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2021 ReportFlinders Mines Limited
ABN 46 091 118 044
Annual Report
for the year ended 30 June 2021
Flinders Mines Limited
Annual Report - 30 June 2021
Contents Page
Corporate Directory
Chairman’s Report
Directors' Report
Auditor’s Independence Declaration
Financial Statements
Directors’ Declaration
Independent Auditor's Report to the Members
Additional Information
Interest in Mining Tenements
Mineral Resources and Ore Reserves Information
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4
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37
39
40
2
Flinders Mines Limited
Corporate Directory
Corporate Directory
Board of Directors
Neil Warburton
Independent Non-Executive Chair
The Hon. Cheryl Edwardes, AM
Independent Non-Executive Deputy Chair
Michael Wolley
Evan Davies
James Gurry
Amy Jiang
Officers
Non-Executive Director
Non-Executive Director
Independent Non-Executive Director
Non-Executive Director
Andrew Whitehead
General Manager
Joint Company Secretaries
Sarah Wilson
Shannon Coates
Registered Office
45 Ventnor Avenue
West Perth WA 6005
Telephone: 08 9389 4483
Email: info@flindersmines.com
Website: www.flindersmines.com
Share Registry
Computershare Investor Services Pty Ltd
Level 11, 172 St Georges Terrace
Perth WA 6000
Telephone: 08 9323 2000
Website: www.computershare.com.au
Auditors
KPMG
235 St Georges Terrace
Perth WA 6000
Securities Exchange Listing
Shares in Flinders Mines Limited are quoted on the Australian Securities Exchange under trading code FMS.
3
Flinders Mines Limited
Chairman’s Report
Chairman’s Report
Dear Shareholders,
I am pleased to present the Flinders Mines Limited Annual Report for the financial year ended 30 June 2021, a
year that has been a challenging one for the Company.
On a positive note on the 4 September 2020 the Company announced that all conditions precedent for the farm-in
incorporated joint venture with BBIG had been satisfied or waived and the joint venture could proceed to develop
the Company’s flagship Pilbara Iron Ore Project (PIOP) in Western Australia. Since then the PIOP joint venture
has formed with BBIG as the operator. BBIG has since been progressing a range of activities during the year
including:
• Developing further understanding of the PIOP ore body
• Stratigraphic reinterpretation of Blacksmith
• BFS resource definition programme design completed
• Maturing of the preferred mine plan and finalising and documenting the draft mine plan report
• Completion of the Anvil rehabilitation programme and completion of the first phase of Blacksmith
•
rehabilitation and planning for further rehabilitation across Blacksmith.
Laboratory based metallurgical test work to better determine ore product design specification and planning
associated with a larger field based, next phase metallurgical test work programme.
• Continued development on determining the optimum location and layout of the ore processing facility
(OPF) at the PIOP.
The tenements remain in good standing and the various joint venture obligations are in place.
However, BBIG has advised the Company that given the challenges of Covid and the relationship between China
and Australia it has made planned funding for PIOP challenging. As a result, BBIG has developed several proposals
to progress the development of PIOP and the FMS Board has been focussing on assessing these development
options in the best interests of all shareholders.
The first of these options was to place both the PIOP mine and the BBIG infrastructure within one corporate group
to better facilitate financing. Accordingly, on 7 December 2020 Flinders received the Non-Binding Indicative Offer
(NBIO) from BBIG proposing Flinders purchase 100% of the issued share capital of Forge Resources Swan Pty
Ltd (FRS), a wholly owned subsidiary of BBIG which holds BBIG’s port and rail subsidiaries and infrastructure,
including the agreement under the Railway (BBIG Rail Aus Pty Ltd) Agreement Act 2017 (State Rail Agreement)
(Proposed Transaction) for a nominal sum of $1. Also proposed is the assumption of an FRS obligation to BBIG of
a 5% royalty, based on the FOB sales value of all product handled at the FRS facilities at the Balla Balla Port. In
support of third-party costs directly associated with progressing the Proposed Transaction, the Company reached
an agreement with BBIG whereby BBIG would advance $1m. The funds were received in 3 equal instalments in
January 2021, March 2021, and April 2021. Should a fully approved transaction result from the NBIO, then the
Company will reimburse the funds to BBIG or offset against any monies owed by BBIG to the Company from
termination of the farm-in incorporated joint venture on the later of the completion date or 31 December 2021. If no
Transaction eventuates then funds drawn down at that date are not repayable.
A Board sub-committee made up of myself, Independent Directors Cheryl Edwardes and James Gurry and the
General Manager Dr Andrew Whitehead was formed along with the appointment of independent external advisers
to assess and negotiate the concept put forward by BBIG. Negotiations with BBIG on this option have not concluded.
The second of these options is to amend the current approved transaction documents between BBIG and FMS to
enable use of a road infrastructure solution. This would enable the Company to potentially accelerate project
development than under the current arrangements through a lower cost and faster infrastructure solution while
retaining the option to build the proposed rail line. These discussions were announced to the market in 22 July
2021 and are ongoing. The same Board sub-committee consisting of the Independent Directors are leading these
discussions with BBIG.
During the year, an exploration programme was completed at the Canegrass Project. A drilling programme was
conducted consisting of ~20 RCP drill holes designed to infill and test for shallower higher-grade vanadium-
titanium-magnetite (VTM) zones within the Mineral Resource. Overall, the drilling programme was successful in
intersecting VTM mineralisation grading greater than the Mineral Resource reported grade of 0.64% V2O5. The
analytical results indicate that while the better vanadium results are associated with the more intense magnetite
segregations, significant vanadium is also present in intervals of gabbro hosting high contents of disseminated
magnetite. Results were announced to the market on 21 January 2021.
4
Flinders Mines Limited
Chairman’s Report
During the year we welcomed the appointment of Ms Amy Jiang, as a nominee Director of the Company’s second
largest shareholder, OCJ Investment (Australia) Pty Ltd (OCJ). Ms Jiang, who is the Company Secretary and
Executive Manager of OCJ, holds a Bachelor of Arts and is in her final year of a Juris Doctor, both from the
University of Sydney.
On 9 June 2021, the Company announced that an advance to the predicted shortfall amount under the Farm-In
Agreement had been agreed with BBIG, resulting in the Company receiving $2.0 million. Under the terms of the
Farm-In Agreement, BBIG must spend $15.0 million each year and if those funds are not spent, it must contribute
the difference to the Company. BBIG and the Company have agreed that the shortfall due to be paid to the
Company for the first year which ended 2 September 2021 is approximately $5.48m, post the $2 million Shortfall
advance in June 2021.
The Company ended the financial year with $2.9 million in cash and a long-term unsecured fully drawn debt facility
with a principal amount of $3 million, repayable by 30 June 2022.
In conclusion, I would like to thank the Board and our staff for their significant contribution to the Company and all
shareholders for their continued support.
The progress made during the 2021 financial year in a challenging period is positive and the options being
developed for alternative development of PIOP are potentially attractive for FMS shareholders. I look forward to
reporting further progress during the 2022 financial year.
Neil Warburton
Chairman
Perth, Western Australia
30 September 2021
5
Flinders Mines Limited
Directors’ Report
Directors' Report
Your Directors present their report on the Consolidated Entity comprising Flinders Mines Limited (the Company or
Flinders) and its controlled entities (the Group) for the financial year ended 30 June 2021.
Directors
The following persons held office as Directors of Flinders Mines Limited from the start of the financial year to the
date of this report, unless otherwise stated.
Name
Neil Warburton
The Hon. Cheryl Edwardes AM
Michael Wolley
Evan Davies
James Gurry
Amy Jiang
Title
Independent Non-Executive Chair
Independent Non-Executive Deputy Chair
Non-Executive Director
Non-Executive Director
Independent Non-Executive Director
Non-Executive Director
Appointment
19 October 2016
17 June 2019
19 October 2016
19 October 2016
18 September 2019
5 March 2021
Company Secretary
Ms Sarah Wilson was appointed on 20 November 2018 as Company Secretary. On 30 August 2019, Ms Shannon
Coates was appointed as Joint Company Secretary.
Information on Directors
Neil Warburton
Qualifications
Experience
Independent Non-Executive Chair
Assoc. MinEng WASM, MAusIMM, FAICD
Mr Warburton has over 40 years’ experience in corporate and all areas of
mining operations. Mr Warburton held senior positions with Barminco
Limited culminating in being the Chief Executive Officer from August 2007
to March 2012. He successfully grew Barminco into Australia and West
Africa’s largest underground hard rock mining contractor before expanding
to non-executive director roles with ASX listed and private mining
companies.
Interest in FMS Shares and
Options at the date of this report
Nil
Special responsibilities
Chair of Nominations and Remuneration Committee and member of Audit
and Risk Committee.
Directorships held in other ASX
listed entities in the last three
years
The Hon. Cheryl Edwardes,
AM
Qualifications
Experience
Interest in FMS Shares and
Options at the date of this report
Special responsibilities
Directorships held in other ASX
listed entities in the last three
years
Previously a Non-Executive Director of Coolgardie Minerals Limited (July
2017 to May 2020) and IGO Limited (October 2015 to October 2020).
Independent Non-Executive Deputy Chair
LLM, B. Juris, BA
A lawyer by training, Mrs Edwardes is former Minister in the Western
Australian Legislative Assembly with extensive experience and knowledge
of WA’s legal and regulatory framework relating to mining projects,
environmental, native title and heritage and land access. Mrs Edwardes
was appointed in August 2017 as a part-time member of the Foreign
Investment Review Board for a five-year period. Ms Edwardes assists the
clients of FTI Consulting within a range of complex statutory approvals
required for resources and infrastructure projects. She also chairs the Port
Hedland International Airport.
20,646 fully paid ordinary shares.
Member of Audit and Risk Committee and Nominations and Remuneration
Committee.
Non-Executive Director of Vimy Resources Limited (May 2014 to date) and
Nuheara Limited (January 2020 to date).
Previously a Non-Executive Director of CropLogic Limited (March 2018 to
February 2019) and AusCann Group Holding Limited (May 2016 to January
2020).
6
Michael Wolley
Qualifications
Experience
Flinders Mines Limited
Directors’ Report
Non-Executive Director
BE (Chemical and Materials, 1st Class Hons), MMan
Mr Wolley had a 15-year career with Mobil Oil Australia Pty Ltd in a range
of roles including engineering, operations, strategic planning and business
development. Mr Wolley was previously Chief Operating Officer for Lynas
Corporation and is currently Vice President Minerals for the Todd
Corporation. Mr Wolley is a nominee Director of the Company’s largest
shareholder, TIO (NZ) Limited.
Interest in FMS Shares and
Options at the date of this report
Nil
Special responsibilities
Member of Nominations and Remuneration Committee and Audit and Risk
Committee.
Directorships held in other ASX
listed entities in the last three
years
Previously a Non-Executive Director of Wolf Minerals Limited (June 2013 to
October 2018).
