Annual Report 2020 Contents Contents Operations Overview………………………………………………………………………………………………………………………2 Financial Report…………………………………………………………………………………………………………………………….13 ASX Additional Information……………………………………………………………………………………………………………74 Page 1 1 Annual Report 2020 Operations Overview BATTERY MINERALS DEVELOPMENT STRATEGY - SUMMARY In recent years across the world, there is widespread significant evidence of an accelerated development of renewable energy generation, the application of electric vehicles from bikes to scooters, cars, trucks, ships as well as recreational and commercial scale drone use. This is also delivering increased utilisation of energy dense lithium-ion batteries in all manner of computing devices, robotics and industrial tooling. In addition, the importance of access to critical minerals is now understood as being important from a geopolitical perspective. Nations recognise that their ability to participate in leading technologies for the benefit of their people as well as defense of existing industries is reliant on their access to critical minerals. Graphite is an important critical mineral, an essential component across the electronics industry and specifically in the production of anodes in lithium- ion batteries. Copper, nickel, lithium, cobalt and a range of rare earth elements like vanadium are also strategic or critical minerals. In developing a highly advanced high grade graphite project with a complete and available logistics solution in place, is arguably the most important graphite province in the world, Battery Minerals has deposits which provide significant opportunity for a value catalyst for the benefit of shareholders. The world is accelerating in the application of battery technology and electronics generally. The Montepuez Graphite project, has completed all environmental permitting, holds a national mining licence and Battery Minerals has already constructed a tailings dam, mining camp and mobilised a crusher to site. Battery Minerals does not need to relocate any communities prior to the commencement of development. Battery Minerals is aware that the market price of some grades of graphite, that could be produced by its two Mozambican graphite development projects, have increased recently. This and invigorated interest in the minerals needed for EV batteries has highlighted the quality of Battery Minerals’ two graphite projects. In addition to graphite, Battery Minerals has acquired 808 square kilometres of highly prospective ground in Victoria, the Stavely-Stawell Project. From the late 1800’s the area was explored predominantly for gold up until the late 1990’s. Battery Minerals is the first company to be able to secure the entire package and sustain systematic modern exploration for strategic commodities particularly base metals and gold. Since the ground was last explored in the 1990’s explorers on adjacent tenements in similar geological terrain have identified significant deposits and intercepts of copper, nickel and gold. In addition, the area has been subject to new highly credible detailed geological interpretation by the Victorian Geological Survey, and they have identified large areas on our ground that they consider prospective for base metals. 2 Page 2 Battery Minerals LimitedOperations Overview Operations Overview GIPPSLAND, VICTORIA Completion of acquisition of 100% interest in Gippsland Prospecting During the December 2020 Quarter, Battery Minerals completed acquisition of 100% of Gippsland Prospecting Pty Ltd (“Gippsland Prospecting), which owns the highly- prospective Stavely-Stawell Project (exploration licence EL6871) immediately adjacent to Stavely Minerals (ASX:SVY) Thursday’s Gossan copper-gold project in Victoria. The tenement covers 808sqkm and hosts the historic Moyston gold mine, which produced ~75,000oz at 22g/t Au. The boundary of the exploration licence is also just 7km from the rich Stawell gold mine, which has produced ~5Moz of gold. The Stavely-Stawell Project is considered highly prospective for shear zone-hosted orogenic gold deposits such as Stawell, as well as volcanic-hosted base metals mineralisation and large-scale Cadia Ridgeway-type porphyry copper mineralisation, within the well-defined Stavely volcanic belt. Battery Minerals has commenced acquisition of high-resolution LiDAR and multi- spectral data sets, as well as commissioning reprocessing of publicly available geophysical data to assist with high-priority target identification and ranking. During the December 2020 Quarter, the Company commenced engagement with local land owners to enable access for exploration activities commencing in 2021. Targeting interpretation, geochemistry, historic Foundation datasets (geophysics, geology drilling) have been reviewed, reprocessed where appropriate and the Company is in the process of supplementing the existing data with further geophysical studies, satellite spectral imagery and historic data compilation and validation. Targets are considered Orogenic Gold style, typical in Victoria. Gold emplacement is structurally controlled, associated with quartz veining and often coarse ‘bonanza’ grade gold, eg. Bendigo, Ballarat, Stawell. Page 3 3 Annual Report 2020Operations Overview Operations Overview Seven Targets have been identified along the Moyston Fault, targeting notes highlighted below: Prospect Prospect Operations Overview Target Type Target Type Status Status Priority Priority Further Work Further Work Nine Mile Creek Orogenic Gold Nine Mile Creek Orogenic Gold Regional Aircore Regional Aircore Drill Testing Drill Testing 1 Londonderry Orogenic Gold Seven Targets have been identified along the Moyston Fault, targeting notes highlighted Regional Aircore Drill Testing below: Londonderry Frying Pan Orogenic Gold 1 Regional Aircore Drill Testing Regional Aircore Drill Testing Further Work 1 Priority Prospect Nine Mile Creek Moyston Frying Pan Extensions Orogenic Gold/Epithermal Target Type Overprint Orogenic Gold Orogenic Gold Orogenic Gold/ Epithermal Overprint 1 2 Limited historic drilling, favourable structural 1 location. Limited historic drilling, favourable structural location. As and Au signature, 1 favourable structural As and Au signature, location. favourable structural Potential epithermal location. overprint, highly- Status serpentinised footwall UM unit mapped. Potential epithermal Limited historic drilling, Limited drilling outside of overprint, highly- 1 favourable structural 2 the mine footprint. Land serpentinised footwall location. access priority. UM unit mapped. As and Au signature, and Historic workings favourable structural drilling, low-grade location. intercepts, favourable Potential epithermal structural location. overprint, highly- Shallow workings, As and 1 serpentinised footwall UM 3 Au signature. Land access unit mapped. Historic workings and priority. Limited drilling outside of drilling, low-grade Shallow workings, As and 2 the mine footprint. Land intercepts, favourable 3 Au signature. Land access structural location. access priority. priority. Historic workings drilling, low-grade Shallow workings, As and intercepts, favourable Au signature. Land access structural location. priority. Shallow workings, As and Au signature. Land access priority. Shallow workings, As and Shallow workings, As and Au signature. Land access Au signature. Land access priority. priority. Limited drilling outside of the mine footprint. Land access priority. and 3 3 2 1 Historic drilling requires Regional Aircore Regional Aircore Drill Testing further validation - step out Drill Testing geochem 2 Further surface geochem for Regional Aircore Drill Testing pathfinder elements required Historic drilling requires further validation - step out geochem drilling requires Historic Regional Aircore Drill Testing further validation - step out Further surface geochem requires drilling Historic geochem for Historic requires drilling further validation - step out pathfinder further validation - step out elements required geochem geochem 2 3 Further surface geochem for pathfinder elements required Historic drilling requires further validation - step out geochem Historic requires drilling further validation - step out Historic drilling geochem requires further requires drilling Historic validation - step out further validation - step out geochem geochem 3 Londonderry Jaluka Park Orogenic Gold Orogenic Gold Moyston Extensions Orogenic Gold Frying Pan Orogenic Gold/Epithermal Orogenic Gold Overprint Cox’s Find Moyston Billy Goat Extensions Jaluka Park Orogenic Gold Orogenic Gold Orogenic Gold Jaluka Park Orogenic Gold Cox’s Find Orogenic Gold Billy Goat Billy Goat Orogenic Gold Orogenic Gold Cox’s Find Table 1: Battery Minerals Initial Gold Target Ranking Orogenic Gold Table 1: Battery Minerals Initial Gold Target Ranking 4 Page 4 Page 4 Battery Minerals LimitedOperations Overview Operations Overview STAWELL GOLD CORRIDOR STAWELL GOLD MINE (>5moz) Glenlyle (Au, Ag) Moyston (77koz @ 22gpt Au) STAWELL GOLD CORRIDOR Thursday’s Gossan (Cu, Au) Figure 1: Location of EL6871, adjacent to Stawell historic mine and Stavely tenure showing locations of key regional prospects and deposits Page 5 5 Annual Report 2020Operations Overview Operations Overview STAWELL GOLD MINE (>5moz) Illawarra Billy Goat Cosmopolitan Coxs Find Frying Pan Londonderry Jalukar Park Nine Mile Road MOYSTON MINE (77koz @ 22gpt Au) Figure 2: Battery Minerals - Mag TMI, Structural Interpretation, Moyston Fault Au Targets 6 Page 6 Battery Minerals LimitedOperations Overview Operations Overview GRAPHITE PROJECTS, MOZAMBIQUE The Company has implemented a range of measures to combat the risks associated with COVID-19. These measures are in addition to the travel restrictions and the requirement for 14-day isolation periods throughout our countries of interest. Montepuez Site Staffing of the Montepuez site continues to be at a reduced level, in line with the Mozambican Government’s social distancing, isolation and travel restrictions. As previously reported, in the interest of reducing the influx of foreign personnel into the project site in the district of Montepuez, the Company decided to reduce its expatriate staff presence on site. This effectively reduces risk to local populations from the import of COVID-19 from South Africa and Australia. Furthermore, in compliance with the Australian Government’s travel advisory, Battery Minerals has halted all non-essential travel to Mozambique for the purpose of work. The travel restrictions and reduced presence on site will not affect business continuity. As previously reported, the Company will continue to monitor the situation and will make changes as required to align with national legislation and support the health and safety of the Company’s staff and local communities. MONTEPUEZ GRAPHITE PROJECT Extension of the Environmental Licence In compliance with national regulations, the Company updated its Environmental Management Plan and its environmental analysis tools in support of the extension of the Environmental Licence, the validity of which is extended every two years. After an external audit of the site and the Environmental Management Program by a certified independent body, the Company was awarded the extension until 28/10/2022. Development of an Elephant Management Plan In line with meeting the Equator Standards, the Company developed an Elephant Management Plan in response to the reported presence of elephants in the area. An assessment was carried out by an independent body to determine the possible threat of elephant encroachment into the project area. Given that the introduction of an artificial permanent water source (Water Storage Facility and TSF) could attract a greater number of elephants and encourage them to reside in the project area for longer periods of time than in previous years when there was an absence of a permanent water source, the study was deemed necessary. In collaboration with the independent body, a series of mitigation measures were developed and implemented successfully by the Company. To date, no human-elephant conflict has taken place on site or within neighboring communities. Mining Agreement As previously reported, while the grant of a Mining Agreement is not a condition precedent to production, exports and cashflows, the execution of a Mining Agreement Page 7 7 Annual Report 2020Operations Overview Operations Overview provides the Company with additional rights that enable investing companies like Battery Minerals to obtain absolute clarity around the application of the legal framework to the project. The Mining Agreement also formalises a project’s fiscal stability rights into a contractually binding document and provides an agreed dispute resolution process. During 2020, Battery Minerals continued to progress government engagement in relation to the Mining Agreement. As previously advised, the Company does not expect a material variation in project economics to result from the Mining Agreement. Community Investment As previously advised, the Company works closely with local Government and community leaders on specific community initiatives including local employment and training, supporting medical and educational facilities and services such as schooling and clinic infrastructures and increasing access to safe water. During 2020, the Company provided vital sanitation supplies to two district health facilities in support of the national COVID-19 response plan. The supplies will support the safe clinical treatment of children and vulnerable communities within the district. Once the Company achieves project finance for the Montepuez project and commences development and then production, it will further expand its planned long term locally supported and government endorsed community initiatives. BALAMA CENTRAL GRAPHITE PROJECT - Mining Licence Submitted Battery Minerals’ mining concession application for its Balama Central Graphite Project was submitted to the Government in late June 2019 for its review and consideration. The application reduced the footprint of the exploration licence to minimise the impact on local communities. The licence, reclassified as 10031C (formerly 4118L), is 1543 ha. Approval is expected in the second half of 2021. As previously reported, the environmental impact assessment (EIA) for 10031C has been completed and no significant environmental or social threats have been indicated. The application for the environmental licence was submitted in December 2019. CORPORATE During the December 2020 Quarter, the Company completed a placement for $5.5M and a well supported Share Purchase Plan for $744,000. The funds raised will ensure the Company is well funded to complete its exploration commitments for the Stavely- Stawell Project in Victoria. On 22 October 2020, the Company issued the consideration securities to the vendors of Gippsland Prospecting Pty Ltd, being within five business days of the grant by the Victorian State Government of EL6871. 8 Page 8 Battery Minerals LimitedOperations Overview Operations Overview The funding process for the Montepuez Graphite Project, which is being led by Third Way Africa, is continuing. As previously advised, key funding development activities, including site visits, have had to be postponed until after COVID-19 travel and isolation restrictions have been lifted. As at 31 December 2020, the Company had cash and liquid assets of $7.3M. The Company continues to prioritise its cash expenditure to ensure it maximises its ability to meet its funding obligations for the Stavely-Stawell Project in Victoria and secure project finance for its Montepuez graphite project over the coming year. Competent Person Statement The information in this release that relates to Exploration Targets, Exploration Results or Mineral Resources is based on information compiled by Nicholas Jolly, who is a Member of The Australasian Institute of Mining and Metallurgy and is currently General Manager Exploration for Battery Minerals Limited. Mr Jolly has sufficient experience which is 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 Jolly consents to the inclusion in the release of the matters based on his information in the form and context in which it appears. Mozambique Assets Competent Person’s Statement Battery Minerals confirms that all the material assumptions underpinning the production targets for its Montepuez and Balama Central graphite projects and any of the forecast financial information derived from these production targets, in the 4 and 12 December 2018 ASX announcements, on these projects continue to apply at the date of release of this presentation and have not materially changed. Battery Minerals confirms that it is not aware of any new information or data that all material assumptions and technical parameters underpinning the estimates in the 4 and 12 December 2018 announcements continue to apply and have not materially changed. Any references to Ore Reserve and Mineral Resource estimates should be read in conjunction with the competent person statements included in the ASX announcements referenced in this report as well as Battery Minerals’ other periodic and continuous disclosure announcements lodged with the ASX, which are available on the Battery Minerals’ website. For Mineral Resources - See announcement dated 16th July and 18th October 2018 for full details and Competent Persons sign- off. For Ore Reserves - See announcements dated 4 and 12 December 2018 for full details and Competent Persons sign-off. The information in this report that relates to Battery Minerals’ Mineral Resources or Ore Reserves is a compilation of previously published data for which Competent Persons consents were obtained. Their consents remain in place for subsequent releases by Battery Minerals of the same information in the same form and context, until the consent is withdrawn or replaced by a subsequent report and accompanying consent. The information in this Report that relates to Montepuez Mineral Resources is extracted from the ASX Announcement titled ‘Group Resource Update’ dated 18 October 2018, where the Statement of Estimates of Mineral Resources was compiled by Mr. Shaun Searle who is a Member of the AIG. Mr. Searle has sufficient experience that is relevant to the style of mineralisation and type of deposit under consideration and to the activity that he has undertaken to qualify as a Competent Person as defined in the JORC Code (2012). Mr Searle consented to the inclusion in that report of the matters based on his information in the form and context in which it appears. Important Notice This ASX Announcement does not constitute an offer to acquire or sell or a solicitation of an offer to sell or purchase any securities in any jurisdiction. In particular, this ASX Announcement does not constitute an offer, solicitation or sale to any U.S. person or in the United States or any state or jurisdiction in which such an offer, tender offer, solicitation or sale would be unlawful. The securities referred to herein have not been and will not be registered under the United States Securities Act of 1933, as amended (the “Securities Act”), and neither such securities nor any interest or participation therein may not be offered, or sold, pledged or otherwise transferred, directly or indirectly, in the United States or to any U.S. person absent registration or an available exemption from, or a transaction not subject to, registration under the United States Securities Act of 1933. Page 9 9 Annual Report 2020Operations Overview Operations Overview Forward-Looking Statements This announcement contains “forward-looking statements” within the meaning of securities laws of applicable jurisdictions. Forward-looking statements can generally be identified by the use of forward-looking words such as “may”, “will”, “expect”, “intend”, “plan”, “estimate”, “anticipate”, “believe”, “continue”, “objectives”, “outlook”, “guidance” or other similar words, and include statements regarding certain plans, strategies and objectives of management and expected financial performance. These forward-looking statements involve known and unknown risks, uncertainties and other factors, many of which are outside the control of Gippsland Prospecting and any of its officers, employees, agents or associates. Actual results, performance or achievements may vary materially from any projections and forward-looking statements and the assumptions on which those statements are based. Exploration potential is conceptual in nature, there has been insufficient exploration to define a Mineral Resource and it is uncertain if further exploration will result in the determination of a Mineral Resource. Readers are cautioned not to place undue reliance on forward-looking statements and Gippsland Prospecting assumes no obligation to update such information. SUSTAINABILITY Battery Minerals Limited is committed to being a leading and sustainable Australian mining company built on exploration and corporate success for the benefit of all of its stakeholders. During the year, the Company reviewed and revised its Sustainability Policies. These policies apply to all our people and implementation of these policies and their supporting standards and procedures are required across all Battery Minerals operations. Environment Responsibility Battery Minerals is committed to being effective environmental stewards and managing our impacts, whilst both achieving operational excellence and fulfilling its corporate social responsibilities. Battery Minerals is committed to positive environmental management outcomes to maintain and enhance performance. Battery Minerals acknowledges the threat posed by climate change and will work to decarbonise our business in a measured, proportionate and sustainable manner. Health & Safety Battery Minerals aspires to minimise the harm caused by workplace hazards whilst both achieving operational excellence and fulfilling its corporate social responsibilities. Battery Minerals is committed to leadership in health and safety through the use of responsible and reliable management systems to maintain and enhance performance. Community Engagement Battery Minerals is committed to create enduring value for our host communities and limiting our negative impacts, whilst both achieving operational excellence and fulfilling its corporate social responsibilities. Battery Minerals has commenced identifying key community groups and stakeholders within its project areas that the Company will seek to engage with through its exploration program. Battery Minerals seeks to ensure that all its activities are conducted in a manner that represents best practice and that meets all relevant government environment and minerals related legislation. 10 Page 10 Battery Minerals LimitedOperations Overview Operations Overview Governance Battery Minerals Limited and its Board are committed to achieving and demonstrating the highest standards of corporate governance. Battery Minerals Limited has reviewed its Corporate Governance practices against the Corporate Governance Principles and Recommendations (4th edition) published by the ASX Corporate Governance Council. The 2021 Corporate Governance Statement was approved by the Board in April, 2021 and is current at this time. A description of the Group’s current Corporate Governance practices is set out in the Group’s Corporate Governance Statement which can be viewed at www.batteryminerals.com Page 11 11 Annual Report 2020Operations Overview Operations Overview Appendix 1: Tenement Summary - 31 December 2020 1. TENEMENTS HELD Tenement Reference 8770C 10031C 8555 8609 EL6871 Location Nature of interest Interest at end of Year Mozambique Mozambique Mozambique Mozambique Victoria, Australia Mining Licence Granted Mining Concession in Application Exploration Licence Granted Exploration Licence Granted Exploration Licence Granted 100% 100% 1 100% 3 100% 3 100% 2 Note 1: The Balama Central graphite project mining concession application was lodged with government in late June 2019. The application process is expected to conclude in 2021. Note 2: During the December 2020 Quarter, Battery Minerals completed the acquisition of 100% of Gippsland Prospecting Pty Ltd (“Gippsland Prospecting), which owns the highly-prospective exploration licence EL6871 in Victoria. Note 3: With respect to tenement’s 8555 & 8609, an agreement was reached in December 2018 to dispose of these tenements. The agreement reached between BAT, its subsidiaries and Nedeel LLC, was for $50,000 in cash and a 1% royalty (which may be sold for US$1m up to the date of 730 days after the grant of a Mining Concession on either or both of the tenements). The change of ownership of these tenements is currently subject to the approval of the Mozambican Government. 2. MINING TENEMENTS DISPOSED: 5572 transfer approved by Government and completed 3. BENEFICIAL PERCENTAGE INTERESTS HELD IN FARM-IN OR FARM-OUT AGREEMENTS: Nil 4. BENEFICIAL PERCENTAGE INTERESTS HELD IN FARM-IN OR FARM-OUT AGREEMENTS ACQUIRED OR DISPOSED: Nil 12 Page 12 Battery Minerals LimitedOperations Overview Battery Minerals Limited and its Controlled Entities ABN 75 152 071 095 Financial Report 31 December 2020 13 Annual Report 2020 Contents Corporate Information ....................................................................................................................... 15 Directors’ Report ................................................................................................................................ 16 Auditor’s Independence Declaration ................................................................................................. 33 Independent Auditor’s Report ........................................................................................................... 34 Consolidated Statement of Profit or Loss and Other Comprehensive Income.................................. 38 Consolidated Statement of Financial Position ................................................................................... 39 Consolidated Statement of Cash Flows .............................................................................................. 40 Consolidated Statement of Changes in Equity ................................................................................... 41 Notes to the Consolidated Financial Statements ............................................................................... 42 Directors’ Declaration ........................................................................................................................ 73 14 Page 14 Battery Minerals Limited Contents Corporate Information Corporate Information ....................................................................................................................... 15 Directors’ Report ................................................................................................................................ 16 Auditor’s Independence Declaration ................................................................................................. 33 Independent Auditor’s Report ........................................................................................................... 34 Consolidated Statement of Profit or Loss and Other Comprehensive Income.................................. 38 Consolidated Statement of Financial Position ................................................................................... 39 Consolidated Statement of Cash Flows .............................................................................................. 40 Consolidated Statement of Changes in Equity ................................................................................... 41 Notes to the Consolidated Financial Statements ............................................................................... 42 Directors’ Declaration ........................................................................................................................ 