American Pacific Borates Ltd
Annual Report
30 June 2021
ABN 68 615 606 114
americanpacificborate.com
CONTENTS
PAGE
Corporate Directory
1
Directors’ Report
2
Consolidated Statement of Profit or Loss and Other Comprehensive Income
18
Consolidated Statement of Financial Position
19
Consolidated Statement of Changes in Equity
20
Consolidated Statement of Cash Flows
21
Notes to the Consolidated Financial Statements
22
Directors’ Declaration
46
Auditor’s Independence Declaration
47
Independent Auditor’s Report
48
ASX Additional Information
52
Schedule of Tenements
54
Important Information and Disclaimers
56
CORPORATE DIRECTORY
Directors
David Salisbury (Non-Executive Chairman)
Anthony Hall (Executive Director)
Stephen Hunt (Non-Executive Director)
Jimmy Lim (Non-Executive Director)
Company Secretary
Aaron Bertolatti
Registered Office & Principal Place of Business
Level 12, 197 St Georges Terrace,
PERTH WA 6000
Telephone: + 61 6141 3145
Website: americanpacificborate.com
Share Registry
Computershare Investor Services Pty Ltd
Level 11, 172 St Georges Terrace
Perth WA 6000
Auditors
BDO Audit (WA) Pty Ltd
38 Station Street
Subiaco WA 6008
Stock Exchange
Australian Securities Exchange
(Home Exchange: Perth, Western Australia)
ASX Code: ABR
Directors’ Report
American Pacific Borates Limited
2
2021 Annual Report to Shareholders
The Directors present their report for American Pacific Borates Limited (“American Pacific” or “the
Company”) and its subsidiaries (“the Group”) for the year ended 30 June 2021.
DIRECTORS
The names of the Directors of American Pacific during the financial year and to the date of this report are:
▪ David Salisbury – appointed 1 August 2020
▪ Harold (Roy) Shipes – resigned 31 July 2020
▪ Anthony Hall – appointed 28 October 2016
▪ Michael Schlumpberger – resigned 28 April 2021
▪ Stephen Hunt – appointed 2 May 2017
▪ John McKinney – resigned 4 February 2021
▪ Jimmy Lim – appointed 4 February 2021
David Salisbury – appointed 1 August 2020
Non-Executive Chairman, BSc (Electrical Engineering), MBA
David Salisbury is a qualified electrical engineer with over 40 years’ experience in the global mining
industry. David resides in the USA and is a former Rio Tinto executive who was President and CEO of
Resolution Copper Company, Kennecott Minerals Company and Rössing Uranium Limited. David has been
directly responsible for the development, construction and production of four mines.
Anthony Hall – appointed 28 October 2016
Executive Director, BBus, LLB(Hons), ACG
Anthony Hall is a qualified lawyer with 20 years´ commercial experience in venture capital, risk
management, strategy and business development. Anthony was a founding director of the Company and
managed its listing process on the ASX in 2017. Prior to his role with the Company he spent five years as
the initial Managing Director of ASX listed Highfield Resources Ltd (ASX: HFR) from a $10m IPO valuation
to an ASX300 company. Mr Hall holds a Bachelor of Laws (Hons), Bachelor of Business and a Graduate
Diploma of Applied Finance and Investment.
Stephen Hunt – appointed 2 May 2017
Non-Executive Director, BBus, MAICD
Stephen is currently Executive Chairman of Sparc Technologies Ltd. (ASX: SPN). Previous Directorships
include, Executive Chairman and a Non Executive Director of ASX listed company, Volt Resources Ltd, (ASX:
VRC), Non Executive Director Magnis Energy Technologies Ltd. (ASX: MNS), IMX Resources Ltd and
Australian Zircon Ltd. Cumulatively, over 20 years as a Director of ASX listed companies. Earlier experience
includes various marketing roles including over 15 years with BHP. Stephen is a member of ARC Research
Hub for Graphene Enabled Industry Transformation (the Hub) Industry Advisory Committee (IAC) and also
a Director of the charity, Count Me In.
Jimmy Lim– appointed 4 February 2021
Non-Executive Director, BSc, BEng (Hons), MBA
Jimmy is the Managing Director and Founder of Virtova Capital Management, a natural resources industry
advisory firm providing corporate advisory services encompassing M&A and structured financings in
relation to assets in the sector. In this role, he advised several ASX listed mining companies with respect
to mergers, acquisitions and structured finance. Jimmy has worked for global investment banks in Australia
(JPMorgan) and Hong Kong (Morgan Stanley and Goldman Sachs).
Harold (Roy) Shipes – resigned 31 July 2020
Non-Executive Chairman, BSc
Harold (Roy) Shipes served as CEO and General Manager of OK Tedi Mining Ltd, GM Operations for the
Southern Peru Copper Corporation and previously for Phelps Dodge Corp. Mr. Shipes was the Founder
and President of a number of North American focused mining companies, including American Pacific
Mining, Western States Engineering and Atlas Precious Metals Inc (the owner of the Fort Cady assets).
Directors’ Report
American Pacific Borates Limited
3
2021 Annual Report to Shareholders
Michael Schlumpberger – resigned 28 April 2021
Managing Director, BEng (Mining), MBA
Michael Schlumpberger is a qualified mining engineer with over 30 years’ experience in industrial minerals.
His background includes management, operations and maintenance in all aspects of mining, processing,
reclamation, and permitting. Mr Schlumpberger has held senior roles with Potash Corporation of
Saskatchewan, Passport Potash and ASX listed Highfield Resources, and has worked in the United States,
Canada, and Europe. Mr Schlumpberger holds an MBA from East Carolina University.
John McKinney – resigned 4 February 2021
Non-Executive Director, BSc, BA
John McKinney, has co-founded a number of mining companies, including Western Gold Resources,
American International Trading Company and Western States Engineering, an engineering company
specializing in mining related engineering projects. His responsibilities have included overseeing
operations in the U.S., Mexico and Bolivia, including Arisur, AITCO and Atlas Precious Metals in Bolivia.
DIRECTORSHIPS OF OTHER LISTED COMPANIES
Directorships of other listed companies held by current directors in the 3 years immediately before the
end of the financial year are as follows:
Director
Company
Period of Directorship
Anthony Hall
High Grade Metals Ltd (ASX: HGM)
Director since February 2019
Stephen Hunt
Volt Resources Ltd (ASX: VRC)
Sparc Technologies Limited (ASX: SPN)
Director from December 2015 to May 2020
Director since November 2020
Jimmy Lim
Stanmore Resources Limited (ASX: SRL)
Director since October 2019
COMPANY SECRETARY
Aaron Bertolatti
B.Com, CA, ACG
Aaron Bertolatti is a qualified Chartered Accountant and Company Secretary with over 15 years’ experience
in the mining industry and accounting profession. Mr. Bertolatti has both local and international
experience and provides assistance to a number of resource companies with financial accounting and
stock exchange compliance. Mr. Bertolatti has significant experience in the administration of ASX listed
companies, corporate governance and corporate finance.
INTERESTS IN THE SECURITIES OF THE COMPANY
As at the date of this report, the interests of the Directors in the securities of American Pacific are:
Director
Ordinary
Shares
Options –
$0.20 each
on or before
30-Nov-2021
Options –
$0.30 each
on or before
31-May-2022
Options -
$0.50 each
on or before
5-Nov-2022
Options -
$0.50 each
on or before
30-Jul-2024
Options -
$0.90 each
on or before
6-Jul-2024
David Salisbury
-
-
-
-
-
2,000,000
Anthony Hall
5,728,335
1,500,000
1,000,000
2,000,000
2,500,000
2,400,000
Stephen Hunt
623,335
500,000
-
250,000
-
-
Jimmy Lim
51,282,051
-
-
-
-
-
Total
57,633,721
2,000,000
1,000,000
2,250,000
2,500,000
4,400,000
RESULTS OF OPERATIONS
The Company’s net loss after taxation attributable to the members of American Pacific for the year to 30
June 2021 was $15,589,313 (2020: $5,191,489).
Directors’ Report
American Pacific Borates Limited
4
2021 Annual Report to Shareholders
DIVIDENDS
No dividends were paid or declared. The directors do not recommend the payment of a dividend.
CORPORATE STRUCTURE
American Pacific is a company limited by shares, which is incorporated and domiciled in Australia.
NATURE OF OPERATIONS AND PRINCIPAL ACTIVITIES
American Pacific Borates Limited is an ASX listed company focused on advancing its 100% owned Fort
Cady Integrated Boron Facility located in Southern California, USA. The Company is seeking to become a
fully integrated producer of boron specialty products and advanced materials. It is targeting boron
applications in the field of clean energy transition, electric transportation and food security amongst
other high-performance, high-tech and high-margin applications.
The global shift from fossil based systems of energy production to renewable energy is increasingly
important to investors, consumers and governments. The emergence of renewable energy, the onset
of electrification and improvements in energy storage are all key drivers of clean energy transition.
Boron is a key component in energy transition because it is highly versatile in chemical reactions and
can be applied in processes for storing chemical and electrical energy, amongst other applications.
Global access to mined boron is rare and the Company’s production is underpinned by an even more
rare and large colemanite deposit. Colemanite is a conventional boron mineral that has been used to
commercially produce boron for broad applications for centuries. The Fort Cady colemanite ore deposit
is the largest known contained traditional borate occurrence in the world not owned by the two major
borate producers Rio Tinto and Eti Maden. The JORC compliant Mineral Resource Estimate and Reserve
comprises 13.93Mt of contained boric acid.
As part of the commercialisation strategy, the Company will produce boric acid, boron specialty products
and advanced materials (and SOP as a by-product credit) from Mannheim furnaces. SOP is a high value
specialty fertiliser prized for its low chloride potassium and sulfur content. Large target markets exist
on ABR’s doorstep in California and Arizona (collectively known as the bread basket of the United States).
The Company is currently working through a process to ensure a strong listing on a recognised New York
exchange having appointed a US Advisory Board and completing various activities including
strengthening its executive management team, focusing on a larger initial mining operation to deliver
stronger earlier EBITDA and progressing discussions with US based investment banks, potential US
partners and debt capital markets advisors.
Table 1 | JORC compliant Mineral Resource Estimate and Reserve
(ASX release dated 3 December 20181)
Reserves
MMT
B2O3 %
H3BO3 %
Li ppm
B2O3 MT
H3BO3 MT
Proven
27.21
6.70
11.91
379
1.82
3.24
Probable
13.80
6.40
11.36
343
0.88
1.57
Total Reserves
41.01
6.60
11.72
367
2.71
4.81
Resources
Measured
38.87
6.70
11.91
379
2.61
4.63
Indicated
19.72
6.40
11.36
343
1.26
2.24
Total M&I
58.59
6.60
11.72
367
3.87
6.87
Inferred
61.85
6.43
11.42
322
3.98
7.07
Total M,I&I
120.44
6.51
11.57
344
7.84
13.93
1 ABR confirms all material assumptions and technical parameters underpinning the Resource Estimate and Reserve
continue to apply and have not materially changed as per Listing Rule 5.23.2
Directors’ Report
American Pacific Borates Limited
5
2021 Annual Report to Shareholders
In addition to the flagship Fort Cady Integrated Boron Facility, the Company also has an earn in agreement
to acquire a 100% interest in the Salt Wells North and Salt Wells South Projects in Nevada, USA on the
incurrence of US$3m of Project expenditures.
The Projects cover an area of 36km2 and are considered prospective for borates and lithium in the
sediments and lithium in the brines within the project area. Surface salt samples from the Salt Wells North
project area were assayed in April 2018 and showed elevated levels of both lithium and boron with several
results of over 500ppm lithium and over 1% boron.
Rapid Progress by American Pacific Borates
The following are key accomplishments reflecting the rapid progress made since 1 July 2020.
July 2020
Defers spending commitments at Salt Wells Borate Project
August 2020
Appoints Former US Based Rio Tinto Executive David J Salisbury as Chairman
August 2020
Announces an update on construction activities at the Fort Cady Mine
August 2020
Confirms that all substantive operational permits are in place
September 2020
Releases product branding strategy
October 2020
Declares that the Boron enriched SOP crop trial delivers positive results
November 2020
Announces an update on construction activities at the Fort Cady Mine
December 2020
Initiates drawdown of the renegotiated US$30m financing
February 2021
Confirms receipt of US$30m for the Cady Borate Mine
February 2021
Updates enhanced Fort Cady Borate mine DFS
February 2021
Update to the board of directors
February 2021
Appoints construction company for the Fort Cady Borate Mine
March 2021
Updates the Company’s US Listing Strategy
April 2021
Appoints US advisory board to drive US listing
May 2021
Executes LOI with Compass Minerals for SOP sales
May 2021
Defers Phase 1A of Fort Cady Mine to Enhance US Listing
May 2021
Announces senior management appointment
June 2021
Announces the appointment of a new Chief Executive Officer
June 2021
Provides an update on corporate strategy
Directors’ Report
American Pacific Borates Limited
6
2021 Annual Report to Shareholders
REVIEW OF OPERATIONS
On 30 July 2020, the Company reported that it had renegotiated the earn-in agreement expenditure
requirements at the Salt Wells Borate Project. Year 3 (FY21) will now become Year 1 in the revised
agreement and see an expenditure commitment of US$100k (inclusive of annual lease payments). The
existing Year 4 (FY2022) will now become Year 2 with a revised expenditure commitment of US$300k and
so on. The Company went on to state that it remains committed to the Project and still believes it is a very
prospective exploration opportunity for borates.
On 3 August 2020, the Company announced the appointment of ex Rio Tinto executive Mr David J Salisbury
as the Company’s new Non-Executive Chairman.
On 7 August 2020, the Company provided an update on its Fort Cady Borate Mine as construction activities
increased. These activities included the arrival of significant equipment at site; Sales and marketing
activities developing; Final operational permit expected to be awarded; and ongoing Crop trials of “boron-
enriched SOP” fertiliser.
On 17 August 2020, the Company announced it had been awarded the Underground Injection Control
permit by the US EPA on 14 August 2020. With the award of this permit, the Company now has all
substantive operational permits for production of borates and SOP at the Fort Cady Borate Mine.
On 24 September 2020, the Company provided an update on its Fort Cady Borate Mine brand creation
work to establish a US presence for the Company’s intended products. The Company proposed that it
would sell its premium speciality fertiliser products through its newly created sales and marketing
company, “Fort Cady”. This business will focus on developing premium speciality fertiliser products aimed
at the American agricultural market.
On 1 October 2020, the Company provided an update on its independently conducted crop trials of its
boron enriched SOP specialty fertiliser. The broccoli trials demonstrated significant benefits from the use
of the boron-enriched SOP. The trials revealed a notable uptake of boron in the crops resulting in dramatic
yield improvements. Also, the application of Proprietary Blend B of the SOP delivered the highest yield
compared to the grower’s standard SOP fertiliser.
On 18 November 2020, the Company provided an update on activities at the Fort Cady Borate Mine. These
included:
▪ Concrete poured for Materials Warehouse and that construction was progressing
▪ Second Round of SOP+B crop trials in train to focus on greenhouse crops
▪ Continued progress on targeted secondary listing on a New York exchange
▪ Borate educational marketing initiatives developed and being rolled out
▪ A Mine Plant Superintendent appointed
▪ The inclusion in the MSCI Global Micro Cap Index from 30 November 2020
▪ The award for Best Technical Study of 2020 by Mining Journal for its Fort Cady Borate Mine eDFS
On 29 December 2020, the Company provided an update on its financing activities for the Fort Cady Borate
Mine, in Southern California. It advised it had renegotiated the Convertible Note to be 100% equity. The
Company also renegotiated the time period for the drawdown with 100% of the US$30m due on or about
31 January 2021. Under the revised arrangement, the Company did not need to provide any security for
the funds meaning all assets will remained unencumbered and available to support debt facilities as part
of the ongoing financing strategy. The Company confirmed receipt of US$30M from Virtova Capital
Management Limited on 1 February 2021.
Directors’ Report
American Pacific Borates Limited
7
2021 Annual Report to Shareholders
On 4 February 2021, the Company announced the appointment of Mr Jimmy Lim of Virtova Capital
Management Limited as a Non-Executive Director. At the same time Mr John McKinney retired as a Non-
Executive Director.
