Annual
Report
30 JUNE 2021
ABN 84 083 646 477
Corporate Directory
This annual report covers
the consolidated entity of
Ionic Rare Earths Limited
(“IonicRE”) and its subsidiaries.
The consolidated entity’s
functional and presentation
currency is AUD ($).
A description of the consolidated
entity’s operations and of its
principal activities is included
in the review of operations and
activities in the directors’ report.
Ionic Rare Earths Limited / Annual Report 2021
Directors
T B Benson – Chairman
T J Harrison – Managing Director
J Kelley – Executive Director
M E McGarvie – Non-Executive Director
Company Secretary
B D Dickson
Registered Office and
Principal Place of Business
Level 1
34 Colin Street
West Perth WA 6005
Telephone: 08 9481 2555
Fax:
08 9485 1290
Share Registry
Computershare Investor Services Pty Ltd
Level 11
172 St. George’s Terrace
Perth WA 6000
Telephone: 1300 787 272
Auditors
BDO Audit (WA) Pty Ltd
38 Station Street
SUBIACO WA 6008
Bank
National Australia Bank
Level 1, Gateway Building
177-179 Davy Street
Booragoon WA 6154
Solicitors
K & L Gates
Level 32
44 St. George’s Terrace
Perth WA 6000
Stock Exchange
Australian Securities Exchange
Code: IXR
Website
www.ionicre.com.au
Ionic Rare Earths
(“IonicRE”) is focused on
developing its flagship
Makuutu Rare Earths
Project (“Makuutu”)
towards production.
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Ionic Rare Earths Limited / Annual Report 2021
Contents
Directors’ Report
Directors’ Declaration
Auditor’s Independence Declaration
Consolidated Statement Of Profit Or Loss
And Other Comprehensive Income
Consolidated Statement Of Financial Position
Consolidated Statement Of Cash Flows
Consolidated Statement Of Changes In Equity
Notes To The Consolidated Financial Statements
Independent Audit Report
Corporate Governance Statement
Asx Additional Information
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35
37
39
40
41
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43
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75
84
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Ionic Rare Earths Limited / Annual Report 2021
Director’s Report
Directors
The names and details of the
directors of Ionic Rare Earths Limited
in office during the financial year
and until the date of this report are
as follows. Directors were in office for
the whole of the financial year, unless
otherwise stated.
T Benson B.Sc
(Chairman)
T Harrison B.Eng (Chem), Fellow AusIMM
(Managing Director)
Appointed 31 August 2020
Appointed 21 December 2020
Mr Benson has extensive experience as an
Mr. Harrison was previously appointed Chief
investment banker and has served on a number
Executive Officer on 26 June 2020, after initially
of ASX listed company boards as both Chairman
joining the Company as the Project Manager of
and Director. He has specialised in cross border
IonicRE’s Makuutu Rare Earths Project at the start
transactions within the natural resources sector
of 2020. Tim has been instrumental in driving
across China, Africa and SE Asia, and has been
the development of Makuutu and identifying
an adviser to Chinese State-Owned Enterprises
opportunities for enhanced value creation through
(SOE’s). His specialist activities include corporate
downstream refining.
funding solutions within the natural resources
domain. Trevor holds a Bachelor of Science Degree
from the University of Western Australia.
Tim holds a Bachelor of Chemical Engineering
degree from Adelaide University and has over
20 years of experience and an extensive and
Other Public Company Directorships in the
successful track record in the fields of both mineral
past 3 years
Walkabout Resources Ltd
Cannon Resources Limited
processing and hydrometallurgy across multiple
commodities, including significant battery and
technology metals experience.
This has involved roles in project development,
from process development, through studies and
engineering, and commissioning and operations.
Tim is a Fellow of the Australian Institute for Mining
and Metallurgy (AusIMM).
Other Public Company Directorships in the
past 3 years
Nil
4
Ionic Rare Earths Limited / Annual Report 2021
J Kelley
(Executive Director)
Appointed 7 July 2021
Ms. Kelley has previously held roles at the highest
B Dickson B.Bus, FCPA, FGIA, MAICD
(Company Secretary)
Appointed a director on 21 November 2014 (resigned
as a director on 21 December 2020).
levels of international leadership and has played a
Mr Brett Dickson has over 20 years’ experience
crucial role in supporting U.S. military operations
in the financial management of companies,
spanning over 60 countries, collectively known
principally companies in early stage development
as the U.S. Coalition Allies. Ms. Kelley’s networks
of its resource or production and offers broad
in, and knowledge of, Europe, the Middle East,
financial management skills. He has been
Asia, and South and Central America have helped
Company Secretary and Chief Financial Officer
advance American interests during the most
(CFO) for a number of successful resource
critical points in current history. A former honorary
companies listed on the ASX.
ambassador to U.S. Central Command General
Mattis and CIA Director David Petraeus. Ms. Kelley
received the Pentagon’s esteemed Joint Chiefs
Other Public Company Directorships in the
past 3 years
of Staff Award for her leadership, along with the
Rox Resources Limited
Multi-National Military Forces Award, an honour
only bestowed upon a few individuals.
Other Public Company Directorships in the
past 3 years
Nil
M McGarvie MBT, MAICD, FAIM
(Non-Executive Director)
Appointed 16 July 2021
A Rovira BSc (Hons), MAusIMM
(Chairman, Non-Executive Director)
Appointed 21 November 2014 (resigned 21
December 2020)
Mr Tony Rovira has over 30 years technical and
management experience in the mining industry,
as an exploration and mining geologist, and
as a company executive at Board level. Since
graduating from Flinders University in South
Mr. McGarvie is a senior mining executive with
Australia in 1983, Tony has worked for companies
an extensive portfolio of technical/managerial
both large and small, including BHP, Barrack
appointments in a career exceeding 45 years
Mines, Pegasus Gold and Jubilee Mines.
in mine development, mineral processing,
operational and management roles across
Australia, Africa and the Middle East. He has had
a long and distinguished career in the mining
industry, a significant portion of this with Iluka
Resources Limited and prior entities, including
development roles within its mineral sands
operation at Eneabba, Western Australia and a
major role in returning the Sierra Rutile mineral
From 1997-2003 Tony was the General Manager of
Exploration with Jubilee Mines, during which time
he led the team that discovered and developed
the world class Cosmos and Cosmos Deeps nickel
sulphide deposits in Western Australia. In the year
2000, the Association of Mining and Exploration
Companies awarded Mr Rovira the “Prospector of
the Year Award” for these discoveries.
sands operation in Sierra Leone (operated by Iluka)
Other Public Company Directorships in the
to profitable operations following the civil war in
past 3 years
that country.
Other Public Company Directorships in the
Azure Minerals Limited.
past 3 years
Nil
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Ionic Rare Earths Limited / Annual Report 2021
M Steffens BEng(Hons), PhD, MAusIMM
(Non-Executive Director)
Appointed 30 November 2018
(resigned 31 August 2020)
Dr Steffens is a minerals engineer with a PhD
in metallurgy from the WA School of Mines. His
experience covers a broad range of commodities
and includes areas of project evaluation, project
management and process development, as well
as experience in African minerals projects. He is a
Member of the Australian Institute of Mining and
Metallurgy.
Other Public Company Directorships in the
past 3 years
Nil
B Marwood
(Non-Executive Director)
Appointed 21 December 2020
(resigned 16 July 2021)
Mr Marwood is a mining engineer and resources
industry executive with more than 30 years of
experience. He was instrumental in bringing into
production the copper mines at Kipoi (DRC) and
Rapu (Philippines); completing development
of the Svartliden gold mine (Sweden) and has
managed numerous feasibility studies and
advanced stage resource projects in Australia,
Africa, North America and Asia. He has worked in
senior roles for groups such as Normandy Mining
Ltd, Dragon Mining Ltd, Lafayette Mining Ltd,
Moto Goldmines Ltd, Tiger Resources Ltd and
Perseus Mining Ltd before his most recent role as
Managing Director of Consolidated Zinc Limited.
Other Public Company Directorships in the
past 3 years
Consolidated Zinc Limited
Middle Island Resources Limited
6
6 Ionic Rare Earths Limited / Annual Report 2021
Interests in the Shares and Options of the Company
As at the date of this report the interests of the directors in the securities of the company were:
T Benson (appointed 31 August 2020)
T Harrison (appointed 16 December 2020)
J Kelley (appointed 7 July 2021)
M McGarvie (appointed 16 July 2021)
B Marwood (resigned 16 July 21)
B Dickson (resigned 21 December 2020)
A Rovira (resigned 21 December 2020)
M Steffens (resigned 31 August 2020)
Number of
Ordinary Shares*
Number of Options
over Ordinary Shares*
–
4,750,000
20,000,000
40,000,000
–
–
–
25,703,364
53,575,915
–
–
–
–
20,000,000
30,000,000
20,000,000
* represents holding at time of resignation if director resigned during the year
Interests in Contracts or Proposed Contracts
with the Company
During or since the end of the financial year, no director has had any interest in a contract or proposed
contract with the company being an interest the nature of which has been declared by the director in
accordance with Section 300(11)(d) of the Corporations Act 2001.
Directors’ Meetings
During the year 8 directors’ meetings were held. The number of meetings attended by each director
was as follows:
T Benson
T Harrison
J Kelley
M McGarvie
B Marwood
B Dickson
A Rovira
M Steffens
No. of meetings
held while in office
Meetings attended
4
4
–
–
4
2
2
2
4
4
–
–
4
2
2
2
As at the date of this report, the company did not have audit, remuneration or nomination committees, as
the directors believe the size of the company does not warrant their existence.
7
Ionic Rare Earths Limited / Annual Report 2021
Dividends Paid or
Proposed
The company has not paid any dividends since
the commencement of the financial year, and no
dividends are proposed to be paid.
Corporate Information
The Financial Statements of Ionic Rare Earths
Limited for the year ended 30 June 2021 were
authorised for issue in accordance with a resolution
of the directors on 29 September 2021. The group’s
functional and presentation currency is AUD ($).
Ionic Rare Earths Limited is a company limited
by shares incorporated in Australia whose shares
are publicly traded on the Australian Securities
Exchange.
Principal Activities
The principal activity during the year of the
group was investment in the mining and
resource sector.
The group’s business is conducted from
operations located in Australia and Uganda
through its 51% owned affiliate Rwenzori Rare
Metals Limited. During the year the Company
sold its 100% owned subsidiary Minera San
Operating And
Financial Review
Covid-19
On 24 March 2020 and in response to the
worsening COVID-19 pandemic and the ensuing
global uncertainties and volatilities the Company
suspended its exploration activities at Makuutu.
In coming to this decision, the company
considered advice and noted the actions
of regulatory bodies and authorities in the
jurisdictions of both Australia and Uganda.
The company took that step to safeguard the
wellbeing and safety of its African-based team,
contractors and the community in which the
company operates. Additionally, at that time
the company implemented necessary policies
and procedures which include “no travel”, “social
distancing”, “no congregating in groups” and
“working from home where possible”.
While some restrictions have eased and the
impact of COVID-19 is not expected to significantly
affect the 2021/22 work program at Makuutu, the
Company will continue to monitor the situation
with the wellbeing of staff, contractors and
community being of the utmost importance.
The Company was not eligible for and did not
Cristobal, SA which had conducted operations in
receive any government grant during the period.
Nicaragua.
Employees
Other than the Directors the group had 1
employee at 30 June 2021 (2020: Nil).
Overview
Makuutu, Rare Earth Elements (IonicRE
51% earning up to 60%)
During the past financial year, Ionic Rare
Earths Limited (IonicRE or the Company) has
been solely focused on the progression and
development of the Makuutu Rare Earths Project
(Makuutu or the Project) in Uganda. Makuutu is
100% owned by the private Ugandan company
Rwenzori Rare Metals Limited (Rwenzori), of
which IonicRE is participating in an earn in
agreement and has increased ownership from
31% at 30 June 2020, to 51% announced in
October 2020 post submission of the application
to renew Retention Licence 1693. The terms of
the earn in provide a framework for IonicRE to
acquire up to a 60% interest in Makuutu and
Rwenzori upon completion of the Feasibility
Study (expected before 1 November 2022) and
has a pre-emptive right on the remaining 40%.
When IonicRE initially acquired their interest in
Makuutu, the Project originally comprised three
licences covering approximately 132 km2 located
some 40 km east of the regional centre of Jinja
and 120 km east of the capital city of Kampala
(Figure 1 and Figure 2).
8
Ionic Rare Earths Limited / Annual Report 2021
// Figure 1. Makuutu Rare Earths Project Location.
The area has excellent infrastructure with tarred (sealed) roads, rail, power and water all nearby giving
good access throughout the year irrespective of weather conditions. The extent of the infrastructure
immediately available to the Project is also illustrated within Figure 2.
// Figure 2: Makuutu Rare Earths Project Location with major existing infrastructure.
9
Ionic Rare Earths Limited / Annual Report 2021
Makuutu contains ionic adsorption clay (IAC) Rare Earth Element (REE) mineralisation similar to the ionic
clay-type deposits of southern China where the world’s cheapest and most readily accessible sources
of Critical and Heavy Rare Earth Oxides (CREO and HREO) are extracted by rudimentary mining and
processing methods.
Ionic clay-hosted Rare Earth deposits are significantly different from hard rock-hosted Rare Earth deposits.
Typically, Rare Earth minerals can be recovered from ionic clay mineralisation using salt washing in mild
leaching conditions to produce a high-grade Rare Earth Oxide (REO) chemical precipitate concentrate.
This generally presents practical processing advantages which are summarised in the Figure 3.
// Figure 3: Comparison of advantages of with IAC over hard rock REE projects.
During the past financial year, the Company initiated a review of available information across the project
area with a view to the potential for extension of mineralisation and in October 2020, two new additional
tenements, Exploration Licences 00147 and 00148, were lodged to the Directorate of Geological Survey
and Mines (DGSM) in Uganda. The new Exploration Licences present different opportunities which
include:
▲ EL00147 covers an extensive area interpreted to host the continuation of the REE mineralised basin.
▲ EL00148 covering an area that has potential for rare earth mineralisation but also aggregate, stone and
other materials that may be of use during project development, plus provide additional sites suitable
for the process plant immediately adjacent an existing 132 kV transmission corridor.
The two new tenements, illustrated in Figure 4 on the radiometric ternary image, and Figure 5 showing
the infrastructure development across the tenements, were approved in December 2020 and increased
the overall tenement portfolio at Makuutu to approximately 243 km2, or 234,000 hectares (Ha).
10
Ionic Rare Earths Limited / Annual Report 2021
A breakdown of the tenements and status is provided in Table 1.
// Table 1: Makuutu Rare Earths Project tenement Details as at 30 June 2021.
Licence ID
Licence Type
Application
Date
Granted Date
Expiry Date
Area (km2)
RL 1693
Retention
11/07/2017
02/11/2017
01/11/2022
RL 0007
Retention
27/03/2019
27/11/2019
27/11/2022
EL 1766
Exploration
07/04/2017
06/07/2018
05/07/2021
EL00147
Exploration
19/10/2020
28/12/2020
27/12/2023
EL00148
Exploration
21/10/2020
28/12/2020
27/12/2023
43.78
43.38
47.02
60.30
48.15
// Figure 4: Makuutu Rare Earths Project tenement licences on ternary radiometric map.
On 13 July 2020, the company resumed the Phase 2 drill program at Makuutu, which was a 4,000-metre
drill program aimed at increasing the overall Mineral Resource Estimate at Makuutu expanding beyond
the central licence RL 1693 and further testing both eastern and western tenements held at the time.
The Phase 2 drill program initially commenced on 16 March 2020, however this was suspended shortly
thereafter with only 11 holes and 240 metres drilled prior to Government-imposed COVID-19 control
measures rolled out.
The Phase 2 drill program added a further 3,700 metres (222 holes) stretching across approximately 26
kilometers of target of Makuutu between July 2020 and November 2020. The drill program specifically was
a combination of drilling based upon spacing of 100m, 200m and 400m to provide sufficient information
for the Project to confirm requirements for resource classification.
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Ionic Rare Earths Limited / Annual Report 2021
// Figure 5: Makutu Rare Earths Project including new ELs and currently installed available infrastructure.
// Figure 6: Drilling resuming at Makuutu Rare Earths Project with hole RRMDD058
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Ionic Rare Earths Limited / Annual Report 2021
Of the 222 holes drilled across RL 1693, RL 00007 and EL 1766, 216 intersected mineralised clay grading
greater than 200 ppm Total Rare Earth Oxides (TREO) minus cerium oxide (CeO2). This culminated in
a substantial update to the Mineral Resource Estimate (MRE) at Makuutu announced on 3 March 2021,
which increased the total TREO content by 210% at Makuutu. The MRE update is provided in Table 2.
// Table 2: Makuutu Resource above 200ppm TREO-CeO2 Cut-off Grade
Resource
Classification
Indicated Resource
Inferred Resource
Total Resource
Tonnes
(millions)
TREO1
(ppm)
TREO-CeO2
(ppm)
LREO2
(ppm)
HREO3
(ppm)
CREO4
(ppm)
ScO3
(ppm)
66
248
315
820
610
650
570
410
440
590
450
480
230
160
170
300
210
230
30
30
30
Rounding has been applied to 1Mt and 10ppm which may influence averaging calculation.
The MRE determined classified resources in nine (9) of the eleven (11) drilled areas.
Indicated Resources were constrained to the Makuutu Central Zone (MCZ) (RL 1693) where the 200-metre
x 200-metre drill spacing has provided adequate data for this level of confidence. The Inferred Resource
areas are drilled on a 400-metre x 400-metre spacing and will require further infill drilling to increase
resource confidence.
Areas C and E failed to convert to resources during the MRE update, with mineralisation lacking sufficient
continuity at the 400-metre x 400-metre drill spacing to be classified. These areas can be tested with
closer spaced drilling in the future to provide more confidence in the continuity of mineralisation, which
will have the potential to add further resource. As such, Exploration Targets have been maintained for
these areas and future core drilling will look to convert these to additional resource.
The reported resources by each of the areas is listed in Table 3 with the resource areas shown by resource
classification in Figure 7.
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Ionic Rare Earths Limited / Annual Report 2021
// Table 3: Mineral Resources by Area
Classification
Indicated Resource
Inferred Resource
Total Resource
Area
Tonnes
(millions)
TREO
(ppm)
TREO-CeO2
(ppm)
Tonnes
(millions)
TREO
(ppm)
TREO-CeO2
(ppm)
Tonnes
(millions)
TREO
(ppm)
TREO-CeO2
(ppm)
Central Zone
66
820
570
A
B
C
D
E
Central Zone
East
F
G
H
I
51
12
25
–
6
–
37
11
6
4
96
730
570
410
–
500
390
280
–
560
400
–
740
570
660
780
550
–
520
390
450
560
350
410
118
780
540
12
25
–
6
–
37
11
6
4
96
570
410
–
390
280
–
560
400
–
740
570
660
780
550
–
520
390
450
560
350
315
650
440
Total
Resource
66
820
570
248
610
Rounding has been applied to 1Mt and 10ppm which may influence averaging calculations.
