Annual
Report
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CORPORATE INFORMATION
ASPIRE MINING LIMITED
ABN 46 122 417 243
DIRECTORS
Mr Michael Avery (Non-Executive Chairman)
Mr Achit-Erdene Darambazar (Managing Director)
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 Russell Taylor (Non-Executive Director)
Corrs Chambers Wesgarth Lawyers
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COMPANY SECRETARY
Ms Emily Austin
REGISTERED OFFICE
Level 5, 126-130 Phillip Street,
Sydney NSW 2000
T: +61 2 8072 1400
F: +61 2 8072 1440
E: info@aspiremininglimited.com
PRINCIPAL PLACE OF BUSINESS
9TH FLOOR, “JJ” TOWER, BAGA TOIRUU-17,
1ST KHOROO, CHINGELTEI DISTRICT,
ULAANBAATAR MONGOLIA 15170
Level 6, Brookfield Place Tower 2
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
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CONTENTS
OPERATIONAL OVERVIEW
Chairman’s Letter
Operational Overview
Community Relations
Sustainable Development
Industry Overview
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FINANCIAL & SHAREHOLDER REPORTING
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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
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ANNUAL REPORT 2023ASPIRE MINING LIMITED 4
OPERATIONAL
OVERVIEW
Implementation of responsible
mining practices and support
for sustainable development in
the regions where our projects
operate will deliver significant
benefit to the local communities.
ASPIRE MINING LIMITED ANNUAL REPORT 2023 Aspire Mining Limited is focused on
developing coking coal projects in
Mongolia, where it owns 100% of the
Ovoot Coking Coal Project and 90%
of the Nuurstei Coking Coal Project.
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Chairman’s
Letter
Dear Shareholders,
In what is my inaugural year as Chairman of
the Company, I am pleased to update you on
progress made and the remaining task ahead
to bring the Ovoot Coking Coal Project into
operation to the benefit of our shareholders and
broader stakeholders.
The year has been transitional for the Company
with changes made to Board and Management
which have brought focused experience and
expertise to strengthen our ability to deliver on
what has long promised to be a rewarding project.
Minimal capital is currently being invested in
developing or expanding coking coal projects in
Australia and other locations around the world,
where green policies are not differentiating from
coking and thermal coals.
Demand for coking coal continues to increase
globally. It remains an irreplaceable input into
commercially viable processes of making
steel, which is an essential material required to
achieve many of the United Nations Sustainable
Development Goals against which governments
worldwide have aligned their goals and policies.
Mongolia is a young and vibrant democratic
country, with a proud mining heritage. The
Government has been proactive in recent years to
encourage and support both foreign and domestic
in alignment with key strategic
investment,
policies including the ‘Vision 2050 Long-term
Development Policy’ and the ‘New Revival Policy’.
In such context, as a veteran of the coal industry,
the prospect of developing the Ovoot deposit
excites me tremendously. There are few, if any
greenfield coking coal deposits equal or better in
terms of size, quality, or proximity to market.
The Management have been working diligently
to obtain the necessary approvals required
to develop the Ovoot Coking Coal Project. In
the past year, the more significant milestones
achieved in this regard included receiving final
approvals for the:
• Detailed Environmental Impact Assessment
prepared in relation to the planned Ovoot
mining operations;
• Feasibility Study
construction and
for
operation of a Coal Handling and Preparation
Plant at Ovoot;
ASPIRE MINING LIMITED ANNUAL REPORT 2023 7
• Feasibility Study for construction of paved
road to facilitate product coal haulage to rail
terminal nearby Erdenet; and
• Feasibility Study for development of a new rail
junction along the Salkhit – Erdenet rail line to
facilitate rail terminal access.
The mandated processes for obtaining several of
the required approvals necessitates consultation
with local communities. That the planned mine,
washplant, road and rail terminal infrastructure
exist across a route of approximately 600 km
means that there are multiple communities with
which the Company has been liaising.
Currently, the Company is in possession of all
major permits required to commencing mining,
being a valid Mining License, approved Feasibility
Study, and an approved Detailed Environmental
Impact Assessment).
Work continues to progress to obtain the final key
approvals necessary to develop the Ovoot project
and raise funds to finance its development. These
are primarily the:
• Approval of
the Detailed Environmental
Impact Assessments for the paved road and
Coal Handling and Preparation Plant planned
to be developed.
With these last major permissions in hand, and
Independent Technical Report will be prepared
in 2023/24 to satisfy due diligence requirements
of the financing sought to bring the project
into operation.
This Independent Technical Report will be based
upon the updated JORC (2012) Resource and
Reserve estimates currently under development,
and finalised operating and capital cost inputs
derived from completed studies in relation to
mining, processing, transportation, and logistics.
Finally, I would like to thank my fellow Directors
for their unified support to drive the Company
forward, and our loyal shareholders for their
ongoing support and belief in the successful
development of the Ovoot Coking Coal Project.
• Approval of Detailed Design of the paved road
Michael Avery
planned to be constructed; and
— Non-Executive Chairman
ANNUAL REPORT 2023ASPIRE MINING LIMITED 8
Operational
Overview
STRATEGY
EXPLORATION
coal
qualities,
Drilling was conducted within the Ovoot mining
license in the December quarter with focus
on improving the understanding of geological
structure,
hydrogeology
in
environment and geotechnical conditions
the immediate vicinity of the planned Starter Pit
where mining is expected to commence from.
Some drilling was also conducted to refine
understanding of coal seam correlation with the
adjacent Mogoin Gol coal mine.
Based upon the results of rock strength testing,
geotechnical design criteria relevant
the
intended Starter Pit have been provided for
inclusion
revised pit designs. Similarly,
hydrogeological interpretation specific to the
Starter Pit location has been received, which will
support planning for pit water ingress pumping
and utilisation.
to
in
(“ISO”) accredited
testing
Coal quality and coal washability
International Standards
was undertaken by
laboratories
Organisation
in Ulaanbaatar. The new
raw coal quality
information obtained is being incorporated into
an updated JORC (2012) compliant Coal Resource
model by SRK Consulting MGL LLC, along with
new structural data collected from downhole
geophysical surveys. Details of the updated
Coal Resource estimate arising from this will be
communicated once available.
The Company remains focused on developing
its wholly owned Ovoot Coking Coal Project
(“OCCP”). This project entails development of
a coal mine, coal processing facility, road to
facilitate transportation by truck to Erdenet, and
a coal unloading and loading terminal to facilitate
onward railing to customers in China and beyond.
The OCCP is based upon extracting coking coal
from the Ovoot mining license (MV-017098),
granted in August 2012 for a minimum 30-year
tenure with opportunity to extend twice for 20-
year periods. Within this license a total Coal
Resource of 280 Mt has previously been estimated
in accordance with JORC
(2012) standards,
including 197 Mt Measured, 72 Mt Indicated and
12 Mt Inferred.
Combination of the large coal resource, low
stripping ratio and unique ‘fat’ coking coal qualities
underpin the Company’s plans to develop a long
life, world class operation. Onsite beneficiation
and management of an integrated transportation
and logistics chain will maximise the value added
prior to export sale for the benefit of the Company,
its shareholders as well as the community and
government stakeholders.
Development of the OCCP will create wealth for
shareholders, and through responsible mining
practices supportive of sustainable development
in the region, will provide significant benefits to
the local communities in which the operations will
exist, and more broadly to the people of Mongolia.
Efforts to develop the Company’s 90% owned
Nuurstei Coking Coal Project (“NCCP”) remain on
hold, whilst focus is concentrated on development
of the OCCP. The NCCP is significantly smaller
than the OCCP, with current total Coal Resource
of 12.9 Mt previously estimated in accordance
with JORC (2012) requirements.
ASPIRE MINING LIMITED ANNUAL REPORT 2023 MINING
9
After receiving approval of the Detailed Environmental Impact Assessment (“DEIA”) for mining activities
within the Ovoot mining license from the Ministry of Nature, Environmental and Tourism (“MNET”), the
Company now possesses all major permits and approvals required to commence mining operations.
From commencement of topsoil stripping, the lead time to reach first coal could be as short as six
months. Mining operations are not expected to commence, however, until significant progress has been
made on the construction of both the Coal Handling and Preparation Plant (“CHPP”) and paved road
connection. The Company plans to sell only a beneficiated product, and Mongolian legislation
requires that truck haulage of mine products be conducted across paved roads.
JORC RESERVES AND 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 accordance to
the JORC 2012 Code.
3. Nuurstei’s Resource and Reserve estimates have
been estimated by independent third parties (McElroy
Byran Geological Services) and are
in
accordance to the JORC 2012 Code.
reported
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.
4. The technical 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 Independent Technical Report (“ITR”).
On completion, the ITR will identify and report any new
information, data or changes to material assumptions
used in the Pre-feasibility Study.
ANNUAL REPORT 2023ASPIRE MINING LIMITED 10
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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
Institute of
Committee 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.
the Australasian
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.
ANNUAL REPORT 2023
11
PROCESSING
for construction and
The Feasibility Study
operation of a CHPP within the Ovoot mining
license, developed by local consultant Goldman
Project LLC in accordance with requirements of
the Mineral Resources and Petroleum Authority
of Mongolia (“MRPAM”), was approved following
review by the Minerals Resource Council (“MRC”).
The plant design presented within this Feasibility
Study was that previously developed in the
Front End Engineering Design (“FEED”) study
prepared by Sedgman Pty Ltd, but translated
and localised in accordance with Mongolian
requirements. Nameplate capacity of this design
is 350 tonnes per hour of raw coal feed, for up to
7,200 operating hours per annum, over a nominal
lifespan of 20 years.
In recognition of concerns raised by the local and
broader community, the design of the planned
CHPP has been prepared with focus to prevent
and capture potential dust emissions whilst
minimising the raw water supply required.
The main control measures incorporated include:
• Dust controls such an enclosed raw coal receival hopper (meaning
mine trucks will discharge loads within a building), enclosed conveyor
systems, enclosed crushing and processing infrastructure, enclosed
product stockpile and automated product and reject truck loadout
bins. This infrastructure is also supportive of highly automated and
productive operations.
•
Incorporation of filter press technology for dewatering the fine reject
material to minimise raw water consumption. Traditionally such fine
reject material would be sent to a tailings dam, however doing this
is inefficient (as result of evaporative losses) and creates avoidable
environmental risk. Based upon the design, dewatered fine reject
material will be co-disposed with coarse reject within the advance
mined overburden dumps.
The last major permission required to progress
with CHPP development is to obtain approval of a
DEIA in relation to the construction and operation
of the CHPP. On basis that onsite coal processing
was included for in information submitted and
approved in relation to the Mining DEIA, and that
world class controls are planned to minimise dust
generation and raw water use, the Company is
confident of receiving such approval.
ANNUAL REPORT 2023ASPIRE MINING LIMITED 12
TRANSPORTATION
Washed coking coal produced at Ovoot will be transported by truck to a rail terminal to be established
in Jargalant soum, nearby Erdenet city, where coal will be unloaded and transferred to rail wagons for
onward delivery to customers in China and beyond.
The style of the trucking operations planned is significantly different in comparison with the practices
typically associated with coal mines currently operating in the south of Mongolia, with more stringent
consideration of control measures necessary for the protection of safety, environmental and community.
Road Development
The road that the Company is proposing to build
is being designed to meet or exceed current
Mongolian standards for public highway, and
it is purposely being designed as suitable for
mixed use with third party traffic. Most of the
proposed new road alignment overlays a route
already included for in existing government road
development plans.
Approval of Feasibility Study for this road has been
received from the Science and Technology Council
(“STC”) of the Road and Transport Development
Centre (“RTDC”) within the Ministry of Roads and
Transportation Development (“MRTD”). The local
consultants engaged to prepared this, ICT Sain
Consulting LLC (“ICT”) and Gobi Infrastructure
Partners LLC (“GIP”), have since continued with
development of Detailed Design for the new road
proposed to be constructed and existing road
proposed to be improved to facilitate the coal
transportation. Much of this design has been
completed, with remaining works underway now
concentrated upon overcoming challenges posed
by the natural topography and ensuring that
potential hazards are eliminated in design.
Maximum gradient of 5 per cent has been
incorporated into the road design. Whilst this
is conservative
in comparison to applicable
Mongolian standards, it is important considering
the gradeability of the planned vehicles and third-
party traffic, and particularly in consideration
of the safety of all vehicles during descents.
The Khukh Khutul and Buren Mountain passes
presented difficulties in this regard, however
these have now been largely overcome.
Dedicated overtaking lanes are not currently
common on 2-lane bidirectional highways in
Mongolia. Due to the low density of traffic, there is
risk of drivers attempting to overtake slow moving
vehicles approaching crests where visibility is
limited. In recognition of this, overtaking lanes
have been incorporated into the design where
simulated vehicle speeds drop and line-of-sight
for overtaking vehicles is limited by the vertical
curvature over hill crests.
The finalised design is expected to soon be
presented to the Science and Technology Council
within the Ministry of Roads and Transportation
Development for approval. Considering that the
design has purposefully addressed potential
hazards identified, that it aligns with State plans,
and that it will provide for safe and comfortable
all-season trafficability for third party users, it is
expected that this will receive approval.
Transportation Fleet
The trucks intended to be used to transport
washed coking coal between the Ovoot CHPP and
the rail terminal to be developed near Erdenet are
distinctly different from the typical vehicles being
used to haul mostly raw coal between mines in
the south of Mongolia and the Chinese border.
The status quo of coal transportation by truck in
Mongolia involves the use of ‘heavy duty’ trucks
manufactured by Chinese original equipment
manufacturers
incorporate old
(“OEMs”) that
technologies, are underpowered and overloaded,
and are designed and operated with minimal
concern for safety of road users or protection of
the environment. These are used on privately
owned ‘special purpose roads’, however these
roads are also commonly used by third parties.
These ‘heavy duty’ trucks have extremely high
axle loads, typically more than double the limits
commonly regulated for use on public roads
around the world and require significantly thicker
and thus more expensive pavements upon which
to operate. This equipment in use is operating
at or beyond sustainable limits, and there is
significant inefficiency as result of accidents
and breakdowns.
In comparison to this, the Company plans to
operate trucks supplied by Tier 1 OEMs that will be
fitted with contemporary technologies including
powerful,
low emissions engines, advanced
braking, and stability systems, and to operate
these with axle loads that are compliant with
Mongolian standards and international norms for
use on public roads. Use of such vehicles will
support high productivity, and thus low unit costs.
ASPIRE MINING LIMITED ANNUAL REPORT 2023 13
practical improvements can be made to reduce
these times. Several of these are systematic
only, and do not require capital expenditure or
increased operating costs.
improvements
Whilst capacity on the trans-Mongolian railway is
tight, improvements are planned that will alleviate
this and increase overall cargo carrying capacity.
Such
include expansion of
stations to enable handing of more rolling stock,
progressive double tracking, and development
of the Bogd Khan railway around Ulaanbaatar
to avoid congestion and gradient
limiting
sections of track.
LOGISTICS
Following delivery of washed coal to rail terminal
nearby Erdenet, there are multiple feasible paths
to export markets heading both north and south
along the trans-Mongolian railway. The principal
target market regions are within China, but due
to the expected high value of the coal, potential
opportunities also exist elsewhere.
Terminal
The Company plans to construct a bespoke
coal unloading and loading facility adjacent to
the Erdenet – Sakhilt railway line, in Jargalant
soum to east of the city of Erdenet. Land use
permission has been acquired for this purpose,
and a conclusion has been received from the
national rail operator Ulaanbaatar Tumur Zam
(“UBTZ”) that it is possible to construct a branch
railway to facilitate access to/from this facility. The
Company has previously signed a Memorandum
of Understanding (“MoU”) with UBTZ regarding
freight services.
Design and cost estimate for the coal unloading
and loading facility was previously prepared by
O2 Mining Limited, who evaluated the capital
costs, operating costs, operational efficiency, and
environmental containment of several concepts.
The chosen option was developed in more
detail, and included for enclosed truck unloading
station, enclosed product coal stockpile, enclosed
conveyors, and enclosed train loadout bin capable
of bulk loading trains. This design will ensure that
potential dust emissions are contained, that the
efficiency of the truck fleet delivering coal is not
constrained and that trains can be loaded quickly
and accurately.
Railing
Local freight logistics specialist Sunshine Peak LLC
was engaged to analyse the currently available
routes, plausible future routes, and potential
improvements to existing and future routes to
target market regions for Ovoot washed coal in
China. The main target markets considered were
in northeastern Inner Mongolia (entering via the
port of Manzhouli), south central Inner Mongolia
and Northern China on the shore of the Bohai Sea
(entering via the ports of Erlian or Mandal).
