2 0
1 9
A N N U A L
R E P O R T
A B N 1 5 1 1 7 3 3 0 7 5 7
A long-term partner in supplying
eco-friendly natural flake and battery
graphite products to customers in both
established and emerging global markets.
Kibaran Resources Limited (ASX: KNL) is focused on
becoming a long-term partner in supplying
eco-friendly natural flake and battery (spherical)
graphite products to customers in both established
(refractory, recarburiser, lubricant) and emerging
(lithium-ion battery) global markets.
It holds 100% interests in a combination of attractive
graphite businesses that are poised for development,
highly profitable and scalable.
Once established, Kibaran will operate a diversified
graphite portfolio, supplying high quality Tanzanian
natural flake graphite products through TanzGraphite
to established markets in Asia and Europe, together
with EcoGraf, a multi-hub development commencing
in Kwinana, Western Australia that will provide a
global new supply of environmentally responsible
battery graphite for lithium-ion batteries.
CONTENTS
02
Chairman’s
report
28
Auditor’s
independence
declaration
04
Review of
operations
29
Financial
statements
64
Independent
auditor’s report
69
Shareholder
information
15
Directors’
report
63
Directors’
declaration
73
Corporate
directory
KIBARAN RESOURCES ANNUAL REPORT 2019
01
CHAIRMAN’S REPORT
2019 has seen unprecedented global investment in lithium-ion battery
manufacturing capacity to support the paradigm shift in transport technology
to electric vehicles and battery storage for the renewable energy sector.
We are all familiar with the narrative on electric
vehicles, battery storage and the growth in demand
for battery minerals. This is the very understandable
rationale for strong market focus on battery minerals in
recent years.
We hear a lot about cathode minerals, lithium, cobalt,
nickel and manganese which together make up the
composition of the cathode in a lithium-ion battery.
We hear less about the anode which is 100% graphite
and represents almost half of the total minerals in a
lithium-ion battery.
Not just any graphite, but a plus 99.95% pure spherical
graphite product that is refined to meet stringent
chemical and physical specifications capable of
withstanding the intense operating conditions of a
battery in an electric vehicle.
Along with electric vehicles and growth in battery
manufacturing, demand for this specialised spherical
graphite product is growing exponentially. Coupled
with this there is increasing growth in demand for
natural flake graphite, which is the feedstock.
To cater to this new demand for quality graphite
Kibaran has developed an integrated graphite business.
To produce spherical graphite in Western Australia for
export directly to major anode manufacturers while
at the same time developing an upstream mining
business to produce natural flake graphite as feedstock
and for other traditional industrial markets.
Currently all global supply of spherical battery graphite
is produced in China with a very toxic purification
process using hydrofluoric acid.
There is strong demand by anode manufacturers
outside China for an alternative non-Chinese supply
that is environmentally friendly. This is the market
demand that Kibaran is catering to.
We have spent 3 years and many millions of dollars in
perfecting a new eco-friendly purification process. In
research & development, in process design, feasibility
studies, piloting, product testing and endorsement
by anode manufacturers, and more recently on
engineering and design for a processing facility in
Western Australia to export spherical graphite to
customers in Asia, Europe and America.
The purification process and the spherical graphite
product is trademarked EcoGraf with patent pending.
This project is now development ready. The Western
Australian Government is providing strong support
and has allocated Kibaran land in Kwinana near Perth.
Financing discussions are well underway for debt and
equity with both Government and industry groups. This
funding is underpinned by offtake support from major
industrial groups in the sector.
The opportunity to manufacture spherical graphite for
the growing battery market is now a reality.
The Epanko mining project in Tanzania is also ready
for development and independent of the EcoGraf
manufacturing business. Bank funding processes
are now advancing well as the Tanzanian mining
regulations are being implemented and the investment
climate improves.
My thanks to the Kibaran management team and
directors for their hard work during the year and
to you, our shareholders, for your patience and
continuing support. It is our goal to ensure that this is
fully rewarded.
Robert Pett
Chairman
02
The opportunity
to manufacture
spherical graphite
for the growing
battery market is
now a reality.
KIBARAN RESOURCES ANNUAL REPORT 2019
KIBARAN RESOURCES ANNUAL REPORT 2019
03
03
REVIEW OF OPERATIONS
EPANKO GRAPHITE MINING PROJECT
(KNL: 100%)
The Epanko Graphite Project (“Epanko” or the “Project”) is a long life, highly
profitable graphite project located approximately 370km from the city
of Dar es Salaam in Tanzania. It is forecast to produce 60,000 tonnes of
natural flake graphite products each year and during its initial 18 years of
operation Epanko will generate annual EBITDA1 of US$44.5 million, a 38.9%
internal rate of return and pre-tax net present value10 of US$211 million.
Over the past six years, Kibaran has conducted
extensive exploration, feasibility, mine planning and
community development activities in Tanzania to
prepare Epanko for development. A mining licence
was granted in 2015 and a Bankable Feasibility Study
was completed in 2017, led by GR Engineering
Services Limited and involving leading consultants
from Africa, Australia, Asia and Europe. At the request
of proposed lender KfW IPEX-Bank an Independent
Engineer’s Review was completed in August 2017
by SRK Consulting, confirming that the Bankable
Feasibility Study addresses all technical aspects
of the proposed development and that the social
and environmental planning aspects satisfy IFC
Performance Standards and World Bank Group
Environmental, Health and Safety Guidelines.
Sales agreements for Epanko products have been
entered into with Germany’s ThyssenKrupp AG, Sojitz
Corporation of Japan and a major European trading
group. The final milestone is to complete the funding
process so that construction can commence as soon
as possible.
MAJOR INTERNATIONAL CUSTOME RS
S
R
A
E
6 Y
Kibaran has conducted extensive exploration, feasibility,
mine planning and community development activities in
Tanzania to prepare Epanko for development
Note 1 – Earnings Before Interest, Tax, Depreciation and Amortisation.
04
60,000TPA
Natural Flake
US$44.5M
Annual EBITDA
38.9%
Internal Rate of Return
US$211M
Pretax NPV10
100%
Interest in
Epanko
US$1B
Forecast Contribution
to Tanzania
Key Outcomes - BFS June 2017
KIBARAN RESOURCES ANNUAL REPORT 2019
05 05
KIBARAN RESOURCES ANNUAL REPORT 2019 REVIEW OF OPERATIONS
PROJECT FINANCING
The Epanko mine development is planned to be
funded through a combination of limited recourse
debt finance and equity. Encouraging progress
was made during the year to advance the project
financing program and resolve issues arising from
the impact of Tanzania’s 2017 new mining legislation
on international debt financing arrangements in the
mineral sector.
Tanzania has continued to develop its capacity to
regulate the mineral sector, establishing a new Mining
Commission in 2018, appointing a new Minister
of Minerals Hon. Doto Biteko in January 2019 and
issuing further regulations to improve transparency
and accountability across the industry.
Kibaran representatives have held meetings with
Ministers and senior Government officials from
the Tanzanian Ministry of Minerals, the new Mining
Commission, the Bank of Tanzania and the Tanzanian
Investment Centre. These meetings have focused
on Epanko financing arrangements and the impact
of the new laws, in particular the local content
regulations relating to the use of banks and operation
of bank accounts, the Government free-carried
interest, the extent of Tanzanian participation and
warehousing and export procedures.
Feedback across all levels of Government has
been supportive of new investment and includes
confirmation of the Mining Commission’s intention
to renew the Epanko mining licence upon expiry in
2025 and the continued eligibility of foreign financial
institutions to fund mineral projects. As a result of
this progress, in April 2019 German financier KfW
IPEX-Bank was mandated to arrange senior debt
funding of approximately US$40 million for Epanko,
including preparing an application for approval
under the German Untied Loan Guarantee (“UFK”)
scheme through Euler Hermes AG. The UFK process
is very thorough but enables Epanko to access long
term debt finance at competitive interest rates. Due
diligence and credit approvals are progressing as
quickly as possible on the basis that the remaining
regulatory aspects impeding new Tanzanian mine
financing arrangements will be satisfactorily resolved.
In conjunction with the UFK program, a second
lender has commenced credit processes in relation
to the provision of senior debt funding of up to
US$20 million under a common terms loan facility
with KfW IPEX-Bank, for a combined project debt
funding amount of US$60 million.
Kibaran has also continued discussions with several
potential strategic partners about equity investment
in Epanko, with interest received from European and
Asian industrial organisations as projected demand
for battery graphite continues to increase, attracting
investment attention to the sector.
Kibaran also continued
discussions with several
potential strategic partners
about equity investment
06 06
REGIONAL DEVELOPMENT OPPORTUNITIES
The Company's long term plan is to develop multiple
natural flake graphite operations within Tanzania.
Geophysical mapping undertaken at Epanko indicates
the potential for additional graphite mineralisation to
support the expansion of operations and extension
of mine life, enabling the Project to respond to the
forecast growth in graphite demand.
In addition, Kibaran also holds a 100% interest in the
Merelani-Arusha Graphite Project, located 55km
south-east of Arusha in northern Tanzania and a
100% interest in the Tanga Graphite Project, located
approximately 200km north of Dar es Salaam,
both of which offer the potential to support future
development of new sources of graphite production.
potential for additional graphite mineralisation to support
the expansion of operations and extension of mine life
2º
6º
NORTH MARA
MWANZA
KABANGA
TULAWAKA
BULYANHULU
BUZWAGI
Merelani Tanzanite
Merelani Tanzanite
Graphite Mine
Graphite Mine
MERELANI-
ARUSHA
GRAPHITE PROJECT
TANGA
GRAPHITE PROJECT
EPANKO
GRAPHITE PROJECT
Indian
Ocean
Z A M B I A
L E G E N D
10º
City
Port
Projects
Rail
Country Borders
Historical Graphite Production
M A L A W I
200Km
32º
35º
40º
Project location map
KIBARAN RESOURCES ANNUAL REPORT 2019
07
TANZANIAKENYAUGANDARWANDABURUNDIMOZAMBIQUETHE DEMOCRATIC REPUBLIC OF THE CONGODAR ES SALAAMLINDI MBEYATABORADODOMAARUSHAMOROGOROMTWARATANGAMOMBASAAFRICA REVIEW OF OPERATIONS
REVIEW OF OPERATIONS
TANZANIAN ECONOMIC AND SOCIAL
DEVELOPMENT
Epanko is forecast to make a significant positive
impact on the Tanzanian economy, with key benefits
that include:
• Over US$1 billion in direct financial contributions
over the first 20 years of operation through
procurement, employment, royalties, taxes, fees
and dividends, generating an estimated additional
US$3 billion in indirect GDP within Tanzania;
• Direct employment of approximately 300
Tanzanians (over 95% of all staff), creating an
estimated 4,500 indirect jobs through the supply
of local goods and services; and
• Construction of new community housing, school
facilities, Church and medical dispensary, together
with the provision of social supports such as health
insurance and training programs to build lasting
local partnerships.
The long-term nature of the Project will provide for
inter-generational social and economic development
within Tanzania and support its industrialisation
goals by facilitating the establishment of new carbon
product industries that require natural graphite
feedstocks.
Kibaran submitted its inaugural Local Content Plan
and Integrity Pledge to the Mining Commission,
demonstrating the extensive social planning that has
been undertaken to satisfy rigorous Corporate Social
Responsibility standards and expectations. Visits
were made to the Epanko minesite by the Minister
of Minerals Hon. Doto Biteko, Deputy Minister of
Minerals Hon. Stanslaus Nyongo, Chairman of the
Mining Commission Professor Idris Kikula and the
new District Commissioner Hon. Ngollo Malenya.
launched by the Regional Commissioner of
Morogoro, meetings with the Mikumi Vocational
Education Training Authority to arrange the next
intake of sponsored students from the surrounding
communities, construction of demonstration
resettlement housing, provision of medical insurance,
training programs and community discussion forums
to increase Project awareness and ensure community
members are involved in planning decisions.
Letters of recognition were received by Kibaran from
the District Commissioner and the Nawenge ward
Executive Officer for contributions to community
activities.
$USD (MILLION)
DIRE CT BENEFIT
TO TA NZANIA
RE TURN TO
KIBARAN
1,200
1,000
800
600
400
200
0
300
Direct employment
Community activities undertaken during the
year included construction of a classroom at
Nawenge Secondary School, a funding campaign
for construction of a secondary school in Ulanga
4,500
Indirect employment
08
SPHERICAL GRAPHITE MANUFACTURING PROJECT (KNL: 100%)
Early in the year, Kibaran completed the EcoGraf optimisation study
in Germany, which confirmed the successful application of its non-
hydrofluoric (“HF”) acid purification process to natural flake graphite
supplies sourced from Africa, Asia, Europe and the Americas.
Ongoing test work confirmed the process could
consistently produce graphite to battery anode
manufacturer specifications. Validation of the process
on a range of natural graphite supplies demonstrates
the potential to commence operations without
reliance on graphite feedstock from the Company’s
Epanko project.
“ Successful application of EcoGraf
purification to other feedstocks
was a milestone achievement and
the basis of developing EcoGraf as
a standalone business”
The optimised flowsheet developed during the
test work program was incorporated in an updated
global patent application, containing refinements
to the 2017 process to satisfy the highest physical
and chemical specifications required by anode
manufacturers.
Strong interest from potential customers during
the 2018 product test work program led Kibaran
to evaluate various ramp-up options for the first
manufacturing facility, focusing on supporting the
existing markets of South Korea, Japan and China.
Growth in the electric vehicle ("EV") market has
resulted in higher forecast anode demand and
Kibaran incorporated these requirements into design
plans for the initial EcoGraf production plant.
A new spheronising batch plant in Germany was
successfully commissioned during March, and is
consistently producing high quality spherical
graphite to support prospective customer and
partner testing programs.
-
BAT TERY ANODE
100%
75%
50%
25%
0%
SYNTHETIC
GRAPHITE
SILICON
NATURAL
GRAPHITE
27
54
S
G
K
S
G
K
Natural (spherical) graphite
required per EV
Natural graphite feedstock
required to manufacture
27kg of natural graphite
NATURAL GRAPHITE USED IN
BATTERY ANODE IS CURRENTLY
SOURCED FROM CHINA
C HIN A
09
COPPER FOILGRAPHITE SLURRY PASTEONTO COPPER FOILKIBARAN RESOURCES ANNUAL REPORT 2019 REVIEW OF OPERATIONS
GR Engineering recently updated the 2017 study to
incorporate the results of the German pilot plant
program and completed an updated estimate of
capital and operating costs.
GR Engineering’s 2019 capital cost estimate was
based on construction of a new EcoGraf production
facility in both Asia and Kwinana, Australia using
existing sea and land transport infrastructure, water
and power supplies.
The additional engineering studies have resulted in a
faster ramp-up phase to meet the growing demand
requirements of battery anode manufacturers, which
has also enabled the Company to increase the capital
efficiency of the new EcoGraf development.
DEVELOPMENT COST
KEY STUDY OUTCOMES (20,000TPA)
5,000tpa
15,000tpa
NPV10
EBITDA
IRR
Payback
Kwinana, WA
US$22.8m
US$49.2m
US$141m
US$35m
37.0%
Asia
US$20.0m
US$44.4m
US$194m
US$42m
49.8%
~4yrs
~4yrs
Results of the engineering studies have been used to
update the EcoGraf financial model, demonstrating
a highly attractive return on investment for both
locations.
The investment has a pay-back period of less than
4 years and capital and operating costs adopted in
the engineering study were prepared on the basis
of independent quotations submitted by equipment
vendors and service providers.
KWINANA DEVELOPMENT
Increasing transparency for ethical raw materials
and the Australian Government support for battery
minerals value-adding, has resulted in Kibaran
pursing Kwinana, Western Australia as a priority
location for the EcoGraf initial production facility.
The Kwinana development schedule outlines a
staged 5,000tpa and 20,000tpa production design
capacity. Subject to a final investment decision, the
Company expects commercial production to begin
after 11 months at an initial rate of 5,000tpa. This
production will provide commercial quantities to
enter the battery manufacturers' production lines
prior to expanding the plant to achieve a production
rate of 20,000tpa.
The Company has received strong support from
European customers where major investment is
underway in battery manufacturing for electric
vehicles.
The Company has received strong support from European
customers where major investment underway in battery
manufacturing for electric vehicles.
10
KWINANA BULK TERMINAL
TIANQI LITHIUM
BP REFINERY
KWINANA
BULK JETTY
COOGEE CHEMICALS
BHP NICKLE REFINERY
SERVICE CORRIDOR
Z I R C O N I A D R I V E
D
A
O
N R
O
S
R
E
T
T
A
P
Source: Landcorp
FUTURE BATTERIES INDUSTRIES
AVAILABLE LAND
Proposed EcoGraf Kwinana Plant Location
MAJOR INVESTMENT UNDERWAY IN BATTERY
MANUFACTURING FOR ELECTRIC VEHICLES
The German Government has recently announced
support for three battery cell alliances with
earmarked funds of 1 billion euros for the domestic
production of battery cells to reduce German EV car
manufacturers' dependence on Asian markets and
support a battery industry in Europe.
