CORPORATE
INFORMATION
ASPIRE MINING LIMITED
ABN 46 122 417 243
DIRECTORS
Mr Achit-Erdene Darambazar (Managing Director)
Mr David Paull (Non-Executive Chairman)
SHARE REGISTRY
Automic Group
Level 5, 191 St Georges Terrace
PERTH WA 6000 AUSTRALIA
Telephone: 1300 288 664
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
Level 9, 190 St Georges Terrace,
PERTH WA 6000 AUSTRALIA
Telephone: +61 8 9287 4555
Email: info@aspiremininglimited.com
PRINCIPAL PLACE OF BUSINESS
AUSTRALIA
Level 9, 190 St Georges Terrace,
PERTH WA 6000 AUSTRALIA
MONGOLIA
Chingeltei District, 1st Khoroo
Baga Toiruu-17
JJ Tower, 9th Floor
ULAANBAATAR 15170
123 St Georges Terrace
PERTH WA 6000 AUSTRALIA
BANKERS
National Australia Bank
Ground Floor, 100 St Georges Tce
PERTH WA 6000
AUDITORS
HLB MANN JUDD (WA Partnership)
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
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
IV
VI
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13
14
15
16
17
18
44
45
49
CHAIRMAN’S
LETTER
Dear Shareholders,
The global coal markets are currently dislocated
with a hard to comprehend premium for thermal
coal over hard coking coal. Coking coal is rare and a
highly specified high energy containing beneficiated
product yet some coking coal brands are trading at
half the thermal coal spot price. The values of coal
equities have risen to all time highs for producers.
There is a massive premium for incumbency.
Meanwhile Aspire’s market capitalisation and value
has remained static over the year with see through
valuation of its 100% owned Ovoot Coking Coal
Project, after adjusting for cash holdings, moving in
a range of A$8M – A$12M over the year. This is for a
project with a before tax NPV 10 based on the 2019
Pre Feasibility Study of over US$800M.
Confidence in Mongolia as an investment destination
is on the up. Rio Tinto has confirmed this with the
resolution with the Mongolian Government around
funding contributions and loan accounts for Oyu
Tolgoi and Rio’s now recommended US$3.3B offer to
acquire 100% of Turquoise Hill Resources Ltd which
owns 67% of the world class Oyu Tolgoi copper
mine. Also, for the first time in a while there were IPO
listings based on Mongolian resource assets.
Further for the first time in decades, there has been
in railway construction
significant advancement
concentrated in the south of the country but designed
to alleviate bottlenecks that will benefit Aspire’s
Ovoot coking coal travelling south on the Mongolian
railway system to Chinese customers.
Road engineering is well advanced with completion
expected in late calendar 2022 to support a Definitive
Feasibility Study, financing and an
investment
decision thereafter.
Renewable power and a focus on emissions and
water consumption has been a focus on how the
Ovoot Project will be developed in a manner that will
be a significant net benefit to the local community.
The rewards should be there for shareholders as
Aspire moves closer to production. Even given
current high coal prices and coal equity values for
producers, there is little to no exploration for new
coal deposits. What’s more, capital for existing
coking coal deposits is being re-deployed elsewhere
as established jurisdictions in Australia and Canada
enact policies that discourage the normal supply
response that would follow buoyant markets. This will
impact markets for the medium to long term as prices
would be expected to remain historically elevated
while potential alternative technologies to blast
furnace steel production starts to impact demand.
Essentially a survivor’s premium in the coking coal
space which should secure long term returns for
shareholders.
I wish to thank our management team and in particular
COO Sam Bowles who has done an outstanding job
with limited resources while we conserve our cash
resources for the future capital development work
that we anticipate engaging in the coming year.
FEED engineering studies for the Ovoot Project Coal
Handling and Preparation Plant and the Erdenet
Rail Terminal were all completed in the 2022
financial year.
David Paull
— Chairman
IV
ASPIRE MINING LIMITED | ANNUAL REPORT 2022 Renewable power and a
focus on emissions and
water consumption has
been a focus on how
the Ovoot Project will be
developed in a manner
that will be a significant
net benefit to the local
community.
V
ASPIRE MINING LIMITED | ANNUAL REPORT 2022 Listed on the Australian Stock Exchange,
Aspire Mining Limited (ASX : AKM) is a
coking coal resource development company
which owns 100% of the Ovoot Coking Coal
Project and 90% of the Nuurstei Coking
Coal Project in Mongolia.
VI
ASPIRE MINING LIMITED | ANNUAL REPORT 2022 OPERATIONAL
OVERVIEW
STRATEGY
through
The Company’s strategy is to create wealth for
shareholders
the
metallurgical coal deposit at the Ovoot Coking Coal
Project that contains over 280 Mt of JORC 2012
Resources (197 Mt Measured, 72 Mt Indicated and 12
Mt Inferred).
the development of
Coking coal is used in the blast furnace process to
produce steel. The Company will not produce any
thermal coal which is 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 transporting a higher value washed coking
coal product to steel making customers whilst also
bringing significant benefits to the local communities.
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 with the opportunity of
two 20 year extensions.
The Ovoot Coking Coal Project is based on a relatively
low strip ratio, single open cut mine delivering coal
to a wash plant on site. The coal has been shown to
be high yielding at average yields of over 80% and
expected to produce washed coking coal product
with 10.5% ash and 10% moisture. There is no thermal
coal fraction in production.
This combination of good washing yield, low strip
ratio and no thermal fraction makes for a highly
competitive mine cost structure with estimated costs
established in a 2019 Pre Feasibility Study (“PFS”)
below US$100/t delivered
including
import duties and border charges. The Company is
now working on a Definitive Feasibility Study that will
update the PFS outcomes.
into China
VII
ASPIRE MINING LIMITED | ANNUAL REPORT 2022 Figure 1: Blast Furnace Capacity per China Provinces.
Source: Teck Resources Presentation, Steelmaking Coal Resilience, 9 May 2022.
As Figure 1 shows, Mongolia is very well located to the
largest concentration of blast furnace steel making
capacity in the world with over 300 Mtpa and over 65
Mtpa in Hebei and Liaoning provinces respectively
which are within 800 kms of the Mongolian border
at Erlian.
The Ovoot Project is approximately 600 kms by road
from the nearest rail head at Erdenet. From there the
coal can be transported both north and south to steel
making customers.
In 2019 the Company refocused the Ovoot Project’s
development strategy through a Pre Feasibility
Study (“PFS”) based on-road transport of washed
coking coal to Erdenet, to access rail at a company
built terminal.
Strict COVID restrictions made further progress
difficult in 2020 and 2021, however these restrictions
were eased in late 2021 to allow advancement.
During the 2022 year the Company progressed with
activities required for a Definitive Feasibility Study
(“DFS”) for the Ovoot Project and a final investment
decision by the Board. To advance, key permits (with
their conditions) need to be received for activities
including infill drilling to better define the starter pit,
confirm pit wall angles and therefore the amount of
pre-stripping of waste to commence coal mining, and
the ongoing amount of waste removal required.
FEED studies have been completed with designs
and selected technologies at both the Ovoot Project
and the Erdenet Rail terminal. These were chosen
to minimise water and power consumption while
enclosing stockpiles and coal handling facilities to
eliminate dust.
VIII
ASPIRE MINING LIMITED | ANNUAL REPORT 2022 OVOOT PROJECT CHPP
Sedgman Pty Ltd has completed its FEED studies in
relation to the CHPP and mine site materials handling
infrastructure.
The CHPP is rated at 350 tonnes per hour of raw
coal for up to 7,200 hours per annum over a 20 year
life. The flowsheet selected met the Company’s
objectives to maximise water and power efficiency
and avoid the requirement for a tailings dam. All coal
handling and stockpile infrastructure is covered to
limit dust emissions and is capable of supporting a
future phased expansion.
The capital cost was estimated at US$77M (± 15%) for
a 15 month build. This is substantially higher than the
PFS estimated, reflecting general inflation pressures
and the significantly more robust plant design scope.
Sedgman Pty Ltd prepared Lim simulations to evaluate
potential combinations of processing equipment.
These simulations considered use of dense media
cyclones to treat the coarse fraction, spirals and
reflux classifiers for fine fraction, and reflux classifiers
and froth flotation for the ultrafine fraction.
Results indicated that the best overall yield would
be achieved from a process comprising dense
media cyclones
treatment,
and reflux classifiers for both fine and ultrafine
fraction treatment.
for coarse
fraction
According to the simulation results, the chosen
process flowsheet can produce a 10.5% ash (air
dried) product, at greater than 80% yield (air dried),
whilst achieving total product moisture of less than
11% (as received).
The high yield is possible because of the soft nature
of Ovoot coal (Hargrove Grind Index of 100) and the
distinctive difference between the specific gravity
of the coal versus inherent ash. The energy content
within the separated ash is very low, and hence the
proposed plant design does not include middling
circuits for production of a thermal coal by-product.
By incorporating belt press filters for dewatering of
fine and ultrafine tailings, the requirement for raw
water to the Coal Processing Plant (CPP) is reduced.
Importantly, this enables the dewatered fine and
ultrafine tailings to be combined with the coarse
tailings for co-disposal in the mine overburden
dumps, thus avoiding the requirement for a tailings
storage facility (dam).
Figure 2: Ovoot CHPP Flowsheet.
IX
ASPIRE MINING LIMITED | ANNUAL REPORT 2022 ERDENET RAIL TERMINAL (ERT) FEED
STUDY
ROAD CONNECTION FROM OVOOT TO
ERDENET
local engineering consultants,
During the year,
Gobi Infrastructure Partners LLC (GIP) and ICT Sain
Consulting LLC (ICT), continued development of
the feasibility study and detailed design for the
sealed road to be used for hauling washed coking
coal from the OCCP to the ERT in compliance with
requirements of the Ministry of Road and Transport
Development (MRTD).
feasibility
The
study component has been
completed and has been submitted to the Science
and Technology Council appointed by the Road
and Transport Development Centre for review.
