ANNUAL
REPORT
2019
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
Xiaoyu Dai – 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: 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, AJMOB
1
CONTENTS
36
Consolidated Statement of
Cash Flows
37
Notes to the Financial
Statements
81
Directors'
Declaration
82
31
Financial
Statements
32
3
A Message from the
Managing Director
Consolidated Statement of
Profit and Loss
5
Review of
Operations
15
Directors’
Report
30
33
Consolidated Statement of
Other Comprehensive Income
Independent Auditor’s
Report to the Members
34
Consolidated
Balance Sheet
35
87
Additional ASX
Information
91
Auditors’ Independence
Declaration
Consolidated Statement of
Changes in Equity
Mineral Resources and
Ore Reserves Statement
ANNUAL REPORT 2019 ALTURA 2
ALTURA ANNUAL REPORT 2019 A MESSAGE FROM THE
MANAGING DIRECTOR
3
DEAR SHAREHOLDER,
Altura Mining has made outstanding
progress over the period since June
2018 and is now a well-established
lithium producer, generating positive
operating cashflows and with excellent
prospects for the future.
All of the components required for a highly
successful, long-life mining and processing
operation are now in place.
WORLD CLASS ORE BODY
We have a world-class asset at our Pilgangoora
deposit, with a large resource and reserve
providing a long mine life, with further growth
potential. The total resource estimate, at 30 June
2019, was 45.7 million tonnes at a grade of 1.06%
Li2O, containing 483,000 tonnes of Li2O. The Ore
Reserve Estimate was 37.6 million tonnes at 1.08%
Li2O containing 407,000 tonnes of Li2O. That is large
enough to provide a mine life of more than
24 years based on current rates of production.
OPERATIONS WELL ADVANCED
Mining has been under way at Pilgangoora for
more than two years and the pit is well developed.
The high-grade pegmatite zones are being
accessed, ore stockpiles have been established
enabling consistent, high quality ore to be fed to
our state-of-the-art process plant.
The plant is ramping up steadily towards
nameplate production rates as we fine tune various
aspects of the operation to lift throughputs and
increase lithium recoveries. Production reached
a record 45,484 wet metric tonnes (wmt) of
spodumene concentrate in the September quarter,
and we are confident of achieving the nameplate
annual production rate of 220,000 wmt before the
end of the current financial year.
The steady increase in production is leading to
reductions in our unit costs and increasing operating
margins. The operations generated positive earnings
before interest, tax and foreign exchange in both the
June and September quarters of 2019.
HIGH QUALITY PRODUCT
The plant is producing spodumene concentrate
which is of excellent quality, keenly sought after by
lithium converters and battery producers globally
due to its low levels of impurities and preferred
production characteristics – particularly the low
mica levels of 0.5%. Our plant configuration is
the key to being able to generate product that
ultimately may command a premium price from
consumers.
DIVERSE CUSTOMER BASE
We have built a strong customer base, with a
diversified portfolio of committed offtake partners
assembled. Two new Binding Offtake Agreements
were signed in the September quarter with strong
Chinese partners, so Altura now has offtake
commitments for its entire nameplate annual
production capacity. The offtake agreements
have a floor price of US$550 per tonne of 6%
spodumene, with a ceiling price of US$950 per
tonne (on an FOB basis).
As at 2 October 2019, the Company had made 15
shipments of spodumene concentrate totalling
approximately 114,000 tonnes and is focussed on
increasing the amount of shipment both in volume
and regularity.
EXPERIENCED STAFF AND MANAGEMENT
Our employees across the organisation are
committed, highly skilled and hard-working, and
aligned in our goal of generating excellent results
for our stakeholders. The Board is comprised of
quality directors with extensive histories in the
mining industry and demonstrated capacity to
deliver results. In addition, most directors are
significant shareholders in the company and
therefore well incentivised to see strong long-term
rewards created for shareholders.
ANNUAL REPORT 2019 ALTURA 4
A MESSAGE FROM THE
MANAGING DIRECTOR CONTINUED
We also pride ourselves on the excellent safety
focus within the organisation. In the history of
Altura’s Pilgangoora lithium project we have
recorded only one loss time injury and we remain
determined to maintain that excellent record by
constantly reinforcing stringent safety procedures
and practices.
SUPPORTIVE SHARE REGISTER
Our share register is solid and supportive and
we have recently welcomed new investors to the
Company with the potential to be key strategic
partners, in particular Ningbo Shanshan Co. Ltd,
which is one of the world’s largest integrated
suppliers of lithium battery materials. Shanshan
became the largest shareholder in the Company
in July 2019, when it took up a share placement,
investing A$22.4 million. A representative of the
company, Mr Xiaoyu Dai, has since joined the Board
of Altura and we look forward to a long and positive
working relationship with Shanshan.
STRONG LONG TERM DEMAND FOR LITHIUM
The outlook for the global lithium market remains
favourable, despite some short term oversupply in
the market that has seen prices moderate over the
past 12 months.
The oversupply of lithium raw materials has
resulted from mine capacity exceeding demand
from chemical conversion plants in China since
2018. Over the past year, some lithium miners have
curtailed production in response to challenging
market conditions and various expansion plans
have been deferred. For Altura, as an established
producer, we see that as a positive re-adjustment
in the market. We remain focused on driving down
our production costs to ensure that we generate
sustainable operating margins even when prices
are under pressure.
Long term lithium market fundamentals remain
very sound. According to forecaster Roskill,
demand for lithium has increased 13% per year
since 2015, driven by the use of lithium-ion battery
technologies in automotive, portable electronic
and energy storage applications. Furthermore,
Roskill has forecast that demand for lithium in
rechargeable batteries is set to grow more than
six-fold by 2028. We strongly believe in your
company’s fundamentals and remain confident in
the long term outlook for the lithium sector and
our own operations.
In summary, the outlook for your Company in
the current year looks very positive. We have
everything in place to enable us to generate
positive returns for shareholders, although we can
not control the short term fluctuations in market
prices for lithium materials.
I sincerely thank our employees for their hard work
and commitment. The extraordinary progress we
have made in the past two years is a tribute to
their skill and dedication. I also thank my fellow
directors for their wise guidance, advice and
support.
And finally I thank you, the owners of the Company,
for your ongoing investment and look forward to
reporting continued progress in the current year.
James Brown
Managing Director
ALTURA ANNUAL REPORT 2019 5
REVIEW OF
OPERATIONS
ANNUAL REPORT 2019 ALTURA 6
ALTURA LITHIUM
PROJECT
Altura owns and operates the world-
class Altura Lithium Project at
Pilgangoora in the Pilbara region of
Western Australia, which commenced
production in July 2018 and was officially
opened in September 2018.
The development of the Pilgangoora mine and
process plant from the breaking of ground to
production and first shipment in just 18 months
was a remarkable achievement. It has established
Altura as a significant contributor to global lithium
production and perfectly placed to deliver strong
returns to shareholders as the lithium market grows
exponentially over the next decade. Rapid growth in
production of electric vehicles and increasing use
of lithium ion batteries in diverse electrical storage
applications are anticipated to underpin the growth
in lithium demand.
Over the past 12 months, the operational focus
at Altura has been on fine-tuning mining and
processing operations to advance production
steadily towards the nameplate capacity. Significant
progress has been achieved with the project being
able to demonstrate consistent improvements
and measurable increases in output since
commissioning was completed.
PROJECT LOCATION
The Altura Lithium Project is located
approximately 90 km south of Port Hedland, with
road access to the site via the Great Northern
Highway and then Shire roads and station tracks.
Altura’s two mining lease tenements, M45/1230
and M45/1231, cover a total area of 394 hectares.
and in turn delivering a globally competitive low
cost operation.
The project follows a conventional mine and
process plant layout, with open pit mining leading
to crushing, grinding, milling and flotation,
producing spodumene concentrate with a Li2O
grade of approximately 6%. The product is then
hauled to port at Port Hedland and shipped
to offtake partners for further processing and
integration into the battery supply chain.
The project boasts annual plant throughput of
approximately 1.5 million tonnes and nameplate
annual production capacity of 220,000 wet metric
tonnes of spodumene concentrate, with a current
expected project life of more than 25 years.
PROJECT DEVELOPMENT
Since the official commencement of production in
July 2018, the Company has been focused on the
commissioning and development of the operations
to achieve nameplate production rates, reduce unit
costs and deliver positive operating cash flows. In
addition, the Company has made excellent progress
in securing a diverse portfolio of offtake partners with
lithium conversion and battery production capacity.
A number of important milestones have been
achieved since the end of June 2018 including:
• First production of lithium concentrate in late
July 2018
• Formal opening of the Altura Lithium Project on
5 September 2018
• First shipment of lithium concentrate in early
October 2018
• Commercial production declared March 2019.
PROJECT OVERVIEW
PRODUCTION
Mining at the Altura Lithium Project commenced
in May 2017 using open pit methods, with the
deposit being characterised by shallow and thick
mineralisation. The geological setting has assisted
in the reduction of mining and development costs
In the period since preliminary processing
commenced during the September quarter of
2018, more than 2 million tonnes of ore has been
mined, more than 1.3 million tonnes of ore has
been processed, and to date, 15 shipments of
ALTURA ANNUAL REPORT 2019 N o r t h West Coastal Highway
90km
E45/5137
7
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
M45/1260
M45/1230
E45/2363/1
E45/5348
E45/5347
E45/4894
M45/1231
L45/448
E45/2363-1
N
PORT HEDLAND
d
a
Ro
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Great N
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t
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H
ig
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i
P
P
P
o
r
t
E45/5136
H
e
d
l
a
n
d
–
W
Port Hedland
ALTURA
LITHIUM PROJECT
L45/409
New Camp
Wodgina Airport
Wodgina Mine
Kalgoorlie
Perth
2019 KEY
MILESTONES
First production of lithium
concentrate in late July 2018
Formal opening of the Altura
Lithium Project on 5 September 2018
First shipment of lithium
concentrate in early October 2018
Commercial production
declared March 2019
ANNUAL REPORT 2019 ALTURA
8
ALTURA LITHIUM
PROJECT CONTINUED
spodumene concentrate have been delivered
totalling 114,676 tonnes of concentrate.
Quarterly production rates have steadily improved
as the mine has reached steady state and
expanded ore access and blending options across
the ore body whilst simultaneously the process
plant has been fine tuned to improve throughputs
and recovery rates.
MINING AND PROCESS QUANTITIES
Ore mined
Waste mined
Ore mined grade Li2O
Ore processed
Lithium concentrate produced
Sept Qtr
2018
Dec Qtr
2018
Mar Qtr
2019
June Qtr
2019
Sept Qtr
2019
323,539
350,099
404,087
439,559
476,093
1,512,840
1,491,011
1,426,256
1,546,719
1,484,978
1.21
1.19
1.16
1.10
1.18
98,135
256,931
251,200
337,786
376,530
7,379
25,794*
29,627
42,402
45,484
Units
wmt
wmt
%
wmt
wmt
*Includes 6,427 tonnes of low-grade material produced during commissioning, this material would require re-processing and/or
blending in order to be included in saleable product.
SPODUMENE PRODUCTION
)
t
m
w
(
e
t
a
r
t
n
e
c
n
o
c
e
n
e
m
u
d
o
p
S
18,000
16,000
14,000
12,000
10,000
8,000
6,000
4,000
2,000
-
Jul 18
Aug 18
Sep 18
Oct 18
Nov 18
Dec 18
Jan 19
Feb 19
Mar 19
Apr 19
May 19
Jun 19
Jul 19 Aug 19 Sep 19
OFFTAKE AGREEMENTS
Altura has made excellent progress in diversifying
its customer base during the past 12 months,
adding two new offtake partners and reallocating
production from some previous partners.
Altura now has offtake commitments for its entire
nameplate production capacity.
The addition of new offtake partners provides
important diversification in sales, strengthens
our customer base and reduces counterparty risk
for the Company. Our partners have established
operations and strong operating track records.
We have been able to attract quality customers
due to the high quality of our lithium concentrate,
with favourable attributes that are sought after by
lithium converters and battery producers.
The Binding Offtake Agreements contain a floor
price of US$550 per tonne (FOB basis) for 6% Li2O
grade spodumene, and a ceiling price of US$950
(FOB basis) per tonne.
ALTURA ANNUAL REPORT 2019
ALTURA LITHIUM
PROJECT CONTINUED
9
OFFTAKE PARTNERS
Offtake Partner
Lionergy Limited
GFL International Co., Limited
Shandong Ruifu Lithium Industry Co., Ltd
Guangdong Weihua Corporation
Total
Tonnage
BOA Term/Expiry
65,000 dmt
70,000 dmt
35,000 dmt
50,000 dmt
220,000 dmt
September 2023
December 2021
June 2024
December 2024
KEY SUPPLY CONTRACTS
STAGE 2 DEFINITIVE FEASIBILITY STUDY
Altura has several key supply contracts in place.
MINING
NRW Holdings Limited has a five-year contract to
perform mining, drilling and blasting services.
NRW employs conventional bulk mining methods
using hydraulic excavators, dump trucks and
established drilling and blasting techniques.
Ore is trucked directly from the pit to the ROM stockpile.
TRANSPORT AND LOGISTICS
Qube Holdings Pty Ltd is the logistics and transport
supplier for the Project, and also holds the
contract for feeding ore from the stockpile to the
primary crusher using front end loaders.
Qube is responsible for loading the product at the
mine site and transporting it in side-tipping road
trains to Port Hedland, where it has constructed
a dedicated storage shed.
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.
A Definitive Feasibility Study (DFS) regarding
a major expansion of the project was released
in April 2018, showing that a duplication of the
Stage 1 operations and processing plant would
significantly add to the project’s 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
• Life of Mine (LOM) cash cost of A$324 per tonne
of spodumene concentrate
• 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.
Altura’s Board has endorsed the findings of the Stage
2 DFS, but will continue to review the performance of
the existing operations and market conditions 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.
Note: The Company confirms that all the material assumptions
underpinning the Stage 2 DFS continue to apply and have not
materially changed.
ANNUAL REPORT 2019 ALTURA 10
ALTURA LITHIUM
PROJECT CONTINUED
UPGRADED ORE RESERVE AND MINERAL RESOURCE ESTIMATES
A revised Mineral Resource and Ore Reserve Estimate for the Pilgangoora mine was released in October
2019 following 12 months of operations.
MINERAL RESOURCE ESTIMATE (0.30% Li2O CUT-OFF GRADE) – 30 JUNE 2019
JORC category
Measured
Indicated
Measured & Indicated
Inferred
Total
Cut-off Li2O%
0.30
0.30
0.30
0.30
0.30
Tonnes (Mt)
7.4
34.2
41.6
4.1
45.7
Li2O%
1.23
1.03
1.07
0.95
1.06
Fe2O3%
1.38
Li2O Tonnes
91,000
1.29
1.31
1.41
1.32
353,000
444,000
39,000
483,000
ORE RESERVE ESTIMATE (0.30% Li2O CUT-OFF GRADE) – 30 JUNE 2019
JORC category
Proved
Probable
Total
Cut-off Li2O%
0.30
0.30
0.30
Tonnes (Mt)
7.2
30.5
37.6
Li2O%
1.22
1.05
1.08
Fe2O3%
1.40
1.29
1.31
Li2O Tonnes
87,000
320,000
407,000
The estimates reflect the impact of mining
depletion over the period, some adjustments to the
resource model due to improved mining methods
and a reduction in cut-off grade.
