
76
20
‐
‐
20
38
184
170
1,530
1,700
‐
1,151
1,151
549
‐
1
(1)
‐
(1)
3
2
7
‐
‐
7
1
(1)
969
833
1,802
1
807
808
994
‐
24
(24)
‐
(24)
10
(14)
‐
‐
‐
‐
(6)
19
968
1,633
2,601
5
1,583
1,588
1,013
‐
20
(20)
‐
(20)
10
(10)
‐
‐
‐
‐
(4)
28
2017
Summarised statement of financial position
Current assets
Non‐current assets
Total assets
Current liabilities
Non‐current liabilities
Total liabilities
Net assets
Summarised statement of profit or loss and other
comprehensive income
Revenue
Expenses
Profit / (loss) before income tax expense
Income tax expense / (benefit)
Profit / (loss) after income tax expense
Other comprehensive income
Total comprehensive income
Statement of cash flows
Net cash from operating activities
Net cash used in investing activities
Net cash used in financing activities
Net increase / (decrease) in cash and cash equivalents
Other financial information
Profit attributable to non‐controlling interests
Accumulated non‐controlling interest at the end of
reporting period
27. RELATED PARTIES
Transactions within the wholly‐owned group
The wholly‐owned group includes the ultimate parent entity in the wholly‐owned group, and wholly‐owned controlled entities.
The ultimate parent entity in the wholly‐owned group is Altura Mining Limited.
During the year the parent entity provided financial assistance to its wholly owned and controlled entities by way of
intercompany loans. The loans are unsecured, interest free and have no fixed term of repayment. Sales and purchases between
related parties within the Group have been eliminated upon consolidation. There were no further sales or purchases from
wholly‐owned related parties during the financial year.
59
ANNUAL REPORT 2018 ALTURA
72
Altura Mining Limited and Controlled Entities
Notes to the Financial Statements continued
FOR THE YEAR ENDED 30 JUNE 2018
Notes to the Financial Statements (continued)
28. NOTES TO STATEMENT OF CASH FLOWS
a)
For the purpose of the statement of cash flows, cash includes cash on hand and in banks, and investments in money
market instruments, net of outstanding bank overdrafts. Cash at the end of the financial year as shown in the statements
of cash flows is reconciled to the related items in the balance sheet as follows:
Cash at bank and on hand (Note 8)
Cash in assets classified as held for sale
Cash per statement of cash flows
Reconciliation to Statement of Cash Flows
For the purposes of the Statement of Cash Flows, cash and cash equivalents
comprise the following at 30 June:
Cash at bank and on hand
Short‐term deposits
Cash at bank and on hand
2018
$’000
28,761
18
28,779
2017
$’000
13,271
37
13,308
28,779
‐
27,779
13,308
‐
13,308
b)
Reconciliation of operating profit / (loss) after income tax to net cash
used in operating activities
Operating loss after income tax
(12,817)
(6,165)
Adjustments for non‐cash income and expense items:
Option and share pricing
Bonus paid by way of issue of shares to directors and staff
Impairment ‐ equity
Depreciation of property, plant and equipment
Share of (profit) / loss of associates and joint venture partnership
Foreign currency exchange rate movement
(Increase) / decrease in current tax prepaid
Increase / (decrease) in deferred tax balances
Changes in assets and liabilities:
(Increase) / decrease in receivables
(Decrease) / increase in other creditors and accruals
(Increase) / decrease in deposits and prepayments
Increase / (decrease) in current provisions
Net cash used in operating activities
c) Net debt reconciliation
Net debt
Cash and cash equivalents
Borrowings – repayable within one year
Borrowings – repayable after one year
Net Debt
Cash and liquid investments
Gross debt ‐ fixed interest rate
Gross debt ‐ variable interest rate
Net debt
60
1,796
34
‐
287
‐
2,815
126
‐
1,094
948
(51)
316
(5,451)
28,779
‐
(145,887)
(117,108)
28,779
(145,887)
‐
(117,108)
162
70
18
335
124
(5,166)
24
‐
(2,210)
7,128
128
(5)
(5,557)
13,308
(15,677)
‐
(2,369)
13,308
(15,677)
‐
(2,369)
ALTURA ANNUAL REPORT 2018
Altura Mining Limited and Controlled Entities
73
Notes to the Financial Statements continued
FOR THE YEAR ENDED 30 JUNE 2018
Notes to the Financial Statements (continued)
28. NOTES TO STATEMENT OF CASH FLOWS (continued)
Cash and cash
equivalents
Borrowings due
within 1 year
Borrowings due
after 1 year
Total
Net debt as at 30 June 2017
Cash flows
Foreign exchange adjustments
Other non‐cash movements
Net debt as at 30 June 2018
13,308
15,463
8
‐
28,779
(15,677)
‐
(2,369)
15,053
(128,615)
(98,099)
40
584
‐
(11,088)
(11,040)
(6,184)
(5,600)
(145,887)
(117,108)
d) Acquisition of entities
The Group did not acquire any interest in entities during the year.
