DIRECTORS’ REPORT
DIRECTORS’ REPORT
ABOUT HANNANS LTD
Hannans Ltd (ASX:HNR) started as an exploration company with a focus on nickel, gold and
lithium in Western Australia. It now has the opportunity to recover high purity metals from spent
and off specification lithium-ion batteries in Sweden, Norway, Denmark and Finland. Hannans’
major shareholder is leading Australian specialty minerals company Neometals Ltd. Since listing
on the ASX in 2003 Hannans and its subsidiaries have at various times since listing signed
agreements with Vale Exploration, Rio Tinto Exploration, Anglo American, Boliden, Warwick
Resources, Cullen Resources, Azure Minerals, Neometals, Tasman Metals, Grängesberg Iron,
Lovisagruvan, Element 25, and Critical Metals Ltd. Shareholders at various times since listing have
included Rio Tinto, Anglo American, OM Holdings, Craton Capital and BlackRock. For more
information, visit www.hannans.com and search for ‘Hannans’ on Twitter.
ANNUAL REPORT
FOR THE FINANCIAL YEAR ENDED
30 JUNE 2021
Corporate Directory ............................................................................................................................ 1
Directors’ Report .................................................................................................................................. 2
Independence Declaration to the Directors of Hannans Ltd ........................................... 28
Directors’ Declaration ..................................................................................................................... 29
Independent Auditor’s Report to the Members of Hannans Ltd ................................... 30
Consolidated Statement of Profit and Loss and Other Comprehensive Income ..... 34
Consolidated Statement of Financial Position ...................................................................... 35
Consolidated Statement of Changes in Equity ..................................................................... 36
Consolidated Statement of Cash Flows ................................................................................... 37
Notes to the Consolidated Financial Statements ................................................................. 38
DIRECTORS’ REPORT
CORPORATE DIRECTORY
BOARD OF DIRECTORS
PRINCIPAL OFFICE
SHARE REGISTRY
Level 12, 197 St Georges Terrace
Computershare
NON-EXECUTIVE CHAIRMAN
Perth, Western Australia 6000
Level 11, 172 St George’s Terrace
Mr Jonathan Murray
Perth, Western Australian 6000
REGISTERED OFFICE
Telephone 1300 787 272
EXECUTIVE DIRECTOR
Level 12, 197 St Georges Terrace
Website www.computershare.com.au
Mr Damian Hicks
Perth, Western Australia 6000
NON-EXECUTIVE DIRECTORS
POSTAL ADDRESS
AUDITORS
Ernst & Young
Mr Markus Bachmann
PO Box 1227
11 Mounts Bay Road
Mr Clay Gordon
Ms Amanda Scott
West Perth, Western Australia 6872
Perth, Western Australia 6000
CONTACT DETAILS
LAWYERS
COMPANY SECRETARY
Telephone +61 (8) 9324 3388
Steinepreis Paganin
Mr Ian Gregory
Email
info@hannans.com
Level 4, The Read Buildings
Website www.hannans.com
16 Milligan Street
ABN
52 099 862 129
Perth, Western Australia 6000
SOCIAL NETWORK SITES
Twitter @Hannans_Ltd
LinkedIn Hannans Ltd
H A N N A N S A N N U A L R E P O R T 2 0 2 1 | 1
DIRECTORS’ REPORT
CHAIRMAN’S LETTER
The Directors of Hannans Ltd (Hannans or the Company) submit their annual financial report of the Group being
the Company and its controlled entities for the financial year ended 30 June 2021.
Dear Shareholders,
Whilst remaining committed to discovery of a major mineral deposit in Western Australia, Hannans recently
diversified its focus via execution of a conditional farm-in agreement to commercialise a lithium-ion battery (LiB)
recycling technology in Sweden, Norway, Denmark, and Finland (the Nordics).
At Forrestania we completed multiple rounds of drilling (RC and diamond) and geophysics. This led to an
improved understanding of the geology of the project area however we are yet to discover an economic
accumulation of nickel. We will continue pursuing this endeavour and note the recent strong corporate interest in
our neighbours by companies such as IGO Ltd and the Andrew Forrest sponsored Wyloo Metals Ltd. We will
continue exploring Forrestania with the aim of discovering another “Spotted Quoll”.
We entered the Fraser Range via a joint venture agreement and tenement applications in our own name. Fraser
Range is home to the world class Nova-Bollinger nickel-cobalt mine owned by IGO Ltd. Exploration within the
Fraser Range is prolific and many companies are searching for the next “Nova” including Hannans. We completed
an extensive ground geophysical survey on the joint venture tenure and will commence similar surveys on our own
ground early in 2022. We have recently secured additional tenure within the region via tenement applications.
Moogie continues to entice and during the year there was a pegging rush by Chalice Mining Ltd and others
staking ground prospective for hosting another “Julimar” nickel deposit. Hannans had an early mover advantage in
the region as it had identified the area as prospective prior to Julimar being discovered. We are targeting a large
gold and/or nickel-copper deposit at Moogie and will commence our first helicopter-borne electromagnetic
survey late in September 2021. This survey builds on the field work, airborne magnetic survey, and structural
modelling we have completed over the last 18 months.
As mentioned, Hannans has announced a conditional transaction to commercialise a LiB recycling technology in
the Nordics. This reflects the Board’s desire to identify opportunities for shareholders to access projects with rapid
growth potential. The transaction is subject to several conditions precedent that are likely to be met by
30 November 2021. Europe is undergoing a massive trend towards electrification and batteries are vital. It is
important that all batteries are recycled to protect the environment and recover valuable metals for reuse.
Recycling also offsets the impact Hannans’ greenfields exploration has on the nature in Western Australia and
creates a more balanced and sustainable outcome for our stakeholders.
We remain focused on delivering outcomes for our shareholders and this will come either via discovery of an
economic deposit in Western Australia, or successful commercialisation of the lithium-ion battery recycling
technology in the Nordics.
We look forward to your continued support as we embark on the next exciting chapter of our corporate journey.
Yours sincerely,
Jonathan Murray
Non-Executive Chairman
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DIRECTORS’ REPORT
STRATEGIC PLAN
VISION
Our vision is to sustainably produce metals for society.
MISSION
Our mission is to develop an economic interest
in a portfolio of battery metals exploration,
development and production assets.
Our focus is to provide shareholders with a
strong return on investment by managing
our people, projects and capital in an
entrepreneurial and responsible manner.
We recognise that a professional,
knowledgeable and ethical team of directors,
employees and consultants is the key to our
business.
The ability to implement the strategic plan is
determined by Hannans' ability to access
funding. Hannans might chose to sole fund
exploration, contribute funding to maintain
joint venture interests or receive royalties from
future production. Hannans aims to fund the
development of its portfolio of projects via
equity raisings at increasing valuations,
project sales and farm-outs.
GOALS
People
Projects
Capital
∂
∂
∂
∂
∂
∂
∂
∂
∂
To attract and retain a professional,
knowledgeable and ethical team of experts whilst
empowering staff at all levels.
To continually build an understanding of our
strategic partners’ needs and wants and
thereafter conduct business in a fair, transparent
and ethical manner.
To access battery metals exploration,
development, and production opportunities in
Australia and Europe.
To implement an effective acquisition program
that secures access to projects that have the
potential to host significant economic deposits.
To add value by identifying, accessing and
exploring projects that have potential to host
economic deposits and then seek partners to
diversify project risk.
To retain a financial interest in projects but not
necessarily an operational responsibility.
To conduct our affairs in a responsible manner
considering various stakeholder rights and
beliefs.
To create shareholder wealth as measured by the
potential of our projects, the strength of our
balance sheet and share price.
To maintain sufficient funding and working
capital to implement exploration and
development programs through the peaks and
troughs in sentiment and commodity prices
fluctuations.
H A N N A N S A N N U A L R E P O R T 2 0 2 1 | 3
DIRECTORS’ REPORT
2021 OPERATIONAL AND FINANCIAL REVIEW
MAJOR PROJECTS
∂
Forrestania Nickel (100% interest);
∂ Moogie Gold & Nickel-Copper (100% interest); and
∂
Fraser Range Nickel-Copper (100% interest).
NON-CORE PROJECTS
∂ Mt Holland Lithium (100% interest); and
∂
Forrestania Gold (20% free-carried interest).
Figure 1. Project location map showing Hannans projects in red font. Major deposits and mines are shown in blue font.
4 | H A N N A N S A N N U A L R E P O R T 2 0 2 1
DIRECTORS’ REPORT
MINERALS EXPLORATION
FORRESTANIA NICKEL PROJECT (Hannans 100%)
Introduction
The Forrestania Nickel Project (FNP) is located within the Forrestania Greenstone Belt which has a length of ~250 kilometres, a width
ranging from ~5 to 35 kilometres and is subdivided into six ultramafic belts namely the Western, Mid-Western, Takashi, Central, Mid-
Eastern and Eastern.
The Western ultramafic belt is regionally the most well-endowed with nickel-sulphide mineralisation. The Spotted Quoll, New Morning,
Beautiful Sunday, and Flying Fox nickel sulphide deposits are all located within the Western ultramafic belt. Hannans’ tenure covers a
significant strike length of the Western, Mid-Western and Takashi ultramafic belts and minor parts of the Central and Mid-Eastern
ultramafic belts. The Forrestania Greenstone Belt hosts several different nickel sulphide mineralisation settings and styles including basal
massive sulphides, matrix sulphides, disseminated sulphides in cumulates and remobilised massive sulphides. The nickel deposits are
generally associated with olivine cumulate ultramafic rocks, however mineralisation may occur in a range of rock types / settings and
exhibit a range of geophysical responses.
Background
Despite a significant amount of nickel exploration at Forrestania by several companies, the last major nickel sulphide discovery was made
more than 13 years ago, that being the Spotted Quoll deposit (mine) owned by Western Areas Ltd. A detailed review of Hannans’ FNP was
initiated by Newexco Exploration Pty Ltd mid-2018 and completed early 2019. The review identified a range of early stage to advanced
geophysical, geological, and geochemical targets that warranted further investigation. Hannans has been systemically following the
recommendations outlined in the report and the results of these activities have previously been released to ASX.
Figure 2. Regional location map showing Hannans 100% owned Forrestania Nickel Project outlined in red and
major nickel mines (operating and historic) and nickel deposits.
H A N N A N S A N N U A L R E P O R T 2 0 2 1 | 5
DIRECTORS’ REPORT
Figure 3. Project location map showing Hannans Forrestania Nickel Project tenure outlined in red and the major
nickel mines and deposits within the Western Areas Ltd tenure hatched in blue. The approximate
location of Hannans four diamond drill holes are shown by the tags B3, C4, A1 and B5. There is
significant supporting infrastructure in the Forrestania region, with good road access and an existing
electricity network primarily due to past and present mining operations. Located to the south of the
Stormbreaker Prospect area is the Cosmic Boy nickel concentrator, which can process 600,000 tonnes
per annum of ore, with the potential to expand to 1,000,000 tonnes per annum.
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DIRECTORS’ REPORT
Table 1. Completed Exploration Phases from Detailed Review through to completion of Phase 3.
Phase 4 is being planned.
Phase
Description
Detailed
Review
Review of all Hannans Forrestania Tenements with the emphasis on
generating nickel sulphide targets. A geological-geochemical review and a
geophysical review evaluated past work and recommended targeting
bedrock geophysical anomalies mainly within the Western Ultramafic belts.
Prospects and anomalies were visited on the ground to ground-truth
geochemical and geophysical anomalies.
1
2
3
4
A stage-one drilling programme drilled initial targets and intersected
sulphides but no significant nickel sulphide was intersected. Of the seven
holes drilled, two holes were surveyed using DHEM which resulted in an off-
hole anomaly warranting follow-up in one.
Ground geophysical surveys employing Moving Loop and Fixed Loop
electromagnetics were carried out in areas previously untested. Prospects
and anomalies were visited on the ground, two areas were sampled by soil
sampling. Seven holes FSRC067-FSRC073 were drilled targeting bedrock
geophysical conductors and one geology-geochemical target. Encouraging
nickel-copper values were intersected in ultramafic rocks along the Western
Ultramafic Belts. DHEM was undertaken which confirmed that most of the
geophysical anomalies were intersected by drilling and several new targets
were generated that warrant further follow-up.
Historic results were evaluated in conjunction with recent geophysical and
drilling results Geophysical models and anomalies were reviewed and refined.
Diamond drill testing of four targets within the Western and Mid-Western
Ultramafic sequence was completed. All 4 holes encountered bedrock
sulphides.
A review of results so far at Forrestania Project is in progress. The next phase
of exploration planning for the FNP has commenced and shareholders will be
advised when field work commences.
Exploration
A summary of the exploration completed during 2020/2021 can be found on page 12.
H A N N A N S A N N U A L R E P O R T 2 0 2 1 | 7
DIRECTORS’ REPORT
MOOGIE GOLD & COPPER PROJECT (Hannans 100%)
Introduction
Moogie represents a conceptual, greenfields exploration opportunity based on large-scale tectonic controls on mineralisation. The
concept is that deep, long-lived crustal scale structures like major shear zones represent excellent tectonic settings for large scale
mineralising events. Government seismic lines indicate the surface expression of a major structure occurs within the Moogie Project. The
deposit models being assessed by Hannans can best be described as:
∂
∂
hydrothermal silica-magnetite breccia systems with discreet magnetic anomalies that have potential for IOCG mineralisation
(Breccia Prospect); and
mafic and ultramafic parts of the gneissic lithology with geochemistry indicative of magmatic fractionation of the protolith (Minni
Ritchi and Ghallangee prospects). This process is key to development of magmatic sulphides generally, including nickel-copper
sulphides.
Figure 4. Regional location map showing Moogie ~ 260kms north-west of Meekatharra and the proximity of several current and historical mines.
Background
The Moogie Project comprises five exploration licences in the Gascoyne Province, Western Australia, located 260km north-west of
Meekatharra and 300km east of Carnarvon (refer Figure 4 and Figure 5). Moogie is located within the Glenburgh Terrane of the Gascoyne
Province, a Proterozoic metamorphic belt located at the northern margin of the Yilgarn Craton. The project tenure covers the intersection
of the crustal scale Cardilya Fault with the northeast trending Deadman Fault. The project is considered prospective for orogenic
(hydrothermal) gold mineralisation, copper mineralisation and intrusion-related nickel-copper-PGE mineralisation during a period from
around 2000-1800Ma. Tectonic similarities exist with the Albany-Fraser Zone at the south-eastern margin of the Yilgarn Craton.
The Glenburgh Gold Project, owned by Gascoyne Resources Ltd (ASX:GCY), is located ~7km due south of Moogie and contains an
Indicated and Inferred mineral resource of 16.3 Mt @ 1.0 g/t Au for 510,100 ounces of gold. The gold mineralisation at Glenburgh is
hosted within silica altered quartz-feldspar-biotite-garnet-gneiss and is located along the northeast trending Deadman Fault which
continues along strike into Moogie. The Deadman Fault zone is a sinistral transcurrent fault hosting not only gold but also copper
mineralisation (Dalgety Downs). The Deadman Fault zone forms a 14km low ridge on Hannans’ E09/2373 tenement (refer Figure 5) and
ASTER satellite imagery shows argillic alteration along its length; the ridge has not previously been drilled tested.
8 | H A N N A N S A N N U A L R E P O R T 2 0 2 1
DIRECTORS’ REPORT
Figure 5. Project location map showing Hannans tenement applications E09/2373 and E09/2374 (outlined in red) and the intersection of the crustal
scale Cardilya Fault with the Deadman Fault considered prospective for orogenic gold and or copper mineralisation and intrusion-related
Ni-Cu-PGE mineralisation.
Table 2. Development and exploration timeline of Moogie Project
Phase
Description
Concept
Can the position and nature of the major structure at Moogie be defined, and its mineral potential explored? Hannans is
targeting discovery of a large, long-life, low-cost gold, copper and or nickel-copper-PGE deposit (Tier 1). The deposit
models being investigated include both: orogenic Au and or Cu; and intrusion hosted Ni-Cu-PGE. (October 2019)
Proof of
Concept
Detailed aeromagnetic data collection and interpretation, geochemical sampling and interpretation, mapping and thin
section analysis resulted in proof of concept. (December 2019 – June 2020)
Deposit
Models
Following the collection of additional geochemical data, mapping, and interpretation plus a detailed review of all historic
and modern data, focus has turned to deposit models best described as: hydrothermal silica-magnetite breccia systems
(Moogie Breccia); and mafic and ultramafic intrusive systems hosting magmatic sulphides (Minni Ritchi and Ghallangee)
(E09/2373, E09/2374 and E09/2417). The opportunity for orogenic gold mineralisation also remains in tenements (E09/2460
and E09/2461) (July 2020 – June 2021).
Field Work A ground gravity survey was completed over the Breccia prospect in August 2021. An airborne EM and magnetic survey
over the Breccia, Minni Ritch and Ghallangee prospects is scheduled for September 2021. Regional surface sampling and
prospect scale surface sampling at Minni Ritch and Ghallangee is scheduled to recommence in November 2021.
Exploration
A summary of the exploration completed during 2020/2021 can be found on page 12.
H A N N A N S A N N U A L R E P O R T 2 0 2 1 | 9
DIRECTORS’ REPORT
FRASER RANGE (Hannans 100%)
Introduction
Hannans tenure comprises a large joint venture tenement (E63/1772), two large tenement applications, and several small prospecting
licenses located approximately 100kms east of Norseman and 60 kms south-west of the operating Nova nickel-copper-cobalt mine. Four
tenements E63/2020 – 2023 are proximal to the Talbot nickel-copper-cobalt anomaly explored by Sirius Resources Ltd and later IGO Ltd
(refer Figure 6).