On 21 April 2021, the Company announces it had created a US Advisory Board to drive the Company’s US
listing process. The creation of the Advisory Board was a deliberate strategy to enable the Company to
access a team of professionals with deep public markets and industrial minerals’ operating experience
that can support and drive the Company’s aspirations to successfully list its shares on a recognised US
exchange. The Advisory Board consists of three members, John Mitchell, Tim Johnston and Govind Arora.
On 28 April 2021, the Company announced that Mr Michael Schlumpberger had tendered his resignation
as Managing Director and CEO of the Company.
On 7 May 2021, the Company announced it had signed a Letter of Intent (“LOI”) with Compass Minerals
America Inc. (“Compass Minerals”), a subsidiary of NYSE-listed Compass Minerals International, Inc., to
progress negotiations with respect to Compass Minerals taking responsibility for the sales and marketing
of SOP from the Company’s Fort Cady Borate Mine.
On 10 May 2021, the Company announced that it had completed an initial strategic business plan and
would now defer the construction of Phase 1A of the Fort Cady Borate Mine to focus on a larger initial
operation. The Company was also considering completing additional drilling with a view to expanding the
footprint and scale of the JORC Code Compliant Mineral Resource Estimate.
On 19 May 2021, the Company advised that it had appointed Dr. Dinakar (Dino) Gnanamgari as the
Company’s new Chief Commercial Officer / Chief Technical Officer, commencing 31 May 2021. This was
followed by the appointment of Mr Henri Tausch on 11 June 2021 as the Company’s new Chief Executive
Officer, effective 9 August 2021.
On 16 June 2021 the Company announced it had decided to focus on establishing specialty boron products
that leverage a rare boron resource and integrated production facility that includes a solution mine, SOP
plant, boric acid plant and specialty production. This integrated approach will focus on low-cost production
of high value products.
On 4 August 2021, the Company announced a substantial Exploration Target to support proposed
Resource expansion drilling activities scheduled for later this year. In parallel with the preparation of the
Exploration Target and drill hole targets, the Company has been progressing the acquisition of land in the
South Eastern section of the deposit at the Fort Cady Mine. The Company reported it had recently acquired
three parcels of land and associated mineral rights.
Table 2 | Exploration Target for the Fort Cady Boron Project (ASX release dated 4 August 2021)
Area
Thickness
metres
Tonnage
Range Mmt
Grade Range
Boric Acid
Range Mmt
B2O3%
H3BO3 %
Land Parcel A
20.39 – 28.91
5.97 – 35.39
5.53 – 7.15
9.84 – 12.73
0.59 – 4.50
Land Parcel A
29.05 – 38.08
3.32 – 13.06
5.08 – 7.15
9.04 – 12.73
0.30 – 1.66
Land Parcel A
27.94 – 31.48
6.41 – 21.66
4.93 – 7.15
8.78 – 12.73
0.56 – 2.76
Land Parcel A
24.00 – 30.57
4.94 – 18.88
5.72 – 7.22
10.18 – 12.85
0.50 – 2.43
Total
20.64 – 78.99
5.32 – 7.17
9.47 – 12.76
1.95 – 10.08
An Exploration Target is a statement or estimate of the exploration potential of a mineral deposit in a defined
geological setting where the statement or estimate, quoted as a range of tonnes and a range of grade (or quality),
relates to mineralisation for which there has been insufficient exploration to estimate a Mineral Resource.
Directors’ Report
American Pacific Borates Limited
8
2021 Annual Report to Shareholders
The Company confirmed a complimentary listing of its securities in the US remains a priority and working
with all stakeholders to get the Fort Cady Project into production.
Planned Activities
The Company is planning on conducting the following major activities over the remainder of second half
of 2021:
1. Commence Resource upgrade drilling in Q4 2021.
2. consolidating the positive project initiatives that have been progressed over recent months; and
3. Progressing the Company’s complimentary US listing.
ANNUAL REVIEW OF ORE RESERVES AND MINERAL RESOURCES
In accordance with ASX Listing Rule 5, the Company has performed an annual review of all JORC-compliant
ore reserves and mineral resources as at 30 June 2021.
Fort Cady Borate Project
American Pacific Borates has not released an updated Mineral Resource Estimate during the year ending
30 June 2021.
Table 4 | Fort Cady Mineral Resources Summary
30 June 2021
30 June 2020
Tonnes
B2O3
H3BO3
Li
B2O3
H3BO3
Tonnes
B2O3
H3BO3
Li
B2O3
H3BO3
(million) (wt %)
(wt %)
ppm
(Mt)
(Mt)
(million) (wt %)
(wt %)
ppm
(Mt)
(Mt)
Measured
38.9
6.7%
11.9%
379
2.6
4.6
38.9
6.7%
11.9%
379
2.6
4.6
Indicated
19.7
6.4%
11.4%
343
1.3
2.2
19.7
6.4%
11.4%
343
1.3
2.2
Total Measured
& Indicated
58.6
6.6% 11.7%
367
3.9
6.9
58.6
6.6% 11.7%
367
3.9
6.9
Inferred
61.9
6.4%
11.4%
322
4.0
7.1
61.9
6.4%
11.4%
322
4.0
7.1
Total
120.5
6.5% 11.6%
344
7.8
13.9
120.5
6.5% 11.6%
344
7.8
13.9
The Company released a maiden JORC compliant Ore Reserve on 17 December 2018. This Ore Reserve
was converted from the existing MRE as part of the Company’s initial DFS, which was also released on 17
December 2018.
Table 5 |Fort Cady Ore Reserves Summary
30 June 2021
30 June 2020
Tonnes
B2O3
H3BO3
Li
B2O3
H3BO3
Tonnes
B2O3
H3BO3
Li
B2O3
H3BO3
(million) (wt %)
(wt %)
ppm
(Mt)
(Mt)
(million) (wt %)
(wt %)
ppm
(Mt)
(Mt)
Proven
27.2
6.7%
11.9%
379
1.8
3.2
27.2
6.7%
11.9%
379
1.8
3.2
Probable
13.8
6.4%
11.4%
343
0.9
1.6
13.8
6.4%
11.4%
343
0.9
1.6
Total Reserves
41.0
6.6% 11.7%
367
2.7
4.8
41.0
6.6% 11.7%
367
2.7
4.8
Directors’ Report
American Pacific Borates Limited
9
2021 Annual Report to Shareholders
Salt Wells Project
The Salt Wells Project has not reported either an MRE or Ore Reserves.
Summary
A summary of American Pacific Borates total Mineral Resources is shown below.
Table 6 | American Pacific Borates Total Mineral Resources Summary (all projects)
30 June 2021
30 June 2020
Tonnes
B2O3
H3BO3
Li
B2O3
H3BO3
Tonnes
B2O3
H3BO3
Li
B2O3
H3BO3
(million) (wt %)
(wt %)
ppm
(Mt)
(Mt)
(million) (wt %)
(wt %)
ppm
(Mt)
(Mt)
Measured
38.9
6.7%
11.9%
379
2.6
4.6
38.9
6.7%
11.9%
379
2.6
4.6
Indicated
19.7
6.4%
11.4%
343
1.3
2.2
19.7
6.4%
11.4%
343
1.3
2.2
Total Measured
& Indicated
58.6
6.6% 11.7%
367
3.9
6.9
58.6
6.6%
11.7%
367
3.9
6.9
Inferred
61.9
6.4%
11.4%
322
4.0
7.1
61.9
6.4%
11.4%
322
4.0
7.1
Total
120.5
6.5% 11.6%
344
7.8
13.9
120.5
6.5%
11.6%
344
7.8
13.9
Table 7 | American Pacific Borates Total Ore Reserves Summary (all projects)
30 June 2021
30 June 2020
Tonnes
B2O3
H3BO3
Li
B2O3
H3BO3
Tonnes
B2O3
H3BO3
Li
B2O3
H3BO3
(million) (wt %)
(wt %)
ppm
(Mt)
(Mt)
(million) (wt %)
(wt %)
ppm
(Mt)
(Mt)
Proven
27.2
6.7%
11.9%
379
1.8
3.2
27.2
6.7%
11.9%
379
1.8
3.2
Probable
13.8
6.4%
11.4%
343
0.9
1.6
13.8
6.4%
11.4%
343
0.9
1.6
Total Reserves
41.0
6.6% 11.7%
367
2.7
4.8
41.0
6.6% 11.7%
367
2.7
4.8
Corporate Governance – Resources and Reserve Calculations
Due to the nature, stage and size of the Company’s existing operations, the Company believes there would
be no efficiencies or additional governance benefits gained by establishing a separate mineral resources
and reserves committee responsible for reviewing and monitoring the Company’s processes for calculating
mineral resources and reserves and for ensuring that the appropriate internal controls are applied to such
calculations. However, the Company ensures that all Mineral Resource calculations are prepared by a
competent, senior geologist and are reviewed and verified independently by a qualified person.
SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS
There have been no significant changes in the state of affairs of the Group during the financial year, other
than as set out in this report.
SIGNIFICANT EVENTS AFTER THE REPORTING DATE
The following options were converted into ordinary fully paid shares after the reporting date;
Date shares issued
$0.30 each on or before
31-May-2022
$0.75 each on or before
1-Jul-2021
2-Jul-21
-
5,068,333
28-Jul-21
1,000,000
-
14-Sep-21
1,000,000
-
TOTAL
2,000,000
5,068,333
Directors’ Report
American Pacific Borates Limited
10
2021 Annual Report to Shareholders
On 2 July 2021, the Company issued 1,000,000 unlisted options to a consultant as consideration for sales
and marketing services provided. The unlisted options are exercisable at $2.00 each on or before 1 June
2025.
On 12 July 2021, the Company issued 1,500,000 shares to Blue Horizon Advisors LLC, pursuant to the terms
of the Advisory Agreement dated 16 April 2021 and as consideration for Advisory Board services provided.
On 20 August 2021, the Company issued 2,100,000 options to a consultant, pursuant to the terms of an
Independent Contractor Agreement dated 19 August 2021. The unlisted options are exercisable at $2.50
each on or before 31 July 2022.
On 24 August 2021, the Company issued 5,000,000 options as part of the recently appointed CEO’s long
term incentive package. The unlisted options are exercisable at $2.00 each on or before 1 June 2025. The
options vest over three (3) years in three (3) equal annual instalments commencing on the start date of
employment.
On 14 September, the Company announced two senior management appointments effective in the second
half of September 2021. Mr Tyson Hall was appointed Chief Operating Officer, with Mr Chance Pipitone
appointed Head of Corporate Development and Investor Relations.
On 14 September, the Company issued 5,900,000 unlisted options to employees pursuant to the terms of
the Company’s Incentive Option Plan. The unlisted options are exercisable at $2.00 each on or before 1
June 2025.
The impact of the Coronavirus (COVID-19) pandemic is ongoing and it is not practicable to estimate the
potential impact, positive or negative, after the reporting date. The situation is rapidly developing and is
dependent on measures imposed by the Australian Government and other countries, such as maintaining
social distancing requirements, quarantine, travel restrictions and any economic stimulus that may be
provided.
There have been no other significant events subsequent to the end of the financial year to the date of this
report.
LIKELY DEVELOPMENTS AND EXPECTED RESULTS OF OPERATIONS
The Directors have excluded from this report any further information on the likely developments in the
operations of the Company and the expected results of those operations in future financial years, as the
Directors believe that it would be speculative and prejudicial to the interests of the Company.
ENVIRONMENTAL REGULATIONS AND PERFORMANCE
The operations of the Group are presently subject to environmental regulation under the laws of the
United States. The Group is, to the best of its knowledge, at all times in full environmental compliance with
the conditions of its licences.
INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Company has made an agreement indemnifying all the Directors and officers of the Company against
all losses or liabilities incurred by each Director or officer in their capacity as Directors or officers of the
Company to the extent permitted by the Corporations Act 2001. The indemnification specifically excludes
wilful acts of negligence.
Directors’ Report
American Pacific Borates Limited
11
2021 Annual Report to Shareholders
INDEMNIFICATION OF THE AUDITOR
The Company has not, during or since the end of the financial year, indemnified or agreed to indemnify
the auditor of the Company or any related entity against a liability incurred by the auditor. During the
financial year, the Company has not paid a premium in respect of a contract to insure the auditor of the
company or any related entity.
SHARE OPTIONS
As at the date of this report there were 61,750,000 unissued ordinary shares under options. The details of
the options are as follows:
Number
Exercise Price $
Expiry Date
6,500,000
$0.20
30-Nov-2021
3,000,000
$0.30
31-May-2022
100,000
$0.60
30-June-2022
10,000,000
$0.50
5-Nov-2022
8,250,000
$0.50
30-Jul-2024
2,050,000
$0.60
1-Feb-2023
1,550,000
$0.80
1-Feb-2023
9,500,000
$0.90
6-Jul-2024
1,200,000
$1.10
31-Dec-2023
600,000
$1.35
30-Jun-2024
1,500,000
$1.60
31-Dec-2022
14,400,000
$2.00
1-Jun-2025
1,000,000
$2.50
7-Apr-2025
2,100,000
$2.50
31-Jul-2022
61,750,000
No option holder has any right under the options to participate in any other share issue of the Company
or any other entity. 700,000 options lapsed unexercised and 196,945 expired unexercised during the
financial year. 23,941,849 options were exercised during the year ended 30 June 2021.
DIRECTORS’ MEETINGS
During the financial year, in addition to regular Board discussions, the number of meetings of Directors
held during the year and the number of meetings attended by each Director were as follows:
Director
Number of Meetings
Eligible to Attend
Number of Meetings
Attended
David Salisbury
7
7
Anthony Hall
7
7
Stephen Hunt
7
7
Jimmy Lim
3
3
Harold (Roy) Shipes
-
-
Michael Schlumpberger
5
5
John McKinney
4
4
PROCEEDINGS ON BEHALF OF COMPANY
No person has applied for leave of the Court to bring proceedings on behalf of the Company or intervene
in any proceedings to which the Company is a party for the purpose of taking responsibility on behalf of
the Company for all or any part of those proceedings. The Company was not a party to any such
proceedings during the year.
Directors’ Report
American Pacific Borates Limited
12
2021 Annual Report to Shareholders
CORPORATE GOVERNANCE
In recognising the need for the highest standards of corporate behaviour and accountability, the Directors
of American Pacific support and adhere to the principles of sound corporate governance. The Board
recognises the recommendations of the Australian Securities Exchange Corporate Governance Council,
and considers that American Pacific complies to the extent possible with those guidelines, which are of
importance and add value to the commercial operation of an ASX listed resources company.
The Company has established a set of corporate governance policies and procedures and these can be
found on the Company’s website: americanpacificborate.com.
AUDITOR INDEPENDENCE AND NON-AUDIT SERVICES
Section 307C of the Corporations Act 2001 requires the Company’s auditors to provide the Directors of
American Pacific with an Independence Declaration in relation to the audit of the financial report. A copy
of that declaration is included within the annual report. There were no non-audit services provided by the
Company’s auditor.
Officers of the company who are former partners of BDO Audit (WA) Pty Ltd
There are no officers of the company who are former partners of BDO Audit (WA) Pty Ltd.
Auditor
BDO Audit (WA) Pty Ltd continue in office in accordance with section 327 of the Corporations Act 2001.
AUDITED REMUNERATION REPORT
This report, which forms part of the Directors’ report, outlines the remuneration arrangements in place
for the key management personnel of American Pacific for the financial year ended 30 June 2021. The
information provided in this remuneration report has been audited as required by Section 308(3C) of the
Corporations Act 2001.
The remuneration report details the remuneration arrangements for KMP who are defined as those
persons having authority and responsibility for planning, directing and controlling the major activities of
the Group, directly or indirectly, including any Director (whether executive or otherwise) of the Group.
Details of Directors and Key Management Personnel
▪ David Salisbury – appointed 1 August 2020
▪ Harold (Roy) Shipes – resigned 31 July 2020
▪ Anthony Hall – appointed 28 October 2016
▪ Michael Schlumpberger – resigned 28 April 2021
▪ Stephen Hunt – appointed 2 May 2017
▪ John McKinney – resigned 4 February 2021
▪ Jimmy Lim – appointed 4 February 2021
Remuneration Policy
The Board is responsible for determining and reviewing compensation arrangements for the Directors.
The Board assesses the appropriateness of the nature and amount of emoluments of such officers on a
yearly basis by reference to relevant employment market conditions with the overall objective of ensuring
maximum stakeholder benefit from the retention of a high-quality board and executive team. The
expected outcome of this remuneration structure is to retain and motivate Directors.
