Altura Mining Limited Annual Report 2020

Plain-text annual report

ANNUAL REPORT 2020 DIRECTORS James Brown – Managing 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 John Lewis CHIEF EXECUTIVE OFFICER Alex Cheeseman REGISTERED OFFICE Level 9, 863 Hay Street Perth WA 6000 Email: info@alturaltd.com Website: alturamining.com ACN 093 391 774 AUDITORS PKF Perth Level 5, 35 Havelock Street Perth West WA 6005 SHARE REGISTRY Link Market Services Limited Level 12, QV1 Building 250 St George’s Terrace Perth WA 6000 AUSTRALIAN SECURITIES EXCHANGE Code: AJM, AJMOB CORPORATE DIRECTORY CONTENTS 1 2 Highlights 10 Resource Development and Exploration 31 5 Message from the Managing Director 13 Sustainability 34 7 Review of Operations 16 Directors' Report 35 Auditor's Independence Declaration Consolidated Statement of Profit and Loss Consolidated Statement of Other Comprehensive Income 36 Consolidated Balance Sheet 37 38 Consolidated Statement of Changes in Equity Consolidated Statement of Cash Flows 39 Notes to the Financial Statements 88 Directors' Declaration 90 Independent Auditor’s Report 98 Additional ASX Information 102 Competent Persons Statements ANNUAL REPORT 2020 ALTURA 2 HIGHLIGHTS MINING METRICS – FY2020 Total Material Mined Ore Mined Strip Ratio 2.62 Million bcm 1.67 Million wmt 3.5:1 PRODUCTION NUMBERS – FY2020 Ore Processed 1.42 Million wmt Feed Grade 1.23 Per cent Tonnes Concentrate Produced 181,263 wmt ALTURA ANNUAL REPORT 20203 OPERATING CASH COST – FY2020 TOTAL RECORDABLE INJURY FREQUENCY RATE (TRIFR) ENVIRONMENTAL COMPLIANCE USD$358.25 /wmt (FOB/C1) 5.71 Trending down from 12.49 10O% SALES OFFTAKE AGREEMENTS 148,051 dmt sold and shipped 3 new agreements secured REVENUE $106.3 million AUD STATE ROYALTIES & NATIVE TITLE PARTY PAYMENTS $5.41m AUD ANNUAL REPORT 2020 ALTURAMESSAGE FROM THE MANAGING DIRECTOR MESSAGE FROM THE MANAGING DIRECTOR 5 DEAR FELLOW SHAREHOLDERS, As you would all be aware certain events have occurred since the end of the 2020 financial year which have had a profound impact on our company. This Annual Report was originally prepared and due to be issued in October 2020 but the events that occurred in late October 2020 meant Directors were legally restricted from finalising and releasing the document. With the company back under control of the Directors since 5 March 2021, we have undertaken a number of retrospective compliance activities in order to support our re-listing application with the ASX. The auditing, sign-off and release of this report is one of the compliance requirements. The content of the report has, for the most part, been left to reflect the Company’s position in the second half of the 2020 calendar year. I would like to thank our loyal shareholder base for your ongoing support throughout this difficult period. Your Directors are committed to working towards delivering our shareholders long-term value. As frustrating as the events of the past are, they cannot be undone. We need to look forward, the long-term outlook for lithium, as the world continues to transition to a battery-supported future, remains bright. I would like to highlight and praise the efforts of the entire Altura team, who worked tirelessly to ensure the ongoing operational success of our project under such challenging conditions. A number of personal concessions were made by all Altura staff during the uncertain times as we all tried to keep our business in a sound fiscal and operating position. Unfortunately, the actions of our debt holders meant our recapitalisation plans were stifled. (spodumene) What remains undisputed, is that over the 2020 financial year, we successfully cemented Altura as a reliable, low cost, high-quality producer of lithium oxide feedstock. The successful transformation and growth of the operation was underpinned by cash operating costs that were in the lowest quartile of the published peer group of global hard rock producers. The level of production and sales across the first full year of commercial production was extremely pleasing. We produced just over 180,000 wet metric tonnes, representing 80% of nameplate. To operate consistently at those levels during such challenging conditions was a testament to our entire team. Sales to our diverse offtake customer base was impressive, with almost 150,000 wet metric tonnes shipped. The solid sales numbers and the continued demand we received reflected the quality of our product and the strength of our offtake partners in a weak market environment. The health, safety and wellbeing of Altura staff and contractors was always critical to our business. We were proud of our safety record and the improvements made over the year. I was very proud of our quick and effective response to deal with the COVID-19 pandemic. We were quick to put in place a clear and detailed action plan to ensure the safety of our people. This resulted in little interruption to our site activities and ensured there was no interruption to operations. The battery materials market and the electric vehicle revolution continue to reinforce the long-term fundamentals of our industry. Significant investment is continuing into the upstream markets and we believe that similar investment will flow through to the material production sector in due course. While the ultimate outcome has been frustrating, we should all be proud of what was been achieved operationally by this Company and our people. We now look to the future and establishing what we all believe will again be a great Australian company. James Brown Managing Director ANNUAL REPORT 2020 ALTURAREVIEW OF OPERATIONS REVIEW OF OPERATIONS 7 MINING Mining operations were completed as planned during the financial year, with 2.62 million bank cubic metres of total material mined. A total of 1.67 million wet metric tonnes (wmt) of ore and 5.86 million wmt of waste was mined. The mining strip ratio for the financial year was 3.5:1, which was in line with the long-term mining plan. To ensure material movements aligned with the annual mining plan, a one-in-three nightshift operation was introduced by the mining contractor. Altura intends to continue this night shift arrangement for the next 12 months to meet the budgeted waste movement and ore feed requirements. Continuous improvements around drill and blast activities were implemented throughout the year, focussed on achieving better fragmentation of the ore. The outcome was increased productivity of the mining fleet leading to reduced unit operating costs. Altura finished the financial year with approximately 118,000t stockpiled on the run of mine pad and approximately 22,000t of crushed stocks. PRODUCTION The processing plant ran at commercial production levels for the entire financial year. Quarterly production was consistent, ranging between 42,282 to and 47,181 wmt, resulting in a total of 181,263 wmt of lithium concentrate for the year. Of the lithium concentrate produced, approximately 56% was coarse material and 44% fine material. Recoveries averaged 59% for the financial year, which was below forecast. The operations team has completed a number of studies and identified a path to further increase recoveries. These continuous improvement works are ongoing. Plant availability for the full year was 90% and utilisation of available time 96%. Preventative maintenance strategies continue to be evolved through increased understanding and operation of the assets, with focus on equipment and material specification upgrades to improve asset reliability and mean time between failure. The site laboratory service provider produced ongoing analysis to support geology, exploration and plant operations throughout the year. A total of 37,374 samples were delivered and reported on, the majority of which were for grade/plant operations control. The laboratory contractor also performed routine quality assurance/quality control activities throughout the year. The contracted logistics operator hauled 174,085 wmt of product from site to the Wedgefield storage facility. During the year, the logistics Contractor commenced haulage via triple road trains, delivering efficiency and cost savings to the operation. The operation experienced subtle quarter on quarter operating cost variations, with average costs for the year in line with expectations. Altura delivered an average C1 unit cost of USD$358.25/wmt. C1 cost excludes royalties, freight, corporate overheads and financing costs. The C1 cost places Altura as a globally cost- competitive operation. HEALTH AND SAFETY The health and safety of Altura staff and contractors is a primary concern for the Board and Management. Altura was quick to enact a formal management plan with the onset of the COVID-19 pandemic, providing clear information for the workforce to follow and ensure their safety. As such, Altura was able to maintain operations throughout the pandemic period with no interruptions to operations. The Total Recordable Injury Frequency Rate (TRIFR) continued to trend downward from 12.49 to 5.71. While the trend is promising, safety is never taken for granted and it continues to be front and centre with our workforce. Ultimately, Altura takes a zero- harm attitude to health and safety and continues to strive for that outcome. Altura has been proud to promote a holistic approach to health and wellbeing through supporting both ANNUAL REPORT 2020 ALTURA8 Indian Ocean Port Hedland BHP Railway Airport 35km y a w h s t a l H i g a o s t C e o r t h W N R o y H i l l R a i l w a y G r e a t N o r t h e r n H i g h w a y E 45/5137 E 45/5416 E 45/5280 M arble B ar R o a d E 45/5609 Wodgina Access Road E 45/2287 134km E 45/5608 E 45/3488 E 45/2363 E 45/5348 PLS Lithium Mine PLS Lithium Mine E 45/4894 110km E 45/2287 Altura Camp Wodgina Lithium Mine Wodgina Lithium Mine P 45/3149 E 45/5480 E 45/2363 E 45/5347 Altura Lithium Mine M 45/1230, 1231, 1260 Legend Altura Mining Tenement (Live) Altura Exploration Tenement (Live) Altura Exploration Tenement (Pending) E 45/5700 T o N e w m a n B H P R a i l w a y F M G R a i l w a y LOCALITY Port Hedland WESTERN AUSTRALIA Kalgoorlie Perth Marble Bar 0 20km mental and physical health initiatives throughout the year. This has included deliberate activities around R U OK? day, support to individual Movember campaigns and participating as a Company in the Perth City to Surf. SALES AND MARKETING Shipping and exports were scheduled at similar rates to production output, with a total of 148,051 dry metric tonnes (dmt) (157,594 wmt) loaded aboard 12 separate vessels from Berth 2 at Port Hedland, and delivered to numerous Chinese ports. Altura completed a record single shipment in January 2020, delivering 24,500 wmt aboard the Clipper Kamoshio to long-term offtake partner Ganfeng. Altura also completed a record sales and shipping Quarter for June, with 60,950 wmt loaded across four individual shipments. All load port and disport weights and analysis results were measured/ analysed and reported by internationally accredited, independent third parties. Altura’s product averaged 5.9% Li2O across all shipments during the year. Altura’s product continues to gain market share due to its high- quality and suitability for conversion into high-purity lithium chemicals required to support the electric vehicle revolution. throughout the year, with Altura announced a number of changes to offtake arrangements the introduction of established lithium hydroxide and lithium carbonate producers Shandong Ruifu and Guangdong Weihua Corporation (owner/operator of Zhiyuan Lithium) in 2019. Later in the year Altura further announced an offtake agreement with Hunan Yongshan Lithium Co., Ltd (owned by parent company Ningbo Shanshan Co., Ltd), one of Altura’s major Shareholders. In parallel, Altura terminated its remaining offtake arrangement with Shaanxi J&R Optimum Energy and reduced tonnage allocated to Lionergy Limited. All offtake agreements are based on minimum contracted tonnages and have pricing formula linked to agreed indices and reference points. Altura continues to invest heavily in its existing relationships with all offtake partners. Importantly, Altura continues to work with each offtake partner to manage shipments and commercial matters during a challenging time throughout the lithium industry. Altura’s offtake partners have contracts and commercial linkages to globally significant and relevant companies which are leading the electric vehicle revolution. Altura is well-placed to capitalise on the forecast increasing demand of quality lithium chemicals. ALTURA ANNUAL REPORT 2020 Indian Ocean Port Hedland BHP Railway Airport E 45/5137 E 45/5416 35km y a w h s t a l H i g a o s t C e o r t h W N R o y H i l l R a i l w a y G r e a t N o r t h e r n H i g h w a y E 45/5280 M arble B ar R o a d E 45/5609 Wodgina Access Road E 45/2287 E 45/5608 E 45/3488 E 45/2363 134km E 45/5348 PLS Lithium Mine PLS Lithium Mine E 45/4894 110km E 45/2287 Altura Camp Wodgina Lithium Mine Wodgina Lithium Mine P 45/3149 E 45/5480 E 45/2363 E 45/5347 Altura Lithium Mine M 45/1230, 1231, 1260 Legend Altura Mining Tenement (Live) Altura Exploration Tenement (Live) Altura Exploration Tenement (Pending) E 45/5700 T o N e w m a n B H P R a i l w a y F M G R a i l w a y LOCALITY Port Hedland WESTERN AUSTRALIA Kalgoorlie Perth Marble Bar 0 20km RESOURCE DEVELOPMENT AND EXPLORATION 10 RESOURCE DEVELOPMENT AND EXPLORATION A revised Mineral Resource and Ore Reserve Estimate for the Pilgangoora Altura Lithium Project whilst being prepared as a matter of routine business, was not released in 2020 due to the events initiated in late October 2020. This report therefore references the last released figures issued on 9 October 2019. Some commentary on the Mineral Resource and Reserves has been provided where appropriate. MINERAL RESOURCE ESTIMATE (0.30% Li2O CUT-OFF GRADE) – 30 JUNE 2019 JORC category Measured Indicated Measured & Indicated Inferred Total Cut-off Li2O% 7.4 34.2 41.6 4.1 45.7 Tonnes (Mt) 1.23 1.03 1.07 0.95 1.06 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% 1.38 1.29 1.31 1.41 1.32 Li2O% 1.22 1.05 1.08 Fe2O3% 91,000 353,000 444,000 39,000 483,000 Li2O Tonnes 74,000 354,000 428,000 38,000 466,000 Fe2O3% 1.40 1.29 1.31 Li2O Tonnes 87,000 320,000 407,000 Based on current production rates, the Mineral Resources and Reserves at Pilgangoora will support a long mine life, with potential for further increases as a result of additional exploration activities. 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. Fourteen 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. The structurally complex deposit is intersected by a number of faults. 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. Evaluation of geochemical sample analyses and detailed mineralogy work has identified primary and secondary mineralisation phases. The distribution of lithium and other mineral attributes estimated within the pegmatite ALTURA ANNUAL REPORT 2020RESOURCE DEVELOPMENT AND EXPLORATION continued 11 bodies is complex and the mineralisation tends to be heterogeneous. EXPLORATION LITHIUM During FY2020, Altura has focussed its exploration activities at the Altura Lithium Project to further lithological and structural advance detailed mapping, mineralogical studies and improved geological modelling techniques based upon the reinterpretation of pegmatite boundaries. Confidence in the revised model is high based upon a sound interpretation of the in-pit mapping aligned with previously completed drilling data and the knowledge gained through mining activities over the past year. Altura completed a strategic review of its Earn- in Agreement (see ASX announcement on 4 June 2020) with lithium project developer Sayona Mining Limited over its Pilbara lithium portfolio. The tenements retained by Sayona following the strategic review cover an area of 971km2 and are located near the Altura Lithium Project. Detailed geological mapping work was completed by Altura on the Mallina (E47/2983), Deep Well (E47/3829), Tabba Tabba (E45/2364) and Red Rock (E45/4716) tenements. Altura have identified the Mallina tenement as the best tenement for further development and have commenced planning targeted exploration activities. GOLD Altura completed detailed geological mapping along a geological and structural corridor of approximately 4 kilometres in length that extends between the historic Cleopatra and Hazelby Prospects on Altura’s E45/2363 tenement. This work led to the discovery of 37 gold nuggets at the Lucky 13 Prospect and the identification of the Venta and Khasanah Prospects. Geologically, the location of the nugget find was significant, given the proximity to an altered contact between a thick highly strained komatiite intrusive and high-Mg basalt unit. The area is also located near the mineralised Lynas and Cleopatra-Hazelby Faults and associated fault splays. Three different styles of gold mineralisation including low sulphidation epithermal, intrusive- related and orogenic shear replacement types have been identified by Altura in the Cleopatra- Hazelby corridor. These targets will be tested by soil sampling and drilling. ANNUAL REPORT 2020 ALTURASUSTAINABILITY SUSTAINABILITY 13 Altura is focused on the continued development of a long-term and strategic sustainability plan that will guide the Company’s operations. This includes a key focus on the management and development of social and environmental policies. Altura operates in a Tier-1 mining jurisdiction and ensures there is a high-level of focus on sustainable operations and practices, including a continued focus on managing natural resources and minimising waste. Tailings management forms a critical part of managing the risks of waste produced from mining and processing. These risks can range from potential consequences of a Tailings Storage Facility failure through to groundwater impact due to seepage. Altura completes routine inspections across its operations, which includes the monitoring and audits on its Tailings Storage Facility, ensuring the facility is operating in accordance with design and government regulations. In addition, water is recycled from the Tailings Storage Facility and reused in the processing plant circuit. Altura continues to identify further opportunities to enhance its sustainability initiatives and in the coming financial year will continue to pursue options including: Solar panel electricity generation for project support infrastructure and camp facilities Camp vegetation and ‘greening’ Green kitchen waste composting systems Feral fauna and weed eradication programs including trapping and baiting Vegetation rehabilitation trials using native seed sources and a range of germination techniques ANNUAL REPORT 2020 ALTURA 14 Njamal traditional owners, the Eaton family on their land, approximately 400 metres from Altura’s Mine Operations Centre on tenement M45/1230 ENVIRONMENT COMMUNITY Altura is committed to ensuring that it operates in an environmentally sustainable manner and in accordance with relevant legislation, regulatory approvals and statutory obligations. Altura signed a Native Title Agreement with the Njamal People and Kariyarra People, and a Pastoral Access Agreement is in place with Wallareenya and Strelley Stations. To ensure compliance with environmental approvals and legal obligations, the Altura Lithium Project is managed its approved in accordance with Environmental Management Plan (EMP), regulatory approvals and best practice environmental policies and procedures. During the year, Altura undertook groundwater, riparian vegetation and air quality monitoring and implemented weed and feral fauna eradication programs. Altura also submitted a number of environmental compliance and audit reports in order to comply with regulatory obligations and importantly, had no reportable environmental incidents or non-compliances. Altura also received all statutory environmental approvals required to construct the next two stages of its Tailings Storage Facility and commenced work toward implementing vegetation rehabilitation trials in accordance with its approved Mine Closure Plan. Altura continues to engage with the Njamal People and has conducted Cultural Awareness Training as well as several heritage surveys across the site. The Company is committed to indigenous employment and engaging local contractors. Native Title Implementation Committee meetings are held with the Njamal People biannually to ensure compliance with the Native Title Agreement and the continuing alignment of both parties in project development and exploration activities. During the year, Altura sponsored the Yandeyarra School Art Program and assisted with the procurement of cool rooms and a power generator for the Warralong and Strelley Aboriginal community kitchen to assist with COVID-19. Altura also welcomed the Eaton family (Pippingarra Njamal) for a site visit in May and learnt more about the family's link to the Land. ALTURA ANNUAL REPORT 2020DIRECTORS' REPORT 16 DIRECTORS' REPORT `Altura Mining Limited and Controlled Entities Directors’ Report FOR THE YEAR ENDED 30 JUNE 2020 (CONTINUED) 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 2020. 