ASX ANNOUNCEMENT
Wednesday, 31 March 2021
2020 Annual Report, Appendix 4G and Corporate
Governance Statement
Firefinch Limited is pleased to release its 2020 Annual Report together with the Appendix 4G and
Corporate Governance Statement.
This announcement has been approved for release to the ASX by the Board.
Dr Alistair Cowden
Executive Chairman
Firefinch Limited
info@firefinchlimited.com
+61 8 6149 6100
Firefinch Limited
ABN: 11 113 931 105
ASX: FFX
Unit 18, Second Floor
100 - 104 Railway Road
Subiaco WA 6008, Australia
T +61 8 6149 6100
E info@firefinchltd.com
W firefinchltd.com
ABOUT FIREFINCH
Firefinch is a Mali focussed gold miner and lithium developer. It has an 80% interest in the Morila Gold
Mine which has produced 7.5 million ounces of gold since 2000. Firefinch is ramping up production at
the 4.5mtpa mill and mine from a current annual production profile of 40,000 ounces of gold per annum
from tailing treatment towards a target of 70 to 90,000 ounces of gold per annum through mining of
small open pits, stocks and tailings from mid 2021. In 2022, the company plans to further increase
production to target 150,000 to 200,000 ounces of gold per annum by re-commencing mining from the
main Morila pit to fully exploit the 2.35 million ounces of gold in the Global Resource at Morila.
(Measured: 3.15 million tonnes at 0.5g/t gold, Indicated:22.80 million tonnes at 1.59g/t gold and
Inferred:22.23M million tonnes at 1.58g/t gold). A production target of 150,000 to 200,000 ounces of
gold per annum has been set by the Company.
Morila was one of the world’s highest grade open pits 12 to 20 years ago but its limits are not well
understood. Exploration is a major focus at Morila, its satellite resources and multiple targets on the
685km2 of surrounding tenure.
The Goulamina Lithium Project is one of the world’s largest undeveloped deposits and has the potential
to be one of the lowest cost producers. All permits are in place, a Definitive Feasibility Study is complete
and a Global Resource of 109 million tonnes at 1.45% Li2O with 1.57 million tonnes of contained Li2O
has been declared comprising, 8.4Mt at 1.57% Li₂O in the Measured category, 56.2 Mt at 1.48% Li₂O in
the Indicated category and 43.9Mt at 1.45% Li₂O in the Inferred category. Firefinch intends to demerge
Goulamina into a new ASX listed Company and is conducting a process to investigate partnering, offtake
and financing options for the Project.
Firefinch is a responsible miner. We support positive social and economic change through contributing
to the communities in which we operate. We seek to buy local, employ local and safeguard the
environment and our people’s health, safety and wellbeing.
The Company confirms that it is not aware of any new information or data that materially affects the Mineral Resources at
Goulamina and Morila and the production estimates for Goulamina. The Company also confirms that all material assumptions
and parameters underpinning the Mineral Resource estimates and production estimates continue to apply and have not
materially changed. Please refer to ASX Announcements of 8 July 2020 and 20 October 2020 (Goulamina), 31 August 2020, 8
January 2021, 8 February 2021 and 9 February 2021 (Morila), 7 September 2020 (Morila Tailings), 24 November 2020 (N’Tiola,
Viper, Domba), 8 January 2021 (Gold Production) and 22 January 2021 (N’Tiola).
Firefinch Limited
ABN: 11 113 931 105
ASX: FFX
Unit 18, Second Floor
100 - 104 Railway Road
Subiaco WA 6008, Australia
T +61 8 6149 6100
E info@firefinchltd.com
W firefinchltd.com
2020 Annual Report
31 December 2020
Firefinch Limited Annual Report | 31 December 2020
(formerly Mali Lithium Limited)
Corporate Directory
Directors
Dr Alistair Cowden
Dr Michael Anderson
Mr Mark Hepburn
Mr Brendan Borg
Mr Brett Fraser
Mr Bradley Gordon
Company Secretary
Mr Eric Hughes
Chairman
Managing Director
Non-Executive Director
Non-Executive Director
Non-Executive Director
Non-Executive Director
Chief Financial Officer and Company Secretary
Registered Address and Principal Place of Business
Unit 18, Spectrum Building, 100 -104 Railway Road, Subiaco, 6008, Perth WA 6000
Share Registry
Computershare Investor Services Pty Limited Level 11, 172 St Georges Terrace, Perth WA 6000
Telephone: 1300 850 505 (investors within Australia)
Telephone: +61 (0)3 9415 4000
Email: web.queries@computershare.com.au
Website: www.investorcentre.com
Auditors
PricewaterhouseCoopers, Brookfield Place, Level 15, 125 St Georges Terrace, Perth WA 6000
Securities Exchange
Australian Securities Exchange, Level 40, Central Park, 152-158 St Georges Terrace, Perth WA 6000
Telephone: 131 ASX (131 279) (within Australia)
Telephone: +61 (0)2 9338 0000
Facsimile: +61 (0)2 9227 0885
Website: www.asx.com.au
ASX Code: FFX
Firefinch Limited Annual Report | 31 December 2020
(formerly Mali Lithium Limited)
Contents
• Chairman’s letter ..................................................................................................................................... 2
• Review of operations ............................................................................................................................... 4
• Directors' report ...................................................................................................................................... 9
• Remuneration report ……………………………………………………………………………………………………………………….16
• Corporate governance statement ......................................................................................................... 25
• Auditor's independence declaration ..................................................................................................... 26
• Consolidated statement of profit or loss and other comprehensive income........................................ 27
• Consolidated statement of financial position ....................................................................................... 28
• Consolidated statement of changes in equity ....................................................................................... 29
• Consolidated statement of cash flows................................................................................................... 30
• Notes to the consolidated financial statements .................................................................................... 31
• Directors' declaration ............................................................................................................................ 69
• Independent auditor's report ................................................................................................................ 70
• Additional information for listed public companies .............................................................................. 77
Firefinch Limited Annual Report | 31 December 2020 1
(formerly Mali Lithium Limited)
Chairman’s Letter
Fellow Shareholders,
It has been a remarkable year seeing your Company transformed.
This time last year, the outlook for companies with lithium assets was challenging. Lithium markets had
deteriorated, mines failed and production was cut back. We responded by cutting costs, reducing the Board
and asking Board and management to defer and/or reduce salaries and fees.
I flagged in my letter last year that we would focus on taking Goulamina through Definitive Feasibility Study
(DFS) and pivot our attention to our gold assets. And that is what we did.
The Company continued with the Goulamina Definitive Feasibility Study (DFS) in a low-key manner,
preserving a unique asset, an asset we knew its day would come.
We leveraged our relationship with Barrick, then owners of the Morila gold mine adjacent to our Massigui
Gold Project and purchased the Morila mine for US$29.7 million. To do this we raised A$74 million from
shareholders and new investors.
The asset was transformational. Firefinch is now a gold producer with over 200 employees and 400
contractors in Mali. Incredible progress has been made. Your team has defined a 2.35-million-ounce
resource at Morila, has largely refurbished the processing plant and tailings dam, and is nearing completion
of a Life of Mine Plan which is targeting sustained 150,000 to 200,000 ounces per annum of gold production.
The world is an unpredictable place and, despite the pandemic, after we completed the Morila acquisition,
lithium markets and the new energy economy took off. Goulamina was now very attractive to markets. So,
the board had to be nimble and re-set, once again, in order to deliver on its mission of generating maximum
value for shareholders.
Following completion of an outstanding DFS which confirmed Goulamina as one of the world’s best
undeveloped hard rock lithium deposits, a search began for an investment bank with a strong track record
in value realisation. Firefinch partnered with Macquarie Capital who will assist in securing a partner,
financing, and offtake for Goulamina as well as advise on the demerger of the lithium and gold businesses
into two separate, ASX-listed companies.
We believe the restructure (whereby shareholders will receive a pro rata distribution of shares in the new
lithium company for nil consideration), in what is now a strong lithium market, is the optimal way to realise
true value for shareholders.
The rapid transformation of the Company has allowed it to rebuild Board and Management capability and
we are delighted to have attracted talent of such a high calibre.
Brett Fraser joined the Board, bringing his strong governance and African listed company experience as
head of the audit committee. Whilst Bradley Gordon, who led an impressive transformation of LSE-listed
Acacia Mining as CEO, brings his deep operational and mining experience in Africa, Australia and the Asia
Pacific to Firefinch as Non-Executive Director.
We also have appointed Michael Anderson as Managing Director. Mike has benefited from his time at
Taurus Funds Management, a $2.5 billion Private Equity fund focussed on mining finance, where he led
investment into numerous West African gold producers. Previously, as Managing Director of Exco
Resources, Mike drove the company to a number of major achievements and delivered exceptional value
to shareholders. Mike also has a PhD in Geology from Imperial College in London. I very much look forward
to working with Mike as he leads the Company into a new era.
Firefinch Limited Annual Report | 31 December 2020 2
(formerly Mali Lithium Limited)
Chairman’s Letter
I welcome the additions to senior management: Drissa Arama who, as General Manager, expertly guides
the operations at Morila; Bill Oliver who was essential to uncovering the Morila opportunity and is Manager
of Geology, and Andrew Taplin, our Chief Operating Officer.
I also want to thank Eric Hughes (CFO), Marc Rowley (Project Director), Walter Madel (Group Metallurgist)
and Seydou Semega (Country Manager Mali) whose efforts and accommodation of the challenges brought
by lack of funds in 2020 were essential to Firefinch’s success with Morila and Goulamina.
I step back after a year as Executive Chairman with some pride, we have all the ingredients for success,
great people, great assets and a good culture. There is a sense of excitement and momentum around your
Company.
The organisation recognises its responsibilities to the Malian community and, on your behalf, I am
personally very committed to ensuring Firefinch will make a difference to the lives of those in our host
communities.
Finally, I want to thank you, the owners of this business. Many long-term holders strongly supported the
acquisition of Morila with further investment. I understand the Company has had a colourful history but
that is well behind us but Firefinch is essentially a new company, with new projects, new investors and a
clear path to wealth creation; a Firefinch taking flight.
Sincerely
Dr Alistair Cowden
Executive Chairman
Firefinch Limited Annual Report | 31 December 2020 3
(formerly Mali Lithium Limited)
Review of Operations
INTRODUCTION
During the reporting period Firefinch Limited (the Company) announced and completed the acquisition of
80% of Société des Mines de Morila SA (Morila SA), owner of the Morila gold mine in Mali. The Morila mine
has produced 7.5 million ounces of gold since 2000 and was one of the world’s highest grade open pit gold
mines. The exploitation license owned by Morila SA is contiguous with the Company’s Massigui Gold
project.
The Company also completed a Definitive Feasibility Study (DFS) for the Goulamina Lithium project
(Goulamina) in Mali, which is one of the largest undeveloped lithium projects globally. Subsequent to the
end of the reporting period the Company announced its intention to de-merge Goulamina into a new listed
entity.
MORILA
The Company purchased its interest in the Morila Mine from Barrick Gold Corporation and AngloGold
Ashanti, who each held and effective 40% interest in Morila SA with the State of Mali owning the remaining
20%. Barrick’s ownership of Morila SA came about through its US$18 billion merger with Randgold
Resources (Randgold). In many ways the Morila Mine was the foundation of Randgold Resources as a gold
producer as it generated the cashflow that enabled Randgold to pursue an aggressive growth strategy.
Morila has been producing gold continuously for 21 years and mining to December 2020 has delivered 62.18
million tonnes at 3.81 g/t gold for 7.62 million ounces of contained gold to the processing plant. In its early
years the mine had the lowest cash costs in the world (US$150 per ounce) and produced in excess of 1
million ounces of gold in one year (refer ASX Announcement 31 August 2020).
Some 21.3 million tonnes of tailings have been reprocessed giving a total gold production from mining and
re-processing of 6.9 million ounces at an overall recovery 91% recovery.
Mining of the main Morila pit ceased in 2010, other than a limited cut back in 2014 when gold prices were
US$700 per ounce. There was open pit mining of three satellite pits in 2019. Extensive mineralisation was
drilled outside the Morila pit but not pursued at low gold prices prevalent after mining at Morila ceased in
favour of stockpile processing and tailings processing.
Morila has all the infrastructure required of a remote gold mining operation. The processing plant is a
conventional Carbon in Leach (CIL) facility and commenced operating in 2000 with a throughput of up to
4.5 million tonnes per annum. Average gold recoveries were 91% when treating hard rock. The plant was
upgraded in 2004 when a secondary crusher was added to increase throughput to the SAG mill and again
in 2014 when the SAG mill was made redundant with the addition of tertiary crushing and screening.
Additional capacity was also installed in the gravity gold, leach and CIL circuits. The plant remains in
operation today treating tailings at a rate of 5.5 million tonnes per annum (refer ASX announcement 7
September 2020).
Following the announcement of the proposed acquisition of Morila on 31 August, the Company completed
a capital raising of A$74 million and completed all legal and financial processes necessary for the settlement
of the transaction. A shareholder meeting was held on 23 October 2020 to ratify the transaction and the
associated capital raising with completion occurring on 10 November 2020.
The mine is currently producing gold from hydraulic mining and re-treatment of tailings. A total of 7,683
ounces of gold were produced between the Company acquiring ownership of the Morila gold mine and 31
December 2020. The Company is on track to achieve its stated production guidance for Q1 2021 of 10,000
to 10,500 ounces of gold with production of 6,853 ounces of gold to 28 February 2021 (refer ASX
Announcements 3 December 2020 and 8 January 2021).
The Mineral Resource for the Morila tailings as of 31 December 2020 was 3.15 million tonnes at 0.50g/t
gold in the Measured category. The Mineral Resource is the basis for the remaining inventory which will
Firefinch Limited Annual Report | 31 December 2020 4
(formerly Mali Lithium Limited)
Review of Operations
support approximately 4 to 5 months of production from 1 April at an initial 420,000 tonnes per month
production rate tapering down as open pit mining ramp up (refer ASX Announcements 7 September 2020
and 29 January 2021).
The Company plans to ramp-up production from the Morila gold mine in stages, with the next stage to add
feed from open pit mining of the N’Tiola, Viper, Koting, Domba and Pit 5 deposits (or satellite deposits). To
this end work since the acquisition has focused on drilling, estimating Mineral Resource estimation, mine
design for these deposits. Prior to the commencement of drilling the combined Mineral Resources for the
satellite pits was estimated to be 2.5 million tonnes at 1.38g/t gold for 113,000 ounces of contained gold in
the Indicated and Inferred categories (refer ASX Announcement 24 November 2020).
Recently published drilling results for N’Tiola, Koting, Morila Pit 5 and Viper and are anticipated to materially
increase Mineral Resources. Re-estimation of resources is in progress which will enable mine designs to be
verified and completed. Dewatering of all satellite pits is in progress as well as other operational readiness
activities. A tender process for the mining contractor for the satellite pits has been completed and the
contract is likely to be awarded shortly.
To enable processing of ore from the satellite pits, multiple capital works programmes are being undertaken
at the processing plant and the tailings dam. These projects are being funded by cashflow from the
operations.
Major projects at the processing plant include:
-
-
-
Refurbishment of the primary crusher and oxide crusher dump pockets.
Civil works around the Primary Crusher retaining structures.
Sandblasting and painting of the mill steel framework and identification of steelwork needing
replacement.
Replacement of corroded steelwork in process plant and plateworks in chutes etc.
Refurbishment of laboratory buildings complete
Civil works to install a temporary 10MW generator.
-
-
-
- Vendor inspection of crushers and mill
Projects at the Tailings Storage Facility (TSF) include:
-
Establishment of short-term areas within tailings dam footprint to accept tailings.
- Water management modified to accommodate tailings deposition within the TSF.
-
- Design of final tailings facility.
Refurbishment of main drains on tailing dam.
The final stage of the Morila ramp-up strategy will comprise the re-commencement of mining at the main
Morila pit. The Company recently released a new Mineral Resource for the Morila deposit of 42.6 million
tonnes at 1.6g/t gold for 2.2 million contained ounces of gold in the Indicated and Inferred categories
informed by the existing database of 12,082 drillholes for over 483,000 metres of Reverse Circulation and
diamond core drilling (refer ASX Announcement 8 February 2021). This Resource is currently the focus of
mining studies to generate an Ore Reserve and mining schedule. The Company has declared a production
target for the Morila operations of 150,000 – 200,000 ounces of gold per annum (refer ASX Announcement
9 February 2021).
The global Mineral Resources for the Morila gold project now stand at 2.35 million ounces of gold, being
48.3 million tonnes at 1.52g/t gold.
Firefinch Limited Annual Report | 31 December 2020 5
(formerly Mali Lithium Limited)
Review of Operations
Morila Gold Project Mineral Resources.
Deposit
Measured
& Indicated 1
Inferred
Total
Tonnes
(millions)
Grade
(g/t)
Ounces
(‘000)
Tonnes
(millions)
Grade
(g/t)
Ounces
(‘000)
Tonnes
(millions)
Grade
(g/t)
Ounces
(‘000)
Morila Pit 2
21.2
1.60
1,090
17.5
1.37
Morila NE 3
Samacline 3
Tailings 4
N’Tiola 5
Viper 5
Domba 5
3.15
0.50
0.75
1.35
0.67
1.31
0.20
1.75
51
33
28
11
0.21
3.07
3.74
2.56
0.38
1.06
0.29
1.59
0.25
1.61
770
21
308
13
15
13
38.6
1.50
1,860
0.21
3.07
3.74
2.56
3.15
0.50
1.13
1.25
0.96
1.39
0.46
1.67
21
308
51
45
43
25
Total
25.6
1.46
1,214
22.3
1.58
1,136
48.3
1.52
2,350
1Of the Measured and Indicated Resources, the Tailings Mineral Resource is classified as Measured, all other resources in this column are
classified as Indicated.
2 The Morila pit resource is quoted using a 0.4g/t gold cut-off grade, further information in the announcement of 8 February 2021.
3 The Samacline and Morila NE resources are quoted using a 1.8g/t gold cut-off grade, further information in the announcement of 8
February 2021.
4 The Tailings resource is entirely in the Measured classification and is quoted using a 0.3g/t gold cut-off grade, further information in the
announcement of 7 September 2020.
5 The N’Tiola, Viper and Domba resources are quoted using a 0.5g/t gold cut-off grade, further information in the announcement of 24
November 2020.
6 Numbers in the above table may not appear to sum correctly due to rounding.
GOULAMINA
During the reporting period the Company completed and published a DFS for Goulamina. The DFS
confirmed that Goulamina is among the world’s highest quality lithium assets and will deliver a long life,
large scale, low-cost open pit project.
Goulamina is one of the world’s best hard rock lithium assets for scale and cost of production when
compared to current operations and prospective projects and delivers outstanding returns with a pre-tax
NPV of A$1.7 billion (refer ASX Announcement 20 October 2020). A key advantage is the quality of the 6%
Li2O spodumene concentrate (SC6) product, being high in grade and low in impurities. The project was
shown to be simple and robust with high grades and low strip ratios enhancing profitability.
Key metrics of the DFS are:
Mineral Resources (M,I&I)
Mine Life
Ore Reserves (Proven and Probable)
Average Spodumene concentrate production
Concentrate specifications
Annual Mine throughput
Pre-tax NPV (8%) at $666/tonne concentrate
Pre-tax IRR
Capital Cost
Cash Costs (Life of Mine)
All in sustaining cost (AISC) Years 1-5
108.5 million tonnes at 1.45% Li2O
23 years minimum
52 million tonnes at 1.51 % Li2O
436,000 tonnes per annum
6% Li2O, <0.6% Fe2O3, low mica
2.3 million tonnes
Approx. A$1.7 billion (US$1.2billion)
55.8%
US$194 million
US$281 per tonne concentrate
US$306 per tonne concentrate
Firefinch Limited Annual Report | 31 December 2020 6
(formerly Mali Lithium Limited)
Review of Operations
As part of the DFS Proven and Probable Ore Reserves were derived from Measured and Indicated Mineral
Resources contained within the final pit design and scheduled to be processed through the planned
processing facility. The Ore Reserve does not include any material classified as Inferred and Inferred
Resources are not included in economic analysis.
The Ore Reserve is contained within an open pit containing 169 million tonnes of waste resulting in a waste
to ore strip ratio of 3.3:1 with a total of 222 million tonnes of ore plus waste mined over the life of mine.
Included in the waste material is 1.8 million tonnes of Inferred Mineral Resource which is not reported to
Ore Reserves and is an opportunity to provide additional reserves with further drilling. The Ore Reserve is
detailed in the table below and further details are contained in the ASX Announcement of 20 October 2020.
Goulamina Lithium Project Ore Reserves.
Proven
Probable
Total
Tonnes
(millions)
Grade
(% Li2O)
Tonne
s Li2O
(‘000)
Tonnes
(millions)
Grade
(% Li2O)
Tonnes Li2O
(‘000)
Tonnes
(millions
)
Grade
(% Li2O)
Tonnes
Li2O (‘000)
8.1
1.55
125
44.0
1.50
660
52.0
1.51
785
1 All resources are quoted above a 0% Li2O cut-off due to the proposed method of mining and processing (“whole of ore”), further
information in the announcement of 20 October 2020.