73 This financial report includes the consolidated financial statements and notes of Battery Minerals Limited and its controlled entities (“the Group”). The Group’s presentation currency is AUD ($). A description of the Group’s operations and of its principal activities is included in the review of operations and activities in the Directors’ Report on pages 16 to 32. The Directors’ Report is not part of the financial report. Directors David Flanagan Executive Chairman Jeff Dowling Non-Executive Director Darryl Clark Non-Executive Director (appointed 22 October, 2020) Jeremy Sinclair Non-Executive Director (resigned 22 October, 2020) Company Secretary Tony Walsh Registered Office Ground Floor, 10 Ord Street West Perth WA 6005 Website www.batteryminerals.com Auditor KPMG 235 St. Georges Terrace Perth WA 6000 Bankers Westpac Banking Corporation Level 13, 109 St Georges Terrace Perth WA 6000 Solicitors Thomson Greer Level 27, Exchange Tower 2 The Esplanade Perth WA 6000 Stock Exchange Australian Securities Exchange Limited Level 40, Central Park 152-158 St George's Terrace Perth WA 6000 ASX Codes: BAT (shares), BATO (quoted options) Share Registry Automic Registry Services Level 2, 267 St Georges Terrace Perth WA 6000 T: 1300 288 664 Page 14 Page 15 15 Annual Report 2020 Directors’ Report Directors’ Report The Board of Directors present the following report on Battery Minerals Limited and its controlled entities (referred to hereafter as “the Group”) for the year ended 31 December 2020. Directors The names of the Directors in office during the financial year and until the date of this report are as follows. All Directors were in office for the entire period unless otherwise stated: Director David Flanagan Jeff Dowling Darryl Clark Jeremy Sinclair Position Executive Chairman Non-Executive Chairman Executive Chairman Managing Director Executive Chairman Non-Executive Chairman Non-Executive Director Non-Executive Chairman Non-Executive Director Non-Executive Director Managing Director Appointed 25 March 2021 1 July 2019 8 April 2019 25 January 2018 30 March 2017 11 October 2016 8 April 2019 25 January 2018 22 October 2020 22 November 2019 8 April 2019 Resigned - 25 March 2021 1 July 2019 8 April 2019 25 January 2018 30 March 2017 - 8 April 2019 - 22 October 2020 22 November 2019 Dividends No dividends were paid during the financial year (31 December 2019: Nil). Principal Activities Battery Minerals Limited, an ASX listed company (ASX:BAT) is a diversified mining development and minerals exploration company dedicated to exploring for and developing mineral deposits. During the year, the Company has maintained a focus on its two graphite projects Montepuez and Balama which are located in Mozambique as well as acquiring the Stavely-Stawell Gold Project in western Victoria, Australia. Review of Operations a. Group Overview During the year the Company continued to seek project financing for the Montepuez Graphite Project in Mozambique. This goal was hindered by the slower than anticipated recovery of the graphite market and restrictions related to COVID-19 during the period. While continuing to pursue cost effective financing options for the Mozambican graphite projects, the Company acquired a complimentary exploration project at Gippsland in Western Victoria. The Stavely-Stawell Project contains a significant strike length of the Stavely Volcanics, the Moyston shear and the Miga Arc, all considered prospective for base metals and gold in the region. The Group incurred a loss for the period of $6,546,835 (2019: $36,774,169) which included impairment of mine development and exploration expenditure of $4,142,346 (2019: $34,930,796). 16 Page 16 Battery Minerals Limited Directors’ Report Directors’ Report Directors Jeff Dowling Darryl Clark Jeremy Sinclair Dividends Principal Activities Review of Operations a. Group Overview Directors’ Report (continued) b. Highlights & Significant Changes in State of Affairs The Board of Directors present the following report on Battery Minerals Limited and its controlled entities (referred to hereafter as “the Group”) for the year ended 31 December 2020. Placement: A $5.5m fund raising was successfully completed in November 2020 together with a Share Purchase Plan in December 2020 which raised a further $0.744m. The names of the Directors in office during the financial year and until the date of this report are as follows. All Directors were in office for the entire period unless otherwise stated: Director Position David Flanagan Executive Chairman Non-Executive Chairman Executive Chairman Managing Director Executive Chairman Non-Executive Chairman Non-Executive Director Non-Executive Chairman Non-Executive Director Non-Executive Director Managing Director Appointed 25 March 2021 1 July 2019 8 April 2019 25 January 2018 30 March 2017 11 October 2016 8 April 2019 25 January 2018 22 October 2020 Resigned - - - 25 March 2021 1 July 2019 8 April 2019 25 January 2018 30 March 2017 8 April 2019 22 November 2019 22 October 2020 8 April 2019 22 November 2019 As approved by shareholders at the Annual General Meeting in May 2020, in October 2020 the Company completed the acquisition of an exploration project at Gippsland in Western Victoria. The Stavely-Stawell Project is considered prospective for base metals and gold. Likely Developments and Expected Results The Company intends to actively explore its Stavely-Stawell Project in Western Victoria, following the purchase of this project in October 2020. In addition, subject to graphite prices and ongoing and evolving restrictions related to COVID-19, the Company will continue to seek funding options to progress the Montepuez Graphite Project. This will involve attempting to secure funding in the form of debt and equity to complete development and achieve production of its flake graphite concentrate. The Company continues to focus on deriving value from its graphite assets. The Group’s long-term strategic objective is to explore its projects, pursue the discovery and development of complimentary battery mineral exploration projects, ensure all activities are carried out in a transparent and responsible way and contribute to the well-being of local communities, in addition to increasing shareholders’ value. No dividends were paid during the financial year (31 December 2019: Nil). Risk Management Battery Minerals Limited, an ASX listed company (ASX:BAT) is a diversified mining development and minerals exploration company dedicated to exploring for and developing mineral deposits. During the year, the Company has maintained a focus on its two graphite projects Montepuez and Balama which are located in Mozambique as well as acquiring the Stavely-Stawell Gold Project in western Victoria, Australia. During the year the Company continued to seek project financing for the Montepuez Graphite Project in Mozambique. This goal was hindered by the slower than anticipated recovery of the graphite market and restrictions related to COVID-19 during the period. While continuing to pursue cost effective financing options for the Mozambican graphite projects, the Company acquired a complimentary exploration project at Gippsland in Western Victoria. The Stavely-Stawell Project contains a significant strike length of the Stavely Volcanics, the Moyston shear and the Miga Arc, all considered prospective for base metals and gold in the region. The Group incurred a loss for the period of $6,546,835 (2019: $36,774,169) which included impairment of mine development and exploration expenditure of $4,142,346 (2019: $34,930,796). The Board is responsible for ensuring that risks, and opportunities, are identified on a timely basis and that activities are aligned with these risks and opportunities. 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 the Company’s current strategy. • Implementation of Board approved operating plans and budgets and Board monitoring of progress against these budgets. Environmental regulation The Group is subject to significant environmental regulation in respect of mineral exploration activities. The Group operates within the resources sector and conducts its business activities with respect for the environment while continuing to meet the expectations of shareholders, employees and suppliers. The Group’s exploration activities are currently regulated by significant environmental regulation under the laws of Mozambique and Victoria. The Group aims to ensure that the highest standard of environmental care is achieved, and that it complies with all relevant environmental legislation. The Directors are mindful of the regulatory regime in relation to the impact of the organizations activities on the environment. There have been no known breaches by the Group during the year. Page 16 Page 17 17 Annual Report 2020 Directors’ Report (continued) COVID-19 During the reporting period, the Company has seen macro-economic uncertainty with regards to prices and demand for battery minerals including graphite as a result of the COVID-19 (coronavirus) outbreak. Global uncertainty caused abnormally large volatility in commodity and stock markets. The scale and duration of these developments remain uncertain but could impact the Company’s ability to finance its projects. After Reporting Date Events On 25 March 2021 the Company appointed Mr David Flanagan to the role of Executive Chairman from his previous Non-Executive Chairman role. On 4 January 2021 the Company appointed Mr Nicholas Jolly as General Manager Exploration. Apart from the above, there are no other events after the end of the Reporting Period to disclose. Information on Directors David Flanagan Qualifications Experience Executive Chairman (appointed 25 March 2021) Non-Executive Chairman (appointed 1 July 2019 – resigned 25 March 2021) Executive Chairman (appointed 8 April 2019 – resigned 1 July 2019) Managing Director (appointed 25 January 2018 – resigned 8 April 2019) Executive Chairman (appointed 30 March 2017 – resigned 25 January 2018) Non-Executive Chairman (appointed 11 October 2016 – resigned 30 March 2017) BSc, WASM, MAusIMM, FAICD Mr Flanagan is a geologist with more than 25 years' experience in the mining and mineral exploration industry in Australia, Indonesia and Africa. Mr Flanagan was the founding Managing Director at Atlas Iron. During his tenure at Atlas Iron he oversaw its growth from a junior exploration company, to an ASX top 100 listed iron ore exporter, and the operator of three iron mines producing at a rate of 12Mtpa. Mr Flanagan is the past Chancellor of Murdoch University, and during 2014 was named Western Australian of the Year. He was awarded an Eisenhower Fellowship in 2013 and remains active in the not for profit sector. In January 2018, David was awarded the prestigious Member of the General Division of the Order of Australia Award. Current Directorships Former directorships in last 3 years Non-Executive Chairman, CZR Resources Limited (appointed 3 April 2020) Managing Director, Atlas Iron Limited (resigned 28 June 2016) Non-Executive Director, Northern Star Resources Limited (resigned 20 April 2018) Non-Executive Director, Magmatic Resources Limited (resigned 4 February 2021). Jeff Dowling Qualifications Non-Executive Director (appointed 8 April 2019) Non-Executive Chairman (appointed 25 January 2018 – resigned 8 April 2019) Bachelor of Commerce from the University of Western Australia and is a fellow of the Institute of Chartered Accountants, the Australian Institute of Company Directors and the Financial Services Institute of Australasia. 18 Page 18 Battery Minerals Limited Directors’ Report (continued) Directors’ Report (continued) COVID-19 Experience During the reporting period, the Company has seen macro-economic uncertainty with regards to prices and demand for battery minerals including graphite as a result of the COVID-19 (coronavirus) outbreak. Global uncertainty caused abnormally large volatility in commodity and stock markets. The scale and duration of these developments remain uncertain but could impact the Company’s ability to finance its projects. After Reporting Date Events On 25 March 2021 the Company appointed Mr David Flanagan to the role of Executive Chairman from his previous Non-Executive Chairman role. On 4 January 2021 the Company appointed Mr Nicholas Jolly as General Manager Exploration. Apart from the above, there are no other events after the end of the Reporting Period to disclose. Information on Directors David Flanagan Executive Chairman (appointed 25 March 2021) Qualifications Experience Non-Executive Chairman (appointed 1 July 2019 – resigned 25 March 2021) Executive Chairman (appointed 8 April 2019 – resigned 1 July 2019) Managing Director (appointed 25 January 2018 – resigned 8 April 2019) Executive Chairman (appointed 30 March 2017 – resigned 25 January 2018) Non-Executive Chairman (appointed 11 October 2016 – resigned 30 March 2017) BSc, WASM, MAusIMM, FAICD Mr Flanagan is a geologist with more than 25 years' experience in the mining and mineral exploration industry in Australia, Indonesia and Africa. Mr Flanagan was the founding Managing Director at Atlas Iron. During his tenure at Atlas Iron he oversaw its growth from a junior exploration company, to an ASX top 100 listed iron ore exporter, and the operator of three iron mines producing at a rate of 12Mtpa. Mr Flanagan is the past Chancellor of Murdoch University, and during 2014 was named Western Australian of the Year. He was awarded an Eisenhower Fellowship in 2013 and remains active in the not for profit sector. In January 2018, David was awarded the prestigious Member of the General Division of the Order of Australia Award. Current Directorships Non-Executive Chairman, CZR Resources Limited (appointed 3 April 2020) Former directorships in last Managing Director, Atlas Iron Limited (resigned 28 June 2016) 3 years Non-Executive Director, Northern Star Resources Limited (resigned 20 April 2018) Non-Executive Director, Magmatic Resources Limited (resigned 4 February 2021). Jeff Dowling Non-Executive Director (appointed 8 April 2019) Qualifications Non-Executive Chairman (appointed 25 January 2018 – resigned 8 April 2019) Bachelor of Commerce from the University of Western Australia and is a fellow of the Institute of Chartered Accountants, the Australian Institute of Company Directors and the Financial Services Institute of Australasia. Current Directorships Former directorships in last 3 years Darryl Clark Qualifications Experience Current Directorships Jeremy Sinclair Qualifications Experience Current Directorships Former directorships in last 3 years Jeff is a proficient corporate leader with 37 years’ experience in professional services with Ernst & Young. Jeff has held numerous leadership roles within Ernst & Young including at national level being a member of the executive management team and a Board Member. Jeff’s professional expertise centres around audit, risk and financial acumen derived from acting as lead partner on large public company audits, capital raisings and corporate transactions principally in the resources, retail and insurance industries. Jeff’s career with Ernst & Young culminated in his appointment as Managing Partner of the Ernst & Young Western Region for a period of 5 years. Jeff also led Ernst & Young’s Oceania China Business Group and was responsible for building Ernst & Young’s Oceania relationships with Chinese Corporations. Non-Executive Director, S2 Resources Limited Non-Executive Director, NRW Holdings Limited Non-Executive Director, Fleetwood Corporation Ltd Chairman, Pura Vida Energy NL (resigned 16 May 2016) Non-Executive Director, Atlas Iron Limited (resigned 4 May 2016) Non-Executive Director (appointed 22 October 2020) PhD, BSc (Hons),F AUSIMM. Graduate of CODES UTAS. Darryl is principally an exploration geologist whose career has taken him throughout Australia, Central Asia and South East Asia for over 26 years. His responsibilities over the last 17 years have involved him in a diverse range of technological, political and cultural environments with unique challenges. During previous corporate roles with both Vale and BHP Billiton, and in consulting roles including SRK, he has been responsible for business development strategies, designing multi-commodity exploration programs and the co-ordination of exploration teams to deliver discovery events. Recently, Darryl spent several years in Executive Operations roles, initially with Cameco as the CEO of the JV Inkai Uranium Operation in Kazakhstan. Subsequently, Darryl was the CEO of the RG Gold Joint Venture operation also in Kazakhstan. Non-Executive Director, Peako Ltd (appointed 20 March 2019) Non-Executive Director (appointed 22 November 2019 – resigned 22 October 2020)) Managing Director (appointed 8 April 2019 – resigned 22 November 2019) BSc Engineering (Mining) Jeremy is a mining engineer with 25 years’ experience in a broad range of roles including executive, operational, project delivery, corporate leadership and consulting in Australia and Africa. Prior to joining Battery Minerals Limited, Mr Sinclair was the Chief Operating Officer at Atlas Iron, a position which he held from 2011 to 2018. Mr Sinclair oversaw the commissioning and ramp up of Atlas’ five mines from a production rate of 1Mtpa to a production rate of 16Mtpa. Prior to his time at Atlas Mr Sinclair held key management roles in the Pilbara iron ore operations of Rio Tinto. Nil Nil Page 18 Page 19 19 Annual Report 2020 Directors’ Report (continued) Director Meetings The number of Directors’ meetings and number of meetings attended by each of the Directors of the Group during the year: Director Mr David Flanagan Mr Jeff Dowling Mr Darryl Clark Mr Jeremy Sinclair Number of Meetings Eligible to Attend Number of Meetings Directors’ attended 10 10 3 7 10 10 3 7 Retirement, election and continuation in office of directors In accordance with the Constitution, the appropriate directors will retire at the annual general meeting and, being eligible, offer themselves for re-election. Jeremy Sinclair announced his retirement on 22 October 2020. Company Secretary Mr Tony Walsh was appointed as Company Secretary on 17 February 2017. Tony Walsh has over 30 years’ experience in dealing with listed companies, ASX, ASIC and corporate transactions including 14 years with the ASX in Perth where he acted as ASX liaison with the JORC committee, four years as Chairman of an ASX listed mining explorer and as a director of a London AIM listed explorer. Tony is also currently Company Secretary of Legend Mining Ltd (ASX: LEG). Tony is a member of the Australian Institute of Company Directors, a Fellow of the Governance Institute of Australia, the Institute of Chartered Secretaries and the Institute of Chartered Accountants in Australia. Mr Nick Day was appointed as Joint Company Secretary on 8 October 2018 and resigned on 1 July 2020. Nick Day has over 20 years of experience as a company director, CFO and company secretary for a broad range of listed and private technology companies and mining and exploration companies. These have included ASX and TSX listed exploration companies with copper, gold, lead, coal, zinc, rare earths and uranium projects in Madagascar, the Philippines and North/South America, nano-technology and e-book IT companies and nickel/platinum AIM and ASX listed exploration and mining operations across six countries in Africa. He has extensive experience in Africa and Asia with strategic planning, business development, mergers and acquisitions, bankable feasibility studies, debt raising and project development. Financial Performance and Financial Position Financial Performance / Position Cash and cash equivalents Net assets Loss for the period Loss per share (cents) 31-Dec-20 31-Dec-19 Change $ 7,303,942 20,789,576 (6,546,835) (0.458) $ 4,119,160 10,904,565 (36,774,169) (2.930) % 77.3% 90.6% -82.7% -84.2% The net assets of the Group have increased from $10,904,565 as at 31 December 2019 to $20,789,576 as at 31 December 2020 due to the acquisition of the Stavely-Stawell Project in Victoria and an increased cash balance at reporting date. The Group’s working capital (current assets less current liabilities) has increased from $3,982,054 as at 31 December 2019 to $7,117,153 as at 31 December 2020, due to the higher cash balance following the share placement and share purchase plan completed in November and December 2020. 20 Page 20 Battery Minerals Limited Director Meetings the year: Director Mr David Flanagan Mr Jeff Dowling Mr Darryl Clark Mr Jeremy Sinclair Company Secretary Number of Meetings Eligible to Attend Number of Meetings Directors’ attended 10 10 3 7 10 10 3 7 Retirement, election and continuation in office of directors In accordance with the Constitution, the appropriate directors will retire at the annual general meeting and, being eligible, offer themselves for re-election. Jeremy Sinclair announced his retirement on 22 October 2020. Mr Tony Walsh was appointed as Company Secretary on 17 February 2017. Tony Walsh has over 30 years’ experience in dealing with listed companies, ASX, ASIC and corporate transactions including 14 years with the ASX in Perth where he acted as ASX liaison with the JORC committee, four years as Chairman of an ASX listed mining explorer and as a director of a London AIM listed explorer. Tony is also currently Company Secretary of Legend Mining Ltd (ASX: LEG). Tony is a member of the Australian Institute of Company Directors, a Fellow of the Governance Institute of Australia, the Institute of Chartered Secretaries and the Institute of Chartered Accountants in Australia. Mr Nick Day was appointed as Joint Company Secretary on 8 October 2018 and resigned on 1 July 2020. Nick Day has over 20 years of experience as a company director, CFO and company secretary for a broad range of listed and private technology companies and mining and exploration companies. These have included ASX and TSX listed exploration companies with copper, gold, lead, coal, zinc, rare earths and uranium projects in Madagascar, the Philippines and North/South America, nano-technology and e-book IT companies and nickel/platinum AIM and ASX listed exploration and mining operations across six countries in Africa. He has extensive experience in Africa and Asia with strategic planning, business development, mergers and acquisitions, bankable feasibility studies, debt raising and project development. Financial Performance and Financial Position 31-Dec-20 31-Dec-19 Change Financial Performance / Position $ $ Cash and cash equivalents 7,303,942 4,119,160 Net assets Loss for the period Loss per share (cents) 20,789,576 (6,546,835) (0.458) 10,904,565 (36,774,169) (2.930) % 77.3% 90.6% -82.7% -84.2% The net assets of the Group have increased from $10,904,565 as at 31 December 2019 to $20,789,576 as at 31 December 2020 due to the acquisition of the Stavely-Stawell Project in Victoria and an increased cash balance at reporting date. The Group’s working capital (current assets less current liabilities) has increased from $3,982,054 as at 31 December 2019 to $7,117,153 as at 31 December 2020, due to the higher cash balance following the share placement and share purchase plan completed in November and December 2020. Directors’ Report (continued) Directors’ Report (continued) Shares under Options The number of Directors’ meetings and number of meetings attended by each of the Directors of the Group during Unissued ordinary shares of Battery Minerals Limited under options as at 31 December 2020 are summarised as follows: Directors (current & former) Employees (current & former) Service Providers Project Acquisition Shareholders (listed options, ASX:BATO) Non-Vested 58,000,000 54,625,000 - 70,000,000 - Vested 30,000,000 14,675,000 15,600,000 - 274,484,066 182,625,000 334,759,066 Total 88,000,000 69,300,000 15,600,000 70,000,000 274,484,066 517,384,066 Insurance of Directors and Officers Liability The Group has executed a policy with an appropriate level of directors’ and officers’ insurance cover. The liabilities insured are legal costs that may be incurred in defending civil or criminal proceedings that may be brought against the officers in their capacity as officers of entities in the Group, and any other payments arising from liabilities incurred by the officers in connection with such proceedings. This does not include such liabilities that arise from conduct involving a wilful breach of duty by the officers or the improper use by the officers of their position or of information to gain advantage for them or someone else or to cause detriment to the Group. Indemnity and Insurance of Auditors The Company has not, during or since the financial year, indemnified or agreed to indemnify the auditor of the Company or any related entity against a liability incurred by the auditor. During the financial year, the Company has not paid a premium in respect of a contract to insure the auditor of the Company or any related entity. Non-Audit Services Details of the amounts paid or payable to the auditor for non-audit services provided during the financial year by the auditor are outlined in Note 22 to the financial statements. The Directors are satisfied that the provision of non- audit services during the financial year, by the auditor (or by another person or firm on the auditor’s behalf), is compatible with the general standard of independence for auditors imposed by the Corporations Act 2001. The Directors are of the opinion that the services as disclosed in Note 22 to the financial statements do not compromise the external auditor’s independence. Proceedings on Behalf of the Group No person has applied to the Court under section 237 of the Corporations Act 2001 for leave to bring proceedings on behalf of the Group, or to intervene in any proceedings to which the Group is a party, for the purpose of taking responsibility on behalf of the Group for all or part of those proceedings. No proceedings have been brought or intervened in on behalf of the Group with leave of the Court under section 237 of the Corporations Act 2001. Page 20 Page 21 21 Annual Report 2020 Directors’ Report (continued) Audited Remuneration Report This report for the year ended 31 December 2020 outlines the remuneration arrangements of the Group in accordance with the requirements of the Corporations Act 2001 (‘the Act’) and its regulations. This information has been audited as required by section 308(3C) of the Act. The remuneration report details the remuneration arrangements for Directors and Key Management Personnel (‘KMP’) who are defined as those persons having authority and responsibility for planning, directing and controlling the major activities of the Group, directly or indirectly, including any Director (whether executive or otherwise) of the Parent company. The remuneration report is set out under the following main headings: A B C D E F Principles used to determine the nature and amount of remuneration Details of remuneration Service agreements Share-based compensation Director and KMP share and option holdings Additional information The names of the Directors and Key Management Personnel (KMP) in office during the period are as follows: Director David Flanagan David Flanagan Jeff Dowling Darryl Clark Jeremy Sinclair Position Executive Chairman Non-Executive Chairman Executive Chairman Managing Director Executive Chairman Non-Executive Chairman Non-Executive Director Non-Executive Chairman Non-Executive Director Non-Executive Director Managing Director Appointed 25 March 2021 1 July 2019 8 April 2019 25 January 2018 30 March 2017 11 October 2016 8 April 2019 25 January 2018 22 October 2020 22 November 2019 8 April 2019 Resigned - 25 March 2021 1 July 2019 8 April 2019 25 January 2018 30 March 2017 - 8 April 2019 - 22 October 2020 22 November 2019 KMP Tony Walsh Nick Day Position Company Secretary CFO & Company Secretary Appointed 17 February 2017 8 October 2018 Resigned - 1 July 2020 A. Principles Used to Determine the Nature and Amount of Remuneration (i) Board Oversight For 2020, the Board elected not to establish a remuneration committee based on the size of the organisation and had instead agreed to meet as deemed necessary and allocate the appropriate time at its board meetings. The following items are considered and discussed as deemed necessary at the board meetings: The remuneration of Directors, senior officers and general staff; The terms and conditions of employment for the Chairman; Review of the Chairman’s performance, at least annually, including setting the Chairman’s goals for the coming year and reviewing progress in achieving those goals; 22 Page 22 Battery Minerals Limited Directors’ Report (continued) Directors’ Report (continued) Audited Remuneration Report Audited Remuneration Report (continued) The recommendations of the Chairman for the remuneration of all direct reports; Board structure and Director evaluation; Consideration of Non-Executive Directors remuneration. Ensuring that remuneration policies and structures are fair and competitive and aligned with the long- term interests of the Company. (ii) Remuneration Philosophy The Company’s current remuneration policy is based on its status as a junior mineral resources company. The entity’s performance is dependent upon its exploration, project evaluation and project development successes, and as such remuneration is maintained at a reasonable level to enable