A S P I R E M I N I N G L I M I T E D
Annual Report
2020
Corporate
Information
ASPIRE MINING LIMITED
ABN 46 122 417 243
DIRECTORS
SHARE REGISTRY
Automic Group
Level 2, 267 St Georges Terrace
PERTH WA 6000 AUSTRALIA
Mr Achit-Erdene Darambazar (Managing Director)
Telephone: 1300 288 664
Mr David Paull (Non-Executive Chairman)
Mr Boldbaatar Bat-Amgalan (Non-Executive Director)
SOLICITORS
Mr Neil Lithgow (Non-Executive Director)
Corrs Chambers Wesgarth Lawyers
Ms Hannah Badenach (Non-Executive Director)
Level 6, Brookfield Place Tower 2
COMPANY SECRETARY
Mr Philip Rundell
REGISTERED OFFICE
Mezzanine Level
190 St Georges Terrace,
PERTH WA 6000 AUSTRALIA
Telephone: +61 8 9287 4555
123 St Georges Terrace
PERTH WA 6000 AUSTRALIA
BANKERS
National Australia Bank
Level 1, 1238 Hay Street
WEST PERTH WA 6005 AUSTRALIA
AUDITORS
Email: info@aspiremininglimited.com
HLB MANN JUDD (WA Partnership)
PRINCIPAL PLACE OF BUSINESS
AUSTRALIA
Mezzanine Level
190 St Georges Terrace,
PERTH WA 6000
MONGOLIA
Chingeltei District, 1st Khoroo
Baga Toiruu-17
JJ Tower, 9th Floor
ULAANBAATAR 15170
Level 4, 130 Stirling Street
PERTH WA 6000 AUSTRALIA
KPMG
#602, Blue Sky Tower, Peace Avenue 17,
1 Khoroo Sukhbaatar District
ULAANBAATAR 14240 MONGOLIA
SECURITIES EXCHANGE LISTING
AKM
WEBSITE
www.aspiremininglimited.com
Table of
Contents
OPERATIONAL OVERVIEW
Chairman’s Letter
Operational Review
Coal Projects
Community Relations
Rail Infrastructure Investment
Corporate
ii
iv
vi
xvi
xxii
xxiii
FINANCIAL & SHAREHOLDER REPORTING
Corporate information
Directors’ Report
Auditor’s Independence Declaration
Consolidated Statement of Profit or Loss
and other Comprehensive Income
Consolidated Statement of Financial Position
Consolidated Statement of Changes In Equity
Consolidated Statement of Cash Flows
Notes to the Consolidated Financial Statements
Directors’ Declaration
Independent Auditor’s Report
Additional Shareholder Information
1
2
16
17
18
19
20
21
51
52
56
ASPIRE MINING LIMITED ANNUAL REPORT 2020 |
Chairman’s
Letter
Dear Shareholders
a
transformational
During the year just passed your Company
completed
transaction
aimed squarely at building a solid foundation
for the future development of the 100% owned
Ovoot Coking Coal Project, for the benefit of
shareholders and the local communities in which
we will operate.
The equity markets have opened for listed
companies with Mongolian resource projects in
2019/20. Your company led the charge with the
A$33.5 million placement to major shareholder
Mr Tserenpuntsag. This placement was more than
just about raising funds to provide a strengthened
and substantive balance sheet. The placement
was also part of a strategy for the Company to
present as a more Mongolian aligned company
and to ameliorate the local negative reactions to
foreign investment.
The substantial investment from Mr Tserenpuntsag
was accompanied by commitments to provide
future equity support and debt
loans or
guarantees of up to $100 million. A ringing
endorsement of your Company and its projects by
a very successful and well respected Mongolian
business identity.
With the backing of Mr Tserenpuntsag, the
Company is well positioned to fund the valuable
Ovoot Early Development Project. However
momentum has been slowed by the COVID-19
pandemic and the Mongolian Government’s
successful response. This has impacted on the
Company’s ability to host community consultation
meetings which are necessary to complete the
permits and approvals processes.
While we have been on standby, the Company
has been engaging directly with local community
leadership, negotiating a
joint community
development plan and identifying opportunities
to partner with local businesses to ensure that
the benefits of resource development at Ovoot
are spread far and wide.
The coking coal market itself has been negatively
impacted by industrial shut downs in the global
steel industry. China’s steel industry recovered
ahead of most driven by Government stimulus,
while other large consumers such as Japan and
India are rebuilding. As governments continue
to provide economic support to the post COVID
recovery, coking coal demand is predicted to
improve along with prices in 2021.
Aspire
intends to make the Ovoot Coking
Coal Project a first world development that will
provide high quality, well paying jobs, community
benefits and use current technologies to ensure
efficiency and mitigate environmental impacts.
The Company is focusing on efficient coal
beneficiation technology that will be powered
by renewables. Trucking of washed coal product
to the Mongolian rail network will focus on
high efficiency trucking technology which limits
emissions and other wastes along sealed roads
to avoid the dust issues on unsealed roads seen
in the south of the Country.
Aspire intends to make the
Ovoot Coking Coal Project a
first world development that
will provide high quality, well
paying jobs, community benefits
and use current technologies to
ensure efficiency and mitigate
environmental impacts.
I am proud of the community initiatives developed
over the year through our Community Relations
team listening to the pressing needs of the local
community. We have built heated bathrooms
for the regional boarding school, started a
joint vocational training scheme with the local
technical college and funded health days where
medical clinicians go into the herder communities
to provide medical help. Our commitments
to buy locally has seen a focus on capacity
building where we can assist. We have also
developed a plan to grow livestock fodder locally
to support local herders rather than reliance on
expensive imports.
On behalf of shareholders, I wish to thank our
staff and management team, particularly the
dedicated Community Relations teams in the
field who have been pivotal in building local
understanding and support.
David Paull
Chairman
Top: The Company co-operated with UNICEF, sponsoring
artists to paint at five locations, calling for inclusive society
in “Rainbow Cover” project in Murun Soum, Khuvsgul Airmag.
Middle & Bottom: Pupils at Murun Soum, Khuvsgul Airmag,
in front of paintings called “You are Unique” and “Hear Me”.
ii
CHAIRMAN’S LETTER
iii
ASPIRE MINING LIMITED ANNUAL REPORT 2020 |
Operational
Overview
Listed on
the Australian Stock Exchange,
Aspire Mining Limited (ASX : AKM, Aspire or
the Company) is a metallurgical coal resource
development and infrastructure company with all
of its assets in Mongolia.
STRATEGY
The Company’s strategy is to create wealth
for shareholders through the discovery and
development of metallurgical coal deposits.
There are only limited areas around the world
where coal suitable for use to make coke for
steel making are formed and make up just a small
fraction of coal deposits found globally.
In 2010 the Company identified that Mongolia
had both the right geological environment to
host large coking coal deposits and the proximity
to China, the world’s largest market for coking
coal. Since then the Company has discovered
the world class Ovoot Coking Coal Project and
acquired the nearby Nuurstei Coking Coal
Project.
iv
iv
OPERATIONAL OVERVIEW
v
Above: Ovoot Coking Coal Project
Mongolia has both the right geological environment
to host large coking coal deposits and the proximity
to China, the world’s largest market for coking coal.
ASPIRE MINING LIMITED ANNUAL REPORT 2020 | Coal
Projects
OVOOT COKING COAL
PROJECT (100%)
The Ovoot Coking Coal Project (Ovoot or Ovoot
Project) is a world class coking coal discovery in
Northern Mongolia.
In March 2019 the Company announced the
results of a Pre-Feasibility Study (“PFS”) for
the Ovoot Early Development Project (“OEDP”)
which aims to produce up to 4 million tonnes
per annum of a washed “fat” coking coal. Fat
coking coal is valuable in the Chinese and
Russian steel industries due to its excellent blend
carrying characteristics and the ability to improve
coke quality when blending with lower quality
coking coals.
The OEDP involves mining a relatively low ash,
low strip ratio and high yielding “fat” coking coal
from a starter pit that sits within a larger 255Mt
Ovoot JORC Reserve1 (“Ovoot Project Reserve”)
envelope which assumes a rail link is eventually
built between the mine and Ovoot.
In November 2019, the OEDP PFS Extended
Case was updated2 with the current mining
contractor quoted rates which reduced C1 cash
costs per tonne of product from the previously
advised US$83/t to US$76/t for coal delivered to
the China/Mongolia border. Logistics costs were
essentially reconfirmed.
In August 2012, the Company received a mining
license granting a minimum 30 year tenure over
the deposit.
A summary of the outcomes of the updated PFS
relative to the initial study are on the next page
in Table 1:
The OEDP is based on trucking washed coal from
the mine site to the nearest rail head at Erdenet,
approximately 560 kms to the east away. From
there coal can be railed to end customers in
China and Russia.
1 The Ovoot Project Reserve is defined as the 255 Mt Coal
Reserve Estimate announced on 31 January 2014.
2 Refer to ASX Announcement 11 November 2019. The Company
confirms that at this time it is not aware of any new information
or data that materially affects the information included in the
announcements, and that all material assumptions underpinning
the estimates continue to apply and have not materially
changed. On completion, the OEDP Definitive Feasibility Study
will identify any new information, data or change to material
assumptions used in the OEDP Pre-Feasibility Study.
Table 1: Physical and Operating Cost Assumptions
Physicals
Waste Mined (M Bcm)
Strip Ratio (Bcm/tcoal) (incl. pre-strip)
Coal Mined (Mt)
Average Yield (10% moisture)
Coal sold (net of 2% loss) (Mt)
Life of Mine
Operating Costs
Mining ($/t)
Trucking ($/t)
Rail + Border Charges ($/t)
C1 Cash Costs ($/t)
Total Cash Costs ($/t)
Average
Annual
PFS
Extended Case
Updated PFS
Extended Case
19.7
4.6
4.0
253.6
253.6
4.7
53.8
86%
45.2
4.7
53.8
85%
44.7
12.5 years
12.5 years
33
32
18
83
102
26
32
18
76
97
In order to bring the washed “fat” coking coal to market, an onsite Coal Handling and Preparation Plant
will need to be constructed along with supporting infrastructure at both the mine site and the Erdenet
Rail Terminal.
The mine capital expenditure is made up of:
Table 2: Summary Mine Capital
Item (US$)
CHPP Plant
Onsite infrastructure
Offsite terminals and blending facility
Mine Processing and Infrastructure
Waste Pre-stripping
Total Mine Capital
PFS Extended Case
Updated PFS Extended Case
37
10
16
63
47
110
37
10
16
63
31
94
vi
OPERATIONAL OVERVIEW
vii
ASPIRE MINING LIMITED ANNUAL REPORT 2020 | The OEDP will transform Aspire into a significant
pure play coking coal producer positioned in the
second quartile of the global cost curve.
Completion of the Definitive Feasibility Study has
been delayed due to delays in being able to hold
local community public meetings as required by
regulations because of COVID-19 restrictions put
in place by the Mongolian Government.
Mining and process engineering designs for
the OEDP PFS have been developed to support
capital and operating estimates to an accuracy
of ±25% and ±15% respectively. Key assumptions
that the PFS is based on are outlined in the
Company’s full statement released to the ASX
on 11 November 2019. Aspire has concluded it
has a reasonable basis for providing the forward-
looking statements in this report.
For the purposes of this Ovoot PFS, a flat price of
US$150/t Delivered at Place to the Erlian border
for Ovoot “fat” coking coal has been used based
on a detailed Chinese “fat” coking coal market
report completed by Fenwei Energy Information
Services Ltd (Fenwei) in December 2018.
The impact of the Covid-19 pandemic has caused
disruptions to economies globally and the steel
industry in particular. Seaborne prices for coking
coal have fallen substantially over 2020 although
there has been improvement in late September
2020. The shutdown of the Indian steel industry
caused significant dislocation in the seaborne
market although the rapid return to work in China
supported their domestic coking coal miners.
The market expectation is that governments will
be investing heavily in infrastructure which will
be supportive of steel prices and volumes into
2021.
Note in Figure 1 below, the relative stability of
Chinese domestic pricing versus the volatility
seen in seaborne markets.
The OEDP PFS confirms that significant coking
coal production can be achieved from Ovoot in a
low capital intensity manner to unlock attractive
economics that are not dependent on the
construction of the Ovoot to Erdenet railway.
The OEDP will transform Aspire
into a significant pure play coking
coal producer positioned in the second
quartile of the global cost curve.
Figure 1: Seaborne Australian HCC FOB versus Chinese Domestic Pricing. Source: sxcoal.com, UBS, Metal Bulletin
Above: Ovoot Coking Coal Project
viii
OPERATIONAL OVERVIEW
ix
ASPIRE MINING LIMITED ANNUAL REPORT 2020 | ERDENET TO OVOOT
HAUL ROAD
In order to deliver the planned coking coal
volumes to the rail terminal at Erdenet identified
in the OEDP PFS, a special purpose road is to be
built between Ovoot and Erdenet.
A scoping study was completed in 20193 using
Mongolian road consulting engineers, RCSC
LLC, that reviewed a number of alternative
routes including following the planned Mogoin
Gol to Erdenet rail path. The favoured option
is a special purpose public road with a distance
of 560km that links several soum centres in
Khuvsgul with the town of Murun, the capital of
Khuvsgul, through to the rail head at Erdenet.
The Mogoin Gol to Erdenet road alignment was
studied by the Khuvsgul airmag government and
has now been included in its February 2020
Road Development Plan to 2030 (see Figure 2).
The approval allows for community engagement
with each of the soums along the path to gain
final Ministry approval for the alignment and
completion of the definitive engineering study.
The road will be sealed with a cost effective
sealant used in a number of cold climate
applications to suppress dust and is approved
for use in Mongolia. Simulations have been
conducted looking to optimize design gradients
with truck and trailer combinations.
The scoping level engineering study cost of road
construction before contingencies prepared in
2019 is made up as follows:
Table 3: Haul Road Capital Costs
Road
Bridges and culverts
Total
US$m
130
35
165
Note: The above capital costs are estimated to an
accuracy of ±25%.
The above costs are at scoping study level and
will be updated once final alignment approval
and detailed design and geotechnical data have
been received.
NUURSTEI COKING COAL
PROJECT (90%)
The Company completed the acquisition of
the corporate entities that held the remaining
45% interest in the project in July 2017 for US$1
million, increasing the Company’s total interest in
the Nuurstei Project to 90%. In October 2017, a
Mining License was issued over the deposit.
Existing near surface Indicated resources of
4.8 Mt and Inferred resources of 8 Mt could
potentially enable a modest mining operation
washing the relatively high ash raw coal down to
a 10% ash product. Coke Oven test work in 2018
on an indicative sample of Nuurstei Coking Coal
showed outstanding results.
Further drilling and other engineering work
is required in order to complete early stage
feasibility work at Nuurstei. However, this work
has been deferred while negotiations with the
local community continued but was overtaken
and replaced in 2019 by the change in strategy to
development the more advanced and far larger
scale Ovoot Early Development Project.
No substantive work was conducted on this
Project during the year.
Figure 2: Approved 560 km road alignment: Mogoin Gol - Ovoot - Murun - Erdenet.
3 Refer to ASX Announcement 11 November 2019. The Company
confirms that at this time it is not aware of any new information
or data that materially affects the information included in the
announcements, and that all material assumptions underpinning
the estimates continue to apply and have not materially
changed. On completion, the OEDP Definitive Feasibility Study
will identify any new information, data or change to material
assumptions used in the OEDP Pre-Feasibility Study.
Above: Otta Seal Construction (2007) and finished road.
x
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OPERATIONAL OVERVIEW
xi
ASPIRE MINING LIMITED ANNUAL REPORT 2020 | JORC RESERVES
& RESOURCES
Table 4: JORC Reserves and Resources
Deposit
Probable
Reserves
Measured
Indicated
Measured +
Indicated
Inferred
Resources
Ovoot Open Pit(2)
247.0
197.0
Ovoot Underground(2)
Nuurstei(3)
Total
8.0
-
-
-
255.0
197.0
46.9
25.4
4.8
77.1
243.9
25.4
4.8
274.1
9.2
2.6
8.1
19.9
Notes:
1. Ovoot’s Resource and Reserve estimates have been
estimated by independent third parties (Xstract Mining
Consultants Pty Ltd) and are reported in accordance to
the JORC 2012 Code.
2. For full JORC 2012 disclosure in relation to the Ovoot
project JORC 2012 Coal Resources and Reserves, refer
the Company’s Quarterly Report for the period ended
31 December 2013, which is available to view on the
Company’s website and
the ASX Announcements
platform. The Company is not aware of any new information
or data that materially affects the information included
in this December 2013 Quarterly Report. All material
assumptions and technical parameters underpinning
the estimates in the December 2013 Quarterly Report
continue to apply and have not materially changed.
3. Nuurstei’s Resource and Reserve estimates have been
estimated by independent third parties (McElroy Byran
Geological Services) and are reported in accordance to
the JORC 2012 Code.
4. The JORC Code (2012) compliant Ore Reserves and JORC
compliant Mineral Resources for the Nuurstei Coking Coal
Project is reported in the Company’s ASX Announcement
dated 13 April 2016 which is available to view on the
Company’s website and
the ASX Announcements
platform. The Company is not aware of any new
information or data that materially affects the information
included in the 13 April 2016 announcement. All material
assumptions and technical parameters underpinning the
estimates in the announcement continue to apply and
have not materially changed.