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 (resigned 8 April 2021) • Mr Allan Buckler • Mr Dan O’Neill • Mr Beng Teik Kuan • Mr Xiaoyu Dai (appointed 10 September 2019) COMPANY SECRETARY The name of the secretary in office during the financial year and up to the date of this report is as follows: • Mr Damon Cox (resigned 16 April 2021) • Mr John Lewis (appointed 16 April 2021) PRINCIPAL ACTIVITIES The principal activity of the Group during the year was the mining, processing and sale of lithium ore at the Altura Lithium Project in the Pilbara region of Western Australia. Substantial change has occurred to the Group’s operations post year end. The event details are itemised in the subsequent event comments on page 19. OPERATING AND FINANCIAL REVIEW Overview Altura Mining Limited (“AJM”) is an ASX listed entity that was focused on mining operations and exploration at the Altura Lithium Project at Pilgangoora in Western Australia. Refer to subsequent events for information on the mining operations post 30 June 2020 on page 19. The operating and financial review is to be read in conjunction with the subsequent events note. Review of Operations Mining and Production Following the declaration of commercial production in March 2019, the key focus of Altura over the past 12 months has been the delivery of stable levels of production and meeting its class leading cost structure. In the first full financial year of commercial production, Altura produced 181,263 wet metric tonnes (wmt) of high-grade lithium concentrate, which is 82% of the Project’s nameplate capacity. This annual production outcome has been based on consistent quarterly production volumes ranging between 45,000 to 47,000 wmt, other than the March quarter which was impacted by adverse weather events associated with tropical cyclones. During the year the total ore mined was 1.668 million wmt and the total waste mined was 5.865 million wmt. This equates to a strip ratio (waste:ore) of 3.5:1 which provides comparatively low mining costs for the Project. The mining operations were expanded by the continuation of a one-in-three nightshift operation with the mining contractor NRW. This ensured that the movements in materials met the budgeted waste movement and ore feed requirements. The consistent mining grades and processing volumes were underpinned by sound grade control of ore processed, which was managed with the support of a contracted site laboratory service provider. Haulage was also enhanced during the reporting period by the introduction of triple road trains by logistics contractor Qube. This move will provided further operational efficiencies and cost savings to the operation. In addition, the stable production levels have been complemented by planned and preventative maintenance on the crusher and the coarse and fines processing circuits. The Project’s maintenance strategies are evolving through the experience of operating the processing plant and will continue to be modified to ensure consistency of production. 4 ALTURA ANNUAL REPORT 2020 17 DIRECTORS' REPORT continued `Altura Mining Limited and Controlled Entities Directors’ Report FOR THE YEAR ENDED 30 JUNE 2020 (CONTINUED) Although the Company was quietly pleased with the stability of production levels, the objective nonetheless is to achieve nameplate levels of production. Ore mined Waste mined Strip ratio Units wmt wmt Sept Qtr 2019 Dec Qtr 2019 Mar Qtr 2020 June Qtr 2020 Total 476,903 429,890 325,423 435,823 1,668,039 1,484,978 1,493,295 1,357,732 1,528,968 5,864,973 waste:ore 3.1 3.5 4.2 3.5 3.5 Total material mined bcm 670,842 686,501 581,172 683,993 2,622,508 Ore mined grade Li20 Ore processed Lithium concentrate produced % wmt wmt 1.18 1.27 1.27 1.21 1.23% 376,530 345,553 325,258 375,910 1,423,251 45,484 47,181 42,282 46,316 181,263 There were no operational disruptions due to COVID-19. The Company promptly adopted the guidelines prescribed by the State and Commonwealth Governments, including transition to 2 weeks on 2 weeks off rosters with no direct handovers between personnel, increased cleaning regimes and implementation of social distancing protocols. Sales and Marketing Other than the period between mid-January and mid-March when many facilities in China were closed due to COVID-19, shipments of lithium concentrate generally matched the production output during the financial year. During the reporting period a total of 148,053 dmt (157,594 wmt) was loaded aboard 12 separate vessels from the port of Port Hedland. Project milestones were achieved through the reporting period, with a record single shipment of 24,500 wmt shipped to long-term off-take partner Ganfeng in January 2020, and a quarterly sales record of 60,950 wmt in the June 2020 quarter. Altura’s product grade averaged 5.9% Li2O across all shipments and continued to attract market share due to the favorable characteristics of the product and suitability for conversion into high-quality, low-impurity lithium chemicals. During the year Altura increased the number of off-take counterparties with new agreements signed with established lithium hydroxide and lithium carbonate producers Shandong Ruifu, Guangdong Weihua Corporation (owner/operator of Zhiyuan Lithium), and Hunan Yongshan Lithium Co., Ltd, an emerging Lithium Chemicals producer owned by Ningbo Shanshan Co, Ltd. In parallel, Altura terminated its off-take agreement with Shaanxi J&R Optimum Energy and reduced the tonnage allocated to Lionergy Limited. 5 ANNUAL REPORT 2020 ALTURA 18 DIRECTORS' REPORT continued `Altura Mining Limited and Controlled Entities Directors’ Report FOR THE YEAR ENDED 30 JUNE 2020 (CONTINUED) Operating results The Group’s operating loss after providing for income tax and non-controlling interests for the year ended 30 June 2020 was $93,827,087 (2019: loss $26,712,731 ). The Group’s operating loss after providing for income tax from continuing operations for the year ended 30 June 2020 was $89,637,031 (2019: loss $26,571,019). The loss in 2020 includes non-cash costs as follows: • Amortised borrowing costs of $26,424,824 • Depreciation and amortisation of $12,936,948 • Writedown of inventory of $12,215,815 • Impairment of assets held for sale of $4,196,242 and includes further financial costs as follows: Interest on funding facility of $34,206,592 • • Net foreign exchange loss of $3,690,510 Excluding the above items, the Group loss after tax was due to lower revenue which was predominately as a result of a lower spodumene concentrate sales price. The Groups revenue for the year ended 30 June 2020 was $106,336,352 (2019: $39,399,282). The breakdown of revenue in 2020 was as follows: • Revenue from sale of spodumene of $105,538,206 • Revenue from Atlas royalties on Mt Webber of $2,290,536 • Revenue from exploration services of $507,610 Financial position The Group cash and cash equivalents balance as at 30 June 2020 was $2.3 million (2019: $9.4 million). The Group’s cash flow from operating activities was negative $42.8 million (2019: $13.6 million) predominantly due to payment of interest on the loan note facility of $15.9 million and a deficit in operational cash flow of $27.3 million. The Group’s cash flow from investing activities was negative $5.8 million (2019: negative $ 90.3 million) predominantly due to payments for mine properties and property, plant and equipment of $5.5 million. The Group’s net cash flow from financing activities was $41.5 million (2019: $57.4 million) predominantly due to proceeds from various equity raising during the period totalling $42.8million. The net assets of the Group decreased by $35.8 million from $100.8 million to $65.0 million due predominantly to the increase in borrowings balance which is described below. The loan note facility balance, excluding borrowing costs that offset the balance in the financial report, as at 30 June 2020 was A$235.3 million (US$161.5million). This is an increase of A$31.6 million (US$18.6 million) from the 30 June 2019 balance of A$203.7 million (US$142.9 million) due to the capitalisation of the February 2020 interest payment of A$16.2 million (US$11.0 million) and an amendment fee of A$11.7million (US$7.7 million). The AUD equivalent of the US$ loan note facility balance also increased by A$3.7 million due to the weaker AUD:USD foreign exchange rate. Please refer to Note 17 and Note 31 for further details. 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 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. 6 ALTURA ANNUAL REPORT 2020 19 DIRECTORS' REPORT continued `Altura Mining Limited and Controlled Entities Directors’ Report FOR THE YEAR ENDED 30 JUNE 2020 (CONTINUED) MATTERS SUBSEQUENT TO THE END OF THE FINANCIAL YEAR Subsequent to the end of the financial year the following events occurred: 31 July 2020 – Formal request from the Group to its Senior Secured Loan Note Holders (LNH), to extend payment 5 August 2020 – Draft Waiver Letter issued to LNH, subsequently LNH instructed their legal counsel to provide a letter obligations to 31 October 2020 to allow re-structure process to complete. extension (1 week) to allow formal documentation to be completed. 10 August 2020 – The Group entered a trading halt and subsequent suspension from official quotation while refinancing activities were undertaken. 25 August 2020 – LNH provided waiver of all financial obligations and covenants until 31 October 2020 – with 2 milestones: Milestone 1 – 10 September 2020 to present to the LNH some form of non-binding term sheet for an equity, debt, merger proposal; and Milestone 2 – 10 October 2020 to present to the LNH a binding proposal to the LNH and be announced to the market. 26 August 2020 – A credible and well-known participant in the Australian equity market (Bookrunner) commenced a non- deal roadshow to gauge market interest. 10 September 2020 – A prominent Australian-based mining and processing company provided a non-binding indicative offer (NBIO) to Altura and presented to the LNH in accordance with the waiver agreement. 7 October 2020 – LNH were issued with a Term Sheet regarding the recapitalisation process. The Term Sheet was non- binding but allowed the Bookrunner to provide details to equity groups and allow a structure to be agreed with those groups. 9 October 2020 – LNH provided an extension of Milestone 2 from 10 October 2020 to 24 October 2020 due to one large equity group requiring more due diligence time. AJM paid $140,000 of the LNH legal fees for document drafting as part of the recapitalisation process. 14 October 2020 – LNH advised the Company to proceed with document drafting for the re-structure based on the key terms agreed in the Term Sheet – LNH stated that in essence of time the parties should proceed with formal documentation rather than trying to bind the Term Sheet, this followed a few days of negotiation on the Term Sheet. 21 October 2020 – An existing offtake partner committed to an A$66 million cornerstone investment for the proposed equity process, subject to transaction approval at their board meeting on 21 October 2020 – the deal would be announced on the same day, the equity process would launch on week of 26 October 2020. LNH requested Altura hold off on the Offtake partner’s approval until formal documents completed (target 23 October 2020), this would defer approval until Offtake partner’s next board meeting on 29 October 2020. Altura in good faith accepted the LNH request in anticipation of completion and execution of signing documents on the 23 October 2020. 22 October 2020 – The Bookrunner provided a detailed letter of support to the recap process, the Bookrunner also issued LNH with a process timeline and request for them to acknowledge support and terms of the agreements. 23 October 2020 – The Company’s legal counsel provided LNH legal counsel with final drafts of all legal agreements for review and execution. Sunday 25 October 2020 – Altura becomes aware of a potential deal (from a credible media outlet) being struck by the LNH and other parties involved in the process – request sent to other parties for clarification and compliance to the existing Non-Disclosure Agreements in place between Altura and said parties; 25 October 2020 – Notice of Default issued to Altura by LNH (midnight) citing breach of Milestone 2, which came about by Altura in good faith agreeing to the LNH request on the 21 October 2020 of the announcement of the Offtake partner’s deal and the request by the LNH on the 14 October 2020 to proceed with formal documentation on the recapitalisation. 26 October 2020 – Notice of Receivers and Administrators received, Altura had no time to challenge, KordaMentha (KM) appointed as Receivers and Managers. 26 October 2020 – Cor Cordis (CC) appointed as Administrators. 28 October 2020 PLS announce conditional agreement to acquire Altura Lithium Operations stating PLS had entered into an Implementation Deed with the senior secured loan noteholders of Altura. 29 October 2020 – KM announce the LNH have entered into an implementation agreement with Pilbara Minerals (PLS). 1 December 2020 – PLS announce a share sale agreement to acquire the Group’s wholly owned subsidiary Altura Lithium Operations Pty Ltd (ALO). 11 December 2020 - Creditors approve the ALO deed of company arrangement (DOCA) subject to completion of an equity raising by PLS. 20 January 2021 – PLS completes the acquisition of ALO as per the terms of the share sale agreement. ALO was sold for a total consideration of $270 million. As at the date of this report, Directors are unable to quantify the financial impact on operations as a result of the transaction. KM retire as Receivers and Managers. 5 March 2021 – ACN 647 358 987 Pty Ltd entered into a DOCA resulting in the CC deed of administration ceasing and administration for the Group reverting to its Directors. ACN 647 358 987 Pty Ltd has loaned funds to Altura and provided funds to the Altura Mining Limited Creditors Trust. 16 April 2021 – Altura announced the appointment of Alex Cheeseman as CEO of the company, the resignation of Paul Mantell as a director and the appointment of John Lewis as Company Secretary. 3 May 2021 Altura announced it had executed a Letter of Intent (LOI) to enter into an Earn-in Option Agreement (EOA) for 60% project equity in Lithium Corporation’s (“Lithium Corp.”) Fish Lake Valley (FLV) Project located in central- west Nevada, USA. 7 ANNUAL REPORT 2020 ALTURA 20 DIRECTORS' REPORT continued `Altura Mining Limited and Controlled Entities Directors’ Report FOR THE YEAR ENDED 30 JUNE 2020 (CONTINUED) Post the disposal of ALO and the balance of the Australian based assets, the Altura Group retains its interest in the Tabalong Project (whilst searching for a suitable party to divest the project) and investment in Lithium Corporation, Nevada USA. Funding provided from the Group’s current Australian Directors has funded payment of the remaining liabilities and providing sufficient working capital to sustain its operations during the Group’s re-quotation process on the ASX. Material contracts with Key Management Personnel post June 2020 Alex Cheeseman, Chief Executive Officer – (appointed 16 April 2021) the agreement is of no fixed term and allows for payment of an annual cash salary, reviewed each year, and superannuation. Six 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 Key Management Personnel Remuneration post June 2020 During the period after the financial year ending 30 June 2020 the following payments, we made to key management personnel in accordance with their service contracts. Remuneration excludes termination payments as the details require confirmation from KordaMentha/Cor Cordis and performance rights require completion of the re-listing process on the ASX. Estimated remuneration of Key Management Personnel Remuneration 310,185 Executive Directors Non-Executive Directors 83,700 Other key management personnel 180,832 No further events have occurred since 20 May 2021, which would require disclosure in the financial report. FUTURE DEVELOPMENTS, PROSPECTS AND BUSINESS STRATEGIES Post the sale of ALO and the Group’s Australian based assets referred to in the subsequent event matters the Company’s objective is to create shareholder value through acquisition and development of lithium-based exploration tenements and other supplementary mining activities that deliver strong cash flows for the Group, and resultant regular dividends for shareholders. Key Business Strategies Altura’s strategic focus comprises: • Acquisition and exploration of a portfolio of tenements to identify a potential lithium resource, and to maximise the value of any other minerals on the tenements including gold. • Partnering investment and project opportunities with Lithium Corporation • Conducting its exploration operations sustainably across the environment, health and safety, people and community relations. • Divestment of the Tabalong coal project. Future Prospects and Material Business Risks The Company’s future financial performance and financial outcomes are dependent upon a range of risk factors typically encountered by lithium mining companies. These include: Identify and successfully explore tenements suitable for resource development. • • Cost and access to funds for working capital, refinancing or project expansion purposes. • Movements in the Australian Dollar / US Dollar exchange rate can impact on revenue and debt. 8 ALTURA ANNUAL REPORT 2020 21 DIRECTORS' REPORT continued `Altura Mining Limited and Controlled Entities Directors’ Report FOR THE YEAR ENDED 30 JUNE 2020 (CONTINUED) DIVIDENDS There were no dividends paid or declared during the year ended 30 June 2020 (2019: Nil). SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS Post the end of the financial year as discussed in the financial report and elsewhere in this Directors Report the Group has transitioned through significant change in its composition and business activities. With the Group’s release from external management it’s focus apart from exploring new investment opportunities is progressing through the requirements to be relisted on the ASX and return value to its shareholders. OTHER MATTERS Civmec Legal Action On 17 July 2020, Altura was advised by Civmec Construction and Engineering Pty Ltd that it had lodged a writ and statement of claim in the Supreme Court of Western Australia against Altura Lithium Operations Pty Ltd (ALO) in relation to the process plant construction and installation work at the Altura Lithium Project. On 20 July 2020, Altura was served with this statement of claim. Altura proceeded to defend these proceedings until the Group was placed under external management. ALO was acquired by Pilbara Minerals Limited (PLS) following a deed of company arrangement (DOCA) process. As a result of the DOCA process and acquisition by PLS, ALO is no longer a subsidiary of the Company. The Company was not a party to the proceedings. The proceedings were dismissed by a consent order on 4 February 2021. 