61
ANNUAL REPORT 2018 ALTURA
74
Altura Mining Limited and Controlled Entities
Notes to the Financial Statements continued
FOR THE YEAR ENDED 30 JUNE 2018
Notes to the Financial Statements (continued)
29. PARENT ENTITY DISCLOSURE
(a)
Summary of financial information
The individual financial statements for the parent entity show the following
aggregate amounts:
Altura Mining Limited and Controlled Entities
Notes to the Financial Statements (continued)
FOR THE YEAR ENDED 30 JUNE 2018
2018
$’000
Parent
2017
$’000
Parent
32. CONTINGENT LIABILITIES
statements are as follows:
Details and estimates of maximum amounts of contingent liabilities for which no provision is included in the financial
Balance sheet
Current assets
Total assets
Current liabilities
Total liabilities
Net assets
Equity
Contributed equity
Reserves
Retained profits / (accumulated losses)
Total shareholder equity
Loss for the year
Total comprehensive loss for the year
(b)
Contingent liabilities
Contingent liabilities are disclosed in Note 32.
(c)
Contractual commitments
No later than one year
Later than one year and not later than five years
Later than five years
30. AUDITORS’ REMUNERATION
Amount paid or payable for the audit or review of the financial report
31. SUBSEQUENT EVENTS
14,999
113,063
447
447
112,616
192,893
1,602
(81,879)
112,616
13,304
101,008
723
723
100,285
146,556
162
(46,433)
100,285
(35,597)
(7,065)
(35,597)
(7,065)
93
58
‐
151
2018
$’000
121
121
89
148
‐
237
2017
$’000
109
109
Subsequent to the end of the financial year, Altura entered into an amendment deed with existing Loan Note Holders for an
additional US$15 million of debt funding as an extension to the existing debt facility (see ASX announcement of 11 September
2018). The terms of the facility are generally in line with the existing US$110 million senior secured loan note facility that
was executed in July 2017 (see ASX announcement on 28 July 2017). Altura will use the additional funds as it ramps‐up
production to nameplate capacity at the Altura Lithium Project, continued exploration of the Company’s portfolio of
tenements and ongoing work on the Stage 2 expansion.
The commitment in respect of these leases is:
No later than one year
Later than one year and not later than five years
Later than five years
62
63
The bankers of the Group and parent entity have issued undertakings and guarantees
to the DME (Northern Territory Department of Mines and Energy) and various other
entities.
A subsidiary of the Group has entered into a conditional loan agreement
No losses are anticipated in respect of any of the above contingent liabilities.
33. COMMITMENTS
2018
$’000
53
2017
$’000
53
In order to maintain an interest in the mining and exploration tenements in which the Group is involved, the Group is committed
to meeting the conditions under which the tenements were granted and the obligations of any joint venture agreements. The
timing and amount of exploration expenditure commitments and obligations of the Group are subject to the minimum
expenditure commitments required by the relevant State Departments of Minerals and Energy, and may vary significantly from
the forecast based upon the results of the work performed which will determine the prospectivity of the relevant area of
interest.
One of the Group's subsidiaries has contracted to provide up to a US$4 million facility to a minority party in the Tabalong coal
project. The provision of the facility is contingent on project milestones being achieved. The facility will be repaid in accordance
with the loan agreement between the parties. The likelihood of this proceeding is highly probable.
a)
Exploration work
b)
Asset acquisitions
The Company has certain obligations to perform minimum exploration work and expend minimum amounts on its wholly
owned mining tenements. Obligations for the next 12 months are expected to amount to $388,600 (2017: $294,308). No
estimate has been given of expenditure commitments beyond 12 months for its wholly owned tenements as this is
dependent on the Directors’ ongoing assessment of operations and, in certain instances, native title negotiations.
The Group has the following commitments for asset acquisitions at 30 June 2018.