The general area of this group of tenements has been the subject of nickel exploration since the 1960’s. The Talbot prospect (situated
immediately west of E63/2021, or roughly between the four Hannans tenements) was one of the localities at which weak nickel-copper
sulphide mineralisation was discovered at that time, along with Gnama South (approximately 3km to the NW of E63/2022). Exploration
during the era post the Nova discovery has been carried out exclusively by Sirius and later IGO. A significant amount of exploration was
completed in this area between 2011 and 2019, including on the Hannans tenements. Given the proximity of the tenements to a known
nickel sulphide occurrence (which are not common in the Fraser Range area), the leases are of exploration interest. Two tenements
adjacent to the Talbot nickel prospect have seen little coverage with surface geophysics (electromagnetic).
Figure 6. Regional location map showing Hannans tenements and applications in red relative to tenements owned
by IGO Ltd and Bodicea Resources Ltd. The location of the producing Nova nickel-copper-cobalt mine is
also shown.
Exploration
A summary of the exploration completed during 2020/2021 can be found on page 12.
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DIRECTORS’ REPORT
FORRESTANIA GOLD (Hannans 20% Free-Carried)
Introduction
Joint venture partner, Classic Minerals Ltd (ASX:CLZ), is funding exploration on the
Forrestania Gold Project located approximately 120km south of Southern Cross in
the Goldfields region of Western Australia. Hannans owns a 20% free-carried
interest in the FGP meaning Hannans is not required to fund the costs of
exploration until a decision to mine gold has been made by the joint venture. For
the avoidance of doubt Hannans owns a 100% interest in all non-gold rights on the
tenements including but not limited to nickel, lithium, and other metals.
ANNUAL RESOURCE STATEMENTS
Hannans through the joint venture with Classic Minerals Ltd holds a
20% interest in the following JORC resources for the
year ended 30 June 2020 and 30 June 2021.
JULY 2020 – JUNE 2021
Forrestania Gold Project1
JORC Compliant Indicated and Inferred Mineral Resource Table
Figure 7. Forrestania Gold Project (FGP) location map
showing the range of priority gold targets identified
by previous explorers. Hannans holds a 20% free-
carries interest in the gold rights at the FGP.
Indicated
Grade
(Au g/t)
2.01
–
2.01
Ounces (Au)
Tonnes
16,600
–
1,090,800
5,922,700
16,600
7,013,500
Prospect
Lady Ada
Tonnes
257,300
Lady Magdalene
–
TOTAL
257,300
JULY 2019 – JUNE 2020
Forrestania Gold Project2
JORC Compliant Indicated and Inferred Mineral Resource Table
Prospect
Lady Ada
Tonnes
257,300
Lady Magdalene
–
TOTAL
257,300
Competent Person’s Statements – Forrestania Gold Project
Indicated
Grade
(Au g/t)
2.01
–
2.01
Ounces (Au)
Tonnes
16,600
–
1,090,800
5,922,700
16,600
7,013,500
Inferred
Grade
(Au g/t)
1.23
1.32
1.3
Inferred
Grade
(Au g/t)
1.23
1.32
1.3
Ounces (Au)
43,100
251,350
294,450
Ounces (Au)
43,100
251,350
294,450
The information contained in the JORC Compliant Resource Table relates to information compiled or reviewed by Edward S. K. Fry, a Competent person who is a member of the Australasian Institute of Mining
and Metallurgy (AusIMM). Mr Fry is a consultant exploration geologist with BGM Investments Pty Ltd and consults to Classic Minerals Ltd. Mr Fry has sufficient experience that is relevant to the styles of
mineralisation and the types of deposit under consideration, and to the activities undertaken to qualify as a Competent Person as defined in the 2012 edition of the ‘JORC Australian code for reporting of
Exploration Results, Mineral Resources and Ore Reserves’. Mr Fry consents to the inclusion in this report of the matters based on information in the form and context in which it appears.
ACKNOWLEDGEMENT
Hannans would like to acknowledge the work completed by several advisors, consultants, and contractors (Team) through the year.
Hannans appreciates the quality, focus and professionalism of these individuals and organisations. Hannans and its Team are
focussed on the discovery of a world class orebody at Forrestania, Moogie, Fraser Range and Mt Holland.
1 Refer to Classic Minerals Ltd (ASX: CLZ) ASX announcement on 31 July 2020 for further information.
2 Refer to Classic Minerals Ltd (ASX: CLZ) ASX announcement on 31 July 2020 for further information.
H A N N A N S A N N U A L R E P O R T 2 0 2 1 | 11
DIRECTORS’ REPORT
EXPLORATION
Exploration activities completed by Hannans and its joint venture partners during the year ended 30 June 2021 are set out below:
Forrestania
(Nickel)
Mt Holland
(Lithium)
Moogie
(Gold & Copper)
Forrestania
(Gold)
Fraser Range
(Nickel)
Other
Qtr
1
RC drill tested six target
areas with the aim of
intersecting economic
grades and widths of
nickel sulphide
mineralisation. Samples
were submitted to the
laboratory for analysis.
Qtr
2
Completed downhole
electromagnetic surveys
(DHEM) in the RC holes.
Several DHEM anomalies
identified. Drilling assays
confirmed prospective
ultramafic lithologies.
Disseminated sulphides
with anomalous nickel and
copper were intersected.
Qtr
3
Completed evaluation of
historic exploration results
and recent geophysical
surveys. Process enabled
the planning of four
diamond drill holes to test
targets located within the
Western and Mid-Western
Ultramafic sequences.
Qtr
4
Completed four diamond
drill holes. All holes
intersected iron sulphides
of pyrrhotite-pyrite at the
expected depths of the
target horizons.
Forrestania
(Nickel)
Mt Holland
(Lithium)
Moogie
(Gold & Copper)
Forrestania
(Gold)
Fraser Range
(Nickel)
Other
Completed one RC drill
hole at Mt Holland.
Qtr
1
Qtr
2
Forrestania
(Nickel)
Mt Holland
(Lithium)
Qtr
3
Qtr
4
Moogie
(Gold & Nickel-
Copper)
Forrestania
(Gold)
Fraser Range
(Nickel)
Other
Qtr
1
Completed additional
regional surface sampling
and mapping.
Qtr
2
Applied for two new
tenements covering areas
of interest for gold
mineralisation.
Qtr
3
Qtr
4
Reviewed major airborne
magnetic survey, available
remote sensing data,
geochemical and thin
section analysis and four
field visits. Completed
airborne magnetic survey
over two new tenements.
Forrestania
(Nickel)
Mt Holland
(Lithium)
Moogie
(Gold & Copper)
Forrestania
(Gold)
Fraser Range
(Nickel)
Other
Qtr
1
Joint venture partner Classic Qtr
Minerals Ltd drilled 13 RC
holes at the Tangerine
Trees Prospect following up
historical RC drill holes
containing anomalous gold
assays close to surface.
2
Qtr
3
Qtr
4
Forrestania
(Nickel)
Mt Holland
(Lithium)
Moogie
(Gold & Copper)
Forrestania
(Gold)
Fraser Range
(Nickel)
Other
Qtr
1
Qtr
2
Signed agreement to earn
70% interest in granted
exploration license
E63/1772. Site visit
completed over all
tenements to gain an
appreciation of access, the
topography and to identify
outcropping rocks that
provide clues as to the
bedrock geology.
Qtr
3
Completed its 1st round of
surface geophysical surveys
within tenement E63/1772.
Completed petrographic
work which suggests the
most promising samples
from a nickel sulphide
mineralisation perspective
are from within tenement
E63/2024.
Qtr
4
Signed heritage agreement.
All applications were
granted.
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DIRECTORS’ REPORT
Forrestania
(Nickel)
Mt Holland
(Lithium)
Moogie
(Gold & Copper)
Forrestania
(Gold)
Fraser Range
(Nickel)
Other
Qtr
1
Qtr
2
Signed option to purchase
90% interest in exploration
license application
E77/2691 located between
Southern Cross and
Bullfinch.
Planned ground
geophysical surveys at
Southern Cross targeting
ultramafic rocks having the
potential to host nickel
sulphide mineralisation.
Qtr
3
Sought approval to access
the private land underlying
E77/2691 to commence
ground geophysical
surveys.
Qtr
4
Sold Queen Victoria Rock
nickel sulphide tenement
and data.
Re-evaluated historic data
and Hannans ground
gravity survey at Milly Boo
and withdrew tenement.
Exploration expenditure
In line with the Group’s accounting policy, Hannans expensed $1,324,932 on
mineral exploration activities in 2021 (2020: $1,254,103) relating to its non-JORC
compliant mineral projects. These amounts exclude all administration, transaction
costs and exploration expenditure by Hannans joint venture partners.
Table 3. Summary of the exploration expenditure completed during 2020/2021.
Mineral Exploration Activities in 2021
$
%
Geological activities
Geochemical activities
Geophysical activities
Drilling
Field supplies
Field camp and travel
442,979
58,152
269,741
391,584
39,673
19,759
33%
4%
20%
30%
3%
1%
Net annual tenement rent, rates & refunds
(25,889)
(2)%
Tenement administration
Tenement application fees
Acquisition
46,905
6,278
75,750
4%
1%
6%
TOTAL MINERAL EXPLORATION ACTIVITIES
1,324,932
100%
Figure 8. Historical record since listing on ASX of exploration expenditure, cash at bank and market capitalisation as at 30 June.
H A N N A N S A N N U A L R E P O R T 2 0 2 1 | 13
DIRECTORS’ REPORT
Goals Scorecard 2019 – 2021
Hannans introduced the Scorecard in 2015. The Scorecard enables the Directors,
Management and Shareholders to remain focussed on the Goals on a rolling three-
year basis. The table below highlights Hannans achievements relative to the stated
Goals:
Item
Stated Goal AGM 2020
Outcome to Date
Strategic
Plan
Hannans is aiming to develop into a
West Australian mining company
via:
∂ exploration success for nickel at
Forrestania, Fraser Range and
Moogie;
∂ No world class minerals
exploration discovery so far.
∂ No requirement to contribute
funding to JV partners activities
so far.
∂ No acquisition of a major
∂ participation in joint ventures
for gold at Forrestania and
lithium at Lake Johnston; and or
project despite due diligence on
several projects.
∂ Execution of Memorandum of
∂ acquisition of a major project.
Shareholder
Returns
Implement a strategy giving
shareholders the opportunity to:
∂
return multiples on their
original investment, and/or
∂
recover original investment.
Joint Venture
(JV)
Monitor joint venture
partners’ activities
Sole Funded
Projects
Corporate
Activities
Secure joint venture partners
Spin outs
Understanding to
commercialise lithium-ion
battery recycling technology in
Norway, Sweden, Denmark and
Finland.
Hannans share price was
∂ 20 cents (IPO) on 5 Dec 2003
∂ $1.04 (high) on 22 May 2007
∂ 0.2 cents (low) on 15 Feb 2016
∂ 1.8 cents on 24 Aug 2018;
∂ 0.9 cents on 26 Aug 2019;
∂ 0.8 cents on 13 Aug 2020; and
∂ 2.9 cents on 22 Sep 2021.
Hannans has a JV over certain
tenements at Forrestania with
Classic Minerals Ltd (ASX:CLZ).
Classic has been active and had
exploration success. Hannans is free
carried at 20% through to a decision
to mine.
No joint ventures agreements
signed.
Errawarra Resources Ltd was
demerged from Hannans in
February 2012 and listed on
ASX on 11 December 2020.
(www.errawarra.com)
Critical Metals Ltd was demerged
from Hannans in 2016, is
developing a large vanadium
pentoxide project in Sweden and
Finland and aims to list on a
securities exchange in 2022.
(www.criticalmetals.eu)
14 | H A N N A N S A N N U A L R E P O R T 2 0 2 1
DIRECTORS’ REPORT
DIRECTORS
The names and particulars of the Directors of the Company during the financial year and until the date of the report are:
Mr Jonathan Murray, Non-Executive Chairman
(Appointed 29 November 2016,
previously appointed Non-Executive Director on 22 January 2010)
Mr Damian Hicks, Executive Director
(Appointed on 29 November 2016,
previously appointed Managing Director on 11 March 2002)
advising
experience
Mr Murray is a partner at law firm
Steinepreis Paganin, based in Perth,
Western Australia. He has over 20
years
on
initial public offers and
numerous
secondary market capital
raisings,
public and private M&A transactions,
corporate governance and strategy.
Mr Murray graduated from Murdoch
University in 1996 with a Bachelor of
Laws and Commerce (majoring in Accounting). He is also a
member of FINSIA (formerly the Securities
Institute of
Australia).
During the past 3 years Mr Murray has also served as a
director of the following other listed companies:
∂ Errawarra Resources Ltd – listed on 11 December 2020
(appointed 2 February 2012, resigned 2 November 2020,
re-appointed 22 June 2021)
∂ Vietnam Industrial Investments Limited
(appointed 19 January 2016, resigned 15 May 2020)
∂ Peak Resources Limited (appointed 22 February 2011,
resigned 8 March 2021)
Ltd
Mr Hicks was a founding Director of
Hannans
in 2002 and was
appointed to the position of Managing
Director on 5 April 2007 and appointed
as Executive Director on 29 November
2016. Mr Hicks is also Executive Director
of the Group’s subsidiary companies.
Mr Hicks graduated from the University
of Western Australia with a Bachelor of
Commerce (Accounting and Finance) in
1992 and was admitted as a Barrister and Solicitor of the
Supreme Court of Western Australia in 1999. He holds a
Graduate Diploma in Applied Finance & Investment from
FINSIA, a Graduate Diploma in Company Secretarial Practice
from Chartered Secretaries Australia and is a Graduate of the
Australian Institute of Company Directors course.
During the past 3 years Mr Hicks has also served as a director
of the following other listed companies:
∂ Errawarra Resources Ltd – listed on 11 December 2020
(appointed 2 February 2012, resigned 1 April 2021)
Mr Markus Bachmann, Non-Executive Director
(Appointed 2 August 2012)
Mr Clay Gordon, Non-Executive Director
(Appointed 5 October 2016)
Mr Markus Bachmann holds a Master
(MA) in Business and Economics (cum
laude) from the University of Berne,
Switzerland. Markus started his career
in the corporate finance department of
the Credit Suisse Group, before joining
the SBC Brinson Asset Management
Emerging Markets
in 1997.
Moving to South Africa in 2000 he
joined Coronation Fund Managers in
Cape Town, South Africa, as a senior manager for various retail
products and institutional mandates.
team
Markus co-funded Craton Capital in 2003 whereas he is the
manager of the Craton Capital Precious Metals Fund and the
Global Resources Fund since their inception. Over the past 20
years and under his management, his funds received a
number of prestigious industry awards. Markus accumulated
over 25 years of experience in global equity markets, precious
metals and raw materials.
During the past 3 years Mr Bachmann has also served as a
director of the following other listed companies:
∂ Errawarra Resources Ltd – listed on 11 December 2020
(appointed 2 February 2012, resigned 30 June 2021)
Mr Clay Gordon was appointed a
director of Hannans
in 2016. Mr
Gordon obtained a Bachelor of Applied
Science (Geology) and a Master of
Science (Mineral Economics) and has
more than 25 years’ experience in
senior roles (operational, management
and corporate) within large and small
resource companies active in a range of
commodities within Australia, Africa
and South East Asia. He was founding Non-Executive Director
of ASX listed Phoenix Gold Limited, founding Managing
Director of ASX listed Primary Gold Limited and is currently
the Group Geologist of a private mining investment company,
Adaman Resources Pty Ltd. Mr Gordon was also founder and
CEO of Mining Assets Pty Ltd, a private company involved in
the assessment and marketing of mineral projects. He is a
Member of the Australasian Institute of Mining and Metallurgy
and the Australian Institute of Geoscientists.
During the past 3 years Mr Gordon did not serve as a director
of any other listed companies.
H A N N A N S A N N U A L R E P O R T 2 0 2 1 | 15
DIRECTORS’ REPORT
DIRECTORS (cont’d)
COMPANY SECRETARY
Ms Amanda Scott
(Appointed Non-Executive Director on 29 November 2016)
Mr Ian Gregory
(Appointed 5 April 2007)
integral role
Ms Scott was appointed a director of
Hannans
in 2016 and was previously
Exploration Manager of Hannans Ltd. Ms
Scott played an
the
development of the Company’s nickel,
gold, iron and manganese portfolio and is
credited with the discovery of high grade
iron mineralisation at the Jigalong Project
in the East Pilbara region on Western
Australia.
in
Ms Scott holds a Bachelor of Science (Geology) from Victoria
University of Wellington, and is a Member of the Australian
Institute of Mining & Metallurgy.
In 2016, Ms Scott created Scandinavian-based consultancy Scott
Geological AB providing geological and exploration services to a
number of clients from around the world.
During the past 3 years Ms Scott did not serve as a director of any
other listed companies.
is a professional well-
Mr Gregory
connected Director
and Company
Secretary with over 30 years’ experience
in the provision of company secretarial
and business administration services in a
variety
including
exploration, mining, mineral processing,
oil and gas, banking and insurance.
industries,
of
Mr Gregory holds a Bachelor of Business
degree from Curtin University and is a
Fellow of the Governance Institute of Australia, the Financial
Services Institute of Australia and a Member of the Australian
Institute of Company Directors.
Mr Gregory currently consults on company secretarial and
governance matters to a number of listed and unlisted companies
and is a past Chairman of the Western Australian Branch Council
of Governance Institute of Australia. He has also served on the
National Council of GIA.
Directors’ Relevant Interest in Shares and Options
At the date of this report the following table sets out the current Directors’ relevant interests in shares and options of Hannans Ltd and the
changes since 30 June 2021.