Based on current production rates, the resources
and reserves at Pilgangoora will support a long mine
life, with potential for further increases as a result of
additional exploration activities.
The Mineral Resource and Ore Reserve Estimation
work was completed by Cube Consulting Pty Ltd.
For further information on both the Ore Reserve
and Mineral Resource estimates, please refer to
the ASX announcement of 9 October 2019.
GEOLOGY AND MINERALISATION
The Altura Lithium Project occurs at the southern
end of a structurally controlled zone of pegmatite
intrusive dykes within the Pilgangoora greenstone
belt. The pegmatite dykes are hosted within mafic
and ultramafic volcanic rock units. Spodumene
is the main source of lithium ore within the
mineralised pegmatites of the Pilgangoora region.
The pegmatites are within a north-northeast trending
fault zone which is approximately 1,600m long, 550m
wide and up to 350m deep within the Altura Lithium
Project. Fifteen mineralised pegmatites have been
identified and these generally strike 010-030° NNE,
dipping 25–45° ESE and occasionally near vertical.
The dykes have an average thickness of 10–15m and
can range up to 60m thick.
A unique style of pegmatite mineralisation has been
identified within the Altura Lithium Project with the
lodes being comprised of a combination of coarse-
grained spodumene bearing pegmatite and finer
grained aplite. Lithium distribution within each of
the mineralised lodes tends to be heterogeneous.
ALTURA ANNUAL REPORT 2019 N
ELA 47/3829
Deep Well
PORT HEDLAND
E 45/5289
Strelley West
E 45/2364
Tabba Tabba
E 45/5288
Strelley
E 45/4775
Carlindie
E 47/3950
Mt Dove
ELA 47/2983
Mallina
E 47/3802
Friendly Creek
WODGINA
LITHIUM
MINE
E 45/4726
West Wodgina
E 45/4703
Tabba Tabba East
E 45/4716
Red Rock
ALTURA/PILBARA
PILGANGOORA
LITHIUM MINES
E 45/4738
Cooglegong
11
Sayona tenements that
are included in the earn-in
agreement with Altura.
E 45/4727
Moolyella 4
E 45/4721
Moolyella 3
MOOLYELLA
E 45/4700
Moolyella 2
LEGEND
Sayona tenement
Road
Rail
0
25
50km
E 46/1103
Dorringtons
EXPLORATION AGREEMENT
Altura took a major step in expanding its
exploration portfolio in August 2019, completing
an Earn-in Agreement with Sayona Mining Limited
over its Western Australian lithium portfolio
located near the Pilgangoora mine site.
Altura will spend $1.5 million on exploration across
the portfolio over a three-year period to earn a
51% interest, with Sayona retaining the remaining
project interest. Sayona will retain the right to
contribute to project evaluation and development in
the future to participate in the upside potential.
The tenement package consists of some 1,806
square kilometres and significantly expands
Altura’s existing Pilbara tenement holding. The
proximity of the tenements to Altura’s existing
mining and processing infrastructure will
significantly enhance the development potential
of any discoveries.
EXPLORATION
During FY2019, Altura has focussed its
exploration activities at the Altura Lithium Project
to include detailed lithological and structural
mapping, mineralogical studies and improved
geological modelling techniques based upon
the reinterpretation of pegmatite boundaries.
Confidence in the revised model was high based
upon a sound interpretation of the exploration
mapping aligned with previously completed
drilling data and the knowledge gained through
mining activities over the past year.
Altura exploration activities outside the main
project area focussed on exploratory drilling as
a follow up to a geophysical survey utilising the
induced polarization method at its Cleopatra
Prospect, located 3.5km southeast of the Altura
Lithium Project. Strong evidence of wall rock
alteration within the volcanic host rock, typical of
that associated with low sulphidation epithermal
gold mineralisation was recorded. A copper-gold-
silver target was also identified at the Hazelby
Prospect.
ANNUAL REPORT 2019 ALTURA
12
COMMUNITY AND
INDIGENOUS RELATIONS
From the early stages of exploration and mine
development Altura has been committed to
engaging with local community groups and key
stakeholders. A Native Title Agreement has been
signed with the Nyamal People and Kariyarra
People, and a Pastoral Access Agreement has been
reached with Wallareenya Station.
During construction Altura engaged with the
Nyamal People and conducted Cultural Awareness
Training as well as several heritage surveys across
the site. The Company is committed to indigenous
employment and engaging local contractors. The
local community engagement was signified by
the Welcome to Country that was delivered by two
Nyamal elders at the formal opening of the mine
on 5 September 2018.
Native Title Implementation Committee meetings
are held with the Nyamal People biannually
to ensure compliance with the Native Title
Agreement and the continuing alignment of both
parties in project development and exploration
activities.
ALTURA ANNUAL REPORT 2019 13
ENVIRONMENT AND
REGULATORY APPROVALS
Altura operates in accordance with licences and
approvals issued by the WA State government.
These include:
• Mining Proposal and Mine Closure Plan
• Native Vegetation Clearing Permit
• Licence to Take Water (5C)
• Works Approval and Operating Licences
• Project Management Plan.
To ensure compliance with statutory approvals
Altura conducts environmental monitoring
including, water consumption, land clearing,
flora and fauna, dust and greenhouse gas
emission monitoring for inclusion in its Annual
Environmental Report. In FY19 Altura submitted
several annual compliance reports including an
independent geotechnical audit of its operational
Tailings Storage Facility. Altura operates its
project in accordance with its Environmental
Management Plan and other policies and
procedures to ensure environmental values are
protected.
Altura extracts groundwater for operational
purposes in accordance with its licence and
Groundwater Operating Strategy. During FY19
a water exploration program was successfully
undertaken to develop new water sources and
secure sustainable water supply for the project.
ANNUAL REPORT 2019 ALTURA 14
CORPORATE
DEVELOPMENTS
SUBSCRIPTION AND CO-OPERATION
AGREEMENT
One of the world’s largest integrated suppliers of
lithium battery materials, Chinese group Ningbo
Shanshan Co Ltd, became a major shareholder and
strategic partner of Altura in June, when it acquired
an 11.8% interest.
The relationship was cemented in July, when
Shanshan became the largest shareholder in the
Company through a A$22.4 million share placement,
increasing its interest to19.4%. Pursuant to the
subscription agreement, Shanshan is entitled
to appoint a director to Altura, and the General
Manager of Shanshan subsidiary, Shanshan Forever
Lithium Co., Ltd, Mr Xiaoyu Dai, was subsequently
appointed to the Altura board.
Listed on the Shanghai Stock Exchange, Shanshan
has a market capitalisation of approximately
A$2.5 billion, employs more than 4,000 people and
in 2018 reported lithium battery material revenue
of approximately A$14.5 billion.
The relationship demonstrates the value of the
Altura operations and provides an important
strategic relationship with a key Chinese battery
producer with clear potential for further mutual
benefits to emerge in the future.
INDONESIAN COAL ASSETS
Altura has continued to identify potential
acquirers of its Tabalong coal project and has
been actively pursuing several options for the
divestment of this asset.
DOWNSTREAM LITHIUM
INVESTMENT OPPORTUNITY
An Investment Framework Agreement was signed
with unlisted Australian company Zinciferous
Limited in July 2019 providing an opportunity for
Altura to participate in the downstream processing
of lithium in a newly constructed lithium conversion
facility in China.
Zinciferous holds an option to acquire up to an 80%
interest in the newly constructed Tianyuan Lithium
Carbonate Plant together with certain spodumene
concentrate supply and lithium chemical offtake
rights. The cornerstone investment is expected to
be up to A$3 million and remains subject to due
diligence completion and other approvals. For
further information, see the ASX announcement
of 24 July 2019.
ALTURA ANNUAL REPORT 2019 15
DIRECTORS'
REPORT
ANNUAL REPORT 2019 ALTURA 16
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 2019.
DIRECTORS
The names of the directors in office during the
financial year and up to the date of this report are
as follows:
• Mr James Brown
• Mr Paul Mantell
• Mr Allan Buckler
• Mr Dan O’Neill
• Mr Beng Teik Kuan
• Mr Zhao Tong (resigned 18 April 2019)
• Mr Xiaoyu Dai (appointed 10 September 2019)
also has an interest in a coal project in Indonesia,
which is in the process of being divested.
The focus of the AJM group entities is directed
towards the following deliverables:
• Safe, efficient and profitable operation of its
100% owned Altura Lithium project located in
the Pilbara region of Western Australia for the
benefit of shareholders;
• Consistent sales of premium spodumene
concentrate to reliable and sustainable offtake
partners;
• Evaluation of Altura’s vast exploration tenement
portfolio to add value to the existing operations
via increase of Ore Reserve and Mineral
Resource inventory;
•
Increasing shareholder value by the expansion
of the Altura Lithium Project via a prudent and
timely delivery of the planned Stage 2 operation
expansion.
COMPANY SECRETARY
REVIEW OF OPERATIONS
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 commissioning and then mining,
processing and sale of lithium ore at the Altura
Lithium Project in the Pilbara region of Western
Australia.
OPERATING AND FINANCIAL REVIEW
OVERVIEW
Altura Mining Limited (“AJM”) is an ASX listed
entity that is focused on mining operations and
exploration at the Altura Lithium Project at
Pilgangoora in Western Australia. The Company
ALTURA LITHIUM PROJECT
Key focus has been on the delivery of the Altura
Lithium Project during the past financial year. The
project commenced production in July 2018 and
shipped its first cargo of premium spodumene
concentrate in October 2018. Following the
initial commissioning and ramp up in H1 FY 2019
the Company was able to declare Commercial
Production on 13 March 2019. The project is one of
the key new global lithium concentrate suppliers
and has established an upstream supply position
aligned with Tier 1 suppliers of battery pre-cursor
products.
AJM owns and operates the Altura Lithium Project
located in the Pilgangoora district in north-
west Western Australia. The project is located
approximately 100 kilometres south of the major
raw material export centre of Port Hedland. The
Company exploits lithium enriched pegmatites via
open pit methods. Mineralised pegmatite ore is
ALTURA ANNUAL REPORT 2019 DIRECTORS'
REPORT CONTINUED
17
then fed to the process plant for beneficiation with
spodumene concentrate being produced for sale to
North Asian customers. Shipping of product is via
the public user facility at the port of Port Hedland.
The Company owns and operates the process plant
(with exception of the diesel power generators)
and utilises a mining contractor for removal of
waste and ore. Contract product haulage is also
employed at the operations.
The process plant consists of both DMS (Dense
Medium Separation) and Floatation in order to
maximise resource recovery from the raw ore feed.
Since the declaration of Commercial Production,
the process plant has generally operated between
80–90% of nameplate both in throughput, output
and overall lithium metal recovery. The process
plant is only the second combined DMS and
Flotation lithium concentrate plant operating
globally. Product contribution is generally 60%
coarse product from the DMS circuits and 40%
fines from the floatation circuits.
During the past year 77,680 dmt (dry metric
tonnes) of spodumene concentrate was shipped
via 11 separate cargoes dispatched from Port
Hedland. The weighted average grade of the
product cargoes was 5.94% Li20 and is enhanced
by low mica, low iron and optimal moisture with all
cargoes well within offtake specifications. Table 1
(below) details the mining and process quantities
from the past year.
Table 1 – Mining and process quantities
Ore mined
Waste mined
Total material mined
Ore processed
Strip ratio
Ore mined grade Li2O
Lithium concentrate produced
Lithium concentrate shipped
Units
Q1 FY19
Q2 FY 19
Q3 FY19
Q4 FY19 Total FY19
wmt
323,539
350,099
404,087
439,559
1,517,284
wmt
1,512,840
1,491,011
1,426,256
1,546,719
5,976,826
bcm
wmt
waste:ore
%
wmt
dmt
625,881
625,008
622,929
675,726
2,549,544
98,135
256,931
251,200
337,786
944,052
4.7
1.21
4.3
1.19
3.5
1.16
3.5
1.10
3.9
1.16
7,379
25,794*
29,627
42,402
105,202
-
24,419
14,770
38,491
77,680
*Includes 6,427 tonnes of low-grade material produced during commissioning, this material would require re-processing and/or
blending in order to be included in saleable product.
The ramp up of the project has provided some
challenges but has generally shown significant
improvement month on month for the past
year. The process plant output is considered
stable with further continuous improvement
initiatives being undertaken to deliver nameplate annual
product output of 220,000 tonnes. The ramp up in
production over the past year is represented in Figure 1
(below).
ANNUAL REPORT 2019 ALTURA 18
DIRECTORS'
REPORT CONTINUED
Figure 1 – Altura Spodumene Concentrate Production AFY 2018–19
)
t
m
w
(
e
t
a
r
t
n
e
c
n
o
c
e
n
e
m
u
d
o
p
S
18,000
16,000
14,000
12,000
10,000
8,000
6,000
4,000
2,000
-
Jul 18
Aug 18
Sep 18
Oct 18
Nov 18
Dec 18
Jan 19
Feb 19
Mar 19
Apr 19
May 19
Jun 19
OPERATING RESULTS
The Group’s operating loss after providing for
income tax and non-controlling interests for the
year ended 30 June 2019 was $26,712,731 (2018:
loss $12,816,965). The loss in 2019 related to the
Group’s commencement of mining operations,
administrative and corporate costs, depreciation
and a net foreign exchange loss in the year (both of
which are non-cash costs) and financing charges.
However, a positive EBITDA of $9,381,000 was
achieved in fourth quarter, the first complete
quarter of Commercial Production.
Commercial operations commenced in March 2019
at the Group’s Altura Lithium Project. Exploration,
evaluation and development costs are assessed in
accordance with the Group’s accounting policies. It
should be noted that all costs prior to Commercial
Production have been capitalised. These costs
include operating costs and the cost of finance.
Key operational achievements in the first quarter
of Commercial Production include:
• Continuing focus on safety with zero lost time
injuries (LTI);
• Production of 42,402 wet metric tonnes (wmt) of
spodumene concentrate (versus March quarter
29,627 wmt);
• Sales of 38,635 dry metric tonnes (dmt) of high-
quality lithium concentrate via 5 cargoes, with
all sales in line with offtake specifications:
•
Impressive average operating cash cost of
US$392 wmt produced (FOB basis);
• Coarse and fines circuits successfully
decoupled following plant modification
delivering significant improvements in coarse
concentrate production and stabilising fines
concentrate production.
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 the path to
nameplate production from the Altura Lithium
Project and adding additional commitments for the
ALTURA ANNUAL REPORT 2019
DIRECTORS'
REPORT CONTINUED
19
supply of spodumene concentrate. 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
subject to market conditions.
The Company also holds coal assets in Indonesia
which it is in the process of divesting as soon as
reasonably possible.