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. Subsequent to the year end all rights and obligations were transferred with the assets of its Australian mining, development and exploration activities. 9 ANNUAL REPORT 2020 ALTURA 22 DIRECTORS' REPORT continued `Altura Mining Limited and Controlled Entities Directors’ Report FOR THE YEAR ENDED 30 JUNE 2020 (CONTINUED) INFORMATION ON DIRECTORS Mr James Brown (Managing Director) Qualifications Graduate Diploma in Mining from University of Ballarat Experience Mr Brown is a mining engineer with over 35 years' experience in the mining industry in Australia and Indonesia, including the last 12 years in the chief executive role at Altura. His mining development and operations experience includes the New Acland and Jeebropilly mines in South East Queensland, the Adaro and Multi Harapan Utama operations in Indonesia and Blair Athol in the Bowen Basin in Central Queensland. Other current directorships in listed entities Sayona Mining Limited Former directorships in last 3 years None Special responsibilities Chief Executive Officer Interests in shares and options 31,788,301 ordinary shares in Altura Mining Limited 385,000 options over ordinary shares in Altura Mining Limited Mr Paul Mantell (Executive Director) (resigned 8 April 2021) Qualifications Bachelor of Commerce from the University of Queensland and a Fellow of CPA Australia Experience Mr Mantell is an accountant with more than 35 years’ corporate experience in the mining and associated industries. He has been involved in all aspects of accounting and finance, financial reporting, taxation and administration, 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 Special responsibilities None Interests in shares and options 36,899,238 ordinary shares in Altura Mining Limited 385,000 options over ordinary shares in Altura Mining Limited 10 ALTURA ANNUAL REPORT 2020 23 DIRECTORS' REPORT continued `Altura Mining Limited and Controlled Entities Directors’ Report FOR THE YEAR ENDED 30 JUNE 2020 (CONTINUED) Mr Allan Buckler (Non-Executive Director) Qualifications Certificates 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. Other current directorships in listed entities Sayona Mining Limited Former directorships in last 3 years None Special responsibilities Member of the Audit & Risk Committee Member of the Remuneration & Nomination Committee Interests in shares and options 459,738,505 ordinary shares in Altura Mining Limited 58,466,808 options over ordinary shares in Altura Mining Limited Mr Dennis O’Neill (Independent Non-Executive Director) Qualifications Bachelor of Science in geology from the University of Western Australia 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 None Special responsibilities Chairman of the Remuneration & Nomination Committee Member of the Audit & Risk Committee Interests in shares 13,633,336 ordinary shares in Altura Mining Limited 11 ANNUAL REPORT 2020 ALTURA 24 DIRECTORS' REPORT continued `Altura Mining Limited and Controlled Entities Directors’ Report FOR THE YEAR ENDED 30 JUNE 2020 (CONTINUED) Mr Beng Teik Kuan (Independent Non-Executive Director) Qualifications Bachelor of Engineering (University of Malaya) Experience Mr Kuan is an engineer with considerable experience in bulk handling and terminal operations, including responsibility for the development and management of the Pulau Laut Coal Terminal in South Kalimantan, Indonesia. He also has experience in Indonesia, Malaysia and Singapore with tin dredging operations, managing rubber, palm oil and cocoa processing factories, and managing palm oil bulk terminals. He was appointed a director in November 2007. Other current directorships in listed entities None 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 26,600,000 ordinary shares in Altura Mining Limited 1,000,000 options over ordinary shares in Altura Mining Limited 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. He is the Managing Director of Shanshan Forever Lithium Co., Ltd. Other current directorships in listed entities None Former directorships in last 3 years None Special responsibilities None Interests in shares Nil 12 ALTURA ANNUAL REPORT 2020 25 DIRECTORS' REPORT continued `Altura Mining Limited and Controlled Entities Directors’ Report FOR THE YEAR ENDED 30 JUNE 2020 (CONTINUED) COMPANY SECRETARY Mr Damon Cox (resigned 16 April 2021) – 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. Mr John Lewis (appointed 16 April 2021) – Mr Lewis has a Bachelor of Business Degree and is a Chartered Accountant with more than 25 years post qualification experience. Mr Lewis has extensive corporate governance and company reorganisation experience. Since 2007, Mr Lewis has worked predominantly in the resource development and mining sector in Australia and overseas as a Company Director, CFO and Company Secretary. REMUNERATION REPORT (AUDITED) This report details the nature and amount of remuneration for directors and other key management personnel. It does not detail information on the remuneration of key management post this date. 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 2020 year, no 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 23. Group performance, shareholder wealth and director and executive remuneration The Group has recorded the following earnings from continuing operations over the last five years: Revenues and sundry income EBITDA * NPBT * NPAT * Dividends paid 2020 107,023,428 (16,047,598) (89,615,963) (89,637,031) - 2019 39,571,130 (3,967,691) (26,283,568) (26,571,019) - 2018 1,675,168 (13,279,929) (13,120,803) (12,712,487) - 2017 1,600,959 (6,417,320) (6,448,799) (5,914,752) - 2016 1,485,611 (11,290,052) (30,839,474) (31,618,016) - * Definitions: EBITDA = Earnings before interest, tax, depreciation and amortisation NPBT = Net profit before tax NPAT = Net profit after tax & minority interest 13 ANNUAL REPORT 2020 ALTURA 26 DIRECTORS' REPORT continued `Altura Mining Limited and Controlled Entities Directors’ Report FOR THE YEAR ENDED 30 JUNE 2020 (CONTINUED) REMUNERATION REPORT (AUDITED) (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. Rodney Wheatley, Chief Financial Officer – the agreement is of no fixed term and allows for payment of an annual cash salary, reviewed each year, and superannuation. Six 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. 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. 14 ALTURA ANNUAL REPORT 2020 27 DIRECTORS' REPORT continued `Altura Mining Limited and Controlled Entities Directors’ Report FOR THE YEAR ENDED 30 JUNE 2020 (CONTINUED) REMUNERATION REPORT (AUDITED) (CONTINUED) Key Management Personnel Remuneration Short-term benefits Post employment Share based payments Total Cash salary and fees $ Cash bonus $ Bonus shares $ Non- monetary benefits $ Super- annuation $ Termination payments $ Performance rights $ $ Performance rights as a percentage of total % Name 2020 Non-executive directors A Buckler D O’Neill B Kuan X Dai i) Sub total non-executive directors Executive directors J Brown P Mantell Other key management personnel R Wheatley ii) D Cox N Young iii) P Robinson iv) 72,000 84,000 84,000 57,995 297,995 465,423 325,025 223,929 150,000 120,000 48,333 Total for key management personnel compensation Total compensation 1,332,710 1,630,705 2019 Non-executive directors A Buckler D O’Neill B Kuan Z Tong v) Sub total non-executive directors Executive directors J Brown P Mantell Other key management personnel P Robinson iv) C Evans vi) N Young D Cox Total for key management personnel compensation 72,000 84,000 84,000 57,399 297,399 436,278 325,025 267,771 191,151 180,000 150,000 1,550,225 Total compensation 1,847,624 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 6,840 7,980 7,980 - 22,800 104,792 - 13,809 25,000 - 20,687 20,786 14,250 - - - - - - - - - 3,912 11,400 33,323 - 6,393 82,847 - - - - - - - 78,840 91,980 91,980 57,995 320,795 570,215 363,834 - - - - - - 29,955 274,670 10.9% - - - 184,937 168,635 137,573 143,200 77,829 116,170 29,955 1,699,864 143,200 100,629 116,170 29,955 2,020,659 - - - - - 6,840 7,980 7,980 - 22,800 98,334 14,214 - 24,999 - - - - - - - - - - - - - 78,840 91,980 91,980 57,399 320,199 265,000 799,612 132,500 496,738 39,750 455,295 124,85 0 - - - 22,924 22,144 62,716 132,500 408,511 - - 3,848 20,371 17,100 14,250 - - 26,500 26,500 227,448 211,121 124,85 0 124,8 50 136,768 101,417 62,716 622,750 2,598,726 136,768 124,217 62,716 622,750 2,918,925 - - - - - - - 33.1% 26.7% 8.7% 32.4% 11.7% 12.6% i) Mr Dai was appointed as a director in September 2019 ii) Mr Wheatley was appointed as Chief Financial Officer in September 2019 iii) Mr Young retired in February 2020 iv) Mr Robinson was appointed Chief Operating Officer in February 2019 and resigned in September 2019 v) Mr Tong resigned as a director in April 2019 vi) Mr Evans resigned in February 2019 Long service leave payments of $31,497 (2019: Nil) were made during the year 15 ANNUAL REPORT 2020 ALTURA 28 DIRECTORS' REPORT continued `Altura Mining Limited and Controlled Entities Directors’ Report FOR THE YEAR ENDED 30 JUNE 2020 (CONTINUED) REMUNERATION REPORT (AUDITED) (CONTINUED) 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. There were no performance rights on issue as at 30 June 2019. A total of 8,500,000 performance rights were granted in May 2020 to key management personnel and other senior staff. For each recipient, the performance rights comprised three vesting conditions: 1) A company-wide safety performance hurdle (20% of amount); 2) 3) Continuous employment service condition (40%). Individual KPIs (40%); and The rights awarded 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 performance and service conditions. The following performance rights were on issue to key management personnel as at 30 June 2020: R Wheatley Granted number 1,000,000 1,000,000 Vesting 31 Jan 2021 1,000,000 1,000,000 No shares were issued to directors and key management personnel on the vesting of performance rights during the year ended 30 June 2020. 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 18 Directors’ meetings, 2 Audit & Risk Committee meetings and 3 Remuneration & Nomination Committee meetings held. Directors’ Meetings Audit & Risk Committee Number eligible to attend 18 18 18 18 18 17 Number attended 18 18 14 16 17 10 Number eligible to attend - - 2 2 2 - Number attended - - 1 2 2 - J Brown P Mantell A Buckler D O’Neill B Kuan X Dai Number eligible to attend - - 3 3 3 - Remuneration & Nomination Committee Number attended - - 1 3 3 - INDEMNIFICATION AND INSURANCE OF DIRECTORS AND OFFICERS The Company has entered into Deeds of Indemnity with all of its directors in accordance with the Company’s Constitution. During the financial year the Company paid a premium to insure the directors, officers and managers of the Company and its controlled entities. The insurance contract requires that the amount of the premium paid is kept confidential. 16 ALTURA ANNUAL REPORT 2020 29 DIRECTORS' REPORT continued `Altura Mining Limited and Controlled Entities Directors’ Report FOR THE YEAR ENDED 30 JUNE 2020 (CONTINUED) OPTIONS Under the terms of the Placement and the Securities Purchase Plan undertaken in February/March 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. In addition, there were 74,400,000 unlisted options over ordinary shares of Altura Mining Limited outstanding. These unlisted options were issued to LDA Capital on 1 May 2020 (following approval at a general meeting held on 30 April 2020) under the terms of an equity standby facility provided by LDA Capital. The options have an exercise price of $0.0586 cents per option and have an expiry date of 1 May 2023. 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. NON-AUDIT SERVICES The Company’s changed auditor during the period, subject to shareholder approval at the upcoming Annual General meeting in November 2020, from PFK Brisbane Audit to PKF Perth with ASIC consenting to the change on 11 July 2020. PKF Perth, did not provide any non-audit services to the Company during the year ended 30 June 2020. Fees paid or payable to PKF Brisbane Audit, being the previous auditor the Group, during the year ending 30 June 2020 total $nil (2019: nil). Details of the amounts paid or payable to the auditor for non-audit services provided during the financial year by the auditor are outlined in note 30 to the financial statements. The directors are satisfied that the provision of non-audit services during the financial year, by the auditor (or by another person or firm on the auditor's behalf), is compatible with the general standard of independence for auditors imposed by the Corporations Act 2001. The directors are of the opinion that the services as disclosed in note 30- to the financial statements do not compromise the external auditor's independence requirements of the Corporations Act 2001 for the following reasons: • all non-audit services have been reviewed and approved to ensure that they do not impact the integrity and objectivity of the auditor; and • none of the services undermine the general principles relating to auditor independence as set out in APES 110 Code of Ethics for Professional Accountants issued by the Accounting Professional and Ethical Standards Board, including reviewing or auditing the auditor's own work, acting in a management or decision-making capacity for the company, acting as advocate for the company or jointly sharing economic risks and reward. 17 ANNUAL REPORT 2020 ALTURA 30 DIRECTORS' REPORT continued `Altura Mining Limited and Controlled Entities Directors’ Report FOR THE YEAR ENDED 30 JUNE 2020 (CONTINUED) 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 2020 has been received and is included on page 31 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, 25 May 2021 18 ALTURA ANNUAL REPORT 2020 31 PKF Perth AUDITOR’S INDEPENDENCE DECLARATION TO THE DIRECTORS OF ALTURA MINING LIMITED In relation to our audit of the financial report of Altura Mining Limited for the year ended 30 June 2020, to the best of my knowledge and belief, there have been no contraventions of the auditor independence requirements of the Corporations Act 2001 or any applicable code of professional conduct. PKF PERTH SIMON FERMANIS PARTNER 25 MAY 2021 WEST PERTH, WESTERN AUSTRALIA Level 4, 35 Havelock Street, West Perth, WA 6005 PO Box 609, West Perth, WA 6872 T: +61 8 9426 8999 F: +61 8 9426 8900 www.pkfperth.com.au PKF Perth is a member firm of the PKF International Limited family of legally independent firms and does not accept any responsibility or liability for the actions or inactions of any individual member or correspondent firm or firms. Liability limited by a scheme approved under Professional Standards Legislation. 