As part of its Corporate Governance Policies and Procedures, the board has adopted a formal
Remuneration Committee Charter and Remuneration Policy. The Board has elected not to establish a
remuneration committee based on the size of the organisation and has instead agreed to meet as deemed
necessary and allocate the appropriate time at its board meetings.
Directors’ Report
American Pacific Borates Limited
13
2021 Annual Report to Shareholders
Fees and payments to non‑executive directors reflect the demands which are made on, and the
responsibilities of, the directors. Non‑executive directors’ fees and payments are reviewed annually by the
Board. The Chair’s fees are determined independently to the fees of non‑executive directors based on
comparative roles in the external market. Non‑executive directors do not receive performance-based pay.
Remuneration in the current reporting period was determined based on general market rates.
FY2021
Level
Cash
Remuneration
Short Term Incentive2,3
Long Term Incentive
Non-Executive Chairman
US$72,0001
Nil
2.0m share options
Managing Director
US$280,000
Up to 60% of cash remuneration
3.0m share options
Executive Director
Up to US$224,000 Up to 60% of cash remuneration
2.4m share options
Non-Executive Director
A$48,000
Nil
Nil
1 From 1 May through to 30 June 2021, the Company’s Non-Executive Chairman, Mr David Salisbury,
assumed the role of Executive Chairman and was paid US$20,000 per month (an increase of US$14,000
per month).
2 100% of the STI award is paid in cash. STI was calculated based on the short term incentive limit as noted
above being 60% of cash remuneration.
3 The Board has discretion to adjust remuneration outcomes up or down to prevent any inappropriate
reward outcomes, including reducing (down to zero, if appropriate) any STI award.
Additional Fees
A Director may also be paid fees or other amounts as the Directors determine if a Director performs special
duties or otherwise performs services outside the scope of the ordinary duties of a Director. A Director
may also be reimbursed for out-of-pocket expenses incurred as a result of their directorship or any special
duties.
Details of Remuneration
Details of the nature and amount of each element of the remuneration of each Director of the Group for
the year ended 30 June 2021 are as follows:
2021
Short term
Options
Base
Salary
$
Directors’
Fees
$
Consulting
Fees
$
Incentive
Award
$
Share-Based
Payments
$
Other
benefits
$
Total
$
Performance
related
%
David Salisbury1
- 125,8606
-
-
1,156,724
-
1,282,587
-
Harold (Roy) Shipes2
-
6,015
-
-
-
-
6,015
-
Michael
Schlumpberger3
346,736
-
-
201,680
1,735,087
177,2787
2,460,780
8.2
Anthony Hall
-
-
336,000
159,360
1,388,069
-
1,883,429
8.5
Stephen Hunt
-
48,000
-
-
-
-
48,000
-
John McKinney4
-
28,570
-
-
-
-
28,570
-
Jimmy Lim5
-
19,571
-
-
-
-
19,571
-
346,736 228,020
336,000
361,040
4,279,880
177,278
5,728,953
6.3
1 David Salisbury was appointed 1 August 2020.
2 Harold (Roy) Shipes resigned on 31 July 2020.
Directors’ Report
American Pacific Borates Limited
14
2021 Annual Report to Shareholders
3 Michael Schlumpberger resigned on 28 April 2021.
4 John McKinney resigned on 4 February 2021.
5 Jimmy Lim was appointed 4 February 2021.
6 From 1 May through to 30 June 2021, Mr David Salisbury, assumed the role of Executive Chairman and
was paid US$20,000 per month (an increase of US$14,000 per month).
7 Michael Schlumpberger received paid private accommodation from 1 July 2020 to 28 April 2021 and
received termination benefits totalling $153,408 following his resignation in April 2021.
There were no other executive officers of the Company during the financial year ended 30 June 2021.
Details of the nature and amount of each element of the remuneration of each Director of the Group for
the year ended 30 June 2020 are as follows:
2020
Short term
Options
Base
Salary
$
Directors’
Fees
$
Consulting
Fees
$
Incentive
Award
Share-Based
Payments
$
Other
benefits
Total
$
Performance
related
%
Harold (Roy) Shipes
-
74,484
-
-
-
-
74,484
-
Michael
Schlumpberger
366,320
-
-
55,535
498,227
31,2081
951,290
5.8
Anthony Hall
-
-
256,000
16,000
339,278
-
611,278
2.6
Stephen Hunt
-
39,000
-
-
-
-
39,000
-
John McKinney
-
39,000
-
-
-
-
39,000
-
366,320 152,484
256,000
71,535
837,505
31,208
1,715,052
4.2
1 Michael Schlumpberger received paid private accommodation for the entire year.
Shareholdings of Directors
The number of shares in the Company held during the financial year by Directors of the Group, including
their personally related parties, is set out below. There were no shares granted during the reporting year
as compensation.
Balance at the
start of the
year
Granted during
the year as
compensation
On exercise of
share options
Other changes
during the year
Balance at the
end of the year
David Salisbury
-
-
-
-
-
Anthony Hall
5,575,557
-
152,778
-
5,728,335
Stephen Hunt
553,890
-
69,445
-
623,335
Jimmy Lim
-
-
-
51,282,0511
51,282,051
Michael Schlumpberger
675,000
-
-
(675,000)2
-
Harold (Roy) Shipes
49,220,000
-
-
(49,220,000)3
-
John McKinney
-
-
-
-
-
1 Jimmy Lim was appointed 4 February 2021.
2 Michael Schlumpberger resigned on 28 April 2021.
3 Harold (Roy) Shipes resigned on 31 July 2020.
The value of options exercised by Anthony Hall and Stephen hunt was nil given they were free attaching
options. Cash consideration of $222,223 was paid on exercise of the options.
All equity transactions with Directors other than those arising from the exercise of remuneration options
have been entered into under terms and conditions no more favourable than those the Company would
have adopted if dealing at arm’s length.
Directors’ Report
American Pacific Borates Limited
15
2021 Annual Report to Shareholders
Option Holdings of Directors
The numbers of options over ordinary shares in the Company held during the financial year by each
Director of American Pacific, including their personally related parties, are set out below:
1 David Salisbury was appointed 1 August 2020.
2 Jimmy Lim was appointed 4 February 2021.
3 Michael Schlumpberger resigned on 28 April 2021.
4 Harold (Roy) Shipes resigned on 31 July 2020.
5 John McKinney resigned on 4 February 2021.
No option holder has any right under the options to participate in any other share issue of the Company
or any other entity. Options granted as part of remuneration have been valued using the Black Scholes
option pricing model that takes into account the exercise price, the term of the option, the impact of
dilution, the share price at grant date and expected price volatility of the underlying share and the risk-
free interest rate for the term of the option. Options granted under the plan carry no dividend or voting
rights. For details on the valuation of options, including models and assumptions used, please refer to
note 21.
Options Affecting Remuneration
The terms and conditions of options affecting remuneration in the current or future reporting years are
as follows:
Grant
Date
Grant
Number
Expiry
date/last
exercise
date
Exercise
price
per
option
Value of
options at
grant date1
Number of
options
vested
Vested
Max
value yet
to vest
Michael
Schlumpberger
03/12/20
3,000,000 6/07/2024
$0.90
$1,735,087
3,000,000
100%
-
David Salisbury
03/12/20
2,000,000 6/07/2024
$0.90
$1,156,724
2,000,000
100%
-
Anthony Hall
03/12/20
2,400,000 6/07/2024
$0.90
$1,388,069
2,400,000
100%
-
7,400,000
$4,279,880
7,400,000
-
1 The value at grant date has been calculated in accordance with AASB 2 Share-based payments. Fair value
per option is $0.578 and the first exercise date is the grant date. No service condition is attached to the
options on the basis that the directors will not gain a benefit without an increase in share price.
Balance at
the start of
the year
Granted
during the
year as
compensation
Exercised
during the
year
Other
changes
during the
year
Balance
at the end
of the year Exercisable
Un-
exercisable
David Salisbury1
-
2,000,000
-
-
2,000,000
2,000,000
-
Anthony Hall
7,152,778
2,400,000
(152,778)
-
9,400,000
9,400,000
-
Stephen Hunt
819,445
-
(69,445)
-
750,000
750,000
-
Jimmy Lim2
-
-
-
-
-
-
-
Michael
Schlumpberger3
11,500,000
3,000,000
- (14,500,000)
-
-
-
Harold (Roy) Shipes4
1,500,000
-
-
(1,500,000)
-
-
-
John McKinney5
750,000
-
-
(750,000)
-
-
-
Directors’ Report
American Pacific Borates Limited
16
2021 Annual Report to Shareholders
Service Agreements
Anthony Hall is employed under the terms of an Executive Employment Agreement executed on 1 March
2017. Since this time the Board has unanimously resolved to increase Mr. Halls remuneration on an
annual basis. On 29 June 2020 the Board approved an annual consulting fee of US$224,00, effective 1 July
2020.
Non-Executive Directors
On appointment to the Board, all non-executive directors enter into a service agreement with the Group
in the form of a letter of appointment. The letter summarises the Board policies and terms, including
compensation, relevant to the Director. The aggregate remuneration for Non-Executive Directors has
been set at an amount not to exceed $500,000 per annum. This amount may only be increased with the
approval of Shareholders at a general meeting.
Loans to Directors and Executives
There were no loans to Directors and key management personnel during the financial year ended 30 June
2021.
Additional Information
The earnings of the consolidated entity for the five years to 30 June 2021 are summarised below:
2021
2020
2019
2018
20171
$
$
$
$
$
Other income
66,298
196,851
112,161
-
-
EBITDA
(15,467,336)
(5,163,416)
(3,006,224)
(2,795,016)
(848,511)
EBIT
(15,589,313)
(5,191,489)
(3,020,343)
(2,800,802)
(848,511)
Profit after income tax
(15,589,313)
(5,191,489)
(3,020,343)
(2,800,802)
(848,511)
The factors that are considered to affect total shareholders return (“TSR”) are summarised below:
2021
2020
2019
2018
20171
Share price at financial year end ($)
1.14
0.50
0.20
0.29
-
Total dividends declared (cents per share)
-
-
-
-
-
Basic earnings per share (cents per share)
(4.56)
(2.92)
(1.58)
(1.70)
(3.00)
1 American Pacific was incorporated in Australia on 28 October 2016 and commenced trading on the
Australian Securities Exchange on 28 July 2017.
Voting and comments made at the company's 2020 Annual General Meeting
American Pacific received 93% of "yes" votes on its remuneration report for the 2020 financial year. The
Group did not receive specific feedback on its remuneration report at the AGM.
END OF AUDITED REMUNERATION REPORT
Directors’ Report
American Pacific Borates Limited
17
2021 Annual Report to Shareholders
Signed on behalf of the Board in accordance with a resolution of the Directors.
David Salisbury
Non-Executive Chairman
California, USA
17 September 2021
American Pacific Borates Ltd
American Pacific Borates Limited
18
2021 Annual Report to Shareholders
Consolidated Statement of Profit or Loss and Other Comprehensive Income
for the year ended 30 June 2021
Note
30-Jun-21
30-Jun-20
$
$
Continuing Operations
Interest income
4,672
11,470
Other income
66,298
196,851
Expenses
Professional and consulting fees
3
(2,713,227)
(918,505)
Director and employee costs
(684,868)
(272,293)
Other expenses
(727,157)
(354,624)
Interest expense
(2,824)
(349,390)
Loss on foreign exchange
(2,205,366)
(145,991)
Borrowing costs
-
(337,051)
Marketing and promotional expenses
(376,338)
(145,602)
Share-based payments expense
21
(8,659,959)
(2,596,450)
Impairment expense
10(b)
(218,490)
-
Travel and accommodation
(72,054)
(279,904)
Loss before income tax
(15,589,313)
(5,191,489)
Income tax expense
4
-
-
Net loss for the year
(15,589,313)
(5,191,489)
Other comprehensive income
Items that may be reclassified to profit and loss
Exchange differences on translation of foreign operations
(2,307,638)
206,668
Other comprehensive income for the year, net of tax
(2,307,638)
206,668
Total comprehensive loss for the year
(17,896,951)
(4,984,821)
Loss per share
Basic loss per share (cents)
19
(4.56)
(2.34)
Diluted loss per share (cents)
19
(4.56)
(2.34)
The above Consolidated Statement of Profit or Loss and Other Comprehensive Income should be read in conjunction with
the accompanying notes.
American Pacific Borates Ltd
American Pacific Borates Limited
19
2021 Annual Report to Shareholders
Consolidated Statement of Financial Position as at 30 June 2021
30-Jun-21
30-Jun-20
Note
$
$
Current Assets
Cash and cash equivalents
5
54,369,319
38,742,907
Other assets
-
1,694
Receivables
6
729,035
131,785
Total Current Assets
55,098,354
38,876,386
Non-Current Assets
Receivables
7
1,452,700
536,247
Right of Use Assets
8(a)
258,715
-
Property, plant and equipment
9
17,293,264
4,505,103
Deferred exploration and evaluation expenditure
10
38,108,372
29,483,185
Total Non-Current Assets
57,113,051
34,524,535
Total Assets
112,211,405
73,400,921
Current Liabilities
Trade and other payables
11
1,762,709
3,815,995
Lease Liabilities
8(b)
95,789
-
Total Current Liabilities
1,858,498
3,815,995
Non-Current Liabilities
Lease Liabilities
8(b)
166,131
-
Total Non-Current Liabilities
166,131
-
Total Liabilities
2,024,629
3,815,995
Net Assets
110,186,776
69,584,926
Equity
Issued capital
13
123,701,282
73,862,440
Reserves
14
13,935,952
7,583,631
Accumulated losses
15
(27,450,458)
(11,861,145)
Total Equity
110,186,776
69,584,926
The above Consolidated Statement of Financial Position should be read in conjunction with the accompanying notes.
American Pacific Borates Ltd
American Pacific Borates Limited
20
2020 Annual Report to Shareholders
Consolidated Statement of Changes in Equity for the year ended 30 June 2021
Issued
capital
$
Accumulated
losses
$
Foreign
exchange
translation
reserve
$
Share
option
reserve
$
Total
$
Balance at 1 July 2019
31,961,550
(6,669,656)
1,129,206
2,367,562
28,788,662
Total comprehensive loss for the year
Loss for the year
-
(5,191,489)
-
-
(6,475,234)
Foreign currency translation
-
-
206,668
-
206,668
Total comprehensive loss for the year
-
(5,191,489)
206,668
-
(4,984,821)
Transactions with owners in their capacity as owners
Shares issued by placement
41,650,000
-
-
-
41,650,000
Shares issued on exercise of unlisted options
3,559,329
-
-
-
3,559,329
Shares issued on conversion of convertible note
499,523
-
-
-
499,523
Cost of issue
(3,807,962)
-
-
-
(3,807,962)
Share-based payments (note 21)
-
-
-
3,880,195
3,880,195
Balance at 30 June 2020
73,862,440
(11,861,145)
1,335,874
6,247,757
69,584,926
Balance at 1 July 2020
73,862,440
(11,861,145)
1,335,874
6,247,757
69,584,926
Total comprehensive loss for the year
Loss for the year
-
(15,589,313)
-
-
(15,589,313)
Foreign currency translation
-
-
(2,307,638)
-
(2,307,638)
Total comprehensive loss for the year
-
(15,589,313)
(2,307,638)
-
(17,896,951)
Transactions with owners in their capacity as owners
Shares issued by placement
39,487,179
-
-
-
39,487,179
Shares issued on exercise of unlisted options
9,342,962
-
-
-
9,342,962
Unissued share capital
3,031,250
-
-
-
3,031,250
Cost of issue
(2,068,549)
-
-
-
(2,068,549)
Share-based payments (note 21)
46,000
-
-
8,659,959
8,705,959
Balance at 30 June 2021
123,701,282
(27,450,458)
(971,764)
14,907,716
110,186,776
The above Consolidated Statement of Changes in Equity should be read in conjunction with the accompanying notes.