the attraction of key employees. The Company’s broad remuneration strategy is to ensure the remuneration package properly reflects the person’s duties and responsibilities and that remuneration is competitive in attracting, retaining and motivating people of the highest quality. To ensure the maximum amount of the Company’s capital where possible is directed toward its exploration, project evaluation and project development activities, the Company issues options as a “non-cash” method of remunerating and incentivising Directors and Key Management Personal to align their goals with the Company and its shareholders. (iii) Non-Executive Directors a) Fees and Payments Fees and payments to Non responsibilities of, the directors. Non Board. The Chair’s fees are determined independently to the fees of non ‑ comparative roles in the external market. Executive Directors reflect the demands which are made on, and the Executive Directors’ fees and payments are reviewed annually by the executive directors based on ‑ ‑ Non-Executive Directors have up to the date of this report, been offered incentive zero exercise priced options with the objective of ensuring director goals are aligned with the Company and its shareholders. The vesting of the options issued are subject to minimum service periods of up to 12 months. b) Base Fees The current base fees paid to Non-Executive Directors were last reviewed with effect from 25 November 2020. Prior to this they were based on rates set in February 2015. The Directors’ share and option holdings ensure that their goals are aligned with the Company’s share price. Non Executive Directors’ fees are determined within an aggregate Directors’ fee pool limit, which is periodically recommended for approval by shareholders. The Directors’ fee pool will be reviewed for adequacy periodically. ‑ The maximum currently stands at $500,000 cash remuneration per annum and was approved by shareholders via the adoption of a revised constitution at a general meeting of shareholders on 6 July 2012. Page 22 Page 23 23 This report for the year ended 31 December 2020 outlines the remuneration arrangements of the Group in accordance with the requirements of the Corporations Act 2001 (‘the Act’) and its regulations. This information has been audited as required by section 308(3C) of the Act. The remuneration report details the remuneration arrangements for Directors and Key Management Personnel (‘KMP’) who are defined as those persons having authority and responsibility for planning, directing and controlling the major activities of the Group, directly or indirectly, including any Director (whether executive or otherwise) of the Parent company. The remuneration report is set out under the following main headings: Principles used to determine the nature and amount of remuneration A B C D E F Details of remuneration Service agreements Share-based compensation Director and KMP share and option holdings Additional information The names of the Directors and Key Management Personnel (KMP) in office during the period are as follows: Director David Flanagan David Flanagan Jeff Dowling Darryl Clark Jeremy Sinclair Position Executive Chairman Non-Executive Chairman Executive Chairman Managing Director Executive Chairman Non-Executive Chairman Non-Executive Director Non-Executive Chairman Non-Executive Director Non-Executive Director Managing Director Appointed 25 March 2021 1 July 2019 8 April 2019 25 January 2018 30 March 2017 11 October 2016 8 April 2019 25 January 2018 22 October 2020 22 November 2019 22 October 2020 8 April 2019 22 November 2019 Resigned 25 March 2021 1 July 2019 8 April 2019 25 January 2018 30 March 2017 8 April 2019 - - - - KMP Tony Walsh Nick Day Position Company Secretary CFO & Company Secretary Appointed 17 February 2017 8 October 2018 Resigned 1 July 2020 A. Principles Used to Determine the Nature and Amount of Remuneration (i) Board Oversight For 2020, the Board elected not to establish a remuneration committee based on the size of the organisation and had instead agreed to meet as deemed necessary and allocate the appropriate time at its board meetings. The following items are considered and discussed as deemed necessary at the board meetings: The remuneration of Directors, senior officers and general staff; The terms and conditions of employment for the Chairman; Review of the Chairman’s performance, at least annually, including setting the Chairman’s goals for the coming year and reviewing progress in achieving those goals; Annual Report 2020 Directors’ Report (continued) Audited Remuneration Report (continued) c) Options Issue of options to Non-Executive Directors as part of their overall remuneration package is subject to shareholder approval. Options granted to Non-Executive Directors are linked to continuous service as a Non- Executive Director with the Company. d) Additional Fees A Non-Executive Director may also be paid fees or other amounts as the Directors determine if a Director performs special duties or otherwise performs services outside the scope of the ordinary duties of a Director and are based on commercial rates. A Non-Executive Director may also be reimbursed for out-of-pocket expenses incurred as a result of their directorship or any special duties. e) Retirement Allowances for Directors Current base fees are inclusive of superannuation contributions. Superannuation contributions required under the Australian Superannuation Guarantee Legislation will be made as part of the directors’ overall fee entitlements where applicable. No other retirement allowances are paid. iv) Executive Remuneration From November 2019 when Mr Sinclair stepped down as Managing Director, until the completion of the Gippsland Prospecting transaction in October 2020, the Company as part of its cash preservation strategy, did not employ any new full-time executives. Following the completion of the acquisition of Gippsland Prospecting, the Company has employed a General Manager Exploration with specific focus on the exploration assets acquired via the Gippsland Prospecting transaction. The nature and amount of remuneration of Executives are assessed on a periodic basis with the overall objective of ensuring maximum stakeholder benefit from the retention of high performing Executives. Given the current phase of the Company’s development the Board does not consider earnings during the current and previous financial years when determining, and in relation to, the nature and amount of remuneration of Executives. The Executive remuneration framework has two components: Base pay and benefits, including superannuation; and Equity incentives. Base Pay Base Pay consists of base salaries, as well as employer contributions to superannuation funds. Base Pay is reviewed annually by the Board. The process consists of a review of Company and individual performance, relevant comparative remuneration externally and internally and, where appropriate, external advice on policies and practices. No external remuneration consultants were used during the financial year. The Company does not currently have a short-term incentive plan in place. 24 Page 24 Battery Minerals Limited Directors’ Report (continued) Directors’ Report (continued) Audited Remuneration Report (continued) Audited Remuneration Report (continued) Performance Based Remuneration - Equity Incentives Scheme Issue of options to Non-Executive Directors as part of their overall remuneration package is subject to shareholder approval. Options granted to Non-Executive Directors are linked to continuous service as a Non- Executive Director with the Company. The Company has adopted an Employee Share Option Plan (“ESOP”) to reward KMP and key employees and contractors for long-term performance. The maximum number of securities that can be issued under the ESOP plan is 5% of the Company’s Issued Shares. The Company believes that performance-based remuneration helps to attract and retain its key staff, whether employees or contractors. Grants made to eligible participants under the ESOP will assist with the Company's employment strategy and will: a) b) c) d) enable the Company to recruit, incentivise and retain KMP and other eligible employees to assist with the exploration and development of its projects to achieve the Company’s strategic objectives; link the reward of eligible employees with the achievements of strategic goals and the long-term performance of the Company; align the financial interests of eligible participants of the proposed Plan with those of Shareholders; and provide incentives to eligible employees of the ESOP to focus on superior performance that creates shareholder value. Employee Options granted under the ESOP to eligible participants will be linked to the achievement by the Company of certain performance conditions as determined by the Board from time to time. These performance conditions must be satisfied in order for the employee Options to vest - current employee performance conditions are noted in section D below. The employee Options also vest where there is a change of control of the Company. In determining the allocations of equity, the Board considers relevant comparative allocations of equity externally and internally. An independent remuneration consultant was not required to assist with the allocations of equity given the Boards current industry knowledge and experience with allocations of equity. The nature and amount of remuneration of Executives are assessed on a periodic basis with the overall objective of ensuring maximum stakeholder benefit from the retention of high performing Executives. Options issued to Non-Executive Directors have vesting conditions based on continuous service with the Company. Given the nature and current operations of the Group, the Board exercises their discretion in determining whether additional options are granted each year. The Board envisages that the Company’s remuneration policies and procedures for executive remuneration will also evolve to a more traditional corporate governance model and in line with ASX Corporate Governance guidelines. This is expected to include more traditional performance based short-term and long-term incentive plans, which will be recommended to the Board for its consideration. c) Options d) Additional Fees A Non-Executive Director may also be paid fees or other amounts as the Directors determine if a Director performs special duties or otherwise performs services outside the scope of the ordinary duties of a Director and are based on commercial rates. A Non-Executive Director may also be reimbursed for out-of-pocket expenses incurred as a result of their directorship or any special duties. e) Retirement Allowances for Directors Current base fees are inclusive of superannuation contributions. Superannuation contributions required under the Australian Superannuation Guarantee Legislation will be made as part of the directors’ overall fee entitlements where applicable. No other retirement allowances are paid. iv) Executive Remuneration From November 2019 when Mr Sinclair stepped down as Managing Director, until the completion of the Gippsland Prospecting transaction in October 2020, the Company as part of its cash preservation strategy, did not employ any new full-time executives. Following the completion of the acquisition of Gippsland Prospecting, the Company has employed a General Manager Exploration with specific focus on the exploration assets acquired via the Gippsland Prospecting transaction. Given the current phase of the Company’s development the Board does not consider earnings during the current and previous financial years when determining, and in relation to, the nature and amount of remuneration of Executives. The Executive remuneration framework has two components: Base pay and benefits, including superannuation; and Equity incentives. Base Pay Base Pay consists of base salaries, as well as employer contributions to superannuation funds. Base Pay is reviewed annually by the Board. The process consists of a review of Company and individual performance, relevant comparative remuneration externally and internally and, where appropriate, external advice on policies and practices. No external remuneration consultants were used during the financial year. The Company does not currently have a short-term incentive plan in place. Page 24 Page 25 25 Annual Report 2020 Directors’ Report (continued) Audited Remuneration Report (continued) v) Other Benefits No benefits other than noted above, and in the table below, are paid to Directors or Management except for expense reimbursements incurred in normal operations of the business. vi) Remuneration consultants Remuneration consultants have not been used in determining the remuneration paid. B. Details of Remuneration Amounts of Remuneration Details of the remuneration of the directors and key management personnel of the Group as at 31 December 2020 are summarised in the table below: Fixed Remuneration $ Short- term employee benefits 31 December 2020 Salary & fees Termination benefit Non- monetary benefits Performance Based Remuneration $ Share-based payments Total % of variable remunera tion Options Shares Rights % Post- employment benefits Super- annuation Directors Non-executive directors David Flanagan Jeff Dowling Darryl Clark – appointed 22/10/20 Jeremy Sinclair – resigned 22/10/20 Sub-total Key Management Personnel (KMP) Tony Walsh Nick Day – resigned 1/7/20 Sub-total Total Directors and KMP compensation (Group) 106,313 37,271 7,635 31,554 182,773 103,036 31,912 134,948 317,721 - - - - - - 20,000(1) 20,000 20,000 - - - - - - - - - 10,100 3,541 725 1,858 16,224 - 3,220 3,220 - 68,525 - - 68,525 - - - 19,444 68,525 - - - - - - - - - - - - - - - - - - 116,413 109,337 8,360 33,412 267,522 103,036 55,132 158,168 0% 63% 0% 0% 26% 0% 0% 0% 425,690 16% The above table includes values for share based payments (options) at their fair value. (1) A termination benefit in the form of a redundancy payment was paid to Nick Day in accordance with his employment agreement. 26 Page 26 Battery Minerals Limited Directors’ Report (continued) Directors’ Report (continued) Audited Remuneration Report (continued) Audited Remuneration Report (continued) No benefits other than noted above, and in the table below, are paid to Directors or Management except for expense reimbursements incurred in normal operations of the business. Remuneration consultants have not been used in determining the remuneration paid. v) Other Benefits vi) Remuneration consultants B. Details of Remuneration Amounts of Remuneration Details of the remuneration of the directors and key management personnel of the Group as at 31 December 2020 are summarised in the table below: Short- term employee benefits $ Fixed Remuneration Performance Based Remuneration $ Share-based payments Total % of variable remunera tion Post- employment benefits Super- annuation 31 December 2020 Salary & Termination Non- Options Shares Rights % Directors Non-executive directors David Flanagan Jeff Dowling Darryl Clark – appointed 22/10/20 Jeremy Sinclair – resigned 22/10/20 Sub-total Key Management Personnel (KMP) Nick Day – resigned 1/7/20 Tony Walsh Sub-total Total Directors and KMP compensation (Group) fees benefit monetary benefits 106,313 37,271 7,635 31,554 182,773 103,036 31,912 134,948 317,721 - - - - - - 20,000(1) 20,000 20,000 - - - - - - - - - 10,100 3,541 725 1,858 16,224 - 3,220 3,220 68,525 68,525 - - - - - - - - - - - - - - - 116,413 109,337 8,360 33,412 267,522 103,036 55,132 158,168 0% 63% 0% 0% 26% 0% 0% 0% - - - - - - - - - 19,444 68,525 425,690 16% The above table includes values for share based payments (options) at their fair value. (1) A termination benefit in the form of a redundancy payment was paid to Nick Day in accordance with his employment agreement. Details of the remuneration of the directors and key management personnel of the Group as at 31 December 2019 are summarised in the table below: Fixed Remuneration $ Short- term employee benefits 31 December 2019 Salary & fees Termination benefit Non- monetary benefits Performance Based Remuneration $ Share-based payments Total % of variable remunera tion Options Shares Rights % Post- employment benefits Super- annuation Directors Non-executive directors David Flanagan – appointed 8/04/19 Jeff Dowling Jeremy Sinclair – appointed 22/11/19 Gilbert George -resigned 21/05/19 Brett Smith - resigned 21/05/19 Paul Glasson- resigned 21/06/19 Ivy Chen – resigned 21/06/19 Sub-total Executive directors David Flanagan – resigned 8/04/19 Jeremy Sinclair – appointed 8/04/19 – resigned 22/11/19 Sub-total Key Management Personnel (KMP) Nick Day Tony Walsh Ben Van Roon – resigned 8/11/19 Sub-total Total Directors and KMP compensation (Group) 78,200 52,148 3,425 24,388(3) 18,250 17,380 19,692 213,483 - - - - - - - - 122,593 208,931 - 10,414 (6) 331,524 10,414 180,654 (7) 187,313 (8) 168,356 (9) 536,323 - - 4,722 (6) 4,722 1,081,330 15,136 - - - - - - - - - - - - - - - 7,404 4,954 325 - - - 1,871 14,554 - (1) 83,035 - (2) 3,329 3,329 12,716 (9,913) (4) 92,496 11,042 16,187 (239,802) (5) - (2) 27,229 (239,802) 13,940 - 11,418 25,358 - (10) (47,561) (11) (25,148) (4) (72,709) 67,141 (220,015) - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 85,604 140,137 3,750 27,717 21,579 30,096 11,650 320,533 (106,167) 235,532 0% 59% 0% 12% 15% 42% (85%) 29% 226% 0% 129,365 (185%) 194,594 139,752 159,348 493,694 0% (34%) (16%) (15%) 943,592 (23%) The above table includes values for share based payments (options) at their fair value. (1) 8,000,000 zero exercise price options were issued to David Flanagan on 21 May 2019 following the approval of a general meeting of Battery Minerals shareholders. No expense was recognised due to a low probability of vesting conditions being met. (2) 50,000,000 zero exercise price options were issued to Jeremy Sinclair on 21 May 2019 following the approval of a general meeting of Battery Minerals shareholders. No expense was recognised as the options were forfeited following his resignation from the position of Managing Director. The directors’ fees of Gilbert George include fees for additional professional consultancy work of $5,000. (3) (4) Due to the resignation of Ivy Chen and Ben van Roon, 600,000 and 22,000,000 options were forfeited respectively resulting in a reversal of the share-based payment expense recognised in profit and loss. (5) A reversal of the share-based payment expense recognised in profit and loss represents the expectation of vesting conditions not being met. (6) A termination benefit in the form of annual leave entitlements was paid to Jeremy Sinclair and Ben van Roon in accordance with their employment agreement. (7) $300,000 remuneration was paid at 20% part-time pro-rata from 1 July 2019 as per the revised service agreement. (8) $300,000 remuneration was paid at 80% part-time pro-rata till 30 June 2019 and at 40% part-time pro-rata from 1 July 2019. (9) $325,000 remuneration was paid at the casual rate from 1 July 2019 as per the revised service agreement. (10) 4,000,000 options were issued to Nick Day following the approval of the ESOP at a general meeting of Battery Minerals shareholders. No expense was recognised due to the expectation of vesting conditions not being met. (11) 10,000,000 options were issued to Tony Walsh following the approval of the ESOP at a general meeting of Battery Minerals shareholders. No expense was recognised due to the expectation of vesting conditions not being met. The share-based payment expense recognised in profit and loss in prior periods has been reversed due to a low probability of vesting conditions being met. Page 26 Page 27 27 Annual Report 2020 Directors’ Report (continued) Audited Remuneration Report (continued) C. Service Agreements Non-executive Directors On appointment to the Board, all non-executive directors enter into a service agreement with the Group in the form of a letter of appointment. The letter summarises the Board policies and terms, including compensation, relevant to a director. The following table summarises the remuneration of directors as per service agreements in place as at 31 December 2020. Name Non-Executive Term of Agreement Base Salary including Superannuation Termination Benefit (3) Chairman – David Flanagan (from 08/04/19) Director – Jeff Dowling (from 08/04/19) Director – Darryl Clark (from 22/10/20) Open Open Open $85,000(1) $50,000(2) $50,000(2) Nil. Subject to re-election by shareholders. Nil. Subject to re-election by shareholders Nil. Subject to re-election by shareholders (1) Chairman fees were reduced from $80,000 per annum to $64,000 per annum effective 18 May 2020 and increased to $85,000 per annum effective 25 November 2020. (2) Non-executive director fees were reduced from $45,000 per annum to $36,000 per annum effective 18 May 2020 and increased to $50,000 per annum effective 25 November 2020. (3) Subject to clause 13.2 of the Company’s constitution, at the Company's annual general meeting in every year, one-third of the Directors for the time being, or, if their number is not a multiple of 3, then the number nearest one-third (rounded upwards in case of doubt), shall retire from office, provided always that no Director except a Managing Director shall hold office for a period in excess of 3 years, or until the third annual general meeting following his or her appointment, whichever is the longer, without submitting himself for re-election. The Directors to retire at an annual general meeting are those who have been longest in office since their last election, but, as between persons who became Directors on the same day, those to retire shall (unless they otherwise agree among themselves) be determined by drawing lots. A retiring Director is eligible for re-election. An election of Directors shall take place each year. Non-executive directors are subject to standard terms and conditions including duties to the Group, confidentiality and disclosure. Key Management Personnel Remuneration and other terms of employment for a Managing Director and Key Management Personnel are formalized in their service agreements. Employees are eligible for long-term incentive benefits under the Battery Minerals Employee Option Plan. Mr Tony Walsh, Company Secretary • Base Remuneration - $300,000 inclusive of superannuation (paid pro-rata for part-time equivalent) • Termination - one month’s notice Mr Nick Day, Chief Financial Officer & Joint Company Secretary (resigned 1 July 2020) • Base Remuneration - $300,000 inclusive of superannuation (paid pro-rata for part time from 1 July 2019). • Termination - 3 months’ notice. D. Share-based Compensation Options There were no options issued to Directors and Key Management Personal as remuneration during the financial year. 28 Page 28 Battery Minerals Limited Directors’ Report (continued) Directors’ Report (continued) Audited Remuneration Report (continued) Audited Remuneration Report (continued) C. Service Agreements Non-executive Directors place as at 31 December 2020. Name Non-Executive On appointment to the Board, all non-executive directors enter into a service agreement with the Group in the form of a letter of appointment. The letter summarises the Board policies and terms, including compensation, relevant to a director. The following table summarises the remuneration of directors as per service agreements in Term of Agreement Base Salary including Superannuation Termination Benefit (3) Chairman – David Flanagan (from 08/04/19) Director – Jeff Dowling (from 08/04/19) Director – Darryl Clark (from 22/10/20) Open Open Open $85,000(1) $50,000(2) $50,000(2) Nil. Subject to re-election by shareholders. Nil. Subject to re-election by shareholders Nil. Subject to re-election by shareholders (2) Non-executive director fees were reduced from $45,000 per annum to $36,000 per annum effective 18 May 2020 and increased annum effective 25 November 2020. to $50,000 per annum effective 25 November 2020. (3) Subject to clause 13.2 of the Company’s constitution, at the Company's annual general meeting in every year, one-third of the Directors for the time being, or, if their number is not a multiple of 3, then the number nearest one-third (rounded upwards in case of doubt), shall retire from office, provided always that no Director except a Managing Director shall hold office for a period in excess of 3 years, or until the third annual general meeting following his or her appointment, whichever is the longer, without submitting himself for re-election. The Directors to retire at an annual general meeting are those who have been longest in office since their last election, but, as between persons who became Directors on the same day, those to retire shall (unless they otherwise agree among themselves) be determined by drawing lots. A retiring Director is eligible for re-election. An election of Directors shall take place each year. Non-executive directors are subject to standard terms and conditions including duties to the Group, confidentiality and disclosure. Key Management Personnel Minerals Employee Option Plan. Mr Tony Walsh, Company Secretary • Termination - one month’s notice • Termination - 3 months’ notice. D. Share-based Compensation Options year. The following options have been granted in previous years. All options unvested at 31 December 2020 may also have an impact on future year’s remuneration. Conditions are shown below: Date Options Granted Number of Options Granted Vesting Date Expiry Date Exercise Price David Flanagan Jeff Dowling Tony Walsh Nick Day David Flanagan Jeff Dowling Tony Walsh David Flanagan Tony Walsh David Flanagan David Flanagan David Flanagan David Flanagan 21-May-19 21-May-19 21-May-19 21-May-19 27-Jun-18 27-Jun-18 27-Jun-18 26-May-17 15-Feb-17 21-Dec-16 21-Dec-16 21-Dec-16 21-Dec-16 8,000,000 Various (1) 7,500,000 Various (2) 10,000,000 Various (3) 4,000,000 Various (4) 20,000,000 Various (5) 4,500,000 Various (6) 4,000,000 Various (7) 10,000,000 Various (8) 1,500,000 Various (9) 21-Dec-17 5,000,000 21-Dec-17 5,000,000 21-Dec-18 5,000,000 5,000,000 21-Dec-18 89,500,000 20-Jun-24 20-Jun-24 20-Jun-24 20-Jun-24 3-Jul-23 30-Jun-23 13-Jul-23 21-Jun-22 23-Dec-21 23-Dec-21 23-Dec-21 23-Dec-21 23-Dec-21 nil nil nil nil Nil 0.13 nil 0.094 0.15 0.10 0.15 0.20 0.25 Value per option at grant date $ 0.022 0.022 0.022 0.022 0.031 0.0166 0.031 0.0456 0.0636 0.093 0.087 0.0818 0.0778 Total Fair Value $ % vested % forfeited 176,000 165,000 220,000 66,000 465,000 74,861 124,000 455,638 95,384 464,387 433,199 408,961 389,108 3,537,538 0% 33% 0% 0% 0% 100% 0% 0% 33% 100% 100% 100% 100% 0% 0% 0% 100% 0% 0% 0% 0% 0% 0% 0% 0% 0% (1) Chairman fees were reduced from $80,000 per annum to $64,000 per annum effective 18 May 2020 and increased to $85,000 per (1) Options issued to David Flanagan have vesting conditions linked to a financial close and equity funding for the Montepuez project stage 1. (2) 7,500,000 options issued to Jeff Dowling will vest in three equal tranches on completion of 12 months, 24 months and 36 months of continuous service. (3) 4,000,000 options issued to Tony Walsh will vest on financial close and equity funding for the Montepuez project stage 1; 3,000,000 options have vesting conditions linked to commencement of commercial production of the Montepuez project stage 1 and 3,000,000 options will vest on commencement of commercial production of the Montepuez project stage 2. (4) Options were forfeited upon resignation. (5) Options vesting conditions are linked to commencement of commercial production being 25% of the Montepuez project stage 1, 50% of the Montepuez project stage 2 and 25% of the Balama project stage 1. (6) 50% of options vested upon 12 months and 50% vested upon 24 months of continuous service. (7) Options vesting conditions are linked to commencement of commercial production being 50% of the Montepuez project stage 1 and 50% of the Montepuez project stage 2. (8) Options will vest upon the Company’s Montepuez project achieving sales agreements and a commercial rate of production as agreed by the board. (9) 500,000 options vested upon 12 months of service with the Company. 