ALTURA LITHIUM
During the year Altura continued with its
commissioning and operation of the mine and
process plant for Stage 1 of the Altura Lithium
Project at Pilgangoora in Western Australia.
Key developments in the commissioning and
operation of the mine and process plant have
included the following:
• First production of coarse concentrate in July 2018.
• First haulage of product to the Qube storage
facility in Port Hedland in August 2018.
• Official opening of the mine in September 2018.
• First shipment of product in October 2018.
• First production of fines concentrate in
December 2018.
• Modifications to tailings thickener completed in
January 2019.
• Formal declaration of commercial production in
March 2019.
• Modifications completed in April 2019 to
decouple plant modules allowing production to
continue in selected plant modules whilst other
sections are under maintenance.
The Company has diversified its customer base and
now has in place four Binding Offtake Agreements
(BOAs) with China based groups for the supply of 6%
Li2O grade spodumene concentrate. 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. All BOAs have a floor price
of US$550 per tonne of 6% spodumene, and there is
also a ceiling price of US$950 per tonne.
Altura’s current lithium offtake commitments are
summarised below:
Offtake partner
Lionenergy Limited
GFL International Co., Limited
Shandong Ruifu Lithium Industry Co., Ltd
Guangdong Weihua Corporation
Total
COAL ASSETS
Tabalong Coal
The Tabalong Coal Project is a premium grade
thermal coal deposit located in South Kalimantan,
Indonesia. The project consists of five (5) Mining
Licences (IUPs), with all five (5) IUPs granted
Tonnage
BOA term/expiry
65,000 dmt
70,000 dmt
35,000 dmt
50,000 dmt
220,000 dmt
September 2023
December 2021
June 2024
December 2024
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.
ANNUAL REPORT 2019 ALTURA 20
DIRECTORS'
REPORT CONTINUED
FINANCIAL POSITION
The net assets of the Group increased in 2019, with
non-current assets significantly higher due to the
construction of the Lithium Project. During the year
funds were sourced from an additional US$15 million
under the loan facility, a US$11 million prepayment on
future cargoes to Ganfeng, a A$24.5 million placement
and a A$14 million securities purchase plan offering.
RISK
Development of Altura’s lithium project is subject
to the ability of the Company to successfully ramp
up to full production capacity and comparable sales
from the project in a timely manner.
The Company is also subject to movements
in international commodity prices and foreign
exchange movements on its US$ revenue and debt.
of the agreement Shanshan is entitled to appoint
a director to the Altura board, provided that their
relevant interest in Altura shares does not fall below
12.5 per cent for more than 30 consecutive days.
NEW OFFTAKE AGREEMENTS
On 9 July 2019 Altura announced that it had entered
into a new offtake agreement with Shandong Ruifu
Lithium Industry Co., Ltd for 35,000 tonnes per
annum (tpa). At the same time Altura advised that it
had reached agreement with Shaanxi J&R Optimum
Energy Co., Ltd for the termination of the remaining
50,000 tpa under that offtake agreement.
On 1 August 2019 Altura announced that it had
entered into a new offtake agreement with
Guangdong Weihua Corporation for 50,000 tpa. At
the same time Altura advised that it had reached
agreement with Lionergy Limited to reduce its
tonnage from 100,000 tpa to 65,000 tpa.
DIVIDENDS
LOAN NOTE FACILITY
There were no dividends paid or declared during
the year ended 30 June 2019 (2018: 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
has entered into the following agreements:
The Group breached the financial covenant on the
loan note facility (Note 17) for each quarter during
the year, the respective covenant is based on an
annual net debt to EBITDA ratio, the calculation of
this ratio is based on the current operating quarter
results added to the previous 3 operating quarters
in order to deliver an annual result. 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.
As at 30 June 2019 the Group did not hold an
unconditional right to defer settlement of the
loan, and the loan was therefore required to be
reclassified as current on this basis. Subsequent
to the year end, the Group received a full written
waiver of the financial breach from the lenders.
SUBSCRIPTION AND COOPERATION AGREEMENT
On 23 July 2019 Altura announced that it had signed
a subscription and cooperation agreement with
Shanshan Forever International Co., Limited. The
agreement raised A$22.4 million in proceeds, which
were received on 7 August 2019. Under the terms
FUTURE DEVELOPMENTS, PROSPECTS
AND BUSINESS STRATEGIES
The Group will focus on attaining nameplate
production of Stage 1 of the Altura Lithium Project
and deliver the Stage 2 expansion as dictated by
market conditions. The Group intends to divest its
ALTURA ANNUAL REPORT 2019 21
ANNUAL REPORT 2019 ALTURA 22
DIRECTORS'
REPORT CONTINUED
interests in the Tabalong Coal Project as soon as
practical so it can focus on the Altura 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.
Interests in shares and options
30,088,301 ordinary shares in Altura Mining
Limited
385,000 options over ordinary 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
INFORMATION ON DIRECTORS
Experience
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.
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, 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
None
Former directorships in last 3 years
None
Other current directorships in listed entities
Special responsibilities
Sayona Mining Limited
None
Former directorships in last 3 years
Interests in shares and options
None
Special responsibilities
Chief Executive Officer
35,273,084 ordinary shares in Altura Mining
Limited
385,000 options over ordinary shares in Altura
Mining Limited
ALTURA ANNUAL REPORT 2019 DIRECTORS'
REPORT CONTINUED
23
MR ALLAN BUCKLER
(NON-EXECUTIVE DIRECTOR)
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 Buckler was appointed a director
in December 2008.
Experience
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.
Other current directorships in listed entities
Sayona Mining Limited
Former directorships in last 3 years
Other current directorships in listed entities
None
Sayona Mining Limited
Former directorships in last 3 years
None
Special responsibilities
Member of the Audit & Risk Committee (from
18 April 2019)
Member of the Remuneration & Nomination
Committee
Interests in shares and options
311,773,371 ordinary shares in Altura Mining
Limited
58,466,808 options over 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
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,
ANNUAL REPORT 2019 ALTURA 24
DIRECTORS'
REPORT CONTINUED
and managing palm oil bulk terminals. He was
appointed a director in November 2007.
Other current directorships in listed entities
Special responsibilities
Member of the Audit & Risk Committee (until
18 April 2019)
None
Former directorships in last 3 years
None
Special responsibilities
Chairman of the Audit & Risk Committee
Member of the Remuneration & Nomination
Committee
Interests in shares and options
23,000,000 ordinary shares in Altura Mining
Limited
1,000,000 options over ordinary shares in Altura
Mining Limited
MR ZHAO TONG
(NON-EXECUTIVE DIRECTOR –RESIGNED
18 APRIL 2019)
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.
Interests in shares
Nil
MR XIAOYU DAI
(NON-EXECUTIVE DIRECTOR – APPOINTED
10 SEPTEMBER 2019)
Qualifications
Master of Business Administration (Nanjing
University, China)
Experience
Mr Xiaoyu Dai has 21 years’ experience in
chemicals industry, spanning various commodities,
specialties and operations in China, Africa,
Germany, Singapore, Japan and Korea. He
held senior executive roles with extensive
operational experience in both petro and fine
chemicals leading companies, including previous
roles as head of alpha olefins, fatty alcohol in
Sasol China, Managing Director of Rockwood
Lithium China, and senior consultant of
Shanshan Inc. Since 1 July 2019, he works
as General Manager of Shanshan Forever
Lithium Co., Ltd.
Other current directorships in listed entities
None
Former directorships in last 3 years
None
Other current directorships in listed entities
Special responsibilities
None
None
Former directorships in last 3 years
Interests in shares
None
Nil
ALTURA ANNUAL REPORT 2019 DIRECTORS'
REPORT CONTINUED
25
COMPANY SECRETARY
MR DAMON COX
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:
• The responsibility of the role;
• Experience of the employee;
• Past performance and future expectations; and
•
Industry conditions and trends.
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.
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
22 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 2019 year, two
executive directors were issued with shares on the
vesting of previously issued performance rights.
PERFORMANCE-BASED REMUNERATION
The Company currently has performance-based
remuneration in place as disclosed in Note 22.
GROUP PERFORMANCE, SHAREHOLDER WEALTH
AND DIRECTOR AND EXECUTIVE REMUNERATION
The Group has recorded the following earnings
from continuing operations over the last five years:
2019
2018
2017
2016
2015
Revenues and sundry income
39,571,130
1,675,168
1,600,959
1,485,611
4,779,039
EBITDA1
NPBT2
NPAT3
(3,967,691)
(13,279,929)
(6,417,320)
(11,290,052)
(15,861,975)
(26,283,568)
(13,120,803)
(6,448,799)
(30,839,474)
(16,947,795)
(26,571,019)
(12,712,487)
(5,914,752)
(31,618,016)
(17,268,152)
Dividends paid
-
-
-
-
-
1. EBITDA = Earnings before interest, tax, depreciation and amortisation
2. NPBT = Net profit before tax
3. NPAT = Net profit after tax and minority interest
ANNUAL REPORT 2019 ALTURA 26
DIRECTORS'
REPORT CONTINUED
KEY MANAGEMENT PERSONNEL
REMUNERATION POLICY
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 if employment is
terminated by the Company.
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.
Phil Robinson, Chief Operating Officer – the
agreement is of no fixed term and allows for
payment of an annual cash salary, reviewed each
year, and superannuation. Two months’ notice
of termination by either party is required, with a
minimum separation allowance equivalent to one
month’s gross salary to be paid if employment
was terminated by the Company. Mr Robinson was
appointed the Chief Operating Officer in February
2019 and resigned in August 2019.
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. Mr Evans resigned in
February 2019.
Noel Young, Group Financial Controller – the
agreement is of no fixed term and allows for
payment of an annual cash salary, reviewed each
year, and superannuation. 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.
ALTURA ANNUAL REPORT 2019 DIRECTORS'
REPORT CONTINUED
27
Short-term benefits
Cash
salary
and fees
$
Cash
bonus
$
Bonus
shares
$
Non-
monetary
benefits
$
Post
employment
Share based
payments
Super-
annuation
$
Termination
payments
Performance
rights
$
Total
$
Performance
rights as a
percentage
of total
%
Name
2019
Non-executive directors
A Buckler
D O’Neill
B Kuan
Z Tong1
Sub total
non-executive
directors
72,000
84,000
84,000
57,399
297,399
Executive directors
436,278
325,025
267,771
191,151
180,000
150,000
1,550,225
1,847,624
J Brown
P Mantell
Other KMP
P Robinson2
C Evans3
N Young
D Cox
Total for KMP
compensation
Total
compensation
2018
Non-executive directors
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
6,840
7,980
7,980
-
22,800
98,334
14,214
-
24,999
-
-
-
-
-
-
-
124,850
-
-
-
124,850
-
-
3,848
20,371
136,768
22,924
22,144
17,100
14,250
101,417
-
62,716
-
-
62,716
-
-
-
-
-
78,840
91,980
91,980
57,399
320,199
265,000
132,500
799,612
496,738
39,750
132,500
26,500
26,500
622,750
455,295
408,511
227,448
211,121
2,598,726
124,850
136,768
124,217
62,716
622,750
2,918,925
A Buckler
D O’Neill
B Kuan
Z Tong1
Sub total
non-executive
directors
67,000
79,000
79,000
67,032
292,032
30,000
30,000
30,000
24,657
114,657
Executive directors
J Brown
P Mantell
Other KMP
C Evans3
N Young
D Cox
Total for KMP
compensation
Total
compensation
403,529
325,026
278,863
189,062
145,000
1,314,480
-
-
-
-
-
-
1,633,512
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
155,913
106,523
1. Mr Tong joined the Altura Board in March 2017 and resigned in April 2019
2. Mr Robinson was appointed Chief Operating Officer in February 2019
3. Mr Evans resigned in February 2019
No long service leave payments were made during the year (2018 Nil)
-
-
-
-
-
-
-
-
-
-
-
-
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
949,490
515,546
267,583
231,239
2,523,481
952,841
2,963,446
-
-
-
-
33.1%
26.7%
8.7%
32.4%
11.7%
12.6%
1.0%
0.9%
0.9%
-
-
46.6%
37.3%
41.1%
16.6%
19.2%
ANNUAL REPORT 2019 ALTURA 28
DIRECTORS'
REPORT CONTINUED
The following shares were issued to directors and key management personnel on the vesting of
performance rights during the year ended 30 June 2019:
Number issued
Issue date
Value per share at issue date ($)
J Brown
P Mantell
C Evans
P Robinson
P Robinson
N Young
D Cox
2,000,000
1,000,000
1,000,000
300,000
500,000
200,000
200,000
5,200,000
20/02/19
20/02/19
20/02/19
20/02/19
11/10/18
20/02/19
20/02/19
0.1325
0.1325
0.1325
0.1325
0.2497
0.1325
0.1325
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. No performance rights were
granted in the year ended 30 June 2019. The rights
awarded during these years 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.
There were no performance rights on issue to
directors and key management personnel as at
30 June 2019.
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 9
Directors’ meetings, 4 Audit & Risk Committee
meetings and 3 Remuneration & Nomination
Committee meetings held.
Directors'
Meetings
Audit & Risk
Committee
Remuneration &
Nomination Committee
Eligible to attend Attended Eligible to attend Attended Eligible to attend Attended
J Brown
P Mantell
A Buckler
D O’Neill
B Kuan
Z Tong
9
9
9
9
9
7
9
9
8
8
9
6
-
-
1
4
4
3
-
-
1
4
4
3
-
-
3
3
3
-
-
-
2
3
3
-
ALTURA ANNUAL REPORT 2019 DIRECTORS'
REPORT CONTINUED
29
INDEMNIFICATION AND INSURANCE
OF DIRECTORS AND OFFICERS
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 Brisbane Audit, did
not provide any non-audit services to the Company
during the year ended 30 June 2019.
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 thousand dollars in accordance with
the instrument.
AUDITOR’S INDEPENDENCE
DECLARATION
The auditor’s independence declaration for the
year ended 30 June 2019 has been received and is
included on page 30 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
Director
Brisbane, 30 September 2019
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
Under the terms of the Placement and the
Securities Purchase Plan undertaken during the
year ended 30 June 2019, a total of 148,798,009
listed options were issued with an exercise price
of $0.20 cents per option and an expiry date of 28
February 2022. At the date of signing this report,
there were 148,797,979 listed options outstanding.
At 30 June 2019, there were also 5,784,846 unlisted
options over ordinary shares of Altura Mining
Limited outstanding. These unlisted options
expired on 25 September 2019.
WARRANTS
Under the terms of the US$110 million debt facility
announced on 28 July 2017, the lenders received 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, there were 19,812,140 warrants
outstanding.
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
ANNUAL REPORT 2019 ALTURA
30
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 2019, there have
been no contraventions of:
(a)
the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and
(b)
any applicable code of professional conduct in relation to the audit.
