J u p i t e r M i n e s L i m i t e d | A n n u a l R e p o r t 2 0 2 0 2020 Annual Report Corporate Directory Australian Business Number 51 105 991 740 Directors Brian Gilbertson Non-executive Chairman; Independent Paul Murray Non-executive Director; Independent Andrew Bell Non-executive Director; Independent Yeongjin Heo Non-executive Director; Non-independent Hans-Jürgen Mende Non-executive Director; Non-independent Brian Beem Non-executive Director (Alternate to Hans-Jürgen Mende); Non-independent Priyank Thapliyal Executive Director Executives Priyank Thapliyal Chief Executive Officer Melissa North Chief Financial Officer and Company Secretary Principal and Registered Office Level 10 16 St Georges Terrace Perth WA 6000 Telephone: Email: (08) 9346 5500 info@jupitermines.com Share Registry Link Market Services Limited QV1 Building Level 12 250 St Georges Terrace Perth WA 6000 Telephone: 1300 554 474 Fax: Email: Website: (02) 9287 0303 registrars@linkmarketservices.com.au www.linkmarketservices.com.au Auditors Grant Thornton Audit Pty Ltd Level 43 152-158 St Georges Terrace Perth WA 6000 Telephone: Fax: Email: Website: (08) 9480 2000 (08) 9322 7787 info.wa@au.gt.com www.grantthornton.com.au Contents Chairman’s Letter Operating and Financial Review Tshipi Borwa Manganese Mine Marketing and Manganese Market Central Yilgarn Iron Ore Projects Mineral Resources and Ore Reserves and Schedule of Mineral Tenements Directors’ Report Remuneration Report Corporate Governance Statement Financial Report Statement of Consolidated Profit or Loss and Other Comprehensive Income Statement of Consolidated Financial Position Statement of Consolidated Changes in Equity Statement of Consolidated Cash Flows Notes to the Consolidated Financial Statements Auditor’s Independence Declaration and Audit Report Additional Information for Listed Companies Glossary of Terms and Abbreviations 2 3 3 8 9 10 17 22 28 39 40 41 42 43 44 74 79 81 Chairman’s Letter Dear Shareholders, On behalf of the Board of Jupiter Mines, I am pleased to present the Annual Report for the financial year ending 29 February 2020. It has been a challenging time, culminating in the still unfolding impact of COVID-19. Whilst the manganese price softened significantly, Tshipi remained profitable, exporting 3.4 million tonnes and paying dividends to shareholders of just over ZAR2 billion. Jupiter in turn has declared dividends of $93 million, resulting in a dividend yield of almost 15%, and a 92% payout ratio; unprecedented in our industry. Tshipi is in a strong position to weather the uncertainties ahead, as the world struggles, probably for years to come, to recover from the devastating economic consequences of the global lockdown. The scale of its operations, low operating costs, lean overhead structure, and ungeared capital structure are key strengths in these troubled times. Tshipi and hence Jupiter also stand to benefit in decades to come from Tshipi’s large mining reserves; and indeed, also to benefit in the shorter term as operations in South Africa return to full production. I commend both the Jupiter and Tshipi management teams on navigating us through these difficult times. No doubt most of you read my address to the 2019 Annual General Meeting, concerning the voting outcomes of the election and re-election of some of our Directors. Sound governance remains high on the agenda; however, we still believe the current Board and Executive composition, and remuneration, to be appropriate for our current corporate and shareholder return strategy. Since our last Annual Report, we have welcomed two new directors onto the Jupiter Board. Mr Hans-Jürgen Mende was appointed a director on 9 October 2019. Mr Mende co-founded AMCI Group, which is a substantial Jupiter shareholder. Mr Mende has much experience in the global steel and coal industries, both in Australia and in South Africa. He has served on the board of many resource companies. On the same date, Mr Mende nominated Mr Brian Beem as his alternate. Mr Beem is Managing Director of AMCI Group and has led numerous investments within their portfolio and serves on several of their boards. I have no doubt they will both contribute considerable value to our Board discussions. I again thank all shareholders for your continued support of Jupiter particularly as we take up the challenges of the 2021 financial year. Yours Faithfully, Yours Faithfully, Brian Gilbertson Chairman 2 Chairman’s Letter JUPITER MINES LIMITED Operating and Financial Review Jupiter Mines Limited (“Jupiter” or the “Company”) has an interest in two areas: a 49.9% share in Tshipi é Ntle Manganese Mining Proprietary Limited (“Tshipi”), which operates the Tshipi Borwa Manganese mine (“Tshipi Borwa”) in South Africa; and in Australia, the Central Yilgarn Iron Project (“CYIP”), which includes the Mount Ida Magnetite Project (“Mount Ida”) and Mount Mason Hematite Project (“Mount Mason”). TSHIPI BORWA MANGANESE MINE The Tshipi Borwa mine is an open-pit manganese mine with an integrated ore processing plant located in the Kalahari Manganese Fields, in the Northern Cape Province of South Africa, which is the largest manganese bearing geological formation in the world. Tshipi remains the largest manganese mine in South Africa and one of the five largest globally, with a long-life resource and low operating costs. Figure 1. Tshipi Manganese Mine Location Map During the year, Tshipi overcame a number of challenges to produce and export 3.4 million tonnes in line with targets (FY2019: 3.45 million tonnes produced, 3.51 million tonnes exported). Cost of production remained steady, averaging USD2.14 per dmtu over the year, down from USD2.27 in FY2019. Mined volume (inclusive of total barrier pillar waste) Production Sales Average CIF price achieved (high grade lumpy) Average cost of production Average cost of production Unit Bcm Tonnes Tonnes CIF, USD/dmtu FOB, ZAR/dmtu FOB, USD/dmtu FY2020 12,357,691 3,410,111 3,408,552 4.86 31.22 2.14 FY2019 11,234,344 3,448,523 3,511,461 6.41 30.68 2.27 Tshipi also moved the highest amount of waste volumes ever in any financial year. In August 2019, Tshipi commenced mining of the barrier pillar with South32 Limited, mining of which was ahead of forecast for the year. Tshipi remained one of the lowest cost manganese producers globally, with the cost of production averaging ZAR31.22 (per dmtu, FOB) during FY2020 (FY2019: ZAR30.68). Tshipi completed a concept study into a potential mine expansion of up to a production profile of 4.5 million tonnes per annum, underpinned solely by existing ore reserves (ASX announcement 8 January 2020). Work on a comprehensive feasibility study has now commenced. Manganese prices decreased significantly over the year, averaging US$4.18 (per dmtu, Metal Bulletin 37% FOB Port Elizabeth) (FY2019: US$6.00). Prices took a sharp decline in the third quarter of the financial year, mainly relating to the US-China trade dispute, Chinese 70th anniversary celebrations, and weaker steel demand, resulting in increased stockpiles at Chinese ports. The manganese price steadily recovered as expected in January, however due to the COVID-19 pandemic, prices softened slightly once again towards the end of the financial year. Subsequent to year-end, in response to the pandemic, the South African Government mandated a nationwide lockdown, which included the Tshipi mine. As supply declined, the manganese price increased. The South African Government has since announced that all open cast mines are able to operate at full capacity from 1 May 2020 (ASX announcement 27 April 2020). Tshipi management is consulting with third party contractors and logistics providers to safely commence production and exports. During this uncertain period, Tshipi has the ability to meet all financial obligations in the event of another extended lockdown. With continued strong cash generation, Tshipi declared and paid dividends of ZAR2.015 billion relating to FY2020 (FY2019: ZAR3.215 billion). ZAR265 million of the total dividends was paid after year end. Operating and Financial Review 3 ANNUAL REPORT 2020 TSHIPI ENVIRONMENTAL, SOCIAL & GOVERNANCE REPORT Tshipi is committed to sustainable development and continual improvement to minimise the impact on the environment and providing lasting benefits to the surrounding communities. Tshipi places strong emphasis on worker safety and its open-pit operations provides inherent safety advantages. Environment open pit, the dirty water dam. Potable water is supplied by Sedibeng Water. From an operational point of view, priority is given to reusing dirty water, treated sewage effluent and storm water collected within the dirty water dam for non-potable, process water uses before abstraction of water from clean water sources. Ground water seepage into the open pit from wall faces as well as rainwater during storm events is pumped into the dirty water dam. This water is used for dust suppression on the roads Legal Compliance and Strategy Alignment and in the processing plant. During the latter part of FY2019 and during FY2020, Tshipi undertook a number of imperative strategic environmental reviews of its existing and future Environmental Management Plan (“EMP”) commitments and requirements to ensure legal compliance and that commitments support Tshipi’s medium to long term business plans. These reviews included an amendment of the approved Environmental Authorisation to cater for an increase in waste dump capacity and infrastructure improvements (EMP2); update of the approved water use license to meet the expanded waste dump footprint and increased water requirement in light of increased production (Water Use Licence (“WUL”) Application); and the review of Tshipi’s onerous post-closure commitment to completely back fill the pit and replace this with concurrent backfilling which is driven by in-pit dumping (EMP3). The EMP2 Amendment was approved on 3 July 2019 and will enable Tshipi to maintain sustainable mining by extending the Western Waste Rock Dump onto portion 8 of the property Mamatwan 331 and extending the Eastern Waste Rock Dump to merge with the neighbouring Mamatwan Mine Sinterfontain Dump, thus increasing Tshipi‘s dumping efficiency. Tshipi ’s amended WUL was submitted on 19 March 2019 and will cater for Tshipi’s future water needs. Further improvement measures are being undertaken to optimise water use for long term benefit. The application is being processed by relevant authorities and a positive response is expected within FY2021. Tshipi’s EMP3 Amendment Application was submitted on 2 October 2019 and, should the new regulations be promulgated during calendar year 2021, the classic mine closure to return the mine to its pre-mining state will shift to a transitional economy that promotes the potential for multiple alternative closure opportunities. Tshipi is reviewing its commitment to completely backfill the pit with material from surface to opt for concurrent backfill which is driven by in-pit waste dumping, ultimately leaving a pit lake in the northern section of the mine offering opportunities for enhancement of the area through environmental is supported by various independent expert reports, including socio-economic, technical, commercial and legal opinions. improvement projects. The application Water Management The recent drought in the Northern Cape coupled with intermittent service delivery problems from Sedibeng Water, placed Tshipi’s water reserve under strain. To build capacity and also comply with legal requirements, Tshipi has commissioned the construction of a 52,000m3 storm water dam that will increase Tshipi’s capacity to capture water during the rainy months and cater for a one in fifty year flood event. Tshipi Borwa has two main catchment areas at the mine site; the Approximately 85% of potable water use is recycled into the dirty water dam. Solid Waste Management Although waste management is now embedded and integrated into the mining process, the focus has now shifted to reducing Tshipi’s footprint as it relates to offsite hazardous waste disposal. A Bioremediation facility has been constructed under legal requirements to treat polluted soil on site and return it back to the environment. Benefits of this system should be realised in FY2021. Biodiversity Offset Project As part of legal compliance, Tshipi initiated a Specialist Assessment to determine whether a biodiversity offset area is required to compensate for land disturbed through mining operations. The outcome confirmed that a biodiversity offset to the size of 1858ha is required. An Option Analysis assessment was conducted of the 7 portions of available land in the region and three priority areas were identified that would meet Tshipi’s Biodiversity obligation. Discussions with the landowners has commenced and it is anticipated that securing the land should be concluded by end of FY2021 after which the area declaration process will commence. Power Generation Tshipi Borwa currently runs independently of the national grid. The generator plant consists of six diesel driven generators designed to operate in synchronisation with each other. Tshipi is in the process of connecting to the national grid and the building of a new substation is in progress. For the purposes of this self-built project, the Environmental Authorisation has been transferred to Tshipi through an amendment in 2018 and once the project is completed, it will be handed over to ESKOM. The connection to the national grid will decrease operating costs and limit the use of diesel. Safety A focused approach to Zero Harm is critical to the business and remains one of the cornerstones of Tshipi Borwa Mine management plans. The strategic intent is to decrease health and safety risks to individuals and assets, as well as environmental threats, by developing and implementing systems, processes and competencies. Tshipi managed to reverse the concerning safety performance reported during the last six months of FY2019 and reported a significant reduction in all injury indices for FY2020: 4 Operating and Financial Review JUPITER MINES LIMITED LTIFR Comparison FY19 versus FY20 LTI FY19 LTI FY20 TRIFR Comparison FY19 versus FY20 0.21 1.10 0.57 2.13 0.80 0.60 0.40 0.20 0.00 3.00 2.00 1.00 0.00 TRIFR FY19 TRIFR FY20 Note: LTIs (Lost Time Injuries), LTIR (Lost Time Injury Rate), TRIFR (Total Recordable Injury Frequency Rate) To date, no fatality has occurred at Tshipi Borwa. Tshipi recorded 1 LTI during FY2020 as compared to the 6 LTIS recorded in FY2019. Although this represents an improvement of 83% year on year performance in terms of number of Lost Time Injuries, Tshipi’s efforts are focused on entrenching risk management and behavioural transformation framework. Some of the areas that were focused on in turning the safety performance was to roll out a program to embed a transformational leadership and safety culture and risk management framework that will ensure a shift from focus on lagging to leading indicators that will drive a reduction in the site’s risk profile. The emphasis was on the identification and development of performance standards for critical controls as a means of continually driving down Tshipi’s risk profile. Operating and Financial Review 5 ANNUAL REPORT 2020 Social Economic Development Tshipi’s approach to Corporate Social Responsibility expresses its belief in transformation and sustainable development. It demonstrates how Tshipi embraces legislation and regulations and in so doing, has continued to secure its social license to trade. Overview of achievements for this reporting period: 50.1% black ownership maintained; A workforce comprising of 91% Historically Disadvantaged South Africans (“HDSA”); Invested in training initiatives for HDSA learners, artisans, apprentices, scholars and employees as committed in Tshipi’s social labour plans; Continues to divert spend on procuring goods and services to BEE compliant, Black Women Owned, Black Youth Owned and HDSA Owned companies as per commitments with the regulator; Launched new demand-led Enterprise & Supplier Development programme which resulted in new jobs being created within those beneficiary companies; Completed projects providing access to water and ablution facilities for school children in three schools within Tshipi’s hosting communities; and Contributed towards food security (food parcels) in support of the local Mayor’s initiative over December 2019. Tshipi’s achievements show how it has used its business success to benefit the environment, economy and tackle social issues. Interventions to sustainably improve safety performance: Top of Mind Safety intervention in FY2019 and FY2020 and will continue in FY2021 Roll out of a formalised risk process: Top risks and controls; Risk Control Audits, Risk Control Cards, change triggers incorporated in safety tools; Stop, Think and Go implemented, Zero Shortcut Campaign to address taking shortcuts Detailed analysis of lagging and leading indicators and implementation of: Targeted campaigns i.e. Zero Shortcut Campaign, Three- point contact, Line of fire Learnings from incidents Visualisation of critical standards for a Drill Block, Load and Haul and Conveyor standards DMR Preparation Audit Plan implemented to eliminate Authority work stoppages SHE & Peer Educator empowerment Health & Corporate Social Responsibility Tshipi provides free onsite health screening and medical surveillance to all employees. To further improve health service delivery to employees a Memorandum of Understanding was concluded with the Department of Health in the first quarter of FY2019 that enabled the provision of all chronic medication to affected employees. The service was also expanded to include the provision of tuberculosis sampling and electrocardiograms for high risk employees. These services resulted in an increased uptake of impacted employees and significantly reducing the turnaround time of accessing formal health services, quicker medical management, reduction in absenteeism and a much more appreciative work force. Screening for Prostate and Cervical Cancer was also introduced in FY2020 with the uptake being very positive. Health indicators are trending in the right direction and the focus is on ensuring compliance to medical follow-ups and medication management. Percentage of number of employees not compliant to medical follow-ups has dropped to 16%. To further improve employee health, a 5 Point Wellness Journey Plan was launched that focusses on 5 lifestyle transformational initiatives. In response to the COVID-19 pandemic, Tshipi has introduced a rigorous screening process and testing program for those employees who fulfil the criteria for testing. Government Regulations insist that all mining operations have quarantine facilities for employees who test positive for COVID-19, and Tshipi has identified an area at the mine clinic for isolation of those who have tested positive prior to transporting them home for self-isolation or to the hospital if they are sick. Further, vulnerable employees have been identified and are not allowed to work until they are medically assessed and declared fit for work. Tshipi donated ZAR5 million to the South African Solidarity Fund set up by South African President Cyril Ramaphosa in to aid the response to the devastating effects of COVID-19. 6 Operating and Financial Review JUPITER MINES LIMITED FINANCIAL SUMMARY Set out below is a summary of Tshipi’s audited Statement of Consolidated Profit or Loss and Statement of Financial Position: ZAR’000 INCOME STATEMENT Revenue Cost of goods sold Gross margin Other income Administrative expenses Impairment of property, plant and equipment / loss on derecognition Other operating expenses Operating profit Finance income Finance expenses Profit before royalties and taxation Royalties Profit before taxation Taxation Profit after taxation BALANCE SHEET Current assets Royalties prepaid Inventory Trade and other receivables Cash and cash equivalents Contract fulfilment cost assets Contract assets Total current assets Non-current assets Property, plant and equipment Mineral rights Other financial assets Total non-current assets Total assets Current liabilities Tax payable Royalties payable Trade and other payables Contract liabilities Total current liabilities Year Ended 29 February 2020 Year Ended 28 February 2019 8,022,631 (5,060,864) 2,961,767 7,033 (12,796) 1,588 (24,497) 10,147,867 (4,674,368) 5,473,499 6,818 (12,030) (2,259) (25,013) 2,933,096 5,441,015 179,260 (3,811) 3,108,545 (359,548) 2,748,997 (772,966) 1,976,031 79 303,556 676,882 1,111,257 62,993 76,934 2,231,701 2,346,743 178,022 37,796 2,562,561 4,794,262 18,475 - 417,016 62,993 307,361 (3,752) 5,744,624 (537,048) 5,207,576 (1,458,548) 3,749,028 - 309,275 1,028,017 543,124 52,869 167,828 2,101,113 2,240,181 183,957 30,714 2,454,852 4,555,965 55,780 4,588 411,832 52,869 498,484 525,069 Operating and Financial Review 7 ANNUAL REPORT 2020 ZAR’000 Non-current liabilities Decommissioning and rehabilitation provision Deferred tax Total non-current liabilities Total liabilities Equity Share capital and share premium Retained earnings Contributed assets reserve Total equity Total equity and liabilities Year Ended 29 February 2020 Year Ended 28 February 2019 51,570 616,450 668,020 1,166,504 321,359 3,189,438 116,961 3,627,758 4,794,262 43,470 585,699 629,169 1,154,238 321,359 2,963,407 116,961 3,401,727 4,555,965 MARKETING AND MANGANESE MARKET Jupiter continued its operations in South Africa (“Jupiter SA”) as an agent marketing its 49.9% share of Tshipi manganese ore. For the financial year to 29 February 2020, Jupiter SA recorded marketing fee income of $10,358,857 (2019: $13,116,608). Manganese prices decreased significantly over the year, and sharply declined in the third quarter of the financial year. The manganese price steadily recovered as expected in January, however due to the COVID-19 pandemic, prices softened slightly once again towards the end of the financial year. As supply has declined, the manganese price has subsequently rallied in April. 