The German Economy Minister Peter Altmaier stated,
“Germany and Europe need to develop and build
competitive, innovative and environmentally
sustainable battery cells.”
Kibaran is in discussion with the Australian Federal
and State Governments on the benefits of the unique
EcoGraf process, as there are a range of mechanisms
initiated by the Government to incentivise Australian
industry to develop lithium-ion battery capabilities.
The Company’s development also meets the criteria
for the planned creation of WA’s Future Battery
Industry within the Kwinana Industrial Area.
Australia’s reputation as a reliable supplier of high-quality
industrial products supports the proposed Kwinana location.
11
KIBARAN RESOURCES ANNUAL REPORT 2019 REVIEW OF OPERATIONS
NEXT STEPS
Key activities are underway with the final investment decision expected in the first half of 2020.
tick Working with LandCorp to finalise lease arrangements for a site
within the Kwinana Industrial Area
tick
tick
tick
Independent verification process test work and equipment
evaluation with major suppliers
Local permitting and environmental approvals
Offtake and financing arrangements
WA STATE GOVERNMENT SUPPORT
The Kwinana development has secured support
from Western Australian Premier Hon. Mark
McGowan, who requested the Department of Jobs,
Tourism, Science and Innovation (“JTSI”) to provide
lead agency support to Kibaran as it develops the
project. Premier Mr McGowan said
“ The potential to produce
battery grade graphite from
the Ecograf Battery Graphite
Project presents a significant
step in diversifying Western
Australia’s downstream
processing activities and
contribution to the global
battery value chain.”
HON. MARK M CGOWAN,
WE STERN AUS TRALIA PREMIER
Proposed development of EcoGraf at Kwinana is
aligned to the WA Government's Future Battery
Industry Strategy to secure Australia an expanded
place in the rapidly transforming global battery
value chain.
tick
K WIN AN A
The Kwinana development
has secured support from
Western Australian Premier to
provide lead agency support
as it develops the project
12
GRAPHITE MARKET
The outlook for spherical graphite remains positive
with forecast demand expected to increase by over
700% by 2025.
Bloomberg New Energy recently reported that on
current plans, total battery cell production capacity
will exceed 1,000 GWh by 2025.
Prices increased 20% during 2018 and Benchmark
Minerals has reported exports from China expanded
by 16% from Jan-July 19, with coated products
growing by over 200%.
Continued restriction has been seen in Chinese
supply, due to increasing environmental pressure
with fluorine residues, given such production is
reliant on highly toxic hydrofluoric acid to achieve
99.95% carbon grade.
BENCHMARK MINERAL INTELLIGENCE
GRAPHITE PRICES (USD/TONNE) : JAN 2018 - JAN 2019
S PHERIC AL UN COAT ED (99.95 % 1 5 MI CRO NS )
$3,800
$3,600
$3,400
$3,200
$3,000
$2,800
$2,600
PRICES INCREASED BY
20% IN 2018 FOR
SPHERICAL GRAPHITE
JAN
2018
FEB
2018
MAR
2018
APR
2018
MAY
2018
JUN
2018
JUL
2018
AUG
2018
OCT
2018
NOV
2018
DEC
2018
JAN
2019
13
KIBARAN RESOURCES ANNUAL REPORT 2019 REVIEW OF OPERATIONS
The outlook for
spherical graphite
remains positive with
forecast demand
expected to increase
by over 700% by 2025.
14
DIRECTORS' REPORT
BOARD OF DIRECTORS AND EXECUTIVE MANAGEMENT
Robert Pett
Independent Non-Executive Director and Chairman
Robert Pett is a minerals economist with over 30 years’ experience working in exploration and mining. During this
time, he has worked internationally in the resources sector at senior levels both in Australia and Africa. He has been
involved with listed companies at all levels, from grass-roots exploration through to mine development, production
and financing of more than ten mining projects globally including East and West Africa and the construction of the
Golden Pride Gold Mine in Tanzania.
He was founding Chairman of Resolute Mining Limited (gold mines and exploration Africa and Australia), Sapphire
Mines Limited (gemstone mining and exploration), Reliance Mining Limited (nickel mining Kambalda), Senex Energy
Limited (petroleum production and exploration) and director of several other mining and exploration companies
operating in Africa, Asia and Australia in gold, base metals, petroleum and uranium.
Robert has also had an active involvement in education and community activities including over 10 years’ service to
Murdoch University Western Australia as Senator and Chairman of their Resources (Finance) Committee.
Andrew Spinks
Managing Director
Andrew Spinks is a geologist with over 25 years’ professional experience in a range of commodities in Australia
and Africa. Andrew has worked with a number of mining companies including Resolute Mining Limited, Plutonic
Resources Limited, Dominion Mining Limited and Whim Creek Resources in diverse roles across exploration, project
development and mining. He is a co-founder of TanzGraphite Pty Ltd and was responsible for the strategy, target
generation and acquisitions of that company.
Andrew lived and worked in Tanzania at Resolute’s Golden Pride Gold Mine for several years and was a key member
of the management team that won the inaugural Presidential Award for Environmental Excellence and Leadership,
awarded by the then President of Tanzania, His Excellency President Benjamin William Mkapa.
Grant Pierce
Executive Director
Grant Pierce is a mining engineer with over 25 years’ experience in both open-pit and underground mining
operations and in a range of commodities including gold, copper, copper/cobalt, nickel, iron ore and rare earth
elements. He has extensive management experience, having held numerous senior operational management roles
with both mining and exploration companies operating in Africa.
Grant was a member of the development team that built Tanzania’s first modern gold mine, Resolute’s Golden
Pride Gold Mine and was Operations Manager of the mine for its first 6 years of production. Other senior roles
include Executive General Manager (Tanzania) for Barrick Gold Corporation during which time the Tulawaka Gold
Mine was commissioned and General Manager (Operations) for Perseus Mining Limited, from the Edikan Mine’s
environmental permitting phase through to construction and to the first gold pour.
Grant was awarded the Order of Australia Medal in 2003 for his personal contribution to social development
in rural Tanzania. In 2006 he was also awarded Tanzania’s Zeze Award, the highest accolade for outstanding
contribution to Tanzania’s cultural development.
15
KIBARAN RESOURCES ANNUAL REPORT 2019 DIRECTORS' REPORT
(CONTINUED)
John Conidi
Independent Non-Executive Director
John Conidi is a Certified Practicing Accountant. He has over 20 years’ experience developing, acquiring and
managing businesses in the technology and healthcare sectors. In his roles as Managing Director of Capitol Health
Limited, Mr Conidi’s role in strategy, management and business development drove its sustained expansion,
increasing its market capitalisation from $20m to over $500m in the past 10 years.
John has extensive interests in the graphite sector. He is an experienced investor specialising in technology and
resources and is the Chairman of 333D Limited that with Kibaran, jointly owns 3D Graphtech Industries Pty Ltd
which is exploring mechanisms for the deployment of graphite and graphene in emerging technologies.
Christoph Frey
Non-Executive Director
Christoph Frey is a qualified process engineer who has worked exclusively in the natural graphite industry for
over 25 years. Previously Christoph was engaged at Magnezit Group Europe GmbH (Germany) and served as
Project Manager at Dalgraphite Limited in Russia. From 2010 to 2013 he served as Technical Director at Graphit
Kropfmuehl AG where he worked on the Ancuabe Graphite Mine in Mozambique. From 2007 to 2009 he was
General Director of Qingdao Kropfmuehl Graphite Limited based in Qingdao, China.
Christoph has been involved in all facets of development and production of natural flake graphite with expertise in
the supervision of graphite mining and processing, managing the development of product portfolios from graphite
concentrate to higher value graphite products, graphite sales and in evaluating and acquiring graphite projects.
Howard Rae
Chief Financial Officer and Company Secretary
Howard Rae is a Chartered Accountant with over 20 years’ experience across the resources industry in Australia,
Asia and Africa, focusing on business development and financing new mining operations. His career includes Chief
Financial Officer roles with a number of ASX listed resources groups, most recently with Iron Road Limited, where
he was responsible for negotiating a Strategic Co-operation Agreement with China Railway Group Limited in
connection with the funding and development of the US$4bn proposed Central Eye Iron Project in South Australia.
Prior to that role, he served as Chief Financial Officer of Rio Tinto’s Argyle Diamonds Limited, executing a
successful business improvement program as part of its transition to a new US$2bn underground mining
operation and was also Chief Financial Officer for Aquila Resources Limited for seven years, structuring and
negotiating several significant corporate and project funding transactions relating to its coal and iron ore mine,
rail and port developments.
16
FOR THE YEAR ENDED 30 JUNE 2019CONSOLIDATED STATEMENTOF FINANCIAL POSITION The directors’ of Kibaran Resources Ltd (“Kibaran” or “the Company”) and its controlled entities (together referred
to as “consolidated entity”) present their directors’ report (including the Remuneration Report) together with the
financial statements of the Company for the year ended 30 June 2019.
The Company is an entity limited by shares that is incorporated and domiciled in Australia.
BOARD OF DIRECTORS
The qualifications of the directors are set out on pages 15 and 16.
DIRECTORS’ INTERESTS AND OTHER DIRECTORSHIPS
As at the date of this report, the interests (directly or indirectly held) of the directors in the shares and options
of the Company are:
Director
Term
of office
Interest in
ordinary
shares1
Interest in
options over
ordinary shares
Australian
listed company
directorships
Former
directorships
(last 3 years):
Independent Non-Executive Director & Chairman
Robert
Pett
Director since
9 November 2015
Chairman since
9 November 2015
Executive Directors
Andrew
Spinks
Grant
Pierce
Director since
20 July 2012
Managing Director
since 22 April 2015
Director since
17 January 2013
Executive Director
- Projects since
21 August 2014
3,600,000
15,116,130
4,720,000
Independent Non-Executive Director
John
Conidi
Director since
4 May 2015
4,560,000
Non-Executive Director
Christoph
Frey
Director since
9 August 2016
2,125,000
-
-
-
-
-
None
None
None
Kingsrose Mining
Limited
(resigned 16
August 2017)
None
None
333D Limited
(appointed 25
March 2015)
Capitol Health
Limited (resigned
6 October 2016)
Total Face Group
Limited (resigned
31 December 2016)
None
None
1 Securities interest in Kibaran – as notified by the directors to the Australian Securities Exchange (“ASX”) in accordance with s.205G(1) of the
Corporations Act 2001.
17
KIBARAN RESOURCES ANNUAL REPORT 2019 DIRECTORS' REPORT
(CONTINUED)
DIRECTORS’ MEETINGS
During the financial year, four meetings of directors were held and attendances by each director were as follows:
Director
Robert Pett
Andrew Spinks
Grant Pierce
John Conidi
Christoph Frey
Directors’ meetings in person and by resolution
Number eligible to attend
Number attended
4
4
4
4
4
4
4
4
4
3
OPERATING AND FINANCIAL REVIEW
The information reported in this operating and financial review should be read in conjunction with the review
of operations on pages 4 to 14.
PRINCIPAL ACTIVITIES
The principal activities of the Company consisted of:
• exploration and evaluation of its graphite projects in Tanzania;
• pre-development of the Epanko Graphite Project;
• development of sales and marketing arrangements with targeted customers; and
• development of downstream processing technology for the use of natural flake graphite to manufacture
purified spherical graphite products for lithium-ion batteries.
OPERATING RESULTS
The loss after income tax incurred by the consolidated entity for the year ended 30 June 2019 was $3,340,000
(2018: loss $3,764,000).
DIVIDENDS
The directors do not recommend the payment of a dividend and no amount has been paid or declared by way
of a dividend to the date of this report.
CORPORATE STRUCTURE
Kibaran Resources Limited is a public company incorporated and domiciled in Australia, limited by shares. At
the date of this report, the Company had 281,620,967 ordinary shares, 11,000,000 ordinary shares subject to
restrictions on transfer under the Company’s Director & Employee Share Plans and 1,050,000 unlisted options,
on issue.
DISCLOSURE NOTICES
Forward looking statements
This report may contain references to forecasts, estimates, assumptions and other forward-looking statements.
Although the Company believes that its expectations, estimates and forecast outcomes are based on
reasonable assumptions, it can give no assurance that they will be achieved. They may be affected by a variety
of variables and changes in underlying assumptions that are subject to risk factors associated with the nature of
the business, which could cause actual results to differ materially from those expressed in this report. Investors
should rely upon their own enquiries before deciding to acquire or deal in the Company’s securities.
18
FOR THE YEAR ENDED 30 JUNE 2019CONSOLIDATED STATEMENTOF FINANCIAL POSITION SIGNIFICANT CHANGES IN STATE OF AFFAIRS
Significant changes in the state of affairs of the consolidated entity during the year (if any) are contained in the
operating and financial review section of this report.
SIGNIFICANT EVENTS AFTER THE BALANCE DATE
The Company announced on 25 September 2019 that it had raised $1.3 million through a placement of 14.44
million shares at an issue price of 9 cents per share to institutional, sophisticated and professional investors.
No other matters or circumstances have arisen since 30 June 2019 that have significantly affected or may
significantly affect:
• the consolidated entity’s operations in future financial years;
• the results of those operations in future financial years; or
• the consolidated entity’s state of affairs in future financial years.
FUTURE DEVELOPMENTS, PROSPECTS AND BUSINESS STRATEGIES
Likely future developments in the activities of the Company are referred to in the review of operations section
of this report.
ENVIRONMENTAL ISSUES
The Company’s operations are subject to environmental regulation under the laws of the Republic of Tanzania.
The directors believe that the Company has adequate systems in place for environmental management and are
not aware of any breach of environmental requirements as they apply to the Company.
PROCEEDINGS ON BEHALF OF THE COMPANY
No person has applied to the Court under section 237 of the Corporations Act 2001 for leave to bring proceedings
on behalf of the Company, or to intervene in any proceedings to which the Company is a party, for the purposes of
taking responsibility on behalf of the Company for all or part of those proceedings.
No proceedings have been brought or intervened in on behalf of the Company with leave of the Court under
section 237 of the Corporations Act 2001.
EMPLOYEES
In addition to the directors, the Company has one employee as at the date of this report.
COMPANY SECRETARY
Howard Rae is the company secretary, having been appointed on 18 July 2017. Howard’s qualifications are set
out on page 16.
INDEMNIFYING DIRECTORS AND OFFICERS
The Company has entered into an agreement to indemnify all directors and officers against any liability arising
from a claim brought by a third party against the Company. The Company has paid premiums to insure each
director and officer against liabilities for costs and expenses incurred by them in defending any legal proceedings
arising out of their conduct while acting in the capacity of director and officer of the Company, other than as a
result of conduct involving a wilful breach of duty in relation to the Company.
19
KIBARAN RESOURCES ANNUAL REPORT 2019 DIRECTORS' REPORT
(CONTINUED)
INDEMNIFICATION 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 payments have been made to indemnify Ernst & Young to the date of this report.
NON-AUDIT SERVICES
The directors are satisfied that the provision of non-audit services is compatible with the general standard of
independence for auditors imposed by the Corporations Act 2001. The directors ensure that:
• non-audit services are reviewed and approved to ensure that the provision of such services does not
adversely affect the integrity and objectivity of the auditor; and
• audit services do not compromise the general principles relating to auditor independence in accordance
with APES 110: Code of Ethics for Professional Accountants set by the Accounting Professional and Ethical
Standards Board.
The total remuneration for audit and non-audit services provided during the prior and current financial years is
set out in note 17 of the consolidated financial statements.
AUDITOR’S INDEPENDENCE DECLARATION
The auditor’s independence declaration as required under section 307C of the Corporations Act 2001, is
set-out on page 28 of this report.
EXTENSION OF LEAD AUDIT PARTNER
On 24 June 2018, the Board granted approval pursuant to section 324DAC of the Corporations Act 2001 ("the
Act"), for Mr Gavin Buckingham of Ernst & Young to play a significant role in the audit of the Company for an
additional two financial years ending 30 June 2020.
The Board considered the matters set out in section 324DAB(3) of the Act and is satisfied that the approval:
(i) is consistent with maintaining the quality of the audit provided to the Company; and
(ii) would not give rise to a conflict of interest situation.
Reasons supporting this decision include:
• the benefits associated with the continued retention of knowledge regarding key audit matters;
• the Board being satisfied with the quality of Ernst & Young and Mr Buckingham's work as auditor; and
• the Company's on-going governance processes to ensure the independence of the auditor is maintained.