19 ANNUAL REPORT 2020 ALTURA FINANCIAL REPORT 34 CONSOLIDATED STATEMENT OF PROFIT AND LOSS FOR THE YEAR ENDED 30 JUNE 2020 CONTINUING OPERATIONS Revenue Cost of sales Gross profit OTHER INCOME Sundry income EXPENSES Administration costs Employee benefits expense Exploration expenditure written off Other expenses Profit on sale of subsidiary 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 Note 5(a) 5(c) 2020 $'000 2019 $'000 106,336 39,399 (123,682) (31,961) (17,346) 7,438 5(b) 687 172 5(g) 5(d) 5(f) 5(e) 17 7(a) (5,010) (4,448) (218) (160) 1,202 (25,293) (3,691) (28,984) (3,344) (5,725) - (188) - (1,647) (6,466) (8,113) (34,207) (26,425) (10,566) (7,605) (89,616) (26,284) (21) (287) (89,637) (26,571) Loss from discontinued operations after tax 3 (4,190) (142) Net profit/(loss) for the year Profit/(loss) attributable to: Owners of Altura Mining Limited Non-controlling interest (93,827) (26,713) (93,736) (26,665) (91) (48) (93,827) (26,713) (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 (3.75) (3.59) (0.17) (1.40) (1.39) (0.01) The above Consolidated Statement of Profit and Loss should be read in conjunction with the accompanying Notes. ALTURA ANNUAL REPORT 202035 CONSOLIDATED STATEMENT OF OTHER COMPREHENSIVE INCOME FOR THE YEAR ENDED 30 JUNE 2020 PROFIT/(LOSS) FOR THE YEAR 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 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 Non-controlling interest Net profit/(loss) for the year Total comprehensive income/(loss) attributable to members of the parent entity arises from: Continuing operations Discontinued operations Note 2020 $'000 2019 $'000 13 637 (1,377) (740) (2,732) (2,522) (5,254) (94,567) (31,967) (94,556) (31,885) (11) (82) (92,567) (31,967) (94,556) (31,885) (11) (82) (92,567) (31,967) (90,158) (4,398) (31,229) (656) (94,556) (31,885) The above Consolidated Statement of Other Comprehensive Income should be read in conjunction with the accompanying Notes.. ANNUAL REPORT 2020 ALTURA36 CONSOLIDATED BALANCE SHEET AS AT 30 JUNE 2020 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 Right-of-use assets Total non-current assets CURRENT LIABILITIES Trade and other payables Borrowings Short term provisions Lease liabilities Liabilities classified as held for sale Total current liabilities NON-CURRENT LIABILITIES Borrowings Lease liabilities Rehabilitation provision Total non-current liabilities Total liabilities Net assets EQUITY Contributed equity Reserves Accumulated losses Capital and reserves attributable to owners of Altura Mining Limited Non-controlling interest Total equity Note 2020 $'000 2019 $'000 8 9 11 10 12 3c 13 14 15 21 16 17 18 21 3c 17 21 20 22 22 2,298 9,395 26 22,515 66 5,739 6,370 46,409 1,923 288,492 3,312 1,757 295,484 42,955 17,736 1,901 524 2,363 65,479 191,693 1,300 18,435 211,428 276,907 64,986 290,860 (2,359) (223,741) 64,760 226 64,986 9,494 2,149 78 20,720 73 1,155 9,903 43,572 1,286 288,680 3,265 - 293,231 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 The above Consolidated Balance Sheet should be read in conjunction with the accompanying Notes. * The Consolidated Balance Sheet presented refers to account balances at 30 June 2020. With the appointment of the Administrators and Receivers exercising their management control over the Group these balances may have changed significantly post year end, The Directors Report and the Subsequent Events Note (note 31) highlight the events taken place post 30 June 2020. ALTURA ANNUAL REPORT 202037 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 30 JUNE 2020 Contributed equity $'000 Accumulated losses $'000 Options & performance rights reserve $'000 Change in fair value – market valuation $'000 Foreign currency translation reserve $'000 Non- controlling interests $'000 Total (1,588) (2,488) 298 93,353 (83) (31,967) Balance as at 30 June 2018 192,893 (103,340) 1,602 3,488 Total comprehensive income for the year Transactions with owners in their capacity as owners: - (26,665) - (2,732) Issue of shares – employee bonus payment Contributions of equity, net of transaction costs Transfer from share based payment reserve to equity 125 38,118 2,819 Share based payments transactions - - - - - (2,819) 1,217 - - - - Sub-total 41,062 (26,665) (1,602) (2,732) Balance as at 30 June 2019 233,955 (130,005) Balance as at 30 June 2019 233,955 (130,005) Total comprehensive income for the year - (93,736) Transactions with owners in their capacity as owners: Contributions of equity, net of transaction costs 56,905 Share based payments transactions - - - Sub-total 56,905 (93,736) Balance as at 30 June 2020 290,860 (223,741) - - - 1,802 1,802 1,802 756 756 637 - - - - - - (2,488) (4,076) (4,076) (1,478) - - 637 1,393 (1,478) (5,554) - - - - (83) 215 125 38,118 - 1,217 7,492 100,845 215 100,845 11 (94,566) - - 56,905 1,802 11 (35,859) 226 64,986 The above Consolidated Statement of Changes in Equity should be read in conjunction with the accompanying Notes. ANNUAL REPORT 2020 ALTURA38 CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 30 JUNE 2020 CASH FLOWS FROM OPERATING ACTIVITIES Receipts from customers * Payments to suppliers and employees Sundry income Interest received Interest paid Proceeds from jobkeeper Net cash provided by/(used in) in operating activities 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 disposal of subsidiaries Proceeds from held to maturity investments 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 Transaction costs on issue of shares Proceeds from borrowings Repayment of borrowings Payment of lease liabilities Transaction costs related to borrowing 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 Note 2020 $'000 2019 $'000 89,172 (116,524) - 3 (15,927) 470 (42,806) (619) (5,506) - 260 52 2 (5,811) 42,755 (60) 7,878 (7,878) (504) (714) 41,477 (7,140) 9,513 (65) 2,308 (1,802) (16,202) (11,661) 48,432 (34,953) 31 74 - - 13,584 (1,198) (118,618) 29,463 - - 44 (90,309) 38,548 (569) 19,395 - - - 57,374 (19,351) 28,779 85 9,513 (125) (2,141) (625) 28(b) 27 / 28(c) 27 / 28(c) 28(a) 28(a) 23 * 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. ALTURA ANNUAL REPORT 2020NOTES TO THE 39 FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2020 Altura Mining Limited and Controlled Entities Notes to the Financial Statements (continued) FOR THE YEAR ENDED 30 JUNE 2020 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 25 May 2021 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 As detailed in the subsequent events note the Group was placed into external administration and receivership on the 26th October 2020. The Group’s wholly owned subsidiary Altura Lithium Operations Pty Ltd, which owned the Altura Lithium Project, was sold to a third party to payout the Group’s secured noteholders. The Group was administered externally until it was returned to the Directors on the 5th March 2021. During this period a deed of company arrangement (DOCA) was executed, funds were loaned to the Group for working capital and a creditors trust was established. The Directors have decided to seek a relisting of the company on the ASX. To do so they will need to re- comply with a number of ASX requirements. The purpose of the relisting will be to raise sufficient capital to implement the Key Business Strategies detailed in the Directors Report. Accordingly, the ability of the Company and Group to continue as a going concern is dependent on the relisting of the Company on the ASX and the raising of capital to pursue the Group’s Key Business Strategies. The Directors are confident of succeeding with the relisting and the raising of capital because of the assets now controlled by the Group including the Tabalong Project and the investment in Lithium Corporation based in the USA. If the Directors are unable to relist and raise capital, they require the Company and Group may not be able to continue as a going concern. As such a material uncertainty exists in relation to the ability of the Company and Group to continue as going concerns and realise assets and extinguish liabilities in the normal course of business. 25 ANNUAL REPORT 2020 ALTURA 40 NOTES TO THE FINANCIAL STATEMENTS continued Altura Mining Limited and Controlled Entities Notes to the Financial Statements (continued) FOR THE YEAR ENDED 30 JUNE 2020 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: From 1 July 2019, the group adopted AASB 16 Leases. Refer to Note 21. For further details. AASB No. Title AASB 2014-10 AASB 2018-6 AASB 2018-7 AASB 2019-1 AASB 2019-5 AASB 2020-1 AASB 2020-3 AASB 2020-4 AASB 1060 Amendments to Australian Accounting Standards – Sale or Contributions of Assets between an Investor and its Associate or Joint Venture Amendments to Australian Accounting Standards – Definition of a Business Amendments to Australian Accounting Standards – Definition of Material Amendments to Australian Accounting Standards – References to the Conceptual Framework Amendments to Australian Accounting Standards – Disclosure of the Effect of New IFRS Standards Not Yet Issued in Australia Amendments to Australian Accounting Standards – Classification of Liabilities as Current or Non-current Amendments to Australian Accounting Standards – Annual Improvements 2018 – 2020 and Other Amendment Amendments to Australian Accounting Standards – Covid-19 Related Rent Concessions General Purpose Financial Statements – Simplified Disclosures for For-Profit and Not-for-Profit Tier 2 Entities (Appendix C) Application Issue Date. 1 January 2022 December 2014 1 January 2020 December 2018 1 January 2020 December 2018 1 January 2020 May 2019 1 January 2020 November 2019 1 January 2022 March 2020 1 January 2022 June 2020 1 June 2020 June 2020 1 July 2021 March 2020 ii) 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. iii) 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(o). 26 ALTURA ANNUAL REPORT 2020 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 2020 1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued) b) Carrying value of exploration and evaluation expenditure The Group has capitalised exploration and evaluation expenditure of $3.312 million as at 30 June 2020 (2019: $3.265 million). This amount includes additions of $578,000 during the year for drilling and analysis, and employee remuneration costs for the lithium project. 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 2020 and the results of the subsidiaries for the year then ended. Altura Mining Limited and its subsidiaries together are referred to in this financial report as the Group or Consolidated Entity. The Group controls an entity when the Group is exposed to or has rights to variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. A list of controlled entities is contained in Note 26 to the financial statements. All Australian controlled entities have a June financial year-end and all other controlled entities have a December financial year end. All inter-company balances and transactions between entities in the Group, including any unrealised profits or losses, have been eliminated on consolidation. Accounting policies of subsidiaries have been changed where necessary to ensure consistencies with those policies applied by the Group. Where controlled entities have entered or left the Group during the year, their operating results have been included from the date control was obtained or until the date control ceased. Non-controlling interests, being that portion of the profit or loss and net assets of subsidiaries attributable to equity interests held by persons outside the Group, are shown separately within the equity section of the Consolidated Balance Sheet and in the Consolidated 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. 27 ANNUAL REPORT 2020 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 2020 1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued) iii) Changes in ownership interests The Group treats transactions with non-controlling interests that do not result in a loss of control as transactions with equity owners of the Group. A change in ownership interest results in an adjustment between the carrying amounts of the controlling and non-controlling interests to reflect their relative interests in the subsidiary. Any difference between the amount of the adjustment to non-controlling interests and any consideration paid or received is recognised in a separate reserve within equity attributable to the owners of Altura Mining Limited. When the Group ceases to have control, joint control or significant influence, any retained interest in the entity is remeasured to its fair value with the change in carrying amount recognised in profit or loss. This fair value becomes the initial carrying amount for the purposes of subsequently accounting for the retained interest as an associate, jointly controlled entity or financial asset. In addition, any amounts previously recognised in other comprehensive income in respect of that entity are accounted for as if the Group had directly disposed of the related assets or liabilities. This may mean that amounts previously recognised in other comprehensive income are reclassified to profit or loss. If the ownership interest in a jointly controlled entity or an associate is reduced but joint control or significant influence is retained, only a proportionate share of the amounts previously recognised in other comprehensive income are reclassified to profit or loss where appropriate. d) Business combinations The acquisition method of accounting is used to account for all business combinations, including business combinations involving entities or businesses under common control, regardless of whether equity instruments or other assets are acquired. The consideration transferred for the acquisition of a subsidiary comprises the fair values of the assets transferred, the liabilities incurred and the equity interests issued by the Group. The consideration transferred also includes the fair value of any contingent consideration arrangement and the fair value of any pre-existing equity interest in the subsidiary. Acquisition related costs are expensed as incurred with the exception of stamp duty. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are, with limited exceptions, measured initially at their fair values at the acquisition date. On an acquisition by acquisition basis, the Group recognises any non-controlling interest in the acquiree either at fair value or at the non-controlling interest’s proportionate share of the acquiree’s net identifiable assets. The excess of the consideration transferred and the amount of any non-controlling interest in the acquiree and the acquisition date fair value of any previous equity interest in the acquiree over the fair value of the Group’s share of the net identifiable assets acquired is recorded as goodwill. If those amounts are less than the fair value of the net identifiable assets of the subsidiary acquired and the measurement of all amounts has been reviewed, the difference is recognised directly in profit or loss as a gain on acquisition of subsidiaries. Where settlement of any part of cash consideration is deferred, the amounts payable in the future are discounted to their present value as at the date of exchange. The discount rate used is the entity’s incremental borrowing rate, being the rate at which a similar borrowing could be obtained from an independent financier under comparable terms and conditions. Contingent consideration is classified either as equity or a financial liability. Amounts classified as a financial liability are subsequently remeasured to fair value with changes in fair value recognised in profit or loss. 28 ALTURA ANNUAL REPORT 2020 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 2020 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. 29 ANNUAL REPORT 2020 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 2020 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. 30 ALTURA ANNUAL REPORT 2020 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 2020 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 units of production Depreciation Rate 10% – 50% 25% 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 The Group lease various offices and a warehouse. Rental contracts are typically made for fixed terms but may have extension options. Lease terms are negotiated on an individual basis and contain a wide range of different terms and conditions. The lease agreements do not impose any covenants, but leased assets may not be used as security for borrowing purposes. Until the 2019 financial year, leases of property, plant and equipment were classified as either finance or operating leases. Payments made under operating leases (net of any incentive received from the lessor) were charged to the profit or loss on a straight-line basis over the period of the lease. From 1 July 2019, leases are recognised as a right-of-use asset and a corresponding liability at the date at which the leased asset is available for use by the Group. Each lease payment is allocated between the liability and finance cost. The finance cost is charged to profit or loss over the lease period so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period. The right-of-use asset is depreciated over the shorter of the assets useful life and the lease term on a straight-line basis. Assets and liabilities arising from a lease are initially measured on a present value basis. Lease liabilities include the net present value of the following lease payments. • Fixed payments (including in-substance fixed payments), less any lease incentives receivable • Variable lease payment that are based on an index or a rate 31 ANNUAL REPORT 2020 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 2020 1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued) • Amounts expected to be payable by the lessee under residual value guarantees • The exercise price of a purchase option if the lessee is reasonably certain to exercise that option, and • Payments of penalties for terminating the lease, if the lease term reflects the lessee exercising that option The lease payments are discounted using the interest rate implicit in the lease. If that rate cannot be determined, the lessee’s incremental borrowing rate is used, being the rate that the lessees would have to pay to borrow the funds necessary to obtain an asset of similar value in a similar economic environment with similar terms and conditions. Right-of-use assets are measured at cost comprising the following: The amount of the initial measurement of lease liability • Any lease payments made at or before the commencement date less any lease incentives received • Any initial direct costs, and • Restoration costs Payments associated with short-term leases and leases of low-value assets are recognised on a straight-line basis as an expense in profit or loss. Short term leases are leases with a lease term of 12 months or less. Low- value assets comprise IT equipment. j) Impairment of non-financial 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 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. 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. l) Impairment of financial assets 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. 32 ALTURA ANNUAL REPORT 2020 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 2020 1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued) 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 and amortised over the life of the asset, 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. 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. 