1,000,000 options will vest upon commencement of the Montepuez project commercial production. Remuneration and other terms of employment for a Managing Director and Key Management Personnel are formalized in their service agreements. Employees are eligible for long-term incentive benefits under the Battery Options granted carry no dividend or voting rights No shares were issued on the exercise of options during the financial year. When exercised each option is convertible into one ordinary share of Battery Minerals Limited. • Base Remuneration - $300,000 inclusive of superannuation (paid pro-rata for part-time equivalent) Shares Mr Nick Day, Chief Financial Officer & Joint Company Secretary (resigned 1 July 2020) • Base Remuneration - $300,000 inclusive of superannuation (paid pro-rata for part time from 1 July 2019). There were no options issued to Directors and Key Management Personal as remuneration during the financial During the financial year no shares were issued to Directors or key management personnel in lieu of fees and salary. E. Director and Key Management Personnel Share and Option Holdings Shareholdings The numbers of shares in the Group held during the financial period by each director of Battery Minerals Limited and other key management personnel of the Group, including their personally related parties are set out below. Page 28 Page 29 29 Annual Report 2020 Directors’ Report (continued) Audited Remuneration Report (continued) 31 December 2020 Name Balance at the start of the year, number of shares Received during the year on the exercise of options Other changes Balance at the end of the year, number of shares Directors David Flanagan Jeff Dowling Darryl Clark (appointed 22/10/20) Jeremy Sinclair (resigned 31/10/20) KMP Tony Walsh Nick Day (resigned 1/7/20) Total 6,997,492 2,000,000 - 4,000,000 1,250,000 - 14,247,492 - - - - - - - - 681,818(1) 9,363,636(2) (4,000,000)(3) - - 6,045,454 6,997,492 2,681,818 9,363,636 - 1,250,000 - 20,292,946 Shares acquired pursuant to participation in Share Purchase Plan. (1) (2) 8,000,000 shares held upon appointment as a director and 1,363,636 shares acquired pursuant to participation in Share Purchase Plan. The balance of shares at the end of the financial year is considered to be nil due to resignation as a Director. (3) Option holdings The numbers of options over ordinary shares in the Group held during the financial period by each director of Battery Minerals Limited and key management personnel (KPM) of the Group, including their personally related parties are set out below. 31 December 2020 Balance at start of the year Directors David Flanagan Jeff Dowling Darryl Clark 59,425,000 12,550,000 - Jeremy Sinclair 2,000,000 KMP Tony Walsh Nick Day 15,875,000 4,000,000 Total 93,850,000 Granted as Remuneration Placement Options Exercised Expired/ Forfeited/ Other Changes Balance at end of the year(3) Vested and exercisable Unvested - - - - - - - - - - - - - - - - - - - - - - - - (2,000,000)(1) - (4,000,000)(2) 59,425,000 21,425,000 38,000,000 12,550,000 7,550,000 5,000,000 - - - - - - 15,875,000 875,000 15,000,000 - - - (6,000,000) 87,850,000 29,850,000 58,000,000 The balance of options at the end of the financial year is considered to be nil due to resignation as a Director. (1) (2) Options were forfeited upon resignation. (3) Includes listed options issued under the Placement approved on 21 May 2019. 30 Page 30 Battery Minerals Limited Directors’ Report (continued) Audited Remuneration Report (continued) 31 December 2020 Balance at the start Received during the of the year, year on the exercise Other changes Name number of shares of options Balance at the end of the year, number of shares Darryl Clark (appointed 22/10/20) Jeremy Sinclair (resigned 31/10/20) 4,000,000 6,997,492 2,000,000 - - 1,250,000 14,247,492 - - - - - - - 681,818(1) 9,363,636(2) (4,000,000)(3) - - - 6,997,492 2,681,818 9,363,636 1,250,000 - - 6,045,454 20,292,946 Shares acquired pursuant to participation in Share Purchase Plan. (2) 8,000,000 shares held upon appointment as a director and 1,363,636 shares acquired pursuant to participation in Share Purchase The balance of shares at the end of the financial year is considered to be nil due to resignation as a Director. Directors David Flanagan Jeff Dowling KMP Tony Walsh Total (1) (3) Plan. Option holdings Nick Day (resigned 1/7/20) parties are set out below. 31 December 2020 Balance at start of the year Granted as Remuneration Placement Options Exercised Expired/ Forfeited/ Other Changes Balance at end of the year(3) Vested and exercisable Unvested Directors David Flanagan Jeff Dowling Darryl Clark KMP Tony Walsh Nick Day 59,425,000 12,550,000 - 15,875,000 4,000,000 Jeremy Sinclair 2,000,000 - - - - - - - - - - - - - - - - (2,000,000)(1) (4,000,000)(2) - - - - - - - 59,425,000 21,425,000 38,000,000 12,550,000 7,550,000 5,000,000 - - - - - - - - - - 15,875,000 875,000 15,000,000 Total 93,850,000 - (6,000,000) 87,850,000 29,850,000 58,000,000 (1) (3) The balance of options at the end of the financial year is considered to be nil due to resignation as a Director. (2) Options were forfeited upon resignation. Includes listed options issued under the Placement approved on 21 May 2019. Directors’ Report (continued) F. Additional Information Loans to Key Management Personnel There were no loans made to Directors of the Company or other key management personnel during the year ended 31 December 2020. There were no other transactions with key management personnel during the year ended 31 December 2020. -End of the Audited Remuneration Report- Adoption of Key Management Personnel Remuneration Report At the 2020 annual general meeting, Battery Minerals received more than 91% of votes for the adoption of the remuneration report for the 2019 financial year. The company did not receive any specific feedback at the AGM or throughout the year on its remuneration practices. This report of Directors, incorporating the Remuneration Report, is signed in accordance with a resolution of Directors. The numbers of options over ordinary shares in the Group held during the financial period by each director of Battery Minerals Limited and key management personnel (KPM) of the Group, including their personally related Competent Person’s Statement Battery Minerals confirms that all of the material assumptions underpinning the production targets for its Montepuez and Balama Central graphite projects and any of the forecast financial information derived from these production targets, contained in the ASX announcements dated 4 and 12 December 2018, continue to apply at the date of release of this report and have not materially changed. Battery Minerals confirms that it is not aware of any new information or data. All references to future production and production & shipping targets and port access made in relation to Battery Minerals are subject to the completion of all necessary feasibility studies, permit applications, construction, financing arrangements, port access and execution of infrastructure-related agreements. Where such a reference is made, it should be read subject to this paragraph and in conjunction with further information about the Mineral Resources and Ore Reserves, as well as the relevant competent persons' statements. Any references to Ore Reserve and Mineral Resource estimates should be read in conjunction with the competent person statements included in the ASX announcements referenced in this report as well as Battery Minerals’ other periodic and continuous disclosure announcements lodged with the ASX, which are available on the Battery Minerals’ website. For Mozambican graphite projects’ Mineral Resources - refer announcement dated 18th October 2018 for full details and Competent Persons sign-off. For Mozambican graphite projects’ Ore Reserves - refer announcements dated 4th and 12th December 2018 for full details and Competent Persons sign-off. The information in this report that relates to Battery Minerals’ Mineral Resources or Ore Reserves is a compilation of previously published data for which Competent Persons consents were obtained. Their consents remain in place for subsequent releases by Battery Minerals of the same information in the same form and context, until the consent is withdrawn or replaced by a subsequent report and accompanying consent. Page 30 Page 31 31 Annual Report 2020 Directors’ Report (continued) Lead Auditor’s Independence Declaration under Section 307C of the Corporations Act 2001. The lead auditor’s independence declaration is set out on page 33 for the year ended 31 December 2020. This report is made in accordance with a resolution of the Directors. _________________________ David Flanagan Executive Chairman Perth, Western Australia 25 March 2021 32 Page 32 Battery Minerals Limited Directors’ Report (continued) Auditor ‘s Independence Declaration Lead Auditor’s Independence Declaration under Section 307C of the Corporations Act 2001. The lead auditor’s independence declaration is set out on page 33 for the year ended 31 December 2020. This report is made in accordance with a resolution of the Directors. _________________________ David Flanagan Executive Chairman Perth, Western Australia 25 March 2021 Lead Auditor’s Independence Declaration under Section 307C of the Corporations Act 2001 To the Directors of Battery Minerals Limited I declare that, to the best of my knowledge and belief, in relation to the audit of Battery Minerals Limited for the financial year ended 31 December 2020 there have been: i. ii. no contraventions of the auditor independence requirements as set out in the Corporations Act 2001 in relation to the audit; and no contraventions of any applicable code of professional conduct in relation to the audit. KPMG KPM_INI_01 PAR_SIG_01 PAR_NAM_01 PAR_POS_01 PAR_DAT_01 PAR_CIT_01 R Gambitta Partner Perth 25 March 2021 KPMG, an Australian partnership and a member firm of the KPMG global organisation of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved. The KPMG name and logo are trademarks used under license by the independent member firms of the KPMG global organisation. Liability limited by a scheme approved under Professional Standards Legislation. Page 32 Page 33 33 Annual Report 2020 Independent Auditor’s Report Independent Auditor’s Report To the shareholders of Battery Minerals Limited Report on the audit of the Financial Report Opinion We have audited the Financial Report of Battery Minerals Limited (the Company). In our opinion, the accompanying Financial Report of the Company is in accordance with the Corporations Act 2001, including: giving a true and fair view of the Group’s financial position as at 31 December 2020 and of its financial performance for the year ended on that date; and • • The Financial Report comprises: • Consolidated statement of financial position as at 31 December 2020 • Consolidated statement of profit or loss and other comprehensive income, Consolidated statement of changes in equity, and Consolidated statement of cash flows for the year then ended • Notes including a summary of significant complying with Australian Accounting Standards and the Corporations Regulations 2001. accounting policies • Directors’ Declaration. The Group consists of the Company and the entities it controlled at the year-end or from time to time during the financial year. Basis for opinion We conducted our audit in accordance with Australian Auditing Standards. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. 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 Corporations Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional Accountants (including Independence Standards) (the Code) that are relevant to our audit of the Financial Report in Australia. We have fulfilled our other ethical responsibilities in accordance with the Code. Key Audit Matters The Key Audit Matters we identified are: • Carrying value of Mozambique project assets • Acquisition of Stavely-Stawell project. 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. KPMG, an Australian partnership and a member firm of the KPMG global organisation of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved. The KPMG name and logo are trademarks used under license by the independent member firms of the KPMG global organisation. Liability limited by a scheme approved under Professional Standards Legislation. Page 34 34 Battery Minerals Limited Independent Auditor’s Report Independent Auditor’s Report (continued) Carrying value of Mozambique project assets ($ nil) Refer to Notes 12 and 13 to the Financial Report The key audit matter How the matter was addressed in our audit The full impairment of the Mozambique project assets including Mine Development Expenditure (Montepuez Graphite Project) and the Exploration and Evaluation Expenditure (Balama Project) was considered a key audit matter due to: • • the size of the Mozambique project assets (collectively 20% of pre-impaired total assets); and the level of judgement required by us in evaluating the Group’s assessment of impairment. The slower than anticipated recovery of graphite market and the associated inability to obtain funding at the present time amongst other factors such as COVID-19 were identified as impairment triggers which have led to the Mozambique project assets being impaired in full, as the commercial development has not eventuated. The impairment assessment requires the Group to apply judgements through the use of assumptions in a fair value less costs of disposal basis using a discounted cash flow (DCF) model, particularly the forecast commodity prices for graphite. We involved senior team members in assessing this key audit matter. Our procedures included: • • • • • • • evaluating the Group’s assessment of the existence of impairment indicators and the determination of cash generating unit for the Mozambique project assets; evaluating the Group’s assessment of full impairment for consistency with the Group’s consideration of feasible alternatives and current prospects. This includes inspection of Board minutes, the Board approved cash flow forecasts which show a significant reduction in expenditure on the projects and other publicly available documentation; evaluating the methods assessed by the Group to determine fair value less costs of disposal against the requirements of the accounting standards; assessing the integrity of the fair value less costs of disposal DCF model used, including mathematical accuracy; evaluating the scope, competence and objectivity of the Group’s external experts; comparing forecast commodity prices for graphite to views of the industry commentary on future trends and the Group’s external experts’ reports; and assessing the disclosures in the financial report against the requirements of the accounting standards. Page 34 Page 35 35 Annual Report 2020 Independent Auditor’s Report (continued) Independent Auditor’s Report (continued) Acquisition of Stavely-Stawell Project ($12,242,754) Refer to Note 12 to the Financial Report The key audit matter How the matter was addressed in our audit The Group’s acquisition of the Staveley-Stawell Project was a significant transaction for the Group. The acquisition is a key audit matter due to: • • • the significance of the acquisition; judgments made by the Group relating to the measurement of the purchase consideration; and the level of judgment required in determining the accounting approach as either a business combination (in accordance with AASB 3 Business Combinations) or an asset acquisition. The difference in the accounting for the acquisition as a business or an asset is significant and could impact the recognition and measurement of amounts reported in the consolidated financial statements; We involved senior team members in assessing this key audit matter. Our audit procedures included: • • • • inspecting the sale and purchase agreement related to the acquisition to understand the structure, key terms and conditions, and nature of the purchase consideration. Using this, we evaluated the accounting treatment of the purchase consideration and transaction costs against the criteria in the accounting standards; involving senior audit team members to assess the accounting treatment for the transaction. We analysed the conclusions reached by the Group to accounting standards and interpretations; assessing the Group’s determination of the fair value measurement of purchase consideration against the underlying data; and evaluating the disclosures in the financial report against our understanding of the acquisition and the requirements of the accounting standards. Other Information Other Information is financial and non-financial information in Battery Minerals Limited’s annual reporting which is provided in addition to the Financial Report and the Auditor’s Report. The Directors are responsible for the Other Information. Our opinion on the Financial Report does not cover the Other Information and, accordingly, we do not express an audit opinion or any form of assurance conclusion thereon, with the exception of the Remuneration Report and our related assurance opinion. In connection with our audit of the Financial Report, our responsibility is to read the Other Information. In doing so, we 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. We are required to report if we conclude that there is a material misstatement of this Other Information, and based on the work we have performed on the Other Information that we obtained prior to the date of this Auditor’s Report we have nothing to report. 36 Page 36 Page 37 Battery Minerals Limited Independent Auditor’s Report (continued) Independent Auditor’s Report (continued) Responsibilities of the Directors for the Financial Report The Directors are responsible for: • preparing the Financial Report that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 • • implementing necessary internal control to enable the preparation of a Financial Report that gives a true and fair view and is free from material misstatement, whether due to fraud or error assessing the Group and Company’s ability to continue as a going concern and whether the use of the going concern basis of accounting is appropriate. This includes disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless they either intend to liquidate the Group and Company or to cease operations, or have no realistic alternative but to do so. Auditor’s responsibilities for the audit of the Financial Report Our objective is: • • to obtain reasonable assurance about whether the Financial Report as a whole is free from material misstatement, whether due to fraud or error; and to issue an Auditor’s Report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Australian Auditing Standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error. They 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 the Financial Report. A further description of our responsibilities for the audit of the Financial Report is located at the Auditing and Assurance Standards Board website at: https://www.auasb.gov.au/admin/file/content102/c3/ar1_2020.pdf This description forms part of our Auditor’s Report. Report on the Remuneration Report Opinion Directors’ responsibilities In our opinion, the Remuneration Report of Battery Minerals Limited for the year ended 31 December 2020, complies with Section 300A of the Corporations Act 2001. The Directors of the Company are responsible for the preparation and presentation of the Remuneration Report in accordance with Section 300A of the Corporations Act 2001. Our responsibilities We have audited the Remuneration Report included in the Directors’ report for the year ended 31 December 2020. Our responsibility is to express an opinion on the Remuneration Report, based on our audit conducted in accordance with Australian Auditing Standards. KPMG R Gambitta Partner Perth 25 March 2021 Page 36 Page 37 37 Annual Report 2020 Consolidated Statement of Profit or Loss and Other Comprehensive Income for the year ended 31 December 2020 Note Consolidated 31-Dec-20 Consolidated 31-Dec-19 Other Income Gain on disposal of subsidiary Gain on sale of assets Net foreign exchange gain Corporate consultants and advisory fees Personnel costs Corporate and administrative costs Exploration and evaluation costs Share based payment expense Net foreign exchange loss Impairment of mine development and exploration Fair value adjustment on equity securities Other expenses Operating loss Interest income Loss before tax Income tax expense Loss from continuing operations Loss for the period 17,23(c) 12,13 4 5 Other comprehensive income/(loss): Items that will be reclassified subsequently to profit or loss: Exchange difference on translation of foreign operations Total comprehensive loss for the period Loss for the year attributable to: Owners of Battery Minerals Limited Total comprehensive loss for the year attributable to: Owners of Battery Minerals Limited Loss per share from continuing operations: Basic loss per share (cents) Diluted loss per share (cents) 6 6 $ 117,500 - 364 - (406,276) (1,081,335) (80,188) (191,819) (68,525) (145,272) (4,142,346) - (745,055) (6,742,952) 196,117 (6,546,835) - (6,546,835) $ 15,878 270,598 276,503 617,738 (784,568) (2,148,413) (731,875) - 788,027 - (34,930,796) (42,267) (577,152) (37,246,327) 472,158 (36,774,169) - (36,774,169) (6,546,835) (36,774,169) (892,382) (7,439,217) (961,444) (37,735,613) (6,546,835) (36,774,169) (7,439,217) (37,735,613) (0.458) (0.458) (2.930) (2.930) The above consolidated statement of profit or loss and other comprehensive income is to be read in conjunction with the accompanying notes. 38 Page 38 Battery Minerals Limited Consolidated Statement of Profit or Loss and Other Comprehensive Income for the year ended 31 December 2020 Consolidated Statement of Financial Position as at the year ended 31 December 2020 Other Income Gain on disposal of subsidiary Gain on sale of assets Net foreign exchange gain Corporate consultants and advisory fees Personnel costs Corporate and administrative costs Exploration and evaluation costs Share based payment expense Net foreign exchange loss Other expenses Operating loss Interest income Loss before tax Income tax expense Loss from continuing operations Loss for the period Impairment of mine development and exploration 12,13 Fair value adjustment on equity securities Note 17,23(c) 4 5 Other comprehensive income/(loss): Items that will be reclassified subsequently to profit or Exchange difference on translation of foreign loss: operations Total comprehensive loss for the period Loss for the year attributable to: Owners of Battery Minerals Limited Total comprehensive loss for the year attributable to: Owners of Battery Minerals Limited Loss per share from continuing operations: Basic loss per share (cents) Diluted loss per share (cents) 6 6 Consolidated 31-Dec-20 $ 117,500 364 - - (406,276) (1,081,335) (80,188) (191,819) (68,525) (145,272) (4,142,346) (745,055) (6,742,952) 196,117 (6,546,835) - - Consolidated 31-Dec-19 $ 15,878 270,598 276,503 617,738 (784,568) (2,148,413) (731,875) 788,027 - - (34,930,796) (42,267) (577,152) (37,246,327) 472,158 (36,774,169) - (6,546,835) (36,774,169) (892,382) (7,439,217) (961,444) (37,735,613) (6,546,835) (36,774,169) (7,439,217) (37,735,613) (0.458) (0.458) (2.930) (2.930) Page 38 The above consolidated statement of profit or loss and other comprehensive income is to be read in conjunction with the accompanying notes. ASSETS Current Assets Cash and cash equivalents Other receivables Total Current Assets Non-Current Assets Other debtors Property, plant and equipment Intangible assets Exploration & evaluation expenditure Mine development expenditure Total Non-Current Assets Total Assets LIABILITIES Current Liabilities Trade and other payables Provisions Total Current Liabilities Total Liabilities (6,546,835) (36,774,169) NET ASSETS EQUITY Issued Capital Reserves Accumulated Losses TOTAL EQUITY Note Consolidated 31-Dec-20 $ Consolidated 31-Dec-19 $ 8 9 9 10 11 12 13 14 15 16 17 18 7,303,942 170,171 7,474,113 1,209,805 157,372 62,492 12,242,754 - 13,672,423 21,146,536 243,639 113,321 356,960 356,960 4,119,160 236,989 4,356,149 3,509,854 287,869 124,788 - 3,000,000 6,922,511 11,278,660 213,073 161,022 374,095 374,095 20,789,576 10,904,565 96,164,978 3,304,428 (78,679,830) 20,789,576 78,909,275 4,128,285 (72,132,995) 10,904,565 The above consolidated statement of financial position is to be read in conjunction with the accompanying notes. Page 39 39 Annual Report 2020 Consolidated Statement of Cash Flows for the year ended 31 December 2020 Cash flows from operating activities Payments to suppliers and employees Net interest received Net cash (outflow) from operating activities Cash flows from investing activities Net proceeds from sale of subsidiary Net proceeds from sale of assets Payments made for property, plant and equipment and intangibles Payments for exploration & evaluation expenditure Payments for mine development expenditure Proceeds from release of mine performance bond Net cash inflow/(outflow) from investing activities Cash flows from financing activities Proceeds from share issue Capital raising costs Net cash inflow from financing activities Net increase/(decrease) in cash and cash equivalents Cash and cash equivalents at beginning of year Effect of exchange rate fluctuations on cash held Cash and cash equivalents at end of year Note 19 Consolidated 31-Dec-20 $ Consolidated 31-Dec-19 $ (2,299,262) 196,117 (2,103,145) (4,496,334) 472,157 (4,024,177) - 364 - (721,820) (1,122,259) 2,300,049 456,334 6,244,000 (401,730) 5,842,270 4,195,459 4,119,160 (1,010,677) 7,303,942 67,553 366,844 (27,460) (282,218) (3,968,021) - (3,843,302) 5,110,500 (326,944) 4,783,556 (3,083,923) 7,252,709 (49,626) 4,119,160 The above consolidated statement of cash flows is to be read in conjunction with the accompanying notes. 40 Page 40 Battery Minerals Limited Cash flows from operating activities Payments to suppliers and employees Net interest received Cash flows from investing activities Net proceeds from sale of subsidiary Net proceeds from sale of assets Payments made for property, plant and equipment and intangibles Payments for exploration & evaluation expenditure Payments for mine development expenditure Proceeds from release of mine performance bond Net cash inflow/(outflow) from investing activities Cash flows from financing activities Proceeds from share issue Capital raising costs Net cash inflow from financing activities Net increase/(decrease) in cash and cash equivalents Cash and cash equivalents at beginning of year Effect of exchange rate fluctuations on cash held Cash and cash equivalents at end of year 456,334 (3,843,302) 364 - - (721,820) (1,122,259) 2,300,049 6,244,000 (401,730) 5,842,270 4,195,459 4,119,160 (1,010,677) 7,303,942 67,553 366,844 (27,460) (282,218) (3,968,021) - 5,110,500 (326,944) 4,783,556 (3,083,923) 7,252,709 (49,626) 4,119,160 The above consolidated statement of cash flows is to be read in conjunction with the accompanying notes. Consolidated Statement of Cash Flows for the year ended 31 December 2020 Consolidated Statement of Changes in Equity for the year ended 31 December 2020 Net cash (outflow) from operating activities 19 (2,103,145) (4,024,177) Note Consolidated Consolidated 31-Dec-20 31-Dec-19 $ $ (2,299,262) 196,117 (4,496,334) 472,157 Consolidated for the year ended 31 December 2019 Issued Capital Share based payment reserve $ $ Foreign currency translation reserve $ Accumulated losses $ Total $ Balance at 1 January 2019 74,125,719 6,029,637 (151,879) (35,358,826) 44,644,651 Loss for the year Other comprehensive income Total comprehensive income/(loss) for the year Transactions with owners of Battery Minerals Limited Shares issued net of transaction costs Share based payments Total transactions with owners of Battery Minerals Limited - - - - - - - (36,774,169) (36,774,169) (961,444) - (961,444) (961,444) (36,774,169) (37,735,613) 4,783,556 - - (788,029) 4,783,556 (788,029) - - - - - - 4,783,556 (788,029) 3,995,527 Balance at 31 December 2019 78,909,275 5,241,608 (1,113,323) (72,132,995) 10,904,565 Consolidated for the year ended 31 December 2020 Issued Capital $ Share based payment reserve Foreign currency translation reserve $ Accumulated losses $ Total $ Balance at 1 January 2020 78,909,275 5,241,608 (1,113,323) (72,132,995) 10,904,565 Loss for the year Other comprehensive income Total comprehensive income/(loss) for the year Transactions with owners of Battery Minerals Limited Shares issued net of transaction costs Share based payments Total transactions with owners of Battery Minerals Limited - - - - - - - (6,546,835) (6,546,835) (892,382) - (892,382) (892,382) (6,546,835) (7,439,217) 17,255,703 - 17,255,703 - 68,525 68,525 - - - - - - 17,255,703 68,525 17,324,228 Balance at 31 December 2020 96,164,978 5,310,133 (2,005,705) (78,679,830) 20,789,576 The consolidated statement of changes in equity is to be read in conjunction with the accompanying notes. Page 40 Page 41 41 Annual Report 2020 Notes to the Consolidated Financial Statements 1. Reporting entity Battery Minerals Limited is an ASX listed public company, incorporated and domiciled in Australia. Battery Minerals is a for-profit entity for the purposes of preparing these financial statements. These consolidated financial statements comprise Battery Minerals Limited and its subsidiaries (together referred as the ‘Group’). The Group is primarily involved in exploration and development activities relating to its mining operations. 