Avenira
Annual Report 2021

Plain-text annual report

ANNUAL REPORT 2021 TABLE OF CONTENTS TABLE OF CONTENTS ..................................................................................................................................... 2 CORPORATE INFORMATION ......................................................................................................................... 3 DIRECTORS’ REPORT ..................................................................................................................................... 4 AUDITORS INDEPENDENCE LETTER............................................................................................................. 27 QUALIFYING STATEMENTS .......................................................................................................................... 28 CONSOLIDATED STATEMENT OF PROFIT AND LOSS AND OTHER COMPREHENSIVE INCOME ................... 29 CONSOLIDATED STATEMENT OF FINANCIAL POSITION .......................................................................... 30 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY ............................................................................ 31 CONSOLIDATED STATEMENT OF CASH FLOWS ........................................................................................ 32 DIRECTORS’ DECLARATION ......................................................................................................................... 71 INDEPENDENT AUDITORS REPORT ............................................................................................................. 72 ASX ADDITIONAL INFORMATION ................................................................................................................ 78 2 CORPORATE INFORMATION ABN 48 116 296 541 DIRECTORS Brett Clark (Executive Chairman & CEO) Kevin Dundo (Non-executive Director) Winnie Lai Hadad (Non-executive Director) Roger Harris (Non-executive Director) Dr Geoffrey Xue (Non-executive Director) COMPANY SECRETARY Graeme Smith REGISTERED OFFICE Suite 6, 100 Mill Point Road South Perth WA 6151 PRINCIPAL PLACE OF BUSINESS Suite 6, 100 Mill Point Road South Perth WA 6151 SOLICITORS Thomson Geer Lawyers Level 27, Exchange Tower, 2 The Esplanade, Perth WA 6000 BANKERS National Australia Bank Limited Level 14, 100 St George’s Terrace Perth, WA 6000 SHARE REGISTER Computershare Investor Services Pty Limited Level 11, 172 St Georges Terrace Perth, WA 6000 Telephone: 1300 787 272 AUDITORS Hall Chadwick WA Audit Pty Ltd (formerly Bentleys Audit & Corporate (WA) Pty Ltd) 283 Rokeby Road Subiaco WA 6008 INTERNET ADDRESS www.avenira.com EMAIL ADDRESS frontdesk@avenira.com STOCK EXCHANGE LISTING Avenira Limited shares are listed on the: Australian Securities Exchange (Code: AEV) 3 DIRECTORS’ REPORT DIRECTORS’ REPORT Your directors submit their report on the consolidated entity (referred to hereafter as the Group) consisting of Avenira Limited (Company) and the entities it controlled at the end of, or during, the year ended 30 June 2021. DIRECTORS The names and details of the Company’s directors in office during the financial year and until the date of signing this report are as follows. Where applicable, all current and former directorships held in listed public companies over the last three years have been detailed below. Directors were in office for this entire period unless otherwise stated. NAMES, QUALIFICATIONS, EXPERIENCE AND SPECIAL RESPONSIBILITIES Brett Clark, B. Eng., Dip. Fin. (Executive Chairman and CEO) Mr. Clark is a senior executive with 30 years’ experience in the mining and energy sectors in funding, operations and advisory, notably with Hamersley Iron Pty Ltd, CRA Limited, WMC Resources Limited, Iron Ore Company of Canada, Rio Tinto Limited and subsequently with Ernst and Young, Tethyan Copper Company Pty Ltd, Oakajee Port and Rail, Mitsubishi Development and Murchison Metals. Mr. Clark has extensive leadership experience in board positions held at both listed and unlisted companies. His expertise ranges from project development to operations, sales and marketing in gold, iron ore, copper, nickel, coal, industrial minerals, and upstream oil and gas across Australia, Africa, Asia, Latin America and North America. His funding experience includes bond raisings, debt restructuring, equity, and mezzanine financing in the US and Asian capital markets. Shares Held – Nil Options Held – 12,000,000 options ex @ $0.02 expiring 30/11/22 12,000,000 options ex @ $0.03 expiring 30/11/22 Other Current Listed Company Directorships Nil Former Listed Company Directorships in the last 3 years Non-Executive Director of Great Lakes Graphite Corp from November 2017 to July 2019 Non-Executive Director of Nelson Resources Limited from July 2016 to January 2019 Managing Director of Ardea Resources from April 2018 to June 2018 Winnie Lai Hadad, B. Com, MSc, BA, CPA, AusIMM (Non-executive Director) Ms Lai Hadad has expertise in change management, corporate governance and business process improvement and has been involved in listings on the Australian Securities Exchange. Ms Lai Hadad has been involved with both investments into China and out-bound investment from China. Her past roles include implementing Coca-Cola bottling strategies into Greater China and administering the first Chinese direct investment in an iron ore mine in the Pilbara Region of Western Australia. Ms Lai Hadad is a lawyer admitted to practice in Western Australia, a qualified CPA, holds a BA, BCom and MSc, and is a graduate of both the Australian Institute of Company Directors and Governance Institute of Australia. Shares Held – Nil Options Held – 6,000,000 options ex @ $0.02 expiring 30/11/22 6,000,000 options ex @ $0.03 expiring 30/11/22 Other Current Listed Company Directorships Non-Executive Director of Vonex Limited Former Listed Company Directorships in the last 3 years Nil Special Responsibilities Chair of the Audit Committee; Member of the Remuneration and Nomination Committee 4 DIRECTORS’ REPORT Kevin Dundo, LLB, B. Com, FCPA (Non-executive Director) Mr Kevin Dundo is a practicing lawyer, specialising in commercial and corporate law and in particular, mergers and acquisitions, with experience in the mining services and financial services industries. He is a member of the Law Society of Western Australia, Law Council of Western Australia, Australian Institute of Company Directors and a Fellow of the Australian Society of Certified Practicing Accountants. Shares Held – 6,250,000 Options Held – 6,000,000 options ex @ $0.02 expiring 30/11/22 6,000,000 options ex @ $0.03 expiring 30/11/22 Other Current Listed Company Directorships Non-executive Chairman of Red 5 Limited Non-executive Director of Imdex Limited Former Listed Company Directorships in the last 3 years Non-executive Director of Cash Converters International Limited from February 2015 to November 2020 Special Responsibilities Chair of the Remuneration and Nomination Committee; Member of the Audit Committee Roger Harris, B(App)Sc (Non-executive Director) (appointed 8 July 2021) Mr Harris has a B App Science and was the founding director / owner of a large service based company with branches in Western Australia and SE Asia and managed the exit sale that was ultimately acquired by a multi national top 25 ASX listed company. Mr Harris has continued to operate a family office for 30 years investing in the natural resources sector and other asset classes and continues in the development and growth of business’ through mergers and acquisitions. Shares Held – 1,000,000 (Direct) Options Held – Nil 10,430,928 (Indirect) Other Current Listed Company Directorships Nil Former Listed Company Directorships in the last 3 years Nil Special Responsibilities Member of the Audit Committee Dr Geoffrey Xunxing Xue, BSc, MSc, PhD, AusIMM (Non-executive Director) (appointed 23 July 2021) Dr Xue has both a PhD in Economic Geology and a Masters in Economic Geology as well as a Bachelor (Honours) in Geology. Dr Xue has more than 10 years’ experience in mining and investment banking in Australia and has had significant experience in gold project development from exploration through resource definition and feasibility study to commercial production. Dr Xue is currently the Project Manager at Anova Metals Ltd (AWV) and previously a senior executive in KPMG Corporate Finance. Shares Held – Nil Options Held – Nil Other Current Listed Company Directorships Nil Former Listed Company Directorships in the last 3 years Nil Special Responsibilities Member of the Remuneration and Nomination Committee COMPANY SECRETARY Graeme Smith, B.Ec, MBA, MComLaw, FCPA, FCG (CS, CGP), FGIA Mr. Smith is the principal of Wembley Corporate Services which provide corporate secretarial, chief financial officer and corporate governance services. Mr. Smith has over 30 years’ experience in company secretarial work. 5 DIRECTORS’ REPORT PRINCIPAL ACTIVITIES The principal activities of the Company during the course of the financial year, was the development of the Jundee South project in Western Australia. The Group’s operations are discussed in the Review of Operations section of this report. CONSOLIDATED RESULTS Consolidated loss before income tax expense from continuing operations Income tax benefit LOSS FOR THE YEAR YEAR END 30 JUNE 2021 $ YEAR END 30 JUNE 2020 $ (2,105,959) - (2,105,995) (3,395,173) - (3,395,173) DIVIDENDS No dividends were paid or declared during the financial year. No recommendation for payment of dividends has been made. REVIEW OF OPERATIONS A review of the operations of the Group during the financial year and likely developments and expected results is included in the Operating and Financial Review set out below. 6 DIRECTORS’ REPORT JUNDEE SOUTH GOLD PROJECT, WESTERN AUSTRALIA (100% OWNED) The Yandal Greenstone belt is located in the north-eastern part of the Norseman-Wiluna belt of the Archaean Craton in Western Australia. It is one of few Archaean greenstone belts containing multiple million-ounce deposits, including Jundee, Bronzewing and Darlot (Figure 1). The Jundee South Project area is located within 3km of the Jundee Mine and covers more than a 60km strike of highly prospective greenstone stratigraphy. The project area contains major regional structures interpreted to control gold mineralisation throughout the Yandal Greenstone Belt and contains a number of historically defined gold occurrences. Access is via a well-established road system. Accommodation and facilities including flight services are well established in the district, given the number of operating mines in the area. Figure 1: Jundee South Project location map 7 DIRECTORS’ REPORT DRILLING PROGRAM The drilling program was designed to test eight Priority 1 targets and six Priority 2 targets identified from an assessment of all available geologic, geochemical and geophysical information obtained on the Jundee South Gold Project. A total of 259 aircore holes were drilled for 20,147 metres. This comprised 247 holes for 19,134 metres, testing all accessible Priority 1 and 2 targets. Characteristic geological features of lithologies, structures, and alteration comparable to nearby gold projects, were identified in the Priority 1 areas. An additional 12 holes were drilled for 1,013 metres to confirm the grades, lithologies, and structures from selected historic RAB intercepts. These targets include: • • • • cypIWR584: 8m @ 0 .64g/t Au from 28m including 4m @ 0.98g/t Au from 28m gcmLVRB244: 8 m @ 5.74g/t Au from 32m, including 4m @ 11.3g/t Au from 32m gcmMFRB133: 12m @ 0.35g/t Au from 32m, including 4m @ 0.85g/t from 32m gcmSHRB36: 4m @ 9.68g/t Au from 84m, including 2m @ 12.90g/t Au from 85m Figure 2 shows the locations of holes drilled and summary statistics for each target. Figure 2. Location of Aircore holes drilled and summary statistics for targets tested. 8 DIRECTORS’ REPORT MAIDEN AIRCORE DRILLING PROGRAM RESULTS On 3 February 2021, the Company received all composite sample results from its maiden aircore drilling program at Jundee South which was carried out in H2 of 2020. In addition, Avenira resampled anomalous four composite intercepts at one metre sampling intervals. Resampling results received to date and for non-resampled anomalous composites are contained in Table 1 and displayed in Figure 3. Significance of intercepts – Target MF02 The anomaly intersected in hole JSA20_058 is associated with quartz-veined felsic volcanic rocks. The intercept of 7m @ 1.36g/t Au is open at depth and has an open potential strike length of +720 metres due to its unconfirmed orientation. This presents an encouraging target for deeper drill testing during the RC program scheduled for Q4, 2021. Figure 4 displays chip piles from hole JSA20_058 and Figure 5 displays the location of drilling at the MF02 target. Significance of intercepts – Target YaN11 (gcmSHRB36) Target YaN11 contains the historic intercept 4m@9.68g/t Au in hole gcmSHRB36. Aircore drilling to test for strike extensions around this anomaly intercepted several anomalies as outlined in Table 1 and displayed in Figure 6. The most significant intersection was contained in hole JSA20_125, which has identified potential for a 360 metre strike extension to the anomaly in gcmSHRB36, subparallel to NW striking aeromagnetic linear features. This anomaly is associated with a redox front, a zone in the regolith profile where soil conditions change from oxidising to reducing, normally with an associated change in colour of drill spoil. This may result in a concentration of gold in these vertical positions which have been remobilised from mineralised locations nearby due to weathering processes. As such, there may be higher grade mineralisation present adjacent to the intercept. The geology of this area is complex, with the presence of felsic porphyries, foliated basalts and intermediate volcanics with varying degrees of quartz veining and sulphide development. This provides a high priority target for geological interpretation and RC drilling. 9 DIRECTORS’ REPORT Significance of intercepts – Target SH04 This composite anomaly is hosted in weathered dolerite, a similar rock to that hosting gold mineralisation in the adjacent Jundee Gold Mine. Felsic intrusives are also present adjacent to the intercept which may provide a source of heat and fluid associated with gold mineralisation. Drill spoil from associated hole JSA20_223 is displayed in Figure 7. Resampling of the intersection and geological interpretation is required for this target to confirm its similarities to the adjacent Jundee stratigraphy and suitability for follow-up drilling. Significance of intercepts – Target cypIWR584 This composite anomaly is hosted in gabbro, a mafic rock which may provide a suitable locale for gold deposition. In this case, the anomaly sits along a N-S trending magnetic feature and is open along strike to the NNW for up to 1,300 metres. Drill chips from the associated hole are shown in Figure 8. This composite anomaly requires resampling and geological interpretation to assess the need for follow-up work. Figure 3. Location of Aircore holes drilled and anomalous analyses received 10 DIRECTORS’ REPORT Figure 4. Mineralised zone in hole JSA20_058 (35-42m) at Target MF02 Figure 5. Location of anomaly in JSA20_058 at the MF02 Target 11 DIRECTORS’ REPORT Figure 6. Location of anomalies adjacent to historical intercept gcmSHRB36 at the Target YaN11. Figure 7. Mineralised zone in hole JSA_223 (52-56m) from Target SH04 Figure 8. Mineralised zone in JSA20_304 (52-56m) 12 DIRECTORS’ REPORT ACQUISITION OF PROSPECTING LICENCES On 10 March 2021, the Company acquired two Prospecting Licences south of its flagship project at Jundee South. These licences (P53/1712 and P53/1713) expand Avenira’s ground position in the world class Yandal Greenstone Belt (see Figure 1). The licences are located on a magnetic feature along which the Flushing Meadows gold deposit of Yandal Resources Limited (ASX:YRL) is located (see Figure 9). An initial geological interpretation has identified stratigraphy similar to that identified at the Flushing Meadows deposit (see Figure 10). Figure 9. RTP 1VD Magnetics of P53/1712 & P53/1713 Figure 10. Geological Interpretation of P53/1712 & P53/1713 HERITAGE ACCESS AGREEMENT Significant advancements were made in negotiations with the Tarlka Matuwa Piarku Aboriginal Corporation (TMPAC) towards execution of a long-term land access agreement. A meeting was held with the TMPAC board during the final quarter of the reporting period to discuss the agreement and work towards finalising the agreement to commencing a long- term mutually beneficial relationship. TENURE The Jundee South Project comprises four granted Exploration Licences and two Prospecting Licence Applications covering more than 720km2: Tenement ID E53/1856 E53/1859 E53/2078 E53/2079 P53/1712 P53/1713 Total Status Granted Granted Granted Granted Application Application Area (approx km2) 117 192 197 217 1 2 726 Table 2: Jundee South Tenement Status COMPETENT PERSONS STATEMENT The information in this report that relates to exploration results is based on and fairly represents information and supporting documentation prepared by Mr. Steve Harrison, a Competent Person who is a member of the Australian Institute of Geoscientists (AIG). Mr. Harrison is an employee of Avenira Limited. Mr. Harrison has sufficient experience that is relevant to the style of mineralisation and type of deposit under consideration and to the activity being undertaken to qualify as a Competent Person as defined in the December 2012 edition of the “Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves” (JORC Code). Mr Harrison consents to the inclusion in the report of the matters based upon his information in the form and context in which it appears. 13 DIRECTORS’ REPORT WONARAH PHOSPHATE PROJECT, NORTHERN TERRITORY (100% OWNED) SUMMARY Scoping study commenced on the Wonarah Project during the December 2019 Quarter. The scoping study includes the review of existing data utilised in the Wonarah Definitive Feasibility Study (DFS) completed a decade ago. Avenira will also review Diammonium phosphate (DAP) & Monoammonium phosphate (MAP) technology as a value-added step in the processing options in parallel with the option of utilising the Novophos technology. ▪ Considered to be one of Australia’s largest phosphate projects: Figure 11 Location map of Wonarah Phosphate Project ▪ Measured Resource of 64.9 Mt @ 22.4% P2O5 ▪ ▪ Indicated Resource of 133 Mt @ 21.1% P2O5 Inferred Resource of 352 Mt @ 21% P2O5 (15% cut-off) ▪ Excellent infrastructure ▪ Northern Gas Pipeline runs through the project area. ▪ ▪ Adjacent to national highway and a high-quality water source Port and rail is under capacity allowing easy expansion of Wonarah project ▪ Scoping study has commenced for options of Novaphos and MAP/ DAP processing technologies. 