Submission of the detailed design follows approval
of the feasibility study, which is anticipated to be
received before the end of 2022.
The Company will be able to provide an update on
pre-construction activities including preparation of a
government compliant feasibility study shortly.
RAIL DEVELOPMENTS TO IMPROVE
CHINESE MARKET ACCESS
The 2022 year saw the most significant advances to
the Mongolian rail system since it was first established
in 1949, specifically focused on improving bulk
commodity exports.
On 9 September 2022, the first freight train travelled
the 234 km rail connection from the Tavan Tolgoi
Coking Coal mine to the Mongolian/China border at
Gashuun Sukhait.
This new connection is Mongolia’s first 100% owned
railway and was developed in combination with the
connection east from Tavan Tolgoi to Zuunbayan
and Sainshand on the main line. This connection will
enable a diversification of avenues to export bulk
commodities from Mongolia to China.
On 2 July 2022, the Prime Minister of Mongolia,
L. Oyun-Erdene, announced the development of
the 415 km Choibalsan – Khuut – Bichigt railway
with construction to commence from the China –
Mongolian border post at Bichigt, with an initial target
capacity of 25 million tonnes per annum. The border
port at Bichigt is expected to be built within two years
with funding from Asian Development Bank.
O2 Mining LLC was engaged by the Company to
conduct a FEED study on the ERT infrastructure.
is
intended
infrastructure
This
facilitate
transloading of washed coking coal from road
trucks to rail wagons, and the coal handling system
incorporates truck unloading, coal storage and train
loadout facilities.
to
The FEED study included conceptual designs for
process infrastructure including a train loadout facility
of 1,700 tonnes per hour (tph), enclosed storage of
58,500 tonnes and truck unload facility of 750 tph
nominal capacities with room for future expansions.
Capital Cost estimate came in at US$17.7M (+25%/
-10%) before trail spur line costs and assuming a full
EPC turnkey solution.
Figure 3: ERT Conceptual Schematic (inclusive of potential future
expansion).
X
ASPIRE MINING LIMITED | ANNUAL REPORT 2022 Further, Japanese engineering group Nippon Koei
has conducted environmental assessments and
preliminary designs for a future Sainshand – Khuut
railway, which would integrate the central and
eastern rail infrastructure and provide a path for
Ovoot coking coal to access the Bichigt border by
rail from Erdenet. This has been a long-term goal for
the country’s rail strategy.
Gaining access to the Chinese rail system via the
Bichigt port presents opportunity to access the high-
capacity bulk commodity export port at Dalian and
Dandong and to the north-eastern Chinese steel
industries in Jilin and Liaoning provinces, which have
blast furnace capacities of approximately 11 Mt and
69 Mt respectively. This could significantly diversify
Aspire’s potential customer base.
Figure 4: The opening ceremony of the Tavan Tolgoi-Gashuun
Suhait railway was held on 9 September at Umungovi province,
Mongolia. Photo: Twitter.
Figure 5: Map of Mongolian Rail Network and Transport connections with Chinese Steel Industry.
XI
ASPIRE MINING LIMITED | ANNUAL REPORT 2022 THE COKING COAL MARKET
Ovoot will produce a Fat Coking Coal which is a
coal with unique fluidity and plastic properties.
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.
For the purposes of the 2019 Ovoot Coking Coal
Project Pre Feasibility Study (PFS), a flat price of
US$150/t Delivered at Place to the Erlian border for
Ovoot “fat” coking coal was used based on a detailed
Chinese “fat” coking coal market report completed
by Fenwei Energy Information Services Ltd (Fenwei)
in December 2018.
Coking Coal prices both in China and seaborne
have been elevated over the last 12 months and
sit well above the PFS assumed price of US$150/t
delivered into China at Erlian. While steel demand
has been relatively flat, the thermal coal market has
suffered significant dislocation given the Ukraine
– Russian war with spot prices for good quality
thermal coal well above coking coal prices. This
has seen some reclassification of PCI and semi soft
coking coals being blended into the thermal market.
The dislocation in the thermal market is expected
to continue over the medium term which will be
supportive for coking coal prices.
There is also the growing impact on government
policy initiatives and the lack of institutional support
for a supply response from the coking coal industry to
address the price and supply squeeze. Larger players
such as BHP and South32 have made decisions to
curtail investment in coking coal supply. With no
current alternatives to blast furnace steel production
given the wide range of iron ore qualities available,
large coking coal buyers such as India’s Tata Steel
have expressed concerns about future security of
supply and publicly urging miners to continue to
invest in coking coal.
The supply response from smaller miners will also be
muted given that they have fewer funding avenues
for new mine capital and there is no investment
available for exploration or resource evaluation.
Given a thin cupboard of shovel ready new coking
coal developments
is expected that coking
coal pricing will remain above long term historical
averages for the forseeable future.
it
NUURSTEI COKING COAL PROJECT (90%)
No substantive work was conducted on this Project
during the year.
Tianjin Mongolian HCC Price
Kailuan Fat Price (ex Mine)
Tangshan Washed Fat Price
TSI Premium HCC Australia
Export FOB East Coast Port
PFS Price
750
650
550
450
350
250
150
50
Figure 6: Coking Coal Pricing 2020 - 2022. Source: SX Coal.com, Macquarie Bank.
XII
ASPIRE MINING LIMITED | ANNUAL REPORT 2022 Ovoot will produce a Fat Coking
Coal which is a coal with unique
fluidity and plastic properties.
Given the spotlight on emissions
in the Chinese steel industry,
coals that improve yields and
efficiencies are in high demand.
XIII
ASPIRE MINING LIMITED | ANNUAL REPORT 2022 XIV
ASPIRE MINING LIMITED | ANNUAL REPORT 2022 SUSTAINABLE DEVELOPMENT ACTIVITIES
The Company continues to actively engage with
the
local government and communities within
area of the intended Ovoot Coking Coal Project
(OCCP) activities.
The Company is currently in discussions with the
Tsetserleg Soum khural (local government council)
on advancement of a Community Cooperation
Agreement
(“CCA”). These are well structured
agreements encouraged by the minerals law to
ensure there is specific and well targeted benefits
from resource development for local communities.
An advisory board is proposed to be established
between local leadership and the Company and
projects are selected, ranked, approved and funded
from a Company-provided pool of funds linked to
production. The Company presented the draft CCA
to the Tsetserleg Khural at a meeting on 25 July
2022 and will look to have the CCA approved in the
near future.
Figure 7: Tree nursery in Tsetserleg soum.
During the year, the Company purchased additional
cropping equipment and seed to commence the
2022 “Green Fodder Project”. This is the Company’s
its community
most significant
development programme with last year’s programme
assisting over 100 families in the region with heavily
discounted, and in some instances, free fodder
allocations. This programme has been well received
by the local community.
investment
in
In the March 2022 quarter, the Company committed
to planting 10 million trees in alignment with the
President of Mongolia’s ‘One Billion Trees’ initiative,
which he announced at the COP26 World Leaders
Summit in Glasgow, Scotland in November 2021.
The company started tree planting activities on a
trial basis, converting a greenhouse on land that the
company owned in the Tsetserleg soum into a tree
nursery and adding an irrigation system. Planting
of seeds for different types of trees, such as poplar,
larch and elm has commenced.
XV
ASPIRE MINING LIMITED | ANNUAL REPORT 2022 JORC RESERVES & RESOURCES
Deposit
Probable
Reserves
Measured
Resource
Indicated
Resource
Measured
+ Indicated
Inferred
Resource
Ovoot Open Pit(2)
Ovoot Underground (2)
Nuurstei(3)
Total
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 1: 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 accordanceto the JORC 2012 Code.
2. For full JORC 2012 disclosure in relation to
the Ovoot project JORC 2012 Coal Resources and
Reserves, refer the Company’s Quarterly Report
for the period ended 31 December 2013, which is
available to view on the Company’s website and the
ASX Announcements platform. The Company is not
aware of any new information or data that materially
affects the information included in this December
2013 Quarterly Report. All material assumptions and
technical parameters underpinning the estimates in
the December 2013 Quarterly Report continue to
apply and have not materially changed.
3. Nuurstei’s Resource and Reserve estimates
have been estimated by independent third parties
(McElroy Byran Geological Services) and are
reported in accordance to the JORC 2012 Code.
technical
4. The
information and competent
persons statements for the Ovoot Coal Reserves
and Resources are reported in the Company’s
ASX announcements dated 2 November 2012, 31
July 2013 and 30 January 2013 (December 2013
Quarterly Activities Report) which are available
to view on the Company’s website and the ASX
Announcements platform. At this time and other
than the information from the CHPP and ERT FEED
Studies announced on 19 May 2022 and 17 June
2022 respectively, the Company is not aware of
any further new information or data that materially
affects the information included in this presentation.
The Company is progressing with various other
studies and programs for completion of a Definitive
Feasibility Study (DFS). On completion, the DFS
will identify and report any new information, data
or changes to material assumptions used in the
Pre-feasibility Study and this presentation.
XVI
ASPIRE MINING LIMITED | ANNUAL REPORT 2022 Competent Persons Statement – Ovoot Coking
Coal Project
Competent Persons Statement – Nuurstei Coking
Coal Project
The information in this report that relates to
Reporting of Coal Resources at Nuurstei Project,
is based on
information compiled under the
supervision of, and reviewed by, the Competent
Person, Mr Parbury, who is a full time employee of
McElroy Bryan Geological Services, is a Member of
the Australasian Institute of Mining and Metallurgy
(Member #101430) and who has no conflict of
interest with Aspire Mining Limited.