All three routes are common from the planned
terminal location to Salkhit, and the two routes
to Erlian and Manzhouli share the same route
between Salkhit and Sainshand traveling south
along the trans-Mongolian railway. The analysis
has determined the current wagon turnaround
times in each direction, and identified areas where
ANNUAL REPORT 2023ASPIRE MINING LIMITED 14
Community
Relations
the
relationship with
to strengthen
The Company has continued
local government
its
administrations and residents of the communities
in which its current and planned activities are
based. A key theme to this has been to highlight
how responsible mining activities can exist side
by side with the local traditional industries of
agriculture and tourism, whilst simultaneously
protecting the natural environment upon which
these traditional industries are reliant.
As understanding of what responsible mining
entails grows within the community, and members
of the community begin to understand not only
what the Company plans entail but also how
these are often materially different from the
status quo in other Mongolian mining operations,
members of the community are starting to realise
that development of the Ovoot project will be of
significant net benefit to the region.
Scholarship Program
During the 2022-23 academic year, the Company
provided 18 students from Tsetserleg soum with
scholarships covering for annual tuition fees
enabling them to undertake bachelor’s degree
programs at nationally accredited universities.
Recipients will continue to be provided with
the completion of
scholarship
their bachelor’s degrees, on meeting academic
and
criteria
each semester.
administrative
funding until
performance
The Company’s scholarship program is intended
to contribute to the development of Tsetserleg
soum by providing opportunity for youth to
improve their skills and potentially return to
contribute to development in the region. Further,
the Company is interested to upskill residents
of the local community in advance of future
potential employment in technical and managerial
roles at the OCCP.
Green Fodder Program
The Green Fodder Program continued in 2022
and 2023, as an important outreach project to
the local herding community concerned about
the potential impact of the Ovoot project on
surrounding pastures. This program entails
planting and harvesting 200 ha of land within the
Ovoot mining license to produce bales of fodder
which can be donated or sold at discounted prices
to the local community.
Dry weather conditions in 2022 resulted in a much
smaller harvest than during the inaugural year of
the program. These conditions afflicted all pasture
growth in the region, and difficult conditions
were faced by most herders during 2022/23
winter as result. The Company supplemented its
own fodder production with purchase of fodder
produced elsewhere
in Mongolia and spent
wheat grain from breweries in Ulaanbaatar, which
were provided to local herders in need and met
with much gratitude.
Weather during summer 2023 were significantly
wetter, and the growing season much longer
on account of warmer conditions extending
through until mid-October. As result of these
conditions, a bumper harvest is expected to
surpass the production from 2021. The success
of this program is spurring discussion within the
community to establish similar operations nearby,
which is ideally what the Company wanted on
basis that development of local agriculture will
facilitate local supply of produce.
Supporting the Local Economy
Procuring goods and services from the local
community in which the Company operates is an
important mechanism for demonstrating the value
that project development can have. In this regard,
wherever possible that Company hires and
purchases locally to the benefit of the community.
ASPIRE MINING LIMITED ANNUAL REPORT 2023 15
During 2022/23 there was increased activity
within the Ovoot mining license area related
to the 2022 exploration drilling campaign and
the 2022 and 2023 green fodder planting and
harvesting. During these times, effort was made
to procure goods in support of accommodation
and messing from local vendors, and temporary
employment opportunities were provided to local
community members.
During the course of the year the Company
employed 68 people from Khuvsgul aimag. Total
of net salary payments paid to these employees
amounted to MNT 425 million (USD 123 thousand),
and payroll taxes of MNT 173 million (USD 50
thousand) were generated.
Further, approximately MNT 587 million (USD
170 thousand) of goods and services were
also procured from Khuvsgul businesses. This
represents a significant contribution to the local
economy and will increase as the OCCP develops
and transitions into operations.
Sporting Events
Sports competitions provide opportunity
for
the Company to demonstrate good corporate
citizenship by helping community members to
participate in interesting and culturally important
events. During 2022/23
the Company has
provided sponsorship for the following community
sports activities:
• A
traditional
youth wrestling
intercity
championship organized by the ‘Hoimor Nutgiin
Huchten’, meaning the ‘Northern Strongmen
Wrestling Club’, where 226 young wrestlers
participated across four age categories.
• A traditional adult wresting championship in
Khuvsgul in honour of wrestler Bayanmunkh.B,
awarded the national title of ‘Falcon’. A total of
128 wrestlers participated.
• The
19th National Adult
Badminton
Championship in Khuvsgul province, where
150 athletes from 14 provinces competed in
men’s, women’s, and mixed events.
• The Mongolian Rugby Union, which is a member
union with official rights to implement the
policies and programs of the World Rugby and
Asian Rugby organisations, and is promoting
team sport in Mongolia by developing Rugby
15 Rugby 7 competitions.
ANNUAL REPORT 2023ASPIRE MINING LIMITED 16
Sustainable
Development
‘1 Billion Trees’ National Campaign
In November 2021, at the United Nations climate
change conference (COP26) in Glasgow, Scotland,
the President of Mongolia committed the country
to the ‘1 Billion Trees’ initiative. In the following
spring, the Company committed to support this by
pledging to plant 10 million trees by 2030.
The pledge was signed by the Company’s
Managing Director and the Minister of Nature,
Environment and Tourism in the presence of the
President and Prime Minister of
Mongolia. This pledge aligns
with a comprehensive national
to combat climate
campaign
change and desertification, and
Company’s policy to support
achieving the United Nations
Sustainable Development Goals.
In November 2021, at the United
Nations climate change conference
(COP26) in Glasgow, Scotland, the
President of Mongolia committed the
country to the ‘1 Billion Trees’ initiative.
the
the pledge,
To achieve
Company has established a tree nursery in
Tsetserleg soum, in which the Ovoot project is
located. Two greenhouses (total 180m2) and two
open fields (total 2,700m2) have been planted with
endemic species of trees such as poplar, larch, and
elm as an initial trial, with growth rates, survival
rates and unit cost to sapling being monitored for
future expansion. When ready, the saplings will
be planted in cooperation with local communities,
and in aid for future site rehabilitation works.
ASPIRE MINING LIMITED ANNUAL REPORT 2023 17
Environmental Fellowship Program
Baseline Monitoring
The company is a proud sponsor of the Zorig
Foundation’s Environmental Fellowship Program
(“EFP”) and has recently committed to sponsoring
this for the third year in succession. The EFP is
an eight-month program designed for young
professionals desiring to improve their knowledge
on various environmental issues facing Mongolia
and the world.
To measure any impact of the Company’s future
operations, quality baseline data is required
against which to compare. The Company has
engaged accredited
specialists
to conduct air, soil, noise, surface water and
groundwater periodic monitoring to build this
baseline across all seasons in accordance with
national standards.
third-party
Additional to this, the Company
is working
to procure and install permanently mounted
air quality monitoring systems capable
for
continuously monitoring air quality around the
Ovoot mining license. It is intended that all data
captured be made available to the public with
the accredited third-party monitoring results,
to ensure that there is transparency regarding
actual performance.
The program is open to university graduates
under 26 years of age. Participants of the program
can develop their leadership skills, expand their
understanding on the pressing environmental
issues, expand
their professional network
and learn to design and implement projects in
a team setting.
During the program, Achit-Erdene.D, Managing
Director of the Company, was invited to present
to the program participants on ‘Sustainability in
Business’ and ‘Sustainable Development Goals in
the Local Community’. Following this, participants
were able to understand how responsible mining
is essential for achieving the United Nations
Sustainable Development Goals.
ANNUAL REPORT 2023ASPIRE MINING LIMITED 18
INDUSTRY
OVERVIEW
Rail Sector Development
the Tavantolgoi
Following completion of
to
Zuunbayan railway line in March 2022, two further
significant developments were made increasing
the Mongolian rail network in 2022/23, being the
commissioning of the the 258 km Tavantolgoi to
Gashuunsukhait railway on 09 September 2022,
and commissioning of the 227 km Zuunbayan to
Khangi railway on 25 November 2022.
the Tavantolgoi
Whilst
to Zuunbayan and
Tavantolgoi to Gashuunsukhait railways do not
have direct impact on the OCCP, overall, these
developments are aiding to improve the focus
on the importance of railway productivity and
capacity in Mongolia, and their use to facilitate
coal export from the Tavan Tolgoi coalfields
to China is fostering the development of cross
border rail logistics.
The commissioning of the Zuunbayan to Khangi
railway will have direct and indirect benefits in
relation to development of the OCCP. Zuunbayan
is connected to the trans-Mongolian railway
near Sainshand. Khangi is on the Mongolian
side of the border to the Chinese port of Mandal.
Development of this section provides for an
alternative path to south central Inner Mongolia
aside from utilising the trans-Mongolian railway to
enter via the port of Erlian.
Transit of goods through Khangi – Mandal
currently requires cross border transportation by
truck, however there are plans to develop the port
to allow more efficient handling from (Mongolian)
broad gauge to Chinese (standard) gauge rail.
Further, with some cargo being displaced from
the Zamiin-Uud – Erlian crossing to the Khangi –
Mandal crossing, additional opportunity for cargo
will present through Zamiin-Uud – Erlian.
Commissioning of the Zuunbayan to Khangi
railway achieves one of the development projects
to be implemented by the Government of Mongolia
under it’s ‘New Recovery Policy’, which represent
the short-term goals within its Vision 2050 policy.
Other projects within this New Recovery Policy
with potential to positively impact development of
the OCCP include:
• The double tracking of the trans-Mongolian
railway between Sukhbaatar and Zamiin-Uud;
• Construction of cargo terminals at Altanbulag
increase the handling
and Zamiin-Uud to
capacity of these border ports;
•
the Bogdkhan Railway
Implementation of
Project to facilitate the trans-Mongolian railway
bypassing around Ulaanbaatar,
for which
Feasibility Study has already been developed,
which will increase trans-Mongolian capacity
on account of avoiding congestion and train
weight limiting gradients; and
• Development of the Ereentsav-Choibalsan-
railway corridor, which will
Khuut-Bichigt
provide an alternative rail corridor between
Russia and China, for which Mongolia has
signed an agreement with the concessionaire
and is working to start the construction work in
the near future.
ASPIRE MINING LIMITED ANNUAL REPORT 2023 19
Chinese Coal Market
Imports of bituminous coking coal by China
recovered strongly in 2022/23 following the
impacts of COVID during 2021/22, with total
imports increasing 44 per cent year-on-year
(“y-o-y”) from 58.4 million tonnes (“Mt”) to 81.0
Mt according to official statistical data published
by the General Administration of Customs of the
People’s Republic of China.
Mongolia was the most significant beneficiary of
this, with imports from Mongolia increasing by 218
per cent y-o-y from 13.2 Mt to 41.9 Mt, representing
an increase from 22.6 to 50.0 per cent of the
total bituminous coking coal imported into China.
This was helped in part by the introduction of
additional rail capacity, but mainly on account
of cross-border truck transportation returning to
pre-pandemic levels.
2021/22 China Coking Coal Imports (Mt)
2022/23 China Coking Coal Imports (Mt)
United
States
9,15
Other
3,99
Australia
8,18
Canada
9,10
Russia
14,78
Mongolia
13,18
Russia
25,59
Mongolia
41,9
United States 3,48
Other 3,48
Australia 1,35
Canada
7,39
Whilst prices for coking coals decreased in
2022/23 in comparison to the historical high prices
seen in 2021/22 resulting from pandemic related
supply chain constraints, pricing remains strong
and has been improving into 2023/24 following
recent lows at the end of 2022/23. Results from
testing of raw coal, washed product coal, and
pilot coke product by accredited laboratories in
Ulaanbaatar and Tianjin, derived from samples
collected during exploration conducted at Ovoot
in 2022, have been provided to an independent
panel of coal industry experts in China for
assessment of its ‘Value in Use’. Summary of
findings will be published when available, and
results of this will also be used as basis to update
price forecast assumptions.
It is expected that unique fat coking coal to
be produced at Ovoot will be valued by coke
producers on basis that its properties will allow
for incorporation of lower grade and thus lower
cost coals into the coal blends used to produce
coke. This is particularly advantageous when coal
prices are strong, or when steel prices are low and
coke production margins are being squeezed.
Comparable Coal Prices 01-Jul-2022 through 30-Sep-2023 (US$/t)
500
450
400
350
300
250
200
150
100
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Tianjin Mongolia Coking Coal (ex-Stock incl VAT)
Tianjin Australian Primary Coking (ex-Stock incl VAT)
Kailuan Washed Fat (ex-Mine incl VAT)
Tangshan Washed Fat (FOR incl VAT)
ANNUAL REPORT 2023ASPIRE MINING LIMITED 20
FINANCIAL &
SHAREHOLDER
REPORTING
Ovoot will produce a unique,
rare, and high-quality coking
coal, classified as a ‘Fat Coking’
coal under Chinese standard
GB/T 5751-2009, which
is
highly valued on account of its
fluidity, plastic range and dilation
coking properties.
ASPIRE MINING LIMITED ANNUAL REPORT 2023 2030
The Company will plant 10 million
trees by
in support of
Mongolia’s 1 Billion Tree initiative,
and will cooperate with
local
government and communities when
planting these.
21
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22
Corporate
Information
Aspire Mining Limited
Aspire Mining Limited
ABN 46 122 417 243
Annual Financial Report
30 June 2023
ASPIRE MINING LIMITED ANNUAL REPORT 2023 23
Aspire Mining Limited
Corporate directory
30 June 2023
Directors
Mr Achit-Erdene Darambazar (Managing Director)
Mr Boldbaatar Bat-Amgalan (Non-Executive Director)
Mr Michael Avery (Non-Executive Chairman)
Mr Russell Taylor (Non-Executive Director)
Company Secretary
Ms Emily Austin
Registered office and
principal place of business
- Australia
Level 5, 126-130 Phillip Street,
Sydney NSW 2000 AUSTRALIA
Tel: +61 2 8072 1400
Registered office and
principal place of business
- Mongolia
JJ Tower, 9th Floor, Baga Toiruu-17
1st Khoroo, Chingeltei District
Ulaanbaatar 15170 MONGOLIA
Share register
Auditor
- Australia
- Mongolia
Solicitors
Bankers
Automic Group
Level 5, 126 Philip Street
Sydney NSW 2000 AUSTRALIA
Tel: +61 1300 288 664
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
Corrs Chambers Westgarth Lawyers
Level 6, Brookfield Place Tower 2,
123 St Georges Terrace
Perth WA 6000 AUSTRALIA
National Australia Bank
Ground Floor, 100 St Georges Terrace,
Perth WA 6000 AUSTRALIA
Stock exchange listing
Aspire Mining Ltd shares are listed on the Australian Securities Exchange (ASX:
AKM)
Website
ABN
www.aspiremininglimited.com
46 122 417 243
1
ANNUAL REPORT 2023ASPIRE MINING LIMITED
24 Directors’
Report
Aspire Mining Limited
Directors' report
30 June 2023
The directors present their report, together with the financial statements, on the consolidated entity (referred to hereafter as
the 'Group') consisting of Aspire Mining Limited (referred to hereafter as the 'Company' or 'parent entity') and the entities it
controlled at the end of, or during, the year ended 30 June 2023.
Directors
The following individuals were directors of Aspire Mining Ltd during the whole of the financial period and up to the date of
this report, unless otherwise stated:
Mr Michael Avery
Mr Achit-Erdene Darambazar
Mr Boldbaatar Bat-Amgalan
Mr Russell Taylor
Mr David Paull
Mr Neil Lithgow
Ms Hannah Badenach
Non-Executive Chairman (appointed 27 March 2023,
previously appointed Non-Executive Director on 29
November 2022)
Managing Director
Non-Executive Director
Non-Executive Director (appointed 29 November 2022)
Non-Executive Chairman (retired 29 November 2022)
Non-Executive Director (resigned 29 November 2022)
Non-Executive Director (resigned 31 January 2023)
Principal activities
Aspire Mining Limited is an Australian incorporated public company with its shares listed on the ASX under the code AKM.
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). The Company held interests in two tenements:
(a) a 100% interest in the large scale, world class Ovoot Coking Coal Project within mining license MV-017098; and
(b) a 90% interest in the Nuurstei Coking Coal Project within mining license MV-020941.
Dividends
There were no dividends paid, recommended or declared during the current or previous financial year.
Review of operations
The loss for the Group after providing for income tax and non-controlling interest amounted to $557,162 (30 June 2022: profit
of $428,433).
During the period, the Company completed the following main items in progressing development of the Ovoot Project:
●
●
●
●
●
●
A small scale infill exploration drilling program was successfully completed in Q4 2022, which focused primarily on
developing improved understanding of the coal structure, coal quality, geotechnical environment and hydrogeological
environment in the immediate vicinity of the planned Starter Pit location where mining is intended to commence from.
