AGRIMIN LIMITED
ABN 15 122 162 396
Annual Report
For the year ended 30 June 2021
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CORPORATE INFORMATION
DIRECTORS
Richard Seville
Non-Executive Chairperson
Mark Savich
Chief Executive Officer and Executive Director
Brad Sampson
Non-Executive Director
Alec Pismiris
Non-Executive Director and Company Secretary
REGISTERED OFFICE AND PRINCIPAL PLACE OF BUSINESS
2C Loch Street
Nedlands, Western Australia, 6009
Telephone: +61 8 9389 5363
AUDITOR
Ernst & Young
11 Mounts Bay Road
Perth, Western Australia, 6000
Telephone: +61 8 9249 2222
SHARE REGISTER
Automic Registry Services
Level 2, 267 St Georges Terrace
Perth, Western Australia, 6000
Investor enquiries: 1300 288 664
WEBSITE
www.agrimin.com.au
STOCK EXCHANGE LISTING
Agrimin Limited shares are listed on the Australian Securities Exchange (ASX: AMN)
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CONTENTS
CHAIRPERSON’S LETTER
REVIEW OF OPERATIONS
ENVIRONMENTAL, SOCIAL AND GOVERNANCE
DIRECTORS’ REPORT
AUDITOR’S INDEPENDENCE DECLARATION
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
CONSOLIDATED STATEMENT OF CASH FLOWS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
DIRECTORS’ DECLARATION
INDEPENDENT AUDITOR’S REPORT
SHAREHOLDERS' INFORMATION
3
4
12
16
28
29
30
31
32
33
57
58
63
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CHAIRPERSON’S LETTER
Dear Shareholders,
After what has been a challenging year for many people, I hope that this year’s update finds you in good health. At the beginning of
the financial year, we were concerned that the COVID-19 restrictions could cause significant delays to our project, but I am pleased to
report that the impact has been limited and we have made significant progress through the year.
Over the past 7 years Agrimin has invested more than $45 million into the Mackay Potash Project and has set the industry standard
for the Australian Sulphate of Potash industry. Our approach has been to progressively de-risk the project by applying agile
methodologies to the traditional staged approach moving through scoping, prefeasibility and finally definitive feasibility level studies.
Early in the financial year we released our Definitive Feasibility Study which was based on over two years of trench pumping, and pilot
pond trials and potash salts production and set an industry benchmark for such studies. The study showed that once in production,
the Mackay Potash Project could become the lowest cost seaborne supplier of Sulphate of Potash fertiliser globally.
Following completion of the DFS, we continue to apply similar methodologies to de-risk project construction and commissioning. Upon
completion of the Definitive Feasibility Study in July 2020, it was clear that permitting activities at the Mackay Potash Project would
continue well into 2021. This has provided us with a significant opportunity to properly consider the findings of the DFS, have a detailed
Independent Technical Review of all components of the study, and embark on a detailed Front-End Engineering & Design path.
Accordingly, over the past year we awarded key work packages to industry-leading companies regarding the major components of the
project.
Our project received significant validation through the execution of a Binding Offtake Agreement with Sinochem Fertilizer Macao
Limited for the supply of one-third of the project’s planned annual production. Sinochem is a wholly owned subsidiary of Sinofert
Holdings Limited, one of China’s largest crop nutrition companies and plays a pivotal role with global potash suppliers to ensure the
country’s potash supply.
Agrimin has completed a large number of environmental and heritage surveys over the past year. The Company has now finalised
heritage surveys across all three native title determination areas and successfully obtained heritage clearances for the proposed
disturbance envelopes for the Project’s haul road and associated infrastructure such as borrow pits, water bores and communication
towers.
The Kiwirrkurra People, as well as the Ngururrpa People and Tjurabalan People, have provided tremendous support to Agrimin to allow
us to meet our vision, to establish the Mackay Potash Project as the world’s leading seaborne supplier of Sulphate of Potash fertiliser,
developed with sustainability principles at its core and to empower local Indigenous communities throughout the Project’s long life.
On behalf of Agrimin and its shareholders I wish to thank the traditional owners of the lands on which we operate.
I would also like to thank our shareholders. It takes time to develop a world class project in a new sector and their on-going support
and patience is appreciated. I would also like to thank our consultants and engineering partners. And lastly, I would like to thank our
team at Agrimin, led by our CEO Mark Savich, who continue to work diligently as we near the execution of offtake, funding and
construction of the world-class Mackay Potash project.
Richard Seville
Chairperson
September 2021
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REVIEW OF OPERATIONS
MACKAY POTASH PROJECT (100% INTEREST)
Agrimin’s vision is to establish the Mackay Potash Project (“the Project”) as the world’s leading seaborne supplier of Sulphate of Potash
(“SOP”) fertiliser, to develop the Project with sustainability principles at its core and to empower local Indigenous communities
throughout the Project’s long life.
The Mackay Potash Project is situated on Lake Mackay in Western Australia, the largest undeveloped potash-bearing salt lake in the
world. Lake Mackay hosts significant volumes of brine (hypersaline groundwater) containing dissolved potassium and sulphur which
can produce high-grade, water-soluble SOP fertiliser.
SOP has a low salt index and is virtually chloride-free, making it ideal for use on high value crops such as fruits, vegetables, grape vines
and tree nuts. Additionally, Agrimin’s SOP is certified as an allowable input for use in organic production systems.
The Definitive Feasibility Study (“DFS”) for the Mackay Potash Project was completed in July 2020 and demonstrated the Project’s
globally significant scale and that once in operation it could be the world’s lowest cost source of seaborne SOP. The Project also offers
excellent potential to expand over time to meet the expected growth in demand for SOP.
The Project is located 940 kilometres by road south of the Wyndham Port in Western Australia (Figure 1). It comprises nine granted
Exploration Licences covering 3,057 square kilometres in Western Australia and three Exploration Licence applications covering 1,240
square kilometres in the Northern Territory.
The closest community to the Project is Kiwirrkurra which is located approximately 60 kilometres south-west. A Native Title Agreement
with the Kiwirrkurra People was signed in November 2017.
Figure 1: Map of Agrimin’s Projects
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REVIEW OF OPERATIONS
DEFINITIVE FEASIBILITY STUDY
During the year, the Company completed the DFS for the Project and released the results to the ASX on 21 July 2020. The DFS was
completed by an integrated owners team supported by best-in-class consultants and contractors providing expertise across the various
study disciplines. The DFS was prepared to an AACE Class 3 standard and has a -15% to +20% level of accuracy.
The DFS development plan is based on the sustainable extraction of brine from Lake Mackay using a network of shallow trenches.
Brine will be transferred along trenches into a series of solar evaporation ponds located on the salt lake’s surface. Raw potash salts
will crystallise on the floors of the ponds and will be collected by wet harvesters. Harvested salts will be pumped as a slurry to the
processing plant located off the edge of the salt lake. The processing plant will be powered by a hybrid gas, solar, wind and battery
solution with a renewable energy penetration of 58%. Process and potable water will be supplied from a borefield installed to the
south of the salt lake.
The processing plant will produce high quality finished SOP fertiliser ready for direct use by customers. The SOP will be hauled by a
fleet of dedicated road trains to a purpose-built storage facility at Wyndham Port. At the port, SOP will be loaded via an integrated
barge loading facility for shipment to customers.
The DFS returned the following key outcomes for the first stage of production, based on a flat SOP price of US$500 per tonne FOB
(Wyndham Port):
•
•
•
•
•
•
Post-tax NPV8, real of US$655 million and post-tax IRR of 21%;
Production rate of 450,000 tonnes per annum;
Initial 40 year mine life;
Total cash cost of US$159 per tonne FOB (Wyndham Port);
Capital cost of US$415 million, including contingency; and
Annual EBITDA forecast of US$145 million and EBITDA margin of 66%.
The Company has completed extensive pilot testing since 2017 and has produced SOP samples with high-grade product specifications
of >53% K₂O.
During the DFS, a long-term pilot evaporation trial was operated on Lake Mackay from October 2018 to June 2020 which involved a
3,000 square metre pond system run as a constant flow operation with brines being transferred through the ponds under a daily
transfer regime. This industry-leading trial captured more than a full annual cycle of operating data and successfully validated the DFS
pond model and process assumptions. This pilot trial was a major de-risking milestone for the Project.
The pilot trial included the production and harvesting of more than 50 tonnes of raw potash salt at grades of up to 12% K₂O. The potash
salts have undergone pilot processing tests to produce larger quantities of SOP samples within the Company’s targeted product
specifications and have been supplied to potential offtake parties and project partners.
The Project’s development, as contemplated in the DFS, also encompasses a strategic mine-to-ship logistics chain ensuring it remains
scalable and successful over its multi-decade life. This includes the development of key road and port infrastructure, along with a joint
venture alliance with a proven bulk logistics operator to provide critical product haulage capability.
POST-DFS ACTIVITIES AND FRONT-END ENGINEERING & DESIGN
Following completion of the DFS, the Company continued to advance project funding discussions which resulted in the appointment
of Advisian, a subsidiary of Worley Limited, as Independent Technical Expert on behalf of financiers. The Independent Technical Review
(“ITR”) included a detailed assessment of all facets of the project as contemplated in the DFS. The review, while critical for external
financiers, was also designed to inform the Company’s ongoing Front-End Engineering and Design (“FEED”) and other de-risking
activities.
The ITR was completed by Advisian in May 2021. The ITR report concluded that, based upon the data described in the report, the
identified project risks are not expected to impact the technical and financial viability of the Mackay Potash Project, particularly when
considering the FEED work programs and mitigations that are planned to occur prior to the Company making a Final Investment
Decision.
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REVIEW OF OPERATIONS
POST-DFS ACTIVITIES AND FRONT END ENGINEERING & DESIGN (CONTINUED)
The Company has now awarded key detailed design and FEED work packages to preferred tenderers. In November 2020, Royal IHC
was awarded the FEED contract for automated wet harvesting equipment for the Project. Wet harvesting is currently used at the
world’s largest SOP operations and IHC is the world leader in the design and manufacture of dredging systems for wet harvesting
solutions. The application of wet harvesting can provide significant operating benefits including:
•
•
•
•
Significantly lower energy consumption to transfer raw potash salts from the evaporation ponds to the processing plant (i.e.
raw potash salts will be transferred to the plant via pipeline as a slurry, thereby removing the requirement to truck dry salts);
Reduced labour costs as wet harvesters will be automated;
Increased overall potassium recovery with harvesting of two pre-concentration ponds to recover a portion of the potassium-
bearing entrained brine; and
Reduced pond sizes due to harvesting occurring earlier in the evaporation cycle and not having to take ponds off-line for
harvesting.
In February 2021, Coffey Services Australia Pty Ltd were appointed to lead the geotechnical investigations and FEED activities required
to finalise the haul road alignment, construction methodology and detailed design. The commencement of FEED activities relating to
the haul road followed a range of heritage and environmental surveys which were undertaken over several years.
Following the ITR, in May 2021 Primero Group, a subsidiary of NRW Holdings Limited, was awarded the FEED contract for the process
plant and associated non-process infrastructure for the Project. Primero was initially appointed in July 2019 on an Early Contractor
Involvement basis to complete the DFS engineering design for the process plant, and given the successful completion of the DFS and
ITR, the Company appointed Primero to commence the FEED phase.
Agrimin’s commitment to the highest standards of Environmental, Social and Governance (“ESG”) was embodied throughout the DFS
and the Project will deliver on a number of metrics, including:
•
•
•
•
Pro-active engagement with Indigenous people and Traditional Owners, as well as support for important land management
and community programs;
Significant commitment to training and employment opportunities for Indigenous people, particularly in relation to the road
haulage operation;
High renewable energy penetration to deliver very low scope 1 and 2 emissions and one of the lowest carbon footprints
associated with any macro-nutrient fertiliser product; and
Creation of critical new seaborne SOP supply to help developing countries achieve their food security goals, especially with
respect to increasing demand for high value crops such as fruits, vegetables, tree nuts and grape-vines.
As outlined in the DFS, full-scale Project construction is planned to commence upon the completion of permitting and project funding.
A program of early works is scheduled to occur in the six months prior to construction and will focus on site preparation and the
procurement of time-critical equipment for construction of the brine extraction trenches and solar evaporation ponds. First SOP
production is expected approximately 2.5 years after the commencement of construction.
The Project’s strong economic returns and premium SOP product quality will underpin the next phase of development which includes:
Product marketing and offtake agreements;
Project funding and strategic partnerships;
FEED works;
Execution planning and contracting;
Environmental approvals; and
•
•
•
•
•
• Mining tenements and secondary approvals.
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REVIEW OF OPERATIONS
OTHER ACTIVITIES
In May 2021, Agrimin signed a Binding Offtake Agreement with Sinochem Fertilizer Macao Limited for the supply of 150,000 tonnes
per annum of SOP produced from the Mackay Potash Project for sale and distribution in China. This is the largest offtake volume for
any Australian SOP project and has a 10-year term with pricing negotiated quarterly based on a Chinese SOP price index quoted by an
international marketing group. Sinochem Fertilizer Macao Limited is a wholly owned subsidiary of Sinofert Holdings Limited, one of
China’s largest crop nutrition companies and plays a pivotal role with global potash suppliers to ensure the country's potash supply.
Agrimin continues to advance negotiations on offtake agreements with other major fertiliser companies in different regions and
intends to finalise further agreements in the near term to underpin project financing.
In October 2020, Agrimin’s SOP product was certified as an allowable input for use in organic production systems. This now permits
product from Lake Mackay to be marketed within Australia and all Non-Regulated Markets outside Australia as an allowable input
under Australia’s Export Organic Standard. As well as Lake Mackay’s SOP product being certified for use in the rapidly growing organic
agriculture sector, the achievement is also closely aligned with Agrimin’s sustainability vision and commitment to the United Nations
Sustainable Development Goals.
In addition to organic certification, ongoing green studies have identified the potential to increase the Project’s renewable penetration
rate to deliver low carbon SOP. In June 2021, the Company announced findings based on 12 months of Sonic Detection and Ranging
(“SODAR”) data collected at the proposed process plant location which provided information about daily and seasonal wind patterns.
The SODAR device uses sound waves to measure wind speed and direction in the atmosphere at 10m intervals up to 200m above
ground level. The average wind speed detected exceeded the assumption used in the DFS and, importantly, demonstrated that wind
energy is typically stronger at night and in the morning, which will complement solar energy and greatly improve renewable energy
utilisation.
Based on ongoing data collection and studies, the Company plans to optimise the mix of renewable energy generation with a review
of energy storage options and process power demand during the FEED phase.
LAKE AULD POTASH PROJECT (100% INTEREST)
The Lake Auld Potash Project is located approximately 640 kilometres south-east of Port Hedland, Western Australia (Figure 1). The
Lake Auld Potash Project consists of a granted Exploration Licence covering a lakebed area of 108 square kilometres across Lake Auld.
Lake Auld’s exceptionally high grades, favourable climatic conditions for solar evaporation and proximity to a major operating port
support the potential for strong economics.
The Lake Auld Potash Project is neighboured either side by the Company’s existing Exploration Licence applications which cover the
Canning Palaeovalley, including the remainder of Lake Auld and Percival Lakes. The Company’s applications cover the most prospective
portion of the 450 kilometre long lake system where historic sampling of brine has returned the highest known in-situ SOP grades from
an Australian salt lake.
During the year, the Company progressed a Concept Study and advanced plans for a heritage survey with Western Desert Lands
Aboriginal Corporation (Jamukurnu-Yapalikunu) RNTBC, the Native Title representative body for the Martu People.
TALI RESOURCES PTY LTD (40% INTEREST)
Agrimin holds a 40% interest in Tali Resources Pty Ltd which has Exploration Licences in Western Australia that are prospective for gold
and base metals mineralisation. During the year, Tali Resources Pty Ltd signed a Farm-in and Joint Venture Agreement with Rio Tinto
Exploration Pty Ltd, pursuant to which Rio Tinto Exploration Pty Ltd can earn up to a 75% joint venture interest in the Exploration
Licences. Tali Resources Pty Ltd has completed detailed ground gravity and airborne magnetic surveys, as well as ultrafine fraction soil
sampling, rock chip sampling and geological mapping over several exploration target areas.
ENVIRONMENT
Agrimin is committed to minimising the impact of its activities on the environment. Since exploration activities commenced at the
Mackay Potash Project in 2015, no reportable environmental incident has occurred and it is the Company’s focus to maintain this
performance.