The reporting of Coal Resources for 13580X
presented in this report has been carried out
in accordance with the ‘Australasian Code for
Reporting of Exploration Results, Mineral Resources
and Ore Reserves’, The JORC Code 2012 Edition
prepared by the Joint Ore Reserves Committee of
the Australasian Institute of Mining and Metallurgy,
Australian Institute of Geoscientists and Minerals
Council of Australia (JORC).
Mr Parbury has sufficient experience that is relevant
to the style of mineralisation and type of deposit
under consideration and to the activity being
undertaken to qualify as a Competent Person
as defined in the 2012 JORC Code. Mr Parbury
consents to the inclusion in the report of the matters
based on his information in the form and context in
which it appears.
In accordance with
the Australian Securities
Exchange requirements, the technical information
contained in this announcement in relation to the
JORC Code (2012) Compliant Coal Reserves and
JORC Compliant Coal Resource for the Ovoot
Coking Coal Project in Mongolia has been reviewed
by Mr Ian De Klerk and Mr Kevin John Irving of
Xstract Mining Consultants Pty Ltd.
The Coal Resources at Ovoot Project documented
in this release are stated in accordance to the JORC
Code, 2012. They are based on information compiled
and reviewed by Mr. Ian de Klerk who is a Member
of the Australasian Institute of Mining and Metallurgy
(Member #301019) and is a full time employee of
Xstract Mining Consultants Pty Ltd. He has more
than 20 years’ experience in the evaluation of coal
deposits and the estimation of coal resources. Mr.
de Klerk has sufficient experience that is relevant
to the style of mineralisation and type of deposit
under consideration to qualify him as a Competent
Person as defined in the JORC Code, 2012. Neither
Mr. de Klerk nor Xstract have any material interest
or entitlement, direct or indirect, in the securities
of Aspire Mining Limited or any companies
associated with Aspire Mining Limited. Fees for
work undertaken are on a time and materials basis.
Mr. de Klerk consents to the inclusion of the Coal
Resources based on his information in the form and
context in which it appears.
The Coal Reserves at Ovoot Project documented
in this release are stated in accordance with
the guidelines set out in the JORC Code, 2012.
They are based on information compiled and
reviewed by Mr. Kevin Irving who is a Fellow of
the Australasian Institute of Mining and Metallurgy
(Member #223116) and is a full time employee of
Xstract Mining Consultants Pty Ltd. He has more
than 35 years’ experience in the mining of coal
deposits and the estimation of Coal Reserves and
the assessment of Modifying Factors. Mr. Irving
has sufficient experience that is relevant to the
style of mineralisation and type of deposit under
consideration to qualify him as a Competent Person
as defined in the JORC Code, 2012. Neither Mr. Irving
nor Xstract have any material interest or entitlement,
direct or indirect, in the securities of Aspire Mining
Limited or any companies associated with Aspire
Mining Limited. Fees for work undertaken are
on a time and materials basis. Mr. Irving consents
to the inclusion of the Coal Reserves based on
his information in the form and context in which it
appears.
XVII
ASPIRE MINING LIMITED | ANNUAL REPORT 2022 OVOOT EARLY DEVELOPMENT PROJECT (OEDP)
FMS LLC converted the existing Ovoot Resource Model to Surpac and assumed 5% dilution in the re-blocking
exercise for Whittle re-optimisations. FMS then conducted an optimisation based on trucking product to the
rail at Erdenet (as opposed to the assumptions and economics of a rail connection from Ovoot to Erdenet)
and restricting maximum production to 4 million tonnes per annum being the current available rail capacity
from Erdenet to markets. The pit selections produce a steady 4 Mtpa of saleable coal.
The OEDP Reserves for the OEDP have been confirmed as:
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 2: OEDP Reserves
Category
Marketable
Coal Reserve
Total Moisture
10% arb Mt
Product
Specification
adb Ash
Content %
Product
Specifications
adb CSN
Probable Product Reserve Ore Open Pit OEDP
Probable Product Reserve Open Pit OEDP
Plus OEDP Extension
32.2
46.2
10.5
10.5
8.5
8.5
Table 3: OEDP Marketable Reserves
XVIII
ASPIRE MINING LIMITED | ANNUAL REPORT 2022
Notes:
1. The technical information and competent persons
statements for the OEDP Reserves are reported
in the Company’s ASX announcements dated 28
February and 1 March 2019 which are available
to view on the Company’s website & the ASX
Announcements Platform.
2. The information contained in this Annual Report
in respect to the Ovoot Early Development Plan
(OEDP) Extended Case Update to Pre-Feasibility
Study (PFS) Mine Plan and Costs, is reported in the
ASX announcement released on 11 November 2019.
At this time and other than the information from the
CHPP and ERT FEED Studies announced on 19 May
2022 and 17 June 2022 respectively, the Company
is not aware of any further new information or data
that materially affects the information included in
this presentation. The Company is progressing with
various other studies and programs for completion
of a Definitive Feasibility Study (DFS). On completion,
the DFS will identify and report any new information,
data or changes to material assumptions used in the
Pre-feasibility Study and this presentation.
Competent Persons Statement – Ovoot Early
Development Project
The OEDP Reserves in this release are stated in
accordance with the JORC Code, 2012. They are
based on
information compiled and reviewed
by Mr Julien Lawrence who is a Member of the
Australasian Institute of Mining and Metallurgy
(Member #209746) and is a full-time employee
than 20 years’
of FMS LLC. He has more
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.
XIX
ASPIRE MINING LIMITED | ANNUAL REPORT 2022 The Ovoot Project, being relatively
close to the Chinese Steel industry
has certain advantages in terms
of greenhouse emissions from
transport, with over 70% of the
transport distance being
undertaken by rail.
XX
ASPIRE MINING LIMITED | ANNUAL REPORT 2022 EMISSIONS
IDENTIFYING THEN MITIGATING
EMISSIONS
The Ovoot Coking Coal Project will create Scope 1
and 2 emissions. The objective of the Ovoot Project
is to be able to present a washed coking coal product
to customers with below average Scope 1 and 2
greenhouse gas emissions per tonne of product. 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.
The Ovoot Project, being relatively close to the
Chinese Steel industry has certain advantages in
terms of greenhouse emissions from transport, with
over 70% of the transport distance being undertaken
by rail.
The Company engaged local Mongolian consultancy
Terra Nova LLC to map out a strategy to minimise
emissions and maximise renewable power sources.
MINE SITE POWER
The Ovoot Coking Coal Project is expected to rely
on a combination of renewable power, battery and
grid connectivity. The CHPP and materials handling
infrastructure requires a consistent 5 MW draw. It
is envisaged that a combination of solar and wind
combined with a grid connection will be required
to support the mine’s initial power needs. The
grid connection is powered from existing coal fired
power stations however a major solar power project
has been approved to support the grid, which will
improve the grid emissions balance.
In order to properly understand the potential for
renewable resources in the Ovoot area, Terra Nova
has identified areas with strong wind and solar
resource potential in and around the Tsetserleg
soum where the mine is located. These locations will
require more specific solar and wind monitoring data
to optimise positioning.
Figure 8: Map of solar energy per sqm in Tsetserleg and as compared with establishes solar farm locations.
XXI
ASPIRE MINING LIMITED | ANNUAL REPORT 2022 The Company is further looking at how these diesel
powered vehicles can be replaced over time with no or
low emissions vehicles. The regular 600 km trucking
route makes it suitable for trialling new transport
technologies using fuel cell electric vehicles (FCEV)
with hydrogen being produced locally, using FCEV
local high quality renewable resources.
The Company has identified a FCEV provider that
provides a fuel cell power train comparable to the
performance of the Euro 4 diesel powered prime
movers which are planned to be used. Through trials
and careful integration, the Company believes that it
can be an early adopter of these technologies.
MINE METHANE EMISSIONS
Exposure of coal seams usually leads to release of
green house gases when the coal is exposed in situ.
When drilling out the Upper and Lower seams of the
Ovoot Project there were no difficulties in drilling
through cavities or recorded gas concentrations.
The infill drilling around the starter pit for the project
will have gas monitoring equipment to be able to
quantify the amount of gas release. These results
will be accounted for in the Company’s emissions
disclosures.
These coal seam gas emissions will be mitigated
through managing coal seam exposures in mine
the
planning. The operation will benefit
relatively shallow nature and the fact that the Ovoot
coal being in the mid-volatile category is relatively
well transformed, with no high volatile coal seams in
the resource.
from
Figure 10: Indicative Euro 4 Prime Mover.
Figure 9: High wind resource potential in Tsetserleg Soum.
In the Tsetserleg soum of Khuvsgul province, specific
photovoltaic power output is on average 4.8–5.4
kWh/m2 per day. In comparison, all seven solar power
plants that operate in Mongolia are installed on areas
with an average specific output of 4.29–5.24 kWh
per day. These averages however can vary widely
depending on location.
Measurements using a pyranometer are needed to
determine the full potential of solar power near the
Ovoot Project.
Suitable locations for wind turbines near the Ovoot
Project have a mean power density for the highest
10% windiest area in the selected region between
643 W/m2 at 50 m and 746 W/m2 at 100 m height and
wind speeds are between 8.31 m/s – 9.25 m/s. These
are averages and can vary materially however, high
yielding wind turbines usually perform well when
average wind speeds are in excess of 7.5 m/s.
Wind and solar yields will provide the information to
optimise the relative size of each renewable power
resource.
TRUCKING EMISSIONS
The Company needs to truck washed Ovoot coking
coal approximately 600 km from the Ovoot Project to
the Erdenet Rail Terminal.
the various
In evaluating
trailer
combinations, there was a clear focus on minimising
diesel consumption and therefore emissions with
efficient Euro 4 specified prime movers identified.
truck and
XXII
ASPIRE MINING LIMITED | ANNUAL REPORT 2022 The regular 600 km trucking route
makes it suitable for trialling new
transport technologies using fuel cell
electric vehicles with hydrogen being
produced locally, using the local high
quality renewable resources.