American Pacific Borates Ltd
American Pacific Borates Limited
21
2020 Annual Report to Shareholders
Consolidated Statement of Cash Flows for the year ended 30 June 2021
Note
30-Jun-21
30-Jun-20
$
$
Cash flows from operating activities
Payments to suppliers and employees
(4,154,684)
(2,006,204)
Other receipts
58,305
196,851
Interest received
4,672
11,470
Interest paid
-
(349,390)
Net cash used in operating activities
5
(4,091,707)
(2,147,273)
Cash flows from investing activities
Purchase of property, plant and equipment
(15,187,041)
(1,558,585)
Payment for EPA reclamation bond
(1,087,803)
-
Payments for exploration expenditure
(10,362,318)
(4,522,142)
Net cash used in investing activities
(26,637,162)
(6,080,727)
Cash flows from financing activities
Proceeds from issue of shares
39,487,179
41,650,000
Proceeds from issue of Convertible Note
-
2,934,655
Proceeds from the conversion of unlisted options
12,255,346
3,678,196
Borrowing costs
-
(192,834)
Repayment of convertible note
-
(2,471,413)
Payments for share issue costs
(3,182,258)
(1,410,508)
Net cash provided by financing activities
48,560,267
44,188,096
Net increase in cash and cash equivalents
17,831,398
35,960,096
Cash and cash equivalents at the beginning of the year
38,742,907
2,893,663
Effect of exchange rate fluctuations on cash
(2,204,986)
(110,852)
Cash and cash equivalents at the end of the year
5
54,369,319
38,742,907
The above Consolidated Statement of Cash Flows should be read in conjunction with the accompanying notes.
American Pacific Borates Ltd
Notes to the Consolidated Financial Statements for the year ended 30 June 2021
American Pacific Borates Ltd
22
2021 Annual Report to Shareholders
1. Corporate Information
The financial report of American Pacific Borates Limited (“American Pacific” or “the Company”) for the year
ended 30 June 2021 was authorised for issue in accordance with a resolution of the Directors on 17 September
2021. American Pacific is a company limited by shares incorporated in Australia whose shares commenced
public trading on the Australian Securities Exchange on 28 July 2017. The nature of the operations and the
principal activities of the Company are described in the Directors’ Report.
2. Summary of Significant Accounting Policies
(a) Basis of Preparation
The financial statements are general-purpose financial statements, which have been prepared in accordance
with the requirements of the Corporations Act 2001, Australian Accounting Standards and other authoritative
pronouncements of the Australian Accounting Standards Board. The financial statements have also been
prepared on a historical cost basis unless otherwise noted in accounting policies. The presentation currency
is Australian dollars.
Going concern
The financial statements have been approved by the Directors on a going concern basis. In determining the
appropriateness of the basis of preparation, the Directors have considered the impact of the COVID19
pandemic on the position of the Group at 30 June 2021 and its operations in future periods.
Parent entity information
In accordance with the Corporations Act 2001, these financial statements present the results of the
consolidated entity only. Supplementary information about the parent entity is disclosed in note 26.
(b) Compliance Statement
The financial report complies with Australian Accounting Standards, which include Australian equivalents to
International Financial Reporting Standards (AIFRS). Compliance with AIFRS ensures that the financial report,
comprising the financial statements and notes thereto, complies with International Financial Reporting
Standards (IFRS).
(c) Basis of Consolidation
The consolidated financial statements comprise the financial statements of American Pacific Borates Limited
(‘the Company’) and its subsidiaries as at 30 June each year (‘the Group’). Subsidiaries are those entities over
which the Company has the power to govern the financial and operating policies so as to obtain benefits from
their activities. The existence and effect of potential voting rights that are currently exercisable or convertible
are considered when assessing whether a Company controls another entity.
In preparing the consolidated financial statements, all intercompany balances and transactions, income and
expenses and profit and losses resulting from intra-company transactions have been eliminated in full.
Unrealised losses are also eliminated unless costs cannot be recovered. Non-controlling interests in the
results and equity of subsidiaries are shown separately in the Statement of Profit or Loss and Other
Comprehensive Income and Consolidated Statement of Financial Position respectively.
(d) Foreign Currency Translation
(i) Functional and presentation currency
Items included in the financial statements of each of the Company’s controlled entities are measured using
the currency of the primary economic environment in which the entity operates (‘the functional currency’).
The functional and presentation currency of American Pacific Borates Limited is Australian dollars. The
functional currency of the US subsidiary is the US Dollar.
American Pacific Borates Ltd
Notes to the Consolidated Financial Statements for the year ended 30 June 2021
American Pacific Borates Ltd
23
2021 Annual Report to Shareholders
(ii) Transactions and balances
Foreign currency transactions are translated into the functional currency using the exchange rates prevailing
at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such
transactions and from the translation at year-end exchange rates of monetary assets and liabilities
denominated in foreign currencies are recognised in the Statement of Profit or Loss and Other
Comprehensive Income.
(iii) Group entities
The results and financial position of all the Group entities (none of which has the currency of a
hyperinflationary economy) that have a functional currency different from the presentation currency are
translated into the presentation currency as follows:
▪
assets and liabilities for each statement of financial position presented are translated at the closing rate
at the date of that statement of financial position;
▪
income and expenses for each statement of profit or loss and other comprehensive income are
translated at average exchange rates (unless this is not a reasonable approximation of the rates
prevailing on the transaction dates, in which case income and expenses are translated at the dates of the
transactions); and
▪
all resulting exchange differences are recognised as a separate component of equity.
On consolidation, exchange differences arising from the translation of any net investment in foreign entities
are taken to shareholders’ equity. When a foreign operation is sold or any borrowings forming part of the
net investment are repaid, a proportionate share of such exchange differences are recognised in the
statement of profit or loss and other comprehensive income, as part of the gain or loss on sale where
applicable.
(e) Segment Reporting
Operating segments are identified and segment information disclosed on the basis of internal reports that
are regularly provided to, or reviewed by, the Group’s chief operating decision maker which, for the Group, is
the board of directors. In this regard, such information is provided using different measures to those used in
preparing the Statement of Profit or Loss and Other Comprehensive Income and Statement of Financial
Position. Reconciliations of such management information to the statutory information contained in the
annual financial report have been included.
(f) Changes in accounting policies and disclosures
The Directors have reviewed all of the new and revised Standards and Interpretations issued by the AASB that
are relevant to the Company’s operations and effective for future reporting periods. It has been determined
by the Directors that there is no impact, material or otherwise, of the new and revised Standards and
Interpretations on the Company and therefore, no change will be necessary to Company accounting policies.
(g) Exploration and evaluation expenditure
Exploration and evaluation expenditures in relation to each separate area of interest are recognised as an
exploration and evaluation asset in the year in which they are incurred where the following conditions are
satisfied:
(i)
the rights to tenure of the area of interest are current; and
(ii) at least one of the following conditions is also met:
(a) the exploration and evaluation expenditures are expected to be recouped through successful
development and exploration of the area of interest, or alternatively, by its sale; or
(b) exploration and evaluation activities in the area of interest have not at the balance 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.
American Pacific Borates Ltd
Notes to the Consolidated Financial Statements for the year ended 30 June 2021
American Pacific Borates Ltd
24
2021 Annual Report to Shareholders
Exploration and evaluation assets are initially measured at cost and include acquisition of rights to explore,
studies, exploratory drilling, trenching and sampling and associated activities and an allocation of depreciation
and amortisation of assets used in exploration and evaluation activities. General and administrative costs are
only included in the measurement of exploration and evaluation costs where they are related directly to
operational activities in a particular area of interest.
Exploration and evaluation assets are assessed for impairment when facts and circumstances suggest that
the carrying amount of an exploration and evaluation asset may exceed its recoverable amount. The
recoverable amount of the exploration and evaluation asset (for the cash generating unit(s) to which it has
been allocated being no larger than the relevant area of interest) is estimated to determine the extent of the
impairment loss (if any).
Where an impairment loss subsequently reverses, the carrying amount of the asset is increased to the revised
estimate of its recoverable amount, but only to the extent that the increased carrying amount does not exceed
the carrying amount that would have been determined had no impairment loss been recognised for the asset
in previous years.
Where a decision has been made to proceed with development in respect of a particular area of interest, the
relevant exploration and evaluation asset is tested for impairment and the balance is then reclassified to
development. Where an area of interest is abandoned, any expenditure carried forward in respect of that
area is written off.
(h) Income Tax
The income tax expense or benefit for the year is the tax payable on the current year’s taxable income based
on the applicable income tax rate for each jurisdiction adjusted by changes in deferred tax assets and liabilities
attributable to temporary difference and to unused tax losses.
The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at
the end of the reporting year. Management periodically evaluates positions taken in tax returns with respect
to situations in which applicable tax regulation is subject to interpretation. It establishes provisions where
appropriate on the basis of amounts expected to be paid to the tax authorities.
Current tax assets and liabilities for the current and prior years are measured at the amount expected to be
recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount
are those that are enacted or substantively enacted by the balance date. Deferred income tax is provided on
all temporary differences at the balance date between the tax bases of assets and liabilities and their carrying
amounts for financial reporting purposes.
Deferred income tax liabilities are recognised for all taxable temporary differences except when:
▪ the deferred income tax liability arises from the initial recognition of goodwill or of an asset or liability in a
transaction that is not a business combination and that, at the time of the transaction, affects neither the
accounting profit nor taxable profit or loss; or
▪ the taxable temporary difference is associated with investments in subsidiaries, associates or interests in
joint ventures, and the timing of the reversal of the temporary difference can be controlled and it is
probable that the temporary difference will not reverse in the foreseeable future.
Deferred income tax assets are recognised for all deductible temporary differences, carry-forward of unused
tax assets and unused tax losses, to the extent that it is probable that taxable profit will be available against
which the deductible temporary differences and the carry-forward of unused tax credits and unused tax
losses can be utilised, except when:
American Pacific Borates Ltd
Notes to the Consolidated Financial Statements for the year ended 30 June 2021
American Pacific Borates Ltd
25
2021 Annual Report to Shareholders
▪ the deferred income tax asset relating to the deductible temporary difference arises from the initial
recognition of an asset or liability in a transaction that is not a business combination and, at the time of
the transaction, affects neither the accounting profit nor taxable profit or loss; or
▪ the deductible temporary difference is associated with investments in subsidiaries, associates or interests
in joint ventures, in which case a deferred tax asset is only recognised to the extent that it is probable that
the temporary difference will reverse in the foreseeable future and taxable profit will be available against
which the temporary difference can be recognised.
The carrying amount of deferred income tax assets is reviewed at each balance date and reduced to the extent
that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred
income tax asset to be recognised.
Unrecognised deferred income tax assets are reassessed at each balance date and are recognised to the
extent that it has become probable that future taxable profit will allow the deferred tax asset to be recovered.
Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply to the year
when the asset is recognised or the liability is settled, based on tax rates (and tax laws) that have been enacted
or substantively enacted at the balance date.
Income taxes relating to items recognised directly in equity are recognised in equity and not in profit or loss.
Deferred tax assets and deferred tax liabilities are offset only if a legally enforceable right exists to set off
current tax assets against current tax liabilities and the deferred tax assets and liabilities relate to the same
taxable entity and the same taxation authority.
(i) Other taxes
Revenues, expenses and assets are recognised net of the amount of GST, except where the amount of GST
incurred is not recoverable from the Government. In these circumstances the GST is recognised as part of the
cost of acquisition of the asset or as part of an item of the expense. Receivables and payables in the statement
of financial position are shown inclusive of GST.
The net amount of GST recoverable from, or payable to, the Government is included as part of receivables or
payables in the statement of financial position. Cash flows are presented in the statement of cash flows on a
gross basis, except for the GST component of investing and financing activities, which is receivable from or
payable to the Government, are disclosed as operating cash flows.
(j) Impairment of non-financial assets other than goodwill
The Company assesses at each balance date whether there is an indication that an asset may be impaired.
If any such indication exists, or when annual impairment testing for an asset is required, the Company makes
an estimate of the asset’s recoverable amount.
An asset’s recoverable amount is the higher of its fair value less costs to sell and its value in use and is
determined for an individual asset, unless the asset does not generate cash inflows that are largely
independent of those from other assets or Company of assets and the asset’s value in use cannot be
estimated to be close to its fair value.
In such cases the asset is tested for impairment as part of the cash-generating unit to which it belongs. When
the carrying amount of an asset or cash-generating unit exceeds its recoverable amount, the asset or cash-
generating unit is considered impaired and is written down to its recoverable amount.
American Pacific Borates Ltd
Notes to the Consolidated Financial Statements for the year ended 30 June 2021
American Pacific Borates Ltd
26
2021 Annual Report to Shareholders
In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-
tax discount rate that reflects current market assessments of the time value of money and the risks specific
to the asset. Impairment losses relating to continuing operations are recognised in those expense categories
consistent with the function of the impaired asset unless the asset is carried at revalued amount (in which
case the impairment loss is treated as a revaluation decrease).
An assessment is also made at each balance date as to whether there is any indication that previously
recognised impairment losses may no longer exist or may have decreased. If such indication exists, the
recoverable amount is estimated. A previously recognised impairment loss is reversed only if there has been
a change in the estimates used to determine the asset’s recoverable amount since the last impairment loss
was recognised. If that is the case the carrying amount of the asset is increased to its recoverable amount.
That increased amount cannot exceed the carrying amount that would have been determined, net of
depreciation, had no impairment loss been recognised for the asset in prior years.
Such reversal is recognised in profit or loss unless the asset is carried at revalued amount, in which case the
reversal is treated as a revaluation increase. After such a reversal the depreciation charge is adjusted in future
years to allocate the asset’s revised carrying amount, less any residual value, on a systematic basis over its
remaining useful life.
(k) Goods and services tax
Revenues, expenses and assets are recognised net of the amount of goods and services tax (GST), except:
i.
where the amount of GST incurred is not recoverable from the taxation authority, it is recognised as
part of the cost of acquisition of an asset or as part of an item of expense; or
ii.
for receivables and payables which are recognised inclusive of GST.
The net amount of GST recoverable from, or payable to, the taxation authority is included as part of
receivables or payables. Cash flows are included in the cash flow statement on a gross basis. The GST
component of cash flows arising from investing and financing activities which is recoverable from, or payable
to, the taxation authority is classified as operating cash flows.
(l) Cash and cash equivalents
Cash comprises cash at bank and in hand. Cash equivalents are short term, highly liquid investments that are
readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in
value. Bank overdrafts are shown within borrowings in current liabilities in the statement of financial position.
For the purposes of the statement of cash flows, cash and cash equivalents consist of cash and cash
equivalents as defined above, net of outstanding bank overdrafts.
(m) Employee benefits
Short-term employee benefits
Liabilities for wages and salaries, including non-monetary benefits, annual leave and long service leave
expected to be settled wholly within 12 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 of 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 outflows.
American Pacific Borates Ltd
Notes to the Consolidated Financial Statements for the year ended 30 June 2021
American Pacific Borates Ltd
27
2021 Annual Report to Shareholders
Defined contribution superannuation expense
Contributions to defined contribution superannuation plans are expensed in the period in which they are
incurred.
(n) Trade and other payables
Trade payables and other payables are carried at amortised cost and represent liabilities for goods and
services provided to the Company prior to the end of the financial year that are unpaid and arise when the
Company becomes obliged to make future payments in respect of the purchase of these goods and services.
(o) Provisions
Provisions are recognised when the Company has a present obligation (legal or constructive) as a result of a
past event, it is probable that an outflow of resources embodying economic benefits will be required to settle
the obligation and a reliable estimate can be made of the amount of the obligation.
Provisions are not recognised for future operating losses. When the Company expects some or all of a
provision to be reimbursed, for example under an insurance contract, the reimbursement is recognised as a
separate asset but only when the reimbursement is virtually certain. The expense relating to any provision is
presented in the statement of comprehensive income net of any reimbursement.
Provisions are measured at the present value or management’s best estimate of the expenditure required to
settle the present obligation at the end of the reporting year. If the effect of the time value of money is
material, provisions are discounted using a current pre-tax rate that reflects the risks specific to the liability.
When discounting is used, the increase in the provision due to the passage of time is recognised as an interest
expense.
(p) 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 deduction, net of tax, from the proceeds. Incremental costs directly
attributable to the issue of new shares or options for the acquisition of a new business are not included in the
cost of acquisition as part of the purchase consideration.
(q) Property, plant and equipment
Land and buildings are shown at fair value, based on periodic valuations by external independent valuers, less
subsequent depreciation and impairment for buildings. The valuations are undertaken more frequently if
there is a material change in the fair value relative to the carrying amount. Any accumulated depreciation at
the date of revaluation is eliminated against the gross carrying amount of the asset and the net amount is
restated to the revalued amount of the asset.