2. Basis of Accounting The consolidated financial statements are general purpose financial statements which have been prepared in accordance with Australian Accounting Standards (AASBs) adopted by the Australian Accounting Standards `Board (AASB) and the Corporations Act 2001. The consolidated financial statements comply with International Financial Reporting Standards (IFRS) adopted by the International Accounting Standards Board (IASB). They were authorised by the Board of Directors for issue on 25 March 2021. The financial report has been prepared on an accrual basis and is based on historical costs, modified, where applicable, by the measurement at fair value of selected non-current assets, financial assets and financial liabilities. A. Principles of consolidation The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of Battery Minerals Limited (‘’Company’’ or ‘’Parent Entity’’) as at 31 December 2020 and the results of all subsidiaries for the year. Battery Minerals Limited and its subsidiaries together are referred to in this financial report as “the Group” or “the consolidated entity”. Subsidiaries are entities over which the Group has control. The Group controls an entity when the Group is exposed to, or has right to, variable returns from its involvement with the entity and has the ability to affect those returns through its power to direct activities of the entity. The financial statements of subsidiaries are included in the consolidated financial statements from the date on which control commences. They are de- consolidated from the date that control ceases. The acquisition method of accounting is used to account for the acquisition of subsidiaries 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. Investments in subsidiaries and joint venture entities are accounted for at cost in the financial statements of the Company. Dividends received from associates are recognised in the parent entity’s statement of profit or loss and other comprehensive income, rather than being deducted from the carrying amount of these investments. B. Going Concern Basis of Preparation The financial statements have been prepared on the going concern basis which assumes the Company and consolidated entity will have sufficient funds to pay its debts, as and when they become payable, for a period of at least 12 months from the date the financial report was authorised for issue. 42 Page 42 Battery Minerals Limited Notes to the Consolidated Financial Statements Notes to the Consolidated Financial Statements (continued) 1. Reporting entity 2. Basis of Accounting (continued) Battery Minerals Limited is an ASX listed public company, incorporated and domiciled in Australia. Battery C. Foreign Currency Translation Minerals is a for-profit entity for the purposes of preparing these financial statements. Functional and presentation currency These consolidated financial statements comprise Battery Minerals Limited and its subsidiaries (together referred as the ‘Group’). The Group is primarily involved in exploration and development activities relating to its mining operations. 2. Basis of Accounting The consolidated financial statements are general purpose financial statements which have been prepared in accordance with Australian Accounting Standards (AASBs) adopted by the Australian Accounting Standards `Board (AASB) and the Corporations Act 2001. The consolidated financial statements comply with International Financial Reporting Standards (IFRS) adopted by the International Accounting Standards Board (IASB). They were authorised by the Board of Directors for issue on 25 March 2021. The financial report has been prepared on an accrual basis and is based on historical costs, modified, where applicable, by the measurement at fair value of selected non-current assets, financial assets and financial liabilities. A. Principles of consolidation The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of Battery Minerals Limited (‘’Company’’ or ‘’Parent Entity’’) as at 31 December 2020 and the results of all subsidiaries for the year. Battery Minerals Limited and its subsidiaries together are referred to in this financial report as “the Group” or “the consolidated entity”. Subsidiaries are entities over which the Group has control. The Group controls an entity when the Group is exposed to, or has right to, variable returns from its involvement with the entity and has the ability to affect those returns through its power to direct activities of the entity. The financial statements of subsidiaries are included in the consolidated financial statements from the date on which control commences. They are de- consolidated from the date that control ceases. The acquisition method of accounting is used to account for the acquisition of subsidiaries 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. Investments in subsidiaries and joint venture entities are accounted for at cost in the financial statements of the Company. Dividends received from associates are recognised in the parent entity’s statement of profit or loss and other comprehensive income, rather than being deducted from the carrying amount of these investments. B. Going Concern Basis of Preparation The financial statements have been prepared on the going concern basis which assumes the Company and consolidated entity will have sufficient funds to pay its debts, as and when they become payable, for a period of at least 12 months from the date the financial report was authorised for issue. The consolidated financial statements are presented in Australian dollars, which is Battery Minerals Limited’s functional and presentation currency. Items included in the financial statements of each of the Group’s entities are measured using the currency of the primary economic environment in which the entity operates (‘the functional currency’). 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, 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. Foreign exchange gains and losses that relate to borrowings are presented in the statement of profit or loss and other comprehensive income, within finance costs. All other foreign exchange gains and losses are presented in the statement of profit or loss and other comprehensive income on a net basis within other income or other expenses. Non-monetary items that are measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value was determined. Translation differences on assets and liabilities carried at fair value are reported as part of the fair value gain or loss. Foreign Operations The assets and liabilities of foreign operations, including goodwill and fair value adjustments arising on acquisition, are translated into presentation currency of the Group at the exchange rates at the reporting date. The income and expenses of foreign operations are translated at the exchange rates at the dates of the transactions. Foreign currency differences are recognised in other comprehensive income/loss and accumulated in the translation reserve. When a foreign operation is disposed of the cumulative amount in the translation reserve related to that foreign operation is reclassified to profit or loss as part of the gain or loss on disposal. If the Group disposes of part of its interest in a subsidiary but retains control, then the relevant proportion of the cumulative amount is reattributed to non-controlling interest. D. Impairment of Assets At each reporting date, or more frequently if events or changes in circumstances indicate that assets might be impaired, the Group reviews the carrying values of its tangible and intangible assets to determine whether the assets have been impaired. If such an indication exists, the recoverable amount of the asset is the higher of the asset’s fair value less costs to sell and value in use, compared to the asset’s carrying value. Any excess of the asset’s carrying value over its recoverable amount is expensed to the Consolidated Statement of Profit or Loss and other Comprehensive Income. Page 42 Page 43 43 Annual Report 2020 Notes to the Consolidated Financial Statements (continued) D. Impairment of Assets (continued) Where it is not possible to estimate the recoverable amount of an individual asset, the Group estimates the recoverable amount of the cash-generating unit to which the asset belongs. Non-financial assets other than goodwill that suffered any impairment are reviewed for possible reversal of impairment at the end of each reporting period. E. Leases The right-of-use asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or before the commencement date, plus any initial direct costs incurred and an estimate of costs to dismantle and remove the underlying asset or to restore the underlying asset or the site on which it is located, less any lease incentives received. The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to the end of the lease term, unless the lease transfers ownership of the underlying asset to the Group by the end of the lease term or the cost of the right-of-use asset reflects that the Group will exercise a purchase option. In that case the right-of-use asset will be depreciated over the useful life of the underlying asset, which is determined on the same basis as those of property and equipment. In addition, the right-of- use asset is periodically reduced by impairment losses, if any, and adjusted for certain remeasurements of the lease liability. The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the Group’s incremental borrowing rate. The lease liability is measured at amortised cost using the effective interest method. It is remeasured when there is a change in future lease payments arising from a change in an index or rate, if there is a change in the Group’s estimate of the amount expected to be payable under a residual value guarantee, if the Group changes its assessment of whether it will exercise a purchase, extension or termination option or if there is a revised in-substance fixed lease payment. F. Use of Estimates and Judgements In preparing these consolidated financial statements, management has made judgements, estimates and assumptions that affect the application of the Group’s accounting policies and the reported amounts of assets, liabilities, income and expenses. Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that may have a financial impact on the entity and that are believed to be reasonable under the circumstances. Revisions to estimates are recognised prospectively. The Group makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, seldom equal the related actual results. The estimates and assumptions that have a risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed in the notes indicated below: • Impairment of exploration and evaluation expenditure and mine development – Notes 12 and 13. 44 Page 44 Battery Minerals Limited Notes to the Consolidated Financial Statements (continued) Notes to the Consolidated Financial Statements (continued) D. Impairment of Assets (continued) 2. Basis of Accounting (continued) Where it is not possible to estimate the recoverable amount of an individual asset, the Group estimates the G. Changes in Accounting Policy recoverable amount of the cash-generating unit to which the asset belongs. In the year ended 31 December 2020, the Group has reviewed all the new and revised standards and interpretations issued by the Australian Accounting Standards Board that are relevant to its operations and effective for the current year. It has been determined by the Group that there is no impact, material or otherwise, of the new and revised standards and interpretations on its business and, therefore no restatement of prior year comparatives is necessary to the Group’s financial statements. H. Standards issued not yet effective Nature of change Impact When these amendments are first adopted for the year ending 31 December 2022, there will be no material impact on the financial statements. The amendments require the full gain or loss to be recognised when the assets transferred meet the definition of a ‘business’ under AASB 3 (whether housed in a subsidiary or not). AASB 2017-5 defers the mandatory effective date of amendments to AASB 10 Consolidated Financial Statements and AASB 128 that were originally made in AASB 2014-10 so that the amendments are required to be applied for annual reporting periods beginning on or after 1 January 2022 instead of 1 January 2018. Mandatory application date/ Date adopted by company Annual reporting periods beginning on or after 1 January 2022 Amends AASB 101 to require a liability be classified as current when companies do not have a substantive right to defer settlement at the end of the reporting period. When these amendments are first adopted for the year ending 31 December 2022, there will be no material impact on the financial statements. Annual reporting periods beginning on or after 1 January 2022 Title of standard AASB 2014-10 Amendments to Australian Accounting Standards – Sale or Contribution of Assets between an Investor and its Associate or Joint Venture AASB 2015-10 Amendments to Australian Accounting Standards – Effective Date of Amendments to AASB 10 and AASB 128 AASB 2017-5 Amendments to Australian Accounting Standards – Effective Date of Amendments to AASB 10 and AASB 128 and Editorial Corrections AASB 2020-1 Amendments to Australian Accounting Standards – Classification of Liabilities as Current or Non- current Page 44 Page 45 45 Non-financial assets other than goodwill that suffered any impairment are reviewed for possible reversal of impairment at the end of each reporting period. E. Leases The right-of-use asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or before the commencement date, plus any initial direct costs incurred and an estimate of costs to dismantle and remove the underlying asset or to restore the underlying asset or the site on which it is located, less any lease incentives received. The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to the end of the lease term, unless the lease transfers ownership of the underlying asset to the Group by the end of the lease term or the cost of the right-of-use asset reflects that the Group will exercise a purchase option. In that case the right-of-use asset will be depreciated over the useful life of the underlying asset, which is determined on the same basis as those of property and equipment. In addition, the right-of- use asset is periodically reduced by impairment losses, if any, and adjusted for certain remeasurements of the lease liability. The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the Group’s incremental borrowing rate. The lease liability is measured at amortised cost using the effective interest method. It is remeasured when there is a change in future lease payments arising from a change in an index or rate, if there is a change in the Group’s estimate of the amount expected to be payable under a residual value guarantee, if the Group changes its assessment of whether it will exercise a purchase, extension or termination option or if there is a revised in-substance fixed lease payment. F. Use of Estimates and Judgements In preparing these consolidated financial statements, management has made judgements, estimates and assumptions that affect the application of the Group’s accounting policies and the reported amounts of assets, liabilities, income and expenses. Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that may have a financial impact on the entity and that are believed to be reasonable under the circumstances. Revisions to estimates are recognised prospectively. The Group makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, seldom equal the related actual results. The estimates and assumptions that have a risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed in the notes indicated below: • Impairment of exploration and evaluation expenditure and mine development – Notes 12 and 13. Annual Report 2020 Notes to the Consolidated Financial Statements (continued) 2. Basis of Accounting (continued) H. Standards issued not yet effective (continued) Mandatory application date/ Date adopted by company Annual reporting periods beginning on or after 1 January 2022 Title of standard AASB 2020-3 Amendments to Australian Accounting Standards – Annual Improvements 2018-2020 and Other Amendments Nature of change Impact When these amendments are first adopted for the year ending 31 December 2022, there will be no material impact on the financial statements. Amendments to existing accounting standards, particularly in relation to: AASB 1 – simplifies the application of AASB 1 by a subsidiary that becomes a first-time adopter after its parent in relation to the measurement of cumulative translation differences. AASB 3 – to update a reference to the Conceptual Framework for Financial Reporting without changing the accounting requirements for business combinations. AASB 9 – to clarify the fees an entity includes when assessing whether the terms of a new or modified financial liability are substantially different from the terms of the original financial liability. AASB 116 – to require an entity to recognise the sales proceeds from selling items produced while preparing property, plant and equipment for its intended use and the related cost in profit or loss, instead of deducting the amounts received from the cost of the asset. AASB 137 Provisions, Contingent Liabilities and Contingent Assets – to specify the costs that an entity includes when assessing whether a contract will be loss-making. AASB 141 Investment Property – to remove the requirement to exclude cash flows from taxation when measuring fair value, thereby aligning the fair value measurement requirements in AASB 141 with those in other Australian Accounting Standards. All other pending Standards issued between the previous financial report and the current reporting dates have no application to the Group. 3. Segment Reporting Operating Segments The Group has determined its operating segments based on the reports reviewed by the Chief Operating Decision Makers (CODM) that are used to make strategic decisions regarding the Group’s operations. Due to the size and nature of the Group, the Board is considered to be the Chief Operating Decision Maker. The Group’s primary reports are prepared to show the performance and financial position of different business segments which can be distinguished by their risks and rates of return. 46 Page 46 Battery Minerals Limited Notes to the Consolidated Financial Statements (continued) Notes to the Consolidated Financial Statements (continued) 2. Basis of Accounting (continued) H. Standards issued not yet effective (continued) 3. Segment Reporting (continued) Nature of change Impact AASB 2020-3 Amendments to existing accounting standards, When these amendments are first Amendments to particularly in relation to: adopted for the year ending 31 December 2022, there will be no AASB 1 – simplifies the application of AASB 1 by a material impact on the financial subsidiary that becomes a first-time adopter after statements. Mandatory application date/ Date adopted by company Annual reporting periods beginning on or after 1 January 2022 Title of standard Australian Accounting Standards – Annual Improvements 2018-2020 and Other its parent in relation to the measurement of cumulative translation differences. Amendments Framework for Financial Reporting without AASB 3 – to update a reference to the Conceptual changing the accounting requirements for business combinations. AASB 9 – to clarify the fees an entity includes when assessing whether the terms of a new or modified financial liability are substantially different from the terms of the original financial liability. AASB 116 – to require an entity to recognise the sales proceeds from selling items produced while preparing property, plant and equipment for its intended use and the related cost in profit or loss, instead of deducting the amounts received from the cost of the asset. AASB 137 Provisions, Contingent Liabilities and Contingent Assets – to specify the costs that an entity includes when assessing whether a contract will be loss-making. AASB 141 Investment Property – to remove the requirement to exclude cash flows from taxation when measuring fair value, thereby aligning the fair value measurement requirements in AASB 141 with those in other Australian Accounting Standards. The CODM considers the business from functional and geographical perspectives and has identified that there are two reportable segments being: • Mozambique - mineral exploration and evaluation and mine development activities; and • Australia - mineral exploration and evaluation, investing activities and corporate management. The segment information is prepared in conformity with the accounting policies adopted for the preparation of the financial statements of the Group. In presenting the information of the geographical segments, the segment assets have been based on the geographic location of assets and segment expenses have been based on geographic location of supplied goods and application of provided services to the group. 31 December 2020 Interest revenue Mozambique $ 188,394 Australia $ Total $ 7,723 196,117 Other segment income - 117,864 117,864 Net foreign exchange gain/(loss) 20,967 (166,239) (145,272) Corporate and administration overhead Exploration and evaluation costs Loan write-off Provision for VAT receivable Exploration and mine development impairment Total segment expenses (221,183) - (107,021) (125,499) (4,142,346) (4,596,049) (1,927,676) (191,819) - - - (2,119,495) (2,148,859) (191,819) (107,021) (125,499) (4,142,346) (6,715,544) Reportable segment loss (4,386,688) (2,160,147) (6,546,835) Segment Assets Cash Exploration and evaluation Other (1) Total segment assets Mozambique $ 558,012 - 1,412,451 1,970,463 Australia $ 6,745,930 12,242,754 187,389 19,176,073 Total $ 7,303,942 12,242,754 1,599,840 21,146,536 (1) Other assets of the reporting segment “Mozambique” includes a non-current receivable representing a mine performance bond of All other pending Standards issued between the previous financial report and the current reporting dates have no application $1,209,805 held with the Unico Bank. Segment Liabilities Creditors and other payables Total segment liabilities Mozambique $ (85,213) (85,213) Australia $ (271,747) (271,747) Total $ (356,960) (356,960) to the Group. 3. Segment Reporting Operating Segments The Group has determined its operating segments based on the reports reviewed by the Chief Operating Decision Makers (CODM) that are used to make strategic decisions regarding the Group’s operations. Due to the size and nature of the Group, the Board is considered to be the Chief Operating Decision Maker. The Group’s primary reports are prepared to show the performance and financial position of different business segments which can be distinguished by their risks and rates of return. Page 46 Page 47 47 Annual Report 2020 Notes to the Consolidated Financial Statements (continued) 3. Segment Reporting (continued) Capital Expenditure during the year Exploration and evaluation Mine development asset – Montepuez Project Plant & equipment and intangible assets Total capital expenditure Mozambique $ Australia $ 20,087 1,122,259 - 1,142,346 12,242,754 - - 12,242,754 Total $ 12,262,841 1,122,259 - 13,385,100 31 December 2019 Interest revenue Mozambique $ 411,532 Australia $ Total $ 60,626 472,158 Other segment income 8,274 7,604 15,878 Net foreign exchange gain/(loss) 286,180 331,558 617,738 Business development Corporate and administration overhead Fair value adjustment on equity securities Exploration and mine development impairment Total segment expenses - (501,159) - (34,930,796) (35,431,955) (1,197,724) (1,755,098) (42,267) - (2,995,089) (1,197,724) (2,256,257) (42,267) (34,930,796) (38,427,044) Reportable segment loss (34,449,467) (2,324,702) (36,774,169) Segment Assets Cash Exploration and evaluation Mine development asset Other (1) Total segment assets Mozambique $ 567,226 - 3,000,000 3,982,804 7,550,030 Australia $ 3,551,934 - - 176,696 3,728,630 Total $ 4,119,160 - 3,000,000 4,159,500 11,278,660 (1) Other assets of the reporting segment “Mozambique” includes a current and non-current receivable of the mine performance bond of $3,509,854 held with the Unico Bank. Segment Liabilities Creditors and other payables Total segment liabilities Mozambique $ (125,185) (125,185) Australia $ (248,910) (248,910) Total $ (374,095) (374,095) Capital Expenditure during the year Exploration and evaluation – Balama Project Mine development asset – Montepuez Project Plant & equipment and intangible assets Total capital expenditure Mozambique $ 281,835 3,980,647 1,259 4,263,741 Australia $ Total $ - - 32,684 32,684 281,835 3,980,647 33,943 4,296,425 48 Page 48 Battery Minerals Limited - - - - - Notes to the Consolidated Financial Statements (continued) Notes to the Consolidated Financial Statements (continued) 3. Segment Reporting (continued) Capital Expenditure during the year Mozambique Australia Exploration and evaluation Mine development asset – Montepuez Project Plant & equipment and intangible assets $ 12,242,754 $ 20,087 1,122,259 - Total $ 12,262,841 1,122,259 - Total capital expenditure 1,142,346 12,242,754 13,385,100 31 December 2019 Interest revenue Mozambique Australia $ 411,532 $ Total $ 60,626 472,158 4. Other Expenses Office costs Depreciation IT consultants and website Subscriptions Loan write-off Provision for VAT receivable Administrative operating costs Other segment income 8,274 7,604 15,878 Total other expenses Net foreign exchange gain/(loss) 286,180 331,558 617,738 5. Income Tax Consolidated 31 Dec 2020 $ Consolidated 31 Dec 2019 $ 204,157 147,523 85,996 49,691 107,021 125,499 25,168 745,055 227,492 161,330 76,814 28,418 - - 83,098 577,152 Business development Corporate and administration overhead Fair value adjustment on equity securities Exploration and mine development impairment Total segment expenses (501,159) - - (34,930,796) (35,431,955) (1,197,724) (1,755,098) (42,267) (2,995,089) (1,197,724) (2,256,257) (42,267) (34,930,796) (38,427,044) Reportable segment loss (34,449,467) (2,324,702) (36,774,169) Segment Assets Cash Exploration and evaluation Mine development asset Other (1) Total segment assets (1) Other assets of the reporting segment “Mozambique” includes a current and non-current receivable of the mine performance bond of $3,509,854 held with the Unico Bank. Segment Liabilities Mozambique Australia Capital Expenditure during the year Mozambique Australia Creditors and other payables Total segment liabilities Exploration and evaluation – Balama Project Mine development asset – Montepuez Project Plant & equipment and intangible assets Total capital expenditure Mozambique Australia $ $ Total $ 567,226 3,551,934 4,119,160 - 3,000,000 3,982,804 7,550,030 $ (125,185) (125,185) $ 281,835 3,980,647 1,259 4,263,741 - 3,000,000 4,159,500 11,278,660 Total $ (374,095) (374,095) Total $ 281,835 3,980,647 33,943 4,296,425 176,696 3,728,630 $ (248,910) (248,910) $ - - 32,684 32,684 Page 48 The income tax expense/(benefit) for the year comprises current income tax expense/(income) and deferred tax expense/(income). Current income tax expense charged to the profit or loss is the tax payable on taxable income calculated using applicable income tax rates enacted, or substantially enacted, as at reporting date. Current tax liabilities/(assets) are therefore measured at the amounts expected to be paid to/(recovered from) the relevant taxation authority. Deferred income tax expense reflects movements in deferred tax asset and deferred tax liability balances during the period as well as unused tax losses. Current and deferred income tax expense/(income) is charged or credited directly to equity instead of the profit or loss when the tax relates to items that are credited or charged directly to equity. Deferred tax assets and liabilities are ascertained based on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements. Deferred tax assets also result where amounts have been fully expensed but future tax deductions are available. No deferred income tax will be recognised from the initial recognition of an asset or liability, excluding a business combination, where there is no effect on accounting or taxable profit or loss. Deferred tax assets and liabilities are calculated at the tax rates that are expected to apply to the period when the asset is realised or the liability is settled, based on tax rates enacted or substantively enacted at reporting date. Their measurement also reflects the manner in which management expects to recover or settle the carrying amount of the related asset or liability. Deferred tax assets relating to temporary differences and unused tax losses are recognised only to the extent that it is probable that future taxable profit will be available against which the benefits of the deferred tax asset can be utilised. Current tax assets and liabilities are offset where a legally enforceable right of set-off exists and it is intended that net settlement or simultaneous realisation and settlement of the respective asset and liability will occur. Deferred tax assets and liabilities are offset where a legally enforceable right of set-off exists, the deferred tax assets and liabilities relate to income taxes levied by the same taxation authority on either the same taxable entity or different taxable entities where it is intended that net settlement or simultaneous realisation and settlement of the respective asset and liability will occur in future periods in which significant amounts of deferred tax assets or liabilities are expected to be recovered or settled. Page 49 49 Annual Report 2020 Notes to the Consolidated Financial Statements (continued) 5. Income Tax (continued) (a) Income tax expense Current tax Deferred tax (b) Reconciliation of income tax expense to prima facie tax payable: Loss before income tax Prima facie income tax at 30% (30% in 2019 FY) Foreign tax rate differential Non-deductable/taxable items - Australia Non-deductable/taxable items – foreign operations Income tax benefits not brought to account Income tax expense/ (benefit) (c) Unrecognised deferred tax assets arising on timing difference and losses Carried forward tax losses - Australia Carried forward tax losses – foreign operations Other Total 6. Earnings per Share Basic earnings per share Consolidated 31 Dec 2020 $ Consolidated 31 Dec 2019 $ - - - - - - (6,546,835) (1,964,050) (30,648) 808,540 40,868 1,145,290 - (36,774,169) (11,032,251) (11,052) 2,734,315 8,276,597 32,391 - 5,705,265 3,385,391 (5,028) 9,085,628 4,842,693 2,930,867 40,522 7,814,082 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. 