Capital expenditures contracted for at the balance sheet date but not recognised
in the financial statements
Mine development at cost
c)
Operating leases
The Group has entered into operating leases for office premises at Barrack Street in Perth, Western Australia and at
Jakarta and Balikpapan in Indonesia. The Group also has operating leases in relation to certain office equipment.
2018
$’000
5,577
5,577
2018
$’000
254
58
‐
312
2017
$’000
13,903
13,903
2017
$’000
391
266
‐
657
ALTURA ANNUAL REPORT 2018
Altura Mining Limited and Controlled Entities
75
Notes to the Financial Statements continued
FOR THE YEAR ENDED 30 JUNE 2018
Notes to the Financial Statements (continued)
32. CONTINGENT LIABILITIES
Details and estimates of maximum amounts of contingent liabilities for which no provision is included in the financial
statements are as follows:
The bankers of the Group and parent entity have issued undertakings and guarantees
to the DME (Northern Territory Department of Mines and Energy) and various other
entities.
A subsidiary of the Group has entered into a conditional loan agreement
No losses are anticipated in respect of any of the above contingent liabilities.
33. COMMITMENTS
2018
$’000
53
2017
$’000
53
In order to maintain an interest in the mining and exploration tenements in which the Group is involved, the Group is committed
to meeting the conditions under which the tenements were granted and the obligations of any joint venture agreements. The
timing and amount of exploration expenditure commitments and obligations of the Group are subject to the minimum
expenditure commitments required by the relevant State Departments of Minerals and Energy, and may vary significantly from
the forecast based upon the results of the work performed which will determine the prospectivity of the relevant area of
interest.
One of the Group's subsidiaries has contracted to provide up to a US$4 million facility to a minority party in the Tabalong coal
project. The provision of the facility is contingent on project milestones being achieved. The facility will be repaid in accordance
with the loan agreement between the parties. The likelihood of this proceeding is highly probable.
a)
Exploration work
The Company has certain obligations to perform minimum exploration work and expend minimum amounts on its wholly
owned mining tenements. Obligations for the next 12 months are expected to amount to $388,600 (2017: $294,308). No
estimate has been given of expenditure commitments beyond 12 months for its wholly owned tenements as this is
dependent on the Directors’ ongoing assessment of operations and, in certain instances, native title negotiations.
b)
Asset acquisitions
The Group has the following commitments for asset acquisitions at 30 June 2018.
Capital expenditures contracted for at the balance sheet date but not recognised
in the financial statements
Mine development at cost
c)
Operating leases
2018
$’000
5,577
5,577
2017
$’000
13,903
13,903
The Group has entered into operating leases for office premises at Barrack Street in Perth, Western Australia and at
Jakarta and Balikpapan in Indonesia. The Group also has operating leases in relation to certain office equipment.
The commitment in respect of these leases is:
No later than one year
Later than one year and not later than five years
Later than five years
63
2018
$’000
254
58
‐
312
2017
$’000
391
266
‐
657
ANNUAL REPORT 2018 ALTURA
76
Directors' Declaration
Altura Mining Limited and Controlled Entities
Directors’ Declaration
In the Directors’ opinion:
(a)
The financial statements and notes set out on pages 14 to 63 are in accordance with the Corporations Act 2001 and:
a.
b.
comply with Accounting Standards and the Corporations Regulations 2001; and
give a true and fair view of the consolidated entity’s financial position as at 30 June 2017 and its performance for the
financial year ended on that date;
(b)
the financial statements and notes also comply with International Financial Reporting Standards as set out in Note 1;
(c)
there are reasonable grounds to believe that the Company will be able to pay its debt as and when they become due and
payable.
The Directors have been given the declarations by the Chief Executive Officer and the Chief Financial Officer required under section
295A of the Corporations Act 2001.
This declaration is made in accordance with a resolution of the directors.
__________________________
James Brown
Managing Director
Perth, 11 September 2018
64
ALTURA ANNUAL REPORT 2018
77
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF ALTURA MINING LIMITED
Report on the Financial Report
Opinion
We have audited the accompanying financial report of Altura Mining Limited (the company), which comprises
the consolidated balance sheet as at 30 June 2018, the consolidated statement of profit and loss, the
consolidated statement of other comprehensive income, the consolidated statement of changes in equity and
the consolidated statement of cash flows for the year then ended, notes comprising a summary of significant
accounting policies and other explanatory information, and the directors’ declaration of the company and the
consolidated entity comprising the company and the entities it controlled at the year’s end or from time to
time during the financial year.