33 ANNUAL REPORT 2020 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 2020 1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued) 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. c. Impairment of non-financial assets The Group assesses, at each reporting date, whether there are indications that an asset may be impaired. If impairment indicators or triggers exist, or when annual impairment testing for an asset is required, the Group estimates the asset’s recoverable amount. An asset’s recoverable amount is the higher of an asset’s or cash generating unit’s (CGU’s) fair value less costs of disposal and its value in use. It is not always necessary to determine both an asset’s fair value less costs to sell and its value in use. If either of these amounts exceeds the asset’s carrying amount, the asset is not impaired, and it is not necessary to estimate the other amount. The recoverable amount is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or groups of assets. When the carrying amount of an asset or CGU exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount. 34 ALTURA ANNUAL REPORT 2020 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 2020 1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued) o) Significant accounting estimates and judgements (continued) d. Rehabilitation The calculation of the provisions for rehabilitation and the related mine development assets rely on estimates of the cost to rehabilitate an area which is currently disturbed based on legislative requirements and future costs. The costs are estimated on the basis of a mine closure plan. Cost estimates take into account expectations about future events including the mine lives, the time of rehabilitation expenditure, regulations, inflation and discount rates. When these expectations change in the future, the provision and where applicable, the mine development assets are recalculated in the period in which they change. e. Derivatives The fair value of financial instruments must be estimated for recognition and measurement purposes. The fair value of financial instruments traded in active markets such as available-for-sale securities is based on quoted market prices at the reporting date. The quoted market price used for financial assets held by the Group is the current bid price. The fair value of financial instruments that are not traded in an active market are determined using valuation techniques that use observable market data at the reporting date where it is available. f. Income taxes The Group is subject to income taxes in Australia and jurisdictions where it has foreign operations. Significant judgement is required in determining the provision for income taxes. There are transactions and calculations undertaken during the ordinary course of business for which the ultimate tax determination is uncertain. The Group estimates its tax liabilities based on the Group’s understanding of the tax law. Where the final tax outcome of these matters is different from the amounts that were initially recorded, such differences will impact the current and deferred income tax assets and liabilities in the period in which such determination is made. 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 23. This formula takes into account the terms and conditions under which the instruments were granted. h. Mines under construction Expenditure is transferred from ’Exploration and evaluation assets’ to ‘Mine 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. 35 ANNUAL REPORT 2020 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 2020 1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued) o) Significant accounting estimates and judgements (continued) i. Mines under construction COVID-19 Pandemic – Judgement has been exercised in considering the impacts of the COVID-19 Pandemic has or may have on Group. This consideration extends to the nature of product sold, customers, supply chains, staffing and geographical regions in which the Group operates in. Other than addressed above or in specific notes, there does not appear either any significant impact upon the financial statements or any significant uncertainties with respect to events or conditions which may impact the Group unfavourably as a reporting date or subsequently as a result of the COVID-19 Pandemic. The Board continues to actively monitor the situation. 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. 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. 36 ALTURA ANNUAL REPORT 2020 51 NOTES TO THE FINANCIAL STATEMENTS continued Altura Mining Limited and Controlled Entities Notes to the Financial Statements (continued) FOR THE YEAR ENDED 30 JUNE 2020 1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued) s) Revenue Revenue is recognised at an amount that reflects the consideration to which the consolidated entity is expected to be entitled in exchange for transferring goods or services to a customer. For each contract with a customer, the consolidated entity: identifies the contract with a customer; identifies the performance obligations in the contract; determines the transaction price which takes into account estimates of variable consideration and the time value of money; allocates the transaction price to the separate performance obligations on the basis of the relative stand-alone selling price of each distinct good or service to be delivered; and recognises revenue when or as each performance obligation is satisfied in a manner that depicts the transfer to the customer of the goods or services promised. Variable consideration within the transaction price, if any, reflects concessions provided to the customer such as discounts, rebates and refunds, any potential bonuses receivable from the customer and any other contingent events. Such estimates are determined using either the 'expected value' or 'most likely amount' method. The measurement of variable consideration is subject to a constraining principle whereby revenue will only be recognised to the extent that it is highly probable that a significant reversal in the amount of cumulative revenue recognised will not occur. The measurement constraint continues until the uncertainty associated with the variable consideration is subsequently resolved. Amounts received that are subject to the constraining principle are recognised as a refund liability. The following is a summary of the revenue recognition for each revenue stream: 1) 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. 2) 3) 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. 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. 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. 37 ANNUAL REPORT 2020 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 2020 1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued) 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. 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. 38 ALTURA ANNUAL REPORT 2020 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 2020 1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued) 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. 39 ANNUAL REPORT 2020 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 2020 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 2020 $’000 2,298 9,395 26 1,923 13,642 42,955 211,253 254,208 2019 $’000 9,494 2,149 78 1,286 13,007 40,778 179,612 220,390 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$161.5 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 2020, the Group held funds in foreign currency amounting to US$585,000 (2019: US$3,934,000). The Group does not currently enter into any hedging arrangements. 40 ALTURA ANNUAL REPORT 2020 55 NOTES TO THE FINANCIAL STATEMENTS continued Altura Mining Limited and Controlled Entities Notes to the Financial Statements (continued) FOR THE YEAR ENDED 30 JUNE 2020 2. FINANCIAL RISK MANAGEMENT (continued) Foreign currency risk sensitivity analysis At 30 June 2020, 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% ii) Price risk 2020 $’000 674 (674) 674 (674) 2019 $’000 1,317 (1,317) 1,317 (1,317) 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% iii) Interest rate risk 2020 $’000 2019 $’000 - - 192 (192) - - 129 (129) 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 2020, 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% 2020 $’000 (2,355) 2,355 (2,355) 2,355 2019 $’000 (1,987) 1,987 (1,987) 1,987 Term deposits have been treated as a floating rate due to the short-term nature of the deposits. 41 ANNUAL REPORT 2020 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 2020 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: i) Will not have sufficient funds to settle transactions on the due date; ii) Will be forced to sell financial assets at a value which is less than what they are worth; or iii) May be unable to settle or recover a financial asset at all. The Group manages liquidity risk by monitoring forecast cash flows. d) Financial instrument composition and maturity analysis The tables below reflect the undiscounted contractual settlement terms for financial instruments of a fixed period of maturity, as well as management’s expectations for the settlement period for all other financial instruments. As such the amounts may not reconcile to the balance sheet. Weighted average effective interest rate Floating interest rate Within 1 year Fixed interest rate maturing 1 to 5 years Over 5 years Non- interest bearing Total 2020 % 2019 % 2020 $’000 2019 $’000 2020 $’000 2019 $’000 2020 $’000 2019 $’000 2020 $’000 2019 $’000 2020 $’000 2019 $’000 2020 $’000 2019 $’000 The Group Financial assets: Cash & cash equivalents Trade and other receivables Financial assets 0.25% 1% 2,298 9,494 Term deposit 1% 1% Total financial assets Financial liabilities: Trade & other payables - - Borrowings 15% 15% Total financial liabilities - - - - - - 2,298 9,494 - - - - - - - - - 26 26 - - - - - - 78 78 - - - - - - - - - - - - - - 211,253 179,612 - 211,253 179,612 - - - - - - - - - - - - - - - - - - 2,298 9,494 9,395 2,149 9,395 2,149 1,923 1,286 1,923 1,286 - - 26 78 11,318 3,435 13,642 13,007 42,955 40,778 42,955 40,778 - - 211,253 179,612 42,955 40,778 254,208 220,390 42 ALTURA ANNUAL REPORT 2020 NOTES TO THE FINANCIAL STATEMENTS continued Altura Mining Limited and Controlled Entities Notes to the Financial Statements (continued) FOR THE YEAR ENDED 30 JUNE 2020 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) 57 2020 $’000 42,455 500 42,955 2019 $’000 36,523 4,255 40,778 e) Fair value measurements i) Fair value hierarchy 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: • 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 2020 and 30 June 2019. 2020 Assets Listed investments Total assets 2019 Assets Listed investments Total assets ii) Valuation techniques Level 1 $’000 Level 2 $’000 Level 3 $’000 Total $’000 1,923 1,923 1,286 1,286 - - - - - 1,923 - 1,923 - 1,286 - 1,286 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. 43 ANNUAL REPORT 2020 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 2020 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. The Group obtained an independent expert valuation of the Tabalong Group which included a range of valuation cases. The Group adopted a middle range (preferred) valuation of US$2.75 million on a 100% equity basis. As a result, an impairment loss of $4,196,242 was recorded to write down the asset to its fair value less costs to sell. The ability to progress and complete the sale of the Tabalong Group has been affected by COVID-19. 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 2020. Revenue Impairment (loss) Other income/ (expenses) Loss before income tax Income tax expense 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 2020 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 2019 $’000 - - (142) (142) - (142) (142) 2 2 2020 $’000 - (4,196) 6 (4,190) - (4,190) (4,190) (9) (9) 10 2,967 5 3,388 6,370 627 1,736 2,363 ^ 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. 44 ALTURA ANNUAL REPORT 2020 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 2020 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 $’000 103,538 630 - 104,168 2,798 9 - 2,807 - 48 4,000 4,048 - - (4,000) (4,000) 106,336 687 - 107,023 - 107,023 (27,168) 584 (2,400) - (28,984) 2020 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 328,745 828 5,951 251,901 780 21,863 Other segment information Exploration expenditure Depreciation and amortisation 47 12,734 - 47 - 156 45 - (28,985) (60,631) (21) (89,637) (4,190) (93,827) 333,524 6,369 341,893 274,544 2,363 276,907 47 12,937 - - - - ANNUAL REPORT 2020 ALTURA 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) (1,333) 39,399 172 - 39,571 - 39,571 6,290 (1,018) (6,919) - (1,647) 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 2020 4. SEGMENT INFORMATION (continued) 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 46 - (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 - - - - - ALTURA ANNUAL REPORT 2020 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 2020 4. SEGMENT INFORMATION (continued) Geographical segments The Group’s geographical segments are determined based on the location of the Group’s assets. Exploration expenditure Depreciation and amortisation (369) 12,889 416 48 2020 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 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 Australia $’000 Indonesia $’000 Other $’000 Eliminations $’000 Total $’000 103,538 678 4,000 108,216 2,798 9 - 2,807 - - - - - - (4,000) 106,336 687 - (4,000) 107,023 334,467 822 235 273,537 783 224 Australia $’000 Indonesia $’000 Other $’000 37,802 57 - 37,859 1,597 115 1,333 3,045 325,509 1,258 133 232,862 1,002 188 - - - - - - - 107,023 335,524 6,369 341,893 274,544 2,363 276,907 47 12,937 - - - - Eliminations $’000 Total $’000 - - (1,333) (1,333) - - - - - 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 Capital expenditure Exploration expenditure Depreciation and amortisation 66,621 1,527 4,070 - 143 131 - - - 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 40% (US$27.8 million) and 34% (US$23.6 million ) of mining group’s external revenue. 47 ANNUAL REPORT 2020 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 2020 5. PROFIT / (LOSS) FROM ORDINARY ACTIVITIES (a) Revenue Revenue from sales of product Revenue from exploration services Revenue from royalties Total revenue from ordinary activities (b) Other income Interest received Profit on sale of assets Other income 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 2020 $’000 2019 $’000 103,538 507 2,291 106,336 3 2 682 687 102,239 9,257 12,777 (1,189) 598 123,682 37,802 792 805 39,399 55 115 2 172 29,849 6,103 4,013 (8,850) 846 31,961 ^ Inventory movement includes a $12,215,815 (2019: Nil) write down to net realisable value (d) Other expenses Depreciation of plant & equipment Total other expenses from ordinary activities 160 160 188 188 (e) (f) Net foreign exchange loss The net foreign exchange loss is unrealised and relates to the revaluation of the US$ funding facility and other US$ denominated funds held by the Group. Profit on sale of subsidiary In July 2019 the Company sold its wholly owned subsidiary PT Asiadrill Bara Utama (ABU) a cash amount of US$200,000 (A$296,000). ABU was dormant, therefore the sale has an immaterial impact on the Groups financial statements and is not disclosed as a discontinued operation. (g) Employee benefits expense Employee share scheme expense Bonus paid by way of issue of shares to directors and staff Salaries and on-costs expense Total employee benefits expense 201 - 4,247 4,448 1,217 125 4,383 5,725 48 ALTURA ANNUAL REPORT 2020 NOTES TO THE FINANCIAL STATEMENTS continued Altura Mining Limited and Controlled Entities Notes to the Financial Statements (continued) FOR THE YEAR ENDED 30 JUNE 2020 6. EARNINGS / (LOSS) PER SHARE (a) Basic earnings / (loss) per share From continuing operations, attributable to the ordinary equity holders of the Company From discontinued operations Total basic earnings per share attributable to the ordinary equity holders of the Company (b) Diluted earnings / (loss) per share From continuing operations, attributable to the ordinary equity holders of the Company From discontinued operations 63 2020 cents per share 2019 cents per share (3.59) (0.17) (3.75) (3,59) (0.17) (1.39) (0.01) (1.40) (1.39) (0.01) Total basic earnings per share attributable to the ordinary equity (3.75) (1.40) holders of the Company (c) Weighted average number of ordinary shares used as the denominator in calculating the basic and diluted earnings per share. 2020 Number 2019 number 2,499,149,183 1,912,252,661 2020 $’000 2019 $’000 (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 / (loss) used in the calculation of basic EPS (93,736) (91) (93,827) (26,566) (99) (26,665) 49 ANNUAL REPORT 2020 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 2020 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 2020 $’000 2019 $’000 - 21 - 21 21 - 21 - 287 - 287 287 - 287 (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 (89,616) (4,190) (93,806) (26,284) (142) (26,426) Income tax calculated at the Australian rate of 30% (2019 – 30%) (28,142) (7,928) 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) 3,916 60 24,166 21 21 1,327 403 6,199 286 287 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 – at 30% (2019 – 30%) 48,195 20,442 (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. 50 ALTURA ANNUAL REPORT 2020 NOTES TO THE FINANCIAL STATEMENTS continued Altura Mining Limited and Controlled Entities Notes to the Financial Statements (continued) FOR THE YEAR ENDED 30 JUNE 2020 8. CASH AND CASH EQUIVALENTS Cash at bank and on hand 9. TRADE AND OTHER RECEIVABLES Current Trade and other receivables Provision for doubtful debts 65 2020 $’000 2019 $’000 2,298 9,494 9,591 (196) 9,395 3,195 (1,046) 2,149 Refer to note 1 for more information on the risk management policy of the Group and the credit quality of the Group's trade receivables. Management have considered the impact of COVID-19 on trade and other receivables and do not anticipate a significant deterioration of recoverability beyond the level of current provisioning. 2020 Consolidated 2019 Consolidated 0-30 days $000 1,583 1,847 31-60 days $000 3,746 104 61-90 days $000 344 - 90+ days $000 3,722 198 As at 30 June 2020, $7,812,000 (2019 $302,000) trade receivables were past due but not impaired. 10. INVENTORIES Consumables stores – at cost Product and processing stock – at lower of cost and net realisable value # # Write-down of inventories to net realisable value amounted to $12,215,815 (2019: Nil). These were recognised as an expense during the year 30 June 2020 and included in costs of sales in the Statement of Profit or Loss. 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 0.65% (2019: 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. 51 Total $000 9,395 2,149 2019 $’000 5,746 14,974 20,720 2020 $’000 6,352 16,163 22,515 26 26 78 78 ANNUAL REPORT 2020 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 2020 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 2020 $’000 2019 $’000 55 5,684 5,739 1,286 637 1,923 58 1,097 1,155 4,018 (2,732) 1,286 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 2020 Gross carrying amount Balance at 30 June 2019 Additions Increase/(decrease) in provision for rehabilitation # Transfers Exchange difference Disposals Balance at 30 June 2020 Accumulated depreciation Balance at 30 June 2019 Depreciation expense Exchange difference Disposals Balance at 30 June 2020 Net book value as at 30 June 2020 Property plant and equipment $’000 Mine properties in production $’000 Mine properties in development $’000 Total $’000 10,120 2,336 - - 27 (4,812) 7,671 7,876 552 22 (4,899) 3,551 290,342 3,310 6,441 - - - 300,093 3,906 11,815 - - 15,721 4,120 284,372 - - - - - - - - - - - - - 300,462 5,646 6,441 - 27 (4,812) 307,764 11,782 12,367 22 (4,899) 19,272 288,492 # 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 52 ALTURA ANNUAL REPORT 2020 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 2020 14. PROPERTY, PLANT, EQUIPMENT AND MINE PROPERTIES (continued) 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 - - 290,342 - 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 15. EXPLORATION AND EVALUATION Exploration and evaluation expenditure at cost: Carried forward from previous year Incurred during the year Transferred to property, plant and equipment and mine properties 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. 