PKF BRISBANE AUDIT
LIAM MURPHY
PARTNER
30 SEPTEMBER 2019
BRISBANE
ALTURA ANNUAL REPORT 2019
31
FINANCIAL
STATEMENTS
ANNUAL REPORT 2019 ALTURA 32
CONSOLIDATED STATEMENT
OF PROFIT AND LOSS
Altura Mining Limited and Controlled Entities
FOR THE YEAR ENDED 30 JUNE 2019
Consolidated Statement of Profit and Loss
FOR THE YEAR ENDED 30 JUNE 2019
Continuing operations
Revenue
Cost of sales
Gross profit
Other income
Sundry income
Expenses
Administration costs
Employee benefits expense
Other expenses
Profit / (loss) before foreign exchange and finance costs
Net foreign exchange loss
Profit / (loss) before finance costs
Finance costs
Interest on funding facility
Amortisation of transaction costs
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)
7(a)
3
2019
$’000
39,399
(31,961)
7,438
172
(3,344)
(5,725)
(188)
(1,647)
(6,466)
(8,113)
(10,566)
(7,605)
(26,284)
(287)
(26,571)
(142)
(26,713)
(26,665)
(48)
(26,713)
2018
$’000
1,165
(772)
393
510
(3,780)
(3,690)
(188)
(6,755)
(6,366)
(13,121)
-
-
(13,121)
408
(12,713)
(104)
(12,817)
(12,880)
63
(12,817)
(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
(1.40)
(1.39)
(0.01)
(0.74)
(0.73)
(0.01)
The above Consolidated Statement of Profit and Loss should be read in conjunction with the accompanying Notes.
17
ALTURA ANNUAL REPORT 2019
33
CONSOLIDATED STATEMENT OF
OTHER COMPREHENSIVE INCOME
Altura Mining Limited and Controlled Entities
FOR THE YEAR ENDED 30 JUNE 2019
Consolidated Statement of Other Comprehensive Income
FOR THE YEAR ENDED 30 JUNE 2019
Profit / (loss) for the year
(26,713)
(12,817)
Note
2019
$’000
2018
$’000
Other comprehensive income / (loss) for the year
Items that may be reclassified to profit and loss
Changes in the fair value of 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
(2,732)
(2,522)
(5,254)
(31,967)
(31,885)
(82)
(31,967)
(31,229)
(656)
(31,885)
3,194
(1,751)
1,443
(11,374)
(11,413)
39
(11,374)
(10,948)
(465)
(11,413)
The above Consolidated Statement of Other Comprehensive Income should be read in conjunction with the accompanying Notes.
18
ANNUAL REPORT 2019 ALTURA
34
CONSOLIDATED
BALANCE SHEET
Altura Mining Limited and Controlled Entities
AS AT 30 JUNE 2019
Consolidated Balance Sheet
AS AT 30 JUNE 2019
Note
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
Financial assets
Property, plant, equipment and mine properties
Exploration and evaluation
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
Rehabilitation provision
Total non-current liabilities
Total liabilities
Net assets
Equity
Contributed equity
Reserves
Accumulated losses
8
9
11
10
12
3c
13
14
15
16
17
18
3c
17
20
21
21
Capital and reserves attributable to owners of Altura Mining Limited
Non-controlling interest
Total equity
The above Consolidated Balance Sheet should be read in conjunction with the accompanying Notes.
2019
$’000
9,494
2,149
78
20,720
73
1,155
9,903
43,572
1,286
288,680
3,265
293,231
336,803
40,778
179,612
1,669
1,905
223,964
-
11,994
11,994
235,958
100,845
233,955
(3,320)
(130,005)
100,630
215
100,845
2018
$’000
28,761
2,242
52
1
295
384
9,271
41,006
4,018
222,256
1,595
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
19
ALTURA ANNUAL REPORT 2019
35
CONSOLIDATED STATEMENT
OF CHANGES IN EQUITY
Altura Mining Limited and Controlled Entities
FOR THE YEAR ENDED 30 JUNE 2019
Consolidated Statement of Changes in Equity
FOR THE YEAR ENDED 30 JUNE 2019
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 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
Balance as at 30 June 2018
192,893
(103,340)
1,602
3,488
(1,588)
298
93,353
Total comprehensive income for the year
-
(26,665)
-
(2,732)
(2,488)
(83)
(31,967)
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
125
38,118
2,819
-
-
-
-
-
(2,819)
1,217
-
-
-
-
-
-
-
-
-
-
-
-
125
38,118
-
1,217
Sub-total
41,062
(26,665)
(1,602)
(2,732)
(2,488)
(83)
7,492
Balance as at 30 June 2019
233,955
(130,005)
-
756
(4,076)
215
100,845
The above Consolidated Statement of Changes in Equity should be read in conjunction with the accompanying Notes.
20
ANNUAL REPORT 2019 ALTURA
36
CONSOLIDATED STATEMENT
OF CASH FLOWS
Altura Mining Limited and Controlled Entities
FOR THE YEAR ENDED 30 JUNE 2019
Consolidated Statement of Cash Flows
FOR THE YEAR ENDED 30 JUNE 2019
Note
Cash flows from operating activities
Receipts from customers *
Payments to suppliers and employees
Sundry income
Interest received
Income tax received
Net cash provided by / (used in) in operating activities
27(b)
Cash flows from investing activities
Expenditure on exploration and evaluation activities
Purchase of property, plant, equipment and mine properties
Proceeds during commissioning of mine properties *
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
27(c)
27(c)
27(a)
27(a)
22
2019
$’000
48,432
(34,953)
31
74
-
13,584
(1,198)
(118,618)
29,463
44
(90,309)
37,979
19,395
-
57,374
(19,351)
28,779
85
9,513
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
(125)
(2,141)
(625)
(34)
(17,706)
(23,982)
* Receipts from customers include sales of spodumene concentrate from the date of commercial production in March 2019.
Shipments of spodumene concentrate prior to commercial production are recorded in proceeds during commissioning of mine
properties.
The above Consolidated Statement of Cash Flows should be read in conjunction with the accompanying Notes.
21
ALTURA ANNUAL REPORT 2019
37
NOTES TO THE
FINANCIAL STATEMENTS
Altura Mining Limited and Controlled Entities
Notes to the Financial Statements (continued)
FOR THE YEAR ENDED 30 JUNE 2019
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 30 September 2019 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 a net loss after income tax of $26.7 million for the year, net current asset
deficiency of $180.3m and loan note facility of $179.1m due August 2020, the financial statements have been
prepared on a going concern basis as the directors believe that the Group will be able to pay its debts as and when
they fall due and payable.
The Group’s ability to continue as a going concern is dependent on achieving forecast production and sales and the
successful refinancing of the loan note facility by the due date.
Directors are confident that the Altura Lithium Project will:
1.
Continue to successfully generate considerable cash flow sufficient to address the operating losses and
achieve positive cash flows from operations. Should this not be the case the Group will be required to
raise additional working capital. The Directors are confident additional working capital can be secured as
required based on the following:
•
•
The strong support of new and existing shareholders including:
in August 2019 the Group successfully raised A$22.4 million via an equity placement
in February and March 2019, the Group successfully raised A$38.7 million via an
equity placement and securities purchase plan
Supportive off-take parties as evidenced by the signing in November 2018 of a US$11 million
prepayment on future sales
2.
Successfully refinance the loan note facility before the maturity date due to the ongoing support of the
existing lenders. The Company has appointed Azure Capital to assist the company in its facility refinancing.
Notwithstanding the position outlined above, if production and sales cannot be achieved at forecast levels, and the
loan facility cannot be successfully refinanced by the due date, there is a material uncertainty as to whether the Group
will be able to continue as a going concern and, therefore whether it will realise its assets and extinguish its liabilities
in the normal course of business and at the amounts stated in the financial statements. No adjustments have been
made relating to the recoverability and classification of recorded asset amounts or to the amounts and classification
of liabilities that might be necessary should the Group not continue as a going concern.
22
ANNUAL REPORT 2019 ALTURA
38
NOTES TO THE
FINANCIAL STATEMENTS CONTINUED
Altura Mining Limited and Controlled Entities
Notes to the Financial Statements (continued)
FOR THE YEAR ENDED 30 JUNE 2019
1.
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)
ii)
New accounting standards for application in future periods
A number of new standards, amendments and interpretations to existing standards have been published by the
Australian Accounting Standards Board (AASB) that are effective for future periods and which the Group will adopt
when they become effective. None of these are expected to have a significant effect on the consolidated financial
statements of the Group, except:
AASB 16 Leases: (effective for 30 June 2020 reporting period)
AASB 16 establishes principles for the recognition, measurement, presentation and disclosure of leases and
supersedes AASB 117 Leases. AASB 16 eliminates the current dual accounting model for lessees which distinguishes
between on-balance sheet finance leases and off-balance sheet operating leases. The standard provides a single
lessee accounting model, requiring lessees to recognise assets and liabilities for all leases, unless the lease term is
12 months or less or the underlying asset has a low value. The accounting for lessors will not significantly change.
This standard will primarily affect accounting for the Group’s operating leases. AASB 16 Leases is effective for annual
reporting periods beginning on or after 1 January 2019. The Group is not required to adopt this new standard until
the annual reporting period ending 30 June 2020 and has not adopted it in the current financial report.
The Group is finalising its assessment of the potential impact of the application of AASB 16 on its financial
statements, including the potential impact of the various transition provisions available to the Group. At present,
the Group anticipates to adopt the modified retrospective approach in the year ending 30 June 2020 and will not
restate comparative amounts. As the Group has non-cancellable operating lease commitments of $3,424,000, the
impact of the new standard will result in a material right of use asset and lease liability measured at net present
value, with the difference recorded in retained earnings on application.
Due to the complexity involved in calculating the impact of AASB 16, management have not yet finalised this
assessment, therefore no quantification of the impact has been made. Calculation complexity has been impacted
by key judgements, including the incremental borrowing rate used to discount lease assets and liabilities and the
uncertainties surrounding lease terms including potential rights of renewals (renewals are assessed on a lease by
lease basis).
ii)
Impact of new and amended standards adopted by the Group – changes in accounting policies
There were two new standards adopted during the year being AASB 9 Financial Instruments and AASB 15 Revenue
from Contracts with Customers. The new accounting policies that have been applied from 1 July 2018 are detailed
below in Note 1(k) and Note 1(r) respectively.
iii) 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.
iv) 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 1(n).
23
ALTURA ANNUAL REPORT 2019
39
NOTES TO THE
FINANCIAL STATEMENTS CONTINUED
Altura Mining Limited and Controlled Entities
Notes to the Financial Statements (continued)
FOR THE YEAR ENDED 30 JUNE 2019
1.
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)
b)
Carrying value of exploration and evaluation expenditure
The Group has capitalised exploration and evaluation expenditure of $3.265 million as at 30 June 2019 (2018: $1.595
million). This amount includes additions of $2.2 million 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 $548,000. 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 2019 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 25 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 Statement of Profit and Loss. 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.
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.
24
ANNUAL REPORT 2019 ALTURA
40
NOTES TO THE
FINANCIAL STATEMENTS CONTINUED
Altura Mining Limited and Controlled Entities
Altura Mining Limited and Controlled Entities
Notes to the Financial Statements (continued)
Notes to the Financial Statements (continued)
FOR THE YEAR ENDED 30 JUNE 2019
FOR THE YEAR ENDED 30 JUNE 2019
1.
2.
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)
e)
iii)
Income tax
Changes in ownership interests
The charge for current income tax expense is based on the result for the year adjusted for any non-assessable or
The Group treats transactions with non-controlling interests that do not result in a loss of control as transactions
disallowed items. It is calculated using the tax rates that have been enacted or are substantially enacted by the balance
with equity owners of the Group. A change in ownership interest results in an adjustment between the carrying
date for each jurisdiction, adjusted by changes in deferred tax assets and liabilities attributable to temporary differences
amounts of the controlling and non-controlling interests to reflect their relative interests in the subsidiary. Any
and to unused tax losses.
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.
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
When the Group ceases to have control, joint control or significant influence, any retained interest in the entity is
be recognised from the initial recognition of an asset or liability, excluding a business combination, where there is no
remeasured to its fair value with the change in carrying amount recognised in profit or loss. This fair value becomes
effect on accounting or taxable profit or loss.
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
Deferred tax is calculated at the tax rates (and laws) that have been enacted, or substantially enacted by the end of the
income in respect of that entity are accounted for as if the Group had directly disposed of the related assets or
reporting period and are expected to apply to the period when the asset is realised or liability is settled. Deferred tax is
liabilities. This may mean that amounts previously recognised in other comprehensive income are reclassified to
credited in the income statement except where it relates to items that may be credited directly to equity, in which case
profit or loss.
the deferred tax is adjusted directly against equity.
If the ownership interest in a jointly controlled entity or an associate is reduced but joint control or significant
Deferred income tax assets are recognised to the extent that it is probable that future tax profits will be available against
influence is retained, only a proportionate share of the amounts previously recognised in other comprehensive
which deductible temporary differences and unused tax losses can be utilised.
income are reclassified to profit or loss where appropriate.
d)
Business combinations
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.
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.
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.
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.
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 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.
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.
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.
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.
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.
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.
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.
25
26
ALTURA ANNUAL REPORT 2019
41
NOTES TO THE
FINANCIAL STATEMENTS CONTINUED
Altura Mining Limited and Controlled Entities
Notes to the Financial Statements (continued)
FOR THE YEAR ENDED 30 JUNE 2019
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.
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.
26
ANNUAL REPORT 2019 ALTURA
42
NOTES TO THE
FINANCIAL STATEMENTS CONTINUED
Altura Mining Limited and Controlled Entities
Notes to the Financial Statements (continued)
FOR THE YEAR ENDED 30 JUNE 2019
1.
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)
g)
Property, plant, equipment and mine properties
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 Properties
Mine properties consist of two categories being mine properties in production and mine development.
Mine development expenditure relates to costs incurred to access a mineral resource. It represents those costs incurred
after the technical and commercial viability of extracting the mineral resource has been demonstrated and an identified
mineral reserve is being prepared for production (but is not yet in production). Development expenditure is capitalised
as either a tangible or intangible asset depending on the nature of the costs incurred. Capitalisation of development
expenditure ceases once the mining property is capable of commercial production, at which point it is transferred into
the relevant category of property, plant, equipment and mine properties depending on the nature of the asset and
depreciated over the useful life of the asset. Development expenditure includes the direct costs of construction, pre-
production costs, borrowing costs incurred during the construction phase, reclassified exploration and evaluation assets
(acquisition costs) and subsequent development expenditure on the reclassified areas of interest. These costs are not
amortised, the carrying value is assessed for impairment whenever the facts and circumstances suggest that the carrying
amount of the asset may exceed the recoverable amount.
Mine properties in production includes all development expenditure incurred once a mine property is in commercial
production and is immediately expensed to the Statement of Profit and Loss except where it is probable that future
economic benefits will flow to the Group, in which case it is capitalised as mine properties in production. Amortisation is
provided on a unit of production basis which results in an amortisation charge proportional to the depletion of the
economically recoverable mineral resources (comprising proven and probable mineral reserves). A regular review is
undertaken to determine the appropriateness of continuing to carry forward costs in relation to that area of interest. An
impairment exists when the carrying value of mine properties exceeds its estimated recoverable amount. The asset is
then written down to its recoverable amount and the impairment losses are recognised in profit or loss. These assets
include all operating mine related assets that are not included under land, buildings and plant and equipment.