2 Numbers in the above table may not appear to sum correctly due to rounding.
A Measured, Indicated and Inferred Mineral Resource Estimate for Goulamina of 108.5 million tonnes at
1.45% Li2O was published during 2020 (refer ASX Announcement 8 July 2020). The resource represents a
48% uplift in Measured and Indicated resources compared to the previous Mineral Resource and is detailed
in the table below.
Goulamina Lithium Project Mineral Resources.
Deposit
Measured
Indicated
Inferred
Total
Tonnes
(millions)
Grade
Li2O %
Tonnes
Li2O
(‘000)
Tonnes
(millions)
Grade
Li2O %
Tonnes
Li2O
(‘000)
Tonnes
(millions)
Grade
Li2O %
Tonnes
Li2O
(‘000)
Tonnes
(millions)
Grade
Li2O %
Tonnes
Li2O
(‘000)
4.3
0.6
1.47
1.69
62
33
7.2
1.21
87
2.6
1.05
28
14.1
1.26%
177
19.3
1.61
311
11.9
1.54
183
31.8
1.66%
527
10.1
1.54
156
4.8
1.45
70
14.9
1.52%
226
Main
Sangar I
Sangar
II
1.43
141
6.6
1.48
97
20.0
1.49%
297
West I
3.5
1.67
59
West II
Danaya
9.9
1.9
7.8
1.43
30
1.43
112
Total
8.4
1.57
133
56.2
1.48
832
14.5
43.9
1.30
188
22.3
1.35%
300
1.38
606
108.5
1.45
1,570
1 All resources are quoted above a 0% Li2O cut-off due to the proposed method of mining and processing (“whole of ore”), further information
in the announcement of 8 July 2020.
2 Numbers in the above table may not appear to sum correctly due to rounding.
Firefinch Limited Annual Report | 31 December 2020 7
(formerly Mali Lithium Limited)
Review of Operations
During the DFS, the Company commissioned a scoping study to evaluate the potential to further process
spodumene concentrate to produce a lithium sulphate product. Lithium sulphate can potentially be sold
directly to chemical manufacturers for conversion into lithium hydroxide or carbonate. Whilst there were
some promising aspects to the study, it was clear that further work is required before this can be properly
evaluated as a viable option. Planning and costing of these works has been progressed since the DFS was
published.
The Company has appointed a consultant to engage with both the Goulamina and Mafele village leaders to
identify projects to be undertaken in 2021 that will benefit the communities adjacent to the Goulamina
project.
On 9 February 2021, the Company announced it intended to progress a demerger of Goulamina into a
separate lithium focussed company which is expected to be listed on ASX (LithiumCo) in 2021, subject to
shareholder and other required approvals, to realise the true value of Goulamina. On 2 March 2021, the
Company announced that Macquarie Capital had been appointed to advise on funding, partnering
opportunities, offtake and the demerger process for Goulamina.
CORPORATE
On 6 April 2020 the Company announced that the board of the Company would be reduced from 5 to 3,
and the Company’s strategy would change to focus on its gold assets. Mr Chris Evans resigned as Managing
Director and left the Company on 6 April 2020. Mr Noel O’Brien also resigned at that time and was retained
by the Company as a consultant for 3 months. Dr Alistair Cowden assumed the role of Executive Chairman.
The Company changed its name from Mali Lithium Limited to Firefinch Limited on 5 November 2020.
On 11 November 2020 Mr Brett Fraser joined the Firefinch board as Non-Executive Director and Mr Andrew
Taplin was appointed as Chief Operating Officer.
Subsequent to the end of the period, Dr Michael Anderson was appointed as Managing Director and Dr
Alistair Cowden will resume the role of Non-Executive Chairman. Mr Bradley Gordon was appointed as
Non-Executive Director with effect from 6 April 2021.
Firefinch Limited Annual Report | 31 December 2020 8
(formerly Mali Lithium Limited)
Directors’ Report
The Directors present their report for Firefinch Limited (Firefinch or the Company) and its subsidiaries (the
Group) for the year ended 31 December 2020.
DIRECTORS
The following persons were directors of the Company during the financial year and up to the date of this
report.
Dr Alistair Cowden
Non-Executive Chairman (appointed 18 February 2019 – position change on 6
April 2020), Executive Chairman (appointed 6 April 2020)
Dr Michael Anderson Managing Director (commencement 6 April 2021)
Mark Hepburn
Brendan Borg
Brett Fraser
Bradley Gordon
Non-Executive Director (appointed 28 February 2019)
Non-Executive Director (appointed 14 November 2018)
Non-Executive Director (appointed 11 November 2020)
Non-Executive Director (commencement 6 April 2021)
Resignation
Chris Evans resigned as Managing Director effective 6 April 2020.
Noel O’Brien resigned as Non-executive Director effective 6 April 2020.
PRINCIPLE ACTIVITIES
During the year the principle continuing activities of the Group consisted of mineral exploration and
evaluation in Mali West Africa. During the year the activities of the Group changed significantly with the
acquisition of the Morila gold mine on 10 November 2020. The Morila gold mine is located in Mali, West
Africa and is adjacent to existing exploration acreage.
FINANCIAL RESULTS
The Group made a profit for the year of $1,043,816 (2019: $3,504,280 loss). The net assets of the Group
have increased by $72,271,130 to $99,393,236 at 31 December 2020 (2019: $27,166,106).
As at 31 December 2020, the Group's cash and cash equivalents increased by $13,469,882 to $17,263,076
(2019: $3,793,194) and had working capital of $17,916,091 (2019: $2,026,634 working capital).
Going concern
The continued viability of the Group and its ability to continue as a going concern and meet its debts and
commitments as they fall due are dependent on the Group being successful in:
•
•
•
•
The profitable production of gold dore from the current tailings treatment activities;
Re-commence profitable mining of gold bearing ore from satellite pits;
Re-commence mining of the Morila pit;
Securing funding when and if it is required.
The Directors are satisfied that at the date of signing of the financial report, there are reasonable grounds
to believe that the Group will be successful in these endeavours and the Group will be able to continue to
meet its debts as and when they fall due. As a result, the Directors consider it appropriate for the financial
statements to be prepared on a going concern basis.
Firefinch Limited Annual Report | 31 December 2020 9
(formerly Mali Lithium Limited)
Directors’ Report
The following table represents the Company performance over the past five years.
Year ended 31
December 2020
Year ended 31
December 2019
Year ended 31
December 2018
Year ended 30 June
2017
Year ended 30 June
2016
1,043,816
(3,504,280)
(4,067,681)
(5,667,818)
(3,437,312)
nil
99,393,236
0.175
nil
27,166,106
0.097
nil
25,740,323
0.164
nil
11,435,753
0.640
nil
11,307,096
0.328
Profit/ (loss) for the
period, $
Dividends paid, $
Net assets, $
Share price, $
CORPORATE
Dividends
There were no dividends paid or recommended during the year ended 31 December 2020 (2019: No
dividends were paid or recommended).
Issue of securities
During the year the Company issued 464,559,119 fully paid shares.
On 9 September 2020, the Company announced it would issue shares to fund ongoing working capital
commitments and the purchase of the Morila gold mine. This resulted in the issue of 464,205,095 shares at
a price of $0.16 per share to sophisticated investors and shareholders. In addition, 354,024 options with an
exercise price of 15 cents were exercised during the year. The combination of these issues resulted in the
Company having 781, 907, 231 fully paid shares and 31,064,913 options with an exercise price of 15 cents
15 cent on issue at 31 December 2020.
During the year the Company granted the total of 4,000,000 performance rights and 4,350,600 share rights
to its employees and key management personnel.
EXTERNAL FACTORS AFFECTING GROUP RESULTS
Commodity prices
The Group's operating revenues are sourced from the sale of gold and to a much lesser degree, silver. These
commodities are priced by external markets which are subject to fluctuation.
All sales of gold and silver dore since the acquisition of Morila gold mine on 10 November 2020 have been
priced using the London AM Gold Fixing price. The pricing of the metal takes place after it is refined. Subject
to a variety of factors, gold sales take place every two to three weeks.
Exposure to economic, environmental and social sustainability risks
The Group has potentially material exposure to economic, environmental, social and governance
legislation, including, for example those matters related to climate change. Whilst the Group employs
personnel to assist with the management of these risks, as a consequence of purchasing the Morila mine in
November 2020, it intends to conduct a full review of these risks to ensure the appropriate resources and
process is are in place to identify and manage these risks.
Firefinch Limited Annual Report | 31 December 2020 10
(formerly Mali Lithium Limited)
Directors’ Report
COVID-19
On 11 March 2020, the World Health Organization declared the COVID-19 outbreak a pandemic. COVID-19
has had a significant negative and disruptive impact on societies, economies and financial markets
worldwide. The Group is continuing to monitor developments relating to the COVID-19 pandemic, including
the implementation of new local laws and regulations which may impact ongoing operations and ultimately
the Group's future financial results. At this stage, the future financial impact, if any, of the COVID-19
pandemic is not able to be estimated.
Other factors and risks
• Operational factors including uncertain mine grades, mill performance and experience of workforce.
Contained metal [tonnes and grade] estimated annually and published in resource and reserve
statements, however actual production in terms of tonnes and grade often varies as ore bodies can be
complex or inconsistent.
• Exploration success or otherwise.
The reserves and resource base depletes as a result of mining, resulting in the ability to find or replace
reserves resource is presenting a significant business risk.
• Operating costs including supply chain, Labour markets and productivity.
Supply chain issues can materially impact the productivity of an operation especially as a result of the
location of the Group's operations. Labour is one of the main cost drivers in the business and as such
can materially impact the productivity and profitability of an operation.
• Changes in government and / or legislation.
A rise in nationalism sentiment can present an operational risk to the Group. Fiscal policy changes can
materially impact the profitability of the Group.
SIGNIFICANT CHANGES IN STATE OF AFFAIRS
On 10 November 2020, the Group completed the acquisition of an 80% interest in the Morila gold mine
located in Mali, West Africa.
From the time of acquisition, the mine has mined tailings for re processing through existing infrastructure,
producing gold dore for refinement and sale. This has transformed the Group from an exploration and
evaluation Group to one with mining operations producing gold. The Morila mine abuts exploration
tenements upon which the Group has previously identified gold prospects, some of which were previously
sold to and processed through the Morila mine.
The Group raised approximately $74 million with the issue of 464.2 million shares at $0.16 each to fund the
purchase of the 80% interest in the Morila mine and provide working capital.
During the year, the Group also completed and published a DFS on the Goulamina Lithium project also
located in Mali, West Africa.
MATTERS SUBSEQUENT TO BALANCE DATE
A document called a partial assessment from the tax department of Mali (Assessment) was received by
Morila SA in January 2021. The market was advised of the receipt of the partial assessment on 18 January
2021. The Assessment advises that the tax department disputes the amounts due in relation to various
employment taxes, withholding taxes and VAT paid by, or claimed by Morila SA for the tax year ending 31
December 2017.
Firefinch Limited Annual Report | 31 December 2020 11
(formerly Mali Lithium Limited)
Directors’ Report
The Group believes the assessment of employment tax, withholding tax, VAT and gold revenue is incorrect
and has lodged an objection to the assessment with the tax authorities together with supporting
documentation. The objection was prepared by the Group’s tax advisers and peer reviewed by a legal firm
prior to lodgement with the tax department.
On 8 February 2021, the Company announced an increase in the Indicated and Inferred Mineral Resource
at Morila pit, increasing from 1.3 million ounces of contained gold to 2.2 million ounces of contained gold.
The grade of the Mineral Resource increasing from 1.2 g/t gold to 1.6g/t gold resulting in a global resource
for the entire Morila project increasing to 2.35 million ounces of contained gold. Full details of the
Company’s announcement can be found on the Company’s web page.
On 9 February 2021, the Company announced that to realise the true value of the Goulamina Lithium
project (Goulamina), the Company intends to progress a demerger of Goulamina into a separate lithium
focussed company which is expected to be listed on ASX (Lithium Co) in 2021, subject to shareholder and
other required approvals.
On 2 March 2021, The Company announced the appointment of Macquarie Capital (Australia) Limited to
advise on funding, partnering opportunities, offtake and the demerger process for Goulamina.
On 10 March 2021, the Company announced the appointment of Dr Michael Anderson as Managing
Director (with effect from 6 April 2021). Dr Cowden was appointed interim Executive Chairman after the
resignation of the Company’s previous Managing Director until a new Managing Director is appointed. Dr
Cowden will return to his original role of Non-Executive Chairman from 6 April 2021.
On 22 March 2021, the Company announced the appointment of Bradley Gordon as Non-Executive Director
(with effect from 6 April 2021).
LIKELY DEVELOPMENTS
The Group is focused on increasing production at the Morila mine in a staged manner. Work is currently
being undertaken to evaluate a number of previously mined satellite pits to re-commence mining activities.
In conjunction with this work, maintenance and repair work is underway to enable ore from these satellite
pits to be processed. It is intended that processing ore from these pits will provide the Group with sufficient
time to recommence mining operations from the Morila main pit.
As announced on 9 February 2021 the Goulamina Lithium project is to be demerged from the Group. It is
anticipated that the demerger will be completed in 2021.
ENVIRONMENTAL REGULATIONS
The Group holds various permits issued by the authorities that regulate its exploration and mining activities
in Mali. These permits include requirements, limitations and prohibitions on exploration and mining
activities in the interest of environmental protection. The holder of such permits must therefore adhere to
the various conditions which regulate environment rehabilitation of areas disturbed during the course of
the Group’s exploration and exploitation activities.
There have been no known breaches of the Group’s permit conditions or any environmental regulations
which it is subject to.
INFORMATION ON DIRECTORS
The names, qualifications, experience and special responsibilities of the directors in office during or since
the end of the financial year are as follows. Directors were in office for the entire financial year unless
otherwise stated.
Firefinch Limited Annual Report | 31 December 2020 12
(formerly Mali Lithium Limited)
Directors’ Report
Dr Alistair Cowden– Executive Chairman
(Appointed 6 April 2020)
Non-Executive Chairman (18 February 2019 – 6 April 2020)
Dr. Cowden has more than 40 years of experience as a mining executive, director and geologist in the
mining industry in Australia, Africa, Asia and Europe.
Dr. Cowden has been part of the discovery, development and operation of numerous mines in
Australia, Africa and Europe and has extensive experience across all aspects of the mining industry
including mergers, acquisitions and financing that created significant wealth for shareholders.
Dr. Cowden has an Honours degree in Geology from Edinburgh University and a PhD in Geology from
the University of London.
Former directorships in the last three years
Copper Mountain Mining Corporation
Altona Mining Limited
Echo Resources Limited
9 April 2018 - 5 November 2020
2 January 2011 - 9 April 2018
1 August 2019 - 15 October 2019
Mr Mark Hepburn– Non-Executive Director
(Appointed 14 November 2018)
Mr Hepburn is a Corporate and Financial Markets Executive with over 28 years' experience in a range
of management and board positions for Institutional Stockbroking and Derivatives Trading desks for
major Financial Institutions. His career has included roles in Sydney with Deutsche Bank and Macquarie
Bank, managing global derivatives distribution sales teams. Mr Hepburn has worked as an Executive
Director of a leading Perth stockbroking firm during which time he was involved in numerous fund-
raising transactions for ASX listed industrial and resource companies. Mr Hepburn was also Managing
Director of his own Corporate Advisory firm which specialised in executing corporate and equity
transactions for ASX listed resources companies. His experience also includes working as a corporate
executive within mining companies and he has been a member of the Australian Institute of Company
Directors since 2008.
Other current directorships:
Castile Resources Limited
29 November 2019 - present
Former directorships in the last three years:
Sihayo Gold Limited
1 August 2018 - 26 November 2019
Firefinch Limited Annual Report | 31 December 2020 13
(formerly Mali Lithium Limited)
Directors’ Report
Mr Brendan Borg - Non-Executive Director
(Appointed 14 November 2018)
Mr Borg is a consultant geologist who has specialised in the "battery materials" sector including lithium,
graphite and cobalt mineralisation, participating in numerous successful projects, in an investment
and/or operational capacity.
Mr Borg has more than 20 years’ experience gained working in management, operational and project
development roles in the Exploration and Mining industries, with companies including Rio Tinto Iron
Ore, Magnis Resources Limited, IronClad Mining Limited, Lithex Resources Limited and Sibelco Australia
Limited. Brendan operates a geological consulting business Borg Geoscience Pty Ltd.
Mr Borg holds a Master of Science in Hydrogeology and Groundwater Management (University of
Technology Sydney), a Bachelor of Science in Geology/Environmental Science (Monash University) and
is a member of AusIMM and IAH.
Other current directorships:
Celsius Resources Limited
18 April 2017 – present
Former directorships in the last three years:
Tempus Resources Limited
18 April 2018 - 1 February 2021
Mr Brett Fraser – Non-Executive Director
(Appointed 11 November 2020)
Brett is an experienced ASX director, currently holding a position as Director of central-west African iron
ore company, Sundance Resources Limited. Brett’s deep knowledge (acquired over 30 years’ corporate
finance experience) is a great asset to the Company, particularly regarding business acquisitions,
business strategy and restructuring, and corporate governance. Brett is a Fellow of CPA Australia, a
Fellow of Financial Services Institute of Australasia, and a Fellow of the Governance Institute of
Australia. He holds a Bachelor of Business (Accounting) and a Graduate Diploma in Finance (SIA).
Other current directorships:
Sundance Resources Limited
10 March 2018 - present
Former directorships in the last three years:
Blina Minerals
Aura Energy Limited
Holista Colltech Limited
Empire Resources Limited
26 September - 19 September 2019
24 August 2005 - 18 November 2019
21 February 2020 - 2 July 2020
17 July 2018 - 2 October 2018
Mr Eric Hughes, BCom – Company Secretary
(Appointed 26 February 2019)
Mr Hughes has more than 20 years’ experience in senior finance executive roles with ASX-listed
resource companies. He has a proven track record of structuring, evaluating, financing, developing and
operating resource projects in Australia, Turkey, South Africa and Finland. Mr Hughes also brings
experience in the negotiation and execution of major financial and corporate transactions. Mr Hughes
holds a Bachelor of Business – Business Law from Curtin University, is a CPA and a registered tax agent.
He has previously held executive director and Non-Executive Director roles in ASX-listed resource
companies.
Firefinch Limited Annual Report | 31 December 2020 14
(formerly Mali Lithium Limited)
Directors’ Report
DIRECTORS’ MEETINGS
The number of meetings of the directors and the number of meetings attended by each director during
the year ended 31 December 2020.
Directors
A. Cowden
B. Borg
B. Fraser (1)
M. Hepburn
N. O’Brien (2)
C. Evans (3)
Directors’ Meetings
Remuneration and
Nomination Committee
Finance and Operations
Committee
Audit Committee
Number
eligible to
attend
Number
Attended
Number
eligible to
attend
Number
Attended
Number
eligible to
attend
Number
Attended
Number
eligible to
attend
Number
Attended
16
16
1
16
5
5
16
16
1
16
4
3
During the year ended 31 December 2020, the Audit and Risk Committee,
and Remuneration and Nomination Committee comprised the full Board
of Directors. Subsequently, the Board formalised the functions as
separate committees operating under relevant charters and reporting to
the board. As the complexity and size of the Company operations expand,
other relevant subcommittees of the board will be formed.
(1) B. Fraser was elected as a Non-Executive Director on 11 November 2020.
(2) N. O’Brien resigned as a Non-Executive Director on 6 April 2020.
(3) C. Evans resigned as Managing Director on 6 April 2020.
DIRECTORS’INTERESTS
The following relevant interests in shares and performance rights of the Company were held directly and
beneficially by the directors as at the date of this report:
Non-Executive Directors
M. Hepburn
B. Fraser
B. Borg
Executive Directors
Fully paid
ordinary shares
Listed Options
Unlisted
performance rights
Unlisted Options
1,112,500
75,000
750,000
2,000,000
-
-
-
12,500,000
1,075,000
750,000
-
-
-
-
Dr A. Cowden
6,250,000
750,000
2,000,000
Firefinch Limited Annual Report | 31 December 2020 15
(formerly Mali Lithium Limited)
Directors’ Report
REMUNERATION REPORT (AUDITED)
This report outlines the remuneration arrangements in place for the Company’s Non-Executive Directors,
Executive Directors and other Key Management Personnel (‘KMP’) for the year ended 31 December 2020
in accordance with the Corporations Act 2001 (the ‘Act’) and its regulations. For the purpose of this report,
KMP are defined as those persons having authority and responsibility for planning, directing and controlling
the major activities of the Company and the Group, directly or indirectly, including any director (whether
exclusive or otherwise) of the Parent entity. This information has been audited as required by section
308(3C) of the Act.