Feasibility Study was prepared for and approved by the Minerals Resource Council (MRC) of the Mineral Resources
and Petroleum Authority of Mongolia (MRPAM) in relation to the Coal Handling and Preparation Plant (CHPP) proposed
to be constructed within the Ovoot mining license, for which the underlying technologies and design were in alignment
with those determined by the Front End Engineering Design (FEED) study previously prepared by Sedgman Pty Ltd.
Feasibility Study was prepared for and approved by the Science and Technology Council (STC) of the Road and
Transport Development Centre (RTDC), a division within the Ministry of Roads and Transportation Development
(MRTD), for new paved road planned for construction to facilitate washed coking coal transportation by truck from the
Ovoot minesite to a rail terminal proposed to be constructed adjacent to the Erdenet-Salkhit rail line.
On basis of Terms of Reference obtained following approval of the Feasibility Study for new paved road construction,
Detailed Design has been prepared for construction of new and repair, refurbishment and improvement of existing road
infrastructure. This was almost complete within the year, with finalisation targeted within Q3 2023 for submission for
approval, and to then enable bidding for construction pending approval of the related DEIA.
Environmental Baseline Study (EBS) and Detailed Environmental Impact Assessment (DEIA) for the Ovoot mining
operation was prepared, introduced to the host community and approved by Professional Council of the Ministry of
Nature, Environment and Tourism (MNET).
Draft EBS and DEIA reports were prepared in relation to the approved CHPP and Road Feasibility Studies, and
introduced to host communities in advance of Orders and Conclusions being granted by the MNET in relation to the
General Environmental Impact Assessment (GEIA) required in order to ensure that the final DEIA report addresses all
necessary concerns.
3
ASPIRE MINING LIMITED ANNUAL REPORT 2023
25
Aspire Mining Limited
Directors' report
30 June 2023
●
●
Logistics Study evaluating the plausibility, practicalities and economics of delivering coal by rail from the planned
terminal facility on the Erdenet-Salkhit railway line to border ports in the main target market regions was materially
completed within the year.
The Company continued to strengthen its relationship with local communities nearby to the Ovoot mining license, with
continued implementation of the Green Fodder Program in both 2H 2022 and 1H 2023. This program has been
instrumental in improving relations with local community members, who benefit from resulting employment opportunities
and subsidized and/or donate fodder, whilst also enjoying a sense of nostalgia for times past when the area was
previously cultivated during the socialist period prior to the 1990 Democratic Revolution.
Review of financial conditions
At balance date, the Group had $12,922,521 (2022: $31,990,463) in cash assets and $15,093,654 (2022:nil) in investments.
A significant component within the reduction of cash assets is as result of the Company’s actions to invest in a low risk but
moderate to high yielding portfolio of major Australian bank senior debt and covered bonds. The intention of this is to generate
interest to partially offset the costs being incurred investing in development of the Ovoot Project.
The cash on hand and convertible from this bond portfolio at maturity remains 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.
Significant changes in the state of affairs
There were no significant changes in the state of affairs of the Group during the financial year.
Matters subsequent to the end of the financial year
No matter or circumstance has arisen since 30 June 2023 that has significantly affected, or may significantly affect the
Group's operations, the results of those operations, or the Group's state of affairs in future financial years.
Likely developments and expected results of operations
The Group will continue with activities towards meeting its objective of developing the Ovoot Project into production at the
earliest opportunity.
Risk management
The Board of Directors (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 several 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 remaining permits and approvals necessary to develop the project as intended.
raising the necessary project financing to implement the project development as intended;
recruiting and/or training the required personnel in country with the necessary technical, operational, financial and/or
managerial skills and experience to develop, operate and administer the Ovoot Project; and
accessing sufficient and suitably efficient rail capacity to transport washed coal to customers.
Risk and uncertainties
The Group is subject to general risks as well as risks that are specific to the Group and the Group’s business activities. The
following is a list of risks which the Directors believe are or potentially will be material to the Group’s business, however, this
is not a complete list of all risks that the Group is or may be subject to.
4
ANNUAL REPORT 2023ASPIRE MINING LIMITED
26
Aspire Mining Limited
Directors' report
30 June 2023
Company specific risks
Political and legal risks
The Group's mineral projects are located in Mongolia, where mineral exploration and mining activities may be affected in
varying degrees by political instability, economic conditions, expropriation or nationalization of property and changes in
government regulations such as foreign investment laws, tax laws, business laws, environmental laws and mining laws,
affecting the Group's business in that country. Government policy may change to discourage foreign investment,
nationalization of the mining industry may occur and other government limitations, restrictions or requirements may be
implemented. There can be no assurance that the Group's assets will not be subject to nationalization, requisition,
expropriation or confiscation, whether legitimate or not, by any authority or body. The regulatory environment is in a state of
continuing change, and new laws, regulations and requirements may be retroactive in their effect and implementation. There
can be no assurance that Mongolian laws protecting foreign investments will not be amended or abolished or that existing
laws will be enforced or interpreted to provide adequate protection against any or all of the risks described above.
Licence risks
The Group has licenses covering the Ovoot Coking Coal Project and the Nuurstei Coking Coal Project. The Government of
Mongolia could revoke either of these licenses if the Group fails to satisfy its obligations, including payment of royalties and
taxes to the Government of Mongolia and the satisfaction of certain mining, environmental, health and safety requirements.
A termination of the Group's mining licenses by the Government of Mongolia could materially and adversely affect the Group's
reputation, business, prospects, financial conditions and results of operations. In addition, the Group would require additional
licenses or permits to conduct the Group's mining or exploration operations in Mongolia. There can be no assurance that the
Group will be able to obtain and maintain such licenses or permits on terms favourable to it, or at all, for the Group's future
intended mining or exploration targets in Mongolia, or that such terms would not be subject to various changes.
Mineral Resource and Mineral Reserve estimation risk
The Group's estimates of Mineral Resources and Mineral Reserves for its projects are based on a number of assumptions.
There are numerous uncertainties inherent in making such estimates, including for many factors beyond the control of the
Group. Mineral Resource and Mineral Reserve estimates are inherently prone to variability. They involve expressions of
judgment with regard to the presence and quality of mineralization and the ability to extract and process the mineralization
economically. These judgments are based on a variety of factors, such as knowledge, experience and industry practice.
Logistics
The Group plans to export washed coking coal by combination of road and rail logistics. Road infrastructure required to
facilitate transportation of coal between the Ovoot Coal Mine and Erdenet is planned for development, subject to obtaining
necessary permits and approvals. If such permits and approvals are not obtained as intended, the planned methods for road
transportation of washed coking coal product may not be feasible, or as economical. Access to existing rail infrastructure will
be subject to the availability of capacity, and commercial contract negotiation. If insufficient capacity is available, production
rates could be constrained. If commercial negotiations for rail freight transportation do not eventuate as anticipated, and/or
changes made by Government to applicable tariffs occur, the planned rail transportation may not be feasible, or as
economical as planned. The efficiency of export will be subject to the efficiency of freight handling at border ports of export
and import, which has the potential to constrain and/or temporarily suspend freight movement, as occurred during the COVID-
19 pandemic response measures.
Industry risks
Grant of future authorisations to explore and mine
Prior to, and if the Group discovers an economically viable mineral deposit that it then intends to develop, it will, among other
things, require various approvals, licences and permits before it will be able to mine the deposit. There is no guarantee that
the Group will be able to obtain all required approvals, licenses and permits. To the extent that required authorisations are
not obtained or are delayed, the Group's operational and financial performance may be materially adversely affected.
5
ASPIRE MINING LIMITED ANNUAL REPORT 2023
27
Aspire Mining Limited
Directors' report
30 June 2023
Environmental
The operations and proposed activities of the Group are subject to Mongolian laws and regulations concerning the
environment. As with most exploration projects and mining operations, the Group's activities may impact on the environment,
particularly if advanced exploration or mine development proceeds. It is the Group's intention to conduct its activities to the
highest standard of environmental obligation, including compliance with all environmental laws. Mining operations have
inherent risks and liabilities associated with safety and damage to the environment and the disposal of waste products
occurring as a result of mineral exploration and production. The occurrence of any such safety or environmental incident
could delay production or increase production costs. Uncontrollable events may impact on the Group's ongoing compliance
with environmental legislation, regulations, and licences. Significant liabilities could be imposed on the Group for damages,
clean-up costs or penalties in the event of certain discharges into the environment, environmental damage caused by
previous operations or non-compliance with environmental laws or regulations. The disposal of mining and process waste
and mine water discharge are under constant legislative scrutiny and regulation. There is a risk that environmental laws and
regulations become more onerous making the Group's operations more expensive. Approvals are required for land clearing
and for ground disturbing activities. Delays in obtaining such approvals can result in the delay to anticipated exploration
programs or mining activities.
Regulatory compliance
The Group's operating activities are subject to extensive laws and regulations relating to numerous matters including
resource licence consent, environmental compliance and rehabilitation, taxation, employee relations, health and worker
safety, waste disposal, protection of the environment, protection of endangered and protected species and other matters.
The Group requires permits from regulatory authorities to authorise the Group’s operations. These permits relate to
exploration, development, production and rehabilitation activities. While the Group believes that it will operate in substantial
compliance with all material current laws and regulations, agreements or changes in their enforcement or regulatory
interpretation could result in changes in legal requirements or in the terms of existing permits and agreements applicable to
the Group or its properties, which could have a material adverse impact on the Group's current operations or planned
activities. Obtaining necessary permits can be a time-consuming process and there is a risk that Group will not obtain these
permits on acceptable terms, in a timely manner or at all. The costs and delays associated with obtaining necessary permits
and complying with these permits and applicable laws and regulations could materially delay or restrict the Group from
proceeding with the development of a project or the operation or development of a mine. Any failure to comply with applicable
laws and regulations or permits, even if inadvertent, could result in material fines, penalties or other liabilities. In extreme
cases, failure could result in suspension of the Group's activities or forfeiture of one or more of the tenements, the subject of
the Projects.
Climate
There are a number of climate-related factors that may affect the operations and proposed activities of the Group. The climate
change risks particularly attributable to the Group include:
(a) the emergence of new or expanded regulations associated with the transitioning to a lower-carbon economy and market
changes related to climate change mitigation. The Group may be impacted by changes to local or international compliance
regulations related to climate change mitigation efforts, or by specific taxation or penalties for carbon emissions or
environmental damage. These examples sit amongst an array of possible restraints on industry that may further impact the
Group and its business viability. While the Group will endeavour to manage these risks and limit any consequential impacts,
there can be no guarantee that the Group will not be impacted by these occurrences; and
(b) climate change may cause certain physical and environmental risks that cannot be predicted by the Group, including
events such as increased severity of weather patterns and incidence of extreme weather events and longer-term physical
risks such as shifting climate patterns. All these risks associated with climate change may significantly change the industry
in which the Group operates.
Commodity markets
The Group intends to produce and sell washed coking coal products. The selling price for such commodities is subject to
fluctuation of global, interconnected market prices. Producers of commodities face the risk that commodity prices will fall
unexpectedly, which can lead to lower profits or even losses for producers. Any such unexpected falls in commodity prices
could be outside the control of or ability of the Group to forecast, resulting from macroeconomic or political development. The
principal target market regions for the Group are within China, which is currently host to globally systemic steelmaking
capacity, however it is expected that target market regions in other nations will also be viable and targeted to provide for buy
side competition and diversification of geopolitical risk.
6
ANNUAL REPORT 2023ASPIRE MINING LIMITED
28
Aspire Mining Limited
Directors' report
30 June 2023
General risks
Future funding requirements and the ability to access debt and equity markets
Should the Group consider that its exploration results justify commencement of production on any of its projects, additional
funding will be required to implement the Group 's development plans, the quantum of which, remain unknown at the date
of the prospectus. The Group may seek to raise further funds through equity or debt financing, joint ventures, production
sharing arrangements or other means. Failure to obtain sufficient financing for the Group 's activities and future projects may
result in delay and indefinite postponement of exploration, development or production on the Group 's properties or even
loss of a property interest. There can be no assurance that additional finance will be available when needed or, if available,
the terms of the financing might not be favourable to the Group and might involve substantial dilution to shareholders.
Reliance on key personnel
The responsibility of overseeing the day-to-day operations and the strategic management of the Group depends substantially
on its senior management and its key personnel. There can be no assurance given that there will be no detrimental impact
on the Group if one or more of these employees cease their employment. The Group may not be able to replace its senior
management or key personnel with persons of equivalent expertise and experience within a reasonable period of time or at
all and the Group may incur additional expenses to recruit, train and retain personnel. Loss of such personnel may also have
an adverse effect on the performance of the Group .
Competition
The industry in which the Group will be involved is subject to domestic and global competition. Although the Group will
undertake all reasonable due diligence in its business decisions and operations, the Group will have no influence or control
over the activities or actions of its competitors, which activities or actions may, positively or negatively, affect the operating
and financial performance of the Group 's projects and business.
Market conditions
Share market conditions may affect the value of the Group 's shares regardless of the Group's operating performance. Share
market conditions are affected by many factors such as:
(a) general economic outlook;
(b) introduction of tax reform or other new legislation;
(c) interest rates and inflation rates;
(d) global health epidemics or pandemics;
(e) currency fluctuations;
(f) changes in investor sentiment toward particular market sectors;
(g) the demand for, and supply of, capital;
(h) political tensions; and
(i) terrorism or other hostilities.
The market price of shares can fall as well as rise and may be subject to varied and unpredictable influences on the market
for equities in general and resource exploration stocks in particular. Neither the Group nor the Directors warrant the future
performance of the Group or any return on an investment in the Group . Potential investors should be aware that there are
risks associated with any securities investment. Securities listed on the stock market, and in particular securities of
exploration companies experience extreme price and volume fluctuations that have often been unrelated to the operating
performance of such companies. These factors may materially affect the market price of the shares regardless of the Group 's
performance. In addition, after the end of the relevant escrow periods affecting shares in the Group, a significant sale of then
tradeable shares (or the market perception that such a sale might occur) could have an adverse effect on the Group 's share
price.
Commodity price volatility and exchange rate
If the Group achieves success leading to mineral production, the revenue it will derive through the sale of product exposes
the potential income of the Group to commodity price and exchange rate risks. Commodity prices fluctuate and are affected
by many factors beyond the control of the Group. Such factors include supply and demand fluctuations for precious and
base metals, technological advancements, forward selling activities and other macro-economic factors. Furthermore,
international prices of various commodities are denominated in United States dollars, whereas the income and expenditure
of the Group will be taken into account in Australian currency, exposing the Group to the fluctuations and volatility of the rate
of exchange between the United States dollar and the Australian dollar as determined in international markets.
7
ASPIRE MINING LIMITED ANNUAL REPORT 2023
29
Aspire Mining Limited
Directors' report
30 June 2023
Government policy changes
Adverse changes in government policies or legislation may affect ownership of mineral interests, taxation, royalties, land
access, labour relations, and mining and exploration activities of the Group. It is possible that the current system of
exploration and mine permitting in Mongolia may change, resulting in impairment of rights and possibly expropriation of
the Group 's properties without adequate compensation.
Insurance
The Group intends to insure its operations in accordance with industry practice. However, in certain circumstances
the Group 's insurance may not be of a nature or level to provide adequate insurance cover. The occurrence of an event that
is not covered or fully covered by insurance could have a material adverse effect on the business, financial condition and
results of the Group. Insurance of all risks associated with mineral exploration and production is not always available and
where available the costs can be prohibitive.
Force majeure
The Group ’s existing projects or projects acquired in the future may be adversely affected by risks outside the control of
the Group including labour unrest, civil disorder, war, subversive activities or sabotage, fires, floods, explosions or other
catastrophes, epidemics or quarantine restrictions.
Taxation
The acquisition and disposal of shares will have tax consequences, which will differ depending on the individual financial
affairs of each investor. All potential investors in the Group are urged to obtain independent financial advice about the
consequences of acquiring shares from a taxation viewpoint and generally. To the maximum extent permitted by law,
the Group, its officers and each of their respective advisers accept no liability and responsibility with respect to the taxation
consequences of subscribing for shares under the prospectus.
Litigation
The Group is exposed to possible litigation risks including environmental claims, occupational health and safety claims and
employee claims. Further, the Group may be involved in disputes with other parties in the future which may result in litigation.
Any such claim or dispute if proven, may impact adversely on the Group ’s operations, reputation, financial performance and
financial position. The Group is not currently engaged in any litigation.
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 2023.