Competent Persons Statement:
Ovoot Coking Coal Project
Competent Persons Statement
Nuurstei Coking Coal Project
The information in this report that relates to Reporting of
Coal Resources at Nuurstei Project, is based on information
compiled under the supervision of, and reviewed by, the
Competent Person, Mr Parbury, who is a full time employee
of McElroy Bryan Geological Services, is a Member of the
Australasian Institute of Mining and Metallurgy (Member
#101430) and who has no conflict of interest with Aspire
Mining Limited.
The reporting of Coal Resources for 13580X presented
in this report has been carried out in accordance with the
‘Australasian Code for Reporting of Exploration Results,
Mineral Resources and Ore Reserves’, The JORC Code 2012
Edition prepared by the Joint Ore Reserves Committee of
the Australasian Institute of Mining and Metallurgy, Australian
Institute of Geoscientists and Minerals Council of Australia
(JORC).
Mr Parbury has sufficient experience that is relevant to
the style of mineralisation and type of deposit under
consideration and to the activity being undertaken to qualify
as a Competent Person as defined in the 2012 JORC Code.
Mr Parbury consents to the inclusion in the report of the
matters based on his information in the form and context in
which it appears.
In accordance with the Australian Securities Exchange
requirements, the technical information contained in this an-
nouncement in relation to the JORC Code (2012) Compliant
Coal Reserves and JORC Compliant Coal Resource for the
Ovoot Coking Coal Project in Mongolia has been reviewed
by Mr Ian De Klerk and Mr Kevin John Irving of Xstract Min-
ing Consultants Pty Ltd.
The Coal Resources at Ovoot Project documented in this
release are stated in accordance to the JORC Code, 2012.
They are based on information compiled and reviewed
by Mr. Ian de Klerk who is a Member of the Australasian
Institute of Mining and Metallurgy (Member #301019) and is
a full time employee of Xstract Mining Consultants Pty Ltd.
He has more than 20 years’ experience in the evaluation of
coal deposits and the estimation of coal resources. Mr. de
Klerk has sufficient experience that is relevant to the style
of mineralisation and type of deposit under consideration to
qualify him as a Competent Person as defined in the JORC
Code, 2012. Neither Mr. de Klerk nor Xstract have any material
interest or entitlement, direct or indirect, in the securities
of Aspire Mining Limited or any companies associated with
Aspire Mining Limited. Fees for work undertaken are on a time
and materials basis. Mr. de Klerk consents to the inclusion of
the Coal Resources based on his information in the form and
context in which it appears.
The Coal Reserves at Ovoot Project documented in this
release are stated in accordance with the guidelines set
out in the JORC Code, 2012. They are based on information
compiled and reviewed by Mr. Kevin Irving who is a Fellow of
the Australasian Institute of Mining and Metallurgy (Member
#223116) and is a full time employee of Xstract Mining
Consultants Pty Ltd. He has more than 35 years’ experience
in the mining of coal deposits and the estimation of Coal
Reserves and the assessment of Modifying Factors. Mr.
Irving has sufficient experience that is relevant to the style
of mineralisation and type of deposit under consideration to
qualify him as a Competent Person as defined in the JORC
Code, 2012. Neither Mr. Irving nor Xstract have any material
interest or entitlement, direct or indirect, in the securities
of Aspire Mining Limited or any companies associated with
Aspire Mining Limited. Fees for work undertaken are on a
time and materials basis. Mr. Irving consents to the inclusion
of the Coal Reserves based on his information in the form and
context in which it appears
x
xii
OPERATIONAL OVERVIEW
xiii
ASPIRE MINING LIMITED ANNUAL REPORT 2020 | OVOOT EARLY
DEVELOPMENT PROJECT
(OEDP)
FMS LLC converted the existing Ovoot Resource
Model to Surpac and assumed 5% dilution in the
re-blocking exercise for Whittle re-optimisations.
FMS then conducted an optimisation based
on trucking product to the rail at Erdenet (as
opposed to the assumptions and economics of
a rail connection from Ovoot to Erdenet) and
restricting maximum production to 4 million
tonnes per annum being the current available
rail capacity from Erdenet to markets. The pit
selections produce a steady 4 Mtpa of saleable
coal.
The OEDP Reserves for the OEDP have been
confirmed as:
Table 5: OEDP Reserves
Category
Probable Ore Reserve Ore
Open Pit OEDP
Probable Ore Reserve
Open Pit OEDP Plus
OEDP Extension
Coal Reserve
(adb) ROM Mt
Coal Reserve
Total Moisture
2.0% arb ROM Mt
ROM Coal (adb)
Ash Content %
ROM Coal (adb)
CSN%
36.8
53.8
37.6
54.9
17.2
18.0
7.9
8.5
Table 6: OEDP Marketable Reserves
Marketable Coal
Reserve Total Moisture
10% arb Mt
Product Specification
adb Ash Content %
Product Specification
adb CSN%
32.2
46.2
10.5
10.5
8.5
8.5
Category
Probable Product Reserve
Ore Open Pit OEDP
Probable Product Reserve
Open Pit OEDP Plus OEDP
Extension
Notes:
1. The
technical
information and competent persons
statements for the OEDP Reserves are reported in the
Company’s ASX announcements dated 28 February
and 1 March 2019 which are available to view on the
Company’s website & the ASX Announcements Platform.
2. The Company confirms that at this time it is not aware
of any new information or data that materially affects the
information included in the announcements, and that
all material assumptions underpinning the estimates
continue to apply and have not materially changed. On
completion, the OEDP Definitive Feasibility Study will
identify any new information, data or change to material
assumptions used in the OEDP Pre-Feasibility Study.
Competent Persons Statement:
Ovoot Early Development Project
The OEDP Reserves in this release are stated in accordance
with the JORC Code, 2012. They are based on information
compiled and reviewed by Mr Julien Lawrence who is a
Member of the Australasian Institute of Mining and Metallurgy
(Member #209746) and is a full-time employee of FMS LLC.
He has more than 20 years’ experience in the evaluation
of coal deposits and the estimation of coal resources. Mr
Lawrence has sufficient experience that is relevant to the style
of mineralisation and type of deposit under consideration
to qualify him as a Competent Person as defined in the
JORC Code, 2012. Mr Lawrence has no material interest
or entitlement, direct or indirect, in the securities of Aspire
Mining Ltd or any companies associated with Aspire Mining
Ltd. Fees for work undertaken are on a time and materials
basis. Mr Lawrence consents to the inclusions of the OEDP
Reserves based on his information in the form and context in
which it appears.
xiv
OPERATIONAL OVERVIEW
xv
xv
ASPIRE MINING LIMITED ANNUAL REPORT 2020 | Community Relations:
Building our Social License to Operate
The Company has been engaged through the
year in providing information and educating
stakeholders on the Ovoot Early Development
Project (OEDP) on the environmental, social and
governance impacts of this project development.
Aspire Mining Limited is seeking to establish The
Ovoot Coking Coal Project as a new medium
scale open pit metallurgical coal mine in Northern
Mongolia.
Aspire believes that in order to become a
successful, long-term operator in the mining
sector in Mongolia, it is crucial to openly and
transparently engage and educate the local
communities in which it operates and demonstrate
the sharing of benefits that a project of this scale
can offer the local communities.
In 2019 the Company signed a Voluntary Code
of Practice for Responsible Mining along with
a number of other leading Mongolian Miners
in order to promote openness, transparency
and sustainable development in the Mongolian
mining sector.
Further, the Company supports the Ten Principles
of the United Nations Global Compact on
human rights, labour, environment and anti-
corruption. We are committed to making the UN
Global Compact and its principles part of the
strategy, culture and day to day operations of
the Company advancing the UN’s Sustainable
Development Goals.
First and second row: In cooperation with the
Mongolian Council for Sustainable Development
and Social Responsibility, the Company organised a
training on “Sustainable Development Reporting” for
journalists in Khuvsgul Aimag.
Third and fourth row: With the investment of
“Khurgaitai Khairkhan” LLC, modern heated
bathrooms were built for students at a regional
boarding school in Tsetserleg Soum.
xvi
COMMUNITY RELATIONS
xvii
Above: The Company has conducted numerous family visitations across the local community in the vicinity of the planned Ovoot
Coking Coal Project. The Sustainable Development Officer has met with local people and introduced the Company’s activities.
ASPIRE MINING LIMITED ANNUAL REPORT 2020 | A COMMITMENT TO THE
ENVIRONMENT
Aspire is committed to developing its metallurgical
coal assets in accordance with the United Nations
“Equator Principles”. These are 10 overriding
principles that cover environmental management,
stakeholder engagement,
transparency and
accountability.
The environmental base line studies, operational
management plans and rehabilitation strategy are
intended to meet both Mongolian environmental
laws and where applicable adopt the higher
standards required to meet Equator Principles.
In the selection process for the Coal Handling
and Preparation Plant (CHPP) the net amount of
water consumption, post water recovery will be a
key determinant of technology selection.
As part of this process the Company will
undertake annual independent environmental
audits once production commences, with the
results made available to provide accountability
and transparency.
Above: Aerial view of Tsetserleg Soum; Khuvsgul Aimag.
PROVIDE A POSITIVE
INFLUENCE TO LOCAL
COMMUNITIES
The Ovoot Early Development Project (OEDP) is
located in Tsetserleg Soum within the Khuvsgul
Airmag of Mongolia.
The following chart shows the estimation of taxes
and fees payable to the Soum, Airmag and the
State over the first 10 years of the OEDP.
The Tsetserleg Soum has a population of
approximately 5,000 people with the majority of
the population engaged with animal husbandry
and government employment. Unemployment
is over 20% and there has been progressive
depopulation over
20 years as
the
particularly younger and mobile workers seek
employment elsewhere.
last
There is currently an unsealed road which
connects Tsetserleg to the Khuvsgul capital
of Murun some 230 kilometres away and from
there, access to the capital of Ulaanbaatar is
achieved on a sealed road. The total special
purpose road length contemplated in the OEDP
is 560 kilometres with an estimated cost of
approximately US$165m. The State budget has
no funding set aside for building the connecting
roads from Tseserleg to Murun which is where
the OEDP can step in and specifically fund
infrastructure such as this road. This will bring
the soums around the OEDP closer to the rest of
the Mongolian communities, improving access,
commerce and safety. The leveraging of resource
development to fund infrastructure is a key part
of Mongolia’s Resource Development Policy.
The OEDP development will provide over 200
high paying jobs in Tsetserleg and a significant
boost in local government incomes. There is
also a further 250 jobs in driving and servicing
the
road maintenance
required to move the 4 million tonnes per
annum from the Ovoot site to Erdenet which
will cross 3 airmags and 14 soums targeted to
provide employment.
fleet and
trucking
the above
the annual
To put
administrative budget for the Tsetserleg Soum is
US$250,000.
in context,
Prior to mine development the Company will enter
into a “Community Cooperation Agreement”
(CCA) which will outline the Company’s priorities
in relation to social investment in the Soum.
The Company has already jointly funded with
the Khuvsgul airmag the 28 bed Tsetserleg
Soum medical centre and has provided financial
assistance and distributes
to sustain
livestock numbers in affected areas in winter.
feed
USD 73.7 million
USD 33.1 million
4%
8%
88%
USD 767.3 million
State Budget
AIMAG Budget
SOUM Budget
Figure 3: Breakdown of taxes and fees to be paid (USD).
xviii
COMMUNITY RELATIONS
xix
ASPIRE MINING LIMITED ANNUAL REPORT 2020 | GOVERNANCE
In June 2019, the Company signed on to a
Voluntary Code of Practice on Responsible
Mining, along with other leading Mongolian Mining
Companies. The Code of Practice was developed
by the Ministry of Mining and Heavy Industry and
the Mongolian National Mining Association.
The stated objective of the Code of Practice is to
promote, introduce and pursue good standards
of responsible mining in Mongolian mining sector
and cooperate towards sustainable development
of the sector.
The Code places a high emphasis on transparency
and accountability, much of which the Company
already maintains due to its observance of
ASX Listing Rules, as well as environmental
protections.
The Company maintains Board approved policies
in relation to:
▲ An Anti Corruption Policy
▲ A Human Resource Policy that sets out
measures to ensure anti-discrimination
based on sex, race or religion.
▲ An Occupational Health and Safety Policy
and risk assessment.
relating
In order to support governance, the Board of
Directors has established a number of sub
committees
technical,
to
remuneration and audit & risk. These have been
populated based on existing governance best
practice and recommended by ASX guidelines to
ensure separation of duties, accountability and
Board oversight independent of management.
finance,
Above: Students of the Northern Miner Program, partaking in Operator Training for heavy machinery.
Further, the Company’s procurement policies will
be targeted at :
▲ Building diversification into local industries
▲ Building capacity
▲ Spreading the economic growth benefits of
the OEDP into the wider community with an
emphasis on reducing social and economic
inequalities.
The additional direct support, over and above the
increased budget revenues will be determined in
the final negotiation of the CCA.
labour
The Mongolian
laws require a 95%
Mongolian participation rate. The Company’s
goal is to exceed this minimum however to do this
it will need capacity building in the local labour
market. The Company has already partnered
with the Erdenet Technical Institute School to
provide a range of vocational courses. The first
intake in 2019 were trained in heavy earthmoving
equipment with participants sourced locally.
The Company’s employment policies will promote
targeting
gender equality, competitive pay,
local candidates and building capacity gaps
where needed.
xx
COMMUNITY RELATIONS
xxi
Right: Donation of protective equipment against the COVID-19 virus to the Khuvsgul Health Centre.
ASPIRE MINING LIMITED ANNUAL REPORT 2020 | Rail Infrastructure
Investment
Aspire currently owns an 80% interest in Northern
Railways LLC (NR), the Mongolian registered
company that holds the Rail Concession to build
the 547 kilometre long Erdenet to Ovoot Railway
which is part of the Northern Rail Corridor, a new
rail connection between China and Russia through
Mongolia. The Concession Agreement with
the Mongolian Government is to build, operate
then transfer the railway to Government after
30 years. In this Concession, NR is supported
by a consortium of experienced rail and bridge
engineering and construction groups including
China Gezhouba Group Corporation and China
Railways Construction Corp Bureau 20 Group.
In 2018 China Gezhouba Group funded and
completed a feasibility study for the rail route which
was lodged with the Mongolian rail authorities.
In February 2020, NR received an extension from
the Mongolian Government’s National Development
Authority to the time period to meet the conditions
precedent within the Concession Agreement by 18
months through to September 2021.
Further development of the Rail project is dependent
on the operator of the central rail line in Mongolia,
Ulaanbaatar Railways JSC (UBTZ), providing a
guarantee of future rail capacity for NR along the
main line of 10 million tonnes per annum.
Corporate
While there were continued delays on the
project development front, there was significant
corporate developments as
the Company
sought to increase local community project and
funding support through a shareholder approved
placement to major Mongolian shareholder, Mr
Tserenpuntsag. The placement was completed at
2.1 cents per share, a 27.7% premium to the 30 day
moving average price, prior to the announcement
of the transaction and saw Mr Tserenpuntsag’s
investment in the Company increase from 27.5%
to 51% with a $33.5 million investment.
There was also $2.75 million raised with the
exercise of 15.3 million options in December
2019 with Mr Tserenpuntsag converting all of his
options which saw his ownership of the Company
grow to 52.5% .
Along with other existing Mongolian shareholders,
the Company is now clearly majority Mongolian
owned yet listed on ASX, a unique combination
which may establish future models for Australian/
Mongolian resource company collaborations.
The
transaction with Mr Tserenpuntsag
also offered other benefits. He has made a
commitment to provide loans and/or guarantees
for an amount of up to $100 million and to
support future equity raisings to fund the Ovoot
Early Development Project on a pro rata basis.
Post the shareholder approved placement Mr
Achit Darambazar moved from being a Non-
Executive Director to Managing Director and
CEO, with the Chairman, David Paull stepping
down from executive duties.
for
issued capital of
Post the placement in December 2019 the
ten
Company also undertook a one
consolidation of
the
Company to bring the number of shares listed on
Australian Stock Exchange Limited back within
the norms for a resource development company
of Aspire’s size and stage of development.
the
At 30 June 2020 the Company had cash of
$40.7 million and no debt. The organization was
restructured to reduce overhead expenditure
while we await for the necessary permits and
approvals needed to advance the Ovoot Coking
Coal Project.