KMPs of the Company during the financial year ended 31 December 2020:
Position
Commenced/ Resigned
Alistair Cowden
Executive Chairman
Appointed 6 April 2020
Non-Executive Chairman
Appointed 18 February 2019 and ceased on 6 April 2020
Chris Evans
Managing Director
Appointed 24 January 2019/ resigned 6 April 2020
Mark Hepburn
Non-Executive Director
Appointed 14 November 2018
Brendan Borg
Non-Executive Director
Appointed 14 November 2018
Noel O’Brien
Non-Executive Director
Appointed 1 December 2017/ resigned 6 April 2020
Brett Fraser
Eric Hughes
Non-Executive Director
Appointed 11 November 2020
Chief Financial Officer/ Company
Secretary
Appointed 26 February 2019
Andrew Taplin
Chief Operating Officer
Appointed 2 November 2020
The Remuneration Report has been set out under the following main headings:
1. Principles used to determine the nature and amount of remuneration.
2. Details of remuneration (including link to performance).
3. Service agreements.
4. Share-based compensation.
5. Additional information.
1. Principles used to determine the nature and amount of remuneration.
The Board is responsible for determining and reviewing compensation arrangements for the Directors and
management. The Board assesses the appropriateness of the nature and amount of remuneration of such
officers on a periodic basis by reference to relevant employment market conditions. The objective is to
ensure the retention and incentivisation of a high-quality board and executive team.
Non-cash rewards and incentives are linked to vesting criteria that reflect the Company’s strategy. As the
Company expands its executive team, short-term and long-term incentives will be linked to both personal
and Company performance milestones that are considered appropriate at the time.
The Board has adopted a Remuneration Committee Charter. Due to the size of the Company and number
of Directors during the reporting period, the Board elected not to create a separate Remuneration
Committee but has instead decided to undertake the function of the Committee as a full Board under the
guidance of the formal charter. Subsequently to the year end, a Remuneration Committee was formed and
met separately from the Board, operating under the Committee charters.
The Company has a policy prohibiting executives and Directors from entering into transactions or
arrangements which limit the economic risk of participating in unvested entitlements under any equity-
based remuneration scheme.
Firefinch Limited Annual Report | 31 December 2020 16
(formerly Mali Lithium Limited)
Directors’ Report
The Board determines appropriate levels of performance rewards as and when they consider rewards are
warranted.
No remuneration consultants have been used in the current year or prior periods however reference has
been made to published remuneration reports to assess and review appropriate levels of remuneration.
Directors’ fee limits
The aggregate amount of fees payable to Non-Executive Directors is subject to approval by shareholders.
The maximum aggregate amount of fees that is approved for payment to Non-Executive Directors is
$400,000 per annum, excluding the value of approved share-based payments. This limit was approved by
shareholders at the General Meeting in August 2017.
Statutory disclosure key performance indicators of the Group over the last five years.
Profit/(Loss) for the period, $
Dividends paid, $
Net assets, $
Share price, $
Year ended 31
December 2020
1,043,816
Year ended 31
December 2019
(3,504,280)
Year ended 31
December 2018
(4,067,681)
Year ended 30
June 2017
(5,667,818)
Year ended 30
June 2016
(73,437,312)
nil
nil
nil
nil
99,393,236
27,166,106
25,740,323
11,435,753
0.175
0.097
0.164
0.640
nil
11,307,096
0.328
The remuneration of the Non-Executive Directors and Executive Chairman for the year ended 31 December
2020 is detailed below.
Table 1 – Annual board and committee fees payable to Directors
Position
Executive Chairman
Non- Executive Directors
$
450,000 (1)
72,000
(1) Effective from 1 November 2020.
Firefinch Limited Annual Report | 31 December 2020 17
(formerly Mali Lithium Limited)
Directors’ Report
2. Details of Remuneration
Details of the remuneration of the Directors and KMP of the Group (as defined in AASB 124 Related Party Disclosures) are set out in the following table.
Table 2 – Directors and Executive KMP’s remuneration for the year ended 31 December 2020
2020 – Group
Short-term
Post-
employment
Salary &
Fees
Cash bonus
Other
Superannuation
Short-term
Annual leave
paid
Termination
benefits
Total monetary
remuneration
Equity-settled share-
based payments
Performance /
share rights (5)
Options (6)
Total
remuneration
$
$
$
$
$
$
$
$
$
$
P
e
r
f
o
r
m
a
n
c
e
%
Directors
M Hepburn
B Borg
B Fraser (1)
N O’Brien (2)
A Cowden (3)
C Evans (4)
Directors total
Executive KMP
E Hughes
A Taplin (7)
59,178
59,178
8,219
16,438
270,708
127,782
541,503
-
-
-
-
-
-
-
274,833
8,000
63,051
-
Executive KMP total
337,884
8,000
TOTAL REMUNERATION
879,387
8,000
-
-
-
-
-
-
-
-
-
-
-
5,622
5,622
624
2,851
19,370
10,030
44,119
21,343
3,616
24,959
-
-
-
-
-
-
-
-
13,111
-
32,289
116,667
64,800
64,800
8,843
32,400
290,078
286,768
22,059
22,059
-
-
58,825
-
-
-
-
-
86,859
25%
86,859
25%
8,843
32,400
-
-
348,903
17%
-
(305,044)
(18,276)
-
32,289
129,778
747,689
102,943
(305,044)
545,588
-
-
-
-
-
-
304,176
66,667
370,843
115,209
5,658
120,867
-
-
-
419,385
27%
72,325
8%
491,710
69,078
32,289
129,778
1,118,532
223,810
(305,044)
1,037,298
(1) Mr Fraser was appointed Non-Executive Director on 11 November 2020.
(2) Mr O’Brien resigned on 6 April 2020. Mr O’Brien received a further 3 month remuneration totalling $13,111 (exc. superannuation) under a fixed term employment contract.
(3) Dr Cowden was appointed as Executive Chairman on 6 April 2020.
(4) Mr Evans resigned as Managing Director on 6 April 2020.
(5) Vesting expense for the year of performance / share rights issues to the directors under the terms of the Company’s long-term incentive plans approved by shareholders on 23 October 2020. The fair value of the
performance / share rights is calculated at the date of grant date.
(6) Options forfeited upon resignation of the Managing Director.
(7) Mr Taplin was appointed as Chief Operating Officer on 2 November 2020.
Firefinch Limited Annual Report | 31 December 2020 18
(formerly Mali Lithium Limited)
Directors’ Report
Table 2 (continued) – Directors and Executive KMP’s remuneration for the year ended 31 December 2019
Short-term
Post-
employment
Short-term
Cash bonus
Other
Superannuation
Annual Leave
Termination
benefits
Total monetary
remuneration
$
$
$
$
$
$
Equity-settled share-
based payments
Performance /
share rights (7)
$
Options (8)
Total
remuneration
2019 – Group
Directors
M Hepburn (1)
B Borg (3)
N O’Brien (2)
A Cowden (4)
C Evans (5)
Directors total
Executive KMP
E Hughes (6)
Executive KMP total
Salary &
Fees
$
120,794
54,794
66,438
77,947
318,750
638,723
229,012
229,012
5,206
5,206
6,312
7,405
19,056
43,185
49,075
49,075
20,000
20,000
17,573
17,573
P
e
r
f
o
r
m
a
n
c
e
%
nil
nil
nil
nil
44
$
$
126,000
60,000
72,750
85,352
305,044
691,925
305,044
1,036,027
42,737
309,322
14
42,737
309,322
347,781
1,345,349
126,000
60,000
72,750
85,352
386,881
730,983
266,585
266,585
997,568
TOTAL REMUNERATION
867,735
69,075
60,758
Greyhawk Pty Ltd of which Mr Hepburn is a Non-Executive Director, provided consulting services to the Group during the year for which Greyhawk Pty Ltd was paid $165,250. Greyhawk Pty Ltd ceased providing
consulting services to the Group during the year. Mr Hepburn is a Non-Executive Director of the company. His agreed remuneration is $72,000 per annum including superannuation contributions required by law
(currently 9.5%).
Mr O’Brien, Non-Executive Director, has agreed remuneration of $72,000 per annum including superannuation contributions required by law (currently 9.5%).
Mr Borg, Non-Executive Director, has agreed remuneration of $72,000 per annum including superannuation contributions required by law (currently 9.5%).
Dr Cowden commenced as a Non-Executive Director (Chairman) effective 18 February 2019. His agreed remuneration is $98,550 per annum including superannuation contributions required by law (currently
9.5%).
Mr Evans commenced as a Managing Director effective 3 February 2019. His agreed remuneration is $370,531 per annum including superannuation contributions required by law (currently 9.5%). On 17 January
2020 the Company announced that it had amended the variable component of his remuneration package. This resulted in the cancelation of Performance Options and Remuneration Shares, being replaced with
a lower number of Performance Rights and a cash retention payment in future years. The cash retention payment of $49,075 has been accrued and is earned over several years. The accrued amount is described
as “Other” in the above table.
Mr Eric Hughes commenced as a Chief Financial Officer and Company Secretary effective 26 February 2019. His agreed remuneration is $290,531 per annum including superannuation contributions required by
law. Mr Hughes received a one-off retention payment of $20,000 which was an incentive payment to join the Group.
Firefinch Limited Annual Report | 31 December 2020 19
(formerly Mali Lithium Limited)
Directors’ Report
3. Service Agreements
Remuneration and other terms of employment of the Managing Director, Executive Chairman, Chief
Operating Officer and Chief Financial Officer are formalised in employment agreements. Major provisions
of the agreements relating to the remuneration of these positions are set out below.
Remuneration of Executive Chairman, Dr Alistair Cowden
Dr Alistair Cowden was appointed on 6 April 2020 as Executive Chairman after holding a position of Non-
Executive Chairman from 18 February 2019. The role of Executive Chairman is short-term until the Company
appoints a Managing Director. Dr Cowden’s contract terms with the Company are outlined below.
Fixed remuneration
Dr Cowden’s annual salary is $450,000 per annum, inclusive of statutory entitlements effective from 1
November 2020.
Variable remuneration
Dr Cowden is eligible to participate in the Group’s Long-Term Incentive (LTI) scheme.
Termination of contract
Dr Cowden executive role will terminate when the Company appoints a Managing Director and Dr Cowden
will revert to Non-Executive Chairman. The executive role can be terminated by either party without a
notice.
Remuneration of Chief Financial Officer and Company Secretary, Mr Eric Hughes
Mr Eric Hughes was appointed on 26 February 2019 as Chief Financial Officer and Company Secretary and
his employment contract with the Company outlines the following terms:
Fixed remuneration
Mr Hughes’s annual salary is $300,000 per annum, plus statutory superannuation effective from 1
November 2020.
Variable remuneration
The Company will issue Mr Hughes with 500,000 remuneration shares when the first of the below events
occur:
•
• a change of control event; or
• a change of control in major asset
the anniversary of 2 years of continuous service with the Company; or
Termination of contract
The Company may terminate Mr Hughes’ employment at any time on 6 months’ notice, of which at least 3
months must be paid in lieu. Mr Hughes may terminate his employment with the Company at any time on
3 months’ notice.
Remuneration of Chief Operating Officer, Mr Andrew Taplin
Mr Andrew Taplin was appointed 2 November 2020 as Chief Operating Officer and his employment contract
with Firefinch outlines the terms of his employment.
Mr Taplin is entitled to receive fixed remuneration including a base salary and superannuation, plus a
variable remuneration including performance rights determined under the Long-Term Incentive (LTI) plans
and at the discretion of the board. A summary of these and other key terms of Mr Taplin’s employment
contract are described below.
Fixed remuneration
Mr Taplin’s annual salary is set at $400,000 per annum, inclusive of statutory superannuation.
Firefinch Limited Annual Report | 31 December 2020 20
(formerly Mali Lithium Limited)
Directors’ Report
Variable remuneration
Mr Taplin is eligible to participate in the Group’s LTI scheme. The Company will issue Mr Taplin 500,000
shares upon completion of 2 years continuous employment with the Company.
Termination of contract
Mr Taplin and the Company may terminate the contract by giving 3 months’ notice.
Mr Chris Evans – Managing Director (resigned 6 April 2020)
On 24 January 2019 the Company appointed Mr Chris Evans as Managing Director and his employment
contract with the Company outlines the following terms:
Fixed remuneration
Mr Evans’ annual salary was $350,000 per annum plus statutory superannuation.
Variable remuneration
Mr Evans was eligible to participate in the LTI scheme. 3,000,000 share rights and 4,000,000 performance
rights were cancelled upon Mr Evan’s resignation.
4. Share Based Compensation
KMP are eligible to participate in Firefinch LTI scheme. The terms and conditions of the performance / share
rights included in remuneration of directors and KMP in the current or a future reporting period are set out
below. Fair values of performance/share rights at a grant date were determined using a Black Scholes
pricing model. Performance / share rights granted carry no dividend or voting rights. When exercisable, the
performance / share rights are convertible into one ordinary share per right.
Table 3 - Key terms of share-based compensation held by Directors and KMP as at 31 December 2020
Item
Options (1)
Share rights (2)
Performance
rights (3)
Share rights (4)
Grant date
Number
Exercise price, $
Fair value, $
Total fair value, $
Performance period (years)
13 December 2018
26 February 2019
23 October 2020
30 July 2020
2,000,000
500,000
3,500,000
1,500,000
0.40
0.050
100,000
-
nil
0.204
101,760
2
nil
0.185
647,500
3
nil
0.145
217,500
3
Expiry date
20 February 2022
27 February 2021
1 July 2023
1 July 2023
Vesting conditions
100% vested
2 years continuous
employment
See note 6
See note 7
Performance
rights (5)
2 November 2020
500,000
nil
0.140
70,000
2
2 November 2022
2 years
continuous
employment
(1) The assessed value of options at a grant date is fully expensed in the year they were granted as 100% of options vested upon their issue.
Fair values at a grant date are determined using a Black Scholes pricing model.
(2) The assessed fair value of share rights at a grant date is allocated equally over the performance period (24-month period) from 26
February 2019 to 26 February 2021, over which the individuals and the Company’s performance is assessed, and the amount is included
in the remuneration tables above.
(3) The assessed fair value of performance rights at a grant date is allocated equally over the performance period (32-month period) from
23 October 2020 to 1 July 2023 over which the individuals and the Company’s performance is assessed, and the amount is included in
the remuneration tables above. Fair values at a grant date are determined using a Black Scholes pricing model.
(4) The assessed fair value of share rights at a grant date is allocated equally over the performance period (36-month period) from 30 July
2020 to 1 July 2023, over which the individuals and the Company’s performance is assessed, and the amount is included in the
remuneration tables above.
(5) The assessed fair value of performance rights at a grant date is allocated equally over the performance period (24-month period) from
2 November 2020 to 2 November 2022, over which the individuals and the Company’s performance is assessed, and the amount is
included in the remuneration tables above.
(6) The Performance rights will vest subject to at least two (2) of the following vesting conditions being satisfied:
Firefinch Limited Annual Report | 31 December 2020 21
(formerly Mali Lithium Limited)
Directors’ Report
•
•
•
•
The Company’s share price has traded on the ASX at a $0.10 premium to the volume-weighted average price (‘VWAP’) of the
Company’s shares, 3 trading days after the announcement of the Morila acquisition, being $0.1971, for 20 consecutive trading
days in which sales of shares are recorded;
Definition of a JORC Code compliant Inferred Mineral Resource of at least 2,000,000 ounces of gold (or equivalent) on the Morila
exploitation permit and the Company’s Malian subsidiary’s tenements adjoining the Morila exploitation permit at a minimum
average grade of 1.0 grams per tonne of gold (or equivalent);
The Company maintaining production beyond the date provided for in the Closure Plan (May 2021) or expanding production at
the Morila gold mine by commencing open pit production from the Morila exploitation permit; and
The Company enters into a sale, join venture or financing agreement in respect of the Company’s Goulamina Lithium project
which delivers an implied valuation of at least $100,000,000 for the Goulamina Lithium project as at the date of execution.
(7)
The share rights will vest subject to at least two (2) of the following vesting conditions being satisfied:
•
The Company’s share price has traded on the ASX at a $0.10 premium to the Company’s share price 3 trading days after the
announcement of the Morila acquisition, for 20 consecutive trading days in which sales of shares are recorded;
A JORC resource of at least 2,000,000 ounces of gold is defined at the Morila gold mine;
Open pit production is recommenced at the main Morila gold mine; and
The Company enters into a sale, joint venture or financing agreement in respect of the Company’s Goulamina project, which
delivers an implied valuation of at least $100,000,000 for Goulamina as at the date of execution.
•
•
•
Further information relating to the portion of Directors and KMP’s remuneration as an equity
compensation are set out in the following table.
Table 4 - Value of share-based compensation
Value recognised, exercised or lapsed in the year ended December 2020
1.
Total fair value of:
Performance
/share rights, $
Grant date
Value recognised
$
Performance /
share rights
Exercised
$
Performance
/share rights
Lapsed
$
Performance / share
rights
(8) Amount paid
per share on
exercise
138,750
138,750
370,000
217,500
70,000
23-Oct-20
23-Oct-20
23-Oct-20
30-Jul-20
2-Nov-20
22,059
22,059
58,825
115,209
5,658
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Name
Directors
M Hepburn
B Borg
A Cowden
Executive KMP
E Hughes
A Taplin
The movement in performance /share right holdings for KMP and Directors during the year are set out in
the following table:
Table 5 – Movement of performance / share rights granted to Directors and KMPs during the year
Equity instrument
Balance at
start of the
year
Granted
during the
year as
remuneration
Exercised
during the
year
Forfeited /
lapsed
Balance at
end of the
year
Vested
during the
year
Vested and
exercisable
at the end of
the year
Name
Directors
M Hepburn
Performance right
2,000,000
B Borg
A Cowden
C Evans (1)
Executive KMP
Performance right
Performance right
Performance right /
options
750,000
750,000
2,000,000
-
-
7,000,000
-
E Hughes (2)
Share right
500,000
1,500,000
A Taplin
Performance right
-
500,000
-
-
-
-
-
-
-
-
-
2,750,000
750,000
2,000,000
(7,000,000)
-
-
-
2,000,000
500,000
-
-
-
-
-
-
-
-
-
-
-
-
(1) Performance rights and options totalling 7,000,000 were forfeited upon resignation of Chris Evans on 6 April 2020.
Firefinch Limited Annual Report | 31 December 2020 22
(formerly Mali Lithium Limited)
Directors’ Report
Details of remuneration: share-based compensation benefits
The following table details the percentage of the available grant that vested in the financial year and the
percentage forfeited because specified performance criteria was not satisfied. The maximum value of the
performance/ share rights yet to vest has been determined as the fair value amount of the performance /
share rights at a grant date.
Table 6 – Performance /share rights granted/vested/unvested as at 31 December 2020
Equity instrument
Number of
rights granted
Financial
year
granted
Vested in
current
financial
year
Vested in
prior financial
year
Financial year in
which vested or
may vest
Total value yet to
recognise before
vesting
No
Yr
%
%
Yr
$
Name
Directors
M Hepburn
Options
2,000,000
2018
Performance rights
750,000
2020
B Borg
Performance rights
750,000
2020
A Cowden
Performance rights
2,000,000
2020
Executive KMP
E Hughes
Share rights
500,000
2019
Performance rights
1,500,000
2020
A Taplin
Performance rights
500,000
2020
5. Additional information
Loans to directors and executives
-
-
-
-
-
-
-
100
-
-
-
-
-
-
2018
2021
2021
2021
2021
2021
2022
-
116,691
116,691
311,175
8,352
152,962
64,342
There were no loans outstanding at the reporting date to directors or executives.
Other transactions with KMP and or their related parties
Transactions between related parties are on normal commercial terms and conditions no more favourable
than those available to other parties unless otherwise stated.
Greyhawk Pty Ltd of which Mr M Hepburn is a director, was paid nil during the year (2019: $231,250).
There were no other related party transactions for the year ended 31 December 2020 (2019: Nil).
Firefinch Limited Annual Report | 31 December 2020 23
(formerly Mali Lithium Limited)
Directors’ Report
Table 7 – Shareholdings
The number of shares in the Company held by each Director and KMP and their related parties during the
year ended 31 December 2020 is set out below:
2020 – Group
Group KMP
Directors
M Hepburn
B Borg
B Fraser
N O’Brien (2)
A Cowden
C Evans (3)
Executive KMP
E Hughes
A Taplin
Balance at 31
December 2019
Rights
entitlement
Received during the
year on vesting
Other changes
during the year (1)
Balance at date
of resignation
Balance at 31
December 2020
750,000
-
10,750,000
270,000
-
137,500
-
-
2,500,000
1,527,750
375,000
-
-
-
625,000
-
-
-
-
-
-
-
-
-
362,500
1,480,000
-
-
-
-
-
(137,500)
1,112,500
12,500,000
-
-
2,222,250
-
6,250,000
-
(375,000)
-
1,250,000
-
-
-
1,875,000
-
(1) Other changes during the year represent on-market purchase of shares.
(2) Mr O’Brien resigned as Non-Executive Director on 6 April and is not considered KMP from this date. On date of resignation, Noel held
137,500 shares.