Environmental regulation
The Group 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.
8
ANNUAL REPORT 2023ASPIRE MINING LIMITED
30
Aspire Mining Limited
Directors' report
30 June 2023
Information on directors
Name:
Title:
Qualifications:
Experience and expertise:
Mr Michael Ross Avery
Non-Executive Chairman (appointed effective from 27 March 2023)
B.E., MBA
Mr Avery was appointed as a Non-Executive Director effective from 29 November 2022,
and Non-Executive Chairman of the Board effective from 27 March 2023.
Mr Avery is a resident Australian and has been involved in the establishment and
management of successful public and private companies in mining, exploration and
development, mining consulting services and mining contractor services.
He is a 30 year plus mining industry veteran with a Bachelor of Mining Engineering
from the University of New South Wales and a Master of Business Administration from
the University of Queensland. He is also a qualified Australian Coal Mine Manager and
a member of the Australian Institute of Mining and Metallurgy.
He has worked for blue-chip mining and contracting companies (including Rio Tinto,
BHP Billiton and Brambles) at operations and projects both in Australia and
internationally.
These roles covered the full life cycle of open cut and underground mines from resource
exploration and evaluation, through conceptual design, pre-feasibility, feasibility,
construction, operation, and management.
Other current directorships:
None
Former directorships (last 3 years): None
Interests in shares:
Interests in rights:
167,113
Nil
Name:
Title:
Qualifications:
Experience and expertise:
Mr Achit-Erdene Darambazar
Managing Director
BEc, MIA
Mr Achit-Erdene Darambazar was appointed Executive Director on 7 December 2018
and Managing Director on 5 December 2019.
He has extensive experience in the establishment and financing of successful private
and public companies mining, exploration and development, mining service companies
in Mongolia and in the region.
He also has long and established track record of advising and raising financing from in
the capital markets of Canada, Australia and UK. In addition he frequently advises the
government of Mongolia on the privatisation of large SOEs’ and public market
transactions.
Other current directorships:
None
Former directorships (last 3 years): None
Interests in shares:
Interests in rights:
Nil
2,500,000
9
ASPIRE MINING LIMITED ANNUAL REPORT 2023
31
Aspire Mining Limited
Directors' report
30 June 2023
Name:
Title:
Qualifications:
Experience and expertise:
Mr Boldbaatar Bat-Amgalan
Non-Executive Director
B.S, MSc,
Mr 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.
Other current directorships:
None
Former directorships (last 3 years): None
Interests in shares:
Interests in rights:
Nil
500,000
Name:
Title:
Qualifications:
Experience and expertise:
Mr Russell Alan Taylor
Non-Executive Director (appointed effective from 29 November 2022)
MEngSc
Mr Taylor was appointed as a Non-Executive Director on effective from 29 November
2022.
Mr Taylor is a qualified and experienced Mining Engineer, Project Director, and Mining
Executive with over 24 years’ experience. His employment history is with both large
global resource companies and international mining contractors. Mr Taylor has
experience in multiple commodities including coking coal, thermal Coal, PCI coal,
mineral sands, copper/gold, iron ore and lithium. He has led international teams
commissioning several open cut mines and associated major infrastructure to world
class standards in Australia, Mongolia and India.
Other current directorships:
None
Former directorships (last 3 years): None
Interests in shares:
Interests in rights:
Nil
Nil
Name:
Title:
Qualifications:
Experience and expertise:
Mr David Paull
Non-Executive Chairman (retired effective 29 November 2022)
B.Com, FSIA, MBA
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.
10
ANNUAL REPORT 2023ASPIRE MINING LIMITED
32
Aspire Mining Limited
Directors' report
30 June 2023
Name:
Title:
Qualifications:
Experience and expertise:
Name:
Title:
Qualifications:
Experience and expertise:
Mr Neil Lithgow
Non-Executive Director (resigned effective from 29 November 2022)
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).
Ms Hannah Badenach
Non-Executive Director (resigned effective from 31 January 2023)
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.
'Other current directorships' quoted above are current directorships for listed entities only and excludes directorships of all
other types of entities, unless otherwise stated.
'Former directorships (last 3 years)' quoted above are directorships held in the last 3 years for listed entities only and excludes
directorships of all other types of entities, unless otherwise stated.
Company secretary
Mr Philip Rundell (resigned 6 December 2022)
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.
Ms Emily Austin (appointed 6 December 2022)
Qualifications: Postgraduate Degree – Graduate Diploma, Applied Corporate Governance and Risk Management; Diploma
of Business Administration, Management and Operations.
Ms Austin is an experienced Company Secretary and Corporate Governance Advisor to a portfolio of companies including
ASX & NSX listed, incorporated overseas and within Australia, Unlisted Public and Private companies, Not for Profits and
Charities in range of industries including Technology, Education, Health, Funds and Insurance, Finance and Treasury and
oil, gas and mining. Ms Austin is specialised in ASX listing, capital raising transactions, acquisitions and employee share
schemes. Ms Austin is a member of the Governance Institute of Australia.
11
ASPIRE MINING LIMITED ANNUAL REPORT 2023
33
Aspire Mining Limited
Directors' report
30 June 2023
Meetings of directors
The number of meetings of the Board held during the year ended 30 June 2023, and the number of meetings attended by
each director were:
Full Board
Audit and Risk Committee
Remuneration Committee
Attended
Held
Attended
Held
Attended
Held
Mr Michael Avery
Mr Russell Taylor
Mr Achit-Erdene Darambazar
Mr Boldbaatar Bat-Amgalan
Mr David Paull
Mr Neil Lithgow
Ms Hannah Badenach
4
4
7
6
3
3
3
4
4
7
7
3
3
4
2
2
-
2
-
-
-
2
2
-
2
-
-
-
1
1
1
-
-
-
-
1
1
1
-
-
-
-
Held: represents the number of meetings held during the time the director held office or was a member of the relevant
committee.
Note: 'Held' represents the number of meetings held during the time the director held office or was a member of the relevant
committee.
Remuneration report (audited)
The remuneration report details the key management personnel remuneration arrangements for the Group, in accordance
with the requirements of the Corporations Act 2001 and its Regulations.
Key management personnel are those persons having authority and responsibility for planning, directing and controlling the
activities of the entity, directly or indirectly, including all directors.
Principles used to determine the nature and amount of remuneration
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:
2023
$
2022
$
2021
$
2020
$
20191
$
Revenue
Net profit/(loss) after tax
Basic earnings/(loss) $ per share
Share price at year-end
764,992
(559,962)
(0.11)
0.07
51,855
422,111
0.08
0.08
175,554
(5,176,364)
(0.01)
0.07
425,330
(5,488,200)
(0.01)
0.08
325,741
(6,200,307)
(0.02)
0.16
1 A securities consolidation was completed on 5 December 2019. 2019 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 Mr Michael Ross Avery, Mr Achit-Erdene Darambazar and Mr Russell Alan Taylor.
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.
12
ANNUAL REPORT 2023ASPIRE MINING LIMITED
34
Aspire Mining Limited
Directors' report
30 June 2023
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 2023 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 $75,000 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.
The remuneration of Non-Executive Directors for the year ended 30 June 2023 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.
The incentive offered under the STI will vary depending upon individual performance against key performance indicators
('KPIs') and any discretion employed by the Board. KPIs for Chief Executive Officer ('CEO') and CEO’s direct reports are
approved by the Board upon recommendation from the Nomination and Remuneration Committee. KPIs for all other
employees are approved by the CEO. Depending on the individual’s position, KPIs will include a range of metrics including
health and safety, exploration results, corporate governance, financial stewardship, risk management, business development
and leadership. Payment of STIs can be cash or shares which is also at the discretion of the Board.
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 the tables below.
Details of remuneration
Amounts of remuneration
Details of the remuneration of key management personnel of the Group are set out in the following tables.
13
ASPIRE MINING LIMITED ANNUAL REPORT 2023
Aspire Mining Limited
Directors' report
30 June 2023
The key management personnel of the Group consisted of the following directors of Aspire Mining Limited:
●
●
●
●
●
●
●
Mr Michael Avery
Mr Achit-Erdene Darambazar
Mr Boldbaatar Bat-Amgalan
Mr Russell Taylor
Mr David Paull (retired effective from 29 November 2022)
Mr Neil Lithgow (resigned effective from 29 November 2022)
Ms Hannah Badenach (resigned effective from 31 January 2023)
And the following person:
●
Mr Samuel Bowles (Chief Executive Officer)
35
30 Jun 2023
Non-Executive Directors:
Mr Michael Avery
Mr Boldbaatar Bat-Amgalan
Mr Russell Taylor
Mr David Paull
Mr Neil Lithgow
Ms Hannah Badenach
43,750
79,767
35,000
29,167
22,831
-
Executive Directors:
Mr Achit-Erdene Darambazar
306,410
Other Key Management
Personnel:
Mr Samuel Bowles
545,781
1,062,706
30 Jun 2022
Non-Executive Directors:
Mr David Paull
Mr Boldbaatar Bat-Amgalan
Mr Neil Lithgow
Ms Hannah Badenach
70,000
62,664
54,795
-
Executive Directors:
Mr Achit-Erdene Darambazar
250,843
Other Key Management
Personnel:
Mr Samuel Bowles
413,358
851,660
Short-term benefits
Post-
employment
benefits
Long-term
benefits
Share-
based
payments
Cash salary
and fees
$
Cash
bonus
$
Non-
Super-
monetary annuation
$
$
Long
service
leave
$
Equity-
settled
$
Total
$
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
2,397
-
-
-
-
-
-
-
-
9,845
-
(8,679)
(5,786)
-
43,750
89,612
35,000
20,488
19,442
-
-
-
49,206
355,616
-
2,397
-
-
41,585
587,366
86,171 1,151,274
Short-term benefits
Post-
employment
benefits
Long-term
benefits
Share-
based
payments
Cash salary
and fees
$
Cash
bonus
$
Non-
Super-
monetary annuation
$
$
Long
service
leave
$
Equity-
settled
$
Total
$
-
-
5,479
-
-
-
-
-
8,679
5,786
5,786
-
78,679
68,450
66,060
-
-
-
28,928
279,771
-
5,479
-
-
-
49,179
413,358
906,318
-
-
-
-
-
-
-
-
-
-
-
-
-
-
14
ANNUAL REPORT 2023ASPIRE MINING LIMITED
36
Aspire Mining Limited
Directors' report
30 June 2023
The proportion of remuneration linked to performance and the fixed proportion are as follows:
Name
Non-Executive Directors:
Mr Michael Avery
Mr Boldbaatar Bat-Amgalan
Mr Russell Taylor
Mr David Paull
Mr Neil Lithgow
Ms Hannah Badenach
Executive Directors:
Mr Achit-Erdene Darambazar
Other Key Management Personnel:
Mr Samuel Bowles
Fixed remuneration
At risk - LTI
30 Jun 2023 30 Jun 2022 30 Jun 2023 30 Jun 2022
100%
89%
100%
100%
100%
-
-
92%
-
89%
91%
-
-
11%
-
-
-
-
-
8%
-
11%
9%
-
86%
90%
14%
10%
93%
100%
7%
-
Service agreements
Remuneration and other terms of employment for key management personnel are formalised in service agreements. Details
of these agreements are as follows:
Name:
Title:
Details:
Name:
Title:
Details:
Name:
Title:
Details:
Name:
Title:
Details:
Mr Achit-Erdene Darambazar
Managing Director
Mr Darambazar is engaged as the Managing Director pursuant to an Executive
Services Agreement (AD ESA) with the Company that sets out his duties,
responsibilities and obligations. The AD ESA had an initial 2 year term from 2
December 2019 and has been updated in May 2023 after review by Remuneration
Committee. The ADESA can be terminated by either party on 3 months’ notice or other
causes (breach of duty, incapacity, and insolvency. Remuneration under this AD ESA
is US$220,000 per annum.
Mr Boldbaatar Bat-Amgalan
Non-executive Director
Mr Boldbaatar Bat-Amgalan has a non-executive director engagement letter that set
out his duties and responsibilities and the causes for termination (breach of duty,
incapacity and insolvency) or resignation from his appointment. The current
remuneration to non-executive directors is A$60,000 per annum.
Mr Michael Avery
Non-Executive Director
Mr Avery has a non-executive director engagement letter that sets out his duties and
responsibilities and the causes for termination (breach of duty, incapacity, and
insolvency) or resignation from his appointment. The current remuneration to non-
executive directors is A$75,000 per annum.
Mr Russell Taylor
Non-Executive Director
Mr Taylor has a non-executive director engagement letter that sets out his duties and
responsibilities and the causes for termination (breach of duty, incapacity, and
insolvency) or resignation from his appointment. The current remuneration to non-
executive directors is A$60,000 per annum.
15
ASPIRE MINING LIMITED ANNUAL REPORT 2023
37
Aspire Mining Limited
Directors' report
30 June 2023
Name:
Title:
Details:
Share-based compensation
Samuel Bowles
Chief Executive Officer
Mr Bowles is engaged as the Chief Executive Officer pursuant to an Executive Services
Agreement (SB ESA) with the Company that sets out his duties, responsibilities and
obligations. The SB ESA can be terminated by either party with 3 months’ notice or
immediately
insolvency).
Remuneration under this SB ESA is US$363,000 per annum.
for other causes (breach of duty,
incapacity, and
Share based payments is the gross accounting value of performance rights brought to account in accordance with accounting
standards.
Issue of shares
There were no shares issued to directors and other key management personnel as part of compensation during the year
ended 30 June 2023.
Options
There were no options over ordinary shares issued to directors and other key management personnel as part of
compensation that were outstanding as at 30 June 2023.
Performance rights
There were no new performance rights over ordinary shares issued to directors and other key management personnel as
part of compensation that were outstanding as at 30 June 2023. See note 30 for details of all outstanding performance rights
as at 30 June 2023.
Additional disclosures relating to key management personnel
Shareholding
The number of shares in the Company held during the financial year by each director and other members of key management
personnel of the Group, including their personally related parties, is set out below:
Balance at Received Purchase/
on Open
Market
as part of
remuneration
the start of
the year
Balance on Balance at
the end of
resignation/
the year
retirement
Ordinary shares
-
Mr Michael Ross Avery
-
Mr Achit-Erdene Darambazar
-
Mr Boldbaatar Bat-Amgalan
-
Mr Russell Alan Taylor
Mr David Paull (retired 29 November 2022)
2,705,280
Mr Neil Lithgow (resigned 29 November 2022) 23,727,851
Ms Hannah Badenach (resigned 31 January
2023)
Mr Samuel Bowles
1,095,392
-
27,528,523
-
-
-
-
-
-
-
-
-
167,113
-
-
-
-
-
-
-
-
-
(2,705,280)
(23,727,851)
-
-
167,113
(1,095,392)
-
(27,528,523)
167,113
-
-
-
-
-
-
-
167,113
16
ANNUAL REPORT 2023ASPIRE MINING LIMITED
38
Aspire Mining Limited
Directors' report
30 June 2023
Performance rights holding
The number of performance rights over ordinary shares in the Company held during the financial year by each director and
other members of key management personnel of the Group, including their personally related parties, is set out below:
Balance at
the start of
the year
Granted
Exercised
Expired/
forfeited/
other
Balance at
the end of
the year
Rights over ordinary shares
Mr Achit-Erdene Darambazar
Mr David Paull (retired 29 November 2022)
Mr Boldbaatar Bat-Amgalan
Mr Neil Lithgow (resigned 29 November 2022)
Ms Hannah Badenach (resigned 31 January
2023)
Mr Samuel Bowles
2,500,000
750,000
500,000
500,000
-
2,000,000
6,250,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(750,000)
-
(500,000)
2,500,000
-
500,000
-
-
-
(1,250,000)
-
2,000,000
5,000,000
Related Party Transactions
In 2023, Kingsland Corporate Pty Ltd (formerly 2R’s Pty Ltd), a company associated with Mr David Paull, was paid $7,563
at market rates for the services provided by David Paull beyond his NED Chair role (2022: $14,000).
This concludes the remuneration report, which has been audited.
Indemnity and insurance of 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.
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.
Non-audit services
Details of the amounts paid or payable to the auditor for non-audit services provided during the financial year by the auditor
are outlined in note 21 to the financial statements. No non-audit services were provided by the auditors during the year.
Auditor's independence declaration
A copy of the auditor's independence declaration as required under section 307C of the Corporations Act 2001 is set out
immediately after this directors' report.
Auditor
HLB Mann Judd continues in office in accordance with section 327 of the Corporations Act 2001.
17
ASPIRE MINING LIMITED ANNUAL REPORT 2023
Aspire Mining Limited
Directors' report
30 June 2023
This report is made in accordance with a resolution of directors, pursuant to section 298(2)(a) of the Corporations Act 2001.
