Annual Report
2019
Cradle Resources Limited
ABN 60 149 637 016
Corporate directory
Directors
Craig Burton – Chairman
Grant Davey – Executive Director
Chris Bath – Non-Executive Director
Company Secretary
Chris Bath
Registered Office
102 Forrest Street
Cottesloe WA 6011
Tel:
Fax:
+61 8 9320 4700
+61 8 9320 4750
Stock Exchange
Australian Securities Exchange
Home Branch – Perth
Level 40, 152-158 St Georges Terrace
Perth WA 6000
ASX Code
CXX – Fully paid Ordinary Shares
Contents
Share Registry
Link Market Services Limited
QV1 Building
Level 12, 250 St Georges Terrace
Perth WA 6000
Tel:
Int:
1300 554 474
+61 1300 554 474
Auditors
Ernst & Young
11 Mounts Bay Road
Perth WA 6000
Bankers
National Australia Bank Limited
Solicitors
DLA Piper
Website
www.cradleresources.com.au
Directors’ Report ............................................................................................................................................................................ 1
Auditor’s Independence Declaration ............................................................................................................................................ 11
Consolidated Statement of Profit or Loss and Other Comprehensive Income ............................................................................. 12
Consolidated Statement of Financial Position.............................................................................................................................. 13
Consolidated Statement of Changes in Equity............................................................................................................................. 14
Consolidated Statement of Cash Flows ....................................................................................................................................... 15
Notes to the Consolidated Financial Statements ......................................................................................................................... 16
Directors’ Declaration ................................................................................................................................................................... 35
Independent Auditor’s Report ....................................................................................................................................................... 36
Mineral Resources and Ore Reserves Statement ......................................................................................................................... 41
ASX Additional Information ........................................................................................................................................................... 42
Directors’ Report
The Directors of Cradle Resources Limited submit their report for the year ended 30 June 2019.
Directors
The names and details of the Company’s Directors in office during the financial year and until the date of this report are set out
below. Directors were in the office for this entire period unless otherwise stated.
Mr Craig Burton – Chairman
Mr Grant Davey – Executive Director
Mr Chris Bath – Non-Executive Director (appointed 8 July 2019)
Mr Ian Middlemas – Non-Executive Director (resigned 8 July 2019)
Mr Craig Burton BJuris, LLB, MAICD
Chairman (Non-Executive Director)
Mr Burton is an experienced and active investor in emerging businesses, both publicly listed and private. Over the last 25 years,
he has co-founded numerous new projects, with a focus on the resources, oil and gas, and mining services sectors. Mr Burton is
also a Director of Panda Hill Tanzania Ltd, the 50/50 joint venture company between Cradle and Tremont Investments Limited.
Mr Burton was appointed a Director of the Company on 16 September 2013 and served as Chairman of the Company from 16
September 2013 to 1 August 2016. Mr Burton was subsequently re-appointed Chairman on 8 July 2019. During the three-year
period to the end of the financial year, Mr Burton has held directorships in Capital Drilling Limited (January 2009 – 31 August
2018), Atrum Coal Limited (January 2017 – August 2017), Grand Gulf Energy Limited (5 March 2019 – present) and Whitebark
Energy Limited (August 2013 – October 2015).
Mr Grant Davey BSc
Executive Director
Mr Davey is a mining engineer with over 20 years of senior management and operational experience in the construction and
operation of gold, platinum and coal mines in Africa, Australia, South America and Russia. More recently, he has acted as CEO
for several ASX-listed exploration and mining projects. Mr. Davey was instrumental in developing the Panda Hill Niobium Project
in Tanzania, having previously been a Director of Cradle from April 2013 to November 2015. Mr Davey is also a Director of Panda
Hill Tanzania Ltd, the 50/50 joint venture company between Cradle and Tremont Investments Limited.
Mr Davey was appointed a Director of the Company on 27 July 2017. Mr Davey was also a Director of the Company from 15 April
2013 to 10 November 2015. During the three-year period to the end of the financial year, Mr Davey has held directorships in
Graphex Mining Ltd (March 2016 – present) and Boss Resources Limited (January 2016 – 7 February 2019).
Mr Chris Bath CA, MAICD
Non-Executive Director and Company Secretary
Mr Bath is a Chartered Accountant and Member of the Australian Institute of Company Directors. He has more than 20 years’
experience in the energy and resources sector, including oil and gas, coal, gold and mining services, having held the role of CFO
and company secretary for companies listed on ASX, JSX and AIM markets with operations in Australia and Asia.
Mr Bath was appointed a Director of the Company on 8 July 2019. During the three-year period to the end of the financial year,
Mr Bath has held a directorship in Grand Gulf Energy Limited (March 2019 – present).
Mr Ian Middlemas BCom, CA
Non-Executive Director
Mr Middlemas is a Chartered Accountant, a member of the Financial Services Institute of Australasia and holds a Bachelor of
Commerce degree. He worked for a large international Chartered Accounting firm before joining the Normandy Mining Group
where he was a senior group executive for approximately 10 years. He has had extensive corporate and management experience
and is currently a director with a number of publicly listed companies in the resources sector.
Mr Middlemas was appointed a Director of the Company on 8 May 2016 and Chairman of the Company on 1 August 2016. Mr
Middlemas resigned on 8 July 2019. During the three year period to the end of the financial year, Mr Middlemas has held
directorships in Constellation Resources Limited (November 2017 – present), Apollo Minerals Limited (July 2016 – present),
Paringa Resources Limited (October 2013 – present), Berkeley Energia Limited (April 2012 – present), Prairie Mining Limited
(August 2011 – present), Salt Lake Potash Limited (January 2010 – present), Equatorial Resources Limited (November 2009 –
present), Piedmont Lithium Limited (September 2009 – present), Sovereign Metals Limited (July 2006 – present), Odyssey Energy
Limited (September 2005 – present), and Syntonic Limited (April 2010 – June 2017).
Principal activities
The principal activities of Cradle during the financial year consisted of the exploration and development of mineral resource
projects. No significant change in the nature of Cradle’s activities occurred during the year.
1
Directors’ Report
Operating and financial review
Overview
During the financial year, the Group continued to focus on the development of its Panda Hill Niobium Project (“Project”) located
in Tanzania as well as considering new opportunities in the resources sector that could add value to shareholders.
As previously reported, in July 2017, the Tanzanian Government passed amendments to the legal framework governing the mining
sector in Tanzania (“New Legislation”) which, amongst other things, entitles the Tanzanian Government to a 16% shareholding in
all Tanzanian mining companies.
The New Legislation resulted in the termination of the scheme implementation agreement relating to a proposed scheme of
arrangement (“Scheme”) pursuant to which Tremont Investments Limited (“Tremont”) would have acquired all of the issued shares
of Cradle.
Notwithstanding this, the Board remains of the view that the Panda Hill Niobium Project is a world class asset and will be the first
new niobium producer in over 40 years. Niobium is classified as a strategic metal by the USA with consumption growth expected
to remain strong. More than 80% of all Niobium used is consumed as ferroniobium, mainly in the production of high-strength, low-
alloy (HSLA) steels for the construction, automotive and pipeline industries. It is also used in certain types of stainless and heat-
resisting steels.
During the financial year, the Company also reviewed a number of potential resource project acquisitions, however these did not
proceed. The Company will continue to consider all opportunities that could add value for shareholders.
Panda Hill Niobium Project
The Group owns 50% of Panda Hill Tanzania Limited (“PHT”), which owns 100% of the Panda Hill Niobium Project in Tanzania.
The Project is located in the Mbeya region in south western Tanzania, approximately 680km west of the capital Dar es Salaam
(refer Figure 1). The industrial city of Mbeya is situated only 26km from the project area and has a population of approximately
280,000 people. The Project is located near the main highway to the capital Dar es Salaam and in close proximity to the Songwe
Airport which has regular domestic flights from Dar es Salaam and plans for regional expansion.
The Project is covered by three granted Mining Licences (refer Figure 2) totalling 22.1km2, which will enable a quick transition
from the study and development phases, through construction and into operation. The area has excellent access to infrastructure,
with existing roads, rail, airports and power available in close proximity. The three granted Mining Licences were all renewed
during the December 2015 quarter for a further 10-year period (valid until November 2026).
Figure 1: Location of the Panda Hill Niobium Project
2
Operating and financial review (continued)
PHT, the joint venture company owned 50% by Cradle and 50% by Tremont, owns 100% of the Project. Cradle and Tremont
have entered into an agreement in relation to PHT (“Shareholders Agreement”).
Directors’ Report
Figure 2: Mining Licences and Local Infrastructure
As previously advised, the Company and Tremont are in dispute regarding whether a definitive feasibility study has been delivered
within the meaning of the Shareholders Agreement. The dispute has been referred to arbitration. The arbitration hearing which
was scheduled for the first week of October 2018 has now been adjourned. The date for the adjourned arbitration has yet to be
set. Cradle’s position remains as set out previously. Subject to the outcome of the dispute, if the definitive feasibility study which
has been presented is accepted as a definitive feasibility study within the meaning of the Shareholders Agreement the parties will
then consider whether to proceed with construction of a mine to carry out mining activities on the Project ("Decision to Mine").
Any Decision to Mine on the Project will require Cradle to provide funding to PHT based on its pro-rata shareholding in PHT or
dilute its interest in PHT based upon a value of such interest of US$20 million plus contributions made by Cradle since October
2015, which is currently approximately US$3.5 million.
Project activities during the financial year
The Company continued to liaise with all levels of the Tanzanian Government to clarify the uncertainty surrounding new legislation
governing the mining sector in Tanzania and to progress discussions on what project financiers would require so as to complete
the financing of the project.
The permitting process continued with permit applications for the tailings storage facility (“TSF”), water storage dams, explosives
storage, construction, and import duty exoneration all progressing.
Tanzanian Legislation
The New Legislation is contained in four bills which have been passed by the Tanzanian Parliament. The New Legislation appears
to predominantly target the mining and export of precious metals and metal concentrates from existing operations in Tanzania
that have been the focus of recent reviews conducted by Presidential Committees.
The New Legislation allows the Tanzanian Government (“Government”) to renegotiate all existing Mine Development Agreements
(“MDAs”). In addition, the New Legislation requires mandatory beneficiation of minerals within the country and no licence or permit
shall be issued for exportation of raw minerals and mineral concentrates.
Cradle owns 50% of PHT, which owns 100% of the Panda Hill Niobium Project in Tanzania. PHT does not have an MDA with the
Government. The Project consists of three standard Mining Licences which do not require MDAs, as opposed to the Special
Mining Licences used by larger projects which are eligible for concessional tax arrangements via MDAs.
The Company released a Definitive Feasibility Study (“DFS”) on the Project in April 2016. The DFS was based on the Project
upgrading its niobium concentrate to ferro-niobium on-site. Ferro-niobium is a final product that is sold directly to steel mills, with
no further upgrading required.
3
Directors’ Report
Board Changes
In July 2019, the Company appointed Mr Chris Bath as a Director and Company Secretary of the Company. Mr Ian Middlemas
resigned as Chairman and Director of the Company and Mr Gregory Swan resigned as Company Secretary.
Mr Bath is a Chartered Accountant and Member of the Australian Institute of Company Directors. He has broad experience in the
energy and resources sector, having held the role of CFO for a number of companies operating in Australia and Asia.
Operating Results
The net loss of the Consolidated Entity for the year ended 30 June 2019 was $243,580 (2018 loss: $926,670).
Financial Position
At 30 June 2019, the Company had cash reserves of $1,865,314 (2018: $2,710,231). At 30 June 2019, the Company had net
assets of $24,987,052 (2018: $24,060,875), an increase of 4% compared with the previous year.
Business Strategies and Prospects for Future Financial Years
The Group’s strategy is to maximise shareholder value through the development of its Panda Hill Niobium Project in Tanzania.
To achieve its strategic objective, the Group currently has the following business strategies and prospects:
•
•
•
•
•
Maintain a low cost base whilst the Group evaluates the impact of the New Legislation;
Work with the Tanzanian Government to clarify the uncertainty surrounding the New Legislation;
Review and adjust the Project development plans as appropriate in light of the New Legislation;
Continue negotiations to secure funding for the Project; and
Continue to investigate corporate opportunities that have the potential to create shareholder value.