1 : TREO (Total Rare Earth Oxide) = La2O3 + CeO2 + Pr6O11 + Nd2O3 + Sm2O3 + Eu2O3 + Gd2O3 + Tb4O7 +
Dy2O3 + Ho2O3 + Er2O3 + Tm2O3 + Yb2O3 + Y2O3 + Lu2O3.
2 : LREO (Light Rare Earth Oxide) = La2O3 + CeO2 + Pr6O11 + Nd2O3
3 : HREO (Heavy Rare Earth Oxide) = Sm2O3 + Eu2O3 + Gd2O3 + Tb4O7 + Dy2O3 + Ho2O3 + Er2O3 + Tm2O3
+ Yb2O3, + Y2O3 + Lu2O3
4 : CREO (Critical Rare Earth Oxide) = Nd2O3 + Eu2O3 + Tb4O7 + Dy2O3 + Y2O3 (From U.S. Department of
Energy, Critical Materials Strategy, December 2011)
// Figure 7: Mineral Resource Estimate (MRE) areas by classification
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Ionic Rare Earths Limited / Annual Report 2021
The REE mineralisation is concentrated in the weathered profile where it has dissolved from its primary
mineral form, such as monazite and xenotime, then ionically bonded (adsorbed) or colloidally bonded on
to fine particles of aluminosilicate clays (e.g. kaolinite, illite, smectite). The adsorbed and colloidal REE is
the target for extraction and production of REO at Makuutu, with the profile illustrated within Figure 8.
// Figure 8: Cross Section 57,400N (Looking North) Regolith Zonation (10x vertical exaggeration)
On 3 March 2021, the Company announced Exploration Targets for the areas which failed to convert and
post the MRE update plus new tenements acquired at Makuutu.
In RL 1693, areas C and E drilled in the 2020 drilling program and modelled in the MRE failed to achieve
resource confidence due to lack of continuity of mineralisation with intercalated sand and clay units.
Closer spaced drilling has the potential to define the mineralisation in these areas. Exploration target
ranges for these zones are:
Area C: 14 – 27 million tonnes grading 450 – 675 ppm TREO
Area E: 5 – 10 million tonnes grading 450 – 675 ppm TREO
The combined Area C and E exploration target ranges are:
19 – 35 million tonnes grading 450 – 675 ppm TREO*
*This Exploration Target is conceptual in nature but is based on reasonable grounds and assumptions.
There has been insufficient exploration to estimate a Mineral Resource and it is uncertain if further
exploration will result in the estimation of a Mineral Resource.
In RL 1693, a portion of the Central East area, illustrated in Figure 9, was not able to be classified during the
MRE due to a lack of continuity of mineralisation at the 400-metre drill spacing. Further infill drilling has
the potential to reclassify material from this area with and exploration target of:
8 – 17 Million tonnes grading 600 ppm – 820ppm TREO*
*This Exploration Target is conceptual in nature but is based on reasonable grounds and assumptions.
There has been insufficient exploration to estimate a Mineral Resource and it is uncertain if further
exploration will result in the estimation of a Mineral Resource.
On 5 January 2021, the Company announced a material Exploration Target for EL00147 which covered the
eastern extension of the REE mineralised trend as defined by airborne radiometric eU/eTh anomalism and
was untested for REE. The exploration target ranges for EL00147, are:
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Ionic Rare Earths Limited / Annual Report 2021
60 – 270 million tonnes grading 550 – 900 ppm TREO*
*This Exploration Target is conceptual in nature but is based on reasonable grounds and assumptions.
There has been insufficient exploration to estimate a Mineral Resource and it is uncertain if further
exploration will result in the estimation of a Mineral Resource.
The exploration target areas are shown in relation to the MRE areas in Figure 9.
// Figure 9: Makuutu Rare Earths Project Area with MRE and Exploration Target
In addition to the RL 1693 and EL00147 exploration targets, the hardcap material in the resource area
has to date been the subject of preliminary REE extraction testwork determining potentially economical
processing routes. This testwork has shown promising improvement during the evaluation to date,
however at this time, is below the threshold for consideration of Reasonable Prospects of Eventual
Economic Extraction (“RPEEE”).
As such this warrants exclusion of the hardcap from the MRE, however maintaining an exploration target
for this material of:
0 – 120 million tonnes grading 530 – 900 ppm TREO*
*This Exploration Target is conceptual in nature but is based on reasonable grounds and assumptions.
There has been insufficient exploration to estimate a Mineral Resource and it is uncertain if further
exploration will result in the estimation of a Mineral Resource.
On 29 April 2021, the Company announced a positive result of the Makuutu Scoping Study (“the Study”).
The Scoping Study outcomes demonstrate the potential for Makuutu to become a sustainable, long-life,
relative low capital development cost supplying CREO and HREO to global markets, generating strong
financial returns while also delivering significant social and economic benefits for the local communities
in Uganda.
The Study was completed by IonicRE with input from a group of leading independent consultants.
The Base Case Scoping Study considers open pit mining over an initial 11-year mine life, with the IAC run of
mine (ROM) feed to a modular heap leach plant where the REO is recovered from the IAC mineralisation
via salt desorption to produce a mixed rare earth carbonate (MREC) product. The Base Case assumes the
first module will process 2.5 million tonnes per annum (Mtpa) ROM and produce approximately 800 tpa
REO equivalent product. Additionally, the Base Case then assumes given the low-cost capital modular
development approach, additional modules will be added in years 2, 4, 6 and 9 to increase the plant
throughput up to 12.5Mtpa by year 10.
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Ionic Rare Earths Limited / Annual Report 2021
Key Scoping Study Highlights
Strong Financial Returns over initial 11-year LOM based upon Indicated
Mineral Resources
▲ Post‐tax NPV8 of ~US$321 million (~A$428 million);
▲ Post-tax IRR of ~38%;
▲ Post-tax capital payback of ~5 years from first MREC production;
▲ Net Revenue totaling ~US$2.52 billion (~A$3.63 billion)
▲
Initial 11-year revenue forecast of ~ US$73/kg REO equivalent produced (excluding Scandium) payable
▲ EBITDA totaling ~US$1.28 billion (~A$1.71 billion)
▲ Post Tax Free Cash Flow totaling ~ US$766 million (~A$1.02 billion)
Physical Parameters
▲
Initial 11-year Production Target of 84.5 Mt @ 810 ppm Total Rare Earths Oxide (TREO) for 68,400t of
contained TREO;
▲
Initial 11-year Process Plant Feed comprises 69% Indicated Mineral Resources and 31% Inferred Mineral
Resources;
▲
Initial 11-year strip ratio of 0.76;
▲
▲
▲
▲
First module is 2.5 Mtpa, with additional modules added in years 2, 4, 6 and 9 increasing total ROM
throughput to 12.5 Mtpa;
REO anticipated production capacity increases from ~ 800 tpa REO equivalent (Year 1) up to ~ 3800 tpa
REO equivalent in year 11;
Initial 11-year TREO production of 29,400 t REO equivalent (~ 45,000 t MREC grading >90% TREO) via a
modular heap leach salt desorption processing plant;
Potential to produce appreciable Scandium Oxide by-product credit (~740 t Sc2O3) over initial 11-year
period;
▲
Uniquely Positioned to be a Long-Term Sustainable CREO / HREO Producer;
▲
Makuutu basket to provide balanced CREO and HREO product, which combined makes up
approximately 73% of the basket over initial 11-year period, the ideally positioned to benefit in looming
inadequacies in CREO and HREO supply;
▲
Makuutu’s basket contains a market leading 43% magnet REO content (Nd, Pr, Dy, Tb, plus Sm, Gd and
Ho) and 44% HREO (refer to Figure 11);
▲
First production is targeted for early 2024, based on current environmental approvals timeline; and
▲
Makuutu Base Case to produce the permanent magnet rare earths (Nd, Pr, Tb and Dy) to enable
approximately 35 GW of direct drive gearless offshore wind turbine capacity over the Base Case 11 year
period.
Capital Costs & Operating Costs
▲
Pre-production Capital Expenditure (“CAPEX”) (including contingency) of ~US$89 million for Module 1
including mining fleet;
▲
Module 2 expansion in Year 2 for ~US$40 million (including contingency) inclusive of mining, process
plant plus infrastructure;
▲
Expansion from 2 to 5 Modules, CAPEX of ~US$172 million funded by project cashflow;
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Ionic Rare Earths Limited / Annual Report 2021
▲
▲
▲
Initial 11-year AISC cash costs of operations
of ~US$12.60/t ROM feed;
Initial 11-year AISC cash costs of operations
of ~US$36.40/kg REO equivalent produced;
Initial 11-year AISC cash costs of operations
of ~US$23.70/kg REO equivalent produced
(including Sc2O3 by-product credit); and
▲
Power for the Project to be delivered from
low-cost hydroelectric power accessible from
132 kV power transmission corridor running
immediately through project tenement.
Significant Upside Potential
▲
Base case utilises only 84.5 Mt of the Makuutu
315 million tonne MRE, with potential to
increase to 27+ years;
▲
Upside identified considering all Mineral
Resource Estimate at Makuutu would deliver
a significant extension to the Project’s LOM; and
▲
IonicRE to shortly commence a drilling
program to convert further Inferred Resources
to Indicated Resource status.
The Study indicated that a modular open
pit and heap leach operation, starting with
1 module at 2.5Mtpa and progressively
increasing over 10 years to treat 12.5Mtpa
(5 modules) provides an optimal economic
outcome for shareholders. The Study also
confirmed that as the Mineral Resource
Estimate confidence increases, along with
potential for further total resource increase at
Makuutu, the Makuutu Rare Earths Project is
likely to be able to support a larger throughput
and longer life mining and process throughput
rate, suggesting that the increase in confidence
obtained through additional infill drilling
of inferred resources enabling increased
classification to indicated resources or higher
has a high probability of demonstrating an
economic LOM exceeding 27 years.
The completed resource extension drilling,
and radiometric anomaly confirms a large
continuous deposit that extends approximately
26 km with potential for extension further to
the east out to 37 km. The long narrow and
shallow nature of the mineralisation, and low-
cost simple processing could support one or
more satellite processing arrangements.
18
Ionic Rare Earths Limited / Annual Report 2021
// Figure 10: Annual REO production profile from Makuutu across Years 0 to 11.
// Figure 11: Makuutu Product basket over 11-year Base Case term.
As a result of the positive results of the Study, the Company has indicated the commencement of the
Feasibility Study and plans to complete additional infill drilling at Makuutu to increase the confidence
in the MRE to support the longer life basis for the Project moving forward. Furthermore, the Company
indicated that there is significant potential to expand Resources at Makuutu which may warrant further
increases in throughput.
19
Ionic Rare Earths Limited / Annual Report 2021
On 19 March 2021, the Company initiated the Phase 3 Rotary Air Blast (RAB) reconnaissance drill
program to test a number of exploration targets at the Project, including the highly prospective new
tenement EL00147. The 1,200 metre (67 hole) RAB drill program aimed to test new targets plus test REE
mineralisation in areas outside the previous focus of the Project. Some targets were potential alternate
host types that have not been previously tested, with the planned holes illustrated within Figure 12.
// Figure 12: Mineral Resource Estimate (MRE) areas by classification with location of planned RAB holes
// Figure 13: RRMRB001 being drilled at Exploration Licence EL00147
20
Ionic Rare Earths Limited / Annual Report 2021
Initial RAB holes reported 1 April 2021 confirmed the presence of thick near surface clay zones, with initial
holes confirming the presence of sedimentary basin and regolith clay intercepts on Exploration Licence 00147.
Results for the Phase 3 RAB drill program were received and reported 15 July 2021, confirming a major
extension of REE bearing clay mineralisation at EL00147. Equally as important were results confirming
REE bearing clay mineralisation has been intersected in between previously targeted areas identified
by the eU/eTh radiometric responses (that indicate a laterite hardcap is present at surface). The drilling
demonstrated that the hardcap is buried by over 1 metre of soil in some areas and the targeting eU/
eTh radiometric response obscured. These results indicate new areas for follow up exploration that
were previously not tested due to the lack of, or subdued, radiometric eU/eTh response. The results are
illustrated in Figure 14.
As a result of the drilling results reported 20 July 2021, Rwenzori applied for a new Exploration Licence
(TN03573) to the northwest of the Project area. The thick clay interval in RRMRB063, more than 2 km
north and west of the basin margin provided the basis for the application of the 55.5 square kilometres
exploration licence (EL) to the north of the existing licences which is also illustrated in Figure 14.
// Figure 14: Phase 3 RAB drill results and new Exploration Licence application TN03573.
On 20 June 2021, Rwenzori applied to the DGSM for the conversion of EL 1766 to a Retention Licence.
Rwenzori received advice that this was approved on 6 July 2021, with the Rwenzori then granted Retention
Licence 00234 which is due to expire on 05 July 2024.
Post completion of the reporting period, the Company in July 2021 initiated the Phase 4 infill drill
program, mobilising three drill rigs to site in the largest drill program started to date at Makuutu. The
Phase 4 program has approved 7,800 metres of infill drilling to increase the confidence on the MRE and
target the increase in the measured and indicated resource base at Makuutu to in excess of 250 million
tonnes to support the Feasibility Study. It is expected that drilling will be completed in October 2021,
ahead of a substantial MRE update planned for Q1 2022.
Additionally, metallurgical optimisation testwork, including heap leach testwork, metallurgical variability
and process modelling continues along with activities supporting the Makuutu Rare Earths Feasibility
Study. On 28 June 2021, IonicRE awarded Melbourne based Mincore Pty Ltd (Mincore), the Engineering
Manager role for the completion of a Feasibility Study. The Feasibility Study remains on track and is
targeting completion in October 2022.
21
Ionic Rare Earths Limited / Annual Report 2021
On 31 March 2021, the Company advised of the
The initial due diligence completed by Chinalco
engagement of key Ugandan consultants and
and CREJ on key areas relating to the Makuutu
the commencement of the Environmental and
Social Impact Assessment (ESIA) and enhanced
Stakeholder Engagement programs at Makuutu,
which is targeting a low carbon dioxide (CO2)
included the following:
▲
Project geology, drilling results and Mineral
Resource Estimation;
footprint due to the availability of low-cost
▲
Preliminary metallurgical test work review;
▲
Review of product quality and integration
into existing REE separation operations;
▲
Review of Ugandan Mining Act and Regulations;
▲
Review of Ugandan Corporate Business
Regulations and Taxation Code, pertinent to
the Mining Industry;
▲
Review of Ugandan National Environmental
Act;
▲
Review of local infrastructure; and
▲
Review of political and country risk.
A framework and work program has been initiated
between parties to accelerate the development
and provide input to the progression of the MOU
from non-binding to binding.
Importantly discussions continue with other global
groups and post end of the reporting period,
IonicRE announced on 9 August 2021 the initiation
of a Scoping Study to review the economics in
development a standalone HREO separation and
refining facility. The development of such a facility
would be the first HREO refining capacity
developed outside of China which has a near
monopoly of global HREO refining capacity.
As such the development of the HREO facility has
the support of numerous global strategic partner
groups and the Company will update the market at
the appropriate time as those discussions advance.
On 28 January 2021, the Company unveiled plans
to actively market the huge scandium potential
of Makuutu to global groups interested in the
development of low cost long life supply for the
development of aluminium scandium alloys
for the light weighting of global transportation.
Activities remain ongoing at the end of the
reporting period which will see activity increase
over the next 12 months as Makuutu advances
towards the mining licence application.
hydroelectric power within close proximity of
the Project.
Over the reporting period, the Company
undertook a strategic partnering process of the
development of Makuutu, enabling access to
the CREO and HREO products from the Project.
Discussions continue with numerous global
groups at the end of the June 2021.
On 7 April 2021, IonicRE announced the signing
of a milestone non-binding Memorandum of
Understanding (MOU) with China Rare Metals
and Rare Earth (Jiangsu) Co., Ltd (CREJ), a
subsidiary of global rare earth giant Chinalco, in
relation to the development of Makuutu.
Highlights of the MOU include:
1.
IonicRE and CREJ have agreed to use their
reasonable endeavours to strategically
cooperate to accelerate Makuutu mine
development and production for mutual
benefit; as well as
2.
Potential for future investment in IonicRE,
and/or the Makuutu Rare Earths Project
directly, and/or off-take agreements, as
agreed by the parties, for rare earth product
produced by IonicRE.
Chinalco is the world’s largest market capitalised
rare earth miner and separator, with numerous
dedicated subsidiaries operating in mining and
rare earth separation, including the Heavy Rare
Earth Element (HREE) rich ionic adsorption clay
(IAC) mines in Guangdong and Guangxi Provinces
and a number of REE separation plants in Jiangsu
Province operated by CREJ. Most of the global Rare
Earth Oxides (REO) produced globally are initially
processed and separated within China. Therefore,
it is of strategic importance to IonicRE, to have
successfully negotiated this MOU and welcomes
Chinalco and CREJ as a potential cornerstone
project partner.
Chinalco and CREJ completed an extensive due
diligence review on Makuutu over a twelve (12)
months period preceding the MOU signing,
in conjunction with numerous meetings
between the IonicRE executive team and CREJ,
demonstrating that Makuutu is not only a high
quality REE project, but a key globally strategic
CREO and HREO resource.
22
Ionic Rare Earths Limited / Annual Report 2021
Transaction Details
Shareholder approval for the following transaction was obtained at a General Meeting of the Company
held on 19 August 2019.
The Makuutu Rare Earth Elements project is owned 100% by Ugandan registered Rwenzori Rare Metals Limited
(Rwenzori) which in turn was owned 85% by South African registered Rare Earth Elements Africa Proprietary
Limited (REEA). IonicRE has entered into a binding option agreement with both companies that enables it to
acquire up to a 60% direct interest in Rwenzori, and thereby up to a 60% indirect interest in the project by:
1. The payment of US$10,000 for a 30-day exclusive option period. This payment has been made.
2.
Upon exercise of the option, the payment of US$100,000 cash and issuing US$150,000 in IonicRE
shares, at a 30-day VWAP in return for an immediate 20% interest in RRM; This has been completed.
3.
IonicRE to contribute US$1,700,000 of expenditure by 1 October 2020 to earn up to a 51% staged
interest in RRM as follows:
Spend
Interest earned
Cumulative Interest
earned
Exercise of Option US$100,000 as in 2 above
Expenditure contribution of US$650,000
Expenditure contribution of further US$800,000
Expenditure contribution of further US$250,000
20%
11%
15%
5%
20%
31%
46%
51%
During the reporting period, the final expenditure commitments set out in the above table was met
and IonicRE has earned a 51% interest in the share capital of Rwenzori.
4.
IonicRE to fund to completion of a bankable feasibility study to earn an additional 9% interest for a
cumulative 60% interest in Rwenzori. This is presently in action.
5.
During the earn-in phase there are milestone payments, payable in cash or IonicRE shares at the
election of the Vendor, as follows:
1.
US$750,000 on the Grant of Retention licence over RL1693 which is due to expire in November
2020. This payment has been made;
2.
US$375,000 on production of 10 kg of mixed rare-earth product from pilot or demonstration plant
activities; and
3. US$375,000 on conversion of existing licences to mining licences.
6.
At any time should IonicRE not continue to invest in the project and project development ceases for
at least two months Rwenzori has the right to return the capital invested by IonicRE and reclaim all
interest earnt by IonicRE.