XXIII
ASPIRE MINING LIMITED | ANNUAL REPORT 2022 The Company has also pledged
to plant 10 million trees by
2030 as part of the Mongolian
President’s commitment to see
one billion trees planted across
the country by 2030.
XXIV
ASPIRE MINING LIMITED | ANNUAL REPORT 2022 COMMUNITY
RELATIONS
ENVIRONMENT SOCIAL GOVERNANCE
The Company is guided by the United Nations
Sustainability Development Goals in establishing its
Environment Social Governance (“ESG”) framework
to provide a level of transparency and accountability
for its operations and activities.
the Company
In 2021,
inaugural
Environmental Social Governance (“ESG”) Report.
This report can be found on our web site at
www.aspiremininglimited.com.
issued
its
Due to continuing delays in achieving the necessary
permits, the nature of the Company’s activities have
not changed over the year with limited site based
activity. Nevertheless while planning for operations,
the Company has kept its Sustainable Development
Goals front of mind.
Aspire is majority Mongolian owned and plans to
establish a coal mining operation using the best
available technologies and practices.” A key value
for the Company is “Respect” and is applied across
all areas of the Company’s activities.
RESPECT
XXV
ASPIRE MINING LIMITED | ANNUAL REPORT 2022 RESPECTING THE ENVIRONMENT
As part of the Company’s proposed Environmental
Management Plan, it has agreed to acquire and re-
vegetate an area twice the size of the mining license
covering the Ovoot Project area.
In addition to the above the Company has also
pledged to plant 10 million trees by 2030 as part of
the Mongolian President’s commitment to see one
billion trees planted across the country by 2030.
The Company’s commitment represents half of the
commitment from the entire Khuvsgul airmag. The
Company has already established irrigated green
houses in the Tsetserleg soum for seedling growth
with plans to expand from there.
the Company has been
investigating
Further
renewable power options
for minesite power
requirements with a view that they could be
expanded to include renewable power for onsite
mobile equipment and eventually road transport
vehicles (see separate section on Emissions).
In the design of the CHPP at the Ovoot Project the
Company provided a specific brief to Sedgman Pty
Ltd, the FEED engineers, to minimise water and
power usage. Hence the use of reflux classifiers
to recover fine coal without the need for floatation
(which would otherwise introduce chemicals to the
process) and removes the need for a tailings dam.
The process will use a filter press to maximise the
recovery of water from the process.
The Company has also selected coal handling
infrastructure that reduces the amount of mobile
loading equipment involved, reducing dust and
diesel consumption. Stockpiles are all covered on
site to reduce dust emissions.
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.
BUILDING OUR SOCIAL LICENSE TO
OPERATE
SUPPORTING THE LOCAL ECONOMY
Animal husbandry is by far the largest existing
industry in the local soum area of Tsetserleg and the
wider Khuvsgul region. This industry faces continuing
difficulties with harsh winters, unregulated herd sizes
and costly transport costs to markets.
The major project for both the 2021 and now 2022
years is the planting of 200 ha of animal feed crops
over the summer growing season. This is part of a
larger plan to expand feed lots to improve the health
and wellbeing of livestock through the long winters
to support the foundation of a local diary and meat
industry. The feed is sold at discounts to local prices,
particularly to herders in and around the area.
XXVI
ASPIRE MINING LIMITED | ANNUAL REPORT 2022 The programme 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.
to
the Ovoot Project development,
Prior
the
Company will enter into a “Community Development
Agreement” (CDA) which will outline the Company’s
priorities in relation to social investment in the Soum
and its financial contributions. These investments
will be guided by the UN sustainability goals with
particular emphasis on health, education and
capacity building. The CDA will establish a committee
of four soum representatives and three from the
Company who will decide on where the Community
Development Fund will focus its activities.
With the green fodder project ongoing and hopefully
expanding, potential projects around capacity
building will include dairy and meat processing
plants to add value to agricultural products from
the region.
The development of the Ovoot to Murun road by the
Company will be of great local benefit and allow for
the transport of organically produced agricultural
products to the central markets of Murun and
potentially other centres in Mongolia.
Figure 11: Planting underway in June 2022.
XXVII
ASPIRE MINING LIMITED | ANNUAL REPORT 2022 EMPLOYMENT
The Company will focus on employment of local
workers and will look to provide technical training
for equipment operators to build local capacity. The
Company has established a training partnership with
the Erdenet Technical college to assist.
The project will create more than 1,000 direct
jobs and another 2,000 to 3,000 indirect jobs.
The Company will provide training and Tsetserleg
soum residents will be priority hires within the
framework of the Cooperation Agreement with the
Community.
GOVERNANCE
In June 2019 the Company signed on to a Voluntary
Code of Practice on Responsible Mining, along with
other leading Mongolian mining companies. The
Code was developed by the Ministry for Mining and
Heavy Industry and the Mongolian National Mining
Association.
The stated objective of the Code 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.
In order to support Governance, the Company’s
Board has established a number of sub committees
relating to finance, technical, remuneration and
audit and risk. These have been populated based
on
largely existing governance best practice
and recommended by ASX guidelines to ensure
separation of duties, accountability and Board
oversight independent of management. With COVID
restrictions the ability to freely travel in and out of
Mongolia only became possible in the last quarter of
the 2022 financial year, which presented challenges
to the Board and Management. The Company has
also been conserving cash while awaiting permits
necessary to continue with development activities.
XXVIII
ASPIRE MINING LIMITED | ANNUAL REPORT 2022 The project will create more than
1,000 direct jobs and another
2,000 to 3,000 indirect jobs.
The company will provide training
and Tsetserleg soum residents
will be priority hires within the
framework of the Cooperation
Agreement with the Community.
XXIX
ASPIRE MINING LIMITED | ANNUAL REPORT 2022 THIS PAGE HAS BEEN LEFT INTENTIONALLY BLANK
Aspire Mining Limited
Aspire Mining Limited
ABN 46 122 417 243
Annual Financial Report
30 June 2022
Contents
Aspire Mining Limited
Page
CORPORATE INFORMATION................................................................................................................... 1
DIRECTORS’ REPORT.............................................................................................................................. 2
AUDITOR’S INDEPENDENCE DECLARATION ...................................................................................... 13
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME .. 14
CONSOLIDATED STATEMENT OF FINANCIAL POSITION .................................................................. 15
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY .................................................................. 16
CONSOLIDATED STATEMENT OF CASH FLOWS ............................................................................... 17
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ............................................................ 18
DIRECTORS’ DECLARATION ................................................................................................................. 44
INDEPENDENT AUDITOR’S REPORT ................................................................................................... 45
- 1 -
Aspire Mining Limited
CORPORATE INFORMATION
ABN 46 122 417 243
Solicitors
Directors
Mr David Paull (Non-Executive Chairman)
Mr Achit-Erdene Darambazar (Managing Director)
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
Level 9, 190 St Georges Terrace,
PERTH WA, 6000
AUSTRALIA
Telephone: (08) 9287 4555
Email: info@aspiremininglimited.com
Corrs Chambers Westgarth Lawyers
Level 6, Brookfield Place Tower 2,
123 St Georges Terrace
PERTH WA 6000
Bankers
National Australia Bank
Ground Floor, 100 St Georges Terrace,
PERTH WA 6000
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
Principal place of business
Securities Exchange Listing
AKM
Website
www.aspiremininglimited.com
AUSTRALIA
Level 9, 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 5, 191 St Georges Terrace,
PERTH WA 6000
AUSTRALIA
Telephone: 1300 288 664
- 2 -
Aspire Mining Limited
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 2022. 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.
Non-Executive Chairman
Mr David Paull
Mr Achit-Erdene Darambazar Managing Director
Mr Boldbaatar Bat-Amgalan Non-Executive Director
Non-Executive Director
Mr Neil Lithgow
Non-Executive Director
Ms Hannah Badenach
Names, qualifications, experience and special responsibilities
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.
Mr Achit-Erdene Darambazar
Managing 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.
Mr Darambazar has held no other listed public company directorships in the last three years.
- 3 -
Aspire Mining Limited
DIRECTORS’ REPORT (continued)
Names, qualifications, experience and special responsibilities (continued)
Mr Boldbaatar Bat-Amgalan
Non-Executive Director
Mr Boldbaatar Bat-Amgalan was appointed as a Non-Executive Director on 7 December 2018. He 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 was appointed as a Non-Executive Director on 12 February 2010. He 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 was appointed as a Non-Executive Director on 18 April 2013. She is currently Executive Director
Mongolia & Base Metals, Noble Resources Trading Holdings 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 13 years to a number of listed companies.
- 4 -
Aspire Mining Limited
DIRECTORS’ REPORT (continued)
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
ordinary shares
Number of options
over ordinary shares
Number of
performance
rights over
ordinary shares
Mr Achit-Erdene Darambazar
Mr David Paull1
Mr Boldbaatar Bat-Amgalan
Mr Neil Lithgow
Ms Hannah Badenach
1Mr 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.
-
2,705,280
-
23,727,851
1,095,392
2,500,000
750,000
500,000
500,000
-
-
-
-
-
-
During the financial year 4,250,000 performance rights were granted to Directors of the Company as part of
remuneration and with shareholder approval. No performance rights were granted in the previous financial year.
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 Coking Coal Project (Ovoot Project).
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.
During the period, activity in advancing the Ovoot Project was impacted by the Mongolian Government imposed
travel and meeting restrictions in response to COVID-19. Notwithstanding, during the second half of the year, the
Company completed or progressed the following important project steps:
•
•
The Coal Handling and Preparation Plant FEED Study was completed with design selection and capital and
operating expenditures estimated. This involved a trade-off analysis of different concepts and available
technologies. Sustainability and the environment were key priorities in assessing the technologies to be
employed with bespoke designs prepared to facilitate control of dust at locations including raw coal delivery
and washed coal storage and collection. Local companies were engaged to input into specialist areas
including electrical and HVAC design.