39
On behalf of the directors
___________________________
Achit-Erdene Darambazar
Managing Director
29 September 2023
18
ANNUAL REPORT 2023ASPIRE MINING LIMITED
40
Auditor’s
Independence
Declaration
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 2023, 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 2023
B G McVeigh
Partner
19
ASPIRE MINING LIMITED ANNUAL REPORT 2023
41
Aspire Mining Limited
Consolidated statement of profit or loss and other comprehensive income
For the year ended 30 June 2023
Consolidated Statement
of Profit or Loss and
other Comprehensive
Income
Consolidated
Other income
1,278,696
Revenue
764,992
4
5
$
$
Note 30 Jun 2023 30 Jun 2022
2,763,876
51,855
Expenses
Employee benefits expense
Share-based payments expense
Depreciation and amortisation expense
Other expenses
Finance costs
6
30
6
6
(720,006)
(86,171)
(64,713)
(1,708,563)
-
(542,035)
(49,179)
(205,965)
(1,587,240)
(4,664)
(Loss)/profit before income tax expense
Income tax expense
(535,765)
426,648
7
24,197
4,537
(Loss)/profit after income tax expense for the year
(559,962)
422,111
Other comprehensive (loss)/profit
Items that may be reclassified subsequently to profit or loss
Exchange differences on translation of foreign operations
Other comprehensive (loss)/profit for the year, net of tax
Total comprehensive (loss)/profit for the year
(Loss)/profit for the year is attributable to:
Non-controlling interest
Owners of Aspire Mining Limited
Total comprehensive (loss)/profit for the year is attributable to:
Non-controlling interest
Owners of Aspire Mining Limited
(1,195,734)
(329,352)
(1,195,734)
(329,352)
(1,755,696)
92,759
(2,800)
(557,162)
(6,322)
428,433
(559,962)
422,111
(2,800)
(1,752,896)
(163,570)
256,329
(1,755,696)
92,759
Cents
Cents
Basic (loss)/earnings per share
Diluted (loss)/earnings per share
29
29
(0.11)
(0.11)
0.08
0.08
The above consolidated statement of profit or loss and other comprehensive income should be read in conjunction with the
accompanying notes
20
ANNUAL REPORT 2023ASPIRE MINING LIMITED
42
Aspire Mining Limited
Consolidated statement of financial position
As at 30 June 2023
Consolidated Statement
of Financial Position
Consolidated
$
$
Note 30 Jun 2023 30 Jun 2022
Assets
Current assets
Cash and cash equivalents
Trade and other receivables
Investments
Total current assets
Non-current assets
Property, plant and equipment
Intangibles
Deferred exploration and evaluation expenditure
Total non-current assets
Total assets
Liabilities
Current liabilities
Trade and other payables
Total current liabilities
Total liabilities
Net assets
8
9
10
12,922,521 31,990,463
654,819
1,032,017
15,093,654
-
29,048,192 32,645,282
11
12
13
361,227
9,266
389,875
28,009
39,237,316 37,434,836
39,607,809 37,852,720
68,656,001 70,498,002
14
206,044
206,044
378,520
378,520
206,044
378,520
68,449,957 70,119,482
Equity
Issued capital
Reserves
Accumulated losses
Equity attributable to the owners of Aspire Mining Limited
Non-controlling interest
15
16
17
(11,762,391)
(69,282,968)
150,026,408 150,026,408
(10,652,828)
(68,725,806)
68,981,049 70,647,774
(528,292)
(531,092)
Total equity
68,449,957 70,119,482
The above consolidated statement of financial position should be read in conjunction with the accompanying notes
21
ASPIRE MINING LIMITED ANNUAL REPORT 2023
43
Aspire Mining Limited
Consolidated statement of changes in equity
For the year ended 30 June 2023
Consolidated Statement
of Changes In Equity
Foreign
currency
translation
reserve
$
Share-based
payments
reserves
$
Issued
capital
$
Contribution
reserve
$
Accumulated
losses
$
Non-
controlling
interest
$
Total
equity
$
Consolidated
Balance at 1 July
2021
(Loss)/profit after
income tax expense
for the year
Other comprehensive
(loss)/profit for the
year, net of tax
Total comprehensive
(loss)/profit for the
year
Transactions with
owners:
Share-based
payments (note 30)
Balance at 30 June
2022
150,026,408
(12,335,205)
-
1,805,302
(69,154,239)
(364,722)
69,977,544
-
-
-
-
-
(172,104)
(172,104)
-
-
-
-
49,179
-
-
-
-
428,433
(6,322)
422,111
-
(157,248)
(329,352)
428,433
(163,570)
92,759
-
-
49,179
150,026,408
(12,507,309)
49,179
1,805,302
(68,725,806)
(528,292)
70,119,482
Foreign
currency
translation
reserve
$
Share-
based
payments
reserves
$
Issued
capital
$
Contributio
n reserve
$
Accumulate
d losses
$
Non-
controlling
interest
$
Total
equity
$
Consolidated
Balance at 1 July 2022
150,026,408 (12,507,309)
49,179 1,805,302 (68,725,806)
(528,292) 70,119,482
Loss after income tax
expense for the year
Other comprehensive
(loss)/profit for the year,
net of tax
Total comprehensive
(loss)/profit for the year
Share-based payments
(note 30)
-
-
-
(1,195,734)
-
(1,195,734)
-
-
-
-
-
86,171
-
-
-
-
(557,162)
(2,800)
(559,962)
-
-
(1,195,734)
(557,162)
(2,800)
(1,755,696)
-
-
86,171
Balance at 30 June 2023 150,026,408 (13,703,043)
135,350 1,805,302 (69,282,968)
(531,092) 68,449,957
The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes
22
ANNUAL REPORT 2023ASPIRE MINING LIMITED
44
Aspire Mining Limited
Consolidated statement of cash flows
For the year ended 30 June 2023
Consolidated Statement
of Cash Flows
Consolidated
Note 30 Jun 2023 30 Jun 2022
$
$
Cash flows from operating activities
Payments to suppliers and employees
Interest received
Income taxes paid
(2,588,516)
438,267
(10,549)
(2,006,702)
57,210
(4,537)
Net cash used in operating activities
28
(2,160,798)
(1,954,029)
Cash flows from investing activities
Payments for investments
Payments for property, plant and equipment
Payments for exploration and evaluation expenditure
Net cash used in investing activities
Cash flows from financing activities
Repayment of borrowings
Net cash used in financing activities
Net decrease in cash and cash equivalents
Cash and cash equivalents at the beginning of the financial year
Effects of exchange rate changes on cash and cash equivalents
10
11
13
(14,813,562)
(89,561)
(2,865,933)
-
(187,697)
(2,715,444)
(17,769,056)
(2,903,141)
-
-
(53,489)
(53,489)
(19,929,854)
(4,910,659)
31,990,463 34,173,866
2,727,256
861,912
Cash and cash equivalents at the end of the financial year
8
12,922,521 31,990,463
The above consolidated statement of cash flows should be read in conjunction with the accompanying notes
23
ASPIRE MINING LIMITED ANNUAL REPORT 2023
45
Note 1. Significant accounting policies
Aspire Mining Limited
Notes to the consolidated financial statements
30 June 2023
Notes to the
Consolidated Financial
Statements
The principal accounting policies adopted in the preparation of the financial statements are set out below. These policies
have been consistently applied to all the years presented, unless otherwise stated.
New or amended Accounting Standards and Interpretations adopted
The Group has adopted all of the new or amended Accounting Standards and Interpretations issued by the Australian
Accounting Standards Board ('AASB') that are mandatory for the current reporting period.
Any new or amended Accounting Standards or Interpretations that are not yet mandatory have not been early adopted.
Going concern
The 30 June 2023 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.
Basis of preparation
These general purpose financial statements have been prepared in accordance with Australian Accounting Standards and
Interpretations issued by the Australian Accounting Standards Board ('AASB') and the Corporations Act 2001, as appropriate
for for-profit oriented entities. These financial statements also comply with International Financial Reporting Standards as
issued by the International Accounting Standards Board ('IASB').
Historical cost convention
The financial statements have been prepared under the historical cost convention. 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.
Critical accounting estimates
The preparation of the financial statements requires the use of certain critical accounting estimates. It also requires
management to exercise its judgement in the process of applying the Group's accounting policies. The areas involving a
higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the financial
statements, are disclosed in note 2.
Parent entity information
In accordance with the Corporations Act 2001, these financial statements present the results of the Group only.
Supplementary information about the parent entity is disclosed in note 25.
Principles of consolidation
The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of Aspire Mining Limited
('Company' or 'parent entity') as at 30 June 2023 and the results of all subsidiaries for the year then ended. Aspire Mining
Limited and its subsidiaries together are referred to in these financial statements as the 'Group'.
Subsidiaries are all those entities over which the Group has control. The Group controls an entity when the Group is exposed
to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its
power to direct the activities of the entity. Subsidiaries are fully consolidated from the date on which control is transferred to
the Group. They are de-consolidated from the date that control ceases.
Intercompany transactions, balances and unrealised gains on transactions between entities in the Group are eliminated.
Unrealised losses are also eliminated unless the transaction provides evidence of the impairment of the asset transferred.
Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by
the Group.
24
ANNUAL REPORT 2023ASPIRE MINING LIMITED
46
Aspire Mining Limited
Notes to the consolidated financial statements
30 June 2023
Note 1. Significant accounting policies (continued)
The acquisition of subsidiaries is accounted for using the acquisition method of accounting. A change in ownership interest,
without the loss of control, is accounted for as an equity transaction, where the difference between the consideration
transferred and the book value of the share of the non-controlling interest acquired is recognised directly in equity attributable
to the parent.
Non-controlling interest in the results and equity of subsidiaries are shown separately in the statement of profit or loss and
other comprehensive income, statement of financial position and statement of changes in equity of the Group. Losses
incurred by the Group are attributed to the non-controlling interest in full, even if that results in a deficit balance.
Where the Group loses control over a subsidiary, it derecognises the assets including goodwill, liabilities and non-controlling
interest in the subsidiary together with any cumulative translation differences recognised in equity. The Group recognises
the fair value of the consideration received and the fair value of any investment retained together with any gain or loss 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.
Operating segments
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.
Foreign currency translation
The financial statements are presented in Australian dollars, which is Aspire Mining Limited's functional and presentation
currency. The functional currency of the Company's Mongolian subsidiaries is the Mongolian Tughrik ('MNT') with the
exception of Ovoot Coking Coal Pte Ltd, Northern Railways Pte Ltd Northern Railways Holdings LLC and Northern
Infrastructure Limited (formerly Northern Mongolian Railways Limited) whose functional currency is USD. 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.
Foreign currency transactions
Foreign currency transactions are translated into Australian dollars using the exchange rates prevailing at the dates of the
transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation
at financial year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in
profit or loss.
All exchange differences in the consolidated financial report are taken to profit or loss with the exception of differences on
foreign currency borrowings that provide a hedge against a net investment in a foreign entity. These are taken directly to
equity until the disposal of the net investment, at which time they are recognised in profit or loss.
Tax charges and credits attributable to exchange differences on those borrowings are also recognised in equity.
Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange
rate as at the date of the initial transaction. Non-monetary items measured at fair value in a foreign currency are translated
using the exchange rates at the date when the fair value was determined.
Foreign operations
The assets and liabilities of foreign operations are translated into Australian dollars using the exchange rates at the reporting
date. The revenues and expenses of foreign operations are translated into Australian dollars using the average exchange
rates, which approximate the rates at the dates of the transactions, for the period. All resulting foreign exchange differences
are recognised in other comprehensive income through the foreign currency 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.
25
ASPIRE MINING LIMITED ANNUAL REPORT 2023
47
Aspire Mining Limited
Notes to the consolidated financial statements
30 June 2023
Note 1. Significant accounting policies (continued)
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 income is recognised as interest accrues using the effective interest method. This is a method of calculating the
amortised cost of a financial asset and allocating the interest income over the relevant period using the effective interest rate,
which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to the
net carrying amount of the financial asset.
Income tax
The income tax expense or benefit for the period is the tax payable on that period's taxable income based on the applicable
income tax rate for each jurisdiction, adjusted by the changes in deferred tax assets and liabilities attributable to temporary
differences, unused tax losses and the adjustment recognised for prior periods, where applicable.
Deferred tax assets and liabilities are recognised for temporary differences at the tax rates expected to be applied when the
assets are recovered or liabilities are settled, based on those tax rates that are enacted or substantively enacted, except for:
when the deferred income tax asset or liability arises from the initial recognition of goodwill or 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 nor
taxable profits; or
when the taxable temporary difference is associated with interests in subsidiaries, associates or joint ventures, and the
timing of the reversal can be controlled and it is probable that the temporary difference will not reverse in the foreseeable
future.
●
Deferred income tax assets are recognised for all deductible temporary differences, carry-forward of unused tax assets and
unused tax losses, to the extent that it is probable that taxable profit will be available against which the deductible temporary
differences and the carry-forward of unused tax credits and unused tax losses can be utilised, except when the deferred
income tax asset relating to the deductible temporary difference arises from the initial recognition of an asset or liability in a
transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor
taxable profit or loss; or when the deductible temporary difference is associated with investments in subsidiaries, associates
or interests in joint ventures, in which case a deferred tax asset is only recognised to the extent that it is probable that the
temporary difference will reverse in the foreseeable future and taxable profit will be available against which the temporary
difference can be utilised.
The carrying amount of deferred income tax assets is reviewed at each balance date and reduced to the extent that it is no
longer probable that sufficient taxable profit will be available to allow all or part of the deferred income tax asset to be utilised.
Unrecognised deferred income tax assets are reassessed at each balance date and are recognised to the extent that it has
become probable that future taxable profit will allow the deferred tax asset to be recovered.
Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply to the year when the asset
is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the
balance date. Income taxes relating to items recognised directly in equity are recognised in equity and not in profit or loss.
Deferred tax assets and deferred tax liabilities are offset only if a legally enforceable right exists to set off current tax assets
against current tax liabilities and the deferred tax assets and liabilities relate to the same taxable entity and the same taxation
authority.
Current and non-current classification
Assets and liabilities are presented in the statement of financial position based on current and non-current classification.
An asset is classified as current when: it is either expected to be realised or intended to be sold or consumed in the Group's
normal operating cycle; it is held primarily for the purpose of trading; it is expected to be realised within 12 months after the
reporting period; or the asset is cash or cash equivalent unless restricted from being exchanged or used to settle a liability
for at least 12 months after the reporting period. All other assets are classified as non-current.
26
ANNUAL REPORT 2023ASPIRE MINING LIMITED
48
Aspire Mining Limited
Notes to the consolidated financial statements
30 June 2023
Note 1. Significant accounting policies (continued)
A liability is classified as current when: it is either expected to be settled in the Group's normal operating cycle; it is held
primarily for the purpose of trading; it is due to be settled within 12 months after the reporting period; or there is no
unconditional right to defer the settlement of the liability for at least 12 months after the reporting period. All other liabilities
are classified as non-current.
Deferred tax assets and liabilities are always classified as non-current.
Cash and cash equivalents
Cash and cash equivalents includes cash on hand, deposits held at call with financial institutions, other short-term, highly
liquid investments with original maturities of three months or less that are readily convertible to known amounts of cash and
which are subject to an insignificant risk of changes in value.
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.
Financial assets at amortised cost
A financial asset is measured at amortised cost only if both of the following conditions are met: (i) it is held within a business
model whose objective is to hold assets in order to collect contractual cash flows; and (ii) the contractual terms of the financial
asset represent contractual cash flows that are solely payments of principal and interest.
Investments
Investments includes non-derivative financial assets with fixed or determinable payments and fixed maturities where the
Group has the positive intention and ability to hold the financial asset to maturity. This category excludes financial assets
that are held for an undefined period. Investments are carried at amortised cost using the effective interest rate method
adjusted for any principal repayments. Gains and losses are recognised in profit or loss when the asset is derecognised or
impaired.
Impairment of financial assets
The Group recognises a loss allowance for expected credit losses on financial assets which are either measured at amortised
cost or fair value through other comprehensive income. The measurement of the loss allowance depends upon the Group's
assessment at the end of each reporting period as to whether the financial instrument's credit risk has increased significantly
since initial recognition, based on reasonable and supportable information that is available, without undue cost or effort to
obtain.
Property, plant and equipment
Plant and equipment is stated at historical cost less accumulated depreciation and impairment. Historical cost includes
expenditure that is directly attributable to the acquisition of the items.