Depreciation
The depreciable amount of all property plant and equipment 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. Assets classified
as mine properties in production are depreciated using the units of production method for the life of the mine. 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.
27
ALTURA ANNUAL REPORT 2019
43
NOTES TO THE
FINANCIAL STATEMENTS CONTINUED
Altura Mining Limited and Controlled Entities
Notes to the Financial Statements (continued)
FOR THE YEAR ENDED 30 JUNE 2019
1.
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)
g)
Property, plant, equipment and mine properties (continued)
The depreciation rates used for each class of depreciable assets are:
Class of Fixed Asset
Plant and equipment
Leased plant and equipment
Mine properties
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.
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.
28
ANNUAL REPORT 2019 ALTURA
44
NOTES TO THE
FINANCIAL STATEMENTS CONTINUED
Altura Mining Limited and Controlled Entities
Notes to the Financial Statements (continued)
FOR THE YEAR ENDED 30 JUNE 2019
1.
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)
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.
k)
Financial assets
This note explains the impact of the adoption of AASB 9 Financial Instruments on the Group’s financial statements and
discloses the new accounting policies that have been applied from 1 July 2018.
AASB 9 replaces AASB 139 and addresses the classification, measurement and recognition of financial assets and
liabilities, introduces new rules for hedge accounting and a new impairment model for financial assets. The Group notes
the following impacts from the adoption of the new standard on 1 July 2018. Adoption of AASB 9 has resulted in the
reclassification of the following financial instruments:
Category
Cash and cash equivalents
Trade and other receivables
Financial assets
Trade and other payables
Loans and borrowings
Previously AASB 139
Loans and receivables
Loans and receivables
Financial assets at fair value
through OCI
Other financial liabilities
Other financial liabilities
Currently AASB 9
Amortised cost
Amortised cost
Financial assets at fair value
through OCI
Other financial liabilities
Other financial liabilities
AASB 9 replaces the ‘incurred loss’ model in AASB 9 with an ‘expected credit loss’ (ECL) model. The new impairment
model applies to the Group in relation to financial assets classified at amortised cost, being the Group’s trade receivables.
Based on the Group’s assessment of historical provision rates, there is no material financial impact on the impairment
provisions on adoption of this standard and no adjustment to retained earnings is required. For the current period, the
Group has elected to measure loss allowances on trade receivables using a life-time expected loss model. The Group has
also used the practical expedient of a provisions matrix using a single loss rate approach to approximate the expected
credit losses. These provisions are considered representative across all business and geographical segments of the Group
based on historical credit loss experience.
The standard requires that for financial liabilities designated at fair value through profit or loss (FVTPL) any change in fair
value arising as a consequence of a change in the company’s own credit risk should be recognised in other comprehensive
income rather than profit or loss.
The new hedge accounting rules have no impact on the Group’s financial statements.
Following adoption of AASB 9 on 1 July 2018, there is no material impact on the Group’s financial position and no
restatement is required.
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.
29
ALTURA ANNUAL REPORT 2019
45
NOTES TO THE
FINANCIAL STATEMENTS CONTINUED
Altura Mining Limited and Controlled Entities
Notes to the Financial Statements (continued)
FOR THE YEAR ENDED 30 JUNE 2019
1.
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)
l)
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.
m)
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.
n)
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.
30
ANNUAL REPORT 2019 ALTURA
46
NOTES TO THE
FINANCIAL STATEMENTS CONTINUED
Altura Mining Limited and Controlled Entities
Notes to the Financial Statements (continued)
FOR THE YEAR ENDED 30 JUNE 2019
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.
o)
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 resources and reserves
The Company estimates its ore resources and reserves is 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. The current Life of Mine (LOM) for
the Altura Lithium Project is 26 years.
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 in that area of interest,
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 and Loss in the period when the new information becomes available.
31
ALTURA ANNUAL REPORT 2019
47
NOTES TO THE
FINANCIAL STATEMENTS CONTINUED
Altura Mining Limited and Controlled Entities
Notes to the Financial Statements (continued)
FOR THE YEAR ENDED 30 JUNE 2019
1.
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)
o)
Significant accounting estimates and judgements (continued)
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.
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. 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.
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
22. This formula takes into account the terms and conditions under which the instruments were granted.
32
ANNUAL REPORT 2019 ALTURA
48
NOTES TO THE
FINANCIAL STATEMENTS CONTINUED
Altura Mining Limited and Controlled Entities
Notes to the Financial Statements (continued)
FOR THE YEAR ENDED 30 JUNE 2019
1.
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)
o)
Significant accounting estimates and judgements (continued)
h. Mines under construction
Expenditure is transferred from ’Exploration and evaluation assets’ to ‘Mine properties in development’ which
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 properties in 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 properties in development’ are then transferred to ’Mine
properties in production’ which is also a sub-category in ‘Property, plant, equipment and mine properties’.
In March 2019, the Altura Lithium Project recorded in ‘Mine properties in development’ was deemed to have
reached commercial production and transferred to ‘Mine properties in production’. Judgement was involved
in this determination.
p)
Non-current assets (or disposal groups) held for sale and discontinued operations
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.
33
ALTURA ANNUAL REPORT 2019
49
NOTES TO THE
FINANCIAL STATEMENTS CONTINUED
Altura Mining Limited and Controlled Entities
Notes to the Financial Statements (continued)
FOR THE YEAR ENDED 30 JUNE 2019
1.
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)
q)
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.
r)
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.
s)
Revenue
This note explains the impact of the adoption of AASB 15 Revenue from Contracts with Customers on the Group’s financial
statements and discloses the new accounting policies that have been applied from 1 July 2018.
AASB 15 addresses the recognition of revenue. It replaces the previous revenue recognition guidance in AASB 118
Revenue and AASB 111 Construction Contracts. The new standard is based on the principle that revenue is recognised
when control of a good and service transfers to a customer.
The Group adopted AASB 15 from 1 July 2018 which resulted in changes in accounting policies relating to the recognition
of revenue. Management have reviewed each of the Group’s revenue streams under the five-step model outlined in AASB
15 and concluded adoption of AASB 15 has no material impact on revenue recognition. Therefore, there is no requirement
to restate revenue reported in prior periods. The details of the review process are outlined below.
Accounting policies have been amended to ensure that the five-step method is applied consistently to revenue
recognition processes across the Group. To assess the impact of AASB 15 on the Group, each contract type was analysed,
with the five-step method applied to assess the impact on revenue recognition. The five-step method for recognising
revenue from contracts with customers involves consideration of the following: 1. Identifying the contract with the
customer 2. Identifying performance obligations 3. Determining the transaction price 4. Allocating the transaction price
to distinct performance obligations 5. Recognising revenue.
The following is a summary of the revenue recognition for each revenue stream:
(a) Mining services revenue – revenue from mining services provided by the Group is recognised at a point in time upon
delivery of the service to the customer, in accordance with the terms of the contract to provide services.
(b) Royalty revenue – revenue from royalties are recognised at a point in time when entitlement to a royalty is established
in accordance with the terms of the agreement.
(c) Sales of product – revenue from the sale of product is recognised at a point in time, being when the Group delivers
the product to the buyer. In accordance with the contract, delivery is deemed to occur when the product passes the ship’s
rail in the port of shipment. At this point, the performance obligation per the off-take agreement (contract) is satisfied
relating to the delivery of product. A variable consideration of 5% of the total invoice is recognised as revenue to the
extent that it is highly probable that a significant reversal in the amount of cumulative revenue recognised will not occur.
34
ANNUAL REPORT 2019 ALTURA
50
NOTES TO THE
FINANCIAL STATEMENTS CONTINUED
Altura Mining Limited and Controlled Entities
Notes to the Financial Statements (continued)
FOR THE YEAR ENDED 30 JUNE 2019
1.
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)
t)
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.
u)
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.
v)
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.
w)
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.
x)
Financial liabilities
Non-derivative financial liabilities other than financial guarantees are subsequently measured at amortised cost. Gains or
losses are recognised in profit or loss through the amortisation process and when the financial liability is derecognised.
y)
Comparative figures
When required by Accounting Standards, comparative figures have been adjusted to conform to changes in presentation
for the current financial year.
35
ALTURA ANNUAL REPORT 2019
51
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
NOTES TO THE
FINANCIAL STATEMENTS CONTINUED
Altura Mining Limited and Controlled Entities
Notes to the Financial Statements (continued)
FOR THE YEAR ENDED 30 JUNE 2019
1.
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)
z)
Inventories
Consumables stores
Inventories of consumable supplies and spare parts expected to be used in the supply of services are valued at cost.
Product and processing stock
Product and processing stock 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. Finished goods consists of spodumene product ready for transport
or shipment.
aa)
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.
36
ANNUAL REPORT 2019 ALTURA
52
NOTES TO THE
FINANCIAL STATEMENTS CONTINUED
Altura Mining Limited and Controlled Entities
Notes to the Financial Statements (continued)
FOR THE YEAR ENDED 30 JUNE 2019
2.
FINANCIAL RISK MANAGEMENT
The Group’s principal financial instruments comprise receivables, payables, loans, finance leases, financial asset at fair value
through other comprehensive income, 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
Other financial assets
FINANCIAL LIABILITIES
Trade and other payables (note 16)
Borrowings
a) Market risk
2019
$’000
9,494
2,149
78
1,286
13,007
40,778
179,612
220,390
2018
$’000
28,761
2,242
52
4,018
35,073
22,713
145,887
168,600
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, sales of
spodumene concentrate are 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$143 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 2019, the Group held funds in foreign currency amounting to US$3,934,000 (2018: US$382,000)
The Group does not currently enter into any hedging arrangements.
37
ALTURA ANNUAL REPORT 2019
53
NOTES TO THE
FINANCIAL STATEMENTS CONTINUED
Altura Mining Limited and Controlled Entities
Notes to the Financial Statements (continued)
FOR THE YEAR ENDED 30 JUNE 2019
2.
FINANCIAL RISK MANAGEMENT (continued)
Foreign currency risk sensitivity analysis
At 30 June 2019, 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%
2019
$’000
1,317
(1,317)
1,317
(1,317)
2018
$’000
704
(704)
704
(704)
ii)
Price risk
The Group is exposed to equity securities price risk. The Group currently does not have any hedges in place against
the movements in the spot price.
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%
2019
$’000
2018
$’000
-
-
129
(129)
-
-
402
(402)
iii)
Interest rate risk
At balance date the Group’s debt was held at a fixed rate. For further details on interest rate risk refer to Note 17.
Interest rate sensitivity analysis
At 30 June 2019, 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%
2019
$’000
(1,987)
1,987
(1,987)
1,987
2018
$’000
(1,450)
1,450
(1,450)
1,450
Term deposits have been treated as a floating rate due to the short-term nature of the deposits.
38
ANNUAL REPORT 2019 ALTURA
54
NOTES TO THE
FINANCIAL STATEMENTS CONTINUED
Altura Mining Limited and Controlled Entities
Notes to the Financial Statements (continued)
FOR THE YEAR ENDED 30 JUNE 2019
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
Group. The 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:
Will not have sufficient funds to settle transactions on the due date;
i)
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.
Weighted
average
effective
interest rate
2018
2019
%
%
Floating
interest rate
Within 1 year
Fixed interest rate maturing
Over 5 years
1 to 5 years
Non-interest
bearing
Total
2019
$’000
2018
$’000
2019
$’000
2018
$’000
2019
$’000
2018
$’000
2019
$’000
2018
$’000
2019
$’000
2018
$’000
2019
$’000
2018
$’000
The Group
Financial assets:
Cash & cash
equivalents
Trade and other
receivables
Financial assets
Total financial
assets
Financial liabilities:
Trade & other
payables
Borrowings
Total financial
liabilities
Term deposit
1%
1%
1%
1%
9,494
28,761
-
-
-
-
-
-
-
-
9,494
28,761
-
-
15%
14%
-
-
-
-
-
-
-
-
-
78
78
-
-
-
-
-
-
52
52
-
-
-
-
-
-
-
-
-
-
-
-
-
- 179,612 145,887
- 179,612 145,887
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
9,494
28,761
2,149
2,242
2,149
2,242
1,286
4,018
1,286
4,018
-
-
78
52
3,435
6,260
13,007
35,073
40,778
22,713
40,778
22,713
-
- 179,612 145,887
40,778
22,713 220,390 168,600
39
ALTURA ANNUAL REPORT 2019
NOTES TO THE
FINANCIAL STATEMENTS CONTINUED
Altura Mining Limited and Controlled Entities
Notes to the Financial Statements (continued)
FOR THE YEAR ENDED 30 JUNE 2019
2.
FINANCIAL RISK MANAGEMENT (continued)
Trade and other payables are expected to be paid as follows:
Less than 6 months (note 16)
More than 6 months (note 16)
e)
Fair value measurements
i)
Fair value hierarchy
55
2019
$’000
36,523
4,255
40,778
2018
$’000
22,713
-
22,713
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)
b)
c)
Quoted prices (unadjusted) in active markets for identical assets or liabilities (level 1)
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)
The following table presents the Group’s financial assets and financial liabilities measured and recognised at fair value at
30 June 2019 and 30 June 2018.
2019
Assets
Listed investments
Total assets
2018
Assets
Listed investments
Total assets
ii)
Valuation techniques
Level 1
$’000
Level 2
$’000
Level 3
$’000
Total
$’000
1,286
1,286
4,018
4,018
-
-
-
-
-
-
-
-
1,286
1,286
4,018
4,018
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.
40
ANNUAL REPORT 2019 ALTURA
56
NOTES TO THE
FINANCIAL STATEMENTS CONTINUED
Altura Mining Limited and Controlled Entities
Notes to the Financial Statements (continued)
FOR THE YEAR ENDED 30 JUNE 2019
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 year ending 30 June 2019.
2019
$’000
2018
$’000
Revenue
Expenses
Loss before income tax
Loss after income tax of discontinued operation
Loss from discontinued operations after income tax
Net cash Inflow/(outflow) from financing activities
Net increase/(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 2019 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
-
(104)
(104)
(104)
(104)
(21)
(21)
-
(142)
(142)
(142)
(142)
2
2
19
2,899
5
6,980
9,903
206
1,699
1,905
^ 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.
41
ALTURA ANNUAL REPORT 2019
57
NOTES TO THE
FINANCIAL STATEMENTS CONTINUED
Altura Mining Limited and Controlled Entities
Notes to the Financial Statements (continued)
FOR THE YEAR ENDED 30 JUNE 2019
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 lithium mining segment was previously under construction and since commercial production was achieved in March 2019,
has derived its revenue from the sale of spodumene concentrate 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.
