Aspire Mining Limited Annual Report 2021

Plain-text annual report

ASPIRE MINING LIMITED ANNUAL REPORT 2021 m o c d e . t i m i l i i g n n m e r i p s a 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 Ground Floor, 100 St Georges Tce PERTH WA 6000 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 Contents Operational Overview Chairman’s Letter Operational Review Community Relations 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 II IV XX 01 02 14 15 16 17 18 19 47 48 52 Page II Chairman’s Letter Dear Shareholders, This year has been the most frustrating one in the 9 years since we discovered the Ovoot project and secured the mining license over the Project’s resources. The Company is well funded and supported to rapidly progress the development of the world class Ovoot Coking Coal Project but has run into COVID-19 related obstacles in the permitting processes through 2020/21 which has hamstrung on the ground pre-development activities. Mongolia was ahead of much of the world in 2020 in its ability to manage the initial COVID-19 strains but as most of the world has discovered and even with Mongolia’s relatively high levels of vaccination, the Delta strain is a different animal to manage all together. The Mongolian Government is working hard on keeping the most vulnerable safe and progressing with further immunisations. With high vaccination rates, hospital presentations are lower with the Government now looking to boost the economy and exports. What is most frustrating for the long term stakeholders in the Company is that at the time of writing, we are now in the strongest bull market for coking coal since 2010 – 12 when the Ovoot Coking Coal Project was discovered with prices well in excess of the US$150/t price used in the 2019 Pre-Feasibility Study for the Ovoot Early Development Project. “The Company is committed to limit emissions from its activities and will be using world’s best practice processing technologies powered by renewable energy sources.” Aspire Mining LimitedAnnual Report 2021Page III Mobile Cardiac Clinic While waiting for permitting progress for the mine and connecting infrastructure, the team have been engaging with engineering specialists in road engineering and design, truck and trailer manufacturers, coal wash plants and materials handling specialists. We have examined alternative mine operating fleets and looked at various mine site power options. All essential for completing our Definitive Feasibility work required for a project investment decision in 2022. The Company is committed to limit emissions from its activities and will be using world’s best practice processing technologies powered by renewable energy sources. Progress is now being made to secure the key approvals required for both the mine and connecting road. The Board expects that notwithstanding the still severe COVID-19 situation in Mongolia, there will be steady progress in 2021/22 to complete the definitive feasibility study for the Ovoot Project in 2022. I wish to thank our CEO, Achit Darambazar, and his team including COO Sam Bowles and the entire community relations team for their outstanding work and commitment during the year. David Paull — Chairman Aspire Mining LimitedAnnual Report 2021Page IV Operational Overview Listed on the Australian Stock Exchange, Aspire Mining Limited (ASX : AKM, Aspire or the Company) is a coking coal resource development and infrastructure company, which owns 100% of the Ovoot Coking Coal Project and 90% of the Nuurstei Coking Coal Project in Mongolia. Aspire Mining LimitedAnnual Report 2021Page V 280 Mt of JORC 2012 Resources discovered in the Ovoot Coking Coal Project Strategy The Company’s strategy is to create wealth for shareholders through the discovery and development of metallurgical coal deposits. Between 2010 and 2013 the Company discovered the Ovoot Coking Coal Project, a large coking coal deposit containing over 280 mt of JORC 2012 Resources (197 Mt Measured, 72 Mt Indicated and 12 Mt Inferred). Coking Coal is used in the blast furnace process to produce steel. Ovoot does not produce any of the lower value thermal coal used in power generation. The Company is focused on developing the Ovoot Project into a long life world class coking coal mine based on beneficiating the coal at the mine and thus transporting a higher value product to steel making customers, which will bring significant benefits to the local communities in which it operates. Aspire Mining LimitedAnnual Report 2021Page VI 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 August 2012 the Company received a mining license granting a minimum 30 year tenure over the deposit. Aspire Mining LimitedAnnual Report 2021Page VII Mining at the Ovoot Project is based on a relatively low strip ratio, single open pit mine delivering coal to a wash plant on site. The coal has been shown to be high yielding with average yields for the first five years of the Project, of approximately 85% to a washed coking coal product. This combination of good washing yield, low strip ratio and no thermal fraction makes for a highly competitive mine cost structure relative to other Mongolian coking coal miners. l i d e Y g n h s a W i 90% 85% 80% 75% 70% 65% 60% 55% 50% 45% 40% Aspire (243 Mt) Tavan Tolgoi West Tsankhi (888 Mt) UHG Mine (305 Mt) Premium Coking Hard & Semi-Hard Coking & Semi-Soft 30% 40% 50% 60% 70% 80% 90% 100% % Coking Coal Figure 1: Chart of Ovoot versus Other Mongolian Washed Coking Coals. Aspire Mining LimitedAnnual Report 2021 Page VIII Ovoot Coking Coal Project (100%) — Continued The Ovoot Project is approximately 600 kms by road from the nearest rail head at Erdenet. From there the coal can access the Trans-Mongolian Railway for exports both north and south to steel making customers located in China, Russia and beyond. In 2019 the Company refocused the development strategy for the mine away from a large scale 10 Mtpa operation serviced by a dedicated new 545 km railway from the mine to the nearest existing rail head at Erdenet, to a smaller development based on road transport of washed coking coal to Erdenet for rail loading labelled the Ovoot Early Development Project (“OEDP”). Since the announcement of the results of a Pre Feasibility Study (“PFS”) for the OEDP in 2019 the Company has been working on obtaining necessary permitting and refining capital and operating cost numbers to complete a Definitive Feasibility Study (“DFS”) to support project financing. Parts of the DFS have been delayed this financial year due to an inability to receive approvals to undertake necessary site works and some approvals have been delayed where they required community engagement meetings which were deferred due to state, provincial and/or local government implemented COVID-19 restrictions. Nevertheless, the Company has been able to progress some important components of the Ovoot Project including progressing Front End Engineering and Design (“FEED”) studies for the Coal Handling and Preparation Plant (“CHPP”) and the Erdenet Rail Terminal (“ERT”). For each of these activities the Company has chosen technologies that minimise water use and dust generation while maintaining flexibility for future production growth. The Company has been successfully engaging with the local communities in which it operates and has their strong support (see Community Relations section for further detail). With this support the Company believes that it will be able to acquire the necessary permits and approvals in the near term to be able to complete the predevelopment activities to complete the Ovoot Definitive Feasibility Study. Aspire Mining LimitedAnnual Report 2021Page IX Road Connection from Ovoot to Erdenet Within the updated PFS for the OEDP, trucking costs make up over 40% of the total delivered cost per tonne to the Mongolian/China border at Erlian. Forecast capital costs of US$165m for road construction represented over 60% of the total estimated capital cost of the project based on the PFS. Optimising road design and truck fleet operation is therefore of paramount importance in developing a cost competitive project. Cognisant of the magnitude of transportation related costs and the impact on the overall project economics, the Mongolian team have worked to refine these estimates. This has included engaging closely with tractor and trailer manufacturers to understand equipment capabilities and engaging with a specialist automotive engineering consultant to assess and simulate the performance of potential vehicle configurations across the planned route. Town of Murun Resulting from this has been determination of suitable vehicle configurations, the development of equipment lifecycle costing, detailed understanding of fuel consumption and inputs into road design including refinement of gradients, curvatures, lane widths, intersection design and overtaking lanes to support safe and productive operation. Detailed engineering and design process is ongoing with road consultants ICT Sain LLC, in accordance with the Terms of Reference set by the Ministry of Road and Transport Development. The OEDP PFS is based on third party contract quotes for the trucking component of the project. The Company may choose a joint venture or partnering model so that the cost benefits of the above analysis can be realised. Aspire Mining LimitedAnnual Report 2021Page X Ovoot Coking Coal Project (100%) — Continued A summary of physical and operating cost estimates from the 2019 OEDP PFS are shown in Table 1: Physicals Waste Mined (M Bcm) Strip Ratio (Bcm/t coal) (incl. pre-strip) Coal Mined (Mt) Average Yield (10% moisture) Coal sold (net of 2% loss) (Mt) Life of Mine Operating Costs (US$) Mining $/t Trucking $/t Rail + Border Charges- $/t C1 Cash Costs $/t Total Cash Costs $/t Average Annual PFS Extended Case1 Updated PFS Extended Case2 19.7 4.6 4.0 253.6 4.7 53.8 86% 45.2 253.6 4.7 53.8 85% 44.7 12.5 years 12.5 years 33 32 18 83 102 26 32 18 76 97 Table 1: Physical and operating cost estimates from the 2019 OEDP PFS. 1 Refer to ASX Announcement 1 March 2019. 2 Refer to ASX Announcement 11 November 2019. The Company confirms that at this time it is not aware of any new information or data that materially affects the information included in the announcements, and that all material assumptions underpinning the estimates continue to apply and have not materially changed. On completion, the OEDP Definitive Feasibility Study will identify any new information, data or change to material assumptions used in the OEDP Pre-Feasibility Study. Aspire Mining LimitedAnnual Report 2021Page XI PFS Extended Case Updated PFS Extended Case 37 10 16 63 47 110 37 10 16 63 31 94 The estimated capital expenditure from the 2019 OEDP PFS is outlined in Table 2: Item (US$) CHPP Plant Onsite infrastructure Offsite terminals and blending facility Mine Processing and Infrastructure Waste Pre-stripping Total Mine Capital Table 2: Summary Mine Capital Expenditure from the 2019 OEDP PFS. The scoping level engineering study cost of road construction before contingencies included within the 2019 OEDP PFS is summarized in Table 3: Road Bridges and culverts Total Table 3: Estimated Road Capital Costs from the 2019 OEDP PFS. US$M 130 35 165 The above road costs will be updated once final alignment approval and detailed design and geotechnical data have been received. 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. Aspire Mining LimitedAnnual Report 2021Page XII Ovoot Coking Coal Project (100%) — Continued The Coking Coal Market For the purposes of this PFS, a flat price of US$150/t Delivered at Place to the Erlian border for Ovoot “fat” coking coal is used based on a detailed Chinese “fat” coking coal market report completed by Fenwei Energy Information Services Ltd (Fenwei) in December 2018. There has been substantial dislocation in the Coking Coal market in 2021. COVID-19 related restrictions on Mongolian coking coal exports to China, combined with limitations on imports to China from Australia and a generally robust post COVID-19 economic recovery worldwide has seen a dramatic increase in coking coal pricing. Domestic China pricing has continued in recent months to remain more than US$100/t above Australian FOB pricing. This has caused an extraordinary market for coking coal with substantial shortages and record pricing as the supply response lags demand. Given an exchange rate of Rmb6.46:US$1 the prices for fat coal net of VAT in Tianjin are approximately US$500/t (see Figure 2). While it would not be expected that prices at these levels will continue for a sustained length of time, the supply response is expected to be muted as supply from Mongolia slowly returns to normal in 2022. Ovoot will produce a “Fat” Coking Coal which is a coal with unique caking, fluidity and plastic properties (see Figure 3). These properties are highly valued by steel mills as they enable efficient blending of various coals and improve yields from coke ovens. Given the spotlight on emissions in the Chinese steel industry, coals that improve yields and efficiencies are in high demand. “COVID-19 related restrictions on Mongolian coking coal exports to China, combined with limitations on imports to China from Australia and a generally robust post COVID-19 economic recovery worldwide has seen a dramatic increase in coking coal pricing.” Aspire Mining LimitedAnnual Report 2021Coking Coal Prices USD/t excluding VAT | 30 September 2021 Page XIII 600 550 500 450 400 350 300 250 200 150 100 01-Jul-19 01-Oct-19 01-Jan-19 01-Apr-19 01-Jul-19 01-Oct-20 01-Jan-21 01-Apr-21 01-Jul-21 Tianjin Mongolian Price Kailuan Fat Price Tianjin Australian Price Tangshan Washed Fat Price Figure 2: Tianjin Coking Coal Prices for Selected brands at fixed Rmb6.46:US$1 Exchange Rate. Source: Sxcoal.com Premium Coals 2nd Tier (HCC 64) Ovoot Borneo Tuhup Energy Alliance Harfa Glencore Oaky North Teck Cheviot Mozambique Illawarra Hail Creek Anglo Moranbah North BMA Saraji BMA Peal Downs Teck Coal Premium Peabody Metro Hard Glencore Wollombi Anglo Pearce River Jellinbah Lake Vermont Anglo Capricorn Corronado Curragh x e d n I - Y 28 26 24 22 20 18 16 14 12 10 70 75 80 85 90 95 100 G-Index Figure 3: Ovoot has World Leading Caking (G Index) and Plastic Properties (Y Index). Source: Noble Group Aspire Mining LimitedAnnual Report 2021Page XIV Ovoot Coking Coal Project (100%) — Continued World Traded Hard Coking Coals Total Dilation vs Rank Pike River Ovoot Buller Special Oaky Creek Duralie NSW Oaky North Austar NSW Western Coking, West Coast Premium Goonyella North Goonyella Peak Downs German Creek n o i t a l i D l a t o T 350 300 250 200 150 100 50 0 0.00 0.20 0.40 0.60 0.80 1.00 1.20 1.40 1.60 1.80 2.00 % RO Max Figure 4: Ovoot has high plastic properties for its Rank. Source: Independent Technical Review of the UHG Coal Project dated 28 September 2010, and Aspire data Nuurstei Coking Coal Project (90%) No substantive work was conducted on this Project during the year. Aspire Mining LimitedAnnual Report 2021 Page XV Rail Infrastructure Investment Aspire owns an 80% interest in Northern Railways LLC (NR), the Mongolian registered company that holds the Rail Concession to build a 547 kilometre long railway from Erdenet to Ovoot 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. Alignment and competing land use issues remain to be resolved between the parties. In February 2020, NR received an extension of time from the Mongolian Government’s National Development Authority to meet the conditions precedent within the Concession Agreement by 18 months through to September 2021. The Company is in a dialogue with the Mongolian Government regarding further extensions to this period to complete the Rail Concession conditions precedent. 