8 Operating and Financial Review JUPITER MINES LIMITED u t m d / D S U 8.00 7.00 6.00 5.00 4.00 3.00 2.00 1.00 0.00 7 1 0 2 r a M 7 1 0 2 r p A 7 1 0 2 y a M 7 1 0 2 n u J 7 1 0 2 l u J 7 1 0 2 g u A 7 1 0 2 p e S 7 1 0 2 t c O 7 1 0 2 v o N 7 1 0 2 c e D 8 1 0 2 n a J 8 1 0 2 b e F 8 1 0 2 r a M 8 1 0 2 r p A 8 1 0 2 y a M 8 1 0 2 n u J 8 1 0 2 l u J 8 1 0 2 g u A 8 1 0 2 p e S 8 1 0 2 t c O 8 1 0 2 v o N 8 1 0 2 c e D 9 1 0 2 n a J 9 1 0 2 b e F 9 1 0 2 r a M 9 1 0 2 r p A 9 1 0 2 y a M 9 1 0 2 n u J 9 1 0 2 l u J 9 1 0 2 g u A 9 1 0 2 p e S 9 1 0 2 t c O 9 1 0 2 v o N 9 1 0 2 c e D 0 2 0 2 n a J 0 2 0 2 b e F 0 2 0 2 r a M Source: Pricing data sourced from Metal Bulletin Figure 2: Manganese prices 2017 to May 2020 – 37% FOB Port Elizabeth CENTRAL YILGARN IRON PROJECTS The Central Yilgarn Iron Project is located 130km by road northwest of the town of Menzies. The CYIP consists of the long- life Mount Ida Magnetite project and the smaller Mount Mason Hematite DSO project. Both projects are planned around existing infrastructure in the region, including the Leonora to Esperance railway line, and the Port of Esperance. The flagship Mount Ida Magnetite Project has the high quality JORC mineral resources to be a tier one long-life magnetite mine. The Mount Mason high-grade hematite mineralisation is located approximately 12km northwest of the Mount Ida Magnetite Project. It has the potential to be a low-cost start-up, near term project with a short payback period. Both projects remained on care and maintenance with only statutory work being undertaken during the financial year. A strategic review of the projects commenced early in the financial year and continues at present. Jupiter again commissioned an independent valuation of its Central Yilgarn iron ore assets in line with valuation and accounting standards for the financial year. The Board received an independent external valuation of the Mount Ida Magnetite and Mount Mason Hematite projects, which provided value ranges of $5 million to $16 million and $0.6 million and $1.9 million, respectively. The valuation was based on the comparative transaction method, in line with the current carrying values. Further information is provided at Note 13 of the financial statements. Figure 3: CYIP Project Location Map Operating and Financial Review 9 ANNUAL REPORT 2020 Mineral Resources and Ore Reserves Update Jupiter reports mineral resources and ore reserves in accordance with the 2012 edition of the Australasian Code for Reporting Exploration Results, Mineral Resources and Ore Reserves (the JORC Code) as required by Chapter 5 of the ASX Listing Rules. TSHIPI MINERAL RESOURCES AND ORE RESERVES Tshipi is a long mine life and a large JORC Mineral Resource Position. The following tables show the mineral resources and ore reserves of the Tshipi Mine in accordance with the JORC Code (2012) as at 29 February 2020, and comparison to previous year. Mineral Resource Estimation Current Mineral Resource Estimate: Zone Tonnes Mn (%) Fe (%) SG (t/m3) Thickness(m) Category Measured Indicated Inferred X Y Z M C N Supergene Sub-Total X Y Z M C N Sub-Total X Y Z M C N 17,559,000 7,735,000 7,790,000 14,512,000 27,254,000 12,619,000 1,746,000 89,215,000 31,446,000 6,884,000 14,269,000 16,991,000 30,165,000 11,058,000 110,813,000 53,829,000 25,170,000 20,963,000 49,600,000 51,224,000 26,508,000 227,294,000 427,322,000 32.03 22.22 32.68 38.30 36.56 35.40 36.30 34.20 31.46 23.30 31.81 37.51 36.63 35.02 33.69 30.72 25.81 31.40 34.14 35.40 34.41 32.47 33.15 4.85 5.73 5.91 4.74 3.71 5.03 4.71 4.67 5.05 5.38 6.39 5.14 3.71 5.46 4.93 5.33 5.14 5.67 5.06 4.13 5.41 5.02 4.92 3.54 3.30 3.59 3.76 3.66 3.64 3.49 3.61 3.50 3.28 3.55 3.74 3.68 3.67 3.59 3.52 3.35 3.57 3.67 3.66 3.67 3.58 3.59 7.62 3.29 3.02 5.25 9.69 3.74 8.47 6.56 9.94 4.00 4.53 4.82 8.70 3.12 7.07 8.19 4.68 3.10 6.48 6.95 3.36 6.12 6.46 Total Mineral Resource Sub-Total Tonnes are rounded down to 1 000t; Mineral Resources are reported as inclusive of Ore Reserves; Mineral Resource grades and tonnages are reported in situ; Explicit (modelled losses) as well as an additional 5% geological loss have been applied; The maximum depth of the Mineral Resource is 372m below surface. Competent Person: Efet Banda Figure 4: Current Mineral Resource estimate of the Tshipi Mine in accordance with JORC Code (2012) as at 29 February 2020 1 0 Mineral Resources and Ore Reserves Update JUPITER MINES LIMITED Previous Mineral Resource Estimate: Zone Tonnes Mn (%) Fe (%) SG (t/m3) Thickness(m) Category Measured Indicated Inferred X Y Z M C N Supergene Sub-Total X Y Z M C N Sub-Total X Y Z M C N 17,903,000 8,013,000 7,976,000 15,306,000 28,235,000 13,133,000 1,745,000 92,314,000 31,918,000 7,019,000 14,416,000 17,263,000 30,350,000 11,071,000 112,039,000 53,829,000 25,170,000 20,963,000 49,600,000 51,224,000 26,508,000 227,298,000 431,652,000 32.03 22.28 32.66 38.28 36.58 35.48 36.30 34.24 31.47 23.28 31.80 37.52 36.62 35.02 33.68 30.72 25.81 31.40 34.14 35.40 34.41 32.47 33.16 4.85 5.74 5.91 4.72 3.70 5.02 4.71 4.67 5.05 5.37 6.40 5.13 3.72 5.46 4.93 5.33 5.14 5.67 5.06 4.13 5.41 5.02 4.92 3.54 3.30 3.59 3.76 3.66 3.65 3.49 3.61 3.50 3.28 3.55 3.74 3.68 3.67 3.59 3.52 3.35 3.57 3.67 3.66 3.67 3.58 3.59 7.56 3.30 3.00 5.32 9.61 3.73 8.47 6.52 9.91 3.98 4.52 4.86 8.70 3.12 7.07 8.19 4.68 3.10 6.48 6.95 3.36 6.12 6.45 Total Mineral Resource Sub-Total Tonnes are rounded down to 1 000t; Mineral Resources are reported as inclusive of Ore Reserves; Mineral Resource grades and tonnages are reported in situ; Explicit (modelled losses) as well as an additional 5% geological loss have been applied; The maximum depth of the Mineral Resource is 372m below surface. Competent Person: Stewart Nupen Figure 5: Previous Mineral Resource estimate of the Tshipi Mine in accordance with JORC Code (2012) as at 28 February 2019 Mineral Resources and Ore Reserves Update 1 1 ANNUAL REPORT 2020 Comparison with Previous Mineral Resource Estimate: Classification Zone Tonnes Mn (%) Fe (%) SG (t/m3) Thickness(m) Measured Indicated Inferred X Y Z M C N Supergene Sub-Total X Y Z M C N -344,000 -278,000 -186,000 -794,000 -981,000 -514,000 1,000 -3,096,000 -472,000 -135,000 -147,000 -272,000 -185,000 -13,000 Sub-Total -1,224,000 X Y Z M C N Sub-Total 0 0 0 0 0 0 0 Total Mineral Resource -4,320,000 -0.00 -0.07 0.02 0.03 -0.02 -0.08 0.00 -0.04 -0.01 0.02 0.01 -0.01 0.00 0.00 0.01 0.00 0.00 0.00 0.00 0.00 0.00 -0.00 -0.01 0.00 -0.01 0.00 0.02 0.01 0.01 -0.00 0.01 -0.00 0.00 -0.00 0.01 -0.00 0.00 -0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 -0.00 0.00 -0.00 -0.00 -0.01 0.00 -0.00 -0.00 -0.00 -0.00 -0.00 -0.00 -0.00 -0.00 0.00 0.00 0.00 0.00 0.00 0.00 -0.00 -0.00 0.06 -0.01 0.02 -0.07 0.08 0.02 0.00 0.03 0.03 0.02 0.01 -0.04 -0.00 -0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.01 Figure 6: Reconciliation between 29 February 2020 and 28 February 2019 Mineral Resource Estimate in accordance with JORC Code (2012) The changes to the Mineral Resource estimates are due to mining depletion. Ore Reserve Estimate Current Tshipi Ore Reserves statement: Proved Probable Total Zone Tonnes Mn (%) Fe (%) SG (t/m3) Z M C N Supergene Sub-total Z M C N Sub-total 3,296,000 10,779,000 21,009,000 7,331,000 837,000 43,252,000 3,760,000 12,073,000 24,090,000 8,121,000 48,044,000 91,296,000 32.03 38.54 36.67 34.94 37.79 36.51 32.26 38.51 36.74 35.10 36.56 36.54 6.14 4.90 3.76 5.38 4.92 4.52 6.60 5.20 3.71 5.57 4.63 4.58 3.59 3.78 3.67 3.66 3.52 3.69 3.59 3.77 3.68 3.70 3.70 3.69 Tonnes are rounded down to 1 000t; Mining loss of 2%; Processing loss of 2% Competent Person: Jonathan Buckley Figure 7: Ore reserves of the Tshipi Mine in accordance with JORC Code (2012) as at 29 February 2020 1 2 Mineral Resources and Ore Reserves Update JUPITER MINES LIMITED Previous Ore Reserves statement: Proved Probable Total Zone Tonnes Mn (%) Fe (%) SG (t/m3) Z M C N Supergene Sub-total Z M C N Sub-total 3,475,000 11,538,000 21,946,000 7,813,000 836,000 45,608,000 3,900,000 12,333,000 24,268,000 8,133,000 48,634,000 94,242,000 32.66 38.47 36.67 34.99 37.46 36.55 32.38 38.21 36.71 34.91 36.44 36.49 6.06 4.85 3.74 5.38 4.87 4.50 6.67 5.19 3.71 5.62 4.64 4.57 3.60 3.77 3.67 3.66 3.52 3.69 3.58 3.76 3.68 3.68 3.69 3.69 Tonnes are rounded down to 1 000t; Mining loss of 2%; Processing loss of 2% Competent Person: Jonathan Buckley Figure 8: Previous Ore Reserve Statement of the Tshipi Mine in accordance with JORC Code (2012) as at 28 February 2019 Comparison with Previous Ore Reserve Statement: Zone Tonnes Mn (%) Fe (%) SG (t/m3) Proved Probable Total Z M C N Supergene Sub-Total Z M C N Sub-Total -178,000 -759,000 -936,000 -482,000 - -2,355,000 -140,000 -260,000 -177,000 -12,000 -589,000 -2,944,000 -0.63 0.07 -0.01 -0.04 0.33 -0.04 -0.12 0.31 0.03 0.20 0.12 -0.01 0.08 0.05 0.02 0.00 0.05 0.83 -0.07 0.01 0.00 -0.05 -0.01 0.66 -0.01 0.00 0.00 0.00 0.01 0.00 -0.01 0.01 0.00 0.01 0.01 0.00 Figure 9: Reconciliation between 29 February 2020 and 28 February 2019 Ore Reserve in accordance with JORC Code (2012) Depletion due to mining during the period 28 February 2019 to 29 February 2020 was approximately 3.0Mt. During the course of 2019, Tshipi completed part of an ongoing infill exploration drilling programme. The objective of the campaign is to increase geological confidence, largely in the north-west portion of the Mineral Resource footprint. During February 2020, Tshipi appointed The Mineral Corporation to assist with an update to the geological model to support, in particular, the evaluation of the Boundary Pillar Project area. As the exploration drilling programme is still ongoing, the data available to date, and use to update the geological model, has not had a material impact on the Mineral Resource Classification. The information in this report with respect of the Tshipi mine that relates to Reporting of Mineral Resources and Ore Reserves estimation is based on information compiled by Mr Stewart Nupen, Mr Jonathan Buckley and Mr Efet Banda. Mr Jonathan Buckley is a Fellow of the Southern African Institute of Mining and Metallurgy. Mr Stewart Nupen is a member of the Southern African Institute of Mining and Metallurgy. Mr Efet Banda is a member of the South African Council for Natural Scientific Professions (Reg. No. 400035/16). Mr Nupen, Mr Buckley and Mr Banda are employed by The Mineral Corporation. They have sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which being undertaking to qualify as a “Competent Person” as defined in the JORC Code. Mr Buckley, Mr Nupen and Mr Banda consent to the inclusion in this report of the statements based on their information as provided in the Competent Persons Report dated 29 February 2020, in the form and context in which they appear. Mineral Resources and Ore Reserves Update 1 3 ANNUAL REPORT 2020 Zone/ Class Central Indicated Central Inferred Central Total Zone/ Class South Indicated North Inferred Nth + Sth Total Zone/ Class Central Indicated Central Inferred Central Total MOUNT IDA MINERAL RESOURCE ESTIMATES The following tables show the Mineral Resource estimates of the Mount Ida project in accordance with the JORC Code (2012) as at 7 February 2018. There has been no material between the date of the below statements and the end of the financial year. There have been no material changes since the last mineral resource estimate (ASX announcement: 16 April 2018) therefore no reconciliation is shown. Central Zone based on Unweathered BIF with a 10% Magnetic Fe block grade cut-off Material Tonnes x106 Fe (%) SiO2 (%) Al2O3 (%) In situ total 1,062 30.23 48.47 In situ Magnetic 38.45% 25.64 Concentrate 409 66.69 2.64 6.86 In situ total 169 27.03 51.68 In situ Magnetic 32.12% 21.31 Concentrate 54 66.34 2.34 7.28 In situ total 1,231 29.79 48.91 In situ Magnetic 37.58% 35.05 Concentrate 463 66.65 2.60 6.91 1.88 0.02 0.05 2.40 0.02 0.05 1.95 0.02 0.05 CaO (%) 2.70 0.07 0.17 2.92 0.06 0.17 2.73 0.06 0.17 P (%) 0.07 0.01 0.01 0.07 0.01 0.02 0.07 0.01 0.01 S (%) 0.28 0.09 0.23 0.31 0.10 0.32 0.28 0.09 0.24 LOI (%) -0.56 -1.14 -2,97 -0.43 -0.96 -2.98 -0.54 -1.12 -2.97 MgO (%) 3.00 0.05 0.12 3.33 0.05 0.15 3.05 0.05 0.12 South and North Zone based on Unweathered BIF with a 10% Magnetic Fe block grade cut-off Material Tonnes x106 Fe (%) SiO2 (%) Al2O3 (%) In situ total 567 28.63 49.92 In situ Magnetic 34.26% 22.93 2.26 6.60 2.97 7.02 Concentrate In situ total 194 48 66.93 31.63 48.82 In situ Magnetic 42.36% 28.32 Concentrate In situ total 20 615 66.85 28.86 49.84 In situ Magnetic 34.89% 23.35 Concentrate 214 66.92 2.32 6.64 CaO (%) 3.47 0.07 0.21 2.20 0.07 0.16 3.37 0.07 0.20 P (%) 0.07 0.01 0.02 0.07 0.01 0.02 0.07 0.01 0.02 S (%) LOI (%) MgO (%) 0.36 -0.65 0.17 -1.02 0.50 -2.96 0.12 -0.84 0.04 0.09 0.34 0.16 0.46 -1.32 -3.11 -0.67 -1.04 -2.98 2.76 0.05 0.14 2.07 0.05 0.13 2.71 0.05 0.14 Combined Central, South and North Zones based on Unweathered BIF with a 10% Magnetic Fe block grade cut-off Material Tonnes x106 Fe (%) SiO2 (%) Al2O3 (%) 2.64 6.86 In situ total 1,062 30.23 48.47 In situ Magnetic 38.45% 25.64 Concentrate In situ total 408 784 66.69 28.47 50.24 In situ Magnetic 34.29% 22.91 Concentrate 269 66.81 2.32 6.77 In situ total 1,846 29.48 49.22 In situ Magnetic 36.68% 24.48 Concentrate 677 66.74 2.50 6.83 CaO (%) 2.70 0.07 0.17 3.28 P (%) 0.07 0.01 0.01 0.07 0.07 0.01 0.20 2.95 0.07 0.18 0.02 0.07 0.01 0.01 S (%) 0.28 0.09 0.23 0.34 0.15 0.43 LOI (%) -0.56 -1.14 -2.97 -0.62 -1.02 -2.98 0.30 -0.58 0.11 0.31 -1.09 -2.97 MgO (%) 3.00 0.05 0.12 2.84 0.05 0.14 2.94 0.05 0.13 Figure 10: Mineral resource estimates for Mount Ida in accordance with JORC Code (2012) 1 4 Mineral Resources and Ore Reserves Update MnO (%) 0.07 0.01 0.02 0.10 0.01 0.02 0.08 0.01 0.02 MnO (%) 0.09 0.01 0.03 0.06 0.02 0.05 0.09 0.01 0.04 MnO (%) 0.07 0.01 0.02 0.09 0.01 0.03 0.08 0.01 0.03 2.35 0.02 0.06 1.54 0.01 0.03 2.28 0.02 0.05 1.88 0.02 0.05 2.31 0.02 0.05 2.06 0.02 0.05 JUPITER MINES LIMITED MOUNT MASON MINERAL RESOURCE ESTIMATES The following tables show the mineral resources estimates of the Mount Mason project in accordance with the JORC Code (2012) as at 7 February 2018. There has been no material between the date of the below statements and the end of the financial year. There have been no material changes since the last mineral resource estimate (ASX announcement: 16 April 2018) therefore no reconciliation is shown. Classification Measured Indicated Inferred Tonnes 4,800,000 1,080,000 320,000 Total Measured + Indicated 5,900,000 Fe (%) 60.3 59.4 58.4 60.1 SiO2 (%) 7.37 10.41 14.10 7.92 Al2O3 (%) 2.90 3.47 4.37 3.01 P (%) 0.05 0.06 0.08 0.05 S (%) 0.01 0.01 0.01 0.01 CaO (%) 0.03 0.03 0.03 MgO (%) 0.04 0.05 0.06 0.03 0.04 LOI (%) 2.63 2.55 2.88 2.62 Figure 11: Mineral resource estimates Mount Mason in accordance with JORC Code (2012) The information in this report with respect to the CYIP that relates to mineral resource estimates is based on information compiled by Dr Michael Cunningham and Mr Rodney Brown, who are each Members of the Australasian Institute of Mining and Metallurgy and the Australian Institute of Geoscientists. Dr Cunningham was employed by SRK Consulting at the time of the report, and Mr Brown is currently employed by SRK Consulting. They have sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which being undertaking to qualify as a “Competent Person” as defined in the JORC Code. Dr Cunningham and Mr Brown consent to the inclusion in this report of the statements based on their information as provided in the Independent Geologists Report dated February 2018, in the form and context in which they appear. SUMMARY OF GOVERNANCE ARRANGEMENTS AND INTERNAL CONTROLS Mineral Resource and Ore Reserves are estimated by suitably qualified Jupiter or Tshipi personnel or external consultants in accordance with the requirements of the JORC Code, industry standard techniques and internal guidelines for the estimation and reporting of Ore Reserves and Mineral Resources. All Mineral Resource estimates and supporting documentation are prepared and reviewed by a suitably qualified external Competent Person. All Ore Reserves estimates supporting documentation are prepared and reviewed by a suitably qualified external Competent Person. All Ore Reserve estimates are prepared in conjunction with feasibility studies and Company budgets which consider all material factors. The Mineral Resources and Ore Reserves Statement included in the Annual Report is reviewed by a suitably qualified external Competent Person prior to its inclusion. Mineral Resources and Ore Reserves Update 1 5 ANNUAL REPORT 2020 SCHEDULE OF MINERAL TENEMENTS Lease Name Status Applied Date Grant Date Expiry Date Current Area Current Commitment Current Rent G37/36 Graten Well Granted 3/04/2009 17/01/2011 16/01/2032 358.62 Ha G29/21 Mt Mason Granted 22/05/2009 23/03/2010 22/03/2031 95.00 Ha G29/23 Mt Mason Granted 5/05/2012 7/02/2013 6/02/2034 1,256.73 Ha L29/116 Mt Mason Granted 7/06/2012 3/01/2013 2/01/2034 25.48 Ha L29/117 Mt Mason Granted 7/06/2012 7/12/2012 6/12/2033 90.14 Ha L29/118 Mt Mason Granted 7/06/2012 9/11/2012 8/11/2033 11.67 Ha L29/119 Mt Mason Granted 28/08/2012 30/07/2013 29/07/2034 52.76 Ha L29/120 Mt Mason Granted 30/09/2012 7/02/2013 6/02/2034 1,720.05 Ha L29/121 Mt Mason Granted 30/09/2012 30/07/2013 29/07/2034 64.31 Ha L29/123 Mt Mason Granted 25/11/2012 26/03/2013 25/03/2034 23.13 Ha L29/132 Mt Mason Granted 17/06/2016 08/11/2016 27/11/2028 300.00 Ha - - - - - - - - - - - $6,282.50 $1,662.50 $21,980.00 $455.00 $1,592.50 $210.00 $927.50 $11,946.55 $1,137.50 $420.00 $5,267.50 M29/408 Mt Mason Granted 6/02/2006 28/11/2007 27/11/2028 300.00 Ha $30,100.00 $5,959.80 G29/22 Mt Ida Granted 11/01/2011 6/09/2012 5/09/2033 9,634.00 Ha L29/100 Mt Ida Granted 11/01/2011 11/11/2011 10/11/2032 775.00 Ha L29/106 Mt Ida Granted 18/03/2011 20/06/2012 19/06/2033 119.44 Ha L29/78 Mt Ida Granted 1/09/2009 24/06/2010 23/06/2031 6,341.00 Ha L29/79 Mt Ida Granted 12/01/2010 24/08/2010 23/08/2031 6,886.00 Ha L29/81 Mt Ida Granted 13/05/2010 12/09/2011 11/09/2032 26,020.34 Ha L29/99 Mt Ida Granted 12/11/2010 24/02/2012 23/02/2033 64,550.49 Ha L36/214 Mt Ida Granted 5/09/2012 17/06/2013 16/06/2034 19,703.86 Ha L36/215 Mt Ida Granted 20/10/2012 1/08/2013 31/07/2034 29,849.54 Ha L36/216 Mt Ida Granted 20/10/2012 1/08/2013 31/07/2034 17,632.43 Ha L36/217 Mt Ida Granted 20/10/2012 1/08/2013 31/07/2034 5,882.25 Ha L37/203 Mt Ida Granted 3/05/2010 27/06/2011 26/06/2032 68,952.89 Ha L57/45 Mt Ida Granted 5/09/2012 19/08/2013 18/08/2034 8,703.48 Ha L57/46 Mt Ida Granted 05/09/2012 05/12/2014 04/12/2035 31,741.86 Ha L29/122 Mt Ida Granted 30/09/2012 03/04/2014 2/04/2035 6,590.72 Ha L29/131 Mt Ida Granted 12/02/2015 17/12/2015 16/12/2036 541.07 Ha - - - - - - - - - - - - - - - - $168,542.50 $13,562.50 $1,980.00 $3,170.50 $3,787.30 $14,311.55 $35,503.05 $9,852.00 $16,417.50 $9,698.15 $3,235.65 $34,476.50 $4,352.00 $17,458.10 $3,625.05 $9,485.00 M29/414 Mt Ida Granted 11/01/2011 25/11/2011 24/11/2032 6,461.00 Ha $646,000.00 $127,908.00 All tenements are held 100% by Jupiter Mines Limited. 1 6 Mineral Resources and Ore Reserves Update JUPITER MINES LIMITED Directors’ Report In accordance with a resolution of Directors, the Directors present their Report together with the Financial Report of Jupiter Mines Limited (“Jupiter”) and its wholly owned subsidiaries (together referred to as the “Consolidated Entity” or “Group”) for the financial year ended 29 February 2020 and the Independent Auditor’s Report thereon. Directors The Directors of Jupiter at any time during or since the end of the financial year are as follows: Non-Executive Brian Gilbertson Paul Murray Andrew Bell Yeongjin Heo Hans-Jürgen Mende (appointed 9 October 2019) Brian Beem (appointed 9 October 2019; alternate to Hans-Jürgen Mende) Executive Priyank Thapliyal Melissa North (appointed 14 March 2019; resigned 29 July 2019) Additional information is provided below regarding the current Directors and Executives. Brian Gilbertson BSc (Maths and Physics), BSc (Hons) (Physics), MBL, PMD45 (Chairman; Independent Non-Executive Director; Member of the Remuneration and Nomination Committee) In 1997, Gencor Limited restructured its non-precious metals interests as Billiton plc. With Mr Gilbertson as Executive Chairman, Billiton plc raised USD1.5 billion in an initial public offering on the LSE, taking the company into the FTSE 100. Separately, Mr Gilbertson worked to merge the gold operations of Gencor and Gold Fields of South Africa, creating Gold Fields Limited, a leader in the world gold mining industry. He served as its first Chairman until October 1998. In 2001, Billiton plc merged with BHP Limited to create what is widely regarded as the world’s premier resources company, BHP Billiton plc. Mr Gilbertson was appointed its second Chief Executive on 1 July 2002. In late 2003, Mr Gilbertson led mining group Vedanta Resources plc (Vedanta) to the first primary listing of an Indian company on the London Stock Exchange in the second largest IPO of the year (USD876 million). He served as Chairman of Vedanta until July 2004. He was appointed President of Sibirsko-Uralskaya Aluminium Company (SUAL), the smaller aluminium producer in Russia and led that company into the USD30 billion merger with RUSAL and the alumina assets of Glencore International A.G., creating the largest aluminium company in the world. Mr Gilbertson established Pallinghurst Advisors LLP and Pallinghurst (Cayman) GP L.P. during 2005 and 2007 respectively, to develop opportunities on behalf of a group of natural resource investors. Mr Gilbertson is a British and South African citizen. He has not been a Director of any other ASX listed company in the past three years. Paul Murray FFin, CPA (Independent Non-Executive Director; Remuneration Committee Chairman; Audit Committee Chairman) Mr Gilbertson was appointed a Director on 22 June 2010 and subsequently appointed a member of the Remuneration and Nomination Committee on 15 March 2018. Mr Gilbertson has extensive experience in the global natural resources industry. He was Managing Director of Rustenburg Platinum Mines Limited in the 1980’s, a period during which the company gained recognition as the world’s foremost producer of platinum. In the 1990’s, as Executive Chairman of Gencor Limited, he led the restructuring of the South African mining industry into the post-Apartheid era, transforming Gencor Limited into a focused mineral and mining group. During this period, he held ultimate responsibility for Impala Platinum Holdings, for Samancor Limited (the world’s largest producer of manganese and chrome ore and alloys) and for Trans-Natal Coal Corporation (a major coal producer and exporter). Important new initiatives included the Hillside and Mozal aluminium smelters, the Columbus stainless steel plant, and the purchase of the international mining assets (Billiton plc) of the Royal Dutch Shell Group. Paul is a founding director of Jupiter Mines Limited and was Chairman at the time of formation in August 2003. Paul was appointed as a Director of the Company on 20 August 2003. He has served continuously since that time as Chairman of both the Audit Committee and the Remuneration and Nomination Committee. In addition to attending to various statutory duties as required, Paul has a strong record of attendance at Company board and shareholder meetings and contributes to consideration and discussions in respect of matters on the Company’s business papers. Apart from academic qualifications which are relevant to his roles, Paul has held positions on boards of a number of ASX listed companies. Mining experience includes exploration for and mining of tin in the New England district of NSW and service on the boards of successful Australian oil and gas companies, Basin Oil NL and Reef Oil NL. Directors’ Report 1 7 ANNUAL REPORT 2020 Andrew Bell B.A. (Hons), M.A., LLB (Hons) (Independent Non-Executive Director; Audit Committee Member; Remuneration Committee Member) Andrew was appointed as a Director of Jupiter on 4 June 2008 and subsequently appointed a member of both the Audit Committee and the Remuneration and Nomination Committee on 15 March 2018. Andrew is Chairman of Red Rock Resources plc, and Regency Mines plc, being companies listed on the AIM market of the London Stock Exchange Ltd. He was a natural resources analyst in London in the 1970s, then specialised in investment and investment banking covering the Asia region. Andrew has been involved in the resource and mining sectors in Asia since the 1990s and has served on the Boards of a number of listed resource companies. Yeongjin Heo B.A. Law (Seoul National University); MBA (University of Leeds) (Non-Executive Director; Audit Committee Member) Mr Heo was appointed as a Director of Jupiter and Member of the Audit Committee on 4 February 2019. Mr Heo is the President of POSCO Australia Pty Ltd, a significant shareholder of the Company. After joining POSCO in 1995, Mr Heo worked across the strategic planning and raw materials areas. Mr Heo brings significant experience in the resource industry to Jupiter. Mr Heo has not been a Director of any other ASX listed companies in the past three years. Priyank Thapliyal Metallurgical Engineer, B Tech (IIT-Kanpur, India), M Eng (McMaster, Canada), MBA (Ivey Business School, Canada) (Executive Director; Chief Executive Officer) Priyank Thapliyal was appointed as a Director of the Company on 4 June 2008. Priyank joined Sterlite Industries in 2000 and worked alongside Mr Anil Agarwal (owner) to implement the strategies that led to the creation of Vedanta Resources plc, a FTSE 100 company. Vedanta floated on the London Stock Exchange (LSE) in December 2003 and raised USD 870 million in its IPO, in what was the largest mining IPO on the LSE that year, and also the first primary listing of an Indian company on the LSE. The success of the Vedanta IPO was instrumental in other emerging market mining companies seeking LSE listings. Subsequent to the LSE listing, he led Vedanta’s first major overseas acquisition via the USD 50 million controlling investment in Konkola Copper Mines (KCM) in Zambia in 2004. At the time of his departure in October 2005 to co-found Pallinghurst Resources LLP, the KCM stake was valued at USD 1 billion and Vedanta had a market capitalisation of USD 7.5 billion. Priyank was instrumental in delivering Pallinghurst Resources’ steel feed strategy via Jupiter. That has led to the creation of the flagship Tshipi Mine, from what was a greenfield project, into one of the largest, long-life and low-cost assets of strategic importance. Prior to Vedanta, Priyank was a mining and metals investment banker with CIBC World Markets in Toronto Canada, is a qualified Metallurgical Engineer, MBA and former Falconbridge employee. Mr Thapliyal has not been a Director of any other ASX listed companies in the past three years. Hans-Jürgen Mende MBA (University of Cologne) (Non-Executive Director) Mr Mende was appointed as a Director of the Company on 9 October 2019. Mr Mende is Executive Chairman of the AMCI Group, which he co-founded in 1986. AMCI is a substantial shareholder of Jupiter. Mr Mende has considerable experience in the global steel and coal industries, and within Australia and South Africa. He has served on the board of many resources companies and was a founder and former non-executive director of Whitehaven Coal. Mr Mende has not been a Director of any other ASX listed companies in the past three years. Brian Beem B.A. Politics (Princeton University) (Non-Executive Director; alternate to Hans-Jürgen Mende) Mr Beem was appointed as an alternate to Hans Mende on 9 October 2019. Mr Beem is the Managing Director of the AMCI Group and manages the majority of the portfolio of their private equity investments. Mr Beem has led numerous investments in AMCI portfolio companies and serves on several of their boards. Mr Beem has not been a Director of any other ASX listed companies in the past three years. 