Nicaragua
The Company sold its interest in Nicaragua during the period.
Operating Results
The Group’s income was $215,161 (2020: $1,226) and the loss was $2,377,629 (2020: $1,486,254) for the
financial year. Salaries, wages and consulting fee-based payments of $677,232 (2020: $269,395) and share
based payments of $979,763 (2020: $670,660) account for approximately 69% (2020: 63%) of this year’s loss.
Operating income
Operating loss
2021
$
2020
$
215,161
1,226
(2,377,629)
(1,486,254)
23
Ionic Rare Earths Limited / Annual Report 2021
Year in Review
Review of Financial Position
During the year, the Group raised $14,482,357
(after all expenses) through the issue of
737,500,036 fully paid shares and $1,405,000
through the exercise of 204,000,000 options.
Environmental Regulation
and Performance
The company is subject to significant
environmental regulation in respect of its
exploration activities. It aims to ensure the
appropriate standard of environmental care is
As a result of those raisings the directors believe
achieved and in so doing, is aware of all relevant
that at the date of this report the Group has
a sound capital structure and is in a position
to progress the planned exploration on the
Company’s mineral properties.
At 30 June 2021 the cash balance of the group
stood at $11,055,530.
Likely Developments and
Expected Results
of Operations
IonicRE will continue to advance the Makuutu
Rare Earth Project with the aim of finalising
a feasibility study by the end of October 2022.
Upon the successful completion of the feasibility
study it is expected that a decision on further
investment into the Makuutu project will be
made.
The impact of COVID-19 on the Group going
environmental legislation. The directors of
the company are not aware of any breach of
environmental legislation for the year under
review. The directors have considered compliance
with the National Greenhouse and Energy
Reporting Act 2007 which requires entities to
report annual greenhouse gas emissions and
energy use. The directors have assessed that the
Company has no current reporting requirements
but may be required to report in the future.
Proceedings on Behalf
of Company
No person has applied for leave of court to
bring proceedings on behalf of the Company
or intervene in any proceedings to which the
Company is a party for the purpose of taking
responsibility on behalf of the Company for all or
any part of those proceedings. The Company was
forward, including its financial condition cannot
not a party to or intervened in any proceedings
be reasonably estimated at this stage and will be
during the year.
reflected in the Group’s 2022 interim and annual
financial statements.
Indemnification and
Insurance of Directors
and Officers
During or since the financial year, the company
has paid premiums in respect of a contract
insuring all the directors of Ionic Rare Earths
Limited against legal costs incurred in defending
proceedings for conduct involving:
(a) a wilful breach of duty; or
(b) 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 $22,000 (2020: $16,650).
24
Ionic Rare Earths Limited / Annual Report 2021
Remuneration Report
(Audited)
This remuneration report outlines the director and executive remuneration arrangements of the
Company and the Group in accordance with the requirements of the Corporations Act 2001 and its
Regulations. For the purposes of this report, key management personnel (KMP) of the Group are defined
as those persons having authority and responsibility for planning, directing and controlling the major
activities of the Company and the Group, directly or indirectly, including any director (whether executive
or otherwise) of the parent company.
For the purposes of this report, the term ‘executive’ encompasses the chief executive and secretaries of
the Parent and the Group.
Details of key management personnel during the whole or part of the
financial period
T B Benson
Chairman (Non-Executive)
T J Harrison
Managing Director – (appointed 21 December 2020, previously CEO)
B J Marwood
Director (Non-Executive) – (appointed 21 December 2020, resigned 16 July 2021)
B D Dickson
Finance Director – (resigned as a director 21 December 2020, continues as
Company Secretary)
A P Rovira
Chairman (Non-Executive) – (resigned 21 December 2020)
M J Steffens
Director (Non-Executive) – (resigned 31 August 2020)
Remuneration philosophy
The Board of Directors is responsible for determining and reviewing compensation arrangements for
the directors. The Board assesses the appropriateness of the nature and amount of emoluments of such
officers on a periodic basis by reference to relevant employment market conditions with the overall
objective of ensuring maximum stakeholder benefit from the retention of a high-quality board and
executive team. Such officers are given the opportunity to receive their base emolument in a variety of
forms including cash and other non-cash payments. It is intended that the manner of payment chosen
will be optimal for the recipient without creating undue cost for the company.
To assist in achieving these objectives, the Board links the nature and amount of executive directors’ and
officers’ emoluments on an annual basis based on individual performance and market conditions.
In the event of serious misconduct or a material misstatement in the Group’s financial statements,
the Board can reduce, cancel or defer performance-based remuneration and may also claw back
performance-based remuneration paid in previous financial years.
Remuneration structure
In accordance with best practice corporate governance, the structure of non-executive director and
executive remuneration is separate and distinct.
25
Ionic Rare Earths Limited / Annual Report 2021
Compensation of Directors and Executive Officer
(i) Compensation Policy
The Board of Directors of Ionic Rare Earths Limited is responsible for determining and reviewing
compensation arrangements for the directors and the Chief Executive Officer.
(ii) Non-Executive Director Compensation
Objective
The Board seeks to set aggregate compensation at a level that provides the company with the ability to
attract and retain directors of the highest calibre, whilst incurring a cost that is acceptable to shareholders.
Structure
The Constitution and the ASX Listing Rules specify that the aggregate compensation of non-executive
directors shall be determined from time to time by a general meeting. An amount not exceeding the
amount determined is then divided between the directors as agreed and reviewed annually. The latest
determination was in 2011 when shareholders approved an aggregate remuneration of $400,000 per
year. The Board may consider advice from external consultants as well as the fees paid to non-executive
directors of comparable companies when undertaking the annual review process.
No consultants were used during the year.
Non-executive directors have long been encouraged by the Board to hold shares in the company
(purchased by the director on market). It is considered good governance for directors to have an equity
interest in the company on which board they sit.
(iii) Executive Compensation
Objective
The entity aims to reward executives with a level and mix of compensation commensurate with their
position and responsibilities within the entity so as to:
▲
Align the interests of executives with those of shareholders; and
▲
Ensure total compensation is competitive by market standards.
Structure
The Board periodically assesses the appropriateness of the nature and amount of emoluments of such
officers on a periodic basis by reference to relevant employment market conditions with overall objective
of ensuring maximum stakeholder benefit from the retention of a high quality board and executive team.
Such officers are given the opportunity to receive their base emolument in a variety of forms including
cash and other non-cash benefits. It is intended that the manner of payment chosen will be optimal for
the recipient without creating undue cost for the company.
(iv) Fixed Compensation
Objective
Fixed compensation is reviewed annually by the Board. The process consists of a review of individual
performance, relevant comparative compensation in the market and internally and, where appropriate,
external advice on policies and practices.
Structure
Executives are given the opportunity to receive their fixed remuneration in a variety of forms including
cash and other non-cash benefits.
(v) Variable Compensation
Objective
The objective is to link the achievement of the company’s targets with the compensation received by the
executives charged with meeting those targets.
Currently, the company does not restrict executives from entering into arrangements to protect the value
of unvested Long-Term Incentives. However, under the Securities Dealing Policy, members of the Board
are required to advise the Company Secretary of any shareholdings including any hedging arrangements.
26
Ionic Rare Earths Limited / Annual Report 2021
Share-based compensation
Options or shares may be issued to directors and executives as part of their remuneration. The options or
shares are not issued based on performance criteria but are issued to the directors and executives of Ionic
Rare Earths Limited to increase goal congruence between executives, directors and shareholders.
During the year 60,000,000 options (2020: 40,000,000) were issued to key management personnel,
details of the options are set out elsewhere in this report. No shares were issued (2020: nil) in lieu of cash
directors’ fee, details of the shares issued are set out elsewhere in this report.
Structure
Actual payments granted to each KMP are determined by the Board who meet periodically to assess the
achievements of the company’s targets. There are currently no targets established.
Employment contracts
Remuneration and other terms of employment for the following KMP are formalised in service
agreements, the terms of which are set out below:
Mr T J Harrison, Managing Director:
▲
Term of agreement – to 31 December 2022.
▲
Fixed consulting fee of $30,000 per month
▲
Termination by either party with six months’ notice.
Mr B D Dickson, Company Secretary:
▲
Term of agreement – to 31 December 2022.
▲
Fixed consulting fee of $12,500 per month
▲
Payment of termination benefit on early termination by the employer, other than for gross
misconduct, includes an amount equal to the amounts due for the balance of the term of the contract
from the date of termination or the equivalent of 6 months remuneration whichever is the greater.
27
Ionic Rare Earths Limited / Annual Report 2021
Compensation of Key Management Personnel (Consolidated and Parent)
Compensation of each director and the executive officer of the parent and group are as follows:
Short term
Post-
employment
Share
based
payments
Total
Total
options
related
Total
performance
related
30 June 2021
Salaries
and fees
Non-
Monetary
Benefit1
Super-
Annuation
Options
$
$
$
$
$
Directors
T B Benson2
118,367
T J Harrison3 & 8
362,500
B J Marwood4
9,581
B D Dickson5
120,000
A P Rovira6
25,000
M J Steffens7
18,888
6,060
3,920
3,820
3,480
3,480
1,240
11,243
211,400
347,070
211,400
–
–
224,100
590,520
224,100
50,000
9,581
–
22,982
–
19,162
112,050
254,692
112,050
2,375
112,050
142,905
112,050
–
–
20,128
–
–
–
–
–
Total
654,336
22,000
42,361
659,600
1,378,297
659,600
50,000
Short term
Post-
employment
Share
based
payments
Total
Total
options
related
Total
performance
related
30 June 2020
Salaries
and fees
Non-
Monetary
Benefit1
Super-
annuation
Options
$
$
$
$
$
$
Directors
T J Harrison
–
B D Dickson
128,750
A P Rovira
40,000
M J Steffens7
134,088
–
5,550
5,550
5,550
–
–
–
–
18,750
57,750
210,800
57,750
3,799
57,750
107,099
57,750
–
115,500
255,138
115,500
Total
302,838
16,650
22,549
231,000
573,037
231,000
–
–
–
–
–
1. The Non-Monetary Benefit relates to the Directors’ Indemnity Insurance.
2. Appointed 31 August 2020
3. Appointed a director on 21 December 2020, previously Chief Executive Officer
4. Appointed 21 December 2020, resigned 16 July 2021
5. Resigned 21 December 2020, continues as Company Secretary
6. Resigned 21 December 2020
7. Resigned 31 August 2020
8.
Includes a $50,000 bonus met through the issue of 3,571,428 fully paid ordinary shares as a result
of Mr. Harrison meeting a performance criteria of the Company completing a positive scoping study
before 1 November 2020
28
Ionic Rare Earths Limited / Annual Report 2021
Compensation Options: Granted and Vested during the year.
During the year 60,000,000 compensation options were granted (2020: 40,000,000). The weighted
average fair value of the options granted was 1.10 cents. The price was calculated by using the Binominal
Option valuation methodology applying the following inputs:
Grant date
Number of options issued
Weighted average exercise price (cents)
Weighted average life of the option (years)
Weighted average underlying share price (cents)
Expected share price volatility (%)
Risk free interest rate (%)
Fair value per options
a
3 Dec 2020
10,000,000
1.8
2.0
1.6
130
0.10
b
3 Dec 2020
50,000,000
2.15
3.0
1.6
130
0.12
0.0099
0.0112
There were no alterations to the terms and conditions of options granted as remuneration since their
grant date. No Compensation Options were exercised during the financial period (2020: Nil); 20,000,000
Compensation Options were forfeited (2020: Nil).
The Company’s remuneration policy prohibits directors and executives from entering into transactions or
arrangements which limit the economic risk of participating in unvested entitlements.
Apart from the issue of options the company currently has no performance–based remuneration
component built into director and executive remuneration (2020: Nil).
Shareholdings of Key Management Personnel
Balance
1 July 2020
Purchased
On Exercise
of Options
Share-based
payment
Sold
Balance
30 June 2021
2021
Specified
Directors
T B Benson
T J Harrison
B J Marwood1
–
–
–
–
1,178,572
–
–
–
–
B D Dickson
23,420,330
1,283,034
4,000,000
A P Rovira1
51,602,016
1,973,899
M J Steffens
–
–
–
–
–
3,571,428
–
–
–
–
–
–
–
–
4,750,000
–
(24,045,330)
4,658,034
–
–
53,575,915
–
Total
75,022,346
4,435,505
4,000,000
3,571,428
(24,045,330)
62,983,949
29
Ionic Rare Earths Limited / Annual Report 2021
Option Holdings of Key Management Personnel
2021
Balance at
beginning
of year
1 July 2020
Granted
Options
Exercised
Options
Lapsed
Balance at
end of year
Vested at
30 June 2021
30 June 2021
Vested &
Exercisable
Unvested
T B Benson
–
20,000,000
T J Harrison
20,000,000 20,000,000
B J Marwood1
–
–
–
–
–
–
–
–
20,000,000
20,000,000
40,000,000
40,000,000
–
–
B D Dickson
24,000,000
10,000,000 (4,000,000)
(10,000,000)
20,000,000
20,000,000
A P Rovira1
30,000,000
10,000,000
M J Steffens1
20,000,000
–
–
–
(30,000,000)
10,000,000
10,000,000
–
20,000,000
20,000,000
Total
94,000,000 60,000,000 (4,000,000)
(40,000,000)
110,000,000
110,000,000
–
–
–
–
–
–
–
1. Holdings as at date of retirement or resignation as a director
Other Transactions
The Company has entered into a sub–lease agreement on normal commercial terms with Azure Minerals
Limited, a company of which Mr Rovira is a director. During the year, the Company paid sub–lease fees
totalling $9,255 (2020: $17,872).
Amounts due and unpaid at 30 June 2021 to Key Management Personnel include consulting fees of
$47,500
Company’s Performance
Company’s share price performance
The Company’s share price performance shown in the below graph for the year ended 30 June 2021 and is
a reflection of the Company’s performance during the year.
The variable component of the executives’ remuneration, which at this stage only includes share options,
is indirectly linked to the Company’s share price performance.
30
Ionic Rare Earths Limited / Annual Report 2021
Loss per share
Below is information on the Company’s loss per share for the previous four financial years and for the
current year ended 30 June 2021.
Basic loss per share (cents)
2021
(0.08)
2020
(0.07)
2019
(0.06)
2018
(0.24)
2017
(0.14)
Voting and comments made at the company’s 2020 Annual General Meeting
IonicRE received a 88.5% “yes” vote on its remuneration report for the 2020 financial year. The company
did not receive any specific feedback at the AGM or throughout the year on its remuneration practices.
End of Remuneration Report (Audited)
Corporate Governance
In recognising the need for the highest standards of corporate behaviour and accountability, the
directors of the company support and have adhered to the principles of corporate governance. The
company’s corporate governance statement is contained in the additional Australian Securities Exchange
information section of this annual report.
Share Options
At the date of this report, there were 175,000,000 (2020: 448,000,000) share options outstanding.
Balance at the beginning of the year
Share option movements during the year
Issued
Lapsed/
Exercised
Total number
of Options
472,000,000
Exercisable at 1.3 cents, on or before 30 Nov ’20
Exercisable at 0.5 cents, on or before 30 Aug ’22
–
–
(22,000,000)
(22,000,000)
(50,000,000)
(50,000,000)
Exercisable at 1.8 cents, on or before 30 Nov ‘22
50,000,000
(10,000,000)
40,000,000
Exercisable at 2.15 cents, on or before 30 Nov ’22
50,000,000
(10,000,000)
40,000,000
Exercisable at 6.0 cents, on or before 28 Feb ‘24
35,000,000
–
35,000,000
Exercisable at 0.75 cents, on or before 31 July ‘21
–
(340,000,000)
(340,000,000)
Total options issued and exercised in the year to
30 June 2021
135,000,000
(432,000,000)
(297,000,000)
Total
175,000,000
31
Ionic Rare Earths Limited / Annual Report 2021
The balance is comprised the following:
Date Granted
Expiry Date
Exercise Price (cents)
23 December 2019
30 November 2022
24 March 2020
30 November 2022
12 August 2020
30 November 2022
3 December 2020
30 November 2022
3 December 2020
30 November 2023
24 February 2021
28 February 2024
1 February 2021
28 February 2024
1.80
1.80
1.80
1.80
2.15
6.00
6.00
Total number of options outstanding at the date of this report
Number of
Options
30,000,000
20,000,000
40,000,000
10,000,000
40,000,000
25,000,000
10,000,000
175,000,000
No person entitled to exercise any option referred to above has or had, by virtue of the option, a right to
participate in any share issue of any other body corporate.
During the financial year 50,000,000 options exercisable at $0.005 and 154,000,000 options exercisable
at $0.0075 were exercised. Since the end of the financial year 154,000,000 options exercisable at $0.0075
have been exercised.
On 31 March 2020 the Company issued 100,000,000 Performance Rights to Airguide Advisory Pte. Ltd in
consideration for corporate advisory services. All Performance Rights met vesting conditions during the
year and as a result 100,000,000 fully paid ordinary shares were issued.
There are no outstanding Performance Rights.
Non Audit Services
The Company may decide to employ the auditor on assignments additional to their statutory audit duties
where the auditor’s expertise and experience with the company and/or the Group are important.
There were no non-audit services provided during the year.
Auditor’s Independence Declaration
We have obtained an independence declaration from our auditors, BDO Audit (WA) Pty Ltd, as presented
on page 37 of this Annual Report.
32
Ionic Rare Earths Limited / Annual Report 2021
Events After Reporting Date
On 7 July 2021 Ms Jill Kelley was appointed a director of the Company and on 16 July Mr. Maxwell McGarvie
was appointed a director of the Company. Mr Brad Marwood resigned as a director on 16 July 2021.
On 31 January 2020, the World Health Organisation (WHO) announced a global health emergency
because of a new strain of coronavirus originating in Wuhan, China (COVID-19 outbreak) and the risks to
the international community as the virus spreads globally beyond its point of origin. Because of the rapid
increase in exposure globally, on 11 March 2020, the WHO classified the COVID-19 outbreak as a pandemic.
The full impact of the COVID-19 outbreak continues to evolve at the date of this report. The Group is
therefore uncertain as to the full impact that the pandemic will have on its financial condition, liquidity,
and future results of operations during FY2022.
Management is actively monitoring the global situation and its impact on the Group’s financial condition,
liquidity, operations, suppliers, industry, and workforce. Given the daily evolution of the COVID-19 outbreak
and the global responses to curb its spread, the Group is not able to estimate the effects of the COVID-19
outbreak on its results of operations, financial condition, or liquidity for the 2022 financial year.
No other matter or circumstance has 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 the state of
affairs of the group in future financial years.
Signed in accordance with a resolution of the directors,
T Benson
Chairman
Perth, 30 September 2021
33
Makuutu –
Developing a
Long Life, Low
Cost and High
Value Critical
and Heavy Rare
Earths Project
Ionic Rare Earths Limited / Annual Report 2021
Directors’ Declaration
In accordance with a resolution of the directors of Ionic Rare Earths Limited, I state that:
1)
In the opinion of the directors:
(a) The financial statements, notes and additional disclosures included in the directors’ report
designated as audited, of the consolidated entity are in accordance with the Corporations Act 2001,
including:
(i)
Giving a true and fair view of the consolidated entity’s financial position as at 30 June 2021 and
of their performance for the year ended on that date; and
(ii) Complying with Australian Accounting Standards which, as stated in accounting policy Note 2
to the Financial Statements, constitutes explicit and unreserved compliance with International
Financial Reporting Standards (IFRS), the Corporations Regulations 2001 and other mandatory
professional reporting requirements; and
(b) Subject to achievement of the matters as set out 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.