CASH
$40.7
million
DEBT
nil
as of 30 June 2020
Above: Erdernet coal train
xxii
ASPIRE MINING LIMITED ANNUAL REPORT 2020 |
RAIL INFRASRUCTURE INVESTMENT
xxiii
ASPIRE MINING LIMITED ANNUAL REPORT 2020 | Aspire Mining Limited
THIS PAGE HAS BEEN INTENTIONALLY LEFT BLANK
Aspire Mining Limited
ABN 46 122 417 243
Annual Financial Report
30 June 2020
Contents
Aspire Mining Limited
Page
- 1 -
Aspire Mining Limited
CORPORATE INFORMATION ................................................................................................................. 1
CORPORATE INFORMATION
DIRECTORS’ REPORT ............................................................................................................................ 2
AUDITOR’S INDEPENDENCE DECLARATION ..................................................................................... 16
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME .. 17
CONSOLIDATED STATEMENT OF FINANCIAL POSITION ................................................................. 18
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY ................................................................. 19
CONSOLIDATED STATEMENT OF CASH FLOWS .............................................................................. 20
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ........................................................... 21
DIRECTORS’ DECLARATION ................................................................................................................ 51
INDEPENDENT AUDITOR’S REPORT .................................................................................................. 52
Solicitors
Corrs Chambers Westgarth Lawyers
Brookfield Place Tower 2
123 St Georges Terrace
PERTH WA 6000
Bankers
National Australia Bank
Level 1, 1238 Hay Street
WEST PERTH WA 6005
Auditors
HLB Mann Judd (WA Partnership)
Level 4, 130 Stirling Street
PERTH WA 6000
KPMG
#602, Blue Sky Tower, Peace Avenue 17,
1 Khoroo Sukhbaatar District
ULAANBAATAR 14240 MONGOLIA
Securities Exchange Listing
AKM
Website
www.aspiremininglimited.com
ABN 46 122 417 243
Directors
Mr Achit-Erdene Darambazar (Managing Director)
Mr David Paull (Non-Executive Chairman)
Mr Boldbaatar Bat-Amgalan (Non-Executive
Director)
Mr Neil Lithgow (Non-Executive Director)
Ms Hannah Badenach (Non-Executive Director)
Company secretary
Mr Philip Rundell
Registered office
Mezzanine Level
190 St Georges Terrace,
PERTH WA, 6000
AUSTRALIA
Telephone:
Email: info@aspiremininglimited.com
(08) 9287 4555
Principal place of business
AUSTRALIA
Mezzanine Level
190 St Georges Terrace,
PERTH WA 6000
MONGOLIA
Chingeltei District, 1st Khoroo
Baga Toiruu-17
JJ Tower, 9th Floor
ULAANBAATAR 15170
Share Register
Automic Group
Level 2, 267 St Georges Terrace
PERTH WA 6000
AUSTRALIA
Telephone: 1300 288 664
- 2 -
- 3 -
Aspire Mining Limited
Aspire Mining Limited
DIRECTORS’ REPORT
DIRECTORS’ REPORT (continued)
Names, qualifications, experience and special responsibilities (continued)
Your Directors submit the annual financial report of the Group consisting of Aspire Mining Limited (“Aspire” or
“Company”) and the entities it controlled during the financial year ended 30 June 2020. In order to comply with
the provisions of the Corporations Act 2001, the Directors report as follows:
Mr Boldbaatar Bat-Amgalan
Non-Executive Director
Directors
The names of Directors who held office during or since the end of the year and until the date of this report are
as follows. Directors were in office for this entire period unless otherwise stated.
Mr Achit-Erdene Darambazar Managing Director
Mr David Paull
Non-Executive Chairman from 15 March 2020, previously Executive Chairman
Mr Boldbaatar Bat-Amgalan Non-Executive Director from 15 December 2019, previously Executive Director
Mr Neil Lithgow
Ms Hannah Badenach
Mr Alexander Passmore
Mr Gan-Ochir Zunduisuren Executive Director (resigned 5 December 2019)
Non-Executive Director
Non-Executive Director
Non-Executive Director (resigned 5 December 2019)
Names, qualifications, experience and special responsibilities
Mr Achit-Erdene Darambazar
Executive Director
Mr Achit-Erdene Darambazar was appointed Executive Director on 7 December 2018 and Managing Director
on 5 December 2019.
He is financial adviser to Mr Tserenpuntsag and President and CEO of Mongolian International Capital
Corporation LLC (MICC), a leading Mongolian investment banking firm and the first investment advisory, stock
underwriting and brokerage firm in Mongolia.
He acted as lead advisor for the first bond offerings on the local stock exchange by major Mongolian
companies, MCS and Gobi Corporation. He has also advised on a number of high profile transactions in
Mongolia, including the privatisation of the Trade and Development Bank of Mongolia and Agricultural Bank.
Mr. Darambazar has completed a Masters degree in International Relations from Columbia University and
holds a Bachelors degree from Middlebury College.
He has held no listed public company directorships in the last three years.
Mr David Paull
Non-Executive Chairman
Qualifications: B.Com, FSIA, MBA (Cornell)
Mr Boldbaatar Bat-Amgalan has had senior roles in public relations and publishing and was previously a
director of Erdenet Mining Company. He also previously held senior roles in the Government of Mongolia,
including the State Secretary for the Ministry of Foreign Affairs, and Chairman of the Communication
Regulatory Commission.
Mr Bat-Amgalan has had no listed public company directorships in the last three years.
Mr Neil Lithgow
Non-Executive Director
Qualifications : MSc, F.Fin, M.AusIMM
Mr Lithgow is a geologist by profession with over 27 years’ experience in mineral exploration, economics and
mining feasibility studies, covering base metals, coal, iron ore and gold. He is also a member of the Australian
Institute of Mining and Metallurgy.
Mr Lithgow has previously worked for Aquila Resources Limited and Eagle Mining Corporation NL and is
currently a Non-Executive Director of Australian Silica Quartz Group Ltd (previously Bauxite Resources
Limited, appointed on the 15 May 2006).
Mr Lithgow has had no other listed public company directorships in the last three years.
Ms Hannah Badenach
Non-Executive Director
Qualifications: BA, LLB (Hons)
Ms Badenach is currently Executive Director Mongolia & Base Metals at Noble Resources Limited.
Ms Badenach is a lawyer, having practiced law for several years in Asia, including two years in Mongolia,
starting in 2004 with Lynch & Mahoney. Ms Badenach has experience in management and development within
Mongolia. Ms Badenach was Managing Director of QGX Mongol LLC from 2006, where Ms Badenach was
responsible for the general management of the company until it was sold in 2008.
Ms Badenach holds a Bachelor of Laws (Hons) and a Bachelor of Arts from the University of Tasmania.
Ms Badenach was a Director of ASX listed and Mongolian focussed explorer, Xanadu Mines Limited from the
4 October 2011 to 1 November 2019. Ms Badenach has had no other listed public company directorships in
the last three years.
Mr Paull has over 28 years’ experience in resource business development and industrial minerals marketing.
He was appointed Managing Director on 1 July 2010, after being involved in the recapitalisation of the
Company and redirection to targeting Mongolian coking coal assets.
Mr Alexander Passmore
Non-Executive Director (resigned 5 December 2019)
Qualifications: B.Sc(Hons) ASIA MAusIMM
Mr Paull was appointed as Executive Director of the Company on 12 February 2010. With the retirement of
the Non-Executive Chairman in March 2018, Mr Paull became the Executive Chairman. With the appointment
of Mr Achit-Erdene Darambazar on 5 December 2019, Mr Paull transitioned to Non-Executive Chairman and
Non-Executive Director on the 15 March 2020.
Mr Paull has had no other ASX listed public company directorships in the last three years.
Mr Passmore is a qualified geologist with a strong financial and technical background in the resource sector.
Alexander has a diverse background having held technical roles in the industry and then senior positions in
both the institutional debt financing and equity capital market arenas. Mr Passmore has a Bachelor of Science
Degree with first class honours in Geology. Mr Passmore was a director of Equator Resources Ltd from
September 2016 to July 2017. He was appointed Managing Director of Cockatoo Island NL in October 2016
and Rox Resources Limited on 30 April 2019.
DIRECTORS’ REPORT (continued)
Names, qualifications, experience and special responsibilities (continued)
DIRECTORS’ REPORT (continued)
- 4 -
- 5 -
Aspire Mining Limited
Aspire Mining Limited
Mr Gan-Ochir Zunduisuren
Non-Executive Director (resigned 5 December 2019)
Qualifications: B.Eng, MSGF (Stern)
Mr Zunduisuren has over 15 years of experience in the resource sector including underground zinc mining,
gold mining and mining business development in Mongolia and Canada. Mr Zunduisuren is Executive Director
and co-founder of Altai Gold LLC, a mineral resource focused investment company, and was a key part of the
syndicate that made the Ovoot Coking Coal project discovery.
Mr Zunduisuren has a Degree in Mining Engineering from the Mongolian University of Science and Technology
and a MSc in Global Finance from NYU Stern School of Business and HKUST.
Company Secretary
Mr Philip Rundell
Company Secretary
Qualifications: Dip BS (Accounting) CA
Mr Rundell has had over 25 years’ experience as a Partner and Director of Coopers & Lybrand and Ferrier
Hodgson, respectively, specialising in company reconstructions and corporate recovery. Mr Rundell has
provided management accounting and company secretarial services over the last 10 years to a number of
listed companies.
Interests in the Shares and Options of the Company and Related Bodies Corporate
As at the date of this report, the relevant interests of the current Directors in shares, options and rights of the
Company are as follows:
Directors
Mr Achit-Erdene Darambazar
Mr David Paull1
Mr Boldbaatar Bat-Amgalan
Mr Neil Lithgow
Ms Hannah Badenach
Number of fully paid
ordinary shares
Number of options
over ordinary
shares
Number of
performance
rights over
ordinary shares
-
2,705,280
-
23,727,851
1,095,392
-
-
-
-
-
-
916,666
-
725,000
361,666
1. Mr David Paull is a Director of Kingsland Corporate Pty Ltd (formerly 2R’s Pty Ltd) which is a beneficial owner of
2,073,680 ordinary shares and 916,666 performance rights. Mr David Paull is also a Director and shareholder of
Paulkiner Pty Ltd, which is a beneficial owner of 631,600 ordinary shares.
There were no options granted to Directors of the Company during or since the end of the financial year as
part of their remuneration.
There are no unpaid amounts on the shares issued.
At the date of this report, there are no unissued ordinary shares of the Company under option. Performance
rights on issue are as follows:
Type
Performance rights
Expiry Date
30 June 2021
Exercise Price
-
Number of Rights
2,294,998
Dividends
No dividends have been paid or declared since the start of the financial year and the Directors do not
recommend the payment of a dividend in respect of the financial year.
Principal Activities
The principal activity of the Group during the year was the completion of the Ovoot Early Development Project
(OEDP) Pre-Feasibility Study, progression for the approvals, completion of studies, and funding towards the
development of the OEDP.
Review of Operations
Aspire is focused on the exploration and eventual development of metallurgical coal assets in Mongolia. Aspire
owns:
(a) a 100% interest in the large scale, world class Ovoot Coking Coal Project; and
(b) a 90% interest in the Nuurstei Coking Coal Project.
In December 2019, the Company entered into a Subscription Agreement and other agreements with Mr.
Tserenpuntsag Tserendamba for Mr Tserenpuntsag to invest an additional $36.3 million in the Company by
way of placement for $33.5 million and $2.8 million by exercise of options to further fund the implementation
of the OEDP.
At the Company’s Annual General Meeting held on 29 November 2019, shareholders approved the
transactions with Mr. Tserenpuntsag.
The proceeds of $A36.3 million before costs, together with existing cash reserves, will fully fund the Company
to complete feasibility studies for the mine and road components of the OEDP to support a planned project
financing and decision to mine in the second half of calender 2020.
The OEDP involves mining a low ash and high yielding coal from a starter pit that sits within the previously
defined Ovoot orebody and road transportation of the coal to the Erdenet rail connection. The designed
production rate at Ovoot under the OEDP will be matched in the medium to long term to forecast logistics
capacities which are limited by existing Mongolian rail capacity to a maximum of 4Mtpa. However, a phased
development plan to initially produce lower tonnages is under assessment with a number of studies to be
completed to determine feasibility.
Progress has been affected by the COVID-10 pandemic with required community approvals and agreements
delayed with bans on public meetings.
Aspire’s Mongolian rail infrastructure subsidiary, Northern Railways LLC, holds a Concession Agreement from
the Mongolian Government to build and operate 549km of rail from the town of Erdenet to the Ovoot Coking
Coal Project in northern Mongolia. The Erdenet to Ovoot Railway is the optimum means to transport the coal
from the Ovoot Coking Coal Project and Nuurstei Coking Coal Project. Construction of the railway is dependent
on achieving a number of conditions precedent including land access agreements and funding. If and when
commissioned, the Ovoot to Erdenet rail line is expected to support up to 10Mtpa of high quality washed coking
coal from Ovoot on a low cost, long term basis.
- 6 -
- 7 -
Aspire Mining Limited
Aspire Mining Limited
DIRECTORS’ REPORT (continued)
Review of Operations (continued)
In February 2020 the Mongolian Government extended the period in which to satisfy the Concession
Agreement conditions precedent for a further 18 months to September 2021.
Review of financial conditions
At balance date, the Group had $40,712,949 (2019: $11,136,142) in cash assets.
This balance will be sufficient to meet required community relations activities, approvals, permits and
evaluation activities to advance towards development of the OEDP.
Further raisings or other means of funding will be required for the capital infrastructure requirements for full
development of the OEDP and the associated haul road.
Operating results for the year
The Group reported an operating loss after tax of $5,488,200 for the year ended 30 June 2020 (2019: Loss
$6,200,307).
Significant changes in the state of affairs
Since the previous Annual Financial Report and during the financial year there has been no significant change
in the state of affairs of the Group.
Significant events after balance date
There has not been any material matter or circumstance that has arisen after balance date that has significantly
affected, or may significantly affect, the operations of the Group, the results of those operations, or the state
of affairs of the Group in future financial periods.
Likely developments and expected results
The Group will continue with activities towards meeting its objective of developing the OEDP into production
at the earliest opportunity.
Risk management
The Board is responsible for ensuring that risks are identified on a timely basis and that activities are aligned
with the risks identified by the Board. The Group believes that it is crucial for all Board members to be a part
of this process and as such the Board has not established a separate risk management committee. The Board
has a number of mechanisms in place to ensure that management’s objectives and activities are aligned with
the risks identified by the Board. These include the Board approval of strategic plans which includes initiatives
designed to meet stakeholder needs and expectations and to manage business risk, and the implementation
of Board approved operating plans and budgets and Board monitoring of progress against these budgets.
Corporate governance
Details of the Company’s Corporate Governance policies are contained within the Corporate Governance Plan
adopted by the Board. The Corporate Governance Statement for the year ended 30 June 2019 can be found
on the Company’s website at www.aspiremininglimited.com. The Corporate Governance Statement for the
year ended 30 June 2020 will be available on the Company’s website and the ASX announcements platform
following lodgement with the Company’s Annual Report in October 2020.
DIRECTORS’ REPORT (continued)
Environmental legislation
The Company is subject to significant environmental and monitoring requirements in respect of its natural
resources exploration activities. The Directors are not aware of any material breaches of these requirements
during the year.
Indemnification and insurance of Directors and officers
The Company has agreed to indemnify all the Directors and officers of the Group for any liabilities to another
person (other than the Group or related bodies corporate) that may arise from their position as Directors or
officers of the Company and its controlled entities, except where the liability arises out of conduct involving a
lack of good faith. During the financial year the Company paid a premium in respect of a contract insuring the
Directors and Officers of the Company and its controlled entities against any liability incurred in the course of
their duties to the extent permitted by the Corporations Act 2001. The contract of insurance prohibits disclosure
of the nature of the liability and the amount of the premium. The Company has not otherwise, during or since
the end of the financial year, except to the extent permitted by law, indemnified or agreed to indemnify an
officer or auditor of the Company or of any related body corporate against a liability incurred as such an officer
or auditor.
Remuneration Report (audited)
This report outlines the remuneration arrangements in place for the Key Management Personnel of the
Company and its controlled entities for the financial year ended 30 June 2020, as follows:
Mr Achit-Erdene Darambazar Executive Director
Mr David Paull
Non-Executive Chairman from 15 March 2020, previously Executive Chairman
Mr Boldbaatar Bat-Amgalan Non-Executive Director from 15 December 2019, previously Executive Director
Non-Executive Director
Mr Neil Lithgow
Non-Executive Director
Ms Hannah Badenach
Mr Alexander Passmore
Non-Executive Director – resigned 5 December 2019
Mr Gan-Ochir Zunduisurn Non-Executive Director – resigned 5 December 2019
Mr Samuel Bowles Chief Operating Officer – appointed 16 March 2020
Remuneration philosophy
The performance of the Group depends upon the quality of the Directors and executives. The philosophy of
the Group in determining remuneration levels is to:
1. set competitive remuneration packages to attract and retain high calibre executive;
2.
link executive rewards to shareholder value creation; and
3. establish appropriate performance hurdles for variable executive remuneration.
In considering the Group’s performance and returns on shareholder wealth, the Board has regard to the
following indicators of performance in respect of the current financial year and the previous four financial years:
2020
$
2019
$
2018
$
Revenue
425,330
325,741
216,309
2017
$
4,133
2016
$
30,210
Net loss after tax
(5,488,200)
(6,200,307)
(6,980,272)
(4,883,119)
(2,312,480)
Basic loss per share
Share price at year-end
(0.0126)1
0.081
(0.020)
(0.035)
(0.052)
(0.025)
0.16
0.22
0.18
0.25
1 Post a securities consolidation completed on 5 December 2019. 2019 and prior years restated assuming 1:10 consolidation applied.
DIRECTORS’ REPORT (continued)
Remuneration Report (audited)
DIRECTORS’ REPORT (continued)
Remuneration Report (audited) (continued)
- 8 -
- 9 -
Aspire Mining Limited
Aspire Mining Limited
Remuneration committee
The Remuneration Committee of the Board of Directors is responsible for determining and reviewing
compensation arrangements for the Director and the senior management team. A Remuneration Committee
was reformed in September 2018 and its current members are Messrs David Paull and Neil Lithgow and Ms
Hannah Badenach.