1 8 Directors’ Report JUPITER MINES LIMITED Melissa North B.Com; CA (Chief Financial Officer; Company Secretary) Melissa North joined Jupiter Mines in May 2012 as Group Financial Controller and was subsequently appointed CFO and Company Secretary on 15 November 2012. Prior to joining Jupiter, Melissa held various roles in finance management and business advisory services over almost a decade, including Group Financial Controller positions within the Chime Communications Group (London) and other large media agencies in the United Kingdom. Ms North qualified as a Chartered Accountant in 2004 after extensive work experience at Grant Thornton Perth (now Crowe Horwath). Over her time with Jupiter, Melissa has played a critical role in the development of the Company, culminating in its ASX listing in April 2018 and its subsequent evolution into a successful ASX 300 company. Principal Activities The principal activities of Jupiter during the year have been the operation of the Tshipi Manganese Mine in South Africa and the sale of manganese ore. Review of Financial Results and Operations The consolidated results of Jupiter for the year ended 29 February 2020 was a profit of $95,118,503 after a $8,807,588 tax expense (2019: profit of $138,033,499 after a $51,016,370 tax expense). Further details of the results of the Consolidated Entity are set out in the accompanying financial statements in this Annual Report. Significant Changes in the State of Affairs In response to the COVID-19 pandemic, the South African Government imposed a nationwide lockdown on 24 March 2020, including the closure of the Tshipi Borwa mine. Subsequently, the Government lifted restrictions to enable Tshipi to recommence full operations from 1 May. Dividends In respect of the 2020 financial year, the Directors have declared the following dividends: Dividend Dividend per share Total dividend Payment date Interim unfranked, wholly conduit foreign income Final unfranked, wholly conduit foreign income $0.0400 $0.0075 $0.0475 $78,359,641 Paid 21 November 2019 $14,692,433 Paid 21 May 2020 $93,052,074 Financial Position At 29 February 2020, Jupiter held $29,285,067 in cash and cash equivalents (2019: $72,848,680), had a carrying value of investments using the equity method of $437,601,406 (2019: $422,841,742) and carrying value of exploration expenditure of $11,774,238 (2019: $10,800,000). Significant Events After Reporting Date These financial statements were authorised for issue on 27 May 2020 by Director Priyank Thapliyal. Tshipi declared a dividend to its shareholders of ZAR265,000,000 on 17 March 2020. Jupiter received its share on 31 March 2020, being $11,410,959.22. Jupiter also received ZAR37,000,000 ($3,649,059.13)) from its South African marketing operations on 5 March 2020. On 29 April 2020, the Directors declared a final dividend for the year ended 29 February 2020 of $0.0075 per ordinary share, paid on 21 May 2020. In response to the COVID-19 pandemic, the South African Government imposed a nationwide lockdown on 24 March 2020, including the closure of the Tshipi Borwa mine. Subsequently, the Government lifted restrictions to enable Tshipi to recommence full operations from 1 May. Likely Developments, Business Strategies and Prospects The operations at the Tshipi Borwa Manganese Mine are expected to continue in a similar manner to present. The Directors intend Jupiter to proceed with the development of Jupiter’s Mount Ida Magnetite and Mount Mason DSO Hematite projects should access to infrastructure become available and the projects are economically viable, or should an opportunity to realise value from these projects arise. Directors’ Report 1 9 ANNUAL REPORT 2020 Environmental Regulations and Performance Jupiter’s operations are subject to general environmental regulation under the laws of the States and Territories of Australia and South Africa. The various exploration interests held by Jupiter impose future environmental obligations for site remediation following sampling and drilling programs. The Board is aware of these requirements and management is charged with ensuring compliance. The Directors are not aware of any breaches of these environmental regulations and licence obligations during the year. Please refer to the Tshipi Environmental, Social & Governance Report in the Operating and Financial Review on page 4 for full details. Meetings – Attendance by Directors Board Meetings The number of Directors’ meetings and the number of meetings attended by each of the Directors of Jupiter during the financial year under review are: Director Brian Gilbertson Paul Murray Priyank Thapliyal Andrew Bell Yeongjin Heo Melissa North Hans-Jürgen Mende Brian Beem Committee Meetings Number of meetings held during tenure of the Director Number of meetings attended 3 3 3 3 3 2 1 1 3 3 3 3 3 2 1 1 The number of committee meetings and the number of meetings attended by each of the Directors of Jupiter during the financial year under review are: Director Paul Murray Andrew Bell Yeongjin Heo Brian Gilbertson Audit Committee meetings held during tenure Audit Committee meetings attended Remuneration Committee meetings held during tenure Remuneration Committee meetings attended 2 2 2 - 2 2 2 - 3 3 - 3 3 3 - 2 Directors’ Interests Particulars of Directors’ interests in securities as at the date of this report are as follows: Director Brian Gilbertson Paul Murray Priyank Thapliyal Andrew Bell1 Yeongjin Heo2 Melissa North Hans-Jürgen Mende3 Brian Beem Ordinary Shares Options over Ordinary Shares 200,000 1,190,000 57,437,584 - - - - - - - - - - - - - 2 0 Directors’ Report JUPITER MINES LIMITED 1 Andrew Bell as the Chairman and Director of Red Rock Resources plc has a relevant interest in Red Rock Resources plc (RRR). RRR is the beneficial owner of 17,024,914 Ordinary Shares in the Company at the date of this report. 2 Yeongjin Heo is the Managing Director of POSCO Australia Pty Ltd, has a relevant interest in POSCO Australia Pty Ltd (POSCO) and POSCO Australia GP PTY LTD (POSA GP). POSCO is the registered owner of 22,948,152 Ordinary Shares and POSA GP is the registered owner of 112,044,320 Ordinary Shares in the Company at the date of this report. 3 Hans-Jürgen Mende is the Executive Chairman of the AMCI Group, which has a relevant interest in AMCI Euro Holdings B.V. This entity is the registered owner of 145,845,372 Ordinary Shares in the Company at the date of this report. Mr Mende also has a relevant interest in HJM Jupiter L.P., which is the beneficial owner of 107,113,430 Ordinary Shares in the Company at the date of this report. Contracts with Directors There are no agreements with any of the Directors other than remuneration agreements. Auditor’s Independence Declaration The Lead Auditor’s Independence Declaration for the year ended 29 February 2020 has been received and can be found on pages 74 to 77 of the Annual Report. Indemnification and Insurance of Officers and Auditors Since the end of the previous financial year, Jupiter has paid premiums to insure the Directors and Officers of the Consolidated Entity. Details of the nature of the liabilities covered and the amount of premium paid in respect of Directors’ and Officers’ insurance policies preclude disclosure to third parties. Jupiter has not paid any premiums in respect of any contract insuring its auditor against a liability incurred in that role as an auditor of Jupiter. In respect of non-audit services, Grant Thornton Audit Pty Ltd, Jupiter’s auditor has the benefit of an indemnity to the extent Grant Thornton Audit Pty Ltd reasonably relies on information provided by Jupiter, which is false, misleading or incomplete. No amount has been paid under this indemnity during the financial year ending 29 February 2020 or to the date of this Report. Non-Audit Services The Board of Directors is satisfied that the provision of non-audit services during the financial year is compatible with the general standard of independence for auditors imposed by the Corporations Act 2001. The Directors are satisfied that the services disclosed below did not compromise the external auditor’s independence for the following reasons: all non-audit services are reviewed and approved by the Audit Committee prior to commencement to ensure they do not adversely affect the integrity and objectivity of the auditor; and the nature of the services provided does not compromise the general principles relating to auditor independence in accordance with APES 110: Code of Ethics for Professional Accountants set by the Accounting Professional and Ethical Standards Board. The following fees were paid or payable to Grant Thornton Australia Limited for non-audit services provided during the year ended 29 February 2020: Taxation Corporate finance $146,337 (2019: $54,081) Nil (2019: $10,000) Corporate Governance The Directors aspire to maintain the standards of Corporate Governance appropriate to Jupiter. Jupiter’s Corporate Governance Statement is set out on pages 28 to 38 of this Report. Proceedings on behalf of Jupiter No person has applied for leave of Court to bring proceedings on behalf of Jupiter or intervene in any proceedings to which Jupiter is a party for the purpose of taking responsibility on behalf of Jupiter for all or any part of those proceedings. Jupiter was not a party to any such proceedings during the year. The Consolidated Entity was not a party to any such proceedings during the reporting year. This report is signed in accordance with a resolution of the Board of Directors. Priyank Thapliyal Guernsey 27 May 2020 Directors’ Report 2 1 ANNUAL REPORT 2020 Remuneration Report LETTER FROM REMUNERATION AND NOMINATION COMMITTEE CHAIRMAN Dear Shareholders I am pleased to present the 2020 Remuneration Report for Jupiter Mines Limited. The Company’s 2019 Annual General Meeting was rather eventful, with a vote against Remuneration Report, resulting in a “second strike” and subsequent “Spill Resolution”, which was not passed. Unfortunately, the election to the Board of Ms Melissa North, Jupiter’s CFO and Company Secretary, was not passed. Other Director election and re-election resolutions were passed, but with a significant vote against. Jupiter met again with investors and proxy advisors both before and after the AGM to discuss the key issues, which were not changed from the prior year. The Committee and Board deliberated on the stakeholder engagement and have chosen to retain remuneration strategy, which is aligned with the shareholder return (dividend and payout ratio) strategy articulated in the IPO prospectus. The election of Mr Hans-Jürgen Mende as a Non-Executive Director, as a major shareholder representative, will further widen the Board’s skill set and experience. I would like to take this opportunity to thank all shareholders for their ongoing support of Jupiter. I recommend this remuneration report to all shareholders and proxy advisors and welcome suggestions and the opportunity to discuss it with you before or during the Annual General Meeting. Yours faithfully Paul Murray Independent Non-Executive Director Chairman, Remuneration and Nomination Committee 2 2 Remuneration Report JUPITER MINES LIMITED Remuneration Report (Audited) The Directors of Jupiter Mines Limited present the Remuneration Report for Non-Executive Directors, Executive Directors and other Key Management Personnel, prepared in accordance with the Corporations Act 2001 and the Corporations Regulations 2001. The Remuneration Report is set out under the following main headings: (a) Principles used to determine the nature and amount of remuneration (b) Details of remuneration (c) Service agreements (d) Share-based remuneration (e) Bonuses included in remuneration; and (f) Other information. a. Principles used to determine remuneration strategy and structure The principles of the Group’s executive strategy and frameworks are: to align rewards to business outcomes that deliver value to shareholders to drive a high performance culture and rewarding high performing individuals; and to ensure remuneration is competitive in the relevant employment market place to support the attraction, motivation and retention of executive talent The Board has established a Remuneration and Nomination Committee which operates in accordance with its charter as approved by the Board and is responsible for determining and reviewing compensation arrangements for the Directors and the Executive Team. The remuneration structure that has been adopted by the Group consists of the following components: fixed remuneration being annual salary; and short term incentives, being employee bonuses. The Remuneration and Nomination Committee assess the appropriateness of the nature and amount of remuneration on a periodic basis by reference to recent employment market conditions with the overall objective of ensuring maximum stakeholder benefit from the retention of a high quality Board and Executive Team. The payment of bonuses and other incentive payments are reviewed by the Remuneration and Nomination Committee annually as part of the review of executive remuneration and a recommendation is put to the Board for approval. All bonuses and incentives must be linked to pre-determined performance criteria. Short Term Incentive (STI) Jupiter performance measures involve the use of annual performance objectives. The performance measures have been set after consultation with the Directors and executives and are specifically tailored to the areas where each executive has a level of control. The measures target areas the Board believes hold the greatest potential for expansion and profit. The key performance indicators (KPIs) for the Executive Team are summarised as follows: Performance areas: Financial: net profit before tax and impairments and distributions to shareholders Non-financial: discretionary strategic and/or project based objectives set by the Board Consequences of performance on shareholder wealth In considering the Group’s performance and benefits for shareholder wealth, the Board have regard to the following items in respect of the current financial year and the previous five financial years: Item EPS ($ per share) 2020 2019 2018 2017 2016 0.0486 0.0706 0.0434 0.0902 (0.0756) Cash distributions to shareholders ($) 93,053,074 146,924,327 82,881,285 70,635,693 - Net profit/(loss) after tax ($) 95,118,503 138,033,499 92,205,663 200,099,335 (172,396,327) Share of profit/(loss) from Tshipi investment ($) 98,191,396 188,505,385 94,040,638 41,474,035 (6,936,157) Remuneration Report (Audited) 2 3 ANNUAL REPORT 2020 e c n a m r o f r e p f o % - e r a h S d e s a b g n o L e c i v r e s r e h t O & n o i t a u n n a r e p u S m r e t - t r o h s & h s a C n o i t a r e n u m e r d e t a l e r l a t o T s t n e m y a p e v a e l s t n e l a v i u q e s t fi e n e b s u n o b h s a C s e e f y r a l a s r a e Y e e y o l p m E l e n n o s r e P t n e m e g a n a M y e K r e h t O & r o t c e r i D e v i t u c e x E m r e t - g n o L t n e m y o l p m e - t s o P s t fi e n e b s t fi e n e b s t fi e n e b e e y o l p m e m r e t - t r o h S l e n n o s r e P t n e m e g a n a M y e K r e h t o & r o t c e r i D : l l w o e b e b a t e h t n i n w o h s e r a d e t i m i L s e n M i r e t i p u J f o ) P M K ( l e n n o s r e P t n e m e g a n a M y e K h c a e f o n o i t a r e n u m e r e h t l f o t n e m e e h c a e f o t n u o m a d n a e r u t a n e h t f o s l i a t e D n o i t a r e n u m e r f o s l i a t e D . b 2 4 % 7 3 5 . % 9 7 8 . % 1 . 5 2 % 1 . 7 5 - - - - - - - - - - - - - - % 7 . 1 4 % 8 . 1 8 , 1 9 2 3 3 7 , 1 - , 9 3 7 2 9 3 6 , , 6 2 7 8 9 3 6 8 4 6 3 5 , 0 0 5 2 3 1 , 0 0 5 2 3 1 , 0 0 0 6 6 , 0 0 0 6 6 , 0 0 0 0 6 , 0 0 0 0 6 , - 4 8 1 , 8 5 0 0 5 7 5 , 7 0 1 , 4 0 4 6 , 1 2 - - - , 7 5 6 9 6 4 2 , - - - - - - - - - - - - - - - - - , 7 0 7 3 5 1 , 4 - - - - - - - - - - - - - - - - - 4 2 5 0 3 , 4 2 5 0 3 , , 6 1 0 0 5 2 7 , , 7 0 7 3 5 1 , 4 - - 1 6 6 8 1 , 6 4 8 2 2 , 7 4 2 2 4 , - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 5 6 3 7 1 , 0 7 8 7 1 , , 1 1 2 5 0 3 9 , 4 4 7 6 6 7 , 3 4 2 9 6 4 , 1 9 1 9 , 1 5 7 2 0 0 0 0 0 1 , 6 5 3 5 4 2 , , 3 5 5 6 0 3 6 8 6 7 8 1 , - - - - - - - - - - - - - - 0 0 5 2 3 1 , 0 0 5 2 3 1 , 0 0 0 6 6 , 0 0 0 6 6 , 0 0 0 0 6 , 0 0 0 0 6 , - 4 8 1 , 8 5 0 0 5 7 5 , 7 0 1 , 4 0 4 6 , 1 2 - - - 7 0 5 , 1 4 7 4 2 , 2 4 5 6 3 7 1 , 0 7 8 7 1 , , 1 2 5 0 3 0 , 1 0 4 7 9 4 3 , , 1 , 6 9 7 5 7 7 , 1 , 6 9 3 0 6 2 , 1 0 2 0 2 9 1 0 2 0 2 0 2 9 1 0 2 0 2 0 2 9 1 0 2 0 2 0 2 9 1 0 2 0 2 0 2 9 1 0 2 0 2 0 2 9 1 0 2 0 2 0 2 9 1 0 2 0 2 0 2 9 1 0 2 0 2 0 2 9 1 0 2 0 2 0 2 9 1 0 2 O F C & y r a t e r c e S y n a p m o C h t r o N a s s i l e M t n e d n e p e d n i - n o N ; n a m r i a h C n o s t r e b l i G n a i r B s r o t c e r i D e v i t u c e x e - n o N l a y i l p a h T k n a y i r P O E C & r o t c e r i D t n e d n e p e d n I ; r o t c e r i D y a r r u M l u a P t n e d n e p e d n I ; r o t c e r i D l l e B w e r d n A t n e d n e p e d n i - n o N ; r o t c e r i D n o o Y n o w g n u S t n e d n e p e d n i - n o N ; r o t c e r i D o e H n i j g n o e Y t n e d n e p e d n i - n o N ; r o t c e r i D e d n e M n e g r ü J - s n a H t n e d n e p e d n i - n o N ; r o t c e r i D m e e B n a i r B l a t o T 0 2 0 2 l a t o T 9 1 0 2 . s u n o b h c a e n o s l i a t e d r o f ) e ( n o i t c e s o t r e f e r e s a e P l . d n e r a e y o t t n e u q e s b u s d e v o r p p a ; l 0 2 0 2 Y F o t g n i t a e r 4 2 9 6 4 1 $ f o s u n o B , . d n e r a e y o t t n e u q e s b u s d e v o r p p a ; 0 2 0 2 Y F o t g n i t a e r l s u n o B 1 2 Remuneration Report (Audited) JUPITER MINES LIMITED The relative proportions of remuneration that are linked to performance and those that are fixed are as follows: Executive Directors Priyank Thapliyal Melissa North c. Service agreements Fixed Remuneration At risk: Short-term incentives (STI) 46.3% 74.9% 53.7% 25.1% Remuneration and other terms of employment for the Executive Directors and other key management personnel are formalised in a Service Agreement. The major provisions of the agreements relating to remuneration are set out below: Priyank Thapliyal – Chief Executive Officer Subject Base salary Annual Bonus Confidentiality Termination Restrictive covenants Provision The Executive is entitled to receive an annual salary of £400,000 (with no pension or superannuation contributions). The Executive will be entitled to receive a bonus (Annual Bonus) equal to 1% of the value of amounts paid by way of: (i) a dividend; (ii) a distribution, payment or return of capital; or (iii) the acceptance of equal access buy-back offers made to all Shareholders, paid or made by the Company to its Shareholders at any time after the listing date until the date of termination of the Executive’s employment. The Annual Bonus is payable in cash. The Executive must keep the Company’s confidential information confidential, except in certain circumstances, including where the disclosure is required by law or the Company provides prior written consent. The Company may terminate the Executive’s employment by giving 6 months’ written notice and payment of an amount equal to 6 months’ salary and the amount of Annual Bonus paid in the 12 months prior to termination. The Company may make payment in lieu of notice, comprising an amount of up to 12 months’ salary and the amount of Annual Bonus paid in the 12 months prior to termination. The Company may otherwise terminate the employment immediately for misconduct or other matters that are usual grounds for summary dismissal. The Executive may terminate the Executive’s employment by giving 6 months’ written notice. In the event of a change of control (within the meaning of section 50AA of the Corporations Act) and diminution in the duties and responsibilities of the Executive as a chief executive officer of a public listed company, the Executive may elect to terminate the employment and become entitled to receive a payment equal to 12 months’ salary and the amount of Annual Bonus paid in the 12 months prior to termination. The Executive is subject to post-employment restraints on engaging in a business for the production, purchase, sale or marketing of manganese ore, and soliciting the employees, suppliers or clients of the Company or Tshipi é Ntle. The restraint has potential effect globally for up to 6 months following termination of employment. Remuneration Report (Audited) 2 5 ANNUAL REPORT 2020 Melissa North – Chief Financial Officer and Company Secretary Subject Base salary Annual Bonus Other entitlements Confidentiality Provision The Executive is entitled to receive an annual salary of $257,600 inclusive of superannuation. Following the end of each financial year commencing after 28 February 2018, and the Executive being employed at the date of release of the Company’s financial statements for the financial year to which the bonus relates, the Executive may be entitled to an annual bonus of an amount to be determined by the Board in its absolute discretion. The Executive is entitled to a computer and mobile phone allowance, and reimbursement of all out of pocket expenses necessarily incurred by the Chief Financial Officer in the performance of her duties, including expenses relating to entertainment, meals and travelling. The Executive must keep the Company’s confidential information confidential, except in certain circumstances, including where the disclosure is required by law or the Company provides prior written consent. Termination The Company may terminate the Executive’s employment by giving 3 months’ written notice. The Company may make payment in lieu of notice. The Company may otherwise terminate the employment immediately for misconduct or other matters that are usual grounds for summary dismissal. The Executive may terminate the Executive’s employment by giving 3 months’ written notice. In the event of a change of control (within the meaning of section 50AA of the Corporations Act) and diminution in the duties and responsibilities of the Executive as a chief financial officer and company secretary of a public listed company, the Executive may elect to terminate the employment and become entitled to receive a payment equal to 6 months’ salary and the amount of Annual Bonus paid in the 12 months prior to termination. Restrictive covenants The Executive is subject to post-employment restraints on soliciting the Company’s employees, suppliers or clients. The restraint has potential effect globally for up to 6 months following termination of employment. d. Share-based remuneration The Company has not granted any share-based remuneration and does not plan to adopt any such remuneration plans. e. Bonuses included in remuneration Details of the short-term incentive cash bonuses awarded as remuneration to each key management personnel, the percentage of the available bonus that was paid in the financial year, and the percentage that was forfeited because the person did not meet the service and performance criteria is set out below. No part of the