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 for 10 million tonnes per annum. Aspire Mining LimitedAnnual Report 2021Page XVI Coal Projects — Continued JORC Reserves & Resources Deposit Ovoot Open Pit(2) Ovoot Underground (2) Nuurstei(3) Total Probable Reserves Measured Resource Indicated Resource Measured + Indicated Inferred Resource 247 8 - 255 197.0 - - 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 Table 4: JORC Reserves and Resources. 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 with the JORC Code (2012). 2. For full JORC Code (2012) disclosure in relation to the Ovoot project JORC Code (2012) compliant Coal Resource and Reserve, 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 underpinning the estimates in the December 2013 Quarterly Report continue to apply and have not materially changed. parameters 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 Code (2012). 4. The JORC Code (2012) compliant Coal Resource and Reserve estimates for the Nuurstei Coking Coal Project are 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. 5. The Company ensures that the Resource and Reserve estimates are subject to appropriate governance and internal controls by engagement of independent consultancy organisations whose staff are competent and professional; and by its periodical review. 6. There has been no change in the period to Resources or Reserves. Aspire Mining LimitedAnnual Report 2021Page XVII 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 Reserve estimate based on his information in the form and context in which it appears. 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 MV- 020941 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. Competent Persons Statement – Ovoot Coking Coal Project the requirements, In accordance with the Australian Securities Exchange technical information contained in this announcement in relation to the JORC Code (2012) Compliant Coal Reserve and Reserve estimate for the Ovoot Coking Coal Project in Mongolia has been reviewed by Mr Ian De Klerk and Mr Kevin John Irving of Xstract Mining Consultants Pty Ltd. The Coal Resource at the Ovoot Project documented in this release are stated in accordance to the JORC Code, 2012. They information compiled and are based on 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 estimated Coal Resource based on his information in the form and context in which it appears. Aspire Mining LimitedAnnual Report 2021Page XVIII Coal Projects — Continued 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 Mtpa being the current available rail capacity from Erdenet to markets. The pit selections produce a steady 4 Mtpa of saleable coal. The JORC Code (2012) Reserve estimated as a result of this exercise is detailed in Table 5. 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 Category Probable Ore Reserve Ore Open Pit OEDP Probable Ore Reserve Open Pit OEDP Plus OEDP Extension Table 5: OEDP JORC (2012) Reserve. Category Probable Product Reserve Ore Open Pit OEDP Probable Product Reserve Open Pit OEDP Plus OEDP Extension Table 6: OEDP Marketable Reserve. Marketable Coal Reserve Total Moisture 10% arb Mt Product Specification adb Ash Content % Product Specifications adb CSN 32.2 46.2 10.5 10.5 8.5 8.5 Aspire Mining LimitedAnnual Report 2021 Page XIX Notes: for 1. The technical information and competent persons statements 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 Reserve estimated as stated in this release in accordance with the JORC Code, 2012. The estimate is 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. Aspire Mining LimitedAnnual Report 2021Page XX Community Relations Environmental Social Governance The Company made further moves during the year to develop a framework and level of accountability for its operations and activities. During the year the Company issued its inaugural Environment Social Governance (“ESG”) Report. This report can be found on our web site at aspiremininglimited.com Respecting the Environment Aspire is committed to developing its metallurgical coal assets in accordance with the United Nations “Equator Principles”. These are 10 over riding 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 adopting the higher standards required to meet Equator Principles. While designing the Ovoot Coking Coal Project the Company has made it clear that it is targeting the implementation of worlds best practice through all facets of the Project. The Company has chosen a coal washing plant design that does not need a flotation process removing the need for chemical reagents and a belt filter that saves water and removes the need for a tailings dam. The Company has also selected coal handling infrastructure that reduces the amount of mobile loading equipment involved reducing dust and diesel consumption. The Ovoot Coking Coal Project is expected to rely more on renewable power sources than any other mining project in Mongolia, based on a combination of a hybrid system using solar and battery technologies, combined with a grid connection where a proportion of the power will be supplied by a 10MW solar farm. In terms of truck transport the selection of trucks and trailers focuses on minimizing diesel consumption. Further the regular trucking routes make it suitable for trialing new transport technologies using fuel cell electric vehicles. The company is in preliminary discussions with a FCEV provider to commence a trial when operations commence. The Company has engaged a consultant to conduct an audit of greenhouse gas emissions as a base line from which reduction targets will be formulated. Aspire Mining LimitedAnnual Report 2021Page XXI Building our Social License to Operate The Company has formally committed to the United Nations Sustainability Development goals and will report against this framework annually in the ESG Report. The Company is particularly focused on health, education and building the local economy and capacity. 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 our company, advancing the UN’s Sustainable Development Goals. Aspire Mining LimitedAnnual Report 2021Page XXII Community Relations — Continued Community Health Programs Sponsorship of Mobile Cardiac Clinic and surgeries COVID-19 Relief Donation to Local Hospital Early in the pandemic, the Company donated infection protection gear and other equipment to the local Tsetserleg soum hospital in support of COVID-19 pandemic prevention activities. The Company has donated 500 pieces of essential protective clothing, disinfectants and rubber gloves. In addition, 200 rapid test kits were donated and delivered to the Tsetserleg soum hospital. The Company partnered with “The heart will not forget”, a not-for-profit for children’s heart disease diagnosis, and a treatment surgeons team led by renowned cardiac surgeon Dr. Boldsaikhan Bundan of Songdo Hospital within the scope of a health program for the local community. Songdo Hospital performs pediatric cardio surgery which is brand new to Mongolia. Within the scope of the health program, the company built a large ger for the non-profit health team and conducted an all-day check-up session, while observing the strict COVID-19 regulations. The much-needed health program brought together Tsagaan-Uul and Tsetserleg soums of Khuvsgul airmag children in need of cardiac check-ups. Three children from the Tsetserleg soum were diagnosed to be treated by surgery and the Company covered expenses of these three children for cardiac surgery in Ulaanbaatar. 01 02 Aspire Mining LimitedAnnual Report 2021Page XXIII 01 Delivering medical supplies to hospital 02—06 Mobile Cardiac Clinic 04 05 03 06 Aspire Mining LimitedAnnual Report 2021Page XXIV Community Relations — Continued Education Training The “Northern miners” technical and vocational training program is sponsored by the Company in partnership with Erdenet Complex College. The training program was developed in 2020 to support employment opportunities for Tsetserleg soum residents. The program trains local Tsetserleg soum residents to become licensed truck drivers and heavy duty mine machinery operators. Scholarships The Company has made its intention to offer BA level scholarships to citizens who are in 2nd, 3rd and 4th year of studies at a local accredited University. The Scholarship program is designed to contribute to the Tsetserleg soum development. Currently two students from 3rd Bagh of the Tsetserleg soum are offered BA studies scholarships. The two students attend the National University of Mongolia and the Agricultural University of Mongolia, respectively. Supporting the Local Economy The major project for the year was the planting of 200 ha of animal feed crops over the 2021 summer growing season. This was harvested in September and will be distributed amongst local community families in the winter of 2021. This is part of a larger plan to expand feed lots to improve the health and wellbeing of live stock through the long winters to support the foundation of a local dairy and meat industry. The Company has acquired a tractor and other equipment for the purpose of this project and has applied for Asian Development Bank support to substantially expand the feed lot exercise to benefit a wider community. The development of the Ovoot to Murun road will allow for the export of organically produced agricultural products to the central markets of Murun and potentially other centres in Mongolia. 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. These investments will be guided by the UN sustainability goals with particular emphasis on health, education and capacity building. Aspire Mining LimitedAnnual Report 2021Page XXV 01 02 03 Ovoot Seeding Planting underway in June 2021 Award Ceremony of Art Competition 02 03 In order to support Governance, the Board of Directors has established a number of sub-committees relating to finance, technical, remuneration and audit and 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. 01 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 stated objective of the Code of Practice is to promote, introduce and pursue good standards of responsible mining in the 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. Aspire Mining LimitedAnnual Report 2021Contents Aspire Mining Limited Page CORPORATE INFORMATION ................................................................................................................... 1 DIRECTORS’ REPORT .............................................................................................................................. 2 AUDITOR’S INDEPENDENCE DECLARATION ...................................................................................... 14 CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME .. 15 CONSOLIDATED STATEMENT OF FINANCIAL POSITION .................................................................. 16 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY .................................................................. 17 CONSOLIDATED STATEMENT OF CASH FLOWS ............................................................................... 18 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ............................................................ 19 DIRECTORS’ DECLARATION ................................................................................................................. 47 INDEPENDENT AUDITOR’S REPORT ................................................................................................... 48 Aspire Mining Limited Aspire Mining Limited ABN 46 122 417 243 Annual Financial Report 30 June 2021 Contents Aspire Mining Limited Page CORPORATE INFORMATION ................................................................................................................... 1 DIRECTORS’ REPORT .............................................................................................................................. 2 AUDITOR’S INDEPENDENCE DECLARATION ...................................................................................... 14 CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME .. 15 CONSOLIDATED STATEMENT OF FINANCIAL POSITION .................................................................. 16 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY .................................................................. 17 CONSOLIDATED STATEMENT OF CASH FLOWS ............................................................................... 18 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ............................................................ 19 DIRECTORS’ DECLARATION ................................................................................................................. 47 INDEPENDENT AUDITOR’S REPORT ................................................................................................... 48 Aspire Mining Limited Aspire Mining Limited ABN 46 122 417 243 Annual Financial Report 30 June 2021 CORPORATE INFORMATION 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 - 1 - Aspire Mining Limited - 2 - Aspire Mining Limited 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 a Bachelors degree from Middlebury College. AKM Website www.aspiremininglimited.com DIRECTORS’ REPORT 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 2021. In order to comply with the provisions of the Corporations Act 2001, the Directors report as follows: Directors as follows. The names of Directors who held office during or since the end of the year and until the date of this report are 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 Names, qualifications, experience and special responsibilities Mr Achit-Erdene Darambazar Executive Director on 5 December 2019. Mr Achit-Erdene Darambazar was appointed Executive Director on 7 December 2018 and Managing Director He is 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 He has held no other listed public company directorships in the last three years. Mr David Paull Non-Executive Chairman Qualifications: B.Com, FSIA, MBA (Cornell) Mr Paull has over 30 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 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 listed public company directorships in the last three years. - 1 - Aspire Mining Limited - 2 - Aspire Mining Limited Mr Achit-Erdene Darambazar (Managing Director) Corrs Chambers Westgarth Lawyers Solicitors 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 CORPORATE INFORMATION ABN 46 122 417 243 Directors 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: (08) 9287 4555 Email: info@aspiremininglimited.com 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 PERTH WA 6000 AUSTRALIA Level 2, 267 St Georges Terrace Telephone: 1300 288 664 DIRECTORS’ REPORT 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 2021. In order to comply with the provisions of the Corporations Act 2001, the Directors report as follows: 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. Mr Achit-Erdene Darambazar Managing Director Mr David Paull Mr Boldbaatar Bat-Amgalan Non-Executive Director Non-Executive Director Mr Neil Lithgow Non-Executive Director Ms Hannah Badenach Non-Executive Chairman 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 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 other listed public company directorships in the last three years. Mr David Paull Non-Executive Chairman Qualifications: B.Com, FSIA, MBA (Cornell) Mr Paull has over 30 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 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 listed public company directorships in the last three years. DIRECTORS’ REPORT (continued) Names, qualifications, experience and special responsibilities (continued) DIRECTORS’ REPORT (continued) - 3 - - 4 - Aspire Mining Limited Aspire Mining Limited Mr Boldbaatar Bat-Amgalan Non-Executive Director 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 other listed public company directorships in the last three years. Mr Neil Lithgow Non-Executive Director Qualifications : MSc, M.AusIMM Mr Lithgow is a geologist by profession with over 30 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 Vice President of Asset Management and Operations at Noble Resources Limited. the payment of a dividend in respect of the financial year. No dividends have been paid or declared since the start of the financial year and the Directors do not recommend 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. 