The Remuneration Committee assesses the appropriateness of the nature and amount of remuneration of
Directors and senior executives on a periodic basis by reference to relevant employment market conditions
with an overall objective of ensuring maximum stakeholder benefit from the retention of a high quality Board
and executive team.
Remuneration structure
In accordance with best practice Corporate Governance, the structure of Non-Executive Directors and
executive remuneration is separate and distinct.
Non-Executive Director Remuneration
The Board seeks to set aggregate remuneration at a level that provides the Group with the ability to attract
and retain Directors of the highest calibre, whilst incurring a cost that is acceptable to shareholders. The ASX
Listing Rules specify that the aggregate remuneration of Non-Executive Directors shall be determined from
time to time by a general meeting. The latest determination was at the General Meeting held on 19 August
2011 when shareholders approved an aggregate remuneration for Non-Executive Directors of up to $600,000
per year.
If and when applicable, the Board may consider advice from external consultants as well as the fees paid to
Non-Executive Directors of comparable companies when undertaking the annual remuneration review
process.
Each Director is entitled to receive a fee for being a Director of the Company. The remuneration to a Non-
Executive Director has been set at $60,000 per annum. This level of remuneration was reviewed and agreed
by the Board following recommendations from the Remuneration Committee.
The remuneration of Non-Executive Directors for the year ended 30 June 2020 is detailed in the Remuneration
of Key Management Personnel section of this report in Table 1.
Following shareholder approvals, performance rights have been issued to Non-Executive Directors or their
nominees.
Following the 2017 Annual General Meeting, 101,800,000 performance rights were issued to the Non-
Executive Directors to vest in six tranches on achievement of milestones based on share price performance
and development of the Group’s assets. The performance rights were valued at the share price at the grant
date of 1.2 cents per share. On 13 July 2018, 16,966,667 ordinary shares were issued to Non-Executive
Directors on exercise of performance rights vested on achievement of a share price milestone.
At the Company’s Annual General Meeting held on 29 November 2019, shareholders approved a 1 for 10
securities consolidation. The consolidation was completed on 5 December 2019. Post-consolidation, there
were 8,483,333 performance rights on issue to Non-Executive Directors, of which 7,396,668 lapsed without
vesting during the year.
The remaining 1,086,666 performance rights on issue to the Non-Executive Directors will vest if the 30-day
VWAP of the Company’s Shares as traded on ASX is equal to or greater than A$0.40 by 30 June 2021.
Senior manager and executive Director Remuneration
Remuneration consists of fixed remuneration and performance rights (as determined from time to time).
Fixed Remuneration
Fixed remuneration is reviewed periodically by the Remuneration Committee or the Board. The process
consists of a review of relevant comparative remuneration in the market and internally and where appropriate,
external advice on policies and practices. The Committee and the Board has access to external, independent
advice where necessary.
Fixed remuneration is paid in the form of cash payments. The fixed remuneration component of the Group and
the Company executive is detailed in Table 1. During the period, Messrs David Paull and Gan-Ochir
Zunduisuren stepped down from executive positions in the Company.
Post the 1 for 10 securities consolidation completed on 5 December 2019 there were 4,533,224 performance
rights on issue to Mr David Paull (Executive Director at the time), of which 3,666,668 subsequently expired
without vesting, leaving 916,666 on issue at balance date.
Employment Contracts
The Company had a Consultancy Agreement with Kingsland Corporate Pty Ltd (formerly 2R’s Pty Ltd), a
company associated with Mr David Paull (Agreement), from 1 July 2010. Under the Agreement, as varied, Mr
Paull was engaged by the Company to provide services to the Group in the capacity of Managing Director and
Executive Chairman. The Consultancy Agreement continued until terminated when Mr Paull transitioned to
Non-Executive Chairman in March 2020 following the December 2019 Placement by Mr Tserenpuntsag
Tserendamba and the promotion of Mr Achit-Erdene Darambazar to Managing Director. The Kingsland
Corporate Pty Ltd Services Agreement contained standard termination provisions under which the Group
made a payment to Kingsland Corporate Pty Ltd in lieu of termination of the Consultancy Agreement with
Kingsland Corporate Pty Ltd.
Kingsland Corporate Pty Ltd is now remunerated at A$70,000 per annum for providing the services of Mr David
Paull as Non-Executive Chairman. Any additional services are recoverable at a commercial hourly rate.
Mr Achit-Erdene Darambazar is engaged as the Managing Director pursuant to an Executive Services
Agreement (AD ESA) with the Company that sets out his duties, responsibilities and obligations. The AD ESA
has a 2 year term from 2 December 2019, unless extended for a further two years by notice by the Company
or one year by notice by the executive; or terminated by either party on 3 months-notice or other causes
(breach of duty, incapacity and insolvency).
The initial annual remuneration is US$180,000 per annum with an annual review by the Company for any
annual increase or performance-based bonus. Mr Achit-Erdene Darambazar is entitled to US$120,000 if and
when the Company secures loan facilities to fund production commencement by December 2021 and 3 million
performance rights to be issued within the term of engagement (subject to shareholder approval).
Mr Neil Lithgow, Ms Hannah Badenach and Mr Boldbaatar Bat-Amgalan have non-executive director
engagement letters that set out their duties and responsibilities and the causes for termination (breach of duty,
incapacity and insolvency) or resignation of their appointments. The current remuneration to non-executive
directors is A$60,000 per annum. Messrs Lithgow and Bat-Amalgan receive that remuneration. Ms Hannah
Badenach does not receive any remuneration as it is against the policy of her employer and substantial
shareholder of the Company, Noble Resources International Pte Ltd.
Mr Boldbaatar Bat-Amgalan had an Executive Services Agreement from 1 July 2018 to 15 December 2019
within which he was engaged as an Executive Director. During this term Mr Bat-Amgalan was initially
remunerated at US$90,000 per annum. However, following a Remuneration Committee Board remuneration
review and recommendation, Mr Boldbaatar Bat-Amgalan was remunerated at US$135,000 per annum until
he voluntarily requested his role reduce to a non-executive role from 15 December 2019. From 15 December
2019 he is remunerated at A$60,000 per annum.
- 10 -
- 11 -
Aspire Mining Limited
Aspire Mining Limited
DIRECTORS’ REPORT (continued)
Remuneration Report (audited) (continued)
Employment Contracts (continued)
Mr Samuel Bowles is engaged as the Chief Operating Officer pursuant to an Executive Services Agreement
(SB ESA) with the Company and an employer Company subsidiary that sets out his duties, responsibilities
and obligations. The SB ESA has a 2 year term commencing on 16 March 2020, unless extended for a further
two years by notice by the Company or one year by notice by the executive; or terminated by either party on
3 months-notice or other causes (breach of duty, incapacity and insolvency.
The initial annual remuneration of Mr Bowles is US$300,000 per annum with an annual review by the Company
for any annual increase or performance-based bonus. Mr Bowles is entitled to 1.6 million performance rights
to be issued within the term of engagement (subject to Board approval).
The totals of remuneration paid to key management personnel of the company during the year are as follows
and detailed in Table 1:
Short-term employee benefits
Post-employment benefits
Share-based payments
$
1,074,555
5,205
160,422
1,240,182
Share based payments is the gross accounting value of performance rights brought to account in accordance
with accounting standards.
DIRECTORS’ REPORT (continued)
Remuneration Report (audited) (continued)
Remuneration of Key Management Personnel
Table 1: Key management personnel remuneration
Year ended 30 June 2020
Short term
employee
benefits
Post-
employment
benefits
Other
Salary &
fees
$
Mr Achit-Erdene Darambazar 169,581
379,792
Mr David Paull1
117,197
Mr Boldbaatar Bat-Amgalan
54,795
Mr Neil Lithgow
-
Ms Hannah Badenach
25,000
Mr Alexander Passmore2
213,802
Mr Gan-Ochir Zunduisuren
114,388
Mr Samuel Bowles
Total
1,074,555
Superannuation
$
-
-
-
5,205
-
-
-
-
5,205
Share
based
payments
- options
$
-
-
-
-
-
-
-
-
-
Performance
rights
$
-
73,405
-
58,056
28,961
-
-
-
160,422
Total
$
169,581
453,197
117,197
118,056
28,961
25,000
213,802
114,388
1,240,182
Performance
Related
%
-
16
-
49
100
-
-
-
13
The shares, options and performance rights held by key management personnel in the year ended 30 June
2020 are detailed in Tables 2 to 4.
Year ended 30 June 2019
Options
During the year ended 30 June 2020, all options that were part of Key Management Personnel remuneration
were consolidated on 5 December 2020, on a 1:10 basis. The options expired without being exercised on the
11 December 2019.
Performance rights
During the year ended 30 June 2020, all performance rights that were part of Key Management Personnel
remuneration were consolidated on 5 December 2020 on a 1:10 basis. Of the post-consolidation 13,066,668
performance rights, 8,013,336 performance rights expired without vesting on the 30 June 2020 and 3,050,000
performance rights were forfeited and cancelled on the resignation of a Director.
The remaining 1,086,666 performance rights will vest if the 30-day VWAP of the Company’s Shares as traded
on ASX is equal to or greater than A$0.40 by 30 June 2021.
The objective of the performance rights is to provide the Company with a remuneration mechanism to motivate
and reward the performance of directors, employees and qualifying contractors in achieving specified
performance milestones within a specified performance period.
Short term
employee
benefits
Post-
employment
benefits
Other
Salary &
fees
Performance
rights
Performance
related
Total
Superannuation
%
$
-
-
20
-
-
-
66
2,603
100
-
-
-
21
-
22
2,603
1 Paid or issued to Kingsland Corporate Pty Ltd (formerly 2R’s Pty Ltd), a company associated with Mr David
Paull.
Mr Achit-Erdene Darambazar
Mr David Paull1
Mr Boldbaatar Bat-Amgalan
Mr Neil Lithgow
Ms Hannah Badenach
Mr Alexander Passmore2
Mr Gan-Ochir Zunduisuren
Total
$
-
73,204 368,704
- 102,637
87,898
28,882
- 114,000
48,714 226,704
208,698 928,825
$
-
295,500
102,637
27,397
-
42,000
177,990
645,524
57,898
28,882
$
-
Share
based
payments
- options
$
-
-
-
-
-
72,000
-
72,000
2 Paid to Horizon Advisors Pty Ltd, a company associated with Mr Alexander Passmore.
- 12 -
- 13 -
Aspire Mining Limited
Aspire Mining Limited
DIRECTORS’ REPORT (continued)
Remuneration Report (audited) (continued)
Key Management Personnel Equity Holdings
Table 2: Fully Paid Ordinary Shares
Balance at
beginning of
year/on
appointment
Share
consolidation
1 for 10
Purchased
On exercise
of options or
performance
rights
Balance on
retirement
Balance at
end of year
2020
Mr Achit-Erdene
Darambazar
Mr David Paull1
Mr Boldbaatar Bat-Amgalan
Mr Neil Lithgow
Ms Hannah Badenach
Mr Alexander Passmore
Mr Gan-Ochir Zunduisuren
Mr Samuel Bowles
Total
-
26,052,791
-
237,278,501
13,890,476
-
47,392,203
-
324,613,971
-
(23,447,511)
-
(213,550,650)
(12,501,428)
-
(42,652,983)
-
(292,152,572)
-
100,000
-
-
-
-
-
-
100,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(4,739,220)
-
(4,739,220)
-
2,705,280
-
23,727,851
1,389,048
-
-
-
27,822,179
2019
Mr Achit-Erdene
Darambazar
Mr David Paull1
Mr Boldbaatar Bat-Amgalan
Mr Neil Lithgow
Ms Hannah Badenach
Mr Alexander Passmore
Mr Gan-Ochir Zunduisuren
Total
-
16,486,124
-
220,028,501
9,083,333
-
41,292,203
286,890,161
-
-
-
-
-
-
-
-
-
-
-
-
1,190,476
-
-
1,190,476
-
9,566,667
-
17,250,000
3,616,667
-
6,100,000
36,533,334
-
-
-
-
-
-
-
-
-
26,052,791
-
237,278,501
13,890,476
-
47,392,203
324,613,971
1 In 2019 and 2020 David Paull was a Director of Red Island Resources Limited, a public unlisted company
which is the beneficial owner of 8,350,000 ordinary shares pre-securities consolidation (2019: 8,350,000
ordinary shares). However, from 2 August 2019 he no longer had a notifiable interest.
DIRECTORS’ REPORT (continued)
Remuneration Report (audited) (continued)
Key Management Personnel Equity Holdings
Table 3 - Performance rights exercisable at no consideration on achievement of tenure or other performance
milestones
Balance at
beginning of
year/on
appointment
Share
consolidation
1 for 10
-
45,833,333
-
36,250,000
(41,249,999)
(32,625,000)
18,083,333
(16,274,999)
-
-
30,500,000
-
130,666,666
(27,450,000)
-
(117,599,998)
-
55,000,000
-
43,500,000
21,700,000
-
36,600,000
156,800,000
-
-
-
-
-
-
-
-
2020
Mr Achit-Erdene
Darambazar
Mr David Paull
Mr Boldbaatar
Bat-Amgalan
Mr Neil Lithgow
Ms Hannah
Badenach
Mr Alexander
Passmore
Mr Gan-Ochir
Zunduisuren
Mr Samuel Bowles
Total
2019
Mr Achit-Erdene
Darambazar
Mr David Paull
Mr Boldbaatar
Bat-Amgalan
Mr Neil Lithgow
Ms Hannah
Badenach
Mr Alexander
Passmore
Mr Gan-Ochir
Zunduisuren
Total
Granted
Exercised
Expired
Forfeited on
retirement
Balance at
end of
year
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(3,666,668)
-
(2,900,000)
(1,446,668)
-
-
-
-
-
-
-
-
-
(3,050,000)
-
-
916,666
-
725,000
361,666
-
-
-
(8,013,336)
(3,050,000)
2,003,332
-
(9,166,667)
-
(7,250,000)
(3,616,667)
-
(6,100,000)
(26,133,334)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
45,833,333
-
36,250,000
18,083,333
-
30,500,000
130,666,666
Table 4 – Options exercisable at 18 cents on or before 11 December 2019
Balance at
beginning of
year/on
appointment
Share
Consolidation
1 for 10
-
1,145,833
-
6,354,167
2,083,334
12,000,000
-
-
-
(1,031,249)
-
(5,718,750)
(1,875,000)
(10,800,000)
-
-
2020
Mr Achit-Erdene Darambazar
Mr David Paull
Mr Boldbaatar Bat-Amgalan
Mr Neil Lithgow
Ms Hannah Badenach
Mr Alex Passmore
Mr Gan-Ochir Zunduisuren
Mr Samuel Bowles
Total
21,583,334
(19,424,999)
Issued as
remuneration Exercised Expired
Balance on
retirement
Balance at
end of year
-
-
-
-
-
-
-
-
-
-
-
- (114,584)
-
-
- (635,417)
(208,334)
-
-
-
-
-
-
-
-
-
-
-
(1,200,000)
-
-
- (958,335)
(1,200,000)
-
-
-
-
-
-
-
-
-
- 14 -
Aspire Mining Limited
DIRECTORS’ REPORT (continued)
Remuneration Report (audited) (continued)
Table 4 – Options exercisable at 18 cents on or before 11 December 2019 (continued)
Balance at
beginning of
year
Share
Consolidation
1 for 10
Issued as
remuneration Exercised Expired
Balance on
appt/
(retirement)
Balance at
end of year
2019
Mr Achit-Erdene Darambazar
Mr David Paull
Mr Boldbaatar Bat-Amgalan
Mr Neil Lithgow
Ms Hannah Badenach
Mr Alex Passmore
Mr Gan-Ochir Zunduisuren
1,145,833
6,354,167
2,083,334
-
-
-
-
Total
9,583,334
-
-
-
-
-
-
-
-
-
-
-
-
-
12,000,000
-
12,000,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1,145,833
-
6,354,167
2,083,334
12,000,000
-
21,583,334
Related Party Transactions
MICC LLC, a Company related to Executive Director, Mr Achit-Erdene Darambazar, was paid financial
advisory fees of A$55,000 and an equity financing fee of A$418,923 (US$284,750).
As at 30 June 2020, there were no unpaid Directors’ fees payable (2019: $111,486).
End of Remuneration Report
Directors’ Meetings
The number of meetings of Directors held during the year and those attended by each Director were as
follows:
Table 5 – Attendance at Director Meetings
Director
Mr Achit-Erdene Darambazar
Mr David Paull
Mr Boldbaatar Bat-Amgalan
Mr Neil Lithgow
Ms Hannah Badenach
Mr Alexander Passmore
Mr Gan-Ochir Zunduisuren
Director Meetings
Attended
Eligible to Attend
9
11
11
11
8
6
7
11
11
11
11
11
7
7
Proceedings on behalf of the Company
No person has applied to the court under Section 237 of the Corporations Act 2001 for leave to bring
proceedings on behalf of the Company, or to 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 part of those proceedings. No
proceedings have been brought or intervened in on behalf of the Company with leave of the court under
Section 237.