(3) Mr Evans resigned as Managing Director on 6 April 2020 and is not considered KMP from this date. On date of resignation, Chris held
375,000 shares.
The numbers of options, performance rights and share rights outstanding in the Company held by each
Director, KMP and their related parties during the year ended 31 December 2020 is set out below:
Table 8 - Options, performance rights and performance shares
2020 – Group
Group KMP
Directors
Balance at 31
December 2019
Granted as
remuneration
Exercised
Forfeited /
lapsed
Balance at date
of resignation
Balance at 31
December 2020
Vested and
Exercisable
Unvested
M Hepburn
2,075,000 (1)
B Borg
B Fraser
N O’Brien
A Cowden
C Evans
Executive KMP
E Hughes
A Taplin
1,075,000 (2)
-
68,750
750,000
7,062,500
750,000
750,000
-
-
2,000,000
-
500,000
1,500,000
-
500,00
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
68,750 (3)
2,825,000
2,075,000
750,000
1,825,000
1,075,000
750,000
-
-
-
68,750
-
-
-
2,750,000
750,000
2,000,000
(7,000,000)
62,500 (3)
-
62,500
-
-
-
-
-
2,000,000
500,000
-
-
2,000,000
500,000
(1) Includes 75,000 options acquired and paid for by cash.
(2) Options were acquired and paid for by cash.
(3) The options balance on resignation represents options acquired and paid for by cash.
End of Remuneration Report
Firefinch Limited Annual Report | 31 December 2020 24
(formerly Mali Lithium Limited)
Directors’ Report
Indemnification and Insurance of Directors, Officers and Auditors
The Company has executed agreements with the Directors and Officers of the Company indemnifying them
against all losses or liabilities incurred by each Director or Officer in their capacity as Directors or Officer of
a Group Company to the extent permitted by the Corporation Act 2001. The indemnification specifically
excludes wilful acts of negligence.
The Company has paid insurance premiums in respect of Directors’ and Officers’ Liability Insurance
contracts for the current officers of the Company, including officers of the Company’s controlled entities.
The liabilities insured are damages and legal costs that may be incurred in defending civil or criminal
proceedings that may be brought against the officers in their capacity as officers of entities in the Group.
The total amount of insurance premiums paid has not been disclosed for confidentiality reasons.
Proceedings on Behalf of the Company
No person has applied for leave of Court to bring proceedings on behalf of the Company or intervene in any
proceedings to which the Company is a party for the purpose of taking responsibility on behalf of the
Company for all or any part of those proceedings. The Company was not a party to any such proceedings
during the year.
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 are satisfied that the
provision of non-audit services by the auditor, as set out below, did not compromise the auditor
independence requirements of the Corporations Act 2001 for the following reasons:
• all non-audit services have been reviewed by the Board to ensure they do not impact the impartiality
and objectivity of the auditor; and
• none of the services undermine the general principles relating to auditor independence as set out in
APES 110 Code of Ethics for Professional Accountants.
During the year, PricewaterhouseCoopers, the Company’s auditor, provides taxation compliance services,
in addition to their statutory audits. Non-audit fees amounted to $15,300 (2019: $33,899). Details of
remuneration paid to the auditor can be found within the financial statements at note 23.
Corporate Governance Statement
The ASX Corporate Governance Council (CGC) has developed corporate governance principles and
recommendations for listed entities. ASX listing rule 4.10.3 requires that listed entities disclose the extent
to which they have followed the CGC’s recommendations and, where a recommendation has not been
followed, the reasons why.
Firefinch’s corporate governance statement can be found on the Company’s website at the following link:
https://firefinchltd.com/corporate-governance/
AUDITOR’S INDEPENDENCE DECLARATION
The lead auditor's independence declaration under section 307C of the Corporations Act 2001 for the year
ended 31 December 2020 has been received and can be found on page 26 of the annual report.
DR ALISTAIR COWDEN
Executive Chairman
Dated 31 March 2021
Firefinch Limited Annual Report | 31 December 2020 25
(formerly Mali Lithium Limited)
Auditor’s Independence Declaration
As lead auditor for the audit of Firefinch Limited for the year ended 31 December 2020, I declare that
to the best of my knowledge and belief, there have been:
(a)
no contraventions of the auditor independence requirements of the Corporations Act 2001 in
relation to the audit, and
(b)
no contraventions of any applicable code of professional conduct in relation to the audit.
This declaration is in respect of Firefinch Limited and the entities it controlled during the period.
Helen Bathurst
Partner
PricewaterhouseCoopers
Perth
31 March 2021
PricewaterhouseCoopers, ABN 52 780 433 757
Brookfield Place, 125 St Georges Terrace, PERTH WA 6000, GPO Box D198, PERTH WA 6840
T: +61 8 9238 3000, F: +61 8 9238 3999, www.pwc.com.au
Liability limited by a scheme approved under Professional Standards Legislation.
26
CONSOLIDATED STATEMENT OF PROFIT AND LOSS AND
OTHER COMPREHENSIVE INCOME
for the year ended 31 December 2020
Note
2020
$
2019
$
Continuing operations
Revenue
Cost of sales
Gross Profit
Interest income
Other income
Corporate and other expenses
Depreciation
Director fees
Employee salaries and other employment related costs
Exploration expenditure written off
Finance costs
Share-based payments
Foreign exchange gain/ (loss)
Profit/(Loss) before Tax
Income tax (expense)/ benefit
Net Profit/(Loss) for the Year
Other Comprehensive Profit/(Loss)
Items that may be reclassified subsequently to profit or loss
Exchange difference on translation of foreign operations
Total Comprehensive Profit/(Loss) for the Period
Profit/(Loss) for the Period Attributable to:
Owners of Firefinch Limited
Non-controlling interest
Total Comprehensive Profit/(Loss) Attributable to:
Owners of Firefinch Limited
Non-controlling interest
5
5
5
6
20,338,624
(17,408,600)
2,930,024
-
-
-
5,341
409,263
58,804
-
414,604
58,804
(631,968)
(1,298,520)
(221,698)
(292,861)
(747,688)
(615,908)
(1,649,486)
(1,010,829)
-
(112,394)
(37,585)
1,432,534
(6,436)
(5,702)
(347,781)
(20,163)
1,376,343
(3,539,396)
(332,527)
35,116
1,043,816
(3,504,280)
(554,710)
-
489,106
(3,504,280)
114,322
929,494
(3,504,280)
-
1,043,816
(3,504,280)
(329,446)
(3,504,280)
818,552
-
489,106
(3,504,280)
Earnings per share:
Basic profit/(loss) per share (cents per share)
Diluted profit/(loss) per share (cents per share)
7
7
0.03
0.03
(1.27)
(1.27)
The consolidated statement of profit or loss and other comprehensive income is to be read in conjunction with the accompanying notes.
Firefinch Limited Annual Report | 31 December 2020 27
(formerly Mali Lithium Limited)
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
as at 31 December 2020
Current Assets
Cash and cash equivalents
Trade and other receivables
Right of use asset
Inventories
Total Current Assets
Non-Current Assets
Property, plant, and equipment
Right of use asset
Exploration and evaluation expenditure
Other receivables
Total Non-Current Assets
Total Assets
Current Liabilities
Trade and other payables
Lease liability
Provisions
Loans
Current tax liabilities
Total Current Liabilities
Non- Current Liabilities
Lease Liability
Provisions
Total Non-Current Liabilities
Total Liabilities
Net Assets
Equity
Issued capital
Reserves
Accumulated losses
Non-controlling interest
Total Equity
Note
2020
$
2019
$
8
9
15
10
11
12
9
13
15
14
6
17,263,076
14,016,341
29,970
37,272,200
3,793,194
517,340
-
-
68,581,587
4,310,534
303,027
-
59,607,354
10,690,169
498,152
109,841
24,486,347
112,490
70,600,550
25,206,830
139,182,137
29,517,364
9,581,390
2,149,186
28,551
155,577
9,664,296
3,597,808
39,474
77,219
-
18,021
23,027,622
2,283,900
-
14
16,761,279
16,761,279
67,358
-
67,358
39,788,901
2,351,258
99,393,236
27,166,106
17
18
19
27
128,689,714
58,028,843
5,300,261
5,817,386
(36,565,801)
(36,680,123)
1,969,062
-
99,393,236
27,166,106
The consolidated statement of financial position is to be read in conjunction with the accompanying notes.
Firefinch Limited Annual Report | 31 December 2020 28
(formerly Mali Lithium Limited)
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
for the year ended 31 December 2020
Balance at 1 January 2019
(Loss) for the year
Changes in accounting policy
Other comprehensive income for the year
Total comprehensive income for the year
Transaction with owners, directly in equity
Note
Issued
Capital
Accumulated
Losses
Foreign
Exchange
Translation
Reserve
Share-based
Payment
Reserve
$
$
$
$
NCI
$
Total
$
53,448,920 (33,178,202)
1,284,862
4,184,743
- 25,740,323
-
-
-
-
(3,504,280)
2,359
-
(3,501,921)
-
-
-
-
-
-
-
-
-
-
-
347,781
-
-
-
-
-
-
(3,504,280)
2,359
-
(3,501,921)
4,579,923
347,781
Shares issued during the year (net of costs)
4,579,923
Share-based payments
-
-
-
Balance at 31 December 2019
58,028,843 (36,680,123)
1,284,862
4,532,524
- 27,166,106
Balance at 1 January 2020
58,028,843 (36,680,123)
1,284,862
4,532,524
- 27,166,106
NCI on acquisition
Profit for the year
27
Other comprehensive income for the year
Total comprehensive income for the year
Transaction with owners, directly in equity
Shares issued during the year (net of costs)
Share based payments
-
-
-
-
-
- 1,039,568
1,039,568
114,322
-
(554,710)
-
-
929,494
1,043,816
-
(554,710)
114,322
(554,710)
-
929,494
489,106
17
18
70,660,871
-
-
-
-
-
-
37,585
- 70,660,871
-
37,585
Balance at 31 December 2020
128,689,714 (36,565,801)
730,152
4,570,109
1,969,062 99,393,236
The consolidated statement of changes in equity is to be read in conjunction with the accompanying notes.
Firefinch Limited Annual Report | 31 December 2020 29
(formerly Mali Lithium Limited)
CONSOLIDATED STATEMENT OF CASH FLOWS
for the year ended 31 December 2020
Cash Flows from Operating Activities
Proceeds in the course of operations
Payments to suppliers and employees
Income taxes paid
Interest received
Net Cash from Operating Activities
Cash Flows from Investing Activities
Royalty income received
Payments for exploration and evaluation expenditure
Payments made for plant and equipment
Proceeds from sale of plant and equipment
Payments for acquisition of operations, net of cash acquired
Net Cash Used in Investing Activities
Cash Flows from Financing Activities
Proceeds from issue of shares
Payments for capital raising
Net Cash Provided by Financing Activities
Net Increase/(Decrease) in Cash Held
Cash and cash equivalents at the beginning of the period
Change in foreign currency held
Cash and Cash Equivalents at the End of the Period
Note
2020
$
2019
$
12,206,628
-
(18,131,289)
(3,338,622)
(209,550)
5,341
-
23,181
24
(6,128,870)
(3,315,441)
-
2,744,546
(3,197,670)
(4,676,593)
(17,977)
105
(45,995,175)
(53,818)
3,694
-
(49,210,717)
(1,982,171)
73,075,749
(3,665,053)
4,263,095
(276,642)
69,410,696
3,986,453
14,071,109
(1,311,159)
3,793,194
(601,227)
5,124,012
(19,659)
17,263,076
3,793,194
The consolidated statement of cash flows is to be read in conjunction with the accompanying notes.
Firefinch Limited Annual Report | 31 December 2020 30
(formerly Mali Lithium Limited)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the year ended 31 December 2020
1. BASIS OF PREPARATION
These are the consolidated financial statements and notes of Firefinch Limited (Firefinch or the Company) and controlled entities
(collectively the Group). Firefinch is a company limited by shares, domiciled and incorporated in Australia.
The financial statements were authorised for issue on 31 March 2021 by the Directors of the Company.
The nature of the operations and principal activities of the Group are described in the Director’s Report.
The financial statements comprise the consolidated financial statements of the Group. For the purposes of preparing the
consolidated financial statements, the Company is a for-profit entity. Material accounting policies adopted in the preparation of
these financial statements are presented below. They have been consistently applied unless otherwise stated.
Statement of compliance
These financial statements are general purpose financial statements which have been prepared in accordance with Australian
Accounting Standards and Interpretations of the Australian Accounting Standards Board (AAS Board) and other authoritative
pronouncements of the Corporations Act 2001. The consolidated financial statements of the Group also comply with
International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB),
Australian Accounting Standards (AASBs) set out accounting policies that the AAS Board has concluded would result in a financial
report containing relevant and reliable information about transactions, events and conditions to which they apply. Compliance
with AASBs ensures that the financial statements and notes also comply with IFRS as issued by the IASB.
Going concern
The Group made a profit for the year of $1,043,816 (2019: $3,504,280 loss). The net assets of the Group have increased by
$72,271,130 to $99,393,236 at 31 December 2020 (2019: $27,166,106).
As at 31 December 2020, the Group's cash and cash equivalents increased by $13,469,882 to $17,263,076 (2019: $3,793,194)
and had working capital of $17,916,091 (2019: $2,026,634 working capital).
The continued viability of the Group and its ability to continue as a going concern and meet its debts and commitments as they
fall due are dependent on the Group being successful in:
•
•
•
•
The profitable production of gold dore from the current tailings treatment activities;
Re-commence profitable mining of gold bearing ore from satellite pits;
Re-commence commercial mining of the Morila pit;
Securing funding when and if it is required.
The Directors are satisfied that at the date of signing of the financial report, there are reasonable grounds to believe that the
Group will be successful in these endeavours and the Group will be able to continue to meet its debts as and when they fall due.
As a result, the Directors consider it appropriate for the financial statements to be prepared on a going concern basis.
Historical cost convention
The financial statements have been prepared under the historical cost convention, except for financial instruments and share
based payments, which have been measured at fair value.
Significant accounting estimates and judgments
The preparation of consolidated financial statements requires management to make judgements, estimates and assumptions
that affect the application of policies and reported amounts of assets and liabilities, income and expenses. These estimates and
associated assumptions are based on historical experience and various factors that are believed to be reasonable under the
circumstances, the results of which form the basis of making the judgements about carrying values of assets and liabilities that
are not readily apparent from other sources.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the
period in which the estimate is revised and in any future periods affected.
Firefinch Limited Annual Report | 31 December 2020 31
(formerly Mali Lithium Limited)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the year ended 31 December 2020
2. PRINCIPLES OF CONSOLIDATION
Subsidiaries
The Group financial statements consolidate those of the Company and all its subsidiaries. The Company controls a subsidiary if
it is exposed or has rights to variable returns from its involvement with the subsidiary and has the ability to affect those returns
through its power over the activities of the subsidiary.
All transactions and balances between Group companies are eliminated on consolidation, including unrealised gains and losses
on transactions between Group companies. Where unrealised losses on intra-group asset sales are reversed on consolidation,
the underlying asset is also tested for impairment from a group perspective. Amounts reported in the financial statements of
subsidiaries have been adjusted where necessary to ensure consistency with the accounting policies adopted by the Group.
Profit or loss and other comprehensive income of subsidiaries acquired or disposed of during the period are recognised from the
effective date of acquisition, or up to the effective date of disposal, as applicable.
Functional and presentation currency
Items included in the financial statements of each entity within the Group are measured using the currency of the primary
economic environment in which the entity operates (the “functional currency”). The functional currency of Firefinch Limited is
Australian dollars.
The financial report is presented in Australian dollars.
Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the
transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at
year end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the profit and
loss.
Group companies and foreign operations
The results and financial position of all the Group entities (none of which has the currency of a hyperinflationary economy) that
have a functional currency different from the presentation currency are translated into the presentation currency as follows:
• assets and liabilities for each Statement of Financial Position presented are translated at the closing rate at the reporting
date;
•
income and expenses for each statement of profit or loss and other comprehensive income are translated at average
exchange rates (unless this is not a reasonable approximation of the rates prevailing on the transaction dates, in which
case income and expenses are translated at the dates of the transactions); and
• all resulting exchange differences are recognised in other comprehensive income.
On consolidation, exchange differences arising from the translation of any net investment in foreign entities, and of borrowings
and other financial instruments designated as hedges of such investments, are recorded in a reserve in equity. When a foreign
operation is sold or any borrowings forming part of the net investment are repaid, a proportionate share of such exchange
differences are recognised in the consolidated statement of profit or loss and other comprehensive income, as part of the gain
or loss on sale where applicable.
3.
NEW ACCOUNTING STANDARDS
New and revised accounting standards affecting amounts reported and/or disclosures in the financial statements
The Group has consistently applied the accounting policies to all periods presented in the financial statements. The Group has
considered the implications of new and amended Accounting Standards applicable for annual reporting periods beginning after
1 January 2020 but determined that their application to the financial statements is either not relevant or not material.
New Accounting Standards and Interpretations not yet mandatory or early adopted
Certain new accounting standards and interpretations have been published that are not mandatory for 31 December 2020
reporting periods and have not been early adopted by the group. The Group’s assessment of the impact of these new standards
and interpretations is that they would not have a material impact on the entity in the current or future reporting periods and on
foreseeable future transactions.
Firefinch Limited Annual Report | 31 December 2020 32
(formerly Mali Lithium Limited)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the year ended 31 December 2020
4. SEGMENT INFORMATION
Description of segments
The operating segments are based on the reports reviewed by the chief operating decision makers and Board of Directors that
are used to make strategic decisions. The Group reports on a business segment basis as its risks and rates of return are different
for each of the various business segments in which it operates, and this is the format of the information provided to the executive
management team and board of directors.
The Group operated in three segments being Morila, Mali Exploration and Corporate. The segment information is prepared in
conformity with the Group’s accounting policies. The Group comprises the following main segments:
Morila
Mining, development and exploration activities at the Morila gold mine
Mali Exploration
Lithium and gold exploration and evaluation activities in Mali
Corporate
Investing activities and corporate management
Revenue is derived from an external customer arising from the sale of gold doré reported under the Morila segment.
Segment reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision
makers. The chief operating decision makers, who are responsible for allocating resources and assessing performance of the
operating segments, have been identified as the executive management team and board of directors of the parent entity.
Segment information provided to the executive management team and board of directors.
2020
Revenue and other income
Revenue
Other income
Total segment
Results
Operating profit / (loss) b/tax
Income tax
Net profit
Included within segment results:
Depreciation and amortisation
Share-based payments
Foreign exchange gain / (loss)
Segment assets
Current assets
Non-current assets
Total segment assets
Segment liabilities
Current liabilities
Non-current liabilities
Total liabilities
Morila
$
Mali
Exploration
$
Corporate
$
Total
Consolidated
$
20,338,624
292,347
20,630,971
-
-
-
-
20,338,624
122,257
414,604
122,257
20,753,228
4,857,020
(332,527)
(36,229)
(3,444,448)
-
-
1,376,343
(332,527)
4,524,493
(36,229)
(3,444,448)
1,043,816
-
-
1,378,570
(88,241)
-
54,256
(133,457)
(37,585)
(292)
(221,698)
(37,585)
1,432,534
41,988,686
42,883,330
457,270
26,135,631
68,581,587
27,435,292
281,928
70,600,550
84,872,016
27,892,562
26,417,559
139,182,137
21,660,670
16,761,279
348,685
1,018,267
23,027,622
-
-
16,761,279
38,421,949
348,685
1,018,267
39,788,901
Firefinch Limited Annual Report | 31 December 2020 33
(formerly Mali Lithium Limited)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the year ended 31 December 2020
2019
Revenue and other income
Revenue
Other income
Total segment
Results
Operating profit / (loss) b/tax
Income tax
Net profit
Included within segment results:
Impairment and write-offs
Depreciation and amortisation
Share-based payments
Foreign exchange gain / (loss)
Segment assets
Current assets
Non-current assets
Total segment assets
Segment liabilities
Current liabilities
Non-current liabilities
Total liabilities
Morila
$
Mali
Exploration
$
Corporate
$
Total
Consolidated
$
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
58,804
58,804
-
58,804
58,804
(44,550)
35,116
(3,494,846)
(3,539,396)
-
35,116
(9,434)
(3,494,846)
(3,504,280)
(6,436)
(78,856)
-
-
-
(214,005)
(347,781)
(20,163)
(6,436)
(292,861)
(347,781)
(20,163)
462,090
19,738,478
3,848,444
5,468,352
4,310,534
25,206,830
20,200,568
9,316,796
29,517,364
1,395,276
-
888,624
67,358
2,283,900
67,358
1,395,276
955,982
2,351,258
Firefinch Limited Annual Report | 31 December 2020 34
(formerly Mali Lithium Limited)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the year ended 31 December 2020
5. REVENUE AND OTHER INCOME/ OTHER EXPENSES
Revenue
Revenue recognised from gold doré sales contract
Other income
Cash stimulus received from the government
Other sales
Finance costs
Unwinding of rehabilitation provision
RECOGNITION & MEASUREMENT
Consolidated
2020
$
2019
$
20,338,624
20,338,624
117,500
291,763
409,263
(112,394)
-
-
-
-
-
Revenue recognition
Revenue is measured as the amount of consideration that the Group expects to be entitled to in exchange for transferring
goods to its customers. The Group recognises revenue when (or as) the performance obligations, as determined by contracts
with the customers, have been satisfied. The following criteria are also applicable to specific revenue transactions.