14 DIRECTORS’ REPORT TENURE The Wonarah Phosphate Project comprises of three granted exploration licences covering more than 151 km2: Tenement ID EL29840 EL29849 EL32359 Total Status Granted Granted Granted Area (approx km2) 41.92 11.19 98.80 151.91 ANNUAL MINERAL RESOURCE STATEMENT AS AT 30/06/21 Table 2: Wonarah Phosphate Tenement Status WONARAH PROJECT, NORTHERN TERRITORY, AUSTRALIA Tonnes P2O5 Al2O3 CaO Fe2O3 K2O MgO MnO Na2O SiO2 TiO2 Mt % % Measured 78.3 20.8 4.85 % 28 % % % % 1.11 0.43 0.25 0.04 % 0.1 % % 39.7 0.21 17.5 4.75 23.2 1.49 0.47 0.2 0.04 0.09 48.3 0.22 18.3 4.77 24.4 18 4.8 1.4 2.1 1.1 0.46 0.21 0.04 0.09 46.1 0.22 0.5 0.2 0.08 0.05 0.37 0.19 0.04 0.09 46 37 0.2 0.19 1.53 0.47 0.21 0.04 0.09 39.7 0.22 24 30 28 Measured 64.9 22.4 4.47 21.1 4.77 Cut off P2O5 % Resource Category 10 15 Indicated M+I Inferred 222 300 512 Indicated M+I Inferred 133 198 335 21.5 4.67 28.7 1.39 0.44 21 4.5 28 2.0 0.5 0.2 0.2 0.04 0.09 38.8 0.21 0.10 0.06 39 0.2 ANNUAL CHANGE IN RESOURCE CATEGORY WONARAH PROJECT Category Inferred (10% cut-off) Inferred 15% (cut-off) Tonnes (M) % P2O5 Tonnes (M) % P2O5 2019 2020 Change 542 512 -30 18 18 - 352 335 -17 21 21 - Table 3: Mineral Resource Statement The Mineral Resource estimates for the Wonarah project have decreased by approximately 5% in the Inferred Resource category for tonnage. The grades remain unchanged from the 2019 estimates. The estimates for the Measured Resource and Indicated Resource categories remain unchanged from 2019. The decrease in the Inferred Resource category is due to a reduction in tenement area peripheral to the main mineralized zones. The mineral resource statement is based on, and fairly represents, information and supporting documentation prepared by a Competent Person. The mineral resources statement as a whole is approved by Russell Fulton, a Competent Person who is a Member of the Australian Institute of Geoscientists. Mr. Fulton is employed by Russell Fulton Pty Ltd. Mr. Fulton was the former Geological Manager and a full-time employee of the Company and now provides geological consulting services to the Company. Mr. Fulton has sufficient experience deemed relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking 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. Fulton consents to the inclusion in the report of the matters based on his information in the form and context in which it appears. 15 DIRECTORS’ REPORT INVESTMENTS AND CORPORATE INFORMATION BOARD AND EXECUTIVE CHANGES In July 2021 the Company welcomed Roger Harris and Dr Geoffrey Xue to the Board as Non-executive Directors. Mr. Harris and Dr Xue were appointed 8 July 2021 and 23 July respectively. FINANCING Fully Underwritten Entitlements Issue and Placement This financial year, the Company completed a Placement and Entitlement Issue to raise a total of $3.4 million (before costs). The Placement comprised of 277.28 million New Shares, issues at $0.008 per Share to raise $2.2 million (before costs). The Company also undertook a non-renounceable pro-rata entitlements issue (Entitlements Offer), under which eligible shareholders had the opportunity to subscribe for two New Shares for every seven existing shares held at the same issue price of $0.008 per share. The Entitlements Offer raised a further $1.25 million (before costs) and was fully underwritten by Taylor Collison. Loan Facility On 8 March 2021, the Company entered into a $3 million, 3-year loan agreement with an interest rate of 8% pa and a mining mortgage and security over the Company’s Wonarah Project and specified listed securities. The Company received shareholder approval at the General Meeting held 14 June 2021. Further details of the Loan Facility are set out in Note 15. 16 DIRECTORS’ REPORT FINANCIAL REVIEW FINANCIAL INFORMATION At 30 June 2021, the total closing cash balance was $3,123,043 (2020: $1,288,337). The Group has recorded an operating loss after income tax for the year ended 30 June 2021 of $2,105,959 (2020: loss of $5,669,716). OPERATING RESULTS FOR THE YEAR Summarised operating results are as follows 2021 REVENUE $ 2021 RESULTS Consolidated entity activities before income tax 29,026 (2,105,959) Shareholder Returns Basic loss per share from continuing operations (cents) Basic loss per share from discontinued operations (cents) 2021 2020 (0.26) - (0.54) (0.36) SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS Other than detailed in the Review of Operations above there were no significant changes in the state of affairs of the Group. SIGNIFICANT EVENTS AFTER THE BALANCE DATE Other than as disclosed above, no event has occurred since 30 June 2021 that would materially affect the operations of the Group, the results of the Group or the state of affairs of the Group. RISK MANAGEMENT The Board is responsible for ensuring that risks, and 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. SAFETY AND HEALTH Avenira aspires to a goal of causing zero harm to people. In this regard, the Company is committed to undertake our activities so as to protect the safety and health of employees, contractors, visitors and the communities in which we operate. There were no lost time injuries during the year. 17 DIRECTORS’ REPORT ENVIRONMENTAL REGULATION AND PERFORMANCE The Group is subject to significant environmental regulation with respect to its exploration activities. The Group aims to ensure the appropriate standard of environmental care is achieved, and in doing so, as far as it is aware is in compliance with all environmental legislation. The directors of the Group are not aware of any breach of environmental legislation for the year under review. DIRECTORS’ MEETINGS During the year the number of meetings of directors (including meetings of committees of directors) and the number of meetings attended by each director were as follows: DIRECTORS MEETINGS AUDIT COMMITTEE MEETINGS Brett Clark Winnie Lai Hadad Kevin Dundo A 16 16 16 B 16 16 16 A * 2 2 B * 2 2 REMUNERATION AND NOMINATION COMMITTEE MEETINGS A * 1 1 B * 1 1 Notes A – Number of meetings attended. B – Number of meetings held during the time the director held office or was a member of the Committee during the year. * – Not a member of the Committee. SHARES UNDER OPTION At the date of this report there are 60,000,000 unissued ordinary shares in respect of which options are outstanding. Balance at the beginning of the year Movements of share options Issued 24 December 2019 ($0.02) Issued 24 December 2019 ($0.03) Issued 08 September 2020 ($0.025) Issued 08 September 2020 ($0.035) Total number of options outstanding as at the date of this report NUMBER OF OPTIONS 60,000,000 24,000,000 24,000,000 6,000,000 6,000,000 60,000,000 INSURANCE OF DIRECTORS AND OFFICERS During or since the financial year, the Company has paid premiums insuring all the directors of Avenira Limited against costs incurred in defending proceedings for conduct involving: a. willful breach of duty; or b. a contravention of sections 182 or 183 of the Corporations Act 2001, as permitted by section 199B of the Corporations Act 2001. The total amount of insurance contract premiums paid is $82,305 (2020: $130,363). 18 DIRECTORS’ REPORT NON-AUDIT SERVICES AND INDEMNIFICATION OF AUDITORS Details of amounts paid or payable to the auditor for audit and non-audit services provided during the period, and an assessment by the Board of whether non-audit service provided during the period are compatible with general standards of independence for auditors imposed by the Corporations Act 2001 are set out in Note 19 - Remuneration of Auditors, to the Consolidated Financial Statements. To the extent permitted by law, the Company has agreed to indemnify its auditors, Hall Chadwick WA Audit Pty Ltd (formerly Bentleys Audit & Corporate (WA) Pty Ltd), as part of the terms of its audit engagement agreement against claims by third parties arising from the audit (for an unspecified amount). No payment has been made to indemnify Hall Chadwick during or since the financial year. 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. CORPORATE GOVERNANCE In recognising the need for the highest standard of corporate behaviour and accountability, the Directors of Avenira Limited support and adhered to the principles of sound corporate governance. The Board recognises the recommendations of the Australia Securities Exchange Corporate Governance Council, and considers that Avenira Limited is in compliance, to the extent with those guidelines, which are of importance to the commercial operation of a junior listed resources company. During the financial year, shareholders continued to receive the benefit of an efficient and cost-effective corporate governance policy for the Company. The Company has established a set of corporate governance policies and procedures and these can be found within the Company’s Corporate Governance section on the Company’s website: http://www.avenira.com/about-us/governance. 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 27. RESIGNATION AND APPOINTMENT OF AUDITOR Ernst & Young resigned as the Company’s auditor after having received consent from ASIC effective from 12 January 2021. The Company has appointed Hall Chadwick WA Audit Pty Ltd (formerly Bentleys Audit & Corporate (WA) Pty Ltd) as its auditor for the period ended 31 December 2020 and year ended 30 June 2021. The Company will seek confirmation of the appointment of Hall Chadwick WA Audit Pty Ltd to continue as its auditor for future years at the Company’s AGM to be held later this year. The Company sought a change in auditors to an audit firm that it considered to be a better fit with the Company’s size and requirements. 19 DIRECTORS’ REPORT REMUNERATION REPORT - AUDITED The remuneration report is set out under the following main headings: Introduction A. B. Remuneration governance C. Overview of executive remuneration D. Details of remuneration of Key Management Personnel E. Executive KMP employment agreements F. Overview of Non-executive Director remuneration G. Share-based compensation H. Equity holdings A. INTRODUCTION The remuneration report for the year ended 30 June 2021 outlines the director and executive remuneration arrangements of the Company and Group. The information in this remuneration report has been provided in accordance with section 300A of the Corporations Act 2001. The information has been audited as required by section 308(3C) of the Corporations Act 2001. For the purpose of this report, Key Management Personnel (“KMP”) of the Group are defined as those persons having authority and responsibility for planning, directing and controlling the major activities of the Company and Group, directly or indirectly, including any Director (whether executive or otherwise) of the Company. The table below outlines the KMP of the Group during the financial year ended 30 June 2021. Unless otherwise indicated, the individuals were KMP for the entire financial year. NAME Directors Brett Clark POSITION Executive Chairman and CEO Winnie Lai Hadad Non-executive Director Kevin Dundo Non-executive Director Other key management personnel - - B. REMUNERATION GOVERNANCE Remuneration and Nomination Committee TERM AS KMP Full financial year Full financial year Full financial year - The Board retains overall responsibility for remuneration policies and practices within the Group. The Board has established a Remuneration and Nomination Committee (“RNC”) which operates in accordance with its charter as approved by the Board. A copy of the charter is available under the corporate governance section of the Group’s website. The RNC is primarily responsible for making recommendations to the Board on remuneration arrangements for Executive Directors, Non-executive Directors and other Senior Executives. The Corporate Governance Statement provides further information on the role of this committee. The RNC meets as required throughout the year. Refer to page 18 for the number of Committee meetings held during the year. The Executive Chairman/CEO attends certain RNC meetings by invitation, where management input is required. The Executive Chairman/CEO is not present during any discussions relating to his own remuneration arrangements. 20 DIRECTORS’ REPORT Use of remuneration consultants The RNC seeks external remuneration advice where necessary to ensure it is fully informed when making remuneration decisions. Remuneration advisors are engaged by, and report directly to, the RNC. No remuneration consultants were engaged during the financial year. Securities trading policy The Groups securities trading policy applies to all Non-executive Directors and executives. The policy prohibits employees from dealing in Avenira Limited securities while in possession of material non-public information relevant to the Group. The policy is available to be viewed within the corporate governance section of the Company’s website. Voting and comments – 2020 Annual General Meeting (AGM) The 2020 remuneration report was passed on a poll at the 2020 AGM. The Company did not receive any specific feedback at the AGM regarding its remuneration practices. C. OVERVIEW OF EXECUTIVE REMUNERATION The remuneration policy of Avenira Limited has been designed to align executives’ objectives with shareholders and business objectives. The Board of Avenira believes the policy to be appropriate and effective in its ability to: • • attract and retain high quality directors and executives to run and manage the Company. create goal congruence between directors, executives and shareholders. The executive KMP receive an appropriate level and mix of remuneration consisting of fixed remuneration and variable remuneration in the form of incentive opportunities. The RNC reviews executive KMP packages annually by reference to the Group’s performance, executive performance and comparable information from industry sectors and other listed companies in similar industries. Elements of Executive Remuneration The executive remuneration framework is comprised of: a. b. Fixed Remuneration - Base Salary, including superannuation (if applicable) Variable Remuneration - Incentives and Cash Bonuses 1. FIXED REMUNERATION - BASE SALARY, INCLUDING SUPERANNUATION All executive KMPs receive a base cash salary (which is based on factors such as scope of the role, skills, experience, location and length of service) and superannuation contributions, where applicable. The executive KMPs, where applicable, receive a superannuation guarantee contribution required by the government, which is currently 9.50%, and do not receive any other retirement benefits. 2. VARIABLE REMUNERATION – INCENTIVES AND CASH BONUSES Incentives in the form of equities and cash bonuses are provided to certain executive KMP at the Board’s discretion. The policy is designed to provide a variable “at risk” component within the executive KMP’s total remuneration packages to attract, retain and motivate the highest calibre of executive KMP and reward them for performance that results in long term growth in shareholder wealth through achievement of the Company’s financial and strategic objectives. Receipt of variable remuneration in any form is not guaranteed under any executive KMP’s employment contract. 21 DIRECTORS’ REPORT 2.1 LONG TERM INCENTIVE (LTI) In 2020, 48,000,000 Options were issued to the Directors as LTI’s. No LTI’s were issued in 2021. Refer to Section G of the Remuneration Report for further details. 2.2 SHORT TERM INCENTIVE (STI) Under the STI, certain executives have the opportunity to earn an annual incentive award. The STI recognises and rewards annual performance. The bonus KPIs are chosen as they reflect the core drivers of the short-term performance and also provide a framework for delivering sustainable value to the Group and its shareholders. Executive Chairman/CEO 2021 Short-Term Incentive The Executive Chairman/CEO, Mr Brett Clark, is engaged pursuant to a Consultant Service Agreement, which provides for Mr Clark to participate in a short term incentive scheme on a yearly basis, being no more than an incentive payment of 50% of his yearly remuneration, based on certain non-financial measures. A summary of the non-financial measures to be achieved and their weightings are set out in the table below: SUMMARY Complete corporate transactions as directed by the Board Complete as planned and in budget initial exploration on Jundee South and develop long term plan for the Jundee Project Individual Performance Review % 60 15 25 The Board approved the final STI award based on assessment of performance against the non-financial measures. Based on the assessment, a cash bonus in the amount of $45,000 was paid to the Executive Chairman and CEO Mr. Brett Clark, following the end of the 2021 financial year. Relationship between remuneration policy and company performance The remuneration policy has been tailored to increase the direct goal congruence between shareholders, directors and executives. The table below shows the performance of the Company over the last 5 years: EPS (cents) Share Price Net Profit / (Loss) before discontinued operations 2021 (0.26) $0.007 2020 (0.54) $0.009 2019 (0.30) $0.006 2018 (0.42) $0.02 2017 (5.09) $0.07 (2,105,959) (3,395,173) (3,084,624) 3,225,309 (30,579,063) As the Company is in the development phase the performance of the Company is not related to the profit or earnings of the Company. 22 DIRECTORS’ REPORT D. DETAILS OF REMUNERATION OF KEY MANAGEMENT PERSONNEL (KMP) The table below shows details of each component of total remuneration for KMP. SHORT-TERM POST EMPLOYMENT LONG-TERM SHARE-BASED PAYMENTS SALARY & FEES CASH BONUS $ $ NON- MONETARY (7) SUPERANNUATION TERMINATION BENEFITS LONG SERVICE LEAVE ANNUAL LEAVE TOTAL CASH RELATED PERFORMANCE RIGHTS OPTIONS (8) TOTAL REMUNERATION PERFORMANCE RELATED $ $ $ $ $ $ $ $ $ % Directors Brett Clark (1) 2021 2020 Winnie Lai Hadad (2) 2021 2020 Kevin Dundo (3) 2021 2020 Louis Calvarin (4) 2021 2020 Timothy Cotton (5) 2021 2020 Subtotal Directors 2021 2020 Other executive KPM Rod Wheatley (6) 250,000 290,458 72,000 33,290 72,000 33,290 - 225,000 - 18,452 45,000 70,000 - 25,000 - 25,000 - - - - 46,688 - - - - - - 48,027 - - 23,750 12,667 6,840 - 6,840 - - - - - 394,000 600,490 45,000 120,000 46,688 48,027 37,430 12,667 - - - - - - - 48,327 - - - 48,327 2021 2020 - 44,901 - - - - - 4,266 - 97,880 Total KMP compensation 2021 2020 394,000 645,391 45,000 120,000 46,688 48,027 37,430 16,933 - 146,207 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 365,438 373,125 78,840 58,290 78,840 58,290 - 321,354 - 18,452 523,118 829,511 - 147,047 523,118 976,558 - - - - - - - - - - - - - - - - - 187,025 - 93,513 - 93,513 - - - - - 365,438 560,150 78,840 151,803 78,840 151,803 - 321,354 - 18,452 523,118 374,051 1,203,562 - - - - 147,047 523,118 374,051 1,350,609 - 33% - 62% - 62% - - - - - - (1) The amount represents the total remuneration paid to Brett Clark and includes (2020: $117,125) of fees paid for advisory services provided during the year. Mr. Clark is remunerated through CBD Executive Services Pty Ltd; a business of which Mr. Clark is the principal. (2) Winnie Lai Hadad appointed as Non-Executive Director on 22 October 2019. (3) Kevin Dundo was appointed as Non-Executive Director on 22 October 2019. (4) Louis Calvarin resigned as Non-Executive Director on 22 October 2019. (5) Timothy Cotton resigned as Non-Executive Director on 22 October 2019. (6) Rodney Wheatley resigned as Chief Financial Officer and Joint Company Secretary on 26 August 2019. (7) Non-monetary benefits include car lease payments and income insurance. (8) The amount represents Option Holdings granted in the 2020 financial year to the Directors. Refer to Share-Based Compensation on page 25 for further details. 