ANNUAL
REPORT
CORPORATE INFORMATION
Directors
Share Register
James Walker (Non-Executive Chairman)
Automic Registry Services
Matt Shackleton (Managing Director
& Chief Executive Officer)
Brett Lambert (Non-Executive Director)
Rhett Brans (Non-Executive Director)
Company Secretary
Sophie Raven
Level 2, 267 St Georges Terrace
PERTH WA 6000
Auditors
Bentleys Audit & Corporate (WA) Pty Ltd
Level 3, 216 St Georges Terrace
PERTH WA 6000
Registered Office & Principal Place of Business
Website
31 Ord Street
WEST PERTH WA 6005
Telephone: +61 8 9322 1003
Solicitors
Steinepreis Paganin
Level 4, The Read Building
16 Milligan Street
PERTH WA 6000
www.australianpotash.com.au
Stock Exchange Listing
The following are listed on the Australian Securities
Exchange:
• Australian Potash Limited shares (ASX code APC)
• Australian Potash Limited 20 cent options
expiring on 25 October 2019 (ASX code APCOA)
• Australian Potash Limited 12 cent options
expiring on 8 August 2021 (ASX code APCOB)
TABLE OF CONTENTS
Chairman’s Letter
Operations Report
Mineral Resource Statement
Directors’ Report
Auditors 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 Financial Statements
Directors’ Declaration
Audit Report
ASX Additional Information
2
3
10
13
23
24
25
26
27
28
47
48
53
1
Australian Potash LimitedAnnual Report For The Year Ended June 2019
CHAIRMAN’S LETTER
Dear Shareholders,
On behalf of the Board of Australian Potash Limited, it is my great pleasure to present the 2019 Annual Report to you.
The year has successfully culminated with the Company having delivered the findings of the Definitive Feasibility
Study on its 100% owned Lake Wells Sulphate of Potash Project (LSOP).
Completion of the DFS confirms the compelling economics of the LSOP, highlights of which include:
-
Pre-tax NPV8 of A$665M
- Annual pre-tax free cash flows of A$100M and Life of Mine (LOM) pre-tax free cash flows of A$3.1Billion
-
-
-
Pre-tax Internal Rate of Return of 25%
150,000 tonnes per annum Sulphate of Potash (SOP) production rate
30 year mine life with LOM production of 4.5Mt of premium high-grade SOP
This enhances APC’s ability to finalise binding off-take agreements, optimise and secure the finance debt package,
finalise the approvals process and progress towards completing the FEED activities, which commenced in
September.
I would like to take this opportunity to thank the whole team at APC, headed up by Matt Shackleton (the Company’s
Managing Director and CEO), for its hard work and dedication to completing this key step in the Company’s trajectory.
We look forward to updating you on the Company’s progress to it becoming an SOP producer and hallmark
operation in the Eastern Goldfields.
Yours sincerely,
Jim Walker
2
Australian Potash LimitedAnnual Report For The Year Ended June 2019 OPERATIONS REPORT
Australian Potash Limited (ASX: APC) is an ASX-listed Sulphate of Potash (‘SOP’) developer. APC holds a 100% interest
in the Lake Wells Sulphate of Potash Project (LSOP or the Project) located approximately 500kms northeast of
Kalgoorlie, in Western Australia’s Eastern Goldfields.
During the year, APC continued progressing the Definitive Feasibility Study (DFS) into the development of the Project.
In August 2019, the Company completed the DFS for the Project underpinned by extensive and rigorous testwork,
data, and modelling from the programs during the year.
Lake Wells Sulphate of Potash Project
Definitive Feasibility Study
Subsequent to year end, on 28 August 2019, APC announced the completion of an AACE Class 3 DFS (+15%/-5%)
on developing the LSOP into a 150,000 tonne per annum Sulphate of Potash operationi. The DFS was prepared
by Lycopodium in conjunction with industry leading consultants including Novopro, AQ2, Knight Piésold, and MBS
Environmental.
The Project will use a bore-field to abstract brine, mitigating the geotechnical challenges and decline in grade and
production over time, evident in trenching systems. The Project has an extremely competitive capital intensity,
forecast first quartile operating costs and exceptional returns.
The highlights of the DFS include:
• Compelling economics:
⁰ Pre-tax NPV8 of A$665M
⁰ Annual pre-tax free cash flows of A$100M and Life of Mine (LOM) pre-tax free cash flows of A$3.1Billion
⁰ Pre-tax Internal Rate of Return (IRR) of 25% on robust operational and capital efficiencies
⁰
150,000 tonnes per annum (tpa) SOP production rate
• Long life Project with lowest quartile production costs:
⁰
⁰
30 year mine life with LOM production of 4.5Mt of premium high-grade SOP
LOM cash cost of US$262/t places the LSOP in the first quartile of the SOP cost curve
• Sector leading CAPEX:
⁰ Development CAPEX of A$208M
⁰ Competitive capital intensity of A$1,387/t SOP
• Resources and Reserves:
⁰
LOM production is met using maiden 3.6Mt Probable Reserve and draws on the Measured Resource
Estimate of 18.1Mt drainable SOP
3
Australian Potash LimitedAnnual Report For The Year Ended June 2019 First Field Evaporated SOP Produced
The pilot pond trials continued during the year comprising of 1 large pre-concentration pond and 3 smaller harvest
ponds. The raw, hypersaline brine was pumped into the pre-concentration pond using one of the 5 already installed
production bores at the Project.
In August 2018, the Company successfully transferred brine from the pre-concentration pond into the first harvest
pond at the LSOP pilot evaporation pond network.
The pilot pond trials successfully produced and harvested 11 tonnes of potassium-rich salts (Figure 1), the first
collected from the LSOP.
.
Figure 1: 11 tonnes of potassium rich salts from the LSOP’s pilot pond trials ready for processing into Lake Wells Sulphate of Potash
In December 2018, the Company delivered three tonnes of potassium-rich feeder salts to the Company’s pilot
processing plant in Canning Vale, Western Australia.
In January 2019, the Company produced 250 kilograms of the first field evaporated Sulphate of Potash at its pilot
processing facility in Canning Vale. Working to the flow-sheet designed by Novopro as part of the DFS, the SOP
produced was 98% purity which is equivalent to approximately 53% K2O. The standard benchmark for SOP is a
51% K2O product.
4
Australian Potash LimitedAnnual Report For The Year Ended June 2019 Figure 2: APC Director Rhett Brans, Novopro Chemical Engineer Mike Morrison and Bureau Veritas Senior Metallurgist Jeremy Neal handle a
sample of 98% pure K2SO4 produced at the pilot processing plant
Completion of the Resource and Reserve Testwork
During the year, APC continued the Resource and Reserve definition testwork including drilling, passive seismic
surveys, developing production bores and test pumping, and borehole magnetic resonance (BMR) logging. In June
2019 the final test pumping program was completed on the production bores completing the extensive collation
of data required to complete the Resource and Reserve modelling. The final test-production bore was developed
through 62 metres of high-yielding sands in the palaeochannel and was cased to 175.5 metres, with long term flow
rates of 15/ls.
5
Australian Potash LimitedAnnual Report For The Year Ended June 2019 Completion of the Trial Evaporation Pond Construction Program
Figure 3: On-playa trial pre-concentration pond demonstrated low-cost, efficient lateral seepage barrier construction techniques, using the
highly stable and easily accessible playa perimeter
Subsequent to year end, the on-playa trial ponds assessing the constructability, efficacy and economics of three
sub-surface, vertical barrier designs was completed. The trial pond was filled using a near-by production bore. The
optimisation program highlighted that all the pond perimeters were highly stable and accessible and confirmed that
the vertical and lateral brine seepage was contained within the design limits. The trial pond also demonstrated good
salt crystallisation even through the low-evaporation winter months.
Grant of Mining Leases
In September 2018, Mining Leases were granted for the LSOP (Figure 4). The Mining Leases cover an area in excess
of 30,000 hectares of the Lake Wells playa and underlying palaeochannel system. Mining Leases granted are
M38/1274, M38/1275 and M38/1276.
6
Australian Potash LimitedAnnual Report For The Year Ended June 2019 Figure 4: Mining Leases have been granted covering the Lake Wells playa and underlying palaeochannel system
Environmental Approvals
In September 2018, APC lodged the Environmental Scoping Document (ESD) with the Environmental Protection
Authority of Western Australia (EPA). The EPA has advised that the ESD has been approved as providing an
acceptable basis for the preparation of the Environmental Review Document (ERD). An ERD will be prepared and
submitted to the EPA who will assess the Project and prepare a report and recommendations for the Minister for
Environment. When the Minister has considered the EPA’s report a Ministerial Approval Statement can then be issued
pursuant to s45(5) of the Environmental Protection Act 1986 (WA).
7
Australian Potash LimitedAnnual Report For The Year Ended June 2019 UWA Glasshouse and On-farm field trial programs
During the year, the Company commenced an Australian first collaborative research program between the Western
Australian No-Tillage Farmers Association, The University of Western Australia’s Institute of Agriculture, and APC for
a two-year controlled environmental study (glasshouse trial) and accompanying broadacre field trials.
The field trials will compare commonly used muriate of potash (MOP) with SOP and investigate the full effects of
both potassium sources on crop yield, quality, safety and value.
Figure 5: APC continues to work closely with Western Australian farmers
Major Resource Estimate Upgradeii
Subsequent to year end, and in conjunction with the DFS referred to above, APC upgraded the JORC 2012 Compliant
Mineral Resource Estimate. The upgraded JORC 2012 Compliant Mineral Resource Estimate comprises 18.1 million
tonnes of drainable SOP in the measured category. Refer the Company’s Mineral Resource Statement for
further information.
Lake Wells Gold Project
In October 2018, APC and St Barbara Limited (SBM) entered into an Earn In & Joint Venture Agreement covering
tenure at the Lake Wells Gold Project. The Agreement provided that SBM pay APC $1.25M in cash consideration
during the December quarter for entering into the Agreement and fund the minimum exploration expenditure of
$1.75M in the first year of the Agreement.
Since the Agreement SBM has completed the following exploration:
• A 585 hole aircore drill program for 29,337 metres testing 8 targets; and
• A detailed 36,633 line kilometre airborne magnetic survey over the entire tenement area.
8
Australian Potash LimitedAnnual Report For The Year Ended June 2019 Corporate
Appointments
In August 2018, experienced mining industry executive and director Jim Walker was appointed Non-Executive
Chairman of the Company. Matt Shackleton, formerly Executive Chairman, was appointed Managing Director and
Chief Executive Officer.
In May 2019, the Company appointed Scott Nicholas to the position of Chief Financial Officer, bringing significant
experience to the Company across a broad range of financial disciplines in the resources sector including large scale
debt and equity project financings.
Completion of Pro-rata Renounceable Entitlements Issue
In March 2019, the Company completed the allotment of the final tranche of securities under the pro-rata
renounceable entitlements issue as set out in the Entitlement Issue Prospectus issued on 13 February 2019, being
5,000,000 fully paid ordinary shares at an issue price of $0.08 per share and 1,250,000 free-attaching listed options
(exercisable at $0.12 each on or before 8 August 2021).
Quotation of Unlisted Options
During April 2019, the Company applied for quotation on ASX of 21,600,000 unlisted options exercisable at $0.12
each on or before 8 August 2021 that were issued on 8 and 15 August 2018 as part of the placement to sophisticated
and professional investors undertaken by the Company in May 2018.
$1.3m R&D Tax Incentive Received
Subsequent to year end, the Company received a $1.3M rebate under the Research and Development Tax Incentive
program. The incentive recognises the innovative test work activities undertaken by the Company during the
financial year ending 30 June 2018.
i Refer to ASX announcement 28 August 2019 ‘Australian Potash Ltd Announces Definitive Feasibility Study’. That announcement contains
the relevant statements, data and consents referred to in this announcement. Apart from that which is disclosed in this document, Australian
Potash Limited, its directors, officers and agents: 1. Are not aware of any new information that materially affects the information contained in
the 28 August 2019 announcement, and 2. State that the material assumptions and technical parameters underpinning the estimates in the
28 August 2019 announcement continue to apply and have not materially changed.
ii Refer to ASX announcement 5 August 2019 ‘Major Resource Estimate Upgrade’. That announcement contains the relevant statements, data
and consents referred to in this announcement. Apart from that which is disclosed in this document, Australian Potash Limited, its directors,
officers and agents: 1. Are not aware of any new information.
9
Australian Potash LimitedAnnual Report For The Year Ended June 2019 MINERAL RESOURCE STATEMENT
AS AT 30 JUNE 2019
On 5 August 2019, APC released an undated Mineral Resource Estimate (MRE) containing 18.1Mt of SOP in the
Measured category. As the release of the updated MRE was after the 30 June reporting date the following Mineral
Resource Statement refers to the estimated resource available as at 30 June 2019. The Mineral Resource estimates
are grouped by deposit which form part of the Lake Wells Sulphate of Potash Project in Western Australia.
No Ore Reserves had been reported for these deposits as at the report date, though an Ore Reserve was announced
in conjunction with a Definitive Feasibility Study on the 28 August 2019 of 3.6Mt SOP.
Lake Wells Sulphate of Potash Project - Mineral Resource Estimate
In compliance with internationally recognised reporting standards, APC has reported its Resource estimate using
specific yield1 , or drainable porosity. The Company believes this is an accurate estimate of the amount of brine that
can be abstracted from the aquifers.
On 29 June 2016, APC announced a Maiden Sulphate of Potash (SOP) JORC compliant Mineral Resource Estimate2 ,
using specific yield (drainable porosity). The maiden resource estimate sat in the Inferred Mineral Resource category
and contained 18.4 million tonnes of SOP at 8.05 kg/m3 including a high-grade zone: 10.5 Mt of SOP at 9.03 kg/m3.
With additional information and increased confidence in the mineral resource, on 23 March 2017 APC announced an
updated SOP JORC compliant Mineral Resource Estimate , with the majority being in the Indicated Category. Using
specific yield (drainable porosity), the JORC 2012 compliant Mineral Resource Estimate3 currently comprises 14.7m
tonnes of SOP, including 12.7mt in the Indicated category. Refer to table 1 on page 11.
The Mineral Resource, which has taken into account potential future economic abstraction, has been classified as
Indicated, with the Southern Zone remaining Inferred (Table 1). The Indicated Resource is estimated at 12.7 Mt at 8,267
mg/L (8.267 kg/m3) SOP. The Southern Zone of the Lake Wells Sulphate of Potash Project, has an Inferred estimate
of 2.1 Mt at 5,963 mg/L (5.963 kg/m3) SOP.