The Environmental Impact Assessment (”EIA”) for the Mackay Potash Project continued during the year, and remains the critical path
item for the commencement of full-scale construction. The Project will be assessed by the Western Australian Environmental
Protection Authority (“EPA”) at a Public Environmental Review level with a four week public comment period. The EPA’s assessment
is an accredited process under a bilateral agreement with the Commonwealth Government, and therefore the Project will not require
a separate assessment by the Commonwealth Department of Agriculture, Water and the Environment (“DAWE”). During the year the
Company completed a range of field surveys and studies, as well as continued to prepare its Environmental Review Document for
submission to the EPA.
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REVIEW OF OPERATIONS
ENVIRONMENT (CONTINUED)
In parallel with the EIA, the Company is progressing the Mackay Potash Project’s other remaining approvals, licences and agreements,
which include:
•
•
•
Department of Mines, Industry Regulation and Safety (“DMIRS”) – Miscellaneous Licences, Mining Lease, Mining Proposal
and Mine Closure Plan approvals under the Mining Act 1978;
Department of Water and Environmental Regulation (“DWER”) – Works Approval and Licence under the Environmental
Protection Act 1986; and
Agreements with Parna Ngururrpa (Aboriginal Corporation) RNTBC and Tjurabalan Native Title Lands (Aboriginal
Corporation) for the grant of Miscellaneous Licences over the proposed haul road.
COMMUNITY
The Mackay Potash Project is located within the Kiwirrkurra native title determination area. The Company values its relationship with
the Kiwirrkurra native title holders and is committed to maintaining an enduring partnership to ensure the Project’s development can
bring many benefits to the local community.
The Company continued its active engagement in local communities and across all levels of Federal, State and Local Government. The
Mackay Potash Project enjoys strong support in local communities, particularly given the employment opportunities and economic
infrastructure that the Project will create. The Project is expected to create approximately 200 direct full-time jobs and support over
600 jobs through the regional supply chain over its 40 year life, generating valuable long-term opportunities for Indigenous people
living in Central Desert communities, as well as people living throughout the broader Kimberley region.
During the year, Newhaul Bulk Pty Ltd (the strategic haulage joint venture between Agrimin and Newhaul Pty Ltd) continued to
progress plans to establish a Driver Training Academy to maximise the number of local employees and provide further opportunities
for local employment and skills training presented by the Project’s development. The Driver Training Academy will aim to provide
inspiring pathways for young people in Central Desert, East Pilbara and Kimberley communities who are interested in pursuing a long-
term career in logistics.
The Company finalised heritage surveys across all three native title determination areas through which the haul road corridor passes.
The determination areas are Tjamu Tjamu (Aboriginal Corporation) RNTBC, Parna Ngururrpa (Aboriginal Corporation) RNTBC and
Tjurabalan Native Title Land Aboriginal Corporation RNTBC.
SAFETY
The Company is firmly committed to ensuring all work activities are carried out safely with all practical measures taken to remove risks
to the health, safety and welfare of workers, contractors, authorised visitors and anyone else who may be affected by the Company’s
activities. The Company is pleased to report that no recordable injuries have been reported during the year. The Company’s past safety
performance, along with a strong safety culture, bodes well as activity levels continue to grow.
SUSTAINABILITY
Agrimin is committed to developing the Mackay Potash Project sustainably and in alignment with the United Nations Sustainable
Development Goals. The Company’s commitment is embodied throughout the recently released DFS and has been demonstrated
through over six years of positive stakeholder engagement.
The Company believes in caring for the natural environment and aims to produce sustainable fertiliser products that minimise the
environmental impacts of global agriculture. Agrimin is committed to managing its own environmental responsibilities during the
production of its SOP, as well as offering an alternative to existing chemical and chloride-based potash fertilisers.
Agrimin’s Board is committed to the adoption of corporate governance policies and practices consistent with the ASX Corporate
Governance Council’s Corporate Governance Principles and Recommendations that are appropriate for a company of Agrimin’s size
and nature. Agrimin’s governance documents are reviewed annually and are available on the Company’s website.
The Company is committed to maximising the employment and business opportunities for Indigenous people.
COVID-19 PANDEMIC
The COVID-19 outbreak was declared a pandemic by the World Health Organisation in March 2020. The outbreak and the response of
Governments in dealing with the pandemic has not had a significant impact on the operations of the Company. The main impacts
during the year related to the postponement of native title meetings that were planned, as well as the delay of certain heritage and
environmental surveys. These activities have since re-commenced.
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REVIEW OF OPERATIONS
CORPORATE
On 1 December 2020, the Company received a government grant of $1,587,901 (2020: $1,943,682) in the form of a research and
development refund for the financial year ended 30 June 2020. There were no unfulfilled conditions attached to the grant.
On 11 December 2020, the Company announced a capital raising of $5,000,000 (before costs) via a placement to institutional and
sophisticated investors. The placement included 11,111,112 ordinary shares issued at a price of $0.45 per share. The shares were
issued on 17 December 2020.
On 11 December 2020, the Company announced plans to undertake a non-underwritten Share Purchase Plan (“SPP”) to raise up to
approximately $2 million (before costs) via an issue of shares at an issue price of $0.45 per share. Following closure of the SPP, the
Company issued 3,287,171 shares on 1 February 2021 to raise $1,479,227 (before costs).
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REVIEW OF OPERATIONS
ANNUAL MINERAL RESOURCES AND ORE RESERVE STATEMENT
Resource Zone
UZT
UZB
LZ1
LZ2
LZ3
Total
Resource Zone
UZT
UZB
LZ1
LZ2
LZ3
Total
Aquifer
Volume
(Mm3)
10,568
28,636
48,127
248,711
17,003
353,045
Aquifer
Volume
(Mm3)
10,568
28,636
48,127
248,711
17,003
353,046
Drainable Porosity Mineral Resource Estimate (JORC Code 2012)
Measured & Indicated
Measured
Indicated
Total
Inferred
Total Mineral Resource
K (mg/L)
SOP (Mt)
K (mg/L)
SOP (Mt)
K (mg/L)
SOP (Mt)
K (mg/L)
SOP (Mt)
K (mg/L)
SOP (Mt)
3,473
-
-
-
-
3,473
3.9
-
-
-
-
3.9
3,719
3,405
3,542
-
-
3,527
3.3
6.5
9.7
-
-
19.5
3,558
3,405
3,542
-
-
3,509
7.3
6.5
9.7
-
-
23.5
2,969
3,084
3,428
3,382
1,910
3,232
3.7
3.6
9
75
8.7
100.0
3,360
3,292
3,487
3,382
1,910
3,285
11
10.1
18.7
75
8.7
123.5
Total Porosity Mineral Resource Estimate (JORC Code 2012)
Measured & Indicated
Measured
Indicated
Total
Inferred
Total Mineral Resource
K (mg/L)
SOP (Mt)
K (mg/L)
SOP (Mt)
K (mg/L)
SOP (Mt)
K (mg/L)
SOP (Mt)
K (mg/L)
SOP (Mt)
3,473
-
-
-
-
3,473
16.5
-
-
-
-
16.5
3,719
3,405
3,542
-
-
3,501
8.6
54.6
81.4
-
-
144.6
3,558
3,405
3,542
-
-
3,498
25.1
54.6
81.4
-
-
161.1
2,952
3,084
3,428
3,382
1,910
3,323
10.9
29.8
75.7
787.8
30.4
934.6
3,375
3,292
3,487
3,382
1,910
3,349
36
84.4
157
787.8
30.4
1,095.6
Ore Reserve
Classification
Brine Volume (GL)
K (mg/l)
SOP (Mt)
Proved
Probable
Total
602
2,592
3,194
2,797
2,819
2,815
3.7
16.3
20.0
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REVIEW OF OPERATIONS
COMPETENT PERSON STATEMENT
The mineral resources and ore reserves statement in this Annual Report is based on, and fairly represents, information and supporting
information prepared by a competent persons.
The mineral resources statement in this Annual Report as a whole has been approved by Mr Derek Loveday, who is a full-time employee
of Stantec Consulting Services Inc. Mr Loveday is a geologist and is an independent consultant to Agrimin Limited. Mr Loveday is a
Member of the Society for Mining, Metallurgy & Exploration, a Professional Engineer of the Association of Professional Engineers and
Geoscientists of Alberta, and a Professional Engineer of the South African Council for Natural Scientific Professions. Mr Loveday has
provided his prior written consent to the form and context in which the mineral resources statement appears in this Annual Report.
The ore reserves statement in this Annual Report as a whole has been approved by Mr Rick Reinke, who is a full-time employee of
Stantec Consulting Services Inc. Mr Reinke is a hydrogeologist and is an independent consultant to Agrimin Limited. Mr Reinke is a
member, a Professional Geoscientist, and Professional Geophysicist of the Association of Professional Engineers and Geoscientists of
Alberta. Mr Reinke has provided his prior written consent to the form and context in which the ore reserves statement appears in this
Annual Report.
FORWARD LOOKING STATEMENTS
This Annual Report may contain certain forward-looking statements which may not have been based solely on historical facts, but
rather may be based on the Company’s current expectations about future events and results. Where the Company expresses or implies
an expectation or belief as to future events or results, such expectation or belief is expressed in good faith and believed to have a
reasonable basis. However, forward-looking statements are subject to risks, uncertainties, assumptions and other factors, which could
cause actual results to differ materially from future results expressed, projected or implied by such forward-looking statements.
Forward looking information includes exchange rates; the proposed production plan; projected brine concentrations and recovery
rates; uncertainties and risks regarding the estimated capital and operating costs; uncertainties and risks regarding the development
timeline, including the need to obtain the necessary approvals. For a more detailed discussion of such risks and other factors, refer to
this Annual Report in its entirety, as well as the Company’s other ASX Releases. Readers of this Annual Report should not place undue
reliance on forward-looking information. No representation or warranty, express or implied, is made by the Company that the matters
stated in this Annual Report will be achieved or prove to be correct. Recipients of this Annual Report must make their own
investigations and inquiries regarding all assumptions, risks, uncertainties and contingencies which may affect the future operations
of the Company or the Company’s securities. The Company does not undertake any obligation to update or revise any forward-looking
statements as a result of new information, estimates or opinions, future events or results, except as may be required under applicable
securities laws.
CAUTIONARY STATEMENT
The Definitive Feasibility Study results, production target and forecast financial information referred to in this Annual Report are
supported by the Definitive Feasibility Study mine plan which is based on the extraction of 93% Ore Reserve and 7% Inferred Mineral
Resource. There is a low level of geological confidence associated with the Inferred Mineral Resource and there is no certainty that
further exploration work and economic assessment will result in the conversion to Ore Reserve or that the production target itself will
be realised. The Mineral Resource and Ore Reserve underpinning the production target in this Annual Report have been prepared by
a competent person in accordance with the requirements of the JORC Code (2012).
Page | 11
ENVIRONMENTAL, SOCIAL AND GOVERNANCE
Agrimin is committed to developing the Mackay Potash Project sustainably and in alignment with the United Nations Sustainable
Development Goals, as outlined in Figure 2. The Company’s commitment is embodied throughout the recently released DFS and has
been demonstrated through seven years of positive stakeholder engagement.
Goal
Agrimin’s Alignment
Zero
Hunger
We aim to establish a globally important supply of sustainable fertiliser that can
improve global agricultural productivity and assist developing countries to achieve
food security.
Good Health
and Well-Being
We strive to provide a safe work place for our employees and the communities in
which we operate. Their health and well-being is our paramount focus.
Quality
Education
Gender
Equality
Decent Work
and Economic
Growth
Industry,
Innovation and
Infrastructure
We have a planned program of training and education opportunities within our
local communities which are designed to improve accessibility to the jobs that will
be created over the life of our operations.
We aspire to provide a positive and inclusive team environment. We recognise the
importance of improving gender representation in the roles we create.
We aim to empower local communities by creating jobs and supporting training
programs throughout all phases of our operations to ensure economic benefits
endure locally over the long-term.
We will develop important regional infrastructure that will create economic and
social opportunities through better connectivity for remote communities.
Reduced
Inequalities
We seek to provide jobs and economic opportunities for Indigenous people living in
our country’s most isolated communities. We firmly believe our operations can be
a catalyst for an improved quality of life.
Responsible
Consumption
and Production
Climate
Action
Life on
Land
We have designed a sustainable and low impact production process to ensure that
our operations minimise the consumption of water, energy and other materials.
We aim to achieve a high penetration of renewable energy in our operations and
we are proud that our fertiliser will have one of the lowest carbon footprints
associated with any major macro-nutrient fertiliser.
We are committed to protecting the environment and minimising the impact on
the biodiversity within the ecosystems we operate. Globally, we aim for our
fertiliser to reduce the environmental impact of agriculture.
Peace, Justice
and Strong
Institutions
We are committed to acting in a transparent, accountable and responsible manner
throughout all of our business dealings. We operate to high levels of corporate
governance and intend to grow these with our business.
Figure 2. Alignment with the United Nations Sustainable Development Goals
Page | 12
ENVIRONMENTAL, SOCIAL AND GOVERNANCE
ENVIRONMENT
Agrimin believes in caring for the natural environment and aims to produce sustainable fertiliser products that minimise the
environmental impacts of global agriculture. Agrimin is committed to managing its own environmental responsibilities during the
production of its SOP, as well as offering an alternative to existing chemical and chloride-based potash fertilisers.
The Mackay Potash Project gives Agrimin an opportunity to integrate environmental and social outcomes from the very beginning. The
Project has a targeted renewable energy penetration of 58% through the utilisation of a hybrid gas, solar, wind and battery solution.
This has contributed to Agrimin’s SOP having one of the lowest carbon footprints associated with any major macro-nutrient fertiliser.
Agrimin has worked diligently to design a project that minimises the impact on the biodiversity within the ecosystems it operates. The
Company has undertaken an extensive set of environmental surveys and studies with the aim of developing a comprehensive and
holistic understanding of Lake Mackay, the Lake’s local and regional significance and potential impacts associated with the Project.
The Company has been operating extensive field programs on Lake Mackay since 2015 and is proud to have never recorded a single
significant environmental incident or received an environmental improvement or prohibition notice.
Significant environmental incidents
Value of fine
DMRS improvement notices - environment
DMRS prohibition notices - environment
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
FY17
FY18
FY19
FY20
FY21
Figure 3. Environmental performance
SAFETY
The safety and wellbeing of Agrimin’s people and the communities in which it operates is a paramount focus. Agrimin believes all
incidents are preventable and its aim is that all people will return home after work in the same or better condition than when they
arrived.
As Agrimin has grown it has retained an embedded and positive safety culture which is reflected in its safety performance. Agrimin’s
culture is set by its progressive and accessible leadership team, along with everyone’s individual commitment to the values that drive
safe behaviour.
During the year, Agrimin had no Lost Time Injuries (“LTIs”) and no significant incidents were reported within the communities in which
it operates.
2
-
-
-
-
FY17
FY18
FY19
FY20
FY21
Figure 4. LTI Performance
Page | 13
ENVIRONMENTAL, SOCIAL AND GOVERNANCE
SOCIAL
Agrimin’s vision is to empower local Indigenous communities through sustainable economic development and aims to sustainably
produce fertiliser products that help achieve global food security.
Agrimin believes in supporting the communities in which it operates and that it is essential to deliver significant benefits to members
of local and regional communities, in particular the Traditional Owners of the lands it operates. Further, it will only truly succeed once
it is accepted as an integral party of the communities in which it operates.
Agrimin has established a long-standing and respectful relationship with the Traditional Owners who are affected by the Mackay Potash
Project. The Company aims to continue to build upon this mutually beneficial relationship with the Traditional Owners of the land in
which it operates, providing economic and cultural-strengthening opportunities with effective engagement, consultation and
communication.
The Mackay Potash Project will not only create jobs and economic opportunities for the local communities, but Agrimin will also
provide training and education opportunities designed to improve their accessibility. Agrimin is particularly proud that its haulage joint
venture (Newhaul Bulk) is developing a driver training program which will maximise the opportunity to recruit local and Indigenous
employees.
The development of the Mackay Potash Project will present local communities with improved access to infrastructure including roads,
communication networks and access to utilities. Central to the project is a proposed sealed haul road which will directly benefit local
communities and other businesses in the region.
Agrimin’s premium quality SOP products will play a critical role in helping to achieve global food security. SOP will improve agricultural
productivity and increase sustainable food production for farmers, particularly in the developing countries of South and Southeast Asia
to nourish their rapidly growing middle-class populations.