bonus is payable in future years. Executive Grant date Nature of compensation Service or performance criteria Financial year related to Included in remuneration ($) Percentage vested during the year Percentage forfeited during the year Priyank Thapliyal 31 October 2019 Cash bonus 29 April 2020 Cash bonus 17 September 2018 Cash bonus 19 February 2019 Cash bonus Distribution of cash to shareholders Distribution of cash to shareholders Distribution of cash to shareholders Distribution of cash to shareholders 2020 783,596 100% 2020 146,9241 100% 2019 979,496 100% 2019 489,748 100% - - - - 2 6 Remuneration Report (Audited) JUPITER MINES LIMITED Executive Grant date Nature of compensation Service or performance criteria Financial year related to Included in remuneration ($) Percentage vested during the year Percentage forfeited during the year 2020 100,0001 100% 2019 40,000 100% 2019 141,553 100% 2019 125,000 100% - - - - Melissa North 24 March 2020 Cash bonus 19 March 2018 Cash bonus 18 April 2018 Cash bonus 28 February 2019 Cash bonus 1 Subsequent to year end. f. Other information Discretionary financial year bonus, to be employed at date of release of 2020 financial statements Completion of March 2018 share buy-back Listing of Jupiter Mines on ASX Discretionary financial year bonus, to be employed at date of release of 2019 financial statements Shares held by directors and key management personnel The number of ordinary shares in the Company during the 2020 reporting period held by each of the Group’s key management personnel, including their related parties, is set out below: Director Brian Gilbertson Andrew Bell1 Paul Murray Priyank Thapliyal Yeongjin Heo2 Hans-Jürgen Mende3 Brian Beem Melissa North Balance at start of year Granted as remuneration Other changes Held at the end of reporting period 145,845,372 18,524,914 1,190,000 33,939,917 134,992,472 - - - - - - - - - - - (145,645,372) (1,500,000) - 200,000 17,024,914 1,190,000 23,497,667 57,437,584 - 134,992,472 252,958,802 252,958,802 176,950 - 176,950 - 1 Andrew Bell as the Chairman and Director of Red Rock Resources plc has a relevant interest in Red Rock Resources plc (RRR). RRR is the beneficial owner of 17,024,914 Ordinary Shares in the Company at balance date. 2 Yeongjin Heo as Managing Director of POSCO Australia Pty Ltd, has a relevant interest in POSCO Australia Pty Ltd (POSCO) and POSCO Australia GP PTY LTD (POSA GP). POSCO is the registered owner of 22,948,152 Ordinary Shares and POSA GP is the registered owner of 112,044,320 Ordinary Shares in the Company at balance date. 3 Hans-Jürgen Mende as Executive Chairman of the AMCI Group, which has a relevant interest in AMCI Euro Holdings B.V. This entity is the registered owner of 145,845,372 Ordinary Shares in the Company at balance. Mr Mende also has a relevant interest in HJM Jupiter L.P, which is the beneficial owner of 107,113,430 Ordinary Shares in the Company at balance date. None of the shares included in the table above are held nominally by key management personnel. Other transactions with key management personnel There were no other material transactions with key management personnel for 2020 or 2019. End of Audited Remuneration Report Remuneration Report (Audited) 2 7 ANNUAL REPORT 2020 Corporate Governance Statement 1. Overview The Company’s Board of Directors (the “Board”) is responsible for the overall corporate governance of the Company, and it recognises the need for the highest standards of ethical behaviour and accountability. It is committed to administering its corporate governance structures to promote integrity and responsible decision-making. Accordingly, where appropriate the Company has sought to adopt the ‘Corporate Governance Principles and Recommendations’ (Third Edition) (ASX Recommendations) published by the ASX Corporate Governance Council. The corporate governance principles and practices adopted by the Company may depart from those generally applicable to ASX- listed companies under ASX Recommendations where the Board considers compliance is not appropriate having regard to the nature and size of the Company’s business and operations. The Company sets out below its “if not why not” report in relation to those matters of corporate governance where the Company’s practice departs from the ASX Recommendations, to the extent that they are currently applicable to the Company. This statement is current as at 27 May 2020 and has been approved by the Board. 2. ASX Corporate Governance Principles and Recommendations Principle ASX Recommendation Comply Comments Principle 1 – Lay solid foundation for management and oversight 1.1 A listed entity should disclose: Yes (a) the respective roles and responsibilities of its board and management; and (b) those matters expressly reserved to the board and those delegated to management. Jupiter has adopted a Board Charter that discloses the role and responsibilities of the Board. Under the Board Charter, the Board is responsible for the overall operation and stewardship of the Company and, in particular, is responsible for: oversight of control and accountability systems; appointing and removing the Chief Executive Officer, Chief Financial Officer and Company Secretary; approving the annual operating budget; approving and monitoring the progress of major capital and operating expenditure; monitoring compliance with all legal and regulatory obligations; reviewing any risk management system (which may be a series of systems established on a per-project basis); monitoring any executive officer’s performance; and approving and monitoring financial and other reporting to the market, shareholders of the Company (Shareholders), employees and other stakeholders. A copy of the Board Charter can be found on the Company’s website at www.jupitermines.com/about-us/corporate-governance 2 8 Corporate Governance Statement JUPITER MINES LIMITED Principle ASX Recommendation Comply Comments 1.2 A listed entity should: Yes (a) undertake appropriate checks before appointing a person, or putting forward to security holders a candidate for election, as a director; and (b) provide security holders with all material information in its possession relevant to a decision on whether or not to elect or re- elect a director. Jupiter conducts background checks of candidates for the position of director of the Company (Director) prior to their appointment or nomination for election by Shareholders, including checks as to good character, experience, education, qualifications, criminal history and bankruptcy. The Company does not propose to conduct specific checks prior to nominating an existing Director for re-election by Shareholders at a general meeting on the basis that each incumbent Director is required to submit to the ASX ‘good fame and character’ assessment during the Company’s admission to the official list of ASX. As a matter of practice, Jupiter includes in its notices of meeting a brief biography and other material information in relation to each Director who stands for election or re-election, including relevant qualifications and professional experience of the nominated Director for consideration by Shareholders. 1.3 1.4 A listed entity should have a written agreement with each director and senior executive setting out the terms of their appointment. The company secretary of a listed entity should be accountable directly to the board, through the chair, on all matters to do with the proper functioning of the board. Yes Yes The Company has entered into an employment contract with Priyank Thapliyal, the Company’s Chief Executive Officer, and Melissa North, the Company’s Chief Financial Officer, who are engaged on a full-time basis. The Company has entered into letters of engagement with each of its non-executive Directors setting out the key terms and conditions of their engagement. The Company Secretary reports directly, and is accountable, to the Board through the Chairman of the Board (Chairman) in relation to all governance matters. The Company Secretary also advises and supports the Board to implement adopted governance procedures and co-ordinates the circulation of meeting agendas and papers. Corporate Governance Statement 2 9 ANNUAL REPORT 2020 Principle ASX Recommendation Comply Comments Given the Company’s main asset is its interest in the Tshipi Borwa Manganese Mine (Tshipi Project), which it holds through its indirect 49.9% interest in Tshipi é Ntle, and Jupiter itself has few employees, Jupiter has not adopted a formal diversity policy at this stage. The Company appointed its first female Director to the Board on 14 March 2019, however this appointment was not approved by shareholders and Ms North was removed from the Board on 29 July 2019. The Company has a policy to select the best available officers and staff for each relevant position in a non-discriminatory manner based on merit. Notwithstanding this, the Board respects and values the benefits that diversity (e.g. gender, age, ethnicity, cultural background, disability and martial/family status etc.) brings in relation to expanding the Company’s perspective and thereby improving corporate performance, increasing Shareholder value and maximising the probability of achieving the Company’s objectives. The Board is committed to developing a diverse workplace where appointments or advancements are made on a fair and equitable basis. 1.5 A listed entity should: No (a) have a diversity policy which includes requirements for the board or a relevant committee of the board to set measurable objectives for achieving gender diversity and to assess annually both the objectives and the entity’s progress in achieving them; (b) disclose that policy or a summary of it; and (c) disclose as at the end of each reporting period the measurable objectives for achieving gender diversity set by the board or a relevant committee of the board in accordance with the entity’s diversity policy and its progress towards achieving them, and either: (i) the respective proportions of men and women on the board, in senior executive positions and across the whole organisation (including how the entity has defined “senior executive” for these purposes); or (ii) if the entity is a “relevant employer” under the Workplace Gender Equality Act, the entity’s most recent “Gender Equality Indicators”, as defined in and published under that Act. 1.6 A listed entity should: Yes (a) have and disclose a process for periodically evaluating the performance of the board, its committees and individual directors; and (b) disclose, in relation to each reporting period, whether a performance evaluation was undertaken in the reporting period in accordance with that process. The Remuneration and Nomination Committee is responsible for the evaluation of the Board’s performance and its individual Directors. Jupiter has also adopted in its Board Charter a commitment to review its own performance at intervals considered appropriate by the Chairman. The same performance review mechanism is also present in the Audit Committee and Remuneration and Nomination Committee Charters. Jupiter will continue to disclose if and when it has conducted any performance evaluations. 3 0 Corporate Governance Statement JUPITER MINES LIMITED Principle ASX Recommendation Comply Comments 1.7 A listed entity should: (a) have and disclose a process for periodically evaluating the performance of its senior executives; and (b) disclose, in relation to each reporting period, whether a performance evaluation was undertaken in the reporting period in accordance with that process. Yes The Board is responsible for monitoring the performance of executive officers. The Board has established policies to ensure that Jupiter remunerates fairly and responsibly. The Company designed its remuneration policy to ensure that the level and composition of remuneration is competitive, reasonable and appropriate to attract and maintain Directors with the requisite skills and experience to guide the Company towards achieving its objectives. Jupiter will continue to disclose if and when it has conducted any performance evaluations. Principle 2 – Structure the board to add value 2.1 The board of a listed entity should: Yes The Board has established a Remuneration and Nomination Committee (RN Committee). The RN Committee Charter discloses the RN Committee’s role and responsibilities. The RN Committee presently consists of Paul Murray, Andrew Bell and Brian Gilbertson. Mr Murray, Mr Bell and Mr Gilbertson are independent and non-executive Directors. Mr Murray is the chairman of the RN Committee. Jupiter will continue to disclose at the end of each reporting period the number of times the RN Committee met throughout the relevant period. The RN Committee Charter is available on Jupiter’s website at www.jupitermines.com/about-us/corporate-governance (a) have a nomination committee which: (i) has at least three members, a majority of whom are independent directors; and (ii) is chaired by an independent director, and disclose: (iii) the charter of the committee; (iv) the members of the committee; and (v) as at the end of each reporting period, the number of times the committee met throughout the period and the individual attendances of the members at those meetings; or (b) if it does not have a nomination committee, disclose that fact and the processes it employs to address board succession issues and to ensure that the board has the appropriate balance of skills, knowledge, experience, independence and diversity to enable it to discharge its duties and responsibilities effectively. A listed entity should have and disclose a board skills matrix setting out the mix of skills and diversity that the board currently has or is looking to achieve in its membership. 2.2 No Jupiter does not currently have a skills or diversity matrix in relation to its Board members. The Board considers that such a matrix is not necessary given the current state of operations. The RN Committee is presently responsible for ensuring the Directors have the appropriate mix of competencies to enable the Board to discharge its responsibilities effectively. The Board may adopt such a matrix later as the Company’s operations evolve. Corporate Governance Statement 3 1 ANNUAL REPORT 2020 Principle ASX Recommendation Comply Comments The Board considers that Mr Paul Murray ,Mr Andrew Bell and Mr Brian Gilbertson are independent Directors because they are free from any business or other relationship with the Company that could materially interfere with, or reasonably be perceived to materially interfere with, the independent exercise of their judgement as Directors. The Company appointed Mr Murray as a Director on 4 August 2003, Mr Bell on 19 May 2008, and Mr Gilbertson on 22 June 2010. Mr Gilbertson was re-classified as Independent following Pallinghurst Consolidated (Cayman) Limited’s sale of all Jupiter shares. 2.3 A listed entity should disclose: Yes (a) the names of the directors considered by the board to be independent directors; (b) if the director has an interest, position, association or relationship of the type described in Box 2.3 but the board is of the opinion that it does not compromise the independence of the director, the nature of interest, position, association or relationship in question and an explanation of why the board is of that opinion; and (c) the length of service of each director. 2.4 A majority of the board of a listed entity should be independent directors. No A majority of the Board are not independent Directors. Three of the Board’s six Directors, being Mr Paul Murray, Mr Andrew Bell and Mr Brian Gilbertson are considered independent. The Company does not consider Mr Yeongjin Heo independent because he is the managing director of POSCO Australia Pty Ltd, a significant shareholder of Jupiter. The Company does not consider Mr Priyank Thapliyal independent because Jupiter employs him in an executive capacity, as the Company’s Chief Executive Officer. The Company does not consider Mr Hans Mende independent because of his association with AMCI Euro Holdings B.V., a significant shareholder of Jupiter. The Company believes that the current structure of the Board is the most appropriate given the size and current operations of the Company. 2.5 The chair of the board of a listed entity should be an independent director and, in particular, should not be the same person as the CEO of the entity. Yes The Chairman, Mr Brian Gilbertson, is an independent Director. The Board believes Mr Gilbertson’s experience and industry knowledge makes him the most appropriate person to lead the Board. Mr Priyank Thapliyal is the Chief Executive Officer and is not the Chairman. 3 2 Corporate Governance Statement JUPITER MINES LIMITED Principle ASX Recommendation Comply Comments 2.6 A listed entity should have a program for inducting new directors and provide appropriate professional development opportunities for directors to develop and maintain the skills and knowledge needed to perform their role as directors effectively. Principle 3 – Act ethically and responsibly 3.1 A listed entity should have a code of conduct for its directors, senior executives and employees and disclose that code or a summary of it. Yes Induction program When a Director is appointed, they receive with their appointment letter a copy of the Company’s constitution, corporate governance policies and charters. The contents of this due diligence pack contain sufficient information to allow the new Director to gain an understanding of the rights, duties, responsibilities and role of the Board, Board committees and the executive team. The Company Secretary arranges for new Directors to undertake an induction program to enable them to gain an understanding of: the Company’s operations and the industry sectors in which it operates; the Company’s financial, strategic, operational and risk management position; their rights, duties and responsibilities; and any other relevant information. As part of this induction program, a new Director will meet with all incumbent Directors (if this has not already taken place). Director development In order to achieve continuing improvement in Board performance, all Directors are encouraged to undergo continual professional development. Yes The Board believes that the success of Jupiter has been, and will continue to be, enhanced by a strong ethical culture within the organisation. Jupiter has a Code of Conduct and Ethics (Code) which sets the standards that all Directors, officers, employees, consultants and contractors and all other people representing the Company are expected to comply with in relation to all commercial operations. The Code also outlines the procedure for reporting any breaches of the Code and the possible disciplinary action the Company may take in respect of any breaches. In addition to their obligations under the Corporations Act 2001 (Cth) (Corporations Act) in relation to inside information, all Directors, employees and consultants have a duty of confidentiality to Jupiter in relation to confidential information they possess. In fulfilling their duties, each Director dealing with corporate governance matters may obtain independent professional advice at Jupiter’s expense after consultation with the Chairman. The Company ensures that all incumbent and new personnel have a copy of the Code. It is also available on Jupiter’s website at www.jupitermines.com/about-us/corporate-governance Corporate Governance Statement 3 3 ANNUAL REPORT 2020 Principle ASX Recommendation Comply Comments Principle 4 – Safeguard integrity in corporate reporting 4.1 The board of a listed entity should: Yes The Company has established an Audit Committee to assist the Board in its oversight responsibilities in relation to financial management and reporting, external audit and financial risk management of the Company and safeguarding the independence of the external auditor. The Audit Committee Charter sets out the functions, operating mechanisms and responsibilities of the Audit Committee. The Audit Committee presently consists of Paul Murray, Andrew Bell and Mr Yeongjin Heo. Mr Murray and Mr Bell are both independent and non-executive. Mr Murray acts as the chairman of the Audit Committee. The Audit Committee Charter also requires that all committee members have a working familiarity with basic accounting and finance practices and that at least one member have financial expertise. A copy of the Audit Committee Charter is available on Jupiter’s website at www.jupitermines.com/about-us/corporate-governance (a) should have an audit committee which: (i) has at least three members, all of whom are non- executive directors and a majority of whom are independent directors; and (ii) is chaired by an independent director, who is not the chair of the board, and disclose: (iii) the charter of the committee; (iv) the relevant qualifications and experience of the members of the committee; and (v) in relation to each reporting period, the number of times the committee met throughout the period and the individual attendances of the members at those meetings, or (b) if it does not have an audit committee, disclose that fact and the processes it employs that independently verify and safeguard the integrity of its corporate reporting, including the processes for the appointment and removal of the external auditor and the rotation of the audit engagement partner. The board of a listed entity should, before it approves the entity’s financial statements for a financial period, receive from its CEO and CFO a declaration that, in their opinion, the financial records of the entity have been properly maintained and that the financial statements comply with the appropriate accounting standards and give a true and fair view of the financial position and performance of the 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. A listed entity that has an AGM should ensure that its external auditor attends its AGM and is available to answer questions from security holders relevant to the audit. 4.2 4.3 3 4 Yes As a matter of practice, Jupiter obtains declarations from its Chief Executive Officer and Chief Financial Officer substantially in the form referred to in Recommendation 4.2 before approving its financial statements. Yes In accordance with the Company’s constitution and the applicable provisions of the Corporations Act, the Company requests its external auditor to attend each annual general meeting and be available to answer shareholder questions about the conduct of the audit and the preparation and content of the auditor’s report. Corporate Governance Statement JUPITER MINES LIMITED Principle ASX Recommendation Comply Comments Principle 5 – Make timely and balanced disclosure 5.1 A listed entity should have a written policy for complying with its continuous disclosure obligations under the Listing Rules and disclose that policy or a summary of it. Principle 6 – Respect the rights of security holders A listed entity should provide information about itself and its governance to investors via its website. A listed entity should design and implement an investor relations program to facilitate effective two- way communication with investors. 