In our opinion, the financial report of Altura Mining Limited is in accordance with the Corporations Act 2001,
including:
i)
Giving a true and fair view of the consolidated entity’s financial position as at 30 June 2018
and of its performance for the year ended on that date; and
ii)
Complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for Opinion
We conducted our audit in accordance with Australian Auditing Standards. Those standards require that we
comply with relevant ethical requirements relating to audit engagements and plan and perform the audit to
obtain reasonable assurance about whether the financial report is free from material misstatement. Our
responsibilities under those standards are further described in the Auditor’s Responsibility section of our
report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
opinion.
Independence
We are independent of the consolidated entity in accordance with the Corporations Act 2001 and the ethical
requirements of the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for
Professional Accountants (the code) that are relevant to our audit of the financial report in Australia. We
have also fulfilled our other ethical responsibilities in accordance with the Code.
Key Audit Matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our
audit of the financial report of the current period. These matters was addressed in the context of our audit of
the financial report as a whole, and in forming our opinion thereon, and we do not provide a separate opinion
on these matters. For the matters below, our description of how our audit addressed these matters is
provided in that context.
65
ANNUAL REPORT 2018 ALTURA
78
1. Mine Development Assets – Recognition and Measurement
Why significant
How our audit addressed the key audit matter
As at 30 June 2018 mine development expenditure
relating to the Pilgangoora Lithium Project of $221.562
million has been capitalised and is disclosed in Note 16.
The consolidated entity’s accounting policy in respect of
mine development assets is detailed in Note 1.
The mine development assets – recognition and
measurement is a key audit matter due to:
the significance of the balance (being 82.4% of
total assets); and
the level of judgement applied in determining
the treatment of mine development expenditure
in accordance with AASB 116 Property, Plant
and Equipment.
In particular, judgement exists around:
whether the conditions for capitalisation are
satisfied; and
whether facts and circumstances indicate that
the mine development assets should be tested
for impairment.
The evaluation of the recoverable amount of the asset
requires significant judgement in determining the key
assumptions supporting the expected future cash flows
of the Pilgangoora Lithium Project.
In assessing this key audit matter, we involved senior
audit team members who understand the industry.
Our audit procedures included, amongst others:
that
to confirm
obtaining a project management report and
holding discussions with the directors and
the mine
management
development project remains on budget with
time and resources;
obtaining a schedule of costs capitalised and
testing on a sample basis, expenditure on the
mine site, including construction, installation
and / or completion of infrastructure facilities
capitalised during the year;
performing a physical inspection of the mine
site, including mine site tour and physical
observation of mine site construction assets
capitalised. This inspection and observation
was conducted by all senior members of the
engagement team;
interviews with staff on mine, including the
authorised mining licensee;
ensuring costs capitalised during the year
comply with the recognition and measurement
criteria of AASB 116 for qualifying assets; and
assessing whether any facts or circumstances
existed to suggest impairment testing was
required.
66
ALTURA ANNUAL REPORT 2018
79
2. Borrowings – Loan Note Facility – Recognition and Measurement
Why significant
How our audit addressed the key audit matter
As at 30 June 2018 the consolidated entity held a loan
note facility of $145.887 million (2017: $- million) as
described
in Note 18. The consolidated entity’s
accounting policy in respect of the loan note facility is
detailed in Note 1.
In assessing this key audit matter, we involved senior
audit team members who understand such financial
instruments. We also obtained external advice where
appropriate.
Our audit procedures included, amongst others:
obtaining and reviewing
loan agreements,
subscription deeds and warrant deeds relating
to the loan note facility;
obtaining a schedule of costs capitalised and
testing on a sample basis, costs capitalised
during the year. This included an assessment
of the costs capitalised to ensure they meet
the appropriate criteria of the standards;
obtaining
application of relevant accounting standards;
reviewing management’s position papers and
in
accounting policies regarding
accordance
accounting
relevant
standards; and
reviewing management’s forecasted plans for
repayment
the
consolidated entity’s ability to repay the facility
by the maturity date.
technical advice concerning
assessment
treatment
with
and
the
of
Borrowings - loan note facility – recognition and
measurement is a key audit matter due to:
the significance of the balance (being 83.1% of
total liabilities); and
the level of complexity and judgement applied in
determining the correct treatment in accordance
with AASB
132 Financial
Instruments:
Presentation, AASB 9 Financial Instruments
and AASB 123 Borrowing Costs.