The Indicated Mineral Resource is a static estimate. It represents the volume of potentially recoverable brine that is
contained within the defined aquifer. It does not take into account modifying factors such as the design of bore fields
(or other pumping scheme), which will affect both the proportion of the Indicated Mineral Resource that is ultimately
recovered and changes in grade associated with mixing between each aquifer unit. The Southern Zone remains a
data constrained Inferred Resource, with planned future drilling aiming to bring it into the Indicated category.
1Specific yield reflects the amount of recoverable Sulphate of Potash, in compliance with NI43-101, the only CRIRSCO reporting code to
include a brine standard.
2 Refer to ASX announcement 29 June 2016 ‘Maiden SOP Resource Estimate’. That announcement contains the relevant statements, data
and consents referred to in this announcement. Apart from that which is disclosed in this document, Goldphyre Resources Limited, its
directors, officers and agents: 1. Are not aware of any new information that materially affects the information contained in the 29 June 2016
announcement, and 2. State that the material assumptions and technical parameters underpinning the estimates in the 29 June 2016
announcement continue to apply and have not materially changed.
3 Refer to ASX announcement 23 March 2017 ‘Scoping Study Confirms Exceptional Economics of APC’s 100% Owned Lake Wells Potash
Project In WA’. That announcement contains the relevant statements, data and consents referred to in this announcement. Apart from that
which is disclosed in this document, Australian Potash Limited, its directors, officers and agents: 1. Are not aware of any new information that
materially affects the information contained in the 23 March 2017 announcement, and 2. State that all the material assumptions and technical
parameters underpinning the production target and the forecast financial information derived from a production target in the 23 March 2017
announcement continue to apply and have not materially changed.
10
Australian Potash LimitedAnnual Report For The Year Ended June 2019
JORC 2012 Mineral Resource Estimate Summary
Hydrogeological Unit
Volume of
Aquifer
Specific
Yield
Drainable
Brine
Volume
K
Concentration
(mg/L)
SOP Grade
(mg/L)
SOP
Resource
MCM
Mean
MCM
Weighted
Mean Value
Weighted
Mean Value
Indicated Resources
Western High Grade Zone
Surficial Aquifer
Upper Sand
Clay Aquitard
Basal Sand Aquifer
Sub Total (MCM / MT)
Eastern Zone
Surficial Aquifer
Upper Sand
Clay Aquitard
Basal Sand Aquifer
Sub Total (MCM / MT)
Total Indicated
Surficial Aquifer
Upper Sand
Clay Aquitard
Basal Sand Aquifer
Indicated Resource (MCM / MT)
Southern Zone
5,496
37
4,758
214
10,505
3,596
22
2,689
237
6,545
9,092
59
7,447
452
17,050
10%
25%
6%
29%
10%
25%
6%
29%
10%
25%
6%
29%
549
9
308
63
919
359
5
174
69
602
907
15
482
132
1,521
Inferred Resources
3,738
4,017
4,068
4,520
3,904
3,416
3,345
3,362
3,352
3,391
3,610
3,769
3,813
3,906
3,707
8,336
8,958
9,071
10,080
8,706
7,617
7,459
7,497
7,475
7,563
8,051
8,404
8,503
8,711
8,267
Surficial Aquifer
Clay Aquitard
Basal Sand Aquifer
Inferred Resources (MCM / MT)
Indicated Resource based modelled aquifer volume, mean specific yield and weighted mean K concentrations (derived from modelling)
1,296
1,901
82
3,279
2,742
2,620
2,871
2,674
6,115
5,842
6,401
5,963
207
114
19
340
16%
6%
23%
Indicated Resources
Inferred Resources
Total Resources
17,050
3,279
20,329
1,521
340
1,861
3,707
2,674
3,541
8,267
5,963
7,896
Resources do not include exploration target at Lake Wells South (tenement areas south of Southern Zone)
Summary
Table 1: Indicated and Inferred Mineral Resource estimate measured using Specific Yield (drainable porosity)4
MT
4.6
0.1
2.8
0.6
8.1
2.7
0.04
1.3
0.5
4.6
7.3
0.1
4.1
1.1
12.7
1.3
0.7
0.1
2.1
12.7
2.1
14.7
4Rounding may affect sub-totals and totals in all tables.
11
Australian Potash LimitedAnnual Report For The Year Ended June 2019 Annual Statement of Mineral Resources
The Annual Statement of Mineral Resources as at 30 June 2019 presented in this Report has been prepared in
accordance with the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves
2012 Edition (the JORC Code 2012) and ASX listing Rules.
Subsequent to 30 June 2019, on 5 August 2019, APC announced an upgrade to the JORC 2012 Compliant Mineral
Resource Estimate5 . Ore Reserves were declared as part of the Definitive Feasibility Study released on
28 August 20196 .
APC is not aware of any other new information or data that materially affects the information included in this Annual
Statement and confirms that the all the material assumptions and technical parameters underpinning the estimates
in the relevant market announcements continue to apply and have not materially changed.
Mineral Resources Corporate Governance
Due to the nature, stage and size of APC’s existing operations, the Board believes there would be no efficiencies
gained by establishing a separate mineral reserves and resources committee responsible for reviewing and
monitoring APC’s processes for estimating mineral resource and ore reserves and for ensuring that the appropriate
internal controls are applied to such estimates. However, APC ensures that any mineral reserve and ore resource
estimations are prepared by competent geologists and hydrogeologists and are reviewed independently and
verified including estimation methodology, sampling, analytical and test data. APC reports mineral resources
estimates in accordance with the 2012 JORC Code.
Competent persons statement
The information in this report that relates to Mineral Resources and Reserves is based on information that was
compiled by Mr. Duncan Gareth Storey. Mr. Storey is a Director and Consulting Hydrogeologist with AQ2, a firm
that provides consulting services to the Company. Neither Mr. Storey nor AQ2 own either directly or indirectly any
securities in the issued capital of the Company. Mr. Storey has 30 years of international experience. He is a Chartered
Geologist with, and Fellow of, the Geological Society of London (a Recognised Professional Organisation under
the JORC Code 2012). Mr. Storey has experience in the assessment and development of palaeochannel aquifers,
including the development of hypersaline brines in Western Australia. His experience and expertise are such that he
qualifies as a Competent Person as defined in the 2012 edition of the “Australian Code for Reporting of Exploration
Results, Mineral Resources and Ore reserves”. Mr. Storey consents to the inclusion in this report of the matters based
on this information in the form and context as it appears.
The information in this report that relates to Exploration Results is based on information compiled by Christopher
Shaw who is a member of the Australian Institute of Geoscientists (AIG). Mr. Shaw is an employee of Australian Potash
Ltd. Mr. Shaw has sufficient experience relevant to the style of mineralisation and type of deposit under consideration
and to the activity currently being undertaken to qualify as a Competent Person as defined in the 2012 edition of the
‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’. Mr. Shaw consents to
the inclusion in this report of the matters based on his information in the form and context in which it appears.
Forward looking statements disclaimer
This announcement contains forward-looking statements that involve a number of risks and uncertainties.
These forward-looking statements are expressed in good faith and believed to have a reasonable basis. These
statements reflect current expectations, intentions or strategies regarding the future and assumptions based on
currently available information. Should one or more of the risks or uncertainties materialise, or should underlying
assumptions prove incorrect, actual results may vary from the expectations, intentions and strategies described in
this announcement. No obligation is assumed to update forward looking statements if these beliefs, opinions and
estimates should change or to reflect other future developments.
5Refer to ASX announcement 8 August 2019 ‘Major Resources Estimate Upgrade’. That announcement contains the relevant statements,
data and consents referred to in this announcement. Apart from that which is disclosed in this document, Australian Potash Limited, its
directors, officers and agents: 1. Are not aware of any new information that materially affects the information contained in the 8 August 2019
announcement, and 2. State that all the material assumptions and technical parameters underpinning the production target and the
forecast financial information derived from a production target in the 8 August 2019 announcement continue to apply and have not
materially changed.
6 Refer to ASX announcement 28 August 2019 ‘Australian Potash Ltd Announces Definitive Feasibility Study’. That announcement contains
the relevant statements, data and consents referred to in this announcement. Apart from that which is disclosed in this document.
12
Australian Potash LimitedAnnual Report For The Year Ended June 2019 DIRECTORS’ REPORT
Your directors submit their report on the consolidated entity (referred to hereafter as the Group) consisting of
Australian Potash Limited and the entities it controlled at the end of, or during, the year ended 30 June 2019.
Directors
The names and details of the Company’s directors in office during the year and until the date of this report are as
follows. Directors were in office for this entire period unless otherwise stated.
James (Jim) Walker (Non-Executive Chairman)
Appointed 15 August 2018
Mr Walker has over 45 years’ experience in the resources industry, at both senior management and board level. Prior
to retiring from the position in 2013, Mr Walker was the Managing Director and Chief Executive Officer of WesTrac Pty
Ltd, during which time that company enjoyed significant expansion across Australia and into north-east China. From
January 2015 through to July 2015, Mr Walker performed the Executive Chairman’s role at Macmahon Holdings Ltd
as that company sought a replacement CEO. Mr Walker has been a member of the Macmahon board since 2013, and
was the non-executive Chair from 14 July 2015 until 27 June 2019.
Other current directorships:
Mr Walker is currently Chairman of Austin Engineering Limited (appointed November 2016).
Former directorships (last 3 years):
Non-executive Chairman of Macmahon Holdings Ltd (resigned 27 June 2019).
Matt Shackleton (Managing Director & Chief Executive Officer, member of the Audit Committee)
Appointed 15 August 2018 (prior to this Mr Shackleton was the Executive Chairman)
Mr Shackleton is a Chartered Accountant with over 20 years’ experience in senior management and board roles.
Previously the Managing Director of ASX listed Western Australian gold developer Mount Magnet South NL, Mr
Shackleton was a founding director of ASX listed and West African gold and bauxite explorer Canyon Resources
Limited. He has also held senior roles with Bannerman Resources Limited, a uranium developer, Skywest Airlines,
iiNet Limited and DRCM Global Investors in London. Mr Shackleton holds an MBA from The University of Western
Australia, is a Fellow of The Institute of Chartered Accountants, Australia and New Zealand and a Member of the
Australian Institute of Company Directors.
Former directorships (last 3 years):
None
Brett Lambert (Non-Executive Director, member of the Audit and Remuneration committees)
Mr Lambert is a mining engineer and experienced company director in the Australian and international mineral
resources industry. Over a career spanning 35 years, Mr Lambert has held senior management roles with Western
Mining Corporation, Herald Resources, Western Metals, Padaeng Industry, Intrepid Mines, Thundelarra Exploration
and Bullabulling Gold. He has successfully managed several of green-fields resource projects through feasibility
study and development and has been involved in numerous facets of financing resource project development.
Mr Lambert has experience as a director of companies listed on the Australian Securities Exchange, AIM and the
Toronto Stock Exchange and holds a B.App.Sc. (Mining Engineering) degree from Curtin University in Western
Australia and is a Member of the Australian Institute of Directors.
Other current directorships:
Mr Lambert is currently Chairman of Mincor Resources NL (appointed January 2017).
Former directorships (last 3 years):
Non-executive Director of De Grey Mining Limited
13
Australian Potash LimitedAnnual Report For The Year Ended June 2019 Rhett Brans (Non-Executive Director, member of the Audit and Remuneration committees)
Mr Brans is an experienced director and civil engineer with over 45 years experience in project developments. He
is currently a Non-executive Director of Syrah Resources and Carnavale Resources Ltd. Previously, Mr Brans was a
founding director of Perseus Mining Limited and served on the boards of Tiger Resources Limited and Monument
Mining Limited. Throughout his career, Mr Brans has been involved in the management of feasibility studies and the
design and construction of mineral treatment plants across a range of commodities and geographies. Mr Brans holds
a Dip.Engineering (Civil), and is a member of the Institution of Engineers, Australia.
Other current directorships:
Mr Brans is currently a non-executive director of AVZ Minerals Limited (appointed February 2018) and Carnavale
Resources Limited (appointed September 2013).
Former directorships (last 3 years):
Mr Brans was a director of Syrah Resources Limited, Monument Mining Limited and RMG Limited.
Company Secretary
Sophie Raven
Ms Raven is a corporate lawyer and company secretary, with extensive experience in Australia and internationally,
including as a corporate lawyer in Santiago, Chile advising Australian and Canadian resources and drilling companies.
Ms Raven has held positions as Company Secretary with Golden West Resources Limited, Sunbird Energy Limited,
Citation Resources Ltd, Whitebark Energy Ltd, Salt Lake Potash Limited, and Cradle Resources Limited.
Ms Raven holds a Bachelor of Laws from the University of Western Australia and is a member of the Australian
Institute of Company Directors. Ms Raven is a board member of Parkerville Children and Youth Care (Inc), a not-for-
profit organisation. Ms Raven has not held any former directorships in the last 3 years.
Interests in the shares and options of the company and related bodies corporate
As at the date of this report, the interests of the directors in the shares and options of Australian Potash Limited were:
James Walker
Matt Shackleton
Brett Lambert
Rhett Brans
Principal Activities
Ordinary
Shares
398,000
6,432,499
459,911
220,000
Options over
Ordinary
Shares
1,277,496
4,967,870
859,666
849,688
During the year the Group carried out exploration and feasibility studies on its tenements and applied for or acquired
additional tenements with the objective of identifying potash and other economic mineral deposits.
Dividends
No dividends were paid or declared during the year. No recommendation for payment of dividends has been made.
14
Australian Potash LimitedAnnual Report For The Year Ended June 2019 Finance Review
The Group began the year with available cash assets of $2,201,681. The Group raised funds during the year via the
issue of shares and options. Total gross funds raised during the year amounted to $4,250,050.
During the year, the Group changed its accounting policy relating to exploration expenditure incurred. Costs
associated with an area of interest that had progressed to a definitive feasibility stage will be capitalised while
areas of interest that have not reached that stage will be expensed as incurred. This resulted in the capitalisation of
exploration costs amounting to $5,053,765 (2018: nil). Exploration expenditure not at the definitive feasibility stage of
$353,246 (2018: $5,270,983) was expensed as incurred.
The Group recognised the FY2018 research and development tax incentive receivable amounting to $1,327,579,
which was received subsequent to year end (2018: $1,821,743).