ROUNDING
The amounts contained in this report and in the consolidated financial statements have been rounded to the
nearest $1,000 (unless otherwise stated) under the option available to the Company under ASIC Corporations
(Rounding in Financial/Directors’ Reports) Instrument 2016/191. The Company is an entity to which the
legislative instrument applies.
CORPORATE GOVERNANCE
The directors of Kibaran are responsible for the corporate governance of the Company and have applied ASX
Corporate Governance Principles in a manner that is appropriate to the Company’s circumstances.
The Company’s corporate governance statement is available on the Company’s website at
www.kibaranresources.com
20
FOR THE YEAR ENDED 30 JUNE 2019CONSOLIDATED STATEMENTOF FINANCIAL POSITION REMUNERATION REPORT (AUDITED)
1.
INTRODUCTION
The following sections provide details of the remuneration paid to key management personnel by the
Company and its controlled entities for the year ended 30 June 2019. It forms part of the directors’ report and
has been audited in accordance with section 308C of the Corporations Act 2001.
Key management personnel are those persons who, directly or indirectly, have authority and responsibility for
planning, directing and controlling the major activities of the consolidated entity and include:
• non-executive directors; and
• executive directors and senior executives (collectively “executives”).
Key management personnel
Position
Tenure during the year
Non-executive directors
Robert Pett
John Conidi
Christoph Frey
Executive directors
Andrew Spinks
Grant Pierce
Senior executives
Howard Rae
Non-Executive Chair
Non-Executive Director
Non-Executive Director
Full financial year
Full financial year
Full financial year
Managing Director
Executive Director – Projects
Full financial year
Full financial year
Chief Financial Officer & Company
Secretary
Full financial year
2. EXECUTIVE REMUNERATION
The remuneration structure has been designed to promote alignment between the objectives and interests
of shareholders, directors and executives. Accordingly, as the Company’s key assets have not yet reached the
operational phase, a greater emphasis is placed on rewarding long term performance through the award of
equity in the Company that preserves cash resources and is directly linked to the creation of shareholder value.
2.1 Principles of executive remuneration
Key principles that guide decisions about executive remuneration are:
• Fairness: provide a fair level of reward to all employees;
• Transparency: establish transparent links between reward and performance;
• Alignment: promote mutually beneficial outcomes by aligning employee, customer and shareholder
interests; and
• Culture: drive leadership performance and behaviours that promote safety, diversity and employee
engagement.
21
KIBARAN RESOURCES ANNUAL REPORT 2019 DIRECTORS' REPORT
(CONTINUED)
2. EXECUTIVE REMUNERATION (CONTINUED)
2.2 Executive remuneration framework
A combination of fixed and variable reward is provided to executives, based on their responsibility within the
Company in relation to the achievement of its strategic objectives and capacity to contribute to the generation
of long term shareholder value.
The components of executive remuneration currently consist of:
• a base cash salary;
• statutory superannuation contributions; and
• non-cash share based payments.
The combination of these comprises the executive’s total remuneration.
2.3 Financial performance
The table below sets out information about the Company’s results and movements in shareholder value for the
past five years up to and including the current financial year. The historic numbers have not been assessed and
adjusted for the impact of the new accounting standards.
30 June
2019
30 June
2018
30 June
2017
30 June
2016
30 June
2015
Net loss after tax ($’000)
Share price at end of year ($)
Basic loss per share (cents)
(3,340)
(3,764)
(4,099)
(4,268)
0.12
(1.19)
0.14
(1.50)
0.18
(1.86)
0.26
(2.46)
(5,704)
0.18
(4.39)
2.4 Remuneration decision making
Due to the current size of the Company, it is more efficient and effective for the functions otherwise
undertaken by a remuneration committee to be performed by the Board. All directors are therefore responsible
for determining and reviewing compensation arrangements for key management personnel, including
periodically assessing the appropriateness of the nature and amount of remuneration by reference to relevant
market conditions and prevailing practices.
From time to time the directors seek independent external advice on the appropriateness of the remuneration
framework and remuneration arrangements for key management personnel.
2.5 Use of remuneration advisors
During the year ended 30 June 2019, the Board did not engage the services of remuneration advisors.
2.6 Employee share and option plan
There were no shares issued to executives, subject to the rules of the applicable Employee Share Plan, during
the year ended 30 June 2019. No options were issued.
2.7 Executive employment agreements
The remuneration and other conditions of employment of executives are formalised in employment contracts,
a summary of which is set out below.
Mr Andrew Spinks, Managing Director, has an employment contract with the Company that specifies duties
and obligations to be fulfilled and provides for an annual review of remuneration. Mr Spinks receives fixed
remuneration of $355,875 per annum inclusive of statutory superannuation and did not receive an increase in
fixed remuneration during the reporting period.
22
FOR THE YEAR ENDED 30 JUNE 2019CONSOLIDATED STATEMENTOF FINANCIAL POSITION Mr. Grant Pierce, Executive Director - Projects, has an employment contract with the Company that specifies
duties and obligations to be fulfilled and provides for an annual review of his remuneration. Mr. Pierce is based
in Tanzania and until 28 February 2019 received fixed remuneration of $280,000 plus US$50,000 (net of tax)
per annum, medical and travel insurance, four return flights to Perth each year, a maintained vehicle and
furnished accommodation in Dar es Salaam. In accordance with cost containment activities in Tanzania, from
1 March 2019, his fixed remuneration was reduced by approximately 50% plus US$50,000 (net of tax) per
annum and benefits reduced to a maintained vehicle.
Mr. Howard Rae, Chief Financial Officer and Company Secretary, has an employment contract with the
Company that specifies duties and obligations to be fulfilled and provides for an annual review of remuneration.
Mr. Rae receives fixed remuneration of $355,875 per annum, inclusive of statutory superannuation. He received
an increase of $54,750 in his fixed remuneration during the reporting period.
Termination provisions
Executive termination notice periods and payment provisions are as follows:
Andrew Spinks
Grant Pierce
Howard Rae
Resignation
6 months
3 months
3 months
Termination
for cause
Termination in case of death,
disablement, redundancy or
notice without cause
None
None
1 month
1 month
1 month
3 months
Termination
payment
3 months
3 months
3 months
3. NON-EXECUTIVE DIRECTOR REMUNERATION
3.1 Remuneration policy
Non-executive director remuneration is structured in order to attract and retain persons with the experience
and skills necessary to oversee the Company’s business activities and to guide its growth and development
into a successful mining and manufacturing company. Fees are not linked to the financial performance of the
Company. Directors may be paid additional amounts for special duties or exertions (consultancy services outside
of director's duties) and are entitled to be reimbursed for reasonable out-of-pocket expenses incurred in the
course of their duties.
3.2 Maximum aggregate amount
Total fees payable to all non-executive directors, excluding amounts for special exertion or the reimbursement
of reasonable business expenditures, must not exceed $300,000 per annum, in accordance with the approval
provided by shareholders in 2010.
3.3 Non-executive director share and option plans
There were no shares issued to non-executive directors, subject to the rules of the applicable non-executive
director Share Plan, during the year ended 30 June 2019. No options were issued.
23
KIBARAN RESOURCES ANNUAL REPORT 2019 DIRECTORS' REPORT
(CONTINUED)
4. KEY MANAGEMENT PERSONNEL REMUNERATION
Details of the remuneration of directors and executives of the consolidated entity are set out in the
following table.
Short-term
benefits
Post-
employ-
ment
Long-
term
benefits
Share-
based
pay-
ments
Fees for
special
duties or
exertion
Super-
annua-
tion
Long
Service
Leave
expense
Salary/
Fees
Plan
shares
Total
Equity %
of com-
pensa-
tion
Non-executive directors
Robert Pett
John Conidi
Christoph Frey
Executives
Andrew Spinks
Grant Pierce
Howard Rae
Total remuneration
2019
2018
2019
2018
2019
2018
2019
2018
2019
2018
2019
2018
2019
2018
73,059
15,000
73,059
54,750
54,750
50,000
50,000
338,321
330,875
330,424
371,229
351,163
316,531
1,197,717
1,196,444
-
-
-
130,638
126,323
-
-
-
-
-
-
145,638
126,323
6,941
6,941
-
-
-
-
25,000
25,000
-
-
24,000
22,919
55,941
54,860
-
-
-
-
-
-
-
95,000
260,392
-
130,196
-
260,392
340,392
54,750
184,946
180,638
436,715
16,155
-
379,476
-
-
-
4,933
-
21,088
260,392
-
260,392
-
372,065
616,267
330,424
631,621
380,096
711,515
- 1,420,384
- 1,543,829 2,921,456
0%
77%
0%
70%
0%
60%
0%
42%
0%
41%
0%
52%
0%
53%
Robert Pett is a director and shareholder of the following related party entity which transacted with the
consolidated entity. Represented by invoices related to work performed by the Group.
Entity
Prevelly Holdings Pty Ltd
Services provided
Consultancy services
2019
$’000
16
2018
$’000
11
Christoph Frey is a director and shareholder of the following related party entity which transacted with the
consolidated entity. Represented by invoices related to work performed by the Group.
Entity
ProGraphite GmbH
Services provided
Consultancy services
2019
$’000
265
2018
$’000
149
24
FOR THE YEAR ENDED 30 JUNE 2019CONSOLIDATED STATEMENTOF FINANCIAL POSITION 5. SHARE BASED COMPENSATION
Plan shares are issued to directors and employees in recognition of their performance with the Company and
as incentive remuneration under the respective director and employee share plans (together the "Share Plans").
The terms and conditions of the Share Plans are identical, other than in respect of who is eligible to participate
in each plan.
Under the Share Plans, eligible directors and employees are offered plan shares in the Company at prices
determined by the Board, which has the discretion to impose conditions on the shares issued under the Share
Plans and may also grant a loan, in the form of a non-cash credit facility, to a participant for the purposes of
subscribing for plan shares. Shares issued via loan facility may not be granted at less than the volume weighted
average price of the Company’s shares during the 5 trading days up to and including the date of acceptance
and are escrowed as security until the loan has been fully repaid, via cash payment and/or the sale of the plan
shares. If the loan is repaid by the sale of shares, any surplus on sale is remitted to the participant and any
shortfall is borne by the consolidated entity.
There were no shares issued to Non-executive directors or executives, during the year ended 30 June 2019.
6. KEY MANAGEMENT PERSONNEL EQUITY OWNERSHIP
6.1 Options
Balance at
30 June
2018
Balance
at date of
appoint-
ment
Options
exercised
Net
change/
Other
Balance at
30 June
2019
Vested at
30 June
2019
Vested
and
exercis-
able
Options
vested
during
year
Non-executives
Robert
Pett
John
Conidi
Christoph
Frey
Executives
Andrew
Spinks
Grant
Pierce
Howard
Rae
-
-
1,000,000
-
-
-
Total
1,000,000
-
-
-
-
-
-
-
-
-
-
-
-
(1,000,000)1
-
-
-
-
-
-
-
(1,000,000)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1 Unlisted options granted on 27th June 2016 with an exercise price of $0.2282, expired unexercised 2nd June 2019
25
KIBARAN RESOURCES ANNUAL REPORT 2019 DIRECTORS' REPORT
(CONTINUED)
6.1 Options (continued)
Balance
at 1 July
2017
Balance at
date of
appoint-
ment
Options
exercised
Net
change/
Other
Balance at
30 June
2018
Vested at
30 June
2018
Vested
and
exercis-
able
Options
vested
during
year
Non-executives
Robert
Pett
John
Conidi
Christoph
Frey
Executives
Andrew
Spinks
Grant
Pierce
Howard
Rae
-
-
1,250,000
-
-
-
Total
1,250,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
- (250,000)1
1,000,000 1,000,000 1,000,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
- (250,000) 1,000,000 1,000,000 1,000,000
-
-
-
-
-
-
-
1 Unlisted options granted on 17 October 2014, with an exercise price of $0.30, expired unexercised 17 October 2017
6.2 Shares
Non-executives
Robert Pett
John Conidi
Christoph Frey
Executives
Andrew Spinks
Grant Pierce
Howard Rae
Total
Balance at
30 June 2018
Balance at date of
appointment
Movement
during the year
Balance at
1 July 2019
3,450,000
4,250,000
2,075,000
14,826,130
4,570,000
3,000,000
32,171,130
-
-
-
-
-
-
-
150,0001
310,0001,2
50,0001
290,0001,3
150,0001
150,0001
1,100,000
3,600,000
4,560,000
2,125,000
15,116,130
4,720,000
3,150,000
33,271,130
1 Shares purchased on market under Share Purchase Plan February 2019;
2 160,000 Shares purchased on market;
3 140,000 Shares purchased on market.
26
FOR THE YEAR ENDED 30 JUNE 2019CONSOLIDATED STATEMENTOF FINANCIAL POSITION 6.3 Shares issued under non-executive director and employee share plans
Included in the table 6.2 above are plan shares held by key management personnel. The balance and
movement during the reporting period in the number of plan shares held directly, indirectly or beneficially, by
each key management person, including their related parties, is as follows:
Non-executives
Robert Pett
John Conidi
Christoph Frey
Executives
Andrew Spinks
Grant Pierce
Howard Rae
Total
Balance at
1 July 2018
Net Change
Balance at
30 June 2019
3,250,000
3,250,000
2,000,000
6,000,000
4,250,000
3,000,000
21,750,000
-
-
-
-
-
-
-
3,250,000
3,250,000
2,000,000
6,000,000
4,250,000
3,000,000
21,750,000
6.4 Loans to key management personnel
There were no loans granted to key management personnel during the year ended 30 June 2019.
6.5 Other transactions with key management personnel
There were no other transactions with key management personnel of the consolidated entity, including their
personally related parties during the year ended 30 June 2019 other than ‘Fees for special duties or exertion’
and payments to related entities disclosed in the remuneration table in section 4.
Signed in accordance with a resolution of the directors made pursuant to s298 (2) of Corporations Act 2001.
Andrew Spinks
Managing Director
25 September 2019
27
KIBARAN RESOURCES ANNUAL REPORT 2019 AUDITOR’S INDEPENDENCE DECLARATION
Ernst & Young
11 Mounts Bay Road
Perth WA 6000 Australia
GPO Box M939 Perth WA 6843
Tel: +61 8 9429 2222
Fax: +61 8 9429 2436
ey.com/au
Auditor’s independence declaration to the Directors of Kibaran
Resources Limited
As lead auditor for the audit of the financial report of Kibaran Resources Limited for the financial year
ended 30 June 2019, I declare to the best of my knowledge and belief, there have been:
a)
b)
no contraventions of the auditor independence requirements of the Corporations Act 2001 in
relation to the audit; and
no contraventions of any applicable code of professional conduct in relation to the audit.
This declaration is in respect of Kibaran Resources Limited and the entities it controlled during the
financial year.
Ernst & Young
Gavin Buckingham
Partner
25 September 2019
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
GB:JG:KNL:050
28
FOR THE YEAR ENDED 30 JUNE 2019CONSOLIDATED STATEMENTOF FINANCIAL POSITION
FINANCIAL STATEMENTS
Consolidated statement of profit or
loss & other comprehensive income
Consolidated statement
of financial position
Consolidated statement
of changes in equity
Consolidated statement
of cash flows
Notes to the consolidated
financial statements
KIBARAN RESOURCES ANNUAL REPORT 2019
29
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFOR THE YEAR ENDED 30 JUNE 2019 FINANCIAL STATEMENTS
CONSOLIDATED STATEMENT OF PROFIT OR LOSS & OTHER
COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2019
REVENUE
Interest income
Other income
EXPENSES
Accounting & audit
Consultants & contractors
Employee benefits
Depreciation
Directors fees
Exploration and evaluation written off
Information systems & technology
Listing & compliance
Office rental & outgoings
Other
Share based payments
Travel & accommodation
Unrealised foreign exchange differences
Loss before income tax
Income tax expense
Loss after income tax for the year
Note
2019
$’000
2018
$’000
3
4
10
8
12
5
8
243
251
(175)
(1,052)
(541)
(45)
(185)
(964)
(59)
(60)
(204)
(133)
-
(170)
(3)
(3,591)
(3,340)
-
(3,340)
7
399
406
(74)
(924)
(659)
(62)
(185)
-
(54)
(65)
(235)
(93)
(1,544)
(153)
(122)
(4,170)
(3,764)
-
(3,764)
Total comprehensive loss for the year
(3,340)
(3,764)
Loss attributable to members of Kibaran Resources Limited
(3,340)
(3,764)
Total comprehensive loss attributable to members of
Kibaran Resources Limited
(3,340)
(3,764)
Loss per share attributable to the
Members of Kibaran Resources Limited
Basic loss per share (cents per share)
Diluted loss per share (cents per share)
16
16
(1.19)
(1.19)
(1.50)
(1.50)
The above statement should be read in conjunction with the accompanying notes.