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE
INCOME FOR THE YEAR ENDED 30 JUNE 2020
- 17 -
Aspire Mining Limited
Other income
Employee benefits expense
Exploration and evaluation expenditure impaired
Contract mining
Foreign exchange (loss)/gain
Interest expense
Share based payments
Other expenses
Loss before income tax expense
Income tax expense
Net loss for the year
Other comprehensive income
Items that may be reclassified to profit or loss
Exchange differences on translation of foreign
operations
Other comprehensive loss for the year net of tax
Total comprehensive loss
Loss attributable to:
Owners of the parent
Non-controlling interests
Total comprehensive loss attributable to:
Owners of the parent
Non-controlling interests
Note
2(a)
10
2020
$
425,330
(1,035,322)
(1,233,218)
-
(84,124)
(13,759)
(169,480)
2(b)
(3,366,119)
3
(5,476,692)
(11,508)
(5,488,200)
2019
$
325,741
(1,343,522)
(7,924)
(1,053,330)
225,738
(164,841)
(344,088)
(3,818,472)
(6,180,698)
(19,609)
(6,200,307)
(878,620)
(977,576)
(878,620)
(6,366,820)
(977,576)
(7,177,883)
15
(5,440,715)
(47,485)
(5,488,200)
(6,299,960)
15
(66,860)
(6,366,820)
(6,042,258)
(158,049)
(6,200,307)
(6,933,549)
(244,334)
(7,177,883)
Basic loss per share (cents per share)
4
(1.26)
(2.01)
The accompanying notes form part of these financial statements.
- 16 - AUDITOR’S INDEPENDENCE DECLARATION As lead auditor for the audit of the consolidated financial report of Aspire Mining Limited for the year ended 30 June 2020, I declare that to the best of my knowledge and belief, there have been no contraventions of: a) the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and b) any applicable code of professional conduct in relation to the audit. Perth, Western Australia 29 September 2020 B G McVeigh Partner
- 18 -
Aspire Mining Limited
d
e
t
i
m
L
i
i
i
g
n
n
M
e
r
i
p
s
A
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2020
Current Assets
Cash and cash equivalents
Trade and other receivables
Total Current Assets
Non-Current Assets
Deferred exploration and evaluation expenditure
Property plant and equipment
Intangible assets
Total Non-Current Assets
Total Assets
Current Liabilities
Trade and other payables
Financial liabilities
Total Current Liabilities
Non-Current Liabilities
Financial liabilities
Total Non-Current Liabilities
Total Liabilities
Net Assets
Equity
Issued capital
Reserves
Accumulated losses
Note
8
9
10
12
13
11
14
14
2020
$
2019
$
40,712,949
11,136,142
802,360
504,291
41,515,309
11,640,433
36,470,102
37,461,876
304,309
171,113
477,056
112,618
36,945,524
38,051,550
78,460,833
49,691,983
162,116
11,588
173,704
58,904
58,904
309,632
12,068
321,700
73,411
73,411
232,608
395,111
78,228,225
49,296,872
6
7
7
150,026,408
114,897,715
(7,017,569)
(5,191,712)
(64,267,695)
(59,963,072)
-
9
1
-
Equity attributable to owners of the parent
78,741,144
49,742,931
Non-controlling interests
Total Equity
15
(512,919)
(446,059)
78,228,225
49,296,872
The accompanying notes form part of these financial statements.
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- 20 -
- 21 -
Aspire Mining Limited
Aspire Mining Limited
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2020
Cash flows from operating activities
Interest received
Payments to suppliers and employees
Income tax paid
Interest and borrowing costs paid
Note
2020
$
2019
$
426,889
302,288
(4,077,285)
(6,178,022)
(11,508)
(13,759)
(19,609)
(186,253)
Net cash used in operating activities
8
(3,675,663)
(6,081,596)
Cash flows from investing activities
Payments for exploration and evaluation expenditure
(1,409,894)
(1,900,672)
Purchase of non-current assets
Receipts from sale of non-current assets
Net cash used in investing activities
Cash flows from financing activities
Proceeds from issue of securities
Payments for capital raising costs
Repayment of borrowings
(217,313)
(391,772)
19,089
27,171
(1,608,118)
(2,265,273)
36,284,541
12,679,330
(1,155,849)
14
(14,987)
(684,218)
(13,316)
Net cash provided by financing activities
35,113,705
11,981,796
Net increase in cash and cash equivalents
Cash and cash equivalents at the beginning of the year
Effect of foreign exchange rate fluctuations on cash held
29,829,924
11,136,142
(253,117)
3,634,927
7,488,401
12,814
Cash and cash equivalents at the end of the year
8
40,712,949
11,136,142
The accompanying notes from part of these financial statements.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES
(a)
(b)
(c)
Basis of Preparation
The financial report is a general purpose financial report, which has been prepared in accordance with
the requirements of the Corporations Act 2001, Australian Accounting Standards and Interpretations
and complies with other requirements of the law.
The financial report has also been prepared on a historical cost basis. Cost is based on the fair values
of the consideration given in exchange for assets.
The financial report is presented in Australian dollars.
The Company is a listed public Company, incorporated in Australia and operating in Mongolia. The
principal activity of the Group during the year was the progression for the approvals, completion of
studies, and funding towards the development of the Ovoot Early Development Project (OEDP).
Going concern
The 30 June 2020 financial report has been prepared on the going concern basis that contemplates the
continuity of normal business activities and the realisation of assets and discharge of its liabilities as
and when they fall due, in the ordinary course of business.
Adoption of new and revised standards
Standards and Interpretations applicable 30 June 2020
In the year ended 30 June 2020, the Directors have reviewed all of the new and revised Standards and
Interpretations issued by the AASB that are relevant to the Company and effective for the current annual
reporting period. As a result of this review, the Directors have determined that there is no material impact
of the new and revised Standards and Interpretations on the Group and apart from adopting AASB16,
therefore, no material change is necessary to Group accounting policies.
Standards and interpretations in issue not yet adopted
The Directors have also reviewed all Standards and Interpretations in issue not yet adopted for the
period 30 June 2020. As a result of this review the Directors have determined that there is no material
impact of the Standards and Interpretations in issue no yet adopted on the Company.
Change in Accounting Policy
AASB 16 Leases supersedes AASB 117 Leases. The Group has adopted AASB 16 from 1 July 2019
which has resulted in changes in the classification, measurement and recognition of leases. The
changes result in almost all leases where the Group is the lessee being recognised on the Statement
of Financial Position and removes the former distinction between ‘operating’ and ‘finance’ leases. The
new standard requires recognition of a right-of-use asses (the leased item) and a financial liability (to
pay rentals). The exceptions are short-term leases and leases of low value assets.
The Group has adopted AASB 16 using the modified retrospective approach under which the
reclassifications of the adjustments arising from the new leasing rules are recognised in the opening
Condensed Statement of Financial Position on 1 July 2019. Under this approach, there is no initial
impact on accumulated losses, and comparatives have not been restated.
The Group leases various premises, plant and equipment. Prior to 1 July 2019, leases were classified
as operating leases. Payments made under operating leases were charged to profit and loss on a
straight-line basis over the period of the lease.
From 1 July 2019, where the Company is the lessee, the Group recognises a right-of-use asset and a
corresponding liability at the date which the lease asset is available for use by the Group (i.e.
commencement date). Each lease payment is allocated between the liability and the finance cost.
- 22 -
- 23 -
Aspire Mining Limited
Aspire Mining Limited
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)
(c)
Adoption of new and revised standards (continued)
The finance cost is charged to profit or loss over the lease period so as to produce a consistent period
rate of interest on the remaining balance of the liability for each period.
The lease liability is initially measured at the present value of the lease payments that are not paid at
commencement date, discounted using the rate implied in the lease. If this rate is not readily
determinable, the Group uses its incremental borrowing rate.
(d)
Statement of Compliance
Lease payments included in the initial measurement if the lease liability consist of:
• Fixed lease payments less any lease incentives receivable;
• Variable lease payments that depend on an index or rate, initially measured using the index or
(e)
rate at commencement date;
• Any amounts expected to be payable by the Group under residual value guarantees;
• The exercise price of purchase options, if the Group is reasonably certain to exercise the
options; and
• Termination penalties of the lease term reflects the exercise of an option to terminate the lease.
Extension options are included in a number of property leases across the Group. In determining the
lease term, management considers all facts and circumstances that create an economic incentive to
exercise an extension option. Extension options are only included in the lease term if, at commencement
date, it is reasonably certain that the options will be exercised.
Subsequent to initial recognition, the lease liability is measured by increasing the carrying amount to
reflect interest on the lease liability (using the effective interest method) and by reducing the carrying
amount to reflect the lease payments made. The lease liability is remeasured (with a corresponding
adjustment to the right-of-use asset) whenever there is a change in the lease term (including
assessments relating to extension and termination options), lease payments due to changes in an index
or rate, or expected payments under guaranteed residual values.
Right-of-use assets comprise the initial measurement of the corresponding lease liability, lease
payments made at or before commencement date, less any lease incentives received and any initial
direct costs. These right-of-use assets are subsequently measured at cost less accumulated
depreciation and impairment losses.
Where the terms of lease require the Group to restore the underlying asset, or the Group has an
obligation to dismantle and remove a leased asset, the provision is recognised and measured in
accordance with AASB 137. To the extent that the costs relate to a right-of-use asset, the costs are
included in the related right-of-use asset.
Right-of-use assets are depreciated on a straight-line basis over the term of the lease (or the useful life
of the leased asset if this is shorter). Depreciation starts on commencement date of the lease. Where
leases have a term of less than 12 months or relate to low value assets, the group has applied the
optional exemptions to not capitalise these leases and instead account for the lease expense on a
straight-line basis over the lease term.
The leases of the Group all have terms less than 12 months, therefore are exempt from AASB16 and
there is no material impact from adopting this standard.
The financial report was authorised for issue on 29 September 2020.
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).
Basis of Consolidation
The consolidated financial statements comprise the financial statements of Aspire Mining Limited
(“Company” or “Parent”) and its subsidiaries as at 30 June each year (the “Group”). Control is achieved
where the Company has the power to govern the financial and operating policies of an entity so as to
obtain benefits from its activities.
The financial statements of the subsidiaries are prepared for the same reporting period as the parent
company, using consistent accounting policies.
In preparing the consolidated financial statements, all intercompany balances and transactions, income
and expenses and profit and losses resulting from intra-group transactions have been eliminated in full.
Subsidiaries are fully consolidated from the date on which control is transferred to the Group and cease
to be consolidated from the date on which control is transferred out of the Group. Control exists where
the Company has the power to govern the financial and operating policies of an entity so as to obtain
benefits from its activities. The existence and effect of potential voting rights that are currently
exercisable or convertible are considered when assessing when the Group controls another entity.
Business combinations have been accounted for using the acquisition method of accounting (refer Note
1(o)).
Unrealised gains or transactions between the Group and its associates are eliminated to the extent of
the Group’s interests in the associates. Unrealised losses are also eliminated unless the transaction
provides evidence of an impairment of the asset transferred. Accounting policies of associates have
been changed where necessary to ensure consistency with the policies adopted by the Group.
When the Group ceases to have control, joint control or significant influence, any retained interest in the
entity is remeasured to its fair value with the change in carrying amount recognised in profit or loss. The
fair value is the initial carrying amount for the purposes of subsequently accounting for the retained
interest as an associate, joint controlled entity or financial asset. In addition, any amounts previously
recognised in other comprehensive income in respect of that entity are accounted for as if the Group
had directly disposed of the related assets or liabilities. This may mean that amounts previously
recognised in other comprehensive income are reclassified to profit or loss.
(f)
Critical accounting judgements and key sources of estimation uncertainty
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 period in which the
estimate is revised if it affects only that period or in the period of the revision and future periods if the
revision affects both current and future periods.
Share-based payment transactions:
The Group measures the cost of equity-settled transactions with employees by reference to the fair value
of the equity instruments at the date at which they are granted. The fair value is determined by using a
Black and Scholes model for unlisted options and the market traded price for listed options and
performance rights that are bought to account, having regard to the terms and conditions upon which
the instruments are granted.
- 24 -
- 25 -
Aspire Mining Limited
Aspire Mining Limited
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)
(f)
Critical accounting judgements and key sources of estimation uncertainty (continued)
(j)
Trade and other receivables (continued)
Exploration and evaluation costs carried forward
The Group’s accounting policy for exploration and evaluation expenditure is set out at Note 1(w). The
application of this policy necessarily requires management to make certain estimates and assumptions
as to future events and circumstances, in particular, the assessment of the expectation that exploration
costs incurred can be recouped through the successful development of the area (unless activities in the
area have not yet reached a stage that permits reasonable assessment of the existence of economically
recoverable reserves). The estimates and assumptions may change as new information becomes
available. If, after having capitalised expenditure under the policy, it is concluded that the expenditure
incurred is unlikely to be recovered by future exploitation or sale, then the relevant capitalised amount
will be impaired or written off through the statement of profit or loss and other comprehensive income.
The Group writes off a trade receivable when there is information indicating that the debtor is in severe
financial difficulty and there is no realistic prospect of recovery; for example, when the debtor has been
placed under liquidation or has entered into bankruptcy proceedings, or when the trade receivables are
over two years past due, whichever occurs earlier. The amount of the impairment loss is recognised in
the statement of profit or loss and other comprehensive income within other expenses. When a trade
receivable for which an impairment allowance had been recognised becomes uncollectible in a
subsequent period, it is written off against the allowance account. Subsequent recoveries of amounts
previously written off are credited against other expenses in the statement of profit or loss and other
comprehensive income.
(g)
Segment Reporting
(k)
Derecognition of financial assets and financial liabilities
Operating segments are reported in a manner consistent with the internal reporting provided to the chief
operating decision maker. The chief operating decision maker, who is responsible for allocating
resources and assessing performance of the operating segments, has been identified as the Board of
Directors of Aspire Mining Limited.
(h)
Revenue Recognition
Revenue is recognised to the extent that control of the goods or service has passed and it is probable
that the economic benefits will flow to the Group and the revenue can be reliably measured. The
following specific recognition criteria must also be met before revenue is recognised:
Interest income
Interest revenue is recognised on a time proportionate basis that takes into account the effective yield
on the financial asset.
(i)
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.
(j)
Trade and other receivables
Trade receivables are measured on initial recognition at fair value. Trade receivables are generally due
for settlement within periods ranging from 15 days to 30 days. The Group measures the loss allowance
for trade and other receivables at an amount equal to lifetime expected credit loss. The expected credit
losses on trade and other receivables are estimated with reference to past default experience of the
debtor and an analysis of the debtor’s current financial position, adjusted for factors that are specific to
the debtor, general economic conditions of the industry in which the debtor operates and an assessment
of both the current and the forecast direction of conditions at the reporting date.
(i) Financial assets
A financial asset (or, where applicable, a part of a financial asset or part of a Group of similar financial
assets) is derecognised when:
•
•
•
the rights to receive cash flows from the asset have expired;
the Group retains the right to receive cash flows from the asset, but has assumed an obligation
to pay them in full without material delay to a third party under a ‘pass-through’ arrangement;
or
the Group has transferred its rights to receive cash flows from the asset and either:
(a)
(b)
has transferred substantially all the risks and rewards of the asset, or
has neither transferred nor retained substantially all the risks and rewards of the asset
but has transferred control of the asset.
When the Group has transferred its rights to receive cash flows from an asset and has neither
transferred nor retained substantially all the risks and rewards of the asset nor transferred control of the
asset, the asset is recognised to the extent of the Group’s continuing involvement in the asset.
Continuing involvement that takes the form of a guarantee over the transferred asset is measured at
the lower of the original carrying amount of the asset and the maximum amount of consideration
received that the Group could be required to repay.
When continuing involvement takes the form of a written and/or purchased option (including a cash-
settled option or similar provision) on the transferred asset, the extent of the Group’s continuing
involvement is the amount of the transferred asset that the Group may repurchase, except that in the
case of a written put option (including a cash-settled option or similar provision) on an asset measured
at fair value, the extent of the Group’s continuing involvement is limited to the lower of the fair value of
the transferred asset and the option exercise price.
(ii) Financial liabilities
A financial liability is derecognised when the obligation under the liability is discharged or cancelled or
expires. When an existing financial liability is replaced by another from the same lender on substantially
different terms, or the terms of an existing liability are substantially modified, such an exchange or
modification is treated as a derecognition of the original liability and the recognition of a new liability,
and the difference in the respective carrying amounts is recognised in profit or loss.
- 26 -
- 27 -
Aspire Mining Limited
Aspire Mining Limited
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)
(l)
Foreign currency translation
(m)
Income tax (continued)
The functional and presentation currency of Aspire Mining Limited is Australian dollars. Each entity in
the Group determines its own functional currency and items included in the financial statements of each
entity are measured using that functional currency.
Transactions in foreign currencies are initially recorded in the functional currency by applying the
exchange rates ruling at the date of the transaction. Monetary assets and liabilities denominated in
foreign currencies are retranslated at the rate of exchange ruling at the balance date.
All exchange differences in the consolidated financial report are taken to profit or loss with the exception
of differences on foreign currency borrowings that provide a hedge against a net investment in a foreign
entity. These are taken directly to equity until the disposal of the net investment, at which time they are
recognised in profit or loss.
Tax charges and credits attributable to exchange differences on those borrowings are also recognised
in equity.
Non-monetary items that are measured in terms of historical cost in a foreign currency are translated
using the exchange rate as at the date of the initial transaction.
Non-monetary items measured at fair value in a foreign currency are translated using the exchange
rates at the date when the fair value was determined.