The Group reported an operating profit after income tax for the year ended 30 June 2019 of $142,446 (2018: Loss
$4,999,921). The operating profit was a result of the $1,327,579 FY2018 research and development tax incentive being
recognised and the $1,250,000 proceeds from the St Barbara farm-in agreement.
At 30 June 2019 cash assets available totalled $1,952,751.
Operating Results for the Year
Summarised operating results are as follows:
2019
Revenues
$
Revenues and profit from ordinary activities before income tax expense
2,307,861
Shareholder Returns
Basic earnings/(loss) per share (cents)
Risk Management
2019
0.04
Results
$
142,446
2018
(1.93)
The board is responsible for ensuring that risks, and also opportunities, are identified on a timely basis and that
activities are aligned with the risks and opportunities identified by the board.
The Company believes that it is crucial for all board members to be a part of this process, and as such the board has
not established a separate risk management committee.
The board has a number of mechanisms in place to ensure that management’s objectives and activities are aligned
with the risks identified by the board. These include the following:
• Board approval of a strategic plan, which encompasses strategy statements designed to meet stakeholders’
needs and manage business risk.
•
Implementation of board approved operating plans and budgets and board monitoring of progress against
these budgets.
Significant Changes In The State Of Affairs
Other than as disclosed in this Report, no significant changes in the state of affairs of the Group occurred during the
financial year.
Significant Events After The Balance Date
No matters or circumstances, besides those disclosed at note 20, have arisen since the end of the year which
significantly affected or may significantly affect the operations of the Group, the results of those operations, or the
state of affairs of the Group in future financial periods.
15
Australian Potash LimitedAnnual Report For The Year Ended June 2019 Likely Developments And Expected Results
The Group expects to maintain the present status and level of operations and will report any further developments in
accordance with ASX continuous disclosure requirements.
Environmental Regulation And Performance
The Group is subject to significant environmental regulation in respect to its exploration activities.
The Group aims to ensure the appropriate standard of environmental care is achieved, and in doing so, that it is
aware of and is in compliance with all environmental legislation. The directors of the Company are not aware of any
breach of environmental legislation for the year under review.
The directors have considered the National Greenhouse and Energy Reporting Act 2007 (the NGER Act) which
introduces a single national reporting framework for the reporting and dissemination of information about
greenhouse gas emissions, greenhouse gas projects, and energy use and production of corporations. At the current
stage of development, the directors have determined that the NGER Act will have no effect on the Group for the
current, nor subsequent, financial year. The directors will reassess this position as and when the need arises.
Remuneration Report
The information provided in this remuneration report has been audited as required by section 308(3C) of the
Corporations Act 2001.
Principles used to determine the nature and amount of remuneration
Remuneration Policy
The remuneration policy of Australian Potash Limited has been designed to align key management personnel
objectives with shareholder and business objectives by providing a fixed remuneration component and offering
specific longterm incentives based on key performance areas affecting the Group’s financial and operating results.
The board of Australian Potash Limited believes the remuneration policy to be appropriate and effective in its ability
to attract and retain the best key management personnel to run and manage the Group.
The board’s policy for determining the nature and amount of remuneration for board members and senior executives
(if any) of the Group is as follows:
The remuneration policy, setting the terms and conditions for the executive directors, was developed by the board.
All executives receive a base salary or fee (which is based on factors such as length of service, performance and
experience) and the equivalent statutory superannuation. The board reviews executive packages annually by
reference to the Group’s performance, executive performance and comparable information from industry sectors
and other listed companies in similar industries.
The board may exercise discretion in relation to approving incentives, bonuses and options. The policy is designed to
attract and retain the highest calibre of executives and reward them for performance that results in longterm growth
in shareholder wealth.
Executives are also entitled to participate in the employee share and option arrangements.
The directors and executives (if any) receive a superannuation guarantee contribution required by the government,
which was 9.5% for the 2019 financial year. Some individuals may choose to sacrifice part of their salary or fees to
increase payments towards superannuation.
All remuneration paid to key management personnel is valued at the cost to the company and expensed. Shares
issued to key management personnel are valued as the difference between the market price of those shares and the
amount paid by the key management personnel. Options are valued using the BlackScholes methodology.
The board policy is to remunerate nonexecutive directors at market rates for comparable companies for time,
commitment and responsibilities. The board determines payments to the nonexecutive directors and reviews their
remuneration annually, based on market practice, duties and accountability. Independent external advice is sought
when required. The maximum aggregate amount of fees that can be paid to nonexecutive directors is subject to
approval by shareholders at the Annual General Meeting (currently $300,000). Fees for nonexecutive directors are
not linked to the performance of the Group. However, to align directors’ interests with shareholder interests, the
directors are encouraged to hold shares in the company and are able to participate in the employee option plan.
16
Australian Potash LimitedAnnual Report For The Year Ended June 2019 Performance based remuneration
Short Term Incentive
The Group currently has no short term performance based remuneration components built into key management
personnel remuneration packages.
Long Term Incentive (LTI)
The LTI awards are aimed specifically at creating long term shareholder value and the retention of executives. The
Group has implemented an Incentive Option Plan (Plan) which enables the provision of options to executives and
employees.
During the 2019 financial year, no options were issued to executives. In the prior year options issued to executives
will vest subject to pre-defined performance hurdles. The grant of options was to reward executives in a manner that
aligns remuneration with the creation of shareholder wealth.
Performance measures to determine vesting
The vesting of the options is subject to the attainment of defined individual and group performance criteria, chosen
to align the interests of employees with shareholders, representing key drivers for delivering long term value. During
the 2019 financial year, no options were issued to executives. The performance measures for the prior year options
related to:
• Completion of the Lake Wells Potash Project feasibility study (Class 3)
• Finalisation of a board approved finance package to commence the development of the Lake Wells Potash
Project.
• Delineation of JORC compliant resource of > 250,000 gold equivalent ounces of bas, PG or precious metals.
Termination and change of control provisions
Where an executive ceases employment prior to the vesting of an award, the incentives are forfeited unless the
Board applies its discretion to allow vesting at or post cessation of employment in appropriate circumstances.
In the event of a change of control of the Group, the performance period end date will generally be brought forward
to the date of the change of control and the options and rights will vest in full, subject to ultimate Board discretion.
No hedging of LTIs
As part of the Company’s Securities Trading Policy, the Company prohibits executives from entering into
arrangements to protect the value of unvested LTI awards. This includes entering into contracts to hedge exposure
to options, performance rights or shares granted as part of their remuneration package.
Use of remuneration consultants
The Group did not employ the services of any remuneration consultants during the financial year ended 30 June
2019 (2018: Nil).
Voting and comments made at the Company’s 2018 Annual General Meeting
The Company received 100% of “yes” votes on its remuneration report for the 2018 financial year. The Company
did not receive any specific feedback at the Annual General Meeting or throughout the year on its remuneration
practices.
Details of remuneration
Details of the remuneration of the key management personnel of the Group are set out in the following table.
The key management personnel of the Group include the directors as per pages 13 and 14 above.
17
Australian Potash LimitedAnnual Report For The Year Ended June 2019 Key management personnel of the Group
Short-Term
Post-Employment
Share-based
Payments
Total
Performance
Related
Salary
& Fees
Non-
Monetary
Superann
uation
Retirement
benefits
Shares
Options
$
$
$
$
$
Directors
Jim Walker
2019
2018
$
61,884
-
Matt Shackleton
2019
2018
250,000
250,000
Brett Lambert
2019
2018
Rhett Brans
2019
2018
41,096
41,096
41,096
41,096
$
-
-
-
-
-
-
-
-
Total directors’ compensation
2019
2018
394,076
332,192
Executives
Scott Nicholas
2019
2018
33,273
-
-
-
-
-
Total executives’ compensation
2019
2018
33,273
-
-
-
5,879
-
23,750
23,750
3,904
3,904
3,904
3,904
37,437
31,558
3,161
-
3,161
-
Total key management personnel compensation
2019
2018
427,349
332,192
-
-
40,598
31,558
Service agreements
Managing Director and Chief Executive Officer
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
%
-
-
10,220 77,983
-
-
76,263 350,013
121,128 394,878
21.8%
28.2%
-
-
-
-
-
-
-
45,000
42,750 87,750
-
45,000
42,750 87,750
86,483 517,996
206,628 570,378
-
-
-
-
36,434
-
36,434
-
86,483 554,430
206,628 570,378
Matt Shackleton (formerly Executive Chairman, currently Managing Director and Chief Executive Officer), first
appointed 23 July 2014:
• Paid annual salary of $250,000 (plus statutory superannuation). Effective 1 July 2019 Mr Shackleton’s annual
salary increased to $280,000 (plus statutory superannuation).
• The Company may terminate, without cause, the Executive’s employment at any time by giving three calendar
months’ written notice to the Executive.
Chief Financial Officer
Scott Nicholas (Appointed 18 May 2019):
• Paid annual salary of $264,840 (plus statutory superannuation).
• The Company may terminate, without cause, the Executive’s employment at any time by giving three calendar
months’ written notice to the Executive.
18
Australian Potash LimitedAnnual Report For The Year Ended June 2019 Share-based compensation
Options
Terms and conditions of share-based payment arrangements affecting remuneration of key management personnel
in the current financial and future financial years:
Grant Date
28/11/2016
28/11/2016
30/11/2017
30/11/2017
23/10/2017
23/10/2017
Value per option
at grant date
(cents)
Exercise Price
(cents)
Expiry Date
Vesting Date
4.7
4.3
7.1
6.6
5.7
5.7
17.5
22.5
16.0
20.0
22.5
22.5
28/11/2019
28/11/2019
30/11/2020
30/11/2020
09/05/2020
09/05/2020
(1)
(1)
(2)
(2)
09/05/2018
09/05/2018
(1) Vesting of the options granted is dependent on the following performance criteria being met:
•
•
•
one third will vest upon the completion of a feasibility program (Class 3) into the Lake Wells Potash Project
one third will vest on listed ordinary shares in the Company trading at $0.25 or above for 5 consecutive trading days; and
one third will vest upon finalisation of board approved finance package to commence development of the Lake Wells Potash Project.
(2) Vesting of the options granted is dependent on the following performance criteria being met:
•
•
50% will vest upon a resolution of the Board to proceed to the development of the Lake Wells SOP Project.
50% will vest on delineation of JORC compliant resource of > 250,000 gold equivalent ounces (as measured at the spot price) of
base, PG or precious metals.
The following options over ordinary shares of the Company were granted, vested or lapsed with key management
personnel during the year:
Options
awarded
during
the year
No.
Grant
Date
Value
per
option
at grant
date
(cents)
Vesting
Date
Exercise
Price
(cents)
Expiry
Date
No.
Vested
during
the year
No.
Lapsed
during
the
year
Value of
options
granted
during
the year
Value of
options
exercised
during
the year
Financial
Year
Directors
Jim Walker
2019
1,277,496 29/11/18
0.8
27/12/18
22.5
27/12/21 1,277,496
-
10,220
Matt Shackleton
2016
2016
2016
2016
2016
2016
30/11/15
30/11/15
30/11/15
30/11/15
30/11/15
30/11/15
-
-
-
-
-
-
30/11/15
30/11/16
30/11/17
30/11/15
30/11/16
30/11/17
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
666,666
666,667
666,667
666,666
666,667
666,667
-
-
-
-
-
-
-
-
-
-
-
-
-
19
Australian Potash LimitedAnnual Report For The Year Ended June 2019 Equity instruments held by key management personnel
Share holdings
The numbers of shares in the company held during the financial year by each director of Australian Potash Limited
and other key management personnel of the Group, including their personally related parties, are set out below.
There were no shares granted during the reporting period as compensation.
2019
Ordinary shares
Directors
Jim Walker
Matt Shackleton
Brett Lambert
Rhett Brans
Executives
Scott Nicholas
Option holdings
Balance at
start of the
year
Received
during the year
on the exercise
of options
Number
acquired
during the year
Balance at end
of the year
-
5,824,999
200,000
-
-
-
-
-
-
-
398,000
607,500
259,911
220,000
398,000
6,432,499
459,911
220,000
-
-
The numbers of options over ordinary shares in the Company held during the financial year by each director of
Australian Potash Limited and other key management personnel of the Group, including their personally related
parties, are set out below:
Balance at
start of the
year
Granted as
compensa-
tion
Exercised
Expired
Other
changes
Balance at
end of the
year
Vested and
exercisable Unvested
2019
Directors
Jim Walker
Matt
Shackleton
Brett Lambert 750,000
Rhett Brans
750,000
Executives
Scott
Nicholas
-
-
1,277,496
8,726,620
-
-
-
-
-
-
-
-
-
-
1,277,496
1,277,496
-
(4,000,000) 241,250
4,967,870
251,250
4,716,620
109,666
859,666
99,688
849,688
859,666
849,688
-
-
-
-
-
-
-
Loans to key management personnel
There were no loans to key management personnel during the year.
Other transactions with key management personnel
There were no other transactions with key management personnel during the year.
End of audited Remuneration Report
20
Australian Potash LimitedAnnual Report For The Year Ended June 2019 Directors’ Meetings
During the year the Company held six meetings of directors. The attendance of directors at meetings of the board
and committees were:
Directors Meetings
Audit Committee Meetings
A
6
6
6
6
B
6
6
6
6
A
2
2
2
2
B
2
2
2
2
Jim Walker
Matt Shackleton
Brett Lambert
Rhett Brans
Notes
A – Number of meetings held during the time the director held office during the year.
B – Number of meetings attended.
Shares Under Option
Unissued ordinary shares of Australian Potash Limited under option at the date of this report are as follows:
Date options issued
Expiry date
Exercise price (cents)
Number of options
25 October 2017
25 October 2019
8 August 2018
22 April 2016
22 April 2016
8 August 2021
21 April 2021
21 April 2021
28 November 2016
28 November 2019
28 November 2016
28 November 2019
22 December 2016
14 December 2019
22 December 2016
14 December 2019
23 October 2017
9 May 2020
30 November 2017
30 November 2020
30 November 2017
30 November 2020
27 December 2018
27 December 2021
20.0 Listed
12.0 Listed
10.0 Unlisted
15.0 Unlisted
17.5 Unlisted
22.5 Unlisted
17.5 Unlisted
22.5 Unlisted
22.5 Unlisted
16.0 Unlisted
20.0 Unlisted
22.5 Unlisted
37,594,906
47,850,135
3,430,000
3,430,000
1,861,702
2,034,883
2,559,526
2,756,412
1,500,000
1,250,000
1,250,000
1,277,496
Total number of options outstanding at the date of this report
106,795,060
No option holder has any right under the options to participate in any other share issue of the Company or
any other entity.