Lithium
mining
$’000
Exploration
services
$’000
Mineral
exploration
$’000
Eliminations
Total
$’000
$’000
37,802
2
-
37,804
1,597
115
1,333
3,045
-
55
-
55
-
-
(1,333)
39,399
172
-
(1,333)
39,571
-
39,571
6,290
(1,018)
(6,919)
-
(1,647)
2019
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
321,925
1,253
3,722
232,331
1,002
719
Other segment information
Capital expenditure
Exploration expenditure
Depreciation and amortisation
66,535
1,670
3,883
76
-
128
10
-
190
42
-
(1,647)
(24,637)
(287)
(26,571)
(142)
(26,713)
-
-
-
-
-
326,900
9,903
336,803
234,052
1,906
235,958
66,621
1,670
4,201
ANNUAL REPORT 2019 ALTURA
58
NOTES TO THE
FINANCIAL STATEMENTS CONTINUED
Altura Mining Limited and Controlled Entities
Notes to the Financial Statements (continued)
FOR THE YEAR ENDED 30 JUNE 2019
4.
SEGMENT INFORMATION (continued)
Lithium
mining
$’000
Exploration
services
$’000
Mineral
exploration
$’000
Eliminations
Total
$’000
$’000
-
-
-
-
771
457
94
1,322
-
447
-
447
-
-
(94)
(94)
771
904
-
1,675
-
1,675
-
(524)
(6,231)
-
(6,755)
-
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
43
-
(6,755)
(6,366)
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 2019
59
NOTES TO THE
FINANCIAL STATEMENTS CONTINUED
Altura Mining Limited and Controlled Entities
Notes to the Financial Statements (continued)
FOR THE YEAR ENDED 30 JUNE 2019
4.
SEGMENT INFORMATION (continued)
Geographical segments
The Group’s geographical segments are determined based on the location of the Group’s assets.
Australia
$’000
Indonesia
$’000
Other
$’000
Eliminations
$’000
Total
$’000
37,802
57
-
37,859
1,597
115
1,333
3,045
-
-
-
-
-
-
(1,333)
(1,333)
2019
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
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
325,509
1,258
133
232,862
1,002
188
Australia
$’000
Indonesia
$’000
Other
$’000
-
447
-
447
771
457
94
1,322
-
-
-
-
-
-
-
256,489
2,899
217
25,239
148,293
144
39,399
172
-
39,571
-
39,571
326,900
9,903
336,803
234,052
1,906
235,958
66,621
1,670
4,201
-
-
-
-
-
Eliminations
$’000
Total
$’000
-
-
(94)
(94)
-
-
-
-
-
771
904
-
1,675
-
1,675
259,605
9,271
268,876
173,676
1,846
175,522
162,209
369
287
Capital expenditure
Exploration expenditure
Depreciation and amortisation
162,209
229
188
-
140
99
-
-
-
The Group has a number of customers to whom it provides spodumene product and exploration services. The mining group
supplies two external customers in this segment who account for 52% (US$13,800,000) and 30% (US$7,850,000) of mining
group’s external revenue (2018: Nil) The exploration services group supplies two external customers in this segment who
account for 61% (US$348,000) and 12% (US$68,000) of external revenue (2018: 46%).
44
Capital expenditure
Exploration expenditure
Depreciation and amortisation
66,621
1,527
4,070
-
143
131
ANNUAL REPORT 2019 ALTURA
60
NOTES TO THE
FINANCIAL STATEMENTS CONTINUED
Altura Mining Limited and Controlled Entities
Notes to the Financial Statements (continued)
FOR THE YEAR ENDED 30 JUNE 2019
5.
PROFIT / (LOSS) FROM ORDINARY ACTIVITIES
(a)
Revenue
Revenue from sales of product
Revenue from mining services
Revenue from royalties
Total sales revenues from ordinary activities
(b)
Other revenues
Interest received
Profit on sale of assets
Other revenue
Total other revenues from ordinary activities
(c)
Cost of sales
Mining and processing costs
Royalty expenses
Depreciation and amortisation
Product inventory movement
Mining services drilling costs
Total cost of sales
(d)
Other expenses
Depreciation of plant & equipment
Total other expenses from ordinary activities
(e)
Net foreign exchange loss
The net foreign exchange loss is unrealised and relates to the revaluation of
the US$ 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
2019
$’000
2018
$’000
37,802
792
805
39,399
55
115
2
172
29,849
6,103
4,013
(8,850)
846
31,961
188
188
1,217
125
4,383
5,725
-
772
393
1,165
447
48
15
510
-
-
99
-
673
772
188
188
1,796
34
1,860
3,690
45
ALTURA ANNUAL REPORT 2019
61
NOTES TO THE
FINANCIAL STATEMENTS CONTINUED
Altura Mining Limited and Controlled Entities
Notes to the Financial Statements (continued)
FOR THE YEAR ENDED 30 JUNE 2019
6.
EARNINGS / (LOSS) PER SHARE
(a)
(b)
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
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.
(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
2019
cents per share
2018
cents per share
(1.39)
(0.01)
(1.40)
(1.39)
(0.01)
(1.40)
(0.73)
(0.01)
(0.74)
(0.73)
(0.01)
(0.74)
2019
number
2018
number
1,912,252,661
1,743,518,956
2019
$’000
2018
$’000
(26,566)
(99)
(26,665)
(12,803)
(77)
(12,880)
46
ANNUAL REPORT 2019 ALTURA
62
NOTES TO THE
FINANCIAL STATEMENTS CONTINUED
Altura Mining Limited and Controlled Entities
Notes to the Financial Statements (continued)
FOR THE YEAR ENDED 30 JUNE 2019
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
2019
$’000
2018
$’000
-
287
-
287
287
-
287
-
(408)
-
(408)
(408)
-
(408)
(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
(26,284)
(142)
(26,426)
(13,121)
(104)
(13,225)
Income tax calculated at the Australian rate of 30% (2018 - 27.5%)
(7,928)
(3,637)
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
Income tax expense / (benefit)
1,327
403
6,199
286
287
413
503
2,721
(408)
(408)
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 30% (2018 - 27.5%)
20,442
12,016
(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.
47
ALTURA ANNUAL REPORT 2019
63
NOTES TO THE
FINANCIAL STATEMENTS CONTINUED
Altura Mining Limited and Controlled Entities
Notes to the Financial Statements (continued)
FOR THE YEAR ENDED 30 JUNE 2019
8.
CASH AND CASH EQUIVALENTS
Cash at bank and on hand
9,494
28,761
2019
$’000
2018
$’000
9.
TRADE AND OTHER RECEIVABLES
Current
Trade and other receivables
Provision for doubtful debts
3,195
(1,046)
2,149
3,323
(1,081)
2,242
2019 Consolidated
2018 Consolidated
0-30
days
$000
1,847
1,732
31-60
days
$000
104
61
61-90
days
$000
-
54
90+
days
$000
198
395
As at 30 June 2019, $302,000 (2018 $510,000) trade receivables were past due.
10.
INVENTORIES
Consumables stores – at cost
Product and processing stock – at cost
Movement in product and processing stock inventory of $8.85m as a result of
production activity following the declaration of commercial production from March
2019 has been allocated against mining and processing costs in the determination of
cost of sales. Additional costs have been allocated to inventory from mine
development costs on the determination of commercial production.
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% (2018: 1.0%). 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.
48
Total
$000
2,149
2,242
2018
$’000
1
-
1
2019
$’000
5,746
14,974
20,720
78
78
52
52
ANNUAL REPORT 2019 ALTURA
64
NOTES TO THE
FINANCIAL STATEMENTS CONTINUED
Altura Mining Limited and Controlled Entities
Notes to the Financial Statements (continued)
FOR THE YEAR ENDED 30 JUNE 2019
12. OTHER CURRENT ASSETS
Financial assets (security deposits)
Prepayments
13.
FINANCIAL ASSETS
Listed investments at fair value
Carried forward from previous year
Changes in fair value
Total listed investments at fair value
2019
$’000
2018
$’000
58
1,097
1,155
4,018
(2,732)
1,286
118
266
384
824
3,194
4,018
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, EQUIPMENT AND MINE PROPERTIES
2019
Gross carrying amount
Balance at 30 June 2018
Additions
Increase/(decrease) in provision for
rehabilitation #
Transfers
Exchange difference
Disposals
Balance at 30 June 2019
Accumulated depreciation
Balance at 30 June 2018
Depreciation expense
Exchange difference
Disposals
Balance at 30 June 2019
Net book value
as at 30 June 2019
Property plant and
equipment
$’000
Mine properties
in production
$’000
Mine properties in
development
$’000
Total
$’000
9,472
455
-
1,393
290
(1,490)
10,120
8,778
307
280
(1,489)
7,876
-
6,293
8,076
275,973
-
-
286,424
-
3,906
-
-
3,906
2,244
286,436
221,562
55,804
-
(277,366)
-
-
-
-
-
-
-
-
-
231,034
62,552
8,076
-
290
(1,490)
300,462
8,778
4,213
280
(1,489)
11,782
288,680
# An increase or decrease is created to mine development asset from any movement in provision for rehabilitation costs to the
extent that the movement in provision relates to future production activities
49
ALTURA ANNUAL REPORT 2019
65
NOTES TO THE
FINANCIAL STATEMENTS CONTINUED
Altura Mining Limited and Controlled Entities
Notes to the Financial Statements (continued)
FOR THE YEAR ENDED 30 JUNE 2019
14.
PROPERTY, PLANT, EQUIPMENT AND MINE PROPERTIES (continued)
Property plant and
equipment
$’000
Mine properties
in production
$’000
Mine properties in
development
$’000
Total
$’000
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
9,228
134
200
(90)
9,472
8,378
287
203
(90)
8,778
694
-
-
-
-
-
-
-
-
-
-
-
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.
59,353
162,209
-
-
221,562
-
-
-
-
-
68,581
162,343
200
(90)
231,034
8,378
287
203
(90)
8,778
221,562
222,256
2019
$’000
2018
$’000
1,595
-
2,218
(548)
3,265
-
3,265
1,226
(932)
1,662
(361)
1,595
-
1,595
50
ANNUAL REPORT 2019 ALTURA
66
NOTES TO THE
FINANCIAL STATEMENTS CONTINUED
Altura Mining Limited and Controlled Entities
Notes to the Financial Statements (continued)
FOR THE YEAR ENDED 30 JUNE 2019
16.
TRADE AND OTHER PAYABLES
Trade payables and accruals
Accrued interest on loan note facility
Prepaid revenue #
# In November 2018, Jiangxi Ganfeng Lithium Co. Ltd provided a prepayment of US$11
million for the future supply of spodumene concentrate. The repayment is made as
shipments are completed by returning 30% of the proceeds received. The prepayment
is forecast to be completed during the third quarter of FY 2020.
17. BORROWINGS
Current borrowings
Loan note facility
Other
Total current borrowings
Non-current borrowings
Loan note facility
Total non-current borrowings
2019
$’000
2018
$’000
18,920
12,248
9,610
40,778
22,713
-
-
22,713
179,100
512
179,612
-
-
-
-
145,887
145,887
145,887
Total borrowings
179,612
145,887
Reconciliation borrowings - loan note facility
Opening balance
Loan notes issued^
Interest capitalised
Exchange rate differences
Amortisation of transaction costs
Transaction costs incurred
Total borrowings – loan note facility
145,887
21,661
2,141
10,036
7,031
(7,656)
179,100
-
141,075
17,706
11,088
-
(23,982)
145,887
^ On 27 July 2017, loan notes were issued to lenders Magy LLC, Pala Investments Limited and CarVal Investors LLC (the
facility). On 10 September 2018 the facility was extended providing additional funding under the same terms and conditions
as the original facility. The loan notes are available for trade and the current loan note holders are Magy LLC, CarVal Investors
LLC, Nomura Corporate Funding Americas, LLC and Clearwater Capital Partners Fund V, L.P.
The interest rate was 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 payments other than interest are due until the loan termination date. The loan is secured over all Altura
Lithium Operations (ALO) assets, shares in ALO, AJM bank accounts and certain AJM receivables.
The Company had the option to capitalise the first two interest payments into the facility until 6 February 2019. Accrued
interest of $19.8 million has been capitalised to the end of the year.
Transaction costs capitalised are amortised over the remaining life of the financial instrument. As part of the transfer of costs
from mine development at cost to mine properties – production on achievement of commercial production, $5.1m was
transferred to the loan note facility as transaction costs. These transaction costs were initially recorded to mine development
but instead relate to transaction costs incurred on recognition of the loan note facility. There was no impact to profit or loss.
51
ALTURA ANNUAL REPORT 2019
67
NOTES TO THE
FINANCIAL STATEMENTS CONTINUED
Altura Mining Limited and Controlled Entities
Notes to the Financial Statements (continued)
FOR THE YEAR ENDED 30 JUNE 2019
17. BORROWINGS (continued)
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.
The Group breached the financial covenant for each quarter during the year. As at 30 June 2019 the Group did not hold an
unconditional right to defer settlement of the loan, and the loan was therefore required to be reclassified as currents on this
basis. Subsequent to the year end, the Group received a full written waiver of the financial breach from the lenders.
18.
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
19.
CURRENT TAXATION & DEFERRED TAX LIABILITIES & ASSETS
(a)
Liabilities
Current
Income tax paid / payable
Non-Current
Deferred tax liability comprises:
Tax allowances relating to exploration
Property, plant & equipment
Other
(b)
Assets
Non-Current
Deferred assets comprise:
Provisions
Revenue losses
Revenue losses not recognised
Unrealised foreign exchange loss
Other
52
2019
$’000
2018
$’000
1,669
1,669
1,158
1,247
(736)
1,669
1,158
1,158
842
563
(247)
1,158
1,669
1,669
1,158
1,158
-
-
949
28,563
59
29,571
4,083
42,486
(20,442)
2,651
793
29,571
4,918
6,961
9
11,888
1,399
22,204
(11,014)
124
(825)
11,888
ANNUAL REPORT 2019 ALTURA
68
NOTES TO THE
FINANCIAL STATEMENTS CONTINUED
Altura Mining Limited and Controlled Entities
Notes to the Financial Statements (continued)
FOR THE YEAR ENDED 30 JUNE 2019
20. 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
Directors have reviewed the rehabilitation provision and are confident that inputs
into the current calculation can be relied upon. Refer to Note 1n (d) and Note 1p (i)
for accounting policies in relation to the rehabilitation provision.
21.
CONTRIBUTED EQUITY
Issued capital
2019
$’000
2018
$’000
11,994
11,994
3,918
8,076
-
11,994
3,918
3,918
3,918
-
-
3,918
2,125,462,476 (2018: 1,819,866,474) ordinary shares issued and fully paid
233,955
192,893
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 ##
Shares issued in lieu of loan note fees
Share placement / securities purchase plan ###
Exercise of Warrants and Unlisted Options
Share issue costs
2019
Number
$’000
Number
$’000
2018
1,819,866,474
-
8,000,000
-
297,596,002
-
-
192,893
-
2,944
-
38,687
-
(569)
1,541,678,000
150,000
3,800,000
74,644,513
136,973,685
64,620,276
-
146,556
34
356
11,521
26,025
9,799
(1,398)
Balance at the end of the financial year
2,125,462,476
233,955
1,819,866,474
192,893
Fully paid ordinary shares carry one vote per share and carry the rights to dividends. Ordinary shares have no par value
# Nil shares were issued to directors and other key management personnel in 2019 (30 June 2018: nil).
## 5,200,000 shares were issued to directors and other key management personnel in 2019 on the vesting of performance
rights (30 June 2018: 2,600,000).