Director
Damian Hicks
Jonathan Murray
Markus Bachmann(i)
Clay Gordon
Amanda Scott
Ordinary Shares
Options over Ordinary Shares
Current
Holding
Net Increase/
(decrease)
7,461,763
19,523,313
85,952,405
5,771,294
1,260,001
–
–
–
–
–
Current
Holding
–
7,000,000
7,000,000
7,000,000
7,000,000
Net Increase/
(decrease)
–
–
–
–
–
(i)
These shares are held by Craton Capital Funds of which Mr Bachmann is a founding partner and Chief Executive Officer.
16 | H A N N A N S A N N U A L R E P O R T 2 0 2 1
DIRECTORS’ REPORT
REMUNERATION REPORT (AUDITED)
The remuneration report is set out under the following main headings:
A.
B.
C.
D.
E.
Principles used to determine the nature and amount of remuneration
Details of remuneration
Service agreements
Share–based compensation
Additional information
The information provided in this remuneration report has been audited as required by section 308(3C) of the Corporations Act 2001.
A. Principles used to determine the nature and amount of remuneration
The whole Board forms the Remuneration Committee. The remuneration policy has been designed to align director and executive
objectives with shareholder and business objectives by providing a fixed remuneration component with the flexibility to offer specific
long term incentives based on key performance areas affecting the Group’s financial results. The Board believes the remuneration policy
to be appropriate and effective in its ability to attract and retain the best directors and executives to manage the Group.
The Board’s policy for determining the nature and amount of remuneration for Board members and senior executives is as follows:
∂
∂
∂
∂
∂
The remuneration policy, setting the terms and conditions for the executive directors and other senior executives, was developed
by the Board. All executives receive a base salary (which is based on factors such as length of service and experience) and
superannuation. The Board reviews executive packages annually and determines policy recommendations by reference to
executive performance and comparable information from industry sectors and other listed companies in similar industries.
The Board may exercise discretion in relation to approving incentives, bonuses and options. The policy is designed to attract and
retain the highest calibre of executives and reward them for performance that results in long term growth in shareholder wealth.
The Executive Director and executives receive a superannuation guarantee contribution required by the government where
applicable, which is currently 10.0% of base salary and do not receive any other retirement benefits.
All remuneration paid to directors and executives is valued at the cost to the Group and expensed. Options are valued using the
Black–Scholes methodology where relevant.
The Board policy is to remunerate non–executive directors at market rates for comparable companies for time, commitment and
responsibilities. The Board determines payments to the non–executive directors and reviews the remuneration annually, based on
market practice, duties and accountability. Independent external advice is sought when required. No independent external advise
was sought during the year. The maximum aggregate amount of fees that can be paid to Non–Executive Directors is subject to
approval by shareholders at the Annual General Meeting. The approved maximum aggregate amount that may be paid to Non-
Executive Directors as remuneration for each financial year is set at $250,000 which may be divided among the Non-Executive
Directors in the manner determined by the Board and Company from time to time. Fees for Non–Executive Directors are not
linked to the performance of the Company. The 2020 remuneration report was approved at the last Annual General Meeting held
on 30 November 2020.
The remuneration policy has been tailored to increase the direct positive relationship between shareholders’ investment objectives and
directors and executive performance. The Company facilitates this through the issue of options from time to time to the directors and
executives to encourage the alignment of personal and shareholder interests. The Company believes this policy will be effective in
increasing shareholder wealth. The Company currently has no performance based remuneration component built into director and
executive remuneration packages.
The Board does not consider earnings during the current and previous financial years when determining, and in relation to, the nature
and amount of directors’ remuneration. Refer below for a summary of the Group’s earnings and the Company’s market performance for
the past 5 years.
Summary of 5 Years earnings and market performance as at 30 June
Profit/(Loss) ($)
Share price (c)
Market capitalisation
(Undiluted) ($)
2021
2020
2019
2018
2017
(1,550,464)
(1,900,520)
(2,085,563)
(1,379,271)
11,663,780
0.5
0.5
1.0
1.4
1.5
11,799,886
9,939,773
19,879,545
27,724,264
25,239,608
H A N N A N S A N N U A L R E P O R T 2 0 2 1 | 17
DIRECTORS’ REPORT
REMUNERATION REPORT (AUDITED) (cont’d)
B. Details of remuneration
Details of remuneration of the Directors and key management personnel (as defined in AASB 124 Related Party Disclosures) of Hannans
are set out in the table below.
The key management personnel of Hannans and the Group are listed on pages 15 and 16.
Given the size and nature of operations of Hannans, there are no other employees who are required to have their remuneration disclosed
in accordance with the Corporations Act 2001.
Short Term
Post-employment
Equity
Other
benefits
(i)
D&O(ii)
insu-
rance
Salary
& fees
Superan-
nuation
Other
benefits
Options
(iii)
Long
term
benefits
Other
benefits
$
$
$
$
$
$
$
$
Value
options as
proportion of
remuneration
%
Total
$
2021
Directors
Damian Hicks
240,000
18,462
2,590
22,800
Jonathan Murray
Markus Bachmann
Clay Gordon
Amanda Scott
24,000
24,000
24,000
24,000
–
–
–
–
2,589
2,589
2,589
2,589
–
–
2,280
–
336,000
18,462
12,946
25,080
–
Total
2020
Directors
Damian Hicks (iv)
240,000
20,138
2,396
22,800
Jonathan Murray
Markus Bachmann
Clay Gordon
Amanda Scott
24,000
24,000
24,000
24,000
–
–
–
–
2,396
2,395
2,395
2,395
–
–
2,280
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
26,318
6,580
6,580
6,580
6,580
Total
336,000
20,138
11,977
25,080
–
52,638
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
283,852
26,589
26,589
28,869
26,589
392,488
311,652
32,976
32,975
35,255
32,975
445,833
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
8.4%
20.0%
20.0%
18.7%
20.0%
11.8%
(i) Short Term Other benefits include annual leave accrued during the year
of $18,462 (2020: $20,138) for Mr Damian Hicks.
(ii) For accounting purposes Directors & Officers Indemnity Insurance is
required to be recorded as remuneration. No director receives any cash
benefits, simply the benefit of the insurance coverage for the financial
year.
(iii) The amounts included are issued under Hannans’ Director Equity
Option Plan approved by shareholders in September 2016. The
amounts are non-cash items that are subject to vesting conditions.
Refer to Section D for more information.
C.
Service agreements – Executive Director
(iv) After a further review of Mr Hicks’ contract with the Company, the
Board resolved from 1 July 2019 to increase his fees to $240,000 per
annum for executive services. In an effort to assist the Company with
managing its cash flow, Mr Hicks deferred $28,750 in salary & fees
entitlements during the period 1 April 2020 to 30 June 2020. From
1 July 2020 Mr Hicks continues to receive his salary in accordance with
his contract. The deferred salary was paid to Mr Hicks in September
2020.
Mr Hicks was appointed a Director Hannans on 11 March 2002 and commenced employment with Hannans Ltd on 3 December 2003.
He entered into an employment agreement as Managing Director of the Company on 21 December 2009. On 29 November 2016,
Mr Hicks was appointed as the Executive Director of the Group. The Board resolved from 1 July 2017 to increase his fees to $198,000 per
annum for executive services and $20,000 per annum for services related specifically to his role as a director of the Board.
On 1 July 2019, Mr Hicks’ entered into an executive employment agreement with the Company with his salary increased to $240,000 per
annum. The remuneration package includes statutory superannuation entitlements, a remuneration increase of not less than 5% per
annum and provision of leave in accordance to the National Employment Standards. The increase was not applied in the prior or current
financial year.
18 | H A N N A N S A N N U A L R E P O R T 2 0 2 1
DIRECTORS’ REPORT
REMUNERATION REPORT (AUDITED) (cont’d)
C.
Service agreements (cont’d)
Executive Director (cont’d)
In an effort to assist the Company with managing its cash flow, Mr Hicks deferred $28,750 in salary entitlements during the period
1 April 2020 to 30 June 2020. The deferred salary was paid to Mr Hicks in September 2020.
Remuneration and other terms of employment for the executive is formalised in an employment agreement. The executive is employed
on a rolling basis with no specified fixed terms. Major provisions of the agreements relating to the executive are set out below.
Name
Engagement
By HANNANS
By Employee
Termination Notice Period
Termination
payments*
Director | Damian Hicks
Employee
12 months
3 months
3 months
* Termination payments (other than for gross misconduct) are calculated on current remuneration at date of termination and are inclusive of the notice
period.
Non-Executive Directors
Remuneration and other terms of employment for the Non-executive Directors are formalised in service agreements. The Non-executive
directors are employed on a rolling basis with no specified fixed terms. They are remunerated on a fixed remuneration basis, exclusive of
superannuation. On 1 July 2017 the Non-Executive Directors fees were set at $20,000 per annum for each Non-executive Director. From
1 July 2019 the Non-Executive Directors fee is $24,000 per annum for each Non-executive Director.
Major provisions of the agreements relating to the Non-Executive directors are set out below.
Name
Non-Executive Directors
Jonathan Murray
Markus Bachmann
Clay Gordon
Amanda Scott
Termination Notice Period
By HANNANS
By Director
Termination
payments*
1 month
1 month
1 month
1 month
1 month
1 month
1 month
1 month
1 month
1 month
1 month
1 month
* Termination payments (other than for gross misconduct) are calculated on current remuneration at date of termination and are inclusive of the notice
period.
D.
Share–based compensation
If approved by shareholders, options are issued to directors and executives as part of their remuneration. The options are not based on
performance criteria, but are issued to align the interests of directors, executives and shareholders. There were no options issued to the
directors and executives during the year. As at 30 June 2021, 28,000,000 options (2020: 47,935,417) were held by Directors and Non-
Executives.
Directors
J Murray
M Bachmann
Issued
in
Finan-
cial
year
2017
2018
2018
2018
2017
2018
2018
2018
Options
issued
during
the year
No of
options
No.
No.
Issue date
Fair
value
per
options
at issue
date
Vesting
date(i)
Exercise
price
Expiry
date
–
–
–
–
–
–
–
–
–
–
15 Sep 17
0.9 cents
15 Sep 17
2.7 cents
15 Sep 20
27 Oct 17
1.0 cents
27 Oct 17
2.6 cents
27 Oct 20
3,500,000
27 Oct 17
1.0 cents
27 Oct 18
1.8 cents
27 Oct 21
3,500,000
27 Oct 17
1.2 cents
27 Oct 19
1.5 cents
27 Oct 22
–
–
15 Sep 17
0.9 cents
15 Sep 17
2.7 cents
15 Sep 20
27 Oct 17
1.0 cents
27 Oct 17
2.6 cents
27 Oct 20
3,500,000
27 Oct 17
1.0 cents
27 Oct 18
1.8 cents
27 Oct 21
3,500,000
27 Oct 17
1.2 cents
27 Oct 19
1.5 cents
27 Oct 22
Vested
during
the year
Expired/
Exercised
during
the year
No.
No.
–
–
–
–
–
–
–
–
3,237,500
3,500,000
–
–
2,697,917
3,500,000
–
–
H A N N A N S A N N U A L R E P O R T 2 0 2 1 | 19
DIRECTORS’ REPORT
REMUNERATION REPORT (AUDITED) (cont’d)
D.
Share–based compensation (cont’d)
Issued
in
Finan-
cial
year
2018
2018
2018
2018
2018
2018
Directors
C Gordon
A Scott
Options
issued
during
the year
No of
options
No.
No.
Issue date
Fair
value
per
options
at issue
date
Vesting
date(i)
Exercise
price
Expiry
date
Vested
during
the year
Lapsed/
Exercised
during
the year
No.
No.
–
–
–
–
–
–
–
27 Oct 17
1.0 cents
27 Oct 17
2.6 cents
27 Oct 20
3,500,000
27 Oct 17
1.0 cents
27 Oct 18
1.8 cents
27 Oct 21
3,500,000
27 Oct 17
1.2 cents
27 Oct 19
1.5 cents
27 Oct 22
–
27 Oct 17
1.0 cents
27 Oct 17
2.6 cents
27 Oct 20
3,500,000
27 Oct 17
1.0 cents
27 Oct 18
1.8 cents
27 Oct 21
3,500,000
27 Oct 17
1.2 cents
27 Oct 19
1.5 cents
27 Oct 22
–
–
–
–
–
–
3,500,000
–
–
3,500,000
–
–
(i) The unlisted options become vested on the vesting date. No other vesting condition applies.
E. Additional information
Performance income as a proportion of total compensation
No performance based bonuses have been paid to directors or executives during the financial year.
Key management personnel (KMP) equity holdings
Fully paid ordinary shares of Hannans Ltd
Balance at
1 July
Granted as
remuneration
Received on
exercise of
options
Net other
change
Balance at
30 June
Key management personnel
No.
No.
No.
No.
No.
2021
Damian Hicks
Jonathan Murray
Markus Bachmann
Clay Gordon
Amanda Scott
7,007,218
12,705,132
75,725,134
2,362,204
1,260,001
99,059,689
–
–
–
–
–
–
–
–
–
–
–
–
454,545
7,461,763
6,818,181
19,523,313
10,227,271
85,952,405
3,409,090
–
5,771,294
1,260,001
20,909,087
119,968,776
20 | H A N N A N S A N N U A L R E P O R T 2 0 2 1
DIRECTORS’ REPORT
REMUNERATION REPORT (AUDITED) (cont’d)
E.
Additional information (cont’d)
Options of Hannans Ltd
Key management personnel
2021
Damian Hicks
Jonathan Murray(i)
Markus Bachmann
Clay Gordon
Amanda Scott
Balance
at
1 July
No.
–
13,737,500
13,197,917
10,500,000
10,500,000
47,935,417
Granted as
remune-
ration
Options
exercised
Net other
change
Balance at
30 June
Exercisable
Not
exercisable
Vested at 30 June
No.
No.
No.
No.
No.
No.
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
(6,737,500)
7,000,000
7,000,000
(6,197,917)
7,000,000
7,000,000
(3,500,000)
7,000,000
7,000,000
(3,500,000)
7,000,000
7,000,000
(19,935,417) 28,000,000
28,000,000
–
–
–
–
–
–
(i) Mr Murray holds 840,000 in trust for unrelated third parties.
The options include those held directly, indirectly and beneficially by KMP.
Loans to KMP and their related parties
There were no loans to KMP and their related parties during the year.
Other transactions and balances with KMP and their related parties
Director transactions
Steinepreis Paganin, of which Mr Jonathan Murray is a partner, provided legal services amounting to $15,136 (2020: $4,983) to the Group
during the year. The amounts paid were on arm’s length commercial terms. Mr Murray’s director’s fees are also paid to Steinepreis
Paganin. At 30 June 2021 $433 was owed to Steinepreis Paganin (2020: Nil).
Corporate Board Services Pty Ltd (CBS), of which Mr Damian Hicks is a director, provided accounting and compliance services amounting
to $150,000 (2020: $143,750) to the Group during the year. The amounts paid were on arm’s length commercial terms. At 30 June 2021
there was no amount outstanding owed to CBS. During the year, Hannans invoiced $741 (2020: $2,894) for expenses paid on behalf CBS.
At 30 June 2021 there was no amount outstanding owed by CBS (2020: $1,298).
Scott Geological AB, of which Ms Amanda Scott is a director, provided geological services amounting to $5,825 (2020: $13,639) to the
Group during the year. The amounts paid were on arm’s length commercial terms. Ms Scott’s director’s fees are also paid to Scott
Geological. At 30 June 2021 there was no amount outstanding owed to Scott Geological AB (2020: $5,029).
End of Remuneration Report
DIRECTORS MEETINGS
The following tables set information in relation to Board meetings held during the financial year.
Board Member
Held while Director
Attended
Board Meetings
Damian Hicks
Jonathan Murray
Markus Bachmann
Clay Gordon
Amanda Scott
3
3
3
3
3
3
2
3
3
3
Circular
Resolutions
Passed
2
2
2
2
2
Total
5
4
5
5
5
H A N N A N S A N N U A L R E P O R T 2 0 2 1 | 21
DIRECTORS’ REPORT
PROJECTS
The Projects are constituted by the following tenements:
Tenement
Interest
Tenement
Interest
Tenement
Interest
Tenement Number
% Note
Tenement Number
% Note
Tenement Number
% Note
Project: Forrestania
Project: Forrestania
Project: Fraser Range
E77/2207-I
E77/2219-I
E77/2220-I
E77/2239-I
P77/4290
P77/4291
E77/2546
P77/4534
100
100
100
100
100
100
100
100
1,2
E77/2460
100
3
E63/1772
1,2
Project: Moogie
1,2
E09/2373
1,2
E09/2374
1,2
E09/2417
1,2
E09/2460
E09/2461
1
1
100
100
100
100
100
1
1
1
1
1
E63/2020
E63/2021
E63/2022
E63/2023
E63/2024
E63/2025
E63/2026
0
100
100
100
100
100
100
100
4
1
1
1
1
1
1
1
NOTE:
1
2
3
4
Reed Exploration Pty Ltd (REX) is a wholly owned subsidiary of Hannans Ltd. REX is the registered holder of the tenements.
REX holds a 100% interest in all minerals excluding gold. REX holds a 20% free-carried interest in the gold rights.
HR Forrestania Pty Ltd (HRF) is a wholly owned subsidiary of Hannans Ltd. HRF is the registered holder of the tenements.
REX may earn up to 70% interest in all minerals in accordance with the transaction terms. Kingmaker Metals Pty Ltd is the registered
holder of the tenement.