6.1 6.2 6.3 Yes Jupiter has adopted a Continuous Disclosure Policy. Jupiter is a “disclosing entity” pursuant to section 111AR of the Corporations Act and, as such, is required to comply with the continuous disclosure requirements of Chapter 3 of the Listing Rules and section 674 of the Corporations Act. The Company is committed to observing its disclosure obligations under the Corporations Act and its obligations under the Listing Rules. The Company will post all announcements provided to ASX on its website. A copy of the Continuous Disclosure Policy is available on Jupiter’s website at www.jupitermines.com/about-us/corporate-governance Yes Yes Information about Jupiter and its corporate governance, including copies of the Company’s various corporate governance policies and charters, are available on its website at www.jupitermines.com/about-us Jupiter has adopted a Shareholder Communications Policy to promote effective communication with Shareholders, ensure all relevant information is disseminated to Shareholders effectively and to encourage the participation of Shareholders at Company general meetings. The Company communicates with Shareholders: through releases to the market via the ASX; through Jupiter’s website; through information provided directly to Shareholders; and at general meetings. A listed entity should disclose the policies and processes it has in place to facilitate and encourage participation at meetings of security holders. Yes Jupiter supports Shareholder participation in general meetings and seeks to provide appropriate mechanisms for such participation, including by ensuring that meetings are held at convenient times and places to encourage Shareholder participation. In preparing for general meetings, Jupiter drafts the notice of meeting and related explanatory information so that they provide all of the information that is relevant to Shareholders in making decisions on matters to be voted on by them at the meeting. This information is presented clearly and concisely so that it is easy to understand and not ambiguous. Jupiter uses general meetings as a tool to effectively communicate with Shareholders and allow Shareholders a reasonable opportunity to ask questions of the Board of Directors and to participate in the meeting. Mechanisms for encouraging and facilitating Shareholder participation are reviewed regularly to encourage the highest level of Shareholder participation. Corporate Governance Statement 3 5 ANNUAL REPORT 2020 Principle ASX Recommendation Comply Comments 6.4 A listed entity should give security holders the option to receive communications from, and send communications to, the entity and its security registry electronically. Yes Jupiter considers that communicating with Shareholders by electronic means is an efficient way to distribute information in a timely and convenient manner. Jupiter provides new Shareholders with the option to receive communications from Jupiter electronically and encourages them to do so. Existing Shareholders are also encouraged to request communications electronically. Jupiter will provide all Shareholders that have opted to receive communications electronically with notifications when it uploads an announcement or other communication (including an annual reports and notice of meeting) to the ASX announcements platform. Principle 7 – Recognise and manage risk 7.1 The board should: No Jupiter does not have a separate risk management committee. (a) have a committee or committees to oversee risk, each of which: (i) has at least three members, a majority of whom are independent directors; and (ii) is chaired by an independent director, and disclose: (iii) the charter of the committee; (iv) the members of the committee; and (v) as at the end of each reporting period, the number of times the committee met throughout the period and the individual attendances of the members at those meetings; or (b) if it does not have a risk committee or committees that satisfy (a) above, disclose that fact and the processes it employs for overseeing the entity’s risk management framework. The board or a committee of the board should review the entity’s risk management framework at least annually to satisfy itself that it continues to be sound; and disclose, in relation to each reporting period, whether such a review has taken place. 7.2 3 6 The Board as a whole is broadly responsible for risk management, including the review of any risk management system or series of systems that may be implemented by management on a per-project basis. The Audit Committee is responsible for the management of financial risk. The Board considers that, given the Company’s current scope of operations and the fact that only Mr Thapliyal holds an executive position, efficiencies or other benefits would not be gained by establishing a separate risk management committee at present. As the Company’s operations evolve, the Board will reconsider the appropriateness of forming a separate risk management committee. Yes The Board has responsibility for the monitoring of risk management and reviews the Company’s risk management framework on an annual basis to ensure that the framework continues to be effective. The Company will continue to disclose the outcome of the annual risk management review in its annual reports. Corporate Governance Statement JUPITER MINES LIMITED Principle ASX Recommendation Comply Comments 7.3 A listed entity should disclose: Yes (a) if it has an internal audit function, how the function is structured and what role it performs; or (b) if it does not have an internal audit function, that fact and the processes it employs for evaluating and continually improving the effectiveness of its risk management and internal control processes. Jupiter does not currently have an internal audit function. This function is undertaken by relevant staff under the direction of the Board. The Company has adopted internal control procedures, including the following: the Company has authorisation limits in place for expenditure and payments; a Director or senior manager must not approve a payment to themselves or a related party, other than standard salary/ directors fees in accordance with their Board approved remuneration; the Company prepares cash flow forecasts which include materiality thresholds and which are regularly reviewed; and the Company regularly reviews its other financial materiality thresholds. The Board and senior management are charged with evaluating and considering improvements to the Company’s risk management and internal control processes on an ongoing basis. The Board considers that an internal audit function is not currently necessary given the current size and scope of the Company’s operations. As the Company’s operations evolve, the Board will reconsider the appropriateness of adopting an internal audit function. 7.4 A listed entity should disclose whether it has any material exposure to economic, environmental and social sustainability risks and, if it does, how it manages or intends to manage those risks. Yes Jupiter’s primary business is the production and export of manganese via its 49.9% beneficial interest in the Tshipi Project in South Africa. As such, the Company is exposed to the unique risks to which Tshipi é Ntle is exposed. This includes, but is not limited to, the following key risks: fluctuations in the price of manganese ore; fluctuations in third party contractor costs; any reduction in the global demand for steel; risks arising from mining operations being concentrated at one mine; economic, political or social instability in South Africa may effect operations or profits; and a range of other economic, environmental and social sustainability risks faced by all other mining industry companies in an open economy. Corporate Governance Statement 3 7 ANNUAL REPORT 2020 Principle ASX Recommendation Comply Comments Principle 8 – Remunerate fairly and responsibly 8.1 The board of a listed entity should have a remuneration committee which: (a) has at least three members, a majority of whom are independent directors; (b) is chaired by an independent director, and disclose: (c) the charter of the committee; (d) the members of the committee; and (e) as at the end of each reporting period, the number of times the committee met throughout the period and the individual attendances of the members at those meetings. Yes The Company has established a RN Committee to assist the Board in fulfilling its responsibilities with respect to: remuneration policies for non–executive Directors; remuneration policies for executive Directors; remuneration policies for executive management; equity participation; human resources policies; and any other matters referred to the RN Committee by the Board. The RN Committee Charter sets out the functions, operating mechanisms and responsibilities of the committee. The RN Committee presently consists of Paul Murray, Andrew Bell and Brian Gilbertson, who are independent and non-executive directors. Mr Murray acts as the chairman of the RN Committee. Jupiter will continue to disclose at the end of each reporting period the number of times the committee met throughout the relevant period. A copy of the RN Committee Charter is available on Jupiter’s website at www.jupitermines.com/about-us/corporate-governance 8.2 8.3 A listed entity should separately disclose its policies and practices regarding the remuneration of non-executive directors and the remuneration of executive directors and other senior executives. A listed entity which has an equity-based remuneration scheme should have a policy on whether participants are permitted to enter into transactions (whether through the use of derivatives or otherwise) which limit the economic risk of participating in the scheme; and disclose that policy or a summary of it. Yes Jupiter’s policies and practices regarding the remuneration of executive and non-executive Directors and other senior executives will be set out in the remuneration report contained in Jupiter’s annual report for each financial year. Furthermore, Jupiter’s remuneration policies and practices are subject to review by the RN Committee, as set out in the Company’s RN Committee Charter. Yes Jupiter’s Share Trading Policy states the requirements for all Directors, executives, employees, contractors and consultants of the Company dealing in the Company’s Securities. The policy provides that Directors and senior executives must not at any time enter into a transaction (e.g. writing a call option) that operates or is intended to operate to limit the economic risk of holdings of unvested Jupiter securities under any equity-based remuneration schemes offered by the Company. A copy of the Share Trading Policy is available on Jupiter’s website at www.jupitermines.com/about-us/corporate-governance 3 8 Corporate Governance Statement JUPITER MINES LIMITED Annual Financial Report FOR THE YEAR ENDED 29 FEBRUARY 2020 ABN 51 105 991 740 CONSOLIDATED ENTITY Statement of Consolidated Profit or Loss and Other Comprehensive Income FOR THE YEAR ENDED 29 FEBRUARY 2020 Consolidated Group Note February 2020 $ February 2019 $ Revenue Gross profit Other income Employee benefits expense Depreciation of property, plant and equipment Amortisation of intangible assets Administrative expenses Other expenses Profit from operations Share of profit from joint venture entities using the equity method Reversal of impairment of exploration and evaluation assets 2 2 17 10 11 4 14 13 10,358,857 10,358,857 660,096 (2,533,112) (2,427) (4,086) (77,905) (4,264,161) 4,137,262 98,191,396 - 1,188,810 (476,780) 885,403 13,116,608 13,116,608 645,559 (7,462,473) (763) 2,740 (87,404) (3,920,195) 2,294,072 188,505,385 1,177,243 980,907 (578,223) (3,329,515) Finance income Finance costs Foreign exchange gain/(loss) Profit before income tax Income tax expense 103,926,091 189,049,869 3 (8,807,588) (51,016,370) Net profit attributable to members of parent entity 95,118,503 138,033,499 Other comprehensive income Items that may be subsequently transferred to profit or loss: Translation of foreign currency financial statements Items not to be reclassified to profit or loss in subsequent periods: Change in the fair value of equity instruments carried at FVOCI 19 19 Other comprehensive loss for the period, net of tax Total comprehensive income for the period Profit for the year attributable to: Owners of the parent Total comprehensive loss attributable to: Owners of the parent Overall Operations Basic earnings per share Diluted earnings per share (18,314) (310,412) (217,535) (235,849) (496,638) (807,050) 94,882,654 137,226,449 94,882,654 137,226,449 (235,849) (807,050) 0.0486 0.0486 0.0706 0.0706 The Statement of Profit or Loss and Other Comprehensive Income should be read in conjunction with the accompanying notes. 4 0 Statement of Consolidated Profit or Loss and Other Comprehensive Income JUPITER MINES LIMITED Statement of Consolidated Financial Position AS AT 29 FEBRUARY 2020 ASSETS CURRENT ASSETS Cash and cash equivalents Trade and other receivables Other current assets TOTAL CURRENT ASSETS NON-CURRENT ASSETS Equity instruments at fair value through other comprehensive income Property, plant and equipment Intangible assets Investments accounted for using the equity method Exploration and evaluation assets Deferred tax asset TOTAL NON-CURRENT ASSETS TOTAL ASSETS LIABILITIES CURRENT LIABILITIES Trade and other payables Dividend payable Employee benefits TOTAL CURRENT LIABILITIES NON-CURRENT LIABILITIES Deferred tax liability TOTAL NON-CURRENT LIABILITIES TOTAL LIABILITIES NET ASSETS EQUITY Issued capital Reserves Accumulated profits/(losses) TOTAL EQUITY Consolidated Group Note February 2020 $ February 2019 $ 6 7 12 8 10 11 14 13 3 15 16 3 18 19 29,285,067 72,848,680 40,357,267 85,369,828 57,884 57,884 69,700,218 158,276,392 329,528 547,064 4,721 3,131 4,965 7,217 437,601,406 422,841,742 11,774,238 10,800,000 633,417 1,355,163 450,346,441 435,556,151 520,046,659 593,832,543 37,619,369 - 218,029 84,082,617 48,974,776 125,078 37,837,398 133,182,471 56,192,897 56,192,897 51,156,721 51,156,721 94,030,295 184,339,192 426,016,364 409,493,351 410,435,400 410,435,400 62,604 298,453 15,518,360 (1,240,502) 426,016,364 409,493,351 The above Statement of Financial Position should be read in conjunction with the accompanying notes. Statement of Consolidated Financial Position 4 1 ANNUAL REPORT 2020 Statement of Consolidated Changes in Equity FOR THE YEAR ENDED 29 FEBRUARY 2020 Ordinary Issued Capital $ Foreign Currency Translation Reserve $ Equity Instruments at FVOCI Reserve $ Note Financial Assets Reserve $ Accumulated Profits/ (Losses) $ Total $ Balance at 1 March 2018 433,003,602 268,608 - - 836,896 32,048,590 466,157,696 - 138,033,499 138,033,499 Profit attributable to members of parent entity Change in accounting policy arising from AASB 9 Total other comprehensive loss for the year Total comprehensive income for the year Shares bought back Equity share based payments - - - - 18 18 (26,721,909) 4,153,707 Dividends paid/declared - - - - - - - - - 836,896 (836,896) (310,412) (496,638) - - - - (807,050) (310,412) 340,257 (836,896) 138,033,499 137,226,449 Balance as at 28 February 2019 410,435,400 (41,804) 340,257 Profit attributable to members of parent entity Total other comprehensive loss for the year Total comprehensive income for the year Dividends paid/declared - - - - - - (18,314) (217,535) (18,314) (217,535) - - Balance as at 29 February 2020 410,435,400 (60,118) 122,722 The Statement of Changes in Equity should be read in conjunction with the accompanying notes. - - - - - - - - - (24,398,266) (51,120,175) - 4,153,707 (146,924,327) (146,924,327) (1,240,502) 409,493,351 95,118,503 95,118,503 - (235,849) 95,118,503 94,882,654 (78,359,641) (78,359,641) 15,518,360 426,016,364 4 2 Statement of Consolidated Changes in Equity JUPITER MINES LIMITED Statement of Consolidated Cash Flows FOR THE YEAR ENDED 29 FEBRUARY 2020 CASH FLOWS FROM OPERATING ACTIVITIES Payments to suppliers and employees Receipts from customers Income taxes paid Net cash used in operating activities CASH FLOWS FROM INVESTING ACTIVITIES Purchase of property, plant and equipment Purchase of intangible assets Payments for exploration and evaluation of mining reserves Dividend received from investments Interest received Taxes paid Net cash from investing activities CASH FLOWS FROM FINANCING ACTIVITIES Share buy-backs Dividend paid Net cash used in financing activities Consolidated Group Note February 2020 $ February 2019 $ 23 10 11 14 18 (12,825,698) (8,264,623) 14,190,076 15,790,578 (2,692,358) (8,207,440) (1,327,980) (681,485) (2,183) - (974,238) (4,518) (2,492) (919,011) 83,431,732 150,918,449 1,158,122 318,997 - (4,187,458) 83,613,433 146,123,967 - (51,120,175) (127,334,417) (97,949,552) (127,334,417) (149,069,727) Net decrease in cash and cash equivalents held (45,048,964) (3,627,245) Cash and cash equivalents at beginning of financial period 6 72,848,680 76,544,487 Effect of exchange rates on cash holdings in foreign currencies 1,485,351 (68,562) Cash and cash equivalents at the end of the financial period 29,285,067 72,848,680 The Statement of Cash Flows should be read in conjunction with the accompanying notes. Statement of Consolidated Cash Flows 4 3 ANNUAL REPORT 2020 Notes to the Consolidated Financial Statements FOR THE YEAR ENDED 29 FEBRUARY 2020 NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES These consolidated financial statements and notes represent those of Jupiter Mines Limited (“Jupiter”) and its Controlled Entities (the “Consolidated Group” or “Group”). The principal activities of Jupiter during the year have been investment in the operating Tshipi Borwa Manganese Mine in South Africa and the sale of manganese ore. The separate financial statements of the parent entity, Jupiter Mines Limited, have not been presented within this financial report as permitted by the Corporations Act 2001. The financial statements were authorised and issued by the Board of Directors on 27 May 2020. Basis of Preparation These general purpose financial statements have been prepared in accordance with Australian Accounting Standards, Interpretations, other authoritative Australian Accounting pronouncements of the Australian Accounting Standards Board (AASB) and the Corporations Act 2001. Australian Accounting Standards set out accounting policies that the AASB has concluded 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 statements and notes also comply with International Financial Reporting Standards. Material accounting policies adopted in the preparation of this financial report are presented below and have been consistently applied unless otherwise stated. The financial report has been prepared on an accruals basis and is based on historical costs, modified, where applicable, by the measurement at fair value of selected non-current assets, financial assets and financial liabilities. All amounts in the financial report have been rounded to the nearest dollar. Tables may not cast in all instances due to rounding. Jupiter Mines Limited is a for-profit entity for the purpose of preparing the financial statements. a. Principles of Consolidation The Group financial statements consolidate those of the Parent Company and all its subsidiaries as of 29 February 2020. The parent controls a subsidiary if it is exposed, or has rights, to variable returns from its involvement with the subsidiary and has the ability to affect those returns through its power over the subsidiary. All subsidiaries have a reporting date of 29 February. A list of controlled entities is contained in Note 9 to the financial statements. In preparing the consolidated financial statements, all inter- Group balances and transactions between entities in the Consolidated Group have been eliminated on consolidation. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with those adopted by the parent entity. Business Combinations The Group applies the acquisition method in accounting for business combinations. The consideration transferred by the Group to obtain control of a subsidiary is calculated as the sum of the acquisition-date fair values of assets transferred, liabilities incurred, and the equity interests issued by the Group, which includes the fair value of any asset or liability arising from a contingent consideration arrangement. Acquisition costs are expensed as incurred. The Group recognises identifiable assets acquired and liabilities assumed in a business combination regardless of whether they have been previously recognised in the acquiree’s financial statements prior to the acquisition. Assets acquired and liabilities assumed are generally measured at their acquisition- date fair values. Goodwill is stated after separate recognition of identifiable intangible assets. It is calculated as the excess of the sum of: (a) fair value of consideration transferred, (b) the recognised amount of any non-controlling interest in the acquiree, and (c) acquisition-date fair value of any existing equity interest in the acquiree, over the acquisition-date fair values of identifiable net assets. If the fair values of identifiable net assets exceed the sum calculated above, the excess amount (i.e. gain on a bargain purchase) is recognised in profit or loss immediately. b. Interests in Joint Ventures The Group acquired an interest in Tshipi é Ntle Manganese Mining Proprietary Limited (“Tshipi”), a joint venture entity, in October 2010. The Group’s accounting policy for joint ventures was considered by the Directors as part of the deliberation on the Tshipi acquisition, and had not been formally considered or articulated previously. A joint venture is an arrangement that the Group controls jointly with one or more other investors, and over which the Group has rights to a share of the arrangement’s net assets rather than direct rights to underlying assets and obligations for underlying liabilities. Investments in joint ventures are accounted for using the equity method. Any goodwill or fair value adjustment attributable to the Group’s share in the associate or joint venture is not recognised separately and is included in the amount recognised as investment. 4 4 Notes to the Consolidated Financial Statements JUPITER MINES LIMITED NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) The carrying amount of the investment in associates and joint ventures is increased or decreased to recognise the Group’s share of the profit or loss and other comprehensive income of the associate and joint venture, adjusted where necessary to ensure consistency with the accounting policies of the Group. d. Property, Plant and Equipment Each class of property, plant and equipment is carried at cost as indicated less, where applicable, any accumulated depreciation and impairment losses. Unrealised gains and losses on transactions between the Group and its associates and joint ventures are eliminated to the extent of the Group’s interest in those entities. Where unrealised losses are eliminated, the underlying asset is also tested for impairment. c. Income Tax The income tax expense (revenue) for the year comprises current income tax expense (income) and deferred tax expense (income). Current income tax expense charged to profit or loss is the tax payable on taxable income. Current tax liabilities (assets) are measured at the amounts expected to be paid to (recovered from) the relevant taxation authority. Deferred income tax expense reflects movements in deferred tax asset and deferred tax liability balances during the year as well as unused tax losses. Current and deferred income tax expense (income) is charged or credited outside profit or loss when the tax relates to items that are recognised outside profit or loss. Except for business combinations, no deferred income tax is recognised from the initial recognition of an asset or liability, where there is no effect on accounting or taxable profit or loss. Deferred tax assets and liabilities are calculated at the tax rates that are expected to apply to the year when the asset is realised, or the liability is settled, and their measurement also reflects the manner in which management expects to recover or settle the carrying amount of the related asset or liability. Deferred tax assets relating to temporary differences and unused tax losses are recognised only to the extent that it is probable that future taxable profit will be available against which the benefits of the deferred tax asset can be utilised. Where temporary differences exist in relation to investments in subsidiaries, branches, associates, and joint ventures, deferred tax assets and liabilities are not recognised where the timing of the reversal of the temporary difference can be controlled and it is not probable that the reversal will occur in the foreseeable future. Current tax assets and liabilities are offset where a legally enforceable right of set-off exists and it is intended that net settlement or simultaneous realisation and settlement of the respective asset and liability will occur. Deferred tax assets and liabilities are offset where: (a) a legally enforceable right of set- off exists; and (b) the deferred tax assets and liabilities relate to income taxes levied by the same taxation authority on either the same taxable entity or different taxable entities where it is intended that net settlement or simultaneous realisation and settlement of the respective asset and liability will occur in future years in which significant amounts of deferred tax assets or liabilities are expected to be recovered or settled. Plant and equipment Plant and equipment are measured on the cost basis. The carrying amount of plant and equipment is reviewed annually by directors to ensure it is not in excess of the recoverable amount from these assets. The recoverable amount is assessed on the basis of the expected net cash flows that will be received from the asset’s employment and subsequent disposal. The expected net cash flows have been discounted to their present values in determining recoverable amounts. The cost of fixed assets constructed within the Consolidated Group includes the cost of materials, direct labour, borrowing costs and an appropriate proportion of fixed and variable overheads. Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. All other repairs and maintenance are charged to the Statement of Profit or Loss and Other Comprehensive Income during the financial year in which they are incurred. Depreciation The depreciable amount of all fixed assets is depreciated on a straight-line basis over their useful lives to the Consolidated Group commencing from the time the asset is held ready for use. The depreciation rates used for each class of depreciable assets are: Class of Fixed Asset Depreciation Rate Leasehold improvements Furniture & fittings Plant & equipment: Motor vehicles Site equipment 20.00% 33.33% 12.50% 33.33% The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at each reporting date. An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is greater than its estimated recoverable amount. Gains and losses on disposals are determined by comparing proceeds with the carrying amount. These gains and losses are included in the Statement of Profit or Loss and Other Comprehensive Income. Notes to the Consolidated Financial Statements 4 5 ANNUAL REPORT 2020 NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) e. Exploration and Evaluation Financial assets at amortised cost Expenditure The application of the Group’s accounting policy for exploration and evaluation expenditure requires judgment in determining whether it is likely that future economic benefits are likely either from future exploitation or sale or where activities have not reached a stage which permits a reasonable assessment of the existence of reserves. The determination of a Joint Ore Reserves Committee (JORC) resource is itself an estimation process that requires varying degrees of uncertainty depending on sub- classification and these estimates directly impact the point of deferral of exploration and evaluation expenditure. The deferral policy requires management to make certain estimates and assumptions about future events or circumstances, in particular whether an economically viable extraction operation can be established. Estimates and assumptions made may change if new information becomes available. If, after expenditure is capitalised, information becomes available suggesting that the recovery of expenditure is unlikely, the amount capitalised is written off in the Statement of Profit or Loss and Other Comprehensive Income in the year when the new information becomes available. f. Financial Instruments Financial assets and financial liabilities are recognised when the Group becomes a party to the contractual provisions of the financial instrument. Financial assets are derecognised when the contractual rights to the cash flows from the financial asset expire, or when the financial asset and substantially all the risks and rewards are transferred. A financial liability is derecognised when it is extinguished, discharged, cancelled or expires. Classification and initial measurement of financial assets Financial assets are classified according to their business model and the characteristics of their contractual cash flows. Except for those trade receivables that do not contain a significant financing component and are measured at the transaction price in accordance with AASB 15, all financial assets are initially measured at fair value adjusted for transaction costs (where applicable). Subsequent measurement of financial assets For the purpose of subsequent measurement, financial assets, other than those designated and effective as hedging instruments, are classified into the following two categories: Financial assets at amortised cost Equity instruments at fair value through other comprehensive income (“Equity FVTOCI”) All income and expenses relating to financial assets that are recognised in profit or loss are presented within finance costs, finance income or other financial items, except for impairment of trade receivables which is presented within other expenses. Financial assets with contractual cash flows representing solely payments of principal and interest and held within a business model of ‘hold to collect’ contractual cash flows are accounted for at amortised cost using the effective interest method. The Group’s trade and most other receivables fall into this category of financial instruments as well as bonds that were previously classified as held-to-maturity under AASB 139. Equity instruments at fair value through other comprehensive income (“Equity FVTOCI”) Investments in equity instruments that are not held for trading are eligible for an irrevocable election at inception to be measured at FVTOCI. Under this category, subsequent movements in fair value are recognised in other comprehensive income and are never reclassified to profit or loss. Dividend income is taken to profit or loss unless the dividend clearly represents return of capital. Trade and other receivables The Group makes use of a simplified approach in accounting for trade and other receivables and records the loss allowance at the amount equal to the expected lifetime credit losses. In using this practical expedient, the Group uses its historical experience, external indicators and forward-looking information to calculate the expected credit losses using a provision matrix. The Group allows 1% for amounts that are 30 to 60 days past due, 1.5% for amounts that are between 60 and 90 days past due and writes off fully any amounts that are more than 90 days past due. Financial assets at fair value through other comprehensive income The Group recognises 12 months expected credit losses for financial assets at FVTOCI. As most of these instruments have a high credit rating, the likelihood of default is deemed to be small. However, at each reporting date the Group assesses whether there has been a significant increase in the credit risk of the instrument. In assessing these risks, the Group relies on readily available information such as the credit ratings issued by the major credit rating agencies for the respective asset. The Group only holds simple financial instruments for which specific credit ratings are usually available. In the unlikely event that there is no or only little information on factors influencing the ratings of the asset available, the Group would aggregate similar instruments into a portfolio to assess on this basis whether there has been a significant increase in credit risk. In addition, the Group considers other indicators such as adverse changes in business, economic or financial conditions that could affect the borrower’s ability to meet its debt obligation or unexpected changes in the borrowers operating results. Should any of these indicators imply a significant increase in the instrument’s credit risk, the Group recognises for this instrument or class of instruments the lifetime expected credit losses. 4 6 Notes to the Consolidated Financial Statements JUPITER MINES LIMITED NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Classification and measurement of financial liabilities k. Trade and Other Receivables The Group’s financial liabilities include only trade and other payables. Financial liabilities are initially measured at fair value, and, where applicable, adjusted for transaction costs unless the Group designated a financial liability at fair value through profit or loss. Subsequently, financial liabilities are measured at amortised cost using the effective interest method. All interest-related charges and, if applicable, changes in an instrument’s fair value that are reported in profit or loss are included within finance costs or finance income. g. Impairment of Non-Financial Assets At each reporting date, the Group reviews the carrying values of its tangible and intangible assets to determine whether there is any indication that those assets have been impaired. If such an indication exists, the recoverable amount of the asset, being the higher of the asset’s fair value less costs to sell and value in use, is compared to the asset’s carrying value. Any excess of the asset’s carrying value over its recoverable amount is expensed to the Statement of Profit or Loss and Other Comprehensive Income. Where it is not possible to estimate the recoverable amount of an individual asset, the Group estimates the recoverable amount of the cash-generating unit to which the asset belongs. Impairment testing is performed annually for goodwill and intangible assets with indefinite lives. h. Employee Benefits Provisions are made for the Company’s liability for employee benefits arising from services rendered by employees to reporting date. Employee benefits that are expected to be settled wholly within one year have been measured at the amounts expected to be paid when the liability is settled. Employee benefits payable later than one year have been measured at the present value of the estimated future cash outflows to be made for those benefits. Those cash flows are discounted using market yields on high quality corporate bonds with terms to maturity that match the expected timing of cash flows. i. Provisions Provisions are recognised when the Group has a legal or constructive obligation, as a result of past events, for which it is probable that an outflow of economic benefits will result and that outflow can be reliably measured. j. Cash and Cash Equivalents Cash and cash equivalents include cash on hand, deposits held at call with banks, other short-term highly liquid investments with original maturities of three months or less, less credit card facilities used. Bank overdrafts are shown as short-term borrowings in liabilities. Trade receivables are initially measured at their transaction price. Subsequent to initial recognition, they are measured at amortised cost using the effective interest method. The Group makes use of the simplified approach in accounting for trade and other receivables and records the loss allowance at the amount equal to the expected lifetime credit losses. At each reporting date, the Branch recognises the change in lifetime expected credit losses in profit or loss as an impairment gain or loss. l. Revenue and Other Income AASB 15 Revenue from Contracts with Customers outlines a single comprehensive model of accounting for revenue arising from contracts with customers. The core principle is that an entity recognises revenue based on a five-step model to reflect the transfer of goods or services, measured at the amount to which the Branch expects to be entitled to in exchange for those goods or services. The application of the five-step model in AASB 15 requires the exercise of judgement, considering all facts and circumstances relevant to each contract - the relevant judgements have been disclosed in Note 1. The standard also provides guidance on the accounting treatment of costs attributable to fulfilling the contract, as well as the incremental costs of obtaining the contract. In terms of AASB 15, the Branch identifies each separate performance obligation contained in the contract and allocates a portion of the contract revenue to each performance obligation. Revenue is then only recognised on the satisfaction of each of the relevant performance obligations. Revenue from contracts with customers is recognised when control is transferred to the customer. Interest revenue is recognised using the effective interest rate method, which, for floating rate financial assets, is the rate inherent in the instrument. Full details are provided at Note 2. All revenue is stated net of the amount of goods and services tax (GST). m. Borrowing Costs Borrowing costs directly attributable to the acquisition, construction or production of assets that necessarily take a substantial period of time to prepare for their intended use or sale, are added to the cost of those assets, until such time as the assets are substantially ready for their intended use or sale. All other borrowing costs are recognised in the Statement of Profit or Loss and Other Comprehensive Income in the period in which they are incurred. Notes to the Consolidated Financial Statements 4 7 ANNUAL REPORT 2020 NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) n. Goods and Services Tax (GST) Revenues, expenses and assets are recognised net of the amount of GST, except where the amount of GST incurred is not recoverable from the Australian Taxation Office (ATO). Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net amount of GST recoverable from, or payable to, the ATO is included with other receivables or payables in the statement of financial position. Cash flows are presented on a gross basis. The GST components of cash flows arising from investing or financing activities which are recoverable from, or payable to, the ATO are presented as operating cash flows included in receipts from customers or payments to suppliers. o. Trade and Other Payables Trade and other payables are carried at cost and due to their short term nature they are not discounted. They represent liabilities for goods and services provided to the Group prior to the end of the financial period that are unpaid and arise when Jupiter becomes obliged to make future payments in respect of the purchase of these goods and services. The amounts are unsecured and are usually paid within 30 days of recognition. p. Comparative Figures When required by Accounting Standards, comparative figures have been adjusted to conform to changes in presentation for the current financial period. q. Critical Accounting Estimates and Judgements The Directors evaluate estimates and judgements incorporated into the financial report based on historical knowledge and best available current information. Estimates assume a reasonable expectation of future events and are based on current trends and economic data, obtained both externally and within the Group. Key estimates – Impairment of non-financial assets The Group assesses impairment at each reporting date by evaluating conditions specific to the Group that may lead to impairment of assets. Where an impairment trigger exists, the recoverable amount of the asset is determined. Key judgements – Exploration and evaluation expenditure The Group’s accounting policy for exploration and evaluation expenditure results in certain items of expenditure being capitalised for an area of interest where it is considered likely to be recoverable by future exploitation or sale or where the activities have not reached a stage which permits a reasonable assessment of the existence of reserves. This policy requires management to make certain estimates and assumptions as to future events and circumstances, in particular whether an economically viable extraction operation can be established. Any such estimates and assumptions may change as new information becomes available. If, after having capitalised the expenditure under the policy, a judgement is made that recovery of the expenditure is unlikely, the relevant capitalised amount will be written off to the Statement of Profit or Loss and Other Comprehensive Income. Key judgements – revenue from contracts with customers The Jupiter Mines Limited (External Profit Company) (“SA Branch”) acted as an agent, as opposed to a principal, for all sales contracts entered into during the financial year. In determining whether the SA Branch acted as an agent, management considered elements of control and risks assumed by the SA Branch. The SA Branch earned a fixed percentage marketing fee for the sales contracts, assumed limited risks (inventory, pricing) and although the SA Branch obtained legal title of the goods this was only obtained momentarily and did not demonstrate that the SA Branch controlled the goods. Based on these factors, the Branch considered it was acting in an agency relationship. The revenue and associated trade receivables and trade payables balances are calculated based on management’s best estimate of the metal and moisture content of the ore shipped to customers. Extensive sampling and surveying is performed prior to shipment in an effort to ensure the accuracy of these estimations. Due to the inherent limitations of sampling and the method of transport, variances in the metal and moisture content measured on arrival at the discharge port may be different from those estimated by management on the date of the sale. Variances in the metal and moisture content of the shipped ore on arrival at the discharge port will have an impact on the profitability of the SA Branch. r. Foreign Currency Translation (i) Functional and presentation currency The functional and presentation currency of Jupiter and its subsidiaries is Australian dollars ($). The presentation and functional currency for the interest in Tshipi is the South African Rand. The results are translated disclosure in Jupiter’s consolidated accounts. into Australian dollars for Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rate as at the initial transaction. Non-monetary items measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value was determined. (ii) Translation of interest in Joint Venture functional currency to presentation currency The results of the South African Joint Venture interest are translated into Australian dollars using an average rate over the period of the transactions. Assets and liabilities are translated at exchange rates prevailing at reporting dates. New and amended Accounting Standards and Interpretations for current year A number of new Standards, amendment of Standards and interpretations have recently been issued that were effective for the year ended 29 February 2020. Details of these are provided below: 4 8 Notes to the Consolidated Financial Statements JUPITER MINES LIMITED NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) AASB 16: Leases AASB 16 Leases replaces AASB 117 Leases along with three interpretations (Interpretation 4 Determining whether an Arrangement contains a Lease, Interpretation 115 Operating Leases-Incentives and 127 Evaluating the Substance of Transactions Involving the Legal Form of a Lease). Interpretation The Group has elected to account for short-term leases and leases of low-value assets using the practical expedients. Instead of recognising a right-of-use asset and lease liability, the payments in relation to these are recognised as an expense in profit or loss on a straight-line basis over the lease term. On 1 March 2019, on transition to AASB 16, the Consolidated Entity calculated $53,048 right-of-use assets, and $58,507 lease liabilities reporting the net difference within retained earnings. The Consolidated Entity calculated $22,735 right-of-use assets, and $25,182 lease liabilities as at 29 February 2020. The adoption of this standard has had no material impact on the current or previous reporting period and as such there have been no adjustments made. The Group has applied AASB 16 using the modified retrospective approach and therefore comparative information has not been restated. This means comparative information is still reported under AASB 117 and Interpretation 23. The Group as a lessee For any new contracts entered into on or after 1 March 2019, the Group considers whether a contract is, or contains a lease. A lease is defined as ‘a contract, or part of a contract, that conveys the right to use an asset (the underlying asset) for a period of time in exchange for consideration’. To apply this definition the Group assesses whether the contract meets three key evaluations which are whether: the contract contains an identified asset, which is either explicitly identified in the contract or implicitly specified by being identified at the time the asset is made available to the Group the Group has the right to obtain substantially all of the economic benefits from use of the identified asset throughout the period of use, considering its rights within the defined scope of the contract the Group has the right to direct the use of the identified asset throughout the period of use. The Group assess whether it has the right to direct ‘how and for what purpose’ the asset is used throughout the period of use. Measurement and recognition of leases as a lessee At lease commencement date, the Group recognises a right- of-use asset and a lease liability on the balance sheet. The right-of-use asset is measured at cost, which is made up of the initial measurement of the lease liability, any initial direct costs incurred by the Group, an estimate of any costs to dismantle and remove the asset at the end of the lease, and any lease payments made in advance of the lease commencement date (net of any incentives received). The Group depreciates the right-of-use assets on a straight-line basis from the lease commencement date to the earlier of the end of the useful life of the right-of-use asset or the end of the lease term. The Group also assesses the right-of-use asset for impairment when such indicators exist. At the commencement date, the Group measures the lease liability at the present value of the lease payments unpaid at that date, discounted using the interest rate implicit in the lease if that rate is readily available or the Group’s incremental borrowing rate. Lease payments included in the measurement of the lease liability are made up of fixed payments (including in substance fixed), variable payments based on an index or rate, amounts expected to be payable under a residual value guarantee and payments arising from options reasonably certain to be exercised. Subsequent to initial measurement, the liability will be reduced for payments made and increased for interest. It is remeasured to reflect any reassessment or modification, or if there are changes in in-substance fixed payments. When the lease liability is remeasured, the corresponding adjustment is reflected in the right-of-use asset, or profit and loss if the right-of-use asset is already reduced to zero. The Group has elected to account for short-term leases and leases of low-value assets using the practical expedients. Instead of recognising a right-of-use asset and lease liability, the payments in relation to these are recognised as an expense in profit or loss on a straight-line basis over the lease term. On the statement of financial position, right-of-use assets are disclosed in property, plant and equipment (except those meeting the definition of investment property) and lease liabilities are disclosed in trade and other payables. Accounting policy applicable before 1 March 2019 Finance leases Management applies judgment in considering the substance of a lease agreement and whether it transfers substantially all the risks and rewards incidental to ownership of the leased asset. Key factors considered include the length of the lease term in relation to the economic life of the asset, the present value of the minimum lease payments in relation to the asset’s fair value, and whether the Group obtains ownership of the asset at the end of the lease term. For leases of land and buildings, the minimum lease payments are first allocated to each component based on the relative fair values of the respective lease interests. Each component is then evaluated separately for possible treatment as a finance lease, taking into consideration the fact that land normally has an indefinite economic life. Operating leases All other leases are treated as operating leases. Where the Group is a lessee, payments on operating lease agreements are recognised as an expense on a straight-line basis over the lease term. Associated costs, such as maintenance and insurance, are