Increases in the carrying amounts arising on revaluation of land and buildings are credited in other
comprehensive income through to the revaluation surplus reserve in equity. Any revaluation decrements are
initially taken in other comprehensive income through to the revaluation surplus reserve to the extent of any
previous revaluation surplus of the same asset. Thereafter the decrements are taken to profit or loss.
Plant and equipment is stated at historical cost less accumulated depreciation and impairment. Historical cost
includes expenditure that is directly attributable to the acquisition of the items. An item of property, plant and
equipment is derecognised upon disposal or when there is no future economic benefit to the consolidated
entity. Gains and losses between the carrying amount and the disposal proceeds are taken to profit or loss.
Any revaluation surplus reserve relating to the item disposed of is transferred directly to retained profits.
American Pacific Borates Ltd
Notes to the Consolidated Financial Statements for the year ended 30 June 2021
American Pacific Borates Ltd
28
2021 Annual Report to Shareholders
Depreciation is calculated on a straight-line basis to write off the net cost of each item of property, plant and
equipment (excluding land) over their expected useful lives as follows:
Buildings
40 years
Leasehold improvements
3-10 years
Motor Vehicles
5 years
Plant and equipment
3-10 years
(r) Right of use assets
A right-of-use asset is recognised at the commencement date of a lease. The right-of-use asset is measured at
cost, which comprises the initial amount of the lease liability, adjusted for, as applicable, any lease payments
made at or before the commencement date net of any lease incentives received, any initial direct costs
incurred, and, except where included in the cost of inventories, an estimate of costs expected to be incurred
for dismantling and removing the underlying asset, and restoring the site or asset.
Right-of-use assets are depreciated on a straight-line basis over the unexpired period of the lease or the
estimated useful life of the asset, whichever is the shorter. Where the consolidated entity expects to obtain
ownership of the leased asset at the end of the lease term, the depreciation is over its estimated useful life.
Right-of use assets are subject to impairment or adjusted for any remeasurement of lease liabilities.
The Company has elected not to recognise a right of use asset and corresponding lease liability for short term
leases with terms of twelve months or less and leases of low value assets. Lease payments on these assets are
expensed to the profit or loss as incurred.
(s) Lease Liabilities
A lease liability is recognised at the commencement date of a lease. The lease liability is initially recognised at
the present value of the lease payments to be made over the term of the lease, discounted using the interest
rate implicit in the lease or, if that rate cannot be readily determined, the consolidated entity's incremental
borrowing rate. Lease payments comprise of fixed payments less any lease incentives receivable, variable
lease payments that depend on an index or a rate, amounts expected to be paid under residual value
guarantees, exercise price of a purchase option when the exercise of the option is reasonably certain to occur,
and any anticipated termination penalties. The variable lease payments that do not depend on an index or a
rate are expensed in the period in which they are incurred
Lease liabilities are measured at amortised cost using the effective interest method. The carrying amounts are
remeasured if there is a change in the following: future lease payments arising from a change in an index or a
rate used; residual guarantee; lease term; certainty of a purchase option and termination penalties. When a
lease liability is remeasured, an adjustment is made to the corresponding right-of use asset, or to profit or loss
if the carrying amount of the right-of-use asset is fully written down.
(t) 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 Group'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.
American Pacific Borates Ltd
Notes to the Consolidated Financial Statements for the year ended 30 June 2021
American Pacific Borates Ltd
29
2021 Annual Report to Shareholders
A liability is classified as current when: it is either expected to be settled in the Group'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.
(u) Revenue
Interest
Interest revenue is recognised as interest accrues using the effective interest method. This is a method of
calculating the amortised cost of a financial asset and allocating the interest income over the relevant period
using the effective interest rate, which is the rate that exactly discounts estimated future cash receipts
through the expected life of the financial asset to the net carrying amount of the financial asset.
(v) Earnings per share
Basic earnings/loss per share is calculated as net profit/loss attributable to members, adjusted to exclude any
costs of servicing equity (other than dividends) divided by the weighted average number of ordinary shares,
adjusted for any bonus element.
Diluted earnings per share is calculated as net profit/loss attributable to members, adjusted for:
▪ costs of servicing equity (other than dividends);
▪ the after-tax effect of dividends and interest associated with dilutive potential ordinary shares that have
been recognised as expenses; and
▪ other non-discretionary changes in revenues or expenses during the year that would result from the
dilution of potential ordinary shares;
divided by the weighted average number of ordinary shares and dilutive potential ordinary shares, adjusted
for any bonus element.
(w) Share-based payment transactions
(i) Equity settled transactions:
The Company provides benefits to individuals acting as, and providing services similar to employees (including
Directors) of the Company in the form of share-based payment transactions, whereby individuals render
services in exchange for shares or rights over shares (‘equity settled transactions’). There is currently an
Employee Share Option Plan (ESOP) in place, which provides benefits to Directors and individuals providing
services similar to those provided by an employee.
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 fair value is determined by using the Black Scholes formula taking into
account the terms and conditions upon which the instruments were granted, as discussed in note 21. The
expected price volatility is based on the historic volatility of the Company’s share price on the ASX.
In valuing equity settled transactions, no account is taken of any performance conditions, other than
conditions linked to the price of the shares of American Pacific Borates Limited (‘market conditions’). The cost
of the equity settled transactions is recognised, together with a corresponding increase in equity, over the
year 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 (i) the extent to which the vesting year has expired and (ii) the number of awards that, in the opinion
of the Directors of the Company, will ultimately vest. This opinion is formed based on the best available
information at balance date.
American Pacific Borates Ltd
Notes to the Consolidated Financial Statements for the year ended 30 June 2021
American Pacific Borates Ltd
30
2021 Annual Report to Shareholders
No adjustment is made for the likelihood of the market performance conditions being met as the effect of
these conditions is included in the determination of fair value at grant date. The statement of comprehensive
income charge or credit for a year represents the movement in cumulative expense recognised at the
beginning and end of the year. No expense is recognised for awards that do not ultimately vest, except for
awards where vesting is conditional upon a market condition. Where the terms of an equity settled award are
modified, as a minimum an expense is recognised as if the terms had not been modified. In addition, an
expense is recognised for any increase in the value of the transaction as a result of the modification, as
measured at the date of the modification.
Where an equity settled award is cancelled, it is treated as if it had vested on the date of the 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, as described in the
previous paragraph.
The cost of equity-settled transactions with non-employees is measured by reference to the fair value of goods
and services received unless this cannot be measured reliably, in which case the cost is measured by reference
to the fair value of the equity instruments granted. The dilutive effect, if any, of outstanding options is reflected
in the computation of loss per share (see note 19).
(x) Critical accounting estimates and judgements
The application of accounting policies requires the use of judgements, estimates and assumptions about
carrying values of assets and liabilities that are not readily apparent from other sources. The estimates and
associated assumptions are based on historical experience and other factors that are considered to be
relevant. Actual results may differ from these estimates. The estimates and underlying assumptions are
reviewed on an ongoing basis. Revisions are recognised in the year in which the estimate is revised if it affects
only that year, or in the year of the revision and future years if the revision affects both current and future
years.
Share-based payment transactions:
The Company measures the cost of equity-settled transactions and cash-settled share-based payments with
employees and third parties by reference to the fair value of the equity instruments at the date at which they
are granted. The fair value at the grant date is determined using the Black and Scholes option pricing model
taking into account the terms and conditions upon which the instruments were granted and the assumptions
detailed in note 21.
Deferred Exploration and evaluation Expenditure
Deferred exploration and evaluation expenditure has been capitalised on the basis that the company will
commence commercial production in the future, from which time the costs will be amortised in proportion to
the depletion of the mineral resources. Key judgements are applied in considering costs to be capitalised
which includes determining expenditures directly related to these activities and allocating overheads between
those that are expensed and capitalised.
In addition, costs are only capitalised that are expected to be recovered either through successful
development or sale of the relevant mining interest. Factors that could impact the future commercial
production at the mine include the level of reserves and resources, future technology changes, which could
impact the cost of mining, future legal changes and changes in commodity prices. To the extent that capitalised
costs are determined not to be recoverable in the future, they will be written off in the year in which this
determination is made.
American Pacific Borates Ltd
Notes to the Consolidated Financial Statements for the year ended 30 June 2021
American Pacific Borates Ltd
31
2021 Annual Report to Shareholders
Coronavirus (COVID-19) pandemic
Judgement has been exercised in considering the impacts that the Coronavirus (COVID-19) pandemic has had,
or may have, on the Group based on known information. This consideration extends to the nature of the
products and services offered, customers, supply chain, staffing and geographic regions in which the Group
operates. Other than as addressed in specific notes, there does not currently appear to be either any
significant impact upon the financial statements or any significant uncertainties with respect to events or
conditions which may impact the Group unfavourably as at the reporting date or subsequently as a result of
the Coronavirus (COVID-19) pandemic.
(y) New or amended Accounting Standards and Interpretations adopted
The Group has adopted all of the new or amended Accounting Standards and Interpretations issued by the
Australian Accounting Standards Board ('AASB') that are mandatory for the current reporting period. Any new
or amended Accounting Standards or Interpretations that are not yet mandatory have not been early adopted.
The following Accounting Standards and Interpretations are most relevant to the Group:
Conceptual Framework for Financial Reporting (Conceptual Framework)
The Group has adopted the revised Conceptual Framework from 1 July 2020. The Conceptual Framework
contains new definition and recognition criteria as well as new guidance on measurement that affects several
Accounting Standards, but it has not had a material impact on the consolidated entity's financial statements.
3.
Expenses
Professional and consulting fees
Corporate Advisory fees
(1,224,713)
(88,000)
Consulting fees
(794,939)
(720,171)
Legal Fees
(560,746)
(30,228)
Other
(132,829)
(80,106)
(2,713,227)
(918,505)
4.
Income Tax
(a) Income tax expense
Major component of tax expense for the year:
Current tax
-
-
Deferred tax
-
-
-
-
(b) Numerical reconciliation between aggregate tax expense recognised in the
statement of profit or loss and other comprehensive income and tax expense
calculated per the statutory income tax rate.
A reconciliation between tax expense and the product of accounting loss
before income tax multiplied by the Company’s applicable tax rate is as
follows:
Loss from continuing operations before income tax expense
(15,589,313)
(5,191,489)
Tax at the Australian rate of 30%
(4,676,794)
(1,557,447)
Share-based payments
2,597,988
778,935
Non-deductible legal expenses
(266,717)
288,899
Income tax benefit not brought to account
2,345,524
489,613
Income tax expense
-
-
2021
$
2020
$
American Pacific Borates Ltd
Notes to the Consolidated Financial Statements for the year ended 30 June 2021
American Pacific Borates Ltd
32
2021 Annual Report to Shareholders
(c) Deferred tax
The following deferred tax balances have not been bought to account:
Liabilities
Unrealised foreign exchange
-
(455,844)
Offset by deferred tax assets
-
455,844
Deferred tax liability recognised
-
-
Assets
Losses available to offset against future taxable income
2,993,383
1,921,104
Accrued expenses
5,850
5,475
Section 40-880 costs
254,398
443,773
882,912
Deferred tax assets offset against deferred tax liabilities
-
(455,844)
Net deferred tax asset not recognised
4,136,543
1,914,508
(d) Unused tax losses
Unused tax losses
9,977,944
6,403,679
Potential tax benefit not recognised at 30%
2,993,383
1,921,104
The benefit for tax losses will only be obtained if:
i. the Company derives future assessable income of a nature and of an amount sufficient to enable the
benefit from the deductions for the losses to be realised; and
ii. the Company continues to comply with the conditions for deductibility imposed by tax legislation; and
iii. no changes in tax legislation adversely affect the Company in realising the benefit from the deductions
for the losses.
5.
Cash and cash equivalents
Cash comprises of:
Cash at bank
54,369,319
38,742,907
Reconciliation of operating loss after tax to net cash flow from
operations
Loss after tax
(15,589,313)
(5,191,489)
Non-cash and non-operating items
Share-based payments
8,659,959
2,596,450
Interest expense
2,824
-
Borrowing costs
-
337,051
Foreign exchange (gain)/loss
2,205,366
36,281
Depreciation
121,977
28,073
Change in assets and liabilities
Decrease / (increase) in trade and other receivables
(15,015)
(14,068)
Increase / (decrease) in trade and other payables
522,495
60,429
Net cash flow used in operating activities
(4,091,707)
(2,147,273)
2021
$
2020
$
American Pacific Borates Ltd
Notes to the Consolidated Financial Statements for the year ended 30 June 2021
American Pacific Borates Ltd
33
2021 Annual Report to Shareholders
6.
Receivables - Current
Other receivables
109,599
-
GST receivable
30,902
131,785
Prepayment for electricity
588,534
-
729,035
131,785
Debtors, other debtors and GST receivable are non-interest bearing and generally receivable on 30-day terms.
They are neither past due nor impaired. The amount is fully collectible. Due to the short-term nature of these
receivables, their carrying value is assumed to approximate their fair value.
7.
Receivables – Non-Current
Bonds and guarantees
1,452,700
536,247
The Bonds are pledged to the Bureau of Land Management (San Bernardino County) for the Fort Cady
Project’s water permits and to the Environmental Protection Authority for site reclamation.
8.
a) Right of Use Assets
Office lease
Opening balance
-
-
Additions – office lease
291,014
-
Accumulated amortisation
(32,299)
-
Closing balance
258,715
-
b) Lease Liabilities
Opening balance
-
-
Additional liability recognised for new lease
291,014
-
Repayment
(31,918)
-
Interest
2,824
-
Closing balance
261,920
-
Current
95,789
-
Non- Current
166,131
-
261,920
-
9.
Property, plant and equipment
Land and Buildings, net
1,880,095
937,572
Plant and Equipment, net
1,969,944
419,343
Motor Vehicles, net
68,020
31,942
Construction Work in Progress
13,375,205
3,116,246
17,293,264
4,505,103
Movements in property, plant and equipment:
a) Land and Buildings
Opening balance
937,572
708,454
Additions
1,021,210
214,780
Net exchange differences on translation
(78,687)
14,338
Closing balance
1,880,095
937,572
2021
$
2020
$
American Pacific Borates Ltd
Notes to the Consolidated Financial Statements for the year ended 30 June 2021
American Pacific Borates Ltd
34
2021 Annual Report to Shareholders
b) Plant and Equipment
Opening balance
419,343
21,071
Additions
1,662,663
418,479
Net exchange differences on translation
(35,194)
426
Depreciation for the year
(76,868)
(20,633)
Closing balance
1,969,944
419,343
c) Motor Vehicles
Opening balance
31,942
38,652
Additions
52,130
-
Net exchange differences on translation
(2,681)
730
Depreciation for the year
(13,371)
(7,440)
Closing balance
68,020
31,942
d) Construction Work in Progress
Opening balance
3,116,246
-
Additions
10,477,449
3,116,246
Impairment expense
(218,490)1
-
Closing balance
13,375,205
3,116,246
1 Following completion of the initial strategic business plan in May 2021, the Company decided to defer the
construction of Phase 1A. As a result, some items of prepaid equipment were required to be cancelled.
Construction work in progress represents the equipment which has been acquired and is not in use and
prepayments for construction services in relation to the development of the Fort Cady Borate Project.
10. Deferred Exploration and Evaluation Expenditure
Exploration and Evaluation phase - at cost
Opening balance
29,483,185
24,692,541
Foreign exchange translation difference
(1,527,112)
272,726
Exploration and evaluation expenditure incurred during the year
10,152,299
4,517,918
Closing balance
38,108,372
29,483,185
The ultimate recoupment of costs carried forward for exploration expenditure is dependent on the successful
development and commercial exploitation or sale of the respective mining areas.
11. Trade and Other Payables
Trade payables
1,387,101
3,550,491
Other payables
21,108
133,254
Accruals
354,500
132,250
1,762,709
3,815,995
Trade creditors and other creditors are non-interest bearing and generally payable on 30-day terms. Due to
the short-term nature of these payables, their carrying value is assumed to approximate their fair value.