Evan Davies
Qualifications
Experience
Non-Executive Director
BTP, MSc, MPhil
Mr Davies has previously held leadership roles in Rainbow Corporation and
Brierley Properties Group (New Zealand). Mr Davies was Managing
Director of Sky City Entertainment Group (New Zealand) from 1996 to 2007,
which he grew from a single site to have business operations through New
Zealand and Australia.
Mr Davies has been Managing Director of Todd Properties Group since
2008. Mr Davies is a nominee Director of the Company’s largest
shareholder, TIO (NZ) Limited
Interest in FMS Shares and
Options at the date of this report
Nil
Special responsibilities
Member of Nominations and Remuneration Committee and Audit and Risk
Committee.
Directorships held in other ASX
listed entities in the last three
years
Nil
James Gurry
Qualifications
Experience
Interest in FMS Shares and
Options at the date of this report
Special responsibilities
Independent Non-Executive Director
B.Com (Hons), CA, GAICD
Mr Gurry is a leading equity analyst with extensive research experience in
the iron ore sector. His most recent role was as Director – Corporate &
Investment Bank, and Head of Natural Resources Equity Research with
Deutsche Bank Equities Australia, and previous roles have included equity
research with Credit Suisse Equities in both Sydney and London where he
was Head of Mining Company Research. He started his career in the
Transaction Advisory Services Division of Ernst & Young, Melbourne
45,493 fully paid ordinary shares.
Chair of Audit and Risk Committee and member of Nominations and
Remuneration Committee.
Directorships held in other ASX
listed entities in the last three
years
Nil
7
Amy Jiang
Qualifications
Experience
Flinders Mines Limited
Directors’ Report
Non-Executive Director
B.Arts, GAICD and GIA (Affiliated)
Ms Jiang has more than 13 years’ experience in management and corporate
governance within the mining and resources sector.
Ms Jiang is currently company secretary and executive manager and
nominee director of OCJ Investment (Australia) Pty Ltd, the second largest
shareholder of Flinders Mines Limited.
Ms Jiang is a member and graduate of the Australia Institute of Company
Directors and an affiliate member of the Governance Institute of Australia.
She holds a Bachelor of Arts (Management and Performance Studies) from
The University of Sydney and is currently in her final year of a Juris Doctor
at The University of Sydney. In addition, Ms Jiang is currently completing a
Graduate Diploma of Applied Corporate Governance and Risk Management
at the Governance Institute of Australia.
Interest in FMS Shares and
Options at the date of this report
Nil
Special responsibilities
Member of Audit and Risk Committee and Nominations and Remuneration
Committee.
Directorships held in other ASX
listed entities in the last three
years
Nil
Shannon Coates
Joint Company Secretary
Qualifications
Experience
LLB, BA(Jur), GAICD, GIA
Ms Coates is a non-executive director and Chartered Secretary. She is a
qualified lawyer and has over 20 years’ experience in corporate law and
compliance. Ms Coates is currently Managing Director of Evolution
Corporate Services, a boutique corporate advisory firm providing company
secretarial and corporate advisory support
to boards and various
committees across a variety of industries including resources, oil and gas,
manufacturing and technology.
Sarah Wilson
Joint Company Secretary
Experience
Meeting of Directors
Ms Wilson is a Corporate Advisor with Evolution Corporate Services Pty Ltd
and has over 10 years’ experience in company secretarial, corporate
advisory and corporate governance roles, which have included the provision
of company secretarial services to a number of resource companies. Ms
Wilson holds a Certificate in Governance Practice and is a Certified Member
of the Governance Institute of Australia.
The numbers of meetings of the Company's Board of Directors and of each Board committee held during the year
ended 30 June 2021, and the numbers of meetings attended by each Director were:
N Warburton
C Edwardes
M Wolley
E Davies
J Gurry
A Jiang1
Board
Audit & Risk
Committee
Nominations &
Remuneration
Committee
A
17
17
17
17
17
4
B
16
16
17
15
17
4
A
2
2
2
2
2
0
B
2
2
2
1
2
12
A
1
1
1
1
1
1
B
1
1
1
1
1
1
A = Number of meetings held during the time the Director held office or was a member of the committee during the
year.
B = Number of meetings attended.
1 Miss Jiang was appointed on 5 March 2021.
2 Miss Jiang attended one Audit & Risk Committee meeting by invitation, prior to her appointment to the Committee.
8
Flinders Mines Limited
Directors’ Report
Principal Activities
The Group's principal continuing activities during the year consisted of governance and oversight of the Pilbara
Iron Ore Project (PIOP) in Western Australia which is the subject of a Farm-In Agreement with BBI Group Pty Ltd
(BBIG) and discussions commenced with BBIG in relation to a potential ownership restructuring opportunity of the
infrastructure associated with the PIOP integrated project.
Mineral exploration also continued on the Group’s Canegrass Project in Western Australia.
There were no significant changes in the nature of the activities of the Group during the year other than as stated
above.
Dividends
No dividends have been declared or paid during the financial year (2020: $nil).
Operating Results and Financial Position
The net result of operations for the financial year was a loss of $3.482 million (2020: loss of $8.086 million).
Review of Operations
Corporate
Director and Management Changes
On 5 March 2021, Ms Amy Jiang was appointed as a Non-executive Director of the Company as a nominee of the
Company’s second largest shareholder, OCJ Investment (Australia) Pty Ltd (OCJ). Ms Jiang is Company
Secretary and Executive Manager of OCJ.
PIOP Farm-In Transaction
On 4 September 2020, the Company announced that all conditions precedent to the Farm-In Agreement with BBIG
had been completed and that BBIG would be able to continue advancing the feasibility studies for the development
of the Company’s PIOP and perform its other obligations under the Farm-IN Agreement for its initial 10% voting
interest in the incorporated joint venture vehicle, PIOP Mine Co NL. The Company retains 100% economic
ownership of PIOP Mine Co NL until a final investment decision is made under the Farm-In Agreement.
Following completion of the Farm-In Agreement, BBIH Pty Limited (BBIH), a wholly owned subsidiary of BBIG, was
appointed Manager of the PIOP.
The Company’s independent Directors remain as Directors of PIOP Mine Co NL along with a nominee from BBIG.
NBIO Proposal from BBIG
On 14 December 2020, the Company announced that it had received a non-binding indicative offer (NBIO) from
BBIG in relation to a potential ownership restructuring opportunity of the infrastructure associated with the
Company’s PIOP.
BBIG approached the Company to commence a discussion about a potential transaction that would result in the
Group retaining 100% ownership of the PIOP as well as 100% of BBIG’s port and rail infrastructure assets. BBIG
has proposed that the development of the BBIG infrastructure and the PIOP mine as an integrated project within
one corporate group would better facilitate financing of the project development.
On 15 January 2021, the Company announced that it had entered into a Funding Agreement with BBIG, whereby
BBIG had agreed to provide funding support of up to $1.0 million to the Company for third party costs incurred by
the Company in progressing discussions with BBIG on the NBIO.
The funding is only repayable if an agreement is executed by 31 December 2021 and subsequently completed,
with payment due on the latter of the completion date and 31 December 2021.
On 9 June 2021, the Company announced that an advance to the predicted shortfall amount under the Farm-In
Agreement had been agreed with BBIG, resulting in the Company receiving $2.0 million. Under the terms of the
Farm-In Agreement, BBIG must spend $15.0 million each year and if those funds are not spent, it must contribute
the difference to the Company.
In September 2021, the Company received notification from BBIG that there was a further shortfall of $5.486 million
to the minimum annual expenditure of $15.0 million required under the Farm-In Agreement. Under the terms of
the Farm-In Agreement, this $5.486 million is to be remitted to Flinders, with the expectation the funds will be
received in November 2021.
The Company also held initial preliminary discussions with BBIG on a staged development approach that would
accommodate a potential trucking operation prior to rail using the existing Farm-In Agreement framework.
Share Consolidation
On 27 November 2020, the Company completed a 1 for 25 share consolidation as approved by shareholders at its
Annual General Meeting on 20 November 2020.
9
Flinders Mines Limited
Directors’ Report
Pilbara Iron Ore Project, Western Australia
BBIH, as Manager of the Company’s PIOP, continued to progress the development of the PIOP integrated project
pursuant to the Farm-In Agreement, that was completed with BBIG in the September 2020 quarter.
BBIH carried out a range of activities associated with the advancement of the PIOP Feasibility Study including:
•
•
•
The first phase of Blacksmith rehabilitation (capping of existing open holes) was completed. Water dipping
and monitoring activities were also conducted to capture essential monitoring data. Site familiarisation
activities were undertaken by members of the team to gain a better understanding of the PIOP areas
including mining, heritage and environmental risks.
The Department of Mines Industry Regulation and Safety (DMIRS) have provided final approval for the
consolidated programme of works (POW) that agglomerates some 20 pre-existing POWs with outstanding
rehabilitation obligations, all relating to the PIOP tenements.
The award of contracts and safe mobilisation of contractors for the Blacksmith camp upgrade and
rehabilitation programme will be a major focus area for July and August.
Key activities planned for next period include:
•
The Blacksmith rehabilitation programme is anticipated to commence in mid-August upon completion of
camp upgrade works. A scope of work has been issued to civil contracting companies with a request for
quotation. Civil contractors will be engaged to execute this work with selection and prequalification
anticipated for late July.
• Review and approval of the Camp and Rehabilitation contractors Health, Safety and Environmental
Management Systems (HSEMS) will commence pending issue of all signed contracts and PO’s.
Contractors are only permitted to mobilise once compliance to the BBI HSEMS has been achieved.
Canegrass, Western Australia
The Company engaged CSA Global Pty Ltd to design and execute an exploration programme that included both
soil sampling and a drilling programme.
Soil sampling programme
A soil geochemical sampling programme was completed within E58/520, E58/521 and E58/522, which included
several rock samples of potentially gold bearing quarts float and selected soil samples and rock samples within
E58/236 and E58/282. The soil sampling within E58/520 and E58/522 targeted potentially gold bearing structural
trends south of the Honeypot gold prospect. The soil sampling within E58/521 was designed to test for possible
platinum group metals across the interpreted contact between the upper and middle units of the Windimurra
Igneous Complex.
Drill programme
Ten RCP drill holes over E58/232 and E58/282 were completed, which were designed to infill and test for shallower
higher-grade vanadium-titanium magnetite (VTM) zones within the Mineral Resource VTM mineralisation. Results
of the programme were announced to the ASX on 21 January 2021.
COVID-19 Pandemic Response
In March 2020, the COVID-19 outbreak was declared a pandemic by the World Health Organisation. At the date of
this report, the pandemic, together with the various Government measures so far introduced, have not significantly
affected the Company itself, as outlined below.
The Company has implemented controls as necessary to protect the health and safety of its workforce and their
families while ensuring a safe environment to allow activities to continue.
The Company’s COVID-19 response protocols reinforce and operate concurrently with public health advice to
include:
•
•
•
•
•
•
social distancing protocols;
suspension of large indoor gatherings;
cancellation of all non-essential travel;
flexible and remote working plans for employees;
self-isolation following international travel, development of symptoms, or interaction with a confirmed case
of COVID; and
increased focus on cleaning and sanitation.