2)
This declaration has been made after receiving the declarations required to be made to the
directors in accordance with section 295A of the Corporations Act 2001 for the financial year ending
30 June 2021.
On behalf of the Board
T Benson
Chairman
Perth, 30 September 2021
35
Ionic Rare Earths Limited / Annual Report 2021
Auditors Declaration of Independence
Tel: +61 8 6382 4600
Fax: +61 8 6382 4601
www.bdo.com.au
38 Station Street
Subiaco, WA 6008
PO Box 700 West Perth WA 6872
Australia
DECLARATION OF INDEPENDENCE BY JARRAD PRUE TO THE DIRECTORS OF IONIC RARE EARTHS
LIMITED
As lead auditor of Ionic Rare Earths Limited for the year ended 30 June 2021, I declare that, to the
best of my knowledge and belief, there have been:
1. No contraventions of the auditor independence requirements of the Corporations Act 2001 in
relation to the audit; and
2. No contraventions of any applicable code of professional conduct in relation to the audit.
This declaration is in respect of Ionic Rare Earths Limited and the entity it controlled during the
period.
Jarrad Prue
Director
BDO Audit (WA) Pty Ltd
Perth, 30 September 2021
BDO Audit (WA) Pty Ltd ABN 79 112 284 787 is a member of a national association of independent entities which are all members of BDO Australia Ltd ABN 77 050 110 275,
an Australian company limited by guarantee. BDO Audit (WA) Pty Ltd and BDO Australia Ltd are members of BDO International Ltd, a UK company limited by guarantee, and
form part of the international BDO network of independent member firms. Liability limited by a scheme approved under Professional Standards Legislation.
37
Ionic Rare Earths Limited / Annual Report 2021
Consolidated Statement of Profit or Loss
and Other Comprehensive Income
For Year Ended 30 June 2021
Other income
Interest Received
Other income
Expenses
Consultants
Directors’ fees (excluding executives)
Executives’ salaries, wages and consulting fees
Exploration expenses
Legal fees
Travel and accommodation
Administration expenses
Insurance
Promotion
Share based payments
Loss on sale of subsidiary
Impairment of receivables
Notes
Consolidated
2021
$
2020
$
3
3
3
1,212
1,226
213,949
–
(102,524)
(65,895)
(103,886)
(114,974)
(470,822)
(203,500)
–
(54,791)
(43,086)
(56,633)
(10,750)
(21,930)
(500,366)
(208,444)
(28,297)
(20,103)
(161,673)
(42,651)
20
(979,763)
(670,660)
(191,623)
–
–
(27,899)
Loss from continuing operations before income tax
(2,377,629)
(1,486,254)
Income tax credit/(expense)
4
–
–
Loss for the year
Other comprehensive income
Items that may be reclassified subsequently to profit or loss:
(2,377,629)
(1,486,254)
Foreign currency translation differences
Other comprehensive income net of tax
(589,586)
(589,586)
1,262
1,262
Total comprehensive loss for the year, net of tax
(2,967,215)
(1,484,992)
Attributable to:
Equity holders of the parent
Non-controlling interests
(2,967,215)
(1,484,992)
–
–
(2,967,215)
(1,484,992)
Total Loss per share for loss attributable to the ordinary equity holders
Basic loss per share (cents)
Diluted loss per share (cents)
14
14
(0.08)
(0.08)
(0.07)
(0.07)
The above Consolidated Statement of Profit or Loss and Other Comprehensive Income should be read in
conjunction with the accompanying notes.
39
Ionic Rare Earths Limited / Annual Report 2021
Consolidated Statement of
Financial Position
As At 30 June 2021
Consolidated
Notes
2021
$
2020
$
Assets
Current assets
Cash and cash equivalents
12
11,055,530
829,933
Receivables
Other
Total current assets
Non–current assets
Investments
Exploration & evaluation expenditure
Total non–current assets
Total assets
Liabilities
Current liabilities
Payables
Other
Total current liabilities
Total liabilities
Net assets
Equity
Issued capital
Reserves
Accumulated losses
Total equity
63,604
15,530
16,761
6,541
11,134,664
853,235
6
7
3,536,269
2,461,308
3,409,530
525,697
6,945,799
2,987,005
18,080,463
3,840,240
9
394,698
127,980
–
210,000
394,698
337,980
394,698
337,980
17,685,765
3,502,260
10
11
43,393,406
27,938,424
7,225,808
6,119,656
(32,933,449)
(30,555,820)
17,685,765
3,502,260
The above Consolidated Statement of Financial Position should be read in conjunction with the
accompanying notes.
40
Ionic Rare Earths Limited / Annual Report 2021
Consolidated Statement of Changes
in Cash Flows
For Year Ended 30 June 2021
Notes
Consolidated
2021
$
2020
$
Cash flows from operating activities
Payments to suppliers and employees
(1,333,717)
(757,340)
Payments for exploration expenditure
Interest received
–
(54,791)
1,212
1,226
Net cash flows used in operating activities
12
(1,332,505)
(810,905)
Cash flows from investing activities
Receipt of government R&D rebate
Proceeds from sale of subsidiary
Deconsolidation of subsidiary
Payment for investments
Payment for capitalised exploration
Net cash flows used in investing activities
Cash flows from financing activities
Proceeds from issue of ordinary shares
(net of transaction costs)
Proceeds received in advance of share placement
Net cash flows from financing activities
213,949
53,436
(11,456)
–
–
–
(1,210,048)
(1,031,673)
(3,165,136)
(525,697)
(4,119,255)
(1,557,370)
15,677,357
2,296,982
–
210,000
15,677,357
2,506,982
Net increase in cash and cash equivalents
10,225,597
138,707
Cash and cash equivalents at the beginning
of the financial year
829,933
691,153
Effect of exchange rate changes on cash and cash equivalents
–
73
Cash and cash equivalents at the end of the financial year
12
11,055,530
829,933
The above Consolidated Statement of Cash Flows should be read in conjunction with the accompanying
notes.
41
Ionic Rare Earths Limited / Annual Report 2021
Consolidated Statement of Changes
in Equity
For Year Ended 30 June 2021
Ordinary
Shares
Convertible
Notes
Reserve
Share
Option
Reserve
Foreign
Currency
Translation
Reserve
Accumulated
Losses
Total
At 1 July 2020
27,938,424
136,403
6,216,857
(233,604)
(30,555,820)
3,502,260
Loss for the period
Other comprehensive loss
Total comprehensive loss
for the period
–
–
–
Shares issued during
the period
16,955,000
Transaction costs
(1,017,643)
Vesting of performance
rights
386,100
Share based transaction
costs
(868,475)
Share based payments
Foreign currency
translation
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
(386,100)
868,475
979,763
–
–
–
–
–
–
233,600
–
(2,377,629)
(2,377,629)
(589,586)
–
(589,586)
(589,586)
(2,377,629)
(2,967,215)
–
–
–
–
–
–
16,955,000
(1,017,643)
–
–
979,763
233,600
At 30 June 2021
43,393,406
136,403
7,678,995
(589,590)
(32,933,449)
17,685,765
Ordinary
Shares
Convertible
Notes
Reserve
Share
Option
Reserve
Foreign
Currency
Translation
Reserve
Accumulated
Losses
Total
At 1 July 2019
24,503,006
136,403
5,326,197
(234,866)
(29,069,566)
661,174
Loss for the period
Other comprehensive loss
Total comprehensive loss
for the period
Shares issued during
the period
Transaction costs
Vesting of performance
rights
–
–
–
3,489,756
(159,338)
105,000
Share based payments
–
–
–
–
–
–
–
–
–
–
–
–
–
(105,000)
995,660
–
(1,486,254)
(1,486,254)
1,262
–
1,262
1,262
(1,486,254)
(1,484,992)
–
–
–
–
–
–
–
–
3,489,756
(159,338)
–
995,660
At 30 June 2020
27,938,424
136,403
6,216,857
(233,604)
(30,555,820)
3,502,260
Changes in Equity should be read in conjunction with the accompanying notes.
42
Ionic Rare Earths Limited / Annual Report 2021
Notes to the Consolidated Financial
Statements
For Year Ended 30 June 2021
1. Corporate Information
The Consolidated Financial report of Ionic
Rare Earths Limited for the year ended
30 June 2021 was authorised for issue in
accordance with a resolution of the directors
on 29 September 2021. The consolidated
financial statements and notes represent
those of Ionic Rare Earths Limited and
its controlled entities (the “Group”). The
consolidated entity’s functional and
presentation currency is AUD ($). The
separate financial statements of the parent
entity, Ionic Rare Earths Limited, have not
been presented within this financial report
as permitted by the Corporations Act 2001.
Ionic Rare Earths Limited is a company
limited by shares incorporated in Australia
whose shares are publicly traded on the
Australian Securities Exchange.
The nature of the operations and principal
activities of the Group are described in the
Directors’ Report.
2. Summary Of Significant
Accounting Policies
(a) Basis of Preparation
The Financial report is a general-purpose
Financial report, which has been prepared
in accordance with the requirements
of the Corporations Act 2001, Australian
Going Concern
This report has been prepared on the going
concern basis, which contemplates the
continuity of normal business activity and
the realisation of assets and settlement of
liabilities in the normal course of business.
The Company incurred a loss after tax of
$2,377,629 (2020: $1,486,254) for the year
ended 30 June 2021 and experienced net
cash outflows from operating activities of
$1,332,505 (2020: $810,905).
The COVID-19 pandemic, announced by the
World Health Organisation on 31 January
2020, is having a negative impact on world
stock markets, currencies and general
business activity. The Group has developed
a policy and is evolving procedures to address
the health and wellbeing of employees,
consultants and contractors in relation to
COVID-19. The timing and extent of the
impact and recovery from COVID-19 is
unknown but it may have an impact on
activities and potentially impact the ability
for the entity to raise capital in the current
prevailing market conditions.
The ability of the group to continue as a
going concern is dependent on the Group
being able to raise additional funds as
required to meet ongoing and budgeted
exploration commitments and for working
capital. These conditions indicate a material
Accounting Standards, Australian Accounting
uncertainty that may cast significant doubt
Interpretations and other authoritative
pronouncements of the Australian
about the Group’s ability to continue as a
going concern and, therefore, it may be
Accounting Standards Board. The Financial
unable to realise its assets and discharge its
report has also been prepared on an accruals
liabilities in the normal course of business.
The Directors believe that they will be able to
raise additional capital as required and are
in the process of evaluating the Group’s cash
requirements. The Directors believe that the
Group will continue as a going concern.
basis. The Group is a for-profit entity for
the purpose of preparing the financial
statements.
Australian Accounting Standards set out
accounting policies that the AASB has
concluded that would result in a financial
report containing relevant and reliable
information about transactions, events and
conditions. Compliance with Australian
Accounting Standards ensures that the
financial reports and notes also comply with
International Financial Reporting Standards.
43
Ionic Rare Earths Limited / Annual Report 2021
As a result, the financial report has been
The assets, liabilities and results of
prepared on a going concern basis. However,
subsidiaries are fully consolidated into the
should the Group be unsuccessful in
financial statements of the Group from the
undertaking additional raisings, the Group
date on which control is obtained by the
may not be able to continue as a going
Group. The consolidation of a subsidiary is
concern. No adjustments have been made
discontinued from the date that control
relating to the recoverability and classification
ceases. Intercompany transactions,
of liabilities that might be necessary should
balances and unrealised gains or losses on
the Group not continue as a going concern.
transactions between group companies are
Should the going concern basis not be
appropriate, the entity may have to realise
its assets and extinguish its liabilities other
than in the ordinary course of business and
at amounts different from those stated
fully eliminated on consolidation. Accounting
policies of subsidiaries have been changed
and adjustments made where necessary to
ensure uniformity of the accounting policies
adopted by the Group.
in the financial report. No allowance for
Equity interests in a subsidiary not
such circumstances has been made in the
attributable, directly or indirectly, to the
financial report.
(b) Adoption of new and amended accounting
standards
The Company has adopted all of the new,
revised or amending Accounting Standards
and Interpretations issued by the Australian
Accounting Standards Board (“AASB”) that
are mandatory for the current reporting
period. There has been no material impact on
the financial statements by their adoption.
A number of other standards, amendments
to standards and interpretations issued by the
AASB which are not materially applicable to
Group are referred to as ‘non-controlling
interests’. The Group recognises any non-
controlling interests in subsidiaries on a
case-by-case basis either at fair value or at the
non-controlling interests’ proportionate share
of the subsidiary’s net assets. Non-controlling
interests are shown separately within the
equity section of the statement of financial
position and statement of profit or loss and
other comprehensive income.
d) Significant accounting estimates and
assumptions
Impact of Coronavirus (COVID-19) pandemic.
the Group have not been applied in preparing
Judgement has been exercised in considering
these consolidated financial statements.
the impacts that the Coronavirus (COVID-19)
(c) Basis of consolidation
The parent entity and its subsidiaries are
collectively referred to as the “Group”. The
parent of this Group is Ionic Rare Earths
Limited. Entities (including structured
entities) over which the parent (or the
Group) directly or indirectly exercises control
are called “subsidiaries”. The consolidated
financial statements incorporate the assets,
liabilities and results of all subsidiaries. The
pandemic has had, or may have, on the
company based on known information.
Other than as addressed in specific notes,
there does not currently appear to be either
any significant impact upon the financial
statements or any significant uncertainties
with respect to events or conditions which
may impact the company unfavourably as at
the reporting date or subsequently as a result
of the Coronavirus (COVID-19) pandemic.
Group controls an entity when the Group is
The carrying amounts of certain assets and
exposed to, or has rights to, variable returns
liabilities are often determined based on
from its involvement with the entity and has
estimates and assumptions of future events.
the ability to affect those returns through its
The key estimates and assumptions that
power over the entity. A list of the Group’s
have a significant risk of causing a material
subsidiaries is provided in Note 8.
adjustment to the carrying amounts of
certain assets and liabilities within the next
annual reporting period are:
Treatment of expenditure on the Makuutu
project
Management have applied judgement in
the treatment of expenditure incurred on
the Makuutu Project in Uganda. (see further
details on the acquisition in Note 6).
44
Ionic Rare Earths Limited / Annual Report 2021
Expenditure incurred in order to acquire the
Exploration and evaluation costs
project has been capitalised as an initial cost
of an investment in associate (being Rwenzori
Rare Metals Limited (‘RML”)) which represents
the group’s 51% interest in RML which the
group has significant influence over. In addition,
exploration expenditure incurred during the
period to increase the group’s interest to 51% has
been capitalised as a further investment in RML
and to exploration and evaluation expenditure.
Management have determined that they
have significant influence as they do not have
control over the management direction and
control over the activities and operations of the
Makuutu project.
Exploration and evaluation costs are written
off in the year they are incurred apart from
acquisition costs (including costs such as the
earn-in payments relating to the Makuutu
project) which are carried forward where right
of tenure of the area of interest is current and
are expected to be recouped through sale
or successful development and exploitation
of the area of interest or, where exploration
and evaluation activities in the area of
interest have not reached a stage that permits
reasonable assessment of the existence of
economically recoverable reserves. The future
recoverability of exploration and evaluation
The group assesses whether there is objective
expenditure is dependent on a number of
evidence that the investment in associate
is impaired by reference to the underlying
project held by RML which is in exploration
factors, including whether the Group decides
to exploit the related lease itself, or, if not,
whether it successfully recovers the related
stage. Management have in accordance with
exploration and evaluation assets through sale.
AASB 6: Exploration and Evaluation of Mineral
Assets, performed a review of impairment
indicators on the investment in associate
which included the review of the rights to
tenure and future planned expenditure.
Factors that could impact the future
recoverability include the level of reserves
and resources, future technological changes,
which could impact the cost of mining,
future legal changes (including changes to
During the earn in period contributed
environmental restoration obligations) and
expenditure incurred is deemed to be
changes to commodity prices.
capitalised exploration and evaluation
expenditure, as opposed to contributions
towards the associate. Once an earn in
milestone has been met, expenditure is
transferred from capitalised exploration
and evaluation expenditure to Investment
in Associate.
Share based payments
The Company 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
the binominal or implied barrier formula.
For options issued in this financial year,
the assumptions detailed as per Note 20
were used.
To the extent that capitalised exploration and
evaluation expenditure is determined not to
be recoverable in the future, profits and net
assets will be reduced in the period in which
this determination is made.
(e) Investments in Associates
Associates
Associates are all entities over which the
Group has significant influence but not
control or joint control. This is generally the
case where the Group holds between 20%
and 50% of the voting rights or in other cases
with greater than 50% where control has still
not been obtained due to the lack of controls
over the relevant activities. Investments in
associates are accounted for by using the
equity method of accounting after being
initially recognised at cost.
45
Ionic Rare Earths Limited / Annual Report 2021
Equity method
(h) Foreign currency translation
Under the equity method of accounting,
the investments are initially recognised at
cost and adjusted thereafter to recognise
the Group’s share of the post-acquisition
Both the functional and presentation
currency of Ionic Rare Earths Limited and
its Australian subsidiaries is Australian
dollars (A$).
profits or losses of the investee in profit or
Transactions in foreign currencies are initially
loss, and the Group’s share of movements in
recorded in the functional currency at the
other comprehensive income of the investee
exchange rates ruling at the date of the
in other comprehensive income. Dividends
transaction. Monetary assets and liabilities
received or receivable from associates and
denominated in foreign currencies are
joint ventures are recognised as a reduction
translated at the rate of exchange ruling
in the carrying amount of the investment.
at the end of the reporting period. Non-
When the Group’s share of losses in an
equity-accounted investment equals or
exceeds its interest in the entity, including
monetary items measured at historical cost
continue to be carried at the exchange rate
at the date of the transaction.
any other unsecured long-term receivables,
All resulting exchange differences in the
the Group does not recognise further losses,
unless it has incurred obligations or made
consolidated financial statements are taken
to the statement of profit or loss and other
payments on behalf of the other entity.
comprehensive income.
Unrealised gains on transactions between the
Group companies
Group and its associates and joint ventures are
The financial results and position of foreign
eliminated to the extent of the Group’s interest
operations, whose functional currency is
in these entities. Unrealised losses are also
different from the Group’s presentation
eliminated unless the transaction provides
currency, are translated as follows:
evidence of an impairment of the asset
transferred. Accounting policies of equity
accounted investees have been changed
where necessary to ensure consistency with
the policies adopted by the Group.
The carrying amount of equity-accounted
investments is tested for impairment each
reporting period.