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 12 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 Number of fully paid Number of options Number of Mr Achit-Erdene Darambazar Mr David Paull1 Mr Boldbaatar Bat-Amgalan Mr Neil Lithgow Ms Hannah Badenach ordinary shares over ordinary shares performance rights over ordinary shares - - 2,705,280 23,727,851 1,095,392 - - - - - - - - - - 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. 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 or performance rights granted to Directors of the Company during or since the end of the financial year as part of 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. Dividends Principal Activities Review of Operations owns: The principal activity of the Group during the year was progression for the approvals and studies towards the development of the Ovoot Early Development Project (OEDP). Aspire is focused on the exploration and eventual development of metallurgical coal assets in Mongolia. Aspire (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. 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. A phased development plan to support production rates at Ovoot under the OEDP will be matched to forecast logistics capacities through to end customers in China and Russia. Progress in the year was adversely affected by the COVID-19 pandemic with restrictions introduced by the Government of Mongolia and local authoraties that continue to delay permitting required before Ovoot development can proceed. DIRECTORS’ REPORT (continued) Names, qualifications, experience and special responsibilities (continued) DIRECTORS’ REPORT (continued) - 3 - - 4 - Aspire Mining Limited Aspire Mining Limited Interests in the Shares and Options of the Company and Related Bodies Corporate As at the date of this report, the relevant interests of the current Directors in shares, options and rights of the Company are as follows: 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 Directors State Secretary for the Ministry of Foreign Affairs, and Chairman of the Communication Regulatory Commission. 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 - - - - - - - - - - 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. 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 or performance rights granted to Directors of the Company during or since the end of the financial year as part of 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. 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 progression for the approvals and studies towards the development of the Ovoot Early Development Project (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. 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. A phased development plan to support production rates at Ovoot under the OEDP will be matched to forecast logistics capacities through to end customers in China and Russia. Progress in the year was adversely affected by the COVID-19 pandemic with restrictions introduced by the Government of Mongolia and local authoraties that continue to delay permitting required before Ovoot development can proceed. Mr Boldbaatar Bat-Amgalan Non-Executive Director Mr Neil Lithgow Non-Executive Director Qualifications : MSc, M.AusIMM Mr Bat-Amgalan has had no other listed public company directorships in the last three years. Mr Lithgow is a geologist by profession with over 30 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 Vice President of Asset Management and Operations 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. 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 12 years to a number of listed companies. - 5 - - 6 - Aspire Mining Limited Aspire Mining Limited DIRECTORS’ REPORT (continued) Review of Operations (continued) Whilst the Company was not able to conduct ground based activities while permitting processes were ongoing, the Company continued other aspects of a Definitive Feasibility Study (DFS) for the OEDP including mine engineering, wash plant, materials handling and road transport solutions. Re-optimisations of the mine plan used in the OEDP Pre-Feasibility (PFS) mine plan have involved re- sequencing production and with the use of different combinations of excavators and mine haulage trucks, indicate significant mine cost savings as compared to the PFS. The Company conducted additional indicative coal sizing tests using a number of flow sheets to further confirm physical characteristics through various wash plant technologies before appointing Sedgman Pty Limited to conduct Front End Engineering and Design for the OEDP Coal Handling and Processing Plant. The Company also commenced Front End Engineering and Design of the Erdenet Rail Terminal with local engineering group O2 Mining Limited, where coal is received by truck and loaded onto rail wagons. Likely developments and expected results The Group will continue with activities towards meeting its objective of developing the OEDP into production at Both of these engineering activities will assist in providing accurate capital and operating cost assessments for the DFS. The Company also expended a considerable amount of time and effort on road design and engineering for the 560 km road between Ovoot and Erdenet. Road pathways were re-examined and various truck and trailer combinations were modelled to optimize time, fuel cost and capital costs for trucks and road construction. Given that trucking cost per tonne is considerably more that than the forecast mining cost per tonne of product this is clearly an area of significant potential cost saving. The Company also maintained a strong local community engagement programme in line with the Company’s sustainability goals to improve health and education outcomes for the local communities in which it operates. This was enhanced with a trial fodder programme where the company planted a feed crop which can be stored by local herders to assist with managing livestock through the harsh winters. This is the first stage of a multifaceted programme to support the development of a local diary and organic meat industry. These measures are all contained in draft community engagement agreements that the Company is currently negotiating with local community leadership. 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. 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. Northern Railways LLC is in discussions for an extension to the period to complete conditions precedent that would otherwise have expired in September 2021. Review of financial conditions At balance date, the Group had $34,173,866 (2020: $40,712,949) in cash assets. The Group holds the majority of its cash in USD and the reduction in the cash assets is materially affected by the strengthening of the AUD:USD between balance dates. The cash assets balance will be sufficient to meet required community relations activities, approvals, permits and evaluation activities to advance towards development of the OEDP. auditor. 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. DIRECTORS’ REPORT (continued) Operating results for the year $5,488,200). Significant changes in the state of affairs in the state of affairs of the Group. Significant events after balance date The Group reported an operating loss after tax of $5,176,364 for the year ended 30 June 2021 (2020: Loss Since the previous Annual Financial Report and during the financial year there has been no significant change 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. 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 2020 can be found on the Company’s website at www.aspiremininglimited.com. The Corporate Governance Statement for the year ended 30 June 2021 will be available on the Company’s website and the ASX announcements platform following lodgement with the Company’s Annual Report in October 2021. Environmental legislation during the year. 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 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 - 5 - - 6 - Aspire Mining Limited Aspire Mining Limited DIRECTORS’ REPORT (continued) Review of Operations (continued) Whilst the Company was not able to conduct ground based activities while permitting processes were ongoing, the Company continued other aspects of a Definitive Feasibility Study (DFS) for the OEDP including mine engineering, wash plant, materials handling and road transport solutions. Re-optimisations of the mine plan used in the OEDP Pre-Feasibility (PFS) mine plan have involved re- sequencing production and with the use of different combinations of excavators and mine haulage trucks, indicate significant mine cost savings as compared to the PFS. The Company conducted additional indicative coal sizing tests using a number of flow sheets to further confirm physical characteristics through various wash plant technologies before appointing Sedgman Pty Limited to conduct Front End Engineering and Design for the OEDP Coal Handling and Processing Plant. The Company also commenced Front End Engineering and Design of the Erdenet Rail Terminal with local engineering group O2 Mining Limited, where coal is received by truck and loaded onto rail wagons. Both of these engineering activities will assist in providing accurate capital and operating cost assessments for the DFS. The Company also expended a considerable amount of time and effort on road design and engineering for the 560 km road between Ovoot and Erdenet. Road pathways were re-examined and various truck and trailer combinations were modelled to optimize time, fuel cost and capital costs for trucks and road construction. Given that trucking cost per tonne is considerably more that than the forecast mining cost per tonne of product this is clearly an area of significant potential cost saving. The Company also maintained a strong local community engagement programme in line with the Company’s sustainability goals to improve health and education outcomes for the local communities in which it operates. This was enhanced with a trial fodder programme where the company planted a feed crop which can be stored by local herders to assist with managing livestock through the harsh winters. This is the first stage of a multifaceted programme to support the development of a local diary and organic meat industry. These measures are all contained in draft community engagement agreements that the Company is currently negotiating with local community leadership. 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. 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. Northern Railways LLC is in discussions for an extension to the period to complete conditions precedent that would otherwise have expired in September 2021. Review of financial conditions At balance date, the Group had $34,173,866 (2020: $40,712,949) in cash assets. The Group holds the majority of its cash in USD and the reduction in the cash assets is materially affected by the strengthening of the AUD:USD between balance dates. The cash assets 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. DIRECTORS’ REPORT (continued) Operating results for the year The Group reported an operating loss after tax of $5,176,364 for the year ended 30 June 2021 (2020: Loss $5,488,200). 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 2020 can be found on the Company’s website at www.aspiremininglimited.com. The Corporate Governance Statement for the year ended 30 June 2021 will be available on the Company’s website and the ASX announcements platform following lodgement with the Company’s Annual Report in October 2021. 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. - 7 - - 8 - Aspire Mining Limited Aspire Mining Limited DIRECTORS’ REPORT (continued) 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 2021, as follows: Mr Achit-Erdene Darambazar Executive Director Mr David Paull Mr Boldbaatar Bat-Amgalan Non-Executive Director Non-Executive Director Mr Neil Lithgow Non-Executive Director Ms Hannah Badenach Mr Samuel Bowles Chief Operating Officer Non-Executive Chairman 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: 2021 $ 2020 $ 2019 $ 2018 $ Revenue 175,854 425,330 325,741 216,309 2017 $ 4,133 Net loss after tax (5,176,364) (5,488,200) (6,200,307) (6,980,272) (4,883,119) Basic loss per share (0.0102) (0.0126) (0.020)1 (0.035)1 (0.052)1 vesting. Share price at year-end 0.07 0.08 0.161 0.221 0.181 1 Post a securities consolidation completed on 5 December 2019. 2019 and prior years restated assuming 1:10 consolidation applied. 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. DIRECTORS’ REPORT (continued) Remuneration Report (audited) 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. No external consultants were engaged during the 2021 financial year. 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 2021 is detailed in the Remuneration of Key Management Personnel section of this report in Table 1. Senior manager and executive Director Remuneration Remuneration consists of fixed remuneration and performance rights (as determined from time to time). Fixed Remuneration where necessary. 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 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. On 30 June 2021 all 2,003,332 performance rights on issue to Key Management Personnel expired without 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 until terminated when Mr Paull transitioned to Non-Executive Chairman in March 2020. 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 in the event that the Company secures loan facilities to fund production commencement by December 2021 and performance rights to be negotiated and issued within the term of employment (subject to shareholder approval). DIRECTORS’ REPORT (continued) Remuneration Report (audited) DIRECTORS’ REPORT (continued) Remuneration Report (audited) - 7 - - 8 - Aspire Mining Limited Aspire Mining Limited 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 2021, as follows: Mr Achit-Erdene Darambazar Executive 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 Mr Samuel Bowles Chief Operating Officer 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: 2021 $ 2020 $ 2019 $ 2018 $ 2017 $ 4,133 Revenue 175,854 425,330 325,741 216,309 Net loss after tax (5,176,364) (5,488,200) (6,200,307) (6,980,272) (4,883,119) Basic loss per share (0.0102) (0.0126) (0.020)1 (0.035)1 (0.052)1 Share price at year-end 0.07 0.08 0.161 0.221 0.181 1 Post a securities consolidation completed on 5 December 2019. 2019 and prior years restated assuming 1:10 consolidation applied. Remuneration committee Hannah Badenach. 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 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. No external consultants were engaged during the 2021 financial year. 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 2021 is detailed in the Remuneration of Key Management Personnel section of this report in Table 1. 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. On 30 June 2021 all 2,003,332 performance rights on issue to Key Management Personnel expired without vesting. 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 until terminated when Mr Paull transitioned to Non-Executive Chairman in March 2020. 