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. 50 Page 50 Battery Minerals Limited Notes to the Consolidated Financial Statements (continued) Notes to the Consolidated Financial Statements (continued) 5. Income Tax (continued) 6. Earnings per Share (continued) Consolidated Consolidated 31 Dec 2020 31 Dec 2019 $ $ - - - - - - (6,546,835) (1,964,050) (30,648) 808,540 40,868 1,145,290 - (36,774,169) (11,032,251) (11,052) 2,734,315 8,276,597 32,391 - 5,705,265 3,385,391 (5,028) 9,085,628 4,842,693 2,930,867 40,522 7,814,082 (a) Income tax expense Current tax Deferred tax (b) Reconciliation of income tax expense to prima facie tax payable: Loss before income tax Prima facie income tax at 30% (30% in 2019 FY) Foreign tax rate differential Non-deductable/taxable items - Australia Non-deductable/taxable items – foreign operations Income tax benefits not brought to account Income tax expense/ (benefit) (c) Unrecognised deferred tax assets arising on timing difference and losses Carried forward tax losses - Australia Carried forward tax losses – foreign operations Other Total 6. Earnings per Share 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. 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. The following reflects the income and share data used in the basic and diluted earnings per share computations: Loss attributable to the owners of Battery Minerals Limited ($) Basic loss per share attributable to equity holders (cents) Consolidated 31 Dec 2020 (6,546,835) Consolidated 31 Dec 2019 (36,774,169) (0.458) (2.930) Weighted average number of ordinary shares used as the denominator in calculating basic loss per share Weighted average number of ordinary shares used in calculation of diluted loss per share 1,430,886,671 1,255,124,426 1,430,886,671 1,255,124,426 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. 7. Dividends Paid or Proposed No amount has been paid or declared by way of a dividend to the date of this report. 8. Cash and Cash Equivalents For statement of cash flows presentation purposes, cash and cash equivalents includes cash on hand, deposits held at call with financial institutions and other short-term highly liquid investments 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 on hand Consolidated 31 Dec 2020 $ 7,303,942 7,303,942 Consolidated 31 Dec 2019 $ 4,119,160 4,119,160 Cash at bank and on hand earns interest at floating rates based on daily bank rates. Refer to Note 20(c) for additional details on the impact of interest rates on cash and cash equivalents for the period. 9. Other Receivables Receivables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method, less an allowance for impairment. Page 50 Page 51 51 Annual Report 2020 Notes to the Consolidated Financial Statements (continued) Current Prepaid expenses GST receivable Other receivables Non-Current Other receivables (1) Consolidated 31 Dec 2020 $ Consolidated 31 Dec 2019 $ 62,989 32,126 75,056 170,171 72,823 88,568 75,598 236,989 Consolidated 31 Dec 2020 $ Consolidated 31 Dec 2019 $ 1,209,805 1,209,805 3,509,854 3,509,854 (1) The non-current other receivable is the mine performance bond kept on deposit with the Unico Bank in Mozambique. During the period a portion of the bond was released reducing the balance from MZN 152 million (A$3.5 million equivalent) to MZN 69.5 million (A$1.2 million equivalent). The carrying amounts disclosed above represent their fair value. 10. Property, Plant & Equipment Property, plant and equipment is stated at historical cost less depreciation. Historical cost includes expenditure that is directly attributable to the acquisition of the items. Cost may also include transfers from equity of any gains or losses on qualifying cash flow hedges of foreign currency purchases of property, plant and equipment. Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. The carrying amount of any component accounted for as a separate asset is derecognised when replaced. All other repairs and maintenance are charged to profit or loss during the reporting period in which they are incurred. Depreciation on plant and equipment is calculated using the straight-line method or the units of production method to allocate their cost or revalued amounts, net of their residual values, over their estimated useful lives or, in the case of leasehold improvements and certain leased plant and equipment, the shorter lease. The depreciation rates vary between 10% and 40%. reporting period. The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each 52 Page 52 Battery Minerals Limited Notes to the Consolidated Financial Statements (continued) Notes to the Consolidated Financial Statements (continued) Current Prepaid expenses GST receivable Other receivables Non-Current Other receivables (1) Consolidated 31 Dec 2020 Consolidated 31 Dec 2019 $ $ 62,989 32,126 75,056 170,171 72,823 88,568 75,598 236,989 Consolidated 31 Dec 2020 Consolidated 31 Dec 2019 $ $ 1,209,805 1,209,805 3,509,854 3,509,854 (1) The non-current other receivable is the mine performance bond kept on deposit with the Unico Bank in Mozambique. During the period a portion of the bond was released reducing the balance from MZN 152 million (A$3.5 million equivalent) to MZN 69.5 million (A$1.2 million equivalent). The carrying amounts disclosed above represent their fair value. 10. Property, Plant & Equipment Property, plant and equipment is stated at historical cost less depreciation. Historical cost includes expenditure that is directly attributable to the acquisition of the items. Cost may also include transfers from equity of any gains or losses on qualifying cash flow hedges of foreign currency purchases of property, plant and equipment. Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. The carrying amount of any component accounted for as a separate asset is derecognised when replaced. All other repairs and maintenance are charged to profit or loss during the reporting period in which they are incurred. Depreciation on plant and equipment is calculated using the straight-line method or the units of production method to allocate their cost or revalued amounts, net of their residual values, over their estimated useful lives or, in the case of leasehold improvements and certain leased plant and equipment, the shorter lease. The depreciation rates vary between 10% and 40%. The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each reporting period. An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is greater that it’s estimated recoverable amount. Gains and losses on disposals are determined by comparing proceeds with carrying amount. These are included in profit or loss. When re-valued assets are sold, it is Group policy to transfer any amounts included in other reserves in respect of those assets to retained earnings. The majority of plant and equipment forms part of the Montepuez project, being the cash generating unit tested for impairment (refer to Note 13). Plant and equipment at cost Accumulated depreciation Net carrying amount Movements in carrying amounts Balance at beginning of the year Additions during the year Reclassified to mine development Depreciation expense Reclassified to intangibles Foreign currency translation movement Net carrying amount at the end of the year 11. Intangible Assets Consolidated 31 Dec 2020 $ 512,891 (355,519) 157,372 Consolidated 31 Dec 2019 $ 628,952 (341,083) 287,869 Consolidated 31 Dec 2020 $ 287,869 - - (85,227) - (45,270) 157,372 Consolidated 31 Dec 2019 $ 521,226 3,985 (3,006) (103,485) (128,912) (1,939) 287,869 Intangible assets with finite lives that are acquired separately are carried at cost less accumulated amortisation and accumulated impairment losses. Amortisation is recognised on a straight-line basis over their estimated useful lives that generally range between 3 and 5 years. The estimated useful life and amortisation method are reviewed at the end of each reporting period, with the effect of any changes in estimate being accounted for on a prospective basis. Intangible assets with indefinite useful lives that are acquired separately are carried at cost less accumulated impairment losses. Page 52 Page 53 53 Annual Report 2020 Notes to the Consolidated Financial Statements (continued) 11. Intangible Assets (continued) Software at cost Accumulated depreciation Net carrying amount Movements in carrying amounts Balance at beginning of the year Additions during the year Reclassification from property, plant and equipment Depreciation expense 12. Exploration and Evaluation Expenditure Consolidated 31 Dec 2020 $ 186,905 (124,413) 62,492 Consolidated 31 Dec 2019 $ 186,905 (62,117) 124,788 Consolidated 31 Dec 2020 $ Consolidated 31 Dec 2019 $ 124,788 - - (62,296) 62,492 23,363 29,958 128,912 (57,445) 124,788 Exploration and evaluation costs for each area of interest in the early stages of the project life are expensed as they are incurred except for acquisition costs, until they satisfy the requirements that are stated below. Exploration and evaluation costs for each area of interest that progress to a pre-feasibility study (analysis of potential mining project) are capitalised 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 activities 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 capitalised costs are written off to the extent that they will not be recoverable in the future. A regular review is undertaken of each area of interest to determine the appropriateness of continuing to carry forward costs in relation to that area of interest. Once technical feasibility and commercial viability of extraction of mineral resources in a particular area of interest become demonstrable, the exploration and evaluation assets attributable to that area of interest are reclassified to a mine development asset. Government grants are recognised where there is reasonable assurance that the grant will be received, and all attached conditions will be complied with. The research and development grant received by the Group relates to capitalised exploration expenditure, as such it is recognised in the statement of financial position offset against capitalised exploration expenditure. 54 Page 54 Battery Minerals Limited Notes to the Consolidated Financial Statements (continued) Notes to the Consolidated Financial Statements (continued) 11. Intangible Assets (continued) 12. Exploration and Evaluation Expenditure (continued) Software at cost Accumulated depreciation Net carrying amount Movements in carrying amounts Balance at beginning of the year Additions during the year Reclassification from property, plant and equipment Depreciation expense 12. Exploration and Evaluation Expenditure Consolidated 31 Dec 2020 Consolidated 31 Dec 2019 $ 186,905 (124,413) 62,492 $ 186,905 (62,117) 124,788 Consolidated 31 Dec 2020 Consolidated 31 Dec 2019 $ 124,788 - - (62,296) 62,492 $ 23,363 29,958 128,912 (57,445) 124,788 Exploration and evaluation costs for each area of interest in the early stages of the project life are expensed as they are incurred except for acquisition costs, until they satisfy the requirements that are stated below. Exploration and evaluation costs for each area of interest that progress to a pre-feasibility study (analysis of potential mining project) are capitalised 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 activities 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 capitalised costs are written off to the extent that they will not be recoverable in the future. A regular review is undertaken of each area of interest to determine the appropriateness of continuing to carry forward costs in relation to that area of interest. Once technical feasibility and commercial viability of extraction of mineral resources in a particular area of interest become demonstrable, the exploration and evaluation assets attributable to that area of interest are reclassified to a mine development asset. Government grants are recognised where there is reasonable assurance that the grant will be received, and all attached conditions will be complied with. The research and development grant received by the Group relates to capitalised exploration expenditure, as such it is recognised in the statement of financial position offset against capitalised exploration expenditure. Acquisition On 13 May 2020, Battery Minerals shareholders approved the issue of 439,363,850 shares to the shareholders of Gippsland Prospecting Pty Ltd (Gippsland) subject to the grant of exploration license EL06871, for the Stavely-Stawell copper-gold project in western Victoria. The Company completed the acquisition of 100% of Gippsland on 22 October 2020 following the grant of the exploration license on 16 October 2020. The area, known as Block 4, covers 809 km2 and hosts the historic Moyston gold mine. The transaction was executed in accordance with the signed sale agreements between Gippsland’s shareholders and the Company dated 26 February 2020 and 12 March 2020. As per the sale agreements each shareholder sold their fully paid ordinary shares in Gippsland to the Company for consideration consisting of a cash payment, repayment of shareholder’s loans and an issue of Company shares and options. Non-Current Exploration and evaluation at cost Movement Balance at beginning of the year Acquisition costs capitalised during the year Exploration expenditure capitalised during the year (1) Exploration expenditure disposed due to the tenement sale (2) Impairment (3) Foreign currency translation movement Closing exploration and evaluation net carrying amount N Consolidated 31 Dec 2020 $ Consolidated 31 Dec 2019 $ 12,242,754 - - 12,242,754 20,087 - (20,087) - 12,242,754 2,902,615 - 281,835 (96,680) (3,081,606) (6,164) - (1) Costs capitalised relate to the Balama Central Project in Mozambique. (2) Disposal of the exploration and evaluation expenditure relating to the sale of Tenement 5572 in Mozambique and its final settlement in October 2019. (3) The carrying amount of exploration and evaluation expenditure attributable to the Balama Central Project has been fully impaired. Assessment of Impairment The Group assesses whether impairment indicators exist that would require the company to estimate the recoverable amount of the capitalised exploration and evaluation expenditure. At 31 December 2020 the Group has determined that the Balama Central Project is considered to be part of the same cash generating unit as the Montepeuz Graphite Project resulting in the exploration and evaluation expenditure being impaired to nil (refer note 13). Page 54 Page 55 55 Annual Report 2020 Notes to the Consolidated Financial Statements (continued) 13. Mine Development Expenditure Once technical feasibility and commercial viability of extraction of mineral resources in a particular area of interest become demonstrable, the exploration and evaluation assets attributable to that area of interest are reclassified as mine development. Mine development represents the direct and indirect costs incurred in preparing mines for production and includes plant and equipment under construction, stripping and waste removal costs incurred before production commences. These costs are capitalised to the extent that they are expected to be recouped through the successful exploitation of the related mining leases. Once production commences, these costs are transferred to Mine Properties or Plant and Equipment, as relevant, and will be amortised using the units of production method based on the estimated economically recoverable reserves to which they relate or are written off if the mine property is abandoned. Development expenditure assets are assessed for impairment if an impairment trigger is identified. For the purposes of impairment testing capitalised mine development assets are allocated to the cash generating unit (“CGU”) to which the development activity relates. Costs of site restoration and rehabilitation are provided over the life of the facility and are included in the capitalised expenditure of that stage. Site restoration costs include the dismantling and removal of mining plant, equipment and building structures, waste removal and rehabilitation of the site in accordance with clauses of the mining permits. Such costs are determined using estimates of future costs, current legal requirements and technology on an undiscounted basis. Since the mine plant or building structures works have not commenced there is no provision made for site restoration or rehabilitation. Non-Current Mine development expenditure Movement Balance at beginning of the year Mine development expenditure capitalised during the year Reversal of capitalised expenditure due to purchase refund Reclassified from property, plant and equipment Research and development tax refund received Impairment Foreign currency translation movement Closing mine development net carrying amount Assessment of Impairment N Consolidated 31 Dec 2020 $ Consolidated 31 Dec 2019 $ - 3,000,000 3,000,000 1,730,742 (513,290) - (95,193) (4,122,259) - - 30,950,808 3,980,647 - - - (31,849,190) (82,265) 3,000,000 The Group assesses whether there are indicators that assets, or groups of assets, may be impaired at each reporting date. Covid-19 related macro-economic events, the slower than anticipated recovery of the graphite market and the associated inability to obtain bank finance at the present time were identified as impairment indicators and accordingly, the Montepuez Graphite Project has been tested for impairment. In determining the recoverable amount the Group has had regard to a range of valuation methodologies including: 56 Page 56 Battery Minerals Limited Notes to the Consolidated Financial Statements (continued) Notes to the Consolidated Financial Statements (continued) 13. Mine Development Expenditure 13. Mine Development Expenditure (continued) Once technical feasibility and commercial viability of extraction of mineral resources in a particular area of interest become demonstrable, the exploration and evaluation assets attributable to that area of interest are reclassified as mine development. Mine development represents the direct and indirect costs incurred in preparing mines for production and includes plant and equipment under construction, stripping and waste removal costs incurred before production commences. These costs are capitalised to the extent that they are expected to be recouped through the successful exploitation of the related mining leases. Once production commences, these costs are transferred to Mine Properties or Plant and Equipment, as relevant, and will be amortised using the units of production method based on the estimated economically recoverable reserves to which they relate or are written off if the mine property is abandoned. Development expenditure assets are assessed for impairment if an impairment trigger is identified. For the purposes of impairment testing capitalised mine development assets are allocated to the cash generating unit (“CGU”) to which the development activity relates. Costs of site restoration and rehabilitation are provided over the life of the facility and are included in the capitalised expenditure of that stage. Site restoration costs include the dismantling and removal of mining plant, equipment and building structures, waste removal and rehabilitation of the site in accordance with clauses of the mining permits. Such costs are determined using estimates of future costs, current legal requirements and technology on an undiscounted basis. Since the mine plant or building structures works have not commenced there is no provision made for site restoration or rehabilitation. Mine development expenditure Non-Current Movement Balance at beginning of the year Mine development expenditure capitalised during the year Reversal of capitalised expenditure due to purchase refund Reclassified from property, plant and equipment Research and development tax refund received Impairment Foreign currency translation movement Closing mine development net carrying amount Assessment of Impairment Consolidated Consolidated N 31 Dec 2020 31 Dec 2019 $ $ 3,000,000 1,730,742 (513,290) (95,193) (4,122,259) - - - - 3,000,000 30,950,808 3,980,647 - - - (31,849,190) (82,265) 3,000,000 The Group assesses whether there are indicators that assets, or groups of assets, may be impaired at each reporting date. Covid-19 related macro-economic events, the slower than anticipated recovery of the graphite market and the associated inability to obtain bank finance at the present time were identified as impairment indicators and accordingly, the Montepuez Graphite Project has been tested for impairment. In determining the recoverable amount the Group has had regard to a range of valuation methodologies including: • Discounted cash flow forecasts – this approach uses externally sourced forecasts for graphite prices, estimated quantities of recoverable ore, production levels, operating costs and capital requirements sourced from the Group’s budgeting process. • Comparable reserve and resource tonne multiples - enterprise value contained graphite multiples on both a reserve and resource basis has been calculated for selected peers. Share prices were significantly affected as a result of volatility on global and graphite markets. • Simulated option value using an option pricing model – this approach simulates multiple scenarios using the Monte Carlo option pricing model by adjusting the probability of the graphite price increasing. Each of the above approaches is considered to be a fair value less cost of sale approach. The slower than anticipated recovery of the graphite market and resultant pricing has resulted in a challenging environment to raise significant project debt and equity finance to progress the development of the Montepeuz Graphite Project. Under current pricing, it is unlikely that the projects would be developed, however, the Group intends to preserve the value of its projects and keep them in good standing as prices recover. In this regard, in 2019 the Directors had regard to the above methodologies in determining the recoverable amount of $3 million as at 31 December 2019. As graphite prices have not significantly improved during the year and the Company has not been able to secure project finance, the Company has made the decision that the carrying value be further impaired to nil. 14. Trade and Other Payables Trade and other payables These amounts represent liabilities for goods and services provided to the Group prior to the end of the financial year that are unpaid. The amounts are unsecured and are usually paid within 30 days of recognition. Trade and other payables are presented as current liabilities unless payment is not due within 12 months from the reporting date. They are recognised initially at their fair value and subsequently measured at amortised cost using the effective interest method. Current Trade and other payables Accrued expenses 15. Provisions Consolidated 31 Dec 2020 $ Consolidated 31 Dec 2019 $ 183,928 59,711 243,639 156,900 56,173 213,073 Provisions Provisions are recognised when the Group has a present legal or constructive obligation as a result of past events, it is probable that an outflow of resources will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. Provisions are not recognised for future operating losses. Provisions are measured as the present value of management’s best estimate of the expenditure required to settle the present obligation at the end of the reporting period. The discount rate used to determine the present value reflects current market assessments of the time value of money and the risks specific to the liability. The increase in the provision due to the passage of time is recognised as an interest expense. Page 56 Page 57 57 Annual Report 2020 Notes to the Consolidated Financial Statements (continued) 15. Provisions (continued) Employee benefits Short term obligations Liabilities for short-term employee benefits expected to be wholly settled within 12 months of the reporting date are recognised in other payables in respect of employees’ services up to the reporting date. They are measured at the amounts expected to be paid when the liabilities are settled. Current Provisions – employee benefits Movement Balance at beginning of the year Employee benefits provision accrued during the year Employee benefits paid during the year Balance at the end of the year 16. Issued Capital Ordinary shares are classified as equity. Consolidated 31 Dec 2020 $ Consolidated 31 Dec 2019 $ 113,321 113,321 161,022 109,761 (157,462) 113,321 161,022 161,022 211,658 354,447 (405,083) 161,022 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 Movements in ordinary share capital 2020 01-Jan-2020 22-Oct-2020 23-Nov-2020 22-Dec-2020 Opening Balance Share issue – Gippsland acquisition Share issue – Placement Share issue – Share Purchase Plan Less: Share issue costs Consolidated 31 Dec 2020 $ 96,164,978 Consolidated 31 Dec 2019 $ 78,909,275 96,164,978 78,909,275 No. of Shares 1,318,091,549 439,363,850 250,000,000 33,818,142 2,041,273,541 Issue Price - $0.026 $0.022 $0.022 - Amount $ 78,909,275 11,423,460 5,500,000 744,000 (411,757) 96,164,978 58 Page 58 Battery Minerals Limited Notes to the Consolidated Financial Statements (continued) Notes to the Consolidated Financial Statements (continued) 15. Provisions (continued) Employee benefits Short term obligations Liabilities for short-term employee benefits expected to be wholly settled within 12 months of the reporting date are recognised in other payables in respect of employees’ services up to the reporting date. They are measured at the amounts expected to be paid when the liabilities are settled. 