(f) Cash and cash equivalents
Cash and cash equivalents in the statement
▲
Assets and liabilities are translated at
exchange rates prevailing at the end of
the reporting period;
▲
Income and expenses are translated at
average exchange rates for the period;
and
▲
Retained earnings are translated at the
exchange rates prevailing at the date of
the transaction.
of financial position comprise cash at the
Exchange differences arising on translation of
bank and short-term deposits with an original
foreign operations with functional currencies
maturity of three months or less that are
other than Australian dollars are recognised
readily convertible to known amounts of cash
in other comprehensive income and included
and which are subject to an insignificant risk
in the foreign currency translation reserve
of changes in value.
(g) Other receivables
Other receivables are recognised initially at
in the statement of financial position. These
differences are recognised in profit or loss in
the period in which the operation is disposed.
fair value and subsequently measured at
(i) Income tax
amortised cost using the effective interest
Current tax assets and liabilities for the
method, less an allowance for impairment.
current and prior periods are measured at the
amount expected to be recovered from or
paid to the taxation authorities based on the
46
Ionic Rare Earths Limited / Annual Report 2021
current period’s taxable income. The tax rates
The carrying amount of deferred income
and tax laws used to compute the amount
tax assets is reviewed at each end of the
are those that are enacted or substantively
reporting period and reduced to the extent
enacted by the end of the reporting period.
that it is no longer probable that sufficient
Deferred income tax is provided on all
temporary differences at the end of the
reporting period between the tax bases
taxable profit will be available to allow all or
part of the deferred income tax asset to be
utilised.
of assets and liabilities and their carrying
Unrecognised deferred income tax assets
amounts for financial reporting purposes.
are reassessed at each end of the reporting
Deferred income tax liabilities are recognised
for all taxable temporary differences except:
▲
When the deferred income tax liability
arises from the initial recognition of
goodwill or of an asset or liability in
a transaction that is not a business
combination and that, at the time of
the transaction, affects neither the
accounting profit nor taxable profit or
loss; or
▲
When the taxable temporary difference
is associated with investments in
subsidiaries, associates or interests in
joint ventures, and the timing of the
period and are recognised to the extent that
it has become probable that future taxable
profit will allow the deferred tax asset to be
recovered.
Deferred income tax assets and liabilities are
measured at the tax rates that are expected
to apply to the year when the asset is realised
or the liability is settled, based on tax rates
(and tax laws) that have been enacted or
substantively enacted at the end of the
reporting period.
Income taxes relating to items recognised
directly in equity are recognised in equity and
not in profit or loss.
reversal of the temporary difference can
Deferred tax assets and deferred tax liabilities
be controlled and it is probable that the
are offset only if a legally enforceable right
temporary difference will not reverse in
exists to set off current tax assets against
the foreseeable future.
Deferred income tax assets are recognised for
all deductible temporary differences, carry-
current tax liabilities and the deferred tax assets
and liabilities relate to the same taxable entity
and the same taxation authority.
forward of unused tax credits and unused tax
Tax consolidation legislation
Ionic Rare Earths Limited and its wholly
owned Australian controlled entities have
implemented the tax consolidation legislation
as of 1 July 2003.
The head entity, Ionic Rare Earths Limited and
the controlled entities in the tax consolidated
group continue to account for their own
current and deferred tax amounts. The Group
has applied the group allocation approach
in determining the appropriate amount of
current taxes and deferred taxes to allocate to
members of the tax consolidated group.
losses, to the extent that it is probable that
taxable profit will be available against which
the deductible temporary differences and
the carry-forward of unused tax credits and
unused tax losses can be utilised, except:
▲
when the deferred income tax asset
relating to the deductible temporary
difference arises from the initial
recognition of an asset or liability in
a transaction that is not a business
combination and, at the time of
the transaction, affects neither the
accounting profit nor taxable profit or
loss; or
▲
when the deductible temporary
difference is associated with investments
in subsidiaries, associates or interests in
joint ventures, in which case a deferred
tax asset is only recognised to the extent
that it is probable that the temporary
difference will reverse in the foreseeable
future and taxable profit will be available
against which the temporary difference
can be utilised.
47
Ionic Rare Earths Limited / Annual Report 2021
( j) Other taxes
The cost of equity-settled transactions is
Revenues, expenses and assets are
recognised, together with a corresponding
recognised net of the amount of GST except:
increase in equity, over the period in which
▲
▲
Where the GST incurred on a purchase
of goods and services is not recoverable
from the taxation authority, in which case
the GST is recognised as part of the cost
the performance conditions are fulfilled,
ending on the date on which the relevant
employees become fully entitled to the award
(‘vesting date’).
of acquisition of the asset or as part of the
The cumulative expense recognised for
expense item as applicable; and
equity-settled transactions at each End of the
Receivables and payables are stated with
the amount of GST included.
reporting period until vesting date reflects
(i) the extent to which the vesting period has
expired and (ii) the number of awards that, in
The net amount of GST recoverable from, or
the opinion of the directors of the Group, will
payable to, the taxation authority is included
ultimately vest. This opinion is formed based
as part of receivables or payables in the
on the best available information at reporting
date. No adjustment is made for the
likelihood of market performance conditions
being met as the effect of these conditions is
included in the determination of fair value at
grant date.
No expense is recognised for awards that
do not ultimately vest, except for awards
where vesting is conditional upon a market
condition. Where the terms of an equity-
settled award are modified, as a minimum
an expense is recognised as if the terms had
not been modified. In addition, an expense is
recognised for any increase in the value of the
transaction as a result of the modification, as
measured at the date of modification.
Where an equity-settled award is cancelled,
it is treated as if it had vested on the date
of cancellation, and any expense not yet
recognised for the award is recognised
immediately. However, if a new award is
substituted for the cancelled award and
designated as a replacement award on
the date that it is granted, the cancelled
and new award are treated as if they were
a modification of the original award, as
described in the previous paragraph.
The dilutive effect, if any, of outstanding
options is reflected as additional share dilution
in the computation of earnings per share.
statement of financial position.
Cash flows are included in the Statement
of Cash Flows on a gross basis and the GST
component of cash flows arising from investing
and financing activities, which is recoverable
from, or payable to, the taxation authority, are
classified as operating cash flows.
Commitments and contingencies are
disclosed net of the amount of GST
recoverable from, or payable to, the taxation
authority.
(k) Trade and other payables
Trade payables and other payables are carried
at amortised costs and represent liabilities
for goods and services provided to the Group
prior to the end of the financial year that are
unpaid and arise when the Group becomes
obliged to make future payments in respect
of the purchase of these goods and services.
(l) Share-based payment transactions
The Group provides benefits to directors,
employees and consultants of the Group
(with shareholders’ approval) in the form of
share-based payment transactions, whereby
directors, employees and consultants render
services in exchange for options over shares
(‘equity-settled transactions’).
The cost of these equity-settled transactions
with employees is measured by reference to
the fair value at the date at which they are
granted. The fair value is determined by an
external valuer using a binomial model.
In valuing equity-settled transactions,
no account is taken of any performance
conditions, other than conditions linked to
the price of the shares of Ionic Rare Earths
Limited (‘market conditions’).
48
Ionic Rare Earths Limited / Annual Report 2021
(m) Contributed equity
Ordinary shares are classified as equity.
(p) Exploration and development expenditure
Exploration and evaluation costs are written
Incremental costs directly attributable to the
off in the year they are incurred apart from
issue of new shares or options are shown in
acquisition costs, including costs such as the
equity as a deduction, net of tax, from the
earn-in payments relating to the Makuutu
proceeds.
project, which are carried forward where right
Effective 1 July 1998, the corporations
legislation abolished the concepts of
authorised capital and par value shares.
Accordingly, the company does not have
authorised capital nor par value in respect of
its issued capital.
of tenure of the area of interest is current
and they are expected to be recouped
through sale or successful development
and exploitation of the area of interest or,
where exploration and evaluation activities
in the area of interest have not reached a
stage that permits reasonable assessment
Basic earnings per share is calculated as net
of the existence of economically recoverable
profit attributable to members of the parent,
reserves.
adjusted to exclude any costs of servicing
equity (other than dividends) and preference
share dividends, divided by the weighted
average number of ordinary shares, adjusted
for any bonus element.
(n) Earnings per share
Where an area of interest is abandoned or the
directors decide that it is not commercial, any
accumulated acquisition costs in respect of
that area are written off in the financial period
the decision is made. Each area of interest is
also reviewed at the end of each accounting
Diluted earnings per share is calculated as net
period and accumulated costs written off to
profit attributable to members of the parent,
the extent that they will not be recoverable in
adjusted for:
the future.
Amortisation is not charged on costs carried
forward in respect of areas of interest in
the development phase until production
commences.
▲
▲
Costs of servicing equity (other than
dividends) and preference share dividends;
The after tax effect of dividends and interest
associated with dilutive potential ordinary
shares that have been recognised as
expenses; and
▲
Other non-discretionary changes in revenues
or expenses during the period that would
result from the dilution of potential ordinary
shares:
▲
Divided by the weighted average number of
ordinary shares and dilutive potential ordinary
shares, adjusted for any bonus element.
(o) Comparative figures
When required by accounting standards
comparative figures have been adjusted to
conform to changes in the presentation for
the current financial year.
49
Ionic Rare Earths Limited / Annual Report 2021
3. Expenses and Losses
Profit/(loss) from continuing operations before income tax includes the following specific expenses
Salaries & wages expenses
Operating lease rentals
Directors’ benefit expense (excluding executive directors)
Exploration expenses
4. Income Tax
The major components of income tax expense are:
Statement of profit or loss and other comprehensive income
Current income tax benefit/(expense)
Deferred income tax benefit/(expense)
Income tax benefit/(expense) reported in the statement
of profit or loss and other comprehensive income
2021
$
470,822
12,255
103,886
–
2020
$
203,500
17,872
114,974
54,791
2021
2020
$
$
–
–
–
–
–
–
A reconciliation between tax expense and the product of accounting profit/(loss) before income
tax multiplied by the Group’s applicable income tax rate is as follows:
Accounting loss before income tax
(2,377,629)
(1,486,254)
At the Group’s statutory income tax rate of 26% (2020: 27.5%)
(618,185)
(408,720)
Less: Share options expenses during the year
Exploration expenditure
Government grants exempt from tax
Other expenditure not allowable for income tax purposes
254,738
–
(55,627)
49,822
184,432
15,068
–
13,537
(369,252)
(195,683)
Current year tax losses not brought to account
369,252
195,683
Income tax (benefit)/expense reported in the consolidated
statement of profit or loss and other comprehensive income
–
–
Deferred Income Tax
Deferred income tax at 30 June relates to the following:
Deferred tax liabilities
Prepayments
Total deferred tax liabilities
Deferred tax assets
Accrued expenses
Capital raising costs
Tax assets/losses recognised /(not brought to account)
Total deferred tax assets
(4,038)
(4,038)
(1,799)
(1,799)
5,200
19,377
(20,539)
4,038
5,500
19,964
(23,665)
1,799
Net deferred tax liabilities/(asset)
–
–
50
Ionic Rare Earths Limited / Annual Report 2021
Other than to offset deferred tax liabilities the Group has not recognised tax losses arising in Australia
of $13,432,620 (2020: $12,993,498) that may be available for offset against future taxable profits of the
companies in which the losses arose. The potential benefit of carried forward losses will only be obtained
if assessable income is derived of a nature and, of an amount sufficient to enable the benefit from the
deductions to be realised or the benefit can be utilised by the Company provided that :
(i) the provisions of deductibility imposed by law are complied with;
(ii) the group satisfies the continuity of ownership test from the period the losses were incurred to the
time they are to be utilised; and
(iii) no change in tax legislation adversely affect the realisation or the benefit from the deductions.
Tax Consolidation
Ionic Rare Earths Limited and its 100% owned Australian subsidiaries have formed a tax consolidated
group. Members of the group entered into a tax sharing arrangement in order to allocate the income tax
expense to the wholly owned subsidiaries on a pro-rata basis. The agreement provides for the allocation of
income tax liabilities should the head entity default on its tax payment obligations. At the reporting date,
the possibility of default is remote.
Tax effect accounting by members of the tax consolidated group
The allocation of taxes under the tax sharing and funding agreement is recognised as an increase/
decrease in the subsidiaries’ inter-company accounts with the tax consolidated group head company,
Ionic Rare Earths Limited. The group has applied the group allocation approach in determining the
appropriate amount of current taxes to allocate to members of the tax consolidated group.
5. Operating Segment
The Group has based its operating segment on the internal reports that are reviewed and used by the
Board of Directors (“Board”) (the chief operating decision makers) in assessing performance and in
determining the allocation of resources.
The Group does not have production and is only currently involved in exploration activities. As a
consequence, activities in the operating segment are identified by the Board based on the manner in
which resources are allocated and the nature of the resources provided.
Based on this criterion, the Board has determined that the Group has one operating segment, being
exploration, and the segment operations and results are the same as the Group’s results.
During the period the Company conducted its activities across three geographic locations, being
Australia, Uganda and Nicaragua.
2021
Australia
Nicaragua
Uganda
$
$
$
Total
$
Revenues
Loss
Non-current assets
Total assets
Total liabilities
2020
Revenues
Loss
215,161
–
(2,186,007)
(191,622)
–
–
215,161
(2,377,629)
–
11,134,664
(394,698)
Australia
Nicaragua
$
$
1,226
–
–
–
–
6,945,799
6,945,799
6,945,799
18,080,463
Uganda
$
–
–
(394,698)
Total
$
1,226
(1,403,790)
(27,899)
(54,791)
(1,486,480)
Non-current assets
–
–
–
–
Total assets
Total liabilities
841,780
(260,585)
11,455
2,987,005
3,840,240
–
(77,395)
(337,980)
51
Ionic Rare Earths Limited / Annual Report 2021
6. Investments
An amount of $3,526,269 has been presented in the financial statements as an Investment in Associates.
This represents amounts incurred to acquire an interest in Rwenzori Rare Metals Limited which holds
100% of the Makuutu Rare Earth Elements project. Refer to note 19 for further information. This includes
the amounts set out below.
Subscription for initial 20% interest in Rwenzori Rare Metals Limited
US$100,000 paid to Rare Earth Elements Africa Pty Ltd
29,179,517 fully paid shares issued to Rare Earth Elements Africa Pty Ltd
2021
2020
$
$
148
148,035
233,436
148
148,035
233,436
100,000,000 fully paid shares issued to Southern Cross Mining Pty Ltd
800,000
800,000
50,000,000 options (exercise price) of $0.005 issued to SCM
325,000
325,000
Expenditure on exploration and evaluation for additional 11% interest
954,689
954,689
Expenditure on exploration and evaluation for additional 15% interest
Expenditure on exploration and evaluation for additional 5% interest
Movement in foreign exchange
1,166,337
498,210
(589,586)
–
–
–
3,536,269
2,461,308
Summarised financial information for associate –
Rwenzori Rare Metals Limited (RRM)
The table below summarises the financial information for the associate that is relevant to Ionic Rare
Earths Limited. The information disclosed reflects the amounts presented in the financial statements
of RRM and not Ionic Rare Earths Limited share of those amounts. They have been amended to reflect
adjustments, if any, made by Ionic Rare Earths Limited when using the equity method, including fair value
adjustments and modifications for differences in accounting policy.
Current assets
Cash
Non-current assets
Plant and equipment
Other
Current Liabilities
Payables
Net assets
Groups share in %
Groups share in $
Fair value uplift
Carrying amount
110,693
18,346
31,284
38,533
(123,499)
57,011
51%
29,076
9,690
(1,454)
26,582
31%
8,240
3,507,541
2,453,068
3,536,617
2,461,308
The fair value uplift is attributable to IonicRE’s contribution towards exploration in excess of their share of
the net assets of RRM.
The Company’s may increase its interest in RRM from 51% to 60% by the completion of a bankable
feasibility study.
52
Ionic Rare Earths Limited / Annual Report 2021
7. Exploration and Evaluation Expenditure
At Cost (a)
2021
2020
$
$
3,409,530
525,697
Impairment of exploration & evaluation expenditure
–
–
Carrying amount at the end of the financial year
3,409,530
525,697
Carrying amount at the beginning of the financial year
525,697
–
Additions
Transferred to Investment in Associate
2,883,833
1,480,386
–
(954,689)
Carrying amount at the end of the financial year
3,409,530
525,697
(a) This amount represents contribution to expenditure to earn a 51% interest in Rwenzori Rare Metals
Limited which hold the Makuutu exploration licence.
Recovery of the capitalised amount is dependent upon:
(i) the continuance of the Group’s right to tenure of the area of interest;
(ii) the results of future exploration; and
(iii) the successful development and commercial exploitation, or alternatively sale.
8. Interest in Subsidiaries
The subsidiaries listed below have share capital consisting solely of ordinary shares.
Each country of incorporation is also its principal place of business.
Name of Subsidiary
Country of
Incorporation
% equity held by
consolidated entity
Goldcap Resources Pty Limited
Australia
And its subsidiary
2021
100
2020
100
Minera San Cristobal, S.A.
Nicaragua
–
100
There are no significant restrictions over the Group’s ability to access or use assets and settle liabilities of
the group.
9. Payables (Current)
Trade creditors and accruals
2021
2020
$
394,698
$
127,980
53
10. Contributed Equity
(a) Issued and paid up capital
Fully paid ordinary shares
Less: capital raising costs
Ionic Rare Earths Limited / Annual Report 2021
2021
2020
$
$
47,358,254
30,017,154
(3,964,848)
(2,078,730)
43,393,406
27,938,424
Ordinary shares entitle the holder to participate in dividends and the proceeds on winding up of the
Company in proportion to the number and amounts paid on the shares held. On a show of hands every
holder of ordinary shares present at a meeting in person or by proxy is entitled to one vote, and upon a
poll each share is entitled to one vote.
(b) Movements in ordinary share capital
2021
2020
Number of
shares
$
Number of
shares
$
2,161,328,050
27,938,424
1,555,678,533
24,503,006
(i)
(ii)
(ii)
(iii)
(i)
(iv)
(iv)
(iv)
(iv)
(i)
(i)
(v)
300,000,000
12,000,000
154,000,000
1,155,000
50,000,000
250,000
3,571,428
50,000
–
–
–
–
–
–
–
–
437,500,036
3,500,000
143,750,000
1,150,000
33,300,000
33,300,000
33,400,000
145,200
128,700
112,200
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
15,000,000
105,000
200,000,000
600,000
117,720,000
706,320
129,179,517
1,033,436
(1,886,118)
–
(159,338)
Beginning of the
financial year
Issued during the year
Issue at $0.04
Issue at $0.0075
Issue at $0.005
Issue at $0.014
Issue at $0.008
Issue at $0.0044
Issue at $0.0039
Issue at $0.0034
Issue at $0.007
Issue at $0.003
Issue at $0.006
Issue at $0.008
Cost of share issues
End of the financial year
3,206,399,514
43,393,406
2,161,328,050
27,938,424
(i)
Funds raised from the share placements during the 2021 and 2020 year were used to progress the
Group’s exploration activities and for general working capital.
(ii) Exercise of options
(iii) Issued in lieu of cash bonus.
(iv) Issued on vesting of performance rights.
(v) Facilitation fee for the acquisition of the Makutu project in Uganda
54
Ionic Rare Earths Limited / Annual Report 2021
(c) Movements in unlisted options on issue
At balance date, there were 361,000,000 (2020: 472,000,000) share options outstanding.