23 DIRECTORS’ REPORT E. EXECUTIVE KMP EMPLOYMENT AGREEMENTS The Group has entered into formal employment contracts with Executive KMP. The employment contracts for executive KMP have no fixed term and do not prescribe how remuneration levels are to be modified from year to year. A summary of the main provisions of these contracts for the year ended 30 June 2021 are set out below: NAME TERMS Brett Clark (Executive Chairman and CEO) Base salary of $250,000 (exclusive of superannuation contributions), reviewed annually. 6 months’ notice by Mr. Clark. 6 months by Company and upon change of control. Termination payments to reflect appropriate notice, except in cases of termination for cause. Two tranches of 12,000,000 options issued to Mr. Clark approved by shareholders 29 November 2019. Mr. Clark shall be eligible to participate in Short Term Incentive Schemes up to 50% of his base salary that the Company may offer. F. OVERVIEW OF NON-EXECUTIVE DIRECTOR REMUNERATION The Board policy is designed to attract and retain high caliber directors and to remunerate Non-executive Directors at market rates for comparable companies for time, commitment, and responsibilities. The Board determines payments to the Non-executive Directors and reviews their remuneration annually, based on market practice, duties and accountability. The Executive Chairman’s fee will be determined independently to the fees of the Non-executive Directors based on comparative roles in the external market. External advice from independent remuneration consultants is sought when required. The maximum aggregate amount of fees that can be paid to Non-executive Directors is subject to approval by shareholders at the Annual General Meeting. The most recent determination was at the November 2016 Annual General Meeting, where shareholders approved the maximum aggregate amount of fees that can be paid to Non- executive Directors to be $600,000. The Company makes superannuation contributions on behalf of the Non-executive Directors in accordance with its Australian statutory superannuation obligations, and each director may sacrifice part of their fee for further superannuation contribution by the Company. Any equity components of Non-executive Directors’ remuneration, including the issue of options or Performance Rights, are required to be approved by shareholders prior to award. The table below summaries the Non-executive fees for the 2021 financial year: Board Non-executive Directors Committee Audit Chair Remuneration and Nomination Chair BASE FEES 2021 BASE FEES 2020 $72,000 $48,000 Nil Nil Nil Nil Termination payments The Board must approve all termination payments provided to all employees at the level of director, executive or senior management to ensure such payments reflect the Company’s remuneration policy and are in accordance with the Corporations Act 2001. Other transactions and balances with KMPs and their related parties (i) The Company has an exclusive licence to ultilise the Novaphos, Inc (Novaphos) technology in Australia. Former Director Mr. Cotton has an equity interest in Novaphos. 24 DIRECTORS’ REPORT G. SHARE-BASED COMPENSATION There were no share-based payments issued to directors or other KMP during the 2021 financial year. Share based compensation – Option Holdings Option Holdings affecting remuneration in the current or future reporting period are as follows: Key terms of options granted to KMP NUMBER VESTED GRANT DATE NUMBER GRANTED DURING THE YEAR VESTING DATE EXPIRY DATE FAIR VALUE PER OPTION AT GRANT DATE, $ EXERCISE PRICE, $ VESTED % 2020 TRANCHE 1 Directors Brett Clark 29-Nov-19 12,000,000 Winnie Lai Hadad 29-Nov-19 6,000,000 29-Nov-19 29-Nov-19 Kevin Dundo TRANCHE 2 Directors Brett Clark 29-Nov-19 6,000,000 29-Nov-19 29-Nov-19 12,000,000 29-Nov-19 Winnie Lai Hadad 29-Nov-19 6,000,000 Kevin Dundo 29-Nov-19 6,000,000 29-Nov-19 29-Nov-19 Further information is set out in Note 28 of the financial statements. 30-Nov-22 30-Nov-22 30-Nov-22 30-Nov-22 30-Nov-22 30-Nov-22 $0.008 $0.008 $0.008 $0.007 $0.007 $0.007 $0.02 $0.02 $0.02 $0.03 $0.03 $0.03 100% 100% 100% 100% 100% 100% 25 DIRECTORS’ REPORT H. EQUITY HOLDINGS Option Holdings The number of options over ordinary shares in the Company held during the financial year by each director of Avenira Limited and other KMP of the Group, including their personally related parties, are set out below: BALANCE AT START OF THE YEAR GRANTED AS COMPENSATION EXERCISED EXPIRED BALANCE AT END OF THE YEAR VESTED AND EXERCISABLE UNVESTED 2021 Directors Brett Clark Winnie Lai Hadad Kevin Dundo 24,000,000 12,000,000 12,000,000 - - - - - - - - - 24,000,000 24,000,000 12,000,000 12,000,000 12,000,000 12,000,000 - - - All vested options were exercisable at the end of the year. Full details can be found at Note 16. Shareholdings The number of shares in the Company held during the financial year by each director of Avenira Limited and other KMP of the Group, including their personally related partied, are set as follows: BALANCE AT START OF THE YEAR RECEIVED DURING THE YEAR FOR RIGHTS CONVERTED GRANTED AS REMUNERATION OTHER CHANGES DURING THE YEAR BALANCE AT END OF THE YEAR 2021 Directors Brett Clark Winnie Lai Hadad Kevin Dundo - - - - - - - - - - - - - 6,250,000 6,250,000 None of the shares above are held nominally by the directors or any of the KMP. There were no other transactions and balances with KMP and their related parties other than as disclosed. End of Remuneration Report Signed in accordance with a resolution of the directors. BRETT CLARK Executive Chairman Perth, 22 September 2021 26 To the Board of Directors Auditor’s Independence Declaration under Section 307C of the Corporations Act 2001 As lead audit partner for the audit of the financial statements of Avenira Limited for the year ended 30 June 2021, I declare that to the best of my knowledge and belief, there have been no contraventions of: • the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and • any applicable code of professional conduct in relation to the audit. Yours faithfully, HALL CHADWICK WA AUDIT PTY LTD DOUG BELL CA Partner Dated 22nd of September 2021 QUALIFYING STATEMENTS STATEMENT OF GOVERNANCE ARRANGEMENTS AND INTERNAL CONTROLS Governance of Avenira Limited’s Mineral Resources estimation process is a key responsibility of the Executive Management of the Company. The Chief Geologist of the Company oversees technical reviews of the estimates and the evaluation process is augmented by utilising Avenira’s in-house knowledge in operational and project management, ore processing and commercial/financial areas. The Company also utilises external consultants for these purposes. The Chief Geologist is responsible for managing all Avenira’s drilling programs, including resource definition drilling. The estimation of Mineral Resources is done by an independent contractor, MPR Geological Consultants Pty Ltd. The Company has adopted quality assurance and quality control protocols based on current and best practice regarding all field aspects including drill hole surveying, drill sample collection, sample preparation, sample security, provision of duplicates, blanks and matrix-matched certified reference materials. All geochemical data generated by laboratory analysis is examined and analysed by the Chief Geologist before accession to the Company database. Data is subject to additional vetting by the independent contractor who carries out the resource estimates. Resource estimates are based on well-founded, industry-accepted assumptions and compliance with standards set out in the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves. Mineral resource estimates are subject to peer review by the independent contractor and a final review by Avenira’s Executive Management before market release. Avenira Limited reports its mineral resources and ore reserves on an annual basis, in accordance with the Australian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (the JORC code) 2012 Edition. PREVIOUSLY REPORTED RESULTS There is information in this report relating to Mineral Resource estimates which was previously reported on 15 Mar 2013, 30 Apr 2014 and 31 Jan 2020. The Company confirms that it is not aware of any new information or data that materially affects the information included in the original market announcements and, in the case of estimates of Mineral Resources or Ore Reserves that all material assumptions and technical parameters underpinning the estimates in the relevant market announcement continue to apply and have not materially changed. The company confirms that the form and context in which the Competent Person’s findings are presented have not been materially modified from the original market announcement. CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION All statements, trend analysis and other information contained in this document relative to markets for Avenira’s trends in resources, recoveries, production and anticipated expense levels, as well as other statements about anticipated future events or results constitute forward-looking statements. Forward-looking statements are often, but not always, identified by the use of words such as “seek”, “anticipate”, “believe”, “plan”, “estimate”, “expect” and “intend” and statements that an event or result “may”, “will”, “should”, “could” or “might” occur or be achieved and other similar expressions. Forward-looking statements are subject to business and economic risks and uncertainties and other factors that could cause actual results of operations to differ materially from those contained in the forward- looking statements. Forward-looking statements are based on estimates and opinions of management at the date the statements are made. Avenira does not undertake any obligation to update forward-looking statements even if circumstances or management’s estimates or opinions should change. Investors should not place undue reliance on forward-looking statements. 28 CONSOLIDATED STATEMENT OF PROFIT AND LOSS AND OTHER COMPREHENSIVE INCOME YEAR ENDED 30 JUNE 2021 INCOME Interest income Other income EXPENDITURE Depreciation and amortisation expense Salaries and employee benefits expense Net foreign currency gain/(loss) Impairment of exploration and evaluation expenditure Interest expense - leases Net gain/(loss) on disposal of fixed asset / intangibles Share based payment (expense)/reversal Administrative and other expenses LOSS BEFORE INCOME TAX FROM CONTINUING OPERATIONS INCOME TAX BENEFIT LOSS FOR THE YEAR FROM CONTINUING OPERATIONS Discontinued Operations Net gain/(loss) after tax for the year from discontinued operations LOSS FOR THE YEAR OTHER COMPREHENSIVE INCOME Items that may be reclassified subsequently to Profit or Loss, net of tax Exchange differences on translation of foreign operations Recycled to the profit and loss on derecognition of controlled entity Exchange differences arising during the year Financial assets measured at fair value through profit and loss Net fair value gain / (loss) on financial assets measured at fair value through OCI Other comprehensive income / (loss) for the year, net of tax TOTAL COMPREHENSIVE INCOME / (LOSS) FOR THE YEAR Income / (Loss) for the year is attributable to: Owners of Avenira Limited Non-controlling interest Total comprehensive income / (loss) for the year is attributable to: Owners of Avenira Limited Non-controlling interest LOSS PER SHARE From continuing operations Basic profit per share (cents) Diluted profit per share (cents) From total operations Basic loss per share (cents) Diluted loss per share (cents) CONSOLIDATED NOTES 2021 $ 2020 $ 5 5 6 12 10 28 6 7 11 27 27 27 27 18,086 10,940 35,680 - (34,214) (857,575) 51 (92,924) (4,515) - (77,919) (1,067,889) (2,105,959) - (22,283) (744,576) 607 (596,960) (3,611) (47,129) (374,051) (1,642,850) (3,395,173) - (2,105,959) (3,395,173) - (2,105,959) (2,274,543) (5,669,716) - - - 418,550 418,550 2,332,312 119,851 2,452,163 67,882 2,520,045 (1,687,409) (3,149,671) (2,105,959) - (2,105,959) (5,312,588) (357,128) (5,669,716) (1,687,409) - (2,792,543) (357,128) (1,687,409) (3,149,671) (0.26) (0.26) (0.26) (0.26) (0.54) (0.54) (0.84) (0.84) The above Consolidated Statement of Profit and Loss and Other Comprehensive Income should be read in conjunction with the Notes to the Consolidated Financial Statements. 29 CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2021 CURRENT ASSETS Cash and cash equivalents Trade and other receivables TOTAL CURRENT ASSETS NON-CURRENT ASSETS Trade and other receivables Financial assets Plant and equipment Capitalised exploration and evaluation expenditure Right-of-use assets TOTAL NON-CURRENT ASSETS TOTAL ASSETS CURRENT LIABILITIES Trade and other payables Lease Liability Provisions Amounts received in advance on sale of financial assets TOTAL CURRENT LIABILITIES NON-CURRENT LIABILITIES Provisions Lease Liability Loans and borrowings TOTAL NON-CURRENT LIABILITIES TOTAL LIABILITIES NET ASSETS NOTES CONSOLIDATED 2021 $ 2020 $ 8 9 9 18 12 10 13 10 14 14 10 15 3,123,043 129,209 3,252,252 1,481,600 1,718,543 - 7,511,257 48,800 10,760,200 14,012,452 527,286 38,148 43,404 31,306 640,144 1,768,081 16,741 2,480,000 4,264,822 4,904,966 9,107,486 1,288,337 109,139 1,397,476 1,481,600 424,993 3,796 6,344,326 84,348 8,339,063 9,736,539 361,023 35,816 6,415 - 403,254 1,739,674 55,986 - 1,795,660 2,198,914 7,537,625 EQUITY Issued capital Reserves Accumulated losses Capital and reserves attributable to members of Avenira Limited Non-controlling interest TOTAL EQUITY 16 17(a) 17(b) 140,516,513 18,290,545 (149,699,572) 9,107,486 - 9,107,486 137,337,162 25,259,540 (155,059,077) 7,537,625 - 7,537,625 The above Consolidated Statement of Financial Position should be read in conjunction with the Notes to the Consolidated Financial Statements. 30 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY CONSOLIDATED NOTES ISSUED CAPITAL RESERVES ACCUMULATED LOSSES TOTAL NON- CONTROLLING INTEREST TOTAL ATTRIBUTABLE TO OWNERS OF AVENIRA LIMITED BALANCE AT 30 JUNE 2019 Loss for the year Other comprehensive income/(loss) for the year TOTAL COMPREHENSIVE INCOME FOR THE YEAR TRANSACTIONS WITH OWNERS IN THEIR CAPACITY AS OWNERS Shares cancelled during the year Shares issued during the year Share based payment Discontinued operations BALANCE AT 30 JUNE 2020 Loss for the year Other comprehensive income/(loss) for the year TOTAL COMPREHENSIVE INCOME FOR THE YEAR TRANSACTIONS WITH OWNERS IN THEIR CAPACITY AS OWNERS Shares issued during the year Share issue transaction costs Share based payment NCI Reserve transfer BALANCE AT 30 JUNE 2021 $ $ $ $ $ $ 142,280,149 27,014,485 (149,389,359) 19,905,275 (3,427,261) 16,478,014 - - - (4,942,987) - - - - (5,312,588) (5,312,588) (357,128) (5,669,716) 2,520,044 2,520,044 - - 374,051 (4,649,041) - 2,520,045 - 2,520,045 (5,312,588) (2,792,544) (357,128) (3,149,672) - - - (4,942,987) - 374,051 - - - (4,942,987) - 374,051 (357,128) (5,006,169) 3,784,389 (1,221,780) 137,337,162 25,259,540 (155,059,077) 7,537,625 - - - 3,376,783 (197,432) - 418,550 418,550 - - - - 77,919 (7,465,464) (2,105,959) (2,105,959) - 418,550 (2,105,959) (1,687,409) - - - 7,465,464 3,376,783 (197,432) 77,919 - 140,516,513 18,290,545 (149,699,572) 9,107,486 - - - - - - - - - 7,537,625 (2,105,959) 418,550 (1,687,409) 3,376,783 (197,432) 77,919 - 9,107,486 28 11 28 The above Consolidated Statement of Changes in Equity should be read in conjunction with the Notes to the Consolidated Financial Statements. 31 CONSOLIDATED STATEMENT OF CASH FLOWS YEAR ENDED 30 JUNE 2021 CASH FLOWS FROM OPERATING ACTIVITIES Payments to suppliers and employees Receipts for other income Interest received Payment of lease interest NOTES CONSOLIDATED 2021 $ 2020 $ (1,737,879) 10,940 (3,739,733) 3,561 17,448 (4,515) 33,487 (3,611) NET CASH (OUTFLOW) FROM OPERATING ACTIVITIES 26 (1,714,006) (3,706,296) CASH FLOWS FROM INVESTING ACTIVITIES Expenditure on mining interests Payments for mine development Payments for exploration expenditure Payments for plant and equipment Receipts received in advance for sale of financial instruments Refund from security deposits Proceeds from sale of discontinued operations, net of cash disposed Purchase of financial instruments (1,166,931) - (64,517) - 31,306 - - (875,000) (770,515) (962,814) (3,700) - 1,527 4,284,234 (341,491) NET CASH (OUTFLOW) FROM INVESTING ACTIVITIES (2,075,142) 2,207,240 CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from share-buy back Transaction costs on issue of shares Proceeds from loans and borrowings Payment of principal portion of lease liabilities Repayments of loans NET CASH INFLOW FROM FINANCING ACTIVITIES NET (DECREASE)/INCREASE IN CASH AND CASH EQUIVALENTS Cash and cash equivalents at the beginning of the financial year Effects of exchange rate changes on cash and cash equivalents 3,376,783 (197,432) 2,480,000 (35,548) - 5,623,803 1,834,655 1,288,337 51 - - 3,028,126 (16,408) (674,950) 2,336,768 837,712 300,544 150,081 CASH AND CASH EQUIVALENTS AT THE END OF THE FINANCIAL YEAR 8 3,123,043 1,288,337 The above Consolidated Statement of Cash Flows should be read in conjunction with the Notes to the Consolidated Financial Statements. 