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 Current Provisions – employee benefits Movement Balance at beginning of the year Employee benefits provision accrued during the year Employee benefits paid during the year Balance at the end of the year 16. Issued Capital Ordinary shares are classified as equity. purchase consideration. (a) Share capital Ordinary shares fully paid Movements in ordinary share capital 2020 01-Jan-2020 22-Oct-2020 23-Nov-2020 22-Dec-2020 Opening Balance Share issue – Gippsland acquisition Share issue – Placement Share issue – Share Purchase Plan Less: Share issue costs Consolidated 31 Dec 2020 $ Consolidated 31 Dec 2019 $ 113,321 113,321 161,022 109,761 (157,462) 113,321 161,022 161,022 211,658 354,447 (405,083) 161,022 Consolidated 31 Dec 2020 $ Consolidated 31 Dec 2019 $ 96,164,978 96,164,978 78,909,275 78,909,275 No. of Shares Issue Price 1,318,091,549 439,363,850 250,000,000 33,818,142 $0.026 $0.022 $0.022 - - 2,041,273,541 Amount $ 78,909,275 11,423,460 5,500,000 744,000 (411,757) 96,164,978 16. Issued Capital (continued) Movements in ordinary share capital 2019 01-Jan-2019 12-Apr-2019 30-May-2019 Opening Balance Share issue - Placement - Tranche 1 (1) Share issue -Placement – Tranche 2 (2) Less: Share issue costs No. of Shares 1,113,671,549 160,000,000 44,420,000 1,318,091,549 Issue Price - $0.025 $0.025 - Amount $ 74,125,719 4,000,000 1,110,500 (326,944) 78,909,275 (1) The Tranche 1 Placement shares were issued on 12 April 2019 under the Company’s 15% placement capacity pursuant to ASX Listing Ruling 7.1 and on 21 May 2019 the General Meeting of Battery Minerals Limited shareholders approved and ratified the prior issue of the shares as part of the Tranche 1 Placement. (2) The issue of Tranche 2 Placement securities was approved by the General Meeting of Battery Minerals shareholders held on 21 May 2019. Ordinary Shares Ordinary shares entitle the holder to participate in dividends and 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. Options Information relating to options over ordinary shares on issue, including details of options issued, exercised and lapsed during the financial year and options outstanding at the end of the year is set in Note 17 and Note 23. The Company has 274,484,066 listed options (ASX: BATO) on issue exercisable at 10 cents on or before 31 July 2023. The options were issued as free options pursuant to capital raisings undertaken in 2018 and 2019. 17. Reserves Foreign currency translation reserve The foreign currency translation reserve comprises all foreign exchange differences arising from the translation of the foreign controlled entities where their functional currency is different to the presentation currency of the reporting entity. These foreign exchange differences are recognised in other comprehensive income as described in Note 2C and accumulated in a separate reserve account within equity. The cumulative amount is reclassified to profit or loss when the net investment is disposed of. Page 58 Page 59 59 Annual Report 2020 Notes to the Consolidated Financial Statements (continued) Share-based payments reserve The share-based payments reserve is used to recognise the fair value of options, contingent rights and performance rights granted by the Company. Reserves Foreign currency translation reserve Share- based payments reserve (1) Consolidated 31 Dec 2020 $ Consolidated 31 Dec 2019 $ (2,005,705) 5,310,133 3,304,428 (1,113,323) 5,241,608 4,128,285 (1) Share based payment reserve comprises options issued as share-based payments. Refer to Note 23 for more details. Movements in share-based payments reserve 2020 01-Jan-20 31-May-20 31-May-20 1-Jul-20 22-Oct-20 20-Nov-20 31-Dec-20 31-Dec-20 Details Opening Balance Options expired Options forfeited(1) Options forfeited(1) Options issued for Gippsland acquisition(2) Options forfeited(1) Vesting expense of prior years’ options Balance at end of year No. of Options 195,900,000 (2,500,000) (14,000,000) (4,000,000) 70,000,000 (2,500,000) - 242,900,000 Amount $ 5,241,608 - - - - - 68,525 5,310,133 (1) Unvested options forfeited upon resignation of an employee. (2) Zepo options were issued to the shareholders of Gippsland Prospecting Pty Ltd in accordance with the approval of the General Meeting of shareholders on 13 May 2020. Options are exercisable at nil price and expire on 22 October 2025. Vesting conditions of the consideration options are as follows: • • • Tranche 1 - 40,000,000 options will vest upon definition of a JORC Code compliant Mineral Resource of at least 1,000,000 ounces of gold (or equivalent) on tenement EL06871 at a minimum average grade of 1 gram per tonne of gold (or equivalent). Tranche 2 - 20,000,000 options will vest upon completion of a pre-feasibility study and definition of a JORC Code compliant Ore Reserve of at least 750,000 ounces of gold (or equivalent) on tenement EL06871 at a minimum average grade of 1 gram per tonne of gold (or equivalent). Tranche 3 - 10,000,000 options will vest upon the Company achieving production over two consecutive months which is equal to 80% of the pro-rated production schedule pursuant to a Definitive Feasibility Study approved by the Board. 60 Page 60 Battery Minerals Limited Notes to the Consolidated Financial Statements (continued) Notes to the Consolidated Financial Statements (continued) Share-based payments reserve The share-based payments reserve is used to recognise the fair value of options, contingent rights and performance rights granted by the Company. Reserves Foreign currency translation reserve Share- based payments reserve (1) Consolidated 31 Dec 2020 $ Consolidated 31 Dec 2019 $ (2,005,705) 5,310,133 3,304,428 (1,113,323) 5,241,608 4,128,285 (1) Share based payment reserve comprises options issued as share-based payments. Refer to Note 23 for more details. Movements in share-based payments reserve 2020 01-Jan-20 31-May-20 31-May-20 1-Jul-20 22-Oct-20 20-Nov-20 31-Dec-20 31-Dec-20 Details Opening Balance Options expired Options forfeited(1) Options forfeited(1) Options forfeited(1) Options issued for Gippsland acquisition(2) Vesting expense of prior years’ options Balance at end of year No. of Options 195,900,000 (2,500,000) (14,000,000) (4,000,000) 70,000,000 (2,500,000) - 242,900,000 Amount $ 5,241,608 - - - - - 68,525 5,310,133 (1) Unvested options forfeited upon resignation of an employee. (2) Zepo options were issued to the shareholders of Gippsland Prospecting Pty Ltd in accordance with the approval of the General Meeting of shareholders on 13 May 2020. Options are exercisable at nil price and expire on 22 October 2025. Vesting conditions of the consideration options are as follows: Tranche 1 - 40,000,000 options will vest upon definition of a JORC Code compliant Mineral Resource of at least 1,000,000 ounces of gold (or equivalent) on tenement EL06871 at a minimum average grade of 1 gram per tonne of gold (or equivalent). • • • 17. Reserves (continued) Movements in share-based payments reserve 2019 01-Jan-19 15-Feb-19 21-May-19 21-May-19 24-Jun-19 01-Jul-19 01-Jul-19 08-Nov-19 15-Nov-19 22-Nov-19 31-Dec-19 31-Dec-19 31-Dec-19 Details Opening Balance Forfeited options (1) Options issued to directors (2) Options issued to employees (3) Forfeited options (1) Forfeited options (1) Forfeited options (1) Forfeited options (1) Forfeited options (1) Forfeited options (1) Vesting expense of prior years’ options Reverse vesting expense of prior years (4) Balance at end of year No. of Options 135,050,000 (2,000,000) 65,500,000 72,850,000 (1,500,000) (200,000) (1,200,000) (22,000,000) (600,000) (50,000,000) - - 195,900,000 Amount $ 6,029,637 (9,885) 121,217 20,695 (17,809) (2,443) (14,660) (84,036) (7,330) (59,461) 386,764 (1,121,081) 5,241,608 The total share-based payment expense of ($788,027) relating to prior years was reversed into profit and loss in 2019 due to a low probability of vesting conditions being met. (1) Unvested options forfeited upon resignation of an employee or director. (2) Zepo options were issued to David Flanagan, Jeremy Sinclair and Jeff Dowling in accordance with the approval of the General Meeting of shareholders on 21 May 2019. Options are exercisable at nil price and expire on 20 June 2024. 8,000,000 options issued to David Flanagan and 12,000,000 options issued to Jeremy Sinclair have vesting conditions linked to a financial close and equity funding for the Montepuez Project phase 1. 38,000,000 options issued to Jeremy Sinclair have vesting conditions linked to commencement of commercial production being 43.5% of the Montepuez Project stage 1, 43.5% of the Montepuez project stage 2 and 13% of the Balama project stage 1. 7,500,000 options issued to Jeff Dowling will vest in three equal parts on completion of 12 months, 24 months and 36 months of continuous service. (3) The issue of Zepo options to employees was approved at the General Meeting of shareholders on 21 May 2019. Options are exercisable at nil price and expire on 20 June 2024. 23,450,000 options will vest on financial close and equity funding for the Montepuez project stage 1; 23,750,000 options will vest on commencement of commercial production of the Montepuez project stage 1; 24,650,000 options will vest on commencement of commercial production of the Montepuez project stage 2 and 1,000,000 options will vest on commencement of commercial production of the Balama project. (4) Share-based payment expenses recognised in prior periods have been reversed on the expectation of vesting conditions not being met. Tranche 2 - 20,000,000 options will vest upon completion of a pre-feasibility study and definition of a JORC Code compliant Ore Reserve of at least 750,000 ounces of gold (or equivalent) on tenement EL06871 at a minimum average 18. Accumulated Losses grade of 1 gram per tonne of gold (or equivalent). Tranche 3 - 10,000,000 options will vest upon the Company achieving production over two consecutive months which is equal to 80% of the pro-rated production schedule pursuant to a Definitive Feasibility Study approved by the Board. Movement in accumulated losses Consolidated 31 Dec 2020 $ Consolidated 31 Dec 2019 $ Balance at beginning of the year Loss attributable to the owners of Battery Minerals Limited Balance at end of the year (72,132,995) (6,546,835) (78,679,830) (35,358,826) (36,774,169) (72,132,995) Page 60 Page 61 61 Annual Report 2020 Notes to the Consolidated Financial Statements (continued) 19. Operating Cash Flow Reconciliation Reconciliation of operating cash flows to operating loss: Loss from ordinary activities after income tax Adjustment for non-cash items: Depreciation and amortisation Mine development impairment Loan write-off Fair value adjustment to equity securities Gain on sale of assets Share- based payments Dissolution of subsidiary Foreign currency (gain)/loss Changes in operating assets and liabilities during the year: (Increase)/decrease in trade and other receivables Increase/(decrease) in trade and other payables Net cash outflow from operating activities 20. Financial Risk Management Consolidated 31 Dec 2020 $ Consolidated 31 Dec 2019 $ (6,546,835) (36,774,169) 147,523 4,142,346 107,021 - - 68,525 - (71,409) 161,330 34,930,796 - 42,267 90,341 (788,027) (203,045) (693,106) 66,818 (17,134) 95,680 (886,244) (2,103,145) (4,024,177) The Group’s activities expose it to a variety of financial risks including foreign exchange risk, interest rate risk, credit risk and liquidity risk. The Group’s overall risk management program focuses on the unpredictability of the financial markets and seeks to minimise potential adverse effects on the financial performance of the Group. The Group uses different methods to measure different types of risk to which it is exposed. These methods include sensitivity analysis in the case of foreign currency and interest rate risks and ageing analysis for credit risk. Risk management is carried out by the Board of Directors with assistance from suitably qualified external and internal advisors as required. The Board provides written principles for overall risk management and further policies will evolve commensurate with the evolution and growth of the Group. These disclosures are not, nor are they intended to be an exhaustive list of risks which the Group has exposure to. (a) Market risk Market risk arises from the Group’s exposure to interest bearing financial assets and foreign currency financial instruments. There is a risk that the fair value of future cash flows of financial instruments will fluctuate because of changes in foreign exchange rates (currency risk), interest rates (interest rate risk) and share prices (price risk). 62 Page 62 Battery Minerals Limited Reconciliation of operating cash flows to operating loss: Loss from ordinary activities after income tax (6,546,835) (36,774,169) Adjustment for non-cash items: Depreciation and amortisation Mine development impairment Loan write-off Fair value adjustment to equity securities Gain on sale of assets Share- based payments Dissolution of subsidiary Foreign currency (gain)/loss Changes in operating assets and liabilities during the year: (Increase)/decrease in trade and other receivables Increase/(decrease) in trade and other payables Net cash outflow from operating activities 20. Financial Risk Management Consolidated 31 Dec 2020 Consolidated 31 Dec 2019 $ $ 147,523 4,142,346 107,021 - - - 68,525 (71,409) 161,330 34,930,796 - 42,267 90,341 (788,027) (203,045) (693,106) 66,818 (17,134) 95,680 (886,244) (2,103,145) (4,024,177) The Group’s activities expose it to a variety of financial risks including foreign exchange risk, interest rate risk, credit risk and liquidity risk. The Group’s overall risk management program focuses on the unpredictability of the financial markets and seeks to minimise potential adverse effects on the financial performance of the Group. The Group uses different methods to measure different types of risk to which it is exposed. These methods include sensitivity analysis in the case of foreign currency and interest rate risks and ageing analysis for credit risk. Risk management is carried out by the Board of Directors with assistance from suitably qualified external and internal advisors as required. The Board provides written principles for overall risk management and further policies will evolve commensurate with the evolution and growth of the Group. These disclosures are not, nor are they intended to be an exhaustive list of risks which the Group has exposure to. (a) Market risk Market risk arises from the Group’s exposure to interest bearing financial assets and foreign currency financial instruments. There is a risk that the fair value of future cash flows of financial instruments will fluctuate because of changes in foreign exchange rates (currency risk), interest rates (interest rate risk) and share prices (price risk). Notes to the Consolidated Financial Statements (continued) Notes to the Consolidated Financial Statements (continued) 19. Operating Cash Flow Reconciliation 20 Financial Risk Management (continued) (b) Foreign exchange risk The functional currency of the Group is Australian dollars; however, the Group and the parent entity operate internationally and are exposed to various currencies, primarily with respect to US Dollars (USD) and Mozambique New Meticals (MZN). The Group is exposed to foreign exchange risk arising from fluctuations of the Australian dollar against the US dollar (USD) at parent level and fluctuations of the Australian dollar against the Mozambique New Metical (MZN) and USD at subsidiary level. Foreign exchange risk arises from future commercial transactions and recognised assets and liabilities denominated in a currency that is not the entity’s functional currency and net investments in foreign operations. The exposure to risks is measured using sensitivity analysis and cash flow forecasting. The Group has not formalised a foreign currency risk management policy, however it monitors its foreign currency expenditure in the light of exchange rate movements. The Group does not have any other material foreign currency dealings other than the noted currencies. The Group’s exposure to US Dollar foreign currency risk at the reporting date, expressed in Australian Dollars, was as follows: Financial assets Cash and cash equivalents Total financial assets Financial liabilities Trade creditors and other payables Total financial liabilities Consolidated 31 Dec 2020 $ Consolidated 31 Dec 2019 $ 988,229 988,229 - - 884,525 884,525 20,762 20,762 The following conversion rates were used at the end of the financial year: • USD/AUD 0.77009 (2019: 0.7002) Sensitivity analysis - change in foreign currency rates The following table demonstrates the estimated sensitivity on assets and liabilities held in foreign currency at 31 December 2020 to a 10% increase/decrease in the USD/AUD exchange rates, with all variables held constant, on post-tax profit or loss and equity. These sensitivities should not be used to forecast the future effect of movements in the Australian dollar exchange rate on future cash flows. Impact on post tax profits and equity USD/AUD +10% USD/AUD -10% Consolidated 31 Dec 2020 $ (89,839) 109,803 Consolidated 31 Dec 2019 $ (78,524) 95,974 A hypothetical change of 10% in exchange rates were used to calculate the Group’s sensitivity to foreign exchange rate movements as this is management’s estimate of possible rate movements over the coming year taking into account currency market conditions and past volatility (2019: 10%). Page 62 Page 63 63 Annual Report 2020 Notes to the Consolidated Financial Statements (continued) 20. Financial Risk Management (continued) (c) 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 31 December 2020, the Group had interest-bearing assets in the form of cash and cash equivalents of $7,303,942 (2019: $4,119,160) and a mine performance bond of $1,209,805 (2019: $3,509,854). As such the Group’s operating cash flows are exposed to movements in market interest rates due to the movements in variable interest rates on cash and cash equivalents. 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. Sensitivity analysis – change in interest rates Based on the financial assets held at reporting date, with all other variables assumed to be held constant, the table below sets out the notional effect on consolidated profit or loss after tax for the year and on equity at reporting date under varying hypothetical changes in prevailing interest rates. Impact on post tax profits and equity Hypothetical 80 basis points increase in interest Hypothetical 80 basis points decrease in interest Consolidated 31 Dec 2020 $ 68,110 (68,110) Consolidated 31 Dec 2019 $ 61,032 (61,032) The weighted average interest rate received on cash, cash equivalents and mine performance bond of the Group is 2.25% (2019: 4.49%) (d) Credit risk Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the Group. The Group has adopted the policy of dealing with creditworthy counterparties and obtaining sufficient collateral or other security where appropriate, as a means of mitigating the risk of financial loss from defaults. The Group measures credit risk on a fair value basis. The Group does not have any significant credit risk exposure to a single counterparty or any Group of counterparties having similar characteristics. The carrying amount of financial assets recorded in the financial statements, net of any provisions for losses, represents the Group’s maximum exposure to credit risk without taking account of the fair value of any collateral or other security obtained. Financial assets Cash and cash equivalents Other receivables Non-current receivables Total financial assets Consolidated 31 Dec 2020 $ Consolidated 31 Dec 2019 $ 7,303,942 170,171 1,209,805 8,683,918 4,119,160 236,989 3,509,854 7,866,003 64 Page 64 Battery Minerals Limited Notes to the Consolidated Financial Statements (continued) Notes to the Consolidated Financial Statements (continued) 20. Financial Risk Management (continued) (c) 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 31 December 2020, the Group had interest-bearing assets in the form of cash and cash equivalents of $7,303,942 (2019: $4,119,160) and a mine performance bond of $1,209,805 (2019: $3,509,854). As such the Group’s operating cash flows are exposed to movements in market interest rates due to the movements in variable interest rates on cash and cash equivalents. 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. Sensitivity analysis – change in interest rates Based on the financial assets held at reporting date, with all other variables assumed to be held constant, the table below sets out the notional effect on consolidated profit or loss after tax for the year and on equity at reporting date under varying hypothetical changes in prevailing interest rates. Impact on post tax profits and equity Hypothetical 80 basis points increase in interest Hypothetical 80 basis points decrease in interest Consolidated 31 Dec 2020 $ 68,110 (68,110) Consolidated 31 Dec 2019 $ 61,032 (61,032) The weighted average interest rate received on cash, cash equivalents and mine performance bond of the Group is 2.25% (2019: 4.49%) (d) Credit risk Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the Group. The Group has adopted the policy of dealing with creditworthy counterparties and obtaining sufficient collateral or other security where appropriate, as a means of mitigating the risk of financial loss from defaults. The Group measures credit risk on a fair value basis. The Group does not have any significant credit risk exposure to a single counterparty or any Group of counterparties having similar characteristics. The carrying amount of financial assets recorded in the financial statements, net of any provisions for losses, represents the Group’s maximum exposure to credit risk without taking account of the fair value of any collateral or other security obtained. Financial assets Cash and cash equivalents Other receivables Non-current receivables Total financial assets Consolidated 31 Dec 2020 $ Consolidated 31 Dec 2019 $ 7,303,942 170,171 1,209,805 8,683,918 4,119,160 236,989 3,509,854 7,866,003 Page 64 20. Financial Risk Management (continued) The credit quality of financial assets that are neither past due nor impaired can be assessed by reference to external credit ratings as follows: Financial assets Westpac Bank AA- rated Mozambique banks BBB – rated (1) Unrated Consolidated 31 Dec 2020 $ Consolidated 31 Dec 2019 $ 6,760,563 1,753,183 170,172 8,683,918 3,563,002 4,066,013 236,988 7,866,003 (1) Includes mine performance bond of MZN69.5 million (A$1.2 million equivalent) (2019: MZN152 million (A$3.5 million equivalent)) held with the Unico Bank in Mozambique. (e) Liquidity risk Prudent liquidity risk management implies maintaining sufficient cash and marketable securities, the availability of funding through an adequate amount of committed credit facilities and the ability to close out market positions. The Group manages liquidity risk by continuously monitoring forecast and actual cash flows and matching the maturity profile of financial assets and liabilities. As at the reporting date the Group had sufficient cash reserves to meet its requirements. The financial liabilities of the Group at reporting date were trade & other payables incurred in the normal course of business. These were non-interest bearing and were due within the normal 30 - 90 day terms of creditor payments. Less than 1 month $ 48,904 48,904 1-3 months, $ 228,730 228,730 3months - 1 year $ 79,326 79,326 No set date of repayment - - 59,980 59,980 201,400 201,400 112,715 112,715 - - Total $ 356,960 356,960 374,095 374,095 2020 Trade creditors & other payables 2019 Trade creditors & other payables (f) Net fair value Fair value estimation 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. No assets or liabilities are held at fair value. (g) Capital risk management The Group’s objectives when managing capital are to safeguard its ability to continue as a going concern, so that it can continue to provide returns to shareholders and benefits for other stakeholders and to maintain an optimal capital structure to reduce the cost of capital. Page 65 65 Annual Report 2020 Notes to the Consolidated Financial Statements (continued) Due to the nature of the Group’s activities, being mineral exploration and development, the Group does not have ready access to credit facilities, with the primary source of funding being equity raisings. Therefore, the focus of the Group’s capital risk management is the current working capital position against the requirements of the Group to meet exploration & evaluation programs and corporate overheads. The Group’s strategy is to ensure appropriate liquidity is maintained to meet anticipated operating requirements, with a view to initiating appropriate capital raisings as required. The working capital position of the Group at the end of the year is as follows: Cash and cash equivalents Current trade and other receivables Current trade and other payables Current provisions Consolidated 31 Dec 2020 $ Consolidated 31 Dec 2019 $ 7,303,942 170,171 (243,639) (113,321) 7,117,153 4,119,160 1,991,916 (213,073) (161,022) 5,736,981 21. Related Party Disclosures Parent entities and subsidiaries Battery Minerals Limited is the ultimate Australian parent entity. Interests in subsidiaries are set out below: Country of Incorporation % Equity 31 December 2020 % Equity 31 December 2019 Gippsland Prospecting Pty Ltd (1) Express Resources Pty Ltd Index Resources Pty Ltd Action Resources Pty Ltd Jackal Resources Pty Ltd Au Resources Pty Ltd Skype Resources Pty Ltd Battery Minerals (USA) Pty Ltd Rovuma Resources Limited Jorc Resources Limited Assain Investments Limited Greenstone Resources Limited Rio Mazowe Limited Suni Resources SA Niassa Gold SA Goldcrest Resources SA Afriminas Minerais Limitada Australia Australia Australia Australia Australia Australia Australia Australia Mauritius Mauritius Mauritius Mauritius Mauritius Mozambique Mozambique Mozambique Mozambique 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 - 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 (1) The Company acquired all of the shares in Gippsland Prospecting Pty Ltd on 22 October 2020 pursuant to a sale agreement set out in the Notice of AGM for the meeting held on 13 May 2020. 