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 in the event that the Company secures loan facilities to fund production commencement by December 2021 and performance rights to be negotiated and issued within the term of employment (subject to shareholder approval). - 9 - - 10 - Aspire Mining Limited Aspire Mining Limited DIRECTORS’ REPORT (continued) Remuneration Report (audited) 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 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 performance rights to be negotiated and issued within the term of employment (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 $ 830,469 5,205 67,033 902,707 Share based payments is the gross accounting value of performance rights brought to account in accordance with accounting standards. Year ended 30 June 2020 The shares, performance rights and options held by key management personnel in the year ended 30 June 2021 are detailed in Tables 2 to 4. Options No options were on issue during the year that were part of Key Management Personnel remuneration. Performance rights On 30 June 2021 all Performance Rights that were on issue during the year lapsed without vesting. 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. As aforementioned, Performance Rights will be offered to Key Management Personnel as part of the terms and conditions of their engagement. DIRECTORS’ REPORT (continued) Remuneration Report (audited) (continued) Remuneration of Key Management Personnel Table 1: Key management personnel remuneration Year ended 30 June 2021 Post- employment benefits Other fees Superannuation rights3 Total related Performance Performance Mr Achit-Erdene Darambazar 244,125 Mr David Paull1 Mr Boldbaatar Bat-Amgalan Mr Neil Lithgow Ms Hannah Badenach Mr Samuel Bowles Total 30,672 100,672 $ - - $ 244,125 60,101 84,259 12,102 - 401,448 5,205 24,259 12,102 5,205 67,033 902,707 Post- employment benefits Other fees Superannuation rights Total Related Performance Performance Mr Achit-Erdene Darambazar Mr David Paull1 Mr Boldbaatar Bat-Amgalan Mr Neil Lithgow Ms Hannah Badenach Mr Alexander Passmore2 Mr Gan-Ochir Zunduisuren Mr Samuel Bowles 5,205 73,405 58,056 28,961 $ - - - - - $ 169,581 453,197 117,197 118,056 28,961 25,000 213,802 114,388 Total 1,074,555 5,205 160,422 1,240,182 1 Paid or issued to Kingsland Corporate Pty Ltd (formerly 2R’s Pty Ltd), a company associated with Mr David Paull. 2 Paid to Horizon Advisors Pty Ltd, a company associated with Mr Alexander Passmore. 3 All Performance Rights lapsed on 30 June 2021 without vesting. Short term employee benefits Salary & $ 70,000 60,101 54,795 - 401,448 830,469 Short term employee benefits Salary & $ 169,581 379,792 117,197 54,795 - 25,000 213,802 114,388 $ - - - - - $ - - - - - - - % - 30 - 29 100 - 7 % - 16 - 49 - - - 13 100 DIRECTORS’ REPORT (continued) Remuneration Report (audited) 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 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 performance rights to be negotiated and issued within the term of employment (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 with accounting standards. Options Performance rights The shares, performance rights and options held by key management personnel in the year ended 30 June 2021 are detailed in Tables 2 to 4. No options were on issue during the year that were part of Key Management Personnel remuneration. On 30 June 2021 all Performance Rights that were on issue during the year lapsed without vesting. 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. As aforementioned, Performance Rights will be offered to Key Management Personnel as part of the terms and conditions of their engagement. - 9 - - 10 - Aspire Mining Limited Aspire Mining Limited DIRECTORS’ REPORT (continued) Remuneration Report (audited) (continued) Remuneration of Key Management Personnel Table 1: Key management personnel remuneration Year ended 30 June 2021 Mr Achit-Erdene Darambazar Mr David Paull1 Mr Boldbaatar Bat-Amgalan Mr Neil Lithgow Ms Hannah Badenach Mr Samuel Bowles Total $ 830,469 5,205 67,033 902,707 Share based payments is the gross accounting value of performance rights brought to account in accordance Year ended 30 June 2020 Mr Achit-Erdene Darambazar Mr David Paull1 Mr Boldbaatar Bat-Amgalan Mr Neil Lithgow Ms Hannah Badenach Mr Alexander Passmore2 Mr Gan-Ochir Zunduisuren Mr Samuel Bowles Total Short term employee benefits Salary & fees $ 244,125 70,000 60,101 54,795 - 401,448 830,469 Short term employee benefits Salary & fees $ 169,581 379,792 117,197 54,795 - 25,000 213,802 114,388 Post- employment benefits Other Superannuation $ - - - 5,205 - - Performance rights3 $ - 30,672 - 24,259 12,102 - Total $ 244,125 100,672 60,101 84,259 12,102 401,448 5,205 67,033 902,707 Performance related % - 30 - 29 100 - 7 Post- employment benefits Other Superannuation $ - - - 5,205 - - - - Performance rights $ - 73,405 - 58,056 28,961 - - - Total $ 169,581 453,197 117,197 118,056 28,961 25,000 213,802 114,388 Performance Related % - 16 - 49 100 - - - 1,074,555 5,205 160,422 1,240,182 13 1 Paid or issued to Kingsland Corporate Pty Ltd (formerly 2R’s Pty Ltd), a company associated with Mr David Paull. 2 Paid to Horizon Advisors Pty Ltd, a company associated with Mr Alexander Passmore. 3 All Performance Rights lapsed on 30 June 2021 without vesting. - 11 - - 12 - Aspire Mining Limited Aspire Mining Limited DIRECTORS’ REPORT (continued) Remuneration Report (audited) (continued) DIRECTORS’ REPORT (continued) Remuneration Report (audited) (continued) Key Management Personnel Equity Holdings Key Management Personnel Equity Holdings Table 2: Fully Paid Ordinary Shares Table 3 - Performance rights exercisable at no consideration on achievement of tenure or other performance milestones 2021 Mr Achit-Erdene Darambazar Mr David Paull1 Mr Boldbaatar Bat-Amgalan Mr Neil Lithgow Ms Hannah Badenach Mr Samuel Bowles Total Balance at beginning of year/on appointment - 2,705,280 - 23,727,851 1,389,048 - 27,822,179 Sold Balance at end of year - - - - (293,656) - (293,656) - 2,705,280 - 23,727,851 1,095,392 - 27,528,523 Balance at beginning of year/on appointment Share consolidation 1 for 10 Purchased Balance on retirement Balance at end of year - 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 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 1 In 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. However, from 2 August 2019 he no longer had a notifiable interest. Granted Exercised Expired Balance at end of year Balance at beginning of year 916,666 725,000 361,666 - - - 2,003,332 - - - - - - - - - - - - - - (916,666) (725,000) (361,666) - - - (2,003,332) 2021 Mr Achit-Erdene Darambazar Mr David Paull Mr Boldbaatar Bat-Amgalan Mr Neil Lithgow Ms Hannah Badenach Mr Samuel Bowles Total 2020 Mr Achit-Erdene Darambazar Mr David Paull Mr Boldbaatar Bat-Amgalan Mr Neil Lithgow Ms Hannah Badenach Mr Alexander Passmore Mr Samuel Bowles Total Balance at Share beginning of consolidation Forfeited Balance at on end of year 1 for 10 Granted Exercised Expired retirement year 45,833,333 (41,249,999) 36,250,000 18,083,333 (32,625,000) (16,274,999) - - - - - - - - - (3,666,668) (2,900,000) (1,446,668) - - - - - - - - - - - - - - - - - - - - 916,666 725,000 361,666 - - - - - Mr Gan-Ochir Zunduisuren 30,500,000 (27,450,000) (3,050,000) 130,666,666 (117,599,998) (8,013,336) (3,050,000) 2,003,332 Table 4 – Options exercisable at 18 cents on or before 11 December 2019 No options were on issue during the year that were part of Key Management Personnel remuneration. Balance at beginning of Share year/on Consolidation Issued as Balance on Balance at appointment 1 for 10 remuneration Exercised Expired retirement end of year Mr David Paull 1,145,833 (1,031,249) 6,354,167 (5,718,750) 2,083,334 (1,875,000) 12,000,000 (10,800,000) 2020 Mr Achit-Erdene Darambazar Mr Boldbaatar Bat-Amgalan Mr Neil Lithgow Ms Hannah Badenach Mr Alex Passmore Mr Gan-Ochir Zunduisuren Mr Samuel Bowles - - - - - - - - - (114,584) (635,417) (208,334) - - - - - - - - - - - - - - - - - - - - (1,200,000) Total 21,583,334 (19,424,999) (958,335) (1,200,000) - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 11 - - 12 - Aspire Mining Limited Aspire Mining Limited DIRECTORS’ REPORT (continued) Remuneration Report (audited) (continued) DIRECTORS’ REPORT (continued) Remuneration Report (audited) (continued) Key Management Personnel Equity Holdings Key Management Personnel Equity Holdings Table 2: Fully Paid Ordinary Shares Table 3 - Performance rights exercisable at no consideration on achievement of tenure or other performance milestones 2021 Mr Achit-Erdene Darambazar Mr David Paull1 Mr Boldbaatar Bat-Amgalan Mr Neil Lithgow Ms Hannah Badenach Mr Samuel Bowles Total Balance at beginning of year/on appointment 2,705,280 23,727,851 1,389,048 - - - Sold Balance at end of year - - - - - (293,656) 2,705,280 23,727,851 1,095,392 - - - 2021 Mr Achit-Erdene Darambazar Mr David Paull Mr Boldbaatar Bat-Amgalan Mr Neil Lithgow Ms Hannah Badenach Mr Samuel Bowles Total 27,822,179 (293,656) 27,528,523 Balance at beginning of year - 916,666 - 725,000 361,666 - 2,003,332 Granted Exercised Expired Balance at end of year - - - - - - - - - - - - - - - (916,666) - (725,000) (361,666) - (2,003,332) - - - - - - - 2020 Mr Achit-Erdene Darambazar Mr David Paull Mr Boldbaatar Bat-Amgalan Mr Neil Lithgow Ms Hannah Badenach Mr Alexander Passmore Balance at beginning of year Share consolidation 1 for 10 - 45,833,333 - 36,250,000 18,083,333 - (41,249,999) (32,625,000) (16,274,999) - Mr Gan-Ochir Zunduisuren Mr Samuel Bowles Total 30,500,000 - 130,666,666 (27,450,000) - (117,599,998) Granted Exercised Expired Forfeited on retirement Balance at end of year - - - - - - - - - - - - - - - - - - - (3,666,668) - (2,900,000) (1,446,668) - - (8,013,336) - - - - - - - 916,666 - 725,000 361,666 - (3,050,000) - - - (3,050,000) 2,003,332 Mr Gan-Ochir Zunduisuren 47,392,203 (42,652,983) (4,739,220) Table 4 – Options exercisable at 18 cents on or before 11 December 2019 No options were on issue during the year that were part of Key Management Personnel remuneration. Balance at beginning of Share year/on consolidation Purchased appointment 1 for 10 Balance on retirement Balance at end of year 26,052,791 (23,447,511) 100,000 237,278,501 13,890,476 (213,550,650) (12,501,428) - - - - - - - - - - - - - - - - - - - - - - 2,705,280 23,727,851 1,389,048 - - - - - 324,613,971 (292,152,572) 100,000 (4,739,220) 27,822,179 2020 Mr Achit-Erdene Darambazar Mr David Paull1 Mr Boldbaatar Bat-Amgalan Mr Neil Lithgow Ms Hannah Badenach Mr Alexander Passmore Mr Samuel Bowles Total 1 In 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. However, from 2 August 2019 he no longer had a notifiable interest. Issued as remuneration Exercised Expired Balance on retirement Balance at end of year Balance at beginning of year/on appointment Share Consolidation 1 for 10 - 1,145,833 - (1,031,249) - 6,354,167 2,083,334 12,000,000 - - 21,583,334 - (5,718,750) (1,875,000) (10,800,000) - - (19,424,999) 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 - - - - - - - - - - - - - - - - - - - - - (114,584) - (635,417) (208,334) - - - (1,200,000) - - - - (958,335) (1,200,000) - - - - - - - - - - 13 - Aspire Mining Limited DIRECTORS’ REPORT (continued) Remuneration Report (audited) (continued) Related Party Transactions In 2021, Kingsland Corporate Pty Ltd (formerly 2R’s Pty Ltd), a company associated with Mr David Paull, was paid $15,150 at market rates for the services provided by David Paull beyond his NED Chair role (2020: Nil). In 2020, 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 2021, there were unpaid Directors’ fees payable of US$10,000 (2020: Nil). 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 Neil Lithgow Mr Boldbaatar Bat-Amgalan Ms Hannah Badenach Director Meetings Attended Eligible to Attend 7 7 7 7 7 7 7 7 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. Auditor Independence and Non-Audit Services Section 307C of the Corporations Act 2001 requires the Company’s auditors, HLB Mann Judd, to provide the Directors of the Company with an Independence Declaration in relation to the audit of the financial report. This Independence Declaration is set out on page 14 and forms part of this Directors’ report for the year ended 30 June 2021. Non-Audit Services Details of amounts paid or payable to the auditor for non-audit services provided during the year by the auditor are outlined in Note 23 to the financial statements. The Directors are satisfied that the provision of non-audit services is compatible with the general standard of independence for auditors imposed by the Corporations Act 2001. The Directors are of the opinion that the services do not compromise the auditor’s independence as all non- audit services have been reviewed to ensure that they do not impact the impartiality and objectivity of the auditor and none of the services undermine the general principles relating to auditor independence as set out in Code of Conduct APES 110 Code of Ethics for Professional Accountants issued by the Accounting Professional & Ethical Standards Board. Signed in accordance with a resolution of the Directors. Achit-Erdene Darambazar Managing Director 28 September 2021 - 14 - 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 2021, 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 28 September 2021 B G McVeigh Partner - 13 - Aspire Mining Limited DIRECTORS’ REPORT (continued) Remuneration Report (audited) (continued) Related Party Transactions In 2021, Kingsland Corporate Pty Ltd (formerly 2R’s Pty Ltd), a company associated with Mr David Paull, was paid $15,150 at market rates for the services provided by David Paull beyond his NED Chair role (2020: Nil). In 2020, 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 2021, there were unpaid Directors’ fees payable of US$10,000 (2020: Nil). The number of meetings of Directors held during the year and those attended by each Director were as follows: End of Remuneration Report Directors’ Meetings Table 5 – Attendance at Director Meetings Director Mr Achit-Erdene Darambazar Mr David Paull Mr Neil Lithgow Mr Boldbaatar Bat-Amgalan Ms Hannah Badenach Director Meetings Attended Eligible to Attend 7 7 7 7 7 7 7 7 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. Auditor Independence and Non-Audit Services Section 307C of the Corporations Act 2001 requires the Company’s auditors, HLB Mann Judd, to provide the Directors of the Company with an Independence Declaration in relation to the audit of the financial report. This Independence Declaration is set out on page 14 and forms part of this Directors’ report for the year ended 30 June 2021. Non-Audit Services 2001. Details of amounts paid or payable to the auditor for non-audit services provided during the year by the auditor are outlined in Note 23 to the financial statements. The Directors are satisfied that the provision of non-audit services is compatible with the general standard of independence for auditors imposed by the Corporations Act The Directors are of the opinion that the services do not compromise the auditor’s independence as all non- audit services have been reviewed to ensure that they do not impact the impartiality and objectivity of the auditor and none of the services undermine the general principles relating to auditor independence as set out in Code of Conduct APES 110 Code of Ethics for Professional Accountants issued by the Accounting Professional & Ethical Standards Board. Signed in accordance with a resolution of the Directors. Achit-Erdene Darambazar Managing Director 28 September 2021 - 14 - 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 2021, 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 28 September 2021 B G McVeigh Partner CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME FOR THE YEAR ENDED 30 JUNE 2021 CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2021 - 15 - - 16 - Aspire Mining Limited Aspire Mining Limited Deferred exploration and evaluation expenditure 35,043,789 36,470,102 Total Assets 70,249,735 78,460,833 Other income Employee benefits expense Exploration and evaluation expenditure impaired 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 2021 $ 175,854 (677,716) (884) (2,922,426) (9,285) (79,993) 2(b) (1,650,495) 3 (5,164,945) (11,419) (5,176,364) 2020 $ 425,330 (1,035,322) (1,233,218) (84,124) (13,759) (169,480) (3,366,119) (5,476,692) (11,508) (5,488,200) (3,154,310) (878,620) (3,154,310) (8,330,674) (878,620) (6,366,820) 15 (5,167,777) (8,587) (5,176,364) (8,478,871) 15 148,197 (8,330,674) (5,440,715) (47,485) (5,488,200) (6,299,960) (66,860) (6,366,820) Basic loss per share (cents per share) 4 (1.02) (1.26) The accompanying notes form part of these financial statements. Current Assets Cash and cash equivalents Trade and other receivables Total Current Assets Non-Current Assets Property plant and equipment Intangible assets Total Non-Current 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 Non-controlling interests Total Equity Note 8 9 10 12 13 11 14 14 2021 $ 2020 $ 34,173,866 40,712,949 533,507 802,360 34,707,373 41,515,309 421,668 76,905 304,309 171,113 35,542,362 36,945,524 218,702 10,522 229,224 42,967 42,967 162,116 11,588 173,704 58,904 58,904 272,191 232,608 69,977,544 78,228,225 6 7 7 150,026,408 150,026,408 (10,529,903) (7,017,569) (69,154,239) (64,267,695) 15 (364,722) (512,919) 69,977,544 78,228,225 Equity attributable to owners of the parent 70,342,266 78,741,144 The accompanying notes form part of these financial statements. CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME FOR THE YEAR ENDED 30 JUNE 2021 CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2021 - 15 - - 16 - Aspire Mining Limited Aspire Mining Limited Other income Employee benefits expense Exploration and evaluation expenditure impaired 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 3 2021 $ 175,854 (677,716) (884) (2,922,426) (9,285) (79,993) (5,164,945) (11,419) (5,176,364) 2(b) (1,650,495) 2020 $ 425,330 (1,035,322) (1,233,218) (84,124) (13,759) (169,480) (3,366,119) (5,476,692) (11,508) (5,488,200) (3,154,310) (878,620) (3,154,310) (8,330,674) (878,620) (6,366,820) 15 (5,167,777) (8,587) (5,176,364) (8,478,871) 15 148,197 (8,330,674) (5,440,715) (47,485) (5,488,200) (6,299,960) (66,860) (6,366,820) Basic loss per share (cents per share) 4 (1.02) (1.26) The accompanying notes form part of these financial statements. 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 2021 $ 2020 $ 34,173,866 40,712,949 533,507 802,360 34,707,373 41,515,309 35,043,789 36,470,102 421,668 76,905 304,309 171,113 35,542,362 36,945,524 70,249,735 78,460,833 218,702 10,522 229,224 42,967 42,967 162,116 11,588 173,704 58,904 58,904 272,191 232,608 69,977,544 78,228,225 6 7 7 150,026,408 150,026,408 (10,529,903) (7,017,569) (69,154,239) (64,267,695) Equity attributable to owners of the parent 70,342,266 78,741,144 Non-controlling interests Total Equity 15 (364,722) (512,919) 69,977,544 78,228,225 The accompanying notes form part of these financial statements. d e t i i i i m L g n n M e r i p s A - 7 1 - I Y T U Q E N I S E G N A H C F O T N E M E T A T S D E T A D L O S N O C I 1 2 0 2 E N U J 0 3 D E D N E R A E Y E H T R O F y t i u q e l a t o T - n o N l t e b a u b i r t t A n o i t u b i r t n o C d e s a b e r a h S y c n e r r u c i n g e r o F l d e t a u m u c c A $ $ $ $ $ $ $ $ g n i l l o r t n o c s t s e r e t n i f o s r e n w o o t t n e r a p e h t e v r e s e r e v r e s e r s t n e m y a p e v r e s e r l n o i t a s n a r t s e s s o l d e u s s I l a t i p a c CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 30 JUNE 2021 - 18 - Aspire Mining Limited Cash flows from operating activities Interest received Payments to suppliers and employees Income tax paid Interest and borrowing costs paid Note 2021 $ 2020 $ 193,923 426,889 (1,836,918) (4,077,285) (11,419) (9,284) (11,508) (13,759) Net cash used in operating activities 8 (1,663,698) (3,675,663) Cash flows from investing activities Payments for exploration and evaluation expenditure 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 Net cash (used in)/provided by financing activities (874,180) (315,351) (1,409,894) (217,313) 19,089 (1,189,531) (1,608,118) - - - 14 (17,003) (17,003) 36,284,541 (1,155,849) (14,987) 35,113,705 Net (decrease)/increase in cash and cash equivalents (2,870,232) 29,829,924 Cash and cash equivalents at the beginning of the year 40,712,949 11,136,142 Effect of foreign exchange rate fluctuations on cash held (3,668,851) (253,117) Cash and cash equivalents at the end of the year 8 34,173,866 40,712,949 The accompanying notes from part of these financial statements. 2 7 8 , 6 9 2 , 9 4 ) 9 5 0 , 6 4 4 ( 1 3 9 , 2 4 7 , 9 4 , 2 0 3 5 0 8 , 1 , 2 5 8 7 6 1 , 1 ) 6 6 8 , 4 6 1 , 8 ( ) 2 7 0 , 3 6 9 , 9 5 ( 5 1 7 , 7 9 8 , 4 1 1 ) 0 2 6 , 8 7 8 ( ) 5 7 3 , 9 1 ( ) 5 4 2 , 9 5 8 ( ) 0 0 2 8 8 4 , , 5 ( ) 5 8 4 , 7 4 ( ) 5 1 7 0 4 4 , , 5 ( ) 0 2 8 6 6 3 , , 6 ( ) 0 6 8 , 6 6 ( ) 0 6 9 9 9 2 , , 6 ( - - 0 8 4 , 9 6 1 3 9 6 , 8 2 1 , 5 3 - - - - - - 0 8 4 , 9 6 1 3 9 6 , 8 2 1 , 5 3 - - - - - - - - - - - 0 8 4 , 9 6 1 ) 7 7 8 , 0 6 7 ( ) 5 1 2 , 5 7 3 ( - - - - - ) 5 4 2 , 9 5 8 ( ) 5 4 2 , 9 5 8 ( - ) 5 1 7 , 0 4 4 , 5 ( ) 5 1 7 , 0 4 4 , 5 ( - - 7 7 8 , 0 6 7 5 1 2 , 5 7 3 - - - - - - 3 9 6 , 8 2 1 , 5 3 5 2 2 , 8 2 2 , 8 7 ) 9 1 9 , 2 1 5 ( 4 4 1 , 1 4 7 , 8 7 , 2 0 3 5 0 8 , 1 0 4 2 , 1 0 2 ) 1 1 1 , 4 2 0 , 9 ( ) 5 9 6 , 7 6 2 , 4 6 ( 8 0 4 , 6 2 0 , 0 5 1 - 3 9 9 , 9 7 - - - 3 9 9 , 9 7 ) 4 6 3 6 7 1 , , 5 ( ) 7 8 5 , 8 ( ) 7 7 7 7 6 1 , , 5 ( ) 0 1 3 4 5 1 , , 3 ( 4 8 7 , 6 5 1 ) 4 9 0 1 1 3 , , 3 ( ) 4 7 6 0 3 3 , , 8 ( 7 9 1 , 8 4 1 ) 1 7 8 8 7 4 , , 8 ( - - - - - 3 9 9 , 9 7 ) 3 3 2 , 1 8 2 ( - - - - - - ) 4 9 0 , 1 1 3 , 3 ( ) 4 9 0 , 1 1 3 , 3 ( - ) 7 7 7 , 7 6 1 , 5 ( - 3 3 2 , 1 8 2 ) 7 7 7 , 7 6 1 , 5 ( - - - - - t n u o c c a o t t h g u o r b e u a v l s t h g i r e c n a m r o f r e P t n u o c c a o t t h g u o r b s t h g i r e c n a m r o f r e P d e r i p x e s t h g i r e c n a m r o f r e P 0 2 0 2 e n u J 0 3 t a e c n a l a B s s o l i e v s n e h e r p m o c r e h t O d e r i p x e s t h g i r e c n a m r o f r e P s s o l i e v s n e h e r p m o c l a t o T r a e y e h t r o f s s o L d e r i p x e s n o i t p O 9 1 0 2 e n u J 0 3 t a e c n a l a B r a e y e h t r o f s s o L s s o l i e v s n e h e r p m o c r e h t O s s o l i e v s n e h e r p m o c l a t o T s t s o c f o t e n s e u s s i e r a h S 4 4 5 , 7 7 9 , 9 6 ) 2 2 7 , 4 6 3 ( 6 6 2 , 2 4 3 , 0 7 , 2 0 3 5 0 8 , 1 - ) 5 0 2 , 5 3 3 , 2 1 ( ) 9 3 2 , 4 5 1 , 9 6 ( 8 0 4 , 6 2 0 , 0 5 1 1 2 0 2 e n u J 0 3 t a e c n a l a B s t n e m e t a t s l i a c n a n i f e s e h t f o t r a p m r o f s e t o n i g n y n a p m o c c a e h T CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 30 JUNE 2021 - 18 - Aspire Mining Limited Cash flows from operating activities Interest received Payments to suppliers and employees Income tax paid Interest and borrowing costs paid Note 2021 $ 2020 $ 193,923 426,889 (1,836,918) (4,077,285) (11,419) (9,284) (11,508) (13,759) Net cash used in operating activities 8 (1,663,698) (3,675,663) Cash flows from investing activities Payments for exploration and evaluation expenditure 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 Net cash (used in)/provided by financing activities (874,180) (315,351) - (1,409,894) (217,313) 19,089 (1,189,531) (1,608,118) 14 - - (17,003) (17,003) 36,284,541 (1,155,849) (14,987) 35,113,705 Net (decrease)/increase in cash and cash equivalents (2,870,232) 29,829,924 Cash and cash equivalents at the beginning of the year 40,712,949 11,136,142 Effect of foreign exchange rate fluctuations on cash held (3,668,851) (253,117) Cash and cash equivalents at the end of the year 8 34,173,866 40,712,949 The accompanying notes from part of these financial statements. d e t i m i L g n i n i M e r i p s A - 7 1 - - - - - - - ) 0 2 6 , 8 7 8 ( ) 5 7 3 , 9 1 ( ) 5 4 2 , 9 5 8 ( ) 0 0 2 , 8 8 4 , 5 ( ) 5 8 4 , 7 4 ( ) 5 1 7 , 0 4 4 , 5 ( ) 0 2 8 , 6 6 3 , 6 ( ) 0 6 8 , 6 6 ( ) 0 6 9 , 9 9 2 , 6 ( 0 8 4 , 9 6 1 3 9 6 , 8 2 1 , 5 3 0 8 4 , 9 6 1 3 9 6 , 8 2 1 , 5 3 - - - ) 4 6 3 , 6 7 1 , 5 ( ) 7 8 5 , 8 ( ) 7 7 7 , 7 6 1 , 5 ( ) 0 1 3 , 4 5 1 , 3 ( 4 8 7 , 6 5 1 ) 4 9 0 , 1 1 3 , 3 ( ) 4 7 6 , 0 3 3 , 8 ( 7 9 1 , 8 4 1 ) 1 7 8 , 8 7 4 , 8 ( 3 9 9 , 9 7 3 9 9 , 9 7 - - - - - - - - - - - - - - - - - - - - - - - 0 8 4 , 9 6 1 ) 7 7 8 , 0 6 7 ( ) 5 1 2 , 5 7 3 ( 3 9 9 , 9 7 ) 3 3 2 , 1 8 2 ( $ - - - - - - - - ) 5 4 2 , 9 5 8 ( ) 5 4 2 , 9 5 8 ( ) 4 9 0 , 1 1 3 , 3 ( ) 4 9 0 , 1 1 3 , 3 ( $ - - - - - ) 5 1 7 , 0 4 4 , 5 ( ) 5 1 7 , 0 4 4 , 5 ( 7 7 8 , 0 6 7 5 1 2 , 5 7 3 ) 7 7 7 , 7 6 1 , 5 ( 3 3 2 , 1 8 2 ) 7 7 7 , 7 6 1 , 5 ( $ - - - - - - - - - - - y t i u q e l a t o T - n o N g n i l l o r t n o c s t s e r e t n i e l b a t u b i r t t A f o s r e n w o o t t n e r a p e h t $ $ $ $ $ e v r e s e r e v r e s e r s t n e m y a p e v r e s e r n o i t a l s n a r t s e s s o l n o i t u b i r t n o C d e s a b e r a h S y c n e r r u c n g i e r o F d e t a l u m u c c A d e u s s I l a t i p a c 2 7 8 , 6 9 2 , 9 4 ) 9 5 0 , 6 4 4 ( 1 3 9 , 2 4 7 , 9 4 2 0 3 , 5 0 8 , 1 2 5 8 , 7 6 1 , 1 ) 6 6 8 , 4 6 1 , 8 ( ) 2 7 0 , 3 6 9 , 9 5 ( 5 1 7 , 7 9 8 , 4 1 1 5 2 2 , 8 2 2 , 8 7 ) 9 1 9 , 2 1 5 ( 4 4 1 , 1 4 7 , 8 7 2 0 3 , 5 0 8 , 1 0 4 2 , 1 0 2 ) 1 1 1 , 4 2 0 , 9 ( ) 5 9 6 , 7 6 2 , 4 6 ( 8 0 4 , 6 2 0 , 0 5 1 Y T I U Q E N I S E G N A H C F O T N E M E T A T S D E T A D I L O S N O C 1 2 0 2 E N U J 0 3 D E D N E R A E Y E H T R O F 3 9 6 , 8 2 1 , 5 3 t n u o c c a o t t h g u o r b e u l a v s t h g i r e c n a m r o f r e P 9 1 0 2 e n u J 0 3 t a e c n a l a B r a e y e h t r o f s s o L s s o l e v i s n e h e r p m o c r e h t O s s o l e v i s n e h e r p m o c l a t o T s t s o c f o t e n s e u s s i e r a h S d e r i p x e s t h g i r e c n a m r o f r e P 0 2 0 2 e n u J 0 3 t a e c n a l a B s s o l e v i s n e h e r p m o c r e h t O d e r i p x e s t h g i r e c n a m r o f r e P s s o l e v i s n e h e r p m o c l a t o T r a e y e h t r o f s s o L d e r i p x e s n o i t p O s t n e m e t a t s l a i c n a n i f e s e h t f o t r a p m r o f s e t o n g n i y n a p m o c c a e h T t n u o c c a o t t h g u o r b s t h g i r e c n a m r o f r e P 4 4 5 , 7 7 9 , 9 6 ) 2 2 7 , 4 6 3 ( 6 6 2 , 2 4 3 , 0 7 2 0 3 , 5 0 8 , 1 ) 5 0 2 , 5 3 3 , 2 1 ( ) 9 3 2 , 4 5 1 , 9 6 ( 8 0 4 , 6 2 0 , 0 5 1 1 2 0 2 e n u J 0 3 t a e c n a l a B - 19 - - 20 - Aspire Mining Limited Aspire Mining Limited NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2021 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 2021 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 2021 In the year ended 30 June 2021, 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 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 2021. As a result of this review the Directors have determined that there is no material impact of the Standards and Interpretations in issue not yet adopted on the Company. (d) Statement of Compliance The financial report was authorised for issue on 28 September 2021. 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). (e) 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 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2021 NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued) (e) Basis of Consolidation (continued) 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. 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. (g) Segment Reporting Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker. The chief operating decision maker, who is responsible for allocating resources and assessing performance of the operating segments, has been identified as the Board of Directors of Aspire Mining Limited. - 19 - - 20 - Aspire Mining Limited Aspire Mining Limited NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2021 NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2021 NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued) (a) Basis of Preparation (e) Basis of Consolidation (continued) 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). (b) Going concern The 30 June 2021 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. (c) Adoption of new and revised standards Standards and Interpretations applicable 30 June 2021 In the year ended 30 June 2021, 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 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 2021. As a result of this review the Directors have determined that there is no material impact of the Standards and Interpretations in issue not yet adopted on the Company. (d) Statement of Compliance The financial report was authorised for issue on 28 September 2021. 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). (e) 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. 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. (g) Segment Reporting Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker. The chief operating decision maker, who is responsible for allocating resources and assessing performance of the operating segments, has been identified as the Board of Directors of Aspire Mining Limited. - 21 - - 22 - Aspire Mining Limited Aspire Mining Limited NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2021 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2021 NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued) NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued) (h) Revenue Recognition (k) Derecognition of financial assets and financial liabilities 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. 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. • • • or (a) (b) (i) Financial assets assets) is derecognised when: A financial asset (or, where applicable, a part of a financial asset or part of a Group of similar financial 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; the Group has transferred its rights to receive cash flows from the asset and either: 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. (l) Foreign currency translation 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 Tax charges and credits attributable to exchange differences on those borrowings are also recognised recognised in profit or loss. 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. - 21 - - 22 - Aspire Mining Limited Aspire Mining Limited NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2021 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2021 NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued) NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued) (h) Revenue Recognition (k) Derecognition of financial assets and financial liabilities 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 revenue is recognised on a time proportionate basis that takes into account the effective yield Interest income 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. 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. (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. (l) Foreign currency translation 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. - 23 - - 24 - Aspire Mining Limited Aspire Mining Limited NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2021 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2021 NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued) NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued) (l) Foreign currency translation (continued) (m) Income tax (continued) 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, Black Rock LLC and Uruun Elbeg 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. 