GOVERNANCE
Agrimin strives to act in a transparent, accountable and responsible manner in all of its business dealings.
Agrimin’s Board is committed to the adoption of corporate governance policies and practices consistent with the ASX Corporate
Governance Council’s Corporate Governance Principles and Recommendations that are appropriate for a company of Agrimin’s size
and nature. Agrimin’s governance documents are reviewed annually and include:
•
•
•
•
•
•
•
•
•
•
•
•
Values Statement
Code of Business Conduct
Shareholder Communication Policy
Continuous Disclosure Policy
People and Remuneration Committee Charter
Diversity Policy
Environmental and Cultural Heritage Policy
Audit and Risk Management Committee Charter
Disclosure Policy
Securities Trading Policy
Whistleblower Policy
Anti-Bribery and Corruption Policy
These documents are available on the Agrimin website.
Agrimin recognises that as the Mackay Potash Project moves to the next phase of development, contract and procurement
management will become an increasingly important area of governance.
Page | 14
ENVIRONMENTAL, SOCIAL AND GOVERNANCE
Agrimin is committed to maximising the employment and business opportunities for Indigenous people, particularly the Kiwirrkurra
People. Proposals from Kiwirrkurra People or entities will be given preferential weighting when tendering for smaller packages of work.
PEOPLE
Agrimin cares about its people, they are its most important asset and the Company aspires to provide a positive, safe and inclusive
team environment. Agrimin recognises the importance and improvement to business performance a diverse workforce can bring.
Agrimin is committed to measuring and developing inclusive diversity within the roles it creates at the Mackay Potash Project ensuring
equal access to opportunities irrespective of gender, age, race, national or ethnic origin, cultural background, social group, marital
status, religion, sexual orientation or physical ability while ensuring equal remuneration is offered for all employees, reflective of the
position, candidate experience and position tenure.
Professional and personal development of its workforce is central to its business objective. Agrimin aims to create a positive team
environment where its employees have the opportunity for lifelong learning and development, where it can empower its employees
and local communities and leave a lasting positive legacy.
Page | 15
DIRECTORS’ REPORT
Your directors are pleased to provide their report on Agrimin Limited (ASX: AMN) (‘Agrimin’ or the ‘Company’) together with the
consolidated financial statements for the Company and its controlled entities (‘Group’) for the year ended 30 June 2021.
DIRECTORS’ AND COMPANY SECRETARY
The names and details of the Company’s directors and company secretary in office during the financial year and until the date of this
report are as follows. The directors and company secretary were in office for the entire period unless otherwise stated.
NAMES, QUALIFICATIONS, EXPERIENCE AND SPECIAL RESPONSIBILITIES
Richard Seville
Non-Executive Chairperson, appointed 5 August 2019.
BSc (Hons) Mining Geology, MEngSc Rock Engineering, MAusIMM, ARSM.
Mr Seville has over 35 years of experience in the resources sector including positions as Managing Director, Operations Director, Non-
Executive Director and Chairperson of a number of ASX, TSX and AIM listed companies. Until 2019, Mr Seville was Chief Executive
Officer and Managing Director of Orocobre Limited (ASX: ORE), a lithium and boron chemicals producer with operations in Argentina.
Mr Seville led Orocobre for 12 years from IPO and during which time, he brought the flagship Olaroz brine project through exploration,
feasibility and financing with project debt and partnering with Toyota Tsusho Corporation, into production and expansion. Mr Seville
holds a BSc in Mining Geology from Imperial College, London and a Masters in Engineering Science from James Cook University.
Mr Seville’s other current ASX directorships include Orocobre Limited and OZ Minerals Limited.
Mr Seville was formerly a director of Advantage Lithium Corp.
Mark Savich
CEO and Executive Director, appointed 1 December 2012 and Chief Executive Officer from 1 March 2015.
BComm, CFA, GradDipMinExplGeoSc, GAICD.
Mr Savich has 18 years of experience in the resources sector in Western Australia. He began his career as an accountant in 2003 and
was subsequently a resources analyst between 2006 and 2014. Mr Savich became a Non-Executive Director of Agrimin in 2012 and
was appointed as an Executive Director in 2014. He holds a Bachelor of Commerce from the University of Western Australia, a Graduate
Diploma in Mineral Exploration Geoscience from the WA School of Mines, is a Chartered Financial Analyst (CFA), a graduate member
of the Australian Institute of Company Directors and completed the Chartered Accountants (CA) program.
Brad Sampson
Non-Executive Director, appointed 22 April 2016 (formerly Non-Executive Chairperson until 5 August 2019).
B.E. (Hons) Mining, MBA, AMP, MAusIMM.
Mr Sampson is an internationally experienced business leader, director and mining professional with 30 years’ resources industry
experience. In addition to significant project development and operating experience, he is an experienced director with listed and non-
listed companies and has joint venture governance experience across multiple international jurisdictions. Mr Sampson currently serves
as Chief Executive Officer and Director of Kore Potash Plc. He has been the Managing Director of Discovery Metals Ltd and held senior
management roles in resources and engineering companies including Newcrest Mining, Gold Fields Ltd and Thiess. His experience
covers the entire cycle of exploration, development, operations and closure, and includes equity and debt funding of resources
projects, government relations and product marketing.
Mr Sampson’s other current ASX directorships include Kore Potash Plc and Metallica Minerals Ltd.
Page | 16
DIRECTORS’ REPORT
Alec Pismiris
Non-Executive Director and Company Secretary, appointed 3 October 2013.
BComm, MAICD, FGIA FCG.
Mr Pismiris has over 30 years of experience in the securities, finance and mining industries. Since 1990, Mr Pismiris has served as a
director and company secretary for various ASX listed companies as well as a number of unlisted public and private companies. Mr
Pismiris completed a Bachelor of Commerce degree at the University of Western Australia, is a member of the Australian Institute of
Company Directors and a fellow of The Governance Institute of Australia. Mr Pismiris has participated numerous times in the processes
by which boards have assessed the acquisition and financing of a diverse range of assets and has participated in and become familiar
with the range of evaluation criteria used and the due diligence processes commonly adopted in the commercial assessment of
corporate opportunities.
Mr Pismiris’ other current directorships include Frontier Resources Limited, Pacton Gold Inc., Sunshine Gold Limited and The Market
Herald Limited.
Mr Pismiris was formerly a director of Aguia Resources Limited and Victory Mines Limited.
INTERESTS IN THE SHARES AND OPTIONS OF THE COMPANY AND RELATED BODIES CORPORATE
As at the date of this report the relevant interests of each director in the shares and options of the Group are:
Director
R Seville
M Savich
B Sampson
A Pismiris
Ordinary
377,193
9,910,000
1,600,000
4,500,000
Options
Performance Rights
-
-
-
-
1,000,000
4,000,000
500,000
500,000
DIRECTORS’ MEETINGS
An audit committee was originally established in July 2007. However, due to the current composition of the Board of Directors and
scale of activities of the Company, this committee was not utilised during the year ended 30 June 2021. All matters that would normally
have been reviewed by this committee were reviewed by the full Board of Directors.
The number of directors’ meetings and number of meetings attended by each of the directors of the Company during the financial
year were:
Director
R Seville
M Savich
B Sampson
A Pismiris
Board Meetings
Held
Attended
16
16
16
16
16
16
16
16
PRINCIPAL ACTIVITIES
The principal activity of the Group during the year was advancing the Mackay Potash Project in Western Australia. There was no
significant change in the nature of the Group’s activities during the financial year ended 30 June 2021.
REVIEW AND RESULTS OF OPERATIONS
The Company incurred a $5,022,249 loss after income tax for the period (2020: $1,799,067). This result was in line with expectations
and reflected operating costs incurred during the period which were mainly costs associated with general administration of the
Company and compliance expenses. During the year, $5,235,516 (2020: $11,109,101) of exploration expenditure was capitalised to
exploration and evaluation assets.
Page | 17
DIRECTORS’ REPORT
DIVIDENDS
No dividends have been paid or recommended for the current year (2020: None).
EVENTS SUBSEQUENT TO REPORTING DATE
LIKELY DEVELOPMENTS AND EXPECTED RESULTS OF OPERATIONS
Likely developments in the operations of the Group are set out in the Review of Operations on page 4.
INDEMNIFICATION OF AUDITORS
To the extent permitted by law, the Company has agreed to indemnify its auditors, Ernst & Young Australia, as part of the terms of its
audit engagement agreement against claims by third parties arising from the audit (for an unspecified amount).
No payment has been made to indemnify Ernst & Young during or since the financial year.
INDEMNIFICATION AND INSURANCE OF DIRECTORS AND OFFICERS
INDEMNIFICATION
The Company has agreed to indemnify the directors of the Company against all liabilities to another person (other than the Company
or a related body corporate) that may arise from their position as directors of the Company, except where the liability arises out of
conduct involving a lack of good faith. The agreement stipulates that the Company will meet the full amount of any such liabilities,
including costs and expenses.
INSURANCE PREMIUMS
The Company has arranged directors’ and officers’ liability insurance, for past, present or future directors, secretaries and executive
officers. The insurance cover relates to:
-
-
costs and expenses incurred by the relevant officers in defending proceedings, whether civil or criminal and whatever their
outcome; and
other liabilities that may arise from their position, with the exception of conduct involving a wilful breach of duty or improper
use of information or position to gain a personal advantage.
The Group paid a premium of $32,500 (2020: $27,500) for directors’ and officers’ insurance.
ENVIRONMENTAL REGULATION AND PERFORMANCE
The Group is subject to environmental regulation in respect to its exploration activities and aims to ensure that the highest standard
of environmental care is achieved, and it complies with all relevant environmental legislation. There have been no material breaches
during the period covered by this report.
NON-AUDIT SERVICES
The Board has considered the non-audit services provided during the financial year by the auditor and is satisfied that the provision of
those non-audit services is compatible with, and did not compromise, the auditor’s independence requirements of the Corporations
Act 2001. The non-audit services were reviewed by the Board to ensure:
-
-
they do not impact the integrity and objectivity of the auditor; and
they do not undermine the general principles relating to auditor independence as set out in APES 110 Code of Ethics for
Professional Accountants, as they did not involve reviewing or auditing the auditor’s own work, acting in a management or
decision-making capacity for the Group, acting as an advocate for the Group or jointly sharing risks and rewards.
During the period, Ernst & Young assisted with tax services including the preparation of the Income Tax Return and Research and
Development. The Company paid $54,711 for the services provided (2020: $60,000).
Page | 18
DIRECTORS’ REPORT
CORPORATE GOVERNANCE
This statement outlines the main corporate governance practices adopted by the Board of Agrimin which comply with the ASX
Corporate Governance Council recommendations unless otherwise stated.
The Board and management of Agrimin recognise their duties and obligations to shareholders and other stakeholders to implement
and maintain a proper system of corporate governance. The Company believes that good corporate governance adds value to
stakeholders and enhances investor confidence.
The ASX Listing Rules require listed companies to prepare a statement disclosing the extent to which they have complied with the
recommendations of the ASX Corporate Governance Council (‘Recommendations’) in the reporting period. The Recommendations are
guidelines designed to improve the efficiency, quality and integrity of the Company. They are not prescriptive and if a company
considers a recommendation to be inappropriate having regard to its own circumstances, it has the flexibility not to follow it. Where a
company has not followed all the Recommendations, it must identify which Recommendations have not been followed and give
reasons for not following them.
This Corporate Governance Statement (‘Statement’) sets out a description of the Company’s main corporate practices and provides
details of the Company’s compliance with the Recommendations, or where appropriate, indicates a departure from the
Recommendations with an explanation.
This Statement is current as at 30 June 2021 and has been approved by the Board of Directors of Agrimin. It is available on the
Company’s website at http://www.agrimin.com.au/corporate-governance/.
AUDITOR’S INDEPENDENCE DECLARATION
A copy of the Auditor’s independence declaration as required under section 307C of the Corporations Act 2001 is set out on page 28.
Page | 19
DIRECTORS’ REPORT
REMUNERATION REPORT (AUDITED)
1. PRINCIPLES OF REMUNERATION
Key management personnel have the authority and responsibility for planning, directing and controlling the activities of the Group.
The Key Management Personnel of Agrimin Limited and the Group are:
Directors
R Seville
Non-Executive Chairperson
M Savich
Chief Executive Officer and Executive Director
B Sampson
Non-Executive Director
A Pismiris
Non-Executive Director and Company Secretary
Named Key Management Personnel
T Lyons
General Manager
All the above persons were key management personnel during the financial year to 30 June 2021 unless otherwise stated. The
information provided in this remuneration report has been audited as required by section 308 (3C) of the Corporations Act 2001.
Key elements of Key Management Personnel remuneration strategy
The following principles of remuneration have been agreed by the Board and formed the basis of the principles of remuneration during
the relevant periods of employment and will remain relevant to future employment arrangements.
Remuneration levels for key management personnel of the Group are competitively set to attract and retain appropriately qualified
and experienced directors and executives and as relevant to the circumstances of the Company from time to time. The remuneration
structures explained below are designed to attract suitably qualified candidates, reward the achievement of strategic objectives, and
achieve the broader outcome of creation of value for shareholders. The remuneration structures consider the capability and
experience of the key management personnel and the Group’s performance including:
-
-
-
-
-
the successful implementation of exploration and development programs designed to progress into operations;
the Group’s earnings, when and if appropriate;
the growth in share price and delivering enhancement of shareholder value;
the relevant prevailing employment market conditions; and
the amount of incentives within each key management person's remuneration.
Remuneration packages include a mix of fixed and variable remuneration and short and long-term performance-based incentives.
1.1
FIXED REMUNERATION
Fixed remuneration consists of base remuneration (which is calculated on a total cost basis and includes any fringe benefits tax charges
related to employee benefits) as well as employer contributions to superannuation funds, as required by law. Remuneration levels are
reviewed annually by the Chief Executive Officer and the Board through a process that considers individual performance, employment
market conditions and overall performance of the Group.
1.2
PERFORMANCE LINKED REMUNERATION
Performance linked remuneration includes short-term and long-term incentives and is designed both to reward key management
personnel for meeting or exceeding their financial and personal objectives and to keep the Group competitive in the marketplace. The
Short-Term Incentive (STI) is an at-risk bonus provided in the form of cash and based on agreed key performance indicators (KPIs) for
each position. A Long-Term Incentive (LTI) has been provided as performance rights to ordinary shares of the Company under the rules
of the Agrimin Employee Securities Incentives Plan 2019 (ESIP). The ESIP provides for the issuance of performance securities which can
include a plan share, option, performance right or other convertible security. Upon determination by the Board that the performance
conditions attached to the performance securities have been met, this will result in the issue of one ordinary share in the Company for
each performance security.
If a performance condition of a performance security is not achieved by the milestone date then the performance security will lapse.
A performance security will also lapse if the Board determines the participant ceases to be an eligible employee for the purposes of
the ESIP for any reason (other than as a result of retirement, disability, bona fide redundancy or death).
Page | 20
DIRECTORS’ REPORT
1.3
SHORT TERM INCENTIVE BONUS
Each year the Board of Directors sets the KPIs for key management personnel and senior management. The KPIs will generally include
measures relating to the Group, and to the individual, and include financial, people, strategy and risk measures. The measures are
chosen as they directly align the individual’s reward to the KPIs of the Group and to its strategy and performance. The full Board
reviews and confirms the cash incentive to be paid to each individual. This method of assessment was chosen as it provides the Board
with an objective assessment of the individual’s performance.
1.4
LONG-TERM INCENTIVES
The LTIs include long-service leave and share based payments (‘performance securities’) which are outlined below.
Performance Securities
Performance securities are issued under the ESIP (made in accordance with thresholds set in plans that have been initially approved
by the Board) and it provides for key management personnel to receive varying numbers of performance rights for no consideration.
The actual number of performance securities issued depends on the seniority and responsibility of the executive concerned. The
performance conditions and vesting periods of the performance securities are set so as to provide a realistic incentive to each executive
and to reflect the executive’s contribution to the Group and enhancement of value for all shareholders.
At the annual general meeting of shareholders held on 27 November 2019, the Company obtained approval for the adoption of the
ESIP in accordance with the requirements of ASX Listing Rule 7.2, Exception 9. The ESIP has not replaced the Performance Right Plan
2014 (PRP) which was renewed in 2017. Under the PRP 7,000,000 performance rights were issued to the following directors and other
key management personnel:
Director
M Savich
B Sampson
A Pismiris
Number issued
4,000,000
500,000
500,000
Other key management personnel
T Lyons
2,000,000
The performance condition attached to these rights were as follows:
Performance condition
An ASX announcement by the Company of the production of its first Sulphate of Potash
(SOP) from the Mackay SOP Project as per the final feasibility study.