Gold doré sales
The Group recognises revenue from gold doré sales as its obligations are satisfied in accordance with an agreed contract
between the Group and its customers. Revenue is recognised when the gold doré has been collected from the mine site by
the customer. It is at this point that control over the gold doré has been passed to the customer and the Group has fulfilled
its obligations under the contract. Revenue from the sales is recognised based on a market price on the date of sale.
Interest income
Interest income is recognised in the income statement as it accrues, using the effective interest method.
Government grants
Grants from the government are recognized at the fair value where it is a reasonable assurance that the grant will be received
and the Group will comply with the conditions attached to the grant.
Other sales
The revenue from other sales that do not arise from the ordinary activities of the group are recognised at the point of a sale,
when a buyer takes immediate ownership of the purchased goods.
JUDGEMENTS AND ESTIMATES
(i) Revenue from contracts with customers
Revenue from contracts with customers is recognised when a customer obtains control of the promised asset and the Group
satisfies its performance obligations under the contract. The Revenue is allocated to each performance obligation. The Group
considers the terms of the contract in determining the transaction price. The transaction value is based on the amount the
entity expects to be entitled to upon an initial assay prepared on collection of the goods.
Firefinch Limited Annual Report | 31 December 2020 35
(formerly Mali Lithium Limited)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the year ended 31 December 2020
6. INCOME TAX
Reconciliation of income tax expense to prima facie tax payable
The prima facie tax payable/ (benefit) on profit/ (loss) from ordinary activities
before income tax is reconciled to the income tax expense as follows:
Accounting profit/ (loss) before tax
Prima facie tax on operating loss at 30.0% (2019: 30.0%)
Add / (less) tax effect of:
Permanent expenses/(benefits)
Movement in temporary tax expenses/(benefits) - Australia
Movement in temporary tax expenses/(benefits) - foreign operations
Tax losses not recognised
Over/(under) provision tax liability
Income tax expenses/(benefits)
Current tax liabilities
Provision for income tax – Mali (1)
Deferred tax assets/liabilities unrecognised
Accruals and provisions
Prepayments
Property, plant and equipment
Section 40-880 costs
Net deferred tax asset not brought into account
Net deferred tax assets
Tax losses and deductible temporary differences
(1) The corporate income tax rate in Mali is 30%
Consolidated
2020
$
2019
$
1,376,343
(3,539,396)
412,903
1,061,819
(23,975)
(94,190)
10,683
27,106
-
(519,633)
(95,718)
10,579
1,666,591
35,712
332,527
(35,712)
3,597,808
18,021
5,271,081
(1,269,473)
58,453
415,683
430,966
-
(192,913)
71,830
(4,475,745)
(309,883)
-
-
Total carried forward tax losses of $17,955,149 at 31 December 2020 (31 December 2019: $15,182,708) are available for offset
against future assessable income. The deductible temporary differences and tax losses do not expire under current tax
legislation. Deferred tax assets have not been recognised in respect of these items because it is not probable that future taxable
profit will be available against which the consolidated tax group can utilise the benefits thereof.
Tax consolidation
Firefinch has formed a tax consolidation group and has in place a tax sharing agreement.
RECOGNITION & MEASUREMENT
The income tax expense or benefit for the year is the tax payable on the current year’s taxable income based on the applicable
income tax rate for each jurisdiction adjusted by changes in deferred tax assets and liabilities attributable to temporary
differences and to unused tax losses.
The current income tax charge is calculated on a basis of the tax laws enacted or substantively enacted at the end of the year in
the countries where the Company’s subsidiaries and associated operate and generate taxable income. Management periodically
evaluates positions taken in tax returns with respect to situations in which applicable tax regulation is subject to interpretation.
It establishes provisions where appropriate, on the basis of amounts expected to be paid to the tax authorities.
Firefinch Limited Annual Report | 31 December 2020 36
(formerly Mali Lithium Limited)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the year ended 31 December 2020
SIGNIFICANT JUDGEMENTS AND ESTIMATES
Judgement is required in determining whether deferred tax assets are recognised in the statement of financial position. Deferred
tax assets, including those arising from un-utilised tax losses, require management to assess the likelihood that the Group will
generate taxable earnings in future years allowing to utilise the recognised deferred tax assets. Estimates of future taxable income
are based on forecast cash flows from operations and the application of existing tax laws in each jurisdiction. To the extent that
future cash flows and taxable income differ significantly from estimates, the ability of the Group to realise the net deferred tax
assets recorded at the reporting date could be impacted. Additionally, future changes in tax laws in jurisdictions in which the
Group operates could limit the ability of the Group to obtain tax deductions in future years.
Current tax assets and liabilities for the current and prior periods 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 by the balance date in the countries where the Group’s subsidiaries operate and generate taxable income.
Deferred income tax is provided for on all temporary differences at balance date between the tax base of assets and liabilities
and their carrying amounts for financial reporting purposes. No deferred income tax will be recognised from the initial recognition
of goodwill or of an asset or liability, excluding a business combination, where there is no effect on accounting or taxable profit
or loss. No deferred income tax will be recognised in respect of temporary differences associated with investments in subsidiaries
if the timing of the reversal of the temporary difference can be controlled and it is probable that the temporary differences will
not reverse in the near future.
Tax Assessment of Morila SA
The Group purchased an 80% interest in Morila, the owner of the Morila Gold Mine in Mali on 10 November 2020. A document
called a partial assessment from the tax department of Mali (Direction Générale des Impôts) (“Assessment”) was received by
Morila SA in January 2021. The market was advised of the receipt of the partial assessment on 18 January 2021.
The Assessment advises that the tax department disputes the amounts due in relation to various employment taxes, withholding
taxes and VAT paid by, or claimed by Morila SA for the tax year ending 31 December 2017.
The Assessment notes that the tax department believes that Morila SA has materially understated its income from gold sales
made in 2017. In 2017, the mine produced approximately 70,000 ounces of gold and sold 67,612 ounces of gold for net revenue
received of US$92.65 million. The mine has reviewed its records and has no reason to revise the amount of gold produced or the
revenue received.
The tax department has advised that, based on advice from the government department responsible for customs and exports, it
believes the revenue from gold sales for 2017 should be US$146.9 million. The basis for this higher estimate was not provided.
The Group’s internal records and receipts of sales from Rand Refinery in South Africa confirm its production and revenue as
disclosed in its 2017 tax return. The Group is confident that the source of information utilised by the tax department to establish
Morila SA gold sales is incorrect.
The Group believes the assessment of employment tax, withholding tax, VAT and gold revenue is incorrect and has lodged an
objection to the assessment with the tax authorities together with supporting documentation. The objection was prepared by
the Group’s tax advisers and peer reviewed by a legal firm prior to lodgement with the tax department.
On the above basis, no amounts have been recorded for any potential liability in relation to these matters, as the Group believes
it is probable that the taxation authority will accept the Group's tax treatment in the past. An estimate of the potential liability
has not been disclosed as the Group cannot reasonably predict the outcome.
Firefinch Limited Annual Report | 31 December 2020 37
(formerly Mali Lithium Limited)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the year ended 31 December 2020
7. EARNINGS PER SHARE
Consolidated
2020
$
2019
$
(a) Reconciliation of earnings to profit or loss
Profit /(loss) used in the calculation of basic and diluted EPS
114,322
(3,504,280)
(b) Weighted average number of ordinary shares outstanding during the year
used in calculation of basic EPS
Weighted average number of dilutive equity instruments outstanding
(c) Weighted average number of ordinary shares outstanding during the year
used in calculation of basic EPS
(d) Earnings per share
Basic EPS (cents per share)
Diluted EPS (cents per share)
No. of shares
No. of shares
404,324,952
275,042,504
N/A
N/A
404,324,952
275,042,504
$
0.03
0.03
$
(1.27)
(1.27)
As at 31 December 2020 the Group has 31,064,913 unissued shares under options (2019: 31,418,937) and 8,850,600 under
performance/share rights on issue (2019: 7,500,000).
RECOGNITION & MEASUREMENT
Basic earnings per share
Basic earnings per share is calculated by dividing the net result attributable to owners of the parent, 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 element.
Diluted earnings per share
Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into account the after
income tax effect of interest and other financing costs associated with dilutive potential ordinary shares and the weighted
average number of ordinary shares assumed to have been issued for no consideration in relation to dilutive potential ordinary
shares.
Firefinch Limited Annual Report | 31 December 2020 38
(formerly Mali Lithium Limited)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the year ended 31 December 2020
8. CASH AND CASH EQUIVALENTS
Cash at bank and in hand (1)
Bank overdraft (2)
Short-term deposits (3)
Consolidated
2020
$
24,443,784
(7,213,198)
32,490
2019
$
3,793,194
-
-
17,263,076
3,793,194
(1) Cash at bank earns interest at floating rates based on daily bank deposit.
(2) Bank overdraft used by Societe des Mines de Morila SA at the bank in Mali. The maximum overdraft is XOF 6 million (AUD equiv. 7.3
million).
(3) Security deposit required as per the office rent agreement.
RECOGNITION & MEASUREMENT
For the purpose of presentation in the statement of cash flows, cash and cash equivalents includes cash on hand, deposits held
at call with financial institutions with an original maturity not exceeding three months, highly liquid investments that are readily
convertible to known amounts of cash and which are subject to an insignificant risk of changes in value, and bank overdrafts. If
greater than three months, principal amounts can be redeemed in full, with interest payable at the same cash rate from inception
as per the agreement with each bank.
Firefinch Limited Annual Report | 31 December 2020 39
(formerly Mali Lithium Limited)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the year ended 31 December 2020
9. TRADE AND OTHER RECEIVABLES
Current
Trade debtors (1) (2)
Sundry debtors (1)
Prepayments (3)
GST receivable
Other receivable
Non-current
VAT paid (4)
Security deposits
Consolidated
2020
$
2019
$
9,695,692
510,679
3,442,156
363,998
3,816
14,016,341
10,581,706
108,463
10,690,169
-
-
35,053
101,747
380,540
517,340
-
112,490
112,490
(1) Trade and sundry debtors are non-interest bearing and generally are on 30-day terms.
(2) The Group has analysed the probability of default events and concluded that no credit losses will likely occur.
(3) Prepayments relate to insurances and drilling services prepaid throughout the Group.
(4) VAT receivable represents the fair value of the VAT refund receivable from the Tax Department of Mali that was recognised through the
acquisition of Morila SA operations.
RECOGNITION & MEASUREMENT
Trade and other receivables
Trade receivables are recognised initially at fair value and subsequently measured at amortised cost less expected credit losses
Trade receivables are generally due for settlement within 30 days. They are presented as current assets unless collection is not
expected for more than 12 months after the reporting date.
Due to the short-term nature of the current receivables, their carrying amount is assumed to approximate their fair value. The
carrying amount of the long-term receivable deposits is assumed to approximate fair value as the security deposits have a
market-based interest rate.
The group applies the AASB 9 simplified approach to measuring expected credit losses which uses a lifetime expected loss
allowance for all trade receivables and contract assets.
Trade receivables and contract assets are written off where there is no reasonable expectation of recovery. Indicators that there
is no reasonable expectation of recovery include, amongst others, the failure of a debtor to engage in a repayment plan with the
group, and a failure to make contractual payments for a period of greater than 120 days past due.
Impairment losses on trade receivables and contract assets are presented as net impairment losses within operating profit.
Subsequent recoveries of amounts previously written off are credited against the same line item.
Loan and receivables
Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active
market. They are included in current assets, except for those with maturities greater than 12 months after the year-end which
are classified as non-current assets. Loans and receivables are included in receivables in the statement of financial position.
Loans and receivables are subsequently carried at amortised cost using the effective interest method.
Firefinch Limited Annual Report | 31 December 2020 40
(formerly Mali Lithium Limited)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the year ended 31 December 2020
10.
INVENTORIES
Current
Gold doré on hand
Gold in circuit at cost
Consumable supplies (1)
Ore – tailings at cost (2)
Consolidated
2020
$
2019
$
497,691
432,761
12,987,721
23,354,027
37,272,200
-
-
-
-
-
(1) Consumable supplies include reagents, fuel and general stores items.
(2) The value of the tailings was recognized on the acquisition of Morila operations. In accordance with the Mineral Resource Statement by
Billandbry Consulting of 6 Sep’20 Morila Measured Tailings of contained gold were 76,000 oz. The recovery rate of 50%, the gold price of
US1,800 p/oz and all-in costs of USD900 were applied to measure the value of the tailings. The measured resource (contained gold) value
was adjusted for the production movement from 10 November till 31 December 2020.
RECOGNITION & MEASUREMENT
Gold doré, gold in circuit and tailings are physically measured or estimated and stated at the lower of cost and net realisable
value. Cost comprises direct material, direct labour and an appropriate proportion of variable and fixed overhead expenditure,
the latter being allocated on the basis of normal operating capacity. Costs are assigned to individual items of inventory on the
basis of weighted average costs in getting such inventories to their existing location and condition, based on weighted average
costs incurred during the year in which such inventories were produced. Net realisable value is the estimated selling price in the
ordinary course of business, less estimated costs of completion and costs of selling the final product. Inventories of consumable
supplies and spare parts expected to be used in production are valued at weighted average cost.
SIGNIFICANT JUDGEMENTS AND ESTIMATES
Net realisable value tests are performed at least quarterly and represent the estimated future sales price of the product based
on prevailing spot metals prices at the reporting date, less estimated costs to complete production and bring the product to sale.
Stockpiles are measured by estimating the number of tonnes added and removed from the stockpile, the number of contained
gold ounces based on assay data, and the estimated recovery percentage based on the expected processing method. Stockpile
tonnages are verified by periodic surveys.
Firefinch Limited Annual Report | 31 December 2020 41
(formerly Mali Lithium Limited)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the year ended 31 December 2020
11. PROPERTY, PLANT AND EQUIPMENT
Plant and equipment – at cost
Accumulated depreciation
Reconciliation of plant and equipment
Carrying amount at the beginning of the period
Additions
Depreciation
Disposals
Foreign currency translation movement
Carrying amount at the end of the year
Consolidated
2020
$
2019
$
828,892
(525,865)
303,027
810,216
(312,064)
498,152
498,152
17,977
650,283
64,533
(222,309)
(212,946)
-
9,207
(3,718)
-
303,027
498,152
RECOGNITION & MEASUREMENT
Property, plant and equipment
Buildings and all other property, plant and equipment are stated at historical cost less accumulated depreciation and impairment
losses. Historical cost includes expenditure that is directly attributable to the acquisition of the items. Subsequent costs are
included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future
economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. All other
repairs and maintenance are charged to the statement of comprehensive income during the financial year in which they are
incurred. Property, plant and equipment directly engaged in mining operations are depreciated over the shorter of expected
economic life or over the remaining life of the mine on a units-of-production basis. Assets which are depreciated on a basis other
than units-of-production method are typically depreciated on a straight-line basis over their estimated useful lives as follows:
Item Estimated useful life (years)
Plant and equipment 3-10
Machinery and vehicles 5
Buildings 20
Leasehold improvements 3
The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each year. 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
recognized in the statement of comprehensive income.
Impairment of assets
Intangible assets that have an indefinite useful life are not subject to amortisation and are tested annually for impairment or
more frequently if events or changes in circumstances indicate that they may be impaired. Other assets are tested for impairment
whenever events or changes in circumstances indicate that the carrying amount exceeds its recoverable amount. An impairment
loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount
is the higher of an asset’s fair value less costs of disposal and value in use.
Value in use is the present value of the future cash flows expected to be derived from the asset or cash generating unit. In
estimating value in use, a pre-tax discount rate is used which reflects current market assessments of the time value of money
and the risks specific to the asset. Fair value less costs of disposal is the amount the cash generating unit can be sold to a
knowledgeable and willing market participant in an arm’s length transaction, less the disposal costs. In estimating fair value less
costs of disposal, discounted cash flow methodology is utilised, and a post-tax discount rate is used.
For the purposes of assessing impairment, assets are grouped at the levels for which there are separately identifiable cash inflows
which are largely independent of the cash inflows from other assets or groups of assets (cash-generated units). Non-financial
assets other than goodwill that suffered impairment are reviewed for possible reversal of the impairment at the end of each
year.
Firefinch Limited Annual Report | 31 December 2020 42
(formerly Mali Lithium Limited)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the year ended 31 December 2020
12.
EXPLORATION AND EVALUATION EXPENDITURE
Exploration and evaluation expenditure at cost:
Exploration – Morila project (1)
Exploration – Other projects (2)
Reconciliation of exploration and evaluation expenditure
Carrying amount at beginning of the year
Exploration expenditure during the year
Exploration asset on acquisition of Morila (1)
Expenditure written off
Foreign currency translation
Carrying amount at the end of the year (2)
Consolidated
2020
$
2019
$
32,421,277
27,186,077
59,607,354
-
24,486,347
24,486,347
24,486,347
19,034,425
2,847,845
34,181,710
-
(1,908,548)
5,458,358
-
(6,436)
-
59,607,354
24,486,347
(1) The exploration and evaluation asset was recognized on the acquisition of the Morila operations.
(2) The total capitalized expenditure comprises the exploration and evaluation costs of $21,510,990 relating to the Goulamina Lithium project
and the total of $5,675,086 relating to the gold tenements in Mali in the areas of Dankassa, Massigui, Finkola and Morila. The ultimate
recoupment of this expenditure is dependent upon successful development and commercial exploitation, or alternatively, sale of the
respective areas of interest. There is no information up to the date of this report which would result in an impairment trigger due to potential
loss of tenements.
RECOGNITION & MEASUREMENT
Exploration and evaluation expenditures in relation to each separate area of interest with current tenure are carried forward to
the extent that:
(i)
(ii)
such expenditures are expected to be recouped through successful development and exploration of the area of interest,
or alternatively, by its sale; or
exploration and evaluation activities in the area of interest have not at the reporting date reached a stage which permits a
reasonable assessment of the existence or otherwise of economically recoverable reserves, and active and significant
operations in, or in relation to, the area of interest is continuing.
Exploration and evaluation assets are initially measured at cost and include acquisition of rights to explore, studies, exploratory
drilling, trenching and sampling and associated activities and an allocation of depreciation and amortisation of assets used in
exploration and evaluation activities. General and administrative costs are only included in the measurement of exploration and
evaluation costs where they are related directly to operational activities in a particular area of interest.
In the event that an area of interest is abandoned or, if facts and circumstances suggest that the carrying amount of an
exploration and evaluation asset is impaired then the accumulated costs carried forward are written off in the year in which the
assessment is made.
Where a decision has been made to proceed with development in respect of a particular area of interest, the relevant exploration
and evaluation asset is tested for impairment and the balance is then reclassified as ‘mine development asset”.
JUDGEMENTS AND ESTIMATES
Management determines when an area of interest should be abandoned. When a decision is made that an area of interest is not
commercially viable, all costs that have been capitalised in respect of that area of interest are written off. In determining this,
assumptions, including the maintenance of title, ongoing expenditure and prospectivity are made.
The future recoverability of capitalised exploration and evaluation expenditure is dependent on a number of factors including
whether the Group decides to exploit the related lease itself or, if not, whether it successfully recovers the related exploration
and evaluation asset through sale. Factors which could impact the future recoverability include the level of proved, probable and
inferred mineral resources, future technological changes which could impact the cost of mining, future legal changes (including
changes to environmental restoration obligations) and changes to commodity prices.
Firefinch Limited Annual Report | 31 December 2020 43
(formerly Mali Lithium Limited)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the year ended 31 December 2020
13.
TRADE AND OTHER PAYABLES
Current
Trade payables and accruals (1)
Royalties payables
Other liabilities (2)
Consolidated
2020
$
2019
$
7,636,729
2,149,186
585,489
1,359,172
-
-
9,581,390
2,149,186
(1) Trade and other creditors are non-interest bearing and are normally settled on 30-day terms.
(2) Other liabilities include withholding taxes, payroll related taxes and contributions payable to the government agencies.
RECOGNITION & MEASUREMENT
These amounts represent liabilities for goods and services provided to the Group prior to the end of the financial year that are
outstanding. The amounts are unsecured and are usually paid within 30 days of recognition. Trade and other payables are
presented as current liabilities unless payment is not due within 12 months from the reporting date. They are recognised initially
at their fair value and subsequently measured at amortised cost using the effective interest method.