32 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, YEAR ENDED 30 JUNE 2021 1. BASIS OF PREPARATION The financial statements are for the consolidated entity consisting of Avenira Limited and its subsidiaries (the “Company” or the “Group). The financial statements are presented in the Australian currency. Avenira Limited is a for profit company limited by shares, domiciled and incorporated in Australia, whose shares are publicly traded on the Australian Securities Exchange. The Company’s registered office and principal place of business is Suite 6, 100 Mill Point Road South Perth WA 6151. The financial statements were authorised for issue in accordance with a resolution of the directors on 20 September 2021. The directors have the power to amend and reissue the financial statements. These general-purpose financial statements have been prepared in accordance with Australian Accounting Standards, other authoritative pronouncements of the Australian Accounting Standards Board and the Corporations Act 2001. The accounting policies outlined throughout the financial statements have been consistently applied to all the years presented, unless otherwise stated. Compliance with IFRS The financial statements of the Group also comply with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB). Historical cost convention The financial statements have been prepared under the historical cost convention, modified, where applicable by the measurement at fair value of selected non-current assets, financial assets and financial liabilities. Functional and presentation currency The financial statements are presented in Australian dollars, which is the Group’s reporting currency and the functional currency of the parent company and its Australian subsidiaries. Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in profit or loss, except when they are deferred in equity as qualifying cash flow hedges and qualifying net investment hedges or are attributable to part of the net investment in a foreign operation. Translation differences on financial assets and liabilities carried at fair value are reported as part of the fair value gain or loss. Translation differences on non-monetary financial assets and liabilities such as equities held at fair value through profit or loss are recognised in profit or loss as part of the fair value gain or loss. Translation differences on non-monetary financial assets such as equities classified as available-for-sale financial assets are included in the fair value reserve in equity. 33 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, YEAR ENDED 30 JUNE 2021 1. BASIS OF PREPARATION (continued) Going concern The financial report has been prepared on the going concern basis which contemplates the continuity of normal business activity, the realisation of assets and the settlement of liabilities in the ordinary course of business. For the year ended 30 June 2021 the Group made a loss of $2,105,959 (2020: $5,669,716) and net operating cash outflows of $1,714,006 (2020: $3,706,296). The ability of the Group to continue as a going concern is principally dependent sale of liquid investments and if required capital raising. 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. The Directors believe it is appropriate to prepare these accounts on going concern basis for the following reasons: • • • • Following the end of the financial year, the Company drew down the remaining $520,000 from its $3 million Loan Facility; The Group holds liquid financial assets that can be sold to meet cash flow requirements; The Company has the ability to raise capital; and The Group has the ability to reduce corporate and overhead expenditures in line with available funds if required. 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. Critical accounting estimates The preparation of financial statements requires management to use estimates, judgements, and assumptions. Application of different assumptions and estimates may have a significant impact on Avenira’s net assets and financial results. Estimates and assumptions are reviewed on an ongoing basis and are based on the latest available information at each reporting date. Actual results may differ from the estimates. The areas involving a higher degree of judgement and complexity, or areas where assumptions are significant to the financial statements are: Note 12 Impairment of capitalised exploration and evaluation expenditure Note 14 Provision for mine rehabilitation and restoration Note 28 Share based payments Page 50 Page 51 Page 68 Comparative Figures When required by the accounting standards, comparative figures have been adjusted to conform to changes in presentation for the current financial year. When the Group applies an accounting policy retrospectively, makes a retrospective restatement or reclassifies items in its financial statements, a statement of financial position as at the beginning of the earliest comparative period will be disclosed. 34 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, YEAR ENDED 30 JUNE 2021 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. COVID-19 The COVID-19 outbreak has continued to impact everybody in 2021. Measures taken by various governments to contain the virus have affected economic activity. We have taken a number of measures to monitor and prevent the effects of the COVID-19 virus such as safety and health measures for our people (like social distancing and working from home). At this stage, the impact on our business and results is limited. We will continue to follow the various national institutes policies and advice and in parallel will do our utmost to continue our operations in the best and safest way possible without jeopardizing the health of our people. 35 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, YEAR ENDED 30 JUNE 2021 2. PRINCIPLES OF CONSOLIDATION Subsidiaries The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of Avenira Limited (“Company” or “Parent Entity”) as at 30 June 2021 and the results of all subsidiaries for the year then ended. Avenira Limited and its subsidiaries together are referred to in this financial report as the Group or the consolidated entity. Subsidiaries are all entities (including special purpose 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 Group re-assesses whether or not it controls an investee if facts and circumstances indicate that there are changes to one or more of the three elements of control. Consolidation of a subsidiary begins when the Group obtains control over the subsidiary and ceases when the Group loses control of the subsidiary. Assets, liabilities, income and expenses of a subsidiary acquired or disposed of during the year are included in the consolidated financial statements from the date the Group gains control until the date the Group ceases to control the subsidiary. If the Group loses control over a subsidiary, it derecognises the related assets (including goodwill), liabilities, non- controlling interest and other components of equity, while any resultant gain or loss is recognised in profit or loss. Any investment retained is recognised at fair value. 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 asset transferred. 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 comprehensive income, consolidated statement of changes in equity and consolidated statement of financial position respectively. Investments in subsidiaries are accounted for at cost in the individual financial statements of the Company. 36 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, YEAR ENDED 30 JUNE 2021 3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (a) Fair Value of Assets and Liabilities The Group measures some of its assets and liabilities at fair value on either a recurring or non-recurring basis, depending on the requirements of the applicable Accounting Standard. Fair value is the price the Group would receive to sell an asset or would have to pay to transfer a liability in an orderly (i.e. unforced) transaction between independent, knowledgeable and willing market participants at the measurement date. As fair value is a market-based measure, the closest equivalent observable market pricing information is used to determine fair value. Adjustments to market values may be made having regard to the characteristics of the specific asset or liability. The fair values of assets and liabilities that are not traded in an active market are determined using one or more valuation techniques. These valuation techniques maximise, to the extent possible, the use of observable market data. To the extent possible, market information is extracted from either the principal market for the asset or liability (i.e. the market with the greatest volume and level of activity for the asset or liability) or, in the absence of such a market, the most advantageous market available to the entity at the end of the reporting period (i.e. the market that maximises the receipts from the sale of the asset or minimises the payments made to transfer the liability, after taking into account transaction costs and transport costs). For non-financial assets, the fair value measurement also takes into account a market participant’s ability to use the asset in its highest and best use or to sell it to another market participant that would use the asset in its highest and best use. The fair value of liabilities and the entity’s own equity instruments (excluding those related to share-based payment arrangements) may be valued, where there is no observable market price in relation to the transfer of such financial instruments, by reference to observable market information where such instruments are held as assets. Where this information is not available, other valuation techniques are adopted and, where significant, are detailed in the respective note to the financial statements. VALUATION TECHNIQUES In the absence of an active market for an identical asset or liability, the Group selects and uses one or more valuation techniques to measure the fair value of the asset or liability. The Group selects a valuation technique that is appropriate in the circumstances and for which sufficient data is available to measure fair value. The availability of sufficient and relevant data primarily depends on the specific characteristics of the asset or liability being measured. The valuation techniques selected by the Group are consistent with one or more of the following valuation approaches: Market approach: valuation techniques that use prices and other relevant information generated by market transactions for identical or similar assets or liabilities. Income approach: valuation techniques that convert estimated future cash flows or income and expenses into a single discounted present value. Cost approach: valuation techniques that reflect the current replacement cost of an asset at its current service capacity. Each valuation technique requires inputs that reflect the assumptions that buyers and sellers would use when pricing the asset or liability, including assumptions about risks. When selecting a valuation technique, the Group gives priority to those techniques that maximise the use of observable inputs and minimise the use of unobservable inputs. Inputs that are developed using market data (such as publicly available information on actual transactions) and reflect the assumptions that buyers and sellers would generally use when pricing the asset or liability are considered observable, whereas inputs for which market data is not available and therefore are developed using the best information available about such assumptions are considered unobservable. 37 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, YEAR ENDED 30 JUNE 2021 3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) FAIR VALUE HIERARCHY AASB 13 requires the disclosure of fair value information by level of the fair value hierarchy, which categorises fair value measurements into one of three possible levels based on the lowest level that an input that is significant to the measurement can be categorised into as follows: Level 1 Measurements based on quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date. Level 2 Measurements based on inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. Level 3 Measurements based on unobservable inputs for the asset or liability. The fair values of assets and liabilities that are not traded in an active market are determined using one or more valuation techniques. These valuation techniques maximise, to the extent possible, the use of observable market data. If all significant inputs required to measure fair value are observable, the asset or liability is included in Level 2. If one or more significant inputs are not based on observable market data, the asset or liability is included in Level 3. The Group would change the categorisation within the fair value hierarchy only in the following circumstances: i. ii. If a market that was previously considered active (Level 1) became inactive (Level 2 or Level 3) or vice versa; or If significant inputs that were previously unobservable (Level 3) became observable (Level 2) or vice versa. When a change in the categorisation occurs, the Group recognises transfers between levels of the fair value hierarchy (i.e. transfers into and out of each level of the fair value hierarchy) on the date the event or change in circumstances occurred. (b) Foreign exchange transactions and balances Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in profit or loss. Translation differences on financial assets and liabilities carried at fair value are reported as part of the fair value gain or loss. Translation differences on non-monetary financial assets and liabilities such as equities held at fair value through profit or loss are recognised in profit or loss as part of the fair value gain or loss. Translation differences on non- monetary financial assets such as equities classified as financial assets through other comprehensive income are included in the fair value reserve in equity. (c) New and revised AASB’s affecting amounts reported and/or disclosures in the financial statements In the year ended 30 June 2021, the Directors have reviewed all of the new and revised Standards and Interpretations issued by the AASB that are relevant to the Company and effective for the current annual reporting period. As a result of this review, the Directors have determined that there is no material impact of the new and revised Standards and Interpretations on the Company and, therefore, no material change is necessary to Group accounting policies. 38 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, YEAR ENDED 30 JUNE 2021 3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) (d) New and revised Accounting Standards for Application in Future Periods The Directors have also reviewed all of the new and revised Standards and Interpretations in issue not yet adopted for the year ended 30 June 2021. As a result of this review the Directors have determined that there is no material impact of the Standards and Interpretations in issue not yet adopted on the Company and, therefore, no change is necessary to Group accounting policies. (e) Deferred tax assets and deferred tax liabilities 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. 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. 39 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, YEAR ENDED 30 JUNE 2021 4. SEGMENT INFORMATION Accounting Policy 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. (a) Description of segments Management has determined the operating segments based on the reports reviewed by the Board of Directors that are used to make strategic decisions. The Board considers the business from both functional and geographic perspectives and has identified that there are two reportable segments being: • exploration and development of Wonarah in the Northern Territory in Australia; • exploration and development of Jundee South in Western Australia; and • unallocated items comprise corporate administrative costs, interest revenue, finance costs, investments, corporate plant and equipment and income tax assets and liabilities. (b) Segment information provided to the Board The following table presents revenue and profit for the Group’s operating segments for the reporting period. WONARAH (NORTHERN TERRITORY) JUNDEE SOUTH (WESTERN AUSTRALIA) UNALLOCATED – OTHER SEGMENTS TOTAL CONSOLIDATED $ $ $ $ 2021 Income Interest income Other income Total segment income Total revenue as per statement of comprehensive income Impairment of non-current assets Salaries, administrative and other expenses Depreciation and amortisation Net loss on disposal of fixed assets Segment net loss before tax Tax benefit Segment net loss after tax Total net loss as per statement of comprehensive income Segment assets Capitalised exploration and evaluation expenditure Other assets at balance date Total segment assets Segment liabilities Other liabilities at balance date Total segment liabilities 9,420 10,000 19,420 (92,924) (37,992) - - (111,496) - (111,496) - - - - - - - - - - 8,666 940 9,606 18,086 10,940 29,026 29,026 - (92,924) (1,969,855) (2,007,847) (34,214) (34,214) - - (1,994,463) (2,105,959) - - (1,994,463) (2,105,959) (2,105,959) 5,889,800 1,621,457 - 7,511,257 1,487,481 7,377,281 1,768,430 1,768,430 - 5,013,714 6,501,195 1,621,457 5,013,714 14,012,452 - - 3,136,536 3,136,536 4,904,966 4,904,966 40 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, YEAR ENDED 30 JUNE 2021 WONARAH (NORTHERN TERRITORY) JUNDEE SOUTH (WESTERN AUSTRALIA) UNALLOCATED – OTHER SEGMENTS TOTAL CONSOLIDATED $ $ $ $ 23.471 23,471 (596,960) (38,926) - (883) (613,298) - (613,298) - - - - - - - - - 12,209 12,209 35,680 35,680 35,680 - (596,960) (2,725,555) (2,764,481) (22,283) (46,246) (22,283) (47,129) (2,781,875) (3,395,173) - - (2,781,875) (3,395,173) (2,274,543) (5,669,716) 5,889,800 454,526 - 6,344,326 - 1,497,094 7,386,895 1,740,628 1,740,628 - - 454,526 3,796 1,891,322 1,895,118 3,796 3,388,416 9,736,539 - - 458,286 458,286 2,198,914 2,198,914 2020 Income Interest income Total segment income Total revenue as per statement of comprehensive income Impairment of non-current assets Salaries, administrative and other expenses Depreciation and amortisation Net loss on disposal of fixed assets Segment net loss before tax Tax benefit Segment net loss after tax Loss from discontinued operations Total net loss as per statement of comprehensive income Segment assets Capitalised exploration and evaluation expenditure Plant and equipment Other assets at balance date Total segment assets Segment liabilities Other liabilities at balance date Total segment liabilities 5. INCOME Accounting policies Interest income is recognised on a time proportionate basis that takes into account the effective yield on the financial assets. Other income Interest from financial institutions Other income 2021 $ 2020 $ 18,086 10,940 29,026 35,680 - 35,680 41 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, YEAR ENDED 30 JUNE 2021 6. ADMINISTRATIVE AND EMPLOYEE BENEFITS EXPENSE Loss before income tax includes the following administrative expenses Consultants Regulatory expenses Accounting and legal Travel expenses Short term office lease expense Other administrative expenses Loss before income tax includes the following employee benefit expenses Salaries and wages Defined contribution superannuation expense Regulatory taxes Director fees Medical and insurance 7. INCOME TAX Accounting Policies 2021 $ 2020 $ 347,445 148,308 379,173 30,740 32,154 130,069 842,055 130,416 337,187 31,524 89,407 212,261 1,067,889 1,642,850 2021 $ 2020 $ 287,436 62,099 22,352 439,000 46,688 857,575 76,252 16,932 - 603,366 48,027 744,576 The income tax expense or benefit for the period is the tax payable on the current period’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 Company’s subsidiaries and associated entities 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. 