TENEMENTS UNDER APPLICATION
Applications for tenements have been submitted are as follows:
Tenement Number
Project: Forrestania
E77/2711
CORPORATE STRUCTURE
The corporate structure of Hannans group is as follows:
Hannans Ltd
(ASX: HNR)
HR Forrestania Pty Ltd
(100%)
HR Equities Pty Ltd
(100%)
Reed Exploration Pty Ltd
(100%)
22 | H A N N A N S A N N U A L R E P O R T 2 0 2 1
CAPITAL
Hannans Ltd issued capital is as follows:
Ordinary Fully Paid Shares
At the date of this report, the number of ordinary fully paid shares are:
Ordinary fully paid shares at 30 June 2021
Ordinary fully paid shares at the date of this report
DIRECTORS’ REPORT
Number of shares
2,359,977,192
2,359,977,192
At a general meeting of shareholders:
(a)
(b)
on a show of hands, each person who is a member or sole proxy has one vote; and
on a poll, each shareholder is entitled to one vote for each fully paid share.
Shares Under Option
At the date of this report there are a total of 7 unlisted option holders holding 129,500,000 unissued ordinary shares in respect of which
options are outstanding. The unlisted options do not carry voting rights at a general meeting of shareholders.
Balance at the beginning of the year
Movements of share options during the year
Expired on 15 September 2020 exercisable at 2.7 cents
Expired on 27 October 2020 exercisable at 2.6 cents
Issued on 29 October 2020 exercisable at 1.2 cents, expiring 30 October 2021
Issued on 29 October 2020 exercisable at 1.7 cents, expiring 30 October 2021
Issued on 29 October 2020 exercisable at 2.2 cents, expiring 30 October 2022
Issued on 29 October 2020 exercisable at 2.7 cents, expiring 30 October 2022
Balance at 30 June 2021
Total number of options outstanding at the date of this report
Substantial Shareholders
Hannans Ltd has the following substantial shareholders as at 22 September 2021:
Number of options
108,655,848
(21,155,848)
(28,000,000)
10,000,000
15,000,000
20,000,000
25,000,000
129,500,000
129,500,000
Name
Number of shares
Percentage of issued capital
Neometals Investments Pty Ltd
773,164,028
32.76%
Range of Shares as at 22 September 2021
Range
1 – 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,001 – 9,999,999
Total
Total Holders
128
194
160
1,071
1,048
2,601
Units
33,719
668,039
1,345,337
53,948,785
2,303,981,312
2,359,977,192
% Issued Capital
0.01%
0.03%
0.06%
2.29%
97.61%
100.00%
H A N N A N S A N N U A L R E P O R T 2 0 2 1 | 23
DIRECTORS’ REPORT
CAPITAL (cont’d)
Unmarketable Parcels as at 22 September 2021
Minimum $500.00 parcel at $0.029 per unit
17,242
Minimum parcel size
Holders
585
Units
3,491,659
Top 20 holders of Ordinary Shares as at 22 September 2021
Rank
Name
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
Neometals Investments Pty Ltd
Citicorp Nominees Pty Limited
HSBC Custody Nominees (Australia) Limited
MCA Nominees Pty Ltd
Equity & Royalty Investments Ltd
Anglo American Exploration
Comsec Nominees Pty Limited
Mr Michael Sydney Simm
Mossisberg Pty Ltd
Cmc Markets Stockbroking Nominees Pty Limited
BNP Paribas Nominees Pty Ltd
C Y T Investment Pty Ltd
Acacia Investments Pty Ltd
Mrs Andrea Murray
Pershing Australia Nominees Pty Ltd
Mr Ross Edward Itzstein
Anytime Accounts&Bookkeeping
Allua Holdings Pty Ltd
Over The Hill WA Pty Ltd
Mr William Scott Rankin
Units
773,164,028
122,115,502
86,465,573
77,401,545
60,000,003
60,000,000
46,179,197
38,000,000
35,107,728
31,140,258
26,106,983
21,000,000
19,015,090
18,594,137
15,000,000
13,818,181
11,770,000
10,000,000
10,000,000
8,699,489
% of Issued
Capital
32.76%
5.17%
3.66%
3.28%
2.54%
2.54%
1.96%
1.61%
1.49%
1.32%
1.11%
0.89%
0.81%
0.79%
0.64%
0.59%
0.50%
0.42%
0.42%
0.37%
Total of Top 20 holders of ORDINARY SHARES
1,483,577,714
62.87%
On-market buy back
There is no current on-market buy-back.
24 | H A N N A N S A N N U A L R E P O R T 2 0 2 1
DIRECTORS’ REPORT
PRINCIPAL ACTIVITIES
The principal activities of the Group during the year were the exploration and evaluation of mining tenements with the objectives of
identifying economic mineral deposits.
FINANCIAL REVIEW
The Group began the financial year with cash reserves of $855,949.
During the year total exploration expenditure expensed by the Group amounted to $1,324,932 (2020: $1,254,103). The exploration
expenditures relate to non JORC compliant mineral resource projects and this has been expensed in accordance with the Group’s
accounting policy. Administrative expenditure incurred amounted to $579,376 (2020: $800,096). This has resulted in an operating loss after
income tax for the year ended 30 June 2021 of $1,550,464 (2020: $1,900,520 loss).
As at 30 June 2021 cash and cash equivalents totalled $1,013,733.
Summary of 5 Year Financial Information as at 30 June
2021
2020
2019
2018
2017
Cash and cash equivalents ($)
1,013,733
855,949
2,686,790
4,082,079
1,481,828
Net assets/equity ($)
3,199,959
3,157,778
4,989,155
6,788,307
4,043,759
Exploration expenditure expensed ($)
(1,324,932)
(1,254,103)
(766,344)
(505,967)
(804,102)
Exploration and evaluation expenditure
capitalised/(written-off) ($)
(16,000)
–
(404,000)
(28,000)
2,688,000^
No of issued shares
2,359,977,192
1,987,954,539
1,987,954,539
1,980,304,538
1,682,640,560
No of options
Share price ($)
129,500,000
108,655,848
117,172,512
125,022,513
57,201,681
0.005
0.005
0.010
0.014
0.015
Market capitalisation (Undiluted) ($)
11,799,886
9,939,773
19,879,545
27,724,264
25,239,608
^ On 15 September 2016 Hannans held a General Meeting and shareholders approved the issue of 620,833,333 Hannans shares to Neometals Ltd in
consideration of the acquisition of 100% of the issued share capital of Reed Exploration Pty Ltd. On 29 September 2016 the acquisition of Reed
Exploration Pty Ltd was completed. The capitalised exploration and evaluation expenditure related to the acquisition of Reed Exploration Pty Ltd.
Summary of Share Price Movement for year ended 30 June 2021
Highest
Lowest
Latest
Price (cents)
1.2
0.5
2.9
Date
19 Jan 2021
1 Jul 2020, 17-21 Dec 2020,
23 Dec 2020-4 Jan 2021,
20 Jan 2021
22 September 2021
CORPORATE GOVERNANCE STATEMENT
The Company is committed to high standards of corporate governance designed to enable the Company to meet its performance
objectives and better manage its risks.
The Company has adopted a comprehensive governance framework in the form of a formal corporate governance charter together with
associated policies, protocols and related instruments (together Charter).
The Company’s Charter is based on a template which has been professionally verified to be complementary to and in alignment with the
ASX Corporate Governance Council Principles and Recommendations 4th Edition 2019 (ASX CGCPR) in all material respects. The Charter
also substantially addresses the suggestions of good corporate governance mentioned in the ‘Commentary’ sections of the ASX CGCPR.
H A N N A N S A N N U A L R E P O R T 2 0 2 1 | 25
DIRECTORS’ REPORT
CORPORATE GOVERNANCE STATEMENT (cont’d)
The Board is responsible for the overall corporate governance of the Group. The Board has governance oversight of all matters relating to
the strategic direction, corporate governance, policies, practices, management and operations of the Group with the aim of delivering
value to its Shareholders and respecting the legitimate interest of its other valued stakeholders, including employees, suppliers and joint
venture partners.
Under ASX Listing Rule 4.10.3, the Company is required to provide in its annual report details of where shareholders can obtain a copy of
its corporate governance statement, disclosing the extent to which the Company has followed the ASX Corporate Governance Council
Principles and Recommendations in the reporting period. The corporate governance statement is published on the Company’s website:
https://www.hannans.com/corporate-governance.php
ANNOUNCEMENTS
ASX Announcements for the year and to the date of this report
Date
Announcement Title
Date
Announcement Title
9 Sep 2021
Reinstatement to Official Quotation
1 Dec 2020
Update - Proposed issue of Securities - HNR
9 Sep 2021
LiB Recycling in the Nordics Presentation
1 Dec 2020
Proposed issue of Securities - HNR
9 Sep 2021
Lithium-ion Battery Recycling in the Nordics
1 Dec 2020
AGM Results
8 Sep 2021
Suspension from Official Quotation
30 Nov 2020 AGM Presentation
6 Sep 2021
Trading Halt
30 Nov 2020 New SPP Closing Date
2 Aug 2021
Southern Cross Gold & Nickel Project Update
30 Nov 2020
Secures Nickel Project at Fraser Range
30 Jul 2021
4th Quarter Activities Report
30 Nov 2020
Secures Gold & Nickel Project near Southern Cross
30 Jul 2021
4th Quarter Cashflow Report
16 Nov 2020
Placement & SPP
13 Jul 2021
Forrestania Nickel Project Update
2 Nov 2020
Placement & SPP
30 Apr 2021
3rd Quarter Activities Report
2 Nov 2020
Proposed issue of Securities - HNR
30 Apr 2021
3rd Quarter Cashflow Report
31 Oct 2020
1st Quarter Activities Report
21 Apr 2021
Forrestania Nickel Project Update
31 Oct 2020
1st Quarter Cashflow Report
19 Apr 2021
Geophysical surveys at Fraser Range
30 Oct 2020
Company Presentation
12 Mar 2021 Half Year Financial Report
30 Oct 2020
Letter to Shareholders
10 Feb 2021
Company Presentation
29 Oct 2020 Notice of Annual General Meeting
31 Jan 2021
2nd Quarter Activities Report
29 Oct 2020
Issue of Options
31 Jan 2021
2nd Quarter Cashflow Report
29 Oct 2020
Proposed issue of Securities - HNR
22 Jan 2021
Change in substantial holding from NMT
28 Oct 2020
Expiry of Options
19 Jan 2021
Response to ASX Price and Volume Query
12 Oct 2020
Director Nominations and Change of Address
19 Jan 2021
Pause in Trading
18 Sep 2020
Appendix 4G
18 Jan 2021
Fraser Range Geophysical Surveys
18 Sep 2020
2020 Annual Report
22 Dec 2020
Change of Directors' Interest Notice x4
16 Sep 2020
Change of Director's Interest Notice
22 Dec 2020
Change of Interest of Substantial Holder
16 Sep 2020
Expiry of Options
21 Dec 2020
SPP and Placement Raises $1.6M
15 Sep 2020
Forrestania Nickel Drilling
16 Dec 2020 New Constitution
14 Sep 2020 Moogie Geochemical Sampling Update
11 Dec 2020
Forrestania Nickel Update
31 Jul 2020
4th Quarter Activities Report
4 Dec 2020
Cleansing Notice
31 Jul 2020
4th Quarter Cashflow Report
4 Dec 2020
Amended Appendix 2A
29 Jul 2020
Drill Testing of Nickel Targets
4 Dec 2020
Issue of Shares
2 Jul 2020
Forrestania Nickel Project (Interim Update)
26 | H A N N A N S A N N U A L R E P O R T 2 0 2 1
DIRECTORS’ REPORT
COMPLIANCE
Significant Changes in State of Affairs
Share options
Other than those disclosed in this annual report no significant
changes in the state of affairs of the Group occurred during the
financial year.
Significant Events after the Balance Date
No other matters or circumstances have arisen since the end of
the financial year which significantly affected or may significantly
affect the operations of the Group, the results of those
operations, or state of affairs of the Group in future financial
years other than those stated below:
(a) On 3 September 2021 the Company signed a Memorandum
of Understanding (MoU) with Critical Metals that provides
Hannans with rights to use a Lithium-ion Battery (LiB)
recycling technology that is safe, sustainable, low energy
and low CO2. The MoU with Critical Metals will take the form
of a joint venture enabling Hannans to earn its interest by
funding and managing certain tasks and activities. Refer to
ASX announcement dated 9 September 2021 for further
details.
COVID-19
The COVID-19 pandemic continues to pose a global socio-
political, economic and health risk. The potential for the
pandemic to have both lasting and unforeseen impacts is high.
At this point in time the Group is experiencing minor delays in
project timelines as a result of the pandemic. These delays are
not expected to be significant. As a Group, we adhere to the
changes in government policies and changed the way we work
to protect the wellbeing of our people and ensure business
continuity. We continue to maintain a state of response
readiness commensurate with the risks and in accordance with
Government recommendations and health advice.
As at the date of this report, there were 129,500,000 options on
issue to purchase ordinary shares at a range of exercise prices
(129,500,000 at the reporting date). Refer to the remuneration
report for further details of the options outstanding.
Option holders do not have any right, by virtue of the option, to
participate in any share issue of the Company or any related body
corporate.
Insurance of Directors and Officers
During or since the end of the financial year, the Company has
paid premiums insuring all the Directors of Hannans Ltd against
costs incurred in defending conduct involving:
(a)
(b)
a wilful breach of duty, and
a contravention of sections 182 or 183 of the Corporations
Act 2001,
as permitted by section 199B of the Corporations Act 2001.
The total amount of insurance contract premiums paid was
$12,946.
Indemnification of auditors
To the extent permitted by law, the Company has agreed to
indemnify its auditors, Ernst & Young Australia, as part of the
terms of its audit engagement agreement against claims by third
parties arising from the audit (for an unspecified amount). No
payment has been made to indemnify Ernst & Young during or
since the financial year.
Dividends
No dividends were paid or declared during the financial year and
no recommendation for payment of dividends has been made.
Likely developments and Expected Results
Non–Audit Services
The Group expects to maintain the present status and level of
operations and hence there are no likely developments in the
Group’s operations.
During the year Ernst & Young, the Group auditor, did not
perform other non-audit services in addition to its statutory
duties.
Environmental Regulation and Performance
Auditor’s independence declaration
The Group is subject to significant environmental regulation in
respect to its exploration activities.
The auditor’s independence declaration as required under section
307C of the Corporations Act 2001 is included on page 28.
The Group aims to ensure the appropriate standard of
environmental care is achieved, and in doing so, that it’s aware
of and is in compliance with all environmental legislation. The
Directors of the Group are not aware of any breach of
environmental legislation for the year under review.
Signed in accordance with a resolution of the Directors made
pursuant to s.298(2) of the Corporations Act 2001.
On behalf of the Directors
Damian Hicks
Executive Director
Perth, Australia this 23rd day of September 202
H A N N A N S A N N U A L R E P O R T 2 0 2 1 | 27
INDEPENDENCE DECLARATION TO THE DIRECTORS OF
HANNANS LTD
28 | H A N N A N S A N N U A L R E P O R T 2 0 2 1
DIRECTORS’ DECLARATION
The Directors declare that:
(a)
(b)
in the Directors’ opinion, subject to the achievement of matters noted in note 2(a), there are reasonable grounds to believe that the
Company will be able to pay its debts as and when they become due and payable;
in the Directors’ opinion, the attached financial statements and notes thereto are in accordance with the Corporations Act 2001,
including compliance with Australian Accounting Standards and International Financial Reporting Standards as disclosed in note 2
to the financial report and giving a true and fair view of the financial position and performance of the Group for the financial year
ended 30 June 2021; and
(c)
the Directors have been given the declarations required by s.295A of the Corporations Act 2001 for the financial year ended
30 June 2021.
Signed in accordance with a resolution of the Directors made pursuant to s.295(5) of the Corporations Act 2001.
On behalf of the Directors
Damian Hicks
Executive Director
Perth, Australia this 23rd day of September 2021
H A N N A N S A N N U A L R E P O R T 2 0 2 1 | 29
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF
HANNANS LTD
30 | H A N N A N S A N N U A L R E P O R T 2 0 2 1
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF
HANNANS LTD
H A N N A N S A N N U A L R E P O R T 2 0 2 1 | 31
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF
HANNANS LTD
32 | H A N N A N S A N N U A L R E P O R T 2 0 2 1
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF
HANNANS LTD
H A N N A N S A N N U A L R E P O R T 2 0 2 1 | 33
CONSOLIDATED STATEMENT OF PROFIT AND LOSS AND
OTHER COMPREHENSIVE INCOME
for the financial year ended 30 June 2021
Note
2021
$
2020
$
Interest and other income
5(a)(b)
125,621
117,561
5(c)
5(d)
5(e)
5(f)
14
6
Loss on sale of listed securities
Employee and contractors expenses
Depreciation expense
Consultants expenses
Occupancy expenses
Marketing expenses
Exploration and evaluation expenses
Write off of exploration and evaluation expenses
Fair value changes in financial assets designated at fair value through P&L
Other expenses
Loss from continuing operations before income tax expense
Income tax benefit/(expense)
Loss from continuing operations attributable
to members of the parent entity
Other comprehensive loss for the year
Items that may be reclassified subsequently to profit or loss
Items that will not be reclassified to profit or loss
Total other comprehensive loss for the year
(486)
(238,308)
(3,882)
(210,089)
(750)
(5,520)
–
(413,386)
(4,248)
(220,738)
(1,910)
(4,483)
(1,324,932)
(1,254,103)
(16,000)
244,709
(120,827)
–
36,118
(155,331)
(1,550,464)
(1,900,520)
–
–
(1,550,464)
(1,900,520)
–
–
–
–
–
–
Total comprehensive loss for the year
(1,550,464)
(1,900,520)
Net loss attributable to the parent entity
(1,550,464)
(1,900,520)
Total comprehensive loss attributable to the parent entity
(1,550,464)
(1,900,520)
Loss per share:
Basic (cents per share)
Diluted (cents per share)
The accompanying notes form part of the financial statements.