Firefinch Limited Annual Report | 31 December 2020 44
(formerly Mali Lithium Limited)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the year ended 31 December 2020
14. PROVISIONS
Current
Employee entitlements
Reconciliation of current provision
Carrying amount at the beginning of the year
Increase / decrease of employee benefits
Carrying amount at the end of the year
Non-current
Employee entitlements
Rehabilitation and decommissioning (1)
Reconciliation of non-current provision – employee entitlements
Carrying amount at the beginning of the year
Acquired through business combination of Morila
Increase in provision
Foreign currency translation movement
Carrying amount at the end of the year
Reconciliation of non-current provision- rehabilitation and decommissioning
Carrying amount at the beginning of the period
Acquired through business combination of Morila
Decrease in provision
Foreign currency translation movement
Carrying amount at the end of the year
Consolidated
2020
$
155,577
155,577
77,219
78,358
155,577
2019
$
77,219
77,219
-
77,219
77,219
Consolidated
2020
$
2019
$
1,161,395
15,599,884
16,761,279
-
1,118,573
105,103
(62,281)
1,161,395
-
16,803,993
(268,464)
(935,645)
15,599,884
-
-
-
-
-
-
-
-
-
-
-
-
-
(1) The provision for rehabilitation and decommissioning relates to the Morila gold mine. The timing of settlement of those obligations will be
reviewed and updated based on the additional development and mining activities at the mine.
RECOGNITION & MEASUREMENT
Provisions
Provisions are recognised when the Group has a present legal or constructive obligation as a result of past events, and it is
probable that an outflow of resources will be required to settle the obligation and a reliable estimate can be made of the amount
of the obligation. Provisions are not recognised for future operating losses. Provisions are measured as the present value of
management’s best estimate of the expenditure required to settle the present obligation at the end of the year. The discount
rate used to determine the present value reflects current market assessments of the time value of money and the risks specific
to the liability. The increase in the provision due to the passage of time is recognised as an interest expense.
Firefinch Limited Annual Report | 31 December 2020 45
(formerly Mali Lithium Limited)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the year ended 31 December 2020
Employee benefits
(a) Short-term obligations
Liabilities for employee benefits that are expected to be settled within 12 months of the reporting date represent present
obligations resulting from employees' services provided to the reporting date. They are measured at the amounts expected to
be paid when the liabilities are settled. Non-accumulating non-monetary benefits, such as medical care, housing, cars and free
or subsidised goods and services, are expensed based on the net marginal cost to the Group as the benefits are taken by the
employees.
(b) Other long-term employee benefit obligations
The Group's obligation in respect of long-term employee benefits other than defined benefit plans, such as long service leave,
is the amount of future benefit that employees have earned in return for their service in the current and prior periods plus
related on-costs. Expected future benefit payments are discounted using market yields at the end of the year on high quality
corporate bonds with terms to maturity and currency that match, as closely as possible, the estimated future cash outflows. Any
actuarial gains or losses are recognised in profit or loss in the period in which they arise.
(c) Retirement benefit obligations
Contributions are made by the Group to superannuation funds as stipulated by statutory requirements and are charged as
expenses when incurred.
(d) Termination benefits
When applicable, the Group recognises a liability and expense for termination benefits at the earlier of: (a) the date when the
Group can no longer withdraw the offer for termination benefits; and (b) when the Group recognises costs for restructuring
pursuant to AASB 137 Provisions, Contingent Liabilities and Contingent Assets and the costs include termination benefits. In
either case, unless the number of employees affected is known, the obligation for termination benefits is measured on the basis
of the number of employees expected to be affected. Termination benefits that are expected to be settled wholly before 12
months after the annual reporting period in which the benefits are recognised are measured at the (undiscounted) amounts
expected to be paid. All other termination benefits are accounted for on the same basis as other long-term employee benefits.
Rehabilitation provision
A provision for restoration and rehabilitation is recognised when there is a present obligation as a result of development activities
undertaken and it is probable that an outflow of economic benefits will be required to settle the obligation, and the amount of
the provision can be measured reliably. The estimated future obligations include the costs of abandoning sites, removing facilities
and restoring the affected areas. The provision for future restoration costs is the best estimate of the present value of the
expenditure required to settle the restoration obligation at the balance date. Future restoration costs are reviewed annually and
any changes in the estimate are reflected in the present value of the restoration provision at each balance date. The initial
estimate of the restoration and rehabilitation provision is capitalised into the cost of the related asset and amortised on the
same basis as the related asset, unless the present obligation arises from the production of inventory in the year, in which case
the amount is included in the cost of production for the year. Changes in the estimate of the provision for restoration and
rehabilitation are treated in the same manner, except that the unwinding of the effect.
SIGNIFICANT JUDGEMENTS AND ESTIMATES
Rehabilitation provision
The value of the current restoration and rehabilitation provision is based on a number of assumptions, including the nature of
restoration activities required, the valuation at the present value of future obligations that necessitate estimation of the cost of
the work required, the timing of future cash flows and the appropriate risk- free discount rate. In addition, provisions are based
on the assumption that no significant changes will occur in relevant legislation covering restoration of mineral properties. A
change in any, or a combination, of these assumptions used to determine current provisions could have a material impact to the
carrying value of the provision.
Firefinch Limited Annual Report | 31 December 2020 46
(formerly Mali Lithium Limited)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the year ended 31 December 2020
15.
LEASES
Consolidated
2020
$
2019
$
239,635
(209,665)
239,635
(129,794)
29,970
109,841
2020
$
2019
$
28,551
-
39,474
67,358
28,551
106,832
106,832
-
9,923
(88,204)
28,551
-
187,773
5,702
(86,643)
106,832
Right-of-use assets
Right of use assets -buildings
Accumulated depreciation
Net carrying amount at the end of the year
Lease liabilities
Current
Non-current
Reconciliation of lease liability
Carrying amount at the beginning of the year
Additions
Interest expense
Payments
Carrying amount at the end of the year
RECOGNITION & MEASUREMENT
Leases (AASB 16)
The group leases offices. Rental contracts are typically made for fixed periods of 1 month to 3 years and may have extension
options as described below. Contracts may contain both lease and non-lease components. The Group allocates the consideration
in the contract to the lease and non-lease components based on their relative stand-alone prices. However, for leases of real
estate for which the group is a lessee, it has elected not to separate lease and non-lease components and instead accounts for
these as a single lease component. Lease terms are negotiated on an individual basis and contain a wide range of different terms
and conditions. The lease agreements do not impose any covenants other than the security interests in the leased assets that
are held by the lessor. Leased assets may not be used as security for borrowing purposes.
Assets and liabilities arising from a lease contract are initially measured on a present value basis. Leases measurement includes
the net present value of the following lease components:
-
-
-
-
-
fixed payments (including in-substance fixed payments), less any lease incentives receivable;
variable lease payment that are based on an index or a rate, initially measured using the index or rate as at the
commencement date;
amounts expected to be payable by the group under residual value guarantees;
the exercise price of a purchase option if the group is reasonably certain to exercise that option, and
payments of penalties for terminating the lease, if the lease term reflects the group exercising that option.
The lease payments are discounted using the interest rate implicit in the lease. If that rate cannot be readily determined, which
is generally the case for leases in the group, the lessee’s incremental borrowing rate is used, being the rate that the individual
lessee would have to pay to borrow the funds necessary to obtain an asset of similar value to the right-of-use asset in a similar
economic environment with similar terms, security and conditions.
When adjustments to lease payments based on an index or rate take effect, the lease liability is reassessed and adjusted against
the right-of-use asset.
Firefinch Limited Annual Report | 31 December 2020 47
(formerly Mali Lithium Limited)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the year ended 31 December 2020
Lease payments are allocated between principal and finance cost. The finance cost is charged to profit or loss over the lease
period to produce a constant periodic rate of interest on the remaining balance of the liability for each period.
Right-of-use assets are generally depreciated over the shorter of the asset's useful life and the lease term on a straight-line basis.
If the group is reasonably certain to exercise a purchase option, the right-of-use asset is depreciated over the underlying asset’s
useful life.
Payments associated with short-term leases of offices, equipment and vehicles and all leases of low-value assets are recognised
on a straight-line basis as an expense in profit or loss. Short-term leases are leases with a lease term of 12 months or less.
None of the leases entered into by the group provide residual value guarantees.
Firefinch Limited Annual Report | 31 December 2020 48
(formerly Mali Lithium Limited)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the year ended 31 December 2020
16.
FINANCIAL RISK MANAGEMENT
Set out below is an overview of financial instruments held by the Group as at 31 December 2020 and 31 December 2019.
Floating
interest
rate
$
Fixed
interest
rate
$
Non-
interest
bearing
$
2020
Total
$
Floating
interest
Rate
$
Fixed
interest
Rate
$
Non-
interest
bearing
$
2019
Total
$
2020
2019
Financial Assets
Cash and cash equivalents 17,263,076
-
- 17,263,076
3,793,194
Trade and other receivables
Non-current receivables
-
-
- 14,016,341 14,016,341
-
108,463
108,463
-
-
Total Financial Assets
17,263,076
- 14,124,804 31,387,880
3,793,194
-
-
-
-
-
3,793,194
517,340
517,340
112,490
112,490
629,830
4,423,024
Financial Liabilities
Trade and other payables
-
-
9,581,390
9,581,390
-
-
2,149,186
2,149,186
Current loans (1)
9,664,296
-
9,664,296
Total Financial Liabilities
9,664,296
-
9,581,390 19,245,686
-
-
2,149,186
2,149,186
Net Financial (Liabilities)/
Assets
7,598,780
-
4,543,414 12,142,194
3,793,194
- (1,519,356)
2,273,838
(1)
Loan recognised on the acquisition of Morila SA.
The Group’s activities expose it to a variety of financial risks: market risk (including currency risk, interest rate risk and price risk),
credit risk, liquidity risk and equity price risk. The Group therefore has an overall risk management program that focuses on the
unpredictability of financial and precious metal commodity markets and seeks to minimise potential adverse effects on the
financial performance of the Group.
The Group uses different methods to measure different types of risk to which it is exposed including sensitivity analysis in the
case of interest rate, foreign exchange and other price risks and aging analysis for credit risk. Risk management is carried out by
the board of directors with assistance from suitably qualified external and internal advisors as required. The Board provides
written principles for overall risk management and further policies will evolve commensurate with the evolution and growth of
the Group.
Market Risk
(a) Foreign currency exchange risk
The Group operates internationally and is exposed to foreign exchange risk arising from various currency exposures, primarily
with respect to the US dollar (USD) and West African CFA franc (CFA). Foreign exchange risk arises from commercial transactions
and recognised assets and liabilities denominated in a currency that is not the entity’s functional currency. The risk is measured
using sensitivity analysis and cash flow forecasting. Foreign exchange risk arises from future commercial transactions and
recognised assets and liabilities denominated in a currency that is not the entity’s functional currency and net investments in
foreign operations. In addition, the parent entity has intercompany receivables from its subsidiaries denominated in US Dollars
which are eliminated on consolidation. The gains or losses on re-measurement of these intercompany receivables from US Dollars
to Australian Dollars are not eliminated on consolidation as those loans are not considered to be part of the net investment in
the subsidiaries.
Firefinch Limited Annual Report | 31 December 2020 49
(formerly Mali Lithium Limited)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the year ended 31 December 2020
The Group’s exposure to foreign currency risk at the end of the year, expressed in Australian dollars, was as follows.
USD
CFA
EUR
USD
CFA
EUR
2020
2019
Financial Assets
Cash and cash equivalents
Intercompany loans
Trade and other receivables
-
(6,624,692)
37,278,819
-
-
Total Financial Assets
37,278,819
(6,624,692)
-
-
-
-
Financial Liabilities
Trade and other payables
Loan
(11,874,091)
-
(2,974)
-
(9,664,296)
-
Total Financial Liabilities
(11,874,091)
(9,664,296)
(2,974)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Sensitivity
The following table summarises the sensitivity of financial instruments held at balance date to movement in the exchange rate
of AUD to USD with all other variables held constant and AUD to CFA with all other variables held constant, including the impact
of the foreign exchange movement on the inter-company loan of $37m million (2019: nil). The sensitivity is based on
management’s estimate of reasonably possible changes over a financial year.
The following table illustrates sensitivities to the Group's exposures to changes in interest rates. The table indicates the impact
on how profit and equity values reported at balance sheet date would have been affected by changes in the relevant risk variable
that management considers to be reasonably possible. These sensitivities assume that the movement in a particular variable is
independent of other variables.
2020
2019
2020
2019
Change in USD rate
Impact on profit or loss
before tax and equity, $
+10%
-10%
+10%
-10%
(3,388,984)
4,142,091
-
-
Change in CFA rate
Impact on profit or loss
before tax and equity, $
+10%
-10%
+10%
-10%
2,493,607
(572,033)
-
-
The Group’s exposure to other foreign currency movements is not material.
(b) Interest rate risk
Interest rate risk arises from the possibility that changes in interest rates will affect future cash flows or the fair value of financial
instruments. The Group’s exposure to market risk for changes to interest rate risk relates primarily to its earnings on cash and
term deposits. Based on the financial assets held at reporting date, with all other variables assumed to be held constant, the
table below sets out the notional effect on consolidated profit or loss after tax for the year and on equity at reporting date under
varying hypothetical changes in prevailing interest rates.
Based on the financial assets held at reporting date, with all other variables assumed to be held constant, the table below sets
out the notional effect on consolidated profit or loss after tax for the year and on equity at reporting date under varying
hypothetical changes in prevailing interest rates.
100 basis points increase in interest rate
100 basis points decrease in interest rate
2020
$
87,127
(232,360)
2019
$
37,932
(37,932)
Firefinch Limited Annual Report | 31 December 2020 50
(formerly Mali Lithium Limited)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the year ended 31 December 2020
(c) Price risk
The Group is exposed to commodity price risk for its future gold production at the Morila gold mine. Following the acquisition of
Morila SA and as at the end of the financial year the Group did not have forward commodity price derivates in place. Therefore,
the sensitivity analysis of the fair value of instruments to the forward gold price were not performed. The Group is yet to
implement a policy to manage its exposure to the gold price movements.
Credit Risk
Credit risk represents the loss that would be recognised if counterparties failed to perform as contracted under a financial
instrument resulting in a financial loss to the Group and arises from deposits with banks and financial institutions, favourable
derivative financial instruments as well as credit exposures to customers including outstanding receivables and committed
transactions. The Group measures credit risk on a fair value basis. The Group does not have any significant credit risk exposure
to a single counterparty or any Group of counterparties having similar characteristics.
The carrying amount of financial assets recorded in the financial statements, net of any provisions for losses, represents the
Group’s maximum exposure to credit risk without taking account of the fair value of any collateral or other security obtained.
Financial Assets
Cash and cash equivalents
Trade and other receivables
Non-current receivables
2020
$
2019
$
17,263,076
14,016,341
108,463
3,793,194
517,340
112,490
Total Financial Assets
31,387,880
4,423,024
The credit quality of financial assets that are neither past due nor impaired can be assessed by reference to external credit ratings
as follows:
Financial assets
Westpac Bank A+ rated
Banks in Mali BB rated (1)
Unrated
2020
$
2020
$
23,863,337
(6,653,348)
14,299,479
3,353,058
440,136
629,830
31,509,468
4,423,024
(1) The balance as at 2020 financial year end includes a bank overdraft.
Liquidity risk
Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due. The Group’s approach to
managing liquidity is to ensure, that as far as possible, it will always have sufficient liquidity to meet its liabilities when due, under
both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Group’s reputation.
Prudent liquidity risk management implies maintaining sufficient cash and marketable securities, the availability of funding
through an adequate amount of committed credit facilities and the ability to close out market positions. The Group manages
liquidity risk by continuously monitoring forecast and actual cash flows and matching the maturity profile of financial assets and
liabilities. As at the reporting date the Group had sufficient cash reserves to meet its requirements. The financial liabilities of the
Group at reporting date were trade & other payables incurred in the normal course of the business. These were non-interest
bearing and were due within the normal 30-60 days terms of creditor payments.
Firefinch Limited Annual Report | 31 December 2020 51
(formerly Mali Lithium Limited)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the year ended 31 December 2020
Maturities of financial liabilities
The following table analyses the Group’s financial liabilities based on their contractual maturities.
1-3 months
$
3-12 months
$
12+ months
$
Total
$
2020
Financial liabilities due for payment:
Trade and other payables
Loan
Lease liabilities
Financial assets:
Cash and cash equivalents
Trade and other receivables
9,130,127
-
451,263
9,664,296
28,551
9,130,127
10,144,110
17,263,076
10,775,854
28,038,930
-
3,240,487
3,240,487
-
-
-
-
-
-
-
9,581,390
9,664,296
28,551
19,274,237
17,263,076
14,016,341
31,279,417
12,005,180
Net inflow/(outflow) of financial instruments
18,908,803
(6,903,623)
2019
Financial liabilities due for payment:
Trade and other payables
Lease liabilities
Financial assets:
Cash and cash equivalents
Trade and other receivables
Net inflow/(outflow) of financial instruments
Fair value estimation
1-3 months
$
3-12 months
$
12+ months
$
Total
$
2,149,186
39,474
2,188,660
3,793,194
364,261
4,157,455
1,968,795
-
-
-
-
-
-
-
-
2,149,186
67,358
106,832
67,358
2,256,018
-
-
-
3,793,194
364,261
4,157,455
(67,358)
1,901,437
The fair value of financial assets and financial liabilities held by the Group must be estimated for recognition and measurement
or for disclosure purposes. All financial assets and financial liabilities of the Group at the balance date are recorded at amounts
approximating their fair value.
The fair value of financial instruments traded in active markets is based on quoted market prices at the reporting date. The quoted
market price used for financial assets held by the Group is the current bid price.
The carrying value less impairment provision of trade receivables and payables are assumed to approximate their fair values due
to their short-term nature.
Financial instruments whose carrying values is equivalent to fair value due to their nature include:
•
•
•
Cash and cash equivalents;
Trade and other receivables; and
Trade and other payables
At the end of the financial year the Group did not have financial instruments other than those with carrying amounts which are
reasonable approximation of fair value.
Firefinch Limited Annual Report | 31 December 2020 52
(formerly Mali Lithium Limited)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the year ended 31 December 2020
17.
ISSUED CAPITAL
(a) Issued and paid-up share capital
Consolidated
2020
$
2019
$
781,907,231 (2019: 317,348,112) ordinary shares fully paid
128,689,714
58,028,843
Movement in ordinary shares
2020
No
2019
No
2020
$
2019
$
Balance at the beginning of the year
317,348,112
259,148,940
58,028,843
53,448,920
Shares issued during the period:
Share allotment - placements (1)
Share allotment – SPP (2)
Exercise of options (3)
Transaction costs relating to share issues
402,736,345
58,199,172
64,437,820
5,138,439
61,468,750
354,024
-
-
-
-
9,835,000
53,104
-
-
(3,665,053)
(558,516)
Balance at the end of the year
781,907,231
317,348,112
128,689,714
58,028,843
(1) Shares were issued at $0.16 through a placement in two tranches in September and October 2020.
(2) Share were issued at $0.16 pursuant to Share Purchase Plan (SPP) announced in September 2020.
(3) Listed options expiring on 17/10/2021 were exercised at $0.15.
(b) Movements in performance / share rights
At beginning of the year
Forfeited during the year
Issued during the year (1) (2)
Balance at the end of the year
2020
No.
7,500,000
(7,000,000)
2019
No.
-
8,350,600
7,500,000
8,850,600
7,500,000
(1) 4,850,600 share rights were issued to employees under the Awards Plan. Share rights expiry on 1 /07/2023 and have nil exercise price.
(2) 3,500,000 performance rights were issued to directors as per the shareholders’ approval at the annual general meeting on 23/10/2020.
Share rights expire on 01/07/2023 and have nil exercise price.
(c) Movements in options
At beginning of the year
Listed options issued during the year
Expired options
Listed options exercised
Balance at the end of the year
2020
No.
2019
No.
31,418,937
9,500,000
-
-
29,418,937
(7,500,000)
(354,024)
-
31,064,913
31,418,937
Firefinch Limited Annual Report | 31 December 2020 53
(formerly Mali Lithium Limited)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the year ended 31 December 2020
RECOGNITION & MEASUREMENT
Ordinary shares are classified as equity and incremental costs directly attributable to the issue of new shares are shown in equity
as a deduction, net of tax, from the proceeds. If the Company reacquires its own equity instruments for the purpose of reducing
its issued capital, for example as the result of a share buy-back, those instruments are deducted from equity and the associated
shares are cancelled. No gain or loss is recognised in the profit or loss and the consideration paid including any directly
attributable incremental costs (net of tax) is recognised directly in equity.
(d) Capital Management
The Group manages its capital to ensure that entities in the Group will be able to continue as a going concern while maximising
the return to stakeholders through the optimisation of the debt and equity balance.
The capital structure of the Group consists of cash and cash equivalents and equity attributable to equity holders of the parent,
comprising issued capital, reserves and accumulated losses. Operating cash flows are used to maintain and expand operations,
as well as to make routine expenditures and general administrative outgoings. Group’s strategy is to ensure appropriate liquidity
is maintained to meet anticipated operating requirements, with a view to initiating appropriate funding as required.