All of these activities present inherent risk and therefore the Board is unable to provide certainty that any or all of these activities
will be able to be achieved. The material business risks faced by the Group that are likely to have an effect on the Group’s future
prospects, and how the Group manages these risks, include:
•
•
•
•
•
New Legislation – Tanzania has introduced the New Legislation which includes a number of changes to the legal and
regulatory framework governing the natural resources sector in Tanzania. The New Legislation requires, amongst other
things, (a) the Government shall have not less than 16% non-dilutable free carried interest in the capital of any mining
company; (b) the Government shall be entitled to acquire, in total, up to 50% of the shares of any mining company,
commensurate with quantified value of tax incentives incurred by the Government in favour of the mining company; (c)
increases in the Government mineral royalty rates for certain minerals; and (d) a new 1% clearing fee on the value of all
minerals exported from Tanzania from 1 July 2017. The Company’s DFS did not factor in any Government free carried
interest. The Group continues to work closely with the various levels of government in Tanzania to clarify the uncertainty
surrounding the New Legislation, however the proposed changes are likely to have an adverse effect on the Group and
the Project;
Country risk – the Group’s operations in Tanzania are exposed to various levels of political, economic and other risks and
uncertainties. There are risks attached to exploration and mining operations in a developing country like Tanzania which
are not necessarily present in a developed country like Australia. The Company continues to work closely with the various
levels of government in Tanzania but there can be no assurances that the future political developments in Tanzania will
not directly impact the Company’s operations or its ability to attract funding for its operations;
Future capital requirements – the ability to finance a mining project is dependent on the Group’s existing financial position,
the availability and cost of project and other debt markets, the availability and cost of leasing and similar finance packages
for project infrastructure and mobile equipment, the availability of mezzanine and offtake financing and the ability to access
equity markets to raise new capital. There can be no guarantees that when the Group seeks to implement financing
strategies to pursue the development of its projects that suitable financing alternatives will be available and at a cost
acceptable to the Group;
Commodity price volatility – the demand for, and price of, niobium is highly dependent on a variety of factors, including
international supply and demand, weather conditions, the price and availability of alternative metals, actions taken by
governments, and global economic and political developments. Future production, if any, from the Company’s mineral
resource and other mineral properties will be dependent upon the price of niobium being adequate to make these properties
economic. The Company currently does not engage in any hedging or derivative transactions to manage commodity price
risk; and
Exploration and development risks – the exploration for, and development of, mineral deposits involves a high degree of
risk. Few properties which are explored are ultimately developed into producing mines. To mitigate this risk, the Group has
undertaken systematic and staged exploration and testing programs on its mineral properties and has undertaken a
number of technical and economic studies with respect to its projects. However, there can be no guarantee that the Group’s
mineral properties will be successfully brought into production.
4
Directors’ Report
Dividends paid or recommended
The Directors do not propose to recommend the payment of a dividend for the year ended 30 June 2019 (2018: Nil). No dividends
have been paid or declared by the Company during the current period.
Environmental regulation and performance
The Consolidated Entity’s operations are subject to various environmental laws and regulations under the relevant government’s
legislation. Full compliance with these laws and regulations is regarded as a minimum standard for all operations to achieve.
The Directors are not aware of any non-compliance with environmental laws by the Consolidated Entity.
Significant changes in the state of affairs
In the opinion of the directors there were no significant changes in the state of affairs of the Group that occurred during the financial
year under review.
Significant events after the balance date
Other than as outlined above, at the date of this report there are no matters or circumstances which have arisen since 30 June
2019 that have significantly affected or may significantly affect:
•
•
•
the operations, in financial years subsequent to 30 June 2019, of the Consolidated Entity;
the results of those operations, in financial years subsequent to 30 June 2019, of the Consolidated Entity; or
the state of affairs, in financial years subsequent to 30 June 2019, of the Consolidated Entity.
Directors' meetings
The number of meetings of Directors held during the year and the number of meetings attended by each director were as follows:
Mr Ian Middlemas
Mr Grant Davey
Mr Craig Burton
Number eligible to attend
Number attended
Board Meetings
3
3
3
3
3
3
There were no Board committees during the financial year. The Board as a whole currently performs the functions of an Audit
Committee, Risk Committee, Nomination Committee and Remuneration Committee, however this will be reviewed should the size
and nature of the Company’s activities change.
Directors' interests
As at the date of this report, the Directors' interests in the securities of the Company are as follows:
Mr Craig Burton
Mr Grant Davey
Mr Chris Bath
Interest in securities at the date of the report
Shares 1
30,800,000
1,066,276
-
Options 2
Rights 3
-
-
-
-
-
-
Notes:
1
2
3
“Shares” means fully paid ordinary shares in the capital of the Company.
“Options” means unlisted options to subscribe for one Share in the capital of the Company.
“Rights” means unlisted performance rights that convert into one Share in the capital of the Company upon the satisfaction of various
performance conditions.
Share options and rights
As at the date of this report, there were nil Options issued over unissued Shares of the Company.
During the year ended 30 June 2019, no ordinary shares were issued as a result of the conversion of Performance Rights.
Subsequent to year end and until the date of this report, no ordinary shares were issued following the conversion of Rights or
exercise of Options.
5
Directors’ Report
Indemnification and insurance of officers
The Constitution of the Company requires the Company, to the extent permitted by law, to indemnify any person who is or has
been a director or officer of the Company or Group for any liability caused as such a director or officer and any legal costs incurred
by a director or officer in defending an action for any liability caused as such a director or officer.
During or since the end of the financial year, no amounts have been paid by the Company or Group in relation to the above
indemnities. During the financial year, the Company paid an annualised insurance premium of $24,200 (2018: $15,500) to provide
adequate insurance cover for directors and officers against any potential liability and the associated legal costs of a proceeding.
Indemnification and insurance of auditors
To the extent permitted by law, the Company has agreed to indemnify its auditors, Ernst & Young, as part of the terms of its audit
engagement agreement against claims by third parties arising from the audit (for an unspecified amount). No payment has been
made to indemnify Ernst & Young during or since the financial year.
Non-audit services
During the year, Ernst & Young (Australia), the Company’s auditor, received $nil (2018: $nil) for the provision of non-audit services.
Auditor's independence declaration
The lead auditor's independence declaration for the year ended 30 June 2019 has been received and can be found on page 11
of the Directors' Report.
6
Directors’ Report
Remuneration report (audited)
This Remuneration Report, which forms part of the Directors’ Report, sets out information about the remuneration of Key
Management Personnel (“KMP”) of the Group.
Details of Key Management Personnel (“KMP”)
Details of the KMP of the Group during or since the end of the financial year are set out below:
Directors
Mr Craig Burton
Mr Grant Davey
Mr Chris Bath
Mr Ian Middlemas
Other KMP
Mr Chris Bath
Mr Greg Swan
Chairman
Executive Director
Non-Executive Director (appointed 8 July 2019)
Non-Executive Director (resigned 8 July 2019)
Company Secretary (appointed 8 July 2019)
Company Secretary (resigned 8 July 2019)
Unless otherwise disclosed, the KMP held their position from 1 July 2018 until the date of this report.
Remuneration Policy
The Group’s remuneration policy for its KMP has been developed by the Board taking into account the size of the Group, the size
of the management team for the Group, the nature and stage of development of the Group’s current operations, market conditions
and comparable salary levels for companies of a similar size and operating in similar sectors.
In addition to considering the above general factors, the Board has also placed emphasis on the following specific issues in
determining the remuneration policy for KMP: (i) the Group is currently focused on undertaking exploration and development
activities; (ii) risks associated with small cap resource companies whilst exploring and developing projects; and (iii) other than
profit which may be generated from asset sales, the Group does not expect to be undertaking profitable operations until sometime
after the commencement of commercial production on any of its projects.
Executive Remuneration
The Group’s remuneration policy is to provide a fixed remuneration component and a performance based component (short term
incentive and long-term incentive). The Board believes that this remuneration policy is appropriate given the considerations
discussed in the section above and is appropriate in aligning executives’ objectives with shareholder and business objectives.
Fixed Remuneration
Fixed remuneration consists of base salaries, as well as employer contributions to superannuation funds and other non-cash
benefits. Non-cash benefits may include provision of car parking and travel benefits.
Fixed remuneration 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.
Performance Based Remuneration – Short Term Incentive (“STI”)
Some executives are entitled to an annual cash bonus upon achieving various key performance indicators (“KPI’s”), as set by the
Board.
Having regard to the current size, nature and opportunities of the Company, the Board has determined that these KPI’s will include
measures such as: (i) successful exploration activities (e.g. completion of exploration programs within budgeted timeframes and
costs); (ii) successful development activities (e.g. completion of technical studies); (iii) successful corporate activities (e.g.
recruitment and management of key personnel and investor relations activities); and (iv) successful business development
activities (e.g. corporate transactions and capital raisings). These measures were chosen as the Board believes these represent
the key drivers in the short and medium-term success of the Company’s development. On an annual basis, subsequent to year
end, the Board assesses performance against each individual executive’s KPI criteria and considers the position of the Company
to be able to award STI cash bonuses.
During the 2019 financial year, no cash bonuses were awarded to executive KMP (2018: $12,255).
7
Directors’ Report
Remuneration report (audited)
Performance Based Remuneration – Long Term Incentive
The Group has a long-term incentive plan (“LTIP”) comprising the grant of Options and/or Rights to reward KMP and key
employees and contractors for long-term performance. To achieve its corporate objectives, the Group needs to attract, incentivise,
and retain its key employees and contractors.
Options: The Group has chosen to grant Options to some KMP and key employees and contractors as part of their remuneration
and incentive arrangements in order to attract and retain their services and to provide an incentive linked to the performance of
the Group.
The Board’s policy is to grant Incentive Options to KMP with exercise prices at or above market share price (at the time of
agreement). As such, the Incentive Options granted to KMP are generally only of benefit if the KMP performs to the level whereby
the value of the Group increases sufficiently to warrant exercising the Incentive Options granted. Other than service-based vesting
conditions (if any) and the exercise price required to exercise the Incentive Options, there are no additional performance criteria
on the Incentive Options granted to KMP, as given the speculative nature of the Group’s activities and the small management
team responsible for its running, it is considered that the performance of the KMP and the performance and value of the Group
are closely related. The Group prohibits executives from entering into arrangements to limit their exposure to Incentive Options
granted as part of their remuneration package.
Rights: The Group has also chosen to grant Rights to some KMP and key employees and contractors which, upon satisfaction of
the relevant performance conditions attached to the Rights, will result in the issue of a Share for each Right. Rights are issued for
no consideration and no amount is payable upon conversion thereof. Rights allow the Group to: (a) recruit, incentivise and retain
KMP and other key employees and contractors needed to achieve the Group's business objectives; (b) link the reward of key staff
with the achievement of strategic goals and the long-term performance of the Group; (c) align the financial interest of participants
of the Plan with those of Shareholders; and (d) provide incentives to participants of the Plan to focus on superior performance
that creates Shareholder value. Rights granted are linked to the achievement by the Group of certain performance conditions as
determined by the Board from time to time. These performance conditions must be satisfied in order for the Rights to vest. Upon
Rights vesting, Shares are automatically issued for no consideration. If a performance condition of a Performance Right is not
achieved by the expiry date then the Performance Right will lapse.
During the 2019 financial year, no Options or Rights were granted to executive KMP. At 30 June 2019, no Options and no Rights
were held by executive KMP (2018: Nil).
Non-Executive Director Remuneration
The Board’s policy is for fees to Non-Executive Directors to be no greater than market rates for comparable companies for time,
commitment and responsibilities. Given the size, nature and risks of the Company, Incentive Options and Performance Rights
may also be used to attract and retain Non-Executive Directors. The Board determines payments to the Non-Executive Directors
and reviews their remuneration annually, based on market practice, duties and accountability. Independent external advice is
sought when required.
The maximum aggregate amount of fees that can be paid to Non-Executive Directors is subject to approval by shareholders at a
General Meeting. Director’s fees paid to Non-Executive Directors accrue on a daily basis. Fees for Non-Executive Directors are
not linked to the performance of the economic entity. However, to align Directors’ interests with shareholder interests, the Directors
are encouraged to hold shares in the Company. Given the size, nature and opportunities of the Company, Non-Executive Directors
may also receive Options or Rights in order to secure and retain their services. The Company prohibits Non-Executive Directors
entering into arrangements to limit their exposure to Options granted as part of their remuneration package.
Fees for the Chairman were set at $60,000 per annum (excluding post-employment benefits). Fees for Non-Executive Directors’
were set at between $30,000 to $50,000 per annum (excluding post-employment benefits). These fees cover main board activities
only. Non-Executive Directors may receive additional remuneration for other services provided to the Company, including but not
limited to, membership of committees.
During the 2019 financial year, no Options or Rights were granted to Non-Executive Directors. At 30 June 2019, no Options and
no Rights were held by Non-Executive Directors (2018: Nil).
Relationship between Remuneration of KMP and Shareholder Wealth
During the Company’s exploration and development phases of its business, the Board anticipates that the Company will retain
earnings (if any) and other cash resources for the exploration and development of its resource projects. Accordingly, the Company
does not currently have a policy with respect to the payment of dividends and returns of capital. Therefore, there was no
relationship between the Board’s policy for determining the nature and amount of remuneration of KMP and dividends paid and
returns of capital by the Company during the current and previous financial years.
8
Directors’ Report
Remuneration report (continued)
The Board did not determine the nature and amount of remuneration of the KMP by reference to changes in the price at which
shares in the Company traded between the beginning and end of the current and the previous financial years. Discretionary
annual cash bonuses are based upon achieving various non-financial key performance indicators as detailed under “Performance
Based Remuneration – Short Term Incentive” and are not based on share price or earnings. However, as noted above, certain
KMP have received Incentive Options and Performance Rights which will be of greater value to KMP if the value of the Company’s
shares increases.