Balance at the beginning of the year
Share option movements during
the year
Total options issued and lapsed in the
year to 30 June 2021
Balance at the end of the year
Issued
Exercised
Lapsed
Total number
of Options
472,000,000
135,000,000
(204,000,000)
(42,000,000)
(111,000,000)
361,000,000
The balance of options on issue is comprised of the following:
Date Granted
Expiry Date
Exercise Price
(cents)
Number of
Options
25 July 2018
31 July 2021
23 December 2019
30 November 2022
24 March 2020
12 August 2020
3 December 2020
3 December 2020
24 February 2021
1 February 2021
30 November 2022
30 November 2022
30 November 2022
30 November 2023
28 February 2024
28 February 2024
Total number of options outstanding at the date of this report
0.75
1.80
1.80
1.80
1.80
2.15
6.00
6.00
186,000,000
30,000,000
20,000,000
40,000,000
10,000,000
40,000,000
25,000,000
10,000,000
361,000,000
(d) Capital Management
When managing capital, management’s objective is to ensure the Group continues as a going concern
as well as to maintain optimal returns to shareholders and benefits for other stakeholders. Management
also aims to maintain a capital structure that ensures the lowest cost of capital available to the Group.
The Group is not exposed to any externally imposed capital requirements.
55
Ionic Rare Earths Limited / Annual Report 2021
2021
2020
$
$
6,216,857
5,326,197
(386,100)
(105,000)
1,848,238
995,660
7,678,995
6,216,857
2021
2020
$
136,403
–
$
136,403
–
136,403
136,403
2021
2020
$
$
(233,604)
(234,866)
(355,986)
1,262
(589,590)
(233,604)
11. Reserves
Share Option Reserve
Balance at beginning of year
Vesting of performance rights
Movement during the year
Balance at the end of year
Convertible Note Equity Reserve
Balance at beginning of year
Movement during the year
Balance at the end of year
Foreign Currency Translation Reserve
Balance at beginning of year
Movement during the year
Balance at the end of year
Nature and purpose of reserves
Share option reserve
This reserve records the value of options issued to directors, employees and associates as part of their
remuneration.
Convertible note equity reserve
This reserve records the equity portion attributable to the convertible notes at the time of issue.
Foreign currency translation reserve
This reserve is used to record exchange differences arising from the translation of foreign controlled
subsidiaries.
56
Ionic Rare Earths Limited / Annual Report 2021
12. Statement of Cash Flows
Reconciliation of the net profit/(loss) after tax to the net cash flows from operations
Net loss
Share based payments
Fees paid through share issue
Loss on sale of subsidiary
R&D income classified as Investing Activity
Changes in assets and liabilities
Trade receivables
Prepayments
Trade and other creditors
2021
2020
$
$
(2,377,629)
(1,486,254)
979,763
670,660
50,000
191,623
(213,949)
–
–
–
(46,848)
(16,761)
(8,989)
93,524
136
21,314
Net cash flows used in operating activities
(1,332,505)
(810,905)
(a) Reconciliation of cash
Cash balance comprises:
Cash at bank
Short term deposit
Closing cash balance
11,022,029
796,432
33,501
33,501
11,055,530
829,933
Cash at bank earns interest at floating rates based on daily bank deposit rates.
Short term deposits are made at various periods on call, depending on the immediate cash requirements
of the Group and earn interest at the respective short term deposit rates. At 30 June 2021, the Group had
borrowing facilities of $30,000 (2020: $30,000). The short term deposit is provided as security for $30,000
of the facilities. This facility is unutilised at 30 June 2021.
The fair value of cash and cash equivalents is $11,055,530 (2020: $829,933).
The effective interest rate on cash at bank was 0.1% (2020: 0.8%).
Refer to Note 18 for risk exposure.
(b) Non-cash investing and financing activities
During the financial year the Group undertook the following non-cash financing activities.
Shares issued in lieu of cash bonus
3,571,428 fully paid shares issued to Horizon Metallurgy Pty Ltd
50,000
–
Shares issued as facilitation fees for the introduction of the
Makuutu Project
29,179,517 fully paid shares issued to Rare Earth Elements Africa Pty Ltd
100,000,000 fully paid shares issued to Southern Cross Mining
Pty Ltd (SCM)
50,000,000 options (exercise price) of $0.005 issued to SCM
–
–
–
233,436
800,000
325,000
50,000
1,358,436
57
Ionic Rare Earths Limited / Annual Report 2021
13. Events Occurring After the Reporting Period
On 7 July 2021 Ms Jill Kelley was appointed a director of the Company and on 16 July Mr. Maxwell McGarvie
was appointed a director of the Company. Mr Brad Marwood resigned as a director on 16 July 2021.
On 31 January 2020, the World Health Organisation (WHO) announced a global health emergency
because of a new strain of coronavirus originating in Wuhan, China (COVID-19 outbreak) and the risks to
the international community as the virus spreads globally beyond its point of origin. Because of the rapid
increase in exposure globally, on 11 March 2020, the WHO classified the COVID-19 outbreak as a pandemic.
The full impact of the COVID-19 outbreak continues to evolve at the date of this report. The Group is
therefore uncertain as to the full impact that the pandemic will have on its financial condition, liquidity,
and future results of operations during FY2022.
Management is actively monitoring the global situation and its impact on the Group’s financial condition,
liquidity, operations, suppliers, industry, and workforce. Given the daily evolution of the COVID-19 outbreak
and the global responses to curb its spread, the Group is not able to estimate the effects of the COVID-19
outbreak on its results of operations, financial condition, or liquidity for the 2022 financial year.
No other matter or circumstance has 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 the state of
affairs of the group in future financial years.
14. Loss Per Share
Basic loss per share amounts are calculated by dividing net loss for the year attributable to ordinary
Owners of the parent, adjusted to exclude any costs of servicing equity, divided by the weighted average
number of ordinary shares, adjusted for any bonus element.
Diluted loss per share amounts are calculated by dividing the net loss attributable to ordinary Owners of
the parent by the weighted average number of ordinary shares during the year plus the weighted average
number of ordinary shares that would be issued on the conversion of all the dilutive potential ordinary
shares into ordinary shares.
The following reflects the income / (loss) and share data used in the calculations of basic and diluted loss
per share:
(a) Basic and diluted loss per share
From continuing operations attributable to the ordinary Owners
of the company
(b) Reconciliations of losses used in calculating losses per share
Loss attributable to the ordinary Owners of the company used in
calculating basic and diluted earnings per share
2021
2020
Cents
(0.08)
Cents
(0.07)
$
$
From continuing operations
(2,377,629)
(1,486,254)
Weighted average number of ordinary shares on issue used in the
calculation of continuing and discontinued basic and diluted earnings
per share
2,875,075,245
2,000,293,466
(c) Effect of dilutive securities
Options on issue at reporting date could potentially dilute basic loss per share in the future. The effect
in the current year is to decrease the loss per share hence they are considered anti-dilutive. Accordingly,
diluted loss per share has not been disclosed.
58
Ionic Rare Earths Limited / Annual Report 2021
15. Auditor’s Remuneration
Amounts received or due for an audit or review of financial statements:
BDO Audit (WA) Pty Ltd
16. Key Management Personnel
Compensation of key management personnel by compensation
Short-term
Post-employment
Share-based payment
2021
2020
$
41,903
41,903
$
39,169
39,169
2021
2020
$
$
676,336
319,488
42,361
659,600
1,378,297
22,549
231,000
573,037
17. Related Party Disclosure
(a) Subsidiaries
The consolidated financial statements include the financial statement of Ionic Rare Earths
Limited and the subsidiaries listed in the following table.
Name
Country of
incorporation
Equity interest
2021
%
2020
%
Goldcap Resources
Australia
and its 100% owned subsidiary
Minera San Cristobal, S.A.
Nicaragua
100
–
100
100
(b) Ultimate parent
Ionic Rare Earths Limited is the ultimate parent entity.
(c) Other
The Company has entered into a sub-lease agreement on normal commercial terms with Azure Minerals
Limited, a company of which Mr Rovira is a director. During the year the Company paid sub-lease fees
totalling $9,255 (2020: $17,892).
(d) Loans to/from Key Management Personnel
There were no loans outstanding to or from key management personnel as at 30 June 2021 (2020: Nil).
(e) Other transactions and balances with Key Management Personnel
Amounts due and unpaid at 30 June 2021 to Key Management Personnel includes consulting fees of
$20,000 to Coolform Investments Pty Ltd, a related party of B D Dickson and consulting fees of $27,500 to
Horizon Metallurgy Pty Ltd, a related party of TJ Harrison.
59
Ionic Rare Earths Limited / Annual Report 2021
18. Financial Instruments
(a) Financial Risk Management
The Group’s financial instruments comprise receivables, payables and cash.
The Group’s main risks arising from the financial instruments are:
(i)
interest rate risk,
(i)
liquidity risk,
(i) credit risk
(i) foreign currency risk.
Risk Exposures and Responses
(i) Interest Rate Risk
Interest rate risk is the risk that changes in interest rates will affect the Group’s income. The objective of
interest rate risk management is to manage and control risk exposures within acceptable parameters,
while optimising any return. As the Group has interest bearing assets, the Group’s income and operating
cash flows are exposed to changes in market interest rates. The assets are short term interest bearing
deposits. The Group does not have any policy in place and no financial instruments are employed to
mitigate interest rate risks.
At reporting date, the Group had the following financial assets exposed to Australian and Ugandan
variable interest rate risk:
Financial Assets – Cash at Bank
Australia
Nicarargua
2021
2020
$
$
11,055,530
784,977
–
11,455
11,055,530
796,432
The Group has no interest bearing liabilities and is therefore not exposed to interest rate risks.
The following sensitivity analysis is based on the interest rate risk exposures in existence at the end of the
reporting period. The 1% sensitivity is based on reasonable possible change over the financial year using
the observed range for the historic 2 years.
At 30 June, if interest rates had moved, as illustrated in the table below, with all variables held constant,
post tax profit and equity would have been affected as follows:
Judgements of reasonably
possible movements
Post tax profit
Higher/(Lower)
Equity
Higher/(Lower)
CONSOLIDATED
+1% (100 basis points)
-1% (100 basis points)
2021
$
2020
$
2021
$
2020
$
110,555
(110,555)
7,964
(7,964)
110,555
(110,555)
7,964
(7,964)
The movements in profit and equity are due to higher/lower interest costs from variable rate cash balances.
60
Ionic Rare Earths Limited / Annual Report 2021
(ii) Liquidity Risk
Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due.
The Group’s approach to managing liquidity is to ensure, as far as possible, that it will always have
sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without
incurring unacceptable losses or risking damage to the Group’s reputation.
The table below reflects all contractually fixed pay-offs and receivables for settlement, repayments and
interest resulting from recognised financial assets and liabilities. Undiscounted cash flows of financial
liabilities are presented.
The Group has no derivative financial instruments.
The remaining contractual maturities of the Group’s financial liabilities are:
Financial Assets – Cash at Bank
2021
2020
6 months or less
6 – 12 months
1 – 5 years
$
394,698
–
–
$
127,980
–
–
394,698
127,980
Maturity analysis of financial assets and liability based on management’s expectation
The risk implied from the values shown in the table below, reflects a balanced view of cash inflows
and (outflows). Leasing obligations, trade payables and other financial liabilities mainly originate from
the financing of assets used in our ongoing operations such as property, plant and equipment and
investments in working capital e.g. inventories and trade receivables. These assets are considered in the
Group’s overall liquidity risk.
61
Ionic Rare Earths Limited / Annual Report 2021
<6 months
6 – 12
months
1 – 5 years
> 5 years
Total
$
$
$
$
$
Consolidated
Year ended 30 June 2021
Financial assets
Cash & cash equivalents
11,055,530
Trade & other
receivables
Financial liabilities
63,605
11,119,135
Trade & other payables
394,698
Net Maturity
10,724,437
Year ended 30 June 2020
Financial assets
Cash & cash equivalents
Trade & other receivables
829,933
16,761
846,694
Financial liabilities
Trade & other payables
127,980
Net Maturity
718,714
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
11,055,530
63,605
11,119,135
394,698
10,724,437
829,933
16,761
846,694
127,980
718,714
(iii) Credit Risk
Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument
fails to meet its contractual obligations and arises principally from transactions with customers and
investments.
The Group’s exposure to credit risk arises from potential default of the counter party, with a maximum
exposure equal to the carrying amount of the financial assets of the Group, which comprises of cash and
cash equivalents, trade and other receivables and available for sale financial assets.
The Group does not hold any credit derivatives to offset its exposure.
The Group trades only with recognised, creditworthy third parties, and as such collateral is not requested
nor is it the Group’s policy to securitise its trade and other receivables.
It is the Group’s policy that all customers who wish to trade on credit terms are subject to credit
verification procedures. Receivable balances are monitored on an ongoing basis with the result that the
Group’s exposure to bad debts is not significant.
The Group places its cash deposits with institutions with a credit rating of AA or better and only with
major banks.
62
Ionic Rare Earths Limited / Annual Report 2021
Fair value
The fair values of financial assets and liabilities approximate their carrying amounts shown in the
statement of financial position due to their short-term nature. The carrying amounts of financial assets
and liabilities as described in the statement of financial position are as follows:
Consolidated
Carrying
Amount
Aggregate
Net Fair Value
Financial Asset
Cash
Receivables
2021
$
2020
$
2021
$
2020
$
11,055,530
829,933
11,055,530
829,933
63,605
16,761
63,605
16,761
Total financial assets
11,119,135
846,694
11,119,135
846,694
Inancial Liabilities
Trade creditors and accruals
and other creditors
394,698
127,980
394,698
127,980
Total financial liabilities
394,698
127,980
394,698
127,980
The following methods and assumptions are used to determine the net fair values of financial assets and
liabilities:
Cash and cash equivalent: The carrying amount approximates fair value because of their short-term to
maturity.
Receivables and payables: The carrying amount approximates fair value.
(iv) Foreign Currency Risk
Foreign currency risk is the risk that changes in foreign exchange rates will affect the Group’s income or
the value of its holdings of financial instruments. The Group is exposed to currency risk on purchases that
are denominated in a currency other than the respective functional currencies of Group entities, primarily
the United Sates Dollar (USD), Ugandan Shilling (UGX) and Nicaragua Cordoba (NiC). The currencies in
which the transactions primarily are denominated are USD, UGX and NiC.
The Group has not entered into any derivative financial instruments to hedge such transactions and
anticipated future receipts or payments that are denominated in a foreign currency.
Group’s investments in its subsidiaries are not hedged as those currency positions are considered to be
long term in nature.
Exposure to currency risk
The Group’s exposure to foreign currency risk at reporting date, expressed in Australian dollars (AUD), was:
Financial Assets – Cash at Bank
Cash
Trade Receivables
Trade Payables
Gross Statement of Financial Position Exposure
Forward exchange contracts
Net Exposure
2021
2020
110,693
11,455
–
106,090
216,783
–
216,783
–
–
11,455
–
11,455
63
Ionic Rare Earths Limited / Annual Report 2021
The following significant exchange rates applied during the year:
AUD/NiC
AUD/UGX
Sensitivity analysis
Average rate
Reporting date spot rate
2021
25.78
2.73
2020
22.7
–
2021
26.22
2.67
2020
23.5
–
Over the reporting period there have been significant movements in the Australian dollar when
compared to other currencies, it is therefore considered reasonable to review sensitivities base on a
10% movement in the Australian dollar. A 10 percent movement of the Australian dollar against the
Nicaraguan Cordoba at 30 June would have had no effect on equity and loss. A 10 percent movement of
the Australian dollar against the Ugandan Shilling at 30 June would have affected equity and loss by the
amounts shown below. This analysis assumes that all other variables, in particular interest rates, remain
constant. The analysis was performed on the same basis for 2020.
30 June 2021
Ugandan Shilling
30 June 2020
Ugandan Shilling
Equity
Profit or loss
$
$
+/- 104,974
Nil
–
–
64
Ionic Rare Earths Limited / Annual Report 2021
19. Parent Entity Finacial Information
(a) Summary Financial Information
The following information has been extracted from the books and records of the parent and has been
prepared in accordance with Accounting Standards:
Statement Of Financial Position
Assets
Current assets
Non-Current assets
Total assets
Liabilities
Current liabilities
Total liabilities
Equity
Issued capital
Reserves
Share-option
Convertible note equity
Foreign Currency Reserve
Accumulated loses
Total Equity
Statement Of Profit Or Loss And Other Comprehensive Income
Total loss
Total comprehensive loss
2021
2020
$
$
11,119,135
841,780
6,961,328
2,987,005
18,080,463
3,828,785
394,698
394,698
337,980
337,980
43,393,406
27,938,424
7,678,995
6,216,857
136,403
136,403
(589,590)
(32,933,449)
(30,800,879)
17,685,765
3,490,805
(2,132,574)
(1,458,355)
(2,132,574)
(1,458,355)
(b) Guarantees
Ionic Rare Earths Limited has not entered into any guarantees, in the current or previous financial year, in
relation to the debts of its subsidiaries.
(c) Contingent liabilities
On 19 August 2019, the Group received shareholder approval to acquire up to a 60% interest in the
Makuutu rare earths project (Makuutu). Makuutu is owned 100% by Ugandan registered Rwenzori Rare
Metals Limited (RRM) which at the time was owned 85% by South African registered Rare Earth Elements
Africa Proprietary Limited (REEA). IonicRE has entered into a binding option agreement with both
companies that enables it to acquire up to a 60% direct interest in RRM, and thereby up to a 60% indirect
interest in Makuutu. The Group currently has a 51% interest in RRM and to increase to 60% it must fund, to
completion, a bankable feasibility study, which is in progress.
65
Ionic Rare Earths Limited / Annual Report 2021
1.
Additionally during the earn-in phase there are milestone payments, payable in cash or IonicRE shares
at the election of the Vendor, those milestone payments remaining are as follows:
a.
US$375,000 on production of 10 kg of mixed rare-earth product from pilot or demonstration plant
activities; and
b. US$375,000 on conversion of existing licences to mining licences.
2.
At any time should IonicRE not continue to invest in the project and project development ceases for at
least two months RRM has the right to return the capital sunk by IonicRE and reclaim all interest earnt
by IonicRE.
20. Share Based Payments
Details of each class of option issues are set out below.
(a) Employee and consultants’ option plan
The Company does not have a current Employee and Consultants Option Plan and there are no options
on issue that were issued under an Employee and Consultants Option Plan.
(b) Directors and executive options
During the year 60,000,000 options were issued to directors and senior executives (2020: 60,000,000). Set
out below are summaries of options issued to senior executives.
2021
Grant
Date
Expiry
Date
Exercise
Price
(cents)
Value per
option at
grant date
(cents)
Balance at
the start of
the year
Number
Granted
during
the year
Number
Exercised
during the
year
Number
Lapsed
during the
year
Number
Balance
at end of
the year
Number
Vested and
Exercisable
at end of the
year Number
15 Dec ‘17
30 Nov ‘20
23 Dec ‘19 30 Nov ‘22
24 Mar ‘20 30 Nov ‘22
3 Dec ‘20 30 Nov ‘22
1.3
1.8
1.8
1.8
3 Dec ‘20 30 Nov ‘23
2.15
0.35
22,000,000
–
0.58 40,000,000
0.27
20,000,000
0.99a
1.12b
–
–
10,000,000
50,000,000
TOTAL
82,000,000
60,000,000
Weighted average exercise price
$0.017
$0.021
–
–
–
–
–
–
–
22,000,000
–
–
10,000,000
30,000,000
30,000,000
–
–
20,000,000
20,000,000
10,000,000
10,000,000
10,000,000
40,000,000
40,000,000
42,000,000
100,000,000
100,000,000
$0.016
$0.019
$0.019
The weighted average remaining contractual life of share options outstanding at the end of the period
was 1.82 years (2020: 1.88 years).