30
FOR THE YEAR ENDED 30 JUNE 2019CONSOLIDATED STATEMENTOF FINANCIAL POSITIONFINANCIAL STATEMENTS CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2019
ASSETS
Current assets
Cash and cash equivalents
Other receivables
Prepayments
Total current assets
Non-current assets
Property, plant and equipment
Exploration and evaluation assets
Total non-current assets
Total assets
LIABILITIES
Current liabilities
Trade and other payables
Employee provisions
Total current liabilities
Non-current liabilities
Employee provisions
Total non-current liabilities
Total liabilities
Net assets
EQUITY
Contributed equity
Reserves
Accumulated losses
Total equity
Note
2019
$’000
2018
$’000
6
7
10
8
9
11
12
13
1,462
118
29
1,609
189
17,292
17,481
2,827
249
-
3,076
234
16,922
17,156
19,090
20,232
602
74
676
22
22
513
47
560
-
-
698
560
18,392
19,672
44,852
2,594
(29,054)
18,392
43,786
1,600
(25,714)
19,672
The above statement should be read in conjunction with the accompanying notes.
31
KIBARAN RESOURCES ANNUAL REPORT 2019 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2019
Contributed
equity
$’000
Accumulated
losses
$’000
Loan share
reserve
$’000
Share based
payment
reserve
$’000
Total
$’000
Balance at 30 June 2017
39,215
(21,950)
(3,086)
5,105
19,284
Loss for the year
Other comprehensive income
Total comprehensive loss for the
year
Transactions with owners in their
capacity as owners
Shares issued during the year
Share based payments
Share issue expense
-
-
-
4,762
-
(191)
(3,764)
-
(3,764)
-
-
-
-
-
-
(1,963)
-
-
-
-
-
-
1,544
-
(3,764)
-
(3,764)
2,799
1,544
(191)
Balance at 30 June 2018
43,786
(25,714)
(5,049)
6,649
19,672
Loss for the year
Other comprehensive income
Total comprehensive loss for the
year
Transactions with owners in their
capacity as owners
Shares issued during the year
Share plan shares cancelled
Share issue expense
-
-
-
2,168
(994)
(108)
(3,340)
-
(3,340)
-
-
-
-
-
-
-
994
-
-
-
-
-
-
-
(3,340)
-
(3,340)
2,168
-
(108)
Balance at 30 June 2019
44,852
(29,054)
(4,055)
6,649
18,392
The above statement should be read in conjunction with the accompanying notes.
32
FOR THE YEAR ENDED 30 JUNE 2019CONSOLIDATED STATEMENTOF FINANCIAL POSITIONFINANCIAL STATEMENTS CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2019
OPERATING ACTIVITIES
Research and development tax credit received
Payments to suppliers and employees
Net cash flows used in operating activities
14
Note
INVESTING ACTIVITIES
Payments for exploration and evaluation
Payments for property, plant & equipment
Interest received
Research and development tax credit received
Net cash flows from/ (used in) investing activities
FINANCING ACTIVITIES
Proceeds from issue of shares and options
Capital raising costs for issue of shares
Net cash flows from financing activities
Net increase/ (decrease) in cash and cash equivalents held
Cash and cash equivalents at beginning of the year
Cash and cash equivalents at end of the year
6
The above statement should be read in conjunction with the accompanying notes.
2019
$’000
243
(2,477)
(2,234)
2018
$’000
684
(2,742)
(2,058)
(1,367)
(1,682)
-
8
33
(1,326)
2,303
(108)
2,195
(1,365)
2,827
1,462
(1)
10
2,135
462
2,664
(191)
2,473
877
1,950
2,827
33
KIBARAN RESOURCES ANNUAL REPORT 2019 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
1. COMPANY INFORMATION
The consolidated financial statements of Kibaran Resources Limited and its subsidiaries (collectively, “the
consolidated entity”) for the year ended 30 June 2019 were authorised for issue in accordance with a
resolution of the directors on 25 September 2019.
Kibaran Resources Limited (“the Company” or “the parent”) is a for profit company limited by shares
incorporated in Australia whose shares are publicly traded on the Australian Securities Exchange. It has activities
in Tanzania and Australia, with the country of domicile being Australia and the registered office located in
Australia.
The nature of the operations and principal activities of the consolidated entity are described in the directors’
report. Information on the consolidated entity’s structure is provided in note 22 and details of other related
party relationships is provided in note 21 .
2. BASIS OF PREPARATION
The financial report is a general purpose financial report, which has 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 financial report has been prepared on a historical cost basis.
The financial report complies with International Financial Reporting Standards (IFRS) as issued by the
International Accounting Standards Board.
Going concern
The directors have prepared the consolidated financial statements on a going concern basis which
contemplates the continuation of normal business activities and the realisation of assets and the settlement of
liabilities in the normal course of business.
During the year, the consolidated entity incurred a net loss of $3,340,000 (2018: loss $3,764,000) and had cash
outflows from operating and investing activities of $3,560,000 (2018: $1,596,000).
The consolidated entity had cash and cash equivalents at 30 June 2019 of $1,462,000 (2018: $2,827,000).
The balance of cash and cash equivalents as at 30 June 2019 is not sufficient to meet the consolidated entity’s
planned expenditures over the next 12 months. It is the current intention of the consolidated entity to continue
to fund working capital for general corporate activities through equity capital from shareholders. Based on the
consolidated entity’s history in raising working capital, the directors are satisfied they have a reasonable basis to
conclude that further working capital can be raised as required.
The Company announced on 25 September 2019 that it had raised $1.3 million through a placement of 14.44
million shares at an issue price of 9 cents per share to institutional, sophisticated and professional investors.
In the event that the consolidated entity is unable to obtain sufficient funding to meet its liabilities as required,
there is material uncertainty whether it will continue as a going concern and therefore whether it will realise
its assets and discharge its liabilities in the normal course of business and at the amounts stated in the financial
report. The financial statements do not include any adjustment relating to the recoverability or classification
of recorded asset amounts or to the amounts or classification of liabilities, that may be necessary should the
consolidated entity not be able to continue as a going concern.
34
FOR THE YEAR ENDED 30 JUNE 2019CONSOLIDATED STATEMENTOF FINANCIAL POSITIONFINANCIAL STATEMENTS Functional and presentational currency
These consolidated financial statements are presented in Australian dollars, which is the consolidated entity’s
functional currency. All amounts have been rounded to the nearest thousand, unless otherwise stated in
accordance with ASIC Corporations (Rounding In Financial/Directors’ Reports) Instrument 2016/191.
3. OTHER INCOME
Research and development tax credit
4. CONSULTANTS AND CONTRACTORS
Accounting and administrative services
Downstream processing research, development and engineering
Legal
Public Relations
Other
2019
$’000
2018
$’000
243
243
330
511
78
126
7
1,052
399
399
376
295
159
80
14
924
5.
INCOME TAX EXPENSE
Reconciliation of tax benefit/expense and the accounting loss multiplied by Australia’s domestic tax rate:
Accounting loss before tax
(3,340)
(3,764)
At Australia’s statutory income tax rate of 30.0% (2018: 30.0%)
Tax effect of amounts not deductible
Effect of different tax rates
Benefit of tax losses and timing differences not brought to account as an asset
Income tax expense attributable to entity
Deferred income tax at balance date relates to the following:
Deferred tax assets
Tax losses available to offset against future taxable income
Total deferred tax asset
Deferred tax liabilities
Exploration and evaluation assets
Deferred tax asset used to offset deferred tax liability
Net deferred tax assets not brought to account
(1,002)
(73)
-
1,075
-
9,556
9,556
(5,188)
5,188
-
4,368
(1,035)
425
(16)
626
-
6,979
6,979
(3,935)
3,935
-
3,044
The benefit of deferred tax assets not brought to account will only be recognised if:
• Future assessable income is derived of a nature and of an amount sufficient to enable the benefit to be realised
• The conditions for deductibility imposed by tax legislation continue to be complied with
• No changes in tax legislation adversely affect the consolidated entity in realising the benefit
35
KIBARAN RESOURCES ANNUAL REPORT 2019 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
(CONTINUED)
6. CASH AND CASH EQUIVALENTS
Cash at bank and on hand
7. OTHER RECEIVABLES
Goods and services taxation receivable (1)
Other receivables
Security deposits
(1) Non-interest bearing and generally on 14 day terms at the end of each quarter.
8. EXPLORATION AND EVALUATION ASSET
Exploration and evaluation expenditure carried forward:
Carrying amount as at 1 July
Capitalised expenditure at cost
Exploration and evaluation expenditure written off
Research and development refund
2019
$’000
1,462
1,462
38
-
80
118
16,922
1,367
(964)
(33)
17,292
2018
$’000
2,827
2,827
35
135
79
249
17,036
1,347
-
(1,461)
16,922
Recoverability of the carrying amount of exploration and evaluation assets is dependent on the successful
development and commercial exploitation of areas of interest and the sale of minerals, or the sale of the
respective areas of interest. The Company is in discussion with the Government of Tanzania with respect to
regulatory arrangements and approvals for the development of the Epanko Graphite Project, including mining
licence conditions past due for the commencement of regular production. On 4 September 2018, the Mining
Commission confirmed to the Company that it will be ready to renew the mining licence upon expiry of the
licence period in 2025, provided that the requirements of section 53 of the Mining Act 2010 are fulfilled.
A write off of exploration and evaluation expenditure carried forward for the Merelani and Tanga tenements
was made due to inactivity, as the Company is concentrating its efforts on the Epanko Project tenements.
9. TRADE AND OTHER PAYABLES
Trade payables (1)
Accrued expenses
433
169
602
171
342
513
(1) Trade creditors are non-interest bearing and are normally settled on 45 day terms.
36
FOR THE YEAR ENDED 30 JUNE 2019CONSOLIDATED STATEMENTOF FINANCIAL POSITIONFINANCIAL STATEMENTS 10. PROPERTY, PLANT AND EQUIPMENT
Plant &
equipment
office
Plant &
equipment
field
Motor
Vehicles
Furniture &
equipment
Leasehold
assets
Total
$’000
$’000
$’000
$’000
$’000
$’000
At cost
Accumulated depreciation
Net carrying amount
33
(19)
14
22
(14)
8
261
(116)
145
38
(22)
16
9
(3)
6
364
(175)
189
Movement in the carrying amounts for each class of property, plant and equipment between the beginning
and the end of the current financial year, is as follows:
Balance at 1 July 2017
Additions
Depreciation expense
Balance at 30 June 2018
Additions
Depreciation expense
Balance at 30 June 2019
25
-
(6)
19
-
(5)
14
15
-
(4)
11
-
(3)
8
222
-
(45)
177
-
(32)
145
25
1
(6)
20
-
(4)
16
8
-
(1)
7
-
(1)
6
295
1
(62)
234
-
(45)
189
11. CONTRIBUTED EQUITY
292,620,967 (2018: 275,680,967) fully paid ordinary shares
a) Ordinary shares
At 30 June 2017
Share placement
Issue of shares to consultant in lieu of cash(1)
Issue of plan shares
Capital raising costs
At 30 June 2018
Share placement
Plan shares expired
Capital raising costs
Balance at 30 June 2019
(1) 150,000 shares issued at $0.15 per share to settle an invoice.
Fully paid ordinary shares carry one vote per share and carry a right to dividends.
2019
$’000
2018
$’000
44,852
43,786
$’000
No. of shares
39,215
2,776
23
1,963
(191)
43,786
2,168
(994)
(108)
44,852
243,202,394
19,828,573
150,000
12,500,000
-
275,680,967
21,690,000
(4,750,000)
-
292,620,967
37
KIBARAN RESOURCES ANNUAL REPORT 2019 FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
(CONTINUED)
11. CONTRIBUTED EQUITY (CONTINUED)
b) Options unissued are as follows:
Grant
date
Date of
expiry
Exercise
price
Balance at
start of the
year
27/06/16
02/06/19
0.228
1,000,000
16/01/17
16/01/20
09/01/17
31/12/18
0.23
0.30
Total
1,050,000
1,000,000
3,050,000
FY19
Granted
Exercised
-
-
-
-
Weighted average exercise price of options outstanding at 30 June 2019: $0.23
Grant
date
Date of
expiry
Exercise
price
08/07/15
22/10/17
15/05/15
17/10/17
13/07/15
26/10/17
27/06/16
02/06/19
16/01/17
16/01/20
09/01/17
31/12/18
Total
0.40
0.30
0.174
0.228
0.23
0.30
Balance at
start of the
year
4,000,000
750,000
1,050,000
1,000,000
1,050,000
1,000,000
8,850,000
FY18
Granted
Exercised
-
-
-
-
-
-
-
Balance at
end of the
year
Expired
unexercised
(1,000,000)
-
1,050,000
(1,000,000)
(2,000,000)
1,050,000
Expired
unexercised
(4,000,000)
(750,000)
(1,050,000)
Balance at
end of the
year
-
-
-
-
-
-
1,000,000
1,050,000
1,000,000
(5,800,000)
3,050,000
-
-
-
-
-
-
-
-
-
-
Weighted average exercise price of options outstanding at 30 June 2018: $0.25.
38
FOR THE YEAR ENDED 30 JUNE 2019CONSOLIDATED STATEMENTOF FINANCIAL POSITIONFINANCIAL STATEMENTS 12. RESERVES
Share based payment reserve
Loan share reserve
Movement in share based payment reserve
Balance at beginning of year
Share based payments
Balance at end of year
Movement in loan share reserve
Balance at beginning of year
Plan shares expired/(issued)
Balance at end of year
Share based payments reserve
2019
$’000
2018
$’000
6,649
(4,055)
2,594
6,649
-
6,649
(5,049)
994
(4,055)
6,649
(5,049)
1,600
5,105
1,544
6,649
(3,086)
(1,963)
(5,049)
The reserve recognises the value of equity provided as remuneration to employees and also to other parties as
compensation for services provided to the consolidated entity.
Plan share reserve
The reserve represents the non cash nominal value of loan shares on issue to employees and is deducted from
equity.
13. ACCUMULATED LOSSES
Balance at beginning of year
Loss for the year
Balance at end of year
(25,714)
(3,340)
(29,054)
(21,950)
(3,764)
(25,714)
39
KIBARAN RESOURCES ANNUAL REPORT 2019 FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
(CONTINUED)
14. CASH FLOW INFORMATION
Reconciliation of cash flow from operations with loss for the year
Loss for the year
Adjustments for:
Share based payments
Interest income
Depreciation
Write off of exploration assets
Unrealised foreign exchange losses
Changes in assets and liabilities:
(Increase) / decrease in Other receivables
Increase / (decrease) in Trade and other payables
Increase / (decrease) in Employee provisions
Net cash outflows used in operations
15. EXPENDITURE COMMITMENTS
Mineral tenements
2019
$’000
2018
$’000
(3,340)
(3,764)
-
(8)
45
964
3
(33)
113
22
1,544
(6)
62
-
122
145
(161)
-
(2,234)
(2,058)
In order to maintain current rights of tenure to exploration tenements, the consolidated entity is required to outlay
rentals and to satisfy minimum expenditure requirements of $1,402,673 (2018: $1,205,581) over the next 12 months,
in accordance with agreed work programmes submitted over the Company’s exploration licences. Financial
commitments for subsequent periods are contingent upon future exploration results.
16. LOSS PER SHARE
Data used in the basic loss per share computations
Loss for the year
Weighted average number of ordinary shares
Basic and diluted loss per share (cents)
(3,340)
(3,764)
280,159,433
250,195,408
(1.19)
(1.50)
Loss per share is calculated by dividing the loss for the year attributable to ordinary equity holders of the
Company by the weighted average number of ordinary shares outstanding during the year.
1,050,000 share options outstanding at 30 June 2019 (2018: 3,050,000) have not been included in determining
the diluted loss per share as they are not considered to be dilutive due to the loss position of the Company for
years ended 30 June 2018 and 2019.
17. AUDITOR’S REMUNERATION
Amounts received or due and receivable by Ernst & Young for:
Auditor services
Audit or review of the financial report
Other non- audit services
Taxation services
$
$
45,600
34,065
19,194
64,794
18,754
52,819
40
FOR THE YEAR ENDED 30 JUNE 2019CONSOLIDATED STATEMENTOF FINANCIAL POSITIONFINANCIAL STATEMENTS 18. SEGMENT INFORMATION
The consolidated entity reports one segment, graphite exploration and evaluation, to the chief operating
decision maker, being the Managing Director for the purposes of assessing performance and determining the
allocation of resources.
Unless otherwise stated, all amounts reported to the chief operating decision maker are determined in
accordance with accounting policies that are consistent with those adopted in this financial report.