42 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, YEAR ENDED 30 JUNE 2021 7. INCOME TAX (continued) (a) Income tax expense/(benefit) Current tax Deferred tax (b) Numerical reconciliation of income tax expense to prima facie tax payable Loss from continuing operations before income tax expense Loss from discontinued operations before income tax expense Accounting loss before income tax Prima facie tax benefit at the Australian tax rate of 30% (2019: 30%) Tax effect of amounts which are not deductible/(taxable) in calculating taxable income: Share based payments Unrealised foreign exchange gain/(loss) Other Tax effect of current year tax losses and timing differences for which no deferred tax asset has been recognised Income tax benefit (c) Tax affect relating to each component of other comprehensive income Financial assets (d) Deferred tax assets Capital raising costs Rehabilitation provision Other provisions and accruals Tax losses in Australia Financial assets at FVOCI Deferred tax assets not recognised Offset against deferred tax liabilities Net deferred tax assets (e) Deferred tax liabilities 2021 $ 2020 $ - - - (2,105,959) - (2,105,959) (631,788) 23,376 5,849 (224,734) - - - (3,395,173) (2,274,543) (5,669,716) (1,700,915) 112,215 9,118 (110,078) 827,297 1,689,660 - - 145,930 145,930 173,250 530,424 101,294 (20,365) (20,365) 173,250 521,902 57,637 35,098,926 34,329,651 145,930 - 36,049,824 35,082,440 (33,787,055) (33,158,777) 2,262,769 (2,262,769) - 1,923,663 (1,923,663) - Capitalised exploration and evaluation costs and development costs (2,253,377) (1,903,298) Financial assets at FVOCI Other accruals Offset against deferred tax assets Net deferred tax liabilities - (9,392) (2,262,769) 2,262,769 - (20,365) - (1,923,663) 1,923,663 - 43 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, YEAR ENDED 30 JUNE 2021 7. INCOME TAX (continued) DEFFERED TAX Potential deferred tax assets attributable to tax losses and exploration expenditure carried forward have not been brought to account at 30 June 2021 because the directors do not believe it is appropriate to regard realisation of the deferred tax assets as probable at this point in time. These benefits will only be obtained if: (i) The Company derives future assessable income of a nature and of an amount sufficient to enable the benefit from the deductions for the loss and exploration expenditure to be realised; (ii) The Company continues to comply with conditions for deductibility imposed by law; and (iii) No changes in tax legislation adversely affect the Company in realising the benefit from the deductions for the loss and exploration expenditure. TAX CONSOLIDATION Avenira Limited and its 100% owned Australian resident subsidiaries are part of a tax consolidated group. As a consequence, all members of the tax consolidated group are taxed as a single entity. Avenira Limited is the head entity of the tax consolidated group. Members of the tax consolidated group have entered into a tax sharing agreement that provides for the allocation of income tax liabilities between the entities should the head entity default on its payment obligations. No amounts have been recognised in the financial statements in respect of this agreement on the basis that the possibility of default is remote. 8. CASH AND CASH EQUIVALENTS Accounting Policies For statement of cash flows presentation purposes, cash and cash equivalents includes cash on hand, deposits held at call with financial institutions, other short-term highly liquid investments with original maturities of three months or less that are readily convertible to known amounts of cash and which are subject to insignificant risk of changes in value, and bank overdrafts. Cash at bank and in hand (continuing operations) Short-term deposits Cash and cash equivalents 2021 $ 3,123,043 - 2020 $ 488,337 800,000 3,123,043 1,288,337 Cash at bank and in hand earns interest at floating rates based on daily bank deposit rates. Short term deposits are made for varying periods of between one day and three months depending on the immediate cash requirements of the Group and earn interest at the respective short-term deposit rates. Refer to Note 18 for additional details on the impact of interest rates on cash and cash equivalents for the period. 44 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, YEAR ENDED 30 JUNE 2021 9. TRADE AND OTHER RECEIVABLES Accounting Policies Recognition and measurement Trade receivables are initially recognised at fair value and subsequently at amortised cost less a provision for any expected credit losses. Trade receivables are due for settlement no more than 30 days from the date of recognition. Impairment The Group recognises an allowance for expected credit losses (ECLs) for all debt instruments not held at fair value through profit or loss. ECLs are based on the difference between the contractual cash flows due in accordance with the contract and all the cash flows that the Group expects to receive, discounted at the original effective interest rate. The expected cash flows will include cash flows from the sale of collateral held or other credit enhancements that are integral to the contractual terms. For trade receivables and other receivables, the Group applies a simplified approach in calculating ECLs. Therefore, the Group does not track changes in credit risk, but instead recognises a loss allowance based on lifetime ECLs at each reporting date. The Group concluded that the lifetime ECL for these assets would be negligible and therefore no additional loss allowance was required. Current Trade and other receivables(i) Government taxes receivable(ii) Prepayments (iii) Security deposits 2021 $ 2,989 48,429 48,124 29,667 129,209 2020 $ 3,627 75,845 - 29,667 109,139 (i) Trade and other receivables are generally due for settlement within 30 days and therefore classified as current. (ii) Government taxes receivable in 2021 relates to GST receivable in Australia. (iii) Prepayments include payments made in relation to D&O insurance paid for the period 01/07/2021 – 30/03/2022. The carrying amounts disclosed above represent their fair value. Non-Current Security deposits (i) (i) Security Deposit for Wonarah tenements in the Northern Territory 10. LEASES Accounting Policies (i) Right-of-use assets 2021 $ 2020 $ 1,481,600 1,481,600 1,481,600 1,481,600 The Group recognises right-of-use assets at the commencement date of the lease (i.e., the date the underlying asset is available for use). Right-of-use assets are measured at cost, less any accumulated depreciation and impairment losses, and adjusted for any remeasurement of lease liabilities. The cost of right-of-use assets includes the amount of lease liabilities recognised, initial direct costs incurred, and lease payments made at or before the commencement date less any lease incentives received. Unless the Group is reasonably certain to obtain ownership of the leased asset at the end of the lease term, the recognised right-of-use assets are depreciated on a straight-line basis over the shorter of its estimated useful life and the lease term. Right-of-use assets are subject to impairment. 45 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, YEAR ENDED 30 JUNE 2021 10. LEASES (continued) (ii) Lease liabilities At the commencement date of the lease, the Group recognises lease liabilities measured at the present value of lease payments to be made over the lease term. The lease payments include fixed payments (including in-substance fixed payments) less any lease incentives receivable, variable lease payments that depend on an index or a rate, and amounts expected to be paid under residual value guarantees. The lease payments also include the exercise price of a purchase option reasonably certain to be exercised by the Group and payments of penalties for terminating a lease, if the lease term reflects the Group exercising the option to terminate. The variable lease payments that do not depend on an index or a rate are recognised as expense in the period on which the event or condition that triggers the payment occurs. In calculating the present value of lease payments, the Group uses the incremental borrowing rate at the lease commencement date if the interest rate implicit in the lease is not readily determinable. After the commencement date, the amount of lease liabilities is increased to reflect the accretion of interest and reduced for the lease payments made. In addition, the carrying amount of lease liabilities is remeasured if there is a modification, a change in the lease term, a change in the in-substance fixed lease payments or a change in the assessment to purchase the underlying asset. (iii) Leases - Estimating the incremental borrowing rate When the Group cannot readily determine the interest rate implicit in the lease, it uses its incremental borrowing rate (IBR) to measure lease liabilities. The IBR is the rate of interest that the Group would have to pay to borrow over a similar term, and with a similar security, the funds necessary to obtain an asset of a similar value to the right-of-use asset in a similar economic environment. The IBR therefore reflects what the Group ‘would have to pay’, which requires estimation when no observable rates are available (such as for subsidiaries that do not enter into financing transactions) or when they need to be adjusted to reflect the terms and conditions of the lease (for example, when leases are not in the subsidiary’s functional currency). The Group estimates the IBR using observable inputs (such as market interest rates) when available and is required to make certain entity-specific estimates (such as the subsidiary’s stand-alone credit rating). (iv) Short-term leases and leases of low-value assets The Group applies the short-term lease recognition exemption to its short-term leases (i.e., leases that have a lease term of 12 months or less from the commencement date and do not contain a purchase option). It also applies the lease of low-value assets recognition exemption to leases that are considered of low value. Lease payments on short-term leases and leases of low-value assets are recognised as expense on a straight-line basis over the lease term. Right-to-use assets recognised and movements during the year Opening net carrying amount Additions Depreciation expense Transfer to discontinued operations Net carrying amount Lease liabilities and movements during the year Opening net carrying amount Additions Interest expense Payments Adjustments to prior period Transfer to discontinued operations Closing net carrying amount Current Non-current 2021 $ 84,348 - (35,548) 2020 $ 1,887,602 104,599 (20,251) - (1,887,602) 48,800 84,348 2021 $ 91,802 - 4,515 (40,000) (1,428) 2020 $ 1,887,602 104,599 3,611 (16,408) - - (1,887,602) 54,889 38,148 16,741 91,802 35,816 55,986 46 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, YEAR ENDED 30 JUNE 2021 11. DISCONTINUED OPERATIONS Accounting Policy The Group classifies non-current assets and disposal groups as held for sale if their carrying amounts will be recovered principally through a sale transaction rather than through continuing use. Non-current assets and disposal groups classified as held for sale are measured at the lower of their carrying amount and fair value less costs to sell. Costs to sell are the incremental costs directly attributable to the disposal of an asset (disposal group), excluding finance costs and income tax expense. The criteria for held for sale classification is regarded as met only when the sale is highly probable and the asset or disposal group is available for immediate sale in its present condition. Actions required to complete the sale should indicate that it is unlikely that significant changes to the sale will be made or that the decision to sell will be withdrawn. Management must be committed to the plan to sell the asset and the sale expected to be completed within one year from the date of the classification. Property, plant and equipment and intangible assets are not depreciated or amortised once classified as held for sale. Assets and liabilities classified as held for sale are presented separately as current items in the statement of financial position. A disposal group qualifies as discontinued operation if it is a component of an entity that either has been disposed of, or is classified as held for sale, and:   Represents a separate major line of business or geographical area of operations Is part of a single co-ordinated plan to dispose of a separate major line of business or geographical area of operations Sale of Baobab Phosphate Project On 1 July 2019 Avenira announced that it proposed to sell its interests in the Baobab Phosphate Project and Novaphos to a consortium of its major shareholders (the Purchasers) in return for cash consideration and essential funding support (the ‘Transaction’). The Baobab Phosphate Project represented the entirety of the Group’s Baobab (Senegal) operating segment until 14 October 2019. With Baobab Phosphate Project being classified as a discontinued operation, the Baobab (Senegal) segment is no longer presented in the segment note. The results of the Baobab Phosphate Project and Novaphos for the period as presented below: Other income Administration expenses Salaries and employee benefits Depreciation Impairment of Doubtful debts Impairment of financial assets Other operating expenses Impairment FX Movements Profit/(loss) before tax from discontinued operation Tax benefit: Loss for the year from discontinued operations Loss on sale of the discontinued operations Profit/(loss) for the period from discontinued operations Loss for the period is attributable to: Owners of Avenira Limited Non-controlling interest Profit/(loss) for the period from discontinued operations *Represents the level of activity prior to the sale on 22 October 2019 2021 $ 2020* $ - - - - - - - - - - - - - - - - - 3,561 (411,690) (132,048) (116,719) - - (343,958) - 54,041 (946,813) - (946,813) (1,327,730) (2,274,543) (1,917,415) (357,128) (2,274,543) 47 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, YEAR ENDED 30 JUNE 2021 11. DISCONTINUED OPERATIONS (continued) Consideration received from sale of Baobab Project Cash Received (U$3,000,000) Shares returned (617,873,316 shares @ $0.008) Loans Forgiven Directors Fees Forgiven Total Consideration Net cash flows generated from the sale of Baobab Project are Cash Received (U$3,000,000) Cash sold as part of discontinued operations Total Consideration The net cash flows from the discontinued operation are as follows: Operating Investing Financing Net cash (outflow) / inflow Earnings per share Basic profit / (loss) for the year from discontinued operations (cps) Diluted profit / (loss) for the year from discontinued operations (cps) 2021 $ - - - - - - 2020 $ A$ 4,369,356 4,942,987 1,389,284 408,452 11,110,079 2020 $ 4,369,356 (85,122) 4,284,234 2020 $ (1,154,281) (1,132,017) 2,349,565 63,267 (0.36) (0.36) 48 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, YEAR ENDED 30 JUNE 2021 11. DISCONTINUED OPERATIONS (continued) The Baobab Phosphate Project Sale was completed on 22 October 2019 and under the agreement Avenira agreed to sell or assign all its rights and interests in the following assets to a consortium of its major shareholders (the Purchasers): • Baobab Fertilizer Africa (BFA) (the wholly owned subsidiary which held Avenira’s interests in the Baobab Phosphate Project) and the associated Baobab Intellectual Property and Other Information; • Novaphos (other than the existing Australian Licence Agreement as outlined below); and • The intercompany loan between Avenira and BMCC; and the intercompany loan between Avenira and BFA. Under the Transaction: • Avenira received cash consideration of US$3.0M (A$4.4M), and loan and director fees forgiveness of US$1.2M (A$1.8M), for a total consideration value of US$4.2M (A$6.2M), using a A$:US$ 0.6866 exchange rate. • Avenira undertook, for nil consideration, a buy-back and capital reduction of all the existing shares held by the major shareholders. The transaction also resulted in the Purchasers taking on responsibility for the outcome of current Senegalese tax audits of BMCC and Gadde Bissik Phosphate Operations SUARL (its operating subsidiary). Whilst Avenira has sold its interests in Novaphos (including the licence agreement to use the Novaphos technology in Senegal), Avenira retains an exclusive licence to use the Novaphos technology in Australia. On 1 July 2019 the Group recognised a right of use asset and lease liability of A$1,887,602 for the 25-year lease on a port facility relating to the Baobab Project. As the Baobab project was sold prior to 30 June 2020, the assets and liabilities classified as held for sale are no longer included in the statement of financial position. Pursuant to the sale agreement, Avenira must indemnify and keep indemnified Tablo Corporation, Baobab Partners LLC and Agrifields DMCC in respect of any undisclosed tax liabilities of BFA, BMCC or GBO that were due and payable and not been paid before the sale. This amount is capped at US$500,000 in aggregate and expires in October 2020. 