27
ASPIRE MINING LIMITED ANNUAL REPORT 2023
49
Aspire Mining Limited
Notes to the consolidated financial statements
30 June 2023
Note 1. Significant accounting policies (continued)
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.
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.
An item of property, plant and equipment is derecognised upon disposal or when there is no future economic benefit to the
Group. Gains and losses between the carrying amount and the disposal proceeds are taken to profit or loss. Property, plant
and equipment is subject to impairment or adjusted for any remeasurement of value.
Deferred exploration and evaluation assets
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:
the rights to tenure of the area of interest are current; and
(i)
(ii) at least one of the following conditions is also met:
(a) the exploration and evaluation expenditures are expected to be recouped through successful development and
exploration of the area of interest, or alternatively, by its sale; or
(b) exploration and evaluation activities in the area of interest have not at the reporting date reached a stage which
permits a reasonable assessment of the existence or otherwise of economically recoverable reserves, and active and
significant operations in, or in relation to, the area of interest are continuing.
Exploration and evaluation assets are initially measured at cost and include acquisition of rights to explore, studies,
exploratory drilling, trenching and sampling and associated activities. General and administrative costs are only included in
the measurement of exploration and evaluation costs where they are related directly to operational activities in a particular
area of interest.
Exploration and evaluation assets are assessed for impairment when facts and circumstances suggest that the carrying
amount of an exploration and evaluation asset may exceed its recoverable amount. The recoverable amount of the
exploration and evaluation asset (for the cash generating unit(s) to which it has been allocated being no larger than the
relevant area of interest) is estimated to determine the extent of the impairment loss (if any). Where an impairment loss
subsequently reverses, the carrying amount of the asset is increased to the revised estimate of its recoverable amount, but
only to the extent that the increased carrying amount does not exceed the carrying amount that would have been determined
had no impairment loss been recognised for the asset in previous years. Where a decision has been made to proceed with
development in respect of a particular area of interest, the relevant exploration and evaluation asset is tested for impairment
and the balance is then reclassified to development.
28
ANNUAL REPORT 2023ASPIRE MINING LIMITED
50
Aspire Mining Limited
Notes to the consolidated financial statements
30 June 2023
Note 1. Significant accounting policies (continued)
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.
Derecognition of financial assets and financial liabilities
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) has transferred substantially all the risks and rewards of the asset, or
(b) 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.
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.
29
ASPIRE MINING LIMITED ANNUAL REPORT 2023
Aspire Mining Limited
Notes to the consolidated financial statements
30 June 2023
Note 1. Significant accounting policies (continued)
Other taxes
51
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.
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.
30
ANNUAL REPORT 2023ASPIRE MINING LIMITED
52
Aspire Mining Limited
Notes to the consolidated financial statements
30 June 2023
Note 1. Significant accounting policies (continued)
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.
Provisions
Provisions are recognised when the Group has a present (legal or constructive) obligation as a result of a past event, it is
probable the Group will be required to settle the obligation, and a reliable estimate can be made of the amount of the
obligation. The amount recognised as a provision is the best estimate of the consideration required to settle the present
obligation at the reporting date, taking into account the risks and uncertainties surrounding the obligation. If the time value of
money is material, provisions are discounted using a current pre-tax rate specific to the liability. The increase in the provision
resulting from the passage of time is recognised as a finance cost.
Employee benefits
Share-based payments
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.
If the non-vesting condition is within the control of the Group or employee, the failure to satisfy the condition is treated as a
cancellation. If the condition is not within the control of the Group or employee and is not satisfied during the vesting period,
any remaining expense for the award is recognised over the remaining vesting period, unless the award is forfeited.
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.
31
ASPIRE MINING LIMITED ANNUAL REPORT 2023
53
Aspire Mining Limited
Notes to the consolidated financial statements
30 June 2023
Note 1. Significant accounting policies (continued)
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.
Fair value measurement
When an asset or liability, financial or non-financial, is measured at fair value for recognition or disclosure purposes, the fair
value is based on the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction
between market participants at the measurement date; and assumes that the transaction will take place either: in the principal
market; or in the absence of a principal market, in the most advantageous market.
Fair value is measured using the assumptions that market participants would use when pricing the asset or liability, assuming
they act in their economic best interests. For non-financial assets, the fair value measurement is based on its highest and
best use. Valuation techniques that are appropriate in the circumstances and for which sufficient data are available to
measure fair value, are used, maximising the use of relevant observable inputs and minimising the use of unobservable
inputs.
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.
Parent entity financial information
The financial information for the parent entity, Aspire Mining Limited, disclosed in note 25 has been prepared on the same
basis as the consolidated financial statements, other than investments in subsidiaries are accounted for at cost.
Business combinations
The acquisition method of accounting is used to account for business combinations regardless of whether equity instruments
or other assets are acquired.
The consideration transferred is the sum of the acquisition-date fair values of the assets transferred, equity instruments
issued or liabilities incurred by the acquirer to former owners of the acquiree and the amount of any non-controlling interest
in the acquiree. For each business combination, the non-controlling interest in the acquiree is measured at either fair value
or at the proportionate share of the acquiree's identifiable net assets. All acquisition costs are expensed as incurred to profit
or loss.
On the acquisition of a business, the Group assesses the financial assets acquired and liabilities assumed for appropriate
classification and designation in accordance with the contractual terms, economic conditions, the Group's operating or
accounting policies and other pertinent conditions in existence at the acquisition-date. On an acquisition-by-acquisition basis,
the Group recognises any non-controlling interest in the acquiree either at fair value or at the non-controlling interest’s
proportionate share of the acquiree’s net identifiable
The difference between the acquisition-date fair value of assets acquired, liabilities assumed and any non-controlling interest
in the acquiree and the fair value of the consideration transferred and the fair value of any pre-existing investment in the
acquiree is recognised as goodwill. If the consideration transferred and the pre-existing fair value is less than the fair value
of the identifiable net assets acquired, being a bargain purchase to the acquirer, the difference is recognised as a gain directly
in profit or loss by the acquirer on the acquisition-date, but only after a reassessment of the identification and measurement
of the net assets acquired, the non-controlling interest in the acquiree, if any, the consideration transferred and the acquirer's
previously held equity interest in the acquirer.
32
ANNUAL REPORT 2023ASPIRE MINING LIMITED
54
Aspire Mining Limited
Notes to the consolidated financial statements
30 June 2023
Note 1. Significant accounting policies (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.
Earnings per share
Basic earnings per share
Basic earnings per share is calculated by dividing the profit attributable to the owners of Aspire Mining Limited, excluding
any costs of servicing equity other than ordinary shares, by the weighted average number of ordinary shares outstanding
during the financial year, adjusted for bonus elements in ordinary shares issued during the financial year.
Diluted earnings per share
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 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.
Note 2. Critical accounting judgements, estimates and assumptions
The preparation of the financial statements requires management to make judgements, estimates and assumptions that
affect the reported amounts in the financial statements. Management continually evaluates its judgements and estimates in
relation to assets, liabilities, contingent liabilities, revenue and expenses. Management bases its judgements, estimates and
assumptions on historical experience and on other various factors, including expectations of future events, management
believes to be reasonable under the circumstances. The resulting accounting judgements and estimates will seldom equal
the related actual results. The judgements, estimates and assumptions that have a significant risk of causing a material
adjustment to the carrying amounts of assets and liabilities (refer to the respective notes) within the next financial year are
discussed below.
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
The Group’s accounting policy for exploration and evaluation expenditure is set out at note 1. 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.
Note 3. Operating segments
Identification of reportable operating segments
The Group is organised into 3 operating segments: Australia, Mongolia and Singapore. These operating segments are based
on the internal reports that are reviewed and used by the Board of Directors (who are identified as the Chief Operating
Decision Makers ('CODM')) in assessing performance and in determining the allocation of resources. There is no aggregation
of operating segments.
33
ASPIRE MINING LIMITED ANNUAL REPORT 2023
55
Aspire Mining Limited
Notes to the consolidated financial statements
30 June 2023
Note 3. Operating segments (continued)
Operating segment information
Consolidated - 30 Jun 2023
Revenue
Interest Income
Total revenue
EBITDA
Depreciation and amortisation
(Loss)/profit before income tax expense
Income tax expense
Loss after income tax expense
Assets
Segment assets
Total assets
Liabilities
Segment liabilities
Total liabilities
Australia
Mongolia
$
$
Singapore
$
Total
$
523,023
523,023
241,969
241,969
-
-
764,992
764,992
22,273
-
22,273
(463,732)
(64,716)
(528,448)
(29,590)
-
(29,590)
(471,049)
(64,716)
(535,765)
(24,197)
(559,962)
25,370,950 43,272,038
13,013 68,656,001
68,656,001
97,105
105,604
3,335
206,044
206,044
Capital expenditure during the year
72,262
2,900,996
-
2,973,258
Consolidated - 30 Jun 2022
Revenue
Interest revenue
Total revenue
EBITDA
Depreciation and amortisation
(Loss)/profit before income tax expense
Income tax expense
Profit after income tax expense
Assets
Segment assets
Total assets
Liabilities
Segment liabilities
Total liabilities
Australia
Mongolia
Singapore
$
$
$
Total
$
6,487
6,487
45,368
45,368
-
-
51,855
51,855
1,082,717
-
1,082,717
(832,324)
205,965
(626,359)
(29,710)
-
(29,710)
220,683
205,965
426,648
(4,537)
422,111
27,368,151 43,120,341
9,510 70,498,002
70,498,002
(327,790)
(50,730)
-
(378,520)
(378,520)
Capital expenditure during the year
-
2,674,922
-
2,674,922
34
ANNUAL REPORT 2023ASPIRE MINING LIMITED
56
Aspire Mining Limited
Notes to the consolidated financial statements
30 June 2023
Note 4. Revenue
Consolidated
30 Jun 2023 30 Jun 2022
$
$
488,688
276,304
51,855
-
764,992
51,855
Consolidated
30 Jun 2023 30 Jun 2022
$
$
1,278,696
2,763,876
Consolidated
30 Jun 2023 30 Jun 2022
$
$
64,713
205,965
120,252
86,355
494,094
215,942
38,028
354,574
63,179
42,332
80,911
212,896
120,790
82,178
443,781
205,180
13,119
386,146
54,591
42,879
101,693
136,883
1,708,563
1,587,240
720,006
542,035
Interest income from term deposits
Interest income from investment in bond
Revenue
Note 5. Other income
Net foreign exchange gain
Note 6. Expenses
(Loss)/profit before income tax includes the following specific expenses:
Depreciation
Property, Plant and equipment
Other expenses
Accounting and audit fees
Company secretarial
Directors Fees
Insurance
Legal fees
Office, corporate and administration costs
Share registry and listing expenses
Media, promotion and investor relations
Short term lease rent and outgoings
Other expenses
Employment and consultancy expenses
Wages & Salaries
35
ASPIRE MINING LIMITED ANNUAL REPORT 2023
57
Aspire Mining Limited
Notes to the consolidated financial statements
30 June 2023
Note 7. Income tax expense
Numerical reconciliation of income tax expense and tax at the statutory rate
(Loss)/profit before income tax expense
Income tax benefit/(expense) at the statutory tax rate of 30%
Tax effect amounts which are not deductible/(taxable) in calculating taxable income:
Accrued expenses
Other expenses not deductible for tax purposes
Income tax not brought to account
Deductions available for greater than 1 year
Income tax expense on Mongolian operations
Income tax expense
Consolidated
30 Jun 2023 30 Jun 2022
$
$
(535,765)
426,648
(160,730)
127,994
(9,074)
164,098
21,167
(15,461)
12,344
(157,851)
22,050
-
24,197
4,537
24,197
4,537
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.
As at 30 June 2023, Aspire Mining Limited has carried forward tax losses with a tax effect of $6,555,753 (30 June 2022:
$6,485,195) in respect to tax losses arising in Australia and $157,516 (30 June 2022: $717,470) in respect of 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.
These losses can only be utilised in the future if the continuity of ownership test is passed, or failing that, the same business
test is passed.
The Group has an unrecorded deferred tax asset of Nil (2022: Nil) relating to share issue and other costs, and deferred tax
liabilities of $2,302,335 (2022: $2,280,549) relating to capitalised exploration and evaluation expenditure arising in Australia
for which an offsetting deferred tax asset has been recognised.
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 8. Cash and cash equivalents
Current assets
Cash at bank
Short term interest bearing deposits
Consolidated
30 Jun 2023 30 Jun 2022
$
$
3,278,979 27,266,140
4,724,323
9,643,542
12,922,521 31,990,463
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 (2022: $10,000) is on deposit as cash backed security against a business use credit card limit
and office rental.
36
ANNUAL REPORT 2023ASPIRE MINING LIMITED
58
Aspire Mining Limited
Notes to the consolidated financial statements
30 June 2023
Note 9. Trade and other receivables
Current assets
Other receivables
Prepayments
GST recoverable
Consolidated
30 Jun 2023 30 Jun 2022
$
$
369,417
644,741
17,859
141,196
511,136
2,487
1,032,017
654,819
There were no credit losses in the current or the prior year.
Other receivables relate to security and environmental deposits paid, refund of goods and services tax payments due and
other current loans. Balances within other receivables do not contain impaired assets and are not past due. It is expected
that these balances will be received in full. Due to the short-term nature of these receivables, their carrying value is assumed
to approximate their fair value. The maximum exposure to credit risk is the fair value of receivables.
Note 10. Investments
Current assets
Short term interest bearing bond
Consolidated
30 Jun 2023 30 Jun 2022
$
$
15,093,654
-
During the year A$14.8 million was invested into portfolio of major Australian bank senior debt and covered bonds, to
generate strong and secure yields for offset against operating costs whilst continuing to develop the Ovoot Coking Coal
Project. This portfolio is comparable in risk profile to Australian bank fixed term deposits, but able to generate return on US$
denominated holdings.
Note 11. Property, plant and equipment
Non-current assets
Plant and equipment - at cost
Less: Accumulated depreciation
Consolidated
30 Jun 2023 30 Jun 2022
$
$
1,171,530
(810,303)
1,135,673
(745,798)
361,227
389,875
37
ASPIRE MINING LIMITED ANNUAL REPORT 2023
Aspire Mining Limited
Notes to the consolidated financial statements
30 June 2023
Note 11. Property, plant and equipment (continued)
Reconciliations
Reconciliations of the written down values at the beginning and end of the current and previous financial year are set out
below:
59
Consolidated
Balance at 1 July 2021
Additions
Disposals
Exchange differences
Depreciation expense
Balance at 30 June 2022
Additions
Disposals
Exchange differences
Depreciation expense
Plant and
Right-of-use
property
$
Furniture and
Fittings
$
Equipment &
Motor
Vehicles
$
Office Equip
ment
$
315,770
-
-
(2,469)
(31,481)
281,820
-
-
(14,404)
(29,205)
21,738
88,874
(16,964)
(3,092)
(24,592)
65,964
42,711
-
(1,251)
(37,372)
58,022
-
(941)
912
(26,003)
31,990
715
-
49,096
(32,887)
26,138
7,307
(1,922)
1,061
(22,483)
10,101
7,412
(9,976)
8,527
(12,014)
Total
$
421,668
96,181
(19,827)
(3,588)
(104,559)
389,875
50,838
(9,976)
41,968
(111,478)
Balance at 30 June 2023
238,211
70,052
48,914
4,050
361,227
Note 12. Intangibles
Non-current assets
Software - at cost
Less: Accumulated amortisation
Consolidated
30 Jun 2023 30 Jun 2022
$
$
277,482
(268,216)
255,486
(227,477)
9,266
28,009
Reconciliations
Reconciliations of the written down values at the beginning and end of the current and previous financial year are set out
below:
Consolidated
Balance at 1 July 2021
Additions
Exchange differences
Amortisation expense
Balance at 30 June 2022
Additions
Exchange differences
Amortisation expense
Balance at 30 June 2023
Exploration
Software
$
Total
$
76,905
52,239
271
(101,406)
28,009
37,102
(2,812)
(53,033)
76,905
52,239
271
(101,406)
28,009
37,102
(2,812)
(53,033)
9,266
9,266
38
ANNUAL REPORT 2023ASPIRE MINING LIMITED
60
Aspire Mining Limited
Notes to the consolidated financial statements
30 June 2023
Note 13. Deferred exploration and evaluation expenditure
Consolidated
30 Jun 2023 30 Jun 2022
$
$
Non-current assets
Deferred exploration and evaluation expenditure – Ovoot Coking Coal Project
38,678,708 36,865,397
Deferred exploration and evaluation expenditure - Nuurstei Coking Coal Project
558,608
569,439
39,237,316 37,434,836
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.