The functional currency of the Mongolian incorporated subsidiaries, Khurgatai Khairkhan LLC, Northern
Railways LLC, Ovoot Coal Mining LLC, Chilchig Gol LLC, Ekhgoviin Chuluu LLC and Black Rock LLC
is Mongolian Tugriks (MNT), Ovoot Coking Coal Pte Ltd, Northern Railways Pte Ltd Northern Railways
Holdings LLC and Northern Mongolian Railways Limited is USD.
As at the balance date the assets and liabilities of the subsidiaries are translated into the presentation
currency of Aspire Mining Limited at the rate of exchange ruling at the balance date and its statement
of profit or loss and other comprehensive income is translated at the average exchange rate for the
year.
The exchange differences arising on the translation are taken directly to the foreign currency translation
reserve in equity.
On disposal of a foreign entity, the deferred cumulative amount recognised in equity relating to that
particular foreign operation is recognised in profit or loss.
(m)
Income tax
Current tax assets and liabilities for the current and prior periods 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
• when 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 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 when 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
utilised.
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 utilised.
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 realised 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.
(n)
Other taxes
Revenues, expenses and assets are recognised net of the amount of GST except:
• when the GST incurred on a purchase of goods and services is not recoverable from the taxation
authority, in which case the GST is recognised as part of the cost of acquisition of the asset or as
part of the expense item as applicable; and
receivables and payables, which are stated with the amount of GST included.
•
The net amount of GST recoverable from, or payable to, the taxation authority is included as part of
receivables or payables in the Statement of Financial Position.
Cash flows are included in the Statement of Cash Flows on a gross basis and the GST component of
cash flows arising from investing and financing activities, which is recoverable from, or payable to, the
taxation authority, are classified as operating cash flows.
Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable
to, the taxation authority.
(o)
Business combinations
The acquisition method of accounting is used to account for all business combinations, including
business combinations involving entities or business under common control, regardless of whether
equity instruments or other assets are acquired. The consideration transferred for the acquisition of a
subsidiary comprises the fair value of the assets transferred, the liabilities incurred and the equity
interests issued by the Group. The consideration transferred also includes the fair value of any
contingent consideration arrangement and the fair value of any pre-existing equity interest in the
subsidiary. Acquisition-related costs are expensed as incurred.
- 28 -
- 29 -
Aspire Mining Limited
Aspire Mining Limited
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)
(o) Business combinations (continued)
(q)
Trade and other payables
Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination
are, with limited exceptions, measured initially at their fair values at the acquisition date. On an
acquisition-by-acquisition basis, the Group recognises any non-controlling interest in the acquiree either
at fair value or at the non-controlling interest’s proportionate share of the acquiree’s net identifiable
assets.
The excess of the consideration transferred, the amount of any non-controlling interest in the acquiree
and the acquisition-date fair value of any previous equity interest in the acquiree over the fair value of
the Group’s share of the net identifiable assets acquired is recorded as goodwill. If those amounts are
less than the fair value of the net identifiable assets of the subsidiary acquired and the measurement of
all amounts has been reviewed, the difference is recognised directly in profit or loss as a bargain
purchase.
Where settlement of any part of cash consideration is deferred, the amounts payable in the future are
discounted to their present value as at the date of exchange. The discount rate used is the entity’s
incremental borrowing rate, being the rate at which a similar borrowing could be obtained from an
independent financier under comparable terms and conditions.
Contingent consideration is classified as either equity or a financial liability. Amounts classified as a
financial liability are subsequently remeasured to fair value with changes in fair value recognised in profit
or loss.
(p)
Impairment of assets
The Group assesses at each reporting 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 Group
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 groups
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.
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 periods to allocate the asset’s revised carrying amount, less any residual value, on a systematic
basis over its remaining useful life.
Trade payables and other payables are carried at amortised costs and represent liabilities for goods
and services provided to the Group 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.
(r)
Property, plant and equipment
Plant and equipment is stated at cost less accumulated depreciation and any accumulated impairment
losses. Depreciation is calculated on a straight-line basis over the three (3) year estimated useful life of
the assets.
The assets' residual values, useful lives and amortisation methods are reviewed, and adjusted if
appropriate, at each financial year end.
(i) Impairment
The carrying values of plant and equipment are reviewed for impairment at each balance date, with
recoverable amount being estimated when events or changes in circumstances indicate that the carrying
value may be impaired.
The recoverable amount of plant and equipment is the higher of fair value less costs to sell and value
in use. 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.
For an asset that does not generate largely independent cash inflows, recoverable amount is determined
for the cash-generating unit to which the asset belongs, unless the asset's value in use can be estimated
to be close to its fair value.
Impairment exists when the carrying value of an asset or cash-generating units exceeds its estimated
recoverable amount. The asset or cash-generating unit is then written down to its recoverable amount.
For plant and equipment, impairment losses are recognised in the income statement in the cost of sales
line item.
(ii) Derecognition and disposal
An item of property, plant and equipment is derecognised upon disposal or when no further future
economic benefits are expected from its use or disposal.
Any gain or loss arising on derecognition of the asset (calculated as the difference between the net
disposal proceeds and the carrying amount of the asset) is included in profit or loss in the year the asset
is derecognised.
(s)
Provisions
Provisions are recognised when the Group 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.
When the Group 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 profit or loss and other
comprehensive Income net of any reimbursement. 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 a borrowing
cost.
- 30 -
- 31 -
Aspire Mining Limited
Aspire Mining Limited
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)
(t)
Share-based payment transactions
(v)
Earnings per share (continued)
The Group provides benefits to employees (including senior executives) of the Group in the form of
share-based payments, whereby employees render services in exchange for shares or rights over
shares (equity-settled transactions). The cost of these equity-settled transactions with employees is
measured by reference to the fair value of the equity instruments at the date at which they are granted.
In valuing equity-settled transactions, account is taken of any performance conditions, and conditions
linked to the price of the shares of Aspire Mining Limited (market conditions) if applicable.
The cumulative expense recognised for equity-settled transactions at each reporting date until vesting
date reflects (i) the extent to which the vesting period has expired, and (ii) the Group’s best estimate of
the number of equity instruments that will ultimately vest. No adjustment is made for the likelihood of
market performance conditions being met as the effect of these conditions is included in the
determination of fair value at grant date. The statement of profit or loss and other comprehensive income
charge or credit for a period represents the movement in cumulative expense recognised as at the
beginning and end of that period.
No expense is recognised for awards that do not ultimately vest, except for awards where vesting is
only conditional upon a market condition.
If 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 modification that increases
the total fair value of the share-based payment arrangement, or is otherwise beneficial to the employee,
as measured at the date of modification.
If an equity-settled award is cancelled, it is treated as if it had vested on the date of cancellation, and
any expense not yet recognised for the award is recognised immediately. However, if a new award is
substituted for the cancelled award and designated as a replacement award on the date that it is
granted, the cancelled and new award are treated as if they were a modification of the original award,
as described in the previous paragraph.
Cash settled transactions:
The Group measures the cost of equity-settled transactions with employees by reference to the fair value
of the equity instruments at the date at which they are granted. The fair value is determined by using a
Black and Scholes model for unlisted options and the market traded price for listed options and
performance rights that are bought to account, having regard to the terms and conditions upon which
the instruments are granted. This fair value is expensed over the period until vesting with recognition of
a corresponding liability. The liability is re-measured to fair value at each balance date up to and including
the settlement date with changes in fair value recognised in profit or loss.
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)
Exploration and evaluation
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)
ii) at least one of the following conditions is also met:
the rights to tenure of the area of interest are current; and
(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 reporting date reached
a stage which permits a reasonable assessment of the existence or otherwise of economically
recoverable reserves, and active and significant operations in, or in relation to, the area of
interest are continuing.
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. 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.
(u)
Issued capital
(x)
Parent entity financial information
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.
(v)
Earnings per share
Basic earnings per share is calculated as net profit or loss attributable to members of the parent,
adjusted to exclude any costs of servicing equity (other than dividends) and preference share dividends,
divided by the weighted average number of ordinary shares, adjusted for any bonus element. Diluted
earnings per share is calculated as net profit or loss attributable to members of the parent, adjusted for:
costs of servicing equity (other than dividends) and preference share 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 period that would
The financial information for the parent entity, Aspire Mining Limited, disclosed in Note 24 has been
prepared on the same basis as the consolidated financial statements, other than investments in
subsidiaries are accounted for at cost.
- 32 -
- 33 -
Aspire Mining Limited
Aspire Mining Limited
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
NOTE 3: INCOME TAX (continued)
The Group also has an unrecorded deferred tax asset of $345,745 (2019: $345,745) in respect to capital
losses arising in Australia.
The recovery of the carried forward tax losses is subject to the applicable Group companies continuing to
satisfy the continuity of ownership test or the similar business test or other tax legislation requirements or
limitations.
NOTE 4: EARNINGS PER SHARE
Basic loss per share:
2020
Cents per share
2019
Cents per share
(1.26)
(2.01)
The earnings and weighted average number of ordinary
shares used in the calculation of basic earnings per share is as
follows:
Earnings used in calculation of basic loss per share:
Loss attributable to owners of the parent
Weighted average number of ordinary shares for the purpose of
basic loss per share
(5,440,715)
(6,042,258)
433,448,136
300,632,131
The 2019 loss per share has been restated for the 1 for 10 securities consolidation completed on 5 December
2019.
As losses have been incurred to date, no dilutive earning loss per share has been disclosed.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
NOTE 2: REVENUES AND EXPENSES
(a) Revenue
Interest income
(b) Other Expenses
Accounting and audit fees
Amortisation and depreciation expense
Community relations
Company secretarial
Consultants
Corporate costs
Directors’ fees
Insurance
Legal fees
Office and administration costs
Share registry and listing expenses
Media, promotion and investor relations
Short term lease rent and outgoings
Travel expenses
Other
NOTE 3: INCOME TAX
Income tax recognised in profit or loss
The prima facie income tax expense on pre-tax accounting loss
from operations reconciles to the income tax expense in the
financial statements as follows:
Accounting loss before tax
Income tax benefit calculated at 30%
Accrued expenses
Other non-deductible expenses
Deductions available over more than one year
Exploration and tenement expenses
Income tax benefit not brought to account
Income tax (benefit)/expense
Made up of:
Income tax expense on Mongolian operations
Income tax expense
2020
$
425,330
425,330
176,770
297,782
139,458
161,453
209,663
289,250
965,372
170,126
62,218
118,255
81,542
168,878
181,377
216,739
127,236
3,366,119
2020
$
(5,476,692)
(1,643,008)
473
392,709
(41,103)
369,966
932,471
11,508
11,508
11,508
2019
$
325,741
325,741
160,780
160,590
340,125
154,321
258,604
557,040
633,677
131,560
364,490
67,202
75,572
252,333
131,939
307,360
222,879
3,818,472
2019
$
(6,180,698)
(1,854,209)
8,175
688,356
(108,876)
2,377
1,283,786
19,609
19,609
19,609
The tax rate used in the above reconciliation is the corporate tax rate of 30% payable by Australian corporate
entities on taxable profits under Australian tax law. There has been no change in this tax rate since the
previous reporting period.
The Group has an unrecorded deferred tax asset of $6,321,138 (2019: $5,705,739) in respect to tax losses
arising in Australia and $207,313 (2019: $1,786,589) in respect to tax losses arising in Mongolia, the tax
benefit of which has not been brought to account and are available subject to confirmation of the continuity of
ownership test or the same business test.
The Group has an unrecorded deferred tax asset of $30,922 (2019: $72,025) relating to share issue and other
costs, and deferred tax liabilities of $1,931,565 (2019: $1,858,080) relating to capitalised exploration and
evaluation expenditure arising in Australia for which an offsetting deferred tax asset has been recognised.
- 34 -
- 35 -
Aspire Mining Limited
Aspire Mining Limited
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
NOTE 5: SEGMENT INFORMATION
NOTE 6: ISSUED CAPITAL
Year ended 30 June 2020
Total segment revenue
Segment net operating loss
after tax
Interest revenue
Depreciation and amortisation
Exploration and evaluation
expenditure incurred
Continuing operations
Mongolia
$
Australia
$
Singapore
$
Total
$
310,247
115,083
-
425,330
(1,870,918)
(3,582,814)
(34,468)
(5,488,200)
310,247
-
115,083
297,782
-
1,233,218
-
-
-
425,330
297,782
1,233,218
Segment assets
36,186,821
42,264,347
9,665
78,460,833
Segment liabilities
Capital expenditure during the
year
(61,637)
(170,971)
-
(1,604,710)
-
-
(232,608)
(1,604,710)
Year ended 30 June 2019
Total segment revenue
Segment net operating loss
after tax
Interest revenue
Depreciation and amortisation
Exploration and evaluation
expenditure incurred
Continuing operations
Mongolia
$
Australia
$
Singapore
$
Total
$
122,047
203,694
-
325,741
(2,763,744)
(3,247,389)
(189,174)
(6,200,307)
122,047
-
-
203,694
160,590
7,924
-
-
-
325,741
160,590
7,924
Segment assets
9,262,900
40,423,217
5,866
49,691,983
Segment liabilities
Capital expenditure during the
year
(291,321)
(103,790)
-
(3,069,560)
-
-
(395,111)
(3,069,560)
Ordinary shares
Issued and fully paid
Less share issue costs
Movements in ordinary shares on issue
At 1 July 2018
Shares issued at 1.25 cents on 17 July 2018 on exercise of vested
performance rights
Shares issued at 2.5 cents on 15 August 2018 on exercise of unlisted
options
Shares issued at 1.8 cents on 24 September 2018 on exercise of listed
options
Shares issued at 2.1 cents on 6 December 2018 pursuant to debt and
interest for equity agreement
Shares issued at 2.1 cents on 6 December 2018 pursuant to placement
with a substantial shareholder
Shares issued at 2.1 cents on 6 December 2018 to subscribers to the
additional placement
Shares issued at 1.8 cents on 19 March 2019 on exercise of listed options
Share issue costs
At 30 June 2019
At 1 July 2019
Shares issued at 1.8 cents on 29 November 2019 on exercise of options
Shares issued at 2.1 cents on 3 December 2019 pursuant to the
Placement with a substantial shareholder
Shares issued at 1.8 cents on 4 December 2019 on exercise of options
Securities consolidation 1 for 10 on 5 December 2019
Shares issued at 18 cents on 11 December 2019 to a substantial
shareholder on exercise of options
Shares issued at 18 cents on 11 December 2019 on exercise of options
Share issue costs
At 30 June 2020
2020
$
2019
$
157,999,366 121,714,824
(7,972,958)
(6,817,109)
150,026,408 114,897,715
No.
2,529,223,526
$
99,087,130
34,216,671
426,767
44,527,250
1,113,181
53,400
961
161,366,954
3,388,706
476,190,476
10,000,000
80,952,381
10,417
-
1,700,000
188
(819,218)
3,326,541,075
114,897,715
3,326,541,075 114,897,715
1,788
99,334
1,595,900,000
214,499
(4,430,478,995)
33,513,900
3,861
-
15,333,012
28,060
-
2,759,942
5,051
(1,155,849)
507,636,985 150,026,408
- 36 -
- 37 -
Aspire Mining Limited
Aspire Mining Limited
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
NOTE 7: ACCUMULATED LOSSES AND RESERVES
NOTE 7: ACCUMULATED LOSSES AND RESERVES (continued)
Accumulated losses
Movements in accumulated losses are as follows:
Balance at beginning of financial year
2020
$
2019
$
(59,963,072)
(53,920,814)
Net loss for the year attributable to owners of the parent
(5,440,715)
(6,042,258)
Transfer on expiry of options/performance rights
Balance at end of financial year
1,136,092
-
(64,267,695)
(59,963,072)
Reserves
Contribution
Reserve
Foreign currency
translation
reserve
Share based
payments reserve
Total
$
$
$
$
Options
The following table illustrates the number (No.) and weighted average exercise prices of and movements in
share options issued during the year:
Outstanding at the beginning of the
year
Granted during the year
Exercised during the year
(pre-consolidation)
2020
No.
2019
No.
2020
Weighted
average
exercise
price
700,722,235
0.018
875,879,502
-
-
12,000,000
2019
Weighted
average
exercise
price
0.019
0.018
(313,833)
0.018
(44,591,067)
0.025
At 30 June 2018
1,805,302
(7,273,575)
1,250,531
(4,217,742)
Share Consolidation (1:10)
(630,367,523)
Currency translation differences
Issue of performance rights
Performance rights vested
Performance rights expired
Issue of options as remuneration
-
-
-
-
-
(891,291)
-
(891,291)
-
-
-
-
273,168
273,168
(426,767)
(426,767)
(1,080)
72,000
(1,080)
72,000
At 30 June 2019
1,805,302
(8,164,866)
1,167,852
(5,191,712)
At 30 June 2019
1,805,302
(8,164,866)
1,167,852
(5,191,712)
Currency translation differences
Options expired
Performance rights expired
Performance rights to account
-
-
-
-
(859,245)
-
(859,245)
-
-
-
(760,877)
(760,877)
(375,215)
(375,215)
169,480
169,480
At 30 June 2020
1,805,302
(9,024,111)
201,240
(7,017,569)
Nature and purpose of reserves
Foreign currency translation reserve
The foreign currency translation reserve is used to record exchange differences arising from the translation of
the financial statements of foreign subsidiaries.
Share based payments reserve
The share based payments reserve is used to record the value of equity instruments issued to Directors,
employees and qualifying contractors as part of their remuneration.
Contribution Reserve
The contribution reserve is used to record the value which arises as a result of transactions with non-controlling
interests that do not result in a loss of control.