In particular, complexity and judgement exists around:
whether the loan note is classified as a financial
liability, rather than an equity instrument;
which particular transactions costs, if any, are
able to be capitalised;
which interest costs, if any, are able to be
capitalised;
which foreign currency costs, if any, are able to
be capitalised; and
management’s plan and
the consolidated
entity’s capacity concerning the repayment of
the borrowing facility.
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ANNUAL REPORT 2018 ALTURA
80
3. Funding and Liquidity
Why significant
How our audit addressed the key audit matter
As detailed in note 1(a)(i), the consolidated entity
recorded an operating loss after tax of $12.82m (2017:
loss of $6.16m) and cash outflows from operations of
$5.45m (2017: outflows of $5.56m). At year-end the
consolidated entity had $28.76m (2017: $13.27m) of
cash available for future expenditure.
these
the date
The consolidated entity has prepared a forecast which
demonstrates that there will be sufficient funding to
operate for a period that is not less than twelve months
beyond
financial statements are
approved. The forecast takes into account the available
cash on hand at year-end, combined with the forecast
cash inflows from operations (successful production and
sale of product), cash outflows flows from investing
(completion of the mine development asset) and cash
inflows from financing (continued support from financiers
/ shareholders).
Given the judgement involved and audit effort involved in
reviewing the forecast cash flows from operations, we
have included the going concern assumption as a key
audit matter.
In assessing this key audit matter, we have evaluated
management’s plans for future actions in relation to its
going concern assessment, whether the outcome of
these plans is likely to improve the situation and
whether management’s plans are feasible in the
circumstances. This included evaluating the
consolidated entity’s latest cash flow forecast for a
period that is not less than 12 months beyond the date
of the financial statements are approved. We have
considered whether there are indicators that the
consolidated entity may face a liquidity shortfall and
assessed the resulting implications by:
Understanding and challenging the reasonableness
of key assumptions used by the consolidated entity
in their cash flow forecast for a period that is not
less than 12 months beyond the date of these
financial statements are approved;
Performing sensitivity analysis to determine the
robustness of the cash flow forecast and the impact
of changing key assumptions; and
Assessing the adequacy of the disclosures made by
management in the consolidated financial
statements.
Other Information
Other information is financial and non-financial information in the annual report of the consolidated entity
which is provided in addition to the Financial Report and the Auditor’s Report. The directors are responsible
for Other Information in the annual report.
We have obtained all the other information prior to the date of this Auditor’s Report, which includes the letter
from the Managing Director, Directors’ Report, Corporate Governance Statement and Shareholder
Information.
Our opinion on the Financial Report does not cover the Other Information and, accordingly, the auditor does
not and will not express an audit opinion or any form of assurance conclusion thereon, with the exception of
the Remuneration Report.
In connection with our audit of the Financial Report, our responsibility is to read the Other Information. In
doing so, we consider whether the Other Information is materially inconsistent with the Financial Report or
our knowledge obtained in the audit, or otherwise appears to be materially misstated.
We are required to report if we conclude that there is a material misstatement of this Other Information in the
Financial Report and based on the work we have performed on the Other Information that we obtained prior
the date of this Auditor’s Report we have nothing to report.
Directors’ Responsibilities for the Financial Report
The Directors of the company are responsible for the preparation of the financial report that gives a true and
fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such
internal control as the Directors determine is necessary to enable the preparation of the financial report that
68
ALTURA ANNUAL REPORT 2018
81
gives a true and fair view and is free from material misstatement, whether due to fraud or error. In Note 1,
the Directors also state, in accordance with Australian Accounting Standard AASB 101 Presentation of
Financial Statements, that the financial report complies with International Financial Reporting Standards.
In preparing the financial report, the Directors are responsible for assessing the consolidated entity’s ability
to continue as a going concern, disclosing, as applicable, matters related to going concern and using a going
concern basis of accounting unless the Directors either intend to liquidate the consolidated entity or to cease
operations, or have no realistic alternative but to do so.
Auditor’s Responsibilities for the Audit of the Financial Report
Our responsibility is to express an opinion on the financial report based on our audit. Our objectives are to
obtain reasonable assurance about whether the financial report as a whole is free from material
misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in
accordance with Australian Auditing Standards will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are considered material if, individual or in aggregate, they
could reasonably be expected to influence the economic decisions of users taken on the basis of this
financial report.
As part of an audit in accordance with Australian Auditing Standards, we exercise professional judgement
and maintain professional scepticism throughout the audit.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the
financial report.