Reconciliations
Reconciliations of the written down values at the beginning and end of the current and previous financial year are set out
below:
Consolidated
Balance at 1 July 2021
Additions
Research and development grant received
Exchange differences
Balance at 30 June 2022
Additions
Exchange differences
Balance at 30 June 2023
The Company held interests in two tenements during 2023:
(a) Ovoot Coking Coal Project; and
(b) Nuurstei Coking Coal Project.
Note 14. Trade and other payables
Current liabilities
Trade payables
Accrued expenses
Employee liabilities
Personal income tax
Corporate credit card
Other payables
Exploration
and
evaluation
$
35,043,789
2,741,771
(66,850)
(283,874)
37,434,836
2,973,258
(1,170,778)
39,237,316
Consolidated
30 Jun 2023 30 Jun 2022
$
$
16,200
151,196
3,886
34,492
270
-
270,407
-
-
-
-
108,113
206,044
378,520
Refer to note 19 for further information on financial risk management objectives and policies.
39
ASPIRE MINING LIMITED ANNUAL REPORT 2023
61
Aspire Mining Limited
Notes to the consolidated financial statements
30 June 2023
Note 14. Trade and other payables (continued)
Trade payables and other creditors are non-interest bearing and are normally settled on 30 day terms.
Note 15. Issued capital
Consolidated
30 Jun 2023 30 Jun 2022 30 Jun 2023 30 Jun 2022
Shares
Shares
$
$
Ordinary shares - fully paid (net of transaction costs)
507,636,985
507,636,985 150,026,408 150,026,408
Ordinary shares
Ordinary shares entitle the holder to participate in dividends and the proceeds on the winding up of the Company in proportion
to the number of and amounts paid on the shares held. The fully paid ordinary shares have no par value and the Company
does not have a limited amount of authorised capital.
On a show of hands every member present at a meeting in person or by proxy shall have one vote and upon a poll each
share shall have one vote.
Share buy-back
There is no current on-market share buy-back.
Note 16. Reserves
Foreign currency translation reserve
Contribution reserve
Share-based payments reserve
Consolidated
31 Dec 30
Jun 2023
$
30 Jun 2022
$
(13,703,043)
1,805,302
135,350
(12,507,309)
1,805,302
49,179
(11,762,391)
(10,652,828)
Foreign currency translation reserve
This reserve is used to accumulate the changes in the value investments in subsidiaries that arise from changes in the
exchange rates.
Share-based payments reserve
This reserve is used to record the value of equity benefits provided to directors and employees as part of their fees and
remuneration, and external service providers for goods and services provided (including acquisition of tenements).
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.
Note 17. Non-controlling interest
There is a 10% non-controlling interest in subsidiary Blackrock LLC, which holds the Nuurstei Coking Coal Project mining
license.
There is a 20% non-controlling interest in subsidiary Northern Infrastructure Limited (formerly Northern Mongolian Railways
Limited), which pertains to potential rail infrastructure.
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.
40
ANNUAL REPORT 2023ASPIRE MINING LIMITED
62
Aspire Mining Limited
Notes to the consolidated financial statements
30 June 2023
Note 17. Non-controlling interest (continued)
Non-controlling interest
Non-controlling interest summary
Balance at 30 June 2022
Loss allocated to non-controlling interest
Consolidated
30 Jun 2023 30 Jun 2022
$
$
(531,092)
(528,292)
Blackrock
LLC
Northern
Infrastructure
Limited
Total
(182,740)
(62)
(345,552)
(2,738)
(528,292)
(2,800)
(182,802)
(348,290)
(531,092)
Blackrock
LLC
30 June 2023 30 June 2022 30 June 2023
Northern
Infrastructrue
Ltd
30 June 2022
Current Assets
Non-Current Assets
Total Assets
Current Liabilities
Net Assets
Revenue
Loss for the year
31,514
558,608
590,122
31,357
569,931
601,288
11,788
-
11,788
11,880
-
11,880
(38,908)
(17,151)
(3,222)
(8,454)
551,214
584,137
8,566
3,426
-
(44,758)
(44,758)
-
(27,665)
(27,665)
-
(3,899)
(3,899)
-
(17,777)
(17,777)
Total comprehensive profit/(loss) for the year
-
(97,923)
-
(768,888)
Note 18. Dividends
There were no dividends paid, recommended or declared during the current or previous financial year.
Note 19. Financial risk management objectives and policies
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.
The Board of Directors is responsible for the determination of the Group's risk management objectives and policies. The
Board has delegated to the Group's management, the authority for designing and operating processes that ensure the
effective implementation of the objectives and policies.
The overall objective of the Board is to set policies that seek to reduce risk as much as possible without unduly affecting
the Group's competitiveness and flexibility. Further details regarding these policies are set out below.
41
ASPIRE MINING LIMITED ANNUAL REPORT 2023
63
Aspire Mining Limited
Notes to the consolidated financial statements
30 June 2023
Note 19. Financial risk management objectives and policies (continued)
Market risk
Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in
market prices. Market prices are comprised of four types of risk: foreign currency risk, commodity price risk, equity price
risk and interest rate risk.
Foreign currency risk
The Group is exposed to foreign exchange fluctuations with respect to Australian Dollars ('A$'), US Dollars ('US$') and
Mongolian Tughrik ('MNT'). The Group’s financial results are reported in A$. Salaries for certain local employees in Mongolia
may be paid in MNT. The Group’s operations are in Mongolia and some of its payment commitments and exploration
expenditures under the various agreements governing its rights are denominated in MNT and US$. As a result, the Group’s
financial position and results are impacted by the exchange rate fluctuations among A$, US$ and MNT. Such fluctuations
may materially affect the Group’s financial position and results.
The Group's currency risk to US$ and MNT foreign denominated financial assets and liabilities at the end of the reporting
period, expressed in Australian Dollars, was as follows:
The carrying amount of the Group's foreign currency denominated financial assets and financial liabilities at the reporting
date were as follows:
Consolidated
Assets
Liabilities
30 Jun 2023 30 Jun 2022 30 Jun 2023 30 Jun 2022
$
$
$
$
Cash and cash equivalents denominated in US$
Cash and cash equivalents denominated in MNT
Financial assets denominated in USD
Financial liabilities denominated in MNT
11,859,264 31,922,931
391,786
-
-
14,160
15,093,654
-
-
-
-
191,730
-
-
-
49,360
26,967,078 32,314,717
191,730
49,360
The following sensitivity is based on the foreign currency risk exposures in existence at the balance date:
A$ strengthened
Effect on
A$
weakened
Effect on
Consolidated - 30 Jun 2023
% change
profit before
tax
Effect on
equity
% change
profit before
tax
Effect on
equity
A$/US$ '000
A$/MNT '000
10%
10%
2,695,292
1,416
2,695,292
1,416
(10%)
(10%)
(2,695,292)
(1,416)
(2,695,292)
(1,416)
2,696,708
2,696,708
(2,696,708)
(2,696,708)
A$ strengthened
Effect on
A$
weakened
Effect on
Consolidated - 30 Jun 2022
% change
profit before
tax
Effect on
equity
% change
profit before
tax
Effect on
equity
A$/US$ '000
A$/MNT '000
10%
10%
2,902,085
59,429
2,902,085
59,429
(10%)
(10%)
(2,902,085)
(59,429)
(2,902,085)
(59,429)
2,961,514
2,961,514
(2,961,514)
(2,961,514)
42
ANNUAL REPORT 2023ASPIRE MINING LIMITED
64
Aspire Mining Limited
Notes to the consolidated financial statements
30 June 2023
Note 19. Financial risk management objectives and policies (continued)
Commodity price risk
Even if commercial quantities of mineral deposits are discovered, there is no guarantee that a profitable market will exist for
the sale of the metals produced. Factors beyond the control of the Group may affect the marketability of any minerals
discovered. The prices of various metals have experienced significant movement over short periods of time, and are affected
by numerous factors beyond the control of the Group, including, among other things, international economic and political
trends, expectations of inflation, currency exchange fluctuations, interest rates and global or regional consumption patterns,
speculative activities and increased production due to improved mining and production methods. The Group is particularly
exposed to the risk of movement in the price of coal.
Equity price risk
Equity risk is the uncertainty associated with the valuation of assets arising from changes in equity markets. The Group does
not hold equity in any publicly listed companies.
Interest rate risk
Interest rate risk is the risk that future cash flows will fluctuate as a result of changes in market interest rates. The Group does
not have any borrowings at variable rates and the Group's investments in bonds have fixed interest rates. Interest rate risk
is limited to potential decreases on the interest rate offers on cash and cash equivalents held with chartered financial
institutions. The Group considers this risk to be immaterial.
The Group’s exposure to market risk for changes in interest rates relates primarily to its cash held in variable interest
accounts.
As at the reporting date, Group had the following cash and cash equivalents and variable rate borrowings outstanding:
Consolidated
30 Jun 2023
30 Jun 2022
Weighted
average
interest rate
%
Weighted
average
interest rate
%
Balance
$
Balance
$
Cash and cash equivalents
3.64% 12,922,521
0.50% 31,990,463
Net exposure to cash flow interest rate risk
12,922,521
31,990,463
The following sensitivity is based on the interest rate risk exposures in existence at the balance date:
Consolidated - 30 Jun 2023
Basis points
change
profit before
tax
Effect on
equity
Basis points
change
profit before
tax
Effect on
equity
Basis points increase
Effect on
Basis points decrease
Effect on
Net interest rate risk exposure
100
129,225
129,225
(100)
(129,225)
(129,225)
Consolidated - 30 Jun 2022
Net interest rate risk exposure
($'000)
Basis points increase
Effect on
Basis points decrease
Effect on
Basis points
change
profit before
tax
Effect on
equity
Basis points
change
profit before
tax
Effect on
equity
100
272,332
272,332
(100)
(272,332)
(272,332)
The movements in post-tax profit are due to the movements in interest amounts from lower cash balances held that balance
date in comparison to the prior period.
43
ASPIRE MINING LIMITED ANNUAL REPORT 2023
65
Aspire Mining Limited
Notes to the consolidated financial statements
30 June 2023
Note 19. Financial risk management objectives and policies (continued)
Credit risk
Credit risk is the risk that one party to a financial instrument will fail to discharge an obligation and cause the other party to
incur a financial loss. Financial instruments which are potentially subject to credit risk for the Group consist primarily of cash
and amounts receivable. Cash is maintained with financial institutions of reputable credit and may be redeemed upon
demand.
The Group's maximum exposure to credit risk at the reporting date is the carrying value of its cash and cash equivalents of
$12,922,521 (30 June 2022 $31,990,463). The Group also holds $15,093,654 in short term interest bearing deposit
investments.
Liquidity risk
Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due. The primary source of
funds available to the Group is from equity financing. The Group has in place a planning and budgeting process to help
determine the funds required to support the Group's normal operating requirements on an ongoing basis, to support its
exploration plans, and to ensure that it will have sufficient liquidity to meet its liabilities when due. To the extent
the Group does not believe it has sufficient liquidity to meet these obligations, management will consider securing additional
funds through equity or debt transactions. The Group does not have unlimited financial resources and there is no assurance
that sufficient additional funding or financing will be available to the Group or its direct and indirect subsidiaries on acceptable
terms, or at all, for further exploration or development of its properties or to fulfil its obligations under any applicable
agreements.
Failure to obtain such additional funding could result in the delay or indefinite postponement of the exploration and
development of the Group's properties.
Remaining contractual maturities
The following tables detail the Group's remaining contractual maturity for its financial instrument liabilities. The tables have
been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the financial
liabilities are required to be paid. The tables include both interest and principal cash flows disclosed as remaining contractual
maturities and therefore these totals may differ from their carrying amount in the statement of financial position.
Consolidated - 30 Jun 2023
Non-derivatives
Non-interest bearing
Trade payables
Total non-derivatives
Consolidated - 30 Jun 2022
Non-derivatives
Non-interest bearing
Trade payables
Other payables
Total non-derivatives
Weighted
average
interest rate
%
1 year or less
$
Between 1
and 2 years
$
Between 2
and 5 years
$
Over 5 years
$
Remaining
contractual
maturities
$
-
16,200
16,200
-
-
-
-
-
-
16,200
16,200
Weighted
average
interest rate
%
1 year or less
$
Between 1
and 2 years
$
Between 2
and 5 years
$
Over 5 years
$
Remaining
contractual
maturities
$
-
-
270,407
108,113
378,520
-
-
-
-
-
-
-
-
-
270,407
108,113
378,520
The cash flows in the maturity analysis above are not expected to occur significantly earlier than contractually disclosed
above.
44
ANNUAL REPORT 2023ASPIRE MINING LIMITED
66
Aspire Mining Limited
Notes to the consolidated financial statements
30 June 2023
Note 19. Financial risk management objectives and policies (continued)
Other business risks
Political and legal risks
The Group's mineral projects are located in Mongolia, where mineral exploration and mining activities may be affected in
varying degrees by political instability, economic conditions, expropriation or nationalization of property and changes in
government regulations such as foreign investment laws, tax laws, business laws, environmental laws and mining laws,
affecting the Group's business in that country. Government policy may change to discourage foreign investment,
nationalization of the mining industry may occur and other government limitations, restrictions or requirements may be
implemented. There can be no assurance that the Group's assets will not be subject to nationalization, requisition,
expropriation or confiscation, whether legitimate or not, by any authority or body.
The regulatory environment is in a state of continuing change, and new laws, regulations and requirements may be retroactive
in their effect and implementation. There can be no assurance that Mongolian laws protecting foreign investments will not be
amended or abolished or that existing laws will be enforced or interpreted to provide adequate protection against any or all
of the risks described above.
Licence risks
The Group has licenses covering the Ovoot Coking Coal Project and the Nuurstei Coking Coal Project. The Government of
Mongolia could revoke either of these licenses if the Group fails to satisfy its obligations, including payment of royalties and
taxes to the Government of Mongolia and the satisfaction of certain mining, environmental, health and safety requirements.
A termination of the Group's mining licenses by the Government of Mongolia could materially and adversely affect the Group's
reputation, business, prospects, financial conditions and results of operations. In addition, the Group would require additional
licenses or permits to conduct the Group's mining or exploration operations in Mongolia. There can be no assurance that
the Group will be able to obtain and maintain such licenses or permits on terms favourable to it, or at all, for the Group's
future intended mining or exploration targets in Mongolia, or that such terms would not be subject to various changes.
Mineral resource assumptions risk
The Group's Mineral Resource Estimate and Mineral Reserve Estimate for the projects are based on several assumptions.
There are numerous uncertainties inherent in estimating quantities of mineral reserves and grades of mineralization, including
many factors beyond the control of the Group.
Mineral Resource and Mineral Reserve estimates are inherently prone to variability. They involve expressions of judgment
with regard to the presence and quality of mineralization and the ability to extract and process the mineralization
economically. These judgments are based on a variety of factors, such as knowledge, experience and industry practice.
Environmental risk
Existing and possible future environmental legislation, regulations and actions could cause significant expense, capital
expenditures, restrictions and delays in the activities of the Group, the extent of which cannot be predicted and which may
well be beyond the capacity of the Group to fund. Failure to comply with applicable environmental laws and permitting
requirements may result in enforcement actions thereunder, including orders issued by regulatory or judicial authorities
causing operations to cease, and may include corrective measures requiring capital expenditures, installation of additional
equipment or remedial actions.
Operational risk
The Group's activities are subject to a number of operational risks and hazards, some of which are beyond its control. These
risks and hazards include unexpected maintenance or technical problems, periodic interruptions due to inclement or
hazardous weather conditions, natural disasters such as earthquakes, industrial accidents, power, water or fuel supply
interruptions or the increase in the price of such supplies, critical equipment failure, malfunction and breakdowns of
information management systems, fires, and unusual or unexpected variations in mineralization, geological or mining
conditions.