49 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, YEAR ENDED 30 JUNE 2021 12. CAPITALISED EXPLORATION AND EVALUATION EXPENDITURE Accounting Policies – Capitalised Exploration and Evaluation Expenditure Exploration and evaluation costs for each area of interest that has progressed to pre-feasibility are accumulated and carried forward where right of tenure of the area of interest is current and they are expected to be recouped through sale or successful development and exploitation of the area of interest or, where exploration and evaluation activities in the area of interest have not at the end of the reporting period reached a stage that permits reasonable assessment of the existence of economically recoverable reserves, and activates and significant operations in, or in relation to, the area of interest are continuing. When an area of interest is abandoned or the directors decide that it is not commercial, any accumulated costs in respect to that area are written off in the financial period the decision is made. Each area of interest is also reviewed at the end of each accounting period and accumulated costs written off to the extent that they will not be recoverable in the future. Reconciliation of movements of exploration and evaluation costs in respect of mining areas of interest 2021 $ 2020 $ Opening net carrying amount Capitalised exploration and evaluation costs Increase to rehabilitation provision Impairment of exploration and evaluation expenditure Closing net carrying amount (i) Closing net carrying amount represented by the following projects Jundee South Project Wonarah Phosphate Project Closing net carrying amount 6,344,326 1,231,448 28,407 (92,924) 7,511,257 5,889,800 601,312 450,174 (596,960) 6,344,326 2021 $ 2020 $ 1,621,457 5,889,800 7,511,257 454,526 5,889,800 6,344,326 The ultimate recoupment of costs carried forward for exploration and evaluation is dependent on the successful development and commercial exploitation or sale of the respective mining areas. (i) Impairment recognized in respect of the Wonarah Project. Refer to the key estimates and assumptions section below for details regarding the Group’s assessment of the carrying value of recognised exploration and evaluation expenditure. 50 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, YEAR ENDED 30 JUNE 2021 12. CAPITALISED EXPLORATION AND EVALUATION EXPENDITURE (continued) Key estimates and assumptions The application of the Group’s accounting policy requires management to make certain estimates and assumptions as to future events and circumstances, in particular, the assessment of whether economic quantities of reserves will be found. Any such estimates and assumptions may change as new information becomes available, which may require adjustments to the carrying value of assets. The Group assesses impairment at each reporting date by evaluating conditions specific to the Group that may lead to impairment of assets. Where an impairment trigger exists, the recoverable amount of the asset is determined. SRK Consulting conducted an update to the valuation of the Wonarah Project as at 30 June 2021. In SRK’s opinion, the valuation of the Wonarah Project has not materially changed since the effective date of the 2019 SRK Report. As such the valuation summary outlined in the 2019 SRK Report and the 2019 Report Update is effective as at 30 June 2021. The 2019 report revealed fair values for the Wonarah Project ranging from $6,010,000 to $16,020,000, based on a range of resource multiples derived from recent transactions and enterprise values of market participants with defined phosphate mineral resources (level 3 in the fair value hierarchy). The directors consider that the low end of the independent expert’s range is most representative of the fair value less costs of disposal of the Wonarah Project. As a result, during the reporting period an amount of $92,924 (30 June 2020: $596,960) was impaired and recognised in the Statement of Profit or Loss and Other Comprehensive Income. The recoverable amount is calculated as $5,889,800 after allowing for estimated costs of disposal. 13. TRADE AND OTHER PAYABLES Accounting Policies Recognition and measurement Liabilities for trade creditors and other amounts are carried at amortised cost, which is the amount initially recognised, minus repayments whether or not billed to the consolidated entity. 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. Trade payables(i) Other payables and accruals (i) Trade payables are non-interest bearing and generally on 30-day terms. The carrying amounts disclosed above represent their fair value. 14. PROVISIONS Accounting Policies (i) Wages and salaries and annual leave 2021 $ 228,086 299,200 527,286 2020 $ 194,793 166,230 361,023 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 provisions 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. (ii) Long service leave The Group does not expect its long service leave benefits to be settled wholly within 12 months of each reporting date. The Group recognised a liability for long service leave measured as the present value of expected future payments to be made in respect of services provided by employees up to the reporting date using the projected unit credit method. Consideration is given to expected future wages and salary levels, experience of employee departures, and periods of service. Expected future payments are discounted using market yields at the reporting date on high quality corporate bonds with terms to maturity and currencies that match, as closely as possible the estimated future cash outflows. 51 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, YEAR ENDED 30 JUNE 2021 14. PROVISIONS (continued) (iii) Mine rehabilitation and restoration The Group records the present value of the estimated cost of legal and constructive obligations to restore operating locations in the period in which the obligation arises. The nature of restoration activities includes the dismantling and removing of structures, rehabilitating mines, dismantling operating facilities, closure of plant and waste sites and restoration, reclamation and revegetation of affected areas. Typically, the obligation arises when the asset is installed or the ground/environment is disturbed at the production location. When the liability is initially recorded, the estimated cost is recognised by increasing the carrying amount of the related mining asset. Over time, the liability is increased for the change in the present value based on a discount rate appropriate to the market assessments and the risks inherent in the liability. Additional disturbances or changes in rehabilitation costs will be recognised as additions or changes to the corresponding asset and rehabilitation liability when incurred. The unwinding of the effect of discounting the provision is recorded as a finance cost in the statement of comprehensive income. The recognized carrying amount is depreciated over the useful life of the related asset. Costs incurred that relate to an existing condition caused by past operations, and do not have future economic benefit, are expensed as incurred. Current Employment benefits Non-Current Mine rehabilitation and restoration(i) Movements in mine rehabilitation and restoration provision Opening net carrying amount (Decrease)/increase in provision (Decrease)/increase from change in discount and inflation rate Closing net carrying amount 2021 $ 43,404 43,404 2020 $ 6,415 6,415 2021 $ 2020 $ 1,768,081 1,768,081 1,739,674 1,739,674 1,739,674 1,289,500 - 28,407 344,196 105,978 1,768,081 1,739,674 (i) Provision for future removal and restoration costs are recognised where there is a present obligation as a result of exploration, development, production, transportation or storage activities having been undertaken, and it is probable that an outflow of economic benefits will be required to settle the obligation. The provision includes the restoration costs based on the estimated future costs as assessed independently by the Northern Territory Government Department of Regional Development, Primary Industry, Fisheries and Resources. The estimated future obligations include the costs of removing plant, abandoning mine site and restoring the affected areas. Key estimates and assumptions The Group assesses its mine rehabilitation provision half yearly in accordance with the above accounting policy. Significant judgment is required in determining the provision for mine rehabilitation as there are many transactions and other factors that will affect the ultimate liability payable to rehabilitate the mine sites. Factors that will affect this liability include future disturbances caused by further development, changes in technology, changes in regulations, price increases and changes in discount rates. When these factors change, or become known in the future, such differences will impact the mine rehabilitation provision in the period in which they change or become known. As at 30 June 2021 the rehabilitation obligation has a carrying value of $1,768,081 (2020: $1,739,674) for the Wonarah Phosphate Project. 52 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, YEAR ENDED 30 JUNE 2021 15. LOANS AND BORROWINGS Accounting Policies Borrowings are presented as current liabilities unless the Group has an unconditional right to defer settlement for at least 12 months after the reporting date. Borrowings are initially recognised at fair value (net of transaction costs) and subsequently carried at amortised cost. Any differences between the proceeds (net of transaction costs) and the redemption value is recognised in profit or loss over the period of the borrowings using the effective interest method. Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial period of time to get ready for its intended use or sale are capitalised as part of the cost of the asset. All other borrowing costs are expensed in the period in which they occur. Borrowing costs consist of interest and other costs that an entity incurs in connection with the borrowing of funds. Non-Current Loan Facility - secured Total non-current loans and borrowings Loan Facility INTEREST RATE % 8% 2021 $ 2,480,000 2,480,000 2020 $ - - In June 2020 the Company received shareholder approval to enter into a $3 million secured loan facility with Au Xingao Investment Pty Ltd, a substantial shareholder of the Company. The loan was drawn down to $2,480,000 at the end of the 2021 financial year. The material terms of the Loan Facility are as follows: Loan Amount $3,000,000. Interest Security Termination and repayment Conversion Prepayment 8% per annum. Accrued interest will be capitalised (if not paid) every 6 months. The Loan Facility will be secured by a mining mortgage over the Company's Wonarah Project and a general security deed over specified listed securities held by the Company. The Company must repay the Loan Amount and all other amounts outstanding (including all capitalised interest and accrued uncapitalised interest) after 3 years form the date of signing the loan agreement ('Repayment Date'), unless the Lender elects to convert earlier. After 18 months, the Lender may elect to convert the Loan Amount into ordinary shares in the Company based on the 30 day VWAP of the Company's shares prior to the conversion date. The Company may prepay the Loan Amount at any time prior to the Repayment Date. 53 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, YEAR ENDED 30 JUNE 2021 16. ISSUED CAPITAL Accounting Policies 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. (a) Share capital Ordinary shares fully paid Total share capital NOTES NUMBER OF SHARES $ NUMBER OF SHARES $ 2021 2020 16(b), 16(e) 862,852,818 140,516,513 440,754,926 137,337,162 862,852,818 140,516,513 440,754,926 137,337,162 (b) Movements in ordinary share capital Beginning of the financial year Transactions during the year: - Shares cancelled (i) - Issue of shares @ $0.008 - Issue of shares @ $0.008 - Issue of shares @ $0.008 - Issue of shares @ $0.008 - Issue of shares @ $0.008 - Issue of shares @ $0.008 Less transaction costs End of the financial year 440,754,926 137,337,162 1,058,628,242 142,280,148 - - (617,873,316) (4,942,987) 66,113,238 74,966,928 69,850,964 528,906 599,735 558,808 136,878,660 1,095,029 48,900,070 25,388,032 - 862,852,818 391,201 203,104 (197,432) 140,516,513 440,754,926 137,337,162 (i) Shares returned as part of the consideration received from the sale of the Baobab Project. Refer to Note 11 for further details. (c) Movements in unlisted options on issue Beginning of the financial year Expired/cancelled during the financial year Issued during the financial year - 2 cent options, 30 November 2022 - 3 cent options, 30 November 2022 - 2.5 cent options, 7 September 2023 (i) - 3.5 cent options, 7 September 2023 (i) End of the financial year NUMBER OF OPTIONS 2021 2020 48,000,000 80,000,000 - - - (80,000,000) 24,000,000 24,000,000 6,000,000 6,000,000 60,000,000 48,000,000 (i) Options issued to Taylor Collison Sharebrokers and Investment Advisers subsequent to the shareholder approval. The Group recognised $77,919 of share-based payment expense in the statement of profit or loss. 54 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, YEAR ENDED 30 JUNE 2021 16. ISSUED CAPITAL (continued) (e) Ordinary shares 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. (f) Capital risk management The Group’s objectives when managing capital are to safeguard their ability to continue as a going concern, so that they may continue to provide returns for shareholders and benefits for other stakeholders. There has been no change in the strategy adopted by management to control the capital of the Group since the prior year. 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 support exploration programmes, development and production start-up phases of its exploration projects 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 funding as required. The working capital position of the Group at the end of the year is as follows: Cash and cash equivalents Trade and other receivables Trade and other payables Lease Liability Current provisions Amounts received in advance from sale of financial assets 2021 $ 3,123,043 129,209 (527,286) (38,148) (43,404) (31,306) 2020 $ 1,288,337 109,139 (361,023) (35,816) (6,415) - Working capital position 2,612,108 994,222 55 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, YEAR ENDED 30 JUNE 2021 17. RESERVES AND ACCUMULATED LOSSES (a) Reserves Financial assets at fair value through OCI Foreign currency translation Share-based payments Non-controlling interest reserve (i) Total reserves 2021 $ 2020 $ 486,432 128,765 67,882 128,765 17,675,348 17,597,429 - 7,465,464 18,290,545 25,259,540 (i) As the Group no longer has any non-controlling interests, the NCI reserve has been derecognised and transferred to accumulated losses. Movements: Fair Value Reserve of Financial Assets at FVOCI Balance at beginning of year Revaluation Balance at end of year Foreign currency translation reserve Balance at beginning of year Recycled to the profit and loss on derecognition of controlled entity Currency translation differences arising during the year Balance at end of year Share-based payments reserve Balance at beginning of year Performance rights and share rights Other share-based payments(i) Share rights converted to ordinary shares Balance at end of year Non-controlling interest reserve Balance at beginning of year Parent equity adjustment for NCI consideration Balance at end of year (i) Refer to Note 28 Share Based Payments for further details. 2021 $ 2020 $ 67,882 418,550 486,432 - 67,882 67,882 128,765 2,325,644 - - 128,765 (2,332,312) 135,433 128,765 17,597,429 17,223,379 - - 77,919 374,051 - - 17,675,348 17,597,429 7,465,464 7,465,464 (7,465,464) - - 7,465,464 56 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, YEAR ENDED 30 JUNE 2021 17. RESERVES AND ACCUMULATED LOSSES (continued) (b) Accumulated losses Balance at beginning of year Net loss for the year attributable to owners of Avenira Limited NCI reserve transfer Balance at end of year (c) Nature and purpose of reserves 2021 $ 2020 $ (155,059,077) (149,389,359) (2,105,959) (5,669,716) 7,465,463 - (149,699,572) (155,059,077) (i) Fair Value Reserve of Financial Assets at FVOCI Changes in the fair value of investments, such as equities classified as Fair value reserve of financial assets at FVOCI, are recognised in other comprehensive income and accumulated in a separate reserve within equity. Amounts are reclassified to profit or loss when the associated assets are sold or impaired. (ii) Foreign currency translation reserve The foreign currency translation reserve comprises all foreign exchange differences arising from the translation of foreign operations where their functional currency is different to the presentation currency of the reporting entity. The reserve is recognised in profit and loss when the net assets of foreign controlled entities are disposed of. (iii) Share-based payments reserve The share-based payments reserve is used to recognise the fair value of options, contingent share rights and performance rights granted. (iv) Non-controlling interest reserve The non-controlling interest’s reserve records the difference between the fair value of the amount by which the non- controlling interest was adjusted to record their initial relative interest and the consideration paid. 18. FINANCIAL RISK MANAGEMENT Accounting Policies Financial Assets The Group classifies its financial assets in the following categories: at fair value through profit or loss (FVTPL), financial assets at amortised cost, or fair value through other comprehensive income (FVOCI). The classification is based on two criteria: the Group’s business model for managing the assets; and whether the instruments’ contractual cash flows represent ‘solely payments of principal and interest’ on the principal amount outstanding (the ‘SPPI criterion’). The SPPI test is applied to the entire financial asset, even if it contains an embedded derivative. Consequently, a derivative embedded in a debt instrument is not accounted for separately. (i) Trade and other receivables Trade receivables are initially recognised at fair value and subsequently at amortised cost less a provision for any expected credit losses. Trade receivables are due for settlement no more than 30 days from the date of recognition. (ii) Financial assets measured at fair value through other comprehensive income These financial assets consist of investments in ordinary shares, comprising principally of marketable equity securities. Investments are initially recognised at fair value plus transaction costs. Unrealised gains and losses arising from changes in the fair value of these investments are recognised in equity in the financial assets revaluation reserve. Amounts recognised are not recycled to the statement of comprehensive income in future periods. The fair value of the listed securities are based on quoted market prices and accordingly is a Level 1 measurement basis on the fair value hierarchy. 