Exercised during the year
(post-consolidation)
Expired during the year
Outstanding at the end of the year
Exercisable at the end of the year
(15,361,072)
(54,679,807)
-
-
-
0.18
0.18
-
-
-
-
(142,566,200)
700,722,235
700,722,235
-
-
0.025
0.018
0.018
On 5 December 2019, all options outstanding were consolidated on a 1:10 basis. All remaining options expired
on 11 December 2019 and as such there were no options on issue as at 30 June 2020 (30 June 2019:
700,722,235).
Performance rights
The value of the performance rights is based on the number of performance rights granted multiplied by the
prevailing share price at the date of the grant of the performance rights. The number of performance rights
issued and the prevailing share price are known variables.
The vesting requirements applicable to the issued performance rights are based on achievement of operational
and strategic milestones. The value of the performance rights is taken to the Share Based Payments Reserve
progressively over the period the performance rights are expected to vest. The cumulative expense that will be
recorded will equate to the performance rights that ultimately vest.
The number of performance rights unexercised at 30 June 2020 are:
Outstanding at the beginning of the year
Granted during the year
Share Consolidation 1:10 – 5 December 2019
Vested and shares issued during the year
Forfeited/Expired during the year
Outstanding at the end of the year
2020
No.
161,083,330
-
(137,474,993)
2019
No.
245,300,000
-
-
-
(34,216,671)
(21,313,339)
(49,999,999)
2,294,998
161,083,330
- 38 -
- 39 -
Aspire Mining Limited
Aspire Mining Limited
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
NOTE 7: ACCUMULATED LOSSES AND RESERVES (continued)
Nature and purpose of reserves (continued)
Performance rights (continued)
Following from shareholder approval given at the 2017 Annual General Meeting held on 26 November 2017,
55,000,000 performance rights were issued to the nominee of David Paull, 101,800,000 performance rights
were issued to Non-Executive Directors or their nominees, and 48,500,000 performance rights were issued to
employees and qualified contractors on 8 May 2018. The performance milestones attaching to the performance
rights were strategic. During the 2019 financial year, one of the six tranches vested and 34,216,671 ordinary
shares issued on exercise on 13 July 2018 as the 30 day VWAP of the Company’s Shares as traded on ASX
was equal to or greater than A$0.02 by 30 June 2019. 49,999,999 performance rights were cancelled on
termination of employment. This left an opening balance for the 2020 financial year of 161,083,330 performance
rights outstanding.
At the Company’s Annual General Meeting held on 29 November 2019, shareholders approved a 1 for 10
securities consolidation. The consolidation was completed on 5 December 2019.
During the year:
•
3,055,003 performance rights lapsed and were cancelled as the milestone of 80% or more of the Listed
Options were not exercised on or before 11 December 2019.
• Two tranches (total 6,110,004 performance rights) with production and profitability milestones did not
vest on or before 31 December 2019 and were cancelled.
•
3,055,001 performance rights lapsed and were cancelled as the milestone of a 30 day VWAP of the
Company’s shares as traded on ASX at equal to or greater than A$0.30 by 30 June 2020 did not occur.
•
9,093,331 performance rights were forfeited and cancelled on termination of employment.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
NOTE 8: CASH AND CASH EQUIVALENTS
Cash at bank and on hand
Short term deposits
2020
$
730,004
39,982,945
40,712,949
2019
$
4,546,272
6,589,870
11,136,142
Cash at bank earns interest at floating rates based on daily bank deposit rates.
All cash was available for use and no restrictions were placed on the use of it at any time during the period,
other than a short term deposit of $10,000 (2019: $10,000) is on deposit as cash backed security against a
business use credit card limit and office rental.
Reconciliation of loss for the year to net cash flows from operating activities
Loss for the year
Change in net assets and liabilities:
Change in trade and other receivables
Changes in trade and other payables
Profit on sale of property, plant and equipment
Amortisation and depreciation expense
Share based payments
Interest expense settled by issue of shares
Exploration expenditure impairment
Foreign exchange (gain)/loss
Net cash used in operating activities
2020
$
2019
$
(5,488,200)
(6,200,307)
(289,735)
315,441
2,227
297,782
169,480
-
1,233,218
84,124
(3,675,663)
2020
$
17,035
445,648
23,424
316,253
802,360
358,224
(603,137)
(27,171)
160,590
344,088
103,931
7,924
(225,738)
(6,081,596)
2019
$
41,468
333,235
24,983
104,605
504,291
The remaining 2,294,998 performance rights will vest if the 30-day VWAP of the Company’s Shares as traded
on ASX is equal to or greater than A$0.04 by 30 June 2021.
NOTE 9: CURRENT TRADE AND OTHER RECEIVABLES
The performance rights are valued at the share price on grant date, being 1.2 cents for each of the performance
rights issued to the Directors and 1.4 cents for each of the performance rights issued to the employees and
contractors.
GST recoverable
Prepayments
Interest receivable
Other receivables
- 40 -
- 41 -
Aspire Mining Limited
Aspire Mining Limited
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
NOTE 10: DEFERRED EXPLORATION AND EVALUATION EXPENDITURE
Costs carried forward in respect of:
Exploration and evaluation phase – at cost
Balance at beginning of year
Expenditure incurred, net of cost recoveries
Impairment of exploration and evaluation expenditure
Foreign exchange loss
Total exploration and evaluation expenditure
Total expenditure incurred and carried forward in respect of specific
projects -
Ovoot Coking Coal Project
Nuurstei Coking Coal Project
Total exploration and evaluation expenditure
2020
$
2019
$
37,461,876
35,609,772
1,374,197
(1,233,218)
2,578,993
(7,924)
(1,132,753)
(718,965)
36,470,102
37,461,876
35,433,775
36,235,803
1,036,327
1,226,073
36,470,102
37,461,876
Exploration expenditure incurred on the Ovoot Coking Coal Project and Nuurstei Coking Coal Project mining
licences has been carried forward as that expenditure is expected to be recouped through successful
development and exploration of the areas of interest, or alternatively, by sale. Exploration expenditure incurred
on areas of interest other than mining licences has been impaired or written off as recoupment by development
or sale is not expected. In the period, expenditure incurred on exploration license XV-014510 was written-off
following a post-balance date Company Board decision to relinquish the license based on a technical geological
recommendation.
As Northern Railways LLC does not currently have in place the funding to build and operate the railway, the
Group has impaired the evaluation expenditure incurred.
NOTE 11: TRADE AND OTHER PAYABLES (CURRENT)
Trade payables
Accrued expenses
Employee entitlements
Corporate credit card
Trade payables and accrued expenses are normally settled on 30 day terms.
2020
$
130,592
25,000
5,925
599
2019
$
241,282
45,205
15,425
7,720
162,116
309,632
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
NOTE 12: PROPERTY, PLANT AND EQUIPMENT
Leasehold
Improvements
Plant &
Equipment
$
$
Furniture
&
Fittings
$
Office
Equipment
Motor
Vehicles
Total
$
$
$
134,291
13,199
-
102,880
-
-
53,789
20,061
(7,380)
57,499 128,597
-
29,248
(8,870)
(12,633)
477,056
62,508
(28,883)
(18,549)
(52,678)
(28,668)
(32,159)
(64,415)
(196,469)
(5,044)
123,897
(1,157)
49,045
(1,249)
36,553
(1,421)
40,534
(1,032)
54,280
(9,903)
304,309
1,291,603
(987,294)
304,309
155,686
-
79,402
62,738
16
68,710
21,253
13,051
55,654 154,682
269,408
341,784
(17,280)
(36,915)
(14,551)
(10,502)
(45,986)
(125,234)
(4,115)
(2,345)
(386)
(704)
(1,352)
(8,902)
134,291
102,880
53,789
57,499 128,597
477,056
1,393,115
(916,059)
477,056
Year ended 30 June 2020
Carrying value at 1 July 2019
Additions
Disposals
Depreciation charge for the year
Exchange rate movement
Carrying value at 30 June 2020
30 June 2020
Cost
Accumulated depreciation
Net carrying amount
Year ended 30 June 2019
Carrying value at 1 July 2018
Additions
Depreciation charge for the year
Exchange rate movement
Carrying value at 30 June 2019
30 June 2019
Cost
Accumulated depreciation
Net carrying amount
The carrying value of motor vehicles held under a finance loan agreement at 30 June 2020 is $54,280
(2019: $115,430). The motor vehicle is pledged as security for the finance loan liability.
- 42 -
- 43 -
Aspire Mining Limited
Aspire Mining Limited
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
NOTE 13: INTANGIBLE ASSET
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
Exploration Software
NOTE 15: NON-CONTROLLING INTERESTS AND CONTRIBUTION RESERVE
Carrying value at beginning of year
Additions
Disposals
Amortisation for the year
Exchange rate movement
At end of year
At 30 June
Cost
Accumulated amortisation
Net carrying amount
NOTE 14: FINANCIAL LIABILITIES
Finance loan liability
Current liability
Non-current liability
Balance at beginning of period
Addition in the period
Payments
Balance at end of period
2020
$
112,618
168,005
(16)
(101,313)
(8,181)
171,113
307,782
(136,669)
171,113
2020
$
70,492
70,492
11,588
58,904
70,492
$
85,479
-
(14,987)
70,492
2019
$
-
148,783
-
(35,356)
(809)
112,618
147,976
(35,358)
112,618
2019
$
85,479
85,479
12,068
73,411
85,479
$
-
98,795
(13,316)
85,479
In August 2018, the Company’s Mongolian subsidiary, Khurgatai Khairkhan LLC, entered into a loan agreement
for two motor vehicles for use by the Ulanbaatar office. The loan is for 180million MNT ($98,795) with monthly
principal instalments of 1.875 million MNT per month (approx. $1,040 pm) and interest at 15.6% pa over the 96
month term.
There is a 10% non-controlling interest in the Coalridge Limited group entity that holds the Nuurstei Coking Coal
mining and exploration licenses.
There is also a 20% non-controlling interest in Northern Rail Holdings Limited. During 2018, the Group disposed
of a 10% interest in NRML to the Noble Group to bring Noble’s interests in NRML to 20% in exchange for a
US$1.4 million reduction of the long-term facility payable to Noble.
In 2018, the gain on divestment of the shares held by the Company in NRIPL of $1,805,302 was reclassified to
a contribution reserve on consolidation.
Non-controlling interest summary
Balance at 30 June 2018
Loss allocated to non-controlling interest
Other comprehensive loss allocated to
non-controlling interest
Balance at 30 June 2019
Loss allocated to non-controlling interest
Other comprehensive loss allocated to
non-controlling interest
Balance at 30 June 2020
Coalridge Limited
$
(68,942)
(10,398)
(9,039)
(88,379)
(18,034)
(10,611)
(117,024)
Northern Rail
Holdings Limited
$
(132,783)
Total
$
(201,725)
(147,651)
(158,049)
(77,246)
(357,680)
(86,285)
(446,059)
(29,451)
(47,485)
(8,764)
(395,895)
(19,375)
(512,919)
Current Assets
Non-Current Assets
Total Assets
Current Liabilities
Non-Current Liabilities
Total Liabilities
Net Assets
Coalridge Limited
30 June
2020
30,811
1,038,718
1,069,529
(17,403)
-
(17,403)
1,052,126
30 June
2019
13,734
1,230,554
1,244,288
(9,477)
-
(9,477)
1,234,811
Northern Railway
Holdings Limited
30 June
2020
10,210
-
10,210
(13,737)
-
(13,737)
(3,527)
30 June
2019
60,485
-
60,485
-
-
60,485
Revenue
Loss for the year
Total comprehensive loss for the year
(180,333)
(286,442)
(103,981)
(194,363)
-
(147,256)
(191,077)
3
(742,573)
(1,124,484)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
- 44 -
- 45 -
Aspire Mining Limited
Aspire Mining Limited
NOTE 16: FINANCIAL INSTRUMENTS
The Group manages its capital to ensure that entities in the Group will be able to continue as a going concern.
The capital structure of the Group consists of cash and cash equivalents and equity attributable to equity holders
of the parent, comprising issued capital, reserves and retained earnings. None of the Group’s entities are subject
to externally imposed capital requirements. Operating cash flows are used to maintain and expand operations,
as well as to make routine expenditures such as tax, dividends and general administrative outgoings. Working
capital, cash and cash equivalents and capital requirements are reviewed by the Board on a regular basis.
Financial assets:
Receivables
Cash and cash equivalents
Financial liabilities:
Trade and other creditors
Borrowings
2020
$
356,712
40,712,949
41,069,661
162,116
70,492
232,608
2019
$
171,056
11,136,142
11,307,198
309,632
85,479
395,111
The following table details the expected maturities for the Group’s non-derivative financial assets. These have
been drawn up based on contractual maturities of the financial assets except where the Group anticipates that
the cash flow will occur in a different period.
Weighted average
effective interest
rate
Less than 1
month
1 – 3
Months
3 months – 1
year
1 – 5
years
5+ years
%
$
$
$
$
$
2020
Non-interest
bearing
Variable interest
rate instruments
Fixed interest rate
instruments
2019
Non-interest
bearing
Variable interest
rate instruments
Fixed interest rate
instruments
0.50
1.25
0.50
2.66
390,541
696,175
-
-
-
-
- 34,903,456
1,086,716 34,903,456
5,079,489
5,079,489
263,798
4,453,531
-
-
-
-
-
4,717,329
6,579,870
6,579,870
10,000
10,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
NOTE 16: FINANCIAL INSTRUMENTS (continued)
The following table details the Group’s remaining contractual maturities for its non-derivative financial
liabilities. These are based on the undiscounted cash flows of financial liabilities based on the earliest date on
which the Group can be required to pay.
Weighted average
effective interest
rate
Less than 1
month
1 – 3
Months
3 months – 1
year
1 – 5
years
5+ years
2020
Non-interest
bearing
Variable interest
rate instruments
Fixed interest rate
instruments
2019
Non-interest
bearing
Variable interest
rate instruments
Fixed interest rate
instruments
%
-
-
15.6
-
-
15.6
$
$
$
$
$
162,116
-
-
162,116
309,634
-
-
309,634
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
11,588
11,588
58,903
58,903
-
-
-
-
12,068
12,068
73,411
73,411
NOTE 17: FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES
The Group has exposure to the following risks from the use of financial instruments:
• Credit risk
• Liquidity risk
•
Interest rate risk
• Foreign currency risk
• Market risk
This note presents the information about the Group’s exposure to each of the above risks, their objectives,
policies and processes for measuring and managing risk. The Board has overall responsibility for the
establishment and oversight of the risk management framework. The Board reviews and agrees policies for
managing each of these risks as summarised below. The Group’s principal financial instruments comprise cash
and short-term deposits. The main purpose of the financial instruments is to earn the maximum amount of
interest at a low risk to the Group. The Group also has other financial instruments such as receivables and
creditors which arise directly from its operations. For the years ended 30 June 2020 and 2019, it has been the
Group’s policy not to trade in financial instruments.
Credit risk management
(a)
Credit risk refers to the risk that a counter-party will default on its contractual obligations resulting in financial
loss to the Group. The Group has adopted a policy of only dealing with creditworthy counterparties and obtaining
sufficient collateral where appropriate, as a means of mitigating the risk of financial loss from defaults. The
Group only transacts with entities that are rated the equivalent of investment grade and above. This information
is supplied by independent rating agencies where available and, if not available, the Group uses publicly
available financial information. The Group’s exposure and the credit ratings of its counterparties are continuously
monitored and the aggregate value of transactions concluded is spread amongst approved counterparties.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
- 46 -
- 47 -
Aspire Mining Limited
Aspire Mining Limited
NOTE 17: FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (continued)
NOTE 17: FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (continued)
Credit exposure is controlled by counterparty limits that are reviewed and approved by the risk management
committee annually.
Foreign currency sensitivity analysis
The Group does not have any significant credit risk exposure to any single counterparty or any Group of
counterparties having similar characteristics. The credit risk on liquid funds and derivative financial instruments
is limited because the counterparties are banks with high credit ratings assigned by international credit rating
agencies.
The carrying amount of financial assets recorded in the financial statements, net of any allowance for losses,
represents the Group’s maximum exposure to credit risk without taking account of the value of any collateral
obtained.
(b)
Liquidity risk management
Ultimate responsibility for liquidity risk management rests with the Board, who have built an appropriate liquidity
risk management framework for the management of the Group’s short, medium and long-term funding and
liquidity management requirements. The Group manages liquidity risk by maintaining adequate reserves and
banking by continuously monitoring forecast and actual cash flows and matching the maturity profiles of financial
assets and liabilities. The Group did not have any undrawn facilities at balance date (2019: $NIL).
(c)
Interest rate risk management
The Group is exposed to interest rate risk as the Group deposits the bulk of the Group’s cash reserves in term
deposits with the National Australia Bank (“NAB”). The risk is managed by the Group by maintaining an
appropriate mix between short term and medium-term deposits. The Group’s exposures to interest rate on
financial assets and financial liabilities are detailed in the liquidity risk management section of this note.
Interest rate sensitivity
At 30 June 2020, the effect on loss and equity as a result of changes in the interest rate, with all other variable
remaining constant would be as follows:
Change in Loss
Increase in interest rate by 1%
Decrease in interest rate by 1%
Change in Equity
Increase in interest rate by 1%
Decrease in interest rate by 1%
2020
$
6,947
(6,947)
2019
$
44,535
(44,535)
6,947
(6,947)
44,535
(44,535)
(d)
Foreign currency risk management
The Group undertakes certain transactions denominated in foreign currencies hence exposures to exchange
rate fluctuations arise. The Group does not manage these exposures with foreign currency derivative products.