2020
Grant
Date
Expiry
Date
Exercise
Price
(cents)
Value per
option at
grant date
(cents)
Balance at
the start
of the year
Number
Granted
during
the year
Number
Exercised
during
the year
Number
Lapsed
during
the year
Number
Balance
at end of
the year
Number
Vested and
Exercisable
at end of the
year Number
27 Nov ‘14 30 Sep ‘19
31 Mar ‘15
30 Sep ‘19
15 Dec ‘17
30 Nov ‘20
23 Dec ‘19 30 Nov ‘22
24 Mar ‘20 30 Nov ‘22
5.0
5.0
1.3
1.8
1.8
0.37
5,000,000
0.28
2,000,000
0.35
22,000,000
–
–
–
0.58a
0.27b
– 40,000,000
–
20,000,000
TOTAL
29,000,000
60,000,000
Weighted average exercise price
$0.022
$0.018
–
–
–
–
–
–
–
5,000,000
2,000,000
–
–
–
–
–
–
–
22,000,000
22,000,000
40,000,000
40,000,000
20,000,000
20,000,000
7,000,000
82,000,000
82,000,000
$0.05
$0.017
$0.017
66
Ionic Rare Earths Limited / Annual Report 2021
Fair value of director and senior executive options granted
During the year 60,000,000 options were issued (2020: 60,000,000). The weighted average fair value of
the options granted was 1.10 cents. The price was calculated by using the Binominal Option valuation
methodology applying the following inputs:
Number of options issued
10,000,000
50,000,000
a
b
Weighted average exercise price (cents)
Weighted average life of the option (years)
Weighted average underlying share price (cents)
Expected share price volatility (%)
Risk free interest rate (%)
Fair value per option
1.8
2.0
1.6
130
0.10
2.15
3.0
1.6
130
0.12
0.0099
0.0112
(c) Performance Share Rights
No performance rights were granted during the year (2020: 100,000,000). Set out below are summaries of
performance rights issued.
2021
Grant
Date
Expiry
Date
Share
Price
(Vesting
cents)
Value per
right at
grant date
(cents)
Balance at the
start of the
year
Number
Granted
during
the year
Number
Vested
during the
year
Number
Lapsed
during
the year
Number
Balance
at end of
the year
Number
Vested at
end of
the year
Number
31 Mar ‘20 31 Mar ‘23
31 Mar ‘20 31 Mar ‘23
31 Mar ‘20 31 Mar ‘23
1.1
2.2
3.3
0.44
33,300,000
0.39
33,300,000
0.34
33,400,000
–
–
–
33,300,000
33,300,000
33,400,000
TOTAL
2020
100,000,000
– 100,000,000
Grant
Date
Expiry
Date
Share
Price
(Vesting
cents)
Value per
right at
grant date
(cents)
Balance at the
start of the
year
Number
Granted
during
the year
Number
Vested
during the
year
Number
Lapsed
during
the year
Number
–
–
–
–
–
–
–
–
Balance
at end of
the year
Number
Vested
at end of
the year
Number
–
–
–
–
–
13 Aug’18
13 Aug ‘20
13 Aug’18
13 Aug ‘20
13 Aug’18
13 Aug ‘20
31 Mar ‘20 31 Mar ‘23
31 Mar ‘20 31 Mar ‘23
31 Mar ‘20 31 Mar ‘23
1.0
1.5
2.0
1.1
2.2
3.3
0.60
15,000,000
0.60
15,000,000
0.50
20,000,000
–
–
–
0.44
0.39
0.34
–
–
–
33,300,000
33,300,000
33,400,000
15,000,000
–
–
–
–
–
15,000,000
20,000,000
–
–
–
–
–
–
33,300,000
33.300.000
33.400.000
TOTAL
50,000,000
100,000,000
15,000,000
35,000,000 100,000,000
–
–
–
–
–
–
–
67
Ionic Rare Earths Limited / Annual Report 2021
Airguide Advisory Pte. Ltd
On 31 March 2020 the Company issued 100,000,000 Performance Rights to Airguide Advisory Pte. Ltd in
consideration for corporate advisory services. The vesting conditions for the Performance Rights were as follows:
(i)
based on the reference Share price of $0.011 (“Reference Price A”), the Reference Date Market
Capitalisation Target shall be $22,000,000.00. In the event the Fully Diluted Market Capitalisation
of the Company is equal or higher than $22,000,000.00, calculated based on the 20-day VWAP
of the Shares, the Vesting Condition of 33,300,000 Performance Rights shall be deemed satisfied
(“Tranche A Performance Rights”);
(ii) based on the reference Share price of $0.022 (“Reference Price B”), the Reference Date Market
Capitalisation Target shall be $44,100,000.00. In the event the Fully Diluted Market Capitalisation
of the Company is equal or higher than $44,100,000.00, calculated based on the 20-day VWAP
of the Shares, the Vesting Condition of 33,300,000 Performance Rights shall be deemed satisfied
(‘’Tranche B Performance Rights”); and
(iii) based on the reference Share price of $0.033 (“Reference Price C”), the Reference Date Market
Capitalisation Target shall be $66,100,000.00. In the event the Fully Diluted Market Capitalisation
of the Company is equal or higher than $66,100,000.00, calculated based on the 20-day VWAP of
the Shares, the Vesting Condition of 33,400,000 Performance Rights shall be deemed satisfied
(“Tranche C Performance Rights”).
Total expenses arising from the issue of performance share rights were expensed in full in the year in
which they were granted as there were no service conditions associated with the performance rights.
During the year the performance conditions were met and the Rights were converted to shares.
d. Shares and Options issued to unrelated Parties
During the year three tranches of options were issued to unrelated consultants in lieu of cash fees. The
services provided by the consultants were unable to be accurately valued and as such a value was placed
on the options issued. The price of each option was calculated by using the Binominal Option valuation
methodology applying the following inputs:
Grant date
12 August 2020
24 February 2021
1 February 2021
Number of options issued
40,000,000
25,000,000*
10,000,000
Expiry date (years)
Underlying share price (cents)
Exercise price (cents)
Expected share price volatility (%)
Risk free interest rate (%)
Fair value per option
2.34
1.10
1.80
100
0.27
0.005
3.00
0.50
6.0
112
0.1
0.035
3.00
0.37
6.0
112
0.1
0.012
*25,000,000 options were issued in relation to share issue costs, therefore have been offset against
ordinary shares.
There were no other share based payments to unrelated parties during the 2021 or 2020 financial years.
Total expenses arising from share-based payment transactions during the period were as follows:
Options issued to executives (b)
Performance Share Rights Issued (c)
Options issued to unrelated parties (d)
Total
Consolidated
2021
2020
$
$
659,600
284,560
–
386,100
320,163
–
979,763
670,660
68
Ionic holds 51% of
Rwenzori Rare
Metals Ltd.
(RRM, Ugandan),
which holds 100%
of the Makuutu
Rare Earths
Project
Ionic Rare Earths Limited / Annual Report 2021
Independent Auditor's Report
Tel: +61 8 6382 4600
Fax: +61 8 6382 4601
www.bdo.com.au
38 Station Street
Subiaco, WA 6008
PO Box 700 West Perth WA 6872
Australia
INDEPENDENT AUDITOR'S REPORT
To the members of Ionic Rare Earths Limited
Report on the Audit of the Financial Report
Opinion
We have audited the financial report of Ionic Rare Earths Limited (the Company) and its subsidiary (the
Group), which comprises the consolidated statement of financial position as at 30 June 2021, the
consolidated statement of profit or loss and other comprehensive income, the consolidated statement
of changes in equity and the consolidated statement of cash flows for the year then ended, and notes
to the financial report, including a summary of significant accounting policies and the directors’
declaration.
In our opinion the accompanying financial report of the Group, is in accordance with the Corporations
Act 2001, including:
(i)
(ii)
Giving a true and fair view of the Group’s financial position as at 30 June 2021 and of its
financial performance for the year ended on that date; and
Complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under
those standards are further described in the Auditor’s responsibilities for the audit of the Financial
Report section of our report. We are independent of the Group in accordance with the Corporations
Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board’s
APES 110 Code of Ethics for Professional Accountants (including Independence Standards) (the Code)
that are relevant to our audit of the financial report in Australia. We have also fulfilled our other
ethical responsibilities in accordance with the Code.
We confirm that the independence declaration required by the Corporations Act 2001, which has been
given to the directors of the Company, would be in the same terms if given to the directors as at the
time of this auditor’s report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our opinion.
Material uncertainty related to going concern
We draw attention to Note 2 in the financial report which describes the events and/or conditions which
give rise to the existence of a material uncertainty that may cast significant doubt about the group’s
ability to continue as a going concern and therefore the group may be unable to realise its assets and
discharge its liabilities in the normal course of business. Our opinion is not modified in respect of this
matter.
BDO Audit (WA) Pty Ltd ABN 79 112 284 787 is a member of a national association of independent entities which are all members of BDO Australia Ltd ABN 77 050 110 275,
an Australian company limited by guarantee. BDO Audit (WA) Pty Ltd and BDO Australia Ltd are members of BDO International Ltd, a UK company limited by guarantee, and
form part of the international BDO network of independent member firms. Liability limited by a scheme approved under Professional Standards Legislation.
70
Ionic Rare Earths Limited / Annual Report 2021
Independent Auditor's Report
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in
our audit of the financial report of the current period. These matters were addressed in the context of
our audit of the financial report as a whole, and in forming our opinion thereon, and we do not provide
a separate opinion on these matters. In addition to the matter described in the Material uncertainty
related to going concern section, we have determined the matters described below to be the key audit
matters to be communicated in our report.
Carrying value of Investment in Associate
Key audit matter
How the matter was addressed in our audit
At 30 June 2021, the carrying value of the
equity accounted investment in associate
Rwenzori Rare Metals Limited (“RRM”) who
holds 100% interest in the Makuutu Rate Earth
Elements Project in Uganda is disclosed in Note
6.
At each reporting period, the value of the
equity accounted investment in RRM needs to
be assessed for indicators of impairment. If
indicators of impairment exist, the recoverable
amount needs to be estimated.
The assessment of the carrying value of the
equity accounted investment in RRM was a key
audit matter due to the judgement involved in
determining the appropriate accounting
treatment and determining whether there are
any indicators to suggest that the investment in
associate could be impaired.
Our procedures included, but were not limited to:
Considering the appropriateness of
management’s assessment of significant
influence over RRM and accounting for the
interest as an investment in associate;
Considering management’s assessment of
indicators that the investment in associate
could be impaired;
Verifying the Group’s contribution to RRM’s
exploration and evaluation expenditure to
earn its equity interest in RMM during the
year and confirming the Group’s percentage
ownership of RRM;
Reviewing the calculation for the carrying
value of the investment including the
Group’s share in RRM’s loss;
Reviewing ASX announcements, Board of
Directors meetings minutes to assess for
potential indicators of impairment; and
Assessing the adequacy of the related
disclosures in Notes 2 and 6 to the financial
report.
71
Ionic Rare Earths Limited / Annual Report 2021
Independent Auditor's Report
Carrying value of Exploration and Evaluation Expenditure
Key audit matter
How the matter was addressed in our audit
At 30 June 2021 the carrying value of
capitalised exploration expenditure was
disclosed in Note 7.
As the carrying value of the exploration assets
represent a significant asset of the Group, we
considered it necessary to assess whether any
facts or circumstances exist to suggest that the
carrying amount of these assets may exceed its
recoverable amount.
Judgement is applied in determining the
treatment of exploration expenditure in
accordance with Australian Accounting
Standard AASB 6 Exploration for and Evaluation
of Mineral Resources. In particular, whether
facts and circumstances indicate that the
exploration and evaluation assets should be
tested for impairment.
Our procedures included, but were not limited to:
•
•
•
•
Obtaining a schedule of the area of
interest held by the Group and assessing
whether the rights to tenure of the area of
interest remained current at balance date;
Considering the status of the ongoing
exploration programmes in the respective
area of interest by holding discussions with
management, and reviewing the Group’s
exploration budgets, ASX announcements
and director’s minutes;
Considering whether any area of interest
had reached a stage where a reasonable
assessment of economically recoverable
reserves existed;
Considering whether any facts or
circumstances existed to suggest
impairment testing was required; and
Assessing the adequacy of the related
disclosures in Note 2 and Note 7 to the
financial report.
Other information
The directors are responsible for the other information. The other information comprises the
information in the Group’s annual report for the year ended 30 June 2021, but does not include the
financial report and the auditor’s report thereon.
Our opinion on the financial report does not cover the other information and we do not express any
form of assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information
and, in doing so, consider whether the other information is materially inconsistent with the financial
report or our knowledge obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this
other information, we are required to report that fact. We have nothing to report in this regard.
72
Ionic Rare Earths Limited / Annual Report 2021
Independent Auditor's Report
Responsibilities of the directors for the Financial Report
The directors of the Company are responsible for the preparation of the financial report that gives a
true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001
and for such internal control as the directors determine is necessary to enable the preparation of the
financial report that gives a true and fair view and is free from material misstatement, whether due to
fraud or error.
In preparing the financial report, the directors are responsible for assessing the ability of the group to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the
going concern basis of accounting unless the directors either intend to liquidate the Group or to cease
operations, or has no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the Financial Report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free
from material misstatement, whether due to fraud or error, and to issue an auditor’s report that
includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an
audit conducted in accordance with the Australian Auditing Standards will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered material
if, individually or in the aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of this financial report.
A further description of our responsibilities for the audit of the financial report is located at the
Auditing and Assurance Standards Board website (http://www.auasb.gov.au/Home.aspx) at:
https://www.auasb.gov.au/admin/file/content102/c3/ar1_2020.pdf
This description forms part of our auditor’s report.
Report on the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included in pages 22 to 26 of the directors’ report for the
year ended 30 June 2021.
In our opinion, the Remuneration Report of Ionic Rare Earths Limited, for the year ended 30 June 2021,
complies with section 300A of the Corporations Act 2001.
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the
Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our responsibility
is to express an opinion on the Remuneration Report, based on our audit conducted in accordance with
Australian Auditing Standards.
BDO Audit (WA) Pty Ltd
Jarrad Prue
Director
Perth, 30 September 2021
73
74
Ionic Rare Earths Limited / Annual Report 2021
Corporate Governance Statement
Approach to Corporate
Governance
Ionic Rare Earths Limited ACN 083 646 477
(Company) has established a corporate governance
framework, the key features of which are set out
in this statement. In establishing its corporate
governance framework, the Company has
referred to the recommendations set out in the
ASX Corporate Governance Council’s Corporate
Governance Principles and Recommendations
Charters
Board
Audit and Risk Committee
Nomination Committee
Remuneration Committee
Policies and procedures
Policy and Procedure for the Selection and
4th edition. The Company has followed each
(Re)Appointment of Directors
recommendation where the Board has considered
the recommendation to be an appropriate
benchmark for its corporate governance practices.
Where the Company’s corporate governance
practices follow a recommendation, the Board has
Process for Performance Evaluations
Securities Trading Policy
Code of Conduct (summary)
made appropriate statements reporting on the
Diversity Policy (summary)
adoption of the recommendation. In compliance
with the “if not, why not” reporting regime
Continuous Disclosure Policy (summary)
where, after due consideration, the Company’s
Continuous Disclosure Compliance Procedures
corporate governance practices do not follow a
(summary)
recommendation, the Board has explained the
reasons for not following the recommendation
and disclosed what, if any, alternative practices
Shareholder Communication and Investor
Relations Policy
the Company has adopted instead of those in the
Whistle Blower Policy
recommendation.
The following governance-related documents can
be found on the Company’s website at
https://ionicre.com.au/governance/
Anti-Bribery and Corruption Policy
The Company reports below on whether it has
followed each of the recommendations during the
Reporting Period. This statement was approved by
a resolution of the Board on, and
the information in this statement is current as
at, 29 September 2021.
75
Ionic Rare Earths Limited / Annual Report 2021
Principle 1:
Lay solid foundations
for management and
oversight
Recommendation 1.1
The Company has established the respective
roles and responsibilities of its Board and
management, and those matters expressly
reserved to the Board and those delegated
to management and has documented this in
its Board Charter, which is disclosed on the
Company’s website.
Recommendation 1.2
Recommendation 1.4
The Company Secretary is accountable directly to
the Board, through the Chair, on all matters to do
with the proper functioning of the Board.
Recommendation 1.5
The Company has a Diversity Policy, a summary
of which is disclosed on the Company’s website.
However, the Diversity Policy does not include
requirements for the Board to set measurable
objectives for achieving gender diversity and
to assess annually both the objectives and the
Company’s progress in achieving them. Nor
has the Board set measurable objectives for
achieving gender diversity. Given the Company’s
stage of development as an exploration
The Company undertakes appropriate checks
before appointing a person or putting forward
company, the number of employees in Australia
and the nature of the labour market in Uganda
to shareholders a candidate for election as a
and Nicaragua, the Board considers that it is
director and provides shareholders with all
not practical to set measurable objectives for
material information in its possession relevant to
achieving gender diversity.
a decision on whether or not to elect or re-elect
a director. The checks which are undertaken, and
the information provided to shareholders are set
out in the Company’s Policy and Procedure for
the Selection and (Re)Appointment of Directors,
which is disclosed on the Company’s website.
The respective proportions of men and women
on the Board, in senior executive positions
and across the whole organisation are set out
in the following table. “Senior executive” for
these purposes means a person who makes,
or participates in the making of, decisions that
The Company appointed Mr. Trevor Benson
affect the whole or a substantial part of the
to the board on 31 August 2020, Ms Jill Kelley
business or has the capacity to affect significantly
on 7 July 2021 and Mr Max McGarvie on 16 July
the Company’s financial standing. During the
2021; the checks referred to in the Company’s
Reporting Period, this included the Finance
policies and Procedures for the selection and (Re)
Director & Company Secretary:
Appointment of Directors were undertaken.
The Company provided shareholders with all
material information in relation to the election of Mr
Trevor Benson at its 2020 Annual General Meeting.
Whole organisation
(including the Board)
Proportion
of women
0 out of 4 (0%)
Recommendation 1.3
Senior executive positions
0 out of 1 (0%)
The Company has a written agreement with each
Board
0 out of 3 (0%)
director and senior executive setting out the
terms of their appointment.
The material terms of any employment, service
or consultancy agreement the Company, or any
of its child entities, has entered into with its Chief
Executive Officer, any of its directors, and any
other person or entity who is related party of
the Chief Executive Officer or any of its directors
has been disclosed in accordance with ASX
Listing Rule 3.16.4 (taking into consideration the
exclusions from disclosure outlined in that rule).