The procedures selected depend on the auditor’s judgement, including assessment of the risks of material
misstatement of the financial report, whether due to fraud or error. In making those risk assessments, the
auditor considers internal control relevant to the entity’s preparation of the financial report that gives a true
and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the
purpose of expressing an opinion on the effectiveness of the entity’s internal control.
The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from
error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of
internal control.
An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of
accounting estimates made by the Directors, as well as evaluating the overall presentation of the financial
report.
We conclude on the appropriateness of the Directors’ use of the going concern basis of accounting and,
based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions
that may cast significant doubt on the consolidated entity’s ability to continue as a going concern. If we
conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the
related disclosures in the financial report or, if such disclosures are inadequate, to modify our opinion. Our
conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future
events or conditions may cause the consolidated entity to cease to continue as a going concern.
We evaluate the overall presentation, structure and content of the financial report, including the disclosures,
and whether the financial report represents the underlying transactions and events in a manner that achieves
fair presentation.
We obtain sufficient appropriate audit evidence regarding the financial information of the entities or business
activities within the consolidated entity to express an opinion on the financial report. We are responsible for
the direction, supervision and performance of the audit. We remain solely responsible for our audit opinion.
We communicate with the Directors regarding, among other matters, the planned scope and timing of the
audit and significant audit findings, including any significant deficiencies in internal control that we identify
during our audit.
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ANNUAL REPORT 2018 ALTURA
82
The Auditing Standards require that we comply with relevant ethical requirements relating to audit
engagements. We also provide the Directors with a statement that we have complied with relevant ethical
requirements regarding independence, and to communicate with them all relationships and other matters
that may reasonably be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with the Directors, we determine those matters that were of most
significance in the audit of the financial report of the current period and are therefore key audit matters. We
describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the
matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in
our report because the adverse consequences of doing so would reasonably be expected to outweigh the
public interest benefits of such communication.
Report on the Remuneration Report
We have audited the Remuneration Report included in the directors’ report for the year ended 30 June 2018.
Opinion
In our opinion, the Remuneration Report of Altura Mining Limited for the year ended 30 June 2018, complies
with section 300A of the Corporations Act 2001.
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the Remuneration
Report in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an
opinion on the Remuneration Report, based on our audit conducted in accordance with Australian Auditing
Standards.
PKF HACKETTS AUDIT
LIAM MURPHY
PARTNER
11 SEPTEMBER 2018
BRISBANE, AUSTRALIA
70
ALTURA ANNUAL REPORT 2018
83
Interest
Additional ASX Information
SCHEDULE OF MINERAL PROPERTIES
Tenement Number
E 45/2277
E 45/2287
E 45/2363
E 45/3488
E 45/4894
E 45/5136
E 45/5137
E 45/5280
E 45/5347
E 45/5348
P 45/2758
M 45/1230
M 45/1231
M 45/1260
L 45/400
L 45/401
L 45/404
L 45/409
L 45/416
L 45/448
EL 26626
ELA 26627
EL 26628
EL 29828
PT Suryaraya Permata Khatulistiwa
PT Suryaraya Cahaya Cemerlang
PT Suryaraya Pusaka
PT Kodio Multicom
PT Marangkayu Bara Makarti
COC 182 (Area 3) - Catanduanes
COC 200 (Area 4) - Rapu-Rapu
COC 202 (Area 17) - Surigao del Sur
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
10%
10%
10%
10%
70%
70%
70%
56%
56%
100%
100%
100%
Location
Pilbara, Western Australia
Tanami, Northern Territory
Tabalong, South Kalimantan
Catanduanes, Philippines
Albay Region, Philippines
Bislig Region, Philippines
Key to tenement type:
E, EL: Exploration Licence
G: General Purpose Lease
L: Miscellaneous Licence
M, ML: Mining Lease
P: Prospecting Licence
ANNUAL REPORT 2018 ALTURA 84
ASX Additional Information continued
ISSUED CAPITAL
The issued capital of the company as at 30 September 2018 consists of 1,819,866,474 fully paid ordinary shares.