21
Australian Potash LimitedAnnual Report For The Year Ended June 2019 Insurance Of Directors And Officers
During the financial year, Australian Potash Limited paid a premium of $9,586 to insure the directors and secretary of
the Company.
The liabilities insured are legal costs that may be incurred in defending civil or criminal proceedings that may
be brought against the officers in their capacity as officers of the Company, and any other payments arising from
liabilities incurred by the officers in connection with such proceedings. This does not include such liabilities that arise
from conduct involving a wilful breach of duty by the officers or the improper use by the officers of their position or
of information to gain advantage for themselves or someone else or to cause detriment to the Company. It is not
possible to apportion the premium between amounts relating to the insurance against legal costs and those relating
to other liabilities.
Non Audit Services
There were no non audit services provided by the entity’s auditor, Bentleys, or associated entities.
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 any 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 of the Corporations Act 2001.
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 on page 23.
Signed in accordance with a resolution of the directors.
Matt Shackleton
Managing Director & Chief Executive Officer
Perth, 11 September 2019
22
Australian Potash LimitedAnnual Report For The Year Ended June 2019 AUDITOR’S INDEPENDENCE DECLARATION
23
Australian Potash LimitedAnnual Report For The Year Ended June 2019To The Board of DirectorsAuditor’s Independence Declaration under Section 307C of the Corporations Act 2001As lead audit partnerfor the audit of the financial statements of Australian PotashLimitedfor the financial year ended 30 June 2019, I declare that to the best of my knowledge and belief, there have been no contraventions of:−the auditor independence requirements of the Corporations Act 2001in relation to the audit;and−any applicable code of professional conduct in relation to the audit.Yours faithfullyBENTLEYSMARK DELAURENTIS CAChartered AccountantsPartnerDated at Perth this 11thday of September 2019
CONSOLIDATED STATEMENT OF PROFIT OR
LOSS AND OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2019
REVENUE
Finance revenue
Other income
EXPENDITURE
Administration expenses
Depreciation and amortisation expenses
Employee benefits expenses
Exploration expenses
Share-based payments expense
PROFIT/(LOSS) BEFORE INCOME TAX
Income tax benefit/(expense)
Note
5
23(e)
7
2019
$
1,039
2,306,822
(923,416)
(31,444)
(754,469)
(353,246)
(102,840)
142,446
-
2018
$
1,854
1,872,243
(744,608)
(20,189)
(641,226)
(5,270,983)
(197,012)
(4,999,921)
-
TOTAL COMPREHENSIVE PROFIT/(LOSS) FOR THE PERIOD
ATTRIBUTABLE TO OWNERS OF AUSTRALIAN POTASH LIMITED
142,446
(4,999,921)
Earnings/(loss) per share (cents per share)
Basic, profit/(loss) attributable to the ordinary equity holders of
the Company
Diluted, profit/(loss) attributable to the ordinary equity holders
of the Company
22
22
0.04
0.04
(1.93)
(1.93)
The above Consolidated Statement of Profit or Loss and Other Comprehensive Income should be read in conjunction with the Notes to the
Consolidated Financial Statements.
24
Australian Potash LimitedAnnual Report For The Year Ended June 2019
CONSOLIDATED STATEMENT OF
FINANCIAL POSITION
AS AT 30 JUNE 2019
CURRENT ASSETS
Cash and cash equivalents
Trade and other receivables
TOTAL CURRENT ASSETS
NON CURRENT ASSETS
Plant and equipment
Intangibles
Exploration and evaluation
TOTAL NON CURRENT ASSETS
TOTAL ASSETS
CURRENT LIABILITIES
Trade and other payables
Provisions
TOTAL CURRENT LIABILITIES
TOTAL LIABILITIES
NET ASSETS
EQUITY
Issued capital
Reserves
Accumulated losses
TOTAL EQUITY
Note
8
9
10
11
12
13
2019
$
1,952,751
1,630,202
3,582,953
131,152
3,476
5,053,765
5,188,393
8,771,346
2,666,143
87,731
2,753,874
2,753,874
6,017,472
2018
$
2,201,681
143,246
2,344,927
119,993
13,557
-
133,550
2,478,477
575,518
63,824
639,342
639,342
1,839,135
23,896,438
1,501,938
(19,380,904)
6,017,472
19,963,387
1,399,098
(19,523,350)
1,839,135
The above Consolidated Statement of Financial Position should be read in conjunction with the Notes to the Consolidated
Financial Statements.
25
Australian Potash LimitedAnnual Report For The Year Ended June 2019 CONSOLIDATED STATEMENT OF
CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2019
BALANCE AT 1 JULY 2017
Loss for the period
TOTAL COMPREHENSIVE LOSS
TRANSACTIONS WITH OWNERS IN THEIR
CAPACITY AS OWNERS
Shares and options issued during the period
Share issue transaction costs
Issue of employee options
BALANCE AT 30 JUNE 2018
BALANCE AT 1 JULY 2018
Profit for the period
TOTAL COMPREHENSIVE PROFIT
TRANSACTIONS WITH OWNERS IN THEIR
CAPACITY AS OWNERS
Shares and options issued during the period
Share issue transaction costs
Issue of employee options
BALANCE AT 30 JUNE 2019
Issued Capital
Share-based
Payments
Reserve
Accumulated
Losses
$
$
$
13,025,831
1,202,086
(14,523,429)
-
-
7,391,785
(454,229)
-
-
-
-
-
197,012
(4,999,921)
(4,999,921)
-
-
-
19,963,387
1,399,098
(19,523,350)
Total
$
(295,512)
(4,999,921)
(4,999,921)
7,391,785
(454,229)
197,012
1,839,135
19,963,387
1,399,098
(19,523,350)
1,839,135
-
-
4,409,050
(475,999)
-
-
-
-
-
102,840
142,446
142,446
142,446
142,446
-
-
-
4,409,050
(475,999)
102,840
6,017,472
23,896,438
1,501,938
(19,380,904)
The above Consolidated Statement of Changes in Equity should be read in conjunction with the Notes to the Consolidated
Financial Statements.
26
Australian Potash LimitedAnnual Report For The Year Ended June 2019 CONSOLIDATED STATEMENT
OF CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2019
CASH FLOWS FROM OPERATING ACTIVITIES
Expenditure on exploration
Payments to suppliers and employees
Interest received
Research and development refund received
Payment for tenements
Proceeds on sale of tenements
Notes
2019
$
(330,978)
(1,640,518)
1,047
-
-
-
Joint venture agreement participation fee
Net cash outflow from operating activities
5
21
1,250,000
(720,449)
CASH FLOWS FROM INVESTING ACTIVITIES
Payments for plant and equipment
Payments for evaluation and exploration
Net cash outflow from investing activities
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issue of shares and options
Payments of share issue transaction costs
Net cash inflow from financing activities
Net increase in cash and cash equivalents
Cash and cash equivalents at the beginning of the year
Effect of exchange rate changes on cash and cash equivalents
CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR
8
(38,826)
(3,435,687)
(3,474,513)
4,250,050
(316,999)
3,933,051
(261,911)
2,201,681
12,981
1,952,751
2018
$
(6,476,059)
(1,397,579)
4,356
1,821,743
(150,000)
50,000
-
(6,147,539)
(60,276)
-
(60,276)
6,891,785
(454,229)
6,437,556
229,741
1,960,557
11,383
2,201,681
The above Consolidated Statement of Cash Flows should be read in conjunction with the Notes to the Consolidated Financial Statements.
27
Australian Potash LimitedAnnual Report For The Year Ended June 2019 NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The principal accounting policies adopted in the preparation of the financial statements are set out below. The
financial statements are for Australian Potash Limited. The financial statements are presented in the Australian
currency. Australian Potash Limited is a company limited by shares, domiciled and incorporated in Australia. The
financial statements were authorised for issue by the directors on 11 September 2019. The directors have the power
to amend and reissue the financial statements.
a. 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 and the Corporations Act 2001.
Australian Potash Limited is a for-profit entity for the purpose of preparing the financial statements. All amounts are
presented in Australian dollars unless otherwise stated.
(i)
Compliance with IFRS
The financial statements of Australian Potash Limited also comply with International Financial Reporting Standards
(IFRS) as issued by the International Accounting Standards Board (IASB).
(ii) New and amended standards adopted by the Group
The Group has adopted all of the new, revised or amending Accounting Standards and Interpretations issued by the
Australian Accounting Standards Board (“AASB”) that are mandatory for the current reporting period. The adoption of
these Accounting Standards and Interpretations did not have any significant impact on the financial performance or
position of the Group during the financial year.
(iii) Adoption of new and revised Accounting Standards
The Group has adopted all new and revised Standards and Interpretations issued by the Australian Accounting
Standards Board (the AASB) that are relevant to its operations and effective for an accounting period that begins on
or after 1 January 2018.
New and revised Standards and amendments thereof and Interpretations effective for the current year that are
relevant to the Group include:
• AASB 9 Financial Instruments and related amending Standards
• AASB 15 Revenue from Contracts with Customers and related amending Standards
• AASB 2016-5 Amendments to Australian Accounting Standards – Classification and Measurement of Share-based
Payment Transactions
AASB 9 Financial Instruments and related amending Standards
In the current year, the Group has applied AASB 9 Financial Instruments (as amended) and the related consequential
amendments to other Accounting Standards that are effective for an annual period that begins on or after 1 January
2018. The transition provisions of AASB 9 allow an entity not to restate comparatives however there was no material
impact on adoption of the standard.
Additionally, the Group adopted consequential amendments to AASB 7 Financial Instruments: Disclosures.
In summary AASB 9 introduced new requirements for:
• The classification and measurement of financial assets and financial liabilities,
•
Impairment of financial assets, and
• General hedge accounting.
28
Australian Potash LimitedAnnual Report For The Year Ended June 2019 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
AASB 15 Revenue from Contracts with Customers and related amending Standards
In the current year, the Group has applied AASB 15 Revenue from Contracts with Customers (as amended) which
is effective for an annual period that begins on or after 1 January 2018. AASB 15 introduced a 5-step approach to
revenue recognition. Far more prescriptive guidance has been added in AASB 15 to deal with specific scenarios.
There was no material impact on adoption of the standard and no adjustment made to current or prior period
amounts.
(iv) Early adoption of standards
Any new, revised or amending Accounting Standards or Interpretations that are not yet mandatory have not been
early adopted.
(v) Historical cost convention
These financial statements have been prepared under the historical cost convention, as modified by the revaluation
of available-for-sale financial assets, which have been measured at fair value.
(vi) Going concern
The financial report has been prepared on a going concern basis, which contemplates the continuity of normal
business activity and the realisation of assets and the settlement of liabilities in the ordinary course of business.
The Group generated a profit for the period of $142,446 (2018: Loss $4,999,921) and net cash outflows of $261,911
(2018: Inflows $229,741). The ability of the Group to continue as a going concern is principally dependent upon
the ability of the Group to secure funds by raising capital from equity markets and managing cashflow in line with
available funds. These conditions indicate a material uncertainty that may cast significant doubt about the ability of
the Group to continue as a going concern.
The directors have prepared a cash flow forecast, which indicates that the Group will have sufficient cash flows
to meet all commitments and working capital requirements for the 12-month period from the date of signing this
financial report.
Based on the cash flow forecasts and other factors referred to above, the directors are satisfied that the going
concern basis of preparation is appropriate. In particular, given the Group’s history of raising capital to date, the
directors are confident of the Group’s ability to raise additional funds as and when they are required.
Should the Group be unable to continue as a going concern it may be required to realise its assets and extinguish
its liabilities other than in the normal course of business and at amounts different to those stated in the financial
statements. The financial statements do not include any adjustments relating to the recoverability and classification
of asset carrying amounts or to the amount and classification of liabilities that might result should the Group be
unable to continue as a going concern and meet its debts as and when they fall due.
b. Principles of consolidation
(i)
Subsidiaries
Subsidiaries are all entities (including structured 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. The acquisition method of accounting is used to account for business combinations by the Group.
Intercompany transactions, balances and unrealised gains on transactions between Group companies are
eliminated. Unrealised losses are also eliminated unless the transaction provides evidence of the impairment of the
transferred asset. Accounting policies of subsidiaries have been changed where necessary to ensure consistency
with the policies adopted by the Group.
Non-controlling interests in the results and equity of subsidiaries are shown separately in the consolidated statement
of profit or loss and other comprehensive income, statement of changes in equity and statement of financial position
respectively.
29
Australian Potash LimitedAnnual Report For The Year Ended June 2019 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
b. Principles of consolidation (continued)
(ii) Changes in ownership interests
The Group treats transactions with non-controlling interests that do not result in a loss of control as transactions with
equity owners of the Group. A change in ownership interest results in an adjustment between the carrying amounts
of the controlling and non-controlling interests to reflect their relative interests in the subsidiary. Any difference
between the amount of the adjustment to non-controlling interests and any consideration paid or received is
recognised in a separate reserve within equity attributable to owners of Australian Potash Limited.
When the Group ceases to have control, any retained interest in the entity is remeasured to its fair value with the
change in carrying amount recognised in profit or loss. The fair value is the initial carrying amount for the purposes
of subsequently accounting for the retained interest as an associate, jointly 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.
If the ownership interest in a jointly controlled entity or associate is reduced but joint control or significant influence
is retained, only a proportionate share of the amounts previously recognised in other comprehensive income are
reclassified to profit or loss where appropriate.
c. Segment reporting
An operating segment is defined as a component of an entity that engages in business activities from which it may
earn revenues and incur expenses, whose operating results are regularly reviewed by the entity’s chief operating
decision maker to make decisions about resources to be allocated to the segment and assess its performance, and
for which discrete financial information is available.
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 full Board of Directors.
d. Revenue recognition
Interest revenue is recognised on a time proportionate basis that takes into account the effective yield on the
financial assets.
e.
Income tax
The income tax expense or revenue for the year is the tax payable on the current year’s taxable income based on the
applicable income tax rate for each jurisdiction adjusted by changes in deferred tax assets and liabilities attributable
to temporary differences and to unused tax losses.
The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the
end of the reporting period in the countries where the Group’s subsidiaries and associated operate and generate
taxable income. Management periodically evaluates positions taken in tax returns with respect to situations in which
applicable tax regulation is subject to interpretation. It establishes provisions where appropriate on the basis of
amounts expected to be paid to the tax authorities.