### The Company conducted a share placement and securities purchase plan offering during February and March 2019 at an
issue price of 13.0 cents per share. A total of 297.596 million shares were issued as follows:
-
-
-
Placement of 69.528 million shares to institutional and sophisticated investors on 13 February 2019.
Securities purchase plan issue of 107.594 million shares to existing eligible shareholders on 20 March 2019.
Further placement of 120.474 million shares on 26 March 2019 to related parties (following shareholder approval).
Fully paid ordinary shares carry one vote per share and carry the rights to dividends. Ordinary shares have no par value.
53
ALTURA ANNUAL REPORT 2019
NOTES TO THE
FINANCIAL STATEMENTS CONTINUED
Notes to the Financial Statements (continued)
Altura Mining Limited and Controlled Entities
FOR THE YEAR ENDED 30 JUNE 2019
21.
CONTRIBUTED EQUITY (continued)
Option and performance rights reserve
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 contributed equity
Balance at year end
The option and performance rights reserve records items recognised as
expenses on the valuation of share options and performance rights.
Foreign currency translation reserve
Movements in foreign currency translation reserve
Opening balance
Foreign currency translation differences
Balance at year end
The foreign currency translation reserve records exchange differences
arising on translation of a foreign controlled subsidiary.
Fair value reserve
Movements in fair value reserve
Opening balance
Change in fair value of financial assets
Balance at year end
69
2019
$’000
2018
$’000
1,602
1,217
(2,819)
-
162
1,796
(356)
1,602
(1,588)
(2,488)
(4,076)
139
(1,727)
(1,588)
3,488
(2,732)
756
294
3,194
3,488
The change in fair value reserve records valuation differences arising on
the market valuation of financial assets at fair value through other
comprehensive income. Refer to note 13 for reconciliation of movements in the year.
Capital management
Capital consists of ordinary share capital, retained earnings, reserves and net debt. 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. Other than obtaining
consent from existing loan note holders, 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.
Please refer to note 17 for further details of the loan facility.
54
ANNUAL REPORT 2019 ALTURA
70
NOTES TO THE
FINANCIAL STATEMENTS CONTINUED
Altura Mining Limited and Controlled Entities
Notes to the Financial Statements (continued)
FOR THE YEAR ENDED 30 JUNE 2019
22.
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 rewards; 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.
There were no outstanding Performance Rights granted under the LTIP as at 30 June 2019.
b)
Bonus shares
During the year, the Company had the following share based payments
expenses:
Performance rights (Note 21)
Bonus shares
2019
$’000
2018
$’000
1,217
125
1,342
1,796
34
1,830
23. 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 (resigned 18 April 2019)
Key Management Personnel
Phil Robinson
Chris Evans
Noel Young
Damon Cox
Chief Operating Officer (appointed in February 2019, resigned August 2019)
Chief Operating Officer (resigned in February 2019)
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
55
2,109,242
-
124,217
62,716
622,750
2,918,925
1,904,082
-
106,523
-
952,841
2,963,446
ALTURA ANNUAL REPORT 2019
71
NOTES TO THE
FINANCIAL STATEMENTS CONTINUED
Altura Mining Limited and Controlled Entities
Notes to the Financial Statements (continued)
FOR THE YEAR ENDED 30 JUNE 2019
23. 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.
2019
J Brown
P Mantell
A Buckler
D O’Neill
B Kuan
Z Tong
Balance at
the start of
the year
2,000,000
1,000,000
-
-
-
-
C Evans #
1,000,000
P Robinson ^
N Young
D Cox
800,000
200,000
200,000
Granted as
compensation
Shares issued/
rights lapsed
Balance at
the end of
the year
Vesting
30 Nov
2019
-
-
-
-
-
-
-
-
-
-
2,000,000
1,000,000
-
-
-
-
1,000,000
800,000
200,000
200,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
# C Evans resigned as Chief Operating Officer effective from February 2019
^ P Robinson appointed Chief Operating Officer effective February 2019
2018
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
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
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 this note.
56
ANNUAL REPORT 2019 ALTURA
72
NOTES TO THE
FINANCIAL STATEMENTS CONTINUED
Altura Mining Limited and Controlled Entities
Notes to the Financial Statements (continued)
FOR THE YEAR ENDED 30 JUNE 2019
23. 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
Placement &
Share Purchase
Plan
Balance at the
end of the year
2019
J Brown
P Mantell
A Buckler
D O’Neill
B Kuan
Z Tong
C Evans #
P Robinson ^
N Young
D Cox
2018
J Brown
P Mantell
A Buckler
D O’Neill
B Kuan
C Evans
N Young
D Cox
28,518,301
33,503,084
194,839,756
13,633,336
21,000,000
-
1,000,000
200,000
17,574,411
1,675,000
27,518,301
33,003,084
177,293,692
14,433,336
20,900,000
1,400,000
17,174,411
1,475,000
(1,200,000)
-
-
-
-
-
(1,500,000)
-
-
-
-
-
17,446,064
(900,000)
-
(800,000)
-
-
2,000,000
1,000,000
-
-
-
-
1,000,000
800,000
200,000
200,000
1,000,000
500,000
100,000
100,000
100,000
400,000
200,000
200,000
770,000
770,000
116,933,615
-
2,000,000
-
-
-
867,390
-
-
-
-
-
-
-
-
-
30,088,301
35,273,084
311,773,371
13,633,336
23,000,000
-
500.000
1,000,000
18,641,801
1,875,000
28,518,301
33,503,084
194,839,756
13,633,336
21,000,000
1,000,000
17,574,411
1,675,000
# C Evans resigned as Chief Operating Officer effective from January 2019
^ P Robinson appointed Chief Operating Officer effective from February 2019
24.
INVESTMENTS IN OTHER ENTITIES
a)
Joint operations
Altura Mining Limited holds no interests in any joint operations or ventures.
57
ALTURA ANNUAL REPORT 2019
73
NOTES TO THE
FINANCIAL STATEMENTS CONTINUED
Altura Mining Limited and Controlled Entities
Notes to the Financial Statements (continued)
FOR THE YEAR ENDED 30 JUNE 2019
25.
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
2019
%
2018
%
Australia
Australia
Australia
Australia
Mauritius
Singapore
Philippines
Indonesia
Indonesia
Indonesia
Indonesia
Indonesia
Indonesia
100
100
100
100
100
100
40
100
100
100
100
100
100
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
2019
%
50
70
70
70
70
70
70
70
56
56
2018
%
50
70
70
70
70
70
70
70
56
56
2019
%
50
30
30
30
30
30
30
30
44
44
2018
%
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.
58
ANNUAL REPORT 2019 ALTURA
74
NOTES TO THE
FINANCIAL STATEMENTS CONTINUED
Altura Mining Limited and Controlled Entities
Notes to the Financial Statements (continued)
FOR THE YEAR ENDED 30 JUNE 2019
25.
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
PT Suryaraya
Pusaka
PT Kodio
Multicom
PT Marangkayu
Bara Makarti
$’000
$’000
$’000
$’000
2019
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
557
341
898
270
(25)
245
653
793
802
(9)
-
(9)
34
25
89
-
-
89
12
297
180
1,685
1,865
-
1,262
1,262
603
-
-
-
-
-
(6)
(6)
1
-
-
1
(2)
(3)
1,063
915
1,978
1
876
877
1,101
-
3
(3)
-
(3)
(17)
(20)
-
-
-
-
(9)
11
1,061
1,792
2,853
5
1,720
1,725
1,128
-
5
(5)
-
(5)
(15)
(20)
-
-
-
-
(9)
23
59
ALTURA ANNUAL REPORT 2019
75
NOTES TO THE
FINANCIAL STATEMENTS CONTINUED
Altura Mining Limited and Controlled Entities
Notes to the Financial Statements (continued)
FOR THE YEAR ENDED 30 JUNE 2019
25.
INTERESTS IN SUBSIDIARIES (continued)
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
PT Velseis
Indonesia
PT Suryaraya
Pusaka
PT Kodio
Multicom
PT Marangkayu
Bara Makarti
$’000
$’000
$’000
$’000
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
1,008
867
1,875
1
828
829
1,046
-
(12)
12
-
12
(12)
-
-
-
-
-
-
(1)
19
1,007
1,700
2,707
5
1,627
1,632
1,075
-
(20)
20
-
20
(11)
9
-
-
-
-
4
32
60
ANNUAL REPORT 2019 ALTURA
76
NOTES TO THE
FINANCIAL STATEMENTS CONTINUED
Altura Mining Limited and Controlled Entities
Notes to the Financial Statements (continued)
FOR THE YEAR ENDED 30 JUNE 2019
26. 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.
Transactions other related parties
During the year, Mr Allan Buckler a director of the Group provided an unsecured loan via his controlled entity Katsura Holdings
Pte Ltd. The facility provided was for $15 million at an interest rate of 10% per annum. The loan facility converted into Securities
to the nominee of Katsura at the rate of two (2) Shares and one (1) Option for every A$0.26 loaned by Katsura (these being the
same terms as under the Placement) on the basis that the amount lent to the Company would have otherwise been utilised by
Katsura to subscribe for Shares and Options in the Placement itself.
The facility was provided on 5 February 2019 and was converted to shares on 26 March 2019 after shareholder approval.
Details of the conversion of the loan facility was as follows:
o
o
o
o
o
$15,000,000
Loan amount
Interest at 10% pa $201,370
Total amount
13 cents per share and 1 option for every 2 shares subscribed
Securities issued
$15,201,370
Shares 116,933,615
Options 58,466,808
27.
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
2019
$’000
2018
$’000
9,494
19
9,513
28,761
18
28,779
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
9,513
-
9,513
28,779
-
28,779
61
ALTURA ANNUAL REPORT 2019
77
NOTES TO THE
FINANCIAL STATEMENTS CONTINUED
Altura Mining Limited and Controlled Entities
Notes to the Financial Statements (continued)
FOR THE YEAR ENDED 30 JUNE 2019
27. NOTES TO STATEMENT OF CASH FLOWS (continued)
b)
Reconciliation of operating profit / (loss) after income tax to net cash
used in operating activities
Operating loss after income tax
(26,713)
(12,817)
2019
$’000
2018
$’000
Adjustments for non-cash income and expense items:
Option and share pricing
Bonus paid by way of issue of shares to directors and staff
Loan facility fees
Depreciation of property, plant and equipment
Interest expensed
Foreign currency exchange rate movement
(Increase) / decrease in current tax prepaid
Changes in assets and liabilities:
(Increase) / decrease in receivables
(Decrease) / increase in other creditors and accruals
Increase in inventories
(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
2019
$’000
1,217
125
7,605
4,201
10,566
8,620
-
93
18,065
(9,935)
(771)
511
13,584
2018
$’000
1,796
34
-
287
-
2,815
127
1,094
948
-
(51)
316
(5,451)
9,513
(512)
(179,100)
(170,099)
9,513
(179,612)
-
(170,099)
28,779
-
(145,887)
(117,108)
28,779
(145,887)
-
(117,108)
Cash and cash
equivalents
Borrowings due
within 1 year
Borrowings due
after 1 year
Total
Net debt as at 30 June 2018
28,779
-
(145,887)
(117,108)
Cash flows
(19,351)
(512)
(19,520)
(39,383)
Foreign exchange adjustments
Other non-cash movements
Net debt as at 30 June 2019
85
-
9,513
-
-
(10,036)
(3,657)
(9,951)
(3,657)
(512)
(179,100)
(170,099)
d) Acquisition of entities
The Group did not acquire any interest in entities during the year.
62
ANNUAL REPORT 2019 ALTURA
78
NOTES TO THE
FINANCIAL STATEMENTS CONTINUED
Altura Mining Limited and Controlled Entities
Notes to the Financial Statements (continued)
FOR THE YEAR ENDED 30 JUNE 2019
28.
PARENT ENTITY DISCLOSURE
(a)
Summary of financial information
The individual financial statements for the parent entity show the following
aggregate amounts:
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 31.
(c)
Contractual commitments
No later than one year
Later than one year and not later than five years
Later than five years
29. AUDITORS’ REMUNERATION
Amount paid or payable for the audit or review of the financial report
2019
$’000
Parent
2018
$’000
Parent
1,960
141,950
523
523
141,427
233,955
-
(92,528)
141,427
14,999
113,063
447
447
112,616
192,893
1,602
(81,879)
112,616
(10,649)
(35,597)
(10,649)
(35,597)
55
3
-
58
2019
$’000
2018
$’000
122
122
93
58
-
151
121
121
63
ALTURA ANNUAL REPORT 2019
79
NOTES TO THE
FINANCIAL STATEMENTS CONTINUED
Altura Mining Limited and Controlled Entities
Notes to the Financial Statements (continued)
FOR THE YEAR ENDED 30 JUNE 2019
30.
SUBSEQUENT EVENTS
Subscription and Cooperation Agreement
On 23 July 2019 Altura announced that it had signed a subscription and cooperation agreement with Shanshan Forever
International Co., Limited. The agreement raised A$22.4 million in proceeds, which were received on 7 August 2019. Under
the terms of the agreement Shanshan is entitled to appoint a director to the Altura board, provided that their relevant interest
in Altura shares does not fall below 12.5 per cent for more than 30 consecutive days.
New Offtake Agreements
On 9 July 2019 Altura announced that it had entered into a new offtake agreement with Shandong Ruifu Lithium Industry Co.,
Ltd for 35,000 tonnes per annum (tpa). At the same time Altura advised that it had reached agreement with Shaanxi J&R
Optimum Energy Co., Ltd for the termination of the remaining 50,000 tpa under that offtake agreement.
On 1 August 2019 Altura announced that it had entered into a new offtake agreement with Guangdong Weihua Corporation
for 50,000 tpa. At the same time Altura advised that it had reached agreement with Lionergy Limited to reduce its tonnage
from 100,000 tpa to 65,000 tpa.
Loan Note Facility
The Group breached the financial covenant on the loan note facility (Note 17) for each quarter during the year, the respective
covenant is based on an annual net debt to EBITDA ratio, the calculation of this ratio is based on the current operating quarter
results added to the previous 3 operating quarters in order to deliver an annual result. 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.
As at 30 June 2019 the Group did not hold an unconditional right to defer settlement of the loan, and the loan was therefore
required to be reclassified as current on this basis. Subsequent to the year end, the Group received a full written waiver of the
financial breach from the lenders.
31.
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.
2019
$’000
2018
$’000
78
53
64
ANNUAL REPORT 2019 ALTURA
80
NOTES TO THE
FINANCIAL STATEMENTS CONTINUED
Altura Mining Limited and Controlled Entities
Notes to the Financial Statements (continued)
FOR THE YEAR ENDED 30 JUNE 2019
32.