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 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 assets. purchase. - 23 - - 24 - Aspire Mining Limited Aspire Mining Limited NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2021 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2021 NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued) NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued) (l) Foreign currency translation (continued) (m) Income tax (continued) 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, Black Rock LLC and Uruun Elbeg 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 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 utilised. 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. 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. - 25 - - 26 - Aspire Mining Limited Aspire Mining Limited NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2021 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2021 NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued) NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued) (o) Business combinations (continued) (r) Property, plant and equipment 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. (q) Trade and other payables 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. 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' residual values, useful lives and amortisation methods are reviewed, and adjusted if the assets. 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. to be close to its fair value. 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 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. cost. 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 - 25 - - 26 - Aspire Mining Limited Aspire Mining Limited NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2021 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2021 NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued) NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued) (o) Business combinations (continued) (r) Property, plant and equipment 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. (q) Trade and other payables 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. 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. - 27 - - 28 - Aspire Mining Limited Aspire Mining Limited NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2021 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2021 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. (u) Issued capital Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax, from the proceeds. (x) Parent entity financial information (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 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) the rights to tenure of the area of interest are current; and ii) at least one of the following conditions is also met: (a) the exploration and evaluation expenditures are expected to be recouped through successful development and exploration of the area of interest, or alternatively, by its sale; or (b) exploration and evaluation activities in the area of interest have not at the 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. 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. - 27 - - 28 - Aspire Mining Limited Aspire Mining Limited NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2021 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2021 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) 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. 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. (x) Parent entity financial information 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. 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. only conditional upon a market condition. No expense is recognised for awards that do not ultimately vest, except for awards where vesting is 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. (u) Issued capital (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 - 29 - - 30 - Aspire Mining Limited Aspire Mining Limited NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2021 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2021 NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued) NOTE 2: REVENUES AND EXPENSES (y) Leases 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. 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. (b) Other Expenses Accounting and audit fees Amortisation and depreciation expense 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 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. 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. 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. (a) Revenue Interest income Cash flow boost 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 expense Made up of: Income tax expense Income tax expense on Mongolian operations 2021 $ 158,707 17,147 175,854 174,452 234,814 37,257 101,538 - 258,659 238,013 173,700 12,825 118,255 54,034 59,216 86,750 68,812 32,170 2021 $ (5,164,945) (1,549,484) 10,620 905,445 (15,461) 249 660,050 11,419 11,419 11,419 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 2020 $ (5,476,692) (1,643,008) 473 392,709 (41,103) 369,966 932,471 11,508 11,508 11,508 1,650,495 3,366,119 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 $6,529,888 (2020: $6,321,138) in respect to tax losses arising in Australia and $255,189 (2020: $207,313) 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. - 29 - - 30 - Aspire Mining Limited Aspire Mining Limited NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2021 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2021 NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued) NOTE 2: REVENUES AND EXPENSES (a) Revenue Interest income Cash flow boost (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 expense Made up of: Income tax expense on Mongolian operations Income tax expense 2021 $ 158,707 17,147 175,854 174,452 234,814 37,257 101,538 - 258,659 238,013 173,700 12,825 118,255 54,034 59,216 86,750 68,812 32,170 1,650,495 2021 $ (5,164,945) (1,549,484) 10,620 905,445 (15,461) 249 660,050 11,419 11,419 11,419 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 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 $6,529,888 (2020: $6,321,138) in respect to tax losses arising in Australia and $255,189 (2020: $207,313) 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. (y) Leases 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. 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. 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 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. 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. 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. - 31 - - 32 - Aspire Mining Limited Aspire Mining Limited NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2021 NOTE 3: INCOME TAX (continued) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2021 NOTE 5: SEGMENT INFORMATION (CONTINUED) The Group has an unrecorded deferred tax asset of $15,461 (2020: $30,922) relating to share issue and other costs, and deferred tax liabilities of $1,984,673 (2020: $1,931,565) relating to capitalised exploration and evaluation expenditure arising in Australia for which an offsetting deferred tax asset has been recognised. The Group also has an unrecorded deferred tax asset of $345,745 (2020: $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: 2021 Cents per share 2020 Cents per share (1.02) (1.26) 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 (5,167,777) (5,440,715) 507,636,563 433,448,136 As losses have been incurred to date, no dilutive earning loss per share has been disclosed. NOTE 5: SEGMENT INFORMATION Year ended 30 June 2021 Total segment revenue Interest revenue Depreciation and amortisation Exploration and evaluation expenditure impaired Segment net operating loss after tax Continuing operations Mongolia $ Australia $ Singapore $ 61,664 44,517 - 114,190 114,190 234,814 - 884 - - - - Total $ 175,854 158,707 234,814 884 (3,909,987) (1,239,939) (26,438) (5,176,364) Segment assets 29,863,351 40,373,520 12,864 70,249,735 Segment liabilities Capital expenditure during the year (156,023) (116,168) - (1,250,218) - - (272,191) (1,250,218) Continuing operations Australia $ Mongolia $ Singapore 310,247 115,083 310,247 - - 115,083 297,782 1,233,218 Total $ 425,330 425,330 297,782 1,233,218 Year ended 30 June 2020 Total segment revenue Interest revenue Depreciation and amortisation Exploration and evaluation expenditure impaired Segment net operating loss after tax (1,870,918) (3,582,814) (34,468) (5,488,200) Segment assets 36,186,821 42,264,347 9,665 78,460,833 Segment liabilities (61,637) (170,971) Capital expenditure during the year - (1,604,710) (232,608) (1,604,710) $ - - - - - - NOTE 6: ISSUED CAPITAL Ordinary shares Issued and fully paid Less share issue costs Movements in ordinary shares on issue At 1 July 2019 2021 $ 2020 $ 157,999,366 157,999,366 (7,972,958) (7,972,958) 150,026,408 150,026,408 No. $ 3,326,541,075 114,897,715 15,333,012 2,759,942 - (1,155,849) 507,636,985 150,026,408 507,636,985 150,026,408 Shares issued at 1.8 cents on 29 November 2019 on exercise of options 99,334 1,788 Shares issued at 2.1 cents on 3 December 2019 pursuant to the Placement with a substantial shareholder 1,595,900,000 33,513,900 Shares issued at 1.8 cents on 4 December 2019 on exercise of options 214,499 Securities consolidation 1 for 10 on 5 December 2019 (4,430,478,995) 3,861 - 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 28,060 5,051 Share issue costs At 30 June 2020 At 30 June 2021 - 31 - - 32 - Aspire Mining Limited Aspire Mining Limited NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2021 NOTE 3: INCOME TAX (continued) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2021 NOTE 5: SEGMENT INFORMATION (CONTINUED) Year ended 30 June 2020 Total segment revenue Interest revenue Depreciation and amortisation Exploration and evaluation expenditure impaired Segment net operating loss after tax Continuing operations Mongolia $ Australia $ Singapore $ 310,247 115,083 310,247 - 115,083 297,782 - 1,233,218 - - - - Total $ 425,330 425,330 297,782 1,233,218 (1,870,918) (3,582,814) (34,468) (5,488,200) Cents per share Cents per share 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) NOTE 6: ISSUED CAPITAL Ordinary shares Issued and fully paid Less share issue costs Movements in ordinary shares on issue 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 At 30 June 2021 2021 $ 2020 $ 157,999,366 157,999,366 (7,972,958) (7,972,958) 150,026,408 150,026,408 No. $ 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) 507,636,985 150,026,408 507,636,985 150,026,408 The Group has an unrecorded deferred tax asset of $15,461 (2020: $30,922) relating to share issue and other costs, and deferred tax liabilities of $1,984,673 (2020: $1,931,565) relating to capitalised exploration and evaluation expenditure arising in Australia for which an offsetting deferred tax asset has been recognised. The Group also has an unrecorded deferred tax asset of $345,745 (2020: $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: 2021 (1.02) 2020 (1.26) 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 507,636,563 433,448,136 As losses have been incurred to date, no dilutive earning loss per share has been disclosed. (5,167,777) (5,440,715) NOTE 5: SEGMENT INFORMATION Year ended 30 June 2021 Total segment revenue Interest revenue Depreciation and amortisation Exploration and evaluation expenditure impaired Segment net operating loss after tax Continuing operations Mongolia Singapore Australia $ 61,664 44,517 - - $ 114,190 114,190 234,814 884 Total $ 175,854 158,707 234,814 884 (3,909,987) (1,239,939) (26,438) (5,176,364) Segment assets 29,863,351 40,373,520 12,864 70,249,735 Segment liabilities (156,023) (116,168) Capital expenditure during the year - (1,250,218) (272,191) (1,250,218) $ - - - - - - - 33 - - 34 - Aspire Mining Limited Aspire Mining Limited NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2021 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2021 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 2021 $ 2020 $ (64,267,695) (59,963,072) Net loss for the year attributable to owners of the parent (5,167,777) (5,440,715) Transfer on expiry of options/performance rights Balance at end of financial year 281,233 1,136,092 (69,154,239) (64,267,695) Reserves Contribution Reserve Foreign currency translation reserve Share based payments reserve Total $ $ $ $ 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) At 30 June 2020 1,805,302 (9,024,111) 201,240 (7,017,569) Currency translation differences Performance rights expired Performance rights to account - - - (3,311,094) - (3,311,094) - - (281,233) (281,233) 79,993 79,993 Options share options issued during the year: The following table illustrates the number (No.) and weighted average exercise prices of and movements in Outstanding at the beginning of the year Granted during the year Exercised during the year (pre-consolidation) Share Consolidation (1:10) Exercised during the year (post-consolidation) Expired during the year Outstanding at the end of the year Exercisable at the end of the year 2021 No. 2020 No. 2021 Weighted average exercise price - - - - - - - - - - - - - - - - 700,722,235 (630,367,523) (15,361,072) (54,679,807) - - - 2020 Weighted average exercise price 0.018 0.018 0.018 0.018 - - - (313,833) 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 2021 (30 June 2020: Nil). 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 At 30 June 2021 1,805,302 (12,335,205) - (10,529,903) issued and the prevailing share price are known variables. 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. 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. 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. There were no performance rights unexercised at 30 June 2021. The performance rights unexercised at 30 June 2020 were: 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 2021 No 2020 No. 2,294,998 161,083,330 - - - - (137,474,993) - - 2,294,998 (2,294,998) (21,313,339) - 33 - - 34 - Aspire Mining Limited Aspire Mining Limited NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2021 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2021 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 2021 $ 2020 $ (64,267,695) (59,963,072) Net loss for the year attributable to owners of the parent (5,167,777) (5,440,715) Transfer on expiry of options/performance rights Balance at end of financial year 281,233 1,136,092 (69,154,239) (64,267,695) Reserves Contribution Foreign currency Share based Total Reserve payments reserve translation reserve $ $ At 30 June 2019 1,805,302 (8,164,866) 1,167,852 (5,191,712) Currency translation differences (859,245) - (859,245) Options expired Performance rights expired Performance rights to account (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) At 30 June 2020 1,805,302 (9,024,111) 201,240 (7,017,569) Currency translation differences Performance rights expired Performance rights to account (3,311,094) - (3,311,094) (281,233) (281,233) 79,993 79,993 At 30 June 2021 1,805,302 (12,335,205) - (10,529,903) $ - - - - - - - $ - - - - - The foreign currency translation reserve is used to record exchange differences arising from the translation of 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. Nature and purpose of reserves Foreign currency translation reserve the financial statements of foreign subsidiaries. Share based payments reserve Contribution Reserve interests that do not result in a loss of control. 