76
Ionic Rare Earths Limited / Annual Report 2021
Recommendation 1.6
The Chair is responsible for evaluation of
the Board and, when deemed appropriate,
Board committees and individual directors in
accordance with the process disclosed in the
Company’s Process for Performance Evaluations.
During the Reporting Period, an evaluation
of the Board, its committees and individual
directors took place in accordance with the
process disclosed in the Company’s Process for
Performance Evaluations.
Principle 2:
Structure the board to be
effective and add value
Recommendation 2.1
The Board has not established a separate
Nomination Committee. The Board believes
that there would be no efficiencies or other
benefits gained by establishing a separate
Nomination Committee. Accordingly, the Board
performs the role of the Nomination Committee.
The Chairperson’s performance is evaluated by
Although the Board has not established a
the other members of the Board in accordance
separate Nomination Committee, it has adopted
with the process disclosed in the Company’s
a Nomination Committee Charter which
Process for Performance Evaluations.
describes the role, composition, functions and
During the Reporting Period, an evaluation of the
Chairperson took place in accordance with the
process disclosed in the Company’s Process for
Performance Evaluations.
Recommendation 1.7
responsibilities of the full Board in its capacity
as the Nomination Committee. The Company’s
Nomination Committee Charter is disclosed on
the Company’s website.
The Board carries out those functions which are
delegated to it in the Company’s Nomination
Committee Charter. When matters that are
The Chief Executive Officer is responsible for
within the responsibility of the full Board in its
evaluating the performance of senior executives
capacity as the Nomination Committee are
in accordance with the process disclosed in the
considered, they are marked as separate agenda
Company’s Process for Performance Evaluations.
items at Board meetings. The Board deals with
The Chairman is responsible for evaluating the
Chief Executive Officer in accordance with the
process disclosed in the Company’s Process for
Performance Evaluations.
any conflicts of interest that may occur when
nomination related matters are considered
by ensuring that the director with conflicting
interests is not party to the relevant discussions.
During the Reporting Period, an evaluation of
the Company’s senior executives took place in
Recommendation 2.2
accordance with the process disclosed in the
The mix of skills and diversity for which the
Company’s Process for Performance Evaluations.
Board is looking to achieve in membership of
the Board is represented by the Board’s current
composition, which includes extensive geological
experience and qualifications, experience in
mineral processing, experience in operating
in locations outside of Australia, accounting
qualifications and financial management skills,
leadership, governance and strategy.
While the Company is at exploration and feasibility
stage, it does not wish to increase the size of the
Board and considers that the Board weighted
towards technical experience is appropriate at this
stage of the Company’s development. External
consultants may be brought in with specialist
knowledge to address areas where this is an
attribute deficiency in the Board.
77
Ionic Rare Earths Limited / Annual Report 2021
Recommendation 2.3
The Board considers the independence of directors having regard to the relationships listed in Box 2.3 of
the Principles & Recommendations.
Details of the Board of directors, their appointment date, length of service and independence status is as
follows:
Director’s name
Appointment date
Length of service at
30/06/2021
Independence status
T Benson
Non-executive Chairman
T Harrison
Managing Director
B Marwood
Non-executive director
31 August 2020
11 months
Independent
12 December 2020
6 months
Not Independent
21 December 2020
6 months
Independent
Mr Marwood resigned effective 16 July 2020 and Ms Kelly and Mr McGarvie were appointed Independent
Directors on 7 July and 16 July 2021, respectively.
Recommendation 2.4
The Board has a majority of directors who are independent. The Board does not wish to increase its size at
present and considers that the current composition of the Board is adequate for the Company’s current
size and operations, and includes an appropriate mix of skills and expertise relevant to the Company’s
business.
Recommendation 2.5
The Chair is Mr Trevor Benson an independent director and is not the CEO of the Company.
Recommendation 2.6
The Company has an induction program that it uses when new directors join the Board and when new
senior executives are appointed. The goal of the program is to assist new directors to participate fully and
actively in Board decision-making at the earliest opportunity and to assist senior executives to participate
fully and actively in management decision-making at the earliest opportunity.
The full Board in its capacity as the Nomination Committee regularly reviews whether the directors as
a group have the skills, knowledge and familiarity with the Company and its operating environment
required to fulfil their role on the Board and the Board committees effectively using a Board skills matrix.
Where any gaps are identified, the full Board in its capacity as the Nomination Committee considers what
training or development should be undertaken to fill those gaps. In particular, the full Board in its capacity
as the Nomination Committee ensures that any director who does not have specialist accounting skills
or knowledge has a sufficient understanding of accounting matters to fulfil his or her responsibilities in
relation to the Company’s financial statements.
78
Ionic Rare Earths Limited / Annual Report 2021
Principle 3:
Instil a culture of acting
lawfully, ethically and re-
sponsibly
Recommendation 3.1
The Company expects that its board and senior
executives will conduct themselves with integrity
and honesty in accordance with the Code of
Conduct. Directors, executives and employees shall
deal with the Company’s customers, suppliers,
competitors, shareholders and each other with
honesty, fairness and integrity and observe
the rule and spirit of the legal and regulatory
environment in which the Company operates.
The Company aims to increase shareholder
value within an appropriate framework which
safeguards the rights and interests of the
Company’s shareholders and the financial
community and to comply with systems of
control and accountability which the Company
has in place as part of its corporate governance
with openness and integrity.
The Company is to comply with all legislative
and common law requirements which affect
its business wherever it operates. Where the
Company has operations overseas, it shall
comply with the relevant local laws as well as
any applicable Australian laws. Any transgression
from the applicable legal rules is to be reported
to the Managing Director as soon as a person
becomes aware of such a transgression.
Recommendation 3.2
Recommendation 3.3
The Company has adopted a Whistleblower
Policy to encourage the raising of any concerns
or reporting of instances of any violations (or
suspected violations) of the Code of Conduct (or
any potential breach of law or any other legal or
ethical concern) without the fear of intimidation
or reprisal.
Recommendation 3.4
The Company has established an anti-bribery
and corruption policy which is disclosed on the
Company’s website. Any breach of that policy
is immediately reported to the Chief Executive
Officer and Chairman of the board of directors.
Principle 4:
Safeguard the integrity of
corporate reports
Recommendation 4.1
The Board has not established a separate Audit
and Risk Committee. The Board believes that
there would be no efficiencies or other benefits
gained by establishing a separate Audit and Risk
Committee. Accordingly, the Board performs the
role of the Audit and Risk Committee. Although
the Board has not established a separate Audit
and Risk Committee, it has adopted an Audit
and Risk Committee Charter which describes the
role, composition, functions and responsibilities
of the full Board in its capacity as the Audit and
Risk Committee. The Company’s Audit and
Risk Committee Charter is disclosed on the
The Company has established a Code of Conduct
Company’s website.
for its directors, senior executives and employees, a
The Board carries out those functions which
summary of which is disclosed on the Company’s
are delegated to it in the Company’s Audit and
website. Any breach of that code is reported to the
Risk Committee Charter. When matters that are
board at the next meeting of directors.
within the responsibility of the full Board in its
capacity as the Audit and Risk Committee are
considered, they are marked as separate agenda
items at Board meetings. The Board deals with
any conflicts of interest that may occur when
audit or risk related matters are considered
by ensuring that the director with conflicting
interests is not party to the relevant discussions.
79
The Company has also established a Procedure
for the Selection, Appointment and Rotation of
its External Auditor, which is an appendix to its
Audit and Risk Committee Charter disclosed on
the Company’s website. The Board is responsible
for the initial appointment of the external auditor
and the appointment of a new external auditor
when any vacancy arises, as recommended by
the Audit and Risk Committee (or its equivalent).
Candidates for the position of external auditor
must demonstrate complete independence
from the Company through the engagement
period. The Board may otherwise select an
external auditor based on criteria relevant to
the Company’s business and circumstances.
The performance of the external auditor is
reviewed on an annual basis by the Audit and
Risk Committee (or its equivalent) and any
recommendations are made to the Board.
Recommendation 4.2
Before the Board approved the Company
financial statements for the half year ended 31
December 2020 and the full-year ended 30 June
2021, it received from the Managing Director
and the Chief Financial Officer a declaration
that, in their opinion, the financial records of
the Company for the relevant financial period
have been properly maintained and that the
financial statements for the relevant financial
period comply with the appropriate accounting
standards and give a true and fair view of the
financial position and performance of the
Company and the consolidated entity and
that the opinion has been formed on the basis
of a sound system of risk management and
internal control which is operating effectively
(Declaration).
Recommendation 4.3
Processes are in place to verify the integrity of the
Company’s periodic corporate reports released to
the market and not audited or reviewed by the
external auditor. Examples of periodic corporate
reports released by the company include
quarterly cash flow reports. IonicRE has adopted
a Continuous Disclosure Policy which sets out
how market announcements are prepared
and released and has appointed the Company
Secretary as the Continuous Disclosure officer
who oversees the drafting of and approves the
final release of announcements. The Company
Secretary is responsible for satisfying him/
herself that the content of any announcement is
accurate and not misleading and is supported by
appropriate verification.
Ionic Rare Earths Limited / Annual Report 2021
80
Ionic Rare Earths Limited / Annual Report 2021
Principle 5:
Make timely and balanced
disclosure
Principle 6:
Respect the rights of
security holders
Recommendation 5.1
Recommendation 6.1
The Company has established written policies
The Company provides information about itself
and procedures for complying with its
and its governance to investors on its website at
continuous disclosure obligations under the
www.ionicre.com.au.
ASX Listing Rules. A summary of the Company’s
Continuous Disclosure Policy and Continuous
Disclosure Compliance Procedures are disclosed
on the Company’s website.
Recommendation 5.2
Recommendation 6.2
The Company has designed and implemented an
investor relations program to facilitate effective
two-way communication with investors. The
program is set out in the Company’s Shareholder
The Company secretary circulates all material
Communication and Investor Relations Policy,
market announcements to the board prior to
release to ASX.
which is disclosed on the Company’s website.
Recommendation 5.3
Recommendation 6.3
The Company has in place a Shareholder
All new presentations are released to ASX
Communication and Investor Relations Policy
Markets Platform ahead of any presentation
(disclosed on the Company’s website) which
to investors.
outlines the policies and processes that it has
in place to facilitate and encourage participation
at meetings of shareholders.
Recommendation 6.4
All resolutions put to meetings of shareholders
are decided by way of a poll.
Recommendation 6.5
The Company engages its share registry to
manage the majority of communications with
shareholders. Shareholders are encouraged
to receive correspondence from the company
electronically, thereby facilitating a more
effective, efficient and environmentally friendly
communication mechanism with shareholders.
Shareholders not already receiving information
electronically can elect to do so through the
share registry, Computershare Investor Services
Pty Ltd at www.computershare.com.au.
81
Ionic Rare Earths Limited / Annual Report 2021
Principle 7:
Recognise and manage risk
Principle 8: Remunerate
fairly and responsibly
Recommendation 7.1
Recommendation 8.1
The Board has not established a separate Audit
The Board has not established a separate
and Risk Committee. The Board performs the
Remuneration Committee. The Board believes
role of the Audit and Risk Committee. Please
that there would be no efficiencies or other
refer to the disclosure above in relation to
benefits gained by establishing a separate
Recommendation 4.1.
Recommendation 7.2
The full Board in its capacity as the Audit and
Risk Committee reviews the Company’s risk
management framework annually to satisfy
Remuneration Committee. Accordingly, the
Board performs the role of the Remuneration
Committee. Although the Board has not
established a separate Remuneration
Committee, it has adopted a Remuneration
Committee Charter which describes the role,
composition, functions and responsibilities of
itself that it continues to be sound, to determine
the full Board in its capacity as the Remuneration
whether there have been any changes in the
Committee. The Company’s Remuneration
material business risks the Company faces and to
Committee Charter is disclosed on the
ensure that the Company is operating within the
Company’s website.
risk appetite set by the Board. The Board carried
out these reviews during the Reporting Period.
Recommendation 7.3
The Company does not have an internal audit
function. To evaluate and continually improve the
effectiveness of the Company’s risk management
and internal control processes,
the Board relies on ongoing reporting and
discussion of the management of material
business risks as outlined in the Company’s
Risk Management Policy.
Recommendation 7.4
As the Company is not in production, the
Company has not identified any material
exposure to any environmental and/or social
sustainability risks. However, the Company
does have a material exposure to the following
economic risks:
Market risk – movements in commodity prices.
The Company manages its exposure to market
risk by monitoring market conditions and
making decisions based on industry experience.
Future capital risk – cost and availability of funds
to meet the Company’s business requirements.
The Company manages this risk by maintaining
adequate reserves by continuously monitoring
forecast and actual cash flows.
The Board carries out those functions which are
delegated to it in the Company’s Remuneration
Committee Charter. When matters that are
within the responsibility of the full Board in its
capacity as the Remuneration Committee are
considered, they are marked as separate agenda
items at Board meetings. The Board deals with
any conflicts of interest that may occur when
remuneration related matters are considered
by ensuring that the director with conflicting
interests is not party to the relevant discussions.
Recommendation 8.2
Details of remuneration, including the
Company’s policy on remuneration, are
contained in the “Remuneration Report”
which forms of part of the Directors’ Report
and commences at page 25. The Company has
not adopted a policy regarding the deferral
of performance-based remuneration and the
reduction, cancellation or clawback of the
performance-based remuneration in the event
of serious misconduct or a material misstatement
in the Company’s financial statements as other
punitive measures, including dismissal, are
available to be utilised by the Company.
Recommendation 8.3
The Company’s Securities Trading Policy
includes a statement of the Company’s policy
on prohibiting executives and directors from
entering into transactions which limit the
economic risk of participating in any equity-
based remuneration scheme.
82
Through
responsible
exploration
we create rare
opportunities
for our
investors.
Ionic Rare Earths Limited / Annual Report 2021
Asx Additional Information
Additional information required by the Australian Securities Exchange Ltd and not disclosed elsewhere
in this report is as follows. The information is current as at 21 September 2021.
Statement of shareholdings
Range
Names of 20 largest shareholders
Fully paid
Ordinary Shares
No of
holders
No. of shares held
% held
100,001 or
more
Mr Bilal Ahmad
Mr Sufian Ahmad
Ms Chunyan Niu
JGM Property Investments Pty Ltd
BNP Paribas Noms Pty Ltd
Markovic Family No 2 Pty Ltd
Reco Holdings Pty Ltd
Citicorp Nominees Pty Limied
DDPEVCIC (WA) Pty Ltd
Upsky Equity Pty Ltd
Martinick Investments Pty Ltd
MGL Corp Pty Ltd
Mr Bongani Raziya
Mr Bin Liu
Compusure Superannuation Pty Ltd
BNP Paribas Nominees Pty Ltd
BNP Paribas Nominees Pty Ltd Six Sis Ltd
Rainmaker Holdings (WA) Pty Ltd
Davy Corp Pty Ltd
157,450,000
156,833,320
106,740,626
104,650,000
82,879,521
74,116,193
52,350,000
40,196,673
36,123,088
34,706,364
34,500,000
30,000,000
30,000,000
29,179,517
28,000,000
25,000,000
22,243,632
22,034,710
21,000,000
19,500,000
4.64
4.62
3.15
3.08
2.44
2.18
1.54
1.18
1.06
1.02
1.02
0.88
0.88
0.86
0.83
0.74
0.66
0.65
0.62
0.57
Various
Various
Various
10,001 -
100,000
5,001 –
10,000
1,001 – 5000
Various
1 – 1,000
Various
Total
20
2,899
1,107,503,644
2,096,780,649
3,204,284,293
32.65
61.81
94.45
Sub-total
4,008
184,487,312
5.44
330
216
289
2,971,228
545,363
111,318
.09
.02
.00
3,392,399,514
100.00
Holding an unmarketable parcel
1,168
7,796,648
0.23
84
Ionic Rare Earths Limited / Annual Report 2021
The Company has the following unquoted securities on issue.
Security
30 November 2022, 1.8 cent options
30 November 2023, 2.15 cent options
28 February 2024, 6.0 cent options
Restricted Securities
There are no restricted securities.
Number
100,000,000
40,000,000
35,000,000
Voting Rights
All ordinary shares carry one vote per share without restriction.
Substantial Shareholders
As at 21 September 2021 there are no substantial shareholders who have notified the company in
accordance with section 671B of the Corporations Act 2001
: Schedule of Mining Tenements Held
Project
Location
Type of Concession
Concession No.
Makuutu
Uganda
Retention Licence
RL1693
Retention Licence
RL00234
Retention Licence
RL00007
Exploration
Exploration
EL00147
EL00148
Percentage
Held
51%*
51%*
51%*
51%*
51%*
* IonicRE may earn up to a 60% interest
Mineral Resources Estimation Governance Statement
Governance of IonicRE’s mineral resources is a responsibility of the Executive Management of the
Company.
The Makuutu mineral resource was first estimated in March 2020 and was updated om 23 June 2020 and
again on 3 March 2021.
IonicRe has ensured that its mineral resources estimates are subject to appropriate levels of governance
and internal controls. The mineral resources reported have been estimated by independent external
consultants who are experienced in best practices in modelling and estimation methods. The consultants
have also undertaken reviews of the quality and suitability of the underlying information used to generate
the resource estimations. Additionally, the Company carries out regular internal peer reviews of processes
and contractors engaged.
Competent Persons named by IonicRE are members of the Australian Institute of Mining and Metallurgy
and/or the Australian Institute of Geoscientists and/or of a “Recognised Professional Organisation”, as
included in a list on the JORC and ASX websites.
85
Ionic Rare Earths Limited / Annual Report 2021
Makuutu Mineral Resource Estimate above 200ppm TREO-CeO2 Cut-off Grade
(ASX: 3 March 2021)
Resource
Classification
Indicated Resource
Inferred Resource
Total Resource
Tonnes
(millions)
TREO
(ppm)
TREO-CeO2
(ppm)
LREO
(ppm)
HREO
(ppm)
CREO
(ppm)
Sc2O3
(ppm)
66
248
315
820
610
650
570
410
440
590
450
480
230
160
170
300
210
230
30
30
30
Rounding has been applied to 1Mt and 10ppm which may influence averaging calculation. All REO are
tabulated in MRE announcement dated 3 March 2021 with formulas defining composition of Light Rare
Earth Oxides (LREO), Heavy Rare Earth Oxides (HREO), Critical Rare Earth Oxides (CREO) and Total Rare
Earth Oxides (TREO).
Competent Person Statement:
Information in this report that relates to previously reported Exploration Results has been crossed-
referenced in this report to the date that it was reported to ASX.
The information in this report that relates to Mineral Resources for the Makuutu deposit is extracted from
the report “Mineral Resource Estimate Increased Threefold at Makuutu” created and released to ASX on
3 March 2021 and is available to view on www.asx.com.
The information in this report that relates to Scoping Study Results and production targets was first
released to ASX on 29 April 2021 and is available to view on www.asx.com.
The Company confirms that it is not aware of any new information or data that materially affects the
information included in the original market announcements and that all material assumptions and
technical parameters underpinning the estimates in the relevant market announcements continue to
apply and have not materially changed. The Company confirms that the form and context in which the
Competent Person’s findings are presented have not been materially modified from the original market
announcements.
86