Relationship between Remuneration of KMP and Earnings
As discussed above, the Company is currently undertaking exploration and development activities, and does not expect to be
undertaking profitable operations (other than by way of potential material asset sales) until sometime after the successful
commercialisation, production and sales of commodities from one or more of its projects. Accordingly, the Board does not consider
earnings during the current and previous financial years when determining the nature and amount of remuneration of KMP.
Remuneration of Directors and Other Key Management Personnel
Details of the remuneration of each Director and KMP of the Group are as follows:
2019
Directors
Mr Craig Burton
Mr Ian Middlemas
Mr Grant Davey
Other KMP
Mr Greg Swan1
Short-term benefits
Salary & fees
$
Cash bonus
$
Post-
employment
benefits
$
Share-based
payments
$
Termination
benefits
$
Total
$
Percentage
performance
related
%
50,000
36,000
120,000
-
206,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
50,000
36,000
120,000
-
206,000
-
-
-
-
-
Notes:
1 Mr Swan provides services as the Company Secretary through a services agreement with Apollo Group Pty Ltd (‘Apollo’). During the year, Apollo was paid or is
payable $180,000 for the provision of administration and company secretarial services to the Group.
2018
Directors
Mr Ian Middlemas
Mr Craig Burton
Mr James Kelly2
Mr Grant Davey1
Mr Robert Behets2
Other KMP
Mr Greg Swan3
Short-term benefits
Salary & fees
$
Cash bonus
$
Post-
employment
benefits
$
Share-based
payments
$
Termination
benefits
$
Total
$
Percentage
performance
related
%
36,000
50,000
2,309
120,000
2,377
-
-
-
12,255
-
-
-
210,686
12,255
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
36,000
50,000
14,564
120,000
2,377
-
222,941
-
-
84%
-
-
-
Notes:
1
2
3
Mr Davey was appointed 27 July 2017.
Mr Kelly and Mr Behets resigned 27 July 2017.
From 1 July 2017, Mr Swan provides services as the Company Secretary through a services agreement with Apollo Group Pty Ltd (‘Apollo’). During the year,
Apollo was paid or is payable $180,000 for the provision of administration and company secretarial services to the Group.
No Options or Rights were granted to KMP of the Group by the Company during the financial year, and no Options or Rights
previously granted to KMP were exercised or lapsed during the financial year.
9
Directors’ Report
Remuneration report (continued)
Option and Right Holdings of Key Management Personnel
Directors
Mr Ian Middlemas
Mr Craig Burton
Mr Grant Davey
Other KMP
Mr Greg Swan
Held at
1 July 2018
Lapsed
Held at
30 June 2019
Vested and
exercisable at 30
June 2019
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Shareholdings of Key Management Personnel
Directors
Mr Ian Middlemas
Mr Craig Burton
Mr Grant Davey
Other KMP
Mr Greg Swan
Held at
1 July 2018
On-market
purchases
Sales
Held at
30 June 2019
15,400,000
30,800,000
1,066,276
250,000
-
-
-
-
-
-
-
-
15,400,000
30,800,000
1,066,276
250,000
Loans involving Key Management Personnel
No loans were provided to or received from Key Management Personnel during the year ended 30 June 2019 (2018: Nil).
Contracts with Directors and KMP
Mr Grant Davey, Executive Director, is engaged under a consultancy agreement with Matador Capital Pty Ltd (“Matador”). The
agreement may be terminated by either party at any time for any or no reason without payment or penalty upon at least one (1)
months’ prior written notice of termination to the other, or payment in lieu thereof. Matador receives a monthly retainer of A$10,000
and will receive a discretionary bonus based on achievement of key performance indicators to be determined by the Board.
Mr Greg Swan provided services as the Company Secretary through a services agreement with Apollo Group Pty Ltd (“Apollo”).
Apollo receives a monthly retainer of A$15,000 for the provision of a fully serviced office and administrative, accounting and
company secretarial services to the Group. The agreement may be terminated by either party at any time for any or no reason
without payment or penalty upon at least one (1) months’ prior written notice of termination to the other, or payment in lieu thereof.
Signed in accordance with a resolution of the Directors.
GRANT DAVEY
Executive Director
26 September 2019
10
Auditor’s independence declaration
11
Consolidated Statement of Profit or Loss and Other Comprehensive Income
for the year ended 30 June 2019
Interest income
Corporate and administrative expenses
Business development expenses
Arbitration expenses
Scheme transaction expenses
Employee benefits expenses
Share-based payment expenses
Share of loss of joint venture interests
Other income and expenses
Loss before income tax
Income tax expense
Loss for the period
Loss attributable to members of Cradle Resources Limited
Other comprehensive income
Items that may be reclassified subsequently to profit and loss (net of tax):
Exchange differences arising on translation of foreign operations
Other comprehensive (loss)/income for the period, net of tax
Total comprehensive (loss)/income for the period
Total comprehensive (loss)/income attributable to members of Cradle
Resources Limited
Notes
3
3
8
3
4
2019
$
37,676
(292,045)
-
(55,784)
-
(206,000)
-
(20,805)
293,378
(243,580)
-
(243,580)
(243,580)
2018
$
28,082
(338,538)
(282,994)
(85,310)
(44,743)
(222,941)
36,000
(21,934)
5,708
(926,670)
-
(926,670)
(926,670)
1,169,757
1,169,757
926,177
876,893
876,893
(49,777)
926,177
(49,777)
Earnings per share
Basic and diluted loss per share (cents per share)
13
(0.13)
(0.53)
The above Consolidated Statement of Profit or Loss and Other Comprehensive Income should be read in conjunction with the accompanying notes.
12
Consolidated Statement of Financial Position
as at 30 June 2019
Notes
30 June 2019
30 June 2018
$
$
6
7
7
8
9
1,865,314
2,710,231
18,933
46,112
1,884,247
2,756,343
102,856
98,223
23,056,027
21,428,498
23,158,883
21,526,721
25,043,130
24,283,064
56,078
56,078
222,189
222,189
56,078
222,189
24,987,052
24,060,875
10
11
12
31,245,828
31,245,828
13,809,233
12,932,826
(20,068,009)
(20,117,779)
24,987,052
24,060,875
ASSETS
Current Assets
Cash and cash equivalents
Other receivables
Total Current Assets
Non-current Assets
Other receivables
Interest in joint ventures
Total Non-Current Assets
TOTAL ASSETS
LIABILITIES
Current Liabilities
Trade and other payables
Total Current Liabilities
TOTAL LIABILITIES
NET ASSETS
EQUITY
Contributed equity
Reserves
Accumulated losses
TOTAL EQUITY
The above Consolidated Statement of Financial Position should be read in conjunction with the accompanying notes
13
Consolidated Statement of Changes in Equity
for the year ended 30 June 2019
Issued
Capital
$
Share Based
Payments
Reserve
Foreign
Currency
Translation
Reserve
Consolidation
Reserve
Accumulated
Losses
$
$
$
$
Total
Equity
$
31,245,828
-
293,350
-
1,718,195
-
10,921,281
-
(20,117,779)
(243,580)
24,060,875
(243,580)
-
-
-
-
-
1,169,757
1,169,757
(293,350)
-
-
-
-
-
1,169,757
(243,580)
926,177
293,350
-
Balance at 1 July 2018
Net loss for the year
Other comprehensive income:
Exchange differences on translation of foreign operations
Total comprehensive (loss)/income for the period
Transactions with owners recorded directly in equity:
Expiry of options
Balance at 30 June 2019
31,245,828
-
2,887,952
10,921,281
(20,068,009)
24,987,052
Balance at 1 July 2017
Net loss for the year
Other comprehensive income:
Exchange differences on translation of foreign operations
Total comprehensive (loss)/income for the period
Transactions with owners recorded directly in equity:
Share placement
Share issue costs
Conversion of performance rights
Expiry of options
28,275,882
-
575,600
-
841,302
-
10,921,281
-
(19,300,109)
(926,670)
21,313,956
(926,670)
-
-
-
-
876,893
876,893
2,900,000
(103,304)
173,250
-
-
-
(173,250)
(109,000)
-
-
-
-
-
-
-
-
-
-
-
(926,670)
876,893
(49,777)
-
-
-
109,000
2,900,000
(103,304)
-
-
Balance at 30 June 2018
31,245,828
293,350
1,718,195
10,921,281
(20,117,779)
24,060,875
The above Consolidated Statement of Changes in Equity should be read in conjunction with the accompanying notes.
14
Cash flows used in operating activities
Payments to suppliers, employees and others
Interest received
Consolidated Statement of Cash Flows
for the year ended 30 June 2019
Notes
2019
$
2018
$
(692,760)
(1,170,142)
37,676
28,082
Net cash used in operating activities
6(a)
(655,084)
(1,142,060)
Cash flows used in investing activities
Contributions to joint venture
Loans to joint venture
Net cash used in investing activities
Cash flows used in financing activities
Gross proceeds from issue of shares
Share issue costs
Net cash generated from financing activities
Net (decrease)/increase in cash and cash equivalents
Net foreign exchange differences
Cash and cash equivalents at beginning of period
8
(189,833)
(262,451)
-
(92,516)
(189,833)
(354,967)
10
10
-
-
-
2,900,000
(103,304)
2,796,696
(844,917)
1,299,669
-
-
2,710,231
1,410,562
Cash and cash equivalents at end of period
6
1,865,314 2,710,231
The above Consolidated Statement of Cash Flows should be read in conjunction with the accompanying notes.
15
Notes to the Consolidated Financial Statements
for the year ended 30 June 2019
1. Corporate information
Cradle Resources Limited (the Company) is domiciled in Australia.
The Company’s registered office is at 102 Forrest Street, Cottesloe, Western Australia. These consolidated financial statements comprise the Company
and its subsidiaries (together referred to as the Group) and were authorised for issue in accordance with a resolution of the directors on 25 September
2019.
The Group is a for-profit company limited by shares incorporated in Australia whose shares are listed on the Australian Stock Exchange. The Group
is principally engaged in the exploration and development of mineral resource projects.
2. Significant accounting policies
(a) Basis of preparation
The consolidated financial statements are general purpose financial statements which have been prepared in accordance with the requirements of the
Corporations Act 2001, Australian Accounting Standards and other authoritative pronouncements of the Australian Accounting Standards Board. The
consolidated financial statements also comply with International Financial Reporting Standards (IFRS) as issued by the International Accounting
Standards Board (IASB).
The financial report has been prepared on a historical cost basis, and the financial report is presented in Australian dollars, unless otherwise stated.
The consolidated financial statements have been prepared on a going concern basis which assumes the continuity of normal business activity and the
realisation of assets and the settlement of liabilities in the ordinary course of business.
At 30 June 2019, the Group had cash and cash equivalents of $1,865,314 (2018: $2,710,231) and net current assets of $1,828,169 (2018: $2,534,154).
The Directors consider that the Group is a going concern and can fund its planned project expenditures during the twelve-month period from the date
of signing this report.
As previously advised, the Company and Tremont are in dispute regarding whether a definitive feasibility study has been delivered within the meaning
of the Shareholders Agreement. The dispute has been referred to arbitration. The arbitration hearing which was scheduled for the first week of October
2018 has now been adjourned. The date for the adjourned arbitration has yet to be set. Cradle’s position remains as set out previously. Subject to the
outcome of the dispute, if the definitive feasibility study which has been presented is accepted as a definitive feasibility study within the meaning of the
Shareholders Agreement the parties will then consider whether to proceed with construction of a mine to carry out mining activities on the Project
("Decision to Mine"). Any Decision to Mine on the Project will require Cradle to provide funding to PHT based on its pro-rata shareholding in PHT or
dilute its interest in PHT based upon a value of such interest of US$20 million plus contributions made by Cradle since October 2015, which is currently
approximately US$3.5 million.
(b) Basis of consolidation
The consolidated financial statements comprise the financial statements of the Company and its subsidiaries as at 30 June 2019. Control is achieved
when the Group is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect those returns through
its power over the investee. Specifically, the Group controls an investee if and only if the Group has:
•
•
•
Power over the investee (i.e. existing rights that give it the current ability to direct the relevant activities of the investee);
Exposure, or rights, to variable returns from its involvement with the investee; and
The ability to use its power over the investee to affect its returns.
Generally, there is a presumption that a majority of voting rights results in control. When the Group has less than a majority of the voting or similar
rights of an investee, the Group considers all relevant facts and circumstances in assessing whether it has power over an investee, including:
•
•
•
The contractual arrangement with the other vote holders of the investee;
Rights arising from other contractual arrangements; and
The Group’s voting rights and potential voting rights.
The Group re-assesses whether or not it controls an investee if facts and circumstances indicate that there are changes to one or more of the three
elements of control. Consolidation of a subsidiary begins when the Group obtains control over the subsidiary and ceases when the Group loses control
of the subsidiary. Assets, liabilities, income and expenses of a subsidiary acquired or disposed of during the year are included in the statement of
comprehensive income from the date the Group gains control until the date the Group ceases to control the subsidiary.
Profit or loss and each component of other comprehensive income (“OCI”) are attributed to the equity holders of the parent of the Group and to the
non-controlling interests, even if this results in the non-controlling interests having a deficit balance. When necessary, adjustments are made to the
financial statements of subsidiaries to bring their accounting policies into line with the Group’s accounting policies. All intra-group assets and liabilities,
equity, income, expenses and cash flows relating to transactions between members of the Group are eliminated in full on consolidation.