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) Share Consolidation (1:10) Exercised during the year (post-consolidation) Expired during the year Outstanding at the end of the year Exercisable at the end of the year 2021 No. 2020 No. 2021 Weighted average exercise price 2020 Weighted average exercise price - - - - - - - - - - - - - - - - 700,722,235 - (313,833) (630,367,523) (15,361,072) (54,679,807) - - 0.018 0.018 0.018 - 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 2021 (30 June 2020: Nil). 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. There were no performance rights unexercised at 30 June 2021. The performance rights unexercised at 30 June 2020 were: The contribution reserve is used to record the value which arises as a result of transactions with non-controlling 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 2021 No 2020 No. 2,294,998 161,083,330 - - - - (137,474,993) - (2,294,998) (21,313,339) - 2,294,998 - 35 - - 36 - Aspire Mining Limited Aspire Mining Limited NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2021 NOTE 7: ACCUMULATED LOSSES AND RESERVES (continued) Nature and purpose of reserves (continued) Performance rights (continued) 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 2020: • 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. During 2021: • The remaining 2,294,998 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 be greater than A$0.40 by 30 June 2021 did not occur. NOTE 8: CASH AND CASH EQUIVALENTS Cash at bank and on hand Short term interest bearing deposits 2021 $ 5,894,268 28,279,598 34,173,866 2020 $ 730,004 39,982,945 40,712,949 There were no credit losses in the current or the prior year. NOTE 10: DEFERRED EXPLORATION AND EVALUATION EXPENDITURE 2021 $ 2020 $ 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 (2020: $10,000) is on deposit as cash backed security against a business use credit card limit and office rental. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2021 NOTE 8: CASH AND CASH EQUIVALENTS (continued) Reconciliation of loss for the year to net cash flows from operating activities 2021 $ 2020 $ (5,176,364) (5,488,200) 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 Exploration expenditure impairment Foreign exchange (gain)/loss Net cash used in operating activities NOTE 9: CURRENT TRADE AND OTHER RECEIVABLES GST recoverable Prepayments Interest receivable Other receivables 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 260,118 4,672 9,759 234,814 79,993 884 2,922,426 (1,663,698) 2021 $ 12,691 457,770 5,356 57,690 533,507 36,470,102 934,829 (884) (2,360,258) 35,043,789 34,435,087 608,702 35,043,789 (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 37,461,876 1,374,197 (1,233,218) (1,132,753) 36,470,102 35,433,775 1,036,327 36,470,102 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2021 NOTE 7: ACCUMULATED LOSSES AND RESERVES (continued) Nature and purpose of reserves (continued) Performance rights (continued) securities consolidation. The consolidation was completed on 5 December 2019. During 2020: • 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. • The remaining 2,294,998 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 be greater than A$0.40 by 30 June During 2021: 2021 did not occur. NOTE 8: CASH AND CASH EQUIVALENTS Cash at bank and on hand Short term interest bearing deposits 2021 $ 5,894,268 28,279,598 34,173,866 2020 $ 730,004 39,982,945 40,712,949 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 (2020: $10,000) is on deposit as cash backed security against a business use credit card limit and office rental. - 35 - - 36 - Aspire Mining Limited Aspire Mining Limited NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2021 NOTE 8: CASH AND CASH EQUIVALENTS (continued) Reconciliation of loss for the year to net cash flows from operating activities At the Company’s Annual General Meeting held on 29 November 2019, shareholders approved a 1 for 10 Change in net assets and liabilities: Loss for the year 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 Exploration expenditure impairment Foreign exchange (gain)/loss Net cash used in operating activities NOTE 9: CURRENT TRADE AND OTHER RECEIVABLES GST recoverable Prepayments Interest receivable Other receivables 2021 $ 2020 $ (5,176,364) (5,488,200) 260,118 4,672 9,759 234,814 79,993 884 2,922,426 (1,663,698) 2021 $ 12,691 457,770 5,356 57,690 533,507 (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 There were no credit losses in the current or the prior year. 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 2021 $ 2020 $ 36,470,102 934,829 (884) (2,360,258) 35,043,789 34,435,087 608,702 35,043,789 37,461,876 1,374,197 (1,233,218) (1,132,753) 36,470,102 35,433,775 1,036,327 36,470,102 - 37 - Aspire Mining Limited NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2021 NOTE 10: DEFERRED EXPLORATION AND EVALUATION EXPENDITURE (continued) 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. 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 2021 $ 152,866 60,403 5,433 - 218,702 2020 $ 130,592 25,000 5,925 599 162,116 Trade payables and accrued expenses are normally settled on 30 day terms. NOTE 12: PROPERTY, PLANT AND EQUIPMENT Right of use property Plant & Equipment $ $ Furniture & Fittings $ Office Equipment Motor Vehicles Total $ $ $ 123,897 228,370 - (24,087) (12,410) 315,770 49,045 - - (37,777) (4,322) 6,946 36,553 4,972 (154) (23,309) (3,270) 14,792 40,534 14,419 (2,244) (22,897) (3,674) 26,138 54,280 63,494 - (54,717) (5,035) 58,022 304,309 311,255 (2,398) (162,787) (28,711) 421,668 1,093,194 (671,526) 421,668 134,291 13,199 - (18,549) (5,044) 123,897 102,880 - - (52,678) (1,157) 49,045 53,789 20,061 (7,380) (28,668) (1,249) 36,553 57,499 128,597 - 29,248 (8,870) (12,633) (64,415) (32,159) (1,032) (1,421) 54,280 40,534 477,056 62,508 (28,883) (196,469) (9,903) 304,309 1,291,603 (987,294) 304,309 30 June 2021 Carrying value at 1 July 2020 Additions Disposals Depreciation charge for the year Exchange rate movement Carrying value at 30 June 2021 30 June 2021 Cost Accumulated depreciation Net carrying amount 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 The carrying value of motor vehicles held under a finance loan agreement at 30 June 2021 is $4,652 (2020: $54,280). The motor vehicle is pledged as security for the finance loan liability. - 37 - - 38 - Aspire Mining Limited Aspire Mining Limited NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2021 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2021 NOTE 10: DEFERRED EXPLORATION AND EVALUATION EXPENDITURE (continued) NOTE 13: INTANGIBLE ASSET Exploration Software 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 1,093,194 (671,526) 421,668 Balance at beginning of period Payments Balance at end of period 2021 $ 171,113 4,094 (10,932) (72,027) (15,343) 76,905 206,391 (129,486) 76,905 2021 $ 53,489 53,489 10,522 42,967 53,489 $ 70,492 (17,003) 53,489 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 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. 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. 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. NOTE 12: PROPERTY, PLANT AND EQUIPMENT 2021 $ 152,866 60,403 5,433 - 218,702 2020 $ 130,592 25,000 5,925 599 162,116 Right of use Plant & property Equipment Office Motor Total Equipment Vehicles $ $ $ $ $ Furniture Fittings & $ 123,897 228,370 - (24,087) (12,410) 315,770 49,045 36,553 - - 4,972 (154) 40,534 14,419 (2,244) 54,280 63,494 - 304,309 311,255 (2,398) (37,777) (23,309) (22,897) (54,717) (162,787) (4,322) 6,946 (3,270) 14,792 (3,674) (5,035) 26,138 58,022 (28,711) 421,668 30 June 2021 Carrying value at 1 July 2020 Additions Disposals Depreciation charge for the year Exchange rate movement Carrying value at 30 June 2021 30 June 2021 Cost Accumulated depreciation Net carrying amount 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 134,291 13,199 - (18,549) (5,044) 123,897 102,880 53,789 20,061 (7,380) 57,499 128,597 29,248 - 477,056 62,508 (12,633) (8,870) (28,883) - - (52,678) (28,668) (32,159) (64,415) (196,469) (1,157) 49,045 (1,249) 36,553 (1,421) (1,032) (9,903) 40,534 54,280 304,309 1,291,603 (987,294) 304,309 The carrying value of motor vehicles held under a finance loan agreement at 30 June 2021 is $4,652 (2020: $54,280). The motor vehicle is pledged as security for the finance loan liability. - 39 - - 40 - Aspire Mining Limited Aspire Mining Limited NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2021 NOTE 15: NON-CONTROLLING INTERESTS AND CONTRIBUTION RESERVE 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 2019 Loss allocated to non-controlling interest Other comprehensive loss allocated to non-controlling interest Balance at 30 June 2020 Loss allocated to non-controlling interest Other comprehensive profit/(loss) allocated to non-controlling interest Balance at 30 June 2021 Coalridge Limited $ (88,379) (18,034) (10,611) (117,024) (2,782) (53,141) (172,947) Northern Rail Holdings Limited $ (357,680) Total $ (446,059) (29,451) (47,485) (8,764) (395,895) (19,375) (512,919) (5,805) (8,587) 209,925 (191,775) 156,784 (364,722) Current Assets Non-Current Assets Total Assets Current Liabilities Non-Current Liabilities Total Liabilities Net Assets Revenue Loss for the year Total comprehensive profit/(loss) for the year Coalridge Limited 30 June 2021 $ 15,660 608,702 624,362 (16,947) - (16,947) 607,415 30 June 2020 $ 30,811 1,038,718 1,069,529 (17,403) - (17,403) 1,052,126 (27,809) (559,221) (180,333) (286,442) Northern Railway Holdings Limited 30 June 2021 $ 10,210 - 10,210 (13,737) - (13,737) (3,527) 30 June 2020 $ 10,210 - 10,210 (13,737) - (13,737) (3,527) - (29,025) 1,020,603 - (147,256) (191,077) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2021 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. 2021 $ 75,737 34,173,866 34,249,603 218,702 53,487 272,189 2020 $ 356,712 40,712,949 41,069,661 162,116 70,492 232,608 Financial assets: Receivables Cash and cash equivalents Financial liabilities: Trade and other creditors Borrowings 2021 Non-interest bearing Variable interest rate instruments Fixed interest rate instruments 2020 Non-interest bearing Variable interest rate instruments Fixed interest rate instruments rate % 0.30 0.41 0.50 1.25 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 Less than 1 month 1 – 3 Months 3 months – 1 1 – 5 years 5+ years $ $ $ $ year $ 23,980,592 29,950,597 4,299,006 4,299,006 108,019 5,861,986 390,541 696,175 - - - - - 34,903,456 1,086,716 34,903,456 5,079,486 5,079,486 - - - - - - - - - - - - - - - - - - - - - - - 39 - - 40 - Aspire Mining Limited Aspire Mining Limited NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2021 NOTE 15: NON-CONTROLLING INTERESTS AND CONTRIBUTION RESERVE 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 Northern Rail Coalridge Limited Holdings Limited $ $ Total $ Balance at 30 June 2019 Loss allocated to non-controlling interest Other comprehensive loss allocated to non-controlling interest Balance at 30 June 2020 Loss allocated to non-controlling interest Other comprehensive profit/(loss) allocated to non-controlling interest Balance at 30 June 2021 (88,379) (18,034) (10,611) (117,024) (2,782) (53,141) (172,947) (357,680) (446,059) (29,451) (47,485) (8,764) (395,895) (19,375) (512,919) (5,805) (8,587) 209,925 (191,775) 156,784 (364,722) Coalridge Limited 30 June 2021 $ 15,660 608,702 624,362 (16,947) - (16,947) 607,415 30 June 2020 $ 30,811 1,038,718 1,069,529 (17,403) - (17,403) 1,052,126 Northern Railway Holdings Limited 30 June 2021 30 June 2020 10,210 10,210 10,210 (13,737) 10,210 (13,737) (13,737) (3,527) (13,737) (3,527) $ - - - $ - - - Total comprehensive profit/(loss) for (27,809) (559,221) (180,333) (286,442) (29,025) 1,020,603 (147,256) (191,077) Current Assets Non-Current Assets Total Assets Current Liabilities Non-Current Liabilities Total Liabilities Net Assets Revenue Loss for the year the year NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2021 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 2021 $ 75,737 34,173,866 34,249,603 218,702 53,487 272,189 2020 $ 356,712 40,712,949 41,069,661 162,116 70,492 232,608 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 % $ $ $ $ $ 0.30 0.41 0.50 1.25 108,019 5,861,986 - - 23,980,592 29,950,597 4,299,006 4,299,006 390,541 696,175 - - - - - - - - - 34,903,456 1,086,716 34,903,456 5,079,486 5,079,486 - - - - - - - - - - - - - - - - 2021 Non-interest bearing Variable interest rate instruments Fixed interest rate instruments 2020 Non-interest bearing Variable interest rate instruments Fixed interest rate instruments NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2021 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2021 - 41 - - 42 - Aspire Mining Limited Aspire Mining Limited NOTE 16: FINANCIAL INSTRUMENTS (continued) NOTE 17: FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (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. Credit exposure is controlled by counterparty limits that are reviewed and approved by the risk management committee annually. Weighted average effective interest rate Less than 1 month 1 – 3 Months 3 months – 1 year 1 – 5 years 5+ years 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 2021 Non-interest bearing Variable interest rate instruments Fixed interest rate instruments 2020 Non-interest bearing Variable interest rate instruments Fixed interest rate instruments % - - 15.6 - - 15.6 $ $ $ $ $ 218,702 - - 218,702 162,116 - - 162,116 - - - - - - - - - - - - - - - - - - - - 10,522 10,522 42,965 42,965 - - - - 11,588 11,588 58,903 58,903 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 2021 and 2020, 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. 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 agencies. 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 (2020: $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 and . 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 remaining constant would be as follows: At 30 June 2021, the effect on loss and equity as a result of changes in the interest rate, with all other variable 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% 2021 $ 58,620 (58,620) 2020 $ 6,947 (6,947) 58,620 (58,620) 6,947 (6,947) (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 2021 2020 $ - $ - 116,167 162,668 Assets 2021 $ 2020 $ 34,107,102 39,937,178 359,053 40,953 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2021 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2021 - 41 - - 42 - Aspire Mining Limited Aspire Mining Limited NOTE 16: FINANCIAL INSTRUMENTS (continued) NOTE 17: FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (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. Credit exposure is controlled by counterparty limits that are reviewed and approved by the risk management committee annually. 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 (2020: $Nil). (c) Interest rate risk management NOTE 17: FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES The Group has exposure to the following risks from the use of financial instruments: 11,588 11,588 58,903 58,903 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 and . 