57 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, YEAR ENDED 30 JUNE 2021 18. FINANCIAL RISK MANAGEMENT (continued) Impairment of financial assets Expected credit losses are recognised in the statement of profit and loss and other comprehensive income on financial assets measured at amortised cost. Financial Liabilities The Group classifies its financial liabilities in the following categories: financial liabilities at amortised cost. (i) Payables This category generally applies to trade and other payables. Liabilities for trade creditors and other amounts are carried at amortised cost which is the amount initially recognised. Minus repayments whether or not billed to the Group. Payables are non-interest bearing and generally settled on 30-90 day terms. Due to the short term nature of these payables, their carrying value is assumed to approximate their fair value. For more information refer to Note 13. (ii) Loans and borrowings This category generally applies to interest-bearing loans and borrowings. All loans and borrowings are initially recognised at fair value less transaction costs and subsequently at amortised cost. Any difference between the proceeds received and the redemption amount is recognised in the income statement over the period of the borrowings using the effective interest method. For more information refer to Note 15. FINANCIAL RISK MANAGEMENT POLICIES The Group’s principal financial liabilities, other than derivatives, comprise loans and borrowings, and trade and other payables. The main purpose of these financial liabilities is to finance the Group’s operations. The Group’s principal financial assets include trade receivables, and cash and short-term deposits that derive directly from its operations. The Group also holds investments in debt and equity instruments and enters into derivative transactions. The Group is exposed to market risk, credit risk and liquidity risk. The Group’s senior management oversees the management of these risks. The Group’s senior management is supported by a financial risk committee that advises on financial risks and the appropriate financial risk governance framework for the Group. The financial risk committee provides assurance to the Group’s senior management that the Group’s financial risk activities are governed by appropriate policies and procedures and that financial risks are identified, measured and managed in accordance with the Group’s policies and risk objectives. All derivative activities for risk management purposes are carried out by specialist teams that have the appropriate skills, experience and supervision. It is the Group’s policy that no trading in derivatives for speculative purposes may be undertaken. The Board of Directors reviews and agrees policies for managing each of these risks, which are summarised below. Financial instruments The Group holds the following financial instruments: Financial assets Cash and cash equivalents Trade and other receivables Other non-current receivables Fair value reserve of financial assets at FVOCI - Listed investments - Unlisted investments 2021 $ 2020 $ 3,123,043 129,209 1,481,600 1,633,543 85,000 6,452,395 1,288,337 109,139 1,481,600 424,993 10,000 3,314,069 58 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, YEAR ENDED 30 JUNE 2021 18. FINANCIAL RISK MANAGEMENT (continued) Financial liabilities Trade and other payables Lease liabilities - current Lease liabilities – non-current Loans and borrowings (a) Market risk 2021 $ 2020 $ 527,286 38,148 16,741 2,480,000 3,062,175 361,023 35,816 55,986 - 452,825 Market risk arises from Avenira’s exposure to interest bearing financial assets and foreign currency financial instruments. It is a risk that the fair value of future cash flows of a financial instruments will fluctuate because of changes in foreign exchange rates (currency risk), interest rates (interest rate risk) and share prices (price risk). The Group has determined the impact of reasonably possible movements in foreign exchange and share prices is not material. (i) Interest rate risk Interest rate risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market interest rates. As at and during the year ended 30 June 2021, the Group had interest-bearing assets in the form of cash and cash equivalents. As such the Group’s income and operating cash flows are somewhat exposed to movements in market interest rates due to the movements in variable interest rates on cash and cash equivalents. The Group’s does not have exposure to interest rate risk arising from its financial liabilities. The Group’s 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. At 30 June 2021, the entire balance of cash and cash equivalents for the Group of $3,123,043 (2020: $1,288,337) is subject to interest rate risk. The proportional mix of floating interest rates and fixed rates, to a maximum of six months, fluctuate during the year depending on current working capital requirements. (b) Credit risk Credit risk is the risk that a counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. The Group is exposed to credit risk from its operating activities (primarily trade receivables) and from its financing activities, including deposits with banks and financial institutions, foreign exchange transactions and other financial instruments Credit risk related to balances with banks and other financial institutions is managed by investing surplus funds in financial institutions that maintain a high credit rating. The maximum exposure to credit risk at the reporting date is the carrying amount of the assets as summarised below, none of which are impaired or past due. 59 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, YEAR ENDED 30 JUNE 2021 18. FINANCIAL RISK MANAGEMENT (continued) Financial assets Cash and cash equivalents Trade and other receivables Other non-current receivables 2021 $ 2020 $ 3,123,043 129,209 1,481,600 4,733,852 1,288,337 109,139 1,481,600 2,879,076 The credit quality of financial assets that are neither past due nor impaired can be assessed by reference to external credit ratings (if available) or to historical information about counterparty default rates. Cash at bank and short-term bank deposits Held with Australian banks and financial institutions AA3 rated 3,123,043 1,288,337 2021 $ 2020 $ Held with South African banks and financial institutions BBB rated Trade and other receivables Held with Australian banks and financial institutions AA- rated AA3 rated Counterparties with external credit ratings Counterparties without external credit ratings Group 1 Group 2 Other non-current receivables Held with Australian banks and financial institutions AA- rated - - 3,123,043 1,288,337 - 29,667 - 99,542 - 129,209 - 29,667 - 79,472 - 109,139 1,481,600 1,481,600 1,481,600 1,481,600 (c) Liquidity risk The Group manages liquidity risk by continuously monitoring forecast and actual cash flows and ensuring sufficient cash and/or funding facilities are available to meet the current and future commitments of the Group. The Board of Directors constantly monitors the state of equity markets in conjunction with the Group’s current and future funding requirements, with a view to initiating capital raisings as required. The financial liabilities of the Group consist of trade and other payables and lease liabilities 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. The following table details the Group’s remaining contractual maturity for its non-derivative financial liabilities with agreed repayment periods. 60 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, YEAR ENDED 30 JUNE 2021 18. FINANCIAL RISK MANAGEMENT (continued) Contractual maturities of financial liabilities LESS THAN 1 MONTH 1-3 MONTHS 3 MONTHS - 1 YEAR $ $ $ 1-5 YEARS $ 5+ YEARS TOTAL $ $ 2021 Trade and other payables Lease Liabilities Loans and borrowings 2020 Trade and other payables Lease Liabilities (d) Net fair value Fair value estimation 228,086 299,200 - - - - 10,796 31,986 17,259 - - 2,480,000 228,086 309,996 31,986 2,497,259 194,792 166,231 - 11,367 194,792 177,598 - 33,751 33,751 - 61,246 61,246 - - - - - - - 527,286 60,041 2,480,000 3,067,327 361,023 106,364 467,387 The fair value of financial assets and financial liabilities held by the Group must be estimated for recognition and measurement or for disclosure purposes. All financial assets and financial liabilities of the Group at the balance date are recorded at amounts approximating their fair value. The fair value of financial instruments traded in active markets is based on quoted market prices at the reporting date. The quoted market price used for financial assets held by the Group is the current bid price. The carrying value less impairment provision of trade receivables and payables are assumed to approximate their fair values due to their short-term nature. The totals for each category of financial instruments, other than those with carrying amounts which are reasonable approximations of fair value, are set out below: CARRYING AMOUNT FAIR VALUE 2021 $ 2020 $ 2021 $ 2020 $ Financial assets Fair value of financial assets through OCI Total financial assets 1,718,543 1,718,543 424,993 424,993 1,718,543 1,718,543 424,993 424,993 61 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, YEAR ENDED 30 JUNE 2021 18. FINANCIAL RISK MANAGEMENT (continued) Financial instruments measured at fair value The financial instruments recognised at fair value in the statement of financial position have been analysed and classified using a fair value hierarchy reflecting the significance of the inputs used in the making the measurements. The fair value hierarchy consists of the following levels: • • quoted prices in active markets for identical assets or liabilities (Level 1). inputs other than quoted process included within Level 1 that are observable for the asset or liability, either directly (as prices) or indirectly (derived from prices) (Level 2). • inputs for the asset or liability that are not based on observable market data (unobservable inputs) (Level 3). LEVEL 1 LEVEL 2 LEVEL 3 TOTAL $ $ $ $ 2021 Financial assets Fair value of financial assets through OCI – listed Fair value of financial assets through OCI– unlisted 2020 Financial assets Fair value of financial assets through OCI – listed Fair value of financial assets through OCI– unlisted 1,633,543 - 1,633,543 414,993 - 414,993 - - - - - - - 1,633,543 85,000 85,000 85,000 1,718,543 - 414,993 10,000 10,000 10,000 424,993 (e) Capital risk management For the purposes of the Group’s capital management, capital includes issued capital and all other equity reserves attributable to the equity holders of the parent, which at 30 June 2021 was $9,107,486 (30 June 2020: $7,537,625). The primary objective of the Group’s capital management is to maximise the shareholder value. Key estimates and assumptions As described in the accounting policy above, the Group uses valuation techniques that include inputs that are not based on observable market data to estimate the fair value of certain types of financial instruments. Key assumptions used in the determination of the fair value of financial instruments, as well as the detailed sensitivity analysis for these assumptions are set out above. The directors believe that the chosen valuation techniques and assumptions used are appropriate in determining the fair value of financial instruments. The Group assesses at each reporting date whether there is objective evidence that an investment or a group of investments is impaired. In the case of equity investments classified as FVOCI, objective evidence would include a significant or prolonged decline in the fair value of the investment below its cost. The determination of what is “significant” or “prolonged” requires judgement. “Significant” is evaluated against the original cost of the investment and “prolonged” against the period in which the fair value has been below its original cost. 62 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, YEAR ENDED 30 JUNE 2021 19. REMUNERATION OF AUDITORS During the year the following fees were paid or payable for services provided by the auditor of the parent entity, its related practices and non-related audit firms: The auditor of Avenira Limited is Hall Chadwick WA Audit (2020: Ernst and Young Australia). Auditor remuneration Fees to Ernst & Young (Australia) Auditing the statutory financial report of the parent covering the group and any controlled entities Assurance services that are required by legislation to be provided by the auditor Other Assurance and agreed-upon-procedure services under other legislation or contractual arrangements where there is discretion as to whether the service is provided by the auditor or another firm Other Services Tax Compliance Total fees to Ernst & Young (Australia) (A) Fees to Hall Chadwick WA Auditing the statutory financial report of the parent covering the group and any controlled entities Assurance services that are required by legislation to be provided by the auditor Other Assurance and agreed-upon-procedure services under other legislation or contractual arrangements where there is discretion as to whether the service is provided by the auditor or another firm Other Services Tax Compliance Total fees to Hall Chadwick WA (B) Total Auditor Remuneration (A+B) 2021 $ 2020 $ 1,788 92,410 - - - 9,038 28,000 29,788 14,000 115,448 33,552 - - - 33,552 63,340 - - - - - - 115,448 From time to time the Group may decide to employ the external auditor on assignments additional to their statutory audit duties where the auditor’s expertise and experience with the Group is important. The Board has considered the position and is satisfied that the provision of non-audit services is compatible with the general standard of independence imposed by the Corporations Act 2001.The nature of services provided to the Group during the period by Hall Chadwick and other practices do not compromise the general principles relating to auditor independence because they relate to tax advice in relation to domestic and international compliance issues, and due diligence services which involved the provision of assurances arising from their engagement. 20. CONTINGENCIES In relation to tenement acquisition agreements entered into by the Group, the following additional cash may be received dependent on future events: TNT Mines Royalty Deed The parent entity will receive a royalty on a quarterly basis on all product sold, removed or otherwise disposed from all tenements held by TNT Mines. The royalty is calculated at 1.5% of the net smelter return and the total amount receivable is capped at $5,000,000. In December 2019, A Deed of Assignment and Assumption was signed with TNT Mines Limited assigning and to TinOne Resources Corporation assuming the obligations of the Principal Agreement (Tenement Sale Agreement). The Directors are of the opinion that it is not practicable to estimate the financial effect at the date of this report. 63 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, YEAR ENDED 30 JUNE 2021 21. COMMITMENTS The Group has certain commitments to meet minimum expenditure requirements on the mineral exploration assets for the Wonarah project and Jundee South project areas that it has an interest in. Outstanding exploration commitments are as follows: (a) Exploration commitments Within one year Later than one year but no later than five years Later than five years 2021 $ 2020 $ 357,884 983,562 - 398,609 994,596 64,832 1,341,446 1,458,037 The Group has an office lease contract as at 30 June 2021. The future lease payments for this non-cancellable lease contract is $40,465 (2020: $40,467), later than one year but no later than five $17,000 (2020: $58,616). 22. DIVIDENDS No dividends were paid during the financial year. No recommendation for payment of dividends has been made. 64 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, YEAR ENDED 30 JUNE 2021 23. RELATED PARTY TRANSACTIONS (a) Parent entity The ultimate parent entity within the Group is Avenira Limited. The consolidated entity has a related party relationship with its subsidiaries (see Note 24) and with its key management personnel. (b) Subsidiaries Interests in subsidiaries are set out in Note 24. (c) Compensation of key management personnel Short-term benefits Long-term benefits Post-employment benefits Termination payments Share-based payments (d) Transactions with key management personnel Other directors’ interest (i) 2021 2020 $ 485,688 - 37,430 - - $ 813,419 - 16,932 146,207 374,051 523,118 1,350,609 2021 $ - - 2020 $ 122,550 122,550 (i) In addition to his Executive Chairman fee, Mr. Clark was engaged to provide the Company strategic advisory services on a consulting basis during the 2020 financial year. Total consultancy fees of $117,125 were charged by Mr. Clark during the year. The agreement had no fixed term and no termination notice period however ceased once appointed Executive Chairman and CEO 5 December 2019. A further $5,425 was also paid to Mr. Clark for fees relating to an interim office lease from the period 1 September to 30 November 2019. The total amount of fees is included in his Salary & Fees amount in the Details of Remuneration of KMP table on page 23. At 30 June 2020, advisory and lease fees paid to Mr. Clark impacted the Statement of Profit and Loss and Other Comprehensive Income with $122,550 recognised in Administrative and Other Expenses. (e) Loans from key management personnel The Group received no loans from KMP or their related parties during the 2021 financial year (2020: Nil): 2020 LENDER BALANCE AT START OF THE YEAR LOAN PROCEEDS RECEIVED INTEREST CHARGED FORGIVEN DURING THE YEAR $ $ $ $ FX IMPACT $ BALANCE AT END OF THE YEAR HIGHEST BALANCE DURING THE YEAR $ $ Agrifos Partners LLC(i) 366,436 - 11,754 (386,250) 8,060 - 386,250 (i) Agrifos Partners LLC is a company related through the common control of former director Mr. Timothy Cotton On 27 September 2019, the Company obtain an extension to the maturity of the Shareholder Loans, extending the maturity date to 21 October 2019. The loan was forgiven as part of the consideration in the Baobab Transaction Sale. Refer to Note 11 for details. 65 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, YEAR ENDED 30 JUNE 2021 24. SUBSIDIARIES Accounting policies The consolidated financial statements incorporate the assets, liabilities and results of the following subsidiaries in accordance with the accounting policy described in Note 2: SUBSIDIARIES COUNTRY OF INCORPORATION CLASS OF SHARES Minemakers Australia Pty Ltd Bonaparte Diamond Mines Pty Ltd Avenira Gold Pty Ltd Avenira Holdings LLC (ii) Australia Australia Australia USA Ordinary Ordinary Ordinary Ordinary (i) The proportion of ownership interest is equal to the proportion of voting power held. (ii) The company’s equity represented by an initial capital contribution by Avenira as the sole member. EQUITY HOLDING(i) 2021 % 100 100 100 100 2020 % 100 100 100 100 25. EVENTS OCCURING AFTER THE BALANCE DATE No event has occurred since 30 June 2021 that would materially affect the operations of the Group, the results of the Group or the state of affairs of the Group not otherwise disclosed in the Group’s financial statements. 