A change in the ownership interest of a subsidiary, without a loss of control, is accounted for as an equity transaction.
If the Group loses control over a subsidiary, it de-recognises the related assets (including goodwill), liabilities, non-controlling interests and other
components of equity, while any resultant gain or loss is recognised in profit or loss. Any investment retained is recognised at fair value.
16
Notes to the Consolidated Financial Statements
for the year ended 30 June 2019
(continued)
2. Significant accounting policies (continued)
(c) Business combinations
Business combinations are accounted for using the acquisition method. The cost of an acquisition is measured as the aggregate of the consideration
transferred, which is measured at acquisition date fair value, and the amount of any non-controlling interests in the acquiree. For each business
combination, the Group elects whether to measure the non-controlling interests in the acquiree at fair value or at the proportionate share of the
acquiree’s identifiable net assets. Acquisition-related costs are expensed as incurred and included in administrative expenses.
When the Group acquires a business, it assesses the financial assets and liabilities assumed for appropriate classification and designation in
accordance with the contractual terms, economic circumstances and pertinent conditions as at the acquisition date. This includes the separation of
embedded derivatives in host contracts by the acquiree.
Any contingent consideration to be transferred by the acquirer will be recognised at fair value at the acquisition date. Contingent consideration classified
as equity is not remeasured and its subsequent settlement is accounted for within equity. Contingent consideration classified as an asset or liability
that is a financial instrument and within the scope of IFRS 9 Financial Instruments, is measured at fair value with the changes in fair value recognised
in the statement of profit or loss in accordance with IFRS 9. Other contingent consideration that is not within the scope of IFRS 9 is measured at fair
value at each reporting date with changes in fair value recognised in profit or loss.
Any contingent consideration to be transferred by the acquirer will be recognised at fair value at the acquisition date. Contingent consideration classified
as an asset or liability that is a financial instrument and within the scope of AASB 139 Financial Instruments: Recognition and Measurement, is
measured at fair value with changes in fair value recognised either in profit or loss or as a change to OCI. If the contingent consideration is not within
the scope of AASB 139, it is measured in accordance with the appropriate AASB. Contingent consideration that is classified as equity is not re-
measured and subsequent settlement is accounted for within equity.
Goodwill is initially measured at cost (being the excess of the aggregate of the consideration transferred and the amount recognised for non-controlling
interests and any previous interest held over the net identifiable assets acquired and liabilities assumed). If the fair value of the net assets acquired is
in excess of the aggregate consideration transferred, the Group re-assesses whether it has correctly identified all of the assets acquired and all of the
liabilities assumed and reviews the procedures used to measure the amounts to be recognised at the acquisition date. If the reassessment still results
in an excess of the fair value of net assets acquired over the aggregate consideration transferred, then the gain is recognised in profit or loss..
After initial recognition, goodwill is measured at cost less any accumulated impairment losses. For the purpose of impairment testing, goodwill acquired
in a business combination is, from the acquisition date, allocated to each of the Group’s cash-generating units that are expected to benefit from the
combination, irrespective of whether other assets or liabilities of the acquiree are assigned to those units.
Where goodwill has been allocated to a cash-generating unit and part of the operation within that unit is disposed of, the goodwill associated with the
disposed operation is included in the carrying amount of the operation when determining the gain or loss on disposal. Goodwill disposed in these
circumstances is measured based on the relative values of the disposed operation and the portion of the cash-generating unit retained.
Investments in associates and joint ventures
(d)
An associate is an entity over which the Group has significant influence. Significant influence is the power to participate in the financial and operating
policy decisions of the investee, but is not control or joint control over those policies.
A joint venture is a type of joint arrangement whereby the parties that have joint control of the arrangement have rights to the net assets of the joint
venture. Joint control is the contractually agreed sharing of control of an arrangement, which exists only when decisions about the relevant activities
require unanimous consent of the parties sharing control.
Joint control is the contractually agreed sharing of control of an arrangement, which exists only when decisions about the relevant activities require the
unanimous consent of the parties sharing control.
The Group’s investment in its associate and joint venture are accounted for using the equity method.
Under the equity method, the investment in an associate or a joint venture is initially recognised at cost. The carrying amount of the investment is
adjusted to recognise changes in the Group’s share of net assets of the associate or joint venture since the acquisition date. Goodwill relating to the
associate or joint venture is included in the carrying amount of the investment and is not tested for impairment separately.
The statement of profit or loss reflects the Group’s share of the results of operations of the associate or joint venture. Any change in OCI of those
investees is presented as part of the Group’s OCI. In addition, when there has been a change recognised directly in the equity of the associate or joint
venture, the Group recognises its share of any changes, when applicable, in the statement of changes in equity. Unrealised gains and losses resulting
from transactions between the Group and the associate or joint venture are eliminated to the extent of the interest in the associate or joint venture.
The aggregate of the Group’s share of profit or loss of an associate and a joint venture is shown on the face of the statement of profit or loss outside
operating profit and represents profit or loss after tax and non-controlling interests in the subsidiaries of the associate or joint venture.
The financial statements of the joint venture are prepared for the same reporting period as the Group. When necessary, adjustments are made to
bring the accounting policies in line with those of the Group.
After application of the equity method, the Group determines whether it is necessary to recognise an impairment loss on its investment in its associate
or joint venture. At each reporting date, the Group determines whether there is objective evidence that the investment in the associate or joint venture
is impaired. If there is such evidence, the Group calculates the amount of impairment as the difference between the recoverable amount of the associate
or joint venture and its carrying value, and then recognises the loss within ‘Share of profit of an associate and a joint venture’ in the statement of profit
or loss.
Upon loss of significant influence over the associate or joint control over the joint venture, the Group measures and recognises any retained investment
at its fair value. Any difference between the carrying amount of the associate or joint venture upon loss of significant influence or joint control and the
fair value of the retained investment and proceeds from disposal is recognised in profit or loss.
17
Notes to the Consolidated Financial Statements
for the year ended 30 June 2019
(continued)
2. Significant accounting policies (continued)
(e) Current versus non-current
The Group presents assets and liabilities in statement of financial position based on current/non-current classification. An asset is current when it is:
•
Expected to be realised or intended to be sold or consumed in normal operating cycle
• Held primarily for the purpose of trading;
•
Expected to be realised within twelve months after the reporting period; or
• Cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve months after the reporting
period.
All other assets are classified as non-current. A liability is current when:
•
•
•
•
It is expected to be settled in the normal operating cycle
It is held primarily for the purpose of trading
It is due to be settled within twelve months after the reporting period, or
There is no unconditional right to defer the settlement of the liability for at least twelve months after the reporting period.
The Group classifies all other liabilities as non-current.
Deferred tax assets and liabilities are classified as non-current assets and liabilities.
(f) Foreign currencies
The Group’s consolidated financial statements are presented in Australian dollars, which is also the Parent’s functional currency. For each entity, the
Group determines the functional currency and items included in the financial statements of each entity are measured using that functional currency.
The Group uses the direct method of consolidation, and on disposal of a foreign operation, the gain or loss that is reclassified to profit or loss reflects
the amount that arises from using this method.
Transactions and balances
Transactions in foreign currencies are initially recorded by the Group’s entities at their respective functional currency spot rates at the date the
transaction first qualifies for recognition.
Monetary assets and liabilities denominated in foreign currencies are translated at the functional currency spot rates of exchange at the reporting date.
Differences arising on settlement or translation of monetary items are recognised in profit or loss with the exception of monetary items that are
designated as part of the hedge of the Group’s net investment of a foreign operation. These are recognised in other comprehensive income until the
net investment is disposed of, at which time, the cumulative amount is reclassified to profit or loss. Tax charges and credits attributable to exchange
differences on those monetary items are also recorded in other comprehensive income.
Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rates at the dates of the initial
transactions. Non-monetary items measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value
is determined. The gain or loss arising on translation of non-monetary items measured at fair value is treated in line with the recognition of gain or loss
on change in fair value of the item.
Group companies
On consolidation, the assets and liabilities of foreign operations are translated into Australian dollars at the rate of exchange prevailing at the reporting
date and their statements of profit or loss are translated at exchange rates prevailing at the dates of the transactions. The exchange differences arising
on translation for consolidation purposes are recognised in other comprehensive income. On disposal of a foreign operation, the component of other
comprehensive income relating to that particular foreign operation is recognised in profit or loss.
Any goodwill arising on the acquisition of a foreign operation and any fair value adjustments to the carrying amounts of assets and liabilities arising on
the acquisition are treated as assets and liabilities of the foreign operation and translated at the spot rate of exchange at the reporting date.
Income tax
(g)
Current income tax
Current income tax assets and liabilities are measured at the amount expected to be recovered from or paid to the taxation authorities. The tax rates
and tax laws used to compute the amount are those that are enacted or substantively enacted at the reporting date in the countries where the Group
operates and generates taxable income.
Deferred income tax
Deferred tax is provided using the liability method on temporary differences between the tax bases of assets and liabilities and their carrying amounts
for financial reporting purposes at the reporting date.
Deferred tax liabilities are recognised for all taxable temporary differences, except:
• When the deferred tax liability arises from the initial recognition of goodwill or an asset or liability in a transaction that is not a business
combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss
•
In respect of taxable temporary differences associated with investments in subsidiaries, associates and interests in joint arrangements, when
the timing of the reversal of the temporary differences can be controlled and it is probable that the temporary differences will not reverse in
the foreseeable future
Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it is probable that future taxable amounts will be
available to utilise those temporary differences and losses.
18
Notes to the Consolidated Financial Statements
for the year ended 30 June 2019
(continued)
2. Significant accounting policies (continued)
The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient
taxable profit will be available to allow all or part of the deferred tax asset to be utilised. Unrecognised deferred tax assets are re-assessed at each
reporting date and are recognised to the extent that it has become probable that future taxable profits will allow the deferred tax asset to be recovered.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year when the asset is realised or the liability is
settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the reporting date.
Deferred tax assets and liabilities are offset only where there is a legally enforceable right to offset current tax assets against current tax liabilities and
deferred tax assets against deferred tax liabilities; and they relate to the same taxable authority on either the same taxable entity or different taxable
entity’s which intend to settle simultaneously.
(h) Cash and cash equivalents
For the purpose of presentation in the statement of cash flows, cash and cash equivalents includes cash on hand and deposits held on call with
financial institutions.
(i) Financial assets – other receivables
Initial recognition and measurement:
Other financial assets are classified, at initial recognition, at amortised cost, financial assets at fair value through profit or loss, fair value through other
comprehensive income as appropriate. Other financial assets are recognised initially at fair value plus, in the case of financial assets not recorded at
fair value through profit or loss, transaction costs that are attributable to the acquisition of the financial asset.
The Group has not recognised any financial assets at fair value through other comprehensive income.
Subsequent measurement:
The subsequent measurement of other financial assets depends on their classification as described below:
i) Financial assets at fair value through profit or loss
Financial assets at fair value through profit or loss are carried in the statement of financial position at fair value with net changes in fair value
presented as finance costs (negative net changes in fair value) or finance income (positive net changes in fair value) in the consolidated
statement of profit or loss and other comprehensive income.
ii) Amortised cost
In order for a financial asset to qualify for measurement as amortised cost, it has to pass both the contractual cash flow characteristics test
as well as the business model test. Under the contractual cash flow characteristics test, an entity has to assess, whether the cash flows
resulting from the financial asset are solely payments for principal and interest on the outstanding principal amount. Under the business
model test the objective is to hold financial assets in order to collect contractual cash flows.
Receivables that are held to collect contractual cash flows and are expected to give rise to cash flows representing solely payments of principle and
interest are classified and subsequently measured at amortised cost using the effective interest rate method. Receivables that do not meet the criteria
for amortised cost are measured at fair value through profit or loss.
Impairment of other financial assets:
The Group assesses on a forward looking basis the expected credit loss associated with other financial assets. Evidence of impairment may include
indications that the debtors or a group of debtors is experiencing significant financial difficulty, default or delinquency in interest or principal payments,
the probability that they will enter bankruptcy or other financial reorganisation and observable data indicating that there is a measurable decrease in
the estimated future cash flows, such as changes in arrears or economic conditions that correlate with defaults.
For other financial assets, the expected credit loss is based on the 12-month expected credit loss. The 12-month expected credit loss is the portion of
lifetime expected credit losses that results from default events on a financial instrument that are possible within 12 months after the reporting date.
However, when there has been a significant increase in credit risk since origination, the allowance will be based on the lifetime expected credit loss.
The Group considers an event of default has occurred when a financial asset is more than 90 days past due or external sources indicate that the debtor
is unlikely to pay its creditors, including the Group. A financial asset is credit impaired when there is evidence that the counterparty is in significant
financial difficulty or a breach of contract, such as a default or past due event has occurred. The Group writes off a financial asset when there is
information indicating the counterparty is in severe financial difficulty and there is no realistic prospect of recovery.