No adjustments have been made to the Group’s result as at 30 June 2021 for the impacts of COVID-19. However,
the scale and duration of possible future Government measures, and their impact on the Company’s activities,
necessarily remains uncertain.
Likely Developments and Business Strategies
The likely developments of the Group and the expected results of those developments are as follows:
• Continuation of the BBIH managed feasibility study on the PIOP; and
• Continue active exploration activity at the Group’s Canegrass tenements in Western Australia.
10
Flinders Mines Limited
Directors’ Report
Events Subsequent to the End of the Reporting Period
In September 2021, the Company received notification from BBIG that there was a further shortfall to the advance
of $2.000 million received in June 2021, of $5.486 million to the minimum annual expenditure of $15.0 million
required under the Farm-In Agreement. Under the terms of the Farm-In Agreement, this $5.486 million is to be
remitted to Flinders, with the expectation the funds will be received in November 2021.
No other matter or circumstance has arisen since 30 June 2021 that has significantly affected, or may significantly
affect the Group’s operations, the results of those operations, or the Group’s state of affairs in future financial years.
Environmental Regulation
The Group's operations are subject to significant environmental regulation under both Commonwealth and relevant
State legislation in relation to the discharge of hazardous waste and materials arising from any exploration or mining
activities and development conducted by the Group on any of its tenements. Subject to ongoing rehabilitation, the
Group believes it has complied with all environmental obligations.
Heritage and Community Relations
The Company recognises the importance of establishing relationships with the Traditional Owners that are based
on trust and mutual advantage and are respectful of the needs and concerns of the communities located within the
regions in which it operates. The Company has agreements in place with the Traditional Owners and is committed
to building strong relationships by:
Improving cross-cultural awareness through training and education;
• Being open and transparent in its communications;
•
• Developing community relations management procedures that include business alliances;
• Being sensitive to the values and heritage issues of the local communities; and
• Being a good neighbour.
Audited Remuneration Report
Remuneration Report
This report sets out the remuneration arrangements in place for Directors and senior management of the Company
and the Group in accordance with the requirements of the Corporations Act 2001 and its regulations. For the
purposes of the report, Key Management Personnel (KMP) of the Group are defined as those persons having
authority and responsibility for planning, directing and controlling the major activities of the Company and the
Group, directly or indirectly, including any Director (whether Executive or otherwise) of the Company.
Key Management Personnel Covered in this Report
The names and positions of the KMP of the Company and the Group during the financial year were:
Neil Warburton
The Hon. Cheryl Edwardes AM
Michael Wolley
Evan Davies
James Gurry
Amy Jiang
Andrew Whitehead
Remuneration Governance
Independent Non-Executive Chair
Independent Non-Executive Deputy Chair
Non-Executive Director
Non-Executive Director
Independent Non-Executive Director
Non-Executive Director (appointed 5 March 2021)
General Manager
The Nominations and Remuneration Committee is a sub-committee of the Board. It is primarily responsible for
making recommendations and assisting the Board to:
•
•
ensure that it is of an effective composition, size and commitment to adequately discharge its
responsibilities and duties;
independently ensure that the Company adopts and complies with remuneration policies that attract,
retain and motivate high calibre executives and Directors to encourage enhanced performance by the
Company; and
• motivate Directors and management to pursue the long-term growth and success of the Company within
an appropriate framework.
Use of Remuneration Consultants
No remuneration consultants were engaged in the year ending 30 June 2021.
Executive Remuneration Policy and Framework
The Group's policy for determining the nature and amounts of emoluments of senior executives is as follows:
In determining executive remuneration, the Board aims to ensure that remuneration practices are:
•
•
competitive and reasonable, enabling the Company to attract and retain key talent; and
aligned to the Company's strategic and business objectives and the creation of shareholder value.
The remuneration of the Company’s General Manager, Dr Whitehead, is determined by the Directors as part of the
terms and conditions of his employment which are subject to review from time to time. The employment conditions
for Dr Whitehead’s role were formalised in a Contractor Agreement.
11
Flinders Mines Limited
Directors’ Report
Dr Whitehead’s term commenced on 17 June 2020 and the Contractors Agreement details the consulting fee per
day, a maximum number of days per week during which the services are to be performed, term of the agreement
and notice period.
Terms of Employment
Dr Whitehead’s terms of employment as General Manager was formalised in a Contractor Agreement and
contained the following material terms:
Name
A Whitehead
Compensation
$6,000 per week (4 days
per week)
Notice Period and Term
Term to 16 September 2022, with a further 3 month
extension at the election of the Company.
Notice period of 30 days.
Non-Executive Directors Remuneration Policy
Non-Executive Directors receive a Directors fee and are eligible for fees for extra exertion and consulting services,
at the discretion of the full Board. Fees provided to Non-Executive Directors are inclusive of superannuation and
salary sacrifice, if applicable.
Fees are reviewed annually by the Board's Nominations and Remuneration Committee considering comparable
roles and market data provided by an independent remuneration adviser.
Non-Executive Directors fees are determined within an aggregate Directors' fee pool limit, which is periodically
recommended for approval by shareholders. The maximum currently stands at $750,000 per rolling 12-month
period and was approved by shareholders at the Annual General Meeting on 6 November 2009. The Board may
apportion any amount up to this maximum amount amongst the Non-Executive Directors as it determines. Directors
are also entitled to be paid reasonable travel, accommodation and other expenses incurred in performing their
duties as Directors.
Non-Executive Directors do not participate in schemes designed for remuneration of executives, nor do they receive
options or bonus payments and are not provided with retirement benefits other than salary sacrifice and statutory
superannuation.
For the year ended 30 June 2021, the Board resolved to reduce the Director fees paid to the Non-Executive
Chairperson from $188,000 to $100,000 per annum and Non-Executive Directors from $119,000 to $70,000 per
annum.
During the year ended 30 June 2020, Messrs Warburton, Gurry and Ms Edwardes and Ms Coates were paid
additional fees as detailed in the table below in relation to the considerable additional time committed by the
independent Non-Executive Directors during the PIOP infrastructure review process, BBIG transaction negotiations
and associated meetings.
Details of Remuneration
The following tables show details of the remuneration received by the Directors and KMP of the Group for the
current and previous financial year.
2021
Non-Executive Directors
N Warburton 3
C Edwardes 3
M Wolley 1
E Davies 1
J Gurry 3
A Jiang 2
Subtotal Non-Executive Directors
Other KMP
A Whitehead
Total
Salary & Service
Contract
$
107,500
77,563
70,000
70,000
70,745
20,653
416,461
247,500
663,961
Superannuation
Total
$
-
7,437
-
-
6,755
1,962
16,154
-
16,154
$
107,500
85,000
70,000
70,000
77,500
22,615
432,615
247,500
680,115
1 Messrs Wolley and Davies Non-Executive Director Fees are paid directly to the Company’s major shareholder,
TIO.
2 Ms Jiang was appointed on 5 March 2021.
3 The Independent Non-Executive Directors are remunerated by the Company in relation to their non-executive
directorships of PIOP Mine Co NL, a wholly owned subsidiary of the Company. As Chair of PIOP Mine Co NL,
Ms Edwardes’ remuneration is $5,000 per meeting and Messrs Warburton and Gurry is $2,500 per meeting.
There has been 3 PIOP Mine Co NL meetings held in the year ending 30 June 2021.
12
2020
Salary &
Service
Contract
Additional
Fees 2
188,000
108,676
119,000
119,000
86,523
43,331
664,530
$
Non-Executive Directors
N Warburton
C Edwardes
M Wolley 1
E Davies 1
J Gurry
S Coates 4
Subtotal Non-
Executive
Directors
Other KMP
D McAdam
A Whitehead 5
Subtotal Other
KMP
Total
942,500
6,000
948,500
1,613,030
Flinders Mines Limited
Directors’ Report
Success
Fee 3
Super-
annuation
Total
$
-
-
-
-
-
-
-
$
$
-
10,324
-
-
8,220
4,116
22,660
233,000
229,000
119,000
119,000
124,743
84,447
909,190
PIOP
Infrastructure
Committee
Chair Fee
$
-
50,000
-
-
-
-
50,000
$
45,000
60,000
-
-
30,000
37,000
172,000
-
-
-
-
-
-
200,000
-
200,000
-
-
-
1,142,500
6,000
1,148,500
172,000
50,000
200,000
22,660
2,057,690
1 Messrs Wolley and Davies Non-Executive Director Fees are paid directly to the Company’s major shareholder,
TIO.
2 These additional fees are noted in the Non-Executive Director Remuneration Policy section and are excluded
from the maximum aggregate Director fee pool of $750,000 per rolling 12-months.
3 Mr McAdam was paid a success fee as a result of the successful outcome of the General Meeting held in March
2020 as noted in the Executive Remuneration Policy and Framework section.
4 Ms Coates resigned on 25 November 2019.
5 Dr Whitehead was appointed on 17 June 2020.
No remuneration
exercised/lapsed during the years ended 30 June 2021.
linked
is
to performance and no share-based payments were received/granted or
Share holdings
Name
N Warburton
C Edwardes
M Wolley
E Davies
J Gurry
A Jiang
A Whitehead
Name
N Warburton
C Edwardes
M Wolley
E Davies
J Gurry
S Coates
D McAdam
A Whitehead
Held at 1 July
2020
-
20,646
-
-
40,493
-
-
Held at 1 July
2019
-
-
-
-
-
-
-
-
Granted
as
compensation
-
-
-
-
-
-
-
Granted
as
compensation
-
-
-
-
-
-
-
-
On exercise of
options/rights
-
-
-
-
-
-
-
On exercise of
options/rights
-
-
-
-
-
-
-
-
Other Changes Held at 30 June
2021
-
-
-
-
5,000
-
-
-
20,646
-
-
45,493
-
-
Other Changes Held at 30 June
2020
-
20,646
-
-
40,493
-
-
-
-
20,646
-
-
40,493
-
-
-
On 27 November 2020, the Company completed a 1 for 25 share consolidation as approved by shareholders at its
Annual General Meeting on 20 November 2020. The holdings in the above table have been adjusted to reflect
this.
Other changes refer to sales/purchases on market and participation in entitlement offers.
There were no shares granted during the reporting period as compensation (2020: nil).
13
Flinders Mines Limited
Directors’ Report
Other Transactions with KMP and their Related Parties
During the year ended 30 June 2021, the Company paid Director fees to TIO, its major shareholder, for Director
services provided by Messrs Wolley and Davies. The total value of these services was $140,000 (2020:
$238,000).
During the year ended 30 June 2021, the Company received a $1m loan from BBI Group Pty Ltd (BBIG), a
subsidiary of the Company’s major shareholder, to provide support for third party costs incurred by the Company
in progressing discussions with BBIG in relation to the potential ownership restructuring opportunity of the
infrastructure associated with the Group’s Pilbara Iron Ore Project. The funding is only repayable if a transactions
results from the discussions and subsequently completes on the later of the completion date and 31 December
2021. As at 30 June 2021, these discussions are continuing.
During the year ended 30 June 2021, the Company received an advance of $2.0 million in relation to the expected
shortfall to the minimum annual expenditure of $15.0 million required under the Farm-In Agreement with BBIG.