2020 $’000 2019 $’000 3,265 578 (313) - 3,530 (218) 3,312 1,595 2,218 - (548) 3,265 - 3,265 53 ANNUAL REPORT 2020 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 2020 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 final prepayment was repaid in November 2019. 17. BORROWINGS Current borrowings Loan note facility Other Total current borrowings Non-current borrowings Loan note facility Total non-current borrowings 2020 $’000 2019 $’000 28,864 14,091 - 42,955 18,920 12,248 9,610 40,778 16,049 1,687 17,736 191,693 191,693 179,100 512 179,612 - - Total borrowings 209,429 179,612 Reconciliation borrowings – loan note facility Opening balance Loan notes issued Interest and fees capitalised Exchange rate differences Amortisation of transaction costs Transaction costs incurred Total borrowings – loan note facility 179,100 - 27,863 3,753 22,897 (25,871) 207,742 145,887 21,661 2,141 10,036 7,031 (7,656) 179,100 As at 30 June 2020, the 3 year term loan had an expiry date of August 2023 and an interest rate of 15%. The loan is secured over all Altura Lithium Operations (ALO) assets, shares in ALO, AJM bank accounts and certain AJM receivables. Transaction costs capitalised are amortised over the remaining life of the financial instrument. - In March 2020, the Company agreed with the loan note holders to extend the maturity date of the existing loan facility by three years to August 2023 and to defer the February 2020 interest payment to February 2021. The amendments to the loan note facility also included a waiver of the net debt to defined EBITDA ratio for each of the periods ending 30 September 2019, 31 December 2019, 31 March 2020 and 30 June 2020. In consideration of these amendments and waivers the Company agreed to pay an amendment fee of 5% of the aggregate principal amount of the loan (including capitalised interest) due and payable in October 2020, a waiver fee of US$1.6 million within 60 days and subject to shareholder approval issue shares to the holders of the loan notes equal to 9.9 % of the Company’s fully diluted capital. The shareholders approved the issue of 284,195,159 shares at 5 cents per share following a general meeting held in April 2020. Under the terms of the facility, the Company is required to comply with the following financial covenants: a) For periods ending on 30 September 2018, the Company shall ensure that the net debt to defined EBITDA ratio b) For quarterly reporting periods after the 30 September 2018 the net debt to defined EBITDA ratio shall not shall not exceed the ratio of 2:1. exceed the ratio of 1.5:1. 54 ALTURA ANNUAL REPORT 2020 NOTES TO THE FINANCIAL STATEMENTS continued Altura Mining Limited and Controlled Entities Notes to the Financial Statements (continued) FOR THE YEAR ENDED 30 JUNE 2020 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: Lease ROU asset Tax allowances relating to exploration Property, plant & equipment Other (b) Assets Non-Current Deferred assets comprise: Provisions Revenue losses Revenue losses not recognised Lease liabilities Unrealised foreign exchange loss Other Net deferred tax balance recognised in the Consolidated Balance Sheet 69 2020 $’000 2019 $’000 1,901 1,901 1,669 1,177 (945) 1,901 1,669 1,669 1,158 1,247 (736) 1,669 1,901 1,901 1,669 1,669 - - 527 963 30,034 253 31,776 6,078 69,126 (48,195) 547 3,783 438 31,776 - - 949 28,563 59 29,571 4,083 42,486 (20,442) - 2,651 793 29,571 - 55 ANNUAL REPORT 2020 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 2020 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 2020 $’000 2019 $’000 18,435 18,435 11,994 6,441 - 18,435 11,994 11,994 3,918 8,076 - 11,994 Directors have reviewed the rehabilitation provision and are confident that inputs into the current calculation can be relied upon. Refer to Note 1o i)(d) and Note 1q (i) for accounting policies in relation to the rehabilitation provision. 21. LEASES The Group has adopted AASB from 1 July 2019 but has not restated comparatives for the 2019 reporting period, as permitted under the specific transitional provisions in the standard. The reclassifications and the adjustments arising from the new leasing rules are therefore recognised in the opening balance sheet on 1 July 2019. Set out below is a summary of the amounts disclosed in the Consolidated Balance Sheet: Lease liability Current Non-current Right of use assets Properties 2020 $’000 2019 $’000 524 1,300 1,824 1,757 1,757 - - - - - Adjustments recognised on adoption of AASB 16 On adoption of AASB 16, the group recognised lease liabilities in relation to leases which had previously been classified as operating leases under the principles of AASB 117 Leases. These liabilities were measured at the present value of the remaining lease payments, discounted using the lessee’s incremental borrowing rate as of 1 July 2019. The weighted average lessee’s incremental borrowing rate applied to the lease liabilities on 1 July 2019 was 5%. The Company did not previously have any leases classified as finance leases therefore no adjustment is required. Any remeasurements to the lease liabilities were recognised as adjustments to the related right-of-use assets immediately after the date of initial application. Operating lease commitments disclosed as at 30 June 2019 Discount using the lessee’s incremental borrowing rate at the date of initial application Lease liability recognised as at 1 July 2019 Of which are: Current lease liabilities Non-current lease liabilities 56 2019 $’000 2,582 (255) 2,327 503 1,824 2,327 ALTURA ANNUAL REPORT 2020 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 2020 21. LEASES (CONTINUED) The associated right-of-use assets for property leases were measured at the amount equal to the lease liability, adjusted by the amount of any prepaid or accrued lease payments relating to that lease recognised in the balance sheet as at 30 June 2019. There were no onerous lease contracts that would have required an adjustment to the right-of-use assets at the date of initial application. The change in accounting policy affected the following items in the balance sheet on 1 July 2019: • • Right-of-use assets – increase by $2,327,000 Lease liabilities – increase by $2,327,000 There was no impact on retained earnings on 1 July 2019. i) Impact on segment disclosure and earning per share Adjusted EBITDA, segment assets and segment liabilities for 30 June 2020 all increase as a result of the change in accounting policy. Lease liabilities are now included in the segment liabilities, whereas finance lease liabilities were previously excluded from segment liabilities. The following segment was affected by the change in policy: Adjusted EBITDA $000’s Segment Assets $’000 Segment Liabilities $’000 Lithium mining 341 2,042 2,079 Earnings per share increased by 0.01 per share for the full year to 30 June 2020 as a result of adoption of AASB 16. ii) Practical expedients applied In applying AASB 16 for the first time, the Group has used the following practical expedients permitted by the standard. • • • • The use of a single discount rate to a portfolio of leases with reasonably similar characteristics Reliance on previous assessments on whether leases are onerous The accounting for operating lease with a remaining term of less than twelve months as at 1 July 2019 as short-term leases the exclusion of initial direct cots for the measurement of the right-of-use asset at the date of the initial application, and The use of hindsight in determining the lease term where the contract contains a lease at the date of the initial application. Instead, for contracts entered into before the transition date the group has relied on its assessment made applying AASB 117 Interpretation 4 Determining whether an arrangement contains a Lease 22. CONTRIBUTED EQUITY Issued capital 2,986,243,275 (2019: 2,125,462,476) ordinary shares issued and fully paid 290,860 233,955 Fully paid ordinary shares Balance at the beginning of the financial year Issue of shares on vesting of performance rights # Shares issued in lieu of loan note fees (Refer note 17) Share placement / securities purchase plan ## Share issue – Rights Offer ### Share placement – Shanshan #### Share placement – Sophisticated Investors ##### Exercise of Listed Options Share issue costs Balance at the end of the financial year 2020 Number 2,125,462,476 - $’000 233,955 - 2019 Number $’000 1,819,866,474 8,000,000 192,893 2,944 284,195,159 14,210 - - - 152,585,610 200,000,000 224,000,000 30 - 2,986,243,275 - 9,155 22,400 11,200 - (60) 290,860 297,596,002 - - - - - 2,125,462,476 38,687 - - - - (569) 233,955 # Nil shares were issued to directors and other key management personnel in 2020 on the vesting of performance rights (30 June 2019: 5,200,000). 57 ANNUAL REPORT 2020 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 2020 21. CONTRIBUTED EQUITY (continued) ## 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). ### On 20 November 2019 Altura announced that it had completed a non-renounceable Entitlement Offer raising a total of $9.156 million. The offer comprised 2 new shares for every 13 held at an offer price of 6 cents per share. A total of 152,585,610 shares were issued. #### Placement of 200,000,000 shares on 7 August 2019 to Shanshan Forever International Co., Limited at an issue price of 11.2 cents per share. ##### Placement of 224,000,000 shares in March and April 2020 to sophisticated investors at an issue price of 5 cents per share. Fully paid ordinary shares carry one vote per share and carry the rights to dividends. Ordinary shares have no par value. Option and performance rights reserve Movements in option and performance rights reserve Opening balance Share based payment expense Other share based options Performance rights exercised and transferred to contributed equity Balance at year end 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 2020 $’000 - 201 1,601 - 1,802 2019 $’000 1,602 1,217 - (2,819) - (4,076) (1,478) (5,554) (1,588) (2,488) (4,076) 756 637 1,393 3,488 (2,732) 756 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 58 ALTURA ANNUAL REPORT 2020 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 2020 22. CONTRIBUTED EQUITY (continued) 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. 23. SHARE BASED PAYMENTS During the year, the Company had the following share-based payments expenses: Performance rights Share options Bonus shares a) Performance Rights 2020 $’000 2019 $’000 201 - - 201 1,217 - 125 1,342 In 2014 the Company approved a Long-Term Incentive Plan (LTIP) under which employees and directors of the Group may be issued on a discretionary basis with performance rights over ordinary shares of Altura Mining Limited. The purpose of this plan is to: • • • assist in the reward, retention and motivation of employees and directors; align the interests of employees and directors more closely with the interests of shareholders by providing an opportunity for employees and directors to receive an equity interest in the form of rewards; and provide employees and directors with the opportunity to share in any future growth in value of the Company. The Performance Rights lapse when employment ceases with Altura Mining Limited. The Performance Rights have been granted for no consideration, and no amount is payable on the vesting or exercising of the Performance Rights. All rights subject to the LTIP carry no rights to dividends and no voting rights, until converted into ordinary shares. The following table shows performance rights issued during the year ended 30 June 2020 and the value attributed: Number of performance rights Expiry Date Fair Value ($/right) Total Value $’000 8,500,000 31 Jan 21 $0.062 527 The Performance Rights granted and outstanding under the LTIP as at 30 June 2020 are as follows: Expiry Date Granted Vested Unvested 31 Jan 21 8,500,000 - 8,500,000 59 ANNUAL REPORT 2020 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 2020 23. SHARE BASED PAYMENTS (continued) b) Share Options During the year the Company issued unlisted options to LDA Capital. The valuation was performed using a Black-Scholes model with the following assumptions resulting in a valuation of $1,601,318 (30 June 2019: Nil): Number Grant Date Dividend yield (%) Expected volatility Risk Free interest rate (%) Expected life of options (years) Option exercise price ($) Share price at grant date ($) Fair value at grant date ($) 74,400,000 1 May 20 0% 78.70% 3.5% 3 years $0.0586 $0.0460 $0.0215 The options granted and outstanding as at 30 June 2020 are as follows: Expiry Date Options Granted Exercise Price ($) Number of options not yet exercised 1 May 23 74,400,000 $0.0586 74,400,000 24. KEY MANAGEMENT PERSONNEL COMPENSATION a) Names and positions held of key management personnel in office at any time during the financial year are: Directors James Brown Paul Mantell Allan Buckler Dan O’Neill BT Kuan Xiaoyu Dai Managing Director Executive Director Non-Executive Director Non-Executive Director Non-Executive Director Non-Executive Director (appointed 10 September 2019) Key Management Personnel Rod Wheatley Noel Young Damon Cox Phil Robinson Chief Financial Officer (appointed 2 September 2019) Group Financial Controller (retired on 29 February 2020) Company Secretary Chief Operating Officer (resigned on 1 September 2019) b) Key management personnel remuneration • Short-term employee benefits Long-term employee benefits Post-employment benefits Termination benefits Share based payments 60 1,773,905 - 100,629 116,170 29,955 2,020,659 2,109,242 - 124,217 62,716 622,750 2,918,925 ALTURA ANNUAL REPORT 2020 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 2020 24. KEY MANAGEMENT PERSONNEL COMPENSATION (continued) c) Performance Rights Number of performance rights held by key management personnel The number of performance rights in the Company held during the financial year by each director of Altura Mining Limited and other key management personnel of the Group, including their personally related parties, are set out below. 2020 J Brown P Mantell A Buckler D O’Neill B Kuan X Dai i) R Wheatley ii) P Robinson iii) N Young iv) D Cox 2019 J Brown P Mantell A Buckler D O’Neill B Kuan Z Tong v) Balance at the start of the year Granted as compensation Shares issued/ rights lapsed Balance at the end of the year Vesting 31 Jan 2021 - - - - - - - - - - - - - - - - 1,000,000 - - - - - - - - - - - - - - - - - - - - - - - - - 1,000,000 1,000,000 - - - - - - Balance at the start of the year Granted as compensation Shares issued/ rights lapsed Balance at the end of the year Vesting 30 Nov 2019 2,000,000 1,000,000 - - - - C Evans vi) P Robinson iii) N Young D Cox 1,000,000 800,000 200,000 200,000 - - - - - - - - - - 2,000,000 1,000,000 - - - - 1,000,000 800,000 200,000 200,000 - - - - - - - - - - - - - - - - - - - - i) X Dai appointed as Non-Executive Director effective from September 2019 ii) R Wheatley appointed as Chief Financial Officer effective from September 2019 iii) P Robinson appointed Chief Operating Officer effective from February 2019 and resigned as Chief Operating Officer effective from August 2019 iv) N Young resigned as Financial Controller effective from February 2020 v) Z Tong resigned as Non-Executive Director effective from April 2019 vi) C Evans resigned as Chief Operating Officer effective from January 2019 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. 61 ANNUAL REPORT 2020 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 2020 24. KEY MANAGEMENT PERSONNEL COMPENSATION (continued) d) Share holdings Number of shares held by key management personnel The number of shares in the Company held during the financial year by each director of Altura Mining Limited and other key management personnel (KMP) of the Group, including their personally related parties, are set out below. Balance at start of the year Purchased / (sold) Vesting of performanc e rights 2020 J Brown P Mantell A Buckler D O’Neill B Kuan X Dai $ R Wheatley @ P Robinson ^ N Young * D Cox 2019 J Brown P Mantell A Buckler D O’Neill B Kuan Z Tong & C Evans # P Robinson ^ N Young D Cox 30,088,301 35,273,084 311,773,371 13,633,336 23,000,000 - - 1,000,000 18,641,801 1,875,000 28,518,301 33,503,084 194,839,756 13,633,336 21,000,000 - 1,000,000 200,000 17,574,411 1,675,000 - - - - 61,537 - - - - - - - - - - - - - - - (1,200,000) - - - - - (1,500,000) - - - 2,000,000 1,000,000 - - - - 1,000,000 800,000 200,000 200,000 Placement & Securities Purchase Plan 1,700,000 1,626,154 147,965,134 - 3,538,463 - - - 820,000 - 770,000 770,000 116,933,615 - 2,000,000 - - - 867,390 - Other Balance at the end of the year - - - - - - - (1,000,000) (19,461,801) - 31,788,301 36,899,238 459,738,505 13,633,336 26,600,000 - - - - 1,875,000 - - - - - - - - - - 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 $ X Dai appointed as Non-Executive Director effective from September 2019 @ R Wheatley appointed as Chief Financial Officer effective from September 2019 ^ P Robinson appointed Chief Operating Officer effective from February 2019 and resigned as Chief Operating Officer effective from August 2019. These amounts represent the balance of shares held upon resignation * N Young resigned as Financial Controller effective from February 2020. These amounts represent the balance of shares held upon retirement & Z Tong resigned as Non-Executive Director effective from April 2019 # C Evans resigned as Chief Operating Officer effective from January 2019. These amounts represent the balance of shares held upon resignation. 62 ALTURA ANNUAL REPORT 2020 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 2020 24. KEY MANAGEMENT PERSONNEL COMPENSATION (continued) e) Option holdings Number of listed options held by key management personnel The number of listed options 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) Placement & Securities Purchase Plan Other Balance at the end of the year 2020 J Brown P Mantell A Buckler D O’Neill B Kuan X Dai $ R Wheatley @ P Robinson ^ N Young * D Cox 2019 J Brown P Mantell A Buckler D O’Neill B Kuan Z Tong & C Evans # P Robinson ^ N Young D Cox 385,000 385,000 58,466,808 - 1,000,000 - - - 385,000 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - (385,000) - 385,000 385,000 58,466,808 - 1,000,000 - - - 385,000 - - - - - - - - - - - 385,000 385,000 58,466,808 - 1,000,000 - - - - - 385,000 385,000 58,466,808 - 1,000,000 - - - 385,000 - $ X Dai appointed as Non-Executive Director effective from September 2019 @ R Wheatley appointed as Chief Financial Officer effective from September 2019 ^ P Robinson appointed Chief Operating Officer effective from February 2019 and resigned as Chief Operating Officer effective from August 2019 * N Young resigned as Financial Controller effective from February 2020 & Z Tong resigned as Non-Executive Director effective from April 2019 # C Evans resigned as Chief Operating Officer effective from January 2019 25. INVESTMENTS IN OTHER ENTITIES a) Joint operations For the year ending June 2020 Altura Mining Limited holds no interests in any joint operations or ventures. 