20
20
(0.07)
(0.07)
(0.10)
(0.10)
34 | H A N N A N S A N N U A L R E P O R T 2 0 2 1
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
as at 30 June 2021
Current assets
Cash and cash equivalents
Trade and other receivables
Other financial assets at fair value through profit and loss
Total current assets
Non–current assets
Other receivables
Property, plant and equipment
Other financial assets at fair value through profit and loss
Exploration and evaluation expenditure
Total non–current assets
TOTAL ASSETS
Current liabilities
Trade and other payables
Provisions
Total current liabilities
TOTAL LIABILITIES
NET ASSETS
Equity
Issued capital
Reserves
Accumulated losses
TOTAL EQUITY
The accompanying notes form part of the financial statements.
Note
27(a)
10
11
12
13
11
14
15
16
17
18
19
2021
$
1,013,733
90,849
65,000
1,169,582
30,000
19,406
328,460
2,240,000
2,617,866
3,787,448
580,104
7,385
587,489
587,489
2020
$
855,949
85,760
12,603
954,312
30,000
23,288
143,751
2,256,000
2,453,039
3,407,351
238,497
11,076
249,573
249,573
3,199,959
3,157,778
42,433,949
40,872,810
655,948
1,092,358
(39,889,938)
(38,807,390)
3,199,959
3,157,778
H A N N A N S A N N U A L R E P O R T 2 0 2 1 | 35
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
for the financial year ended 30 June 2021
Attributable to equity holders
Ordinary Shares
$
Option Reserves
$
Accumulated Losses
$
Total
Equity
$
Balance as at 1 July 2020
40,872,810
1,092,358
(38,807,390)
3,157,778
Loss for the year
Other comprehensive loss
for the period
Total comprehensive loss
for the period
Transactions with owners
Issue of shares
Share based payments
Exercise/Lapse of options
Share issue expense
Total transactions with owners
–
–
–
1,605,000
50,750
–
(94,611)
1,561,139
–
–
–
–
31,506
(467,916)
–
(436,410)
(1,550,464)
(1,550,464)
–
–
(1,550,464)
(1,550,464)
–
–
467,916
–
467,916
1,605,000
82,256
–
(94,611)
1,592,645
Balance as at 30 June 2021
42,433,949
655,948
(39,889,938)
3,199,959
Balance as at 1 July 2019
40,872,810
1,061,897
(36,945,552)
4,989,155
Loss for the year
Other comprehensive loss
for the period
Total comprehensive loss
for the period
Transactions with owners
Share based payments
Exercise/Lapse of options
Share issue expense
Total transactions with owners
–
–
–
–
–
–
–
–
–
–
69,143
(38,682)
–
30,461
(1,900,520)
(1,900,520)
–
–
(1,900,520)
(1,900,520)
–
38,682
–
38,682
69,143
–
–
69,143
Balance as at 30 June 2020
40,872,810
1,092,358
(38,807,390)
3,157,778
36 | H A N N A N S A N N U A L R E P O R T 2 0 2 1
CONSOLIDATED STATEMENT OF CASH FLOWS
for the financial year ended 30 June 2021
Cash flows from operating activities
Payments for exploration and evaluation
Payments to suppliers and employees
Interest received
Receipt from ATO (COVID-19 cash boost)
Note
2021
$
(932,632)
(590,127)
779
62,258
2020
$
(1,227,871)
(550,425)
39,705
–
Net cash used in operating activities
27(b)
(1,459,722)
(1,738,591)
Cash flows from investing activities
Payment for investment securities
Proceed on sale of tenements
Proceeds on sale of investment securities
Release of security bonds
Net cash (used)/received by investing activities
Cash flows from financing activities
Proceeds from issues of equity securities
Payment for share issue costs
Net cash received by financing activities
(21,932)
100,000
29,049
–
107,117
1,605,000
(94,611)
1,510,389
(118,250)
–
–
26,000
(92,250)
–
–
–
Net (decrease)/increase in cash and cash equivalents
157,784
(1,830,841)
Cash and cash equivalents at the beginning of the financial year
855,949
2,686,790
Cash and cash equivalents at the end of the financial year
27(a)
1,013,733
855,949
The accompanying notes form part of the financial statements.
H A N N A N S A N N U A L R E P O R T 2 0 2 1 | 37
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the financial year ended 30 June 2021
1. General Information
The consolidated financial statements of Hannans Ltd (Company or Hannans) and its subsidiaries (collectively, the Group) for the
year ended 30 June 2021 were authorised for issue in accordance with a resolution of the Directors on 23 September 2021.
Hannans is a for profit company limited by shares incorporated and domiciled in Australia whose shares are publicly traded on the
Australian Securities Exchange.
The nature of the operations and principal activities of the Group are mineral exploration and project development which is further
described in the Directors' Report. Information on other related party relationships is provided in note 25.
2.
Summary of significant accounting policies
The financial report is a general purpose financial report, which
has been prepared in accordance with the requirements of the
Corporations Act 2001, Australian Accounting Standards and
other authoritative pronouncements of the Australian
Accounting Standards Board. The financial report includes the
financial statements of Hannans Ltd and its subsidiaries.
The financial report also complies with International Financial
Reporting Standards (IFRS) as issued by the International
Accounting Standards Board.
(a)
Basis of preparation
The financial report has been prepared on an accruals
basis and is based on historical cost, except for certain
financial assets and liabilities which are carried at fair
value. Cost is based on the fair values of the
consideration given in exchange for assets. All amounts
are presented in Australian dollars, unless otherwise
noted.
Separate financial statements for Hannans as an
individual entity are no longer presented as the
consequence of a change to the Corporations Act 2001,
however, required financial information for Hannans as
an individual entity is included in note 30.
The accounting policies set out below have been
applied in preparing the financial statements for the
year ended 30 June 2021 and the comparative
information presented in these financial statements for
the year ended 30 June 2020.
Going concern basis of preparation
The Group recorded a loss of $1,550,464 (2020: loss
$1,900,520) for the year ended 30 June 2021 and had a
cash outflow from operating and investing activities of
$1,352,605 (2020: $1,830,841outflow) during the twelve
(12) month period. The Group had cash and cash
equivalents at 30 June 2021 of $1,013,733 (2020:
$855,949) and has a working capital surplus of $582,093
(2020: $704,739 surplus).
The Group’s cashflow forecast for the period ended
1 September 2021 to 31 March 2023 reflects that the
Group will need to raise additional working capital
during the quarter ending December 2021 to enable the
Group to continue to meet its current committed
administration and exploration expenditure.
(a)
Basis of preparation (cont’d)
Notwithstanding the above matters, the Directors are
satisfied they will be able to raise additional working
capital as required and thus it is appropriate to prepare
the financial statements on a going concern basis. In
arriving at this position the Directors have considered
the following pertinent matters:
∂ The planned exploration expenditure is staged and
expenditure may or may not be spent depending on
the result of the prior exploration stage; and
∂ The Directors are satisfied that they will be able to
raise additional funds by either an equity raising
and/or implementation of joint ventures agreements
to fund ongoing exploration commitments and for
working capital.
In the event that the Group is unable to raise additional
funds to meet the Group’s ongoing working capital
requirements when required, there is a significant
uncertainty as to whether the Group will be able to meet
its debts as and when they fall due and thus continue as
a going concern.
The financial statements do not include any adjustments
relating to the recoverability and classification of
recorded asset amounts, nor to the amounts or
classification of liabilities that might be necessary should
the Group not be able to continue as a going concern.
(b) New Accounting Standards for Application in the
Current Financial Year and Future Periods
The accounting policies adopted in the preparation of
the financial statements are consistent with those
followed in the preparation of the Company’s annual
financial statements for the year ended 30 June 2020
except for the new accounting standards stated below.
New standards, interpretations and amendments
adopted by the Group during the financial year
The Group has considered the implications of new and
amended Accounting Standards which have become
applicable for the current financial reporting period.
38 | H A N N A N S A N N U A L R E P O R T 2 0 2 1
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the financial year ended 30 June 2021
2.
Statement of significant accounting policies (cont’d)
(c)
Cash and cash equivalents
Cash and cash equivalents comprise cash on hand, cash
in banks and investments in money market instruments
that are readily convertible to known amount of cash
which are subject to an insignificant risk of change in
value , net of outstanding bank overdrafts.
(d)
Employee benefits
Provision is made for employee benefits accumulated
as a result of employees rendering services up to the
reporting date. These benefits include wages and
salaries and annual leave and are recognised at the
rates payable when these provisions are expected
to be settled.
Liabilities recognised in respect of employee benefits
expected to be settled within 12 months, are measured
at their nominal values using the remuneration rate
expected to apply at the time of settlement.
Liabilities recognised in respect of employee benefits
which are not expected to be settled within 12 months
are measured as the present value of the estimated
future cash outflows to be made by the entity in respect
of services provided by employees up to reporting date.
(e)
Financial assets
Financial assets are recognised and derecognised on
trade date where purchase or sale of an investment is
under a contract whose terms require delivery of the
investment within the timeframe established by the
market concerned, and are initially measured at fair
value, net of transaction costs.
Subsequently measured at fair value through profit or
loss (FVPL), amortised cost, or fair value through other
comprehensive income (FVOCI). The classification is
based on two criteria: the Group’s business model for
managing the assets; and whether the instruments’
contractual cash flows represent ‘solely payments of
principal and interest’ (SPPI) on the principal amount
outstanding (the SPPI criterion). The SPPI test is
applied to the entire financial asset, even if it contains
an embedded derivative. Consequently, a derivative
embedded in a debt instrument is not accounted for
separately.
(b) New Accounting Standards for Application in the
Current Financial Year and Future Periods (cont’d)
Initial adoption of AASB 2020-04:
COVID-19-Related Rent Concessions
AASB 2020-4: Amendments to Australian Accounting
Standards – COVID-19-Related Rent Concessions
amends AASB 16 by providing a practical expedient
that permits lessees to assess whether rent concessions
that occur as a direct consequence of the COVID-19
pandemic and, if certain conditions are met, account for
those rent concessions as if they were not lease
modifications.
Initial adoption of ASB 2018-6:
Amendments to Australian Accounting Standards
– Definition of a Business
AASB 2018-6 amends and narrows the definition of a
business specified in AASB 3: Business Combinations,
simplifying the determination of whether a transaction
should be accounted for as a business combination or
an asset acquisition. Entities may also perform a
calculation and elect to treat certain acquisitions as
acquisitions of assets.
Initial adoption of AASB 2018-7:
Amendments to Australian Accounting Standards
– Definition of Material
This amendment principally amends AASB 101 and
AASB 108 by refining the definition of material by
improving the wording and aligning the definition
across the standards issued by the AASB.
Initial adoption of AASB 2019-3: Amendments to
Australian Accounting Standards – Interest Rate
Benchmark
This amendment amends specific hedge accounting
requirements to provide relief from the potential effects
of the uncertainty caused by interest rate benchmark
reform.
Initial adoption of AASB 2019-1:
Amendments to Australian Accounting Standards –
References to the Conceptual Framework
This amendment amends Australian Accounting
Standards, Interpretations and other pronouncements
to reflect the issuance of Conceptual Framework for
Financial Reporting by the AASB.
The standards listed above did not have any impact on
the amounts recognised in prior periods and are not
expected to significantly affect the current or future
periods.
H A N N A N S A N N U A L R E P O R T 2 0 2 1 | 39
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the financial year ended 30 June 2021
2.
Statement of significant accounting policies (cont’d)
(e)
Financial assets (cont’d)
(f)
Financial instruments issued by the Company
Trade and other receivables
Transaction costs on the issue of equity instruments
Trade receivables are initially recognised at their
transaction price and other receivables at fair value.
Receivables that are held to collect contractual cash
flows and are expected to give rise to cash flows
representing solely payments of principal and interest
are classified and subsequently measured at amortised
cost. Receivables that do not meet the criteria for
amortised cost are measured at FVPL.
The Group assesses on a forward-looking basis the ECL
associated with its debt instruments carried at amortised
cost. The amount of ECL is updated at each reporting
date to reflect changes in credit risk since initial
recognition of the respective financial instrument. The
Group always recognises the lifetime ECL for trade
receivables carried at amortised cost. The ECL on these
financial assets are estimated based on the Group’s
historic credit loss experience, adjusted for factors that
are specific to the debtors, general economic conditions
and an assessment of both the current as well as
forecast conditions at the reporting date.
For all other receivables measured at amortised cost, the
Group recognises lifetime ECL when there has been a
significant increase in credit risk since initial recognition.
If the credit risk on the financial instrument has not
increased significantly since initial recognition, the
Group measures the loss allowance for that financial
instrument at an amount equal to ECL within the next 12
months.
The Group considers an event of default has occurred
when a financial asset is more than 90 days past due or
external sources indicate that the debtor is unlikely to
pay its creditors, including the Group. A financial asset is
credit impaired when there is evidence that the
counterparty is in significant financial difficulty or a
breach of contract, such as a default or past due event
has occurred. The Group writes off a financial asset
when there is information indicating the counterparty is
in severe financial difficulty and there is no realistic
prospect of recovery.
Equity instruments
Shares and options held by the Group are classified as
equity instruments and are stated at FVPL. Gains and
losses arising from changes in fair value are recognised
directly to profit or loss for the period.
Loans receivables
Loans receivables are classified, at initial recognition,
and subsequently measured at amortised cost, FVOCI, or
FVPL. Loan receivables that are held to collect
contractual cash flows and are expected to give rise to
cash flows representing solely payments of principal and
interest are classified and subsequently measured at
amortised cost. Loan receivables that do not meet the
criteria for amortised cost are measured at FVPL.
Transaction costs arising on the issue of equity
instruments are recognised directly in equity as a
reduction of the proceeds of the equity instruments to
which the costs relate. Transaction costs are the costs
that are incurred directly in connection with the issue of
those equity instruments and which would not have
been incurred had those instruments not been issued.
(g) Goods and services tax
Revenues, expenses and assets are recognised net of the
amount of goods and services tax (GST), except:
i. where the amount of GST incurred is not
recoverable from the taxation authority, it is
recognised as part of the cost of acquisition of an
asset or as part of an item of expense; or
ii.
for receivables and payables which are recognised
inclusive of GST.
The net amount of GST recoverable from, or payable to,
the taxation authority is included as part of receivables
or payables.
Cash flows are included in the cash flow statement on a
gross basis. The GST component of cash flows arising
from investing and financing activities which is
recoverable from, or payable to, the taxation authority is
classified as operating cash flows.
(h)
Impairment of non-financial assets
At each reporting date, the Group reviews the carrying
amounts of its tangible and intangible assets to
determine whether there is any indication that those
assets have suffered an impairment loss. Where the
asset does not generate cash flows that are independent
from other assets, the Group estimates the recoverable
amount of the cash–generating unit to which the asset
belongs. If any such indication exists, the recoverable
amount of the asset is estimated in order to determine
the extent of the impairment loss (if any), being the
higher of the asset’s fair value less costs to sell and value
in use to the asset’s carrying value. Excess of the asset’s
carrying value over its recoverable amount is expensed
to the consolidated statement of comprehensive
income.
Intangible assets with indefinite useful lives and
intangible assets not yet available for use are tested for
impairment annually and whenever there is an indication
that the asset may be impaired.
Recoverable amount is the higher of fair value less costs
to sell and value in use. In assessing value in use, the
estimated future cash flows are discounted to their
present value using a pre–tax discount rate that reflects
current market assessments of the time value of money
and the risks specific to the asset for which the
estimates of future cash flows have not been adjusted.
40 | H A N N A N S A N N U A L R E P O R T 2 0 2 1
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the financial year ended 30 June 2021
2.
Statement of significant accounting policies (cont’d)
(h)
Impairment of non-financial assets (cont’d)
(i)
Tax (cont’d)
Where an impairment loss subsequently reverses, the
carrying amount of the asset (cash–generating unit) is
increased to the revised estimate of its recoverable
amount, but only to the extent that the increased
carrying amount does not exceed the carrying amount
that would have been determined had no impairment
loss been recognised for the cash–generating unit in
prior years. A reversal of an impairment loss is
recognised in profit or loss immediately, unless the
relevant asset is carried at fair value, in which case the
reversal of the impairment loss is treated as a
revaluation increase.
(i)
Tax
Current tax
Current tax is calculated by reference to the amount of
income taxes payable or recoverable in respect of the
taxable profit or tax loss for the period. It is calculated
using tax rates and tax laws that have been enacted or
substantively enacted by reporting date. Current tax for
current and prior periods is recognised as a liability (or
asset) to the extent that it is unpaid (or refundable).
Deferred tax
Deferred tax is accounted for using the full liability
method in respect of temporary differences arising from
differences between the carrying amount of assets and
liabilities in the financial statements and the
corresponding tax base of those items.
Deferred tax liabilities are recognised for taxable
temporary differences arising on investments in
subsidiaries, branches, associates and joint ventures
except where the entity is able to control the reversal of
the temporary differences and it is probable that the
temporary differences will not reverse in the foreseeable
future. Deferred tax assets arising from deductible
temporary differences associated with these investments
and interests are only recognised to the extent that it is
probable that there will be sufficient taxable profits
against which to utilise the benefits of the temporary
differences and they are expected to reverse in the
foreseeable future.
Deferred tax assets and liabilities are measured at the
tax rates that are expected to apply to the period(s)
when the asset and liability giving rise to them are
realised or settled, based on tax rates (and tax laws) that
have been enacted or substantively enacted by
reporting date. The measurement of deferred tax
liabilities and assets reflects the tax consequences that
would follow from the manner in which the entity
expects, at the reporting date, to recover or settle the
carrying amount of its assets and liabilities.
Deferred tax assets and liabilities are offset when they
relate to income taxes levied by the same taxation
authority and the entity intends to settle its current tax
assets and liabilities on a net basis.