66 Page 66 Battery Minerals Limited Notes to the Consolidated Financial Statements (continued) Notes to the Consolidated Financial Statements (continued) 21. Related Party Disclosures (continued) (a) Key Management Personnel The following persons were directors of Battery Minerals Limited during the financial year: Director David Flanagan David Flanagan Jeff Dowling Darryl Clark Jeremy Sinclair Position Appointed Resigned Executive Chairman Non-Executive Chairman Executive Chairman Managing Director Executive Chairman Non-Executive Chairman Non-Executive Director Non-Executive Chairman Non-Executive Director Non-Executive Director Managing Director 25 March 2021 1 July 2019 8 April 2019 25 January 2018 30 March 2017 11 October 2016 8 April 2019 25 January 2018 22 October 2020 22 November 2019 8 April 2019 - 25 March 2021 1 July 2019 8 April 2019 25 January 2018 30 March 2017 - 8 April 2019 - 22 October 2020 22 November 2019 (b) Other key management personnel Name Tony Walsh Nick Day Position Company Secretary Chief Financial Officer Resigned - Resigned 1 July 2020 Country of Incorporation % Equity 31 December 2020 % Equity 31 December 2019 (c) Key management personnel compensation Short-term employee benefits Share based payments Post-employment benefit Total (d) Loans to key management personnel Consolidated 31 Dec 2020 $ 337,721 68,525 19,444 425,690 Consolidated 31 Dec 2019 $ 1,096,466 (220,015) 67,141 943,592 There were no loans made or outstanding to directors of Battery Minerals Limited and other key management personnel of the Group, including their personally related parties. (e) Other transactions with Key Management Personnel There were no other transactions with Key Management Personnel other than share based payments (refer to Note 23). Page 67 67 Due to the nature of the Group’s activities, being mineral exploration and development, the Group does not have ready access to credit facilities, with the primary source of funding being equity raisings. Therefore, the focus of the Group’s capital risk management is the current working capital position against the requirements of the Group to meet exploration & evaluation programs and corporate overheads. The Group’s strategy is to ensure appropriate liquidity is maintained to meet anticipated operating requirements, with a view to initiating appropriate capital raisings as required. The working capital position of the Group at the end of the year is as follows: Cash and cash equivalents Current trade and other receivables Current trade and other payables Current provisions Consolidated 31 Dec 2020 $ Consolidated 31 Dec 2019 $ 7,303,942 170,171 (243,639) (113,321) 7,117,153 4,119,160 1,991,916 (213,073) (161,022) 5,736,981 21. Related Party Disclosures Parent entities and subsidiaries Battery Minerals Limited is the ultimate Australian parent entity. Interests in subsidiaries are set out below: Gippsland Prospecting Pty Ltd (1) Express Resources Pty Ltd Index Resources Pty Ltd Action Resources Pty Ltd Jackal Resources Pty Ltd Au Resources Pty Ltd Skype Resources Pty Ltd Battery Minerals (USA) Pty Ltd Rovuma Resources Limited Jorc Resources Limited Assain Investments Limited Greenstone Resources Limited Rio Mazowe Limited Suni Resources SA Niassa Gold SA Goldcrest Resources SA Afriminas Minerais Limitada Australia Australia Australia Australia Australia Australia Australia Australia Mauritius Mauritius Mauritius Mauritius Mauritius Mozambique Mozambique Mozambique Mozambique 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 - 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 (1) The Company acquired all of the shares in Gippsland Prospecting Pty Ltd on 22 October 2020 pursuant to a sale agreement set out in the Notice of AGM for the meeting held on 13 May 2020. Page 66 Annual Report 2020 Notes to the Consolidated Financial Statements (continued) 22. Auditors’ Remuneration Audit fees - BDO Mozambique Audit and review fees - KPMG Australia Tax and legal advisory services fees - KMPG Mozambique Total remuneration for auditors’ services 23. Share-based payments Consolidated 31 Dec 2020 $ 17,802 47,830 31,086 96,718 Consolidated 31 Dec 2019 $ 16,391 46,598 73,225 136,214 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. (a) Option Issue During the period the Company issued 70,000,000 Zepo options to the vendors of the Stavely-Stawell Project in Victoria. The following table discloses the number of options issued: Tranche Recipient Number of Options Issue Date 1 2 3 Project vendors Project vendors Project vendors 40,000,000 22/10/2020 20,000,000 22/10/2020 10,000,000 22/10/2020 Vesting Date (1) (2) (3) Expiry Date 22/10/2025 22/10/2025 22/10/2025 Exercise Price $ nil nil nil 70,000,000 Total Fair Value $ 211,200 105,600 52,800 369,600 The options issued during the financial year had nil exercise prices and were valued at the share market price on the grant date. No share-based payment expense was recognised on the expectation of the low probability that vesting conditions would be met. 68 Page 68 Battery Minerals Limited Notes to the Consolidated Financial Statements (continued) Notes to the Consolidated Financial Statements (continued) 22. Auditors’ Remuneration 23. Share-based payments (continued) Consolidated 31 Dec 2020 Consolidated 31 Dec 2019 $ 17,802 47,830 31,086 96,718 $ 16,391 46,598 73,225 136,214 (1) 40,000,000 options will vest upon definition of a JORC Code compliant Mineral Resource of at least 1,000,000 ounces of gold (or equivalent) on tenement EL06871 at a minimum average grade of 1 gram per tonne of gold (or equivalent). (2) 20,000,000 options will vest upon completion of a pre-feasibility study and definition of a JORC Code compliant Ore Reserve of at least 750,000 ounces of gold (or equivalent) on tenement EL06871 at a minimum average grade of 1 gram per tonne of gold (or equivalent). (3) 10,000,000 options will vest upon the Company achieving production over two consecutive months which is equal to 80% of the pro-rated production schedule pursuant to a Definitive Feasibility Study approved by the Board. (b) Share options outstanding at the end of the year have the following terms and conditions: 31 December 2020 Grant Date Expiry Date Exercise Price $ FV per security $ Balance at start of year 30-May-16 21-Dec-16 21-Dec-16 21-Dec-16 21-Dec-16 21-Dec-16 21-Dec-16 21-Dec-16 21-Dec-16 15-Feb-17 8-Apr-17 26-May-17 26-May-17 26-May-17 5-Jan-18 5-Jan-18 27-Jun-18 27-Jun-18 27-Jun-18 27-Jun-18 27-Jun-18 27-Jun-18 27-Jun-18 21-May-19 21-May-19 22-Oct-20 22-Oct-20 22-Oct-20 31-May-20 23-Dec-21 23-Dec-21 23-Dec-21 23-Dec-21 23-Dec-21 23-Dec-21 23-Dec-21 23-Dec-21 23-Dec-21 22-May-22 21-Jun-22 21-Jun-22 21-Jun-22 16-Jan-21 16-Jan-21 30-Jun-23 30-Jun-23 3-Jul-23 13-Jul-23 16-Jul-23 16-Jul-23 16-Jul-23 20-Jun-24 20-Jun-24 22-Oct-25 22-Oct-25 22-Oct-25 0.092 0.10 0.15 0.20 0.25 0.15 0.15 0.15 0.15 0.15 0.20 0.94 0.20 0.13 0.1125 0.15 0.13 0.13 0.00 0.00 0.20 0.20 0.15 0.00 0.00 0.00 0.00 0.00 0.036 0.093 0.087 0.082 0.078 0.086 0.086 0.086 0.086 0.064 0.059 0.046 0.038 0.042 0.042 0.039 0.017 0.017 0.031 0.031 0.014 0.014 0.014 0.022 0.022 0.053 0.053 0.053 Number 2,500,000 5,000,000 5,000,000 5,000,000 5,000,000 10,000,000 3,000,000 4,400,000 3,000,000 1,500,000 1,000,000 10,000,000 5,000,000 3,000,000 7,800,000 7,800,000 4,500,000 1,500,000 20,000,000 12,800,000 4,600,000 1,000,000 150,000 56,850,000 15,500,000 - - - - - - - - - - - - - - - - - - - - - - - - - - - - 40,000,000 20,000,000 10,000,000 195,900,000 70,000,000 Granted during the year Exercised during the year Number Number Forfeited / expired during the year Number 2,500,000 Balance at end of the year Number Vested & exercisable at end of the year Number - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 5,000,000 - 5,000,000 - 5,000,000 - 5,000,000 - 10,000,000 - 3,000,000 - 4,400,000 - 3,000,000 - 1,500,000 - 1,000,000 - 10,000,000 - 5,000,000 - 3,000,000 7,800,000 7,800,000 - 4,500,000 1,500,000 - 20,000,000 12,200,000 4,200,000 1,000,000 150,000 37,350,000 15,500,000 40,000,000 20,000,000 10,000,000 - 19,500,000 - - - - 600,000 400,000 - - - - - 5,000,000 5,000,000 5,000,000 5,000,000 - 3,000,000 4,400,000 3,000,000 500,000 - - - 3,000,000 7,800,000 7,800,000 4,500,000 1,500,000 - - 1,200,000 1,000,000 75,000 - 2,500,000 - - - 23,000,000 242,900,000 60,275,000 Page 69 69 Audit fees - BDO Mozambique Audit and review fees - KPMG Australia Tax and legal advisory services fees - KMPG Mozambique Total remuneration for auditors’ services 23. Share-based payments The Group provides benefits to employees (including directors) of the Group in the form of share-based payment transactions, whereby employees render services in exchange for shares or rights over shares (‘equity-settled transactions’). 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. (a) Option Issue During the period the Company issued 70,000,000 Zepo options to the vendors of the Stavely-Stawell Project in Victoria. The following table discloses the number of options issued: Tranche Recipient Number of Issue Date Vesting Expiry Date Exercise Total Fair 1 2 3 Project vendors 40,000,000 22/10/2020 Project vendors 20,000,000 22/10/2020 Project vendors 10,000,000 22/10/2020 Options 70,000,000 Date (1) (2) (3) 22/10/2025 22/10/2025 22/10/2025 Price $ Value $ nil nil nil 211,200 105,600 52,800 369,600 The options issued during the financial year had nil exercise prices and were valued at the share market price on the grant date. No share-based payment expense was recognised on the expectation of the low probability that vesting conditions would be met. Page 68 Annual Report 2020 Notes to the Consolidated Financial Statements (continued) 23. Share-based payments (continued) 31 December 2019 Grant Date Expiry Date Exercise Price $ FV per security $ Balance at start of year 30-May-16 21-Dec-16 21-Dec-16 21-Dec-16 21-Dec-16 21-Dec-16 21-Dec-16 21-Dec-16 21-Dec-16 15-Feb-17 8-Apr-17 26-May-17 26-May-17 26-May-17 5-Jan-18 5-Jan-18 27-Jun-18 27-Jun-18 27-Jun-18 27-Jun-18 27-Jun-18 27-Jun-18 27-Jun-18 21-May-19 21-May-19 31-May-20 23-Dec-21 23-Dec-21 23-Dec-21 23-Dec-21 23-Dec-21 23-Dec-21 23-Dec-21 23-Dec-21 23-Dec-21 22-May-22 21-Jun-22 21-Jun-22 21-Jun-22 16-Jan-21 16-Jan-21 30-Jun-23 30-Jun-23 3-Jul-23 13-Jul-23 16-Jul-23 16-Jul-23 16-Jul-23 20-Jun-24 20-Jun-24 0.09 0.10 0.15 0.20 0.25 0.15 0.15 0.15 0.15 0.15 0.20 0.94 0.20 0.13 0.1125 0.15 0.13 0.13 0.00 0.00 0.20 0.20 0.15 0.00 0.00 0.036 0.093 0.087 0.082 0.078 0.086 0.086 0.086 0.086 0.064 0.059 0.046 0.038 0.042 0.042 0.039 0.017 0.017 0.031 0.031 0.014 0.014 0.014 0.022 0.022 Number 2,500,000 5,000,000 5,000,000 5,000,000 5,000,000 10,000,000 3,000,000 4,400,000 3,000,000 1,500,000 1,000,000 10,000,000 5,000,000 3,000,000 7,800,000 7,800,000 4,500,000 3,000,000 20,000,000 19,800,000 6,600,000 2,000,000 150,000 Granted during the year Exercised during the year Number Number Forfeited / expired during the year Number Balance at end of the year Number Vested & exercisable at end of the year Number 2,500,000 5,000,000 5,000,000 5,000,000 5,000,000 - 3,000,000 4,400,000 3,000,000 500,000 - - - 3,000,000 7,800,000 7,800,000 2,250,000 1,500,000 - - 2,200,000 - 75,000 - - - 2,500,000 - 5,000,000 - 5,000,000 - 5,000,000 - 5,000,000 - 10,000,000 - 3,000,000 - 4,400,000 - 3,000,000 - 1,500,000 - 1,000,000 - 10,000,000 - 5,000,000 - 3,000,000 7,800,000 7,800,000 - 4,500,000 1,500,000 1,500,000 - 20,000,000 12,800,000 7,000,000 2,000,000 4,600,000 1,000,000 1,000,000 150,000 56,850,000 15,500,000 - 16,000,000 50,000,000 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 72,850,000 65,500,000 135,050,000 138,350,000 77,500,000 195,900,000 58,025,000 (c) The expense recognised in profit and loss The share-based payment expense recognised in profit and loss is $68,525. The expense relating to prior years share-based payments of $788,027 was reversed into profit and loss in 2019 due to a low probability of vesting conditions being met. 70 Page 70 Battery Minerals Limited Notes to the Consolidated Financial Statements (continued) Notes to the Consolidated Financial Statements (continued) 23. Share-based payments (continued) 31 December 2019 Grant Date Expiry Date Exercise FV per Balance at Granted Price $ security $ start of year during the year Exercised during the year Forfeited / expired during the year Balance at end of the year Vested & exercisable at end of the year Number Number Number Number Number Number 30-May-16 31-May-20 21-Dec-16 23-Dec-21 21-Dec-16 23-Dec-21 21-Dec-16 23-Dec-21 21-Dec-16 23-Dec-21 21-Dec-16 23-Dec-21 21-Dec-16 23-Dec-21 21-Dec-16 23-Dec-21 21-Dec-16 23-Dec-21 15-Feb-17 23-Dec-21 8-Apr-17 22-May-22 26-May-17 21-Jun-22 26-May-17 21-Jun-22 26-May-17 21-Jun-22 27-Jun-18 30-Jun-23 27-Jun-18 30-Jun-23 27-Jun-18 27-Jun-18 27-Jun-18 27-Jun-18 27-Jun-18 3-Jul-23 13-Jul-23 16-Jul-23 16-Jul-23 16-Jul-23 21-May-19 20-Jun-24 21-May-19 20-Jun-24 0.086 10,000,000 0.046 10,000,000 0.09 0.10 0.15 0.20 0.25 0.15 0.15 0.15 0.15 0.15 0.20 0.94 0.20 0.13 0.15 0.13 0.13 0.00 0.00 0.20 0.20 0.15 0.00 0.00 0.036 0.093 0.087 0.082 0.078 0.086 0.086 0.086 0.064 0.059 0.038 0.042 0.042 0.039 0.017 0.017 0.014 0.014 0.014 0.022 0.022 2,500,000 5,000,000 5,000,000 5,000,000 5,000,000 3,000,000 4,400,000 3,000,000 1,500,000 1,000,000 5,000,000 3,000,000 7,800,000 7,800,000 4,500,000 3,000,000 6,600,000 2,000,000 150,000 0.031 20,000,000 0.031 19,800,000 (c) The expense recognised in profit and loss 5-Jan-18 5-Jan-18 16-Jan-21 0.1125 16-Jan-21 - - - 2,500,000 2,500,000 - 5,000,000 5,000,000 - 5,000,000 5,000,000 - 5,000,000 5,000,000 - 5,000,000 5,000,000 - 10,000,000 - - 3,000,000 3,000,000 - 4,400,000 4,400,000 - 3,000,000 3,000,000 - 1,500,000 500,000 - 1,000,000 - 10,000,000 - 5,000,000 - 3,000,000 3,000,000 - - 7,800,000 7,800,000 7,800,000 7,800,000 - 4,500,000 2,250,000 1,500,000 1,500,000 1,500,000 - 20,000,000 7,000,000 12,800,000 2,000,000 4,600,000 2,200,000 1,000,000 1,000,000 - 150,000 75,000 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 72,850,000 65,500,000 16,000,000 56,850,000 50,000,000 15,500,000 135,050,000 138,350,000 77,500,000 195,900,000 58,025,000 The share-based payment expense recognised in profit and loss is $68,525. The expense relating to prior years share-based payments of $788,027 was reversed into profit and loss in 2019 due to a low probability of vesting conditions being met. 24. Parent Entity Disclosure The following table details information related to the parent entity, Battery Minerals Limited, as at 31 December 2020. The information has been prepared on the same basis as the consolidated financial statements. Current assets Non-Current assets Total assets Current liabilities Total liabilities Contributed equity Share based payments reserve Accumulated losses Total equity Loss after income tax Other comprehensive income/(loss) for the year Total comprehensive income/(loss) for the year Guarantees Company 31 Dec 2020 $ 6,813,785 12,982,109 19,795,894 271,747 271,747 96,164,978 5,310,133 (81,950,964) 19,524,147 (6,981,502) - (6,981,502) Company 31 Dec 2019 $ 3,510,203 5,920,128 9,430,331 248,910 248,910 78,909,275 5,241,608 (74,969,462) 9,181,421 (36,864,911) - (36,864,911) The Parent Company has not entered into any guarantees in relation to the debts of its subsidiaries. Contingent Liabilities and Contractual Commitments of the Parent The Parent Company has no commitments to acquire property, plant and equipment and has no contingent liabilities as at the date of this report. 25. Commitments and Contingent Liabilities (a) Exploration and mining licence commitments With respect to the Group’s mineral property interests in Mozambique, statutory expenditure commitments specified by the mining legislation are nominal in monetary terms. However, as part of the licence application and renewal requirements, the Group submits budgeted exploration expenditure. In assessing subsequent renewal applications, the mining authorities review actual expenditure against budgets previously submitted. These amounts do not become legal obligations of the Group and actual expenditure does vary depending on the outcome of the actual activities. Page 70 Page 71 71 Annual Report 2020 Notes to the Consolidated Financial Statements (continued) The following shows the commitments for exploration and mining licences held by the Group: Within one year Later than one year but no later than five years 26. Events After the End of the Reporting Period Consolidated 31 Dec 2020 $ 2,207,000 11,939,500 14,146,500 Consolidated 31 Dec 2019 $ 707,417 - 707,417 On 25 March 2021 the Company appointed Mr David Flanagan to the role of Executive Chairman from his previous Non-Executive Chairman role. On 4 January 2021 the Company appointed Mr Nicholas Jolly as General Manager Exploration. Apart from the above, there are no other events after the end of the Reporting Period to disclose. 72 Page 72 Battery Minerals Limited Notes to the Consolidated Financial Statements (continued) Director’s Declaration The following shows the commitments for exploration and mining licences held by the Group: Directors’ Declaration Within one year Later than one year but no later than five years 26. Events After the End of the Reporting Period Consolidated 31 Dec 2020 $ 2,207,000 11,939,500 14,146,500 Consolidated 31 Dec 2019 $ 707,417 - 707,417 On 25 March 2021 the Company appointed Mr David Flanagan to the role of Executive Chairman from his previous Non-Executive Chairman role. On 4 January 2021 the Company appointed Mr Nicholas Jolly as General Manager Exploration. Apart from the above, there are no other events after the end of the Reporting Period to disclose. In the Directors’ opinion: (a) the financial statements, comprising the consolidated statement of profit or loss and other comprehensive income, consolidated statement of financial position, consolidated statement of cash flows, consolidated statement of changes in equity, and accompanying notes, are in accordance with the Corporations Act 2001, and: (i) (ii) comply with Accounting Standards, the Corporations Regulations 2001 and other mandatory professional reporting requirements; and give a true and fair view of the financial position as at 31 December 2020 and of the performance for the year ended on that date of the consolidated entity; and (iii) are in accordance with International Financial Reporting Standards issued by the International Accounting Standards Board, as stated in note 2 to the financial statements. (b) In the Directors’ 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. The Directors have been given the declaration by the Chairman and the Chief Financial Officer required by section 295A of the Corporations Act 2001 (Cth). This declaration is made in accordance with a resolution of the Board of Directors and is signed for and on behalf of the directors by:- ____________________ David Flanagan Executive Chairman Perth, Western Australia 25 March 2021 Page 72 Page 73 73 Annual Report 2020 ASX Additional Information Additional information required by the ASX Limited Listing Rules not disclosed elsewhere in this Financial Report is set out below. 1. Share Capital as at 31 March 2021 The issued capital of the Company is: • 2,041,273,541 ordinary fully paid shares; and • 274,484,066 listed options 2. Ordinary shares (ASX Code: BAT) Top 20 Largest Holders of Listed Ordinary shares as at 31 March 2021 Holder Name FARJOY PTY LTD HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED KENT BALAS AVANTI RESOURCES PTY LTD MERRILL LYNCH (AUSTRALIA) NOMINEES PTY LIMITED CITICORP NOMINEES PTY LIMITED PACIFIC DEVELOPMENT CORPORATION PTY LTD BNP PARIBAS NOMS PTY LTD MITCHELL GROUP HOLDINGS PTY LTD J P MORGAN NOMINEES AUSTRALIA PTY LIMITED C & S TONKIN JOHNSTON CORPORATION PTY LTD BNP PARIBAS NOMS PTY LTD SEYMOUR GROUP PTY LTD GURRAVEMBI INVESTMENTS PTY LTD SKER HOLDINGS PTY LTD BNP PARIBAS NOMINEES PTY LTD BERNE NO 132 NOMINEES PTY LTD SAS INVESTMENTS PTY LTD D & CR HICKS Total held by top 20 registered shareholders Total issued capital - selected security class(es) % Holding 9.76% 199,133,245 6.14% 125,237,179 6.11% 124,759,959 4.93% 100,716,703 4.52% 92,234,104 3.22% 65,761,597 2.94% 60,000,000 2.04% 41,613,860 1.32% 27,044,381 1.27% 25,887,903 1.22% 25,000,000 1.22% 25,000,000 1.16% 23,718,408 1.12% 22,923,434 0.98% 20,000,000 0.83% 17,000,000 0.82% 16,709,872 0.74% 15,098,780 0.73% 15,000,000 0.64% 13,000,000 1,068,339,425 52.34% 2,041,273,541 100.00% Distribution of Ordinary Shares (ASX Code: BAT) as at 31 March 2021 Holding Ranges 1 - 1,000 1,001 - 5,000 5,001 - 10,000 10,001 - 100,000 100,001 - 9,999,999,999 Totals Holders 136 63 252 1,788 1,328 3,567 Total Units % Issued Share Capital 8,339 257,367 2,053,770 86,891,892 1,952,062,173 2,041,273,541 0.00% 0.01% 0.10% 4.26% 95.63% 100.00% Unmarketable parcels of Ordinary Shares There were 864 holders of less than a marketable parcel of ordinary shares. 74 Page 74 Battery Minerals Limited Top 20 Largest Holders of Listed Ordinary shares as at 31 March 2021 is set out below. 1. Share Capital as at 31 March 2021 The issued capital of the Company is: • 2,041,273,541 ordinary fully paid shares; and • 274,484,066 listed options 2. Ordinary shares (ASX Code: BAT) Holder Name FARJOY PTY LTD HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED KENT BALAS AVANTI RESOURCES PTY LTD MERRILL LYNCH (AUSTRALIA) NOMINEES PTY LIMITED CITICORP NOMINEES PTY LIMITED PACIFIC DEVELOPMENT CORPORATION PTY LTD BNP PARIBAS NOMS PTY LTD MITCHELL GROUP HOLDINGS PTY LTD J P MORGAN NOMINEES AUSTRALIA PTY LIMITED C & S TONKIN JOHNSTON CORPORATION PTY LTD BNP PARIBAS NOMS PTY LTD SEYMOUR GROUP PTY LTD GURRAVEMBI INVESTMENTS PTY LTD SKER HOLDINGS PTY LTD BNP PARIBAS NOMINEES PTY LTD BERNE NO 132 NOMINEES PTY LTD SAS INVESTMENTS PTY LTD D & CR HICKS Holding % 199,133,245 125,237,179 124,759,959 100,716,703 92,234,104 65,761,597 60,000,000 41,613,860 27,044,381 25,887,903 25,000,000 25,000,000 23,718,408 22,923,434 20,000,000 17,000,000 16,709,872 15,098,780 15,000,000 13,000,000 9.76% 6.14% 6.11% 4.93% 4.52% 3.22% 2.94% 2.04% 1.32% 1.27% 1.22% 1.22% 1.16% 1.12% 0.98% 0.83% 0.82% 0.74% 0.73% 0.64% Total held by top 20 registered shareholders Total issued capital - selected security class(es) 1,068,339,425 52.34% 2,041,273,541 100.00% Distribution of Ordinary Shares (ASX Code: BAT) as at 31 March 2021 Holding Ranges 1 - 1,000 1,001 - 5,000 5,001 - 10,000 10,001 - 100,000 100,001 - 9,999,999,999 Totals Holders Total Units % Issued Share Capital 136 63 252 1,788 1,328 3,567 8,339 257,367 2,053,770 86,891,892 1,952,062,173 2,041,273,541 0.00% 0.01% 0.10% 4.26% 95.63% 100.00% Unmarketable parcels of Ordinary Shares There were 864 holders of less than a marketable parcel of ordinary shares. ASX Additional Information ASX Additional Information (continued) Additional information required by the ASX Limited Listing Rules not disclosed elsewhere in this Financial Report 3. Listed Options (ASX Code: BATO) Top 20 Largest Holders of Listed Options at 31 March 2021 Holder Name FARJOY PTY LTD D M MIDDLETON PTY LTD ANDREW MARK WILMOT SETON SEYMOUR GROUP PTY LTD PACIFIC DEVELOPMENT CORPORATION PTY LTD RESOURCE & LAND MANAGEMENT SERVICES PTY LTD 1 2 3 4 5 6 7 MR STEPHEN BERNARD PEART HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED 8 SKER HOLDINGS PTY LTD 9 10 MR STAN TADEUZ BRZEZOWSKI 11 12 CRANPORT PTY LTD 13 CS FOURTH NOMINEES PTY LIMITED 14 UURO PTY LTD 15 HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED 16 MR GABOR JAKAB 17 CITICORP NOMINEES PTY LIMITED 18 19 MR DAVID WILLIAMS &MR JOHN WILLIAMS 20 MR ANTHONY GEORGE WARD JOHNSTON CORPORATION PTY LTD IGNITION CAPITAL NO2 PTY LTD Total held by top 20 registered option holders Total issued capital - selected security class(es) % Holding 18.82% 51,666,667 7.29% 20,000,000 7.17% 19,670,615 3.64% 10,000,000 3.64% 10,000,000 3.37% 9,249,999 2.91% 8,000,000 2.33% 6,390,040 2.28% 6,249,999 2.22% 6,089,999 2.00% 5,499,999 1.33% 3,639,022 1.32% 3,624,994 1.09% 3,000,000 0.91% 2,500,000 0.91% 2,500,000 0.91% 2,485,000 0.82% 2,250,000 0.73% 2,000,000 0.73% 2,000,000 176,816,334 64.42% 274,484,066 100.00% Distribution of Listed Options (ASX Code: BATO) Holding Ranges 1 - 1,000 1,001 - 5,000 5,001 - 10,000 10,001 - 100,000 100,001 - 9,999,999,999 Totals Holders - - 2 130 214 346 Total Units % Issued Share Capital - - 18,756 7,606,536 266,858,774 274,484,066 - - 0.01% 2.77% 97.22% 100.00% Unmarketable parcels of Listed Options (ASX Code: BATO) There were 99 holders of less than a marketable parcel of listed options. Page 74 Page 75 75 Annual Report 2020 ASX Additional Information (continued) 4. Voting Rights All ordinary shares fully paid have the same voting rights of one vote per ordinary shares fully paid. See also the Company’s Constitution for further details. Listed Options, unlisted incentive options and performance rights have no voting rights. 5. Unquoted Securities as at 31 March 2021 Number 5,000,000 26,900,000 5,000,000 5,000,000 3,000,000 5,000,000 10,000,000 1,000,000 20,000,000 6,000,000 70,000,000 ESOP 1,000,000 500,000 500,000 200,000 75,000 3,000,000 75,000 12,200,000 15,500,000 37,350,000 Class Unquoted options ($0.10, 23 Dec 2021) Unquoted options ($0.15, 23 Dec 2021) Unquoted options ($0.20, 23 Dec 2021) Unquoted options ($0.25, 23 Dec 2021) Unquoted options ($0.13, 21 June 2022) Unquoted options ($0.20, 21 June 2022) Unquoted options ($0.094, 21 June 2022) Unquoted options ($0.20, 22 May 2022 Unquoted ZEPO Options expiring 03/07/2023 NIL EXERCISE subject to performance milestones Unquoted Sign-on Options ($0.13, 30 June 2023) Unquoted ZEPO Options expiring 22/10/2025 NIL EXERCISE subject to performance milestones outlined in the Notice of AGM for the 13 May 2020 AGM relating to the acquisition of Gippsland Prospecting Pty Ltd Unquoted Options expiring 16/07/2023 @ $0.20 – vested Unquoted Options expiring 16/07/2023 @ $0.20 - vested Unquoted Options expiring 16/07/2023 @ $0.20 - vested Unquoted Options 16/07/2023 @ $0.20 - vested Unquoted Options expiring 16/07/2023 @ $0.15 - vested Unquoted Options expiring 16/07/2023 @ $0.20 - vest on Montepuez commercial production Unquoted Options expiring 16/07/2023 @ $0.15 - Vest on Montepuez commercial production Unquoted ZEPO Options expiring 13/07/2023 NIL EXERCISE subject to performance milestones Unquoted ZEPO Options expiring 20/06/2024 NIL EXERCISE subject to performance milestones. Unquoted ZEPO Options expiring 20/06/2024 NIL EXERCISE subject to performance milestones 6. Substantial shareholder notices received as at 31 March 2021 Name FARJOY PTY LTD HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED KENT BALAS Number of Shares 199,133,245 125,237,179 124,759,959 % Holding 9.76% 6.14% 6.11% 76 Page 76 Battery Minerals Limited ASX Additional Information (continued) ASX Additional Information (continued) 4. Voting Rights 7. Restricted Securities Subject to Escrow as at 31 March 2021 There are no shares subject to escrow. All ordinary shares fully paid have the same voting rights of one vote per ordinary shares fully paid. See also the Company’s Constitution for further details. Listed Options, unlisted incentive options and performance rights have no voting rights. 8. On-market buy back 5. Unquoted Securities as at 31 March 2021 Number Class 5,000,000 Unquoted options ($0.10, 23 Dec 2021) 26,900,000 Unquoted options ($0.15, 23 Dec 2021) 5,000,000 Unquoted options ($0.20, 23 Dec 2021) 5,000,000 Unquoted options ($0.25, 23 Dec 2021) 3,000,000 Unquoted options ($0.13, 21 June 2022) 5,000,000 Unquoted options ($0.20, 21 June 2022) 10,000,000 Unquoted options ($0.094, 21 June 2022) 1,000,000 Unquoted options ($0.20, 22 May 2022 20,000,000 Unquoted ZEPO Options expiring 03/07/2023 NIL EXERCISE subject to performance milestones 6,000,000 Unquoted Sign-on Options ($0.13, 30 June 2023) 70,000,000 Unquoted ZEPO Options expiring 22/10/2025 NIL EXERCISE subject to performance milestones outlined in the Notice of AGM for the 13 May 2020 AGM relating to the acquisition of Gippsland Prospecting Pty Ltd ESOP 500,000 500,000 200,000 1,000,000 Unquoted Options expiring 16/07/2023 @ $0.20 – vested Unquoted Options expiring 16/07/2023 @ $0.20 - vested Unquoted Options expiring 16/07/2023 @ $0.20 - vested Unquoted Options 16/07/2023 @ $0.20 - vested 75,000 Unquoted Options expiring 16/07/2023 @ $0.15 - vested 3,000,000 Unquoted Options expiring 16/07/2023 @ $0.20 - vest on Montepuez 75,000 Unquoted Options expiring 16/07/2023 @ $0.15 - Vest on Montepuez commercial production commercial production performance milestones performance milestones. performance milestones 12,200,000 Unquoted ZEPO Options expiring 13/07/2023 NIL EXERCISE subject to 15,500,000 Unquoted ZEPO Options expiring 20/06/2024 NIL EXERCISE subject to 37,350,000 Unquoted ZEPO Options expiring 20/06/2024 NIL EXERCISE subject to 6. Substantial shareholder notices received as at 31 March 2021 Name FARJOY PTY LTD KENT BALAS HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED Number of Shares % Holding 199,133,245 125,237,179 124,759,959 9.76% 6.14% 6.11% There is currently no on-market buyback program for any of Battery Minerals Limited’s listed securities. 9. Group cash and assets In accordance with Listing Rule 4.10.19, the Group confirms that it has been using the cash and assets for the year ended 31 December 2021 consistent with its business objective and strategy. 10. Tenure See Operations Overview 11. Competent Persons Statement See Operations Overview Important Notice This Report does not constitute an offer to acquire or sell or a solicitation of an offer to sell or purchase any securities in any jurisdiction. In particular, this ASX Announcement does not constitute an offer, solicitation or sale to any U.S. person or in the United States or any state or jurisdiction in which such an offer, tender offer, solicitation or sale would be unlawful. The securities referred to herein have not been and will not be registered under the United States Securities Act of 1933, as amended (the “Securities Act”), and neither such securities nor any interest or participation therein may not be offered, or sold, pledged or otherwise transferred, directly or indirectly, in the United States or to any U.S. person absent registration or an available exemption from, or a transaction not subject to, registration under the United States Securities Act of 1933. Forward Looking Statements Statements and material contained in this document, particularly those regarding possible or assumed future performance, resources or potential growth of Battery Minerals Limited, industry growth or other trend projections are, or may be, forward looking statements. Such statements relate to future events and expectations and, as such, involve known and unknown risks and uncertainties. Such forecasts and information are not a guarantee of future performance and involve unknown risk and uncertainties, as well as other factors, many of which are beyond the control of Battery Minerals Limited. Information in this presentation has already been reported to the ASX. All references to future production and production & shipping targets and port access made in relation to Battery Minerals are subject to the completion of all necessary feasibility studies, permit applications, construction, financing arrangements, port access and execution of infrastructure-related agreements. Where such a reference is made, it should be read subject to this paragraph and in conjunction with further information about the Mineral Resources and Ore Reserves, as well as the relevant competent persons' statements. Page 76 Page 77 77 Annual Report 2020 www.batteryminerals.com
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