Revenue by geographical region
2019 Results
Segment other income
Segment expenses
Accounting and audit
Consultants and contractors
Employee benefits
Depreciation
Directors fees
Exploration and evaluation written off
Information systems and technology
Listing and compliance
Office rental and outgoings
Other
Share based payments
Travel and accommodation
Unrealised foreign exchange loss
Segment results
Australia
(corporate)
$’000
Tanzania
$’000
Consolidated
$’000
251
(169)
(830)
(516)
(7)
(185)
-
(43)
(60)
(159)
(107)
-
(117)
(1)
-
251
(6)
(222)
(25)
(38)
-
(964)
(16)
-
(45)
(26)
-
(53)
(2)
(175)
(1,052)
(541)
(45)
(185)
(964)
(59)
(60)
(204)
(133)
-
(170)
(3)
(2,194)
(1,943)
(1,397)
(1,397)
(3,591)
(3,340)
41
KIBARAN RESOURCES ANNUAL REPORT 2019 FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
(CONTINUED)
18. SEGMENT INFORMATION (CONTINUED)
Revenue by geographical region
2018 Results
Segment other income
Segment expenses
Accounting and audit
Consultants and contractors
Employee benefits
Depreciation
Directors fees
Information systems and technology
Listing and compliance
Office rental and outgoings
Other
Share based payments
Travel and accommodation
Unrealised foreign exchange loss
Segment results
Assets by geographical region
2019 Assets
Property, plant and equipment
Exploration and evaluation assets
Segment non-current assets
Unallocated assets:
Cash and cash equivalents
Other receivables
Prepayments
Total assets
2019 Liabilities
Segment liabilities
Total liabilities
42
Australia
(corporate)
$’000
Tanzania
$’000
Consolidated
$’000
406
(52)
(740)
(570)
(9)
(185)
(41)
(65)
(145)
(68)
(1,544)
(114)
-
(3,533)
(3,127)
-
406
(22)
(184)
(89)
(53)
-
(14)
-
(90)
(24)
-
(39)
(122)
(637)
(637)
(74)
(924)
(659)
(62)
(185)
(55)
(65)
(235)
(92)
(1,544)
(153)
(122)
(4,170)
(3,764)
Australia
(corporate)
$’000
Tanzania
$’000
Consolidated
$’000
20
-
20
169
17,292
17,461
(613)
(85)
189
17,292
17,481
1,462
118
29
19,090
(698)
(698)
FOR THE YEAR ENDED 30 JUNE 2019CONSOLIDATED STATEMENTOF FINANCIAL POSITIONFINANCIAL STATEMENTS Assets by geographical region
2018 Assets
Property, plant and equipment
Exploration and evaluation assets
Segment non-current assets
Unallocated assets:
Cash and cash equivalents
Other receivables
Prepayments
Total assets
2018 Liabilities
Segment liabilities
Total liabilities
19. SHARE BASED PAYMENTS
Australia
(corporate)
$’000
Tanzania
$’000
Consolidated
$’000
27
-
27
207
16,922
17,129
(363)
(197)
234
16,922
17,156
2,827
249
-
20,232
(560)
(560)
The Company seeks to incentivise staff and consultants to remain with the consolidated entity and to improve
the longer-term performance of the Company and its return to shareholders. This is achieved through the issue
of a combination of shares and options.
There were no options issued during the year ended 30 June 2019.
The following table illustrates the number and weighted average exercise prices (WAEP) of, and movements in,
share options during the year.
Outstanding at 1 July
Issued during the year
Exercised/expired during the year
Outstanding at 30 June
Exercisable at 30 June (1)
2019
Number
3,050,000
-
(2,000,000)
1,050,000
1,050,000
2019
WAEP
0.25
-
0.26
0.23
0.23
2018
Number
8,850,000
-
(5,800,000)
3,050,000
3,050,000
2018
WAEP
0.31
-
0.35
0.25
0.25
(1) All exercisable options have vested. Options expiry date 16 January 2020.
43
KIBARAN RESOURCES ANNUAL REPORT 2019 FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
(CONTINUED)
19. SHARE BASED PAYMENTS (CONTINUED)
Employee share plan
Under the plan, eligible employees are offered shares in the Company at prices determined by the Board,
which has the ultimate discretion to impose conditions on the shares issued under the plan and may grant
a loan to a participant for the purposes of subscribing for plan shares. Shares issued under loan facilities are
escrowed until the loan is fully repaid. The loans are limited recourse and interest free and are to be repaid
via cash settlement and/or the sale of the plan shares. Where the loan is repaid by the sale of shares, any
remaining surplus is remitted to the participant and any shortfall is borne by the consolidated entity.
There were no plan shares issued during the year ended 30 June 2019.
The following table illustrates the number and weighted average exercise prices (WAEP) of, and movements in,
plan shares during the year:
Outstanding at 1 July
Granted during the year
Forfeited during the year
Exercised during the year
Expired during the year
Outstanding at 30 June
2019
Number
22,300,000
-
-
-
-
22,300,000
2019
WAEP
0.1818
-
-
-
-
0.1818
2018
Number
14,550,000
12,500,000
-
-
(4,750,000)
22,300,000
2018
WAEP
0.2121
0.1571
-
-
0.2095
0.1818
20. DIRECTORS AND KEY MANAGEMENT PERSONNEL DISCLOSURES
a) Names and positions of key management personnel in office at any time during the financial year:
Robert Pett
John Conidi
Christoph Frey
Andrew Spinks
Grant Pierce
Howard Rae
Non-Executive Chairman
Non-Executive Director
Non-Executive Director
Managing Director
Executive Director
Chief Financial Officer and Company Secretary
b) Key management personnel remuneration
Aggregate compensation of key management personnel of the consolidated entity:
Short term employee benefits
Post-employment benefits
Long term employee benefits
Share based payments (non-cash)
2019
$’000
1,343
56
21
-
1,420
2018
$’000
1,322
55
-
1,544
2,921
Detailed information about the remuneration received by key management personnel is provided in the
remuneration report on pages 21 to 27.
44
FOR THE YEAR ENDED 30 JUNE 2019CONSOLIDATED STATEMENTOF FINANCIAL POSITIONFINANCIAL STATEMENTS 21. RELATED PARTY DISCLOSURES
Transactions between related parties are on normal commercial terms.
Ultimate parent
Kibaran Resources Limited is the parent entity.
Subsidiaries
Interests in subsidiaries are set out in note 22.
Key management personnel
Disclosures relating to key management personnel are set out in note 20 and the remuneration report in the
directors’ report.
Transactions with related parties
The following transactions were undertaken with key management personnel during the year ended 30 June
2019. The transactions reflected below have been included in ‘Fees for special duties or exertion’ disclosed in
the remuneration table in section 4 of the remuneration report in the director’s report.
Robert Pett is a director and shareholder of the following related party entity which transacted with the
consolidated entity.
Entity
Services provided
Prevelly Holdings Pty Ltd
Consultancy services
2019
$’000
16
2018
$’000
11
Christoph Frey is a director and shareholder of the following related party entity which transacted with the
consolidated entity.
Entity
ProGraphite GmbH
Services provided
Consultancy services
2019
$’000
265
2018
$’000
149
There were no other significant transactions with related parties entered into during the period.
45
KIBARAN RESOURCES ANNUAL REPORT 2019 FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
(CONTINUED)
22. CONSOLIDATED ENTITY INFORMATION
Information about subsidiaries
The financial statements of the consolidated entity include the following subsidiaries:
Country of incorporation
2019
2018
Percentage owned (%)
Tanzanian Exploration Company Pty Ltd
TanzGraphite Pty Ltd
TanzGraphite (AUS) Pty Ltd
EcoGraf (Australia) Pty Ltd
Westoz Technologies Pty Ltd (Australia)
EcoGraf (Mauritius) Limited
EcoGraf (Tanzania) Limited
TanzGraphite Technologies Limited
TanzGraphite (TZ) Limited
TanzGraphite Exploration (TZ) Limited
Australia
Australia
Australia
Australia
Australia
Mauritius
Tanzania
Tanzania
Tanzania
Tanzania
23. PARENT INFORMATION
Kibaran Resources Limited
Current assets
Non-current assets
Total assets
Current liabilities
Non-current liabilities
Total liabilities
Net assets
Equity
Contributed equity
Share option reserve
Accumulated losses
Total equity
Loss of the parent entity
Total comprehensive loss of the parent entity
46
100
100
100
100
100
100
100
100
100
100
2019
$’000
1,552
24,388
25,940
592
21
613
100
100
100
100
100
-
-
100
100
100
2018
$’000
3,060
22,512
25,572
363
-
363
25,327
25,209
44,852
2,594
(22,119)
25,327
(1,943)
(1,943)
43,786
1,600
(20,177)
25,209
(3,127)
(3,127)
FOR THE YEAR ENDED 30 JUNE 2019CONSOLIDATED STATEMENTOF FINANCIAL POSITIONFINANCIAL STATEMENTS Guarantees entered into by the parent entity in relation to the debts of its subsidiaries
The parent entity did not have any guarantees at 30 June 2019 or 30 June 2018.
Contingent liabilities
The parent entity did not have any contingent liabilities at 30 June 2019 or 30 June 2018.
Capital commitments
The parent entity did not have any capital commitments at 30 June 2019 or 30 June 2018.
Significant accounting policies
The parent entity’s financial information has been prepared using the same basis, including the accounting
policies, as the consolidated entity.
24. FINANCIAL INSTRUMENTS
The consolidated entity is exposed to a variety of financial risks, including market risk, credit risk and liquidity risk.
The consolidated entity’s financial instruments consist of cash and deposits with banks, accounts receivable
and accounts payable. No trading in any financial instruments is undertaken.
Details of the significant accounting policies and methods adopted, including the criteria for recognition, the
basis of measurement and the basis on which income and expense are recognised, in respect of each class of
financial asset, financial liability and equity instrument, are disclosed in note 26. Unless otherwise stated, the
carrying amounts of financial instruments reflect their fair value.
The main risks arising from the consolidated entity’s financial instruments are foreign currency risk, interest rate
risk, liquidity risk and credit risk. The Board determines policies for managing each of these risks and they are
summarised below.
Foreign currency risk
The consolidated entity undertakes certain transactions denominated in foreign currency and is exposed to
foreign currency risk through foreign exchange rate fluctuations. Foreign exchange risk also arises from future
commercial transactions and recognised financial assets and financial liabilities denominated in a currency
other than the consolidated entity’s functional currency. The consolidated entity operates internationally and is
exposed to foreign exchange risk arising from currency exposures to the USD, EUR, TZS and GBP.
The carrying amount, in Australian dollars of the consolidated entity’s foreign currency denominated financial
assets and financial liabilities at the reporting date was as follows:
USD
EUR
TZS
GBP
Total
Assets
Liabilities
2019
$’000
2018
$’000
2019
$’000
2018
$’000
49
-
9
-
58
12
-
4
-
16
-
11
72
86
169
11
14
10
151
186
47
KIBARAN RESOURCES ANNUAL REPORT 2019 FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
(CONTINUED)
24. FINANCIAL INSTRUMENTS (CONTINUED)
The financial impact of a 10% change in the Australian dollar exchange rate on the consolidated entity is as
follows:
Appreciation in AUD exchange rate
Depreciation in AUD exchange rate
%
change
Effect on loss
before tax
Effect
on equity
%
change
Effect on loss
before tax
Effect
on equity
2019
2018
10%
10%
$26,582
$21,515
$26,582
$21,515
10%
10%
$(26,582)
$(21,515)
$(26,582)
$(21,515)
The assumed percentage change used in the above analysis is the expected overall volatility of the significant
currencies, which is based on management’s assessment of reasonable possible fluctuations, taking into
consideration movements during the year and the spot rate at each reporting date.
Interest rate risk
The consolidated entity’s exposure to market risk for changes in interest rates arises from holding cash and
deposits. Funds held in operating accounts and term deposits earned variable interest at rates ranging between
0% to 2.3% (2018: 0% to 2.3%), depending on the type of bank account and cash balance. The consolidated
entity does not have any loans or borrowings.
The interest-bearing financial instruments held by the consolidated entity are:
Cash and cash equivalents
30 June
2019
$’000
30 June
2018
$’000
1,462
2,827
A change of 1% in the variable interest rate at the reporting date would have an impact on the consolidated
entity profit and loss and equity of $15,000 (2018: $28,000) assuming all other variables remain constant.
Liquidity risk
Liquidity risk is the risk that the consolidated entity will not be able to meet its financial obligations as and when
they fall due.
The consolidated entity manages liquidity risk by maintaining adequate cash reserves, by continuously
monitoring actual and forecast cash flows and by matching the maturity profiles of its financial assets and
liabilities.
48
FOR THE YEAR ENDED 30 JUNE 2019CONSOLIDATED STATEMENTOF FINANCIAL POSITIONFINANCIAL STATEMENTS The following table sets out the contractual maturity of the consolidated entity’s financial instrument liabilities
based on undiscounted cash flows.
Carrying
amount
$’000
Contractual
cash flows
$’000
1 year
or less
$’000
Between 1
and 2 years
$’000
Between 2
and 5 years
$’000 s
Over
5 years
$’000
2019
Trade and other payables
676
2018
Trade and other payables
560
676
560
676
560
-
-
-
-
-
-
Credit risk management
Credit risk is the risk that a counterparty will default on its contractual obligations resulting in a financial
loss to the consolidated entity. The consolidated entity is exposed to credit risk from its bank deposits and
other receivables as disclosed in the statement of financial position. The consolidated entity does not have
any significant credit risk exposure to any single counterparty or any group of counterparties having similar
characteristics. The credit risk on liquid funds is limited because the counterparties are banks with high credit-
ratings assigned by international credit-rating agencies. (S+P Australian AA-, Tanzanian B)
Holdings by geographical region
Cash and cash equivalents
Other receivables
Australian
$’000
Tanzanian
$’000
1,405
118
1,523
57
-
57
Total
$’000
1,462
118
1,580
The maximum exposure to credit risk at the reporting date is the carrying value of each class of financial assets
disclosed in Notes 6, 7 and 9.
Fair value measurement
The carrying amounts of Other receivables and Trade and other payables are assumed to approximate their fair
values due to their short-term nature.
25. EVENTS AFTER BALANCE DATE
Share Placement
The Company announced on 25 September 2019 that it had raised $1.3 million through a placement of 14.44
million shares at an issue price of 9 cents per share to institutional, sophisticated and professional investors.
There have not been any other events that have arisen between 30 June 2019 and the date of this report or
any other item, transaction or event of a material and unusual nature likely, in the opinion of the directors, to
materially affect the operations of the Company, the results of those operations or the state of affairs of the
Company, in future financial years.
49
KIBARAN RESOURCES ANNUAL REPORT 2019 FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
(CONTINUED)
26. SIGNIFICANT ACCOUNTING POLICIES
a) Parent entity information
In accordance with the Corporations Act 2001,
these financial statements present the results of the
consolidated entity only, and information about the
parent entity is disclosed in note 22.
b) Basis of consolidation
The consolidated financial statements comprise
the financial statements of the Company and its
subsidiaries as at 30 June 2019. Subsidiaries are
entities that are controlled by the Company. Control
is achieved when the Company is exposed to, or
has rights to, variable returns from its involvement
with its subsidiaries and has the ability to affect those
returns through its capacity to direct the activities of
its subsidiaries.
Specifically, the Group controls a subsidary if, and
only if, the Group has:
• power over the subsidary (i.e., existing rights that
give it the current ability to direct the relevant
activities of the subsidary)
• exposure, or rights, to variable returns from its
involvement with the subsidary
• the ability to use its power over the subsidary to
affect its returns
Generally, there is a presumption that a majority
of voting rights results in control. To support this
presumption and when the Group has less than
a majority of the voting or similar rights of an
subsidary, the Group considers all relevant facts and
circumstances in assessing whether it has power over
an subsidary, including:
• the contractual arrangement(s) with the other vote
holders of the subsidary
• rights arising from other contractual arrangements
• the Group's voting rights and potential voting rights
The consolidated entity re-assesses whether or not it
controls an entity if facts and circumstances indicate
that there is a change to the elements of control.
Assets, liabilities, income and expenses of a subsidiary
acquired or disposed of during the year are included
in the consolidated financial statements from the
date the consolidated entity gains control until the
date the consolidated entity ceases to control the
subsidiary.
When necessary, adjustments are made to the
financial statements of subsidiaries align to their
accounting policies with the consolidated entity.
All consolidated entity assets and liabilities, equity,
income, expenses and cash flows relating to
transactions between members of the consolidated
entity 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.
c) Taxes
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 consolidated entity
operates and generates taxable income.