66 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, YEAR ENDED 30 JUNE 2021 26. STATEMENT OF CASHFLOWS Reconciliation of net loss after income tax to net cash outflow from operating activities 2021 $ 2020 $ Net loss from continuing operations Net loss from discontinuing operations Adjustment for non-cash items Depreciation of plant and equipment Share based payment expense Net foreign currency loss/(gain) Impairment of exploration and evaluation expenditure Disposal of intangibles loss/(gain) Change in operating assets and liabilities, net of effects from purchase of controlled entities Increase in trade and other receivables Increase/(decrease) in trade and other payables Increase (decrease) in provisions (2,105,959) - (3,395,173) (2,274,543) 34,214 77,919 (51) 92,924 - 20,070 203,866 (36,989) 22,283 374,051 (607) 596,960 47,129 66,119 720,894 136,593 Net cash outflow from operating activities from operating activities (1,714,006) (3,706,295) Change in liabilities from financing activities Opening balance 1-Jul-20 Additions during the year Interest accrued Adjustments Payments Forgiven during the period Interest bearing loans & borrowings Lease liabilities - 2,480,000 - - - 91,802 - 91,802 2,480,000 4,515 4,515 (1,428) (40,000) (1,428) (40,000) Closing balance 30-Jun-21 2,480,000 54,889 2,534,889 - - - 27. EARNINGS PER SHARE Accounting Policies Basic earnings per share Basic earnings per share is calculated by dividing the loss 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. 67 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, YEAR ENDED 30 JUNE 2021 27. EARNINGS PER SHARE (continued) 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. (a) Reconciliation of earnings used in calculating loss per share Loss attributable to the owners of the Company used in calculating basic and diluted loss per share (b) Weighted average number of shares used as the denominator Weighted average number of ordinary shares used as the denominator in calculating basic loss per share 2021 $ 2020 $ (2,105,959) (5,312,588) 2021 2020 NUMBER OF SHARES NUMBER OF SHARES 798,750,003 632,041,733 Between the reporting date and the date of authorisation of these financial statements no additional securities were issued that could potentially dilute basic loss per share in the future. 28. SHARE BASED PAYMENTS Accounting Policies 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’). 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 and Monte Carlo methodology as appropriate. 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 or performance rights that, in the opinion of the directors of the Group, 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. 68 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, YEAR ENDED 30 JUNE 2021 28. SHARE BASED PAYMENTS (continued) (a) Performance Rights Plan There were no performance rights granted during the year ended 30 June 2021 (2020: Nil). (b) Options In August 2020, 12,000,000 options were issued to Taylor Collison (Sharebroker). Options were issued in two tranches with a different exercise price for each tranche being 2.5 cents and 3.5 cents, and all have an expiry date of 7 September 2023. All options granted by the Company 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. The below table summarises the number and movement in options granted and their weighted average prices: AVENIRA LIMITED AVENIRA LIMITED 2021 2020 Outstanding at the beginning of the year Granted Exercised Expired NUMBER OF OPTIONS 48,000,000 12,000,000 - - WEIGHTED AVERAGE EXERCISE PRICE $0.025 $0.03 - - NUMBER OF OPTIONS 80,000,000 48,000,000 - (80,000,000) Outstanding at the end of the year Exercisable at the end of the year 60,000,000 60,000,000 $0.026 48,000,000 48,000,000 WEIGHTED AVERAGE EXERCISE PRICE $0.25 $0.025 - $0.25 $0.025 The weighted average remaining contractual life of share options outstanding at the end of the financial year was 1.42 years, and the exercise prices range from 2 cents to 3.5 cents. All options issued during the year were valued using the Black- Scholes option pricing model. The fair value of the options granted during the 2021 year was estimated on the date of grant using the following inputs: Options issued Measurement date Exercise price (cents) Fair value at grant date Volatility Risk free rate Expiry date 2021 2020 TRANCHE 1 TRANCHE 2 TRANCHE 1 TRANCHE 2 6,000,000 6,000,000 24,000,000 24,000,000 07/09/2020 07/09/2020 29/11/2019 24/11/2019 $0.025 0.007 100% 0.23% $0.035 0.006 100% 0.23% $0.02 0.008 100% 0.65% $0.03 0.007 100% 0.65% 07/09/2023 07/09/2023 30/11/2022 30/11/2022 Historically 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 Fair value of options that were granted or vested to directors and recognised in the profit or loss statement Key estimates and assumptions $41,858 $36,061 $201,903 $172,148 The Group measures the cost of equity-settled transactions with employees by reference to the fair value of the equity instruments at the date at which they are granted. The fair value is determined by an internal valuation using a Black- Scholes option pricing model using the assumptions detailed above. 69 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, YEAR ENDED 30 JUNE 2021 29. PARENT ENTITY INFORMATION The following information relates to the parent entity, Avenira Limited, at 30 June 2021. The information presented here has been prepared using accounting policies consistent with Group accounting policies. (a) Financial position Assets Current assets Non-current assets Total assets Liabilities Current liabilities Non-current liabilities Total liabilities Net Asset Position Equity Contributed equity Reserves: - - - Share based payments Performance rights Financial assets at FVOCI Accumulated losses Total equity (b) Financial performance Loss for the year Other comprehensive income Total comprehensive loss for the year 2021 $ 2020 $ 3,245,453 3,389,719 6,635,172 491,537 2,480,000 2,971,537 3,663,635 1,381,063 968,582 2,349,645 458,287 - 458,287 1,891,358 140,516,513 137,337,162 17,071,647 16,993,728 603,701 486,432 603,701 67,882 (155,014,658) (153,111,114) 3,663,635 1,891,358 (1,829,463) (13,513,098) - - (1,829,463) (13,513,098) (c) Details of any contingent liabilities of the parent entity The parent entity does not have any contingent liabilities at 30 June 2021. (d) Details of any commitments by the parent entity for the acquisition of property, plant and equipment There are no contractual commitments by the parent entity for the acquisition of property, plant and equipment as at reporting date. 70 DIRECTORS’ DECLARATION The Directors declare that: 1. The financial statements and notes set out on pages 29 to 70 are in accordance with the Corporations Act 2001, including: a. complying with Accounting Standards, the Corporations Regulations 2001 and other mandatory reporting requirements; and b. giving a true and fair view of the consolidated entity’s financial position as at 30 June 2021 and of their performance for the financial year ended on that date; 2. In their opinion, 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 3. 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 by the chief executive officer and chief financial officer required by section 295A of the Corporations Act 2001. This declaration is made in accordance with a resolution of the directors. Brett Clark Executive Chairman Perth, 22 September 2021 71 INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF AVENIRA LIMITED Report on the Audit of the Financial Report Opinion We have audited the financial report of Avenira Limited (“the Company”) and its subsidiaries (“the Group”), which comprises the consolidated statement of financial position as at 30 June 2021, the consolidated statement of profit or loss and other comprehensive income, the consolidated statement of changes in equity and the consolidated statement of cash flows for the year then ended, and notes to the financial statements, including a summary of significant accounting policies, and the directors’ declaration. In our opinion: a. the accompanying financial report of the Group is 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 2021 and 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 Opinion We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Report section of our report. We are independent of the Group in accordance with the auditor independence requirements of the Corporations Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional Accountants (the Code) that are relevant to our audit of the financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Material Uncertainty Related to Going Concern We draw attention to Note 1 in the financial report, which indicates that the Group incurred a net loss of $2,105,959 during the year ended 30 June 2021. As stated in Note 1 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 going concern. Our opinion is not modified in respect of this matter. Key Audit Matters Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial report of the current period. These matters were addressed in the context of our audit of the financial report as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. Key Audit Matter How our audit addressed the Key Audit Matter Capitalised exploration and evaluation expenditure (Refer to Note 12) The Group has capitalised exploration and evaluation expenditure of $7,511,257 as at balance date. Exploration and evaluation is considered to be a key audit matter due to: • The significance of the balance to the Group’s financial position; • 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”). AASB 6 is an industry standard accounting specific requiring of the significant judgements, estimates industry knowledge. This and includes specific requirements for expenditure to be capitalised as an asset and subsequent requirements which must be complied with for capitalised expenditure to continue application Our procedures included, amongst others: • Assessing management’s determination of its areas of interest for consistency with the definition involved analysing the tenements in which the Group holds an the exploration interest and programs planned for those tenements. in AASB 6. This • For each area of interest, we assessed the Group’s rights to tenure by corroborating to government registries and evaluating agreements in place with other parties as applicable. • We considered the activities in each area of interest to date and assessed the planned future activities for each area of interest by evaluating budgets. • Substantiated a sample of expenditure by agreeing to supporting documentation. • We assessed each area of interest for one or more of the following circumstances that may indicate impairment of the capitalised expenditure: o the licenses for the right to explore Key Audit Matter How our audit addressed the Key Audit Matter to be carried as an asset; and • The assessment of impairment of evaluation inherently and being exploration expenditure difficult. expiring in the near future or are not expected to be renewed; o substantive expenditure for further exploration in the specific area is neither budgeted or planned; o decision or intent by the Company to discontinue activities in the specific area of interest due to lack of commercially viable quantities of resources; and o data to proceed, indicating that, although a development in the specific area is the carrying likely amount of the exploration asset is unlikely to be recovered in full from successful development or sale. Loans and borrowings (Refer to Note 15) The Group has loans and borrowings of $2,480,000 as at balance date. Loans and borrowings are considered to be key audit matter due to: • The significance of the balance to the Group’s financial position; and • The complexities involved in the recognition and measurement of convertible financial instruments. • Examination of the disclosures made in the financial report. Our procedures included, amongst others: • Analysing the Loan Agreement to identify the key terms and conditions; • Verifying the funds receipted on draw down of the loan; • Assessing the accounting treatment of the financial instrument in accordance with the recognition and measurement as well as the disclosure requirements of the relevant Australian Accounting Standards; • Assessing the calculation of the relevant interest expense for the year; and • Examination of the disclosures made in the financial report. 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 2021 but does not include the financial report and our auditor’s report thereon. Our opinion on the financial report does not cover the other information and accordingly we do not express any form of assurance conclusion thereon. In connection with our audit of the financial report, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial report or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard. Responsibilities of the Directors for the Financial Report The directors of the Company are responsible for the preparation of the financial report that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal control as the directors determine is necessary to enable the preparation of the financial report that gives a true and fair view and is free from material misstatement, whether due to fraud or error. In 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. Auditor’s Responsibilities for the Audit of the Financial Report Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with 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 and assess the risks of material misstatement of the financial report, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. • Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group’s internal control. • Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the directors. • Conclude on the appropriateness of the directors’ use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial report or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Group to cease to continue as a going concern. • Evaluate the overall presentation, structure, and content of the financial report, including the disclosures, and whether the financial report represents the underlying transactions and events in a manner that achieves fair presentation. • Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the financial report. We are responsible for the direction, supervision, and performance of the Group audit. We remain solely responsible for our audit opinion. We communicate with the directors regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. We also provide the directors with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards. From the matters communicated with the directors, we determine those matters that were of most significance in the audit of the financial report of the current period and are therefore the key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication. Report on the Remuneration Report We have audited the Remuneration Report included in the directors’ report for the year ended 30 June 2021. 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 Avenira Limited, for the year ended 30 June 2021, complies with section 300A of the Corporations Act 2001. HALL CHADWICK WA AUDIT PTY LTD K DOUG BELL CA Partner Dated 22nd day of September 2021 ASX ADDITIONAL INFORMATION Additional information required by Australian Securities Exchange Ltd and not shown elsewhere in this report is as follows. The information is current as at 8 September 2020. (a) Distribution of equity securities Analysis of numbers of equity security holders by size of holding: 1 – 1,000 1,001 – 5,000 5,001 – 10,000 10,001 – 100,000 100,001 and over ORDINARY SHARES NUMBER OF HOLDERS NUMBER OF SHARES 235 107 140 928 658 2,068 25,936 367,673 1,119,179 41,681,393 819,658,637 862,852,818 The number of equity security holders holding less than a marketable parcel of securities are: 1,261 30,071,114 (b) Twenty largest shareholders The names of the twenty largest holders of quoted ordinary shares are: Top Holders Snapshot - Grouped Rank Name Units % Units 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 AU XINGAO INVESTMENT PTY LTD ANOVA METALS LIMITED BNP PARIBAS NOMINEES PTY LTD SIX SIS LTD AWAKENING INVESTMENT PTY LTD MRS VINEETA GUPTA HOLY INVESTMENTS PTY LTD MR MICHAEL ANDREW WHITING + MRS TRACEY ANNE WHITING SYMINGTON PTY LTD BLAMNCO TRADING PTY LTD MR GIOVANNI DEL CONTE SOCIETE DE POLYSERVE POUR LES ENGRAIS ET PRODUITS CHIMIQUES SA\C STC SUPER HOLDINGS PTY LTD MR BOBBY VINCENT LI LONGRIDGE PARTNERS PTY LTD RIMOYNE PTY LTD NURRAGI INVESTMENTS PTY LTD MR LUKE HUANG MERINDA HOLDINGS PTY LTD OCTIFIL PTY LTD CALAMA HOLDINGS PTY LTD 62,359,226 35,762,303 22,694,894 21,597,005 20,733,821 19,077,684 17,226,366 15,351,914 15,000,000 14,849,612 14,703,962 10,857,142 10,714,284 10,109,409 9,300,000 9,206,116 8,947,470 8,430,928 7,392,650 7,181,993 7.23 4.14 2.63 2.50 2.40 2.21 2.00 1.78 1.74 1.72 1.70 1.26 1.24 1.17 1.08 1.07 1.04 0.98 0.86 0.83 Totals: Top 20 holders of ORDINARY FULLY PAID SHARES (Total) Total Remaining Holders Balance 341,496,779 521,356,039 39.58 60.42 78 (c) Substantial shareholders Name Units % Units AU XINGAO INVESTMENT PTY LTD 62,359,226 7.23 (d) Unquoted Equity Securities The Company has 60,000,000 unquoted options on issue. Grant Date Date of Expiry Exercise Price Number under No of Holders 29 November 2019 30 November 2022 29 November 2019 30 November 2022 07 September 2020 07 September 2023 07 September 2020 07 September 2023 $0.02 $0.03 $0.025 $0.035 Option 24,000,000 24,000,000 6,000,000 6,000,000 60,000,000 3 3 1 1 (e) Voting rights All ordinary shares (whether fully paid or not) carry one vote per share without restriction. (f) Company Secretary, registered and principal administrative office and share registry Details can be found in the Corporate Information on page 3 of the Annual Report. (g) Schedule of interest in mining tenements LOCATION Arruwurra, Northern Territory Dalmore, Northern Territory Central Wonarah, Northern Territory East Murchison, Western Australia East Murchison, Western Australia East Murchison, Western Australia East Murchison, Western Australia TENEMENT EL29840 EL29849 EL32359 E 53/2078 E 53/2079 E 53/1856 E 53/1859 PERCENTAGE HELD / EARNING 100 100 100 100 100 100 100 79 

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