63 ANNUAL REPORT 2020 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 2020 26. INTERESTS IN SUBSIDIARIES The consolidated financial statements incorporate the assets, liabilities and results of the following wholly-owned subsidiaries in accordance with the accounting policy described in Note 1: Name of entity Altura Lithium Operations Pty Ltd Altura Drilling Pty Ltd Altura Minerals Pty Ltd Minvest Australia Pty Ltd Minvest International Corporation Altura Asia Pte Ltd Altura Mining Philippines Inc. * PT Asiadrill Bara Utama PT Altura Indonesia PT Minvest Mitra Pembangunan PT Cakrawala Jasa Pratama PT Minvest Jasatama Teknik PT Cybertek Global Utama Country of incorporation Australia Australia Australia Australia Mauritius Singapore Philippines Indonesia Indonesia Indonesia Indonesia Indonesia Indonesia Ownership interest 2019 % 2020 % 100 100 100 100 100 100 40 - 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: Name of entity PT Velseis Indonesia * PT Jasa Tambang Pratama # Country of incorporation Indonesia Indonesia PT Cahaya Permata Khatulistiwa # Indonesia PT Suryaraya Permata Cemerlang # Indonesia PT Suryaraya Cahaya Khatulistiwa # Indonesia PT Suryaraya Cahaya Cemerlang # Indonesia PT Suryaraya Permata Khatulistiwa # Indonesia PT Suryaraya Pusaka # PT Kodio Multicom PT Marangkayu Bara Makarti Indonesia Indonesia Indonesia Principal activities Parent ownership interest 2020 % 50 70 2019 % 50 70 70 70 70 70 70 70 56 56 70 70 70 70 70 70 56 56 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 Non- controlling interest 2020 % 50 30 2019 % 50 30 30 30 30 30 30 30 44 44 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. 64 ALTURA ANNUAL REPORT 2020 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 2020 26. INTERESTS IN SUBSIDIARIES (continued) Summarised financial information Summarised financial information of the subsidiaries with non-controlling interests that are material to the consolidated entity are set out below: PT Velseis Indonesia PT Suryaraya Pusaka PT Kodio Multicom PT Marangkayu Bara Makarti $’000 $’000 $’000 $’000 2020 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 476 338 814 295 (201) 94 720 515 701 (186) - (186) 250 64 74 - - 74 32 329 184 1,798 1,982 76 1,290 1,366 616 1,086 1,069 2,155 135 894 1,029 1,126 - - - - - (3) (3) 1 - - 1 (1) (6) - (3) 3 - 3 (8) (5) - - - - (2) 9 1,085 1,977 3,062 150 1,756 1,906 1,156 - (5) 5 - 5 (8) (3) - - - - (2) 21 65 ANNUAL REPORT 2020 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 2020 26. INTERESTS IN SUBSIDIARIES (continued) 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 27. RELATED PARTIES Transactions within the wholly-owned Group PT Velseis Indonesia PT Suryaraya Pusaka PT Kodio Multicom PT Marangkayu Bara Makarti $’000 $’000 $’000 $’000 557 341 898 270 (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 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. 66 ALTURA ANNUAL REPORT 2020 81 NOTES TO THE FINANCIAL STATEMENTS continued Altura Mining Limited and Controlled Entities Notes to the Financial Statements (continued) FOR THE YEAR ENDED 30 JUNE 2020 27. RELATED PARTIES (continued) Transactions other related parties a) b) Altura announced in August 2019 that it had signed an Earn-in Agreement (Agreement) with lithium project developer Sayona Mining Limited over its Pilbara lithium tenements. Sayona Mining Limited is a related party due to common directors. Under the Agreement, Altura will spend $1.5 million on exploration across the project 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. In October 2019, 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 $2.878 million and was interest free. The loan facility converted into Securities to the nominee of Katsura at the rate of two (2) Shares for every (13) existing shares held by nominee of Katsura (this being the same terms as under the Rights offer) on the basis that the amount lent to the Company would have otherwise been utilised by Katsura to subscribe for Shares in the Rights offer itself. The facility was provided on 16 October 2019 and was converted to shares on 20 November 2019. Details of the conversion of the loan facility was as follows: • • • Loan amount 6 cents per share Securities issued 47,965,134 ordinary shares $2,877,908 c) In February 2020, 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 $5.0 million and was interest free. The loan facility converted into Securities to the nominee of Katsura on the basis that the amount lent to the Company would have otherwise been utilised by Katsura to subscribe for Shares in the Placement offer itself. The facility was provided on 28 February 2020 and was converted to shares on 1 May 2020 following shareholder approval on 30 April 2020. Details of the conversion of the loan facility was as follows: • • • Loan amount 5 cents per share Securities issued 100,000,000 ordinary shares $5,000,000 28. NOTES TO STATEMENT OF CASH FLOWS a) For the purpose of the statement of cash flows, cash includes cash on hand and in banks, and investments in money market instruments, net of outstanding bank overdrafts. Cash at the end of the financial year as shown in the statements of cash flows is reconciled to the related items in the balance sheet as follows: Cash at bank and on hand (Note 8) Cash in assets classified as held for sale Cash per statement of cash flows Reconciliation to Statement of Cash Flows For the purposes of the Statement of Cash Flows, cash and cash equivalents comprise the following at 30 June: Cash at bank and on hand Short-term deposits Cash at bank and on hand • 67 2020 $’000 2019 $’000 2,298 10 2,308 2,308 - 2,308 9,494 19 9,513 9,513 - 9,513 ANNUAL REPORT 2020 ALTURA 82 NOTES TO THE FINANCIAL STATEMENTS continued Altura Mining Limited and Controlled Entities Notes to the Financial Statements (continued) FOR THE YEAR ENDED 30 JUNE 2020 2020 $’000 2019 $’000 28. NOTES TO STATEMENT OF CASH FLOWS (continued) a) Reconciliation of operating profit / (loss) after income tax to net cash used in operating activities Operating loss after income tax (93,827) (26,713) Adjustments for non-cash income and expense items: Share based payments Bonus paid by way of issue of shares to directors and staff Loan facility fees Depreciation of property, plant and equipment Interest on funding facility Foreign currency exchange rate movement Profit on sale of subsidiary Exploration expenditure written off Profit on sale of assets Impairment on assets held for sale (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 lease liabilities Increase / (decrease) in current provisions Net cash used in operating activities b) 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 2020 $’000 201 - 26,425 12,937 16,202 3,691 (1,202) 218 (2) 4,196 (21) (7,246) 214 (1,795) (2,983) (46) 232 (42,806) 2,308 (17,736) (191,693) (207,121) 2,308 (209,429) - (207,121) 2019 $’000 1,217 125 7,605 4,201 10,566 8,620 ]- - - - - 93 18,065 (9,935) (771) - 511 13,584 9,513 (512) (179,100) (170,099) 9,513 (179,612) - (170,099) 68 ALTURA ANNUAL REPORT 2020 83 NOTES TO THE FINANCIAL STATEMENTS continued Altura Mining Limited and Controlled Entities Notes to the Financial Statements (continued) FOR THE YEAR ENDED 30 JUNE 2020 28. NOTES TO STATEMENT OF CASH FLOWS (continued) Cash and cash equivalents Borrowings due within 1 year Borrowings due after 1 year Total Net debt as at 30 June 2019 Cash flows Foreign exchange adjustments Other non-cash movements Net debt as at 30 June 2020 9,513 (7,140) (65) - 2,308 (512) (179,100) (170,099) (1,175) - (16,049) (17,736) - (3,753) (8,840) (191,693) (8,315) (3,818) (24,889) (207,121) c) Acquisition of entities The Group did not acquire any interest in entities during the year. 29. 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 32. (c) Contractual commitments No later than one year Later than one year and not later than five years Later than five years 69 2020 $’000 Parent 2019 $’000 Parent 3,260 220,511 3,149 3,149 217,362 290,860 1,802 (144,570) 148,092 1,960 141,950 523 523 141,427 233,955 - (92,528) 141,427 (41,141) (10,649) (41,141) (10,649) - - - - 55 3 - 58 ANNUAL REPORT 2020 ALTURA 84 NOTES TO THE FINANCIAL STATEMENTS continued Altura Mining Limited and Controlled Entities Notes to the Financial Statements (continued) FOR THE YEAR ENDED 30 JUNE 2020 30. AUDITORS’ REMUNERATION Auditors of the Group – PKF and related network firms a) Audit of financial report - - Group (PKF Brisbane) Group (PKF (Perth) Total audit of financial reports Other non-audit services (PKF (Brisbane) Total services provided by PKF Other auditors and their related network firms b) Audit of financial report - Foreign Subsidiaries Total audit of financial reports Other non-audit services Total services provided by other auditors 2020 $’000 2019 $’000 48 77 125 84 209 17 17 1 18 122 - 122 - 122 - - - - 31. SUBSEQUENT EVENTS Subsequent to the end of the financial year the following events occurred: 31 July 2020 – Formal request from the Group to its Senior Secured Loan Note Holders (LNH), to extend payment obligations to 31 October 2020 to allow re-structure process to complete. 5 August 2020 – Draft Waiver Letter issued to LNH, subsequently LNH instructed their legal counsel to provide a letter extension (1 week) to allow formal documentation to be completed. 10 August 2020 – The Group entered a trading halt and subsequent suspension from official quotation while refinancing activities were undertaken. 25 August 2020 – LNH provided waiver of all financial obligations and covenants until 31 October 2020 – with 2 milestones: Milestone 1 – 10 September 2020 to present to the LNH some form of non-binding term sheet for an equity, debt, merger proposal; and Milestone 2 – 10 October 2020 to present to the LNH a binding proposal to the LNH and be announced to the market. 26 August 2020 – A credible and well-known participant in the Australian equity market (Bookrunner) commenced a non-deal roadshow to gauge market interest. 10 September 2020 – A prominent Australian-based mining and processing company provided a non-binding indicative offer (NBIO) to Altura and presented to the LNH in accordance with the waiver agreement. 7 October 2020 – LNH were issued with a Term Sheet regarding the recapitalisation process. The Term Sheet was non-binding but allowed the Bookrunner to provide details to equity groups and allow a structure to be agreed with those groups. 9 October 2020 – LNH provided an extension of Milestone 2 from 10 October 2020 to 24 October 2020 due to one large equity group requiring more due diligence time. AJM paid $140,000 of the LNH legal fees for document drafting as part of the recapitalisation process. 14 October 2020 – LNH advised the Company to proceed with document drafting for the re-structure based on the key terms agreed in the Term Sheet – LNH stated that in essence of time the parties should proceed with formal documentation rather than trying to bind the Term Sheet, this followed a few days of negotiation on the Term Sheet. 21 October 2020 – An existing offtake partner committed to an A$66 million cornerstone investment for the proposed equity process, subject to transaction approval at their board meeting on 21 October 2020 – the deal would be announced on the same day, the equity process would launch on week of 26 October 2020. LNH requested Altura hold off on the Offtake partner’s approval until formal documents completed (target 23 October 2020), this would defer approval until Offtake partner’s next board meeting on 29 October 2020. Altura in good faith accepted the LNH request in anticipation of completion and execution of signing documents on the 23 October 2020. 22 October 2020 – The Bookrunner provided a detailed letter of support to the recap process, the Bookrunner also issued LNH with a process timeline and request for them to acknowledge support and terms of the agreements. 23 October 2020 – The Company’s legal counsel provided LNH legal counsel with final drafts of all legal agreements for review and execution. 70 ALTURA ANNUAL REPORT 2020 85 NOTES TO THE FINANCIAL STATEMENTS continued Altura Mining Limited and Controlled Entities Notes to the Financial Statements (continued) FOR THE YEAR ENDED 30 JUNE 2020 31. SUBSEQUENT EVENTS (continued) Sunday 25 October 2020 – Altura becomes aware of a potential deal (from a credible media outlet) being struck by the LNH and other parties involved in the process – request sent to other parties for clarification and compliance to the existing Non-Disclosure Agreements in place between Altura and said parties; 25 October 2020 – Notice of Default issued to Altura by LNH (midnight) citing breach of Milestone 2, which came about by Altura in good faith agreeing to the LNH request on the 21 October 2020 of the announcement of the Offtake partner’s deal and the request by the LNH on the 14 October 2020 to proceed with formal documentation on the recapitalisation. 26 October 2020 – Notice of Receivers and Administrators received, Altura had no time to challenge, KordaMentha (KM) appointed as Receivers and Managers. 26 October 2020 – Cor Cordis (CC) appointed as Administrators. 28 October 2020 PLS announce conditional agreement to acquire Altura Lithium Operations stating PLS had entered into an Implementation Deed with the senior secured loan noteholders of Altura 29 October 2020 – KM announce the LNH have entered into an implementation agreement with Pilbara Minerals (PLS). 1 December 2020 – PLS announce a share sale agreement to acquire the Group’s wholly owned subsidiary Altura Lithium Operations Pty Ltd (ALO). equity raising by PLS. 11 December 2020- Creditors approve the ALO deed of company arrangement (DOCA) subject to completion of an 20 January 2021 – PLS completes the acquisition of ALO as per the terms of the share sale agreement. ALO was sold for a total consideration of $270 million. As at the date of this report, Directors are unable to quantify the financial impact on operations as a result of the transaction. KM retire as Receivers and Managers. 5 March 2021 – ACN 647 358 987 Pty Ltd entered into a DOCA resulting in the CC deed of administration ceasing and administration for the Group reverting to its Directors. ACN 647 358 987 Pty Ltd has loaned funds to Altura and provided funds to the Altura Mining Limited Creditors Trust. 16 April 2021 – Altura announced the appointment of Alex Cheeseman as CEO of the company, the resignation of Paul Mantell as a director and the appointment of John Lewis as Company Secretary. 3 May 2021 Altura announced it had executed a Letter of Intent (LOI) to enter into an Earn-in Option Agreement (EOA) for 60% project equity in Lithium Corporation’s (“Lithium Corp.”) Fish Lake Valley (FLV) Project located in central-west Nevada, USA Post the disposal of ALO and the balance of the Australian based assets, the Altura Group retains its interest in the Tabalong Project (whilst searching for a suitable party to divest the project) and investment in Lithium Corporation, Nevada USA. Funding provided from the Group’s current Australian Directors has funded payment of the remaining liabilities and providing sufficient working capital to sustain its operations during the Group’s re-quotation process on the ASX. Material contracts with Key Management Personnel post June 2020 Alex Cheeseman, Chief Executive Officer – (Appointed 16 April 2021) the agreement is of no fixed term and allows for payment of an annual cash salary, reviewed each year, and superannuation. Six 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 Key Management Personnel Remuneration post June 2020 During the period after the financial year ending 30 June 2020 the following payments, we made to key management personnel in accordance with their service contracts. Remuneration excludes termination payments as the details require confirmation from KordaMentha and performance rights require completion of the re-listing process on the ASX. Estimated remuneration of Key Management Personnel Remuneration Executive Directors 310,185 Non-Executive Directors 83,700 Other key management personnel 180,832 No further events have occurred since 20 May 2021, which would require disclosure in the financial report. 71 ANNUAL REPORT 2020 ALTURA 86 NOTES TO THE FINANCIAL STATEMENTS continued Altura Mining Limited and Controlled Entities Notes to the Financial Statements (continued) FOR THE YEAR ENDED 30 JUNE 2020 32. CONTINGENT LIABILITIES Details and estimates of maximum amounts of contingent liabilities for which no provision is included in the financial statements are as follows: The bankers of the Group and parent entity have issued undertakings and guarantees to the DME (Northern Territory Department of Mines and Energy) and various other entities. A subsidiary of the Group has entered into a conditional loan agreement Civmec Legal Action 2020 $’000 2019 $’000 26 78 On 17 July 2020, Altura was advised by Civmec Construction and Engineering Pty Ltd that it had lodged a writ and statement of claim in the Supreme Court of Western Australia against Altura Lithium Operations Pty Ltd (ALO) in relation to the process plant construction and installation work at the Altura Lithium Project. On 20 July 2020, Altura was served with this statement of claim. Altura proceeded to defend these proceedings until the Group was placed under external management. ALO was acquired by Pilbara Minerals Limited (PLS) following a deed of company arrangement (DOCA) process. As a result of the DOCA process and acquisition by PLS, ALO is no longer a subsidiary of the Company. The Company was not a party to the proceedings. The proceedings were dismissed by a consent order on 4 February 2021. No losses are anticipated in respect of any of the above contingent liabilities. 72 ALTURA ANNUAL REPORT 2020 87 NOTES TO THE FINANCIAL STATEMENTS continued Altura Mining Limited and Controlled Entities Notes to the Financial Statements (continued) FOR THE YEAR ENDED 30 JUNE 2020 33. 