Deferred income tax is provided in full, using the liability method, on temporary differences arising between the
tax bases of assets and liabilities and their carrying amounts in the consolidated financial statements. However, the
deferred income tax is not accounted for if it arises from initial recognition of an asset or liability in a transaction other
than a business combination that at the time of the transaction affects neither accounting nor taxable profit or loss.
Deferred income tax is determined using tax rates (and laws) that have been enacted or substantially enacted by
the reporting date and are expected to apply when the related deferred income tax asset is realised or the deferred
income tax liability is settled.
Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it is probable
that future taxable amounts will be available to utilise those temporary differences and losses.
Deferred tax liabilities and assets are not recognised for temporary differences between the carrying amount and tax
bases of investments in controlled entities where the parent entity is able to control the timing of the reversal of the
temporary differences and it is probable that the differences will not reverse in the foreseeable future.
30
Australian Potash LimitedAnnual Report For The Year Ended June 2019 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Income tax (continued)
e.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets
and liabilities and when the deferred tax balances relate to the same taxation authority. Current tax assets and tax
liabilities are offset where the entity has a legally enforceable right to offset and intends either to settle on a net basis,
or to realise the asset and settle the liability simultaneously.
Current and deferred tax is recognised in profit or loss, except to the extent that it relates to items recognised in other
comprehensive income or directly in equity. In this case, the tax is also recognised in other comprehensive income or
directly in equity, respectively.
f.
Impairment of assets
Goodwill and intangible assets that have an indefinite useful life are not subject to amortisation and are tested
annually for impairment, or more frequently if events or changes in circumstances indicate that they might be
impaired. Other assets are reviewed for impairment whenever events or changes in circumstances indicate that
the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the asset’s
carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less
costs to sell and value in use.
For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately
identifiable cash inflows which are largely independent of the cash inflows from other assets or groups of assets
(cash-generating units). Non-financial assets that suffered an impairment are reviewed for possible reversal of the
impairment at the end of each reporting period.
g. Cash and cash equivalents
For statement of cash flows presentation purposes, cash and cash equivalents includes cash on hand, deposits held
at call with financial institutions, other shortterm 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 insignificant risk of changes
in value, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities on the statement of
financial position.
h. Trade and other receivables
Receivables are recognised at amortised cost less any Expected Credit Losses (ECL). The company has reviewed
its impairment methodology under AASB 9 for financial assets under the new ECL model for all its assets held at
amortised cost. There has been no change in the impairment impacts on the financial statements as a result of this
change in methodology.
i. Exploration and evaluation costs
Exploration and evaluation costs for each area of interest in the early stages of project life are expensed as they are
incurred.
Exploration and evaluation costs for each area of interest that has progressed to the definitive feasibility study
stage are capitalised as exploration and evaluation assets. The capitalised costs are presented as either tangible or
intangible exploration and evaluation assts according to the nature of the assets acquired.
Exploration and evaluation assets shall be assessed for impairment when facts and circumstances suggest that
the carrying amount of an exploration and evaluation asset may exceed its recoverable amount. When facts and
circumstances suggest that the carrying amount exceeds the recoverable amount an impairment loss is recognised
in the Statement of Comprehensive Income.
Refer to note 2 for further information.
j. Financial Instruments
(i)
Classification of financial instruments
The Group classifies its financial assets into the following measurement categories:
•
•
those to be measured at fair value (either through other comprehensive income, or through profit or loss); and
those to be measured at amortised cost.
31
Australian Potash LimitedAnnual Report For The Year Ended June 2019 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
j. Financial Instruments (continued)
The classification depends on the Group’s business model for managing financial assets and the contractual terms of
the financial assets’ cash flows.
The Group classifies its financial liabilities at amortised cost unless it has designated liabilities at fair value through
profit or loss or is required to measure liabilities at fair value through profit or loss such as derivative liabilities.
(ii) Financial assets measured at amortised cost
Debt instruments
Investments in debt instruments are measured at amortised cost where they have:
• contractual terms that give rise to cash flows on specified dates, that represent solely payments of principal
and interest on the principal amount outstanding; and
• are held within a business model whose objective is achieved by holding to collect contractual cash flows.
These debt instruments are initially recognised at fair value plus directly attributable transaction costs and
subsequently measured at amortised cost. The measurement of credit impairment is based on the three-stage
expected credit loss model described below in note (c) Impairment of financial assets.
(iii) Financial assets measured at fair value through other comprehensive income
Equity instruments
Investment in equity instruments that are neither held for trading nor contingent consideration recognised by the
Group in a business combination to which AASB 3 “Business Combination” applies, are measured at fair value
through other comprehensive income, where an irrevocable election has been made by management.
Amounts presented in other comprehensive income are not subsequently transferred to profit or loss. Dividends on
such investments are recognised in profit or loss unless the dividend clearly represents a recovery of part of the cost
of the investment.
(iv)
Items at fair value through profit or loss Items at fair value through profit or loss
Items at fair value through profit or loss Items at fair value through profit or loss comprise:
•
•
items held for trading;
items specifically designated as fair value through profit or loss on initial recognition; and
• debt instruments with contractual terms that do not represent solely payments of principal and interest.
Financial instruments held at fair value through profit or loss are initially recognised at fair value, with transaction
costs recognised in the income statement as incurred. Subsequently, they are measured at fair value and any gains
or losses are recognised in the income statement as they arise.
Where a financial asset is measured at fair value, a credit valuation adjustment is included to reflect the credit
worthiness of the counterparty, representing the movement in fair value attributable to changes in credit risk.
Financial instruments held for trading
A financial instrument is classified as held for trading if it is acquired or incurred principally for the purpose of selling
or repurchasing in the near term, or forms part of a portfolio of financial instruments that are managed together and
for which there is evidence of short-term profit taking, or it is a derivative not in a qualifying hedge relationship.
Financial instruments designated as measured at fair value through profit or loss
Upon initial recognition, financial instruments may be designated as measured at fair value through profit or loss.
A financial asset may only be designated at fair value through profit or loss if doing so eliminates or significantly
reduces measurement or recognition inconsistencies (i.e. eliminates an accounting mismatch) that would otherwise
arise from measuring financial assets or liabilities on a different basis.
32
Australian Potash LimitedAnnual Report For The Year Ended June 2019 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
j. Financial Instruments (continued)
A financial liability may be designated at fair value through profit or loss if it eliminates or significantly reduces an
accounting mismatch or:
•
•
if a host contract contains one or more embedded derivatives; or
if financial assets and liabilities are both managed and their performance evaluated on a fair value basis in
accordance with a documented risk management or investment strategy.
Where a financial liability is designated at fair value through profit or loss, the movement in fair value attributable
to changes in the Group’s own credit quality is calculated by determining the changes in credit spreads above
observable market interest rates and is presented separately in other comprehensive income.
(v)
Impairment of financial assets
The Group applies a three-stage approach to measuring expected credit losses (ECLs) for the following categories of
financial assets that are not measured at fair value through profit or loss:
• debt instruments measured at amortised cost and fair value through other comprehensive income;
•
•
loan commitments; and
financial guarantee contracts.
No ECL is recognised on equity investments.
Determining the stage for impairment
At each reporting date, the Group assesses whether there has been a significant increase in credit risk for exposures
since initial recognition by comparing the risk of default occurring over the remaining expected life from the
reporting date and the date of initial recognition. The Group considers reasonable and supportable information
that is relevant and available without undue cost or effort for this purpose. This includes quantitative and qualitative
information and also, forward-looking analysis.
An exposure will migrate through the ECL stages as asset quality deteriorates. If, in a subsequent period, asset
quality improves and also reverses any previously assessed significant increase in credit risk since origination, then
the provision for doubtful debts reverts from lifetime ECL to 12-months ECL. Exposures that have not deteriorated
significantly since origination are considered to have a low credit risk. The provision for doubtful debts for these
financial assets is based on a 12-months ECL. When an asset is uncollectible, it is written off against the related
provision. Such assets are written off after all the necessary procedures have been completed and the amount of
the loss has been determined. Subsequent recoveries of amounts previously written off reduce the amount of the
expense in the income statement.
The Group assesses whether the credit risk on an exposure has increased significantly on an individual or collective
basis. For the purposes of a collective evaluation of impairment, financial instruments are Grouped on the basis of
shared credit risk characteristics, taking into account instrument type, credit risk ratings, date of initial recognition,
remaining term to maturity, industry, geographical location of the borrower and other relevant factors.
(vi) Recognition and derecognition of financial instruments
A financial asset or financial liability is recognised in the balance sheet when the Group becomes a party to the
contractual provisions of the instrument, which is generally on trade date. Loans and receivables are recognised
when cash is advanced (or settled) to the borrowers.
Financial assets at fair value through profit or loss are recognised initially at fair value. All other financial assets are
recognised initially at fair value plus directly attributable transaction costs.
The Group derecognises a financial asset when the contractual cash flows from the asset expire or it transfers its
rights to receive contractual cash flows from the financial asset in a transaction in which substantially all the risks and
rewards of ownership are transferred. Any interest in transferred financial assets that is created or retained by the
Group is recognised as a separate asset or liability.
A financial liability is derecognised from the balance sheet when the Group has discharged its obligation or the
contract is cancelled or expires.
33
Australian Potash LimitedAnnual Report For The Year Ended June 2019 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
j. Financial Instruments (continued)
(vii) Offsetting
Financial assets and liabilities are offset and the net amount is presented in the balance sheet when the Group has
a legal right to offset the amounts and intends to settle on a net basis or to realise the asset and settle the liability
simultaneously.
k. Trade and other payables
These amounts represent liabilities for goods and services provided to the Group prior to the end of the financial
year which are unpaid. The amounts are unsecured, non-interest bearing and are paid on normal commercial terms.
l. Employee benefits
Wages and salaries and annual leave
Liabilities for wages and salaries, including non-monetary benefits, and annual leave expected to be settled within
12 months of the reporting date are recognised in other payables in respect of employees’ services up to the
reporting date and are measured at the amounts expected to be paid when the liabilities are settled.
m. Share-based payments
The Group provides benefits to employees (including directors) of the Group in the form of share-based payment
transactions, whereby employees render services in exchange for shares or rights over shares (equity-settled
transactions), refer to note 23.
The cost of these equity-settled transactions with employees is measured by reference to the fair value at the date
at which they are granted. The fair value is determined by an internal valuation using a Black-Scholes option pricing
model. A Monte Carlo simulation is applied to fair value the market related options.
The cost of equity-settled transactions is recognised, together with a corresponding increase
in equity, over the period in which the performance conditions are fulfilled, ending on the date on which the relevant
employees become fully entitled to the award (vesting date).
The cumulative expense recognised for equity-settled transactions at each reporting date until vesting date reflects
(i) the extent to which the vesting period has expired and (ii) the number of options that, in the opinion of the directors
of the Company, will ultimately vest. This opinion is formed based on the best available information at balance
date. 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.
No expense is recognised for awards that do not ultimately vest, except for awards where vesting is conditional upon
a market condition.
Where 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.
Options over ordinary shares have also been issued as consideration for the acquisition of interests in tenements and
other services. These options have been treated in the same manner as employee options described above, with the
expense being included as part of exploration expenditure.
n.
Issued capital
Ordinary shares are classified as equity.
Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction,
net of tax, from the proceeds. Incremental costs directly attributable to the issue of new shares or options for the
acquisition of a business are not included in the cost of the acquisition as part of the purchase consideration.
34
Australian Potash LimitedAnnual Report For The Year Ended June 2019 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
o. Earnings per share
(i)
Basic earnings per share
Basic earnings per share is calculated by dividing the profit attributable to owners of the company, 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 year.
(ii) Diluted earnings per share
Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into
account the after income tax effect of interest and other financing costs associated with dilutive potential ordinary
shares and the weighted average number of shares assumed to have been issued for no consideration in relation to
dilutive potential ordinary shares.
p. Goods and Services Tax (GST)
Revenues, expenses and assets are recognised net of the amount of associated GST, unless the GST incurred is not
recoverable from the taxation authority. In this case it is recognised as part of the cost of acquisition of the asset or as
part of the expense.
Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net amount of GST
recoverable from, or payable to, the taxation authority is included with other receivables or payables in the statement
of financial position.
Cash flows are presented on a gross basis. The GST components of cash flows arising from investing or financing
activities which are recoverable from, or payable to the taxation authority, are presented as operating cash flows.
q. New accounting standards and interpretations not yet adopted
Australian Accounting Standards and Interpretations that have recently been issued or amended but are not yet
mandatory, have not been early adopted by the Group for the annual reporting period ended 30 June 2019. The
Group’s assessment of the impact of these new or amended Accounting Standards and Interpretations, most
relevant to the Group, are set out below.
AASB 16 : Leases
This standard is applicable to annual reporting periods beginning on or after 1 January 2019. When effective, this
Standard will replace the current accounting requirements applicable to leases in AASB 117 : Leases and related
Interpretations. AASB 16 introduces a single lessee accounting model that eliminates the requirement for leases to
be classified as operating or finance leases.
The main changes introduced by the new Standard are as follows:
•
recognition of a right-of-use asset and liability for all leases (excluding short-term leases with less than 12
months of tenure and leases relating to low-value assets);
• depreciation of right-of-use assets in line with AASB 116 : Property, Plant and Equipment in profit or loss and
unwinding of the liability in principal and interest components;
•
inclusion of variable lease payments that depend on an index or a rate in the initial measurement of the lease
liability using the index or rate at the commencement date;
• application of a practical expedient to permit a lessee to elect not to separate non-lease components and
instead account for all components as a lease; and
•
inclusion of additional disclosure requirements.
The transitional provisions of AASB 16 allow a lessee to either retrospectively apply the Standard to comparatives
in line with AASB 108 or recognise the cumulative effect of retrospective application as an adjustment to opening
equity on the date of initial application.
The Company has performed a preliminary review of the adoption of AASB 16. As a result of this review the Company
has determined that there is unlikely to be a material impact, of AASB16 on its business and, therefore, no change is
necessary to Company accounting policies at this time.
35
Australian Potash LimitedAnnual Report For The Year Ended June 2019 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
r. Critical accounting judgements, estimates and assumptions
The preparation of these 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:
Environmental Issues
Balances disclosed in the financial statements and notes thereto are not adjusted for any pending or enacted
environmental legislation, and the directors understanding thereof. At the current stage of the Group’s development
and its current environmental impact the directors believe such treatment is reasonable and appropriate.