The working capital position of the Group was as follows:
Cash and cash equivalents
Trade and other receivables
Trade and other payables
Current tax asset/liabilities
Lease liability
Current provisions
Working capital position
Consolidated
2020
$
2019
$
17,263,076
3,793,194
14,016,341
517,340
(9,581,390)
(2,149,186)
(3,597,808)
(28,551)
(155,577)
(18,021)
(39,474)
(77,219)
17,916,091
2,026,634
Firefinch Limited Annual Report | 31 December 2020 54
(formerly Mali Lithium Limited)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the year ended 31 December 2020
18. RESERVES
Foreign currency translation reserve
Share-based payment reserve
Movement in share-based payment reserve
Balance at beginning of the year
Vesting expense of performance/share rights issued during the year
Vesting expense of prior years’ performance/ share rights
Forfeited performance /share rights during the year (1)
Balance at the end of the year
(1) Reversal value of unvested performance/share rights forfeited upon resignation of Chris Evans.
Consolidated
2020
$
2019
$
730,152
1,284,862
4,570,109
4,532,524
5,300,261
5,817,386
Consolidated
2020
$
4,532,524
291,959
50,670
(305,044)
2019
$
4,184,743
347,781
-
-
4,570,109
4,532,524
RECOGNITION & MEASUREMENT
Share-based payments
The share-based payments reserve is used to record the fair value of options, performance rights and share rights issued to
employees and consultants but not exercised. The Group measures the cost of equity-settled transactions by reference to the
fair value of the equity instruments at the date at which they were granted. The fair value of equity instruments granted is
determined using Black-Scholes method or Monte Carlo simulation model and recognised over the vesting period. Refer to note
25 for further details.
Foreign currency translation reserve
The foreign currency translation reserve comprises all foreign exchange differences arising from the translation of the financial
statements of foreign operations where their functional currency is different to the presentation currency of the reporting entity
along with the Company’s movement in its associate’s foreign currency translation reserve.
Non-controlling interest’s reserve
The non-controlling interest’s reserve records the difference between the fair value of the amount by which the non-controlling
interests were adjusted to record their initial relative interest and the consideration paid.
.
Firefinch Limited Annual Report | 31 December 2020 55
(formerly Mali Lithium Limited)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the year ended 31 December 2020
19. RETAINED EARNINGS / (ACCUMULATED LOSSES)
Movements in accumulated losses were as follows.
Balance at beginning of the year
Net loss for the year attributable to owners of the parent
Balance at the end of the year
Consolidated
2020
$
2019
$
(36,680,123)
(33,178,202)
114,322
(3,501,921)
(36,565,801)
(36,680,123)
20.
SUBSIDIARIES
The consolidated financial statements incorporate the assets, liabilities and results of the following subsidiaries:
Name of Subsidiary
Birimian Gold (Mali) Pty Limited
Birimian Gold Mali SARL
Birimian Gold Liberia Inc
Sudquest SARL
Timbuktu Resources SARL
Goulamina Holding Co Pty Ltd
Lithium du Mali
Firefinch Services Pty Ltd
Morila Limited (1)
Societe des Mines de Morila SA (1)
Place of
Incorporation
Australia
Mali
Liberia
Mali
Mali
Australia
Mali
Australia
Jersey
Mali
Consolidated Entity Interest, %
2020
2019
100
100
100
100
100
100
100
100
100
80
100
100
100
100
100
100
100
-
-
-
(1) Acquisition of Morila Limited (Jersey) that owns 80% of Societe des Mines de Morila SA completed on 10 November 2020. The Government
of Mali holds the other 20% in Societe des Mines de Morila SA through the Department of Mines and Energy.
Firefinch Limited Annual Report | 31 December 2020 56
(formerly Mali Lithium Limited)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the year ended 31 December 2020
21. PARENT ENTITY DISCLOSURES
Assets
Current assets
Non-current assets
Total assets
Liabilities
Current liabilities
Non-current liabilities
Total liabilities
Equity
Issued capital
Reserve
Accumulated losses
Total equity
(Loss) for the year
Other comprehensive income
Total comprehensive (loss) / income
Parent
2020
$
2019
$
26,135,631
74,275,872
3,869,913
26,117,110
100,411,503
29,987,023
1,018,267
-
1,018,267
888,624
67,357
955,981
128,689,714
5,854,972
(35,151,450)
58,029,778
5,817,386
(34,816,122)
99,393,236
29,031,042
(335,328)
-
(335,328)
(3,494,846)
-
(3,494,846)
Contingent liabilities of the parent entity:
There are no guarantees entered into by Firefinch Limited for the debts of its subsidiaries as at 31 December 2020 (2019: nil)
RECOGNITION & MEASUREMENT
The financial information for the parent entity, Firefinch Limited has been prepared on the same basis as the consolidated
financial statements, except as set out below.
Investments in subsidiaries, associates and joint venture entities
Investments in subsidiaries, associates and joint venture entities are accounted for at cost in the financial statements of Firefinch
Limited. Dividends from associates are recognised in the parent entity’s profit or loss, rather than being deducted from the
carrying amount of these investments. No dividends were received in 2020 (2019: nil).
Firefinch Limited Annual Report | 31 December 2020 57
(formerly Mali Lithium Limited)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the year ended 31 December 2020
22. RELATED PARTY DISCLOSURES
(a) Identity of related parties
The consolidated entity has a related party relationship with its subsidiaries (see note 20) and with its key management
personnel (refer below).
(b) Transaction with other related parties
The consolidated entity had no transactions with any other related party during the year ended 31 December 2020.
(c) Key management personnel compensation
The key management personnel compensation included in ‘Employee benefits expenses’ and ‘Share based payments’ is as
follows.
Short-term employee benefits
Post-employment benefits
Termination benefits
Share-based payments
Other
Total compensation
Details of remuneration disclosures are provided in the remuneration report on pages 16 to 24.
Consolidated
2020
$
919,676
69,078
129,778
(81,234)
-
2019
$
867,735
60,758
-
347,781
69,075
1,037,298
1,345,349
Firefinch Limited Annual Report | 31 December 2020 58
(formerly Mali Lithium Limited)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the year ended 31 December 2020
23. REMUNERATION OF AUDITORS
Amounts paid or payable to PwC Australia for:
Audit services
Tax advisory services
Amounts paid or payable to auditors in Mali:
Audit services by Sec Diarra SARL to Morila SA
Audit services by Sylla et Associes SARL to Birimian Gold Mali SARL, Timbuktu SARL and
Sudquest SARL
Consolidated
2020
$
146,464
15,300
161,764
79,314
14,626
93,940
255,704
2019
$
80,409
33,899
114,308
-
-
-
114,308
Firefinch Limited Annual Report | 31 December 2020 59
(formerly Mali Lithium Limited)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the year ended 31 December 2020
24. RECONCILIATION OF CASH FLOWS FROM OPERATING ACTIVITIES
Reconciliation of cash flow from operations to (loss)/profit after income tax
Profit/(Loss) after income tax
1,043,816
(3,504,280)
Consolidated
2020
$
2019
$
Non-cash flows in (loss)/profit from ordinary activities:
Depreciation and amortisation
Non-cash cost of production
Exploration expenditure written-off
Net share-based payments expensed
Foreign exchange loss
Other
Fair value increase in royalty receivable/payable
Sale of minor plant and equipment
Changes in assets and liabilities:
(Increase)/decrease in inventory
(Increase)/decrease in trade and other receivables
(Increase)/decrease in prepayments
(Increase)/decrease in other assets
(Decrease)/increase in trade and other payables
Increase/(decrease) in provisions
Increase/(decrease) in tax liability
Cash flow from operations
221,698
8,600,329
-
37,585
358,532
(88,030)
-
-
(2,793,396)
(5,321,900)
(68,360)
83,899
292,861
-
6,436
347,781
19,659
(47,851)
(58,804)
(4,927)
-
-
(35,052)
78,730
(10,621,619)
(484,202)
(1,161,211)
3,579,787
109,920
(35,712)
(6,128,870)
(3,315,441)
Firefinch Limited Annual Report | 31 December 2020 60
(formerly Mali Lithium Limited)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the year ended 31 December 2020
25.
SHARE BASED PAYMENTS
(a) Performance/share rights
Share rights were issued to employees of the Company under the terms of the Awards Plan (Plan)approved by the shareholders
on 29 May 2020. Share rights were issued to directors of the Company as per the shareholder’s approval at the general meeting
held on 23 October 2020. These share rights and performance rights were issued at nil consideration and each share right/
performance right will convert to an ordinary share upon satisfaction of vesting criteria.
The following table illustrates the number and movements in share rights and performance rights during the year.
Grant date
Equity instrument Expiry date
26/02/2019
Share rights (1)
27/05/2019
Share rights (2)
27/05/2019
Share rights (2)
26/02/2021
17/03/2022
17/03/2022
27/05/2019
27/05/2019
27/05/2019
27/05/2019
30/07/2020
16/09/2020
23/10/2020
02/11/2020
17/03/2022
Share rights (2)
Perform. rights (2) 17/03/2021
Perform. rights (2) 17/09/2021
Perform. rights (2) 17/03/2022
01/07/2023
Share rights (3)
01/07/2023
Share rights (3)
Perform. rights (4) 01/07/2023
Perform. rights (5) 01/07/2023
Exercise
price
$
Balance at
start of the
year
Granted
during the
year
Exercised
during
the year
Forfeited /
lapsed
Balance at
end of the
year
Number
Number
Number Number
Number
Vested and
exercisable
at the end
of the year
Number
nil
500,000
0.40 1,000,000
0.55 1,000,000
1.00 1,000,000
nil 1,000,000
nil 1,000,000
nil 2,000,000
nil
-
nil
nil
-
-
nil
-
7,500,000
-
-
-
-
-
-
-
-
-
500,000
- (1,000,000)
- (1,000,000)
- (1,000,000)
- (1,000,000)
- (1,000,000)
- (2,000,000)
-
-
-
-
-
-
3,880,600
470,000
3,500,000
500,000
8,350,600
-
-
-
- 3,880,600
-
470,000
3,500,000
-
500,000
- (7,000,000) 8,850,600
-
-
-
-
-
-
-
-
-
-
-
-
(1) Share rights issued to KMP with nil exercise price and vesting condition being 2 years of a consecutive service with the Company.
(2) Performance/ share rights were forfeited on the resignation of Chris Evans as a managing director of the Company in April 2020.
(3) Share rights issued to employees under the Awards Plan with vesting upon meeting any of the two performance hurdles being: Company’s
share price has traded on ASX at a $0.10 premium to the price on the 3 days of trading after the announcement of the Morila acquisition for
20 consecutive trading days; a JORC resources of at least 2,000,000 ounces of gold is defined at the Morila gold mine; open pit production is
recommenced at the main pit; and the Company enters into a sale, joint venture or financing agreement in respect of the Goulamina project.
(4) Performance rights were issued to the Directors of the Company as per the shareholders’ approval given on 23 October 2020 with any two of
the four vesting conditions: Company’s share price has traded on ASX at a $0.10 premium or above the VWAP of the 3 days after the
announcement of the Morila acquisition for 20 consecutive trading days; a JORC resources of at least 2,000,000 ounces of gold is defined at
the Morila gold mine; maintaining production beyond the closure plan of 2021 the Morila mine; and the Company enters into a sale, joint
venture or financing agreement in respect of the Goulamina project.
(5) Performance rights were issued on commencement of employment of the Chief Operating Officer with vesting condition being completion of
2 years of continuous employment with the Company.
(6) The weighted average exercise price of all performance rights and share rights granted in 2020 was nil.
Grant date
Equity instrument Expiry date
Exercise
price
$
Balance at
start of the
year
Granted
during the
year
Exercised
during
the year
Forfeited /
lapsed
Balance at
end of the
year
Number
Number
Number Number
Number
Vested and
exercisable
at the end
of the year
Number
2019
26/02/2019
Share rights
27/05/2019
Share rights
27/05/2019
Share rights
27/05/2019
Share rights
27/05/2019
Perform. rights
27/05/2019
Perform. rights
27/05/2019
Perform. rights
26/02/2021
17/03/2022
17/03/2022
17/03/2022
17/03/2021
17/09/2021
17/03/2022
nil
0.40
0.55
1.00
nil
nil
nil
-
-
-
-
-
-
-
500,000
1,000,000
1,000,000
1,000,000
1,000,000
1,000,000
2,000,000
7,500,000
-
-
-
-
-
-
-
-
-
500,000
- 1,000,000
- 1,000,000
- 1,000,000
- 1,000,000
- 1,000,000
- 2,000,000
- 7,500,000
-
-
-
-
-
-
-
-
Firefinch Limited Annual Report | 31 December 2020 61
(formerly Mali Lithium Limited)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the year ended 31 December 2020
The fair value of the equity-settled performance rights and share rights granted was estimated as at the grant date using a
Monte Carlo model taking into account the terms and conditions upon which the performance rights and share rights were
granted.
The following table lists the inputs to the model used for the performance rights and share rights issued during the year ended
31 December 2020.
Grant date
Exercise
Price
Expiry date
Expected life
of
performance/
share rights
(years)
Price of
underlying
shares at grant
date
$
nil
nil
nil
nil
01/07/2023
01/07/2023
01/07/2023
01/07/2023
2.92
2.79
2.69
2.66
0.145
0.155
0.185
0.140
2020
30/07/2020
16/09/2020
23/10/2020
02/11/2020
(b) Options
Dividends
expected
on shares
Volatility
%
80
80
80
80
%
nil
nil
nil
nil
Risk-free
interest rate
%
Estimated
vesting date
0.28
0.24
0.14
0.11
31/12/2021
31/12/2021
31/12/2021
02/11/2022
No options were issued during the year ending 31 December 2020. The following table illustrates the number and movements in
options during the year.
Grant date
Equity instrument Expiry date
Exercise
price
$
Balance at
start of the
year
Granted
during the
year
Exercised
during
the year
Forfeited /
lapsed
Balance at
end of the
year
Number
Number
Number Number
Number
Vested and
exercisable
at the end
of the year
Number
2020
15/12/2018 Unlisted options
20/02/2022
0.40
2019
15/12/2018
Unlisted options
20/02/2022
0.40
2,000,000
2,000,000
2,000,000
2,000,000
-
-
-
-
-
-
-
-
- 2,000,000 2,000,000
- 2,000,000 2,000,000
- 2,000,000 2,000,000
- 2,000,000 2,000,000
RECOGNITION & MEASUREMENT
The Group provides benefits to employees (including directors) of the Group in the form of share-based payment transactions,
whereby employees render services in exchange for shares or rights over shares (‘equity-settled transactions’). The cost of these
equity-settled transactions with employees is measured by reference to the fair value at the date at which they are granted. The
fair value is determined by an internal valuation using a Black Scholes option pricing model and Monte Carlo methodology as
appropriate.
The cost of equity-settled transactions is recognised, together with a corresponding increase in equity, over the period in which
the performance conditions are fulfilled, ending on the date on which the relevant employees become fully entitled to the award
(‘vesting date’). The cumulative expense recognised for equity-settled transactions at each reporting date until vesting date
reflects (i) the extent to which the vesting period has expired and (ii) the number of options or performance rights that, in the
opinion of the directors of the Group, will ultimately vest. This opinion is formed based on the best available information at
balance date. No adjustment is made for the likelihood of market performance conditions being met as the effect of these
conditions is included in the determination of fair value at grant date. No expense is recognised for awards that do not ultimately
vest, except for awards where vesting is conditional upon a market condition.
Where an equity-settled award is cancelled, it is treated as if it had vested on the date of cancellation, and any expense not yet
recognised for the award is recognised immediately. However, if a new award is substituted for the cancelled award and
designated as a replacement award on the date that it is granted, the cancelled and new award are treated as if they were a
modification of the original award.
Firefinch Limited Annual Report | 31 December 2020 62
(formerly Mali Lithium Limited)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the year ended 31 December 2020
26. COMMITMENTS
(a) Operating lease commitments
The Group was committed to lease payments in respect of its premises in Mali. The lease agreements were executed for 12
months and may be terminated by giving 3 months or less written notice thereafter. Minimum commitments are estimated as
follows.
Within one year
After one year but not more than five years
Total minimum lease payments
(b) Exploration commitments
2020
$
2019
$
-
-
-
29,261
-
29,261
With respect to the Group’s exploration tenements in Mali, the Group submits budgeted exploration expenditure as part of the
licence application and renewal requirements. In assessing subsequent renewal applications, the mining authorities review actual
expenditure against budgets previously submitted. These amounts do not become legal obligations of the Group and actual
expenditure does vary depending on the outcome of the actual activities.
Within one year
After one year but not more than five years
2020
$
2019
$
3,489,131
1,514,251
-
-
3,489,131
1,514,251
Firefinch Limited Annual Report | 31 December 2020 63
(formerly Mali Lithium Limited)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the year ended 31 December 2020
27. BUSINESS COMBINATIONS - ACQUISITION OF MORILA
Transaction details
On 10 November 2020 Firefinch Limited completed the acquisition of an 80% interest in the Morila gold mine in Mali. Morila is
an operating gold mine and has 4.5 million tonnes per annum processing plant and all infrastructure required for a remote mine
site. Following the satisfaction of conditions precedent to completion of the transaction, Barrick Gold Corporation and AngloGold
Ashanti Limited (Vendors) advised that the final acquisition price was US$29.7 million (approximately A$41.44 million). Firefinch
acquired 100% interest in Morila Limited, incorporated in Jersey, which in turn owns an 80% interest in Morila SA, the owner of
the Morila gold mine. The Government of Mali owns the remaining 20% of Morila SA.
Details of purchase consideration and net assets acquired
The Sales Agreement provides a formula for the aggregate consideration for the purchase of the Morila group and the assignment
of the loans.
Total cash consideration paid
USD
AUD Equiv
29,701,765
41,440,441
Fair value of identifiable net assets and liabilities
At 31 December 2020, the acquisition accounting balances recognised are provisional due to ongoing work finalising valuations
which may impact acquisition accounting entries.
Assets
Bank overdraft
Trade receivables
VAT paid
Other receivables
Inventory (1)
Exploration and evaluation expenditure recognised on acquisition
Total assets
Liabilities
Trade and other payables (2)
Provisions (3)
Loans (4)
Total liabilities
Net assets of Morila
80% of net assets acquired
20% non-controlling interest on acquisition
USD
AUD Equiv
(3,315,072)
(4,554,734)
1,093,129
10,744,704
1,845,579
32,171,946
24,877,865
1,501,902
14,762,657
2,535,728
44,202,556
34,180,873
67,418,152
92,628,982
16,465,981
13,044,581
34,122,007
21,992,275
17,922,567
47,512,950
63,632,570
87,427,792
3,785,582
5,201,190
3,028,466
757,116
4,161,622
1,039,568
3,785,582
5,201,190
(1) Inventory includes tailings. Management has considered the fair value of the tailings to be recognized as part of the net assets of the Morila
acquisition. Based on the Mineral Resource Statement (ASX Announcement on 6 September 2020): Morila Measured Tailings of contained
gold are 76,000 ounces. The applied recovery rate of 50%, gold price of US$1,800 per ounce and all-in costs of US$900 per ounce. The value
of gold in tailings inventory was adjusted for the movement from September to November 2020.
(2) Trade and other payables include income tax liability of US$2,866,525.
(3) Provisions include a rehabilitation provision of US$7,956,960 and employee retirement provision of US$814,131.
(4) Loans include US$26,673,299 loans payable to Firefinch Limited and US$7,448,708 interest bearing loan (LIBOR+2%) owing to the minority
interest.
(5) Plant and equipment were fully written down on date of acquisition. Since the plant needs future rebuilt works its written down value was
considered at the best estimate of its fair value at the time of acquisition.
Firefinch Limited Annual Report | 31 December 2020 64
(formerly Mali Lithium Limited)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the year ended 31 December 2020
Purchase consideration - cash outflows
Outflow of cash to acquire subsidiary, net of cash acquired
Cash consideration paid
Less: Balances acquired
Bank overdraft
Net outflow of cash on acquisition – investing activities
Revenue and profit contribution
2020
$
2019
$
(41,440,441)
-
(4,554,734)
(45,995,174)
(45,995,175)
-
-
-
-
-
The acquired business contributed revenue of $20,338,624 and a net profit of $4,524,493 to the Group for the period from 11
November 2020 to 31 December 2020. If the acquisition had taken place at the beginning of the year, revenue and losst for the
period would have been $109,395,798 and $34,799,819 respectively.
Non-controlling interest
On acquisition of Morila a non-controlling interest of 20% was accounted for as an equity transaction resulting in the following:
Equity attributable to:
Owners of Firefinch – 80%
Non-controlling interest – 20%
Total equity of Morila
Movement in non-controlling interest during the period
Balance on acquisition
Allocated profit for the period from acquisition to end of Dec’20
Foreign currency movements
Balance at the end of the year
Acquisition- related costs
USD
AUD Equiv
3,028,466
757,116
4,161,622
1,039,568
3,785,582
5,201,190
2020
$
2019
$
1,039,568
950,651
(21,157)
1,969,062
-
-
-
-
Acquisition-related costs of $644,729 are included in corporate and other expenses in the statement of profit or loss and in
operating cash flows in the statement of cash flows.