DISTRIBUTION OF SHAREHOLDERS AS AT 30 SEPTEMBER 2018
FULLY PAID ORDINARY SHARES
Number of holders: 12,957
Holders of less than a marketable parcel: 1,682
NUMBER OF HOLDERS IN THE FOLLOWING DISTRIBUTION CATEGORIES:
Fully paid ordinary shares
0–1,000
1,001–5,000
5,001–10,000
10,001–100,000
100,001 and over
Total
20 LARGEST SHAREHOLDERS – FULLY PAID SHARES
The names of the 20 largest shareholders as at 30 September 2018 are as follows:
370
3,588
2,169
5,495
1,335
12,957
Rank
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
Total
Holder name
Furui Holdings Limited
MT Smith
Shazo Holdings Pty Ltd
HSBC Custody Nominees (Australia) Limited
Farjoy Pty Ltd
Citicorp Nominees Pty Ltd
JP Morgan Nominees Australia Limited
PK & MA Mantell
AC Buckler
Lionergy Limited
JS & ML Brown
CS Third Nominees Pty Ltd
BT Kuan
E.M. Enterprises (Qld) Pty Ltd
Sand King Pty Ltd
NT Young
BNP Paribas Nominees Pty Ltd
N Young Investments Pty Ltd
Merrill Lynch (Australia) Nominees Pty Ltd
I Preece
Units % of issued shares
16.81%
10.15%
8.92%
3.56%
3.40%
2.62%
2.59%
1.83%
1.79%
1.41%
1.34%
1.26%
1.15%
0.70%
0.69%
0.53%
0.51%
0.44%
0.39%
0.38%
60.47%
306,000,000
184,710,545
162,353,691
64,830,608
61,830,856
47,748,877
47,158,369
33,363,083
32,486,065
25,591,358
24,428,914
23,004,230
21,000,000
12,700,000
12,473,324
9,600,000
9,235,259
7,974,411
7,066,072
6,844,442
1,100,400,104
ALTURA ANNUAL REPORT 2018 ASX Additional Information continued
85
SUBSTANTIAL SHAREHOLDERS
The names of substantial shareholders and the number of equity securities as disclosed in their most recent
substantial shareholder notices received by the Company are:
Holder name
Shaanxi J&R Optimum Energy Co., Ltd (Furui Holdings Limited)
AC Buckler (Shazo Holdings Pty Ltd)
MT Smith (Hartco Nominees Pty Ltd)
VOTING RIGHTS ON ORDINARY SHARES
Shares
306,000,000
177,293,692
167,264,481
On a show of hands, every person present who is a Shareholder or a proxy, attorney or Representative of
a Shareholder has one vote. On a poll, every person present who is a Shareholder or a proxy, attorney or
Representative of a Shareholder has one vote for each fully paid share held.
ON MARKET BUY BACK
There is no current on market buy back of Altura shares.
PERFORMANCE RIGHTS
The total number of performance rights on issue as at 30 September 2018 was 8,200,000.
As at this date there were 28 holders of these unquoted securities, which have been issued under an employee
incentive scheme.
There are no voting rights attaching to the performance rights.
UNLISTED OPTIONS
The total number of unlisted options on issue as at 30 September 2018 was 5,784,846.
This is the balance of the options issued to Jett Capital Advisors following shareholder approval at the 2017 AGM.
The options remaining are Tranche 1 options exercisable at $0.2340 each and expire on 25 September 2019. All the
Tranche 2 options have been exercised.
There are no voting rights attaching to the unlisted options.
UNLISTED WARRANTS
The total number of unlisted warrants on issue as at 30 September 2018 was 19,812,140.
The warrants were issued to the debt facility loan note holders following shareholder approval at the 2017 AGM. To
date, two of the three loan note holders have exercised all their warrants.
The warrants are exercisable at $0.1260 each and expire on 4 August 2022.
There are no voting rights attaching to the unlisted warrants.
ANNUAL REPORT 2018 ALTURA 86
Mineral Resources and Ore Reserves Statement
PILGANGOORA LITHIUM DEPOSIT
WESTERN AUSTRALIA
Mineral Resource Estimate
The previous Mineral Resource estimate in the 2017 annual report was released to the ASX on 24 October 2017.
The current estimate was announced on 28 May 2018.
Both the current and previous Mineral Resource estimates were prepared by Cube Consulting Pty Ltd.
The differences between the current and previous resource estimates are the result of the completion of a drilling
program conducted in the Southern Ridge Deposit area during the March quarter and a minor change in the cut-off
grade.