The performance rights are subject to a milestone date being five years from the date of
grant on 15 September 2017
Expiry date
Six months from the
date of satisfaction of
the Vesting Condition.
The grant date fair value of the performance rights above ranged between $0.51 to $0.84 per right.
Page | 21
DIRECTORS’ REPORT
1.4 LONG-TERM INCENTIVES (continued)
Performance Securities (continued)
At the annual general meeting of shareholders held on 26 November 2020, the Company obtained approval to amend the terms of
the 7,000,000 existing performance rights in accordance with the Listing Rules 6.23.3 and 6.23.4. Pursuant to the Listing Rule 10.14,
approval was obtained to issue 1,000,000 performance rights to the Chairperson, Richard Seville, in accordance with Agrimin’s ESIP
Plan (2019).
The performance condition attached to these rights are as follows:
Performance condition
Milestone A
An ASX announcement by the Company of the commencement of construction at the
Mackay Potash Project.
The performance rights are subject to a milestone date of 1 November 2022.
Milestone B
An ASX announcement by the Company of the production of its first Sulphate of Potash
(SOP) from the Mackay Potash Project as per the final feasibility study.
The performance rights are subject to a milestone date of 1 November 2025.
Expiry date
Six months from
the date of
satisfaction of the
Vesting
Condition.
Six months from
the date of
satisfaction of the
Vesting
Condition.
On 21 July 2020, the Company announced the results of the DFS for the Mackay Potash Project. The DFS showed the Project to be
economically attractive and more than justified the Project advancing the permitting, offtake and financing stage. However, the
timeframe to complete this stage and then construct the Project has resulted in the expected production date of the existing rights to
be modified.
The Company considered the reasons for the delay in production date were more than justified by the rigour and quality of the DFS
and the development of a more realistic understanding of the timeframe necessary to complete the permitting, offtake and financing
stage to construct the project. The Company also considers that it is appropriate to incentivise the holders of the performance rights
to bring the Project toward the commencement and construction and it is therefore justified, with the approval of Shareholders, to
change the conditions of the existing performance rights.
At Balance Date the Company had 8,500,000 performance rights outstanding (2020: 7,000,000) relating to key management personnel.
This includes a further 500,000 performance rights issued to Mr Lyons under the ESIP on 31 December 2020.
Holder
Milestone date
Milestone A
Commencement of Construction
1 November 2022
Milestone B
Commencement of Production
1 November 2025
R Seville
A Pismiris
B Sampson
M Savich
T Lyons
Total
-
-
-
2,000,000
1,250,000
3,250,000
1,000,000
500,000
500,000
2,000,000
1,250,000
5,250,000
Total
1,000,000
500,000
500,000
4,000,000
2,500,000
8,500,000
The grant date fair value of the performance rights above ranged between $0.455 to $0.51 per right. The probability of achieving the
milestones was assessed by management and it was determined that it is more likely than not that these milestones will be met. The
minimum and maximum value of the performance rights yet to be granted is $0 and $4,272,500. A share-based payment expense of
$2,164,643 was recognised (2020: Nil). This includes $2,061,090 of costs associated with amended performance conditions of
7,000,000 existing rights granted on 17 September 2017 under the PRP (2014). Following the change in performance conditions, the
probability of achieving the milestones was assessed in accordance with AASB 2 Share Based Payments and it was determined that it
is more likely than not that these milestones will be met. Therefore, in accordance with AASB 2 Share Based Payments the Company
has recognised the fair value of the performance rights since grant date. If a performance condition of a performance security is not
achieved by the milestone date then the performance security will lapse. A performance security will also lapse if the Board determines
the participant ceases to be an eligible employee for the purposes of the ESIP for any reason (other than as a result of retirement,
disability, bona fide redundancy or death).
The Board considers that the incentive to the directors and other key management personnel represented by the grant of these
performance rights, are a cost effective and efficient reward for the Company to make to appropriately incentivise the continued
performance of the directors and are consistent with the strategic goals and targets of the Company.
Page | 22
DIRECTORS’ REPORT
1.5
CONSEQUENCES OF PERFORMANCE ON SHAREHOLDER WEALTH
The Board considers that the most effective way to increase shareholder wealth is through the successful exploration and development
of the Group’s exploration tenements. The Board considers that the Group’s LTI schemes incentivise key management personnel to
successfully explore the Group’s tenements by providing rewards that are directly correlated to delivering value to shareholders
through share price appreciation.
The factors that are considered relevant to affect total shareholder returns as required to be disclosed by the Corporations Act 2001
are summarised in the following table. The table excludes return on capital employed as a relevant measure given the exploration
basis of activity and operations of the Company.
Net loss after tax ($000's)
Dividends paid
Share price at year end ($'s)
2021
(5,022)
Nil
$0.495
2020
(1,799)
Nil
$0.435
2019
(1,795)
Nil
$0.505
2018
(1,193)
Nil
$0.940
2017
(903)
Nil
$0.465
2016
(967)
Nil
$0.410
Source of share prices quoted: CommSec
Prior year comparatives above have not been adjusted for any impact of adopting AASB 16 Leases in FY20; and AASB 15 Revenue from
Contracts with Customers and AASB 9 Financial Instruments in FY19.
The Company also notes that as an exploration and development company, operating revenue and profits are not KPIs in reviewing
key management personnel STIs or LTIs. When establishing guidelines for any STIs, the Company looks to other measures such as
enhancement of share price and capital raising opportunities (as relevant), achievement of project development milestones,
conducting operations in line with Company values and maximising value of the Group’s potash projects.
Page | 23
DIRECTORS’ REPORT
2. REMUNERATION OF KEY MANAGEMENT PERSONNEL
Details of the nature and amount of each major element of remuneration of each director and key management person of the Group are as follows:
2021
Directors
R Seville
M Savich
B Sampson
A Pismiris(1)
Total Directors
Key management personnel
T Lyons
Total key management
personnel
Total
2020
Directors
R Seville
M Savich
B Sampson
A Pismiris(1)
Total Directors
Key management personnel
T Lyons
Total key management
personnel
Total
Short-term employee benefits
Salary & fees
$
STI
$
Consulting fees
$
Total
$
Post-employment
superannuation
benefits
$
Other long term
Annual leave
$
Long service
leave
$
Share based
payments(2)
Total
$
$
100,000
284,739
54,795
60,000
499,534
207,930
207,930
707,464
90,731
300,339
61,096
54,000
506,166
196,705
196,705
702,871
-
-
-
-
-
64,800
64,800
64,800
-
-
-
-
-
57,330
57,330
57,330
-
-
-
36,000
36,000
-
-
36,000
-
-
-
36,000
36,000
-
-
36,000
100,000
284,739
54,795
96,000
535,534
272,730
272,730
808,264
90,731
300,339
61,096
90,000
542,166
254,035
254,035
796,201
9,500
25,000
5,205
-
39,705
26,034
26,034
65,738
8,619
20,127
5,804
-
34,550
24,133
24,133
58,683
-
23,836
-
-
23,836
18,461
18,461
42,297
-
23,836
-
-
23,836
16,154
16,154
39,990
-
36,099
-
-
36,099
33,283
33,283
69,382
-
-
-
-
-
-
-
-
61,166
170,666
1,217,123 1,586,797
177,703
213,703
1,513,695 2,148,869
117,703
117,703
650,948 1,001,456
650,948 1,001,456
2,164,643 3,150,325
-
-
-
-
-
-
-
-
99,350
344,302
66,900
90,000
600,552
294,322
294,322
894,874
(1) Mr Pismiris acted as company secretary during the year. Consulting fees represent amounts paid to Mr Pismiris for the performance of these services.
(2) Share based payments include $2,061,090 of costs associated with amended performance conditions of 7,000,000 existing rights granted on 15 September 2017 under the PRP (2014). Following the change
in performance conditions, the probability of achieving the milestones was assessed in accordance with AASB 2 Share Based Payments and it was determined that it is more likely than not that these milestones
will be met. Therefore, in accordance with AASB 2 Share Based Payments the Company has recognised the fair value of the performance rights since grant date.
Page | 24
DIRECTORS’ REPORT
2.1
SERVICE CONTRACTS
Remuneration and other terms of employment for key management personnel are formalised in service agreements.
The Company has entered into an employment agreement with Chief Executive Officer, Mr Mark Savich. The material terms of the
agreement are set out as follows:
-
-
-
-
-
Commencement date: 1 March 2015
Term: Ongoing and reviewed annually at the sole discretion of the Board
Fixed remuneration: $330,000 per annum inclusive of superannuation
Termination for cause: no notice period
Termination without cause: three-month notice period
Mr Savich’s remuneration is in line with market and is inclusive of the potential STI for the year.
The Company has entered into an employment agreement with General Manager, Mr Thomas Lyons. The material terms of the
agreement are set out as follows:
-
-
-
-
-
-
Commencement date: 24 March 2014 (revised contract 1 July 2018)
Term: Ongoing and reviewed annually at the sole discretion of the Board
Fixed remuneration: $240,000 per annum (2020: $210,000 per annum) exclusive of superannuation (revised 1 February
2021).
Annual bonus of up to 30% of remuneration based upon KPIs set by the Board and reviewed annually
Termination for cause: no notice period
Termination without cause: three-month notice period
There are currently no other service contracts with any director and there are no other key management personnel in the Company.
2.2
NON-EXECUTIVE DIRECTORS’ REMUNERATION
Total fees for all Non-Executive Directors was originally set by the Board on 22 June 2007 to not exceed $147,000. The levels of fees
set were based on a review involving reference to fees paid to other Non-Executive Directors of comparable companies at the time.
At a general meeting held on 15 September 2017 the Company obtained shareholder approval to increase the maximum total
aggregate amount of fees payable to Non-Executive Directors from $147,000 per annum to $250,000 per annum. At the annual general
meeting held on 27 November 2019 the Company obtained shareholder approval to increase the maximum total aggregate amount
of fees payable to Non-Executive Directors from $250,000 per annum to $350,000 per annum.
Directors’ fees are paid monthly in arrears. Members of the Board of Directors are entitled to performance related remuneration,
subject to obtaining the appropriate shareholder approvals. The chairperson base fee is $100,000 per annum exclusive of
superannuation and base fees for Non-Executive Directors is $60,000 per annum including superannuation. Directors’ fees cover all
main board activities. Additional services provided outside of board duties attract a separate daily rate agreed by the full Board. There
is no board retirement scheme and there is currently no intention to establish such a scheme.
2.3
SHORT-TERM INCENTIVES
Mr Tom Lyons was entitled to receive a cash bonus for the year ended 30 June 2021 as approved by the directors as determined against
KPI measures set by the Board, which included performance of:
-
-
-
Positive management of health, safety, heritage and environmental;
Progression of project approvals and licences; and
Delivery of work programs on time and within budgets.
The performance conditions selected were to incentivise executives to advance the Mackay Potash Project. As COVID-19 had limited
impact on the Group, there was no adjustment to proposed STI’s awarded to Group’s executives.
Mr Lyons was entitled to receive up to a maximum of 30% of his individual total fixed remuneration. Mr Lyons was awarded 90% of
the maximum entitlement and he received $64,800 for the year ended 30 June 2021 (2020: $57,330).
The cash bonus was paid after the year end.
Page | 25
DIRECTORS’ REPORT
2.4
LONG-TERM INCENTIVES
Performance Securities
The Group’s policy in relation to the proportion of remuneration that is performance related is discussed under the section titled
‘Performance Linked Remuneration’.
Details of vesting profiles of the performance rights granted as remuneration to each key management person of the Group are
detailed below.
Modification of 7,000,000 performance rights
Holder
Grant Date
Number of rights granted
Milestone A(1)
15 Sep 2017
Milestone B(2)
15 Sep 2017
Total
% forfeited
/ cancelled
in year
Expiry date
Directors
A Pismiris
B Sampson
M Savich
Total Directors
Key management personnel
T Lyons
Total key management personnel
Total
-
-
2,000,000
2,000,000
1,000,000
1,000,000
3,000,000
500,000
500,000
2,000,000
3,000,000
500,000
500,000
4,000,000
5,000,000
1,000,000
1,000,000
4,000,000
2,000,000
2,000,000
7,000,000
-
-
-
-
-
-
-
6 months from vesting
6 months from vesting
6 months from vesting
-
6 months from vesting
-
-
(1) An ASX announcement by the Company of the commencement of construction at the Mackay Potash Project.
(2) An ASX announcement by the Company of the production of its first Sulphate of Potash from the Mackay Potash Project as per the final
feasibility study.
The fair value of the rights at grant date was $0.505. The probability of achieving the milestones was assessed by management and it
was determined that it is more likely than not that these milestones will be met. The minimum and maximum value of the performance
rights yet to be granted is $0 and $3,535,000. A share-based payment expense of $2,061,090 has been recognised. In accordance with
AASB 2 Share Based Payments the Company has recognised the fair value of the performance rights since grant date, being 15
September 2017.
Issuance of new rights
Holder
Grant Date
Number of rights granted
Milestone A(1)
Milestone B(2)
2nd Issue
31 Dec 2020
1st Issue
26 Nov 2020
2nd Issue
31 Dec 2020
Total
% forfeited
/ cancelled
in year
Expiry date
Directors
R Seville
Total Directors
Key management personnel
T Lyons
Total key management personnel
Total
-
-
1,000,000
1,000,000
-
-
1,000,000
1,000,000
250,000
250,000
250,000
-
-
250,000
500,000
250,000
500,000
1,000,000
250,000
1,500,000
-
-
-
-
-
6 months
from vesting
-
6 months
from vesting
-
-
(1) An ASX announcement by the Company of the commencement of construction at the Mackay Potash Project.
(2) An ASX announcement by the Company of the production of its first Sulphate of Potash from the Mackay Potash Project as per the final
feasibility study.
The grant date fair value of the performance rights above ranged between $0.455 to $0.510 per right. The probability of achieving the
milestones was assessed by management and it was determined that it is more likely than not that these milestones will be met. The
minimum and maximum value of the performance rights yet to be granted is $0 and $737,500. A share-based payment expense of
$103,553 was recognised (2020: Nil).
Page | 26
DIRECTORS’ REPORT
2.4 LONG-TERM INCENTIVES (CONTINUED)
Details of performance rights held by key management personnel of the Group during the financial year are as follows:
2021
Directors
R Seville
M Savich
B Sampson
A Pismiris
Key management personnel
T Lyons
Total
Held at
beginning of
year (1)
Granted as
compensation
Forfeited/
expired
Vested and
exercised
Held at the
end of year
Vested at
end of year
-
4,000,000
500,000
500,000
1,000,000
-
-
-
2,000,000
7,000,000
500,000
1,500,000
-
-
-
-
-
-
-
-
-
-
-
-
1,000,000
4,000,000
500,000
500,000
2,500,000
8,500,000
-
-
-
-
-
-
(1) At the annual general meeting of shareholders on 26 November 2020, the Company obtained shareholder approval to modify the existing
7,000,000 performance rights. The performance conditions have been outlined in 1.4 Long Term Incentives
2.5
SHAREHOLDINGS OF KEY MANAGEMENT PERSONNEL
Shares held, directly, indirectly or beneficially, by key management personnel, including their related parties during the financial year,
were as follows.
2021
Directors
R Seville
M Savich
B Sampson
A Pismiris
Key Management Personnel
T Lyons
Total
Held at
beginning of
year
310,527
9,910,000
1,600,000
4,500,000
1,931,045
18,251,572
Purchases / other
acquisitions
Sales / other disposals
Held at the end
of year
66,666
-
-
-
100,000
166,666
-
-
-
-
-
-
377,193
9,910,000
1,600,000
4,500,000
2,031,045
18,418,238
2.6
TRANSACTIONS AND BALANCES WITH KEY MANAGEMENT PERSONNEL AND THEIR RELATED PARTIES
During the period $96,000 of fees were paid to Lexcon Services Pty Ltd (2020: $82,000) and $8,000 was payable for professional
services provided by Mr Pismiris as Non-Executive Director and Company Secretary (2020: $8,000).
There were no other related party transactions with other key management personnel of the Group for the year ended 30 June 2021
(2020: Nil).