As at 30 June 2021, the Company has an unsecured $3.000 million loan with PIO Mines Pty Ltd, a subsidiary of
the Company’s major shareholder TIO NZ Limited, repayable on 30 June 2022. Interest is capitalised annually at
a rate of BBSW plus a 2% margin. The value of interest capitalised at 30 June 2021 is $187,911 (2020: $122,409).
The above transactions are all entered into at arm’s length terms.
Voting and comments made at the Company’s 2020 Annual General Meeting
At the Company’s 2020 Annual General Meeting (AGM), there were no comments or queries on the remuneration
report. However, 29.62% of shareholders voted against the remuneration report resulting in a strike. At the 2019
AGM, 31.89% of votes were cast against the remuneration report, resulting in a second strike. At this
Shareholder’s Meeting, the Company included a contingent resolution to hold another general meeting within 90
days (Spill Meeting) if a second strike occurred. 64.45% of Shareholders voted against a Spill Meeting. In the
year ending 30 June 2021, the Board resolved to reduce the fees paid to the Non-Executive Chairperson from
$188,000 to $100,000 per annum and Non-Executive Directors from $119,000 to $70,000 per annum.
End of the Audited Remuneration Repot.
Options Granted over Unissued Shares
There are no unissued ordinary shares of Flinders Mines Limited under option at the date of this report.
Non- Audit Services
No non-audit services were provided by the Company’s auditor, KPMG.
Auditor’s independence declaration
A copy of the auditor's independence declaration as required under section 307C of the Corporations Act 2001 is
set out on the following page.
Indemnification of Auditors
The Company has not indemnified its auditors, KPMG.
Indemnification and Insurance of Officers
The Company has taken out an insurance policy insuring Directors and Officers of the Company against any liability
arising from a claim bought by a third party against the Company or its current or former Directors or Officers and
against liabilities for costs and expense incurred by them in defending any legal proceedings arising out of their
conduct while acting in their capacity as a Director or Officer of the Company, other than conduct involving a wilful
breach of duty in relation to the Company.
The Company indemnifies each of the Directors and Officers of the Company. Under its Constitution, the
Company will indemnify those Directors or Officers against any claim or for any expenses or costs which may arise
as a result of work performed in their respective capacities as Directors or Officers of the Company or any related
entities.
Rounding
The amounts contained in the financial report have been rounded to the nearest $1,000 (unless otherwise stated)
pursuant to the option available to the Company under ASIC Legislative Instrument 2016/191. The Company is
an entity to which this class order applies.
This report is made in accordance with a resolution of Directors.
Neil Warburton
Independent Non-Executive Chair
Perth, Western Australia
30 September 2021
14
Lead Auditor’s Independence Declaration under
Section 307C of the Corporations Act 2001
To the Directors of Flinders Mines Limited
I declare that, to the best of my knowledge and belief, in relation to the audit of Flinders Mines Limited
for the financial year ended 30 June 2021 there have been:
i.
ii.
no contraventions of the auditor independence requirements as set out in the
Corporations Act 2001 in relation to the audit; and
no contraventions of any applicable code of professional conduct in relation to the audit.
KPMG
KPM_INI_01
R Gambitta
Partner
Perth
30 September 2021
PAR_SIG_01
PAR_NAM_01
PAR_POS_01
PAR_DAT_01
PAR_CIT_01
KPMG, an Australian partnership and a member firm of the KPMG global organisation of independent member firms affiliated
with KPMG International Limited, a private English company limited by guarantee. All rights reserved. The KPMG name and
logo are trademarks used under license by the independent member firms of the KPMG global organisation. Liability limited by
a scheme approved under Professional Standards Legislation
Flinders Mines Limited
Consolidated Statement of Profit or Loss and Other Comprehensive Income
For the year ended 30 June 2021
Finance income
Other income
Administrative & other expenses
Finance costs
Loss before income tax
Income tax expense
Loss for the year
Items that may be reclassified to profit or loss:
Other comprehensive income
Other comprehensive loss for the year
attributable to owners of the Company
Loss per share attributable to ordinary
equity holders:
Basic and diluted loss per share
Notes
5
5
5
5
6
7
2021
$’000
9
76
(3,501)
(66)
(3,482)
-
(3,482)
-
(3,482)
Cents
(2.062)
The above statement should be read in conjunction with the accompanying notes.
2020
$’000
17
29
(7,873)
(211)
(8,038)
(48)
(8,086)
-
(8,086)
Cents
(4.932)
16
Current assets
Cash and cash equivalents
Restricted cash
Trade and other receivables
Other current assets
Total current assets
Non-current assets
Exploration and evaluation
Total non-current assets
Total assets
Current liabilities
Trade and other payables
Loans and borrowings
Provisions
Total current liabilities
Non-current liabilities
Loans and borrowings
Provisions
Total non-current liabilities
Total liabilities
Net assets
Equity
Contributed equity
PIOP Class B Reserve
Accumulated losses
Total equity
Flinders Mines Limited
Consolidated Statement of Financial Position
As at 30 June 2021
Notes
8
9
10
11
12
13
14
13
14
15
16
2021
$’000
2,938
747
40
7,452
11,177
73,761
73,761
84,938
1,336
3,188
1,553
6,077
-
2,182
2,182
8,259
2020
$’000
4,101
-
47
405
4,553
64,982
64,982
69,535
502
-
85
587
3,122
665
3,787
4,374
76,679
65,161
160,694
15,000
(99,015)
76,679
160,694
-
(95,533)
65,161
The above statement should be read in conjunction with the accompanying notes.
17
Contributed
equity
$’000
147,064
-
-
Balance at 1 July 2019
Loss for the year
Total comprehensive loss for the
year
Transactions with owners in their
capacity as owners:
Contributions of equity, net of costs
Balance as at 30 June 2020
13,630
160,694
Loss for the year
Total comprehensive loss for the
year
Transactions with owners in their
capacity as owners:
Issue of PIOP B Class Shares
Contributions of equity, net of costs
-
-
-
-
Balance as at 30 June 2021
160,694
Flinders Mines Limited
Consolidated Statement of Changes in Equity
For the year ended 30 June 2021
Accumulated
losses
$’000
PIOP Class B
Reserve
$’000
Total equity
$’000
-
-
-
-
-
-
-
(87,447)
(8,086)
(8,086)
59,617
(8,086)
(8,086)
-
(95,533)
(3,482)
(3,482)
13,630
65,161
(3,482)
(3,482)
15,000
-
15,000
-
-
(99,015)
15,000
-
76,679
The above statement should be read in conjunction with the accompanying notes.
18
Flinders Mines Limited
Consolidated Statement of Cash Flows
For the year ended 30 June 2021
Notes
Cash flows from operating activities
Payments to suppliers and employees
Interest expense
Interest received
Net cash outflow from operating activities
8
Cash flows from investing activities
Payments for exploration activities
Net cash outflow from investing activities
Cash flows from financing activities
Proceeds from issues of shares
Transaction costs
Proceeds from issues of PIOP Mine Co NL
Class B Shares
Proceeds from borrowings
Repayment of borrowings
Net cash inflow from financing activities
Net increase (decrease) in cash and cash
equivalents
Cash and cash equivalents at the beginning
of the year
Cash and cash equivalents at the end of
the year 1
8
2021
$’000
(3,701)
-
9
(3,692)
(5,647)
(5,647)
-
-
7,923
1,000
-
8,923
(416)
4,101
3,685
2020
$’000
(7,868)
(120)
17
(7,971)
(3,209)
(3,209)
13,743
(162)
-
7,000
(7,000)
13,581
2,401
1,700
4,101
1This amount includes $0.747 million of cash held by PIOP Mine Co NL which is the incorporated Joint Venture
vehicle under which the Farm-In Agreement with BBI Group Pty Ltd operates. This cash is only available for use
to progress the feasibility study of the Pilbara Iron Ore Project. Refer to Note 9.
The above statement should be read in conjunction with the accompanying notes.
19
Flinders Mines Limited
Notes to the Consolidated Financial Statements
For the year ended 30 June 2021
1
Corporate information
The consolidated financial report of Flinders Mines Limited for the year ended 30 June 2021 was authorised for
issue in accordance with a resolution of the Directors on 30 September 2021. The Board of Directors has the
power to amend the consolidated financial statements after issue.
Flinders Mines Limited (the ‘Company’ or ‘Flinders’) is a for-profit company limited by shares whose shares are
publicly traded on the Australian Securities Exchange. The Company and its subsidiaries were incorporated and
domiciled in Australia. The registered office and principal place of business of the Company is 45 Ventnor Avenue,
West Perth, WA 6005.
The amounts contained in the financial report have been rounded to the nearest $1,000 (unless otherwise stated)
pursuant to the option available to the Company under ASIC Instrument 2016/191. The Company is an entity to
which this Instrument applies.
2
Reporting entity
The Consolidated Financial Statements comprise of the Company and its subsidiaries, (together referred to as the
‘Consolidated Entity’ or the ‘Group’).
3
Basis of preparation
The Consolidated Financial Statements are general purpose financial statements which have been prepared in
accordance with Australian Accounting Standards and Interpretations issued by the Australian Accounting
Standards Board and the Corporations Act 2001. The Consolidated Financial Statements also comply with
International Financial Reporting Standards as issued by the International Accounting Standards Board.
These financial statements have been prepared under the historical cost convention except for certain financial
assets and liabilities which are required to be measured at fair value.
a)
Basis of consolidation
Subsidiaries are all entities over which the Group has control. The Group controls an entity when the Group is
exposed to, or has rights to, variable returns from its involvement with the entity and could affect those returns
through its power to direct the activities of the entity. Subsidiaries are fully consolidated from the date on which
control is transferred to the Group. They are deconsolidated from the date that control ceases.
The acquisition method of accounting is used to account for business combinations by the Group.
Intercompany transactions, balances and unrealised gains on transactions between Group companies are
eliminated. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of
the transferred asset. Accounting policies of subsidiaries have been changed where necessary to ensure
consistency with the policies adopted by the Group.
b)
Goods and services tax (‘GST’)
Revenues, expenses and assets are recognised net of the amount of GST except:
• when the GST incurred on a purchase of goods and services is not recoverable from the taxation authority,
in which case the GST is recognised as part of the cost of acquisition of the asset or as part of the expense
item as applicable; and
receivables and payables, which are stated with the amount of GST included.
•
The net amount of GST recoverable from, or payable to, the taxation authority is included as part of receivables or
payables in the statement of financial position.
Cash flows are included in the statement of cash flows on a net basis and the GST component of cash flows arising
from investing and financing activities, which is recoverable from, or payable to, the taxation authority are classified
as operating cash flows. Commitments and contingencies are disclosed net of the amount of GST recoverable
from, or payable to, the taxation authority.
c)
Comparatives
When required by Accounting Standards, comparative figures have been adjusted to conform to changes in
presentation for the current financial year.