(j) Trade and other payables
Trade and other payables are carried at amortised cost and due to their short-term nature they are not discounted. They represent liabilities for goods
and services provided to the Company prior to the end of the financial period that are unpaid and arise when the Company becomes obliged to make
future payments in respect of the purchase of these goods and services. The amounts are unsecured and are usually paid within 30 days of recognition.
19
Notes to the Consolidated Financial Statements
for the year ended 30 June 2019
(continued)
2. Significant accounting policies (continued)
(k) Borrowings
All loans and borrowings are initially recognised at fair value, net of transaction costs incurred. Borrowings are subsequently measured at amortised
cost. Any difference between the proceeds (net of transaction costs) and the redemption amount is recognised in profit or loss over the period of the
loans and borrowings using the effective interest method.
All borrowings are classified as current liabilities unless the group has an unconditional right to defer settlement of the liability for at least 12 months
after the end of the reporting period.
(l) Provisions
Provisions are recognised when the Company has a present (legal or constructive) obligation as a result of a past event, it is probable the Company
will be required to settle the obligation, and a reliable estimate of the consideration required to settle the present obligation at the reporting date, taking
into account the risks and uncertainties surrounding the obligation. If the time value of money is material, provisions are discounted using a current
pre-tax rate specific to the liability. The increase in the provision resulting from the passage of time is recognised as a finance cost.
(m) Contributed equity
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction,
net of tax, from the proceeds.
(n) Earnings per share
Basic earnings per share is calculated as net profit attributable to the Company, adjusted to exclude any costs of servicing equity (other than dividends)
and preference share dividends, divided by the weighted average number of ordinary shares, adjusted for any bonus element.
Diluted earnings per share is calculated as net profit attributable to the Company, adjusted for:
•
•
•
Costs of servicing equity (other than dividends) and preference dividends;
The after-tax effect of dividends and interest associated with dilutive potential ordinary shares that have been recognised as expenses; and
Other non-discretionary changes in revenues or expenses during the period that would result from the dilution of potential ordinary shares,
divided by the weighted average number of ordinary shares and dilutive potential ordinary shares, adjusted for any bonus element.
(o) Goods and services tax (GST)
Revenues, expenses and assets are recognised net of the amount of associated GST, unless the GST incurred is not recoverable from the tax authority.
In this case it is recognised as part of the cost of the acquisition of asset or as part of the expense. Receivables and payables are stated inclusive of
the amount of GST receivable or payable. The net amount of GST recoverable from, or payable to, the tax authority is included in other receivables
or other payables in the statement of financial position. Cash flows are presented on a gross basis. The GST components of cash flows arising from
investing or financing activities which are recoverable from, or payable to the tax authority, are presented as operating cash flows. Commitments and
contingencies are disclosed net of the amount of GST recoverable from, or payable to, the tax authority.
(p) Segment reporting
The Group has identified its operating segments based on the internal reports that are reviewed and used by the chief operating decision maker. The
chief operating decision maker, who is responsible in assessing the performance and determining the allocation of resources of the operating segments,
is considered to be the Board of Directors.
Discrete financial information is presented for the Company as a whole. Accordingly, the Board of Directors considers that its business operates in
one segment, being that of mineral exploration.
(q) Share based payments
Employees and consultants of the Group receive remuneration in the form of share-based payments, whereby employees render services as
consideration for equity instruments (equity-settled transactions).
Equity-settled transactions
The cost of equity-settled transactions is determined by the fair value at the date when the grant is made using an appropriate valuation model. That
cost is recognised, together with a corresponding increase in other capital reserves in equity, over the period in which the performance and/or service
conditions are fulfilled in employee benefits expense. The cumulative expense recognised for equity-settled transactions at each reporting date until
the vesting date reflects the extent to which the vesting period has expired and the Group’s best estimate of the number of equity instruments that will
ultimately vest. The statement of profit or loss expense or credit for a period represents the movement in cumulative expense recognised as at the
beginning and end of that period and is recognised in employee benefits expense.
No expense is recognised for awards that do not ultimately vest, except for equity-settled transactions, for which vesting is conditional upon a market
or non-vesting condition. These are treated as vesting irrespective of whether or not the market or non-vesting condition is satisfied, provided that all
other performance and/or service conditions are satisfied.
When the terms of an equity-settled award are modified, the minimum expense recognised is the expense had the terms had not been modified, if the
original terms of the award are met. An additional expense is recognised for any modification that increases the total fair value of the share-based
payment transaction, or is otherwise beneficial to the employee as measured at the date of modification. The dilutive effect of outstanding options is
reflected as additional share dilution in the computation of diluted earnings per share.
Cash-settled transactions
The cost of cash-settled transactions is measured initially at fair value at the grant date using a binomial model. This fair value is expensed over the
period until the vesting date with recognition of a corresponding liability. The liability is re-measured to fair value at each reporting date up to and
including the settlement date, with changes in fair value recognised in employee benefits expense.
20
Notes to the Consolidated Financial Statements
for the year ended 30 June 2019
(continued)
2. Significant accounting policies (continued)
(r) Government grants
Government grants are recognised when there is reasonable assurance that the grant will be received and all attached conditions will be complied
with. When the grant relates to an expense item, it is recognised as income on a systematic basis over the periods that the costs, which it is intended
to compensate, are expensed. When the grant relates to an asset, it is recognised as income in equal amounts over the expected useful life of the
related asset.
(s) Employee benefits
Liabilities for wages and salaries, including non-monetary benefits, annual leave and accumulating sick leave expected to be settled within 12 months
after the end of the period in which the employees render the related service are recognised in respect of employees’ services up to the end of the
reporting period and are measured at the amounts expected to be paid when the liabilities are settled. The liability for annual leave and accumulating
sick leave is recognised in the provision for employee benefits. All other short-term employee benefit obligations are presented as payables.
(t) Parent entity information
The financial information for the parent entity, Cradle Resources Limited, disclosed in note 15 has been prepared on the same basis as the consolidated
financial statements, except as set out below:
Investments in subsidiaries and joint venture entities
Investments in subsidiaries and joint venture entities are accounted for at cost in the financial statements of Cradle Resources Limited. Dividends
received from associates are recognised in the parent entity’s profit or loss when its right to receive the dividend is established.
(u) Use and revision of accounting judgements, estimates and assumptions
The preparation of the financial statements requires Management to make judgements, estimates and assumptions that affect the reported amounts
in the financial statements. Management continually evaluates its judgements and estimates in relation to assets, liabilities, contingent liabilities,
revenue and expenses. Management bases its judgements, estimates and assumptions on historical experience and on other various factors, including
expectations of future events, Management believes to be reasonable under the circumstances. The resulting accounting judgements and estimates
will seldom equal the related actual results. The judgements, estimates and assumptions that have a significant risk of causing a material adjustment
to the carrying amounts of assets and liabilities within the next financial period are discussed below.
Impairment of Assets
An impairment exists when the carrying value of an asset or cash generating unit exceeds its recoverable amount, which is the higher of its fair value
less costs of disposal and its value in use. Significant judgement is required in determining whether it is necessary to recognise an impairment loss
on its investments in joint ventures. At each reporting date, the Group determines whether there is objective evidence that the investment in the joint
venture is impaired. If there is such evidence, the Group calculates the amount of impairment as the difference between the recoverable amount of
the joint venture and its carrying value, then recognises the loss as ‘Share of profit of a joint venture’ in the statement of profit or loss.
Joint Control
The Company continues to hold an interest in PHT. The interest held as at 30 June 2016 was reduced to 50% following Tremont’s full contribution of
$20 million as per the Investment and Shareholders Agreement, resulting in an equal interest of 50% in PHT. The determination of joint control was
based on the Group’s voting rights and potential voting rights. Refer to Note 8 for further details on interests in joint ventures.
Share Based Payments
The assessed fair value at grant date of share-based payments granted during the period was determined using a binomial option pricing model that
takes into account the exercise price, the price of the underlying share at grant date, the life of the option, the volatility of the underlying share, the risk-
free rate and expected dividend payout and any applicable vesting conditions. Management was required to make assumptions and estimates in order
to determine the inputs into the binomial option pricing model. Refer to Note 16 for further details on assumptions and estimates.
(v) Changes in accounting policy
Since 1 July 2018, the Consolidated Entity has adopted all Accounting Standards and Interpretations effective from 1 July 2018. Other than the changes
described below, the accounting policies adopted are consistent with those of the previous financial year. The Consolidated Entity has not early adopted
any other standard, interpretation or amendment that has been issued but is not yet effective.
The Consolidated Entity applied AASB 9 Financial Instruments (“AASB 9”) for the first time from 1 July 2018. A discussion on the impact of the adoption
of AASB 9 is included below.
Several other new and amended Accounting Standards and Interpretations applied for the first time from 1 July 2018. These did not have an impact
on the consolidated financial statements of the Consolidated Entity and, hence, have not been disclosed. Australian Accounting Standards and
Interpretations that have been issued or amended that may be relevant to the Group are set out in the table below.
Standard/Interpretation
Interpretation 23 Uncertainty over Income Tax Treatments
AASB 2017-7 Amendments – Long-term Interests in Associates and Joint Venture Amendments to IAS 28
and Illustrative Example – Long-term Interests in Associates and Joint Ventures
AASB 2018-1 Amendments – Annual Improvements 2015-2017 Cycle
AASB 2018-2 Amendments – Plan Amendment, Curtailment or Settlement (AASB 119)
AASB 16 Leases
Application date
of standard
Application
date for Group
1 January 2019
1 January 2019
1 July 2019
1 July 2019
1 January 2019
1 January 2019
1 January 2019
1 July 2019
1 July 2019
1 July 2019
The adoption of these new and revised standards has not resulted in any significant changes to the Group's accounting policies or to the amounts
reported for the current or prior periods. The Group has not early adopted any other standard, interpretation or amendment that has been issued but
is not yet effective.
21
Notes to the Consolidated Financial Statements
for the year ended 30 June 2019
(continued)
2. Significant accounting policies (continued)
AASB 9 Financial Instruments
AASB 9 sets out requirements for recognising and measuring financial assets, financial liabilities and some contracts to buy or sell non-financial items.
This standard replaces AASB 139 Financial Instruments: Recognition and Measurement. AASB 9 largely retains the existing requirements in AASB
139 for the classification and measurement of financial liabilities. However, it eliminates the previous AASB 139 categories for financial assets held to
maturity, loans and receivables and available for sale. The adoption of AASB 9 has not had a significant effect on the Group’s accounting policies
related to financial liabilities. The adoption of AASB 9 has not had a significant impact on the classification and measurement of financial assets. AASB
9 Financial Instruments does not apply to interests in associates and joint ventures that are accounted for using the equity method.
The Group has adopted AASB 9 from 1 July 2018, which has resulted in changes to the accounting policies applied by the Group and the analysis for
possible adjustments to amounts recognised in the Financial Report. In accordance with the transitional provisions in AASB 9, the reclassifications and
adjustments are reflected in the opening balance sheet as at 1 July 2018. The Group has not recognised a loss allowance on trade and other receivables
following an assessment of the impact of the new impairment model introduced by AASB 9 and the comparatives have not been restated as allowable
under AASB 9.
On adoption of AASB 9, the Group classified financial assets and liabilities measured at either amortised cost or fair value, depending on the business
model for those assets and on the asset’s contractual cash flow characteristics. There were no changes in the measurement of the Group’s financial
instruments.
There was no impact on the statement of comprehensive income or the statement of changes in equity on adoption of AASB 9 in relation to classification
and measurement of financial assets and liabilities. The following table summarises the impact on the classification and measurement of the Group’s
financial instruments at 1 July 2018
Statement of financial position
Financial Asset
AASB 139
AASB 9
Reported $
Restated $
Cash and cash equivalents
Bank deposits
Loans and receivables
Amortised cost
No change
No change
Trade and other receivables
Loans and receivables
Loans and receivables
Amortised cost
No change
No change
Other receivables
Loans and receivables
Loans and receivables
Amortised cost
No change
No change
Trade and other payables
Loans and receivables Amortised cost
Amortised cost
No change
No change
Impairment
AASB 9 introduces a new expected credit loss (“ECL”) impairment model that requires the Group to adopt an ECL position across the Group’s financial
assets from 1 July 2018. The Group’s receivables balance consists of GST refunds from the Australian Tax Office and loan receivable from the joint
venture. While cash and cash equivalents are also subject to the impairment requirements of AASB 9, an impairment loss would be considered
immaterial.
The loss allowances for financial assets are based on the assumptions about risk of default and expected loss rates. The Group uses judgement in
making these assumptions and selecting the inputs to the impairment calculation, based on the Group’s past history, existing market conditions as well
as forward looking estimates at the end of each reporting period. The Group’s has assessed its receivables and considers the expected credit loss to
be insignificant and as such, no impairment loss has been recognised against these receivables as at 30 June 2019.
(w) Standards issued but not yet effective
A number of new standards, amendments to standards and interpretations are effective for annual periods beginning after 1 January 2019 and have
not been applied in preparing these consolidated financial statements. Those which may be relevant to the Group are set out below. The Group does
not plan to adopt these standards early.