-END OF REMUNERATION REPORT-
This report is made with a resolution of the directors:
Mark Savich
Chief Executive Officer and Executive Director
Perth
28 September 2021
Page | 27
Ernst & Young
11 Mounts Bay Road
Perth WA 6000 Australia
GPO Box M939 Perth WA 6843
Tel: +61 8 9429 2222
Fax: +61 8 9429 2436
ey.com/au
Auditor’s independence declaration to the directors of Agrimin Limited
As lead auditor for the audit of the financial report of Agrimin Limited for the financial year ended 30
June 2021, I declare to the best of my knowledge and belief, there have been:
a. No contraventions of the auditor independence requirements of the Corporations Act 2001 in
relation to the audit; and
b. No contraventions of any applicable code of professional conduct in relation to the audit.
This declaration is in respect of Agrimin Limited and the entities it controlled during the financial year.
Ernst & Young
Pierre Dreyer
Partner
28 September 2021
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
PD:ET:AGRIMIN:004
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE
Other income
Finance income
Finance expenses
Loss on deconsolidation of subsidiary
Share based payments
Administrative expenses
Loss before income tax
Income tax expense
Loss for the year
Other comprehensive income
Total comprehensive loss for the year
Comprehensive loss attributable to:
Owners of the Group
Non-controlling interest
Total comprehensive loss for the year
Loss per share
Basic and diluted loss per share
Note
10
16
3
4
2021
$
84,235
14,819
(30,765)
(130,647)
(2,651,190)
(2,308,701)
(5,022,249)
2020
$
159,420
53,230
(30,488)
-
-
(1,981,229)
(1,799,067)
-
-
(5,022,249)
(1,799,067)
-
-
(5,022,249)
(1,799,067)
(5,014,101)
(8,148)
(5,022,249)
(1,794,277)
(4,790)
(1,799,067)
19
(2.46) cents
(1.00) cents
The above consolidated statement of comprehensive income should be read in conjunction with the accompanying notes.
Page | 29
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE
Note
2021
$
2020
$
Assets
Current assets
Cash and cash equivalents
Other receivables
Exploration deposits
Prepayments
Total current assets
Non-current assets
Exploration and evaluation assets
Property, plant and equipment
Right of use asset
Investment in associate
Other assets
Total non-current assets
Total assets
Liabilities
Current liabilities
Trade and other payables
Provisions
Lease liabilities
Total current-liabilities
Non-current liabilities
Provisions
Lease liabilities
Total non-current liabilities
Total liabilities
Net assets
Equity
Share capital
Reserves
Accumulated losses
Total equity interest of the Group
Non-controlling interest
Total equity
5
6
7
8
9
10
11
12
13
14
13
14
15
16
17
5,477,457
161,237
91,688
32,211
5,168,894
328,432
172,540
85,571
5,762,593
5,755,437
34,468,634
31,707,281
203,526
163,839
388,186
846,330
86,754
267,316
-
812,521
36,070,515
32,873,872
41,833,108
38,629,309
1,393,703
1,235,601
246,102
108,881
231,479
101,133
1,748,686
1,568,213
856,091
67,031
923,122
956,435
175,911
1,132,346
2,671,808
2,700,559
39,161,300
35,928,750
63,797,395
57,606,724
3,682,270
947,517
(28,318,365)
(23,304,264)
39,161,300
35,249,977
-
678,773
39,161,300
35,928,750
The above consolidated statement of financial position should be read in conjunction with the accompanying notes.
Page | 30
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED
Note
Share capital
Share based
payment reserve
Other equity
reserve
Accumulated
losses
Total attributable
to the owners of
the Parent
Non-controlling
interest
Total equity
$
$
$
$
$
$
$
Balance at 1 July 2020
Loss for the year
Total comprehensive loss for the year
Issue of ordinary shares
Costs from issue of ordinary shares
Share based payment expense
Deconsolidation of non-controlling interest
Balance at 30 June 2021
Balance at 1 July 2019
Loss for the year
Total comprehensive loss for the year
Issue of ordinary shares
Costs from issue of ordinary shares
Transfer to other reserve/Issue of shares
to the non-controlling interest
Balance at 30 June 2020
15
15
16
17
15
15
57,606,724
-
-
6,479,250
(288,579)
-
-
63,797,395
46,945,885
-
-
11,315,521
(654,682)
1,031,080
-
-
-
-
2,651,190
3,682,270
1,031,080
-
-
-
-
(83,563)
-
-
-
-
-
83,563
-
-
-
-
-
-
-
-
(83,563)
(23,304,264)
(5,014,101)
(5,014,101)
-
-
-
-
(28,318,365)
(21,509,987)
(1,794,277)
(1,794,277)
-
-
-
35,249,977
(5,014,101)
(5,014,101)
6,479,250
(288,579)
2,651,190
83,563
39,161,300
26,466,978
(1,794,277)
(1,794,277)
11,315,521
(654,682)
678,773
(8,148)
(8,148)
(670,625)
-
-
(4,790)
(4,790)
-
-
35,928,750
(5,022,249)
(5,022,249)
6,479,250
(288,579)
2,651,190
(587,062)
39,161,300
26,466,978
(1,799,067)
(1,799,067)
11,315,521
(654,682)
(83,563)
683,563
600,000
57,606,724
1,031,080
(83,563)
(23,304,264)
35,249,977
678,773
35,928,750
The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes.
Page | 31
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED
Cash flows from operating activities
Payments to suppliers and employees
Interest received
Other income
Note
2021
$
2020
$
(1,875,049)
(2,193,007)
14,868
178,805
70,469
64,850
Net cash used in operating activities
18
(1,681,376)
(2,057,688)
Cash flows from investing activities
Payments for exploration and evaluation assets
Net payments for exploration deposits
Payments for property, plant and equipment
Payments for pre-license expenditure
Payments for other assets
Deconsolidation of subsidiary's cash
Proceeds from research and development grant
Net cash used in investing activities
Cash flows from financing activities
Proceeds from issue of share capital
Proceeds received from subsidiary's fundraising
Payment of share issue transaction costs
Repayment of lease liability
Interest payment on lease liability
Cash flows from financing activities
Net increase/(decrease) in cash and cash equivalents
Cash and cash equivalents at 1 July
Cash and cash equivalents at 30 June 2021
5
(5,265,113)
(11,323,271)
-
(187,632)
(8,809)
(25,000)
(171,969)
1,587,901
(51,974)
(45,847)
(38,881)
(25,000)
-
1,943,682
(4,070,622)
(9,541,291)
6,479,250
11,196,771
-
(304,995)
(100,968)
(12,726)
600,000
(638,266)
(83,231)
(17,861)
6,060,561
11,057,413
308,563
5,168,894
5,477,457
(541,566)
5,710,460
5,168,894
The above consolidated statement of cash flows should be read in conjunction with the accompanying notes.
Page | 32
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
1. REPORTING ENTITY
Agrimin Limited (the ‘Company’) is a for profit company limited by shares, incorporated and domiciled in Australia whose shares are
publicly traded on the Australian Securities Exchange (‘ASX’). The consolidated financial report comprises the Company and its wholly
owned subsidiaries (referred to as the ‘Group’ and individually as ‘Group Entities’). Agrimin Limited is primarily involved in the mineral
exploration and development of potash projects in Western Australia. The address of the registered office is 2C Loch Street, Nedlands,
Perth, WA, 6009.
The consolidated financial statements were authorised for issue by the Board of Directors on 28 September 2021.
2. BASIS OF PREPARATION
(a) Basis of Preparation
The consolidated financial statements of the Group are general purpose financial statements for the year ended 30 June 2021 prepared
in accordance with Australian Accounting Standards, other authoritative pronouncements of the Australian Accounting Standards
Board (AASB) and the Corporations Act 2001.
The consolidated financial statements of Agrimin Limited also comply with International Financial Reporting Standards (IFRS) as issued
by the International Accounting Standards Board (IASB).
The consolidated financial statements have been prepared on historical cost basis and are presented in Australian dollars which is the
functional currency of all entities in the Group.
The accounting policies adopted in the preparation of this consolidated financial report have been consistently applied to all periods
presented, unless otherwise stated.
(b) Adoption of new and revised accounting standards
In the year ended 30 June 2021, the Company adopted all new and revised Accounting Standards and Interpretations issued by the
AASB that are relevant to its operations and effective from 1 July 2020. It has been determined that there is a no material impact from
the adoption of new and revised Accounting Standards and Interpretations.
(c) Going concern
This consolidated financial report has been prepared on the going concern basis, which assumes continuity of normal business activities
and the realisation of assets and the settlement of liabilities in the ordinary course of business.
The Group has incurred a loss after tax of $5,022,249 (2020: $1,799,067) and had net cash outflows from operations and investing of
$5,751,998 (2020: $11,598,979). The Group has no source of operating cash inflows other than interest income and funds sourced
through capital raising activities. At 30 June 2021, the Group has cash and cash equivalents totalling $5,477,457 (2020: $5,168,894)
and net working capital (current assets less current liabilities) of $4,013,907 (2020: $4,187,224).
The Group continued to actively manage its operating and overhead expenditure by successfully completing a capital raising of
$5,000,000 (before costs) via a placement to institutional and sophisticated investors in December 2020 and $1,479,250 (before costs)
from a non-underwritten SPP in February 2021.
The Group’s cashflow forecast for the period ending 30 September 2022 reflects that the Group will be required to raise additional
working capital during the 12-month period. The Directors consider that the Group is a going concern and recognises that additional
funding is required to ensure that it can continue to fund its operations during the twelve-month period from the date of this report.
The Directors believe that such additional funding, as the Group has successfully accessed previously, can be derived from raising
additional capital to fund the Group’s ongoing operational and working capital requirements, as and when required.
Accordingly, the Directors believe that the Group will be able to obtain sufficient funding to enable it to continue as a going concern
and that it is appropriate to adopt that basis in the preparation of the financial report.
Page | 33
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
2. BASIS OF PREPARATION (CONTINUED)
(c) Going concern (continued)
In the longer term, the development of economically recoverable mineral deposits found on the Group’s existing exploration
properties or future exploration properties depends on the ability of the Group to obtain financing through equity financing, debt
financing or other means. If the Group’s exploration programs are ultimately successful, additional funds will be required to develop
the Group’s properties and place them into commercial production. The main source of future funds presently available to the Group
is the raising of equity capital by the Group. The ability to arrange such funding in the future will depend in part upon the prevailing
capital market conditions as well as the business performance of the Group and its exploration results. The global economic outlook is
facing uncertainty due to COVID-19 pandemic, which has created volatility in capital markets and share prices. This may adversely
affect the Group’s ability to arrange additional funding in the future.
Should the Group be unable to obtain sufficient funding as outlined above, there is a material uncertainty that may cast significant
doubt whether it will be able to continue as going concern and therefore, whether it will realise its assets and extinguish its liabilities
in the normal course of business and at the amounts stated in the consolidated financial statements. The consolidated financial
statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or to the
amounts and classifications of liabilities that might be necessary should the Group not continue as a going concern.
(d) Principles of consolidation
(i)
Subsidiaries
A subsidiary is an entity controlled by the Group. 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 to direct the activities of the
entity. The financial statements of the subsidiaries are included in the consolidated financial statements from the date that control
commences until the date that control ceases. They are deconsolidated from the date that control ceases.
Intercompany transactions, balances and unrealised gains on transactions between Group companies are eliminated. Unrealised losses
are also eliminated unless the transaction provides evidence of an impairment of the transferred asset. Accounting policies of
subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the Group.
The acquisition method of accounting is used to account for business combinations by the Group.
Non-controlling interests are measured at their proportionate share of the acquiree’s identifiable net assets at the acquisition date.
Change of the Groups’ interest in subsidiary that do not result in loss of control are accounted for as equity transactions.
A change in the ownership interest of a subsidiary, without a loss of control, is accounted for as an equity transaction.
(ii)
Investments in equity accounted investees
An associate is an entity over which the Group has significant influence but not control or joint control. This is generally the case where
the Group has significant voting rights. Investments in associates are accounted for using the equity method of accounting, after
initially being recognised at cost.
Under the equity method of accounting, the investments are initially recognised at fair value and adjusted thereafter to recognise the
Group’s share of the post-acquisition profit or losses of the investee in the consolidated statement of comprehensive income.
The financial statements of the associate are prepared for the same reporting period as the Group. Where necessary, adjustments are
made to bring the accounting policies in line with those of the Group.
After application of the equity method, the Group determines whether it is necessary to recognise an impairment loss on its investment
in its associate. An impairment loss is measured by comparing the recoverable amount of its investment to the carrying amount. An
impairment loss is recognised in the consolidated statement of comprehensive income and is reversed if there has been a favourable
change in the estimates used to determine the recoverable amount.
Page | 34
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
2. BASIS OF PREPARATION (CONTINUED)
(e) Segment reporting
Operating segments are reported in a manner that is consistent with the internal reporting provided to the chief operating decision
maker, which has been identified by the Group as the Chief Executive Officer and other members of the Board of Directors. The Group
operates only in one reportable segment being predominantly in the area of mineral exploration in Western Australia.
(f) Estimates and judgements
The preparation of these 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 involving higher degree of judgement or
complexity, or areas where assumptions and estimates are significant to the financial statements are:
(i) Recoverability of capitalised exploration and evaluation expenditure and pre-license exploration expenditure
The future recoverability of capitalised exploration expenditure and pre-license exploration expenditure is dependent on a number of
factors, including whether the Group decides to exploit the related lease itself or, if not, whether it successfully recovers the related
exploration and evaluation asset and pre-license exploration expenditure through sale.
Factors that could impact the future recoverability include the level of reserves and resources, future technological changes which
could impact the cost of mining, future legal changes (including changes to environmental restoration obligations) and changes to
commodity prices.
To the extent that capitalised exploration and evaluation expenditure and pre-license exploration expenditure is determined not to be
recoverable in the future, profits and net assets will be reduced in the period in which this determination is made.
In addition, exploration and evaluation is capitalised if activities in the area of interest have not yet reached a stage that permits a
reasonable assessment of the existence or otherwise of economically recoverable reserves. To the extent it is determined in the future
that this capitalised expenditure should be written off, profits and net assets will be reduced in the period in which this determination
is made.
(ii) Provision for rehabilitation
The Group records the present value of estimated costs of legal and constructive obligations to restore operating locations in the
period in which the obligation is incurred. The nature of restoration activities includes dismantling and removing structures,
rehabilitating mines, dismantling operating facilities, closure of plant and waste sites and restoration, reclamation and revegetation of
affected areas.
In determining an appropriate level of provision, consideration is given to the expected future costs to be incurred and timing of these
expected future costs. The ultimate cost of decommissioning and restoration is uncertain and costs can vary in response to many
factors including changes to the relevant legal requirements, the emergence of new restoration techniques or experience at other
similar mine-sites. The expected timing of expenditure can also change, for example in response to changes in reserves or to production
rates. Changes to any of the estimates are applied prospectively by recognising an adjustment to the rehabilitation liability.
(iii) Lease
In determining whether the Group’s contracts contain, or are, leases, management must use judgment in assessing whether the
contract provides the customer with the right to substantially all of the economic benefits from the use of the asset during the lease
term and whether the customer obtains the right to direct the use of the asset during the lease term. For those agreements considered
to contain, or be, leases, further judgment is required to determine the lease term by assessing whether termination or extension
options are reasonably certain to be exercised. That is, the Group considers all relevant factors that create economic incentive for it to
exercise the renewal.
(iv)
Share based payments
The Group measures the cost of equity settled transactions with employees by reference to the fair value of the equity instrument at
the date at which they are granted. The fair value was determined to be the market value of the Group’s shares at grant date. The
accounting estimates and assumptions relating to the equity-settled share based payments would have no impact on the carrying
amounts of assets and liabilities within the next annual reporting period but may impact profit or loss and equity.
Page | 35
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
2. BASIS OF PREPARATION (CONTINUED)
(f) Estimates and assumptions (continued)
(v) Employee benefit provision
The liability for employee benefits expected to be settled more than 12 months from the reporting date are recognised and measured
at the present value of the estimated future cash flows to be made in respect of all employees at the reporting date. In determining
the present value of the liability, estimates of attrition rates and pay increases through promotion and inflation have been taken into
account.