Current income tax relating to items recognised
directly in equity is recognised in equity and not
in the statement of profit or loss. Management
periodically evaluates positions taken in the tax
returns with respect to situations in which applicable
tax regulations are subject to interpretation and
establishes provisions where appropriate.
50
FOR THE YEAR ENDED 30 JUNE 2019CONSOLIDATED STATEMENTOF FINANCIAL POSITIONFINANCIAL STATEMENTS Deferred tax
Deferred tax liabilities 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, it affects neither the
accounting profit nor taxable profit or loss; or
• 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 all deductible
temporary differences, the carry forward of unused
tax credits and any unused tax losses. Deferred tax
assets are recognised to the extent that it is probable
that taxable profit will be available against which
the deductible temporary differences and the carry
forward of unused tax credits and unused tax losses
can be utilised, except:
• when the deferred tax asset relating to the
deductible temporary difference arises from
the initial recognition of an asset or liability in a
transaction that is not a business combination and
at the time of the transaction, it affects neither the
accounting profit nor taxable profit or loss
• in respect of deductible temporary differences
associated with investments in subsidiaries,
associates and interests in joint arrangements,
deferred tax assets are recognised only to the extent
that it is probable that the temporary differences
will reverse in the foreseeable future and taxable
profit will be available against which the temporary
differences can be utilised
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 deferred tax liabilities are
offset if a legally enforceable right exists to set off
current tax assets against current tax liabilities and
the deferred taxes relate to the same taxable entity
and the same taxation authority.
d) Exploration and development expenditure
Exploration and evaluation expenditure in relation to
separate areas of interest for which rights of tenure
are current is carried forward as an asset in the
statement of financial position where it is expected
that the expenditure will be recovered through the
successful development of an area of interest, or by
its sale, or exploration activities are continuing in an
area and activities have not reached a stage which
permits a reasonable estimate of the existence or
otherwise of economically recoverable reserves.
Where a project or an area of interest has been
abandoned, the expenditure incurred thereon is
written off in the year in which the decision is made.
When production commences, the accumulated
costs for the relevant area of interest are amortised
over the life of the area according to the rate of
depletion of the economically recoverable reserves.
A regular review is undertaken of each area of interest
to determine the appropriateness of continuing to
carry forward costs in relation to that area of interest.
(Refer to note 26g).
51
KIBARAN RESOURCES ANNUAL REPORT 2019 FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
(CONTINUED)
26. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
d)
Exploration and development expenditure
(continued)
Costs of site restoration are provided over the life
of the facility from when exploration commences
and are included in the costs of that stage. Site
restoration costs include the dismantling and removal
of plant, equipment and building structures, waste
removal and rehabilitation of the site in accordance
with the permits. Such costs are determined using
estimates of future costs, current legal requirements
and applicable technology on a discounted basis.
Payments for exploration and evaluation expenditure
are recorded net of any government grants.
e) Operating segments
Operating segments are presented on the same basis
as the internal reports provided to the chief operating
decision maker who is responsible for the allocation
of resources to operating segments and for assessing
their performance.
f) Property plant & equipment
Each class of property, plant and equipment is carried
at cost less, where applicable, any accumulated
depreciation and impairment losses.
Cost includes acquisition, being the fair value of the
consideration provided, plus incidental costs directly
attributable to the acquisition.
Plant and equipment
The carrying amount of plant and equipment is
reviewed annually by directors to ensure it is not in
excess of the amounts recoverable on the basis of net
cash flows that are expected to be received from the
employment and subsequent disposal of the assets.
Subsequent costs are included in the asset’s
carrying amount or recognised as a separate asset,
as appropriate, only when it is probable that future
economic benefits associated with the item will flow to
the consolidated entity and the cost of the item can be
measured reliably. Repairs and maintenance expenses
are charged to the profit and loss component of
the statement of comprehensive income during the
financial period in which they are incurred.
Depreciation
The depreciable amount of all fixed assets including
any buildings and capitalised lease assets, but
excluding freehold land, is depreciated on a straight-
line basis over their useful lives, commencing from
the time the asset is held ready for use as follows:
Plant and equipment office
Plant and equipment field
Motor vehicles
Furniture and equipment
Leasehold assets
8 years
2–5 years
5 years
4 years
3 years
Residual values of the assets and their useful lives are
reviewed and if necessary adjusted, at each reporting
date.
An asset’s carrying amount is written down
immediately to its recoverable amount if the asset’s
carrying amount is greater than its estimated
recoverable amount.
Gains and losses on disposals are determined by
comparing proceeds with the carrying amount and
are included in the profit and loss component of the
statement of comprehensive income.
g)
Impairment of non-financial assets
At each reporting date, the consolidated entity
reviews the carrying values of its tangible and
intangible assets to determine whether there is any
indication that those assets have been impaired. If
such an indication exists, the recoverable amount
of the asset, being the higher of the asset’s fair
value less costs to sell and value in use, is compared
to the asset’s carrying value. Any excess of the
asset’s carrying value over its recoverable amount
is expensed to the profit or loss component of the
consolidated statement of profit or loss and other
comprehensive income.
Impairment testing is performed annually for
goodwill and intangible assets with indefinite lives.
Where it is not possible to estimate the recoverable
amount of an individual asset, the entity estimates the
recoverable amount of the cash-generating unit to
which the asset belongs.
52
FOR THE YEAR ENDED 30 JUNE 2019CONSOLIDATED STATEMENTOF FINANCIAL POSITIONFINANCIAL STATEMENTS h) Foreign currency transactions and balances
Transactions and balances
Foreign currency transactions are translated into
Australian dollars using the exchange rates prevailing
at the date of the transaction and foreign currency
monetary items are translated at the year-end
exchange rate. Non-monetary items measured at
historical cost continue to be carried at the exchange
rate at the date of the transaction and non-monetary
items measured at fair value are reported at the
exchange rate at the date when fair values were
determined.
The cost of equity-settled transactions is measured
at fair value on grant date. Fair value is independently
determined using either the binomial or Black-
Scholes option pricing model that takes into account
the exercise price, the term of the option, the
impact of dilution, the share price at grant date and
expected price volatility of the underlying share, the
expected dividend yield and the risk free interest
rate for the term of the option, together with non-
vesting conditions that do not determine whether the
consolidated entity receives the services that entitle
the employees to receive payment. No account is
taken of any other vesting conditions.
Exchange differences arising on the translation of
monetary items are recognised in the profit or loss
component of the statement of profit or loss and
other comprehensive income, except where they
are deferred in equity as a qualifying cash flow or net
investment hedge.
Subsidiaries
On consolidation, the assets and liabilities of foreign
operations are translated into Australian dollars at
the exchange rate prevailing at the reporting date
and their statements of profit or loss are translated
at exchange rates prevailing at the dates of the
transactions. Exchange differences arising on
translation for consolidation 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.
i) Employee benefits
Provision is made for the consolidated entity’s
liability for employee benefits arising from services
rendered by employees up to reporting date. Short
term employee benefits have been measured at the
amounts expected to be paid when the liability is
settled, plus related on-costs. Long term employee
benefits have been measured at the present value of
the estimated future cash outflows to be made for
those benefits.
Share-based payments
Equity-settled share-based compensation benefits
are provided to employees and directors.
The cost of equity-settled transactions is recognised
as an expense with a corresponding increase in
equity over the vesting period. The cumulative charge
to profit or loss is calculated based on the grant
date fair value of the award, the best estimate of
the number of awards that are likely to vest and the
expired portion of the vesting period. The amount
recognised in profit or loss for the period is the
cumulative amount calculated at each reporting date
less amounts already recognised in previous periods.
If equity-settled awards are modified, as a minimum
an expense is recognised as if the modification
had not been made. An additional expense is
recognised, over the remaining vesting period, for
any modification that increases the total fair value of
the share-based compensation benefit as at the date
of modification.
If a non-vesting condition is within the control of
the consolidated entity or employee, the failure to
satisfy the condition is treated as a cancellation.
If the condition is not within the control of the
consolidated entity or employee and is not satisfied
during the vesting period, any remaining expense for
the award is recognised over the remaining vesting
period, unless the award is forfeited.
If an equity-settled award is cancelled, it is treated
as if it has vested on the date of cancellation and
any remaining expense is recognised immediately.
If a new replacement award is substituted for the
cancelled award, the cancelled and new award are
treated as if they were a modification.
53
KIBARAN RESOURCES ANNUAL REPORT 2019 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
(CONTINUED)
26. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
j)
Issued capital
Ordinary shares are classified as equity.
Incremental costs directly attributable to the issue
of new shares or options are shown in equity as a
deduction, net of tax, from the proceeds.
k) Financial instruments
A financial instrument is any contract that gives
rise to a financial asset of one entity and a financial
liability or equity instrument of another entity.
Policies under AASB 139
Other receivables
Other receivables, which generally have 30 day
terms, are recognised initially at fair value and
subsequently carried at amortised cost using the
effective interest method, less an allowance for any
estimated shortfall in receipt. An estimate of any
shortfall in receipt is made when there is objective
evidence a loss has been incurred. Bad debts are
written off when identified.
Trade and other payables
Liabilities for creditors and other amounts are carried
at amortised cost, which is the present value of the
consideration to be paid in the future for goods
and services received, whether or not billed to the
consolidated entity. The carrying period is dictated by
market conditions but is generally less than 45 days.
Policies under AASB 9
i) Financial assets
value plus, in the case of a financial asset not at fair
value through profit or loss, transaction costs. Trade
receivables that do not contain a significant financing
component or for which the Group has applied the
practical expedient are measured at the transaction
price determined under AASB 15.
In order for a financial asset to be classified and
measured at amortised cost or fair value through
OCI, it needs to give rise to cash flows that are ‘solely
payments of principal and interest (SPPI)’ on the
principal amount outstanding. This assessment is
referred to as the SPPI test and is performed at an
instrument level.
The Group’s business model for managing financial
assets refers to how it manages its financial assets in
order to generate cash flows. The business model
determines whether cash flows will result from
collecting contractual cash flows, selling the financial
assets, or both.
Subsequent measurement
For purposes of subsequent measurement, financial
assets are classified in four categories:
• Financial assets at amortised cost (debt instruments)
• Financial assets at fair value through OCI with
recycling of cumulative gains and losses (debt
instruments)
• Financial assets designated at fair value through OCI
with no recycling of cumulative gains and losses
upon derecognition (equity instruments)
Initial recognition and measurement
• Financial assets at fair value through profit or loss
Financial assets are classified, at initial recognition, as
subsequently measured at amortised cost, fair value
through other comprehensive income (OCI), and fair
value through profit or loss.
The classification of financial assets at initial
recognition depends on the financial asset’s
contractual cash flow characteristics and the Group’s
business model for managing them. With the
exception of trade receivables that do not contain
a significant financing component or for which
the Group has applied the practical expedient, the
Group initially measures a financial asset at its fair
Financial assets at amortised cost (debt instruments)
This category is the most relevant to the Group. The
Group measures financial assets at amortised cost if
both of the following conditions are met:
• The financial asset is held within a business model
with the objective to hold financial assets in order
to collect contractual cash flows and
• The contractual terms of the financial asset give
rise on specified dates to cash flows that are solely
payments of principal and interest on the principal
amount outstanding
54
FOR THE YEAR ENDED 30 JUNE 2019CONSOLIDATED STATEMENTOF FINANCIAL POSITIONFINANCIAL STATEMENTS Financial assets at amortised cost are subsequently
measured using the effective interest (EIR) method
and are subject to impairment. Gains and losses
are recognised in profit or loss when the asset is
derecognised, modified or impaired.
The Group’s financial assets at amortised cost
includes trade and other receivables.
Derecognition
A financial asset (or, where applicable, a part of a
financial asset or part of a group of similar financial
assets) is primarily derecognised (i.e., removed from
the Group’s consolidated statement of financial
position) when:
• The rights to receive cash flows from the asset have
expired or
• The Group has transferred its rights to receive cash
flows from the asset or has assumed an obligation
to pay the received cash flows in full without
material delay to a third party under a ‘pass-
through’ arrangement; and either (a) the Group has
transferred substantially all the risks and rewards of
the asset, or (b) the Group has neither transferred
nor retained substantially all the risks and rewards of
the asset, but has transferred control of the asset
When the Group has transferred its rights to receive
cash flows from an asset or has entered into a
pass-through arrangement, it evaluates if, and to
what extent, it has retained the risks and rewards
of ownership. When it has neither transferred nor
retained substantially all of the risks and rewards of
the asset, nor transferred control of the asset, the
Group continues to recognise the transferred asset to
the extent of its continuing involvement. In that case,
the Group also recognises an associated liability.
The transferred asset and the associated liability
are measured on a basis that reflects the rights and
obligations that the Group has retained.
Continuing involvement that takes the form of a
guarantee over the transferred asset is measured at
the lower of the original carrying amount of the asset
and the maximum amount of consideration that the
Group could be required to repay.
Impairment of financial assets
Expected credit losses (ECLs) for all debt instruments
not held at fair value through profit or loss will be
recognised through an allowance. ECLs are based on
the difference between the contractual cash flows
due in accordance with the contract and all the cash
flows that the Group expects to receive, discounted
at an approximation of the original effective interest
rate. The expected cash flows will include cash
flows from the sale of collateral held or other credit
enhancements that are integral to the contractual
terms.
ECLs are recognised in two stages. For credit
exposures for which there has not been a significant
increase in credit risk since initial recognition, ECLs
are provided for credit losses that result from default
events that are possible within the next 12-months (a
12-month ECL). For those credit exposures for which
there has been a significant increase in credit risk
since initial recognition, a loss allowance is required
for credit losses expected over the remaining life of
the exposure, irrespective of the timing of the default
(a lifetime ECL).
For other debt financial assets (i.e., cash on deposit
at bank). the ECL is based on the 12-month ECL. The
12-month ECL is the portion of lifetime ECLs 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 ECL.
The Group considers a financial asset in default when
contractual payments are 90 days past due. However,
in certain cases, the Group may also consider a
financial asset to be in default when internal or
external information indicates that the Group is
unlikely to receive the outstanding contractual
amounts in full before taking into account any credit
enhancements held by the Group. A financial asset is
written off when there is no reasonable expectation
of recovering the contractual cash flows.
55
KIBARAN RESOURCES ANNUAL REPORT 2019 FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
(CONTINUED)
26. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
k) Financial instruments (continued)
m) Revenue
ii) Financial liabilities
Policy under AASB 15
Initial recognition and measurement
Financial liabilities are classified, at initial recognition,
as financial liabilities at fair value through profit or
loss, loans and borrowings, payables, or as derivatives
designated as hedging instruments in an effective
hedge, as appropriate.
All financial liabilities are recognised initially at fair
value.
The Group’s financial liabilities include trade and other
payables.
Derecognition
A financial liability is derecognised when the obligation
under the liability is discharged or cancelled or
expires. When an existing financial liability is replaced
by another from the same lender on substantially
different terms, or the terms of an existing liability
are substantially modified, such an exchange or
modification is treated as the derecognition of the
original liability and the recognition of a new liability.
The difference in the respective carrying amounts is
recognised in the statement of profit or loss.
iii) Offsetting of financial instruments
Financial assets and financial liabilities are offset
and the net amount is reported in the consolidated
statement of financial position if there is a currently
enforceable legal right to offset the recognised
amounts and there is an intention to settle on a net
basis, to realise the assets and settle the liabilities
simultaneously.
l) Cash and cash equivalents
Cash and cash equivalents include cash on hand,
deposits held at call with banks and other short-term
highly liquid investments with original maturities of 3
months or less.
Revenue is recognised when it is probable that the
economic benefit will flow to the consolidated entity
and the revenue can be reliably measured. Revenue
is measured at the fair value of the consideration
received or receivable.
Policy under AASB 118
Revenue from contracts with customers is recognised
when control of the goods or services are transferred
to the customer at an amount that reflects the
consideration to which the Group expects to be
entitled in exchange for those goods
or services.
Interest revenue is accrued on a time basis, by
reference to the principal outstanding and at the
effective interest rate applicable, which is the rate
that exactly discounts estimated future cash receipts
through the expected life of the financial asset to that
asset’s net carrying amount.
Other revenue is recognised when it is received or
when the right to receive payment is established.
All revenue is stated net of the amount of goods and
services tax (GST).
n) Goods and services tax (GST)
Revenues, expenses and assets are recognised net
of the amount of GST, except where the amount of
GST incurred is not recoverable from the Australian
Tax Office (ATO) In these circumstances the GST is
recognised as part of the cost of acquisition of the
asset or as part of an item of the expense. Receivables
and payables in the statement of financial position are
shown inclusive of GST.
The net amount of GST recoverable from, or payable
to, the ATO is included as part of receivables or
payables.
Cash flows are presented in the cash flow statement
on a gross basis, except for the GST component of
investing and financing activities, which are disclosed
as operating cash flows.