2021
$
2020
$
American Pacific Borates Ltd
Notes to the Consolidated Financial Statements for the year ended 30 June 2021
American Pacific Borates Ltd
35
2021 Annual Report to Shareholders
12. Borrowings
Convertible note
Issued during the year
7,897,435
2,934,655
Foreign exchange loss
-
36,281
Repaid during the year
7,897,435
(2,970,936)
Closing balance
-
-
On 27 August 2019, the Company announced that it had agreed to issue a US$2m convertible note to Amvest
Capital Mining Opportunities, LLC (“Amvest”). The borrowings were unsecured and were scheduled to mature
in September 2021.
On 14 February 2020 the Company paid Amvest US$1.4m, which represented the return of the outstanding
balance of the US$2.0m convertible note. Refer to note 13(b) for details of shares issued upon conversion of
convertible notes prior to repayment.
13. Issued Capital
(a) Issued and paid up capital
Issued and fully paid
123,701,282
73,862,440
2021
2020
Number of
shares
$
Number of
shares
$
(b) Movements in ordinary shares on issue
Opening Balance
304,560,670
73,862,440
208,442,224
31,961,550
Shares issued via $0.25 placement
-
-
11,000,000
2,750,000
Shares issued via $0.40 placement
-
-
17,750,000
7,100,000
Shares issued via $0.60 placement
-
-
53,000,000
31,800,000
Shares issued via $0.77 placement
41,025,642
31,589,744
-
-
Conversion of Convertible Notes
10,256,409
7,897,435
2,064,462
499,523
Conversion of Unlisted Options - $0.20
500,000
100,000
-
-
Conversion of Unlisted Options - $0.25
12,776,849
3,194,212
2,637,317
659,329
Conversion of Unlisted Options - $0.30
2,500,000
750,000
9,666,667
2,900,000
Conversion of Unlisted Options - $0.40
1,750,000
700,000
-
-
Conversion of Unlisted Options - $0.50
250,000
125,000
-
-
Conversion of Unlisted Options - $0.60
1,000,000
600,000
-
-
Conversion of Unlisted Options - $0.75
5,165,000
3,873,750
-
-
Shares issued to consultants1
80,000
46,000
-
-
Unissued ordinary share capital2
-
3,031,250
Transaction costs on share issue
-
(2,068,549)
-
(3,807,962)
379,864,570
123,701,282
304,560,670
73,862,440
1 On 6 July 2020, 80,000 shares were issued under the terms of a consulting agreement dated 3 July 2020 for
research and valuation services provided to the Company. The deemed issue price was $0.575 per share.
2 During the financial year the Company received funds totalling $3,031,250 for the conversion of 2,273,438
unlisted options into ordinary fully paid shares. Shares however were not allotted until 2 July 2021.
2021
$
2020
$
American Pacific Borates Ltd
Notes to the Consolidated Financial Statements for the year ended 30 June 2021
American Pacific Borates Ltd
36
2021 Annual Report to Shareholders
(c) Ordinary shares
The Company does not have authorised capital nor par value in respect of its issued capital. Ordinary shares
have the right to receive dividends as declared and, in the event of a winding up of the Company, to participate
in the proceeds from sale of all surplus assets in proportion to the number of and amounts paid up on shares
held. Ordinary shares entitle their holder to one vote, either in person or proxy, at a meeting of the Company.
(d) Capital risk management
The Company’s capital comprises share capital, reserves less accumulated losses amounting to a net equity
of $110,186,776 at 30 June 2021. The Company manages its capital to ensure its ability to continue as a going
concern and to optimise returns to its shareholders.
The Company was ungeared at year end and not subject to any externally imposed capital requirements.
Refer to note 20 for further information on the Company’s financial risk management policies.
(e) Share Options
As at 30 June 2021 there were 59,585,000 unissued ordinary shares under options. The details of the options
are as follows:
Number
Exercise Price $
Expiry Date
6,500,000
$0.20
30-Nov-2021
5,000,000
$0.30
31-May-2022
100,000
$0.60
30-June-2022
10,000,000
$0.50
5-Nov-2022
8,250,000
$0.50
30-Jul-2024
2,050,000
$0.60
1-Feb-2023
9,835,000
$0.75
1-Jul-2021
1,550,000
$0.80
1-Feb-2023
9,500,000
$0.90
6-Jul-2024
1,200,000
$1.10
31-Dec-2023
600,000
$1.35
30-Jun-2024
1,500,000
$1.60
31-Dec-2022
2,500,000
$2.00
1-Jun-2025
1,000,000
$2.50
7-Apr-2025
59,585,000
No option holder has any right under the options to participate in any other share issue of the Company or
any other entity. 700,000 options lapsed unexercised and 196,945 expired unexercised during the financial
year. 23,941,849 options were exercised during the year ended 30 June 2021.
14. Reserves
Foreign exchange translation reserve
(971,764)
1,335,874
Share option reserve
14,907,716
6,247,757
13,935,952
7,583,631
2021
$
2020
$
American Pacific Borates Ltd
Notes to the Consolidated Financial Statements for the year ended 30 June 2021
American Pacific Borates Ltd
37
2021 Annual Report to Shareholders
Movements in Reserves
Foreign exchange translation reserve
Opening balance
1,335,874
1,129,206
Foreign exchange translation difference
(2,307,638)
206,668
Closing balance
(971,764)
1,335,874
The foreign exchange differences arising on translation of foreign controlled entities are taken to the foreign
currency translation reserve.
Share option reserve
Opening balance
6,247,757
2,367,562
Share-based payments
8,659,959
3,880,195
Closing balance
14,907,716
6,247,757
The share option reserve is used to record the value of equity benefits provided to Directors and executives
as part of their remuneration and non-employees for their goods and services. Refer to note 21 for further
details of the securities issued during the financial year ended 30 June 2020.
15. Accumulated Losses
Movements in accumulated losses were as follows:
Opening balance
(11,861,145)
(6,669,656)
Loss for the year
(15,589,313)
(5,191,489)
Closing balance
(27,450,458)
(11,861,145)
16. Auditor’s Remuneration
The auditor of American Pacific Borates Limited is BDO Audit (WA) Pty Ltd
Amounts received or due and receivable by the parent auditor for:
- an audit or review of the financial report
41,000
32,050
17. Directors and Key Management Personnel Disclosures
(a) Remuneration of Directors and Key Management Personnel (KMP)
Details of the nature and amount of each element of the emolument of each Director and KMP of the
Company for the financial year are as follows:
Short term employee benefits
1,271,795
846,339
Share-based payments
4,279,880
837,505
Other benefits
177,278
31,208
Total remuneration
5,728,953
1,715,052
Virtova Capital Management is a related party of Jimmy Lim. During the year, the group raised US$30,000,000
from the related entity by issue of ordinary share capital.
2021
$
2020
$
American Pacific Borates Ltd
Notes to the Consolidated Financial Statements for the year ended 30 June 2021
American Pacific Borates Ltd
38
2021 Annual Report to Shareholders
(b) KMP Incentive Options
During the year ended 30 June 2021, the Company issued 7,400,000 KMP incentive options as detailed below;
Name
Grant Date
Expiry date
Exercise
price per
option
Number
Issued
Grant date
fair value
Vested
David Salisbury
30/11/2020
06/07/2024
$0.90
2,000,000
$0.578
100%
Michael Schlumpberger
30/11/2020
06/07/2024
$0.90
3,000,000
$0.578
100%
Anthony Hall
30/11/2020
06/07/2024
$0.90
2,400,000
$0.578
100%
Refer to note 21 for further details of the incentive options issued during the financial year ended 30 June
2021.
18. Related Party Disclosures
(a) Key management personnel
For Director related party transactions please refer to Note 17 “Director and Key Management Personnel
Disclosures”.
(b) Subsidiaries
The consolidated financial statements include the financial statements of American Pacific Borates Limited
and the subsidiaries listed in the following table:
Name of Entity
Country of
Incorporation
Equity Holding
Fort Cady Holdings Pty Ltd
Australia
100%
Fort Cady (California) Corporation
USA
100%
19. Loss per Share
Loss used in calculating basic and dilutive EPS
(15,589,313)
(5,191,489)
Number
of Shares
Number
of Shares
Weighted average number of ordinary shares used in calculating basic
loss per share:
341,848,562
222,099,290
Effect of dilution:
Share options
-
-
Adjusted weighted average number of ordinary shares used in calculating
diluted loss per share:
341,848,562
222,099,290
There is no impact from 59,585,000 options outstanding at 30 June 2021 on the earnings per share calculation
because they are anti-dilutive. These options could potentially dilute basic EPS in the future.
There have been no transactions involving ordinary shares or potential ordinary shares that would
significantly change the number of ordinary shares or potential ordinary shares outstanding between the
reporting date and the date of completion of these financial statements.
2021
$
2020
$
American Pacific Borates Ltd
Notes to the Consolidated Financial Statements for the year ended 30 June 2021
American Pacific Borates Ltd
39
2021 Annual Report to Shareholders
20. Financial Risk Management
Exposure to foreign currency risk, credit risk, liquidity risk and interest rate risk arises in the normal course of
the Company’s business. The Company uses different methods as discussed below to manage risks that arise
from these financial instruments. The objective is to support the delivery of the financial targets while
protecting future financial security.
(a) Liquidity Risk
Liquidity risk is the risk that the Company will encounter difficulty in meeting obligations associated with
financial liabilities. The Company manages liquidity risk by maintaining sufficient cash facilities to meet the
operating requirements of the business and investing excess funds in highly liquid short-term investments.
The responsibility for liquidity risk management rests with the Board of Directors. Alternatives for sourcing
our future capital needs include our cash position and the issue of equity instruments. These alternatives are
evaluated to determine the optimal mix of capital resources for our capital needs. The Directors expect that
present levels of liquidity along with future capital raising will be adequate to meet expected capital needs.
Fair value of financial instruments
Unless otherwise stated, the carrying amounts of financial instruments reflect their fair value.
(b) Interest Rate Risk
Interest rate risk arises from the possibility that changes in interest rates will affect future cash flows or the
fair value of financial instruments. The Company’s exposure to market risk for changes to interest rate risk
relates primarily to its earnings on cash and term deposits. The Company manages the risk by investing in
short term deposits.
Cash and cash equivalents
54,369,319
38,742,907
Interest rate sensitivity
The following table demonstrates the sensitivity of the Company’s statement of profit or loss and other
comprehensive income to a reasonably possible change in interest rates, with all other variables constant.
Change in Basis Points
Effect on Post
Tax Loss ($)
Effect on equity
including retained
earnings ($)
Increase/(Decrease)
Effect on Post
Tax Loss ($)
Effect on equity
including retained
earnings ($)
Increase/(Decrease)
2021
2020
Increase 75 basis points
407,770
407,770
290,572
290,572
Decrease 75 basis points
(407,770)
(407,770)
(290,572)
(290,572)
A sensitivity of 75 basis points has been used as this is considered reasonable given the current level of both
short term and long-term Australian Dollar interest rates. The change in basis points is derived from a review
of historical movements and management’s judgement of future trends.
(c) Credit Risk Exposures
Credit risk represents the risk that the counterparty to the financial instrument will fail to discharge an
obligation and cause the Company to incur a financial loss. The Company’s maximum credit exposure is the
carrying amounts on the statement of financial position. The Company holds financial instruments with credit
worthy third parties. At 30 June 2021, the Company held cash at bank. 100% of the Company’s cash was held
in financial institutions with a rating from Standard & Poors of AA or above (long term). The Company has no
past due or impaired debtors as at 30 June 2021.
2021
$
2020
$
American Pacific Borates Ltd
Notes to the Consolidated Financial Statements for the year ended 30 June 2021
American Pacific Borates Ltd
40
2021 Annual Report to Shareholders
(d) Foreign currency risk
The Company undertakes certain transactions denominated in foreign currencies, hence exposures to
exchange rate fluctuations arise. The carrying amounts of the Group’s foreign currency denominated
monetary assets and monetary liabilities at the balance date expressed in Australian dollars are as follows:
Liabilities
$
Assets
$
2021
US Dollar
1,197,216
2,137,645
2020
US Dollar
2,416,083
1,251,525
21. Share-Based Payments
(a) Recognised share-based payment transactions
Share-based payment transactions during the year were as follows:
Options issued to employees and Directors (note 21 (b))
6,351,526
1,300,803
Options issued to suppliers (note 21 (c))
2,308,433
2,579,392
Movement in share option reserve
8,659,959
3,880,195
Shares issued to consultants
46,0001
-
Share-based payments recognised
8,705,959
3,880,195
1 On 6 July 2020, 80,000 shares were issued to a consultant for nil consideration for research and valuation
services provided.
Share-based payment transactions have been recognised within the consolidated statement of profit or loss
and other comprehensive income and consolidated statement of financial positions as follows:
Share-based payment expense
8,659,959
2,596,450
Deferred exploration & evaluation expenditure
46,000
-
Issued capital – transaction costs on share issue
-
1,283,745
8,705,959
3,880,195
(b) Options issued to employees and Directors
The Company has established an employee share option plan (ESOP). The objective of the ESOP was to assist
in the recruitment, reward, retention and motivation of employees and contractors of American Pacific
Borates Limited. An individual may receive the options or nominate a relative or associate to receive the
options. The plan is open to executive officers, employees and eligible contractors of American Pacific Borates
Limited.
The fair value at grant date of options granted during the reporting year was determined using the Black
Scholes option pricing model that takes into account the exercise price, the term of the option, the share price
at grant date, the expected price volatility of the underlying share and the risk-free interest rate for the term
of the option.
2021
$
2020
$
American Pacific Borates Ltd
Notes to the Consolidated Financial Statements for the year ended 30 June 2021
American Pacific Borates Ltd
41
2021 Annual Report to Shareholders
The table below summarises options granted to employees and Directors during the year ended 30 June 2021:
Grant Date Expiry date
Exercise
price
per
option
Balance
at start of
the year
Granted
during the
year
Exercised
during the
year
Lapsed/
Expired
during the
year
Balance at
end of the
year
Exercisable
at end of the
year
06/07/2020 06/07/2024
$0.90
-
2,100,000
-
-
2,100,000
2,100,000
30/11/2020 06/07/2024
$0.90
-
7,400,000
-
-
7,400,000
7,400,000
03/12/2020 30/06/2024
$1.35
-
400,000
- (200,000)1
200,000
200,000
07/04/2021 07/04/2025
$2.50
-
750,000
-
-
750,000
750,000
18/05/2021 01/06/2025
$2.00
-
2,500,000
-
-
2,500,000
-2
-
13,150,000
-
-
12,950,000
10,650,000
1 200,000 options were forfeited during the financial period as a result of vesting conditions not being met.
2 Options vest over three (3) years in three (3) equal annual instalments commencing on the start date of
employment.
The expense recognised in respect of the above options granted during the year was $6,062,717. The expense
recognised during the year on options granted in prior periods was $288,809.
The model inputs, not included in the table above, for options granted during the year ended 30 June 2021
included:
a) options were granted for no consideration;
b) expected lives of the options range from 3.6 to 4 years;
c) share price at grant date ranged from $0.575 to $2.02;
d) expected volatility ranged from 73% to 110%;
e) expected dividend yield of nil; and
f) a risk-free interest rate of 0.75%
The table below summarises options granted to employees and Directors during the year ended 30 June 2020:
Grant Date Expiry date
Exercise
price
per
option
Balance
at start of
the year
Granted
during the
year
Exercised
during the
year
Lapsed/
Expired
during the
year
Balance at
end of the
year
Exercisable
at end of the
year
30/07/2019 30/07/2024
$0.50
-
2,500,000
-
-
2,500,000
2,500,000
17/10/2019 30/07/2024
$0.50
-
6,000,000
-
-
6,000,000
6,000,000
18/02/2020 01/02/2023
$0.60
-
1,050,000
-
-
1,050,000
1,050,000
18/02/2020 01/02/2023
$0.80
-
550,000
-
-
550,000
550,000
-
10,100,000
-
-
10,100,000
10,100,000
The model inputs, not included in the table above, for options granted during the year ended 30 June 2020
included:
a)
options were granted for no consideration;
b)
expected lives of the options range from 3 to 4 years;
c)
share price at grant date ranged from $0.135 to $0.43;
d)
expected volatility ranged from 74% to 101%;
e)
expected dividend yield of nil; and
f)
a risk-free interest rate ranged from 1.25% to 2.23%
American Pacific Borates Ltd
Notes to the Consolidated Financial Statements for the year ended 30 June 2021
American Pacific Borates Ltd
42
2021 Annual Report to Shareholders
(c) Options issued to suppliers
During the financial year ended 30 June 2021, the Company issued options to brokers and corporate advisors
for services rendered during the year. These options have been valued using the Black-Scholes option pricing
model.