Taxation
Balances disclosed in the financial statements and the notes thereto related to taxation are based on the best
estimates of the directors. These estimates take into account both the financial performance and position of
the Group as they pertain to current income taxation legislation, and the directors understanding thereof. No
adjustment has been made for pending or future taxation legislation. The current income tax position represents that
directors’ best estimate, pending an assessment by the Australian Taxation Office. With regards to the research and
development incentive, AusIndustry reserves the right to review claims made under the R&D legislation.
Share-based payments
Share-based payment transactions, in the form of options to acquire ordinary shares, are valued using the Black-
Scholes option pricing model. A Monte Carlo simulation is applied to fair value the market related element of the
shares or rights. Both models use assumptions and estimates as inputs.
2. CHANGE IN ACCOUNTING POLICY
Capitalisation of Exploration and Evaluation Expenditure
The Company re-assessed its accounting for exploration and evaluation expenditure during the year with respect
to the recognition of costs associated with areas of interest that have progressed to a definitive feasibility stage. The
Company has previously expensed all exploration and evaluation expenditure when incurred.
During the year, the Company elected to change the method of accounting for exploration and evaluation
expenditure relating to areas of interest that have progressed to a definitive feasibility study stage as the Company
believes that this will provide more relevant information to the users of its financial statements and is more aligned
to industry accepted practices. The Company has applied the change in policy retrospectively but there was no
impact on adoption of the new accounting policy in the prior year.
3. FINANCIAL RISK MANAGEMENT
The Group’s activities expose it to a variety of financial risks: market risk (including currency risk, interest rate risk and
price risk), credit risk and liquidity risk. The Group’s overall risk management program focuses on the unpredictability
of financial markets and seeks to minimise potential adverse effects on the financial performance of the Group.
Risk management is carried out by the full Board of Directors as the Group believes that it is crucial for all board
members to be involved in this process. The Managing Director and Chief Executive Officer, with the assistance
of senior management as required, has responsibility for identifying, assessing, treating and monitoring risks and
reporting to the board on risk management.
a. Market Risk
(i)
Foreign exchange risk
As all operations are currently within Australia, the Group is not exposed to any material foreign exchange risk.
(ii) Commodity price risk
Given the current level of operations the Group is not exposed to commodity price risk.
36
Australian Potash LimitedAnnual Report For The Year Ended June 2019 3. FINANCIAL RISK MANAGEMENT (continued)
a. Market Risk (continued)
(iii)
Interest rate risk
The Group is exposed to movements in market interest rates on cash and cash equivalents. The Group policy is to
monitor the interest rate yield curve out to six months to ensure a balance is maintained between the liquidity of cash
assets and the interest rate return. The entire balance of cash and cash equivalents for the Group $1,952,751 (2018:
$2,201,681) is subject to interest rate risk. The weighted average interest rate received on cash and cash equivalents
by the Group was 2.4% (2018: 2.6%).
Sensitivity analysis
At 30 June 2019, if interest rates had changed by -/+ 100 basis points from the weighted average rate for the year
with all other variables held constant, post-tax loss for the Group would have been $15,947 lower/higher (2018:
$14,198 lower/higher) as a result of lower/higher interest income from cash and cash equivalents.
b. Credit Risk
The Group has no significant concentrations of credit risk. The maximum exposure to credit risk at balance date is the
carrying amount (net of provision for impairment) of those assets as disclosed in the statement of financial position
and notes to the financial statements.
As the Group does not presently have any debtors, lending, significant stock levels or any other credit risk, a formal
credit risk management policy is not maintained.
c. Liquidity Risk
The Group manages liquidity risk by continuously monitoring forecast and actual cash flows and ensuring sufficient
cash and marketable securities are available to meet the current and future commitments of the Group. Due to the
nature of the Group’s activities, being mineral exploration, the Group does not have ready access to credit facilities,
with the primary source of funding being equity raisings. The Board of Directors constantly monitor the state of
equity markets in conjunction with the Group’s current and future funding requirements, with a view to initiating
appropriate capital raisings as required.
The financial liabilities of the Group are confined to trade and other payables as disclosed in the statement of
financial position. All trade and other payables are non-interest bearing and due within 12 months of the reporting
date. Financial assets mature within 3 months of balance date.
d. Fair Value Estimation
The fair value of financial assets and financial liabilities must be estimated for recognition and measurement or for
disclosure purposes. The carrying amount of all financial assets and financial liabilities of the Group at the balance
date approximate their fair value due to their short term nature.
4. SEGMENT INFORMATION
For management purposes, the Group has identified only one reportable segment being exploration activities
undertaken in Australia. This segment includes activities associated with the determination and assessment of the
existence of commercial economic reserves, from the Group’s mineral assets in this geographic location.
Segment performance is evaluated based on the operating profit and loss and cash flows and is measured in
accordance with the Group’s accounting policies.
5. OTHER INCOME
Proceeds from Joint Venture Farm-In Agreement (i)
Research and development tax incentive (ii)
Other
2019
$
1,250,000
1,048,612
8,210
2,306,822
2018
$
-
1,821,743
50,500
1,872,243
(i) The Company and St Barbara Limited (SBM) entered into an Earn in & Joint Venture Agreement, covering tenure at the Lake Wells Gold
Project over various tenements. Under the terms agreed, SBM paid APC $1.25M in cash consideration for entering into the Agreement
and has agreed to pay a minimum exploration expenditure of $1.75M in the first year.
(ii)
Incudes $279k tax provision as per Note 12.
37
Australian Potash LimitedAnnual Report For The Year Ended June 2019 6. EXPENSES
Loss before income tax includes the following specific expenses:
Minimum lease payments relating to operating leases
Defined contribution superannuation expense
Depreciation of plant and equipment
Amortisation of intangibles
7.
INCOME TAX
Income tax expense
a.
Current tax
Deferred tax
b. Numerical reconciliation of income tax expense to
prima facie tax payable
Loss from continuing operations before income tax expense
Prima facie tax benefit at the Australian tax rate of 27.5%
Tax effect of not deductible expenses in calculating taxable income
Movements in unrecognised temporary differences
Tax effect of current period tax losses for which no deferred tax asset has
been recognised
Income tax expense
c. Unrecognised temporary differences
Deferred Tax Assets (at 27.5%)
On Income Tax Account
Accruals and other provisions
Depreciation variances
Capital raising costs
Carry forward tax losses
Set off of deferred tax liabilities
Net deferred tax assets
2019
$
50,004
70,380
27,667
3,777
-
-
-
142,446
39,173
(287,214)
(554,498)
802,539
-
109,451
-
186,234
3,803,766
4,099,451
(561,088)
3,538,364
2018
$
50,004
69,190
16,412
3,777
-
-
-
(4,999,921)
(1,374,978)
561
(96,393)
1,470,810
-
7,894
1,128
167,730
3,396,594
3,573,346
(900,848)
2,672,498
Less deferred tax assets not recognised
(3,538,364)
(2,672,498)
Deferred Tax Liabilities (at 27.5%)
Prepayments
Exploration
Set off against deferred tax assets
-
11,450
549,638
561,088
(561,088)
-
-
-
900,848
900,848
(900,848)
-
Net deferred tax assets have not been brought to account as it is not probable within the immediate future that tax
profits will be available against which deductible temporary differences and tax losses can be utilised.
The Group’s ability to use losses in the future is subject to the Group satisfying the relevant tax authority’s criteria for
using these losses.
38
Australian Potash LimitedAnnual Report For The Year Ended June 2019 8. CASH AND CASH EQUIVALENTS
Cash at bank and in hand
Short-term deposits
2019
$
1,927,751
25,000
1,952,751
2018
$
2,176,681
25,000
2,201,681
Cash at bank and in hand earns interest at floating rates based on daily bank deposit rates.
9. TRADE AND OTHER RECEIVABLES
GST receivable
Research and development incentive receivable
(i)
Other receivables
230,263
1,327,579
72,360
1,630,202
(i) The FY2018 research and development tax incentive receivable was received subsequent to year end.
10. PLANT AND EQUIPMENT
Computer
Equipment
Plant and
Equipment
Motor Vehicles
Cost
Balance at 1 July 2017
Additions
Balance at 30 June 2018
Additions
Balance at 30 June 2019
Accumulated Depreciation
Balance at 1 July 2017
Depreciation for the year
Balance at 30 June 2018
Depreciation for the year
Balance at 30 June 2019
Net Book Value
Balance at 30 June 2018
Balance at 30 June 2019
$
3,823
6,418
10,241
11,955
22,196
787
2,403
3,190
4,515
7,705
7,051
14,491
$
78,129
11,765
89,894
26,871
116,765
5,036
12,256
17,292
14,733
32,025
72,601
84,740
11. EXPLORATION AND EVALUATION
Beginning of the financial year
Additions
End of the financial year
$
-
42,093
42,093
-
42,093
-
1,753
1,753
8,419
10,172
40,340
31,921
2019
$
-
5,053,765
5,053,765
75,297
-
67,949
143,246
Total
$
81,952
60,276
142,228
38,826
181,054
5,823
16,412
22,235
27,667
49,902
119,993
131,152
2018
$
-
-
-
The value of the Company’s interest in exploration expenditure is dependent upon:
• The continuance of the Company’s rights to tenure of the areas of interest;
• The results of future exploration; and
• The recoupment of costs through successful development and exploitation of the areas of interest or,
alternatively, by their sale.
39
Australian Potash LimitedAnnual Report For The Year Ended June 2019
12. TRADE AND OTHER PAYABLES
Trade payables
Other payables and accruals
(i)
2019
$
1,954,692
711,451
2,666,143
2018
$
412,678
162,840
575,518
(i) Other payables includes a balance of $279k relating to a tax provision. This balance was recognised as a contingent liability in the
prior year.
13. ISSUED CAPITAL
a. Share capital
Ordinary shares fully paid
b. Other equity securities
Options
2019
Notes
No. of
securities
No. of
securities
$
2018
$
13(c), 13(f)
357,573,073
23,543,143 304,358,073
19,610,092
13(d)
102,355,711
353,295
54,505,576
353,295
Total issued capital
23,896,438
19,963,387
c. Movements in ordinary share capital
Beginning of the financial year
304,358,073
19,610,092
221,454,213
13,008,920
-
-
-
-
-
Issued during the year:
Issued for cash at 10 cents per share
Issued for services rendered at 10 cents
per share
35,418,860
3,541,886
5,000,000
500,000
Issued for cash at 7 cents per share
715,000
50,050
42,485,000
2,973,950
Issued for cash at 8 cents per share
52,500,000
4,200,000
Share issue transaction costs
End of the financial year
d. Movements in other equity securities
Beginning of the financial year
Issued during the year:
-
Free attaching listed options
- Options issued as compensation
- Reclassification of unlisted options to listed options
21,600,000
-
(316,999)
-
-
-
(414,664)
357,573,073
23,543,143 304,358,073
19,610,092
54,505,576
353,295
16,910,670
16,911
13,125,135
-
13,125,000
159,000
-
-
-
37,594,906
-
-
-
-
(159,000)
-
-
-
-
375,949
(39,565)
102,355,711
353,295
54,505,576
353,295
-
Issued for cash at 1 cent per option
Share option transaction costs
End of the financial year
40
Australian Potash LimitedAnnual Report For The Year Ended June 2019 13. ISSUED CAPITAL (continued)
e. Movements in options on issue
Beginning of the financial year
Movements of options during the year
Unlisted options issued, exercisable at 22.5 cents, expiring 9 May 2020
Unlisted options issued, exercisable at 16.0 cents, expiring 30 November 2020
Unlisted options issued, exercisable at 20.0 cents, expiring 30 November 2020
Listed options issued, exercisable at 20.0 cents, expriring 25 October 2019
Listed options issued, exercisable at 12 cents expriing 8 August 2021
Unlisted options issued, exercisable at 22.5 cents, expiring 27 December 2021
Expired during the year
End of the financial year
f. Ordinary shares
Number of options
2019
2018
71,667,429
30,072,523
-
-
-
-
1,500,000
1,250,000
1,250,000
37,594,906
47,850,135
1,277,496
(14,000,000)
-
-
-
106,795,060
71,667,429
Ordinary shares entitle the holder to participate in dividends and the proceeds on winding up of the Company in
proportion to the number of and amounts paid on the shares held.
On a show of hands every holder of ordinary shares present at a meeting in person or by proxy, is entitled to one
vote, and upon a poll each share is entitled to one vote.
Ordinary shares have no par value and the Company does not have a limited amount of authorised capital.
g. Capital risk management
The Group’s objectives when managing capital is to safeguard its ability to continue as a going concern, so that it
may continue to provide returns for shareholders and benefits for other stakeholders.
Due to the nature of the Group’s activities, being mineral exploration, the Group does not have ready access to
credit facilities, with the primary source of funding being equity raisings. Therefore, the focus of the Group’s capital
risk management is the current working capital position against the requirements of the Group to meet exploration
programmes and corporate overheads.
The Group’s strategy is to ensure appropriate liquidity is maintained to meet anticipated operating requirements, with
a view to initiating appropriate capital raisings as required. The working capital position of the Group at 30 June 2019
and 30 June 2018 are as follows:
Cash and cash equivalents
Trade and other receivables
Trade and other payables
Provisions
Working capital position
2019
$
1,952,751
1,630,202
(2,666,143)
(87,731)
829,079
2018
$
2,201,681
143,246
(639,342)
(63,824)
1,641,761
41
Australian Potash LimitedAnnual Report For The Year Ended June 2019 14. DIVIDENDS
No dividends were paid during the financial year. No recommendation for payment of dividends has been made.
15. RELATED PARTY TRANSACTIONS
a. Parent entity
The ultimate parent entity within the Group is Australian Potash Limited.
b. Subsidiaries
Interests in subsidiaries are set out in note 16.
c. Key management personnel compensation
Short-term benefits
Post-employment benefits
Other long-term benefits
Termination benefits
Share-based payments
2019
$
427,349
40,598
-
-
86,483
554,430
2018
$
332,192
31,558
-
-
206,628
570,378
Detailed remuneration disclosures are provided in the remuneration report on pages 5 to 10.
d. Transactions and balances with other related parties
There were no transactions with other related parties, including key management personnel, during the year.
e. Loans to related parties
There were no loans to related parties, including key management personnel, during the year.
16. SUBSDIARIES
No dividends were paid during the financial year. No recommendation for payment of dividends has been made.
The consolidated financial statements incorporate the assets, liabilities and results of the following subsidiaries in
accordance with the accounting policy described in note 1(b):
Name
Country of
Incorporation
Class of Shares
Equity Holding(1)
Lake Wells Potash Pty Ltd
Australia
Ordinary
(1) The proportion of ownership interest is equal to the proportion of voting power held.