56
FOR THE YEAR ENDED 30 JUNE 2019CONSOLIDATED STATEMENTOF FINANCIAL POSITIONFINANCIAL STATEMENTS Key estimates — impairment
The consolidated entity assesses impairment at each
reporting date by evaluating conditions specific to the
entity that may lead to impairment of assets. Where
an impairment trigger exists, the recoverable amount
of the asset is determined. Value-in-use calculations
performed in assessing recoverable amounts
incorporate a number of key estimates.
Recoverability of exploration and evaluation costs
The consolidated entity assesses the recoverability
of the carrying value of capitalised exploration and
evaluation costs at each reporting date (or at closer
intervals should the need arise). In completing
this assessment, regard is had to the Company’s
intentions with regard to proposed future exploration
and development plans for individual exploration
areas, to the success or otherwise of activities
undertaken in individual areas in recent times, to the
likely success of future planned exploration activities
and to any potential plans for divestment of individual
areas. Any required adjustments to the carrying value
of capitalised exploration are completed based on
the results of this assessment.
Share-based payment transactions
The consolidated entity measures the cost of shares
and options issued to employees and third parties by
reference to the fair value of the equity instruments
at the date at which they are granted. The fair value
of unlisted options is determined using either the
binomial or Black-Scholes pricing model, taking into
account the terms and conditions upon which the
instruments were granted.
o) Earnings per share
Basic earnings per share
Basic earnings per share is calculated by dividing the
profit or loss attributable to the owners of Kibaran
Resources Limited, excluding any costs of servicing
equity other than ordinary shares, by the weighted
average number of ordinary shares outstanding
during the financial year, adjusted for any bonus
elements in ordinary shares issued during the
financial year.
Diluted earnings per share
Diluted earnings per share adjusts the figures used
in the determination of basic earnings per share
to take into account the past tax effect of interest
and other financing costs associated with dilutive
potential ordinary shares and the weighted average
number of shares assumed to have been issued for
no consideration in relation to dilutive potential
ordinary shares.
p) Government grants
Government grants are recognised where they can
be reliably measured, it is certain that the grant will be
received and all attached conditions will be satisfied.
When the grant relates to an expense item, it is
recognised as income on a systematic basis over the
periods that the related costs for which it is intended
to compensate, are expensed. When the grant relates
to an asset, it is offset against the capitalised amount
and recognised as income in equal amounts over the
expected useful life of the related asset (when the
asset is depreciated).
q) Critical accounting estimates and judgements
The directors evaluate estimates and judgments
incorporated into the financial report based on
historical knowledge and best available current
information. Estimates assume a reasonable
expectation of future events and are based on current
trends and economic data, obtained both externally
and generated internally by the consolidated entity.
57
KIBARAN RESOURCES ANNUAL REPORT 2019 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
(CONTINUED)
26. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
r) New accounting standards and interpretations
AASB 9 Financial Instruments.
The consolidated entity has adopted AASB 9 using
modified retrospective approach as issued in July
2014 with the date of initial application being for the
reporting periods beginning 1 January 2018 and the
Group adopted from 1 July 2018. In accordance with
the transitional provisions in AASB 9, comparative
figures have not been restated. AASB 9 replaces
AASB 139 Financial Instruments: Recognition and
Measurement bringing together all three aspects
of the accounting for financial instruments:
classification and measurement; impairment; and
hedge accounting
Classification and measurement
Except for certain receivables, under AASB 9, the
consolidated entity initially measures a financial asset
at its fair value plus, in the case of a financial asset
not at fair value through profit or loss, transaction
costs. Under AASB 9, debt financial instruments are
subsequently measured at fair value through profit
or loss (FVPL), amortised cost, or fair value through
other comprehensive income (FVOCI).
The classification is based on two criteria: the
consolidated entity's business model for managing
the assets; and whether the instruments’ contractual
cash flows represent ‘solely payments of principal
and interest’ on the principal amount outstanding
(the ‘SPPI criterion’).
The accounting policies adopted in the preparation
of the half year financial report are consistent with
those adopted and disclosed in the Company's
annual financial report for the year ended 30 June
2018, except for the adoption of new standards and
interpretations as of 1 July 2018.
The Company had to change its accounting policies
as a result of adopting the following standards:
• AASB 15 Revenue from Contracts with Customers,
and
• AASB 9 Financial Instruments.
AASB 15: Revenue from Contracts with Customers
AASB 15 replaces all existing revenue requirements
in Australian Accounting Standards (AASB 111
Construction Contracts, AASB 118 Revenue, AASB
Interpretation 13 Customer Loyalty Programmes,
AASB Interpretation 15 Agreements for the
Construction of Real Estate, AASB Interpretation
18 Transfers of Assets from Customers and AASB
Interpretation 131 Revenue - Barter Transactions
Involving Advertising Services) and applies to all
revenue arising from contracts with customers,
unless the contracts are in the scope of other
standards, such as AASB 117 (or AASB 16 Leases,
once applied). The core principle of AASB 15 is that
an entity recognises revenue to depict the transfer
of promised goods or services to customers in an
amount that reflects the consideration to which an
entity expects to be entitled in exchange for those
goods or services. The adoption of AASB 15 did not
give rise to any transitional adjustments because the
Company does not generate any revenue within the
scope of AASB 15.
58
FOR THE YEAR ENDED 30 JUNE 2019CONSOLIDATED STATEMENTOF FINANCIAL POSITIONFINANCIAL STATEMENTS The new classification and measurement of the
consolidated entity’s financial assets are, as follows:
• Debt instruments at amortised cost for financial
assets that are held within a business model with
the objective to hold the financial assets in order to
collect contractual cash flows that meet the SPPI
criterion. This category includes the consolidated
entity’s other receivables.
• Financial assets at FVPL comprise derivative
instruments and quoted equity instruments which
the consolidated entity had not irrevocably elected,
at initial recognition or transition, to classify at
FVOCI. This category would also include debt
instruments whose cash flow characteristics
fail the SPPI criterion or are not held within a
business model whose objective is either to
collect contractual cash flows, or to both collect
contractual cash flows and sell. Under AASB 139,
the consolidated entity’s quoted equity securities
were classified as AFS financial assets. Upon
transition the AFS reserve relating to quoted equity
securities, which had been previously recognised
under accumulated OCI, was reclassified to retained
earnings.
The assessment of the consolidated entity’s business
models was made as of the date of initial application,
1 July 2018.
interest is made based on the facts and circumstances
as at the date of initial recognition of the assets. The
assessment had no material impact to the Group.
Impairment
The adoption of AASB 9 has changed the
consolidated entity’s accounting for impairment
losses for financial assets by replacing AASB 139’s
incurred loss approach with a forward-looking
expected credit loss (ECL) approach. ECLs are based
on the difference between the contractual cash flows
due in accordance with the contract and all the cash
flows that the consolidated entity expects to receive.
The shortfall is then discounted at an approximation
to the asset’s original effective interest rate.
For other receivables, the consolidated entity has
applied the standard’s general approach and has
calculated ECLs based on lifetime expected credit
losses.
For other debt financial assets (i.e., cash on deposit
at bank), the ECL is based on the 12-month ECL. The
12-month ECL is the portion of lifetime ECLs 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 ECL.
The assessment of whether contractual cash flows on
debt instruments are solely comprised of principal and
While cash and cash equivalents are subject to the
impairment requirements of AASB 9, the identified
impairment loss was immaterial.
27. STANDARDS ISSUED BUT NOT YET EFFECTIVE
Australian Accounting Standards and Interpretations
that have recently been issued or amended but are
not yet mandatory, have not been early adopted
by the consolidated entity for the annual reporting
period ended 30 June 2019. The consolidated entity's
assessment of the impact of these new or amended
Accounting Standards and Interpretations, most
relevant to the consolidated entity, are set out below:
59
KIBARAN RESOURCES ANNUAL REPORT 2019 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
(CONTINUED)
Appli-
cation
date of
stan-
dard
1
January
2019
Appli-
cation
date
for
Group
1 July
2019
Impact
on the
Group
The new
standard
is not
expected
to sig-
nificantly
impact
the con-
solidated
entity as
it does
not hold
any sig-
nificant
leasing
arrange-
ments.
27. STANDARDS ISSUED BUT NOT YET EFFECTIVE (CONTINUED)
Reference
Title
Summary
AASB 16
Leases
Leases
AASB 16 requires lessees to account for
all leases under a single on-balance sheet
model in a similar way to finance leases
under AASB 117 Leases. The standard
includes two recognition exemptions for
lessees – leases of ’low-value’ assets (e.g.,
personal computers) and short-term leases
(i.e., leases with a lease term of 12 months
or less). At the commencement date of a
lease, a lessee will recognise a liability to
make lease payments (i.e., the lease liability)
and an asset representing the right to use
the underlying asset during the lease term
(i.e., the right-of-use asset).
Lessees will be required to separately
recognise the interest expense on the lease
liability and the depreciation expense on the
right-of-use asset.
Lessees will be required to remeasure the
lease liability upon the occurrence of certain
events (e.g., a change in the lease term, a
change in future lease payments resulting
from a change in an index or rate used to
determine those payments). The lessee
will generally recognise the amount of the
remeasurement of the lease liability as an
adjustment to the right-of-use asset.
The Group has assessed the potential
impact on its consolidated financial
statements resulting from the application of
AASB 16.
60
FOR THE YEAR ENDED 30 JUNE 2019CONSOLIDATED STATEMENTOF FINANCIAL POSITIONFINANCIAL STATEMENTS Appli-
cation
date of
stan-
dard
1
January
2020
Appli-
cation
date
for
Group
1 July
2020
Impact
on the
Group
The
Group
has
assessed
there will
be no
material
impact.
Reference
Title
Summary
Conceptual
Framework
AASB 2019-1
Conceptual
Framework
for Financial
Reporting
Amendments
to Australian
Accounting
Standards –
Reference
to the
Conceptual
Framework
The revised Conceptual Framework includes
some new concepts, provides updated
definitions and recognition criteria for assets
and liabilities and clarifies some important
concepts. It is arranged in eight chapters, as
follows:
• Chapter 1 – The objective of financial
reporting
• Chapter 2 – Qualitative characteristics of
useful financial information
• Chapter 3 – Financial statements and the
reporting entity
• Chapter 4 – The elements of financial
statements
• Chapter 5 – Recognition and derecognition
• Chapter 6 – Measurement
• Chapter 7 – Presentation and disclosure
• Chapter 8 – Concepts of capital and capital
maintenance
AASB 2019-1 has also been issued, which sets
out the amendments to Australian Accounting
Standards, Interpretations and other
pronouncements in order to update references
to the revised Conceptual Framework. The
changes to the Conceptual Framework may
affect the application of accounting standards
in situations where no standard applies to a
particular transaction or event. In addition,
relief has been provided in applying AASB 3 and
developing accounting policies for regulatory
account balances using AASB 108, such that
entities must continue to apply the definitions
of an asset and a liability (and supporting
concepts) in the Framework for the Preparation
and Presentation of Financial Statements (July
2004), and not the definitions in the revised
Conceptual Framework.
The Group has assessed there will be no
material impact on the Group’s financial
results when it is first adopted for the year
ended 30 June 2021.
61
KIBARAN RESOURCES ANNUAL REPORT 2019 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
(CONTINUED)
27. STANDARDS ISSUED BUT NOT YET EFFECTIVE (CONTINUED)
Reference
Title
Summary
AASB
2018-7
Amendments
to Australian
Accounting
Standards –
Definition of
Material
This Standard amends AASB 101
Presentation of Financial Statements and
AAS 108 Accounting Policies, Changes
in Accounting Estimates and Errors to
align the definition of ‘material’ across the
standards and to clarify certain aspects
of the definition. The amendments clarify
that materiality will depend on the nature
or magnitude of information. An entity will
need to assess whether the information,
either individually or in combination
with other information, is material in the
context of the financial statements. A
misstatement of information is material if it
could reasonably be expected to influence
decisions made by the primary users.
Appli-
cation
date of
stan-
dard
1
January
2020
Appli-
cation
date
for
Group
1 July
2020
Impact
on the
Group
The
Group
is still
assessing
whether
there will
be any
material
impact.
AASB
Interpretation
23 Uncertainty
over
Income Tax
Treatments,
and relevant
amending
standards
Uncertainty
over Income
Tax Treatments
The Interpretation clarifies the application
of the recognition and measurement
criteria in IAS 12 Income Taxes when there
is uncertainty over income tax treatments.
The Interpretation specifically addresses the
following:
There
will be no
material
impact
on the
Group.
• Whether an entity considers uncertain tax
treatments separately
1
January
2019
1 July
2019
• The assumptions an entity makes about
the examination of tax treatments by
taxation authorities
• How an entity determines taxable profit
(tax loss), tax bases, unused tax losses,
unused tax credits and tax rates
• How an entity considers changes in facts
and circumstances.
The consolidated entity has decided not to early adopt any of the new and amended pronouncements.
This is the end of the consolidated financial statements.
62
FOR THE YEAR ENDED 30 JUNE 2019CONSOLIDATED STATEMENTOF FINANCIAL POSITIONFINANCIAL STATEMENTS DIRECTORS’ DECLARATION
In the directors’ opinion:
1. The financial statements, comprising the consolidated statement of profit or loss and other comprehensive
income, consolidated statement of financial position, consolidated statement of cash flows, consolidated
statement of changes in equity and accompanying notes, are in accordance with the Corporations Act 2001
and:
a) Comply with accounting standards and the Corporations Regulations 2001; and
b) Give a true and fair view of the financial position at 30 June 2019 and of the performance for the year
ended on that date.
2, The Company has included in the notes to the financial statements an explicit and unreserved statement of
compliance with International Financial Reporting Standards.
3. Subject to achieving the matters set out in note 2, in the directors’ opinion, there are reasonable grounds to
believe that the Company will be able to pay its debts as and when they become due and payable.
4. The directors have been given the declarations by the chief executive officer and chief financial officer
required by section 295A of the Corporations Act 2001.
This declaration is made in accordance with a resolution of the directors.
Andrew Spinks
Managing Director
Perth, 25 September 2019
63
KIBARAN RESOURCES ANNUAL REPORT 2019
INDEPENDENT AUDITOR’S REPORT
Ernst & Young
11 Mounts Bay Road
Perth WA 6000 Australia
GPO Box M939 Perth WA 6843
Tel: +61 8 9429 2222
Fax: +61 8 9429 2436
ey.com/au
Independent auditor’s report to the Members of Kibaran Resources
Limited
Report on the audit of the financial report
Opinion
We have audited the financial report of Kibaran Resources Limited (the Company) and its subsidiaries
(collectively the Group), which comprises the consolidated statement of financial position as at 30 June
2019, the consolidated statement of profit or loss and other comprehensive income, consolidated
statement of changes in equity and consolidated statement of cash flows for the year then ended, notes
to the financial statements, including a summary of significant accounting policies, and the Director’s
declaration.
In our opinion, the accompanying financial report of the Group is in accordance with the Corporations Act
2001, including:
a)
b)
giving a true and fair view of the consolidated financial position of the Group as at 30 June 2019
and of its consolidated financial performance for the year ended on that date; and
complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under
those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial
Report section of our report. We are independent of the Group in accordance with the auditor
independence requirements of the Corporations Act 2001 and the ethical requirements of the Accounting
Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional Accountants (the
Code) that are relevant to our audit of the financial report in Australia. We have also fulfilled our other
ethical responsibilities in accordance with the Code.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our opinion.
Material uncertainty related to going concern
We draw attention to Note 2 in the financial report, which describes the principal conditions that raise
doubt about the Group’s ability to continue as a going concern. These conditions indicate the existence of
a material uncertainty that may cast significant doubt about the Group’s ability to continue as a going
concern. Our opinion is not modified in respect of this matter.
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
GB:JG:KNL:051
64
FOR THE YEAR ENDED 30 JUNE 2019CONSOLIDATED STATEMENTOF FINANCIAL POSITION
Key audit matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our
audit of the financial report of the current year. These matters were addressed in the context of our audit
of the financial report as a whole, and in forming our opinion thereon, but we do not provide a separate
opinion on these matters. For each matter below, our description of how our audit addressed the matter
is provided in that context. In addition to the matter described in the Material Uncertainty Related to
Going Concern section, we have determined the matter described below to be the key audit matter to be
communicated in our report.
We have fulfilled the responsibilities described in the Auditor’s Responsibilities for the Audit of the
Financial Report section of our report, including in relation to these matters. Accordingly, our audit
included the performance of procedures designed to respond to our assessment of the risks of material
misstatement of the financial report. The results of our audit procedures, including the procedures
performed to address the matters below, provide the basis for our audit opinion on the accompanying
financial report.