Grant Date Expiry date
Exercise
price
per
option
Balance
at start of
the year
Granted
during the
year
Exercised
during the
year
Lapsed/
Expired
during the
year
Balance at
end of the
year
Exercisable
at end of the
year
27/08/2020 31/12/2023
$1.10
-
700,000
- (500,000)1
200,000
200,000
02/11/2020 31/12/2023 $1.10
-
1,000,000
-
-
1,000,000
1,000,000
03/12/2020 30/06/2024 $1.35
-
400,000
-
-
400,000
400,000
01/02/2021 31/12/2023 $1.60
-
1,500,000
-
-
1,500,000
-2
04/05/2021 07/04/2025 $2.50
-
250,000
-
-
250,000
250,000
-
3,850,000
-
(500,000)
3,350,000
1,850,000
1 500,000 options were forfeited during the financial period as a result of vesting conditions not being met.
2 Options vest on 1 July 2021 if the contractor is still engaged by the Company on that date.
The expense recognised in respect of the above options granted during the year was $2,308,433. The model
inputs, not included in the table above, for options granted during the year ended 30 June 2021 included:
a)
options were granted for no consideration;
b)
expected life of the options ranged from 1.9 to 3.9 years;
c)
share price at grant date ranged from $0.835 to $1.97;
d)
expected volatility ranged from 73% to 110%;
e)
expected dividend yield of nil; and
f)
a risk-free interest rate of 0.75%
The weighted average fair value of options issued to employees, Directors and suppliers during the year was
$0.6233.
The table below summarises options granted to suppliers during the year ended 30 June 2020:
Grant Date Expiry date
Exercise
price
per
option
Balance
at start of
the year
Granted
during the
year
Exercised
during the
year
Lapsed/
Expired
during the
year
Balance at
end of the
year
Exercisable
at end of the
year
18/02/2020 01/02/2023
$0.60
-
1,000,000
-
-
1,000,000
1,000,000
18/02/2020 01/02/2023 $0.80
-
1,000,000
-
-
1,000,000
1,000,000
29/06/2020 01/07/2021 $0.75
-
15,000,000
-
-
15,000,000
15,000,000
-
17,000,000
-
-
17,000,000
17,000,000
The model inputs, not included in the table above, for options granted during the year ended 30 June 2020
included:
a)
options were granted for no consideration;
b)
expected lives of the options range from 1 to 3 years;
c)
share price at grant date ranged from $0.43 to $0.51;
d)
expected volatility of 101%;
e)
expected dividend yield of nil; and
f)
a risk-free interest rate of 1.25%
American Pacific Borates Ltd
Notes to the Consolidated Financial Statements for the year ended 30 June 2021
American Pacific Borates Ltd
43
2021 Annual Report to Shareholders
22. Commitments
a) Preliminary closure and Post-Closure Maintenance Plan
The Group is required to submit to the California Regional Water Quality Control Board a financial assurance
mechanism for the Fort Cady Project for clean closure of the surface impoundments and decommissioning
of associated infrastructure. The amount of this financial assurance mechanism is approximately A$429,943
(US$322,718).
b) Mineral Lease Agreement
The Group has a mineral lease agreement for the purposes of obtaining exclusive rights to exploration at the
Fort Cady Project. The mineral lease agreement requires the Group to make a minimum royalty payment of
US$75,000 per annum until expiry on 1 October 2021. The minimum lease commitments as at 30 June 2021
are as follows:
Within one year
-
109,011
Later than one year but not later than five years
-
-
-
109,011
c) Capital Commitments
The property, plant and equipment commitments as at 30 June 2021 are as follows:
Within one year
3,597,950
-
Later than one year but not later than five years
-
-
3,597,950
-
23. Contingent Assets and Liabilities
There are no known contingent assets or liabilities as at 30 June 2021.
24. Dividends
No dividend was paid or declared by the Company in the year ended 30 June 2021 or the period since the end
of the financial year and up to the date of this report. The Directors do not recommend that any amount be
paid by way of dividend for the financial year ended 30 June 2021.
25. Segment Information
The Group has identified its operating segments based on the internal reports that are reported to the chief
operating decision maker (which, for the Group, is the board of directors) in assessing performance and in
determining the allocation of resources. The Board as a whole will regularly review the identified segments in
order to allocate resources to the segment and to assess its performance.
The Group operates predominately in one industry, being the exploration for Borates and Lithium. The main
geographic areas that the entity operates in are Australia and the United States of America (“USA”). The parent
entity is registered in Australia. The Group’s exploration assets are located in the US.
2021
$
2020
$
2021
$
2020
$
American Pacific Borates Ltd
Notes to the Consolidated Financial Statements for the year ended 30 June 2021
American Pacific Borates Ltd
44
2021 Annual Report to Shareholders
The following table present revenue, expenditure and certain asset and liability information regarding
geographical segments for the year ended 30 June 2021:
Australia $
US $
Total
Year ended 30 June 2021
Other income
269
66,029
66,298
Interest income
743
3,928
4,671
Segment revenue
1,012
69,957
70,969
Result
Loss before tax
(14,822,613)
(766,700)
(15,589,313)
Income tax expense
-
-
-
Loss for the year
(14,822,613)
(766,700)
(15,589,313)
Asset and liabilities
Segment assets
53,824,875
58,386,530
112,211,405
Segment liabilities
565,493
1,459,136
2,024,629
Year ended 30 June 2020
Other income
-
196,851
196,851
Interest income
2,133
9,338
11,471
Segment revenue
2,133
206,189
208,322
Result
Loss before tax
(5,151,707)
(39,782)
(5,191,489)
Income tax expense
-
-
-
Loss for the year
(5,151,707)
(39,782)
(5,191,489)
Asset and liabilities
Segment assets
38,161,108
35,239,813
73,400,921
Segment liabilities
1,399,912
2,416,083
3,815,995
26. Parent Entity Information
The following details information related to the parent entity, American Pacific Borates Limited, at 30 June
2021. The information presented here has been prepared using consistent accounting policies with those
presented in note 2.
Current assets
53,824,775
38,161,008
Total assets
111,485,945
70,901,331
Current liabilities
(565,493)
(1,399,911)
Total liabilities
(565,493)
(1,399,911)
Net assets
110,920,452
69,501,420
Issued capital
123,701,282
73,862,440
Reserves
14,907,717
6,247,758
Accumulated losses
(27,688,547)
(10,608,779)
110,920,452
69,501,419
Loss of the parent entity
(17,079,768)
(5,051,069)
Total comprehensive loss of the parent entity
(17,079,768)
(5,051,069)
2021
$
2020
$
American Pacific Borates Ltd
Notes to the Consolidated Financial Statements for the year ended 30 June 2021
American Pacific Borates Ltd
45
2021 Annual Report to Shareholders
Other Commitments and Contingent Liabilities
The Company had no commitments and no contingent liabilities as at 30 June 2021.
27. Significant Events after the Reporting Date
The following options were converted into ordinary fully paid shares after the reporting date;
Date shares issued
$0.30 each on or before
31-May-2022
$0.75 each on or before
1-Jul-2021
2-Jul-21
-
5,068,333
28-Jul-21
1,000,000
-
14-Sep-21
1,000,000
-
TOTAL
2,000,000
5,068,333
On 2 July 2021, the Company issued 1,000,000 unlisted options to a consultant as consideration for sales
and marketing services provided. The unlisted options are exercisable at $2.00 each on or before 1 June
2025.
On 12 July 2021, the Company issued 1,500,000 shares to Blue Horizon Advisors LLC, pursuant to the terms
of the Advisory Agreement dated 16 April 2021 and as consideration for Advisory Board services provided.
On 20 August 2021, the Company issued 2,100,000 options to a consultant, pursuant to the terms of an
Independent Contractor Agreement dated 19 August 2021. The unlisted options are exercisable at $2.50
each on or before 31 July 2022.
On 24 August 2021, the Company issued 5,000,000 options as part of the recently appointed CEO’s long term
incentive package. The unlisted options are exercisable at $2.00 each on or before 1 June 2025. The options
vest over three (3) years in three (3) equal annual instalments commencing on the start date of employment.
On 14 September, the Company announced two senior management appointments effective in the second
half of September 2021. Mr Tyson Hall was appointed Chief Operating Officer, with Mr Chance Pipitone
appointed Head of Corporate Development and Investor Relations.
On 14 September, the Company issued 5,900,000 unlisted options to employees pursuant to the terms of
the Company’s Incentive Option Plan. The unlisted options are exercisable at $2.00 each on or before 1 June
2025.
The impact of the Coronavirus (COVID-19) pandemic is ongoing and it is not practicable to estimate the
potential impact, positive or negative, after the reporting date. The situation is rapidly developing and is
dependent on measures imposed by the Australian Government and other countries, such as maintaining
social distancing requirements, quarantine, travel restrictions and any economic stimulus that may be
provided.
There have been no other significant events subsequent to the end of the financial year to the date of this
report.
Directors’ Declaration
American Pacific Borates Ltd
46
2021 Annual Report to Shareholders
In accordance with a resolution of the Directors of American Pacific Borates Limited, I state that:
1. In the opinion of the Directors:
a)
the financial statements and notes of American Pacific Borates Limited for the year ended 30 June
2021 are in accordance with the Corporations Act 2001, including:
i.
giving a true and fair view of the consolidated financial position as at 30 June 2021 and of its
performance for the year ended on that date; and
ii.
complying with Accounting Standards (including the Australian Accounting Interpretations), the
Corporations Regulations 2001 and other mandatory professional reporting requirements; and
b)
the financial statements and notes also comply with International Financial Reporting Standards as
disclosed in note 2(b).
2. There are reasonable grounds to believe that the Company will be able to pay its debts as and when they
become due and payable.
3. This declaration has been made after receiving the declarations required to be made by the Directors in
accordance with sections of 295A of the Corporations Act 2001 for the financial year ended 30 June 2021.
On behalf of the Board
David Salisbury
Non-Executive Chairman
California, USA
17 September 2021
BDO Audit (WA) Pty Ltd ABN 79 112 284 787 is a member of a national association of independent entities which are all members of BDO Australia Ltd ABN 77 050 110 275,
an Australian company limited by guarantee. BDO Audit (WA) Pty Ltd and BDO Australia Ltd are members of BDO International Ltd, a UK company limited by guarantee, and
form part of the international BDO network of independent member firms. Liability limited by a scheme approved under Professional Standards Legislation.
Tel: +61 8 6382 4600
Fax: +61 8 6382 4601
www.bdo.com.au
38 Station Street
Subiaco, WA 6008
PO Box 700 West Perth WA 6872
Australia
DECLARATION OF INDEPENDENCE BY PHILLIP MURDOCH TO THE DIRECTORS OF AMERICAN PACIFIC
BORATES LIMITED
As lead auditor of American Pacific Borates Limited for the year ended 30 June 2021, I declare that, to
the best of my knowledge and belief, there have been:
1.
No contraventions of the auditor independence requirements of the Corporations Act 2001 in
relation to the audit; and
2.
No contraventions of any applicable code of professional conduct in relation to the audit.
This declaration is in respect of American Pacific Borates Limited and the entities it controlled during
the period.
Phillip Murdoch
Director
BDO Audit (WA) Pty Ltd
Perth, 17 September 2021
BDO Audit (WA) Pty Ltd ABN 79 112 284 787 is a member of a national association of independent entities which are all members of BDO Australia Ltd ABN 77 050 110 275,
an Australian company limited by guarantee. BDO Audit (WA) Pty Ltd and BDO Australia Ltd are members of BDO International Ltd, a UK company limited by guarantee, and
form part of the international BDO network of independent member firms. Liability limited by a scheme approved under Professional Standards Legislation.
Tel: +61 8 6382 4600
Fax: +61 8 6382 4601
www.bdo.com.au
38 Station Street
Subiaco, WA 6008
PO Box 700 West Perth WA 6872
Australia
INDEPENDENT AUDITOR'S REPORT
To the members of American Pacific Borates Limited
Report on the Audit of the Financial Report
Opinion
We have audited the financial report of American Pacific Borates Limited (the Company) and its
subsidiaries (the Group), which comprises the consolidated statement of financial position as at
30 June 2021, the consolidated statement of profit or loss and other comprehensive income, the
consolidated statement of changes in equity and the consolidated statement of cash flows for the year
then ended, and notes to the financial report, 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:
(i)
Giving a true and fair view of the Group’s financial position as at 30 June 2021 and of its
financial performance for the year ended on that date; and
(ii)
Complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under
those standards are further described in the Auditor’s responsibilities for the audit of the Financial
Report section of our report. We are independent of the Group in accordance with the Corporations
Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board’s
APES 110 Code of Ethics for Professional Accountants (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 confirm that the independence declaration required by the Corporations Act 2001, which has been
given to the directors of the Company, would be in the same terms if given to the directors as at the
time of this auditor’s report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our opinion.
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in
our audit of the financial report of the current period. These matters were addressed in the context of
our audit of the financial report as a whole, and in forming our opinion thereon, and we do not provide
a separate opinion on these matters.
Carrying Value of Exploration & Evaluation Asset
Key audit matter
How the matter was addressed in our audit
The carrying value of capitalised exploration and
evaluation assets as at 30 June 2021 is disclosed in
Note 10 of the financial report.
As the carrying value of exploration and evaluation
assets represents a significant asset of the Group, we
considered it necessary to assess whether any facts or
circumstances exist to suggest that the carrying
amount of this asset may exceed its recoverable
amount.
Judgement is applied in determining the treatment of
exploration expenditure in accordance with Australian
Accounting Standard AASB 6 Exploration for and
Evaluation of Mineral Resources. In particular:
•
Whether the conditions for capitalisation are
satisfied;
•
Which elements of exploration and evaluation
expenditures qualify for recognition; and
•
Whether facts and circumstances indicate that the
exploration and expenditure assets should be
tested for impairment.
As a result, this is considered a key audit matter.
Our procedures included, but were not limited to:
•
Obtaining a schedule of the areas of interest held
by the Group and assessing whether the rights to
tenure of those areas of interest remained current
at balance date;
•
Considering the status of the ongoing exploration
programmes in the respective areas of interest by
holding discussions with management, and
reviewing the Group’s exploration budgets, ASX
announcements and director’s minutes;
•
Considering whether any such areas of interest
had reached a stage where a reasonable
assessment of economically recoverable reserves
existed;
•
Verifying, on a sample basis, exploration and
evaluation expenditure capitalised during the year
for compliance with the recognition and
measurement criteria of AASB 6;
•
Considering whether there are any other facts or
circumstances existing to suggest impairment
testing was required; and
•
Assessing the adequacy of the related disclosures
in Note 10 to the financial report.
Other information
The directors are responsible for the other information. The other information comprises the
information in the Group’s annual report for the year ended 30 June 2021, but does not include the
financial report and the auditor’s report thereon.
Our opinion on the financial report does not cover the other information and we do not express any
form of assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information
and, in doing so, consider whether the other information is materially inconsistent with the financial
report or our knowledge obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this
other information, we are required to report that fact. We have nothing to report in this regard.
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 ability of the group to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the
going concern basis of accounting unless the directors either intend to liquidate the Group or to cease
operations, or has 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 further description of our responsibilities for the audit of the financial report is located at the
Auditing and Assurance Standards Board website (http://www.auasb.gov.au/Home.aspx) at:
https://www.auasb.gov.au/admin/file/content102/c3/ar1_2020.pdf
This description forms part of our auditor’s report.
Report on the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included in pages 12 to 16 of the directors’ report for the
year ended 30 June 2021.
In our opinion, the Remuneration Report of American Pacific Borates 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.
BDO Audit (WA) Pty Ltd
Phillip Murdoch
Director
Perth, 17 September 2021
ASX Additional Information
American Pacific Borates Ltd
52
2021 Annual Report to Shareholders
Additional information required by the Australian Stock Exchange Ltd and not shown elsewhere in this report
is as follows. The information is current at 16 September 2021.
Distribution of Share Holders
Ordinary Shares
Number of Holders
Number of Shares
%
1 - 1,000
532
295,190
0.08
1,001 - 5,000
987
2,710,942
0.7
5,001 - 10,000
496
3,853,034
0.99
10,001 - 100,000
1,017
35,141,490
9.05
100,001 - and over
351
346,432,247
89.19
TOTAL
3,334
388,432,903
100.00
There were 100 holders of ordinary shares holding less than a marketable parcel.