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 to meet minimum expenditure requirements. This expenditure will only be incurred should the Group retain its existing level of interest in its various exploration areas and provided access to mining tenements is not restricted. These obligations will be fulfilled in the normal course of operations, which may include exploration and evaluation activities. b) Exploration The Group has the following estimated exploration expenditure commitments at 30 June 2020. No later than one year Later than one year and not later than five years Later than five years 2020 $’000 2019 $’000 252 348 1,025 1,625 d) Asset acquisitions The Group has the following commitments for asset acquisitions at 30 June 2020. Capital expenditures contracted for at the balance sheet date but not recognised in the financial statements Property, plant and equipment Mine development at cost 2020 $’000 2019 $’000 622 255 877 425 - - 425 978 - 978 c) Operating leases As of June 2020, all leases held by the Company have been measured in accordance with AASB 16 Leases and disclosed within lease liabilities in Note 21. The Company adopted AASB 16 on 1 July 2019 using the modified retrospective approach. Comparatives have therefore not been restated and represent amounts committed at 30 June 2019 date but not recognised as liabilities. 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 - - - - 853 2,571 - 3,424 73 ANNUAL REPORT 2020 ALTURA 88 DIRECTORS' DECLARATION In the Directors’ opinion: (a) The financial statements and notes set out on pages 34 to 87 are in accordance with the Corporations Act 2001 and: a. comply with Accounting Standards and the Corporations Regulations 2001; and b. give a true and fair view of the consolidated entity’s financial position as at 30 June 2020 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, 25 May 2021 ALTURA ANNUAL REPORT 2020INDEPENDENT AUDITOR'S REPORT 90 PKF Perth 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) and its controlled entities (consolidated entity), which comprises the consolidated balance sheet as at 30 June 2020, 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 2020 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. Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Report section of our report. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Material Uncertainty Related to Going Concern As detailed in the subsequent events note the consolidated entity was placed into external administration and receivership on the 26th October 2020. The consolidated entity’s wholly owned subsidiary Altura Lithium Operations Pty Ltd, which owned the Altura Lithium Project, was sold to a third party to payout the consolidated entity’s secured noteholders. The consolidated entity was administered externally until it was returned to the Directors on the 5th March 2021. During this period a deed of company arrangement (DOCA) was executed, funds were loaned to the consolidated entity for working capital and a creditors trust was established. Level 4, 35 Havelock Street, West Perth, WA 6005 PO Box 609, West Perth, WA 6872 T: +61 8 9426 8999 F: +61 8 9426 8900 www.pkfperth.com.au PKF Perth is a member firm of the PKF International Limited family of legally independent firms and does not accept any responsibility or liability for the actions or inactions of any individual member or correspondent firm or firms. Liability limited by a scheme approved under Professional Standards Legislation. 75 ALTURA ANNUAL REPORT 2020 91 PKF Perth The Directors have decided to seek a relisting of the company on the ASX. To do so they will need to re-comply with a number of ASX requirements. The purpose of the relisting will be to raise sufficient capital to implement the Key Business Strategies detailed in the Directors Report. This, along with other matters as set forth in Note 1, a), i), 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 as a result of the external administration and receivership. Independence We are independent of the consolidated entity in accordance with the auditor independence requirements of 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 (including Independence Standards) (the code) that are relevant to our audit of the financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code. Key Audit Matters Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial report for the year ended 30 June 2020. These matters may not be significant post 30 June 2020. The reader of this report must refer to the subsequent events note in the financial report. These matters were 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 each matter below, our description of how our audit addressed the matter is provided in that context. 1. Altura Lithium Project Mine Assets Why significant How our audit addressed the key audit matter As at 30 June 2020 mine assets relating to the Altura Lithium Project of $284.4 million have been recognised as a depreciating asset 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, g). The Altura Lithium Project mine assets is a key audit matter due to: • • level of judgement applied the significance of the balance (being 83% of total assets); and the in determining the treatment of the mine asset in accordance with AASB 116 Property, Plant and Equipment and in whether accordance with AASB 136 Impairment of Assets. the asset impaired is 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 asset is operating as forecasted; • obtaining supporting documentation including external reports to validate the LOM (Life of Mine) 26 year period over which the mine asset is being depreciated; • obtaining and assessing management’s assessment of the recoverable amount of the mine asset; 76 ANNUAL REPORT 2020 ALTURA 92 PKF Perth Why significant How our audit addressed the key audit matter In particular, judgement exists around: • whether depreciation rates applied are appropriate; • whether disclosure is appropriate; and • whether the mine asset is impaired. The evaluation of the recoverable amount of the mine asset requires significant judgement in determining the key assumptions supporting the expected future cash flows of the Altura Lithium Project. 2. Borrowings – loan note facility Why significant Why significant As at 30 June 2020 the consolidated entity held a loan note facility of $207.7 million as described in Note 17. The consolidated entity’s accounting policy in respect of the loan note facility is detailed in Note 1, m). Borrowings – loan note facility is a key audit matter due to: • • the significance of the balance (being 75% of total liabilities); and the level of complexity and judgement applied the correct treatment in accordance with AASB 132 Financial Instruments: Presentation and AASB 9 Financial Instruments. in determining In particular, complexity and judgement exists around: • measurement and recognition of transactions costs incurred; • appropriateness of interest and fees • • capitalised; the period over which transaction costs are amortised; the calculation and appropriateness of foreign currency movements impacts; • whether the is classified loan note appropriately with respect to loan terms and covenant waivers obtained; • • use calculation, reviewing and verifying the key inputs and assumptions used in management’s value in the recoverable amount of the mine asset; comparing production reports and current sales data to forecasts applied in the value in use calculation; and supporting obtaining and reviewing external reports of forward looking spodumene concentrate prices and ensuring $USD sales prices applied in the value in use calculation are line with anticipated prices. reasonable in How our audit addressed the key audit matter How our audit addressed the key audit matter In assessing this key audit matter, we involved senior audit team members who understand such financial instruments. We also obtained external advice where appropriate. Our audit procedures included, amongst others: • obtaining and reviewing loan agreements, subscription deeds, warrant deeds and amendment deeds relating to the loan note facility; • obtaining a schedule of fees and interest costs the and capitalised testing capitalised during the year; reviewing management’s treatment and accounting policies regarding treatment in accordance with relevant accounting standards; the debt covenant breaches reviewing incurred during the year with reference to the loan agreement and waivers received, loan note to ensure classification and related disclosure is appropriate; and reviewing management’s forecasted plans for repayment and assessment of the consolidated entity’s ability to repay the facility by the maturity date. impact on the • • • 77 ALTURA ANNUAL REPORT 2020 93 PKF Perth Why significant How our audit addressed the key audit matter • whether movements in the loan balance during the year have been appropriately disclosed; and • management’s plan to refinance the debt and the consolidated entity’s capacity concerning the the borrowing facility. repayment of Other Information Other information is financial and non-financial information in the annual report of the consolidated entity which is provided in addition to the financial report and the auditor’s report. The directors are responsible for other information in the annual report. The other information we obtained prior to the date of this auditor’s report was the director’s report and additional information for listed public companies. The remaining other information is expected to be made available to us after the date of the auditor’s report. Our opinion on the financial report does not cover the other information and accordingly we do not express any form of assurance conclusion thereon, with the exception of the remuneration report. In connection with our audit of the financial report, our responsibility is to read the other information. In doing so, we consider whether the other information is materially inconsistent with the financial report or our knowledge obtained in the audit, or otherwise appears to be materially misstated. We are required to report if we conclude that there is a material misstatement of this other information in the financial report and based on the work we have performed on the other information that we obtained prior the date of this auditor’s report we have nothing to report. Directors’ Responsibilities for the Financial Report The Directors of the company are responsible for the preparation of the financial report that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal control as the Directors determine is necessary to enable the preparation of the financial report that gives a true and fair view and is free from material misstatement, whether due to fraud or error. 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 the 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 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, individually 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. We also: 78 ANNUAL REPORT 2020 ALTURA 94 PKF Perth • Identify and assess the risks of material misstatement of the financial report, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. 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. • Obtain an understanding of internal control relevant to the audit 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 consolidated entity’s internal control. • Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the Directors. • Conclude on the appropriateness of the Directors’ use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the consolidated entity’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial report or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the consolidated entity to cease to continue as a going concern. • 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. • 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 consolidated entity financial report. We are responsible for the direction, supervision and performance of the consolidated entity 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. 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, actions taken to eliminate threats or safeguards applied. 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 the 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 Opinion We have audited the remuneration report included in the directors’ report for the year ended 30 June 2020. In our opinion, the remuneration report of Altura Mining Limited for the year ended 30 June 2020, complies with section 300A of the Corporations Act 2001. 79 ALTURA ANNUAL REPORT 2020 PKF Perth 95 Responsibilities The directors of the company are responsible for the preparation and presentation of the remuneration report in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on the remuneration report, based on our audit conducted in accordance with Australian Auditing Standards. PKF PERTH SIMON FERMANIS PARTNER 25 MAY 2021 WEST PERTH, WESTERN AUSTRALIA 80 ANNUAL REPORT 2020 ALTURA ADDITIONAL ASX INFORMATION 98 ADDITIONAL ASX INFORMATION SCHEDULE OF MINERAL PROPERTIES Location Tenement Number Interest Tanami, Northern Territory 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: EL: Exploration Licence; P: Prospecting Licence ISSUED CAPITAL 10% 10% 10% 10% 70% 70% 70% 56% 56% 100% 100% 100% The issued capital of the company as at 11 May 2021 consists of 2,986,243,275 fully paid ordinary shares, and 148,797,979 listed options (expiring 28 February 2022). DISTRIBUTION OF SHAREHOLDERS AS AT 11 MAY 2021 Number of shareholders 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 Holders of less than a marketable parcel Shares 399 2,820 1,947 5,702 2,004 12,872 3,854 % of issued 3.10 21.91 15.13 44.30 15.57 100.00 ALTURA ANNUAL REPORT 2020ADDITIONAL ASX INFORMATION continued 99 20 LARGEST SHAREHOLDERS – FULLY PAID ORDINARY SHARES Rank Holder name Units % of issued 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Total SHANSHAN FOREVER INTERNATIONAL CO LIMITED CALIDA HOLDING PTY LTD MR MAXWELL TERRY SMITH MERRILL LYNCH (AUSTRALIA) NOMINEES PTY LIMITED FARJOY PTY LTD J P MORGAN NOMINEES AUSTRALIA PTY LIMITED CITICORP NOMINEES PTY LIMITED HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED BNP PARIBAS NOMINEES PTY LTD CVI CVF III LUX FINANCE SARL MR ALLAN CHARLES BUCKLER MR JAMES STUART BROWN & MRS MICHELE LILLIAN BROWN MR PAUL KEVIN MANTELL & MRS MARGRET ANN MANTELL CVI EMCVF LUX FINANCE SARL BNP PARIBAS NOMS PTY LTD MR BENG TEIK KUAN E M ENTERPRISES (QLD) PTY LTD NOMURA SPECIAL INVESTMENTS SINGAPORE PTE LTD CVIC LUX FINANCE SARL HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED - A/C 2 451,361,249 422,254,584 313,239,925 179,533,210 89,207,149 59,279,951 47,908,852 46,777,583 42,677,841 33,250,834 33,168,536 27,698,914 24,563,083 19,382,110 18,314,084 15,984,616 12,700,000 12,675,104 12,646,684 12,255,740 1,887,554,653 15.11% 14.14% 10.49% 6.01% 2.99% 1.99% 1.60% 1.57% 1.43% 1.11% 1.11% 0.93% 0.82% 0.65% 0.61% 0.54% 0.43% 0.42% 0.42% 0.41% 63.21% DISTRIBUTION OF OPTION HOLDERS AS AT 11 MAY 2021 Number of option holders in the following distribution categories: Fully paid ordinary shares Options % of issued 1–1,000 1,001–5,000 5,001–10,000 10,001–100,000 100,001 and over Total 5 3 328 832 74 1,242 0.00 0.01 2.12 21.00 76.87 100.00 ANNUAL REPORT 2020 ALTURA100 ADDITIONAL ASX INFORMATION continued 20 LARGEST OPTION HOLDERS – LISTED OPTIONS EXPIRING 28 FEBRUARY 2022 Rank Holder name Units % of issued 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Total Calida Holdings Pty Ltd Farjoy Pty Ltd SY Chua M1nt Property Pty Ltd P Ainsworth Z International (HKG) Ltd HSBC Custody Nominees (Australia) Limited (No 2 A/c) WP Wagner DJ Wang DG & AB Carson LJ Cobban CS Fourth Nominees Pty Ltd (HSBC Custody 11 A/c) PS Tan JM Heuser & VM Gillam (JMH Super A/c) MZ Wang Avglen Pty Ltd BT Kuan Citicorp Nominees Pty Ltd GHJC Pty Ltd Robis Wealth Management Pty Ltd 58,466,808 7,741,003 3,846,154 3,805,024 3,401,420 3,343,625 2,933,329 2,500,000 1,500,000 1,393,726 1,355,850 1,326,923 1,300,000 1,118,695 1,110,000 1,000,000 1,000,000 760,945 613,697 700,000 99,617,199 39.29% 5.20% 2.58% 2.56% 2.29% 2.25% 1.97% 1.68% 1.01% 0.94% 0.91% 0.89% 0.87% 0.75% 0.75% 0.67% 0.67% 0.51% 0.48% 0.47% 66.74% 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 (Calida Holdings Pty Ltd) MT Smith Shares 451,361,249 459,738,505 313,239,925 Options Nil 58,466,808 48,695 ALTURA ANNUAL REPORT 2020ADDITIONAL ASX INFORMATION continued 101 VOTING RIGHTS ORDINARY SHARES 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. 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. PERFORMANCE RIGHTS The total number of performance rights on issue as at 30 September 2020 was 8,250,000. As at this date there were 17 holders of these unquoted securities, which have been issued under an employee incentive scheme. There are no voting rights attaching to the performance rights. UNLISTED WARRANTS The total number of unlisted warrants on issue as at 30 September 2020 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. UNLISTED OPTIONS The total number of unlisted options on issue as at 30 September 2020 was 74,400,000. The options were issued to LDA Capital following shareholder approval at a general meeting held on 30 April 2020. The warrants are exercisable at $0.0586 each and expire on 1 May 2023. There are no voting rights attaching to the unlisted options. ANNUAL REPORT 2020 ALTURA102 COMPETENT PERSONS STATEMENTS The information in this statement is based on, and fairly represents, information and supporting documentation prepared by the competent persons listed below. The MROR statements included in this Annual Report were reviewed by a suitably qualified Competent Persons prior to their inclusion. PILGANGOORA LITHIUM The information in this report that relates to the Mineral Resource for the Pilgangoora lithium deposit is based on information compiled by Mr Stephen Barber. Mr Barber is a Member of the Australasian Institute of Mining and Metallurgy. Mr Barber is the Exploration Manager at Altura Mining Limited and has sufficient experience that is relevant to the style of mineralisation under consideration and to the activity of mineral resource estimation to qualify as a Competent Person as defined in the 2012 Edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves. Mr Barber consents to the inclusion in the report of the matters based on this information in the form and context in which it appears. The information in this report that relates to the Ore Reserve for the Pilgangoora lithium deposit is based on information compiled by Mr Quinton de Klerk. Mr de Klerk is a Fellow of the Australasian Institute for Mining and Metallurgy. Mr de Klerk is a Director and Principal Consultant of Cube Consulting Pty Ltd and has sufficient experience that is relevant to the activity of ore reserve estimation to qualify as a Competent Person as defined in the 2012 Edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves. Mr de Klerk consents to the inclusion in the report of the matters based on this information in the form and context in which it appears. The Company confirms that it is not aware of any new information or data that materially affects the information included in the ASX announcement on 9 October 2019. Further, all material assumptions and the technical parameters underpinning mineral resource and ore reserve estimates in that announcement continue to apply and have not materially changed. ALTURA ANNUAL REPORT 2020alturamining.com

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