The Erdenet Rail Terminal FEED Study was also completed with the selection and design drawings of
materials handling (coal truck unloading, coal storage and train loading), supporting commercial and
residential facilities that are scalable and mitigate any environmental impacts. Capital and operating costs
were refined in readiness for input into the DFS financial modelling.
- 5 -
Aspire Mining Limited
DIRECTORS’ REPORT (continued)
Review of Operations (continued)
• With letters of support for the road alignment from local communities, road studies and design progressed
with completion of topographic, geological, hydrological, and archaeological surveys along the planned route.
Tractor-trailer simulation works were undertaken to refine equipment selection and operating cost estimation.
The road study and detailed design has been lodged with the Ministry of Roads and Transportation for
comment and approval.
•
•
The Company continued its engagement with the local community and successfully held the community
meetings to present and discuss the Detailed Environmental Impact Assessment (DEIA). The DEIA has
received support from a majority of the community and the minutes of the community meetings included with
the DEIA report now lodged with Ministry of Nature, Environment and Tourism for assessment and the
approval required to progress site-based activities.
The Company continued to proactively engage with its local community program to support local herders,
healthcare and education. The animal feed program has been successful in providing feed to local herders.
Review of financial conditions
At balance date, the Group had $31,990,463 (2021: $34,173,866) in cash assets.
The cash will be sufficient to meet required community relations activities, approvals, permits and evaluation
activities to advance towards development of the Ovoot Project.
Further raisings or other means of funding will be required for the capital infrastructure requirements for full
development of the Ovoot Project and the associated haul road.
Operating results for the year
The Group reports an operating profit after tax of $422,111 for the year ended 30 June 2022 (2021: Loss
$5,176,364). The Group holds the majority of its cash in USD (US$21.99 million at 30 June 2022) and the net
profit is due to a material foreign exchange gain.
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 Ovoot Project into
production at the earliest opportunity.
- 6 -
Aspire Mining Limited
DIRECTORS’ REPORT (continued)
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.
The key risks in developing the Ovoot Project are
•
•
•
obtaining the permits, approvals and financing against the general negativity towards the coal industry.
Post COVID-19 economic stimulus and a restricted supply response is expected to keep steel demand
high over the short to medium term supporting coking coal prices;
the ability to recruit the required in-country and/or ex-pat personnel with the technical and financial
experience to develop, operate and administer the Ovoot Project; and
access to road and rail to transport washed coal to customers.
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 2021 can be found on
the Company’s website at www.aspiremininglimited.com. The Corporate Governance Statement for the year
ended 30 June 2022 will be available on the Company’s website and the ASX announcements platform following
lodgement with the Company’s Annual Report in October 2022.
Environmental legislation
The Company is subject to significant environmental and monitoring requirements in respect of its natural
resources exploration activities. The Directors are not aware of any material breaches of these requirements
during the year.
Indemnification and insurance of Directors and Officers
The Company has agreed to indemnify all the Directors and Officers of the Group for any liabilities to another
person (other than the Group or related bodies corporate) that may arise from their position as Directors or Officers
of the Company and its controlled entities, except where the liability arises out of conduct involving a lack of good
faith. During the financial year the Company paid a premium in respect of a contract insuring the Directors and
Officers of the Company and its controlled entities against any liability incurred in the course of their duties to the
extent permitted by the Corporations Act 2001. The contract of insurance prohibits disclosure of the nature of the
liability and the amount of the premium. The Company has not otherwise, during or since the end of the financial
year, except to the extent permitted by law, indemnified or agreed to indemnify an officer or auditor of the
Company or of any related body corporate against a liability incurred as such an officer or auditor.
Remuneration Report (audited)
This report outlines the remuneration arrangements in place for the Key Management Personnel of the Company
and its controlled entities for the financial year ended 30 June 2022, as follows:
Non-Executive Chairman
Mr David Paull
Mr Achit-Erdene Darambazar Executive Director
Mr Boldbaatar Bat-Amgalan Non-Executive Director
Non-Executive Director
Mr Neil Lithgow
Non-Executive Director
Ms Hannah Badenach
Chief Operating Officer
Mr Samuel Bowles
- 7 -
Aspire Mining Limited
DIRECTORS’ REPORT (continued)
Remuneration Report (audited) (continued)
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 set competitive remuneration packages to attract and retain high
calibre executive; link executive rewards to shareholder value creation; and 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:
2022
$
2021
$
2020
$
2019
$
2018
$
Revenue
51,855
175,854
425,330
325,741
216,309
Net profit/(loss) after tax
422,111
(5,176,364)
(5,488,200)
(6,200,307)
(6,980,272)
Basic profit/(loss) $ per share
0.0080
(0.0102)
(0.0126)
(0.020)1
(0.035)1
Share price at year-end
0.08
0.07
0.08
0.161
0.221
1Post 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, Neil Lithgow and Ms Hannah
Badenach.
The Remuneration Committee assesses the appropriateness of the nature and amount of remuneration of
Directors and senior executives on a periodic basis by reference to relevant employment market conditions with
an overall objective of ensuring maximum stakeholder benefit from the retention of a high quality Board and
executive team.
Remuneration structure
In accordance with best practice Corporate Governance, the structure of Non-Executive Directors and executive
remuneration is separate and distinct.
Non-Executive Director Remuneration
The Board seeks to set aggregate remuneration at a level that provides the Group with the ability to attract and
retain Directors of the highest calibre, whilst incurring a cost that is acceptable to shareholders. The ASX Listing
Rules specify that the aggregate remuneration of Non-Executive Directors shall be determined from time to time
by a general meeting. The latest determination was at the General Meeting held on 19 August 2011 when
shareholders approved an aggregate remuneration for Non-Executive Directors of up to $600,000 per year.
If and when applicable, the Board may consider advice from external consultants as well as the fees paid to Non-
Executive Directors of comparable companies when undertaking the annual remuneration review process. No
external consultants were engaged during the 2022 financial year.
Each Director is entitled to receive a fee for being a Director of the Company. The remuneration of the Non-
Executive Chair has been set at $70,000 per annum and other Non-Executive Directors at $60,000 per annum.
This level of remuneration was reviewed and agreed by the Board following recommendations from the
Remuneration Committee.
- 8 -
Aspire Mining Limited
DIRECTORS’ REPORT (continued)
Remuneration Report (audited) (continued)
The remuneration of Non-Executive Directors for the year ended 30 June 2022 is detailed in the Remuneration of
Key Management Personnel section of this report in Table 1. Following shareholder approvals, performance rights
have been issued to Non-Executive Directors or their nominees.
Following approval at the 2021 Annual General Meeting, performance rights were issued to Non-executive
Directors (and the Executive Director and Chief Operating Officer - see Table 3) to vest in two tranches on
achievement of the following milestones:
• Class A performance rights shall vest when the Company has announced that it has secured total
funding for the Ovoot Project in Mongolia construction commencement.
• Class B performance rights shall vest when the Company has announced that commercial production
has commenced at the Ovoot Project within 18 months of construction commencement.
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.
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 at US$180,000 per annum in accordance with an Executive Services
Agreement (ADESA) with the Company that sets out his duties, responsibilities and obligations. The ADESA had
an initial 2 year term from 2 December 2019 and has been extended by conduct for a further 2 year term. The
ADESA can be terminated by either party on 3 months-notice or other causes (breach of duty, incapacity and
insolvency.
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 and has been extended for a further
two years by notice by the Company. The SBESA can be 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 has been increased to US$330,000 and 2,000,000
performance rights issued on 30 June 2022 issued to Mr Bowles with Board approval.
- 9 -
Aspire Mining Limited
DIRECTORS’ REPORT (continued)
Remuneration Report (audited) (continued)
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
$
851,660
5,479
49,179
906,318
Share based payments is the gross accounting value of performance rights brought to account in accordance with
accounting standards.
The shares, performance rights and options held by key management personnel in the year ended 30 June 2022
are detailed in Tables 2 to 3.
Options
No options were on issue during the year that were part of Key Management Personnel remuneration.
Performance rights
On 30 June 2022 4,250,000 performance rights were issued to Directors (with shareholder approval) and
2,000,000 to the Chief Operating Officer (with Board approval).
Each performance right will vest as an entitlement to one fully paid ordinary share in the capital of the Company
provided that the vesting conditions are met. If the vesting conditions are not met, the performance rights will
lapse and the holder will have no entitlement to any shares.
There is nil consideration payable upon the grant of a performance right and no amount will be payable on the
vesting of a performance right.
The performance rights vest in two tranches on achievement of the following milestones:
1. Class A performance rights shall vest when the Company has announced that it has secured total
funding for the Ovoot Project construction commencement.
2. Class B performance rights shall vest when the Company has announced that commercial production
has commenced at the Ovoot Project within 18 months of construction commencement.
The 4,250,000 performance rights issued to Directors are valued at the share price at the grant date of $0.079
cents per share for a total value of $335,750 and the 2,000,000 performance rights issued to the Chief Executive
Officer are valued at the share price at the grant date of $0.083 cents per share for a total value of $166,000.
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.