20
Flinders Mines Limited
Notes to the Consolidated Financial Statements
For the year ended 30 June 2021
4
Segment information
Identification of reportable segments
Management has determined the operating segments based on the reports reviewed and used by the Board of
Directors (the chief operating decision maker) that are used to make strategic decisions. The Group is managed
primarily based on geographical area of interest, since the diversification of Group operations inherently has notably
different risk profiles and performance assessment criteria. Operating segments are therefore determined on the
same basis.
Reportable segments disclosed are based on aggregating operating segments where the segments are considered
to have similar economic characteristics and are also similar with respect to the following:
•
•
external regulatory requirements
geographical and geological styles
Operations
The Group has exploration operations in iron ore mineralisation, gold and base metals. The costs associated with
the Pilbara Iron Ore Project are reported on in the Pilbara Iron Ore segment and the costs associated with
Canegrass gold and base metals are reported in the Canegrass segment.
Accounting policies developed
Unless stated otherwise, all amounts reported to the Board of Directors as chief decision maker with respect to
operating segments are determined in accordance with accounting policies that are consistent to those adopted in
the Consolidated Financial Statements of the Group.
2021
Segment result
Capital expenditure
Total segment assets
Total segment liabilities
2020
Segment result
Capital expenditure
Total segment assets
Total segment liabilities
Pilbara Iron Ore
$’000
-
9,243
72,271
3,770
-
2,387
63,028
823
Canegrass
$’000
-
283
2,237
-
-
719
1,954
12
A reconciliation of segment loss to operating loss before income tax is provided as follows:
Total segment loss
Finance income
Other income
Administrative and other expenses
Finance cost
Loss before income tax
Reportable segments' assets are reconciled to total assets as follows:
Segment assets
Unallocated:
Cash and cash equivalents
Trade and other receivables
Other current assets
Total assets
2021
$’000
-
9
76
(3,501)
(66)
(3,482)
2021
$’000
74,508
2,938
40
7,452
84,938
Reportable segments' liabilities are reconciled to total liabilities as follows:
Segment liabilities
Unallocated:
Trade and other payables
Loans and borrowings
Total liabilities
2021
$’000
3,770
1,301
3,188
8,259
Total
$’000
-
9,526
74,508
3,770
-
3,106
64,982
835
2020
$’000
-
17
29
(7,873)
(211)
(8,038)
2020
$’000
64,982
4,101
47
405
69,535
2020
$’000
835
417
3,122
4,374
21
5
Income and expenses
Finance revenue
Interest received
Other income
Other income
Administrative expenses
Compliance
Insurance
Consultants
Administration costs
Salary and Wages (including Director Fees)
Legal costs
Occupancy costs
Other
Finance expense
Interest expense
Bank fees
6
Income tax expense
Flinders Mines Limited
Notes to the Consolidated Financial Statements
30 June 2021
2021
$’000
9
76
(215)
(509)
(1,317)
(125)
(438)
(852)
(30)
(15)
(3,501)
(65)
(1)
(66)
2020
$’000
17
29
(245)
(351)
(4,139)
(389)
(953)
(1,736)
(44)
(16)
(7,873)
(210)
(1)
(211)
The prima facie income tax expense on pre-tax accounting losses from continuing operations reconciles to the
income tax expense in the financial statements as follows:
Loss from continuing operations before income tax
Tax at the Australian tax rate of 30% (2020: 30%)
Tax effect of amounts which are not deductible (taxable) in
calculating taxable income:
Other non-allowable items
Temporary differences not bought to account
Tax expense
2021
$’000
(3,482)
(1,045)
(18)
1,063
-
2020
$’000
(8,038)
(2,412)
(9)
2,469
48
The tax rate used in the above reconciliation is the corporate tax rate of 30% payable by Australian corporate
entities on taxable profits under Australian Tax Law. There has been no change in this tax rate since the previous
reporting period.
The Group has DTAs arising in Australia of $22.940 million (2020: $23.484 million) that are available for offset
against future taxable profits of the companies in which the losses arose.
A deferred tax asset (‘DTA’) on the timing differences has not been recognised as they do not meet the recognition
criteria as outlined in below. A DTA has not been recognised in respect of tax losses either as realisation of the
benefit is not regarded as probable.
The taxation benefits will only be obtained if:
a)
the Consolidated Entity derives future assessable income of a nature and of an amount sufficient to enable
the benefit from the deduction for the loss to be realised;
b)
the Consolidated Entity continues to comply with the conditions for deductibility imposed by law; and
c) no changes in tax legislation adversely affect the consolidated entity in realising the benefits from the
deductions for the loss.
The income tax expense or benefit for the period is the tax payable on the current period’s taxable income based
on the applicable income tax rate for each jurisdiction adjusted by changes in deferred tax assets and liabilities
attributable to temporary differences and to unused tax losses.
22
Flinders Mines Limited
Notes to the Consolidated Financial Statements
30 June 2021
6
Income tax expense (continued)
Deferred income tax is provided in full, using the liability method, on temporary differences arising between the tax
bases of assets and liabilities and their carrying amounts in the consolidated financial statements. However, the
deferred income tax is not accounted for if it arises from initial recognition of an asset or liability in a transaction
other than a business combination that at the time of the transaction affects neither accounting nor taxable profit
nor loss. Deferred income tax is determined using tax rates (and laws) that have been enacted or substantially
enacted by the reporting date and are expected to apply when the related deferred income tax asset is realised or
the deferred income tax liability is settled.
Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it is probable
that future taxable amounts will be available to utilise those temporary differences or losses.
Deferred tax liabilities and assets are not recognised for temporary differences between the carrying amount and
tax bases of investments in controlled entities where the Parent entity is able to control the timing of the reversal
of the temporary differences and it is probable that the differences will not reverse in the foreseeable future.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets
and liabilities and when the deferred tax balances relate to the same taxation authority. Current tax assets and tax
liabilities are offset where the entity has a legally enforceable right to offset and intends either to settle on a net
basis, or to realise the asset and settle the liability simultaneously.
Current and deferred tax balances attributable to amounts recognised directly in equity are also recognised directly
in equity.
Tax Consolidation
The Company and its wholly owned Australian resident entities have formed a tax-consolidated group with effect
from 1 July 2018 and are therefore taxed as a single entity from that date. The head entity within the tax
consolidated group is Flinders Mines Limited. $120.510 million in carry forward revenue tax losses were
transferred into the tax-consolidated group at formation. The Company has assessed that these losses are able
to be carried forward under the Continuity of Ownership test as at 30 June 2021.
The head entity, in conjunction with other members of the tax-consolidated group, have entered into a tax funding
arrangement which sets out the funding obligations of members of the tax-consolidated group in respect of tax
amounts. Any current tax liabilities (or assets) and deferred tax assets arising from unused tax losses of the
subsidiaries are assumed by the head entity and are recognised by the Company as intercompany receivables (or
payables). Contributions to fund the current tax liabilities are payable as per the tax funding arrangement and reflect
the timing of the head entity’s obligation to make payments for tax liabilities to the relevant tax authorities.
The head entity in conjunction with other members of the tax-consolidated group has also entered into a tax sharing
agreement. The tax sharing agreement provides for the determination of the allocation of income tax liabilities
between the entities should the head entity default on its tax payment obligations. No amounts have been
recognised in the financial statements in respect of this agreement as payment of any amounts under the tax
sharing agreement is considered remote.
7
Loss per share
Loss used in calculating basic and diluted loss per share
Loss used in calculating basic and diluted loss per share
from continuing operations
2021
$’000
(3,482)
(3,482)
2021
Number
2020
$’000
(8,086)
(8,086)
2020
Number
Weighted average number of ordinary shares used in the
calculation of basic and diluted loss per share1
168,848,577
163,953,085
1 On 27 November 2020, the Company completed a 1 for 25 share consolidation as approved by shareholders at
its Annual General Meeting on 20 November 2020. The comparative information has been adjusted to reflect this.
Basic earnings/loss per share is determined by dividing net profit or loss after income tax attributable to members
of the Company, excluding any costs of servicing equity other than ordinary shares, by the weighted average
number of ordinary shares outstanding during the financial year.
Diluted earnings per share adjusts the figures used in the determination of basic earnings/loss per share to take
into account the after income tax effect of interest and other financing costs associated with dilutive potential
ordinary shares by the weighted average number of shares assumed to have been issued for no consideration in
relation to potential ordinary shares.
23
8
Cash and cash equivalents
Cash at bank and in hand
Term deposits
Flinders Mines Limited
Notes to the Consolidated Financial Statements
30 June 2021
2021
$’000
2,908
30
2,938
2020
$’000
4,071
30
4,101
Cash and short-term deposits comprise of cash at bank and in hand and short-term deposits with an original
maturity of three months or less.
Reconciliation of loss for the year to net cash flows from operations:
Loss for the year
Other income
Interest expenses (net of paid part)
Income tax expense
Changes in operating assets and liabilities
Decrease in trade and other receivables
(Increase)/decrease in other assets
(Decrease)/increase in trade and other payables
Net cash flows from operating activities
9
Restricted cash
Cash at bank and in hand
2021
$’000
(3,482)
-
65
-
7
(116)
(166)
(3,692)
2021
$’000
747
747
2020
$’000
(8,086)
(29)
90
48
36
(26)
(4)
(7,971)
2020
$’000
-
-
Restricted cash relates to cash held by PIOP Mine Co NL which is the incorporated Joint Venture vehicle under
which the Farm-In Agreement with BBI Group Pty Ltd operates. This cash is only available for use to progress the
feasibility study of the Pilbara Iron Ore Project.
10
Other current assets
Other current assets1
Receivable from BBIG2
2021
$’000
375
7,077
7,452
2020
$’000
405
-
405
1 Other current assets represent the prepaid portion of the Group’s corporate insurances.
2 A receivable has been recognised in relation to the minimum annual expenditure required under the Farm-In
Agreement with BBI Group Pty Ltd of $15.0 million offset by the actual expenditure incurred on the feasibility study
under the Farm-In Agreement.
11
Exploration and evaluation expenditure
Opening balance
Expenditure incurred
Recognition of rehabilitation asset
Exploration expenditure expensed
Closing balance
2021
$’000
64,982
5,754
3,041
(16)
73,761
2020
$’000
61,126
3,122
750
(16)
64,982
The ultimate recoupment of costs carried forward for areas of interest in the exploration and evaluation phases is
dependent upon the successful development and commercial exploitation, or sale, of the respective areas of
interest. For areas which do not meet the criteria of the accounting policy, those amounts are charged to the
Consolidated Statement of Comprehensive Income. During the years ending 30 June 2021 and 30 June 2020
expenditure relating to depreciation and tenement administrative services was written off.
Exploration and evaluation costs related to an area of interest are written off as incurred except they may be carried
forward as an item in the consolidated statement of financial position where the rights of tenure of an area are
current and one of the following conditions is met:
•
•
the costs are expected to be recouped through successful development and exploitation of the area of
interest, or alternatively, by its sale; and
exploration and/or evaluation activities in the area of interest have not at the end of each reporting period
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 are
continuing.