COMMITMENTS
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 $425,000 (2018: $388,600). 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 2019.
Capital expenditures contracted for at the balance sheet date but not recognised
in the financial statements
Property, plant and equipment
Mine development at cost
c)
Operating leases
The Group has entered into operating leases for spodumene storage at
Wedgefield, office premises in Perth, Western Australia and in 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
2019
$’000
2018
$’000
978
-
978
-
5,577
5,577
853
2,571
-
3,424
254
58
-
312
65
ALTURA ANNUAL REPORT 2019
81
DIRECTORS'
DECLARATIONAltura Mining Limited and Controlled Entities
Directors’ Declaration
In the Directors’ opinion:
(a)
The financial statements and notes set out on pages 17 to 65 are in accordance with the Corporations Act 2001 and:
32 to 80
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 2019 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
Director
Brisbane, 30 September 2019
66
ANNUAL REPORT 2019 ALTURA
82
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 2019, 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 2019
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.
Emphasis of matter
Without modifying our opinion, we draw attention to Note 1 of the financial report which indicates that the
consolidated entity incurred a loss after tax of $26.7m (2018: loss of $12.8m) and a negative current asset
deficiency of $180.3m (2018: surplus of $15.3m). At year-end the consolidated entity had $9.5m (2018:
$28.8m) of cash available while needing to refinance a loan note facility of $179.1 million by August 2020.
These conditions, along with other matters as set forth in Note 1, indicate the existence of a material
uncertainty that may cast significant doubt about the consolidated entity’s ability to continue as a going
concern and therefore, the consolidated entity may be unable to realise its assets and discharge its liabilities
in the normal course of business.
The financial report of the consolidated entity does not include any adjustments in relation to the
recoverability and classification of recorded asset amounts or to the amounts and classification of liabilities
that might be necessary should the consolidated entity not continue as a going concern.
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.
ALTURA ANNUAL REPORT 2019
83
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.
1. Altura Lithium Project Mine Assets – Recognition and Measurement
Why significant
How our audit addressed the key audit matter
As at 30 June 2019 mine assets relating to the Altura
Lithium Project of $277.4 million have been capitalised
and subsequently transferred to a depreciating asset
from the date of commercial production as disclosed in
Note 14. The consolidated entity’s accounting policy in
respect of the Altura Lithium Project Mine Assets is
detailed in Note 1.
The Altura Lithium Project Mine Assets – recognition and
measurement is a key audit matter due to:
•
•
the significance of the balance (being 85% 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;
• whether commercial production was achieved;
• whether depreciation
rates applied are
appropriate;
• whether disclosure is appropriate; and
• whether facts and circumstances indicate that
for
the mine assets should be
impairment.
tested
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 Altura Lithium Project Mine Assets.
In assessing this key audit matter, we involved senior
audit team members who understand the industry.
Our audit procedures included, amongst others:
•
•
•
•
•
•
•
•
obtaining a project management report and
holding discussions with the directors and
management to confirm that the mine project
is operating as forecasted;
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 and ensuring costs
capitalised during the year comply with the
recognition and measurement criteria of AASB
116 for qualifying assets;
obtaining evidence to confirm management’s
assessment that commercial production was
achieved from 1 March 2019, including but not
limited to the review of nameplate capacity,
review of production reports, interviews with
mine operations team and review of capital
expenditure budgets;
reviewing the transfer of mine development
expenditure to a depreciating mine asset;
obtaining supporting documentation including
external reports to validate the LOM (Life of
Mine) 26 year period over which the mine
asset is depreciated;
performing a physical inspection of the mine
site, including mine site tour and observation
of mine site assets capitalised. This inspection
and observation was conducted by senior
members of the engagement team;
interviews with staff on mine, including the
authorised mining licensee; and
assessing whether any facts or circumstances
existed to suggest impairment testing was
required.
ANNUAL REPORT 2019 ALTURA
84
2. Borrowings – Loan Note Facility – Classification, Measurement and Disclosure
Why significant
How our audit addressed the key audit matter
As at 30 June 2019 the consolidated entity held a loan
note facility of $179.1 million as described in Note 17.
The consolidated entity’s accounting policy in respect of
the loan note facility is detailed in Note 1.
Borrowings - Loan Note Facility – Classification,
Measurement and Disclosure is a key audit matter due
to:
•
•
the significance of the balance (being 75.9% of
total liabilities); and
the level of complexity and judgement applied in
determining the correct treatment in accordance
132 Financial
with AASB
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;
• whether the impact of debt covenant breaches
on the loan classification has been appropriately
disclosed; and
• management’s plan and
the consolidated
entity’s capacity concerning the repayment of
the borrowing facility.
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:
•
•
•
•
•
•
the
technical advice concerning
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;
reviewing the debt covenant breaches incurred
during the year with reference to the loan
agreement, to ensure the impact on loan note
classification and
is
appropriate; and
reviewing management’s forecasted plans for
the
repayment
consolidated entity’s ability to repay the facility
by the maturity date.
related disclosure
assessment
treatment
with
and
of
ALTURA ANNUAL REPORT 2019
85
Other Information
The Directors are responsible for the other information. The other information comprises the information
included in the consolidated entity’s Annual Report, but does not include the financial report and our auditor’s
report thereon.
Our opinion on the financial report does not cover the other information and we do not express any form of
assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information and, in
doing so, 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. If, based on the work we
have performed, we conclude that there is a material misstatement of this other information, we are required
to report that fact. We have nothing to report in this regard.
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
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
ANNUAL REPORT 2019 ALTURA
86
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.
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 2019.
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.
Opinion
In our opinion, the Remuneration Report of Altura Mining Limited for the year ended 30 June 2019, complies
with section 300A of the Corporations Act 2001.
PKF BRISBANE AUDIT
LIAM MURPHY
PARTNER
30 SEPTEMBER 2019
BRISBANE, AUSTRALIA
ALTURA ANNUAL REPORT 2019
ADDITIONAL ASX
INFORMATION
87
SCHEDULE OF MINERAL PROPERTIES
Location
Tenement Number
Interest
Pilbara, Western Australia
Tanami, Northern Territory
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
E 45/5416
E 45/5480
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
L 45/484
L 45/485
L 45/492
L 45/496
L 45/517
L 45/524
EL 26626
ELA 26627
EL 26628
EL 29828
Tabalong, South Kalimantan
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
Catanduanes, Philippines
Albay Region, Philippines
Bislig Region, Philippines
COC 202 (Area 17) – Surigao del Sur
Key to tenement type:
E, EL: Exploration Licence; G: General Purpose Lease; L: Miscellaneous Licence; M, ML: Mining Lease; P: Prospecting Licence
100%
100%
100%
100%
100%
100%
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%
ANNUAL REPORT 2019 ALTURA 88
ADDITIONAL ASX
INFORMATION CONTINUED
ISSUED CAPITAL
The issued capital of the company as at 30 September 2019 consists of 2,325,462,506 fully paid ordinary
shares, and 148,797,979 listed options (expiring 28 February 2022).
DISTRIBUTION OF SHARE AND OPTION HOLDERS AS AT 30 SEPTEMBER 2019
Number of holders: 13,113
Holders of less than a marketable parcel: 4,243
NUMBER OF HOLDERS IN THE FOLLOWING DISTRIBUTION CATEGORIES:
Fully paid ordinary shares
1–1,000
1,001–5,000
5,001–10,000
10,001–100,000
100,001 and over
Total
Shares
409
3,254
2,015
5,576
1,859
13,113
Options
5
2
360
919
76
1,362
20 LARGEST SHAREHOLDERS – FULLY PAID ORDINARY SHARES
The names of the 20 largest shareholders as at 30 September 2019 are as follows:
Rank
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
TOTAL
Holder name
Shanshan Forever International Co., Ltd
Shazo Holdings Pty Ltd
MT Smith
Farjoy Pty Ltd
HSBC Custody Nominees (Australia) Limited
JP Morgan Nominees Australia Limited
Citicorp Nominees Pty Ltd
PK & MA Mantell
AC Buckler
P & MC Bevilacqua
JS & ML Brown
BT Kuan
BNP Paribas Nominees Pty Ltd (IB AU Nominees A/c)
Xue Investments Pty Ltd
BNP Paribas Nominees Pty Ltd (DRP A/c)
E.M. Enterprises (Qld) Pty Ltd
NT Young
N Young Investments Pty Ltd
SY Chua
Lionergy Limited
Units % of issued shares
19.41%
12.01%
7.95%
3.32%
2.53%
2.38%
1.91%
1.51%
1.40%
1.18%
1.12%
0.99%
0.78%
0.56%
0.55%
0.55%
0.45%
0.35%
0.33%
0.30%
59.57%
451,361,249
279,287,306
184,807,935
77,312,862
58,728,428
55,231,349
44,309,177
35,133,083
32,486,065
27,480,000
25,998,914
23,000,000
18,134,681
13,047,555
12,855,221
12,700,000
10,570,000
8,071,801
7,692,308
7,089,983
1,385,297,917
ALTURA ANNUAL REPORT 2019 ADDITIONAL ASX
INFORMATION CONTINUED
89
20 LARGEST OPTION HOLDERS – FULLY PAID ORDINARY SHARES
The names of the 20 largest option holders as at 30 September 2019 are as follows:
Rank
Holder name
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
Shazo Holdings Pty Ltd
Farjoy Pty Ltd
SY Chua
Sand King Pty Ltd
HSBC Custody Nominees (Australia) Limited (No 2 A/c)
Z International (HKG) Ltd
DG & AB Carson
ML Francke
LJ Cobban
Mastermines (Australia) Pty Ltd
CS Fourth Nominees Pty Ltd (HSBC Custody 11 A/c)
M1nt Property Pty Ltd
WJ Reid
P Ainsworth
BT Kuan
AP & BM Mantell
DJ Wang
Citicorp Nominees Pty Ltd
GHJC Pty Ltd
Gillam Super Investments Pty Ltd
Units % of issued shares
58,466,808
39.29%
7,741,003
3,846,154
3,595,000
2,933,329
1,906,125
1,393,726
1,370,000
1,355,850
1,341,758
1,326,923
1,269,164
1,210,592
1,048,695
1,000,000
1,000,000
1,000,000
745,945
713,697
708,311
5.20%
2.58%
2.42%
1.97%
1.28%
0.94%
0.92%
0.91%
0.90%
0.89%
0.85%
0.81%
0.70%
0.67%
0.67%
0.67%
0.50%
0.48%
0.48%
TOTAL
93,973,080
63.15%
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
Shanshan Forever International Co., Ltd
AC Buckler (Shazo Holdings Pty Ltd)
MT Smith
VOTING RIGHTS
ORDINARY SHARES
Shares
451,361,249
311,773,371
184,807,935
Options
Nil
58,466,808
48,695
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.
ANNUAL REPORT 2019 ALTURA 90
ADDITIONAL ASX
INFORMATION CONTINUED
LISTED OPTIONS
Options do not have voting rights until such options are exercised as fully paid ordinary shares.
ON MARKET BUY BACK
There is no current on market buy back of Altura shares.
UNLISTED WARRANTS
The total number of unlisted warrants on issue as at 30 September 2019 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 original three loan note holders have exercised 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.
ALTURA ANNUAL REPORT 2019 91
MINERAL RESOURCES AND
ORE RESERVES STATEMENT
PILGANGOORA LITHIUM DEPOSIT
WESTERN AUSTRALIA
Mineral Resource Estimate
The previous Mineral Resource estimate in the 2018 annual report was released to the ASX on 28 May 2018.
The current estimate was announced on 9 October 2019.
Both the current and previous Mineral Resource estimates were prepared by Cube Consulting Pty Ltd.
Mining methods used on site have incurred less dilution than was previously modelled and expected.
The June 2019 model uses smaller block estimates (5mEW x 5mNS x 3mRL) to better simulate
the ‘clean’ mining method used on site. Tighter geological modelling used by Cube based upon pit
observations reflects the mining actuals for the past twelve months. The increased recovered Li2O
grade allowed the cut-off grade to be reduced in order to meet the feed requirements of the processing
plant. The majority of the difference between the current and previous resource estimates is the result
of mining depletion.
The revised resource modelling, together with depletion of 17,600 tonnes Li2O through 12 months of mining,
as well as the adjustment of the cut-off grade to 0.30% Li2O, has led to a net 2% reduction in overall Li2O
tonnage within the estimate.
Mineral Resource Estimate Comparison
JORC
resource
category
Measured
Indicated
Sub-total
Inferred
Total
Current estimate (0.30% Li2O cut-off grade) Previous estimate (0.40% Li2O cut-off grade)
Tonnes
(Mt)
7.4
34.2
41.6
4.1
45.7
Li2O
(%)
1.23
1.03
1.07
0.95
1.06
Li2O
(tonnes)
Tonnes
(Mt)
91,000
353,000
444,000
39,000
483,000
8.7
38.0
46.7
3.8
50.5
Li2O
(%)
1.12
1.00
1.02
0.92
1.01
Li2O
(tonnes)
97,000
380,000
477,000
35,000
512,000
Ore Reserve Estimate
The previous Ore Reserve estimate in the 2018 annual report was released to the ASX on 28 May 2018. The
current estimate was announced on 9 October 2019.
Both the current and previous Ore Reserve estimates were prepared by Cube Consulting Pty Ltd.
The Mineral Resources reported are inclusive of the Ore Reserves reported. The Ore Reserves are
reported at a 0.30% Li2O cut-off, which is the same as the 0.30% Li2O cut-off reported in the Mineral
Resources. This cut-off is above the theoretical economic cut-off grade and has been selected to achieve
a target feed grade.
The majority of the difference between the current and previous reserve estimates is the result of mining
depletion. When considering the net effect of the tonnage and grade against the Ore Reserve estimate – with
a commencement of 432,000 tonnes Li2O, less mining depletion of 17,600 tonnes Li2O equates to 414,400
tonnes Li2O delivering a 2% net decrease in overall Li2O tonnage within the estimate.
ANNUAL REPORT 2019 ALTURA 92
MINERAL RESOURCES AND
ORE RESERVES STATEMENT CONTINUED
Ore Reserve Estimate Comparision
JORC
resource
category
Proved
Probable
Total
Current estimate (0.30% Li2O cut-off grade) Previous estimate (0.43% Li2O cut-off grade)
Tonnes
(Mt)
7.2
30.5
37.6
Li2O
(%)
1.22
1.05
1.08
Li2O
(tonnes)
87,000
320,000
407,000
Tonnes
(Mt)
8.3
32.8
41.1
Li2O
(%)
1.14
1.03
1.05
Li2O
(tonnes)
94,000
338,000
432,000
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.
Altura has a Mineral Resource and Ore Reserve Steering Committee (MRORSC) in place. 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
ALTURA ANNUAL REPORT 2019 MINERAL RESOURCES AND
ORE RESERVES STATEMENT CONTINUED
93
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 9 October 2019. 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.
ANNUAL REPORT 2019 ALTURA 94
NOTES
ALTURA ANNUAL REPORT 2019 ALTURAMINING.COM