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:
US Dollars
Mongolian Tugriks
Liabilities
2020
$
-
162,668
2019
$
-
103,670
Assets
2020
$
2019
$
39,937,178
40,953
4,028,639
1,907,147
The Group is exposed to US Dollar (USD) and Mongolian Tugrik currency fluctuations.
The following table details the Group’s sensitivity to a 10% increase and decrease in the Australian dollar against
the relevant foreign currencies. 10% is the sensitivity rate used when reporting foreign currency risk internally
to key management personnel and represent management’s assessment of the possible change in foreign
exchange rates. The sensitivity analysis includes only outstanding foreign currency denominated monetary
items and adjusts their translation at the period end for a 10% change in foreign currency rates. The sensitivity
analysis includes external loans as well as loans to foreign operations within the Group where the denomination
of the loan is in a currency other than the currency of the lender or the borrower. A positive number indicates an
increase in profit and equity where the Australian Dollar weakens against the respective currency. For a
strengthening of the Australian Dollar against the respective currency there would be an equal and opposite
impact on the profit and equity and the balances below would be negative.
10% Increase
2020
$
2019
$
Profit/(loss) and equity – US dollar exposure
3,644,708
366,240
Profit/(loss) and equity – Mongolian Tugrik
11,142
164,209
10% Decrease
$
$
Profit/(loss) and equity – US dollar exposure
(4,454,643)
(447,627)
Profit/(loss) and equity – Mongolian Tugrik
(13,618)
(200,700)
(e)
Market risk management
Market risk is the risk that changes in market prices such as foreign exchange rates, interest rates and equity
prices will affect the Group’s income or value of the holdings of financial instruments. The Group is exposed to
movements in market interest rates on short term deposits. The Group does not have short-term or long-term
debt with variable interest rates, and therefore this risk is minimal. The Group limits its exposure to credit risk by
only investing in liquid securities and only with counterparties that have acceptable credit ratings.
The carrying value of the financial assets and liabilities in the financial statements approximates their fair value.
- 48 -
- 49 -
Aspire Mining Limited
Aspire Mining Limited
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
NOTE 18: COMMITMENTS
Remuneration Commitments
The Group has entered into remuneration commitments with all the Directors and other key management
personnel of the Group which were in effect throughout the financial year. The Group also employs consultants
who are contracted under standard consultancy rates.
Exploration Commitments
The Group has certain commitments to meet minimum expenditure requirements on the mineral exploration
assets it has an interest in. Outstanding exploration commitments are as follows:
Within a year
Later than one year but not later than five years
Motor Vehicle Loan Commitment
2020
$
22,421
67,263
2019
$
27,953
128,700
During the year, the Group entered into a loan agreement to purchase two motor vehicles.
Within a year
Later than one year but not later than five years
More than 5 years
Total liability
Less unexpired interest
Present value
Represented by:
Current liability
Non-current liability:
2020
$
21,759
68,972
13,700
104,431
(33,939)
70,492
11,588
58,904
70,492
2019
$
24,578
79,366
29,400
133,344
(47,865)
85,479
12,068
73,411
85,479
Investment Consideration Commitments
Pursuant to the initial acquisition from Xanadu Limited of the 50% interest in Coalridge Limited that owns 90%
interest in the Nuurstei Coking Coal Project (Nuurstei Project), 5 million shares in Aspire are to be issued to
Xanadu in the event that 30 million tonnes of JORC compliant resources are identified in the Nuurstei Project
area.
NOTE 19: DIVIDENDS
The Directors of the Group have not declared any dividend for the year ended 30 June 2020.
NOTE 20: CONTINGENT LIABILITIES
There are no contingent liabilities at 30 June 2020.
NOTE 21: EVENTS SUBSEQUENT TO REPORTING DATE
There has not been any material matter or circumstance that has arisen after balance date that has significantly
affected, or may significantly affect, the operations of the Group, the results of those operations, or the state of
affairs of the Group in future financial periods.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
NOTE 22: DIRECTORS AND EXECUTIVE DISCLOSURES
The totals of remuneration paid to key management personnel of the company during the year are as follows:
Short-term employee benefits
Post-employment benefits
Share-based payments
2020
$
1,074,555
5,205
160,422
1,240,182
2019
$
645,524
2,603
280,698
928,825
Share based payments is the gross accounting value of performance rights and options brought to account in
accordance with accounting standards.
Related Party Transactions
As at 30 June 2020, there were no unpaid Directors’ Fees payable (2019: $111,486).
NOTE 23: AUDITOR’S REMUNERATION
The auditor of Aspire Mining Limited is HLB Mann Judd.
Amounts received or due and receivable by HLB Mann Judd for:
An audit or review of the financial reports
Other services
2020
$
49,700
-
49,700
The auditor of Khurgatai Khairkhan LLC, its direct subsidiaries and Northern Railways LLC is KPMG.
2019
$
49,000
3,744
52,744
2019
$
46,359
-
46,359
Amounts received or due and receivable by KPMG:
An audit or review of the financial reports
Other services
NOTE 24: PARENT ENTITY DISCLOSURES
Financial position
Assets
Current assets
Non-current assets
Total assets
Liabilities
Current liabilities
Non-current liabilities
Total liabilities
Net assets
Equity
Issued capital
Reserves
Accumulated losses
Total equity
2020
$
75,548
-
75,548
2020
$
36,186,822
6,438,548
42,625,370
61,636
-
61,636
42,563,734
150,026,408
201,240
(107,663,914)
42,563,734
# Options purchased as part of the purchases of the non-renounceable rights issue at $0.08
*1. 20,000 options held in the Name of Russell Lynton Brown.
2. 4,020,000 options held in the name of Husif Nominees Pty Ltd ; Mr Lynton-Brown is a
Director and controlling shareholder.
2019
$
9,262,900
6,193,600
15,456,500
291,320
-
291,320
15,165,180
114,897,715
1,167,852
(100,900,387)
15,165,180
- 50 -
Aspire Mining Limited
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
NOTE 24: PARENT ENTITY DISCLOSURES (continued)
Financial performance
Operating loss for the year
Total comprehensive loss
Year ended
30 June 2020
$
(7,889,619)
(7,889,619)
Year ended
30 June 2019
$
(11,175,235)
(11,175,235)
Parent Company Capital Commitments and Contingent Liabilities
The parent entity currently has no capital commitments for the acquisition of property, plant and equipment.
See Note 18 for obligations of Aspire to issue securities.
NOTE 25: SUBSIDIARIES
The consolidated financial statements include the financial statements of Aspire Mining Limited and its below
subsidiaries.
% Equity Owned
Investment
Subsidiary Name
Khurgatai Khairkhan LLC
Ovoot Coal Mining LLC
Chilchig Gol LLC
Ovoot Coking Coal Pte Ltd
Northern Railways LLC
Northern Railways Holdings LLC
Northern Railways Pte Ltd
Northern Mongolian Railways Limited
Coalridge Limited
Ekhgoviin Chuluu LLC
Black Rock LLC
Country of incorporation
Mongolia
Mongolia
Mongolia
Singapore
Mongolia
Mongolia
Singapore
British Virgin Islands
British Virgin Islands
Mongolia
Mongolia
2020
100%
100%
100%
100%
80%
80%
80%
80%
100%
100%
90%
2020
-
-
-
2019
2019
-
100%
-
100%
-
100%
100% $9,428,158 $9,428,158
-
$136,230
$1
$97,408
100% $1,541,390 $1,541,390
-
100%
-
90%
-
$136,230
$1
$97,408
80%
80%
80%
80%
-
-
Aspire Mining Limited is the ultimate Australian parent entity and ultimate parent of the Group. Transactions
between these parties involved the provision of funding for operations. As at 30 June 2020 and before
impairment, amounts of $58,861,726 (2019: $52,920,821), $20,907,766 (2019: $20,890,902), $138,409 (2019:
$138,409), $1,286,160 (2019: $1,274,439), $18,736 (2019: $14,617) and $450,279 (2019: $395,185) were owed
by Khurgatai Khairkhan LLC, Ovoot Coking Coal Pte Ltd, Northern Railway Holdings LLC, Northern Railways
Pte Ltd, Northern Mongolian Railways Limited and Ekhgoviin Chuluu LLC to the parent entity, respectively. The
loans have been impaired.
- 52 - INDEPENDENT AUDITOR’S REPORT To the members of Aspire Mining Limited Report on the Audit of the Financial Report Opinion We have audited the financial report of Aspire Mining Limited (“the Company”) and its controlled entities (“the Group”), which comprises the consolidated statement of financial position as at 30 June 2020, 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 statements, including a summary of significant accounting policies, and the directors’ declaration. In our opinion, the accompanying financial report of the Group is in accordance with the Corporations Act 2001, including: a) giving a true and fair view of the Group’s financial position as at 30 June 2020 and of its financial performance for the year then ended; and b) complying with Australian Accounting Standards and the Corporations Regulations 2001. Basis for opinion We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Report section of our report. We are independent of the Group in accordance with the auditor independence requirements of the Corporations Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional Accountants (“the Code”) that are relevant to our audit of the financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. 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. We have determined the matters described below to be the key audit matters to be communicated in our report.- 53 - Key Audit Matter How our audit addressed the key audit matter Deferred exploration and evaluation expenditure (Note 10 in the annual financial report) In accordance with AASB 6 Exploration for and Evaluation of Mineral Resources, the Group capitalises acquisition costs of rights to explore as well as subsequent exploration and evaluation expenditure and applies the cost model after recognition. Our audit focussed on the Group’s assessment of the carrying amount of the capitalised exploration and evaluation asset. We considered this to be a key audit matter because this is one of the most significant assets of the Group. There is a risk that the capitalised expenditure no longer meets the recognition criteria of the standard. In addition, we considered it necessary to assess whether facts and circumstances existed to suggest that the carrying amount of the exploration and evaluation asset may exceed its recoverable amount. Our procedures included but were not limited to the following: • We obtained an understanding of the key processes associated with management’s review of the exploration and evaluation asset carrying values; • We verified a sample of the exploration additions; • We verified the write-off of capitalised exploration expenditure; • We considered the Directors’ assessment of potential indicators of impairment; • We obtained evidence that the Group has current rights to tenure of its areas of interest; • We examined the exploration budget for the year ending 30 June 2021 and discussed with management the nature of planned ongoing activities; and • We examined the disclosures made in the financial report. Information other than the financial report and auditor’s report thereon The directors are responsible for the other information. The other information comprises the information included in the Group’s annual report for the year ended 30 June 2020, but does not include the financial report and our auditor’s report thereon. Our opinion on the financial report does not cover the other information and accordingly we do not express any form of assurance conclusion thereon. 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 - 54 - using the going concern basis of accounting unless the directors either intend to liquidate the Group or to cease operations, or have no realistic alternative but to do so. Auditor’s responsibilities for the audit of the financial report Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with 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. As part of an audit in accordance with the Australian Auditing Standards, we exercise professional judgement and maintain professional scepticism throughout the audit. We also: - Identify and assess the risks of material misstatement of the financial report, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. - Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group’s internal control. - Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the directors. - Conclude on the appropriateness of the directors’ use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial report or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Group to cease to continue as a going concern. - Evaluate the overall presentation, structure and content of the financial report, including the disclosures, and whether the financial report represents the underlying transactions and events in a manner that achieves fair presentation. - Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the financial report. We are responsible for the direction, supervision and performance of the Group audit. We remain solely responsible for our audit opinion. We communicate with the directors regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. We also provide the directors with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards. From the matters communicated with the directors, we determine those matters that were of most significance in the audit of the financial report of the current period and are therefore the key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication. - 55 - Report on the Remuneration Report Opinion on the Remuneration Report We have audited the Remuneration Report included within the directors’ report for the year ended 30 June 2020. In our opinion, the Remuneration Report of Aspire Mining Limited for the year ended 30 June 2020 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. HLB Mann Judd B G McVeigh Chartered Accountants Partner Perth, Western Australia 29 September 2020 - 56 -
- -
57
ADDITIONAL SHAREHOLDER INFORMATION
Additional information required pursuant to the ASX Listing Rules and not shown elsewhere in this report is
as follows. The information is current as at 29 September 2020.
1.
Substantial Shareholders
There are two substantial shareholders:
§ Mr Terenpuntsag Tserendamba, 266,376,470 shares or 52.47% on an undiluted basis
§ Noble Resources International Pte Ltd, 66,401,755 shares or 13.08% on an undiluted basis
There are four substantial unlisted performance rights holder:
§ 2Rs Pty Ltd, a company controlled by Mr David Paull, 916,666 performance rights, or 40%
§ Spectral Investments Pty Ltd, a company controlled by Mr Neil Lithgow, 725,000 performance rights or
32%
§ Hannah Badenach, 361,666 performance rights or 16%
§ Barkdell Services Pty Ltd, 283,333 performance rights or 12%
2.
Number of holders in each class of equity securities and the voting rights attached
Ordinary Shares
There are 2,634 holders of ordinary shares. Each shareholder is entitled to one vote per share held. In accordance
with the Company’s Constitution, on a show of hands every member present in person or by proxy or attorney or
duly authorised representative has one vote. On a poll every member present in person or by proxy or attorney
or duly authorised representative has one vote for every fully paid ordinary share held.
Performance Rights
There are five holders of performance rights. There are no voting rights attached to the performance rights.
ADDITIONAL SHAREHOLDER INFORMATION (continued)
3. Distribution schedule of the number of holders in each class of equity security
a) Fully Paid Ordinary Shares
Spread of Holdings
Holders
1 – 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,001 –
763
579
272
764
256
TOTAL ON REGISTER
2,634
Units
288,768
1,588,309
2,209,074
29,660,967
473,889,867
507,636,985
b) There were no listed options on issue as at the date of this report.
c) Unlisted Performance Rights that vest at various dates
Spread of Holdings
Holders
1 – 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,001 –
TOTAL ON REGISTER
-
-
1
-
4
5
4. Marketable Parcel
There are 1,422 shareholders with less than a marketable parcel.
5.
Twenty largest holders of each class of quoted equity security
%
0.06%
0.31%
0.44%
5.84%
93.35%
100.00 %
%
0.0 %
0.0 %
0.4 %
0.0 %
Units
-
-
8,333
-
2,286,665
2,294,998
99.6 %
100.00 %
The names of the twenty largest registered holders of each class of security, the number of equity security each
holds and the percentage of capital each holds are as follows on the next page;
ADDITIONAL SHAREHOLDER INFORMATION (continued)
ADDITIONAL SHAREHOLDER INFORMATION (continued)
- -
58
- -
59
Ordinary Shares Top 20 holders and percentage held
Holder Name
1 Mr Tserenpuntsag Tserendamba
2 BNP Paribas Nominees Pty Ltd
3 MICC LLC(i)
4 Spectral Investments Pty Ltd
5 HSBC Custody Nominees Australia Limited
6 China Tonghai Securities Ltd
7 Custodial Services Limited
8 J P Morgan Nominees Australia Pty Ltd
9 Citicorp Nominees Pty Ltd
10 Mr Stephen Ronald Hobson
11 2R’s Pty Ltd
12 Mentok Pty Ltd
13 Mr Peter Joseph McGuire
14 Glover Superannuation Pty Ltd
15 Mrs Lynette Rita Robinson
16 Sai Holdings (WA) Pty Ltd
17
18 Mr Cho Kheen Chong & Mrs Laura Ah Chun Chong
A/c>
19 Red Island Resources Ltd
20 Mr Shayan Vejdani Najafabadi
Total
Notes
(i)
Held for and on behalf of Mr. Tserenpuntsag Tserendamba
Units
% of Issued
6. Stock exchange on which the Company’s securities are quoted:
The Company’s listed equity securities are quoted on the Australian Stock Exchange.
222,542,060
70,867,277
43,834,410
23,727,851
15,592,316
9,836,492
6,959,470
4,240,165
3,079,936
2,129,833
1,557,013
1,415,000
1,200,000
1,046,427
1,000,000
960,000
912,018
856,060
825,000
802,890
413,384,218
43.84%
13.96%
8.64%
4.67%
3.07%
1.94%
1.37%
0.84%
0.61%
0.42%
0.31%
0.28%
0.24%
0.21%
0.20%
0.19%
0.18%
0.17%
0.16%
0.16%
81.43%
7. Restricted Securities
There are no restricted securities.
8. Review of Operations
A review of operations is contained in the Annual Report and Directors’ Report within the Annual Financial Report.
9. Corporate Governance Statement
The Corporate Governance Statement for the year ending 30 June 2020 can be found on the company’s website at
http://www.aspiremininglimited.com.
10. Schedule of Tenements Mining & Exploration Licenses
The licenses registered in the name of Aspire Mining Limited or its 100% owned subsidiaries are set out in the
Operational Review in the Annual Report.
11. Schedule of Tenements Mining & Exploration Licenses
The licenses registered in the name of the Company or one of its subsidiaries are:
Tenement
Ovoot
MV017098
Hurimt (1)
14510X
Nuurstei
MV-020941
Location
Mongolia
Mongolia
Mongolia
Attributable Equity
100%
100%
90%
(1) Application for relinquishment of this license has been made.
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