Current and deferred tax for the period
Current and deferred tax is recognised as an expense or
income in the statement of comprehensive income,
except when it relates to items credited or debited
directly to equity, in which case the deferred tax is also
recognised directly in equity, or where it arises from the
initial accounting for a business combination, in which
case it is taken into account in the determination of
goodwill or excess.
Tax consolidation
Legislation to allow groups, comprising a parent entity
and its Australian resident wholly owned entities, to
elect to consolidate and be treated as a single entity for
income tax purposes was substantively enacted on 21
October 2002. The Company and its 100% owned
Australian resident subsidiaries implemented the tax
consolidation legislation on 1 July 2008 with Hannans as
the head entity.
(j)
Exploration and evaluation expenditure
Exploration and evaluation expenditure incurred is
expensed immediately to the profit and loss where the
applicable area of interest does not contain a JORC
compliant mineral resource. Where the area of interest
contains a JORC compliant mineral resource exploration
and evaluation expenditure is capitalised. These costs
are carried forward only if they relate to an area of
interest for which rights of tenure are current and in
respect of which:
i.
such costs are expected to be recouped through
successful development and exploitation or from
sale of the area; or
ii. exploration and evaluation activities in the area have
not, at balance date, reached a stage which permits
a reasonable assessment of the existence or
otherwise of economically recoverable reserves, and
active operations in, or relating to, the area are
continuing.
Accumulated costs in respect of areas of interest which
are abandoned are written off in full against profit or
loss in the year in which the decision to abandon the
area is made. A regular review is undertaken of each
area of interest to determine the appropriateness of
continuing to carry forward costs in relation to that area
of interest.
Notwithstanding the fact that a decision not to abandon
an area of interest has been made, based on the above,
the exploration and evaluation expenditure in relation to
an area may still be written off if considered appropriate
to do so.
H A N N A N S A N N U A L R E P O R T 2 0 2 1 | 41
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the financial year ended 30 June 2021
2.
Statement of significant accounting policies (cont’d)
(k)
Government grants
(l)
Joint arrangements (cont’d)
Government grants are recognised where there is
reasonable assurance that the grant will be received and
all attached conditions will be complied with. When the
grant relates to an expense item, it is recognised as
income on a systematic basis over the periods that the
related costs, for which it is intended to compensate, are
expensed. When the grant relates to an asset, it is
recognised as income in equal amounts over the
expected useful life of the related asset.
When the Group receives grants of non-monetary
assets, the asset and the grant are recorded at nominal
amounts and released to profit or loss over the expected
useful life of the asset, based on the pattern of
consumption of the benefits of the underlying asset by
equal annual instalments.
(l)
Joint arrangements
Joint ventures
A joint venture is a type of joint arrangement whereby
the parties that have joint control of the arrangement
have rights to the net assets of the joint venture. Joint
control is the contractually agreed sharing of control of
an arrangement, which exists only when decisions about
the relevant activities require unanimous consent of the
parties sharing control.
The considerations made in determining significant
influence or joint control is similar to those necessary to
determine control over subsidiaries.
The Group’s investments in joint ventures are accounted
for using the equity method.
Under the equity method, the investment in a joint
venture is initially recognised at cost. The carrying
amount of the investment is adjusted to recognise
changes in the Group’s share of net assets of the joint
venture since the acquisition date. Goodwill relating to
the joint venture is included in the carrying amount of
the investment and is neither amortised nor individually
tested for impairment.
The statement of profit or loss reflects the Group’s share
of the results of operations of the joint venture. Any
change in OCI of those investees is presented as part of
the Group’s OCI. In addition, when there has been a
change recognised directly in the equity of the joint
venture, the Group recognises its share of any changes,
when applicable, in the statement of changes in equity.
Unrealised gains and losses resulting from transactions
between the Group and joint venture are eliminated to
the extent of the interest in the joint venture.
The aggregate of the Group’s share of profit or loss of a
joint venture is shown on the face of the statement of
profit or loss outside operating profit and represents
profit or loss after tax and non-controlling interests in
the subsidiaries of the joint venture.
The financial statements of the joint venture are
prepared for the same reporting period as the Group.
When necessary, adjustments are made to bring the
accounting policies in line with those of the Group. After
application of the equity method, the Group determines
whether it is necessary to recognise an impairment loss
on its investment in its joint venture. At each reporting
date, the Group determines whether there is objective
evidence that the investment in the joint venture is
impaired.
If there is such evidence, the Group calculates the
amount of impairment as the difference between the
recoverable amount of the joint venture and its carrying
value, then recognises the loss as ‘Share of profit of a
joint venture’ in the statement of profit or loss.
Upon loss of joint control over the joint venture, the
Group measures and recognises any retained
investment at its fair value. Any difference between the
carrying amount of the joint venture upon loss of joint
control and the fair value of the retained investment and
proceeds from disposal is recognised in profit or loss.
Joint operations
The Group’s recognises its interest in joint operations by
recognising its:
∂ Assets, including its share of any assets held jointly
∂
Liabilities, including its share of any liabilities
incurred jointly
∂ Revenue from the sale of its share of the output
arising from the joint operation
∂ Share of the revenue from the sale of the output by
the joint operation
∂ Expenses, including its share of any expenses
incurred jointly
(m) Payables
Trade payables and other accounts payable are
recognised when the entity becomes obliged to make
future payments resulting from the purchase of goods
and services.
42 | H A N N A N S A N N U A L R E P O R T 2 0 2 1
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the financial year ended 30 June 2021
2.
Statement of significant accounting policies (cont’d)
(n)
Foreign currency translation
(o)
Principles of consolidation
Functional and presentation currency
The consolidated financial statements are presented in
Australian Dollars, which is Hannans’ functional and
presentation currency.
Transactions and balance
Transactions in foreign currencies are initially recorded
in the functional currency (Australian Dollars (AUD)) by
applying the exchange rates ruling at the date of the
transaction. Monetary assets and liabilities denominated
in foreign currencies are retranslated at the rate of
exchange ruling at the reporting date.
Non-monetary items that are measured in terms of
historical cost in a foreign currency are translated using
the exchange rate as at the date of the initial
transaction. Non-monetary items measured at fair value
in a foreign currency are translated using the exchange
rates at the date when the fair value was determined.
Differences arising on settlement or translation of
monetary items are recognised in profit or loss with the
exception of monetary items that are designated as part
of the hedge of the Group’s net investment of a foreign
operation. These are recognised in other comprehensive
income until the net investment is disposed of, at which
time, the cumulative amount is reclassified to profit or
loss. Tax charges and credits attributable to exchange
differences on those monetary items are also recorded
in other comprehensive income.
The gain or loss arising on translation of non-monetary
items measured at fair value is treated in line with the
recognition of gain or loss on change in fair value of the
item (i.e., translation differences on items whose fair
value gain or loss is recognised in other comprehensive
income or profit or loss are also recognised in other
comprehensive income or profit or loss, respectively).
Group companies
On consolidation, the assets and liabilities of foreign
operations are translated into dollars at the rate of
exchange prevailing at the reporting date and their
statements of profit or loss are translated at exchange
rates prevailing at the dates of the transactions. The
exchange differences arising on translation for
consolidation are recognised in other comprehensive
income. On disposal of a foreign operation, the
component of other comprehensive income relating to
that particular foreign operation is recognised in profit
or loss.
The consolidated financial statements comprise the
financial statements of the Group as at and for the
period ended 30 June 2020. Control is achieved when
the Group is exposed, or has rights, to variable returns
from its involvement with the investee and has the
ability to affect those returns through its power over the
investee. Specifically, the Group controls an investee if
and only if the Group has:
∂ Power over the investee (i.e. existing rights that give
it the current ability to direct the relevant activities
of the investee);
∂ Exposure, or rights, to variable returns from its
involvement with the investee; and
∂ The ability to use its power over the investee to
affect its returns.
When the Group has less than a majority of the voting
or similar rights of an investee, the Group considers all
relevant facts and circumstances in assessing whether it
has power over an investee, including:
∂ The contractual arrangement with the other vote
holders of the investee;
∂ Rights arising from other contractual arrangements;
and
∂ The Group’s voting rights and potential voting
rights.
The Group re-assesses whether or not it controls an
investee if facts and circumstances indicate that there
are changes to one or more of the three elements of
control. Consolidation of a subsidiary begins when the
Group obtains control over the subsidiary and ceases
when the Group loses control of the subsidiary. Assets,
liabilities, income and expenses of a subsidiary acquired
or disposed of during the year are included in the
statement of comprehensive income from the date the
Group gains control until the date the Group ceases to
control the subsidiary.
Profit or loss and each component of other
comprehensive income (OCI) are attributed to the equity
holders of the parent of the Group and to the non-
controlling interests, even if this results in the non-
controlling interests having a deficit balance. When
necessary, adjustments are made to the financial
statements of subsidiaries to bring their accounting
policies into line with the Group’s accounting policies.
All intra-group assets and liabilities, equity, income,
expenses and cash flows relating to transactions
between members of the Group are eliminated in full on
consolidation.
H A N N A N S A N N U A L R E P O R T 2 0 2 1 | 43
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the financial year ended 30 June 2021
2.
Statement of significant accounting policies (cont’d)
(o)
Principles of consolidation (cont’d)
(q)
Leases
A change in the ownership interest of a subsidiary,
without a loss of control, is accounted for as an equity
transaction. If the Group loses control over a subsidiary,
it:
∂ De-recognises the assets (including goodwill) and
liabilities of the subsidiary;
∂ De-recognises the carrying amount of any non-
controlling interests;
∂ De-recognises the cumulative translation differences
recorded in equity;
∂ Recognises the fair value of the consideration
received;
∂ Recognises the fair value of any investment retained;
∂ Recognises any surplus or deficit in profit or loss;
and
∂ Reclassifies the parent’s share of components
previously recognised in OCI to profit or loss or
retained earnings, as appropriate, as would be
required if the Group had directly disposed of the
related assets or liabilities.
A list of subsidiaries appears in note 4 to the financial
statements.
(p)
Plant and equipment
Plant and equipment are stated at cost less accumulated
depreciation and impairment loss. Cost includes
expenditure that is directly attributable to the
acquisition of the item.
Depreciation is provided on plant and equipment.
Depreciation is calculated on a straight line or
diminishing value basis so as to write off the net cost of
each asset over its expected useful life to its estimated
residual value. The estimated useful lives, residual values
and depreciation method are reviewed at the end of
each annual reporting period.
The depreciation rates used for each class of depreciable
assets are:
Class of fixed asset
Depreciation rate (%)
Office furniture
10.00 – 20.00
Office equipment
7.50 – 66.67
Motor vehicles
16.67 – 25.00
The Group assesses at contract inception whether a
contract is, or contains, a lease. That is, if the contract
conveys the right to control the use of an identified
asset for a period of time in exchange for consideration
Group as a lessee
The Group applies a single recognition and
measurement approach for all leases, except for short-
term leases (i.e., leases with a lease term of 12 months
or less) and leases of low-value assets. The Group
recognises lease liabilities to make lease payments and
right-of-use assets representing the right to use the
underlying assets.
(i)
Right-of-use assets
The Group recognises right-of-use assets at the
commencement date of the lease (i.e., the date
the underlying asset is available for use). Right-
of-use assets are measured at cost, less any
accumulated depreciation and impairment losses,
and adjusted for any re-measurement of lease
liabilities. The cost of right-of-use assets includes
the amount of lease liabilities recognised, initial
direct costs incurred, and lease payments made
at or before the commencement date less any
lease incentives received. Unless the Group is
reasonably certain to obtain ownership of the
leased asset at the end of the lease term, the
recognised right-of-use assets are depreciated on
a straight-line basis over the shorter of its
estimated useful life and the lease term (where
the entity does not have a purchase option at the
end of the lease term). Right-of-use assets are
subject to impairment assessment.
(ii)
Lease Liabilities
At the commencement date of the lease, the
Group recognises lease liabilities measured at the
present value of lease payments to be made over
the lease term. The lease payments include fixed
payments (including in-substance fixed
payments) less any lease incentives receivable,
variable lease payments that depend on an index
or a rate, and amounts expected to be paid under
residual value guarantees. The lease payments
also include the exercise price of a purchase
option reasonably certain to be exercised by the
Group and payments of penalties for terminating
a lease, if the lease term reflects the Group
exercising the option to terminate. The variable
lease payments that do not depend on an index
or a rate are recognised as expense in the period
on which the event or condition that triggers the
payment occurs.
44 | H A N N A N S A N N U A L R E P O R T 2 0 2 1
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the financial year ended 30 June 2021
2.
Statement of significant accounting policies (cont’d)
(q)
Leases (cont’d)
(t)
Share–based payments
In calculating the present value of lease
payments, the Group uses the incremental
borrowing rate at the lease commencement date
if the interest rate implicit in the lease is not
readily determinable. After the commencement
date, the amount of lease liabilities is increased to
reflect the accretion of interest and reduced for
the lease payments made. In addition, the
carrying amount of lease liabilities is remeasured
if there is a modification, a change in the lease
term, a change in the in-substance fixed lease
payments or a change in the assessment to
purchase the underlying asset.
(iii)
Short-term leases and Low Value Assets
The Group applies the short-term lease
recognition exemption to its short-term leases of
their Office Spaces (i.e., those leases that have a
lease term of 12 months or less from the
commencement date and do not contain a
purchase option). It also applies the lease of low-
value assets recognition exemption (i.e. below
$5,000). Lease payments on short-term leases
and leases of low-value assets are expensed on a
straight-line basis over the lease term.
(r)
Provisions
The amount recognised as a provision is the best
estimate of the consideration required to settle the
present obligation as a result of a past event at
reporting date, taking into account the risks and
uncertainties surrounding the obligation. Where a
provision is measured using the cashflows estimated to
settle the present obligation, its carrying amount is the
present value of those cashflows.
When some or all of the economic benefits required to
settle a provision are expected to be recovered from a
third party, the receivable is recognised as an asset if it
is virtually certain that recovery will be received and the
amount of the receivable can be measured reliably.
(s)
Revenue recognition
Revenue is recognised when or as the Group transfers
control of goods or services to a customer at the
amount to which the Group expects to be entitled. If the
Group estimates the amount of consideration promised
includes a variable amount, the Group estimates the
amount of consideration to which it will be entitled.
Dividend and interest revenue
Dividend revenue is recognised on a receivable basis.
Interest revenue is recognised on a time proportionate
basis that takes into account the effective yield on the
financial asset.
Equity–settled share–based payments are measured at
fair value at the date of grant. Fair value is measured by
use of the Black and Scholes model or Monte-Carlo
simulation model. The expected life used in the model
has been adjusted, based on management’s best
estimate, for the effects of non–transferability, exercise
restrictions, and behavioural considerations.
The fair value determined at the grant date of the
equity–settled share–based payments is expensed on a
straight–line basis over the vesting period, based on the
entity’s estimate of shares that will eventually vest.
For cash–settled share–based payments, a liability equal
to the portion of the goods or services received is
recognised at the current fair value determined at each
reporting date.
(u)
Fair value measurement
The Group measures equity instrument at fair value and
receivables are measured at amortised costs at each
balance sheet date.
Fair value is the price that would be received to sell an
asset or paid to transfer a liability in an orderly
transaction between market participants at the
measurement date. The fair value measurement is based
on the presumption that the transaction to sell the asset
or transfer the liability takes place either:
∂
∂
In the principal market for the asset or liability; or
In the absence of a principal market, in the most
advantageous market for the asset or liability.
All assets and liabilities for which fair value is measured
or disclosed in the financial statements are categorised
within the fair value hierarchy, described as follows,
based on the lowest level input that is significant to the
fair value measurement as a whole:
∂ Level 1: Quoted (unadjusted) market prices in active
markets for identical assets or liabilities;
∂ Level 2: Valuation techniques for which the lowest
level input that is significant to the fair value
measurement is directly or indirectly observable; or
∂ Level 3: Valuation techniques for which the lowest
level input that is significant to the fair value
measurement is unobservable.
(v)
Segment reporting policy
Operating segments are identified and segment
information disclosed on the basis of internal reports
that are regularly provided to, or reviewed by the
Group’s chief operating decision maker which, for the
Group, is the Board of Directors. In this regard, such
information is provided using similar measures to those
used in preparing the statement of comprehensive
income and statement of financial position.
H A N N A N S A N N U A L R E P O R T 2 0 2 1 | 45
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the financial year ended 30 June 2021
3.
Critical accounting estimates and judgements
In the application of the Group’s accounting policies, which are described in note 2, management is required to make judgments,
estimates and assumptions about carrying values of assets and liabilities that are not readily apparent from other sources. The
estimates and associated assumptions are based on historical experience and various other factors that are believed to be
reasonable under the circumstance, the results of which form the basis of making the judgments. Actual results may differ from
these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in
the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods
if the revision affects both current and future periods.
The key estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of certain
assets and liabilities within the next annual reporting period are:
Key judgements — capitalised exploration and evaluation expenditure
The future recoverability of exploration and evaluation expenditure capitalised on the acquisition of areas of interest and/or
capitalised JORC compliant mineral resource expenditure are dependent on a number of factors, including whether the Group
decides to exploit the related lease itself or, if not, whether it successfully recovers the related exploration and evaluation asset
through sale. To the extent that capitalised acquisition costs and/or capitalised JORC compliant mineral resource expenditure are
determined not to be recoverable in the future, profits and net assets will be reduced in the period in which this determination is
made.
Key judgements — share–based payments
The Group measures the cost of equity settled transactions with employees by reference to the fair value of the equity instruments
at the date at which they are granted. The fair value is determined using a Black Scholes simulation model. The related assumptions
detailed in note 8. The accounting estimates and assumptions relating to equity-settled share-based payments would have no
impact on the carrying amount of assets and liabilities within the next annual reporting period but may impact expenses and equity.