(vi) Equity accounted investee
On 1 October 2020, the Group determined that it had ceased control over its 40% owned subsidiary Tali Resources Pty Ltd (‘Tali’) due
to a change in voting rights and as a result and the entity was deconsolidated. The Group determined that it exercised significant
influence over Tali following its deconsolidation and the investment in this equity accounted investee was initially recognised at fair
value. The determination that the Group exercised significant influence over its investment in Tali was based on the fact that AASB 128
Investments in Associates and Joint Ventures stipulates that an entity has significant influence over its investee where its shareholding
in the investee is greater than 20%, unless it can be clearly demonstrated that this is not the case. The Group’s significant influence is
mainly due to the Group having representation on the investee’s board of directors.
(g) Determination of fair values
A number of the Group’s accounting policies and disclosures require the determination of fair value for both financial and non-financial
assets and liabilities. When measuring fair value of an asset or liability, the Group uses market observable data as far as possible.
The fair value of an asset or liability is measured using the assumptions that market participants would use when pricing the asset or
liability, assuming that market participants act in their best economic interest. A fair value measurement of a non-financial asset takes
into account a market participant’s ability to generate economic benefits by using the asset in the highest and best use or by selling it
to another market participant that would use the asset in its highest and best use.
Fair values are categorised into different levels in a fair value hierarchy based on the inputs used in the valuation techniques as follows:
-
-
-
Level 1 – quoted (unadjusted) market price in active markets for identical assets or liabilities;
Level 2 – valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or
indirectly observable; and
Level 3 – valuation techniques for which the lowest level input that is significant to the fair value measurement is
unobservable.
If the inputs used to measure the fair value of an asset or liability might be categorised in different levels of the fair value hierarchy,
then the fair value measurement is categorised in its entirety in the same level of the fair value hierarchy as the lowest level input that
is significant to the entire measurement.
(h) Finance income
Finance income comprises interest income on funds invested. Interest income is recognised as it accrues in profit or loss, using the
effective interest method which is the rate that exactly discounts estimated future cash receipts over the expected life of the financial
asset to the gross carrying amount of the financial asset.
(i) Finance costs
Finance costs comprise of interest expense on lease liabilities and the unwinding of the discount on provisions.
(j)
Income Tax
Income tax expense comprises current and deferred tax. Current and deferred taxes are recognised in profit or loss except to the
extent that they relate to a business combination, or items recognised directly in equity, or in other comprehensive income.
Current tax is the expected tax payable or receivable on the taxable income or loss for the year, using tax rates enacted or substantively
enacted at the reporting date, and any adjustment to tax payable in respect of previous years.
Page | 36
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
2. BASIS OF PREPARATION (CONTINUED)
(j)
Income Tax
(i) Deferred Tax
Deferred tax is recognised in respect of temporary differences between the carrying amounts of assets and liabilities for financial
reporting purposes and the amounts used for taxation purposes. Deferred tax is not recognised for the following temporary
differences: the initial recognition of assets or liabilities in a transaction that is not a business combination and that affects neither
accounting nor taxable profit or loss, and differences relating to investments in subsidiaries to the extent that it is probable that they
will not reverse in the foreseeable future. In addition, deferred tax is not recognised for taxable temporary differences arising on the
recognition of goodwill. Deferred tax is measured at the tax rates that are expected to be applied to the temporary differences when
they reverse, based on the laws that have been enacted or substantively enacted by the reporting date. Deferred tax assets and
liabilities are offset if there is a legally enforceable right to offset current tax liabilities and assets, and they relate to income taxes
levied by the same tax authority on the same taxable entity, or on different tax entities, but they intend to settle current tax liabilities
and assets on a net basis or their tax assets and liabilities will be realised simultaneously.
A deferred tax asset is recognised for unused tax losses, tax credits and deductible temporary differences to the extent that it is
probable that future taxable profits will be available against which they can be utilised. Deferred tax assets are reviewed at each
reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realised.
The Company and its wholly-owned Australian resident entities are part of a tax-consolidated group. All members of the tax-
consolidated group are taxed as a single entity. The head company within the tax-consolidated group is Agrimin Limited.
(k)
Impairment of non-financial assets
Non-financial assets are reviewed for impairment at each reporting date to determine if events or changes in circumstances indicate
that the carrying amount may not be recoverable.
An impairment loss is recognised 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 of disposal and value in use. For the purposes of assessing
impairment, assets are consolidated at the lowest levels for which there are separately identifiable cash inflows which are largely
independent of the cash inflows from other assets (cash-generating units).
Non-financial assets that have been impaired are reviewed for possible reversal of the impairment at each reporting date.
(l) Current and non-current classification
Assets and liabilities are presented in the statement of financial position based on current and non-current classification.
An asset is classified as current when: it is either expected to be realised or intended to be sold or consumed in the consolidated
entity's normal operating cycle; it is held primarily for the purpose of trading; it is expected to be realised within 12 months after the
reporting period; or the asset is cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least
12 months after the reporting period. All other assets are classified as non-current.
A liability is classified as current when: it is either expected to be settled in the consolidated entity's normal operating cycle; it is held
primarily for the purpose of trading; it is due to be settled within 12 months after the reporting period; or there is no unconditional
right to defer the settlement of the liability for at least 12 months after the reporting period. All other liabilities are classified as non-
current.
Deferred tax assets and liabilities are always classified as non-current.
(m) Cash and cash equivalents
Cash and cash equivalents include cash on hand, deposits held at call with financial institutions, other short-term highly liquid
investments with original maturities of three months or less.
(n) Exploration deposits
Exploration deposits represent annual tenement rents paid to the Western Australian Department of Mines Industry Regulations and
Safety (DMIRS) in advance when application for tenements was made during the year. These amounts are held in trust by the DMIRS
pending the grant of the tenements and are refundable if for any reason the tenements do not get granted.
Exploration deposits are classified as current assets.
Page | 37
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
2. BASIS OF PREPARATION (CONTINUED)
(o) Exploration and evaluation assets
Exploration and evaluation costs are capitalised as exploration and evaluation assets on an area of interest basis. Such costs comprise
net direct costs, research and development expenditure and an appropriate portion of related overhead expenditure, but do not
include general overheads or administrative expenditure not having a specific connection with a particular area of interest. Costs
incurred before the Group has obtained the legal right to explore an area of interest are recognised in profit or loss.
An exploration and evaluation asset is only recognised if the right to the area of interest is current and either:
-
-
the expenditure is expected to be recouped through successful development and exploitation of an area of interest, or by
its sale; or
activities in the area of interest have not, at the reporting date, reached a stage which permits a reasonable assessment of
the existence or otherwise of economically recoverable reserves, and active and significant operations in or in relation to the
area of interest are continuing.
Accumulated costs in respect of areas of interest are recognised in profit or loss when the above criteria do not apply or when the
directors assess that the carrying value may exceed the recoverable amount.
Once a development decision has been taken, all past and future exploration and evaluation expenditure in respect of the area of
interest is aggregated within costs of development. The aggregated cost is first tested for impairment and then reclassified from
exploration and evaluation assets to mining property and development assets within property, plant and equipment. The costs of a
productive area are amortised over the life of the area of interest to which such costs relate on the production output basis.
Exploration and evaluation assets are assessed for impairment if sufficient data exists to determine technical feasibility and commercial
viability, and facts and circumstances suggest that the carrying amount of the asset exceeds the recoverable amount. Such indicators
of impairment include the following:
-
-
-
-
the right to explore has expired during the period or will expire in the near future and is not expected to be renewed;
substantive expenditure on further exploration for and evaluation of mineral resources in the specific area is neither
budgeted nor planned;
exploration and evaluation in the specific area has not led to the discovery of commercially viable quantities of mineral
resources and the entity has decided to discontinue such activities in the specific area; or
sufficient data exists to indicate that the carrying amount of the asset is unlikely to be recovered in full from successful
development or by sale even if development in the specific area is likely to proceed.
For the purpose of impairment testing, exploration and evaluation assets are allocated to cash-generating units consistent with
exploration activity. The cash generating units are not larger than the areas of interest.
(p) Property, plant and equipment
Items of property, plant and equipment are measured at cost less accumulated depreciation and accumulated impairment losses.
Cost includes expenditure that is directly attributable to the acquisition of the asset. Purchased software that is integral to the
functionality of the related equipment is capitalised as part of that equipment.
When parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate items (major
components) of property, plant and equipment.
The gain or loss on disposal of an item of property, plant and equipment is determined by comparing the proceeds from disposal with
the carrying amount of property, plant and equipment and is recognised net within other income/other expenses in profit or loss.
(i) Depreciation and amortisation
Depreciation is calculated over the depreciable amount, which is the cost of an asset, or other amount substituted for cost, less its
residual value.
Depreciation is recognised in profit or loss on a straight-line basis over the estimated useful lives of each part of an item of property,
plant and equipment since this most closely reflects the expected pattern of consumption of the future economic benefits embodied
in the asset. Leased assets are depreciated over the shorter of the lease term and their useful lives unless it is reasonably certain that
the Group will obtain ownership by the end of the lease term.
Page | 38
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
2. BASIS OF PREPARATION (CONTINUED)
(p) Property, plant and equipment (continued)
(i) Depreciation and amortisation (continued)
The estimated useful lives for the current and prior period are as follows:
Major depreciation and amortisation periods are:
Plant and equipment
Motor vehicles
Software
Office furniture and equipment
5 years
4 years
2 years
3 - 5 years
Depreciation and amortisation methods, useful lives and residual values are reviewed at each reporting date and adjusted if
appropriate.
(q) Right of use asset
The Group recognises right-of-use assets at the commencement date of the lease (i.e. the date the underlying asset is available for
use). Right-of-use assets are measured at cost, less any accumulated depreciation and impairment losses, and adjusted for any
remeasurement of lease liabilities. The cost of right of use assets includes the amount of lease liabilities recognised, initial direct costs
incurred and lease payments made at or before the commencement date less any lease incentives received. Unless the Group is
reasonably certain to obtain ownership of the leased asset at the end of the lease term, the recognised assets are depreciated on a
straight-line basis over the shorter of its estimated useful life and lease term. Right of use assets are assessed for impairment.
(r) Other assets
Pre-license exploration expenditure relates to the purchase of exploration data where the related exploration license is yet to be
granted, is brought to account as an asset at its cost of acquisition if it gives rise to proprietary information that the Group can control.
(s) Trade and other payables
These amounts represent liabilities for goods and services provided to the Group prior to the end of the financial year and which are
unpaid. They are recognised initially at fair value net of directly attributable transaction costs. Due to their short-term nature they are
measured at amortised cost and are not discounted. The amounts are unsecured and are usually paid withing 30 days of recognition.
(t) Employee benefits
Employee benefits are expensed in the profit or loss and provisions are made for benefits accumulated as a result of employees
rendering services up to the reporting date. These benefits include wages and salaries, annual leave, long service leave and related on
costs such as superannuation, worker’s compensation and payroll tax. The Group’s superannuation is a defined contribution plan
under which fixed contributions are made to a superannuation fund with no further legal or constructive obligation to pay.
A liability is recognised for the amount expected to be paid under short-term cash bonus plans if the Group has a present legal or
constructive obligation to pay this amount as a result of past service provided by the employee and the obligation can be estimated
reliably.
Liabilities expected to be settled within twelve months of the reporting date are measured at the amounts expected to be paid when
the liabilities are settled.
Other long term employee benefits
The liability for annual leave and long service leave not expected to be settled within 12 months of the reporting date are measured
at the present value, and expected future payments to be made in respect of services provided by employees up to the reporting date
using the projected unit credit method. Consideration is given to expected future wage and salary levels, experience of employee
departures and periods of service. Expected future payments are discounted using market yields at the reporting date on corporate
bonds with terms to maturity and currency that match, as closely as possible, the estimated future cash flows.
Page | 39
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
2. BASIS OF PREPARATION (CONTINUED)
(u) Equity settled transactions
The Group provides benefits to employees (including Directors) and other non-employees of the Group in the form of share-based
payment transactions, whereby employees and consultants render services in exchange for shares or rights over shares (equity-settled
transactions). The cost of these equity-settled transactions with employees is measured by reference to the fair value at the date at
which they are granted.
The cost of equity-settled transactions is recognised, together with a corresponding increase in equity, over the period in which the
performance conditions are fulfilled, ending on the date on which the relevant employees become fully entitled to the award (vesting
date).
The cumulative expense recognised for equity-settled transactions at each reporting date until vesting date reflects:
-
-
the extent to which the vesting period has expired; and
the number of awards that, in the opinion of the Directors will ultimately vest. This opinion is formed based on the best
available information at balance date. No adjustment is made for the likelihood of market performance conditions being met
as the effect of these conditions is included in the determination of fair value at grant date.
No expense is recognised for awards that do not ultimately vest, except for awards where vesting is only conditional upon a market
condition. Where an equity-settled award is cancelled, it is treated as if it had vested on the date of cancellation, and any expense not
yet recognised for the award is recognised immediately. However, if a new award is substituted for the cancelled award; and
designated as a replacement award on the date that it is granted, the cancelled and new award are treated as if they were a
modification of the original award.
(v) Lease liabilities
At the commencement date of the lease, the Group recognises lease liabilities measured at the present value of lease payments to be
made over the lease term except for short-term leases and leases of low-value assets. The lease payments include fixed payments
(including in-substance fixed payments) less any lease incentives receivable, variable lease payments that depend on an index or a rate
and amounts expected to be paid under residual value guarantees. The variable lease payments that do not depend on an index or a
rate are recognised as expense in the period on which the event or condition that triggers the payment occurs.
In calculating the present value of lease payments, the Group uses the incremental borrowing rate at the lease commencement date
if the interest rate implicit in the lease is not readily determinable. After the commencement date, the amount of lease liabilities is
increased to reflect the accretion of interest and reduced for the lease payments made. In addition, the carrying amount of lease
liabilities is remeasured if there is a modification, a change in the lease term or a change in the in-substance fixed lease payments.
Short-term leases and leases of low-value assets
The Group applies the short-term lease recognition exemption to its short-term leases that have a lease term of 12 months or less
from the commencement date and do not contain a purchase option. It also applies the lease of low-value assets recognition
exemption to leases of office equipment that are considered to be low value. Lease payments on short-term leases and leases of low-
value assets are recognized as expense on a straight-line basis over the lease term.
(w) Rehabilitation provision
The Group records the present value of estimated costs of legal and constructive obligations to restore operating locations in the
period in which the obligation is incurred as a result of past events. The nature of restoration activities includes dismantling and
removing structures, rehabilitating mines, dismantling operating facilities, closure of plant and waste sites and restoration, reclamation
and revegetation of affected areas. When the liability is initially recognised, the present value of the estimated cost is capitalised by
increasing the carrying amount of the related mining assets. Over time, the discounted liability is increased for the change in present
value based on the discount rates that reflect current market assessments and the risks specific to the liability. The periodic unwinding
of the discount is recognised in the statement of comprehensive income as a finance cost. Additional disturbances or changes in
rehabilitation costs are recognised as additions or charges to the corresponding asset and rehabilitation liability when they occur.
(x)
Issued capital
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options are shown in
equity as a reduction of the share proceeds received.
Page | 40
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
2. BASIS OF PREPARATION (CONTINUED)
(y) Earnings per share
The Group presents basic and diluted earnings per share (EPS) data for its ordinary shares. Basic EPS is calculated by dividing the profit
or loss attributable to ordinary shareholders of the Company by the weighted average number of ordinary shares outstanding during
the year, adjusted for own shares held. Diluted EPS is determined by adjusting the profit or loss attributable to ordinary shareholders
and the weighted average number of ordinary shares outstanding, adjusted for own shares held, for the effects of all dilutive potential
ordinary shares, which comprise share options and performance rights granted to employees and agents of the Group.
(z) Research and development
The Group undertakes expenditure on activities that are categorised as eligible expenditure under the Research & Development Tax
Concession which is dependent upon certain criteria and may be subject to a tax offset. Such government grants are recognised where
there is reasonable assurance that the grant will be received and all attached conditions will be complied with.
Where a grant is received or receivable in relation to research and development costs which have been capitalised, the tax offset
shall be deducted from the carrying value of the asset. All other grants received or receivable are recognised as income in the
statement of comprehensive income.
(aa) Goods and services tax
Revenue, expenses and assets are recognised net of the amount of goods and services tax (GST), except where the amount of GST
incurred is not recoverable from the taxation authority. In these circumstances, the GST is recognised as part of the cost of acquisition
of the asset or as part of the expense.
Receivables and payables are stated with the amount of GST included. The net amount of GST recoverable from, or payable to, the
Australian Taxation Office (ATO) is included as a current asset or liability in the statement of financial position.