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 2021, 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% 2021 $ 58,620 (58,620) 2020 $ 6,947 (6,947) 58,620 (58,620) 6,947 (6,947) (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 2021 $ - 116,167 2020 $ - 162,668 Assets 2021 $ 2020 $ 34,107,102 359,053 39,937,178 40,953 Weighted average effective interest Less than 1 month 1 – 3 Months 3 months – 1 year 1 – 5 years 5+ years $ $ $ $ $ 218,702 218,702 162,116 - - - - 162,116 - - - - - - - - 10,522 10,522 42,965 42,965 - - - - - - - - - - - - - - - - 2021 Non-interest bearing Variable interest rate instruments Fixed interest rate instruments 2020 Non-interest bearing Variable interest rate instruments Fixed interest rate instruments rate % 15.6 - - - - 15.6 • 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 2021 and 2020, it has been the Group’s policy not to trade in financial instruments. (a) Credit risk management 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 2021 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2021 - 43 - - 44 - Aspire Mining Limited Aspire Mining Limited NOTE 17: FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (continued) Foreign currency sensitivity analysis 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. Conversely, a negative number indicates a strengthening of the Australian Dollar against the respective currency and a negative impact on profit and equity. NOTE 18: COMMITMENTS Remuneration Commitments Exploration 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. 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 10% Increase 2021 $ 2020 $ During the prior year, the Group entered into a loan agreement to purchase two motor vehicles. Profit/(loss) and equity – US dollar exposure 3,100,646 3,644,708 Within a year Later than one year but not later than five years Profit/(loss) and equity – Mongolian Tugrik 42,357 11,142 10% Decrease $ $ Profit/(loss) and equity – US dollar exposure (3,789,678) (4,453,643) Profit/(loss) and equity – Mongolian Tugrik (57,248) (13,618) Investment Consideration Commitments (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. 2021 $ 20,359 81,437 2020 $ 22,421 67,263 2021 $ 18,117 56,941 - 75,059 (21,571) 53,488 10,522 42,966 53,488 2020 $ 21,759 68,972 13,700 104,431 (33,939) 70,492 11,588 58,904 70,492 More than 5 years Total liability Less unexpired interest Present value Represented by: Current liability Non-current liability: area. NOTE 19: DIVIDENDS 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 The Directors of the Group have not declared any dividend for the year ended 30 June 2021. NOTE 20: CONTINGENT LIABILITIES There are no contingent liabilities at 30 June 2021. 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 2021 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2021 - 43 - - 44 - Aspire Mining Limited Aspire Mining Limited NOTE 17: FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (continued) Foreign currency sensitivity analysis NOTE 18: COMMITMENTS Remuneration Commitments 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. Conversely, a negative number indicates a strengthening of the Australian Dollar against the respective currency and a negative impact on profit and equity. 10% Increase 2021 $ 2020 $ Profit/(loss) and equity – US dollar exposure 3,100,646 3,644,708 Profit/(loss) and equity – Mongolian Tugrik 42,357 11,142 10% Decrease $ $ Profit/(loss) and equity – US dollar exposure (3,789,678) (4,453,643) Profit/(loss) and equity – Mongolian Tugrik (57,248) (13,618) (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. 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 2021 $ 20,359 81,437 2020 $ 22,421 67,263 During the prior 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: 2021 $ 18,117 56,941 - 75,059 (21,571) 53,488 10,522 42,966 53,488 2020 $ 21,759 68,972 13,700 104,431 (33,939) 70,492 11,588 58,904 70,492 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 2021. NOTE 20: CONTINGENT LIABILITIES There are no contingent liabilities at 30 June 2021. 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. - 45 - - 46 - Aspire Mining Limited Aspire Mining Limited NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2021 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2021 NOTE 22: DIRECTORS AND EXECUTIVE DISCLOSURES NOTE 24: PARENT ENTITY DISCLOSURES (continued) 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 2021 $ 830,469 5,205 67,033 902,707 2020 $ 1,074,555 5,205 160,422 1,240,182 Share based payments is the gross accounting value of performance rights and options brought to account in accordance with accounting standards. Related Party Transactions In 2021, Kingsland Kingsland Corporate Pty Ltd (formerly 2R’s Pty Ltd), a company associated with Mr David Paull, was paid $15,150 for the services provided by David Paull beyond his NED Chair role (2020: Nil). In 2020, 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). 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 2021 $ 50,460 - 50,460 The auditor of Khurgatai Khairkhan LLC, its direct subsidiaries and Northern Railways LLC is KPMG. 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 Total liabilities Net assets Equity Issued capital Reserves Accumulated losses Total equity 2021 $ 73,614 - 73,614 2021 $ 29,863,351 6,615,577 36,478,928 156,022 156,022 36,322,906 150,026,408 - (113,703,502) 36,322,906 2020 $ 49,700 - 49,700 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 Year ended 30 June 2021 $ (6,320,821) (6,320,821) Year ended 30 June 2020 $ (7,889,619) (7,889,619) 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. The consolidated financial statements include the financial statements of Aspire Mining Limited and its below Financial performance Operating loss for the year Total comprehensive loss NOTE 25: SUBSIDIARIES subsidiaries. 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 Infrastructure Limited Coalridge Limited Ekhgoviin Chuluu LLC Black Rock LLC Urnuun Elbeg LLC Country of incorporation 2021 2020 % Equity Owned Investment Mongolia Mongolia Mongolia Singapore Mongolia Mongolia Singapore Mongolia Mongolia Mongolia British Virgin Islands British Virgin Islands 2021 100% 100% 100% 100% 80% 80% 80% 80% 100% 100% 90% 100% 2020 100% 100% 100% 80% 80% 80% 80% 100% 90% - 100% $9,428,158 $9,428,158 $136,230 $136,230 $1 $1 $97,408 $97,408 100% $1,541,390 $1,541,390 - - - - - - - - - - - - - - *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. 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 2021 and before impairment, amounts of $61,219,559 (2020: $58,861,726), $20,920,968 (2020: $20,907,766), $138,409 (2020: $138,409), $1,296,755 (2020: $1,286,160), $22,287 (2020: $18,736) and $466,017 (2020: $450,279) 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. - 45 - - 46 - Aspire Mining Limited Aspire Mining Limited NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2021 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2021 NOTE 22: DIRECTORS AND EXECUTIVE DISCLOSURES NOTE 24: PARENT ENTITY DISCLOSURES (continued) The totals of remuneration paid to key management personnel of the Company during the year are as follows: 2021 $ 830,469 5,205 67,033 902,707 2020 $ 1,074,555 5,205 160,422 1,240,182 Financial performance Operating loss for the year Total comprehensive loss Year ended 30 June 2021 $ (6,320,821) (6,320,821) Year ended 30 June 2020 $ (7,889,619) (7,889,619) 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 Infrastructure Limited Coalridge Limited Ekhgoviin Chuluu LLC Black Rock LLC Urnuun Elbeg LLC Country of incorporation Mongolia Mongolia Mongolia Singapore Mongolia Mongolia Singapore British Virgin Islands British Virgin Islands Mongolia Mongolia Mongolia 2021 100% 100% 100% 100% 80% 80% 80% 80% 100% 100% 90% 100% 2021 - - - 2020 2020 - 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% - - - *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. 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 2021 and before impairment, amounts of $61,219,559 (2020: $58,861,726), $20,920,968 (2020: $20,907,766), $138,409 (2020: $138,409), $1,296,755 (2020: $1,286,160), $22,287 (2020: $18,736) and $466,017 (2020: $450,279) 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. Short-term employee benefits Post-employment benefits Share-based payments accordance with accounting standards. Related Party Transactions Share based payments is the gross accounting value of performance rights and options brought to account in In 2021, Kingsland Kingsland Corporate Pty Ltd (formerly 2R’s Pty Ltd), a company associated with Mr David Paull, was paid $15,150 for the services provided by David Paull beyond his NED Chair role (2020: Nil). In 2020, 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). 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 The auditor of Khurgatai Khairkhan LLC, its direct subsidiaries and Northern Railways LLC is KPMG. 2021 $ 50,460 - 50,460 2021 $ 73,614 - 73,614 2021 $ 29,863,351 6,615,577 36,478,928 156,022 156,022 36,322,906 150,026,408 - (113,703,502) 36,322,906 2020 $ 49,700 - 49,700 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 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 Total liabilities Net assets Equity Issued capital Reserves Accumulated losses Total equity - 47 - Aspire Mining Limited DIRECTORS’ DECLARATION In the opinion of the Directors of Aspire Mining Limited (‘the Company’): 1. The financial statements and notes of the Group are in accordance with the Corporations Act 2001 including: a. b. giving a true and fair view of the Group’s financial position as at 30 June 2021 and of its performance for the year then ended; and complying with Accounting Standards and Corporations Regulations 2001. There are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable. The financial statements and notes are in accordance with International Financial Standards issued by the International Accounting Standards Board. This declaration has been made after receiving the declarations required to be made to the Directors in accordance with Section 295A of the Corporations Act 2001 for the financial year ended 30 June 2021. 2. 3. 4. This declaration is signed in accordance with a resolution of the Board of Directors. Achit-Erdene Darambazar Managing Director 28 September 2021 - 48 - 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 2021, the consolidated statement of profit or loss and other comprehensive income, the consolidated statement of changes in equity and the consolidated statement of cash flows for the year then ended, and notes to the financial 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 2021 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. - 47 - Aspire Mining Limited DIRECTORS’ DECLARATION In the opinion of the Directors of Aspire Mining Limited (‘the Company’): 1. The financial statements and notes of the Group are in accordance with the Corporations Act 2001 including: a. b. giving a true and fair view of the Group’s financial position as at 30 June 2021 and of its performance for the year then ended; and complying with Accounting Standards and Corporations Regulations 2001. 2. There are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable. 3. The financial statements and notes are in accordance with International Financial Standards issued by the International Accounting Standards Board. 4. This declaration has been made after receiving the declarations required to be made to the Directors in accordance with Section 295A of the Corporations Act 2001 for the financial year ended 30 June 2021. This declaration is signed in accordance with a resolution of the Board of Directors. Achit-Erdene Darambazar Managing Director 28 September 2021 - 48 - 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 2021, the consolidated statement of profit or loss and other comprehensive income, the consolidated statement of changes in equity and the consolidated statement of cash flows for the year then ended, and notes to the financial 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 2021 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. - 49 - Key Audit Matter How our audit addressed the key audit matter Deferred exploration and evaluation expenditure Refer to Note 10 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 2022 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 2021, 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 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. - 50 - 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. - 49 - Key Audit Matter How our audit addressed the key audit matter Deferred exploration and evaluation expenditure Refer to Note 10 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 2022 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 2021, 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 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. - 50 - 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. - 51 - 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 2021. In our opinion, the Remuneration Report of Aspire Mining Limited for the year ended 30 June 2021 complies with section 300A of the Corporations Act 2001. Responsibilities The directors of the Company are responsible for the preparation and presentation of the Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on the Remuneration Report, based on our audit conducted in accordance with Australian Auditing Standards. HLB Mann Judd B G McVeigh Chartered Accountants Partner Perth, Western Australia 28 September 2021 - 52 - 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 12th October 2021. 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 2. Number of holders in each class of equity securities and the voting rights attached Ordinary Shares There are 2,505 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. 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 – 744 524 270 709 258 TOTAL ON REGISTER 2,505 Units 278,722 1,432,496 2,188,911 27,861,947 475,874,909 507,636,985 % 0.06% 0.28% 0.43% 5.49% 93.74% 100.00 % b) There were no listed options on issue as at the date of this report. c) There were no unlisted performance rights on issue as at the date of this report. 4. Marketable Parcel There are 1,203 shareholders with less than a marketable parcel. 5. Twenty largest holders of each class of quoted equity security 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; - 51 - 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 2021. In our opinion, the Remuneration Report of Aspire Mining Limited for the year ended 30 June 2021 complies with section 300A of the Corporations Act 2001. Responsibilities The directors of the Company are responsible for the preparation and presentation of the Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on the Remuneration Report, based on our audit conducted in accordance with Australian Auditing Standards. HLB Mann Judd B G McVeigh Chartered Accountants Partner Perth, Western Australia 28 September 2021 - 53 - ADDITIONAL SHAREHOLDER INFORMATION (continued) Ordinary Shares Top 20 holders and percentage held Holder Name 1 Mr Tserenpuntsag Tserendamba 2 Noble Resources International Pte 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 Citicorp Nominees Pty Ltd 9 BNP Paribas Nominees Pty Ltd Istabraq Pty Ltd 10 Mr Michael Frank Manford 11 Mr Stephen Ronald Hobson 12 BNP Paribas Noms Pty Ltd 13 2R’s Pty Ltd 14 15 Glover Superannuation Pty Ltd 16 Mr Peter Joseph McGuire 17 Sandwich Holdings Pty Ltd 18 Mentok Pty Ltd 19 Mr Joseph Warren 20 Mr Derek Palmer & Mrs Mary Margaret Palmer Total Notes (i) Held for and on behalf of Mr. Tserenpuntsag Tserendamba Units % of Issued 222,542,060 66,401,758 43,834,410 23,727,851 15,390,196 9,836,492 6,862,820 3,270,437 2,964,900 2,300,898 2,129,833 1,997,510 1,557,013 1,358,367 1,212,304 1,200,000 1,100,000 1,065,000 1,023,403 1,000,000 410,775,252 43.84% 13.08% 8.64% 4.67% 3.03% 1.94% 1.35% 0.64% 0.58% 0.45% 0.42% 0.39% 0.31% 0.27% 0.24% 0.24% 0.22% 0.21% 0.20% 0.20% 80.92% - 54 - ADDITIONAL SHAREHOLDER INFORMATION (continued) 6. Stock exchange on which the Company’s securities are quoted: The Company’s listed equity securities are quoted on the Australian Stock Exchange. 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 2021 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 Nuurstei MV-020941 Location Mongolia Mongolia Attributable Equity 100% 90%

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