4.
Subsidiaries
The consolidated financial statements of the Group include:
Name of entity
Parent entity:
Hannans Ltd (i)
Subsidiaries:
Principal
Activities
Country of
incorporation
2021
2020
% Ownership interest
Exploration
Australia
HR Equities Pty Ltd (ii)
HR Forrestania Pty Ltd (ii)
Reed Exploration Pty Ltd (ii)
Equities holding
Australia
Exploration
Exploration
Australia
Australia
100
100
100
100
100
100
(i)
(ii)
Hannans is the ultimate parent entity. All the companies are members of the group.
The 100% interest in HR Equities Pty Ltd, HR Forrestania Pty Ltd and Reed Exploration Pty Ltd are held by the parent entity.
46 | H A N N A N S A N N U A L R E P O R T 2 0 2 1
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the financial year ended 30 June 2021
5.
Income/expenses from operations
(a)
Interest income
Bank
Total interest income
(b) Other Income
Asset sale (i)
Other
Cash flow boost (ii)
Total other income
(i) A tenement was sold to an unrelated third party. There is no carrying balance of the
tenement on the capitalised exploration and evaluation expenses.
(ii) Due to the COVID-19 outbreak, the Cash Boost scheme was introduced to provide
eligible entities with additional cash flow as a credit to their account with Australia
Taxation Office. The Company was an eligible entity and the amount relates to the
Cash Boost received in reference to the amount of employee income tax withheld.
(c)
Loss on disposal of shares
Proceeds on disposal of shares (net of broker fees)
Less: Carrying fair value of shares disposed
Total loss on disposal of shares
(d)
Employee benefits expense
Salaries and wages
Post employment benefits:
Defined contribution plans
Share–based payments:
Equity settled share–based payments
Total employee benefits expense
2021
$
2020
$
621
–
621
100,000
–
25,000
125,000
30,489
4,783
35,272
–
7,289
75,000
82,289
29,049
(29,535)
(486)
–
–
–
213,228
324,594
25,080
36,156
–
238,308
52,636
413,386
(e) Depreciation of non–current assets
3,882
4,248
(f)
Lease rental expenses:
Lease payments (i)
Total lease rental expenses
(i) The Group has a lease of office and storage space with lease terms of 12 months or
less and is a lease of low-value asset. The Group applies the ‘short-term lease’ and
‘lease of low-value assets’ recognition exemption for the lease.
750
750
1,910
1,910
(g) Non-employee share based payments
31,506
16,507
H A N N A N S A N N U A L R E P O R T 2 0 2 1 | 47
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the financial year ended 30 June 2021
6.
Income taxes
Income tax recognised in profit or loss
Current income tax
Current income tax charge
Deferred tax
Total tax benefit/(expense)
2021
$
2020
$
–
–
–
–
–
–
The prima facie income tax benefit/(expense) on pre-tax accounting loss from
operations reconciles to the income tax expense in the financial statements
as follows:
Loss from operations
(1,550,464)
(1,900,520)
Income tax benefit calculated at 27.5% (2020: 27.5%)
Effect of expenses that are not deductible in determining taxable profit
Effect of net deferred tax asset not recognised as deferred tax assets
Income tax benefit/(expense) attributable to operating loss
(403,121)
(46,102)
449,223
–
(522,643)
(15,817)
538,460
–
The tax rate for year ended 30 June 2021 payable by Australian corporate entities on
taxable profits under Australian tax law is 26% (2020: 27.5%). The enacted tax rate
for base rate entities is 25% with effect from 1 July 2021. Unrecognised deferred tax
above is calculated at 25% (2020: 26%).
Deferred tax related to items charged or credited directly to
Other Comprehensive Income during the year:
Unrealised loss on available-for-sale investments
–
–
–
–
Statement of
Financial Position
Statement of
Comprehensive Income
2021
$
2020
$
2021
$
2020
$
Deferred Income Tax
Deferred income tax at 30 June
relates to the following
Deferred tax liabilities
Exploration and evaluation assets
(246,630)
(250,790)
Unearned income
Prepayments
Property, plant and equipment
Deferred tax assets
Accruals
Provision for loss on loan
Financial assets
Capital raising costs
Revenue tax losses
Capital losses
Deferred tax assets not brought to account
as realisation is not probable
Deferred tax assets not recognised
Deferred tax (income)/expense
48 | H A N N A N S A N N U A L R E P O R T 2 0 2 1
(52)
(5,736)
(5,046)
11,150
–
35,020
9,008
5,932,875
4,807,030
(93)
(4,819)
(6,055)
11,992
3,345
9,391
17,857
5,452,124
4,807,030
(10,537,619)
(10,039,982)
–
–
4,160
41
(917)
1,009
(842)
(3,345)
25,629
(8,849)
480,751
(17,099)
1,224
(262)
1,517
3,848
(23,372)
5,152
(13,716)
258,096
–
(276,779)
(497,637)
–
61,391
–
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the financial year ended 30 June 2021
6.
Income taxes (cont’d)
Tax consolidation
Relevance of tax consolidation to the Group
Legislation to allow groups, comprising a parent entity and its Australian resident wholly owned entities, to elect to consolidate and
be treated as a single entity for income tax purposes was substantively enacted on 21 October 2002. The Company and its 100%
owned Australian resident subsidiaries have implemented the tax consolidation legislation.
7. Key management personnel disclosures
(a)
Details of key management personnel
The Directors and Executives of Hannans Ltd during the year were:
Directors
•
•
Damian Hicks
Jonathan Murray
•
•
Markus Bachmann
Clay Gordon
•
Amanda Scott
(b)
Key management personnel compensation
The aggregate compensation made to key management personnel of the Company
and the Group is set out below.
Short–term employee benefits
Share based payments
Long–term employee benefits
Post–employment benefits
Total key management personnel compensation
2021
$
2020
$
367,408
–
–
25,080
392,488
368,115
52,638
–
25,080
445,833
The compensation of each member of the key management personnel of the Group is set out in the Directors Remuneration report
on pages 17 to 21.
8.
Share–based payments
The Company has an ownership–based compensation arrangement for employees of the Group.
Each option issued under the arrangement converts into one ordinary share of Hannans on exercise. No amounts are paid or
payable by the recipient on receipt of the option. Options neither carry rights to dividends nor voting rights. Options may be
exercised at any time from the date of vesting to the date of their expiry. The number of options granted is at the sole discretion of
the Directors.
Incentive options issued to Directors (executive and non–executive) are subject to approval by shareholders and attach vesting
conditions as appropriate.
The following share–based payment arrangements were in existence during the current and comparative reporting periods:
Options series
Number
Grant date
Expiry date
Exercise price (cents)
15 September 2016
21,155,848
11 November 2016
15 September 2020
27 October 2017
27 October 2018
27 October 2019
28,000,000
28,000,000
28,000,000
27 October 2017
27 October 2020
27 October 2018
27 October 2021
27 October 2019
27 October 2022
19 November 2019
3,500,000
19 November 2019
19 November 2022
30 October 2021
30 October 2021
30 October 2022
30 October 2022
10,000,000
15,000,000
20,000,000
25,000,000
29 October 2020
30 October 2021
29 October 2020
30 October 2021
29 October 2020
30 October 2022
29 October 2020
30 October 2022
2.7
2.6
1.8
1.5
1.5
1.2
1.7
2.2
2.7
Details of options over ordinary shares in the Company provided as remuneration to each director during the year are set out in the
Directors Remuneration report on pages 17 to 21.
H A N N A N S A N N U A L R E P O R T 2 0 2 1 | 49
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the financial year ended 30 June 2021
8.
Share-based payments (cont’d)
The following reconciles the outstanding share options granted at the beginning and end of the financial year:
2021
2020
Weighted
average
exercise price
$
0.032
0.022
–
0.027
0.018
0.018
Number of
options
108,655,848
70,000,000
–
(49,155,848)
129,500,000
129,500,000
Weighted
average
exercise price
$
0.032
0.015
–
0.029
0.021
0.021
Number of
options
117,172,512
3,500,000
–
(12,016,664)
108,655,848
108,655,848
Balance at beginning of the financial year
Granted during the financial year
Exercised during the financial year
Expired during the financial year
Balance at end of financial year
Exercisable at end of the financial year
(i)
Issued during the financial year
A total of 70,000,000 was issued to an external consultant during the year (2020: 3,500,000). No options over ordinary share
were granted to senior executives and employees during the year (2020: nil).
Option granted on 29 October 2020
Details
Tranche 1
Tranche 2
Tranche 3
Tranche 4
Fair value at grant date
Expected volatility (%)
Risk-free interest rate (%)
Expected life of share options
Share price on issue
Model used
1.1 cents
0.7 cents
1.4 cents
1.1 cents
100%
0.11%
1 year
100%
0.11%
1 year
100%
0.11%
2 years
100%
0.11%
2 years
0.6 cents
0.6 cents
0.6 cents
0.6 cents
Black-Scholes
Black-Scholes
Black-Scholes
Black-Scholes
(ii)
Exercised at end of the financial year
No options over ordinary shares were exercised during the year (2020: nil).
(iii)
Expired during the financial year
During the financial year a total of 49,155,848 (2020: 12,016,664) options over ordinary shares expired, comprising of the
following:
•
•
21,155,848 options at 2.7 cents expired on 15 September 2020; and
28,000,000 options at 2.6 cents expired on 27 October 2020.
(iv) Balance at end of the financial year
The share options outstanding at the end of the financial year had a weighted average exercise price of $0.018 (2020: $0.021)
and a weighted average remaining contractual life of 0.94 years (2020: 1.15 years).
50 | H A N N A N S A N N U A L R E P O R T 2 0 2 1
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the financial year ended 30 June 2021
9. Remuneration of auditors
Fees to Ernst & Young (Australia)
Fees for auditing the statutory financial report of the parent covering the group and
auditing the statutory financial reports of any controlled entities
Total auditor remuneration
10. Current trade and other receivables
Accounts receivable (i)
Net goods and services tax (GST) receivable
Other receivables
(i)
There were no current trade and other receivables that were past due but not impaired
(2020: nil).
11. Other financial assets at fair value through profit and loss
Current
Equity instruments
Quoted equity shares (i)
Total
Non-current
Equity instruments
Quoted equity shares (i)
Unquoted equity shares (ii)
Total
(i)
Investments in listed entities include the following:
(a) 687,594 fully paid ordinary shares in Errawarra Resources Ltd (ASX:ERW)
where 437,594 fully paid ordinary shares are escrowed to 14 December 2022; and
(b) 50,000 fully paid ordinary shares in NickelX Ltd (ASX:NKL)
where 25,000 ordinary shares are escrowed to 26 October 2021.
(ii)
Investment in unlisted entities include the following:
(a) 575,000 fully paid ordinary shares in Critical Metals Ltd. Critical Metals Ltd has
35,902,500 ordinary shares on issue. The principal activity of the Company is to
investigate the recovery of vanadium from steel making slag, sourcing lithium ion
battery feedstock for recycling and exploration of mining tenements.
(b) 1 share at $1 in Equity & Royalty Investments Ltd. Equity & Royalty Investments Ltd has
100 million ordinary shares on issue. The principal activity of the Company is the
investment in equity and royalties in other companies with the objective of realising
gains through equity and generating an income stream through the royalties.
12. Non–current other receivables
Other receivables – bonds
2021
$
2020
$
34,339
34,339
26,026
42,563
22,260
90,849
65,000
65,000
98,459
230,001
328,460
34,614
34,614
4,682
24,928
56,150
85,760
12,603
12,603
–
143,751
143,751
30,000
30,000
30,000
30,000
H A N N A N S A N N U A L R E P O R T 2 0 2 1 | 51
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the financial year ended 30 June 2021
13. Property, plant and equipment
Cost
Balance at 1 July 2019
Additions
Disposals
Balance at 1 July 2020
Additions
Disposals
Balance at 30 June 2021
Accumulated depreciation and impairment
Balance at 1 July 2018
Depreciation expense
Disposals
Balance at 1 July 2019
Depreciation expense
Disposals
Balance at 30 June 2020
Net book value
As at 30 June 2020
As at 30 June 2021
Aggregate depreciation allocated during the year:
Office furniture and equipment
Motor vehicles
14. Exploration and evaluation expenditure
Balance at beginning of financial year
LESS: Write off costs (i)
Balance at end of financial year
Office
furniture
and equipment
at cost
Motor vehicles
at cost
$
$
Total
$
20,291
29,025
49,316
–
–
–
–
–
–
20,291
29,025
49,316
–
–
–
–
–
–
20,291
29,025
49,316
18,740
609
–
19,349
253
–
3,040
3,639
–
6,679
3,629
–
19,602
10,308
942
689
22,346
18,717
2021
$
253
3,629
3,882
21,780
4,248
–
26,028
3,882
–
29,910
23,288
19,406
2020
$
609
3,639
4,248
2,256,000
(16,000)
2,240,000
2,256,000
–
2,256,000
(i) During the year, Hannans recognised a write off of $16,000 in respect of capitalised exploration and evaluation (2020: nil).
The recoverability of the carrying amount of the exploration and evaluation assets is dependent on the continuance of the
consolidated entities right to tenure of the interest, the results of future exploration and the successful development and commercial
exploration, or alternatively, sale of the respective area of interest. For those areas of interest de-recognised or written off during the
year, exploration results indicates the subsequent successful development and commercial exploration may be unlikely and the
decision was made to discontinue activities in these areas, resulting in full de recognition of the capitalised exploration and
evaluation in relation to the related areas of interest.
52 | H A N N A N S A N N U A L R E P O R T 2 0 2 1
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the financial year ended 30 June 2021
15. Current trade and other payables
Trade payables (i)
Accruals
Other payable
(i) The average credit period on purchases of goods and services is 30 days. No interest is
charged on the trade payables for the first 30 to 60 days from the date of invoice.
Thereafter, interest is charged at various penalty rates. The consolidated entity has financial
risk management policies in place to ensure that all payables are paid within the credit
timeframe.
16. Provisions
Current
Employee benefits
Balance at 1 July 2019
Increase/(decrease) in provision
Balance at 1 July 2020
Increase/(decrease) in provision
Utilised during the year
Balance at 30 June 2021
2021
$
405,035
136,713
38,356
580,104
7,385
7,385
Employee
benefits
$
–
11,076
11,076
18,462
(22,153)
7,385
2021
$
2020
$
66,746
139,973
31,778
238,497
11,076
11,076
Total
$
–
11,076
11,076
18,462
(22,153)
7,385
2020
$
17.
Issued capital
2,359,977,192 fully paid ordinary shares (2020: 1,987,954,539)
42,433,949
42,433,949
40,872,810
40,872,810
2021
No.
2020
$
No.
$
Fully paid ordinary shares
Balance at beginning of financial year
1,987,954,539
40,872,810
1,987,954,539
40,872,810
Vendor Shares - 4 Dec 2020
Share Purchase Plan - 22 December 2020
Placement of shares - 22 December 2020
Share issue costs
7,250,000
239,772,654
124,999,999
–
50,750
1,055,000
550,000
(94,611)
–
–
–
–
Balance at end of financial year
2,359,977,192
42,433,949
1,987,954,539
40,872,810
Fully paid ordinary shares carry one vote per share and carry the right to dividends.
H A N N A N S A N N U A L R E P O R T 2 0 2 1 | 53
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the financial year ended 30 June 2021
18. Reserves
Balance at 1 July 2019
Share based payment expense
Exercise/lapse of options
Balance at 1 July 2020
Share based payment expense
Exercise/lapse of options
Loss in an associate
Balance at the end of the financial year
Nature and purpose of reserves
Option reserve
Option reserve
$
Total
reserve
$
1,061,897
1,061,897
69,143
(38,682)
1,092,358
31,506
(467,916)
–
655,948
69,143
(38,682)
1,092,358
31,506
(467,916)
–
655,948
The option reserve recognises the fair value of options issued and valued using the Black-Scholes model.
Share options
As at 30 June 2021, options over 129,500,000 (2020: 108,655,848) ordinary shares in aggregate are as follow:
Issuing entity
Hannans Ltd
Hannans Ltd
Hannans Ltd
Hannans Ltd
Hannans Ltd
Hannans Ltd
Hannans Ltd
Hannans Ltd
No of shares
under option
Class of shares
28,000,000
28,000,000
28,000,000
3,500,000
10,000,000
15,000,000
20,000,000
25,000,000
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Exercise price
of option
2.6 cents each
1.8 cents each
1.5 cents each
Expiry date
of options
27 Oct 2020
27 Oct 2021
27 Oct 2022
1.5 cents each
19 Nov 2022
1.2 cents each
1.7 cents each
2.2 cents each
2.7 cents each
30 Oct 2021
30 Oct 2021
30 Oct 2022
30 Oct 2022
Share options are all unlisted, carry no rights to dividends and no voting rights. On 29 October 2020 70,000,000 options were issued
to an unrelated third party (2020: 3,500,000). No options were exercised during the period (2020: nil). A total of 49,155,848 (2020:
12,016,664) expired unexercised during the period.
19. Accumulated losses
Balance at beginning of financial year
Loss attributable to members of the parent entity
Items of other comprehensive income recognised directly in retained earnings:
Options lapsed
Options exercised
Balance at end of financial year
2021
$
2020
$
(38,807,390)
(1,550,464)
(36,945,552)
(1,900,520)
467,916
–
38,682
–
(39,889,938)
(38,807,390)
54 | H A N N A N S A N N U A L R E P O R T 2 0 2 1
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the financial year ended 30 June 2021
20. Loss per share
Basic loss per share:
Diluted loss per share:
Loss for the year
2021
Cents per share
2020
Cents per share
(0.07)
(0.07)
(0.10)
(0.10)
The loss and weighted average number of ordinary shares used in the calculation of basic and diluted loss per share are as follows:
Loss for the year
Weighted average number of ordinary shares
for the purposes of basic loss per share
Effects of dilution from:
Share options
Weighted average number of ordinary shares adjusted
for the effect of dilution loss per share
2021
$
2020
$
(1,550,464)
(1,900,520)
2021
No.