17. REMUNERATION OF AUDITORS
2019
%
100
2019
$
2018
%
100
2018
$
During the year the following fees were paid or payable for services provided by the auditor of the Group, its related
practices and non-related audit firms:
Audit services
Bentleys Audit & Corporate (WA) Pty Ltd – audit and review
of financial reports
Total remuneration for audit services
28,276
28,276
27,042
27,042
42
Australian Potash LimitedAnnual Report For The Year Ended June 2019 18. CONTINGENCIES
Tenement Acquisition Agreements
Goldphyre WA Pty Ltd
Goldphyre WA Pty Ltd and the Company are parties to a sale of Mining Tenements Agreement dated on or about 11
April 2011 under which the Company acquired a 100% interest in 9 Tenements. In consideration, the Company issued
the Vendor 7,250,000 ordinary shares and 3,625,000 options (with an exercise price of 20 cents that expired on 30
June 2015) during the 2011 financial period. The Company will also issue the Vendor with further ordinary shares in
the following circumstances, subject to any necessary regulatory or shareholder approvals:
a) 2,000,000 ordinary shares upon the Company delineating 250,000 ounces of JORC measured gold or
equivalent (as a single commodity) that can be verified as an economic deposit by an independent expert, on a
project acquired from the Vendor;
b) 2,000,000 ordinary shares upon the Company delineating a further 250,000 ounces of JORC measured gold or
equivalent (as a single commodity) that can be verified as an economic deposit by an independent expert, on a
project acquired from the Vendor; and
c) 3,000,000 ordinary shares upon the Company completing a bankable feasibility study in any of the projects
acquired from the Vendor.
Subject to the grant of a waiver in writing from ASX from Condition 10 of Chapter 1 of the Listing Rules the Company
agrees to pay the Vendor a 2% net smelter royalty on any mineral won from the tenements acquired from the Vendor.
Other than the item disclosed above and in Note 12, there have been no change in contingent liabilities or contingent
assets since the last annual reporting date.
19. COMMITMENTS
2019
$
2018
$
a. Exploration Commitments
The Group has certain commitments to meet minimum expenditure requirements on the mining exploration assets it
has an interest in.
Outstanding exploration commitments are as follows:
Within one year
Later than one year but not later than five years
Later than five years
(i)
(i) Relates to Mining Leases granted for a period of 20 years (until September 2039).
4,254,637
13,893,405
43,089,604
61,237,646
1,117,021
2,418,058
-
3,535,079
b. Lease commitments: Group as lessee
Operating leases (non-cancellable)
Minimum lease payments
Within one year
-
-
43
Australian Potash LimitedAnnual Report For The Year Ended June 2019 20. EVENTS OCCURRING AFTER THE REPORTING DATE
No matters or circumstances have arisen since the end of the financial year which significantly affected or may
significantly affect the operations of the Group, the results of those operations, or the state of affairs of the Group in
future financial periods.
21. CASH FLOW INFORMATION
a. Reconciliation of net profit/(loss) after income tax to
net cash outflow from operating activities
Net profit/(loss) for the year
NonCash Items
Depreciation and amortisation of non-current assets
Shares issued as consideration for services rendered
Share-based payments expense
Loss on disposal of intangible asset
Other
Change in operating assets and liabilities
Decrease/(increase)/decrease in trade and other receivables
Increase/(decrease) in trade and other payables
Increase in provisions
Net cash outflow from operating activities
b. Non-cash investing and financing activities
2019
$
2018
$
142,446
(4,999,921)
31,444
-
102,840
6,304
(12,982)
(1,486,956)
472,547
23,908
(720,449)
20,189
500,000
197,012
-
(11,384)
87,803
(1,979,218)
37,980
(6,147,539)
On 4 April 2019, the Company issued 13,250,000 listed options exercisable at 12 cents and expiring on 8 August 2021
at a deemed cost of $159,000 to Patersons Corporate Finance as fee for services rendered. This item is included in
‘share transaction costs’ on the statement of changes in equity of the Group.
On 24 November 2017 the Company issued 5,000,000 ordinary shares at a deemed cost of $500,000 to Ausdrill
International Pty Ltd for services rendered. This amount was included in ‘Exploration expenses’ on the statement of
profit or loss and other comprehensive income of the Group.
22. EARNINGS/(LOSS) PER SHARE
a. Reconciliation of earnings used in calculating
earnings/(loss) per share
Profit/(loss) attributable to the owners of the Company used in
calculating basic and diluted earnings/(loss) per share
b. Weighted average number of ordinary shares used in
calculating loss per share
Weighted average number of ordinary shares used as the denominator in
calculating basic profit/(loss) per share
Effects of dilution from:
Share options
Weighted average number of ordinary shares adjusted for
the effects of dilution
2019
$
2018
$
142,446
(4,999,921)
Number of shares
319,784,582
258,663,458
3,430,000
-
323,214,582
258,663,458
There have been no other transactions involving ordinary shares or potential ordinary shares between the reporting
date and the date of authorisation of these financial statements.
c.
Information on the classification of options
In the prior year, as the Group has made a loss for the year, all options on issue are considered antidilutive and have
not been included in the calculation of diluted earnings per share.
44
Australian Potash LimitedAnnual Report For The Year Ended June 2019 23. SHARE-BASED PAYMENTS
a. Director Options
The Group has provided benefits to directors of the Company in the form of options constituting share-based
payment transactions. The exercise prices of the options granted was 22.5 cents per option (2018: 16.0 to 22.5 cents).
The contractual term for the options is three years (2018: three years.)
Options granted carry no dividend or voting rights. When exercisable, each option is convertible into one ordinary
share of the Company with full dividend and voting rights.
Fair value of options granted
The weighted average fair value of the options granted during the period was 0.8 cents (2018: 4.49 cents). The
price was calculated by using the Black-Scholes European Option Pricing Model taking into account the terms and
conditions upon which the options were granted. A Monte Carlo simulation is applied to fair value the TSR element, if
applicable.
Weighted average exercise price (cents)
Weighted average life of the option (years)
Weighted average underlying share price (cents)
Expected share price volatility
Risk free interest rate
2019
$
22.5
3.0
6.8
60.0%
2.06%
2018
$
19.7
2.8
11.5
111.8%
2.06%
Historical volatility has been used as the basis for determining expected share price volatility as it assumed that this
is indicative of future trends, which may not eventuate.
b.
Incentive Option Plan
The Group has provided benefits to employees and contractors of the Company in the form of options under the
Company’s Incentive Option Plan as approved at the Annual General Meeting on 28 November 2016, constituting
a share-based payment transaction. No options were issued in the current period. No options were granted in the
current or comparative periods.
Options granted carry no dividend or voting rights. When exercisable, each option is convertible into one ordinary
share of the Company with full dividend and voting rights.
Fair value of options granted
No options were issued during the current or comparative period.
c. Summary of Share-Based Payment
Set out below are summaries of the share-based payment options granted per (a) and (b):
2019
2018
Weighted
average
exercise price
(Cents)
16.1
22.5
-
-
14.1
17.7
16.1
Number of
options
30,072,523
4,000,000
-
-
-
34,072,523
24,131,981
Number of
options
34,072,523
1,277,496
-
-
(14,000,000)
21,350,019
11,409,477
Weighted
average
exercise price
(Cents)
15.6
19.7
-
-
-
16.1
14.6
Outstanding as at 1 July
Granted
Forfeited
Exercised
Expired
Outstanding as at 30 June
Exercisable as at 30 June
The weighted average remaining contractual life of share options outstanding at the end of the year was 1.2 years
(2018: 1.6 years), and the exercise prices range from 10 to 22.5 cents (2018: 10.0 to 22.5 cents).
45
Australian Potash LimitedAnnual Report For The Year Ended June 2019 The following share-based payment arrangements were in existence during the current and prior years:
Number of
options
4,500,000
4,500,000
5,000,000
3,430,000
3,430,000
1,861,702
2,034,883
2,559,526
2,756,412
1,500,000
1,250,000
1,250,000
1,277,496
Date options issued
Expiry date
30 November 2015
30 November 2018
30 November 2015
30 November 2018
2 May 2016
22 April 2016
22 April 2016
2 May 2019
21 April 2021
21 April 2021
28 November 2016
28 November 2019
28 November 2016
28 November 2019
22 December 2016
14 December 2019
22 December 2016
14 December 2019
23 October 2017
9 May 2020
30 November 2017
30 November 2020
30 November 2017
30 November 2020
27 December 2018
27 December 2021
Exercise price
(cents)
Fair value at grant
date (cents)
12.5
17.5
12.5
10.0
15.0
17.5
22.5
17.5
22.5
22.5
16.0
20.0
22.5
3.6
3.3
5.7
7.1
6.8
4.7
4.3
4.2
3.9
5.7
7.1
6.6
0.8
d. Shares issued to suppliers
On 4 April 2019, the Company issued 13,250,000 listed options exercisable at 12 cents and expiring on 8 August
2021 at a deemed cost of $159,000 to Patersons Corporate Finance as a fee for services rendered. In the prior year,
on 24 November 2017 the Company issued 5,000,000 ordinary shares at a deemed cost of $500,000 to Ausdrill
International Pty Ltd for services rendered.
e. Expenses arising from share-based payment transactions
Total expenses arising from share-based payment transactions recognised during the year were as follows:
Shares and options included in share-based payments expense
102,840
197,012
24. PARENT ENTITY INFORMATION
The following information relates to the parent entity, Australian Potash Limited, at 30 June 2019. The information
presented here has been prepared using accounting policies consistent with those presented in Note 1.
2019
$
2018
$
Current assets
Non-current assets
Total assets
Current liabilities
Total liabilities
Issued capital
Reserves
Accumulated losses
Total equity
Profit/(loss) for the year
Total comprehensive profit/(loss) for the year
46
2019
$
3,582,954
5,188,493
8,771,447
(2,753,874)
(2,753,874)
23,896,438
1,501,938
(19,380,804)
6,017,572
142,446
142,446
2018
$
2,344,927
133,650
2,478,577
639,342
639,342
19,963,387
1,399,098
(19,523,249)
1,839,236
(4,999,921)
(4,999,921)
Australian Potash LimitedAnnual Report For The Year Ended June 2019 DIRECTORS’ DECLARATION
In the directors’ opinion:
a) the financial statements comprising the statement of profit or loss and other comprehensive income, statement
of financial position, statement of changes in equity, statement of cash flows and accompanying notes set out on
pages 24 to 46 are in accordance with the Corporations Act 2001, including:
(i). complying with Accounting Standards, the Corporations Regulations 2001 and other mandatory professional
reporting requirements; and
(ii). giving a true and fair view of the Consolidated Entity’s financial position as at 30 June 2019 and of its
performance for the financial period ended on that date;
b) there are reasonable grounds to believe that the Company will be able to pay its debts as and when they
become due and payable; and
c) a statement that the attached financial statements are in compliance with International Financial Reporting
Standards has been included in the notes to the financial statements.
The directors have been given the declarations required by section 295A of the Corporation Act 2001.
This declaration is made in accordance with a resolution of the directors.
Matt Shackleton
Managing Director & Chief Executive Officer
Perth, 11 September 2019
47
Australian Potash LimitedAnnual Report For The Year Ended June 2019 AUDIT REPORT
48
Australian Potash LimitedAnnual Report For The Year Ended June 2019 Independent Auditor's ReportTo the Members of Australian Potash LimitedReport on the Audit of the Financial ReportOpinionWe have audited the financial report of Australian Potash Limited(“the Company”)and its subsidiaries (“the Group”), which comprises the consolidated statement of financial position as at 30 June 2019, the consolidated statement of profit or loss and othercomprehensive 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:a.the accompanying financial report of the Groupis in accordance with the Corporations Act 2001, including:(i)giving a true and fair view of the Group’s financial position as at 30 June 2019and of its financial performance for the year then ended; and(ii)complying with Australian Accounting Standards and the Corporations Regulations 2001.b.the financial report also complies with International Financial Reporting Standards as disclosed in Note 1.Basis for OpinionWe conducted our audit in accordance with Australian Auditing Standards. Those standards require that we comply with relevant ethical requirements relating to audit engagements and plan and perform the audit to obtain reasonable assurance about whether the financial report is free from material misstatement. Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Reportsection of our report. We are independent ofthe Groupin accordance with the auditor independence requirements of the Corporations Act 2001and the ethical requirements of the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional Accountants(the Code) that are relevant to our audit of the financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code.We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. AUDIT REPORT
49
Australian Potash LimitedAnnual Report For The Year Ended June 2019Independent Auditor’s ReportTo the Members of Australian Potash Limited(Continued)Material Uncertainty Related to Going ConcernWithout qualifying our opinion, we draw attention to Note 1(a)(vi) in the financial report which indicates that the Group incurred net cash outflows from operating activities of $720,449 during the year ended 30 June 2019. As stated in Note 1(a)(vi), these events or conditions, along with other matters as set forth in Note 1, indicate that a material uncertainty exists that may cast significant doubt on the Group’s ability to continue as a goingconcern. Our opinion is not modified in respect of this matter.Key Audit MattersKey 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 matterswere 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.Key audit matterHow our audit addressed the key audit matterExploration Expenditure During the year the Group incurred exploration expenses of $5,407,011, of which $5,053,765was capitalised and remainder was expensed to the profit and loss. Exploration expenditure is a key audit matter due to:−The significance to the Group’s statement of profit or loss and other comprehensive income; and−The level of judgement required in evaluating management’s application of the requirements of AASB 6 Exploration for and Evaluation of Mineral Resources. AASB 6 is an industry specific accounting standard requiring the application of significant judgements, estimates and industry knowledge. −The carrying value of capitalised exploration costs represents a significant asset of the Group, we considered it necessary to assess whetherfacts and circumstances existed to suggest the carrying amount of this asset may exceed the recoverable amount; and −Determining whether impairment indicators exist involves significant judgement by management.Our audit procedures included but were notlimited to:−Assessing management’s determination of its areas of interest for consistency with the definition in AASB 6 Exploration and Evaluation of Mineral Resources(“AASB 6”);−Assessing the Group’s rights to tenure for a sample of tenements;−Testing the Group’s additions to mineral exploration expenditure for the year by evaluating a sample of recorded expenditure for consistency to underlying records, the capitalisation requirements of the Group’s accounting policy and the requirements of AASB6;−By testing the status of the Group’s tenure and planned future activities, reading board minutes and discussions with management we assessed each area of interest for one or more of the following circumstances that may indicate impairment of the mineral exploration expenditure:−The licenses for the rights to explore expiring in the near future or are not expected to be renewed; AUDIT REPORT
Independent Auditor’s Report
To the Members of Australian Potash Limited (Continued)
Key audit matter
How our audit addressed the key audit matter
−
−
−
Substantive expenditure for further
exploration in the area of interest is not
budgeted or planned;
Decision or intent by the Group to
discontinue activities in the specific area of
interest due to lack of commercially viable
quantities of resources; and
Data indicating that, although a
development in the specific area is likely to
proceed, the carrying amount of the
exploration asset is unlikely to be recorded
in full from successful development or sale.