- 10 -
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 2022
Short term
employee
benefits
Salary &
fees
$
250,843
70,000
62,664
54,795
-
413,358
851,660
Post-
employment
benefits
Superannuation
$
-
-
-
5,479
-
-
5,479
Other
Performance
rights2
$
28,928
8,679
5,786
5,786
-
-
49,179
Total
$
279,771
78,679
68,450
66,060
-
413,358
906,318
Performance
related
%
10
11
8
9
-
-
5
Mr Achit-Erdene Darambazar
Mr David Paull1
Mr Boldbaatar Bat-Amgalan
Mr Neil Lithgow
Ms Hannah Badenach
Mr Samuel Bowles
Total
Year ended 30 June 2021
Short term
employee
benefits
Salary &
fees
$
244,125
70,000
60,101
54,795
-
401,448
830,469
Post-
employment
benefits
Superannuation
$
-
-
-
5,205
-
-
5,205
Other
Performance
rights3
$
-
30,672
-
24,259
12,102
-
67,033
Total
$
244,125
100,672
60,101
84,259
12,102
401,448
902,707
Performance
related
%
-
30
-
29
100
-
7
Mr Achit-Erdene Darambazar
Mr David Paull1
Mr Boldbaatar Bat-Amgalan
Mr Neil Lithgow
Ms Hannah Badenach
Mr Samuel Bowles
Total
1 Paid or issued to Kingsland Corporate Pty Ltd (formerly 2R’s Pty Ltd), a company associated with Mr David Paull.
2 Performance rights on issue at 30 June 2022 were issued on that date of shareholder approval.
3 Performance rights on issue during 30 June 2021 lapsed without vesting on 30 June 2021.
- 11 -
Aspire Mining Limited
DIRECTORS’ REPORT (continued)
Remuneration Report (audited) (continued)
Key Management Personnel Equity Holdings
Table 2: Fully Paid Ordinary Shares
2022
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
-
2,705,280
-
23,727,851
1,095,392
-
27,528,523
Additions
Sold
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Balance
at end of
year
-
2,705,280
-
23,727,851
1,095,392
-
27,528,523
Table 3 - Performance rights exercisable at no consideration on achievement of tenure or other
performance milestones
Balance at
beginning
of year
Granted Exercised
Expired
2022
Mr Achit-Erdene Darambazar
Mr David Paull
Mr Boldbaatar Bat-Amgalan
Mr Neil Lithgow
Ms Hannah Badenach
Mr Samuel Bowles
Total
-
-
-
-
-
-
-
2,500,000
750,000
500,000
500,000
-
2,000,000
6,250,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Balance at
end of
year
2,500,000
750,000
500,000
500,000
-
2,000,000
6,250,000
On 30 June 2022 4,250,000 performance rights were issued to Directors (with shareholder approval) and
2,000,000 to the Chief Operating Officer (with Board approval). Each performance right will vest as an entitlement
to one fully paid ordinary share in the capital of the Company provided that the vesting conditions are met. If the
vesting conditions are not met, the performance rights will lapse and the holder will have no entitlement to any
shares.
The performance rights vest in two tranches on achievement of the following milestones:
3. 3,125,000 Class A performance rights shall vest when the Company has announced that it has secured
total funding for the Ovoot Project construction commencement.
4. 3,125,000 Class B performance rights shall vest when the Company has announced that commercial
production has commenced at the Ovoot Project within 18 months of construction commencement.
The 4,250,000 performance rights issued to Directors are valued at the share price at the grant date of $0.079
cents per share for a total value of $335,750 and the 2,000,000 performance rights issued to the Chief Executive
Officer are valued at the share price at the grant date of $0.083 cents per share for a total value of $166,000.
Related Party Transactions
In 2022, Kingsland Corporate Pty Ltd (formerly 2R’s Pty Ltd), a company associated with Mr David Paull, was
paid $14,000 at market rates for the services provided by David Paull beyond his NED Chair role (2020: $15,150).
End of Remuneration Report
DIRECTORS’ REPORT (continued)
- 12 -
Aspire Mining Limited
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 David Paull
Mr Achit-Erdene Darambazar
Mr Neil Lithgow
Mr Boldbaatar Bat-Amgalan
Ms Hannah Badenach
Director Meetings
Attended
Eligible to Attend
9
9
9
9
8
9
9
9
9
9
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 13 and forms part of this Directors’ report for the year ended 30
June 2022.
Non-Audit Services
Details of amounts paid or payable to the auditors for services provided during the year are outlined in Note 23 to
the financial statements. No non-audit services were provided by the auditors during the year.
Signed in accordance with a resolution of the Directors.
Achit-Erdene Darambazar
Managing Director
29 September 2022
- 13 -
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 2022, I declare that to the best of my knowledge and belief, there have been
no contraventions of:
a)
the auditor independence requirements of the Corporations Act 2001 in relation to the audit;
and
b)
any applicable code of professional conduct in relation to the audit.
Perth, Western Australia
29 September 2022
B G McVeigh
Partner
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2022
- 14 -
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
Net profit/(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 income/(loss)
Profit/(loss) attributable to:
Owners of the parent
Non-controlling interests
Total comprehensive income/(loss) attributable to:
Owners of the parent
Non-controlling interests
2021
$
175,854
(677,716)
(884)
(2,922,426)
(9,285)
(79,993)
(1,650,495)
(5,164,945)
(11,419)
(5,176,364)
(3,154,310)
(3,154,310)
(8,330,674)
(5,167,777)
(8,587)
(5,176,364)
(8,478,871)
148,197
(8,330,674)
Note
2(a)
10
2022
$
51,855
(542,035)
-
2,763,876
(4,664)
(49,179)
2(b)
(1,793,205)
3
426,648
(4,537)
422,111
(329,352)
(329,352)
92,759
428,433
(6,322)
422,111
256,329
(163,570)
92,759
15
15
4
4
Basic earnings/(loss) per share (cents per share)
Diluted earnings/(loss) per share (cents per share)
The accompanying notes form part of these financial statements.
0.08
0.08
(1.02)
(1.02)
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2022
- 15 -
Aspire Mining Limited
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
2022
$
2021
$
31,990,463
34,173,866
654,819
533,507
32,645,282
34,707,373
37,434,836
35,043,789
389,875
28,009
421,668
76,905
37,852,720
35,542,362
70,498,002
70,249,735
378,520
-
378,520
-
-
218,702
10,522
229,224
42,967
42,967
378,520
272,191
70,119,482
69,977,544
6
7
7
150,026,408
150,026,408
(10,652,828)
(10,529,903)
(68,725,806)
(69,154,239)
Equity attributable to owners of the parent
70,647,774
70,342,266
Non-controlling interests
Total Equity
15
(528,292)
(364,722)
70,119,482
69,977,544
The accompanying notes form part of these financial statements.
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T
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2022
- 17 -
Aspire Mining Limited
Cash flows from operating activities
Interest received
Payments to suppliers and employees
Income tax paid
Interest and borrowing costs paid
Note
2022
$
2021
$
57,210
193,923
(2,006,702)
(1,836,918)
(4,537)
-
(11,419)
(9,284)
Net cash used in operating activities
8
(1,954,029)
(1,663,698)
Cash flows from investing activities
Payments for exploration and evaluation expenditure
Purchase of non-current assets
Net cash used in investing activities
(2,715,444)
(187,697)
(2,903,141)
(874,180)
(315,351)
(1,189,531)
Cash flows from financing activities
Repayment of borrowings
Net cash used in financing activities
14
(53,489)
(53,489)
Net decrease in cash and cash equivalents
Cash and cash equivalents at the beginning of the year
Effect of foreign exchange rate fluctuations on cash held
Cash and cash equivalents at the end of the year
8
(4,910,659)
34,173,866
2,727,256
31,990,463
(17,003)
(17,003)
(2,870,232)
40,712,949
(3,668,851)
34,173,866
The accompanying notes from part of these financial statements.
- 18 -
Aspire Mining Limited
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2022
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 Coking Coal Project.
Going concern
The 30 June 2022 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 2022
In the year ended 30 June 2022, 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 2022. 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 29 September 2022.
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
- 19 -
Aspire Mining Limited
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2022
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.
- 20 -
Aspire Mining Limited
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2022
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)
(h)
Revenue Recognition
Revenue is recognised to the extent that control of the goods or service has passed and it is probable
that the economic benefits will flow to the Group and the revenue can be reliably measured. The
following specific recognition criteria must also be met before revenue is recognised:
Interest income
Interest revenue is recognised on a time proportionate basis that takes into account the effective yield
on the financial asset.
(i)
Cash and cash equivalents
Cash comprises cash at bank and in hand. Cash equivalents are short term, highly liquid investments
that are readily convertible to known amounts of cash and which are subject to an insignificant risk of
changes in value.
(j)
Trade and other receivables
Trade receivables are measured on initial recognition at fair value. Trade receivables are generally due
for settlement within periods ranging from 15 days to 30 days. The Group measures the loss allowance
for trade and other receivables at an amount equal to lifetime expected credit loss. The expected credit
losses on trade and other receivables are estimated with reference to past default experience of the
debtor and an analysis of the debtor’s current financial position, adjusted for factors that are specific to
the debtor, general economic conditions of the industry in which the debtor operates and an assessment
of both the current and the forecast direction of conditions at the reporting date.
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.
- 21 -
Aspire Mining Limited
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2022
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)
(k)
Derecognition of financial assets and financial liabilities
(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.
- 22 -
Aspire Mining Limited
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2022
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)
(l)
Foreign currency translation (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.
- 23 -
Aspire Mining Limited
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2022
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)
(m)
Income tax (continued)
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.
- 24 -
Aspire Mining Limited
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2022
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)
(o) Business combinations (continued)
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.
- 25 -
Aspire Mining Limited
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2022
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)
(r)
Property, plant and equipment
Plant and equipment is stated at cost less accumulated depreciation and any accumulated impairment
losses. Depreciation is calculated on a straight-line basis over the three (3) year estimated useful life of
the assets.
The assets' residual values, useful lives and amortisation methods are reviewed, and adjusted if
appropriate, at each financial year end.
(i) Impairment
The carrying values of plant and equipment are reviewed for impairment at each balance date, with
recoverable amount being estimated when events or changes in circumstances indicate that the carrying
value may be impaired.
The recoverable amount of plant and equipment is the higher of fair value less costs to sell and value
in use. In assessing value in use, the estimated future cash flows are discounted to their present value
using a pre-tax discount rate that reflects current market assessments of the time value of money and
the risks specific to the asset.