AASB 16 Leases – Application date of standard 1 January 2019
This standard AASB 16 Leases will result in almost all leases being recognised on the balance sheet, as the distinction between operating and
finance lease have been removed. The new standard requires a lessee to recognise assets (the right to use the leased item) and liabilities
(obligations to make lease repayments). Short term leases (less than 12 months) and leases of low value assets are exempt from the lease
accounting requirements. Lessor accounting remains similar to current practice. AASB 16 is effective for annual reporting periods beginning on or
after 1 January 2019, with early adoption permitted.
Transition
The Group will initially apply AASB 16 on 1 July 2019, using the modified retrospective approach. Therefore, the cumulative effect of adopting AASB
16 will be recognised as an adjustment to the opening balance of retained earnings at 1 July 2019, with no restatement of comparative information.
When applying the modified retrospective approach to leases previously classified as operating leases under AASB 117, the Group can elect, on a
lease-by-lease basis, whether to apply a number of practical expedients on transition. The Group is assessing the potential impact of using these
practical expedients.
The actual impact of applying AASB 16 on the financial statements in the period of initial application will depend however on future economic
conditions, including the Group’s borrowing rate, the composition of the Group’s lease portfolio, the extent to which the Group elects to use practical
expedients and recognition exemptions, and the new accounting policies, which are subject to change until the Group presents its first financial
statements that include the date of initial application
Based on the Group’s assessment to date, the adoption of AASB 16 is expected to have an immaterial impact on the financial statements of the
Group due to the minimal number, if any, of non-cancellable leases currently entered into by the Group which do not fall under the short-term or low
value exception.
22
Notes to the Consolidated Financial Statements
for the year ended 30 June 2019
(continued)
Note
16
2019
$
288,744
4,364
293,378
2018
$
-
5,708
5,708
206,000
222,941
-
-
206,000
-
206,000
-
-
222,941
(36,000)
186,941
2019
$
2018
$
3. Other income and expenses
Other income and expenses
Sundry income
Net foreign exchange gains/(losses)
Total other income included in profit or loss
Employee benefits expense (including directors and officers)
Wages, salaries and fees
Superannuation benefits
Other employee benefits
Employee benefits expense included in profit or loss
Share-based payment expense included in profit or loss
Total employee benefits expense included in profit or loss
4. Income tax
Recognised in profit or loss
Current income tax:
Current income tax expense in respect of the current year
Deferred income tax:
Relating to origination and reversal of temporary differences
Income tax expense included in profit or loss
(a) Reconciliation between tax expense and accounting profit or loss before income tax
Accounting loss before income tax
At the domestic income tax rate of 27.5% (2018: 27.5%)
Effect of decrease in Australian income tax rate
Expenditure not allowable for income tax purposes
Income not assessable for income tax purposes
Adjustments in respect of deferred income tax of previous years
Deferred tax assets not brought to account
Income tax expense attributable to profit or loss
-
-
-
2019
$
(243,580)
(66,984)
-
21,202
-
-
45,782
-
-
-
-
2018
$
(926,670)
(254,834)
-
6,031
(9,900)
-
258,703
-
23
4. Income tax (continued)
(b) Deferred Tax Assets and Liabilities
Deferred income tax at balance date relates to the following:
Deferred Tax Assets:
Accrued expenditure
Capital allowances
Tax losses
Unrealised FX loss
Deferred tax assets not brought to account1
Notes to the Consolidated Financial Statements
for the year ended 30 June 2019
(continued)
2019
$
-
2018
$
15,675
14,525
14,525
1,954,685
1,893,228
-
(1,969,209)
(1,923,428)
-
-
Notes:
1 The benefit of deferred tax assets not brought to account will only be brought to account if: (i) future assessable income is derived of a nature and of an amount
sufficient to enable the benefit to be realised; (ii) the conditions for deductibility imposed by tax legislation continue to be complied with; and (iii) no changes in tax
legislation adversely affect the Group in realising the benefit.
(c) Tax Consolidation
The Company and its wholly-owned Australian resident entities have not formed a tax consolidated group.
5. Dividends paid or provided for on ordinary shares
No dividends have been paid or proposed for the year ended 30 June 2019 (2018: Nil).
Franking Credit Balance
Franking credits available to shareholders of Cradle Resources Limited for subsequent
financial years
6. Cash and cash equivalents
Cash at bank
(a) Reconciliation of net loss after tax to net cash used in operating activities
Loss for the year
Adjustments to reconcile profit before tax to net cash flows:
Share of loss of joint venture interests
Share based payment expense
Net foreign exchange differences
Gain on investment
Change in operating assets and liabilities:
Decrease/(Increase) in trade and other receivables
(Decrease)/Increase in trade and other payables
Net cash outflow from operating activities
2019
$
2018
$
-
-
2019
$
2018
$
1,865,314
2,710,231
2019
$
2018
$
(243,580)
(926,670)
20,805
-
(4,634)
(288,744)
27,179
(166,111)
(655,085)
21,934
(36,000)
(5,708)
-
26,604
(222,220)
(1,142,060)
24
7. Other receivables
Current
GST receivable
Total current trade and other receivables
Non-current
Loans to joint venture1
Total non-current trade and other receivables
Notes to the Consolidated Financial Statements
for the year ended 30 June 2019
(continued)
2019
$
18,933
18,933
102,856
102,856
2018
$
46,112
46,112
98,223
98,223
Notes:
1
Loans to joint venture represents shareholder loans from the Company to Panda Hill Tanzania Ltd to fund ongoing exploration and evaluation activities. The loans are
unsecured, interest free, and repayable on demand.
8. Interest in joint ventures
Panda Hill Tanzania Ltd
Total interest in joint ventures
(a) Panda Hill Tanzania Ltd
2019
$
2018
$
8(a)
23,056,027
23,056,027
21,428,498
21,428,498
On 6 June 2014, the Company executed an Investment and Shareholders Agreement with Tremont Investments Limited (“Tremont”) to fund the Project,
pursuant to which Tremont has earned a 50% interest in the Project for US$20 million. The Board of PHT is comprised of two representatives of the
Company and two representatives of Tremont. Significant decisions will require unanimous approval over the operations of PHT. As the relevant
activities of PHT require approval by both parties and both parties have rights to the net assets, the Company has assessed that the interest in PHT is
a joint venture. PHT is a company incorporated in Mauritius where its principal place of business is also located. The carrying value is measured using
the equity method of accounting.
Reconciliation of movements in interest in Panda Hill Tanzania Ltd
Carrying amount at 1 July
Acquisition of interest in/contributions to joint venture 1
Foreign exchange differences
Share of joint venture (loss)/profit for the year
Carrying amount at 30 June
Summarised statement of financial position for Panda Hill Tanzania Ltd
Cash and cash equivalents
Other current assets
Non-current assets
Current liabilities
Net assets
Reconciliation of net assets to equity accounted amounts
Closing net assets
Group’s share (2019: 50%; 2018: 50%)
Carrying amount at 30 June
2019
$
2018
$
21,428,498
478,577
1,169,757
(20,805)
23,056,027
226,581
1,438,248
50,422,939
(5,975,713)
46,112,055
46,112,055
23,056,027
23,056,027
20,311,088
262,451
876,893
(21,934)
21,428,498
90,823
1,356,726
47,139,977
(5,730,530)
42,856,996
42,856,996
21,428,498
21,428,498
Notes:
1 During the 2019 financial year, the Company made cash contributions to the joint venture totalling $189,833, being the Company’s share of cash call requests to cover
project expenditures. A further $288,744 were deemed contributions to the joint venture.
25
Notes to the Consolidated Financial Statements
for the year ended 30 June 2019
(continued)
8. Interest in joint ventures (continued)
In determining the recoverable amount of the interest in PHT, in the absence of quoted market prices, estimations are made regarding the present
value of future cash flows. Expected future cash flows are based on estimates of mineral resources, future production profiles, capital and operating
cost estimates and niobium prices. These estimates and assumptions are subject to risk and uncertainty.
The cash flow model from the Company’s DFS has been updated to include changes to the Tanzanian mining laws since the release of the DFS.
Key assumptions include:
16% free carried interest held by the Tanzanian Government;
Average weighted niobium price ranging from US$37.93/kg to US$45.07/kg;
•
•
• Discount rate of 12%, with a sensitivity analysis run at 16%.
The updated DFS model generates a net present value to Cradle of NPV12 US$114 million and NPV16 of US$57 million.
9. Trade and other payables
Trade creditors
Accrued expenses
10. Contributed equity
Issued capital
2019
$
26,078
30,000
56,078
2018
$
165,189
57,000
222,189
2019
$
2018
$
189,681,783 fully paid ordinary shares (2018: 189,681,783)
31,245,828
31,245,828
(a) Movements in Issued Capital During the Past Two Years
Date
Details
Number of
Ordinary Shares
Number of Unlisted
Placement Options
1-Jul-18
Opening balance
189,681,783
Conversion of unlisted performance rights
Share placement
Share placement
Share issue costs
Lapse of unlisted placement options
-
-
-
-
-
30-Jun-19
Closing balance
189,681,783
-
-
-
-
-
-
-
1-Jul-17
21-Jul-17
31-Jan-18
21-Mar-18
30-Jun-18
30-Jun-18
30-Jun-18
Opening balance
164,727,617
2,000,000
Conversion of unlisted performance rights
Share placement
Share placement
Share issue costs
Lapse of unlisted placement options
787,500
19,458,333
4,708,333
-
-
-
-
-
-
(2,000,000)
$
31,245,828
-
-
-
-
-
31,245,828
28,275,882
173,250
2,335,000
565,000
(103,304)
-
Closing balance
189,681,783
-
31,245,828
26
Notes to the Consolidated Financial Statements
for the year ended 30 June 2019
(continued)
10. Contributed equity (continued)
(b) Rights Attaching to Ordinary Shares
The rights attaching to fully paid ordinary shares (“Shares”) arise from a combination of the Company's Constitution, statute and general law.
(i)
(ii)
(iii)
(iv)
(v)
Shares - The issue of shares in the capital of the Company and options over unissued shares by the Company is under the control of the
Directors, subject to the Corporations Act 2001, ASX Listing Rules and any rights attached to any special class of shares.
Meetings of Members - Directors may call a meeting of members whenever they think fit. Members may call a meeting as provided by the
Corporations Act 2001. The Constitution contains provisions prescribing the content requirements of notices of meetings of members and all
members are entitled to a notice of meeting. A meeting may be held in two or more places linked together by audio-visual communication
devices. A quorum for a meeting of members is two shareholders. The Company holds annual general meetings in accordance with the
Corporations Act 2001 and the Listing Rules.
Voting - Subject to any rights or restrictions at the time being attached to any shares or class of shares of the Company, each member of the
Company is entitled to receive notice of, attend and vote at a general meeting. Resolutions of members will be decided by a show of hands
unless a poll is demanded. On a show of hands each eligible voter present has one vote. However, where a person present at a general
meeting represents personally or by proxy, attorney or representative more than one member, on a show of hands the person is entitled to
one vote only despite the number of members the person represents. On a poll each eligible member has one vote for each fully paid share
held and a fraction of a vote for each partly paid share determined by the amount paid up on that share.
Changes to the Constitution - The Company's Constitution can only be amended by a special resolution passed by at least three quarters of
the members present and voting at a general meeting of the Company. At least 28 days' written notice specifying the intention to propose the
resolution as a special resolution must be given.
Listing Rules - Provided the Company remains admitted to the Official List, then despite anything in its Constitution, no act may be done that
is prohibited by the Listing Rules, and authority is given for acts required to be done by the Listing Rules. The Company's Constitution will be
deemed to comply with the Listing Rules as amended from time to time.
11. Reserves
Share based payments reserve
3,250,000 unlisted $0.25 incentive options expiring 31-Oct-18 (2018: 3,250,000)
Nil unlisted performance rights expiring 30-Sep-17 (2018: 787,500)
Nil unlisted $0.25 incentive options expiring 30-Apr-18 (2018: 1,000,000)
Total share-based payments reserve
Foreign currency translation reserve
Consolidation reserve
Total reserves
(a) Nature and Purpose of Reserves
Note
11(b)
11(e)
11(f)
2019
$
-
-
-
-
2018
$
293,350
-
-
293,350
2,887,952
1,718,195
10,921,281
10,921,281
13,809,233
12,932,826
Share based payments reserve
The share based payments reserve is used to record the fair value of options and performance rights issued by the Group.
Foreign currency translation reserve
Exchange differences arising on translation of foreign controlled entities are taken to the foreign currency translation reserve, as described in Note 2(f).
The reserve is transferred to statement of profit or loss and other comprehensive income when the net investment is disposed of.
Consolidation reserve
On 6 June 2014, the Group entered into an Investment and Shareholders Agreement with Tremont, PHM and PHT to fund the Project, pursuant to
which Tremont was granted the right to take up an interest in PHM, equal to its interest in PHT for nil consideration. Tremont are therefore deemed to
have present ownership interest in PHM. The transaction was accounted for as an equity transaction with a non-controlling interest.