2020
No.
2,181,967,701
1,987,954,539
–
–
2,181,967,701
1,987,954,539
At 30 June 2021 129,500,000 (2020: 108,655,848) were not included in the diluted earnings per share calculation as they are anti-
dilutive.
21. Commitments for expenditure
Exploration, evaluation & development (expenditure commitments)
Not longer than 1 year
Longer than 1 year and not longer than 5 years
Longer than 5 years
2021
$
2020
$
385,514
1,060,933
327,241
1,773,688
143,080
436,240
–
579,320
H A N N A N S A N N U A L R E P O R T 2 0 2 1 | 55
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the financial year ended 30 June 2021
22. Contingent liabilities and contingent assets
The Office of State Revenue (OSR) informed the Company on 30 October 2012 that it has raised a Duties Investigation regarding the
restructure involving the Mineral Rights Deed between the Company and Errawarra Resources Ltd. OSR has requested preliminary
supporting information to assess the duty on the transaction. On 21 October 2015 OSR informed the Company that the matter is
currently being reviewed by the technical branch. The Company does not consider it probable a stamp duty liability will arise.
23. Segment reporting
The Group operates in the mineral exploration industry in Australia. For management purposes, the Group is organised into one
main operating segment which involves the exploration of minerals in Australia. All of the Group’s activities are interrelated and
discrete financial information is reported to the Board as a single segment. Accordingly, all significant operating decisions are based
upon analysis of the Group as one segment. Operating segments are identified and segment information disclosed on the basis of
internal reports that are regularly provided to, or reviewed by, the Group’s Chief Operating Decision Maker which, for the Group, is
the Board of Directors. In this regard, such information is provided using similar measures to those used in preparing the statement
of comprehensive income and statement of financial position.
24. Farm-in and joint operations
Name of project
Forrestania (i)
Fraser Range (ii)
Principal activity
Exploration
Exploration
Interest
2021
%
20
0
2020
%
20
0
(i)
(ii)
Reed Exploration entered into a joint arrangement with Classic Minerals Ltd (Classic) (ASX: CLZ) whereby Reed Exploration
retained a 20% interest in the Forrestania gold rights which is free-carried until a decision to mine has been made. Classic is
required to meet all exploration expenditure to keep the project in good standing.
On 29 November 2020 Reed Exploration entered into an earn-in agreement with Kingmaker Metals Pty Ltd (Kingmaker)
whereby Reed Exploration may earn a 70% interest in the Fraser Range tenement (Tenement) by incurring exploration
expenditure of $1 million in accordance with the following schedule:
∂
Initial commitment – the Group must incur a minimum $100,000 of exploration expenditure by 30 June 2021, following
which it shall have the right to withdraw from this agreement or proceed to the next stage. As at 30 June 2021, $130,998
of exploration expenditure was incurred on the Tenement;
∂ may elect to incur an additional $200,000 of exploration expenditure by 30 June 2022 to earn a 33% interest in the
Tenement (Stage 1 Interest);
∂ may elect to incur an additional $300,000 of exploration expenditure by 30 June 2023 to earn a 51% interest in the
Tenement (Stage 2 Interest); and
∂ may incur an additional $400,000 of exploration expenditure by 30 June 2024 to earn a 70% interest in the Tenement
(Stage 3 Interest).
This joint venture accounting is not applicable and all expenditure throughout the farm-in period is reflected as exploration
expenditure in the statement of comprehensive income, consistent with the accounting policy in relation to expenditure on
mining properties outlined in note 2(j).
Hannans will be the manager and be solely responsible for all exploration decisions, pay all rates and rents and maintain the
Tenement in good standing. Kingmaker will be free-carried until a decision to mine is made. Refer to the ASX Announcement
dated 30 November 2020 for further detail in relation to the Tenement and the terms of the agreement.
Capital commitments and contingent liabilities
The capital commitments and contingent liabilities arising from the Group’s interests in joint operations are disclosed in note 22.
56 | H A N N A N S A N N U A L R E P O R T 2 0 2 1
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the financial year ended 30 June 2021
25. Related party disclosures
(a)
Equity interests in related parties
Equity interests in subsidiaries
Details of the percentage of ordinary shares held in subsidiaries are disclosed in note 4 to the financial statements.
Equity interests in joint operations
Details of interests in joint operations are disclosed in note 24 to the financial statements.
(b)
Key management personnel (KMP) remuneration
Details of KMP remuneration are disclosed in note 7 to the financial statements.
(c)
Loans to KMP and their related parties
Errawarra Resources Ltd (Errawarra), of which Mr Jonathan Murray is a director, was provided with a loan facility of $50,000
at an interest rate of 20% per annum. Mr Hicks and Mr Bachmann were directors of Errawarra and resigned as directors of
Errawarra on 1 April 2021 and 30 June 2021 respectively. The interest rate was reduced to 12.5% starting from 1 July 2019
onwards. The loan was secured against Errawarra's rights, title and interest in the agreement executed between Errawarra,
Reid Systems Inc and Reid Systems (Australia) Pty Ltd. Errawarra has fully drawdown on the loan facility. Interest on the loan
facility to 30 June 2020 amounted to $60,016. The loan was carried at its fair value and is measured to nil as the loan was
considered non-recoverable. On 8 September 2020 the Company agreed to convert the outstanding loan, principal plus
interest, of $110,016 to 687,594 fully paid ordinary shares in Errawarra at $0.16 per share on an arm’s length basis and waive
all rights to interest from 1 July 2020 until the date of the conversion. On 30 October 2020 Errawarra fully repaid the loan by
converting the outstanding loan to equity. The settlement of the loan was completed at the fair value of $110,016 and the
impairment was reversed to the consolidated statement of profit or loss.
(d)
Transactions with other related parties
The following table provides the total amount of transactions that have been entered into with related parties for the relevant
financial year.
Director transactions
Steinepreis Paganin
Corporate Board Services
Scott Geological
Sales to
related parties
$
Purchases
from related
parties
$
Amounts
owed by
related parties*
$
Amounts
owed to
related parties*
$
2021
2020
2021
2020
2021
2020
–
–
741
2,894
–
–
15,136
4,983
150,000
143,750
5,825
13,639
–
–
–
1,298
–
–
433
–
–
–
–
5,029
* The amounts are classified as trade receivables and trade payables, respectively.
(e)
Parent entity
The ultimate parent entity in the Group is Hannans Ltd.
H A N N A N S A N N U A L R E P O R T 2 0 2 1 | 57
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the financial year ended 30 June 2021
26. Subsequent events
The following matters or circumstances have arisen since 30 June 2021 that may significantly affect the operations of the Group, the
results of those operations, or the state of affairs of the Group in future financial years:
(a)
On 3 September 2021 the Company signed a Memorandum of Understanding (MoU) with Critical Metals that provides
Hannans with rights to use a Lithium-ion Battery (LiB) recycling technology that is safe, sustainable, low energy and low CO2.
The MoU with Critical Metals will take the form of a joint venture enabling Hannans to earn its interest by funding and
managing certain tasks and activities. Refer to ASX announcement dated 9 September 2021 for further details.
27. Notes to the consolidated statement of cash flows
(a)
Reconciliation of cash and cash equivalents
For the purposes of the statement of cash flows, cash and cash equivalents
includes cash on hand and in banks and investments in money market
instruments, net of outstanding bank overdrafts. Cash and cash equivalents
at the end of the financial year as shown in the statement of cash flows is
reconciled to the related items in the statement of financial position as
follows:
Cash and cash at bank
Term deposit
(b)
Reconciliation of loss for the year to net cash flows from
operating activities
Loss for the year
Write off exploration and evaluation expenses
Issue of share-based payments
Depreciation of non–current assets
Loss on disposal of shares
Gain on sale or disposal of assets
Equity settled share-based payments
Change in fair value of financial assets
designated at fair value though profit or loss
Changes in net assets and liabilities,
net of effects from acquisition and disposal of businesses:
(Increase)/Decrease in assets:
Trade and other receivables
Increase/(Decrease) in liabilities:
Trade and other payables and provisions
Net cash from operating activities
2021
$
2020
$
1,013,733
–
1,013,733
855,949
–
855,949
(1,550,464)
(1,900,520)
16,000
50,750
3,882
486
(100,000)
31,506
–
–
4,248
–
–
69,142
(244,709)
(36,118)
(5,089)
701
337,916
123,956
(1,459,722)
(1,738,591)
Non–cash financing activities
During the current year, the Group did not enter into any non-cash financing activities which are not reflected in the consolidated
statement of cash flows.
58 | H A N N A N S A N N U A L R E P O R T 2 0 2 1
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the financial year ended 30 June 2021
28. Financial risk management objectives and policies
(a)
Financial risk management objectives
The Group manages the financial risks relating to the operations of the Group.
The Group does not enter into or trade financial instruments, including derivative financial instruments, for speculative
purposes although it holds, at 30 June 2021, shares in various other listed mining companies. The use of financial derivatives
is governed by the Group’s Board of Directors.
The Group’s activities expose it primarily to the financial risks of changes in interest rates, but at 30 June 2021 it is also
exposed to market price risk. The Group does not enter into derivative financial instruments to manage its exposure to
interest rate.
(b)
Significant accounting policies
Details of the significant accounting policies and methods adopted, including the criteria for recognition, the basis of
measurement and the basis on which income and expenses are recognised, in respect of each class of financial asset, financial
liability and equity instrument are disclosed in note 2 to the financial statements.
(c)
Foreign currency risk management
The Group is not exposed to any significant currency risk on receivable, payable or borrowings. All loans are denominated in
the Group’s functional currency.
(d)
Interest rate risk management
The Group is exposed to interest rate risk as it places funds at both fixed and floating interest rates. The risk is managed by
maintaining an appropriate mix between fixed and floating rate products which also facilitate access to money.
Cash flow sensitivity analysis for variable rate instruments
A change of 1 per cent in interest rates at the reporting date would have increased profit or loss by the amounts shown
below. This analysis assumes that all other variables remain constant. The analysis is performed on the same basis for 2020:
2021
Variable rate instruments
2020
Variable rate instruments
Profit or Loss
Equity
1%
increase
1%
decrease
1%
increase
1%
decrease
7,071
7,071
6,119
6,119
(7,071)
(7,071)
(6,119)
(6,119)
–
–
–
–
–
–
–
–
The following table details the Group’s exposure to interest rate risk.
H A N N A N S A N N U A L R E P O R T 2 0 2 1 | 59
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the financial year ended 30 June 2021
28. Financial risk management objectives and policies (cont’d)
(d)
Interest rate risk management (cont’d)
Fixed maturity dates
Weighted
average
effective
interest rate
Variable
interest
rate
Less
than 1 year
Consolidated
2021
Financial assets:
%
$
Cash and cash equivalents
0.04%
707,147
Trade and other
receivables
Other receivables
– non-current
Financial liabilities:
Trade and
other payables
2020
Financial assets:
–
–
1.60%
30,000
737,147
–
–
–
Cash and cash equivalents
0.04%
611,850
Trade and other
receivables
Other receivables
– non-current
Financial liabilities:
Trade and
other payables
–
–
1.60%
30,000
641,850
–
–
–
$
–
199
–
199
–
–
–
–
–
–
–
–
1–5
years
$
5+
years
$
Non
interest
bearing
$
Total
$
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
306,586
1,013,733
26,026
26,225
–
30,000
332,612
1,069,958
580,104
580,104
580,104
580,104
244,099
855,949
85,760
85,760
–
30,000
329,859
971,709
238,497
238,497
238,497
238,497
60 | H A N N A N S A N N U A L R E P O R T 2 0 2 1
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the financial year ended 30 June 2021
28. Financial risk management objectives and policies (cont’d)
(e)
Liquidity risk
The Group manages liquidity risk by maintaining sufficient cash to meet the operating requirements of the business and
investing excess funds in highly liquid, high security short term investments. The Group’s liquidity needs can be met through a
variety of sources, including cash generated from operations and issue of equity instruments.
The following table details the Group’s non-derivative financial instruments according to their contractual maturities. The
amounts disclosed are based on contractual undiscounted cash flows.
Less than
6 months
6 months
to 12 months
1 to 2 years
Greater than
2 years
$
$
$
$
2021
Trade and other payables
580,104
Other financial liabilities
–
580,104
2020
Trade and other payables
238,497
Other financial liabilities
–
238,497
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
Total
$
580,104
–
580,104
238,497
–
238,497
It is a policy of the Group that creditors are paid within 30 days.
(f)
Credit risk
Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the
Group. The Group has adopted a policy of only dealing with creditworthy counterparties and obtaining sufficient collateral
where appropriate, as a means of mitigating the risk of financial loss from defaults. The Group’s exposure and the credit
ratings of its counterparties are continuously monitored.
The Group does not have any significant credit risk exposure to any single counterparty or any group of counterparties
having similar characteristics. The credit risk on liquid funds is limited because the counterparties are banks with high credit–
ratings assigned by international credit–rating agencies.
The Group currently does not have any material debtors apart from GST receivable which is claimed at the end of each
quarter during the year and the Cash Boost receivable from ATO which was claimed in July 2021.
(g) Market price risk
Market risk is the potential for loss arising from adverse movements in the level and volatility of equity prices.
The Group’s listed and unlisted equity investments are as detailed in note 11.
A 5 per cent increase (2020: 5 per cent increase) at reporting date in the listed equity prices would increase the market value
of the securities by $8,173 (2020: $7,818) and an equal change in the opposite direction would decrease the value by the
same amount. The increase/decrease would be reflected in the statement of profit or loss as these equity instruments are
classified as equity instruments at FVPL. The increase/decrease net of deferred tax would be $5,721 (2020: $5,472).
(h)
Capital risk management
For the purposes of the Group’s capital management, capital includes issued capital and all other equity reserves attributable
to the equity holders of the parent, which at 30 June 2021 was $3,203,430 (2020: $3,157,778). The Group’s objective when
managing capital is to safeguard its ability to continue as a going concern, so that it can continue to provide returns for
shareholders.
At 30 June 2021 the Group does not hold any external debt funding (2020: Nil) and is not subject to any externally imposed
covenants in respect of capital management.
H A N N A N S A N N U A L R E P O R T 2 0 2 1 | 61
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the financial year ended 30 June 2021
29. Financial instruments
The fair value of financial assets and financial liabilities of the Group approximated their carrying amount. It does not include fair
value information for financial assets and financial liabilities not measured at fair value if the carrying amount is a reasonable
approximation of fair value. The table below analyses financial instruments carried at fair value by value measurement hierarchy.
Quantitative disclosures fair value measurement hierarchy
as at 30 June
Quoted
prices in
active
market
(Level 1)
Significant
observable
inputs
(Level 2)
Significant
unobservable
inputs
(Level 3)
Total
2021
Assets measured at fair value
Equity instruments (note 11):
Quoted equity shares (i)
Unquoted equity shares (ii)
2020
Assets measured at fair value
Equity instruments (note 11):
Quoted equity shares (i)
Unquoted equity shares (ii)
163,459
–
163,459
12,603
–
12,603
–
–
–
–
–
–
–
230,001
163,459
230,001
230,001
393,460
–
12,603
143,751
143,751
143,751
156,354
The management assessed that cash and short-term deposits, trade receivables, trade payables and other current liabilities
approximate their carrying amounts largely due to the short term maturities of these instruments.
The fair value of the financial assets is included at the amount at which the instrument could be exchanged in a current transaction
between willing parties, other than in a forced or liquidation sale. The following methods and assumptions were used to estimate the
fair value:
(i)
(ii)
Fair value of equity instruments and financial assets is derived from quoted market prices in active markets. Refer note 28(g)
for market price risk impact.
The lowest level input has been used to fair value unquoted ordinary shares. The investment was fair valued using the most
recent capital raise dated April 2021. An increase in share price of +/- 20% would have an impact to the consolidated
statement of profit or loss of $46,000.
62 | H A N N A N S A N N U A L R E P O R T 2 0 2 1
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the financial year ended 30 June 2021
30. Parent entity disclosures
The following details information related to the parent entity, Hannans Ltd, at 30 June 2021.
The information presented here has been prepared using consistent accounting policies as presented in note 2.
Results of the parent entity
Loss for the year
Other comprehensive income
Total comprehensive loss for the year
Financial position of parent entity at year end
Current assets
Non–current assets
Total Assets
Current liabilities
Non–current liabilities
Total Liabilities
Total equity of the parent entity comprising of:
Share capital
Reserves
Accumulated losses
Total Equity
2021
$
2020
$
(1,666,557)
(2,009,017)
–
–
(1,666,557)
(2,009,017)
753,472
2,315,411
3,068,883
181,966
–
181,966
819,663
2,335,292
3,154,955
194,126
–
194,126
56,408,040
655,948
54,846,901
1,092,358
(54,177,071)
(52,978,430)
2,886,917
2,960,829
(a)
Guarantees entered into by the parent entity in relation to the debts of its subsidiaries
The parent entity had not entered into any guarantees in relation to the debts of its subsidiaries as at 30 June 2021
(2020: Nil).
(b)
Commitments for the acquisition of property, plant and equipment by the parent entity
The parent entity had no capital commitments for property, plant and equipment as at 30 June 2021 (2020: Nil).
H A N N A N S A N N U A L R E P O R T 2 0 2 1 | 63
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the financial year ended 30 June 2020
64 | H A N N A N S A N N U A L R E P O R T 2 0 2 1
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