Top Twenty Share Holders
The names of the twenty largest holders of quoted equity securities are listed below:
Name
Shares
%
VIRTOVA CAPITAL MANAGEMENT LIMITED
51,282,051
13.20
ATLAS PRECIOUS METALS INC
45,920,000
11.82
MAYFAIR VENTURES PTE LTD
38,339,532
9.87
CS THIRD NOMINEES PTY LIMITED
15,114,560
3.89
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
14,186,598
3.65
CITICORP NOMINEES PTY LIMITED
7,961,317
2.05
MR DANIEL EDDINGTON + MRS JULIE EDDINGTON
6,650,000
1.71
BRING ON RETIREMENT LTD
6,540,000
1.68
BASS FAMILY FOUNDATION PTY LTD
5,400,000
1.39
BNP PARIBAS NOMINEES PTY LTD
5,152,383
1.33
JAWAF ENTERPRISES PTY LTD
4,568,334
1.18
BNP PARIBAS NOMINEES PTY LTD ACF CLEARSTREAM
4,448,816
1.15
ISLV PARTNERS LLC
4,448,000
1.15
METECH SUPER PTY LTD
4,400,000
1.13
MR ZACHARY PURTON
3,230,001
0.83
SCOR GO LUATH LIMITED
2,827,809
0.73
ALLEN GROUP HOLDINGS PTY LTD
2,500,000
0.64
BPM CAPITAL LIMITED
2,400,000
0.62
E & E HALL PTY LTD
2,249,999
0.58
METECH SUPER PTY LTD
2,008,334
0.52
Total
229,627,734
0.59
Substantial Shareholders
Name
Shares
%
VIRTOVA CAPITAL MANAGEMENT LIMITED
51,282,051
13.20
ATLAS PRECIOUS METALS INC
45,920,000
11.82
MAYFAIR VENTURES PTE LTD
38,339,532
9.87
On-Market Buy Back
There is no current on-market buy back.
ASX Additional Information
American Pacific Borates Ltd
53
2021 Annual Report to Shareholders
Voting Rights
All ordinary shares carry one vote per share without restriction. Options have no voting rights.
Use of Proceeds
In accordance with listing rule 4.10.19, the Company confirms that it has used cash and assets in a form readily
convertible to cash in a way consistent with its business objectives during the financial year ended 30 June
2021.
Unlisted Options
Class
Number
Holders with more than 20%
Options over ordinary shares exercisable
at $0.20 on or before 30 November 2021.
6,500,000
- JAWAF Enterprises Pty Ltd
1,500,000 Options
Options over ordinary shares exercisable
at $0.30 on or before 31 May 2022.
3,000,000
- Michael X. Schlumpberger 1,000,000 options
- JAWAF Enterprises Pty Ltd
1,000,000 Options
Options over ordinary shares exercisable
at $0.60 on or before 30 June 2022.
100,000
- John Siembab 100,000 options
Options over ordinary shares exercisable
at $0.50 on or before 5 November 2022.
10,000,000
- Michael X. Schlumpberger 4,000,000 options
- JAWAF Enterprises Pty Ltd
2,500,000 Options
Options over ordinary shares exercisable
at $0.50 on or before 30 July 2024.
8,250,000
- Michael X. Schlumpberger 3,500,000 Options
- JAWAF Enterprises Pty Ltd
2,500,000 Options
Options over ordinary shares exercisable
at $0.60 on or before 1 February 2023.
2,050,000
- BJS Robb Pty Ltd 750,000 Options
- Bob Hayes 500,000 options
Options over ordinary shares exercisable
at $0.80 on or before 1 February 2023.
1,550,000
- BJS Robb Pty Ltd 750,000 Options
Options over ordinary shares exercisable
at $0.90 on or before 6 July 2024.
9,500,000
- Michael X. Schlumpberger 3,000,000 options
- JAWAF Enterprises Pty Ltd
2,400,000 Options
- David Salisbury 2,000,000 options
Options over ordinary shares exercisable
at $1.10 on or before 31 December 2023.
1,200,000
- Veritas Securities Limited 1,000,000 Options
Options over ordinary shares exercisable
at $1.35 on or before 30 June 2024.
600,000
- Praxis Path Pty Ltd
400,000 Options
- Rob Salisbury 200,000 options
Options over ordinary shares exercisable
at $1.60 on or before 31 December 2022.
1,500,000
- Circumference Capital CT Pty Ltd
1,500,000 Options
Options over ordinary shares exercisable
at $2.50 on or before 7 April 2025.
1,000,000
- Chester Bate 250,000 Options
- MTNASH Pty Ltd
250,000 options
Options over ordinary shares exercisable
at $2.00 on or before 1 June 2025.
14,400,000
- Henri Tausch 5,000,000 Options
- Tyson Hall 3,000,000 options
Options over ordinary shares exercisable
at $2.50 on or before 11 July 2022.
2,100,000
- Smoothweb Technologies Limited 2,100,000
Options
Schedule of Tenements
American Pacific Borates Ltd
54
2021 Annual Report to Shareholders
USA Project Locations
Figure 1: Location of the Fort Cady Project, California USA and Salt Wells Project, Nevada USA
USA Tenement Listing
Tenement Name
Country
Status
Grant Date
Expiry
Area
Ownership Rights
Date
km2
Surface
Mineral
Lessee
Fort Cady Project
Parcel 0529-251-01
USA
Granted
8/05/2010
N/A
0.65
FCCC
FCCC
N/A
Parcel 0529-251-03
0.32
Parcel 0529-251-04
USA
Granted
8/05/2010
N/A
1.09
FCCC
State of
California
N/A
Company 1 Group
USA
Granted
Various
N/A
0.65
Elementis
Elementis
FCCC
Litigation 1 Group
12/09/1991
0.65
Litigation 4 Group
Various
0.65
Litigation 5 Group
Various
0.65
Litigation 2
29/07/1937
0.65
Litigation 3
29/07/1937
0.65
Litigation 6
29/07/1937
0.65
Litigation 11
29/07/1937
0.65
Geyser View 1
18/11/1934
0.28
Company 4
15/12/1931
0.65
HEC #124 - #127, HEC #129, HEC #131, HEC
#343, HEC #344, HEC #365, HEC #369, HEC
#371, HEC #372, HEC #374 - #376
USA
Granted
Various
N/A
1.21
Elementis
Elementis
FCCC
HEC #19; HEC #21; HEC# 23; HEC#25; HEC #34
- #41; HEC #43 - #67; HEC #70 - #82; HEC #85 -
#93; HEC #182; HEC #184; HEC #288; HEC
#290; HEC #292; HEC #294; HEC #296 - #297;
HEC #299 - #350
USA
Granted
Various
N/A
9.63
FCCC
FCCC
N/A
Schedule of Tenements
American Pacific Borates Ltd
55
2021 Annual Report to Shareholders
Tenement Name
Country
Status
Grant
Date
Expiry
Area
Ownership
Rights
Tenement
Name
Country
Date
km2
Surface
Salt Wells North Borate and Lithium Project
The Salt Wells North includes the following
claims:
SW 1, 2, 3, 4, 5, 6, 27, 29, 31, 32, 33, 34, 35, 36,
54, 56, 58, 59, 60, 61, 62, 63, 78, 81, 82, 84, 85,
86, 87, 88, 89, 104, 106, 108, 109, 110, 111, 112,
113, 114, 115, 130, 131, 132, 133, 134, 135, 136,
137, 138, 139, 147, 149, 151, 152, 153, 154, 155,
156, 157, 158, 159, 160, 161, 162, , 305, 306, 307,
308, 309, 310, 311, 312, 313, 314, 315, 316, 317,
318, 319, 320, 321, 322, 323, 324, 325, 326, 327,
328, 329, 330, 331, 332, 333, 334, 335, 336, 337,
338, 339, 340, 341, 342, 343, 344, 345, 346, 347,
348, 349, 350, 351, 352, 353, 354, 355, 356, 357,
358, 359, 360, 361, 362, 363, 364, 365, 366, 367,
368, 369, 370, 371, 372, 373, 374, 375, 376, 377,
378, 379, 380, 381, 382, 383, 384, 385, 386, 387,
388, 389, 390,391, 392,393, 394, 395, 396, 397,
398, 399, 400, 401, 402, 403, 404, 405, 406, 407,
408, 409, 410, 411, 412, 413, 414, 415, 416, 417,
418, 419, 420, 421, 422, 423, 424, 425,426, 427,
428, 429, 430, 431, 432, 433, 434, 435, 436, 437,
438, 439, 440, 441, 442, 443, 444, 445, 446, 447,
448, 449, 450, 451, 452, 453, 454, 455, 456, 457,
458, 459, 460, 461, 462 463, 464, 465, 466, 467,
468, 469, 470, 471, 472, 473, 474, 475, 476, 477,
478, 479, 480, 481, 482, 483, 484, 485, 486, 487,
488, 489, 490, 491, 492, 493, 494, 495, 496, 497,
498, 499, 500, 501, 502, 503, 504, 505, 506, 507,
508, 509, 510, 511, 512, 513, 514, 515, 516, 517,
518, 519, 520, 521, 522, 523, 524, 525, 526, 527,
528, 529, 530, 531, 532, 533, 534, 535, 536, 537,
538, 539, 540, 541, 542, 543, 544, 545, 546, 547,
548, 549, 550, 551, 552, 553, 554, 555
USA
Earn in
to
acquire
a 100%
interest
23 May
2018
N/A
13.8
Great Basin
Resources
Inc
Great
Basin
Resources
Inc
Great
Basin
Resources
Inc
Salt Wells South Borate and Lithium Project
The Salt Wells South includes the following
claims:
SW 165, 167, 169, 171, 173, 176, 177, 178, 179,
180, 181, 182, 183, 184, 185, 186, 187, 188, 189,
190, 191, 192, 193, 194, 195, 196, 197, 198, 199,
200, 201, 202, 203, 204, 205, 206, 207, 208, 209,
210, 211, 212, 213, 214, 251, 216, 217, 218, 219,
220, 221, 222, 223, 224, 225, 226, 227, 228, 229,
230, 231, 232, 233, 234, 235, 236, 237, 238, 239,
240, 241, 242, 243, 244, 245, 246, 247, 248, 249,
250, 251, 252, 253, 254, 255, 256, 257, 258, 259,
260, 261, 262, 263, 264, 265, 266, 267, 268, 269,
270, 271, 272, 273, 274, 275, 276, 277, 278, 279,
280, 281, 282, 283, 284, 285, 286, 287, 288, 289,
290, 291, 292, 299, 300, 301, 302, 303, 304
USA
Earn in
to
acquire
a 100%
interest
23 May
2018
N/A
8.5
Great Basin
Resources
Inc
Great
Basin
Resources
Inc
Great
Basin
Resources
Inc
FCCC - Fort Cady (California) Corporation
Elementis - Elementis Specialties, Inc.
Important Information and Disclaimers
American Pacific Borates Limited
56
2021 Annual Report to Shareholders
Competent Person – Fort Cady Project
The information in this report that relates to Exploration Targets, Exploration Results and Mineral Resources is based
on information prepared by Mr Louis Fourie, P.Geo of Terra Modelling Services. Mr Fourie is a licensed Professional
Geoscientist registered with APEGS (Association of Professional Engineers and Geoscientists of Saskatchewan) in the
Province of Saskatchewan, Canada and a Professional Natural Scientist (Geological Science) with SACNASP (South
African Council for Natural Scientific Professions). APEGS and SACNASP are a Joint Ore Reserves Committee (JORC)
Code ‘Recognized Professional Organization’ (RPO). An RPO is an accredited organization to which the Competent
Person (CP) under JORC Code Reporting Standards must belong in order to report Exploration Results, Mineral
Resources, or Ore Reserves through the ASX. Mr Fourie has sufficient experience which is relevant to the style of
mineralisation and type of deposit under consideration and to the activity which they are undertaking to qualify as a
CP as defined in the 2012 Edition of the JORC Australasian Code for Reporting of Exploration Results, Mineral
Resources and Ore Reserves. Mr Fourie consents to the inclusion in the release of the matters based on their
information in the form and context in which it appears.
The information in this report that relates to the conversion of Mineral Resources to Ore Reserves has been prepared
by Tabetha A. Stirrett of RESPEC Consulting Inc. Mrs Tabetha A. Stirrett, P. Geo of RESPEC Consulting Inc. is a member
in good standing of the Association of Professional Engineers and Geoscientists of Saskatchewan (Member #10699)
and a member of the American Institute of Professional Geologists (CPG) (#11581). APEGS and CPG are a Joint Ore
Reserves Committee (JORC) ‘Recognised Professional Organization’ (RPO). Mrs Stirrett has sufficient Experience
which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which they
are undertaking to qualify as a CP as defined in the 2012 Edition of the JORC Australasian Code for Reporting of
Exploration Results, Mineral Resource and Ore Reserves. Mrs Stirrett consents to the inclusion in the release of the
matters based on their information in the form and context in which it appears.
This report contains historical exploration results from exploration activities conducted by Duval Corp (“historical
estimates”). The historical estimates and are not reported in accordance with the JORC Code. A competent person
has not done sufficient work to classify the historical estimates as mineral resources or ore reserves in accordance
with the JORC Code. It is uncertain that following evaluation and/or further exploration work that the historical
estimates will be able to be reported as mineral resources or ore reserves in accordance with the JORC Code. The
Company confirms it is not in possession of any new information or data relating to the historical estimates that
materially impacts on the reliability of the historical estimates or the Company’s ability to verify the historical
estimates.
Competent Person Statement – Salt Wells South Project and Salt Wells North Project
The information in this report that relates to Exploration Targets, Exploration Results, Mineral Resources or Ore
Reserves is based on information prepared by Richard Kern, Certified Professional Geologist (#11494). Mr Kern is a
licensed Professional Geoscientist registered with AIPG (American Institute of Professional Geologists) in the United
States. AIPGis a Joint Ore Reserves Committee (JORC) Code ‘Recognized Professional Organization’ (RPO). An RPO is
an accredited organization to which the Competent Person (CP) under JORC Code Reporting Standards must belong
in order to report Exploration Results, Mineral Resources, or Ore Reserves through the ASX.
Richard Kern has sufficient experience which is relevant to the style of mineralisation and type of deposit under
consideration and to the activity which they are undertaking to qualify as a CP as defined in the 2012 Edition of the
JORC Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves. Mr Kern consents
to the inclusion in the release of the matters based on their information in the form and context in which it appears.
This release contains historical exploration results from exploration activities conducted by Great Basin Resources
Inc. (“historical estimates”). The historical estimates and are not reported in accordance with the JORC Code. A
competent person has not done sufficient work to classify the historical estimates as mineral resources or ore
reserves in accordance with the JORC Code. It is uncertain that following evaluation and/or further exploration work
that the historical estimates will be able to be reported as mineral resources or ore reserves in accordance with the
JORC Code. The Company confirms it is not in possession of any new information or data relating to the historical
estimates that materially impacts on the reliability of the historical estimates or the Company’s ability to verify the
historical estimates.
Important Information and Disclaimers
American Pacific Borates Limited
57
2021 Annual Report to Shareholders
Forward Looking Statements
This announcement contains ‘forward-looking information’ that is based on the Company’s expectations, estimates
and projections as of the date on which the statements were made. This forward-looking information includes,
among other things, statements with respect to the Company’s business strategy, plans, development, objectives,
performance, outlook, growth, cash flow, projections, targets and expectations, mineral reserves and resources,
results of exploration and related expenses. Generally, this forward-looking information can be identified by the use
of forward-looking terminology such as ‘outlook’, ‘anticipate’, ‘project’, ‘target’, ‘potential’, ‘likely’, ‘believe’, ‘estimate’,
‘expect’, ‘intend’, ‘may’, ‘would’, ‘could’, ‘should’, ‘scheduled’, ‘will’, ‘plan’, ‘forecast’, ‘evolve’ and similar expressions.
Persons reading this announcement are cautioned that such statements are only predictions, and that the
Company’s actual future results or performance may be materially different. Forward-looking information is subject
to known and unknown risks, uncertainties and other factors that may cause the Company’s actual results, level of
activity, performance or achievements to be materially different from those expressed or implied by such forward-
looking information.