For an asset that does not generate largely independent cash inflows, recoverable amount is determined
for the cash-generating unit to which the asset belongs, unless the asset's value in use can be estimated
to be close to its fair value.
Impairment exists when the carrying value of an asset or cash-generating units exceeds its estimated
recoverable amount. The asset or cash-generating unit is then written down to its recoverable amount.
For plant and equipment, impairment losses are recognised in the income statement in the cost of sales
line item.
(ii) Derecognition and disposal
An item of property, plant and equipment is derecognised upon disposal or when no further future
economic benefits are expected from its use or disposal.
Any gain or loss arising on derecognition of the asset (calculated as the difference between the net
disposal proceeds and the carrying amount of the asset) is included in profit or loss in the year the asset
is derecognised.
(s)
Provisions
Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of
a past event, it is probable that an outflow of resources embodying economic benefits will be required
to settle the obligation and a reliable estimate can be made of the amount of the obligation.
When the Group expects some or all of a provision to be reimbursed, for example under an insurance
contract, the reimbursement is recognised as a separate asset but only when the reimbursement is
virtually certain.
The expense relating to any provision is presented in the statement of profit or loss and other
comprehensive income net of any reimbursement. If the effect of the time value of money is material,
provisions are discounted using a current pre-tax rate that reflects the risks specific to the liability. When
discounting is used, the increase in the provision due to the passage of time is recognised as a borrowing
cost.
- 26 -
Aspire Mining Limited
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2022
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)
(t)
Share-based payment transactions
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.
(v)
Earnings/loss per share
Basic earnings/loss 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/loss 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
- 27 -
Aspire Mining Limited
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2022
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)
(v)
Earnings/loss 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.
(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.
- 28 -
Aspire Mining Limited
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2022
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)
(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.
- 29 -
Aspire Mining Limited
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2022
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
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 expense/(benefit) calculated at
30% Accrued expenses
Other non-deductible expenses
Deductions available over more than one year
Exploration and tenement expenses
Income tax benefit not brought to account
Income tax (benefit)/expense
Made up of:
Income tax expense on Mongolian operations
Income tax expense
2022
$
51,855
-
51,855
120,790
205,965
-
82,178
341,398
443,781
205,180
13,119
44,748
54,591
42,879
101,693
40,480
96,403
1,793,205
2022
$
426,648
127,994
12,344
(142,390)
(15,461)
-
22,050
4,537
4,537
4,537
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
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 $6,485,195 (2021: $6,529,888) in respect to tax losses
arising in Australia and $717,470 (2021: $255,189) 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.
- 30 -
Aspire Mining Limited
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2022
NOTE 3: INCOME TAX (continued)
The Group has an unrecorded deferred tax asset of Nil (2021: $15,461) relating to share issue and other
costs, and deferred tax liabilities of 2,280,549 (2021: $1,984,673) 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 (2021: $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 earnings/(loss) per share:
Diluted earnings/(loss) per share:
The earnings and weighted average number of ordinary
shares used in the calculation of basic earnings per share is as
follows:
2022
Cents per
share
0.08
0.08
2021
Cents per
share
(1.02)
(1.02)
Earnings used in calculation of basic and diluted earnings/(loss) per share:
Profit/(Loss) attributable to owners of the parent
428,433
(5,167,777)
Weighted average number of ordinary shares for the purpose of
basic earnings/(loss) per share
507,636,985
507,636,985
Weighted average number of ordinary shares for the purpose of
diluted earnings/(loss) per share
507,636,985
507,636,985
507,636,985
507,636,985
NOTE 5: SEGMENT INFORMATION
Year ended 30 June 2022
Total segment revenue
Interest revenue
Depreciation and amortisation
Segment net operating
profit/(loss) after tax
Continuing operations
Mongolia
$
Australia
$
Singapore
$
6,487
6,487
-
45,368
45,368
205,965
-
-
-
1,078,180
(626,359)
(29,710)
Total
$
51,855
51,855
205,965
422,111
Segment Assets
27,368,151
43,120,341
9,510
70,498,002
Segment liabilities
Capital expenditure during the
year
(327,790)
-
(50,730)
2,674,922
-
-
(378,520)
2,674,922
- 31 -
Aspire Mining Limited
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2022
NOTE 5: SEGMENT INFORMATION (CONTINUED)
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
NOTE 6: ISSUED CAPITAL
Ordinary shares
Issued and fully paid
Less share issue costs
Movements in ordinary shares on issue
At 30 June 2021
At 30 June 2022
2022
$
2021
$
157,999,366
157,999,366
(7,972,958)
(7,972,958)
150,026,408
150,026,408
No.
$
507,636,985 150,026,408
507,636,985 150,026,408
NOTE 7: ACCUMULATED LOSSES AND RESERVES
Accumulated losses
Movements in accumulated losses are as follows:
Balance at beginning of financial year
2022
$
2021
$
(69,154,239)
(64,267,695)
Net profit/(loss) for the year attributable to owners of the parent
428,433
(5,167,777)
Transfer on expiry of options/performance rights
Balance at end of financial year
-
281,233
(68,725,806)
(69,154,239)
- 32 -
Aspire Mining Limited
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2022
NOTE 7: ACCUMULATED LOSSES AND RESERVES (continued)
Reserves
Nature and purpose of reserves
Foreign currency translation reserve
The foreign currency translation reserve is used to record exchange differences arising from the translation of
the financial statements of foreign subsidiaries.
Share based payments reserve
The share based payments reserve is used to record the value of equity instruments issued to Directors,
employees and qualifying contractors as part of their remuneration.
Contribution Reserve
The contribution reserve is used to record the value which arises as a result of transactions with non-controlling
interests that do not result in a loss of control.
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.
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.
On 30 June 2022 4,250,000 performance rights were issues to Directors with shareholder approval given at the
annual general meeting held on 30 November 2021 and 2,000,000 performance rights to the Chief Executive
Officer.
The 4,250,000 performance rights issued to Directors are valued at the share price at the grant date of $0.079
cents per share for a total value of $335,750 and the 2,000,000 performance rights issued to the Chief Executive
Officer are valued at the share price at the grant date of $0.083 cents per share for a total value of $166,000.
The value of the performance rights taken to the Share Based Payments Reserve in 2022 is $49,179.
The performance rights vest in two tranches on achievement of the following milestones:
(a)
(b)
3,125,000 Class A performance rights shall vest when the Company has announced that it has
secured total funding for the Ovoot Project construction commencement.
3,125,000 Class B performance rights shall vest when the Company has announced that
commercial production has commenced at the Ovoot Project within 18 months of construction
commencement.
- 33 -
Aspire Mining Limited
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2022
NOTE 8: CASH AND CASH EQUIVALENTS
Cash at bank and on hand
Short term interest bearing deposits
2022
$
27,266,140
4,724,323
31,990,463
2021
$
5,894,268
28,279,598
34,173,866
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 (2021: $10,000) is on deposit as cash backed security against a
business use credit card limit and office rental.
Reconciliation of loss for the year to net cash flows from operating activities
Profit/(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
There were no credit losses in the current or the prior year.
2022
$
422,111
(60,453)
195,724
(2,679)
205,965
49,179
-
2021
$
(5,176,364)
260,118
4,672
9,759
234,814
79,993
884
(2,763,876)
(1,954,029)
2,922,426
(1,663,698)
2022
$
2,487
511,136
-
141,196
654,819
2021
$
12,691
457,770
5,356
57,690
533,507
- 34 -
Aspire Mining Limited
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2022
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
Research & development grant received
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
2022
$
2021
$
35,043,789
2,741,771
(66,850)
-
(283,874)
37,434,836
36,865,397
569,439
37,434,836
36,470,102
934,829
-
(884)
(2,360,258)
35,043,789
34,435,087
608,702
35,043,789
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.
NOTE 11: TRADE AND OTHER PAYABLES (CURRENT)
Trade payables
Accrued expenses
Employee entitlements
Corporate credit card
2022
$
270,407
101,550
5,704
859
378,520
2021
$
152,866
60,403
5,433
-
218,702
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
$
$
$
30 June 2022
Carrying value at 1 July 2021
Additions
Disposals
Depreciation charge for the year
Exchange rate movement
Carrying value at 30 June 2022
30 June 2022
Cost
Accumulated depreciation
Net carrying amount
315,770
-
(31,481)
(2,469)
281,820
6,946
63,731
-
(10,645)
(1,185)
58,847
14,792
25,143
(16,964)
(13,947)
(1,907)
7,117
26,138
7,307
(1,922)
(22,483)
1,061
10,101
58,022
-
(941)
(26,003)
912
31,990
421,668
96,181
(19,827)
(104,559)
(3,588)
389,875
1,135,673
(745,798)
389,875
- 35 -
Aspire Mining Limited
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2022
NOTE 12: PROPERTY, PLANT AND EQUIPMENT (continued)
Right of use
property
Plant &
Equipment
Furniture
& Fittings
Office
Equipment
Motor
Vehicles
$
$
$
$
$
Total
$
123,897
228,370
-
49,045
-
-
36,553
4,972
(154)
40,534
14,419
(2,244)
54,280
63,494
-
304,309
311,255
(2,398)
(24,087)
(37,777)
(23,309)
(22,897)
(54,717)
(162,787)
(12,410)
315,770
(4,322)
6,946
(3,270)
14,792
(3,674)
26,138
(5,035)
58,022
(28,711)
421,668
1,093,194
(671,526)
421,668
2021
$
171,113
4,094
(10,932)
(72,027)
(15,343)
76,905
206,391
(129,486)
76,905
2022
$
76,905
52,239
-
(101,406)
271
28,009
255,486
(227,477)
28,009
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
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
- 36 -
Aspire Mining Limited
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2022
NOTE 14: FINANCIAL LIABILITIES
Finance loan liability
Current liability
Non-current liability
Balance at beginning of period
Payments
Balance at end of period
2022
$
-
-
-
-
-
$
53,489
(53,489)
-
2021
$
53,489
53,489
10,522
42,967
53,489
$
70,496
(17,004)
53,489
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 was for 180 million 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. During 2022, the loan liability was discharged.