expensed as incurred. Notes to the Consolidated Financial Statements 4 9 ANNUAL REPORT 2020 NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Interpretation 23: Uncertainty Over Income Tax Treatment The Interpretation addresses the accounting for income taxes when tax treatments involve uncertainty that affects the application of AASB 112 Income Taxes. It does not apply to taxes or levies outside the scope of AASB 112, nor does it specifically include requirements relating to interest and penalties associated with uncertain tax treatments. The Interpretation specifically addresses the following: Whether an entity considers uncertain tax treatments separately The assumptions an entity makes about the examination of tax treatments by taxation authorities How an entity determines taxable profit (tax loss), tax bases, unused tax losses, unused tax credits and tax rates How an entity considers changes in facts and circumstances An entity has to determine whether to consider each uncertain tax treatment separately or together with one or more other uncertain tax treatments. The approach that better predicts the resolution of the uncertainty needs to be followed. The Group applies significant judgement in identifying uncertainties over income tax treatments. Since the Group operates in a complex multinational environment, it assessed whether the Interpretation had an impact on its consolidated financial statements. The interpretation did not have an impact on the consolidated financial statements of the Group. New accounting standards not yet effective There are no forthcoming standards and amendments that are expected to have a material impact on the group in the current or future reporting periods, or on foreseeable future transactions. NOTE 2: REVENUE Marketing fee revenue Gross profit Other income Other income Consolidated Group February 2020 $ February 2019 $ 10,358,857 10,358,857 660,096 660,096 13,116,608 13,116,608 645,559 645,559 The “SA Branch” is registered in South Africa for the purpose of the sale and export of Jupiter’s share of Tshipi manganese ore. AASB 15 Revenue from Contracts with Customers outlines a single comprehensive model of accounting for revenue arising from contracts with customers. The core principle is that an entity recognises revenue based on a five-step model to reflect the transfer of goods or services, measured at the amount to which the SA Branch expects to be entitled to in exchange for those goods or services. The application of the five-step model in AASB 15 requires the exercise of judgement, considering all facts and circumstances relevant to each contract - the relevant judgements have been disclosed in Note 1. The standard also provides guidance on the accounting treatment of costs attributable to fulfilling the contract, as well as the incremental costs of obtaining the contract. In terms of AASB 15, the SA Branch identifies each separate performance obligation contained in the contract and allocates a portion of the contract revenue to each performance obligation. Revenue is then only recognised on the satisfaction of each of the relevant performance obligations. Revenue from contracts with customers is recognised when control is transferred to the customer. Sale of Manganese Ore Given the Branch only takes control of the goods momentarily before control passes to the customer as well as the limited risks which the Branch assumes the Branch is considered to be acting in an agency capacity. The nature of the SA Branch’s contracts are to arrange for the goods (manganese ore) to be provided by another party (Tshipi) and therefore the SA Branch is acting in an agency capacity, facilitating the sale between Tshipi and the customer. Under the previous accounting standard, AASB 118, all sales contracts entered into, where the purchase price of the manganese ore was equal to the selling price, the SA Branch was also considered to have been acting in an agency capacity. 5 0 Notes to the Consolidated Financial Statements JUPITER MINES LIMITED NOTE 2: REVENUE (CONTINUED) Marketing Fee Income The SA Branch receives a fixed commission on each sale based on the FOB selling price. The amount and timing of revenue to be recognised from marketing fee income under AASB 15 was considered below against the five step model: There is a contract with Tshipi, for each parcel sold, which entitles the SA Branch to receive the commission. The contract has commercial substance and both parties are committed to performing their obligations; The performance obligation for the SA Branch in respect to each sale is that the SA Branch needs to facilitate the sale between the customer and Tshipi; The transaction price can be determined as it is calculated as a fixed percentage of the FOB selling price; There is only one performance obligation in the contract and therefore the whole transaction price has been allocated to this performance obligation; Revenue is recognised when the performance obligation is satisfied. The performance obligation of the SA Branch is considered to be satisfied when control passes from Tshipi to the customer. Control passes to the customer when the ore passes over the rail of the vessel (bill of lading date), this is when the customer has the obligation to pay for the goods transferred and when risk and rewards of ownership are transferred to the customer. Marketing fee income is determined based on the final metal and moisture content at the discharge port. On the bill of lading date, the provisional marketing fee income is recognised based on the load port metal and moisture content which is considered to be the best estimate. Once the final metal and moisture content is determined on finalisation of the sales transaction, typically between 2 and 3 months later, the marketing fee income initially recognised is adjusted subsequently. At the reporting period, the fair value of the original marketing fee income and associated receivable is adjusted by reference to the best estimate of the actual metal and moisture content. The changes in fair value are recorded as an adjustment to marketing fee income. On the bill of lading date, there is no uncertainty regarding Jupiter’s entitlement to the marketing fee as their responsibilities under the marketing fee arrangement have been performed and they have an unconditional right to the marketing fee on this date. The marketing fee amount receivable will only be adjusted for the final metal and moisture content, as stated above. Jupiter invoices Tshipi for the marketing fee once the final metal and moisture content can be determined and the customer has paid Tshipi for the final invoice. The payment is typically three months after the marketing fee income was first recognised and the contract is therefore considered to be short term in nature. Under AASB 15, the accounting for marketing fee income will remain unchanged in that marketing fee income will be recognised when control passes to the customer, which will continue to be the date of delivery when risks and rewards are passed to the customer. Notes to the Consolidated Financial Statements 5 1 ANNUAL REPORT 2020 NOTE 3: INCOME TAX EXPENSE AND DEFERRED TAXES The major components of tax expense and the reconciliation of the expected tax expense based on the domestic effective tax rate of Jupiter Mines at 30% (2019: 30%) and the reported tax expense in the profit or loss are as follows: Tax expense comprises: (a) Current tax Add: Deferred income tax relating to origination and reversal of temporary differences Current tax in respect of prior years Origination and reversal of timing differences Recognition of deferred tax asset losses Under/(over) provision in respect of prior years Tax Expense (b) Accounting profit before tax Domestic tax rate for Jupiter Mines Limited at 30% (2019: 30%) Tax rate differential Other expenditure not allowed or allowable for income tax purposes Under provision in respect of prior years Share of profit in equity accounted investments Deferred tax adjustment on Tshipi investment Income tax expense Consolidated Group February 2020 $ February 2019 $ 2,291,414 3,448,222 758,253 4,447,465 - 1,310,456 8,807,588 - 48,684,161 (1,269,180) 153,167 51,016,370 103,926,091 189,049,869 31,177,827 (158,024) 748,594 2,068,710 56,714,961 (258,569) 3,108,264 153,167 (25,029,519) (46,572,620) - 8,807,588 37,871,167 51,016,370 Deferred taxes arising from temporary differences and unused tax losses can be summarised as follows: Deferred Tax Assets (Liabilities) Liabilities Property, plant and equipment Exploration Other Investments using the equity method Balance as at 29 February 2020 Assets Pension and other employee obligations Provisions Other Tax losses Balance as at 29 February 2020 Opening balance 1 March 2019 Recognised in Profit and Loss During the Year Closing Balance 29 February 2020 10,851 (3,222,900) (94,510) (47,850,162) (51,156,721) 27,828 18,210 39,945 1,269,180 1,355,163 (1,156) (292,271) (314,850) (4,427,899) (5,036,176) 30,051 (18,210) (12,288) (721,299) (721,746) 9,695 (3,515,171) (409,360) (52,278,061) (56,192,897) 57,879 - 27,657 547,881 633,417 Net Deferred Tax Liabilities (49,801,558) (5,757,922) (55,559,480) 5 2 Notes to the Consolidated Financial Statements JUPITER MINES LIMITED NOTE 4: OTHER EXPENSES Manganese marketing costs Insurances Consultancy fees Professional fees Directors fees Regulatory fees Other costs Consolidated Group February 2020 $ February 2019 $ 1,806,620 715,326 125,189 411,972 337,640 238,433 628,981 - 633,680 820,173 689,611 316,000 689,792 770,939 4,264,161 3,920,195 NOTE 5: EARNINGS PER SHARE Both the basic and diluted earnings per share have been calculated using the profit attributable to shareholders of the parent Company (Jupiter Mines Limited). Reconciliation of earnings to net profit for the year: Net profit Weighted average number of ordinary shares outstanding during the year used in calculating basic EPS and dilutive EPS Consolidated Group February 2020 $ February 2019 $ 95,118,503 138,033,499 No. No. 1,958,991,033 1,955,297,513 Profit per share $0.0486 $0.0706 NOTE 6: CASH AND CASH EQUIVALENTS Cash at bank and in hand Short-term bank deposits Consolidated Group February 2020 $ February 2019 $ 10,011,113 19,273,954 11,283,723 61,564,957 29,285,067 72,848,680 The effective interest rate on short-term bank deposits was 2.33%; (February 2019: 2.07%) the term deposits range between 30 and 90 days. Notes to the Consolidated Financial Statements 5 3 ANNUAL REPORT 2020 NOTE 7: TRADE AND OTHER RECEIVABLES Trade receivables GST and VAT receivables Income tax refundable Sundry receivables Consolidated Group February 2020 $ February 2019 $ 39,329,578 83,765,330 166,333 - 861,356 167,417 276,341 1,160,740 40,357,267 85,369,828 All of the Group’s trade and other receivables have been reviewed for indicators of impairment. It was found that the Group’s exposure to bad debts is not significant. Due to the short term nature of these receivables, their carrying value is assumed to approximate their fair value. Details regarding the foreign exchange and interest rate risk exposure are disclosed in Note 26. The majority of trade receivables represent amounts receivable by Jupiter South Africa branch relating to the sale of manganese ore to third party customers. Refer to Note 2 for further details. NOTE 8: EQUITY INSTRUMENTS AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME Financial assets at FVOCI includes equity instruments. The Group chose to make the irrevocable election on transition to classify listed equity securities as Equity FVOCI: Shares in listed corporations NOTE 9: INTERESTS IN SUBSIDIARIES Controlled entities consolidated Parent Entity: Jupiter Mines Limited Subsidiaries of Jupiter Mines Limited: Future Resources Australia Pty Limited Central Yilgarn Iron Pty Limited Broadgold Corporation Pty Limited Consolidated Group February 2020 $ February 2019 $ 329,528 547,064 Country of Incorporation Percentage Owned (%) February 2020 February 2019 Australia Australia Australia Australia Australia 100 100 100 100 100 100 100 100 100 100 Jupiter Kalahari Pty Ltd Jupiter Mines Limited (Incorporated in Australia) External Profit Company (“Jupiter South African Branch”) South Africa During the period all Controlled Entities with the exception of Jupiter Kalahari Pty Ltd and Jupiter South African Branch were dormant. 5 4 Notes to the Consolidated Financial Statements JUPITER MINES LIMITED NOTE 10: PROPERTY, PLANT AND EQUIPMENT Details of the Group’s property, plant and equipment and their carrying amounts are as follows: Gross carrying amount Balance as at 1 March 2019 Additions Leasehold Improvements $ Plant and Equipment $ Furniture and Fittings $ Total $ 110,923 3,737,810 195,740 4,044,473 - 2,183 - 2,183 Balance as at 29 February 2020 110,923 3,739,993 195,740 4,046,656 Depreciation and impairment Balance as at 1 March 2019 Depreciation (110,923) (3,732,845) (195,740) (4,039,508) - (2,427) - (2,427) Balance as at 29 February 2020 (110,923) (3,735,272) (195,740) (4,041,935) Carrying amount as at 29 February 2020 - 4,721 - 4,721 Gross carrying amount Balance as at 1 March 2018 Additions Leasehold Improvements $ Plant and Equipment $ Furniture and Fittings $ Total $ 110,923 3,733,292 195,740 4,039,955 - 4,518 - 4,518 Balance as at 28 February 2019 110,923 3,737,810 195,740 4,044,473 Depreciation and impairment Balance as at 1 March 2018 Depreciation (110,923) (3,726,926) (195,740) (4,033,589) - (5,919) - (5,919) Balance as at 28 February 2019 (110,923) (3,732,845) (195,740) (4,039,508) Carrying amount as at 28 February 2019 - 4,965 - 4,965 Notes to the Consolidated Financial Statements 5 5 ANNUAL REPORT 2020 NOTE 11: INTANGIBLE ASSETS Details of the Group’s other intangible assets and their carrying amounts are as follows: Gross carrying amount Balance as at 1 March 2019 Additions, separately acquired Balance as at 29 February 2020 Amortisation and impairment Balance as at 1 March 2019 Amortisation Balance as at 29 February 2020 Carrying amount at 29 February 2020 Gross carrying amount Balance as at 1 March 2018 Additions, separately acquired Balance as at 28 February 2019 Amortisation and impairment Balance as at 1 March 2018 Reversal of amortisation Balance as at 28 February 2019 Carrying amount at 28 February 2019 Software Licenses $ Total $ 347,504 - 347,504 (340,287) (4,086) (344,373) 3,131 347,504 - 347,504 (340,287) (4,086) (344,373) 3,131 Software Licenses $ Total $ 345,012 2,492 347,504 (343,027) 2,740 (340,287) 7,217 345,012 2,492 347,504 (343,027) 2,740 (340,287) 7,217 Intangible assets have finite useful lives. The current amortisation charges for intangible assets are included under depreciation and amortisation expense per the Statement of Profit or Loss and Other Comprehensive Income. All software is amortised over 3 years. NOTE 12: OTHER CURRENT ASSETS Deposits Consolidated Group February 2020 $ February 2019 $ 57,884 57,884 57,884 57,884 5 6 Notes to the Consolidated Financial Statements JUPITER MINES LIMITED NOTE 13: EXPLORATION AND EVALUATION ASSETS Opening Balance Additions Reversal of impairment Closing Balance Costs carried forward in respect of the following areas of interest: Mount Mason Mount Ida Closing Balance Consolidated Group February 2020 $ February 2019 $ 10,800,000 8,700,000 974,238 - 922,757 1,177,243 11,774,238 10,800,000 927,829 800,000 10,846,409 10,000,000 11,774,238 10,800,000 At 29 February 2020, the future recoverability of capitalised exploration expenditure was assessed, and the Board received an independent external valuation of the Mount Ida Magnetite and Mount Mason Hematite projects, which provided value ranges of $5 million to $16 million and $0.6 million and $1.9 million respectively. The valuation was based on the comparative transaction method, in line with the current carrying values. Notes to the Consolidated Financial Statements 5 7 ANNUAL REPORT 2020 NOTE 14: INVESTMENTS ACCOUNTED FOR USING THE EQUITY METHOD Set out below is the Joint Venture held by the Group as at 29 February 2020, in which the opinion of the Directors, are material to the Group. The entity listed below has share capital consisting solely of ordinary shares, which are held directly by the Group. The country of incorporation or registration is also their principal place of business, and the proportion of the Group’s ownership interest is the same as the proportion of voting rights held. Interest in this entity is held through a fully controlled entity, Jupiter Kalahari Pty Ltd. Name of Entity Tshipi é Ntle Manganese Mining Proprietary Limited Ownership interest held by the Group Country of Incorporation February 2020 February 2019 Nature of Relationship Measurement Method South Africa 49.9% 49.9% Joint Venture Joint Venture Summarised Financial Information Tshipi é Ntle Manganese Mining Proprietary Limited Opening carrying value of joint venture Share of profit using the equity method Dividend paid Other movements Total investments using the equity method Current assets (a) Non-current assets Total assets Current liabilities (b) Non-current liabilities Total liabilities Net assets (a) Includes cash and cash equivalents (b) Includes financial liabilities (excluding trade and other payables Revenue Profit for the year Other comprehensive income for the year Total other comprehensive income for the year Depreciation and amortisation Tax expense February 2020 $ February 2019 $ 422,841,742 385,267,255 98,191,396 188,505,385 (83,431,732) (150,918,449) - (12,449) 437,601,406 422,841,742 219,621,586 210,782,558 252,181,503 246,269,470 471,803,089 457,052,028 49,055,786 65,739,816 52,674,648 63,117,905 114,795,602 115,792,553 357,007,487 341,259,475 109,358,747 8,017,262 54,485,916 11,359,877 196,776,416 377,766,335 - - - - 65,286,722 55,293,434 76,973,225 146,968,850 In accordance with the Group’s accounting policies and processes, the Group performs impairment testing annually at 29 February. The Board has considered in depth its Tshipi investment with regards to impairment indicators under AASB 136 and both internal and external sources of information, with specific regard to the ongoing economic effects of the COVID-19 pandemic. The Board does not believe any indicators exist and an independent valuation has not been commissioned for the 2020 financial year. 5 8 Notes to the Consolidated Financial Statements JUPITER MINES LIMITED NOTE 15: TRADE AND OTHER PAYABLES Trade payables Income tax payable Sundry payables and accrued expenses Consolidated Group February 2020 $ February 2019 $ 36,501,106 82,217,567 80,967 1,037,296 - 1,865,050 37,619,369 84,082,617 Due to the short term nature of these payables, their carrying value is assumed to approximate to their fair value. The majority of trade payables represent amounts payable to Tshipi relating to the purchase of manganese ore. Refer to Note 2 for further information. NOTE 16: CURRENT PROVISIONS All provisions are considered current. The carrying amounts and movements in the provisions account are as follows: Carrying amount 1 March 2019 – employee benefits Additional provisions Amount utilised Carrying amount 29 February 2020 Carrying amount 1 March 2018 – employee benefits Additional provisions Amount utilised Carrying amount 28 February 2019 NOTE 17: EMPLOYEE REMUNERATION Expenses recognised for employee benefits are analysed below: Employee benefits - expense Salary and wages Superannuation costs Payroll and other taxes Bonuses paid/payable Employee benefits expense February 2020 $ 125,078 147,157 (54,206) 218,029 February 2019 $ 52,447 99,671 (27,040) 125,078 Consolidated Group February 2020 $ February 2019 $ 1,614,632 38,544 16,920 863,016 2,533,112 1,650,617 47,180 16,726 5,747,950 7,462,473 Bonuses relate to payments paid or accrued to the Chief Executive Officer and Chief Financial Officer. Refer to Remuneration Report for further details. Notes to the Consolidated Financial Statements 5 9 ANNUAL REPORT 2020 NOTE 18: EQUITY The share capital of Jupiter Mines consists only of fully paid ordinary shares; the shares do not have a par value. All shares are equally eligible to receive dividends and the repayment of capital and represent one vote at the shareholders’ meeting of Jupiter Mines. Shares issued and fully paid: Beginning of the year 2020 No. Shares 2019 No. Shares February 2020 $ February 2019 $ 1,958,991,033 2,064,522,718 410,435,400 433,003,602 19 March 2018 share buy-back ($0.023 per share) 18 July 2018 director share issue to CEO (value at grant date) - - (116,182,215) 10,650,530 - - (26,721,909) 4,153,707 Total contributed equity 1,958,991,033 1,958,991,033 410,435,400 410,435,400 NOTE 19: RESERVES Foreign Currency Translation Reserve $ Equity Instruments at FVOCI Reserve $ Financial Assets Reserve $ Total $ Balance at 1 March 2018 268,608 - 836,896 1,105,503 Change in accounting policy arising from AASB 9 - 836,896 (836,896) - Current year movement, net of tax Balance as at 28 February 2019 Current year movement, net of tax Balance as at 29 February 2020 (310,412) (496,638) (41,804) (18,314) 340,257 (217,535) (60,118) 122,722 - - - - (807,050) 298,453 (235,849) 62,604 NOTE 20: CAPITAL AND LEASING COMMITMENTS The Group leases an office under an operating lease. The future minimum lease payments are as follows: Consolidated Group February 2020 $ February 2019 $ Non-cancellable operating leases contracted for but not capitalised in financial statements: Minimum lease payments Not later than 12 months Between 12 months and 5 years 38,892 - 38,892 52,797 13,294 66,091 This is made up of a non-cancellable lease of 2 years however it can be subleased (with prior consent of Lessor), which expires on 31 May 2020. The lease was subsequently extended to 30 November 2020. Amounts include rent, outgoings and cleaning with 4.5% annual rent review increase. It does not take into account reduced guarantees or returned deposits or incentives. Figures based on 9 months (1 March 2020 to 30 November 2020) which is the end of the lease. The expense recognised for the operating lease was $53,177 (2019: $54,809). The property lease is non-cancellable for six months, with rent payable monthly in advance. Expenditure Commitments In order to maintain current rights of tenure to mining tenements, the Company and Group are required to perform minimum work to meet the requirements specified by various State governments. These obligations can be reduced by selective relinquishment of exploration tenure or application for expenditure exemptions. Due to the nature of the Company and Group’s operations in exploring and evaluating areas of interest, it is very difficult to forecast the nature and amount of future expenditure. It is anticipated that expenditure commitments for the next twelve months will be tenement rentals of $535,207 (2019: $503,888) and exploration expenditure of $676,100 (2019: $676,100). 