Cash flows are included in the statement of cash flows on a gross basis. The GST components of cash flows arising from investing and
financing activities which are recoverable from, or payable to, the ATO are classified as operating cash flows.
(bb) Financial assets
Financial assets are classified in four categories:
-
-
-
-
(i)
Financial assets at amortised cost;
Financial assets at fair value through OCI with recycling of cumulative gains and losses (debt instruments);
Financial assets designated at fair value through OCI with no recycling of cumulative gains and losses upon derecognition
(equity instruments); and
Financial assets at fair value through profit and loss.
Financial assets at amortised cost
This category is the most relevant to the Group. The Group measures financial assets at amortised cost if both the following conditions
are met:
-
-
The financial asset is held within a business model with the objective to hold financial assets in order to collect contractual
cash flows; and
The contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal
and interest on the principal amount outstanding.
Financial assets at amortised cost are subsequently measured using the effective interest rate (EIR) method and are subject to
impairment. Interest received is recognised as part of finance income in comprehensive income. Gains and losses are recognised in
profit or loss when the asset is derecognised, modified or impaired.
(ii)
Financial assets at fair value through profit or loss
Financial assets that do not meet the criteria for amortised cost are measured at fair value through profit and loss.
Page | 41
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
2. BASIS OF PREPARATION (CONTINUED)
(bb) Financial assets (continued)
(iii)
Impairment of financial assets
Financial assets carried at amortised cost requires an expected credit loss model to be applied. The expected credit loss model requires
the Group to account for expected credit losses and changes in those expected credit losses at each reporting date to reflect changes
in credit risk since initial recognition of the financial asset. Due to the short-term nature of the receivables, the Group measures the
loss allowance based on lifetime expected credit loss (ECL). ECL’s are based on the difference between contractual cashflows due in
accordance with the contract and all the Group expects to receive. The shortfall is then discounted at an approximation to the asset’s
original effective interest rate.
Page | 42
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
3. ADMINISTRATIVE EXPENSES
Fees, salaries and benefits
External professional fees
Travel and accommodation expense
Subscriptions and licencing expenses
Insurance expense
ASX fees
Office outgoings
Depreciation of right of use assets
Other administrative expenses
4.
INCOME TAX
Reconciliation between tax expense and pre-tax accounting loss
Loss for the year
Income tax using the Company's domestic tax rate 30% (2020: 30%)
Changes in unrecognised temporary difference
Income tax expense
Unrecognised deferred tax asset
Deferred tax asset calculated at 30% (2020: 30%) have not been
recognised in respect to the following items:
Deductible temporary differences
Tax losses carried forward
Tax losses and temporary differences brought to account to reduce the
provision for deferred tax liabilities
2021
$
1,352,032
390,910
44,952
74,463
61,806
52,688
35,515
103,477
192,858
2020
$
1,200,373
163,532
90,554
85,779
61,008
56,630
39,584
102,379
181,390
2,308,701
1,981,229
2021
$
2020
$
(5,022,249)
(1,506,675)
(1,506,675)
(1,799,067)
(539,720)
(539,720)
-
-
632,253
10,282,458
706,703
10,016,526
(9,660,478)
(9,532,620)
1,254,233
1,190,609
The deductible temporary differences and tax losses do not expire under current tax legislation. Deferred tax asset have not been
recognised in respect of these items because it is not probable that future taxable profits will be available against which the Group
can utilise the benefits.
Provision for deferred tax liability
Deferred tax liability comprises the estimated expense at the applicable
rate of 30% (2020: 30%) on the following items:
Exploration and evaluation assets
Other assets
Prepayments and accrued income
Deferred tax asset attributable to tax losses and temporary differences
brought to account to reduce the provision for deferred income tax
2021
$
2020
$
9,446,815
204,000
9,663
9,302,934
204,000
25,686
(9,660,478)
(9,532,620)
-
-
Page | 43
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
5. CASH AND CASH EQUIVALENTS
Cash and bank balances
Short-term deposits
2021
$
2020
$
5,418,457
59,000
5,109,894
59,000
5,477,457
5,168,894
Cash at bank earns interest at floating rates based on daily bank deposit rates.
Short-term deposits are made for varying periods of between one day to three months, refer to note 22.
6. OTHER RECEIVABLES
Net tax receivable (GST)
Other receivables
Security deposit
7. EXPLORATION AND EVALUATION ASSETS
Opening balance
Additions
Refundable research and development grant received
Disposal of subsidiary's exploration and evaluation
2021
$
2020
$
137,108
1,182
22,947
161,237
157,867
147,618
22,947
328,432
2021
$
2020
$
31,707,281
22,541,862
5,235,516
11,109,101
(1,587,902)
(1,943,682)
(886,261)
-
34,468,634
31,707,281
The carrying amount of the exploration and evaluation assets at 30 June 2021 relates to the exploration capitalised on the Mackay
Potash Project and the Lake Auld Potash Project.
At 30 June 2021, the Group assessed the carrying amount of the assets for impairment. No impairment triggers were present (2020:
Nil).
Page | 44
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
8. PROPERTY, PLANT AND EQUIPMENT
Plant and equipment
At cost
Accumulated depreciation
Movement in carrying amounts
Opening balance
Additions
Depreciation
Closing balance
9. RIGHT OF USE ASSET
Office lease
At cost
Accumulated depreciation
Movement in carrying amount
Opening balance / Initial adoption of AASB 16
Increase to right of use asset
Depreciation
2021
$
2020
$
344,507
(140,981)
203,526
86,754
187,632
(70,860)
203,526
156,875
(70,121)
86,754
75,749
45,847
(34,842)
86,754
2021
$
2020
$
369,695
(205,856)
163,839
369,695
(102,379)
267,316
267,316
-
362,924
6,771
(103,477)
(102,379)
163,839
267,316
At 30 June 2021, the Group assessed the carrying amount of the right of use asset for impairment. No impairment triggers were present
(2020: Nil).
Page | 45
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
10. INVESTMENT IN ASSOCIATE
Interests in associates are accounted for using the equity method of accounting. Information relating to associates that are material
to the Group are set out below:
Name
Principal Activities
Country of Incorporation
Tali Resources Pty Ltd
Mineral Exploration
Australia
Investment in associate
Carrying value of interest in associates
Fair value at initial recognition
Share of comprehensive loss for the period
Equity Holding
2021
%
2021
$
2020
%
40%
-
2020
$
388,186
388,186
400,000
(11,814)
388,186
-
-
-
-
-
On 1 October 2020, the Group ceased to control its 40% subsidiary Tali Resources Pty Ltd due to a change in voting rights and as a
result, the entity was deconsolidated. An investment in equity accounted investee was initially recognised at fair value. The Group
had recognised a loss on deconsolidation of the subsidiary of $130,647 (2020: Nil).
The Group equity accounts for its investment and the carrying amount is increased or reduced by its share of profit or loss for the
period.
At 30 June 2021 the Group assessed the carrying amount of the investment for impairment. No impairment triggers were present.
11. OTHER ASSETS
Opening balance
Additions
2021
$
812,521
33,809
846,330
2020
$
748,640
63,881
812,521
The carrying amount of other assets at 30 June 2021 relates to the pre-licence expenditure for the Lake Auld Potash Project. This
project comprises the broader package of Exploration Licences under application by the Group in the Lake Auld and Percival Lakes
area. Expenditure will be transferred to exploration and evaluation expenditure upon granting of exploration licenses by the
Department of Mines, Industry Regulation and Safety.
At 30 June 2021, the Group assessed the carrying amount of its pre-licence expenditure for impairment. No impairment triggers were
present (2020: Nil).
Page | 46
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
12. TRADE AND OTHER PAYABLES
Trade payables
Accrued expenses
Other payables
13. PROVISIONS
Current
Employee benefits
Non-current
Provision for rehabilitation
Employee benefits
Provision for rehabilitation
Opening balance
Adjustment made during the year
Unwind of discount
2021
$
873,645
406,208
113,850
2020
$
772,807
389,965
72,829
1,393,703
1,235,601
2021
$
2020
$
246,102
246,102
786,709
69,382
856,091
956,435
(187,765)
18,038
786,708
231,479
231,479
956,435
-
956,435
882,980
60,828
12,627
956,435
Employee benefits relate to the balance of annual leave and long service leave accrued by the Group’s employees. Recognition and
measurement criteria have been disclosed in note 2.
During the period, the Group assessed its legal and constructive obligation relating to the rehabilitation provision to restore the
operating location to its original condition. The estimated costs of rehabilitation have decreased by $169,727 to $786,708 (2020:
$956,435).
Page | 47
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
14. LEASE LIABILITIES
Current
Office lease
Non-current
Office lease
Movement for the year
Opening balance / initial adoption of AASB 16
Increase to lease liability
Lease payments
Interest expense
Amounts recognised in the Consolidated Statement of Comprehensive Income:
Depreciation of right of use assets
Interest expense on lease liability
Expenses on short-term leases
The cash outflow for leases during the period amounts to $115,529 (2020: $139,875).
15. SHARE CAPITAL
Share capital
Fully paid ordinary shares
Balance at 1 July 2020
Issue of fully paid ordinary shares at $0.45
Issue of fully paid ordinary shares at $0.45 under share purchase plan
Less share issue costs
Balance at 30 June 2021 attributable to the owners of the Group
2021
$
2020
$
108,881
108,881
67,031
67,031
277,044
-
101,133
101,133
175,911
175,911
362,924
7,131
(113,859)
(110,872)
12,727
175,912
17,861
277,044
2021
$
103,447
12,727
1,835
118,009
2020
$
102,379
17,861
1,835
122,075
2021
Number
$
196,690,682
57,606,724
11,111,112
3,287,171
-
5,000,000
1,479,250
(288,579)
211,088,965
63,797,395
Page | 48
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
15. SHARE CAPITAL (CONTINUED)
Share capital
Fully paid ordinary shares
Balance at 1 July 2019
Issue of fully paid ordinary shares at $0.55
Issue of fully paid ordinary shares at $0.55
Issue of fully paid ordinary shares at $0.30
Issue of fully paid ordinary shares at $0.475
Less share issue costs
Balance at 30 June 2020 attributable to the owners of the Group
All issued shares are fully paid.
2020
Number
$
170,618,112
46,945,885
15,000,000
8,250,000
1,000,000
9,822,570
250,000
-
2,946,771
118,750
-
(654,682)
196,690,682
57,606,724
The holders of ordinary shares are entitled to receive dividends as declared from time to time and are entitled to one vote per share
at meetings of the Company. All shares rank equally with regards to the Company’s residual assets.
16. RESERVES
Reserves
Share based payment reserve
Opening balance
Share based payment expense
Other equity reserves
Transfer to non-controlling interest
Share based payment reserve
Performance related remuneration
2021
$
2020
$
3,682,270
947,517
1,031,080
2,651,190
3,682,270
1,031,080
-
1,031,080
83,563
-
(83,563)
(83,563)
Details of performance rights held by the Group during the financial year are as follows:
Financial
year
Held at
beginning of
year(1)
Granted as
compensation on 26
Nov 2020
Granted as
compensation on
31 Dec 2020
Forfeited/
expired
Vested and
exercised
Held at the
end of year
Vested at
end of
year
2021
8,000,000
1,000,000
2,650,000
-
-
11,650,000
-
(1) At the annual general meeting (“AGM”) of shareholders on 26 November 2020, the Company obtained shareholder approval to modify the
existing 8,000,000 performance rights. The performance conditions has been outlined in Remuneration Report 1.4 Long Term Incentives.
Page | 49
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
16. RESERVES (CONTINUED)
Share based payment reserve (continued)
Modified performance rights
Performance condition
Milestone A – Commencement of construction
of the Mackay Potash Project
Milestone B – Commencement of production of
the Mackay Potash Project
Number of rights granted
Grant date
Expiry date
3,500,000
15 September 2017
1 November 2022
4,500,000
15 September 2017
1 November 2025
The variation to the performance conditions and expiry date of the performance rights granted are as follows:
The performance conditions outlined above are required to be met any time prior to the expiry date.
The fair value of the performance rights at grant date was $0.505 per right. The probability of achieving the milestones was assessed
by management and it was determined that it is more likely than not that these milestones will be met, therefore the share-based
payment expense of $4,040,000 will be recognised over the vesting period. At 30 June 2021, $2,365,370 has been recognised (2020:
Nil). In accordance with AASB 2 Share Based Payments the Company has recognised the fair value of the performance rights since grant
date, being 15 September 2017.
The following performance conditions and expiry date prior to the variation were as follows:
Performance condition
Number of rights
granted
Grant date
Expiry date
An ASX announcement by the Company of the production
of its first Sulphate of Potash (SOP) from the Mackay
Potash Project as per the final feasibility study.
The performance rights are subject to a milestone date
being five years from the date of grant.
Issuance of performance rights
8,000,000
15 September 2017
6 months from
vesting
Shareholders also approved the grant of 1,000,000 Performance Rights, pursuant to and in accordance with Listing Rule 10.14 to the
Chairperson at the AGM held on 26 November 2020.
Performance condition
Milestone A – Commencement of construction
of the Mackay Potash Project
Milestone B – Commencement of production of
the Mackay Potash Project
Number of rights granted
Grant date
Expiry date
Nil
N/A
N/A
1,000,000
26 November 2020
1 November 2025
The fair value of the performance rights at grant date was $0.510 per right. The probability of achieving the milestones was assessed
by management and it was determined that it is more likely than not that these milestones will be met, therefore the share-based
payment expense of $510,000 will be recognised over the vesting period. At 30 June 2021, $61,166 has been recognised (2020: Nil).
On 31 December 2020 a further 2,650,000 rights were issued to employees under the Company’s ESIP as outlined in the table below:
Performance condition
Number of rights granted
Grant date
Expiry date
Milestone A – Commencement of construction
of the Mackay Potash Project
Milestone B – Commencement of production of
the Mackay Potash Project
1,325,000
31 December 2020
1 November 2022
1,325,000
31 December 2020
1 November 2025
The performance conditions outlined above are required to be met any time prior to the expiry date.
The fair value of the performance rights at grant date was $0.455 per right The probability of achieving the milestones was assessed
by management and it was determined that it is more likely than not that these milestones will be met, therefore the share-based
payment expense of $1,205,750 will be recognised over the vesting period. At 30 June 2021, $224,655 has been recognised (2020: Nil).
Page | 50
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
16. RESERVES (CONTINUED)
Share based payment reserve (continued)
Issuance of performance rights (continued)
The Group will re-assess the probability of achieving the performance condition at each reporting date. If the probability falls below
50% the Group will determine whether the previous expense recognised shall be reversed. Performance securities are granted under
a service condition whereby the grantee must be employed by the Group at the time the performance securities vest. If an employee
leaves prior to the vesting date, the share-based payment previously recognised will be reversed on the date employment is
terminated.
Other equity reserve
Deconsolidation of Tali Resources Pty Ltd
On 1 October 2020, the Group ceased to control its 40% subsidiary Tail Resources Pty Ltd and the entity was deconsolidated from the
Group. Any amounts previously recognised in the other equity reserve were derecognised.
17. NON-CONTROLLING INTEREST
Non-controlling interest
Breakdown
Opening balance/issue of shares to the non-controlling interest
Transfers (to)/from reserves
Share of loss for the year
Deconsolidation of non-controlling interest
2021
$
2020
$
-
-
678,773
678,773
678,773
(83,563)
(8,148)
(587,062)
600,000
83,563
(4,790)
-
-
678,773
On 1 October 2020, the Group ceased to control its 40% subsidiary Tail Resources Pty Ltd and the entity was deconsolidated from the
Group. Any amounts previously recognised in the other equity reserve were derecognised.
Page | 51
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
18. STATEMENT OF CASH FLOWS
(a) Reconciliation of cash flows from operating activities
Loss for the year
Non-cash items:
Finance expenses
Depreciation of right of use assets
Share of loss of equity accounted investee
Loss on deconsolidation of subsidiary
Share based payments
Employee entitlements
Change in operating assets and liabilities:
Decrease / (increase) in other receivables
Decrease / (increase) in prepayments
Increase / (decrease) in trade and other payables
Increase in provisions
(b) Non-cash financing and investing activities
There were no non-cash investing activities for the year ended 30 June 2021 (2020: $118,750).