27
Notes to the Consolidated Financial Statements
for the year ended 30 June 2019
(continued)
11. Reserves (continued)
(b) Movements in options and performance rights granted as share-based payments during the past two years
Date
Details
2019
1-Jul-18
Opening balance
31-Oct-18
Lapse of unlisted $0.25 incentive options
30-Jun-19
Closing balance
2018
1-Jul-17
Opening balance
21-Jul-17
Conversion of unlisted performance rights
30-Apr-18
Lapse of unlisted $0.25 incentive options
30-Jun-18
Closing balance
Number of
Options
Number of
Performance
Rights
3,250,000
(3,250,000)
-
4,250,000
-
(1,000,000)
3,250,000
-
-
-
787,500
(787,500)
-
-
$
293,350
(293,350)
-
575,600
(173,250)
(109,000)
293,350
(c) Terms and Conditions of Incentive Options
Unlisted share options (“Options”) are granted based upon the following terms and conditions:
(i)
(ii)
(iii)
(iv)
(v)
(vi)
Each Option entitles the holder to the right to subscribe for one Share upon the exercise of each Option;
The Options are unlisted options exercisable at $0.25 each on or before 31 October 2018;
The Options are exercisable at any time prior to the expiry date, subject to vesting conditions being satisfied (if applicable);
Shares issued on exercise of the Options rank equally with the then Shares of the Company;
Application will be made by the Company to ASX for official quotation of the Shares issued upon the exercise of the Options;
If there is any reconstruction of the issued share capital of the Company, the rights of the Option holders may be varied to comply with the
ASX Listing Rules which apply to the reconstruction at the time of the reconstruction; and
(vii)
No application for quotation of the Options will be made by the Company.
(d) Terms and Conditions of Performance Rights
Unlisted performance rights (“Rights”) are granted based upon the following terms and conditions:
(i)
(ii)
(iii)
(iv)
(v)
Each Right automatically converts into one Share upon vesting of the Right;
Each Right is subject to performance conditions (as determined by the Board from time to time) which must be satisfied in order for the Right
to vest;
Shares issued on conversion of the Rights rank equally with the then Shares of the Company;
Application will be made by the Company to ASX for official quotation of the Shares issued upon conversion of the Rights;
If there is any reconstruction of the issued share capital of the Company, the rights of the Right holders may be varied to comply with the ASX
Listing Rules which apply to the reconstruction at the time of the reconstruction; and
(vi)
No application for quotation of the Rights will be made by the Company.
(e) Movements in foreign currency translation reserve during the past two years
Foreign Currency Translation Reserve
Balance at 1 July
Exchange differences on translation of foreign operations
Balance at 30 June
2019
$
1,718,195
1,169,757
2,887,952
2018
$
841,302
876,893
1,718,195
28
11. Reserves (continued)
(f) Movements in consolidation reserve during the past two years
Consolidation Reserve
Balance at 1 July
Balance at 30 June
12. Accumulated losses
Balance at 1 July
Net loss for the year attributable to members of the parent
Expiry of share options transferred to accumulated losses
Balance at 30 June
13. Earnings per share
Notes to the Consolidated Financial Statements
for the year ended 30 June 2019
(continued)
2019
$
2018
$
10,921,281
10,921,281
10,921,281
10,921,281
2019
$
2018
$
(20,117,779)
(19,300,109)
(243,580)
293,350
(926,670)
109,000
(20,068,009)
(20,117,779)
The following reflects the income and share data used in the calculations of basic and diluted earnings per share:
Basic Earnings:
Net loss attributable to members of the parent used in calculating basic and diluted
earnings per share:
2019
$
2018
$
(243,580)
(926,670)
Number of
Ordinary Shares
2019
Number of
Ordinary Shares
2018
Weighted average number of Ordinary Shares
189,681,783
174,796,825
(a) Anti-Dilutive Securities
For the year ended 30 June 2019, 3,250,000 Options which represent 3,250,000 potential Shares were considered anti-dilutive as they would decrease
the loss per share.
(b) Conversions, Calls, Subscriptions or Issues after 30 June 2019
Since 30 June 2018, nil Ordinary Shares and nil Incentive Securities have been issued. There have been no conversions to, calls of, or subscriptions
for ordinary shares or issues of potential ordinary shares since the reporting date and before the completion of this financial report.
14. Related parties
(a) Subsidiaries
Name
Songwe Hill Limited
Country of Incorporation
Tanzania
% Equity Interest
2019
%
100%
2018
%
100%
29
14. Related parties (continued)
(b) Ultimate Parent
Cradle Resources Limited is the ultimate parent of the Group.
(c) Key Management Personnel
Short-term employee benefits
Notes to the Consolidated Financial Statements
for the year ended 30 June 2019
(continued)
2019
$
206,000
206,000
2018
$
222,941
222,941
Further details relating to Key Management Personnel, including remuneration details and equity holdings are included in the Remuneration Report.
No loans were provided to or received from Key Management Personnel during the year ended 30 June 2019 (2018: Nil).
There were no other transactions with KMP during the year ended 30 June 2019.
(d) Transactions with Related Parties
Balances and transactions between the Company and its subsidiaries, which are related parties of the Company, have been eliminated on consolidation
and are not disclosed in this note.
The Company provided a shareholder loan to Panda Hill Tanzania Ltd to fund ongoing exploration and evaluation activities. The loan is unsecured,
interest free, and repayable on demand
15. Parent entity disclosures
Financial Position
Assets
Current Assets
Non-Current Assets
Total Assets
Liabilities
Current Liabilities
Total Liabilities
Equity
Contributed equity
Reserves
Accumulated losses
Total Equity
Financial Performance
Profit/(Loss) for the year
Total comprehensive profit/(loss)
2019
$
2018
$
1,884,247
23,158,883
25,043,130
2,756,343
21,526,721
24,283,064
56,078
56,078
222,189
222,189
32,045,105
13,008,903
31,245,828
12,931,914
(20,066,956)
(20,116,867)
24,987,052
24,060,875
(49,911)
(49,911)
5,416,158
5,416,158
(a) Other information
The Company has not entered into any guarantees in relation to its subsidiaries. Refer to Note 20 for details of contingent assets and liabilities.
30
Notes to the Consolidated Financial Statements
for the year ended 30 June 2019
(continued)
16. Share-based payments
(a) Recognised Share-based Payment Expense
From time to time, the Group provides Incentive Options or Performance Rights to officers, employees, consultants and other key advisors as part of
remuneration and incentive arrangements. The number of options or rights granted, and the terms of the options or rights granted are determined by
the Board. Shareholder approval is sought where required.
During the past two years, the following share-based payments have been recognised:
Expense arising from cash-settled share-based payment transactions1
Total expense arising from share-based payment transactions
2019
$
-
-
2018
$
(36,000)
(36,000)
Notes:
1 During the 2016 financial year, the Group agreed to issue 1,000,000 options exercisable at A$0.25 and expiring on 31 October 2018 subject to shareholder approval
being obtained by 30 September 2016. Shareholder approval was not obtained and the options subsequently lapsed. As a consequence, the holder had the right to
elect to receive the net cash value of the options, being the difference between the share price of the Company immediately prior to the date on which the holder notifies
the Company of their election to receive the net cash value of the options and the exercise price of A$0.25 per option. At 30 June 2019, the fair value of the liability for
the cash-settled transaction was estimated to be nil (2018: Nil).
(b) Summary of Incentive Options and Performance Rights granted as Share-Based Payments
There were no Incentive Options or Performance Rights granted as share-based payments during the last two years.
The following table illustrates the number and weighted average exercise prices (WAEP) of Incentive Options and Performance Rights granted as
share-based payments at the beginning and end of the financial year:
2019
Number
2019
WAEP
2018
Number
2018
WAEP
Outstanding at beginning of year
3,250,000
$0.25
Converted/exercised during the year
Granted during the year
Lapsed during the year
Outstanding at end of year
-
-
(3,250,000)
-
-
-
$0.25
-
5,037,500
(787,500)
-
(1,000,000)
3,250,000
$0.21
-
-
$0.25
$0.25
(c) Weighted Average Remaining Contractual Life
At 30 June 2019, the weighted average remaining contractual life of Incentive Options and Performance Rights on issue that had been granted as
share-based payments was 0 years (2018: 0.34 years).
(d) Range of Exercise Prices
At 30 June 2019 there were no Options and Performance Rights on issue. As at 30 June 2018, the exercise prices of Incentive Options and
Performance Rights on issue that had been granted as share-based payments was $0.25.
(e) Weighted Average Fair Value
There were no Incentive Options granted as share-based payments during the financial year. The weighted average fair value of Incentive Options
granted as share-based payments for the previous financial year was $0.096.
(f) Option and Rights Pricing Model
The fair values of the equity-settled Incentive Options and Performance Rights granted are estimated as at the date of grant using the Black Scholes
or Binomial option valuation model taking into account the terms and conditions upon which the options were granted. There were no Incentive Options
or Performance Rights granted by the Group during the last two financial years.
17. Segment information
The Consolidated Entity operates in one segment, being mineral exploration. This is the basis on which internal reports are provided to the Directors
for assessing performance and determining the allocation of resources within the Consolidated Entity.
31
Notes to the Consolidated Financial Statements
for the year ended 30 June 2019
(continued)
17. Segment information (continued)
(a) Reconciliation of Non-Current Assets by geographical location
Australia
Tanzania
Non-Current Assets for this purpose consist of interests in/loans to joint ventures.
18. Auditors’ remuneration
The auditor of Cradle Resources Limited is Ernst & Young.
Amounts received or due and receivable by Ernst & Young (Australia) for:
•
an audit or review of the financial report of the Company and any other entity in
the consolidated group
19. Financial risk management objectives and policies
(a) Overview
2019
$
-
23,056,027
23,056,027
2018
$
-
21,526,721
21,526,721
2019
$
25,000
25,000
2018
$
25,000
25,000
The Group's principal financial instruments comprise receivables, payables, and cash. The main risks arising from the Group's financial instruments
are interest rate risk, foreign currency risk, credit risk and liquidity risk.
This note presents information about the Group's exposure to each of the above risks, its objectives, policies and processes for measuring and
managing risk, and the management of capital. Other than as disclosed, there have been no significant changes since the previous financial year to
the exposure or management of these risks.
The Group manages its exposure to key financial risks in accordance with the Group's financial risk management policy. Key risks are monitored and
reviewed as circumstances change (e.g. acquisition of a new project) and policies are revised as required. The overall objective of the Group's financial
risk management policy is to support the delivery of the Group's financial targets whilst protecting future financial security.
Given the nature and size of the business and uncertainty as to the timing and amount of cash inflows and outflows, the Group does not enter into
derivative transactions to mitigate the financial risks. In addition, the Group's policy is that no trading in financial instruments shall be undertaken for
the purposes of making speculative gains. As the Group's operations change, the Directors will review this policy periodically going forward.
The Board of Directors has overall responsibility for the establishment and oversight of the risk management framework. The Board reviews and
agrees policies for managing the Group's financial risks as summarised below.
(b) Credit Risk
Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its contractual obligations. This
arises principally from cash and cash equivalents and trade and other receivables.
The carrying amount of the Group's cash and cash equivalents and trade and other receivables represents the maximum credit risk exposure, as
represented below:
Cash and cash equivalents
Other receivables
Loans to joint venture
2019
$
1,865,314
18,933
102,856
1,987,103
2018
$
2,710,231
46,112
98,223
2,854,566
With respect to credit risk arising from cash and cash equivalents and other receivables, the Group's exposure to credit risk arises from default of the
counter party, with a maximum exposure equal to the carrying amount of these instruments. Where possible, the Group invests its cash and cash
equivalents with banks that are rated the equivalent of investment grade and above. The Group’s exposure and the credit ratings of its counterparties
are continuously monitored and the aggregate value of transactions concluded is spread amongst approved counterparties.
32
Notes to the Consolidated Financial Statements
for the year ended 30 June 2019
(continued)
19. Financial risk management objectives and policies (continued)
The Group does not have any significant customers and accordingly does not have any significant exposure to bad or doubtful debts. Other receivables
are comprised primarily of loans to joint ventures, GST receivable and refundable deposits. The Group trades only with recognised, creditworthy third
parties.
(c) Liquidity Risk
Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due. The Board's approach to managing liquidity is
to ensure, as far as possible, that the Group will always have sufficient liquidity to meet its liabilities when due. As at 30 June 2019 and the date of
this report, the Group has sufficient liquid assets to meet its financial obligations.
The contractual maturities of financial liabilities, including estimated interest payments for the Group, are provided below. There are no netting
arrangements in respect of financial liabilities.
2019
Financial Liabilities
Trade and other payables
2018
Financial Liabilities
Trade and other payables
(d)
Interest Rate Risk
≤6 Months
$
6-12 Months
$
1-5 Years
$
≥5 Years
$
Total
$
56,078
56,078
222,189
222,189
-
-
-
-
-
-
-
-
-
-
-
-
56,078
56,078
222,189
222,189
The Group's exposure to the risk of changes in market interest rates relates primarily to cash and short-term deposits with a floating interest rate.
These financial assets with variable rates expose the Group to cash flow interest rate risk. All other financial assets and liabilities, in the form of
interests in joint ventures, receivables and payables are non-interest bearing. The Group currently does not engage in any hedging or derivative
transactions to manage interest rate risk.