24
Flinders Mines Limited
Notes to the Consolidated Financial Statements
30 June 2021
11
Exploration and evaluation expenditure (continued)
Capitalised costs include costs directly related to exploration and evaluation activities in the relevant area of
interest. General and administrative costs are allocated to an exploration or evaluation asset only to the extent that
those costs can be related directly to operational activities in the area of interest to which the asset relates.
Capitalised exploration and evaluation expenditure is written off where the above conditions are no longer satisfied.
Exploration and evaluation expenditure incurred subsequent to the acquisition in respect of an exploration asset
acquired is accounted for in accordance with the policy outlined above.
All capitalised exploration and evaluation expenditure is assessed for impairment if facts and circumstances
indicate that an impairment may exist. Exploration and evaluation assets are also tested for impairment once
commercial reserves are found, before the assets are transferred to development properties.
12
Trade and other payables
Trade and other payables
Joint Venture payables1
BBIG Advance2
2021
$’000
300
36
1,000
1,386
2020
$’000
502
-
-
502
1 Joint Venture payables relates to amounts owing by PIOP Mine Co NL which is the incorporated Joint Venture
vehicle under which the Farm-In Agreement with BBI Group Pty Ltd operates.
2 Represents funding that BBI Group Pty Ltd (BBIG) provided to support up to $1.0 million of third party costs
incurred by the Company in progressing discussions with BBIG in relation to the potential ownership restructuring
opportunity of the infrastructure associated with the Pilbara Iron Ore Project. The funding is only repayable if an
agreement is executed by 31 December 2021 and subsequently completed, with payment due on the latter of the
completion date and 31 December 2021. At 30 June 2021, these discussions are continuing.
These amounts represent liabilities for goods and services provided to the Group prior to the end of financial year
which are unpaid. The amounts are unsecured, non-interest bearing 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.
13
Loans and Borrowings
Current Loan
Non-current Loan
2021
$’000
3,188
-
3,188
2020
$’000
-
3,122
3,122
The Company has an unsecured loan facility of $3.000 million with PIO Mines Pty Ltd (“Loan Facility”), a subsidiary
of its major shareholder, TIO (NZ) Limited.
The key terms of the Loan Facility are as follows:
Interest on the Loan Facility is capitalised annually at a rate of BBSW plus a 2% margin; and
•
• A repayment date of 30 June 2022.
As at 30 June 2021, the Loan Facility is fully drawn.
Accrued interest at 30 June 2021 has been capitalised to the loan totalling $0.188 million (2020: $0.122 million).
Borrowings are initially recognised at fair value, net of transaction costs incurred. Borrowings are subsequently
measured at amortised cost. Any difference between the proceeds (net of transaction costs) and the redemption
amount is recognised in profit or loss over the period of the borrowings using the effective interest method. Fees
paid on the establishment of loan facilities are recognised as transaction costs of the loan to the extent that it is
probable that some or all of the facility will be drawn down.
Borrowings are classified as current liabilities unless the Group has an unconditional right to defer settlement of
the liability for at least 12 months after the reporting period.
14
Provisions
Current Rehabilitation provision
Non-Current Rehabilitation provision
2021
$’000
1,553
2,182
3,735
2020
$’000
85
665
750
25
14
Provisions (continued)
Opening balance
Expenditure incurred
Changes in estimates
Closing balance
Rehabilitation provision
Flinders Mines Limited
Notes to the Consolidated Financial Statements
30 June 2021
2021
$’000
750
(56)
3,041
3,735
2020
$’000
-
-
750
750
A provision is recognised if, as a result of a past event, the Group has a present legal or constructive obligation
that can be measured reliably, and it is probable that an outflow of economic benefits will be required to settle the
obligation. Provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects
current market assessments of the time value of money and the risks specific to the liability.
A provision is made for the estimated cost of rehabilitation relating to areas disturbed during exploration activities,
such as drill holes, collars and track creation, undertaken at the PIOP up to reporting date but not yet rehabilitated.
Provision has been made in full for all disturbed areas at the reporting date based on current estimates of costs to
rehabilitate such areas, discounted to their present value based on expected future cash flows. The estimated
cost of rehabilitation includes the current cost of re-contouring, topsoiling and revegetation, employing legislative
requirements. Changes in estimates are dealt with on a prospective basis as they arise.
Uncertainty exists as to the amount of rehabilitation obligations which will be incurred due to the impact of changes
in environmental legislation. The provision is recognised as a non-current liability with a corresponding asset
included in property, plant and equipment.
At each reporting date the rehabilitation liability is re-measured in line with changes in discount rates and timing or
amount of costs to be incurred. Changes in the liability relating to rehabilitation of mine infrastructure and
dismantling obligations are added to or deducted from the related asset, other than the unwinding of the discount
which is recognised as finance costs in profit or loss as it occurs.
If the change in liability results in a decrease in the liability that exceeds the carrying amount of the asset, the asset
is written down to nil and the excess is recognised immediately in the income statement. If the change in the
liability results in an addition to the cost of the asset, the recoverability of the new carrying amount is considered.
Where there is an indication that the new carrying amount is not fully recoverable, an impairment test is performed
with the write-down recognised in profit or loss in the period in which it occurs.
15
Contributed equity
Issued share capital is recognised at the fair value of the consideration received by the Company. Any transaction
costs arising on the issue of ordinary shares are recognised, net of tax, directly in equity as a reduction of the share
proceeds received.
Issued shares:
As at 1 July 2019
Shares issued pursuant to a non-renounceable rights issue
Share issue costs
As at 30 June 2020
Number of shares
$’000
3,485,170,081
736,015,800
-
4,221,185,881
147,064
13,743
(113)
160,694
Share consolidation (25:1)
(4,052,337,304)
-
As at 30 June 2021
Ordinary shares
168,848,577
160,694
On 27 November 2020, the Company completed a 1 for 25 share consolidation as approved by shareholders at its
Annual General Meeting on 20 November 2020.
On 28 April 2020, the Company completed a pro-rata non-renounceable entitlement offer at $0.025 cents per share,
raising approximately $8.697 million (before costs).
On 25 June 2020, the Company completed a second pro-rata non-renounceable entitlement offer at $0.013 cents
per share, raising approximately $5.045 million (before costs).
Ordinary shares entitle the holder to participate in dividends and the proceeds on winding up of the Company in
proportion to the number of and amounts paid on the shares held.
On a show of hands every holder of ordinary shares present at a meeting in person or by proxy, is entitled to one
vote, and upon a poll each share is entitled to one vote.
Ordinary shares have no par value and the Company does not have a limited amount of authorised capital.
26
Flinders Mines Limited
Notes to the Consolidated Financial Statements
30 June 2021
15
Contributed equity (continued)
Capital risk management
The Group's debt and capital includes ordinary share capital and debt. There are no externally imposed capital
requirements.
Management effectively manages the Group’s capital by assessing the Group’s financial risks and adjusting its
capital structure in response to changes in these risks and in the market. These responses include the management
of debt levels, distributions to shareholders and share issues.
There have been no changes in the strategy adopted by management to control the capital of the Group since the
prior year. This strategy is to ensure that the Group is able to fund its future activities.
16
Reserves
The PIOP Class B Reserve represents the minimum annual expenditure required under the Farm-In Agreement
with BBI Group Pty Ltd.
17
Financial risk management
The Group's activities expose it to a variety of financial risks: interest rate risk; credit risk and liquidity risk. The
Group's overall risk management program focuses on the unpredictability of financial markets and seeks to
minimise potential adverse effects on the financial performance of the Group.
Risk management is carried out by management under policies approved by the Board of Directors. Management
identifies, evaluates and hedges financial risks in close co-operation with the Group's operating units. The Board
provides principles for overall risk management, as well as policies covering specific areas, such as interest rate
risk, credit risk, and use of financial instruments and investment of excess liquidity where appropriate.
The Group's financial instruments consist mainly of deposits with banks, accounts receivable and payable and
loans to related parties.
Interest rate risk
The Group’s exposure to market risk for changes in interest rates arise from variable interest rate exposure on
cash, fixed deposits and interest-bearing liabilities.
The Group’s policy is to manage its exposure to interest rate risk by holding cash in short-term, fixed rate and
variable rate deposits with reputable high credit quality financial institutions. With interest bearing liabilities,
consideration is also given to the potential renewal of existing positions, alternative financing and the mix of fixed
and variable interest rates.
The following table summarises the financial assets and liabilities of the Group, together with the effective interest
rates as at the balance date.
2021
Cash and
cash
equivalents1
Trade and
other
receivables
Trade and
other payables
Loans and
borrowings
2020
Cash and cash
equivalents
Trade and
other
receivables
Trade and
other payables
Loans and
borrowings
Floating
interest
rate
$’000
3,655
Floating
interest
rate
$’000
4,071
-
-
-
Fixed interest maturing in:
< 1 year
1 – 5 years > 5 years Non-
Average interest rates
Floating
Fixed
$’000
30
$’000
-
$’000
-
-
-
-
-
-
3,188
-
-
-
-
-
-
interest
bearing
$’000
-
40
1,336
%
0.1%
%
0.27%
-
-
-
-
-
2.07%
-
Fixed interest maturing in:
1
–
< 1 year
years
5
> 5 years Non-
$’000
30
$’000
-
$’000
-
-
-
-
-
-
3,122
-
-
-
interest
bearing
$’000
-
47
503
-
Average interest rates
Floating
Fixed
%
0.45%
%
0.91%
-
-
2.54%
-
-
-
27
Flinders Mines Limited
Notes to the Consolidated Financial Statements
30 June 2021
17
Financial risk management (continued)
1 Includes restricted cash of $0.747 million which relates to cash held by PIOP Mine Co NL, which is the
incorporated Joint Venture vehicle under which the Farm-In Agreement with BBI Group Pty Ltd operates. This cash
is only available for use to progress the feasibility study of the Pilbara Iron Ore Project.
As at 30 June 2021, a movement of 1% in interest rates, with all other variables being held constant, results in an
immaterial movement in post-tax loss and equity.
The movements in loss after income tax are due to higher/lower interest costs from fixed and variable rate debt
and cash balances during the relevant year. Reasonably possible movements in interest rates were determined
based on observations of historical movements in the past two years.
The net exposure at balance date is representative of what the Group was and is expecting to be exposed to in the
next twelve months from balance date.
Credit risk
Credit risk arises from the financial assets of the Group, and its exposure to credit risk arises from potential default
of the counter party, with a maximum exposure equal to the carrying amount of the instruments. The Group’s
exposure to credit risk is minimal and results only from its exposure in cash and cash equivalents and trade
receivables.
Liquidity risk
The Group’s objective is to ensure sufficient liquid funds are available to meet the Group’s financial commitments
in a timely and cost-effective manner.
The Group’s treasury function continually reviews the Group’s liquidity position including cash flow forecasts to
determine the forecast liquidity position and maintain appropriate liquidity levels.