NOTE 15: NON-CONTROLLING INTERESTS
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 (NRHL). 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
Coalridge Limited
$
Northern Rail
Holdings Limited
$
Balance at 30 June 2020
(117,024)
(395,895)
Total
$
(512,919)
Loss allocated to non-controlling interest
Other comprehensive loss allocated to
non-controlling interest
Balance at 30 June 2021
Loss allocated to non-controlling interest
Other comprehensive profit/(loss)
allocated to non-controlling interest
Balance at 30 June 2022
(2,782)
(53,141)
(172,947)
(2,767)
(7,026)
(182,740)
(5,805)
(8,587)
209,925
(191,775)
156,784
(364,722)
(3,555)
(6,322)
(150,222)
(345,552)
(157,248)
(528,292)
- 37 -
Aspire Mining Limited
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2022
NOTE 15: NON-CONTROLLING INTERESTS (continued)
Current Assets
Non-Current Assets
Total Assets
Current Liabilities
Non-Current Liabilities
Total Liabilities
Net Assets
Coalridge Limited
30 June
2022
$
31,357
569,931
601,288
(17,151)
-
(17,151)
584,137
30 June
2021
$
15,660
608,702
624,362
(16,947)
-
(16,947)
607,415
Revenue
Loss for the year
Total comprehensive profit/(loss) for
the year
(27,665)
(97,923)
(27,665)
(559,221)
Northern Railway
Holdings Limited
30 June
2022
$
11,880
-
11,880
(8,454)
-
(8,454)
3,426
30 June
2021
$
10,210
-
10,210
(13,737)
-
(13,737)
(3,527)
-
(17,777)
(768,888)
-
(29,025)
1,020,603
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
2022
$
143,683
31,990,463
32,134,146
378,520
-
378,520
2021
$
75,737
34,173,866
34,249,603
218,702
53,487
272,189
- 38 -
Aspire Mining Limited
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2022
NOTE 16: FINANCIAL INSTRUMENTS (continued)
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
%
$
$
$
$
$
2022
Non-interest
bearing
Variable interest
rate instruments
Fixed interest rate
instruments
2021
Non-interest
bearing
Variable interest
rate instruments
Fixed interest rate
instruments
0.50
2.45
0.30
1.25
176,626
27,233,197
-
27,409,823
108,019
5,861,986
-
-
-
-
10,000
10,000
4,714,323
4,714,323
-
-
-
-
-
-
23,980,592
29,950,597
4,299,006
4,299,006
The following table details the Group’s remaining contractual maturities for its non-derivative financial
liabilities. These are based on the undiscounted cash flows of financial liabilities based on the earliest date on
which the Group can be required to pay.
Weighted average
effective interest
rate
Less than 1
month
1 – 3
Months
3 months – 1
year
1 – 5
years
5+ years
$
$
$
$
$
2022
Non-interest
bearing
2021
Non-interest
bearing
Fixed interest rate
instruments
%
-
-
15.6
378,520
378,518
218,702
-
218,702
-
-
-
-
-
-
-
-
-
-
10,522
10,522
42,965
42,965
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
- 39 -
Aspire Mining Limited
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2022
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 2022 and 2021, 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 counterparty 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.
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 (2021: $Nil).
(c)
Interest rate risk management
The Group is exposed to interest rate risk as the Group deposits the Group’s available cash reserves in term
deposits with recognised banks. The risk is managed by the Group by maintaining an appropriate mix between
short term and medium-term deposits. The Group’s exposures to interest rate on financial assets and financial
liabilities are detailed in the liquidity risk management section of this note.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2022
- 40 -
Aspire Mining Limited
NOTE 17: FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (continued)
Interest rate sensitivity
At 30 June 2022, 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%
2022
$
272,332
(272,332)
2021
$
58,620
(58,620)
272,332
(272,332)
58,620
(58,620)
(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:
Liabilities
2022
$
-
49,360
2021
$
-
116,167
Assets
2022
$
2021
$
31,922,931
391,786
34,107,102
359,053
US Dollars
Mongolian Tugriks
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.
10% Increase
Profit/(loss) and equity – US dollar exposure
Profit/(loss) and equity – Mongolian Tugrik
10% Decrease
Profit/(loss) and equity – US dollar exposure
Profit/(loss) and equity – Mongolian Tugrik
2022
$
2021
$
2,902,085
3,100,646
59,429
42,357
$
$
(2,902,085)
(3,100,646)
(59,429)
(42,357)
- 41 -
Aspire Mining Limited
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2022
NOTE 17: FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (continued)
(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.
NOTE 18: COMMITMENTS
Remuneration Commitments
The Group has entered into remuneration commitments with all the Directors and other key management
personnel of the Group which were in effect throughout the financial year. The Group also employs consultants
who are contracted under standard consultancy rates.
Exploration Commitments
The Group has certain commitments to meet minimum expenditure requirements on the mineral exploration
assets it has an interest in. Outstanding exploration commitments are as follows:
Within a year
Later than one year but not later than five years
2022
$
2,890
11,560
2021
$
20,359
81,437
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), 500,000 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 2022.
NOTE 20: CONTINGENT LIABILITIES
There are no contingent liabilities at 30 June 2022.
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.
- 42 -
Aspire Mining Limited
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2022
NOTE 22: DIRECTORS AND EXECUTIVE DISCLOSURES
The totals of remuneration paid to key management personnel of the Company during the year are as follows:
2021
$
2022
$
Short-term employee benefits
Post-employment benefits
Share-based payments
851,660
5,479
49,179
906,318
830,469
5,205
67,033
902,707
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 2022, Kingsland Kingsland Corporate Pty Ltd (formerly 2R’s Pty Ltd), a company associated with Mr David
Paull, was paid $14,000 for the services provided by David Paull beyond his NED Chair role (2021: $15,150).
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
2022
$
49,000
-
49,000
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
2022
$
73,360
-
73,360
2022
$
27,368,152
7,535,339
34,903,491
327,789
327,789
34,575,702
150,026,408
49,179
(115,499,885)
34,575,702
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
- 43 -
Aspire Mining Limited
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2022
NOTE 24: PARENT ENTITY DISCLOSURES (continued)
Financial performance
Operating loss for the year
Total comprehensive loss
Year ended
30 June 2022
$
(1,796,383)
(1,796,383)
Year ended
30 June 2021
$
(6,320,821)
(6,320,821)
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
2022
100%
100%
100%
100%
80%
80%
80%
80%
100%
100%
90%
100%
2022
-
-
-
2021
2021
-
100%
-
100%
100%
-
100% $9,428,158 $9,428,158
-
$136,230
$1
$97,408
100% $1,541,390 $1,541,390
-
100%
-
90%
-
100%
-
$136,230
$1
$97,408
80%
80%
80%
80%
-
-
-
Aspire Mining Limited is the ultimate Australian parent entity and ultimate parent of the Group. Transactions
between these parties involved the provision of funding for operations. As at 30 June 2022 and before
impairment, amounts of $63,996,123 (2021: $61,219,559), $20,934,810 (2021: $20,920,968), $138,409 (2021:
$138,409), $1,307,908 (2020: $1,296,755), $25,486 (2021: $22,287) and $511,616 (2020: $466,017) 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.
- 44 -
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 2022 and of its
performance for the year then ended; and
complying with Accounting Standards and Corporations Regulations 2001.
2.
3.
4.
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 2022.
This declaration is signed in accordance with a resolution of the Board of Directors.
Achit-Erdene Darambazar
Managing Director
29 September 2022
- 45 -
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 2022,
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 2022 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.
- 46 -
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
associated with
management’s review of the exploration
and evaluation asset carrying values;
• We verified a sample of the exploration
processes
additions;
• We
considered
Directors’
assessment of potential indicators of
impairment;
the
• 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 2023 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 2022, 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.
- 47 -
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.
- 48 -
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 2022.
In our opinion, the Remuneration Report of Aspire Mining Limited for the year ended 30 June 2022
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
Chartered Accountants
Perth, Western Australia
29 September 2022
B G McVeigh
Partner
- 49 -
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 20th October 2022.
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, 66,401,758 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 2,335 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 –
729
487
255
621
243
TOTAL ON REGISTER
2,335
Units
264,976
1,327,636
2,041,523
24,488,508
479,514,342
507,636,985
%
0.05%
0.26%
0.40%
4.83%
94.46%
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 1,228 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;
- 50 -
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 Citicorp Nominees Pty Ltd
7 China Tonghai Securities Ltd
8 Custodial Services Ltd
9 BNP Paribas Nominees Pty Ltd
10 Mr Stephen Ronald Hobson
11 Miss Yidi Ren
12 Hurose Pty Ltd
13 2R’s Pty Ltd
14 Sandwich Holdings Pty Ltd
15
16 Mr Joseph Warren
17 Glover Superannuation Pty Ltd
18 Mr Benjamin Wechsler
19 Mr Peter Joseph Mcguire
20 Mentok Pty Ltd
Istabraq Pty Ltd
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
13,226,595
11,149,366
9,836,492
6,298,620
3,769,649
2,129,833
2,041,234
2,000,000
1,557,013
1,500,000
1,358,367
1,300,238
1,261,222
1,250,000
1,200,000
1,065,000
417,449,708
43.84%
13.08%
8.64%
4.67%
2.61%
2.20%
1.94%
1.24%
0.74%
0.42%
0.40%
0.39%
0.31%
0.30%
0.27%
0.26%
0.25%
0.25%
0.24%
0.21%
82.26%
- 51 -
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 2022 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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