At the reporting date, the interest rate profile of the Group's interest-bearing financial instruments was:
Interest-bearing financial instruments
Cash and cash equivalents
2019
$
2018
$
1,865,314
1,865,314
2,710,231
2,710,231
The Group's cash at bank had a weighted average floating interest rate at year end of 1.65%. At the reporting date, the Group did not have any
material exposures to interest rate risk.
(e) Foreign Currency Risk
The Group operates internationally and is exposed to foreign exchange risk arising from various currency exposures, primarily with respect to the
Tanzanian Shilling (TZS), United States Dollar (USD) and British Pound (GBP).
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 Group currently does not engage in any hedging or derivative transactions to
manage foreign currency risk.
At the reporting date, the Group did not have any material exposure to financial instruments denominated in foreign currencies.
(f) Commodity Price Risk
The Group is exposed to commodity price risk. These commodity prices can be volatile and are influenced by factors beyond the Group's control. As
the Group is currently engaged in exploration and business development activities, no sales of commodities are forecast for the next 12 months, and
accordingly, no hedging or derivative transactions have been used to manage commodity price risk.
33
Notes to the Consolidated Financial Statements
for the year ended 30 June 2019
(continued)
19. Financial risk management objectives and policies (continued)
(g) Capital Management
The Group defines its capital as total equity of the Group, being $24,987,052 as at 30 June 2019 (2018: $24,060,875). The Group manages its capital
to ensure that entities in the Group will be able to continue as a going concern while financing the development of its projects through primarily equity
based financing. The Board's policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence and to sustain
future development of the business. Given the stage of development of the Group, the Board's objective is to minimise debt and to raise funds as
required through the issue of new shares.
The Group is not subject to externally imposed capital requirements.
There were no changes in the Group's approach to capital management during the year. During the next 12 months, the Group will continue to explore
project financing opportunities.
(h) Fair Value
The net fair value of financial assets and financial liabilities approximates their carrying value.
20. Commitments and contingencies
As previously advised, the Company and Tremont are in dispute regarding whether a definitive feasibility study has been delivered within the meaning
of the Shareholders Agreement. The dispute has been referred to arbitration. The arbitration hearing which was scheduled for the first week of October
2018 has now been adjourned. The date for the adjourned arbitration has yet to be set. Cradle’s position remains as set out previously. Subject to the
outcome of the dispute, if the definitive feasibility study which has been presented is accepted as a definitive feasibility study within the meaning of the
Shareholders Agreement the parties will then consider whether to proceed with construction of a mine to carry out mining activities on the Project
("Decision to Mine"). Any Decision to Mine on the Project will require Cradle to provide funding to PHT based on its pro-rata shareholding in PHT or
dilute its interest in PHT based upon a value of such interest of US$20 million plus contributions made by Cradle since October 2015, which is currently
approximately US$3.5 million.
21. Events subsequent to balance date
Other than as outlined above, at the date of this report, there are no other matters or circumstances which have arisen since 30 June 2019 that have
significantly affected or may significantly affect:
•
•
•
the operations, in financial years subsequent to 30 June 2019, of the Consolidated Entity;
the results of those operations, in financial years subsequent to 30 June 2019, of the Consolidated Entity; or
the state of affairs, in financial years subsequent to 30 June 2019, of the Consolidated Entity.
34
Directors’ declaration
Directors’ Declaration
In accordance with a resolution of the Directors of Cradle Resources Limited:
1.
In the opinion of the Directors:
(a)
the financial statements and notes of Cradle Resources Limited for the financial year ended 30 June 2019 are
in accordance with the Corporations Act 2001, including:
(i)
giving a true and fair view of the consolidated entity’s financial position as at 30 June 2019 and its
performance for the year ended on that date; and
(ii)
complying with Accounting Standards and the Corporations Regulations 2001; and
(b)
(c)
The financial statements and notes are in compliance with International Financial Reporting Standards, as
stated in note 2 to the financial statements subject to the matters set out in note 2(b),
there are reasonable grounds to believe that the Company will be able to pay its debts as and when they
become due and payable.
2.
This declaration has been made after receiving the declarations required by section 295A of the Corporations Act 2001
for the financial year ended 30 June 2019.
On behalf of the Board
GRANT DAVEY
Executive Director
26 September 2019
35
Independent auditor’s report
36
Independent auditor’s report
37
Independent auditor’s report
38
Independent auditor’s report
39
Independent auditor’s report
40
Mineral resources and ore reserves statement
Mineral Resources and Ore Reserves Statement
1. Mineral Resources
The Company’s Mineral Resources as at 30 June 2019 and 2018, reported in accordance with the 2012 Edition of the JORC Code, are:
Panda Hill Niobium Project
Mineral Resources as at 30 June 2019
(reported above a 0.3% Nb2O5 lower cut-off)
Mineral Resources as at 30 June 2018
(reported above a 0.3% Nb2O5 lower cut-off)
Mineralisation Type Classification
Tonnage
(Mt)
Nb2O5
(%)
Primary
Carbonatite1
Weathered
Carbonatite2
Combined
Resource
Measured
Indicated
Inferred
Subtotal
Measured
Indicated
Inferred
Total
Measured
Indicated
Inferred
Subtotal
14
50
103
167
2
3
6
11
16
53
109
178
0.62
0.49
0.48
0.50
0.67
0.53
0.52
0.55
0.63
0.50
0.48
0.50
Contained
Nb2O5
(kt)
84
247
496
828
15
15
32
63
99
263
528
891
Tonnage
(Mt)
Nb2O5
(%)
14
50
103
167
2
3
6
11
16
53
109
178
0.62
0.49
0.48
0.50
0.67
0.53
0.52
0.55
0.63
0.50
0.48
0.50
Contained
Nb2O5
(kt)
84
247
496
828
15
15
32
63
99
263
528
891
Notes:
1 Primary Carbonatite is defined as a region of fresh to Moderately Oxidised material dominated by carbonatite lithologies. This material is expected to have a higher metallurgical recovery.
2 Weathered Carbonatite is a region dominated by strongly oxidised material comprising weathered carbonatite with other mixed lithologies. This material is expected to have a lower recovery than the
Primary Carbonatite material.
3 Figures have been rounded.
In April 2015, Cradle announced an updated Mineral Resource estimate for the Panda Hill Niobium Project, comprising 178 million tonnes at an average
grade of 0.5% Nb2O5 (Niobium Oxide). Following the annual review of the Company’s Mineral Resources, there has been no change to the Mineral
Resources reported for the Panda Hill Niobium Project located in Tanzania.
2. Ore Reserves
The Company had no reported Ore Reserves as at 30 June 2019 and 2018.
3. Governance of Mineral Resources and Ore Reserves
The Company engages external consultants and competent persons (as determined pursuant to the JORC Code) to prepare and calculate estimates of
its Mineral Resources and Ore Reserves. Management and the Board review these estimates and underlying assumptions for reasonableness and
accuracy. The results of the Mineral Resource and Ore Reserve estimates are then reported in accordance with the requirements of the JORC Code and
other applicable rules (including ASX Listing Rules).
Where material changes occur during the year to a project, including the project’s size, title, exploration results or other technical information then previous
Mineral Resources or Ore Reserves estimates and market disclosures are reviewed for completeness.
The Company reviews its Mineral Resources and Ore Reserves as at 30 June each year. Where a material change has occurred in the assumptions or
data used in a previously reported Mineral Resource or Ore Reserve, then where possible a revised Mineral Resource or Ore Reserve estimate will be
prepared as part of the annual review process. However, there are circumstance where this may not be possible (e.g. an ongoing drilling programme), in
which case a revised Mineral Resource or Ore Reserve estimate will be prepared and reported as soon as practicable.
4. Competent Person Statement
The information in this Mineral Resources Statement that relates to Mineral Resources is based on, and fairly represents, information compiled by Mr
Ingvar Kirchner, who is a Fellow of the Australasian Institute of Mining and Metallurgy and a Member of the Australian Institute of Geoscientists. Mr
Kirchner is a full-time employee of AMC Consultants and 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 Competent Person as defined in the 2012 edition of the ‘Australasian Code for
Reporting of Mineral Resources and Reserves’. Mr Kirchner approves and consents to the inclusion in the Mineral Resources Statement of the matters
based on his information in the form and context in which it appears. Mr Kirchner has approved this Mineral Resource Statement as a whole and consents
to its inclusion in the form and context in which it appears.
41
ASX Additional Information
ASX Additional Information
Additional information required by the Australian Stock Exchange Ltd and not shown elsewhere in this report is as follows. The
information is current as at 25 September 2019.
1. Twenty Largest Shareholders
The names of the twenty largest shareholders are as follows:
Name
Tremont Investments Limited
Aviemore Capital Pty Ltd
Arredo Pty Ltd
Edwards Family Holdings Ltd
National Nominees Limited
HSBC Custody Nominees (Australia) Limited
Recb Limited
Mr Brett Mitchell & Mrs Michelle Mitchell
Beirne Trading Pty Ltd
Nero Resource Fund Pty Ltd
Edwards Family Holdings Limited
Ms Nicole Gallin & Mr Kyle Haynes
Alba Capital Pty Ltd
Mr Azman Haroon
Blu Bone Pty Ltd
Mr Mark John Bahen & Mrs Margaret Patricia Bahen
Harold Cripps Holdings Pty Ltd
Kobia Holdings Pty Ltd
31 May Pty Ltd
Fw Co Pty Ltd
Prospero Capital Pty Ltd
Abrolhos Edge Pty Ltd
Ivoryrose Holdings Pty Ltd
Total twenty largest shareholders
Others
Total ordinary shares on issue
2. Distribution of Equity Securities
Number of
Ordinary Shares
36,933,161
28,800,000
15,400,000
14,250,000
14,189,157
6,460,750
6,200,000
5,720,000
5,199,530
3,683,334
2,575,000
2,000,000
2,000,000
1,963,359
1,608,112
1,550,000
1,448,942
1,350,000
1,307,706
1,250,000
1,250,000
1,250,000
1,125,000
%
19.47
15.18
8.12
7.51
7.48
3.41
3.27
3.02
2.74
1.94
1.36
1.05
1.05
1.04
0.85
0.82
0.76
0.71
0.69
0.66
0.66
0.66
0.59
157,514,051
32,167,732
189,681,783
83.04
16.96
100.00
The distribution of ordinary shares ranked according to size was as follows:
Category
100,001 and Over
10,001 to 100,000
5,001 to 10,000
1,001 to 5,000
1 to 1,000
Total
Ordinary Shares
%
No. of holders
%
182,205,903
6,303,064
919,790
249,423
3,603
189,681,783
96.06
3.32
0.48
0.13
0.00
100
89
174
109
79
27
478
18.62
36.40
22.80
16.53
5.65
100
There were 168 holders holding 714,629 ordinary shares that were less than a marketable parcel of ordinary shares.
42
ASX Additional Information
ASX Additional Information (continued)
3. Voting Rights
See Note 9(b) of the Notes to the Consolidated Financial Statements.
4. Substantial Shareholders
Substantial Shareholder notices have been received from the following:
Shareholder
Tremont Investments Limited
Mr Craig Ian Burton
Edwards Family Holdings Ltd
Arredo Pty Ltd
Harvest Lane Asset Management Pty Ltd and associates
Number of Shares
36,933,161
30,800,000
17,641,000
15,400,000
13,907,343
5. On-Market Buy Back
There are currently no on-market buyback programs for any of Cradle Resources Limited's listed securities.
6. Restricted Securities
3,100,000 ordinary shares are subject to an orderly market restriction until the commencement of commercial production at the Panda
Hill niobium mine.
7. Exploration Interests
PHT, the joint venture company owned 50% by Cradle and 50% by Tremont Investments Limited, held the following interests in
tenements:
Project Name
Tenement Type
Tenement Number
Percentage Interest
Status
Panda Hill Niobium, Tanzania
Mining Licence
ML237/2006
Panda Hill Niobium, Tanzania
Mining Licence
ML238/2006
Panda Hill Niobium, Tanzania
Mining Licence
ML239/2006
100%
100%
100%
Granted
Granted
Granted
8. Corporate Governance
The Company’s Corporate Governance Statement for the year ended 30 June 2019, which explains how Cradle complies with the ASX
Corporate Governance Council’s ‘Corporate Governance Principles and Recommendations – 3rd Edition’, is available in the Corporate
Governance section of the Company’s website, www.cradleresources.com.au and will be lodged with ASX together with an Appendix
4G at the same time that this Annual Report is lodged with ASX.
9. Competent Persons Statement
The information in this report that relates to Exploration Results and Coal Resources was extracted from Cradle’s ASX announcement
dated 30 April 2015 entitled ‘Significant Resource Upgrade for Panda Hill Niobium Project’ which is available to view on the Company’s
website at www.cradleresources.com.au. Cradle confirms that: a) it is not aware of any new information or data that materially affects
the information included in the original ASX announcement; b) all material assumptions and technical parameters underpinning the Coal
Resource included in the original ASX announcement continue to apply and have not materially changed; and c) the form and context in
which the relevant Competent Persons’ findings are presented in this presentation have not been materially modified from the original
ASX announcement.
43