45
ASPIRE MINING LIMITED ANNUAL REPORT 2023
67
Aspire Mining Limited
Notes to the consolidated financial statements
30 June 2023
Note 20. Key management personnel disclosures
Directors
The following persons were directors of Aspire Mining Limited during the financial year:
Mr Michael Avery
Mr Achit-Erdene Darambazar
Mr Boldbaatar Bat-Amgalan
Mr Russel Taylor
Mr David Paull
Mr Neil Lithgow
Ms Hannah Badenach
Independent Non-Executive Chairman (appointed 29
November 2022)
Managing Director
Independent Non-Executive Director
Independent Non-Executive Director (appointed 29
November 2022)
Non-Executive Chairman (retired 29 November 2022)
Independent Non-Executive Director (resigned 29 November
2022)
Independent Non-Executive Director (resigned 31 January
2023)
Other key management personnel
The following person also had the authority and responsibility for planning, directing and controlling the major activities of the
Group, directly or indirectly, during the financial year:
Mr Samuel Bowles
Chief Executive Officer
Compensation
The aggregate compensation made to directors and other members of key management personnel of the Group is set out
below:
Short-term employee benefits
Post-employment benefits
Share-based payments
Note 21. Remuneration of auditors
Auditors of the Group - HLB Mann Judd
Audit and review of financial statements
Group
Total services provided by HLB Mann Judd
Consolidated
30 Jun 2023 30 Jun 2022
$
$
1,062,706
2,397
86,171
851,660
5,479
49,179
1,151,274
906,318
Consolidated
30 Jun 2023 30 Jun 2022
$
$
48,000
49,000
48,000
49,000
46
ANNUAL REPORT 2023ASPIRE MINING LIMITED
68
Aspire Mining Limited
Notes to the consolidated financial statements
30 June 2023
Note 21. Remuneration of auditors (continued)
Other auditors and their related network firms
Audit and review of financial statements
Controlled entities and joint operations (Mongolian Subsidiaries - KPMG)
Controlled entities and joint operations (Mongolian Subsidiaries - Ulziit Account Audit)
Consolidated
30 Jun 2023 30 Jun 2022
$
$
60,225
4,816
65,041
73,360
-
73,360
Total services provided by other auditors (excluding HLB Mann Judd)
65,041
73,360
Note 22. Contingent liabilities
There are no material contingent liabilities relating to the Group.
Note 23. 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:
Committed at the reporting date but not recognised as liabilities, payable:
Within one year
One to five years
Consolidated
30 Jun 2023 30 Jun 2022
$
$
-
-
-
2,890
11,560
14,450
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 24. Related party transactions
Parent entity
Aspire Mining Limited is the parent entity.
Subsidiaries
Interests in subsidiaries are set out in note 26.
Key management personnel
Disclosures relating to key management personnel are set out in note 20 and the remuneration report included in the
directors' report.
47
ASPIRE MINING LIMITED ANNUAL REPORT 2023
69
Aspire Mining Limited
Notes to the consolidated financial statements
30 June 2023
Note 24. Related party transactions (continued)
Transactions with related parties
The following transactions occurred with related parties:
Payment for goods and services:
Consulting fees, paid to Kingsland Corporate Pty Ltd (i)
Consolidated
30 Jun 2023 30 Jun 2022
$
$
7,563
14,000
(i)
The Company sources consulting services from Kingsland Corporate Pty Ltd, an entity related to Mr David Paull.
These services are provided on normal commercial terms and conditions, no more or less favourable than those
available to other parties.
Please refer to the Remuneration Report for salaries and compensation paid to Company Directors.
Receivable from and payable to related parties
There were no trade receivables from or trade payables to related parties at the current and previous reporting date.
Loans to/from related parties
There were no loans to or from related parties at the current and previous reporting date.
Terms and conditions
All transactions were made on normal commercial terms and conditions and at market rates.
Note 25. Parent entity information
Set out below is the supplementary information about the parent entity.
Statement of profit or loss and other comprehensive income
Loss after income tax
Total comprehensive (loss)/profit
Parent
30 Jun 2023 30 Jun 2022
$
$
(9,084,975)
(1,796,383)
(9,084,975)
(1,796,383)
48
ANNUAL REPORT 2023ASPIRE MINING LIMITED
70
Aspire Mining Limited
Notes to the consolidated financial statements
30 June 2023
Note 25. Parent entity information (continued)
Statement of financial position
Total current assets
Total assets
Total current liabilities
Total liabilities
Equity
Issued capital
Reserves
Accumulated losses
Total equity
Parent
30 Jun 2023 30 Jun 2022
$
$
19,698,091 27,368,152
25,674,000 34,903,491
97,105
327,789
97,105
327,789
150,026,408 150,026,408
49,179
(124,584,860) (115,499,885)
135,347
25,576,895 34,575,702
Contingent liabilities
The parent entity had no contingent liabilities as at 30 June 2023.
Capital commitments - Property, plant and equipment
The parent entity had no capital commitments for property, plant and equipment at as 30 June 2023.
Note 26. Interests in subsidiaries
The consolidated financial statements incorporate the assets, liabilities and results of the following subsidiaries in accordance
with the accounting policy described in note 1 to the financial statements:
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
Principal place of business /
Country of incorporation
Ownership interest
30 Jun 2023 30 Jun 2022
%
%
Mongolia
Mongolia
Mongolia
Singapore
Mongolia
Mongolia
Singapore
British Virgin Islands
British Virgin Islands
Mongolia
Mongolia
Mongolia
100.00%
100.00%
100.00%
100.00%
80.00%
80.00%
80.00%
80.00%
100.00%
100.00%
90.00%
100.00%
100.00%
100.00%
100.00%
100.00%
80.00%
80.00%
80.00%
80.00%
100.00%
100.00%
90.00%
100.00%
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 2023 and before impairment, amounts of $71,466,895
(2022: $63,996,123), $20,950,383 (2022: $20,934,810), $138,409 (2022: $138,409), $1,320,490 (2022: $1,307,908),
$29,558 (2022: $25,486) and $511,616 (2022: $511,616) were owed by Khurgatai Khairkhan LLC, Ovoot Coking Coal Pte
Ltd, Northern Railway Holdings LLC, Northern Railways Pte Ltd, Northern Infrastructure Limited (formerly Northern
Mongolian Railways Limited) and Ekhgoviin Chuluu LLC to the parent entity, respectively. The loans have been impaired.
49
ASPIRE MINING LIMITED ANNUAL REPORT 2023
Aspire Mining Limited
Notes to the consolidated financial statements
30 June 2023
Note 27. Events after the reporting period
No matter or circumstance has arisen since 30 June 2023 that has significantly affected, or may significantly affect the
Group's operations, the results of those operations, or the Group's state of affairs in future financial years.
Note 28. Reconciliation of (loss)/profit after income tax to net cash used in operating activities
71
(Loss)/profit after income tax expense for the year
Adjustments for:
Depreciation and amortisation
Net gain on disposal of property, plant and equipment
Share-based payments
Foreign exchange differences
Change in operating assets and liabilities:
Change in operating assets and liabilities
Net cash used in operating activities
Note 29. (Loss)/Earnings per share
(Loss)/profit after income tax
Non-controlling interest
Consolidated
30 Jun 2023 30 Jun 2022
$
$
(559,962)
422,111
64,713
-
86,171
(1,278,696)
205,965
(2,679)
49,179
(2,763,876)
(473,024)
135,271
(2,160,798)
(1,954,029)
Consolidated
30 Jun 2023 30 Jun 2022
$
$
(559,962)
2,800
422,111
6,322
(Loss)/profit after income tax attributable to the owners of Aspire Mining Limited
(557,162)
428,433
Weighted average number of ordinary shares used in calculating basic earnings per share
507,636,985
507,636,985
Weighted average number of ordinary shares used in calculating diluted earnings per share
507,636,985
507,636,985
Number
Number
Basic (loss)/earnings per share
Diluted (loss)/earnings per share
Note 30. Share-based payments
Cents
Cents
(0.11)
(0.11)
0.08
0.08
There were no new share based payments granted to management personnel or employees in the period. In the prior year,
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 Operating Officer. The vesting expense recognised in
the current period totalled $86,171.
50
ANNUAL REPORT 2023ASPIRE MINING LIMITED
72
Aspire Mining Limited
Notes to the consolidated financial statements
30 June 2023
Note 30. Share-based payments (continued)
Set out below are summaries of rights granted under the plan:
Weighted
average
exercise price
30 Jun 2023 30 Jun 2023 30 Jun 2022 30 Jun 2022
Weighted
average
exercise price
Number of
rights
Number of
rights
Outstanding at the beginning of the financial year
Granted
Forfeited
6,250,000
-
(1,250,000)
$0.000
$0.000
$0.000
-
6,250,000
-
$0.000
$0.000
$0.000
Outstanding at the end of the financial year
5,000,000
$0.000
6,250,000
$0.000
30 Jun 2023
Grant date
Expiry date
price
Exercise
Balance at
the start of
the year
Granted
Exercised
Expired/
forfeited/
other
Balance at
the end of
the year
30/06/2022
30/06/2022
30/06/2025
30/06/2025
$0.000
$0.000
4,250,000
2,000,000
6,250,000
-
-
-
-
-
-
(1,250,000)
-
(1,250,000)
3,000,000
2,000,000
5,000,000
30 Jun 2022
Grant date
Expiry date
price
Exercise
Balance at
the start of
the year
Granted
Exercised
Expired/
forfeited/
other
Balance at
the end of
the year
30/06/2022
30/06/2022
30/06/2025
30/06/2025
$0.000
$0.000
-
-
-
4,250,000
2,000,000
6,250,000
-
-
-
-
-
-
4,250,000
2,000,000
6,250,000
Performance rights outstanding at the end of the financial period have the following expiry date and exercise prices:
Option
Class
Exercise
price
Balance of
rights
Unlisted Director Options,
issued as part of share-based
compensation for
remuneration
Unlisted Executive Director
Options, issued as part of
share-based compensation
for performance
Vesting in two tranches :
1,500,000 performance rights shall vest when the Company has
announced that it has secured total funding for the Ovoot Project
construction commencement; and
1,500,000 performance rights shall vest when the Company has
announced that commercial production has commenced at the
Ovoot Project within 18 months of construction commencement.
Vesting in two tranches :
1,000,000 performance rights shall vest when the Company has
announced that it has secured total funding for the Ovoot Project
construction commencement; and
1,000,000 performance rights shall vest when the Company has
announced that commercial production has commenced at the
Ovoot Project within 18 months of construction commencement.
$0.000
3,000,000
$0.000
2,000,000
5,000,000
51
ASPIRE MINING LIMITED ANNUAL REPORT 2023
73
Directors’ Declaration
Aspire Mining Limited
Directors' declaration
30 June 2023
In the directors' opinion:
●
●
●
●
the attached financial statements and notes comply with the Corporations Act 2001, the Accounting Standards, the
Corporations Regulations 2001 and other mandatory professional reporting requirements;
the attached financial statements and notes comply with International Financial Reporting Standards as issued by the
International Accounting Standards Board as described in note 1 to the financial statements;
the attached financial statements and notes give a true and fair view of the Group's financial position as at 30 June
2023 and of its performance for the financial year ended on that date; and
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 directors have been given the declarations required by section 295A of the Corporations Act 2001.
Signed in accordance with a resolution of directors made pursuant to section 295(5)(a) of the Corporations Act 2001.
On behalf of the directors
___________________________
Achit-Erdene Darambazar
Managing Director
29 September 2023
52
ANNUAL REPORT 2023ASPIRE MINING LIMITED
74
Independent Auditor’s
Report
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 2023, 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 2023 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 (including Independence
Standards) (“the Code”) that are relevant to our audit of the financial report in Australia. We have also fulfilled
our other ethical responsibilities in accordance with the Code.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
opinion.
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.
53
ASPIRE MINING LIMITED ANNUAL REPORT 2023
Additional Shareholder
Information
Key Audit Matter
How our audit addressed the key audit
matter
75
Deferred exploration and evaluation expenditure
Refer to Note 13
In accordance with AASB 6 Exploration for and
Evaluation of Mineral Resources, the Group capitalises
acquisition costs of rights to explore as well as
subsequent exploration and evaluation expenditure and
applies the cost model after recognition.
Our audit focussed on the Group’s assessment of the
carrying amount of the capitalised exploration and
evaluation asset. We considered this to be a key audit
matter because this is one of the most significant
assets of the Group. There is a risk that the capitalised
expenditure no longer meets the recognition criteria of
the standard. In addition, we considered it necessary
to assess whether facts and circumstances existed to
suggest that the carrying amount of the exploration
and evaluation asset may exceed its recoverable
amount.
Our procedures included but were not
limited to the following:
• We obtained an understanding of the
key processes associated with
management’s review of the
exploration and evaluation asset
carrying values;
• We verified a sample of the
exploration additions;
• We considered the Directors’
assessment of potential indicators of
impairment;
• We obtained evidence that the Group
has current rights to tenure of its
areas of interest;
• We examined the exploration budget
for the year ending 30 June 2024 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 2023, 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.
54
ANNUAL REPORT 2023ASPIRE MINING LIMITED
76
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.
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.
55
ASPIRE MINING LIMITED ANNUAL REPORT 2023
77
I
I
D
E
T
M
L
G
N
N
M
E
R
P
S
A
I
I
I
3
2
0
2
T
R
O
P
E
R
L
A
U
N
N
A
We also provide the directors with a statement that we have complied with relevant ethical requirements
regarding independence, and to communicate with them all relationships and other matters that may
reasonably be thought to bear on our independence, and where applicable, actions taken to eliminate threats
or safeguards applied.
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.
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
2023.
In our opinion, the Remuneration Report of Aspire Mining Limited for the year ended 30 June 2023 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 2023
B G McVeigh
Partner
56
78
Aspire Mining Limited
Shareholder information
The shareholder information set out below was applicable as at 27 September 2023.
Distribution of equitable securities
Analysis of number of equitable security holders by size of holding:
Ordinary shares
Share rights
Number
of holders
% of total
shares
issued
over
ordinary
shares
Number
of holders
% of total
share rights
issued
1 to 1,000
1,001 to 5,000
5,001 to 10,000
10,001 to 100,000
100,001 and over
724
459
246
557
253
-
0.20
0.38
4.34
95.08
2,239
100.00
Holding less than a marketable parcel
1,209
0.32
Equity security holders
Twenty largest quoted equity security holders
The names of the twenty largest security holders of quoted equity securities are listed below:
-
-
-
-
3
3
-
-
-
-
-
100.00
100.00
-
Ordinary shares
% of total
shares
issued
Number held
222,542,060
66,401,758
43,834,410
23,727,851
11,419,513
9,736,492
7,669,010
5,610,050
4,888,270
2,902,806
2,129,833
1,867,206
1,700,000
1,700,000
1,572,927
1,557,013
1,508,419
1,500,000
1,460,000
1,400,238
43.84
13.08
8.63
4.67
2.25
1.92
1.51
1.11
0.96
0.57
0.42
0.37
0.33
0.33
0.31
0.31
0.30
0.30
0.29
0.28
415,127,856
81.78
MR TSERENPUNTSAG TSERENDAMBA
NOBLE RESOURCES INTERNATIONAL
MICC LLC
SPECTRAL INVESTMENTS PTY LTD
CITICORP NOMINEES PTY LIMITED
QUAM SECURITIES LIMITED
BNP PARIBAS NOMINEES PTY LTD
CUSTODIAL SERVICES LIMITED
HSBC CUSTODY NOMINEES
HUROSE PTY LTD
MR STEPHEN RONALD HOBSON
MISS YIDI REN
MR PETER JOSEPH MCGUIRE
SANDWICH HOLDINGS PTY LTD
A G E DEVELOPMENTS PTY LTD
2 R'S PTY LTD
ISTABRAQ PTY LIMITED
MENTOK PTY LTD
SAI HOLDINGS (WA) PTY LTD
MR JOSEPH WARREN
1
ASPIRE MINING LIMITED ANNUAL REPORT 2023
79
I
I
D
E
T
M
L
G
N
N
M
E
R
P
S
A
I
I
I
3
2
0
2
T
R
O
P
E
R
L
A
U
N
N
A
Aspire Mining Limited
Shareholder information
30 June 2023
ACHIT-ERDENE DARAMBAZAR
SAMUEL JAMES BOWLES
BOLDBATAAR BAT-AMGALAN
Unquoted equity securities
There are no unquoted equity securities.
Substantial holders
Substantial holders in the Company are set out below:
MR TSERENPUNTSAG TSERENDAMBA
NOBLE RESOURCES INTERNATIONAL
Voting rights
The voting rights attached to ordinary shares are set out below:
Share rights over ordinary
shares
% of total
Share rights
issued
Number held
2,500,000
2,000,000
500,000
50.00
40.00
10.00
5,000,000
100.00
Ordinary shares
% of total
shares
issued
Number held
266,376,470
66,401,758
52.47
13.08
Ordinary shares
On a show of hands every member present at a meeting in person or by proxy shall have one vote and upon a poll each
share shall have one vote.
Share rights
Share rights holders do not have any voting rights on the share rights held by them.
There are no other classes of equity securities.
Licenses and projects held by Aspire
Description
Tenement
Name
Tenement
number
Ovoot Coking Coal
Project
Ovoot
Nuurstei Coal Project
Nuurstei
Location
Interest
owned
%
Mongolia,
Khuvsgul Province
Mongolia,
Khuvsgul Province
100.00%
90.00%
2