Mineral Resource Estimate Comparison
JORC
resource
category
Measured
Indicated
Sub-total
Inferred
Total
Current estimate (0.40% Li2O cut-off grade)
Li2O
(tonnes)
Tonnes
(Mt)
Li2O
(%)
Previous estimate (0.43% Li2O cut-off grade)
Li2O
(tonnes)
Tonnes
(Mt)
Li2O
(%)
8.7
38.0
46.7
3.8
50.5
1.12
1.00
1.02
0.92
1.01
97,000
380,000
477,000
35,000
512,000
8.5
35.5
44.0
3.5
47.5
1.12
0.97
1.00
0.84
0.99
96,000
345,000
441,000
29,000
470,000
Ore Reserve Estimate
The previous Ore Reserve estimate in the 2017 annual report was released to the ASX on 24 October 2017. The
current estimate was announced on 28 May 2018.
Both the current and previous Ore Reserve estimates were prepared by Cube Consulting Pty Ltd.
The differences between the current and previous reserve estimates are the result of the completion of a drilling
program conducted in the Southern Ridge Deposit area during the March quarter resulting in an updated open pit
optimisation and pit design.
Ore Reserve Estimate Comparision
JORC
resource
category
Proved
Probable
Total
Current estimate (0.43% Li2O cut-off grade)
Li2O
(tonnes)
Tonnes
(Mt)
Li2O
(%)
Previous estimate (0.43% Li2O cut-off grade)
Li2O
(tonnes)
Tonnes
(Mt)
Li2O
(%)
8.3
32.8
41.1
1.14
1.03
1.05
94,000
338,000
432,000
8.1
26.1
34.2
1.14
1.01
1.04
92,000
265,000
357,000
ALTURA ANNUAL REPORT 2018 Mineral Resources and Ore Reserves Statement continued
ANNUAL REPORT 2018 ALTURA
87
SUMMARY OF GOVERNANCE ARRANGEMENTS AND INTERNAL CONTROLS
Altura has ensured that the Mineral Resource and Ore Reserve Estimates are subject to good governance
arrangements and internal controls. The Mineral Resource and Ore Reserve estimates reported have been
generated by independent consultants who are experienced in modelling and estimation methods. The consultants
have undertaken reviews of the quality and the suitability of the data and information used to generate the
estimations.
Altura carries out regular reviews of its own internal practices and those of external contractors who are engaged
in a range of specialist areas by the Company.
A Mineral Resource and Ore Reserve Steering Committee (MRORSC) was established post the end of the financial
year. The MRORSC includes representatives from operations, exploration and management and is responsible for
the governance and oversight of the resource estimation, mine planning and reporting of Mineral Resources and
Ore Reserves (MROR).
The Mineral Resource and Ore Reserve estimates for Pilgangoora have been compiled and reported in accordance
with the “Australian Code for Reporting Exploration Results, Mineral Resources and Ore Reserves” (the JORC
Code) 2012 Edition.
COMPETENT PERSONS STATEMENTS
The information in this statement is based on, and fairly represents, information and supporting documentation
prepared by the competent persons listed below.
The MROR statements included in this Annual Report were reviewed by a suitably qualified Competent Persons
prior to their inclusion.
PILGANGOORA LITHIUM
The information in this report that relates to the Mineral Resource for the Pilgangoora lithium deposit is based on
information compiled by Mr Stephen Barber. Mr Barber is a Member of the Australasian Institute of Mining and
Metallurgy. Mr Barber is the Exploration Manager at Altura Mining Limited and has sufficient experience that is
relevant to the style of mineralisation under consideration and to the activity of mineral resource estimation to
qualify as a Competent Person as defined in the 2012 Edition of the Australasian Code for Reporting of Exploration
Results, Mineral Resources and Ore Reserves. Mr Barber consents to the inclusion in the report of the matters
based on this information in the form and context in which it appears.
The information in this report that relates to the Ore Reserve for the Pilgangoora lithium deposit is based on
information compiled by Mr Quinton de Klerk. Mr de Klerk is a Fellow of the Australasian Institute for Mining
and Metallurgy. Mr de Klerk is a Director and Principal Consultant of Cube Consulting Pty Ltd and has sufficient
experience that is relevant to the activity of ore reserve estimation to qualify as a Competent Person as defined
in the 2012 Edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore
Reserves. Mr de Klerk consents to the inclusion in the report of the matters based on this information in the form
and context in which it appears.
The Company confirms that it is not aware of any new information or data that materially affects the information
included in the ASX announcement on 28 May 2018. Further, all material assumptions and technical parameters
underpinning the mineral resource and ore reserve estimates in that announcement continue to apply and have not
materially changed.
88
Notes
ALTURA ANNUAL REPORT 2018 ALTURAMINING.COM