2021
Cash and cash equivalents 1
Trade and other receivables
Trade and other payables
Loans and borrowings
Net outflow
2020
Cash and cash equivalents
Trade and other receivables
Trade and other payables
Loans and borrowings
Net outflow
< 1 year
$’000
3,685
40
(1,336)
(3,188)
(799)
4,101
47
(503)
-
3,645
1 – 5 years
$’000
-
-
-
-
-
-
-
-
(3,122)
(3,122)
Total
$’000
3,685
40
(1,336)
(3,188)
(799)
4,101
47
(503)
(3,122)
523
1 Includes restricted cash of $0.747 million which relates to cash held by PIOP Mine Co NL, which is the
incorporated Joint Venture vehicle under which the Farm-In Agreement with BBI Group Pty Ltd operates. This cash
is only available for use to progress the feasibility study of the Pilbara Iron Ore Project.
18
Subsidiaries
The Consolidated Financial Statements include the financial statements of Flinders Mines Limited and the
subsidiaries listed in the following table:
Name of entity
FME Exploration Services Pty Ltd
Flinders Canegrass Pty Ltd
Flinders Diamonds Pty Ltd
Flinders Iron Pty Ltd
PIOP Mine Co NL 1
Country of
incorporation Class of shares
Australia
Australia
Australia
Australia
Australia
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Equity holding %
2020
2021
100
100
100
100
100
100
100
100
100
100
1 PIOP Mine Co NL was incorporated in Australia on 29 October 2019.
28
19
Parent entity information
Current assets
Non-current assets
Current liabilities
Non-current liabilities
Issued capital
Reserves
Accumulated losses
Total equity
Loss for the year
Total comprehensive loss for the year
The Company has no material contingent liabilities.
20
Contingent assets and liabilities
Flinders Mines Limited
Notes to the Consolidated Financial Statements
30 June 2021
2021
$’000
12,500
60,725
4,492
-
160,645
7,077
(98,989)
68,733
(3,473)
(3,473)
2020
$’000
4,523
64,232
503
3,122
160,645
-
(95,564)
65,129
(8,046)
(8,046)
The Group had no contingent assets or liabilities at 30 June 2021 (2020: nil).
21
Remuneration of auditors
During the year the following fees were paid or payable for services provided by the auditor of the parent entity, its
related practices and non-related audit firms:
Auditing and reviewing of financial reports
Taxation advice services
Other assurance services
2021
$
86,439
-
-
86,439
2020
$
65,524
185,861
-
251,385
The auditor of the parent entity for the year ended 30 June 2021 and 30 June 2020 is KPMG.
22
Commitments
Exploration and evaluation expenditure commitments
In order to maintain current rights of tenure to exploration tenements, the Group is required to meet the minimum
expenditure requirements specified by various State and Territory Governments. These obligations are subject to
renegotiation when application for a mining lease is made and at other times. These obligations are not provided
for in this financial report.
The minimum level of exploration commitment expected in the year ending 30 June 2021 for the Group is
approximately $1.345 million (2020: $1.331 million). These obligations are expected to be fulfilled in the normal
course of operations.
23
Related party transactions
Parent entity
The Parent Entity within the Group is Flinders Mines Limited.
Loans to subsidiaries
Loans between entities in the wholly owned Group are non-interest bearing, unsecured and are payable upon
reasonable notice having regard to the financial situation of the entity.
Other transactions with related parties
During the year ended 30 June 2021, the Company paid Director fees to TIO, its major shareholder, for Director
services provided by Messrs Wolley and Davies. The total value of these services was $140,000 (2020:
$238,000).
During the year ended 30 June 2021, the Company received a $1m loan from BBI Group Pty Ltd (BBIG), a
subsidiary of the Company’s major shareholder, to provide support for third party costs incurred by the Company
in progressing discussions with BBIG in relation to the potential ownership restructuring opportunity of the
infrastructure associated with the Group’s Pilbara Iron Ore Project. The funding is only repayable if a transactions
results from the discussions and subsequently completes on the later of the completion date and 31 December
2021. As at 30 June 2021, these discussions are continuing.
During the year ended 30 June 2021, the Company received an advance of $2.0 million in relation to the expected
shortfall to the minimum annual expenditure of $15.0 million required under the Farm-In Agreement with BBIG.
As at 30 June 2021, the Company has an unsecured $3.000 million loan with PIO, repayable on 30 June 2022.
Interest is capitalised annually at a rate of BBSW plus a 2% margin. The value of interest capitalised at 30 June
2021 is $187,911 (2020: $122,409).
29
Flinders Mines Limited
Notes to the Consolidated Financial Statements
30 June 2021
23
Related party transactions (continued)
The above transactions are all entered into at arm’s length terms.
24
Key management personnel disclosures
Details of key management personnel
The names and positions of the KMP of the Company and the Group during the financial year were:
Neil Warburton
Cheryl Edwardes
Michael Wolley
Evan Davies
James Gurry
Amy Jiang 1
Andrew Whitehead
Independent Non-Executive Chair
Independent Non-Executive Deputy Chair
Non-Executive Director
Non-Executive Director
Independent Non-Executive Director
Non-Executive Director
General Manager
1 Ms Jiang was appointed on 5 March 2021.
Compensation of key management personnel
Short-term employee benefits
Post-employment benefits
2021
$
663,961
16,154
680,115
2020
$
2,035,030
22,660
2,057,690
25
Events occurring after the reporting period
In September 2021, the Company received notification from BBIG that there was a further shortfall to the advance
of $2.000 million received in June 2021, of $5.486 million to the minimum annual expenditure of $15.0 million
required under the Farm-In Agreement. Under the terms of the Farm-In Agreement, this $5.486 million is to be
remitted to Flinders, with the expectation the funds will be received in November 2021.
No other matter or circumstance has arisen since 30 June 2021 that has significantly affected, or may significantly
affect the Group’s operations, the results of those operations, or the Group’s state of affairs in future financial years.
26
Critical accounting estimates and assumptions
The preparation of the consolidated financial statements requires management to make estimates and
assumptions. These estimates and assumptions are continually evaluated and are based on historical experience
and other factors, including expectations of future events that may have a financial impact on the Group and that
are believed to be reasonable under the circumstances.
The Group makes estimates and assumptions concerning the future. The resulting accounting estimates will, by
definition, seldom equal the related actual results. The estimates and assumptions that have a significant risk of
causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are
discussed below:
Exploration and evaluation
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 area of interest 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 reserves and resources, future
technological changes which could impact the cost of mining, future legal changes (including changes to
environmental obligations) and changes to commodity prices.
To the extent that capitalised exploration and evaluation expenditure is determined not to be recoverable in the
future, this will reduce profits and net assets in the period in which this determination is made.
In addition, exploration and evaluation expenditure is capitalised if rights to tenure of the area of interest are current
and activities in the area of interest have not yet reached a stage which permits a reasonable assessment of the
existence or otherwise of economically recoverable reserves. To the extent that is determined in the future that this
capitalised expenditure should be written off, this will reduce profits and net assets in the period in which this
determination is made.
Rehabilitation
The Group assesses rehabilitation liabilities annually. The provision recognised is based on an assessment of the
estimated cost of closure and reclamation of the areas using internal information concerning environmental issues
in the exploration area, together with input from various environmental consultants, discounted to present value.
Significant estimation is required in determining the provision for site rehabilitation as there are many factors that
may affect the timing and ultimate cost to rehabilitate sites where mining and/or exploration activities have
previously taken place. These factors include future development/exploration activity, changes in the cost of goods
and services required for restoration activity and changes to the legal and regulatory framework. These factors may
result in future actual expenditure differing from the amounts currently provided.
30
Flinders Mines Limited
Notes to the Consolidated Financial Statements
30 June 2021
27
Changes in accounting policy
In the year ended 30 June 2021, the directors have reviewed all the new and revised Standards and Interpretations
issued by the AASB that are relevant to the Company and effective for the current annual reporting period.
As a result of this review, the directors have determined that there is no material impact of the new and revised
Standards and Interpretations on the Company and, therefore, no material change is necessary to Group
accounting policies.
28
New accounting standards and interpretations
Australian Accounting Standards and Interpretations that have recently been issued or amended but are not yet
effective and have not been adopted by the Group for the period ended 30 June 2021 with relevant standards and
interpretations outlined below.
a)
AASB 2020-3 Amendments to Australian Accounting Standards – Annual Improvements 2018-2020 and
Other Amendments (effective 1 July 2022)
The Group has considered the impact on its Consolidated Financial Statements and assessed that the effect of the
new amendment will be minimal.
b)
Classification of Liabilities as Current or Non-Current (effective 1 January 2023)
The Group has considered the impact on its Consolidated Financial Statements and assessed that the effect of the
amendment will be minimal.
c)
Disclosure of Accounting Policies – Amendments to IAS 1 and IFRS Practice Statement 2 (effective 1
January 2023)
The Group has considered the impact on its Consolidated Financial Statements and assessed that the effect of the
amendment will be minimal.
d)
Definition of Accounting Estimates – Amendments to IAS 8 (effective 1 January 2023)
The Group has considered the impact on its Consolidated Financial Statements and assessed that the effect of the
amendment will be minimal.
There are no other standards that are not yet effective and that would be expected to have a material impact on
the entity in the current or future reporting periods and on foreseeable future transactions.
31
Flinders Mines Limited
Directors’ Declaration
30 June 2021
In the Directors' opinion:
(a)
the Consolidated Financial Statements and notes and Remuneration Report 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 30 June 2021 and of
its performance for the year ended on that date, and
(b)
(c)
there are reasonable grounds to believe that the Company will be able to pay its debts as and when they
become due and payable, and
the financial statements and notes thereto are in accordance with the International Financial Reporting
Standards issued by the International Accounting Standards Board.
The Directors have been given the declarations as required by section 295A of the Corporations Act 2001.
This declaration is made in accordance with a resolution of Directors.
Neil Warburton
Independent Non-Executive Chair
Perth, Western Australia
30 September 2021
32
Independent Auditor’s Report
To the shareholders of Flinders Mines Limited
Report on the audit of the Financial Report
Opinion
We have audited the Financial Report of Flinders
Mines Limited (the Company).
In our opinion, the accompanying Financial Report
of the Company is in accordance with the
Corporations Act 2001, including:
• giving a true and fair view of the Group’s
financial position as at 30 June 2021 and of its
financial performance for the year ended on
that date; and
•
complying with Australian Accounting
Standards and the Corporations Regulations
2001.
Basis for opinion
The Financial Report comprises
• Consolidated Statement of financial position as at
30 June 2021
• Consolidated Statement of profit or loss and other
comprehensive income, Consolidated Statement
of changes in equity, and Consolidated Statement
of cash flows for the year then ended
• Notes including a summary of significant
accounting policies
• Directors’ Declaration.
The Group consists of the Company and the entities
it controlled at the year-end or from time to time
during the financial year.
We conducted our audit in accordance with Australian Auditing Standards. We believe that the audit
evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit
of the Financial Report section of our report.