We also assessed the appropriateness of
the related disclosures in note 11 to the
financial statements.
Other Information
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 2019, but does not include the financial
report and our auditor’s report thereon.
Our opinion on the financial report does not cover the other information and accordingly we do not express any
form of assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information and, in
doing so, consider whether the other information is materially inconsistent with the financial report or our
knowledge obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this other
information, we are required to report that fact. We have nothing to report in this regard.
Responsibilities of the Directors for the Financial Report
The directors of the Company are responsible for the preparation of the financial report that gives a true and
fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such
internal control as the directors determine is necessary to enable the preparation of the financial report that
gives a true and fair view and is free from material misstatement, whether due to fraud or error. In Note 1, the
directors also state in accordance with Australian Accounting Standard AASB 101 Presentation of Financial
Statements, that the financial report complies with International Financial Reporting Standards.
In preparing the financial report, the directors are responsible for assessing the Group’s ability to continue as a
going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of
accounting unless the directors either intend to liquidate the Group or to cease operations, or has no realistic
alternative but to do so.
50
Australian Potash LimitedAnnual Report For The Year Ended June 2019 AUDIT REPORT
51
Australian Potash LimitedAnnual Report For The Year Ended June 2019Independent Auditor’s ReportTo the Members of Australian Potash Limited(Continued)Auditor’s Responsibilities for the Audit of the Financial ReportOur responsibility is to express an opinion on the financial report based on our audit.Our objectives are to obtain reasonable assurance about whether the financial report as awhole is free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the Australian Auditing Standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of this financial report.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 andassess 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 auditevidence 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, futureevents or conditions may cause the Groupto 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 Groupto express an opinion on the financial report. We are responsible for the direction, supervision and performance of the Groupaudit. 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. AUDIT REPORT
Independent Auditor’s Report
To the Members of Australian Potash Limited (Continued)
We also provide the directors with a statement that we have complied with relevant ethical requirements
regarding independence, and to communicate with them all relationships and other matters that may
reasonably be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with the directors, we determine those matters that were of most significance
in the audit of the financial report of the current period and are therefore the key audit matters. We describe
these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or
when, in extremely rare circumstances, we determine that a matter should not be communicated in our report
because the adverse consequences of doing so would reasonably be expected to outweigh the public interest
benefits of such communication.
Report on the Remuneration Report
We have audited the Remuneration Report included in the directors’ report for the year ended 30 June 2019.
The directors of the Company are responsible for the preparation and presentation of the remuneration report
in accordance with s 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.
Auditor’s Opinion
In our opinion, the Remuneration Report of the Company, for the year ended 30 June 2019, complies with
section 300A of the Corporations Act 2001.
BENTLEYS
Chartered Accountants
MARK DELAURENTIS CA
Partner
Dated at Perth this 11th day of September 2019
52
Australian Potash LimitedAnnual Report For The Year Ended June 2019
ASX ADDITIONAL INFORMATION
Additional information required by Australian Stock Exchange Ltd and not shown elsewhere in this report is as
follows. The information is current as at 22 September 2019.
a. Distribution of equity securities
Analysis of numbers of equity security holders by size of holding:
Ordinary Shares
Number of holders
Number of shares
1
- 1,000
1,001
- 5,000
5,001
- 10,000
10,00
- 100,000
100,001 - and over
The number of equity security holders holding
less than a marketable parcel of securities are:
b. Twenty largest shareholders
The names of the twenty largest holders of quoted ordinary shares are:
34
45
191
489
340
1,099
54
3,921
184,948
1,709,533
21,967,065
333,707,606
357,573,073
69,697
Listed ordinary shares
Number of shares
Percentage of
ordinary shares
1
2
3
4
5
6
7
8
9
10
10
11
12
13
14
15
16
17
18
19
20
20
20
Yandal Investments Pty Ltd
Perth Select Seafoods Pty Ltd
Mr Paul Hare
Jemaya Pty Ltd
Cen Pty Ltd
Trade Holdings Pty Ltd
Mr Rodney James Kevan
Mr Geoffrey Donald Coultas
Mr Norman Surtees
Ausdrill International Pty Ltd
Bluedale Pty Ltd
Oceanic Capital Pty Ltd
Fakuba Pty Ltd
Mr Matthew William Shackleton & Mrs Nicole Jodie
Shackleton
Jemaya Pty Ltd
Mr Michael Owen Meredith & Mrs Tracy Lee
Meredith
Mr Paul Leslie Jost
Mr Michael Owen Meredith
Mr Philip Emrys Wall & Mrs Stephanie Wall
Mr Andrew Nunn
Milverton Pty Ltd
Global Dor Pty Ltd
Tangee Pty Ltd
32,344,352
18,500,000
15,400,000
10,684,447
10,400,615
8,500,000
6,100,000
6,000,000
5,040,565
5,000,000
5,000,000
4,500,000
4,000,000
3,636,363
3,568,925
3,528,572
3,491,219
3,485,715
3,175,000
3,100,000
3,000,000
3,000,000
3,000,000
164,455,773
9.05%
5.17%
4.31%
2.99%
2.91%
2.38%
1.71%
1.68%
1.41%
1.40%
1.40%
1.26%
1.12%
1.02%
1.00%
0.99%
0.98%
0.97%
0.89%
0.87%
0.84%
0.84%
0.84%
45.99%
53
Australian Potash LimitedAnnual Report For The Year Ended June 2019 The names of the twenty largest holders of quoted options at $0.20 expiring 25 October 2019 (APCOA) are:
Listed Options (APCOA)
Number of Options
Percentage of
Options
1
2
3
4
5
5
5
6
7
8
9
10
11
12
13
14
15
16
17
17
17
17
18
19
20
Perth Select Seafoods Pty Ltd
Oceanic Capital Pty Ltd
First Investment Partners Pty Ltd
Cen Pty Ltd
Daymist Pty Ltd
Tangee Pty Ltd
Mr Rodney James Kevan
Yundie Holdings Pty Ltd
George S Harris Superannuation Pty Ltd
Mr Michael Owen Meredith
Mr Paul Leslie Jost
Argento Fodera Pty Ltd
R & C Mazz Pty Ltd
St Barnabas Investments Pty Ltd
Mr Terrence Charles Indersmith
Mr Thomas Owen Saggers &
Mr Benjamin Saggers &
Mrs Ruth Saggers
Mr William Henry Clarke &
Mrs Fiona Marie Clarke
Mrs Joanne Louise Malaxos
Turnbull Superannuation Pty Ltd
Mr Richard Ambrose
Mr Robert John Inverarity &
Mrs Jane Inverarity
Baytown Holdings Pty Ltd
Dixtru Pty Limited
Ivyline Investments Pty Ltd
Mr Michael Owen Meredith &
Mrs Tracy Lee Meredith
4,666,667
1,516,667
1,500,000
1,383,334
1,000,000
1,000,000
1,000,000
800,000
766,667
750,000
733,334
666,667
600,000
589,334
562,711
533,334
532,050
515,000
500,000
500,000
500,000
500,000
433,334
432,335
416,667
12.41%
4.03%
3.99%
3.68%
2.66%
2.66%
2.66%
2.13%
2.04%
2.00%
1.95%
1.77%
1.60%
1.57%
1.50%
1.42%
1.42%
1.37%
1.33%
1.33%
1.33%
1.33%
1.15%
1.15%
1.11%
22,398,101
59.58%
54
Australian Potash LimitedAnnual Report For The Year Ended June 2019
The names of the twenty largest holders of quoted options at $0.12 expiring 8 August 2021 (APCOB) are:
Listed Options (APCOB)
Number of Options
Percentage of
Options
1
2
3
4
5
6
7
8
9
10
11
12
13
13
14
15
16
17
18
18
18
18
18
18
18
18
18
19
20
20
20
Embr Capital Llc
Bluedale Pty Ltd
Jemaya Pty Ltd
Mr William Tannahill Fleming
Perth Select Seafoods Pty Ltd
Yandal Investments Pty Ltd
Wythenshawe Pty Ltd
Mr Paul Hare
Jemaya Pty Ltd
Mr Yannick Zowie Berthelot
Vingo Holdings Ltd
First Investment Partners Pty Ltd
Cen Pty Ltd
Rainmaker Holdings (Wa) Pty Ltd
Rotherwood Enterprises Pty Ltd
Diacaf Holdings Pty Ltd
Thang Pty Ltd
Mr Morgan Day
Rls Engineering Pty Ltd
Tarney Holdings Pty Ltd
Mr Rodney James Kevan
Dr Anthony Michael Burke
Kassett Pty Ltd
Chifley Portfolios Pty Ltd
Trade Holdings Pty Ltd
Perth Select Seafoods Pty Ltd
Mr Michael Lynch
Mr Peter Alan Fielding Coffey & Mrs Janette Mary
Coffey
Mr Paul Leslie Jost
Mr Matthew Joel Norton & Mrs Roselynn Fay Norton
Mr Peter Stirling Smith &Mrs Denise Phyllis Smith
2,142,857
2,051,172
2,000,000
1,500,000
1,200,000
1,183,040
1,175,000
1,160,715
1,104,731
1,000,000
975,000
971,753
920,610
920,610
800,000
700,000
577,367
563,607
500,000
500,000
500,000
500,000
500,000
500,000
500,000
500,000
500,000
490,536
460,305
460,305
460,305
4.48%
4.29%
4.18%
3.13%
2.51%
2.47%
2.46%
2.43%
2.31%
2.09%
2.04%
2.03%
1.92%
1.92%
1.67%
1.46%
1.21%
1.18%
1.04%
1.04%
1.04%
1.04%
1.04%
1.04%
1.04%
1.04%
1.04%
1.03%
0.96%
0.96%
0.96%
27,317,913
57.09%
55
Australian Potash LimitedAnnual Report For The Year Ended June 2019
c. Substantial shareholders
The names of substantial shareholders who have notified the Company in accordance with section 671B of the
Corporations Act 2001 are:
Yandal Investments Pty Ltd
Perth Select Seafoods Pty Ltd
d. Voting rights
All ordinary shares (whether fully paid or not) carry one vote per share without restriction.
e. Schedule of interests in mining tenements
Number of Shares
32,344,352
18,500,000
Project
Lake Wells Potash Project
Laverton Downs
Norseman East
Tenement
E38/1903
E38/2901
E38/2505
E38/3021
E38/3039
E38/2113
E38/2114
E38/2744i
E38/2742ii
E38/2988
E38/3018
E38/3028
E38/3109
E38/3224
E38/3225
E38/3226
E38/3270
ELA38/3423
M38/1274i
M38/1275
M38/1276 ii
E38/2724
E38/3014
E38/3132
ELA38/3402
ELA38/3403
ELA38/3404
ELA63/1988
ELA63/1989
ELA63/1990
Percentage
Interest Held
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
iTenements are subject to a Sale and Split Commodity Agreement with Lake Wells Exploration Pty Ltd (Lake Wells) and Mark Creasy,
where the Company has the right to explore for and exploit potash minerals in preference to all other minerals’ exploration and prospecting
activities. Should a Mining Lease be applied for by the Company on any part of these licenses, on grant it will be transferred to 100%
Company ownership and the Company will grant to Lake Wells exploration rights and Mark Creasy prospecting rights. Any rights thus
granted cannot be exercised in preference to the Company’s activities in exploring for or exploiting potash minerals.
iiTenement transfers have been lodged to transfer 100% ownership of the lease to the Company, whereupon the Company will grant to Lake
Wells exploration rights and Mark Creasy prospecting rights. Any rights thus granted cannot be exercised in preference to the Company’s
activities in exploring for or exploiting potash minerals.
56
Australian Potash LimitedAnnual Report For The Year Ended June 2019 f. Unquoted Securities
Holders of 20% or more of the class
Class
Number of Securities
Unlisted 17.5 cent Options,
1,861,702
Expiry 28 November 2019
Unlisted 22.5 cent Options,
2,034,883
Expiry 28 November 2019
Unlisted 17.5 cent Options,
2,559,526
Expiry 14 December 2019
Unlisted 22.5 cent Options,
2,756,412
Expiry 14 December 2019
Unlisted 22.5 cent Options,
1,500,000
Expiry 9 May 2020
Unlisted 16 cent Options,
1,250,000
Expiry 30 November 2020
Unlisted 20 cent Options,
Expiry 30 November 2020
1,250,000
Unlisted 10 cent Options,
Expiry 21 April 2021
3,430,000
Unlisted 15 cent Options,
Expiry 21 April 2021
3,430,000
Unlisted 22.5 cent Options,
Expiry 27 December 2021
Number of
Holders
2
2
3
3
2
1
1
1
1
Holder Name
Matthew William Shackleton
and Nicole Jodie Shackleton
Brenton Siggs
Matthew William Shackleton
and Nicole Jodie Shackleton
Brenton Siggs
Alonso Rubio
Flux Groundwater Pty Ltd as
trustee for the Kraut Family
Trust
Leigh-Ayn Absolom
Alonso Rubio
Flux Groundwater Pty Ltd as
trustee for the Kraut Family
Trust
Number of
Securities
1,063,830
797,872
1,162,790
872,093
892,858
892,858
773,810
961,539
961,539
Leigh-Ayn Absolom
Rhett Brans
833,334
750,000
Brett Thomas Lambert &
Elspeth Margaret Lambert
Matthew William Shackleton
and Nicole Jodie Shackleton
Matthew William Shackleton
and Nicole Jodie Shackleton
1,250,000
1,250,000
Yandal Investments Pty Ltd
3,430,000
Yandal Investments Pty Ltd
3,430,000
1
James Allan Walker
1,277,496
57
Australian Potash LimitedAnnual Report For The Year Ended June 2019
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59
Australian Potash LimitedAnnual Report For The Year Ended June 2019 AUSTRALIAN POTASH LIMITED
31 Ord Street, West Perth WA 6005
PO Box 1941, West Perth WA 6872
+61 8 9322 1003
m.shackleton@australianpotash.com.au
australianpotash.com.au