Firefinch Limited Annual Report | 31 December 2020 65
(formerly Mali Lithium Limited)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the year ended 31 December 2020
RECOGNITION & MEASUREMENT
The acquisition method of accounting is used to account for business combinations by the Group.
The initial accounting for a business combination involves identifying and determining the fair values to be assigned to the
acquiree’s identifiable assets, liabilities and contingent liabilities and the cost of the combination. If the initial accounting for a
business combination can be determined only provisionally by the end of the period the Group will account for the combination
using those provisional values. Any adjustments to those provisional values as a result, of completing the initial accounting will
be recognised within twelve months of the acquisition date.
Non-controlling interest
The Group recognises non-controlling interests in an acquired entity either at fair value or at the non-controlling interest’s
proportionate share of the acquired entity’s net identifiable assets. This decision is made on an acquisition-by-acquisition basis.
For the non-controlling interests in Morila SA, the Group elected to recognise the non-controlling interests at its proportionate
share of the acquired net identifiable assets.
Non-controlling interests in the results and equity of subsidiaries are shown separately in the consolidated statement of profit
or loss, statement of comprehensive income, statement of changes in equity and balance sheet respectively.
Firefinch Limited Annual Report | 31 December 2020 66
(formerly Mali Lithium Limited)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the year ended 31 December 2020
28. CONTINGENCIES
Tax Assessment
The Group purchased an 80% interest in Morila SA, the owner of the Morila gold mine in Mali on 11 November 2020. A Tax
Assessment was received by Morila SA in January 2020. The market was advised of the receipt of the partial assessment on 18
January 2021.
The Assessment advises that the tax department disputes the amounts due in relation to various employment taxes, withholding
taxes and VAT paid by, or claimed by Morila SA for the tax year ending 31 December 2017.
The Assessment also advises that the tax department believes that Morila SA has materially understated its income from gold
sales made in 2017. In 2017, the mine produced approximately 70,000 ounces of gold and sold 67,612 ounces of gold for net
revenue received of US$92.65 million. The mine has reviewed its records and has no reason to revise the amount of gold
produced or the revenue received. Firefinch notes that this gold production was disclosed to public exchanges by the previous
owners of Morila SA: Barrick Gold and AngloGold Ashanti.
The Tax Department has advised that, based on advice from the government department responsible for customs and exports,
it believes the revenue from gold sales for 2017 should be US$146.9 million. The basis for this higher estimate was not provided.
The Company’s internal records and receipts of sales from Rand Refinery in South Africa confirm its production and revenue as
disclosed in its 2017 tax return. The Company is confident that the source of information utilised by the tax department to
establish Morila SA gold sales is incorrect.
The Company believes the assessment of employment tax, withholding tax, VAT and gold revenue is incorrect and has lodged an
objection to the Assessment with the tax authorities together with supporting documentation. The objection was prepared by
the Company’s tax advisers and peer reviewed by a legal firm prior to lodgement with the tax department.
On the above basis, no amounts have been recorded for any potential liability in relation to these matters, as the Group believes
it is probable that the taxation authority will accept the Group's tax treatment in the past. An estimate of the potential liability
has not been disclosed as the Group cannot reasonably predict the outcome.
Founders Fee
Through its wholly-owned Australian subsidiary, Birimian Gold (Mali) Pty Ltd, the Group holds 100 per cent equity in three
subsidiary companies incorporated in Mali, viz. Birimian Gold Mali SARL (BGM), Timbuktu Ressources SARL and Sudquest SARL.
The Group holds seven exploration permits, two of which are lithium-focused and five cover gold prospects, in three discrete
projects: the Goulamina Project and the Massigui and Dankassa Gold Projects.
Pursuant to each Establishment Convention entered into by a Birimian Mali subsidiary, as a holder of an exploration permit, and
the State of Mali under the provisions of Mali’s 2012 Mining Code, it has been agreed that a “Founder’s Fee” (the Fee) is payable
to the State of Mali represented by the Direction Nationale de la Géologie et des Mines (Department of Geology and Mines)
(DNGM). Although agreed to by the holder of an exploration permit, the Fee is payable by the exploitation company that must
be formed in Mali to take a transfer of the exploitation (mining) permit once granted to the holder of the exploration permit.
The establishment of an exploitation company to hold the exploitation permit is a requirement of article 65 of the 2012 Mining
Code.
The Fee is defined as a fixed amount payable in USD to the State of Mali in each relevant applicable Establishment Convention
and is payable in the event of the grant of an exploitation permit in respect of all or part of the area of the exploitation permit.
The calculation of this Fee is by reference to the area of the exploration permit. The Fee is intended to compensate the State of
Mali for previous geological work it has undertaken over the area subject to the exploration permit.
Under the Establishment Conventions with respect to the Finkola and N’tiola permits, BGM agreed to Fees of US$300,800 and
US$192,512 which is contingent on the application and granting of exploitation (mining) permits. It is not clear whether, as a
result of the Group’s historical transactions with Morila, there will be any liability to pay a Fee to the DNGM as a consequence of
the Areas of Interest being included within an enlarged exploitation permit held by Morila. Certainly, Morila has no direct liability
to the State of Mali as a consequence of the Establishment Conventions which BGM entered into. There is a possibility that the
State of Mali may, in the circumstances, request a payment of the Fee from BGM, notwithstanding there is a doubt over the legal
basis for doing so. This uncertainty stems from the legal requirements for the payment of Fees being contained in the
Establishment Conventions that are binding on BGM and not Morila and the fact that both the Establishment Code and the 2012
Mining Code are silent on the manner in which the liability, if any, for the Fee is to be dealt with where there is a transaction
similar to those described in the option agreements entered into between the Group and Morila.
Firefinch Limited Annual Report | 31 December 2020 67
(formerly Mali Lithium Limited)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the year ended 31 December 2020
On 27 October 2016, Timbuktu Resources SARL announced it was undertaking a scoping study on the Torakoro permit, which has
been subsequently followed by a pre-feasibility study (BGS 31 January 2017), which gives rise to a contingent liability totalling
US$300,800.
Goulamina Vendor Fee
In addition to the amounts outlined above, as a result of the Group acquiring the Goulamina Lithium Project in March 2016 by
making payments totalling US$40,000, the vendor is entitled to receive a final payment of US$200,000 should the project reach
commercial production.
29.
EVENTS OCCURING AFTER THE END OF YEAR DATE
A Tax Assessment was received by Morila SA in January 2020. The market was advised of the receipt of the partial assessment on
18 January 2021. The Assessment advises that the tax department disputes the amounts due in relation to various employment
taxes, withholding taxes and VAT paid by, or claimed by Morila SA for the tax year ending 31 December 2017. Further details are
included in Note 6 and note 28.
On 8 February 2021, the Company announced an increase in the Indicated and Inferred Mineral Resource at Morila pit, increasing
from 1.3 million ounces of contained gold to 2.2 million ounces of contained gold. The grade of the Mineral Resource increasing
from 1.2 g/t gold to 1.6g/t gold resulting in a global resource for the entire Morila project increasing to 2.35 million ounces of
contained gold. Full details of the Company’s announcement can be found on the Company’s web page.
On 9 February 2021, the Company announced that to realise the true value of the Goulamina Lithium project (Goulamina), the
Company intends to progress a demerger of Goulamina into a separate lithium focussed company which is expected to be listed
on ASX (Lithium Co) in 2021, subject to shareholder and other required approvals.
On 2 March 2021, The Company announced the appointment of Macquarie Capital (Australia) Limited to advise on funding,
partnering opportunities, offtake and the demerger process for Goulamina.
On 10 March 2021, the Company announced the appointment of Dr Michael Anderson as Managing Director (with effect from 6
April 2021). Dr Cowden was appointed interim Executive Chairman after the resignation of the Company’s previous Managing
Director until a new Managing Director is appointed. Dr Cowden will return to his original role of Non-Executive Chairman from
6 April 2021.
On 22 March 2021, the Company announced the appointment of Bradley Gordon as Non-Executive Director (with effect from 6
April 2021).
Firefinch Limited Annual Report | 31 December 2020 68
(formerly Mali Lithium Limited)
Directors’ Declaration
In the Directors’ opinion:
(a)
the financial statements and notes set out on pages 27 to 68 are in accordance with the Corporations Act 2001, including:
(i)
(ii)
complying with Accounting Standards, the Corporations Regulations 2001 and other mandatory professional
reporting requirements, and
giving a true and fair view of the consolidated entity’s financial position as at 31 December 2020 and of its
performance for the financial year ended on that date, and
(b)
there are reasonable grounds to believe that the Group will be able to pay its debts as and when they become due and
payable, and
Note 1 confirms that the financial statements also comply with International Financial Reporting Standards as issued by the
International Accounting Standards Board.
The Directors have been given the declarations by the Executive Chairman and Chief Financial Officer required by section 295A
of the Corporations Act 2001.
This declaration is made in accordance with a resolution of the Board of Directors and is signed for and on behalf of the directors
by:
DR ALISTAIR COWDEN
Executive Chairman
Dated 31 March 2021
Firefinch Limited Annual Report | 31 December 2020 69
(formerly Mali Lithium Limited)
Independent auditor’s report
To the members of Firefinch Limited
Report on the audit of the financial report
Our opinion
In our opinion:
The accompanying financial report of Firefinch Limited (the Company) and its controlled entities
(together the Group) is in accordance with the Corporations Act 2001, including:
(a)
giving a true and fair view of the Group's financial position as at 31 December 2020 and of its
financial performance for the year then ended
(b)
complying with Australian Accounting Standards and the Corporations Regulations 2001.
What we have audited
The Group financial report comprises:
•
•
•
•
•
•
the consolidated statement of financial position as at 31 December 2020
the consolidated statement of changes in equity for the year then ended
the consolidated statement of cash flows for the year then ended
the consolidated statement of profit or loss and other comprehensive income for the year then
ended
the notes to the consolidated financial statements, which include significant accounting policies
and other explanatory information
the directors’ declaration.
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 believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our opinion.
Independence
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 & Ethical
Standards Board’s APES 110 Code of Ethics for Professional Accountants (including Independence
Standards) (the Code) that are relevant to our audit of the financial report in Australia. We have also
fulfilled our other ethical responsibilities in accordance with the Code.
PricewaterhouseCoopers, ABN 52 780 433 757
Brookfield Place, 125 St Georges Terrace, PERTH WA 6000, GPO Box D198, PERTH WA 6840
T: +61 8 9238 3000, F: +61 8 9238 3999, www.pwc.com.au
Liability limited by a scheme approved under Professional Standards Legislation.
70
Our audit approach
An audit is designed to provide reasonable assurance about whether the financial report is free from
material misstatement. Misstatements may arise due to fraud or error. They are considered material if
individually or in aggregate, they could reasonably be expected to influence the economic decisions of
users taken on the basis of the financial report.
We tailored the scope of our audit to ensure that we performed enough work to be able to give an
opinion on the financial report as a whole, taking into account the geographic and management
structure of the Group, its accounting processes and controls and the industry in which it operates.
Materiality
Audit scope
• Our audit focused on where the Group made
subjective judgements; for example,
significant accounting estimates involving
assumptions and inherently uncertain future
events.
• The accounting processes are structured
around a group finance function at the
Group’s head office in Perth which receives
information from a finance function in Mali.
We have performed our audit procedures
primarily at the Group's Perth office.
• For the purpose of our audit we used overall
Group materiality of $1,277,000, which
represents approximately 1% of the Group’s
total assets.
• We applied this threshold, together with
qualitative considerations, to determine the
scope of our audit and the nature, timing and
extent of our audit procedures and to evaluate
the effect of misstatements on the financial
report as a whole.
• We chose Group total assets, because in our
view, it is the benchmark against which the
performance of the Group is most commonly
measured against, as it transitions from
exploration and development to production.
• We utilised a 1% threshold based on our
professional judgement, noting it is within the
range of commonly acceptable thresholds.
71
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in
our audit of the financial report for the current period. The key audit matters were addressed in the
context of our audit of the financial report as a whole, and in forming our opinion thereon, and we do
not provide a separate opinion on these matters. Further, any commentary on the outcomes of a
particular audit procedure is made in that context. We communicated the key audit matters to the
Audit and Risk Committee.
Key audit matter
Acquisition of Morila Limited
(Refer to note 27)
On 10 November 2020, Firefinch Limited
completed the acquisition of an 80% interest in
Morila Limited for purchase consideration of
US$29.7 million.
The acquisition was a key audit matter because it
was a significant transaction for the year given the
financial and operating impact on the Group. In
addition, the Group made complex judgements
when accounting for the acquisition including
identifying all assets and liabilities of the newly
acquired subsidiaries and estimating the fair
value of each item for initial recognition by the
Group, particularly the ore in tailings inventory,
capitalised exploration and evaluation
expenditure and rehabilitation provision.
The accounting for the acquisitions is provisional
at the time of authorisation of the financial
report.
How our audit addressed the key audit
matter
Our procedures included, but were not limited to:
• obtaining the board approved purchase
contract to understand the nature of the
acquisition and the consideration payable,
•
considering how the Group estimated the fair
value of the assets and liabilities in the
acquisition. In particular, we focused on
significant judgements made by the Group in
assessing the identification of assets acquired,
and liabilities assumed and the
appropriateness of the methodologies and
assumptions utilised by management in
relation to the following:
• Ore in tailings inventory; assessing the
forecast gold price, future processing
costs, ore grades and ore volumes,
expected timing of processing as well as
the overall methodology adopted to value
inventory,
• Capitalised exploration and evaluation
expenditure; inspecting the interim life of
mine plan approved by the directors,
historical resource information and
considering whether Group retained right
of tenure for the tenements acquired, and
• Rehabilitation provision; agreeing
rehabilitation cost estimates to
underlying closure estimates and
assessing key assumptions applied to
determine the rehabilitation liability for
the Morila mine site at acquisition.
We also evaluated the adequacy of the disclosures
made in note 27 to the financial statements in
light of the requirements of Australian
Accounting Standards.
72
Key audit matter
Impairment assessment for capitalised
exploration and evaluation assets
(Refer to note 12)
As at 31 December 2020, the Group had
capitalised exploration and evaluation assets of
$59,607,354. Judgement was required by the
Group to assess whether there were indicators of
impairment of these assets due to the need to
make estimates about future events and
circumstances, such as whether the mineral
resources may be economically viable to mine in
the future.
This was a key audit matter because of the size of
the balance and the risk of impairment should the
Group relinquish certain exploration or mining
licences as it continues to assess future viability.
Rehabilitation and decommissioning
provisions
(Refer to note 14)
As at 31 December 2020, the Group had
recognised rehabilitation and decommissioning
provisions of $15,599,884 as a result of its
obligations to restore and rehabilitate the
environment which has been disturbed by
Morila’s mining operations. Rehabilitation and
decommissioning activities are governed by a
combination of legislative requirements and
Group policies.
This was a key audit matter given the
determination of these provisions required
judgement by the Group in the assessment of the
nature and extent of the work to be performed,
the future cost of performing the work, the timing
of when the rehabilitation will take place and
economic assumptions such as the discount rate
for future cash outflows associated with the
rehabilitation and decommissioning provisions.
How our audit addressed the key audit
matter
We evaluated the Group’s assessment that there
had been no indicators of impairment for its
capitalised exploration and evaluation assets, by
performing the following procedures, amongst
others:
•
inquired with management and the directors
to develop an understanding of the current
status and future intentions of the Group’s
projects in Mali,
•
•
tested whether the Group retained right of
tenure for its exploration and mining licence
areas by obtaining licence status records
maintained by the relevant government
authority in Mail,
considered the consistency of information
provided by the Group’s metallurgic test
work, resource drilling results in relation to
its licences to date, ASX releases and
management’s internal assessment of the
likely prospectively of material licence areas,
•
tested a sample of current year expenditure
on licence areas to source documents, and
• obtained plans for future expenditure and
compared these to contractual minimum
licence expenditure requirements.
We performed the following procedures over the
Group’s rehabilitation and decommissioning
provisions, amongst others:
•
assessed key assumptions utilised in the
rehabilitation and decommissioning model by
evaluating the competency, capabilities and
objectivity of experts retained by the Group
and testing a sample of these cost estimate
inputs to external sources,
•
•
assessed the Group’s judgements in relation
to the manner in which the rehabilitation and
decommissioning is likely to occur, and
considered the appropriateness of the
discount rates and inflation rates utilised in
calculating the provision by comparing them
to current market consensus.
73
Key audit matter
Availability of funding for further
exploration and development activities
(Refer to note 1)
The Group is currently treating and processing
ore from tailings as it works towards
recommencing mining of the Morila pit. As a
result, the Group does not currently generate a
commercial level of revenue and therefore
continues to rely on funding from its shareholders
or other sources to continue as a going concern.
These funds will be required to recommence
mining of the Morila pit and other costs incurred
by the operations of the Group.
In determining the appropriateness of their going
concern basis of preparation of the financial
report, the Group has made a number of
judgements, including the capital expenditure
required to recommence mining at the Morila pit
and associated satellite pits, expected cash inflows
from the processing of tailings and the continued
success of raising funding as and when it is
needed.
Assessing the appropriateness of the Group’s
basis of preparation for the financial report was a
key audit matter due to its importance to the
financial report and the level of judgement
involved in forecasting future cash flows.
How our audit addressed the key audit
matter
We considered the appropriateness of the going
concern assumption used in preparing the
financial report by performing the following
procedures, amongst others:
•
evaluated the Group’s assessment of its ability
to continue as a going concern, including
whether the period covered is at least 12
months from the date of the financial report
and that relevant information of which we are
aware from the audit was included,
•
•
•
inquired of management and the directors
whether they were aware of any events or
conditions, including beyond the period of the
assessment that may cast significant doubt on
the Group’s ability to continue as a going
concern,
agreed the cash receipts from the capital
placements undertaken during the year to the
relevant bank statements,
compared the key underlying data and
assumptions in the Group’s cash flow forecast
to internal reporting and historical cash
outflows,
• developed an understanding of the key
forecast expenditure items, including the
amounts that are contractually committed
and required to be paid to maintain the good
standing of the Group’s tenements as well
other material future capital expenditures,
and
•
evaluated the adequacy of the disclosures
made in the financial report, including the
basis for the directors’ conclusion that the
Group is a going concern in light of the
requirements of the Australian Accounting
Standards.
74
Other information
The directors are responsible for the other information. The other information comprises the
information included in the annual report for the year ended 31 December 2020, but does not include
the financial report and our auditor’s report thereon.
Our opinion on the financial report does not cover the other information and accordingly we do not
express any form of assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information
and, in doing so, consider whether the other information is materially inconsistent with the financial
report or our knowledge obtained in the audit, or otherwise appears to be materially misstated.
If, based on the work we have performed on the other information that we obtained prior to the date of
this auditor’s report, 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 ability of the Group to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the
going concern basis of accounting unless the directors either intend to liquidate the Group or to cease
operations, or 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 the financial report.
A further description of our responsibilities for the audit of the financial report is located at the
Auditing and Assurance Standards Board website at:
https://www.auasb.gov.au/admin/file/content102/c3/ar1_2020.pdf. This description forms part of
our auditor's report.
75
Report on the remuneration report
Our opinion on the remuneration report
We have audited the remuneration report included in pages 16 to 24 of the directors’ report for the
year ended 31 December 2020.
In our opinion, the remuneration report of Firefinch Limited for the year ended 31 December 2020
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.
PricewaterhouseCoopers
Helen Bathurst
Partner
Perth
31 March 2021
76
Additional Information for Listed Public Companies
1
a.
Capital as at 26 March 2021.
Ordinary share capital
782,257,637 ordinary fully paid shares held by 3,865 shareholders.
b.
Unlisted Options over Unissued Shares
Number of
Options
2,000,000
2,000,000
Exercise Price
$
0.40
Expiry
Date
20 February 2022
c.
Listed Options over Unissued Shares
Exercise Price
$
0.15
Expiry
Date
17 October 2021
Number of
Options
28,714,507
28,714,507
d.
Voting Rights
The voting rights attached to each class of equity security are as follows:
◼ Ordinary shares: Each ordinary share is entitled to one vote when a poll is called, otherwise each member
present at a meeting or by proxy has one vote on a show of hands.
◼ Unlisted Options: Options do not entitle the holders to vote in respect of that equity instrument, nor
participate in dividends, when declared, until such time as the options are exercised or performance shares
convert and subsequently registered as ordinary shares.
Llisted Options: Options do not entitle the holders to vote in respect of that equity instrument, nor participate
in dividends, when declared, until such time as the options are exercised or performance shares convert and
subsequently registered as ordinary shares.
e. Substantial Shareholders as at 26 March 2021.
As at 26 March 2021, the register of a substantial shareholder disclosed the following information.
CS Third Nominees Pty Limited
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