We are independent of the Group in accordance with the Corporations Act 2001 and the ethical
requirements of the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for
Professional Accountants (including Independence Standards) (the Code) that are relevant to our audit of the
Financial Report in Australia. We have fulfilled our other ethical responsibilities in accordance with the Code.
We confirm that the independence declaration required by the Corporations Act 2001, which has been
given to the Directors of Flinders Mines Limited, would be in the same terms if given to the Directors as at
the time of this Auditor’s Report.
Key Audit Matters
The Key Audit Matters we identified are:
• Capitalised Exploration and Evaluation
Key Audit Matters are those matters that, in our
professional judgement, were of most significance in our
audit of the Financial Report of the current period.
• Rehabilitation provision
These matters were addressed in the context of our audit of
the Financial Report as a whole, and in forming our opinion
thereon, and we do not provide a separate opinion on these
matters.
KPMG, an Australian partnership and a member firm of the KPMG global organisation of independent member firms affiliated with
KPMG International Limited, a private English company limited by guarantee. All rights reserved. The KPMG name and logo are
trademarks used under license by the independent member firms of the KPMG global organisation. Liability limited by a scheme
approved under Professional Standards Legislation.
Capitalised Exploration and Evaluation $73.761m
Refer to Note 11 and Note 26 to the Financial Report
The key audit matter
How the matter was addressed in our audit
Capitalised Exploration and evaluation expenditure
(E&E) is a key audit matter due to:
•
•
the significance of the activity to the Group’s
business and the balance; and
the greater level of audit effort to evaluate the
Group’s application of the requirements of
AASB 6 Exploration for and Evaluation of
Mineral Resources. In particular the evaluation
of the Pilbara Iron Ore Project (PIOP)
development options to progress the feasibility
of the project. The presence of impairment
indicators would necessitate a detailed analysis
by the Group of the value of E&E. Given the
criticality of this to the scope of our work, we
involved senior team members to challenge the
Group’s determination that no such indicators
existed.
In assessing the conditions allowing capitalisation of
relevant expenditure, we focused on:
•
•
•
the determination of the areas of interest
(areas);
documentation available regarding rights to
tenure, via licensing, and compliance with
relevant conditions, to maintain current rights to
an area of interest and the Group’s intention and
capacity to continue the relevant E&E activities;
and
the Group’s determination of whether the E&E
are expected to be recouped through successful
development and exploitation of the area of
interest.
In assessing the presence of impairment indicators,
we focused on those that may draw into question
the commercial continuation of E&E activities for
PIOP where significant capitalised E&E exists. In
addition to the assessments above, and given the
financial position of the group, we paid particular
attention to:
•
The details of the farm-in incorporated joint
venture with BBI Group Pty Ltd, in which
Flinders would be free carried to Final
Investment Decision.
• Results from latest activities regarding the
existence or otherwise of economically
recoverable reserves.
Our procedures included:
• Evaluating the Group’s accounting policy to
recognise exploration and evaluation assets
using the criteria in the accounting standard.
• We assessed the Group’s determination of its
areas of interest for consistency with the
definition in the accounting standard. This
involved analysing the licenses in which the
Group holds an interest and the exploration
programmes planned for those for consistency
with documentation such as license related
technical conditions and planned work
programmes.
•
For each area of interest, we assessed the
Group’s current rights to tenure by checking
the ownership of the relevant license to
government registries. We also tested for
compliance with conditions, such as minimum
expenditure requirements, on a sample of
licenses.
• We tested the Group’s additions to E&E for
the year by evaluating a sample of recorded
expenditure. We tested consistency to
underlying records, the capitalisation
requirements of the Group’s accounting policy,
and the requirements of the accounting
standard.
• We evaluated Group documents, such as
minutes of Board meetings, for consistency
with their stated intentions for continuing E&E
in certain areas. We challenged this through
interviews with key operational and finance
personnel.
• We obtained project and corporate budgets
identifying areas with existing funding and
those requiring alternate funding sources. We
compared this for consistency with areas with
E&E, for evidence of the ability to fund
continued activities.
• We analysed the Group’s determination of
recoupment through successful development
and exploitation of the area by evaluating the
Group’s documentation of planned future
activities including work programmes and
project budgets for a sample of areas.
Rehabilitation provision $3.735m
Refer to Note 14 and Note 26 to the Financial Report
The key audit matter
How the matter was addressed in our audit
The rehabilitation provision is considered to be a key
audit matter. This is due to the:
•
•
inherent complexity in estimating future
environmental restoration and rehabilitation
costs and
significant audit effort for us in gathering
sufficient audit evidence thereon, particularly
those costs to be incurred several years in the
future.
The estimate of the provision is influenced by:
•
•
•
The complexity in current environmental and
regulatory requirements, and the impact to
completeness of the provision;
The expected environmental management
strategy of the Group and the nature of the
costs incorporated into the provision; and
The expected timing of expenditure which is
planned to occur several years into the future,
and the associated inflation and discounting of
costs in the present value calculation of the
provision.
The Group uses third party and internal experts when
assessing their obligations for restoration and
rehabilitation activities and associated estimates of
future costs.
Our procedures included:
• Comparing the basis for recognition and
measurement of the provisions for
consistency with environmental and regulatory
requirements and criteria in the accounting
standards;
• Obtaining the Group’s rehabilitation provision
calculation, and critically evaluated the
provision by:
— obtaining the Group’s latest third party
expert reports as well as internal and
external underlying documentation for their
determination of future required activities,
their timing and associated cost estimates;
— assessing the planned timing of restoration
and rehabilitation activities through
comparison to exploration plans;
— assessing the competence, scope and
objectivity of the Group’s internal and
external experts used in the determination
of the provision estimate; and
— comparing inflation rate and discount rate
assumptions in the Group’s provision
determination to current market data,
including economic forecasts.
Evaluating the completeness of the provision
against the Group’s analysis of each operating
location to identify where disturbance requires
rehabilitation or restoration and comparing to our
understanding of the Group’s operations.
Other Information
Other Information is financial and non-financial information in Flinders Mines Limited’s annual reporting
which is provided in addition to the Financial Report and the Auditor’s Report. The Directors are responsible
for the Other Information.
Our opinion on the Financial Report does not cover the Other Information and, accordingly, we do not
express an audit opinion or any form of assurance conclusion thereon, with the exception of the
Remuneration Report and our related assurance opinion.
In connection with our audit of the Financial Report, our responsibility is to read the Other Information. In
doing so, we consider whether the Other Information is materially inconsistent with the Financial Report or
our knowledge obtained in the audit, or otherwise appears to be materially misstated.
We are required to report if we conclude that there is a material misstatement of this Other Information,
and based on the work we have performed on the Other Information that we obtained prior to the date of
this Auditor’s Report we have nothing to report.
Responsibilities of the Directors for the Financial Report
The Directors are responsible for:
•
•
•
preparing the Financial Report that gives a true and fair view in accordance with Australian Accounting
Standards and the Corporations Act 2001;
implementing necessary internal control to enable the preparation of a Financial Report that gives a
true and fair view and is free from material misstatement, whether due to fraud or error; and
assessing the Group and Company’s ability to continue as a going concern and whether the use of the
going concern basis of accounting is appropriate. This includes disclosing, as applicable, matters
related to going concern and using the going concern basis of accounting unless they either intend to
liquidate the Group and Company or to cease operations, or have no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the Financial Report
Our objective is:
•
•
to obtain reasonable assurance about whether the Financial Report as a whole is free from material
misstatement, whether due to fraud or error; and
to issue an Auditor’s Report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in
accordance with Australian Auditing Standards will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error. They are considered material if, individually or in the aggregate,
they could reasonably be expected to influence the economic decisions of users taken on the basis of the
Financial Report.
A further description of our responsibilities for the audit of the Financial Report is located at the Auditing and
Assurance Standards Board website at: https://www.auasb.gov.au/admin/file/content102/c3/ar1_2020.pdf
This description forms part of our Auditor’s Report.
Report on the Remuneration Report
Opinion
Directors’ responsibilities
In our opinion, the Remuneration Report of
Flinders Mines Limited for the year ended 30
June 2021 complies with Section 300A of the
Corporations Act 2001.
The Directors of the Company are responsible for the
preparation and presentation of the Remuneration
Report in accordance with Section 300A of the
Corporations Act 2001.
Our responsibilities
We have audited the Remuneration Report included in
pages 11 to 14 of the Directors’ report for the year
ended 30 June 2021.
Our responsibility is to express an opinion on the
Remuneration Report, based on our audit conducted in
accordance with Australian Auditing Standards.
KPMG
R Gambitta
Partner
Perth
30 September 2021
Flinders Mines Limited
Additional Information
As at 31 August 2021
Additional information required by the Australian Securities Exchange Limited and not shown elsewhere in this
report is as follows. The information is current as at 31 August 2021.
Issued Equity Capital
Number of holders
Number on issue
Voting Rights
Ordinary Shares
3,882
168,848,577
Options
Nil
Nil
Voting rights, on a show of hands, are one vote for every registered holder of Ordinary Shares and on a poll, are
one vote for each share held by registered holders of Ordinary Shares. Options do not carry any voting rights.
Distribution of Holdings of Equity Securities
Holding ranges
1 – 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,001 and over
Total
Unmarketable Parcels
Number of Equity Security Holders
Ordinary Shares
2,171
1,040
281
340
50
3,882
Units
790,458
2,537,368
2,036,375
10,245,099
153,239,277
168,848,577
The number of shareholders holding less than a marketable parcel (being 569 shares based on a share price of
$0.88 at 31 August 2021) was 1,645.
Substantial Shareholders
TIO (NZ) Limited 1
OCJ Investment (Australia) Pty Ltd 2
Various Requisitioning Shareholders 3
1. As lodged on ASX on 29 April 2020.
2. As lodged on ASX on 3 February 2017.
Number of Ordinary
Shares
2,258,958,8694
670,604,9954
210,302,4054
Percentage (%)
58.93
21.00
6.03
3. On 13 March 2019, various Shareholders lodged a Form 603 (Becoming a Substantial Shareholder Notice) with ASX disclosing
an association pursuant to sections 12(2)(b) or (c) of the Corporations Act by reason of notices issued under sections 203D and
249D of the Corporations Act requiring the Company to call and arrange to hold a general meeting to consider resolutions to
remove, as directors of the Company, Mr Neil Warburton, Mr Michael Wolley, Mr Evan Davies and any other persons appointed
as directors of the Company prior to the requisitioned meeting, and to elect Mr Brendon Dunstan as a director of the Company.
These resolutions were subsequently not carried at a general meeting of shareholders on 9 May 2019.
4. On a pre-consolidation basis. On 27 November 2020, the Company completed a consolidation of the Company’s issued capital
on the basis that every 25 shares be consolidated into 1.
On Market Buy Back
There is no current on-market buy-back.
37
Top 20 Shareholders
Rank Name
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
TIO (NZ) LIMITED
OCJ INVESTMENT (AUSTRALIA) PTY LTD
MR KENNETH MARTIN KEANE
CITICORP NOMINEES PTY LIMITED
MR KENNETH MARTIN KEANE + MS SALLY MORTON
ROBERTS
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