1. Carrying value of capitalised exploration and evaluation
Why significant
How our audit addressed the key audit matter
As disclosed in Note 8 to the financial report as at 30
June 2019, the Group held capitalised exploration and
evaluation expenditure assets of $17,292,000. Note 8
to the financial report also includes references to the
status of the Group’s Epanko mining licence in Tanzania.
The carrying value of exploration and evaluation
expenditure is assessed for impairment by the Group
when facts and circumstances indicate that the
exploration and evaluation expenditure may exceed its
recoverable amount.
The determination as to whether there are any
indicators to require an exploration and evaluation asset
to be assessed for impairment, involves a number of
judgments including whether the Group has tenure,
intends to perform ongoing expenditure and whether
there is sufficient information for a decision to be made
that the area of interest is not commercially viable.
During the year, the Group determined that there had
been indicators of impairment for two of its areas of
interest and as a result, the Group has written off the
full carrying value of both of these areas of interest at
30 June 2019 amounting to $964,000. The Group
determined that there had been no indicators of
impairment for its remaining area of interest being the
Epanko Graphite Project. Refer to Note 8 in the financial
report for further details.
Our audit procedures included the following:
• Considered the Group’s right to explore in
the relevant area of interests, which
included obtaining and assessing supporting
documentation. We also considered the
status of the Epanko mining licence as it
related to tenure.
• Considered the Group’s intention to carry
out significant exploration and evaluation
activity in the relevant exploration area,
which included assessment of the Group’s
cash-flow forecast models, discussions with
senior management and Directors as to the
intentions and strategy of the Group.
• Considered whether the exploration
activities within each area of interest has
reached a stage where the commercial
viability of the resource estimate could be
made. This included obtaining and assessing
supporting documentation such as
exploration reports and the Group's
announcements to the Australian Stock
Exchange in relation to its mineral
resources.
•
Assessed the adequacy of the disclosure
included in the financial report.
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
65
KIBARAN RESOURCES ANNUAL REPORT 2019
INDEPENDENT AUDITOR’S REPORT
(CONTINUED)
Information other than the financial report and auditor’s report thereon
The Directors are responsible for the other information. The other information comprises the information
included in the Company’s 2019 Annual Report, but does not include the financial report and our
auditor’s report thereon.
Our opinion on the financial report does not cover the other information and accordingly we do not
express any form of assurance conclusion thereon, with the exception of the Remuneration Report and
our related assurance opinion.
In connection with our audit of the financial report, our responsibility is to read the other information and,
in doing so, consider whether the other information is materially inconsistent with the financial report or
our knowledge obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this other
information, we are required to report that fact. We have nothing to report in this regard.
Responsibilities of the Directors for the financial report
The Directors of the Company are responsible for the preparation of the financial report that gives a true
and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for
such internal control as the Directors determine is necessary to enable the preparation of the financial
report that gives a true and fair view and is free from material misstatement, whether due to fraud or
error.
In preparing the financial report, the Directors are responsible for assessing the Group’s ability to
continue as a going concern, disclosing, as applicable, matters relating to going concern and using the
going concern basis of accounting unless the Directors either intend to liquidate the Group or to cease
operations, or have no realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free
from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes
our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit
conducted in accordance with the Australian Auditing Standards will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered material if,
individually or in the aggregate, they could reasonably be expected to influence the economic decisions of
users taken on the basis of this financial report.
As part of an audit in accordance with the Australian Auditing Standards, we exercise professional
judgment and maintain professional scepticism throughout the audit. We also:
►
Identify and assess the risks of material misstatement of the financial report, whether due to fraud
or error, design and perform audit procedures responsive to those risks, and obtain audit evidence
that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a
material misstatement resulting from fraud is higher than for one resulting from error, as fraud
may involve collusion, forgery, intentional omissions, misrepresentations, or the override of
internal control.
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
66
FOR THE YEAR ENDED 30 JUNE 2019CONSOLIDATED STATEMENTOF FINANCIAL POSITION
►
►
►
►
►
Obtain an understanding of internal control relevant to the audit in order to design audit
procedures that are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Group’s internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by the Directors.
Conclude on the appropriateness of the Directors’ use of the going concern basis of accounting
and, based on the audit evidence obtained, whether a material uncertainty exists related to events
or conditions that may cast significant doubt on the Group’s ability to continue as a going concern.
If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s
report to the related disclosures in the financial report or, if such disclosures are inadequate, to
modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our
auditor’s report. However, future events or conditions may cause the Group to cease to continue as
a going concern.
Evaluate the overall presentation, structure and content of the financial report, including the
disclosures, and whether the financial report represents the underlying transactions and events in a
manner that achieves fair presentation.
Obtain sufficient appropriate audit evidence regarding the financial information of the entities or
business activities within the Group to express an opinion on the financial report. We are
responsible for the direction, supervision and performance of the Group audit. We remain solely
responsible for our audit opinion.
We communicate with the Directors regarding, among other matters, the planned scope and timing of the
audit and significant audit findings, including any significant deficiencies in internal control that we
identify during our audit.
We also provide the Directors with a statement that we have complied with relevant ethical requirements
regarding independence, and to communicate with them all relationships and other matters that may
reasonably be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated to the Directors, we determine those matters that were of most
significance in the audit of the financial report of the current year and are therefore the key audit
matters. We describe these matters in our auditor’s report unless law or regulation precludes public
disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should
not be communicated in our report because the adverse consequences of doing so would reasonably be
expected to outweigh the public interest benefits of such communication.
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
67
KIBARAN RESOURCES ANNUAL REPORT 2019
INDEPENDENT AUDITOR’S REPORT
(CONTINUED)
Report on the audit of the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included in the Directors' report for the year ended 30 June
2019.
In our opinion, the Remuneration Report of Kibaran Resources Limited for the year ended 30 June 2019,
complies with section 300A of the Corporations Act 2001.
Responsibilities
The Directors of the Company are responsible for the preparation and presentation of the Remuneration
Report in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an
opinion on the Remuneration Report, based on our audit conducted in accordance with Australian
Auditing Standards.
Ernst & Young
Gavin Buckingham
Partner
Perth
25 September 2019
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
68
FOR THE YEAR ENDED 30 JUNE 2019CONSOLIDATED STATEMENTOF FINANCIAL POSITION
SHAREHOLDER INFORMATION
DISTRIBUTION OF LISTED SECURITIES
Range
1 to 1,000
1,001 to 5,000
5,001 to 10,000
10,001 to 100,000
100,001 and over
Total
Total holders
Units
% of
issued capital
98
263
253
754
317
1,685
25,577
854,786
2,097,663
29,245,860
260,397,081
292,620,967
0.01
0.29
0.72
9.99
88.99
100
TOP 20 HOLDERS OF ORDINARY SHARES
Rank Name
Number of Ordinary
Shares held
% of
issued capital
CITICORP NOMINEES PTY LIMITED
J P MORGAN NOMINEES AUSTRALIA PTY LIMITED
36,253,779
32,846,269
12.39
11.22
DR PETER DENNETT MEIER & MRS LYNETTE SUZANNE MEIER
VALUE-ON-GROWTH INVESTMENT PTY LTD
1
2
3
4
5 GR ENGINEERING SERVICES LIMITED
6
RWH NOMINEES PTY LTD
7 MR ANDREW PETER SPINKS
8 GRANT PIERCE
8
ANDREW SPINKS
9 HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
10
11
12
CORNWALL HOLDINGS PTY LTD
ANDREW SPINKS
LAX CONSULTING PTE LTD
13 MR GREGORY ROBERT HACKSHAW
14
15
16
BCV NOMINEES PTY LTD
REINDEER INVESTMENTS PTY LIMITED
RWH NOMINEES PTY LTD
17 MR NICOLA CONIDI & MRS GIANNINA CONIDI
18 MR ANDREW PETER SPINKS
19 MR RICHARD JOHN DUNN
20
IDINOC PTY LTD
Total
9,182,496
6,621,677
5,737,807
5,681,970
4,926,846
4,250,000
4,250,000
3,438,044
3,325,000
3,304,434
3,039,318
3,010,256
3,000,000
2,950,000
2,810,386
2,401,417
2,280,550
2,250,206
2,250,000
3.14
2.26
1.96
1.94
1.68
1.45
1.45
1.17
1.14
1.13
1.04
1.04
1.03
1.01
0.96
0.82
0.78
0.77
0.77
143,810,455
49.15
69
KIBARAN RESOURCES ANNUAL REPORT 2019 SHAREHOLDER INFORMATION
(CONTINUED)
OTHER SECURITIES ON ISSUE
1 – 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,001 and over
Number on issue
Number of holders
Expiry
Exercise Price
*Details of holders of employee share options are exempt from disclosure under Chapter 4 of the Listing Rules
MINERAL TENEMENTS
Consolidated entity’s 100% interest:
Options
-
-
-
-
5
5
Options
1,050,000
5
16/01/20
$0.23
Licence
ML 548/2015
PL 7906/2012
PL 7907/2012
PL 7915/2012
PL 9306/2013
PL 9331/2013
PL 9537/2014
PL 10090/2014
PL 10091/2014
PL 10092/2014
PL 10388/2014
PL 10390/2014
PL 10394/2014
PL 10752/2016
PL 10868/2016
PL 10869/2016
PL 10872/2016
PL 10972/2016
PL 11081/2017
PL 11082/2017
PL 11083/2017
PL 11143/2017
PL 11196/2018
70
Area (km2)
9.62
59.24
26.42
41.47
17.53
2.76
84.00
44.88
114.22
23.23
2.57
2.81
9.74
23.45
72.82
29.95
2.60
3.83
2.08
20.77
50.73
2.62
46.72
Location
Mahenge, Tanzania
Merelani-Arusha, Tanzania
Merelani-Arusha, Tanzania
Merelani-Arusha, Tanzania
Mahenge, Tanzania
Mahenge, Tanzania
Tanga, Tanzania
Merelani-Arusha, Tanzania
Merelani-Arusha, Tanzania
Merelani-Arusha, Tanzania
Mahenge, Tanzania
Mahenge, Tanzania
Merelani-Arusha, Tanzania
Mahenge, Tanzania
Merelani-Arusha, Tanzania
Merelani-Arusha, Tanzania
Merelani-Arusha, Tanzania
Mahenge, Tanzania
Merelani-Arusha, Tanzania
Merelani-Arusha, Tanzania
Merelani-Arusha, Tanzania
Simanjiro, Tanzania
Merelani-Arusha, Tanzania
FOR THE YEAR ENDED 30 JUNE 2019CONSOLIDATED STATEMENTOF FINANCIAL POSITION
MINERAL RESOURCE STATEMENT
Epanko Graphite Project Mineral Resource Estimate
Classification
Measured
Indicated
Inferred
Total
Tonnage
(Mt)
7.5
12.8
10.4
30.7
30 June 2019
Grade
(%TGC)
9.8
10.0
9.9
9.9
Contained
Graphite (Kt)
Tonnage
(Mt)
738.9
1,280.0
1,030.6
3,049.5
7.5
12.8
10.4
30.7
30 June 2018
Grade
(%TGC)
9.8
10.0
9.9
9.9
Contained
Graphite (Kt)
738.9
1,280.0
1,030.6
3,049.5
Merelani–Arusha Graphite Project Mineral Resource Estimate
Classification Tonnage (Mt)
Measured
Inferred
Total
7.4
10.3
17.7
Notes
30 June 2019
Grade
(%TGC)
6.7
6.3
6.5
Contained
Graphite (Kt) Tonnage (Mt)
500.0
650.0
1,150.0
7.4
10.3
17.7
30 June 2018
Grade
(%TGC)
6.7
6.3
6.5
Contained
Graphite (Kt)
500.0
650.0
1,150.0
• The Epanko and Merelani-Arusha Graphite Projects are located in Tanzania.
• Totals may not sum due to rounding.
• Mt = 1,000,000 tonnes.
• Tonnage figures have been rounded to the nearest 1,000 and % TGC grades have been rounded to 1 decimal place.
• Mineral Resources are quoted from blocks where the TGC grade is greater than 8%.
71
KIBARAN RESOURCES ANNUAL REPORT 2019 SHAREHOLDER INFORMATION
(CONTINUED)
Competent Persons’ Statement
The information in this report that relates to Exploration Results is based on information compiled by Mr
Andrew Spinks, a Competent Person, who is a Member of The Australasian Institute of Mining and Metallurgy
and is employed by Kibaran Resources Limited. Mr Spinks has sufficient experience which is relevant to the
style of mineralisation and type of deposit under consideration and to the activity which he is undertaking
to qualify as a Competent Person as defined in the 2012 Edition of the “Australasian Code for Reporting of
Exploration Results, Mineral Resources and Ore Reserves”. Mr Spinks consents to the inclusion in the report of
the matters based on his information in the form and context in which it appears.
The information in this report that relates to Mineral Resources is based on information compiled by Mr David
Williams, a Competent Person, who is a Member of The Australasian Institute of Mining and Metallurgy and is
employed by CSA Global Pty Ltd, an independent consulting company. Mr Williams has sufficient experience
which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which
he is undertaking to qualify as a Competent Person as defined in the 2012 Edition of the “Australasian Code for
Reporting of Exploration Results, Mineral Resources and Ore Reserves”. Mr Williams consents to the inclusion in
the report of the matters based on his information in the form and context in which it appears.
The information in this report that relates to Ore Reserves has been compiled by Mr Steve O’Grady who
is a Member of The Australasian Institute of Mining and Metallurgy. Mr O’Grady is employed by Intermine
Engineering and produced the Ore Reserve estimate based on data and geological information supplied by Mr
Williams. Mr O’Grady has sufficient experience that is relevant to the estimation, assessment, evaluation and
economic extraction of the Ore Reserve that he is undertaking to qualify as a Competent Person as defined
in the 2012 edition of the “Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore
Reserves”. Mr O’Grady consents to the inclusion in the report of the matters based on his information in the
form and context in which it appears.
MINERAL RESOURCE ESTIMATION - GOVERNANCE STATEMENT
Kibaran ensures that all Mineral Resource Estimates are subject to appropriate levels of governance and
internal controls. Estimation procedures are well established and are subject to systematic internal peer review
and external technical review undertaken by competent and qualified professionals. These reviews have not
identified any material issues. Kibaran also periodically reviews this governance framework to ensure it remains
appropriate for the requirements of its business activities.
Mineral Resource Estimates are reported on an annual basis in accordance with the 2012 Edition of the
“Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves” (‘JORC Code’).
Mineral Resource Estimates are quoted inclusive of Ore Reserves. Competent Persons named are Members or
Fellows of The Australasian Institute of Mining and Metallurgy and/or The Australian Institute of Geoscientists
and qualify as Competent Persons as defined under the JORC Code.
72
FOR THE YEAR ENDED 30 JUNE 2019CONSOLIDATED STATEMENTOF FINANCIAL POSITION CORPORATE DIRECTORY
Non-Executive Chairman
DIRECTORS
Robert Pett
Andrew Spinks Managing Director
Executive Director
Grant Pierce
John Conidi
Non-Executive Director
Christoph Frey Non-Executive Director
COMPANY SECRETARY
Howard Rae
REGISTERED AND PRINCIPAL OFFICE
Level 1/18 Richardson Street
West Perth WA 6005
Telephone: +61 8 6424 9000
Internet: www.kibaranresources.com
info@kibaranresources.com
Email:
SHARE REGISTRY
Link Market Services
Level 12, QV1 Building
250 St Georges Terrace
Perth WA 6000
Telephone: 1300 554 474 (toll free within Australia)
Email:
registrars@linkmarketservices.com.au
SOLICITORS
Steinepreis Paganin
Level 4, The Read Buildings
16 Milligan Street
Perth WA 6000
Telephone: +61 8 9321 4000
Facsimile: +61 8 9321 4333
King & Wood Mallesons
Level 30, QV1 Building
250 St Georges Terrace
Perth WA 6000
Telephone: +61 8 9269 7000
Facsimile: +61 8 9269 7999
AUDITOR
Ernst & Young
11 Mounts Bay Road
Perth WA 6000
Telephone: +61 8 9429 2222
Facsimile: +61 8 9429 2436
BANKERS
Westpac Banking Corporation
Level 3, Tower 2
123 St Georges Terrace
Perth WA 6000
STOCK EXCHANGE LISTING
Australian Securities Exchange
ASX Code: KNL
Frankfurt Stock Exchange (Börse Frankfurt)
FSE Code: FMK
Fully paid ordinary shares
KIBARAN RESOURCES ANNUAL REPORT 2019
73
73
KIBARAN RESOURCES ANNUAL REPORT 2019 A B N 1 5 1 1 7 3 3 0 7 5 7
Phone: + 61 8 6424 9000
Email: info@kibaranresources.com
ASX: KNL
FSE: FMK
www.kibaranresources.com