19. LOSS PER SHARE
(a) Reconciliation of loss
Loss attributable to the owners of the Company used to calculate basic and diluted loss per
share
(b) Weighted average number of ordinary shares used as the denominator
2021
$
2020
$
(5,022,249)
(1,799,067)
30,765
103,477
11,814
130,647
2,651,190
69,382
30,488
102,379
-
-
-
-
112,183
53,360
159,464
18,591
(106,464)
(39,720)
(317,598)
72,294
(1,681,376)
(2,057,688)
2021
$
2020
$
5,022,249
1,799,067
2021
$
2020
$
Weighted average number of ordinary shares used as the denominator in calculating basic and
diluted loss per share
203,968,642
183,631,431
There were no unlisted options outstanding at balance date (2020: Nil). There were 11,650,000 performance rights (2020: 8,000,000)
as at balance date. These have been excluded from the weighted average number of ordinary shares calculation as their effect would
have been anti-dilutive. As a result, the diluted loss per share is equal to the basic loss per share.
Page | 52
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
20. COMMITMENTS
(a)
Exploration commitments
As a condition of retaining right to explore its mining tenements, the Group is required to pay an annual rental and incur a minimum
level of expenditure for each tenement.
Outstanding exploration commitments are as follows:
Exploration commitment
Less than one year
Between one and five years
2021
$
2020
$
762,226
3,392,601
1,282,989
5,723,550
4,154,827
7,006,539
The Group has no expenditure commitments on mining tenements which have not been granted (2020: Nil).
21. CONTINGENCIES
The Group had no contingent assets or liabilities at reporting date (2020: Nil).
22. FINANCIAL RISK MANAGEMENT
The Group’s activities expose it to market, liquidity and credit risks arising from its financial instruments.
The Group’s management of financial risk is aimed at ensuring net cash flows are sufficient to meet all its financial commitments and
maintain the capacity to fund its exploration and evaluation activities, which primarily relate to the Mackay Potash Project. The Board
of Directors has overall responsibility for the establishment and oversight of the risk management framework. Management monitors
and manages the financial risks relating to the operations of the Group through regular reviews of risk.
Market (including interest rate risk), liquidity and credit risks arise in the normal course of business. These risks are managed under
Board approved treasury processes and transactions.
The principal financial instruments as at reporting date include cash, other receivables (excludes net GST receivables and fuel tax
credits), exploration deposits, payables and lease liabilities.
This note presents information about exposures to the above risks, the objectives, policies and processes for measuring and managing
risk, and the management of capital.
(a) Market risk – Interest rate risk
The Group is exposed to movements in market interest rates on cash. The Group’s policy is to monitor the interest rate yield curve out
to six months to ensure a balance is maintained between liquidity of cash assets and the interest rate return. The entire cash balance
for the Group of $5,477,457 (2020: $5,168,894) is subject to interest rate risk. The interest rate profile of the Group’s interest-bearing
financial instruments at the reporting date was:
Fixed rate instrument
Term deposits (cash and cash equivalents)
Variable rate instrument
Cash and cash equivalents
2021
$
2020
$
59,000
59,000
59,000
59,000
5,418,457
5,109,894
5,418,457
5,109,894
Page | 53
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
22. FINANCIAL RISK MANAGEMENT (CONTINUED)
(a) Market risk – Interest rate risk (continued)
Sensitivity analysis
At 30 June 2021, if the interest rates had changed by +/- 80 basis points from the weighted average rate for the period with all other
variables held constant, post tax loss for the Group would have been $43,348 higher/lower (2020: $40,879) as a result of the
lower/higher interest income from cash and cash equivalents. The sensitivity analysis performed was based on rates available to the
Group which management have assessed as being reasonable.
(b) Liquidity risk
The Group manages liquidity risk by continuously monitoring forecast and actual cash flows and ensuring sufficient cash is available to
meet the current and future commitments of the Group. Due to the nature of the Group’s activities, being mineral exploration and
evaluation, the Group does not have ready access to credit facilities, with the primary source of funding being equity raisings.
The Board of Directors constantly monitors the state of equity markets in conjunction with the Group’s current and future funding
requirements, with a view to initiating appropriate capital raisings as required.
The financial liabilities of the Group are confined to trade and other payables and lease liabilities. Trade and other payables are non-
interest bearing and are due within 12 months of the reporting date. Lease liabilities are interest bearing and are payable within 1 to
2 years.
(c) Credit risk
Exposure to credit risk
The carrying amount of financial assets represent the maximum credit exposure. The maximum exposure to credit risk at the reporting
date was:
Cash and cash equivalents
Other receivables(i)
Exploration deposits
(i)
Excludes net GST receivable and fuel tax credits
2021
$
5,477,457
24,129
91,688
2020
$
5,168,894
75,996
172,540
5,593,274
5,417,430
The Group’s significant concentration of credit risk is cash, which is held with major Australian Banks with Aa3 credit rating and
accordingly the credit risk exposure is minimal. Exploration deposits are held by DMIRS a reputable government institution.
(d) Fair values
The current term deposits, receivables and payables carrying values approximate their fair values due to the short term-maturities of
these instruments.
(e) Capital management
The Board’s policy is to preserve a strong capital base and maintain investor and equity market confidence in order to sustain the
Group’s exploration and evaluation activities and supporting functions.
The capital structure of the Group consists of equity attributable to equity holders of the parent, comprising issued capital, reserves
and retained earnings.
There were no changes in the Group’s approach to capital management during the year.
Page | 54
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
23. RELATED PARTY TRANSACTIONS
(a) Key management personnel compensation
Short-term benefits
Post-employment superannuation benefit
Other long-term benefits
Share based payments
2021
$
2020
$
808,264
796,201
71,438
111,680
2,164,643
58,683
39,990
-
3,156,025
894,874
(b) Transactions with directors, director related entities and other related parties
During the period $96,000 of fees were paid to Lexcon Services Pty Ltd (2020: $82,000) and $8,000 was payable for professional
services provided by Mr Pismiris as Non-Executive Director and Company Secretary (2020: $8,000).
24. SUBSIDIARIES
Interest in subsidiaries
The consolidated financial statements incorporate the assets and liabilities and results of the following subsidiary in accordance with
accounting policy:
Name
Principal Activities
Country of Incorporation
Agrimin Potash Pty Ltd
Tali Resources Pty Ltd
Mineral Exploration
Mineral Exploration
Australia
Australia
The proportion of ownership interest is equal to the proportion of voting power held.
Equity Holding
2021
%
100%
-
2020
%
100%
40%
Page | 55
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
25. PARENT ENTITY INFORMATION
The following information relates to the parent entity, Agrimin Limited. The information presented here has been prepared using
accounting policies consistent with those presented in note 2.
Current assets
Non-current assets
Total assets
Current liabilities
Non-current liabilities
Total liabilities
Share capital
Reserves
Accumulated losses
Total equity
Loss for the year
Total comprehensive loss for the year
2021
$
2020
$
5,665,403
5,232,642
553,025
668,316
6,218,428
5,900,958
1,654,453
1,441,156
136,413
175,911
1,790,866
1,617,067
63,103,305
56,647,974
3,002,270
351,080
(61,678,013)
(52,715,164)
4,427,562
4,283,890
(8,698,190)
(10,332,684)
(8,698,190)
(10,332,684)
The carrying amount of all financial instruments is approximate to their fair values at 30 June 2021 and 2020.
26. REMUNERATION OF AUDITORS
During the year, the following fees were paid or were payable to the auditor of the Company, its related practices and non-related
audit firms:
Category 1 - fees to the group auditor for:
(i)
Auditing the statutory financial report of the parent covering the
group
(ii)
Auditing the statutory financial report of any controlled entities
Category 4 - Fees for other services
27. EVENTS AFTER THE REPORTING PERIOD
There were no events after the reporting date.
2021
$
2020
$
40,000
38,000
-
40,000
54,711
54,711
-
38,000
2,500
2,500
Page | 56
DIRECTORS’ DECLARATION
In the opinion of the directors of Agrimin Limited (‘the Company’):
1.
the financial statements and notes set out on pages 29 to 56 are in accordance with the Corporations Act 2001, including:
(a) complying with Accounting Standards and the Corporations Regulations 2001; and
(b) giving a true and fair view of the Group’s financial position as at 30 June 2021 and of its performance for the year ended
on that date;
2.
3.
the financial statements and notes also comply with International Financial Reporting Standards as issued by the
International Accounting Standards Board disclosed in note 2;
subject to the matters set out in note 2(c), there are reasonable grounds to believe that the Company will be able to pay
debts as and when they become due and payable; and
The directors have been given the declarations by the Chief Executive Officer and Chief Commercial Officer required by section
295A of the Corporations Act 2001.
Signed in accordance with a resolution of the directors.
Mark Savich
Chief Executive Officer and Executive Director
Perth
28 September 2021
Page | 57
Ernst & Young
11 Mounts Bay Road
Perth WA 6000 Australia
GPO Box M939 Perth WA 6843
Tel: +61 8 9429 2222
Fax: +61 8 9429 2436
ey.com/au
Independent auditor’s report to the members of Agrimin Limited
Report on the audit of the financial report
Opinion
We have audited the financial report of Agrimin Limited (the Company) and its subsidiary (collectively
the Group), which comprises the consolidated statement of financial position as at 30 June 2021, the
consolidated statement of comprehensive income, consolidated statement of changes in equity and
consolidated statement of cash flows for the year then ended, notes to the financial statements,
including a summary of significant accounting policies, and the directors’ declaration.
In our opinion, the accompanying financial report of the Group is in accordance with the Corporations
Act 2001, including:
a. Giving a true and fair view of the consolidated financial position of the Group as at 30 June 2021
and of its consolidated financial performance for the year ended on that date; and
b. 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 are independent of the Group 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.
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
We draw attention to Note 2(c) in the financial report, which describes the principal conditions that
raise doubt about the Group’s ability to continue as a going concern. These events or conditions
indicate that a material uncertainty exists that may cast significant doubt on the Group’s ability to
continue as a going concern. Our opinion is not modified in respect of this matter.
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
PD:ET:AGRIMIN:005
Key audit matters
Key audit matters are those matters that, in our professional judgment, were of most significance in
our audit of the financial report of the current year. These matters were addressed in the context of
our audit of the financial report as a whole, and in forming our opinion thereon, but we do not provide
a separate opinion on these matters. In addition to the matter described in the Material uncertainty
related to going concern section, we have determined the matter described below to be a key audit
matter to be communicated in our report. For the matter below, our description of how our audit
addressed the matter is provided in that context.
We have fulfilled the responsibilities described in the Auditor’s responsibilities for the audit of the
financial report section of our report, including in relation to this matter. Accordingly, our audit
included the performance of procedures designed to respond to our assessment of the risks of
material misstatement of the financial report. The results of our audit procedures, including the
procedures performed to address the matter below, provide the basis for our audit opinion on the
accompanying financial report.
1. Carrying value of capitalised exploration and evaluation assets
Why significant
How our audit addressed the key audit matter
At 30 June 2021, the Group held capitalised
exploration and evaluation assets of $34.47
million, representing 82% of the Group’s total
assets.
The carrying value of capitalised exploration and
evaluation assets is assessed for impairment by
the Group when facts and circumstances
indicate that this capitalised expenditure may
exceed its recoverable amount.
The determination as to whether there are any
indicators to require capitalised exploration and
evaluation assets to be assessed for impairment,
involves a number of judgements, including
whether the Group has tenure, will be able to
perform ongoing expenditure and whether there
is sufficient information for a decision to be
made that the area of interest is not
commercially viable. The Group did not identify
any impairment indicators as at 30 June 2021.
Refer to Note 7 in the financial report for
capitalised exploration and evaluation asset
balances and related disclosures.
In performing our procedures, we:
• Considered whether the Group’s rights to
explore were current, which included
obtaining and assessing supporting
documentation such as license agreements;
• Considered the Group’s intention to carry
out significant ongoing exploration and
evaluation activities in the relevant areas of
interest which included reviewing the
Group’s cash flow forecast and enquiring of
senior management and the directors as to
their intentions and the strategy of the
Group;
• Assessed whether exploration and
evaluation data existed to indicate that the
carrying value of capitalised exploration and
evaluation is unlikely to be recovered
through development or sale; and
• Assessed the adequacy of the disclosures in
Note 7 of the financial report.
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
Information other than the financial report and auditor’s report thereon
The directors are responsible for the other information. The other information comprises the
information included in the Company’s 2021 annual report, but does not include the financial report
and our auditor’s report thereon.
Our opinion on the financial report does not cover the other information and accordingly we do not
express any form of assurance conclusion thereon, with the exception of the Remuneration Report
and our related assurance opinion.
In connection with our audit of the financial report, our responsibility is to read the other information
and, in doing so, consider whether the other information is materially inconsistent with the financial
report or our knowledge obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this
other information, we are required to report that fact. We have nothing to report in this regard.
Responsibilities of the directors 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 Group’s ability to
continue as a going concern, disclosing, as applicable, matters relating to going concern and using the
going concern basis of accounting unless the directors either intend to liquidate the Group 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 the 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 the aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of this financial report.
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
As part of an audit in accordance with the Australian Auditing Standards, we exercise professional
judgment and maintain professional scepticism throughout the audit. We also:
►
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 Group’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 Group’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 Group 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 Group to express an opinion on the financial report. We are
responsible for the direction, supervision and performance of the Group 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.
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
From the matters communicated to the directors, we determine those matters that were of most
significance in the audit of the financial report of the current year 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 audit of the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included in the directors’ report for the year ended 30
June 2021.
In our opinion, the Remuneration Report of Agrimin Limited for the year ended 30 June 2021,
complies with section 300A of the Corporations Act 2001.
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the
Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our
responsibility is to express an opinion on the Remuneration Report, based on our audit conducted in
accordance with Australian Auditing Standards.
Ernst & Young
Pierre Dreyer
Partner
Perth
28 September 2021
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
SHAREHOLDERS’ INFORMATION
ASX ADDITIONAL INFORMATION
a) DISTRIBUTION OF MEMBER HOLDINGS
The distribution schedule of the number of holders in each class of equity security as at 24 August 2021:
Number of shares
1 - 1,000
1,001 - 5,000
5,001 - 10,000
10,001 - 100,000
100,001 and over
Holders
Securities
188
405
241
477
174
106,029
1,117,651
1,914,393
16,070,888
191,880,004
%
0.05%
0.53%
0.91%
7.61%
90.90%
1,485
211,088,965
100.00%
There are 188 shareholders holding less than a marketable parcel of shares.
b) TWENTY LARGEST SHAREHOLDERS
Party
JP Morgan Nominees Australia Pty Limited
Walloon Securities Pty Ltd
Perth Investment Corporation Ltd
Hillboi Nominees Pty Ltd
Gugalanna Holdings Pty Ltd
Invia Custodian Pty Ltd
BNP Paribas Nominees Pty Ltd Hub24 Custodial Serv Ltd
Spar Nominees Pty Ltd
Goldfire Enterprises Pty Ltd
Deering Nominees Pty Ltd
Eugob Nominees Pty Ltd
Mr Timothy Guy Lyons
ACP Investments Pty Ltd
Exxten Pty Ltd
Mr Timothy Guy Lyons & Mrs Heather Mary Lyons
Mrs Heather Mary Lyons
Goldtrain Holdings Pty Ltd
Gugalanna Pty Ltd
Kakuzi Nominees Pty Ltd
Zero Nominees Pty Ltd
Shares on issue as at 24 August 2021 is: 211,088,965.
Listed Ordinary Shares
No. of Ordinary
Shares
Percentage of issued
capital
31,698,824
10,046,000
9,262,000
8,565,475
7,900,000
6,654,538
5,660,434
5,291,615
4,930,544
4,594,998
3,950,000
3,502,778
3,400,000
2,436,797
2,410,499
2,382,222
2,220,000
2,010,000
2,000,000
1,986,300
120,903,024
15.02%
4.76%
4.39%
4.06%
3.74%
3.15%
2.68%
2.51%
2.34%
2.18%
1.87%
1.66%
1.61%
1.15%
1.14%
1.13%
1.05%
0.95%
0.95%
0.94%
57.28%
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SHAREHOLDERS’ INFORMATION
ASX ADDITIONAL INFORMATION (CONTINUED)
c) SUBSTANTIAL SHAREHOLDERS
The names of substantial shareholders who have notified the Company in accordance with section 671B of the Corporations Act 2001
are:
Party
Australian Super Pty Ltd
Hillboi Nominees Pty Ltd & associated entities
d) VOTING RIGHTS
All shares carry one vote per share without restriction.
Number of ordinary
shares held
Percentage of issued
capital
31,147,824
26,122,974
14.76%
12.38%
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