6 0 Notes to the Consolidated Financial Statements JUPITER MINES LIMITED NOTE 21: CONTINGENT LIABILITIES AND ASSETS Contingent liabilities The parent entity has provided guarantees to third parties in relation to the performance and obligations of controlled entities in respect of banking facilities. At reporting date, the value of these guarantees and facilities are $57,884 (2019: $57,884). Total utilised at reporting date was $57,884 (2019: $57,884). Contingent assets No contingent assets exist as at 29 February 2020 or 28 February 2019. NOTE 22: SEGMENT REPORTING The Group operates in the mining industry. The Group has identified its operating segments based on the internal reports that are reviewed and used by the chief operating decision makers (the Board of Directors and key management) in assessing performance and determining the allocation of resources. The Group segments are structured primarily on the basis of its exploration and production interests. These are considered to be the Central Yilgarn Iron Exploration Project (Iron Ore), located in Australia, the producing Tshipi Mine (Manganese) located in South Africa, and Jupiter’s South African branch which carries out the sale of manganese ore. The remaining items of revenue, expenses, assets and liabilities relate to corporate operations. Any transactions between reportable segments have been offset for these purposes. Segment information for the reporting period is as follows: 29 February 2020 Marketing fee revenue Employee benefits expense Other expenses Segment operating profit Share of profit from joint venture entities using the equity method Finance costs Foreign exchange gain Total Corporate Net profit before tax from continuing operations Segment assets Corporate assets Total assets Segment liabilities Corporate liabilities Total liabilities CYIP – Iron Ore (Australia) $ Jupiter Mines – Manganese (South Africa) $ Tshipi – Manganese (South Africa) $ - - - - - - - - Total $ 10,358,857 (450,610) (2,221,107) 7,687,140 10,358,857 (450,610) (2,221,107) 7,687,140 - - - - - 98,191,396 98,191,396 (471,447) 611,549 - - (471,447) 611,549 7,827,242 98,191,396 106,018,638 (2,092,546) 103,926,092 11,774,238 43,056,258 437,601,406 492,431,902 - (40,305,240) - (40,305,240) 27,614,757 520,046,659 (53,725,055) (94,030,295) Notes to the Consolidated Financial Statements 6 1 ANNUAL REPORT 2020 NOTE 22: SEGMENT REPORTING (CONTINUED) 28 February 2019 Marketing fee revenue Employee benefits expense Other expenses Segment operating profit Share of profit from joint venture entities using the equity method Reversal of impairment of exploration and evaluation assets Finance costs Foreign exchange gain Total Corporate Net profit before tax from continuing operations Segment assets Corporate assets Total assets Segment liabilities Corporate liabilities Total liabilities CYIP – Iron Ore (Australia) $ Jupiter Mines – Manganese (South Africa) $ Tshipi – Manganese (South Africa) $ - - - - - 1,177,243 - - 13,116,608 (417,509) (427,282) 12,271,817 - - (470,871) 829,704 Total $ 13,116,608 (417,509) (427,282) 12,271,817 - - - - 188,505,385 188,505,385 - - - 1,177,243 (470,871) 829,704 1,177,243 12,630,650 188,505,385 202,313,278 (13,263,409) 189,049,869 10,800,000 90,164,207 422,841,742 523,805,949 - (82,276,954) - (82,276,954) 70,026,594 593,832,543 (102,062,238) (184,339,192) NOTE 23: RECONCILIATION OF CASH FLOWS FROM OPERATING ACTIVITIES Profit after income tax Adjustments for: Depreciation and amortisation Reversal of impairment of exploration interests Interest income Foreign exchange differences Consolidated Group February 2020 $ February 2019 $ 95,118,503 138,033,499 6,513 - (1,158,121) (1,503,665) (1,977) (1,177,243) (34,710) 3,282,948 Share of profit from joint venture entities using equity method (98,191,396) (188,505,385) Equity based share payment - 4,153,707 Net changes in working capital: (Increase)/decrease in trade and other receivables 45,012,561 (76,735,084) Increase/(decrease) in trade payables and other creditors (46,463,248) 72,707,657 Increase/(decrease) in provisions Increase/(decrease) in deferred tax liability Increase/(decrease) in deferred tax asset 92,951 5,036,176 721,746 72,926 47,522,177 - Net cash used in operating activities (1,327,980) (681,485) 6 2 Notes to the Consolidated Financial Statements JUPITER MINES LIMITED NOTE 24: EVENTS AFTER THE REPORTING DATE These financial statements were authorised for issue on 27 May 2020 by Director Priyank Thapliyal. Tshipi declared a dividend to its shareholders of ZAR265,000,000 on 17 March 2020. Jupiter received its share on 31 March 2020, being $11,410,959.22. Jupiter also received ZAR37,000,000 ($3,649,059.13) from its South African marketing operations on 5 March 2020. On 29 April 2020, the Directors declared a final dividend for the year ended 29 February 2020 of $0.0075 per ordinary share, to be paid on 21 May 2020. In response to the COVID-19 pandemic, the South African Government imposed a nationwide lockdown on 24 March 2020, including the closure of the Tshipi Borwa mine. Subsequently, the Government lifted restrictions to enable Tshipi to recommence full operations from 1 May. Both Tshipi and Jupiter have the ability to meet all financial obligations in the event of an extended period of uncertainty due to the COVID-19 pandemic. Notes to the Consolidated Financial Statements 6 3 ANNUAL REPORT 2020 NOTE 25: RELATED PARTY TRANSACTIONS The Group’s related parties include its associates and joint venture, key management and others as described below. Unless otherwise stated, none of the transactions incorporate special terms and conditions and no guarantees were given or received. Outstanding balances are settled in cash. Transactions with key management personnel: Director fees paid to Andrew Bell Consultants, a company in which Mr A Bell has a beneficial interest 60,000 60,000 Consolidated Group February 2020 $ February 2019 $ Director fees paid to Mr P Murray Director fees paid to Mr B Gilbertson Director fees paid to POSCO Australia, a company in which Mr Y Heo has a beneficial interest Director fees paid to Mr H Mende Expenses reimbursed to Pallinghurst Advisors LLP, a company in which Mr B Gilbertson has a beneficial interest Expenses reimbursed to Pallinghurst GP Limited, a company in which Mr B Gilbertson has a beneficial interest Expenses reimbursed to Mr B Gilbertson Expenses reimbursed to Mr P Thapliyal Expenses reimbursed to Mr P Murray Short term employee benefits: Salaries including bonuses Superannuation and equivalents Other short term benefits Long service leave Total short-term employee benefits Share based payments Total remuneration Transactions with joint ventures: 66,000 132,500 57,500 21,640 2,860 - 27,149 83,443 171 66,000 132,500 - - 35,440 45,866 93,259 100,812 471 2,042,621 2,715,401 41,507 17,365 30,254 2,131,747 - 2,131,747 42,247 17,870 - 2,775,518 4,153,707 6,929,225 Trade amounts receivable from Tshipi é Ntle Manganese Mining Proprietary Limited (Marketing, management fee and other fees) Trade amounts payable to Tshipi é Ntle Manganese Mining Proprietary Limited (Purchases and other charges) 2,899,513 5,621,153 32,440,212 80,609,630 6 4 Notes to the Consolidated Financial Statements JUPITER MINES LIMITED NOTE 26: FINANCIAL INSTRUMENTS The Group’s financial instruments consist mainly of deposits with banks, short-term investments, accounts receivable and payable. The totals for each category of financial instruments, measured in accordance with AASB 9 as detailed in the accounting policies to these financial statements, are as follows: Financial Assets Cash and cash equivalents Trade and other receivables Equity instruments at FVOCI Other current assets Financial Liabilities Trade and other payables Consolidated Group February 2020 $ February 2019 $ 29,285,067 40,357,267 329,528 57,884 72,848,680 85,369,828 547,064 57,884 70,029,746 158,823,456 37,619,369 37,619,369 84,082,617 84,082,617 Financial Risk Management Policies The Directors monitor the Group’s financial risk management policies and exposures and approves financial transactions. The Directors’ overall risk management strategy seeks to assist the Group in meeting its financial targets, while minimising potential adverse effects on financial performance. Its functions include the review of credit risk policies and future cash flow requirements. Specific Financial Risk Exposures and Management The main risks the Group is exposed to through its financial instruments are credit risk, liquidity risk and market risk consisting of interest rate risk, liquidity risk and equity price risk. (a) Credit Risk Exposure to credit risk relating to financial assets arises from the potential non-performance by counterparties of contract obligations that could lead to a financial loss to the Group. Credit risk is managed through the maintenance of procedures (such procedures include the utilisation of systems for the approval, granting and renewal of credit limits, regular monitoring of exposures against such limits and monitoring of the financial stability of significant customers and counterparties), ensuring to the extent possible, that customers and counterparties to transactions are of sound credit worthiness. Such monitoring is used in assessing receivables for impairment. Risk is also minimised through investing surplus funds in financial institutions that maintain a high credit rating, or in entities that the Directors have otherwise cleared as being financially sound. Credit Risk Exposures The maximum exposure to credit risk by class of recognised financial assets at reporting date, excluding the value of any collateral or other security held, is equivalent to the carrying value and classification of those financial assets (net of any provisions) as presented in the statement of financial position. Credit risk also arises through the provision of financial guarantees, as approved at Board level, given to parties securing the liabilities of certain subsidiaries. Trade and other receivables that are neither past due or impaired are considered to be of high credit quality. Aggregates of such amounts are as detailed in Note 7. There are no amounts of collateral held as security in respect of trade and other receivables. The Group does not have any material credit risk exposure to any single receivable or group of receivables under financial instruments entered into by the Consolidated Group. Credit risk related to balances with banks and other financial institutions is managed by investing cash with major financial institutions in both cash on deposit and term deposit accounts. Interest rates on major deposits that are re-invested are at a fixed rate on a monthly basis. Notes to the Consolidated Financial Statements 6 5 ANNUAL REPORT 2020 NOTE 26: FINANCIAL INSTRUMENTS (CONTINUED) (b) Liquidity risk Liquidity risk arises from the possibility that the Group might encounter difficulty in settling its debts or otherwise meeting its obligations related to financial liabilities. The Group manages this risk through the following mechanisms: preparing forward looking cash flow analysis in relation to its operational, investing and financing activities; monitoring undrawn credit facilities; obtaining funding from a variety of sources; maintaining a reputable credit profile; managing credit risk related to financial assets; and only investing surplus cash with major financial institutions; and comparing the maturity profile of financial liabilities with the realisation profile of financial assets. The Group has no significant exposure to liquidity risk due to the level of cash and cash equivalents detailed at Note 6. The Group manages liquidity risk by monitoring immediate and forecast cash requirements and ensuring adequate cash reserves are maintained. The tables below reflect an undiscounted contractual maturity analysis for financial liabilities. Cash flows realised from financial assets reflect management’s expectation as to the timing of realisation. Actual timing may therefore differ from that disclosed. The timing of cash flows presented in the table to settle financial liabilities reflects the earliest contractual settlement dates. Within 1 Year 1 to 5 Years Over 5 Years 2020 $ 2019 $ 2020 $ 2019 $ 2020 $ 2019 $ 2020 $ Total 2019 $ 37,619,369 84,082,617 37,619,369 84,082,617 29,285,067 72,848,680 40,357,267 85,369,828 - - - - - - - - - - 329,528 547,064 57,884 57,884 - - 69,700,218 158,276,392 329,528 547,064 32,080,849 74,193,775 329,528 547,064 - - - - - - - - - - - - - - - - 37,619,369 84,082,617 37,619,369 84,082,617 29,285,067 72,848,680 40,357,267 85,369,828 329,528 547,064 57,884 57,884 70,029,746 158,823,456 32,410,377 74,740,839 Consolidated Group Financial liabilities due for payment Trade and other payables Total expected outflows Financial assets – cash flows realisable Cash and cash equivalents Trade and other receivables Equity instruments at FVOCI Other current assets Total anticipated inflows Net inflow on financial instruments (c) Market Risk Market risk arises from the Groups use of interest bearing and foreign currency financial instruments. It is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in interest rates (interest rate risk), foreign exchange (currency risk) or other market factors (other price risk). 6 6 Notes to the Consolidated Financial Statements JUPITER MINES LIMITED NOTE 26: FINANCIAL INSTRUMENTS (CONTINUED) (i) Interest rate risk Exposure to interest rate risk arises on financial assets and financial liabilities recognised at the end of the reporting period whereby a future change in interest rates will affect future cash flows or the fair value of fixed rate financial instruments. The financial assets and financial liabilities with exposure to interest rate risk are detailed below: Financial Assets Cash and cash equivalents Other current assets Financial Liabilities Short term borrowings Long term borrowings (ii) Foreign exchange risk Consolidated Group February 2020 $ February 2019 $ 29,285,067 72,848,680 57,884 57,884 29,342,951 72,906,564 - - - - Jupiter operates internationally and is exposed to foreign exchange risk arising from various currency exposures primarily with respect to the Australian Dollar and South African Rand. Jupiter’s exposure to currency risk is on cash, trade receivables, and borrowings. Foreign currency risk is the risk of exposure to transactions that are denominated in a currency other than the Australian dollar. The carrying amounts of the Group’s financial assets and liabilities are denominated in four different currencies as set out below: 29 February 2020 AUD ZAR Financial Assets 18,297,417 4,001,173 (iii) Other price risk EUR 434 USD Total $ 6,986,043 29,285,067 Price risk relates to the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices largely due to demand and supply factors for commodities. As the Group does not derive revenue from sale of products, the effect on profit and equity as a result of changes in the price risk is not considered material. The fair value of the mining projects will be impacted by commodity price changes (predominantly iron ore, nickel and uranium) and could impact future revenues once operational. However, management monitors current and projected commodity prices. Summarised sensitivity analysis The following table summarises the sensitivity of the Jupiter Group’s financial assets and financial liabilities to interest rate risk and foreign exchange risk. Management have reviewed interest rate and foreign exchange risk and determined the rates applied to be appropriate. Notes to the Consolidated Financial Statements 6 7 ANNUAL REPORT 2020 NOTE 26: FINANCIAL INSTRUMENTS (CONTINUED) Interest Rate Risk Foreign Exchange Risk -50 bps +50 bps -10% +10% 29 February 2020 Financial Assets Carrying Amount $ Profit $ Other Equity $ Cash and cash equivalents 29,285,067 (146,425) Receivables 40,357,267 Equity instruments at FVOCI 329,528 Other current assets 57,884 Financial Liabilities Trade and other payables 37,619,369 - - - - Total increase/(decrease) (146,425) - - - - - - Profit $ 146,425 - - - - 146,425 Other Equity $ Profit $ Other Equity $ Profit $ Other Equity $ - - - - - - - (4,035,727) - - 3,761,937 (273,790) - - - - - - - 4,035,727 - - (3,761,937) 273,790 - - - - - - Interest Rate Risk Foreign Exchange Risk -50 bps +50 bps -10% +10% Carrying Amount $ Profit $ Other Equity $ Profit $ Other Equity $ Profit $ Other Equity $ Profit $ Other Equity $ 28 February 2019 Financial Assets Cash and cash equivalents 72,848,680 (364,243) Receivables 85,369,828 Equity instruments at FVOCI 547,064 Other current assets 57,884 Financial Liabilities Trade and other payables 84,082,617 - - - - Total increase/(decrease) (364,243) - - - - - - - - - - 364,243 - - - (8,536,983) - - - - - - - - - 8,536,983 - - - 8,408,262 - (8,408,262) 364,243 - (128,721) - 128,721 - - - - - - 6 8 Notes to the Consolidated Financial Statements JUPITER MINES LIMITED l a t o T g n i r a e B t s e r e t n I - n o N s r a e Y 5 r e v O s r a e Y 5 o t 1 r a e Y n h t i i W e t a R t s e r e t n I g n i t a o l F I R E A W $ 9 1 0 2 $ 0 2 0 2 $ 9 1 0 2 $ 0 2 0 2 $ 9 1 0 2 $ 0 2 0 2 $ 9 1 0 2 $ 0 2 0 2 $ 9 1 0 2 $ 0 2 0 2 $ 9 1 0 2 $ 0 2 0 2 9 % 1 0 2 0 % 2 0 2 s t e s s A l i a c n a n F i ) D E U N I T N O C ( S T N E M U R T S N I I L A C N A N I F : 6 2 E T O N g n i r u t a M e t a R t s e r e t n I d e x i F ) v i ( , 0 8 6 8 4 8 2 7 , , 7 6 0 5 8 2 9 2 , - - , 8 2 8 9 6 3 5 8 , , 7 6 2 7 5 3 0 4 , , 8 2 8 9 6 3 5 8 , , 7 6 2 7 5 3 0 4 , 4 6 0 7 4 5 , 8 2 5 9 2 3 , 4 6 0 7 4 5 , 8 2 5 9 2 3 , 4 8 8 7 5 , 4 8 8 7 5 , 4 8 8 7 5 , 4 8 8 7 5 , , , 6 5 4 3 2 8 8 5 1 6 4 7 9 2 0 0 7 , , , 7 7 7 4 7 9 5 8 , , 9 7 6 4 4 7 0 4 , , 7 1 6 2 8 0 4 8 , , 9 6 3 9 1 6 7 3 , , 7 1 6 2 8 0 4 8 , , 9 6 3 9 1 6 7 3 , , 7 1 6 2 8 0 4 8 , , 9 6 3 9 1 6 7 3 , , 7 1 6 2 8 0 4 8 , , 9 6 3 9 1 6 7 3 , - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - , 7 5 9 4 6 5 , 1 6 , 4 5 9 3 7 2 9 1 , , 3 2 7 3 8 2 , 1 1 3 1 1 , 1 1 0 0 1 , - - - - - - - - - - - - - - - - - - - - , 7 5 9 4 6 5 , 1 6 , 4 5 9 3 7 2 9 1 , , 3 2 7 3 8 2 , 1 1 3 1 1 , 1 1 0 0 1 , 7 0 2 . 3 3 2 . l s e b a v i e c e R d n a h s a C s t i s o p e D r e h t O l i a c n a n F i s t e s s A t n e r r u C s t e s s A r e h t O l a i c n a n i F s t e s s A l a t o T s e i t i l i b a L i l i a c n a n F i d n a e d a r T l s e b a y a p y r d n u s l a i c n a n i F s e i t i l i b a i L l a t o T e t a R t s e r e t n I e v i t c e f f E e g a r e v A d e t h g e W i I = R E A W Notes to the Consolidated Financial Statements 6 9 ANNUAL REPORT 2020 NOTE 26: FINANCIAL INSTRUMENTS (CONTINUED) (d) Net Fair Value The net fair values of cash and cash equivalents and non-interest bearing monetary financial assets and liabilities approximates their carrying value. The net fair value of financial assets and financial liabilities is based upon market prices where a market exists or by discounting the expected future cash flows by the current interest rates for assets and liabilities with similar risk profiles. Listed equity investments have been valued by reference to market prices prevailing at reporting date. Financial Assets Cash at bank February 2020 February 2019 Carrying Amount $ Net Fair Value $ Carrying Amount $ Net Fair Value $ 29,285,067 29,285,067 72,848,680 72,848,680 Trade and other receivables 40,357,267 40,357,267 85,369,828 85,369,828 Equity instruments at FVOCI Other current assets 329,528 57,884 329,528 57,884 547,064 57,884 547,064 57,884 70,029,746 70,029,746 158,823,456 158,823,456 Financial Liabilities Trade and other payables 37,619,369 37,619,369 84,082,617 84,082,617 (e) Categories The carrying amounts of financial assets and financial liabilities in each category are as follows: Financial Assets Cash and cash equivalents Trade and other receivables Equity instruments at FVOCI Other current assets Financial Liabilities Trade and other payables Financial Assets Cash and cash equivalents Trade and other receivables Equity instruments at FVOCI Other current assets Financial Liabilities Trade and other payables February 2020 Amortised Cost $ 29,285,067 40,357,267 - 57,884 69,700,218 37,619,369 37,619,369 February 2019 Amortised Cost $ 72,848,680 85,369,828 - 57,884 158,276,392 84,082,617 84,082,617 FVOCI $ - - 329,528 - 329,528 - - FVOCI $ - - 547,064 - 547,064 - - 7 0 Notes to the Consolidated Financial Statements JUPITER MINES LIMITED NOTE 27: FAIR VALUE MEASUREMENT The financial instruments recognised at fair value in the statement of financial position have been analysed and classified using a fair value hierarchy reflecting the significance of the inputs used in making the measurements. The fair value hierarchy consists of the following levels: Level 1: quoted prices in active markets for identical assets or liabilities; Level 2: inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (as prices) or indirectly (derived from prices); and Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs). Group – as at 29 February 2020: Financial Assets Equity instruments at FVOCI Group – as at 28 February 2019: Financial Assets Equity instruments at FVOCI Level 1 $ Level 2 $ Level 3 $ Total $ 329,528 - - 329,528 Level 1 $ Level 2 $ Level 3 $ Total $ 547,064 - - 547,064 NOTE 28: PARENT COMPANY INFORMATION ASSETS Current assets Non-current assets TOTAL ASSETS LIABILITIES Current liabilities Non-current liabilities TOTAL LIABILITIES NET ASSETS EQUITY Contributed equity Financial assets reserve Accumulated profits/(losses) TOTAL EQUITY FINANCIAL PERFORMANCE Profit for the period Other comprehensive loss TOTAL COMPREHENSIVE INCOME Consolidated Group February 2020 $ February 2019 $ 62,984,872 296,773,308 410,406,076 214,985,973 473,390,948 511,759,054 34,474,149 12,900,435 47,374,584 130,472,445 7,570,235 138,042,680 426,016,364 373,716,374 410,435,400 410,435,400 122,722 340,258 15,458,242 (37,059,284) 426,016,364 373,716,374 67,513,147 (217,535) 152,264,505 (496,638) 67,295,612 151,767,867 The parent company leases an office under an operating lease, and has a future minimum lease payment of $38,892, which is payable within the next 12 months. Refer to Note 20 for further details. Notes to the Consolidated Financial Statements 7 1 ANNUAL REPORT 2020 NOTE 29: DIVIDENDS Dividends declared during the year: Unfranked interim dividend ($0.05 per share, wholly conduit foreign income; declared 17 September 2018, paid 10 October 2018) Unfranked final dividend ($0.025 per share, wholly conduit foreign income; declared 19 February 2019, paid 21 May 2019) Consolidated Group February 2020 $ February 2019 $ - - 97,949,552 48,974,775 Unfranked interim dividend 78,359,641 - ($0.04 per share, wholly conduit foreign income; declared 31 October 2019, paid 21 November 2019) 78,359,641 146,924,327 Subsequent to year end, Jupiter declared a final unfranked dividend for FY2020 of $0.0075 per share, of wholly conduit foreign income, totalling $14,692,433. The dividend was paid on 21 May 2020. NOTE 30: AUDITORS’ REMUNERATION Amounts paid or payable to the auditors of the Company and charged as an expense were: Audit and review of the financial statements Auditors of Jupiter Mines Limited Auditors of subsidiary or related entities Remuneration for audit and review of financial statements Other non-audit services Taxation and other services Corporate finance Total other service remuneration Total auditors’ remuneration Consolidated Group February 2020 $ February 2019 $ 106,808 14,042 120,850 146,337 - 146,337 267,187 148,453 11,739 160,192 54,081 10,000 64,081 224,273 7 2 Notes to the Consolidated Financial Statements JUPITER MINES LIMITED Directors’ Declaration The Directors of Jupiter Mines Limited declare that: 1. the financial statements, notes and the additional disclosures included in the Directors Report designated as audited, of the consolidated entity are in accordance with the Corporations Act 2001 including: (a) complying with Accounting Standards (including the Australian Accounting Interpretations) and the Corporations Regulations 2001; and (b) give a true and fair view of the financial position as at 29 February 2020 and of the performance for the year ended on that date of the company and consolidated entity; 2. The financial statements and notes also comply with International Financial Reporting Standards as disclosed in Note 1. 3. There are reasonable grounds to believe that Jupiter Mines Limited will be able to pay its debts as and when they become due and payable. 4. 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 ended 29 February 2020. Signed on behalf of the Board of Directors Priyank Thapliyal Guernsey 27 May 2020 Directors’ Declaration 7 3 ANNUAL REPORT 2020 Central Park, Level 43 152-158 St Georges Terrace Perth WA 6000 Correspondence to: PO Box 7757 Cloisters Square Perth WA 6850 T +61 8 9480 2000 F +61 8 9480 2050 E info.wa@au.gt.com W www.grantthornton.com.au Auditor’s Independence Declaration To the Directors of Jupiter Mines Limited In accordance with the requirements of section 307C of the Corporations Act 2001, as lead auditor for the audit of Jupiter Mines Limited for the year ended 29 February 2020, I declare that, to the best of my knowledge and belief, there have been: a b no contraventions of the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and no contraventions of any applicable code of professional conduct in relation to the audit. GRANT THORNTON AUDIT PTY LTD Chartered Accountants M J Hillgrove Partner – Audit & Assurance Perth, 27 May 2020 Grant Thornton Audit Pty Ltd ACN 130 913 594 a subsidiary or related entity of Grant Thornton Australia Ltd ABN 41 127 556 389 www.grantthornton.com.au ‘Grant Thornton’ refers to the brand under which the Grant Thornton member firms provide assurance, tax and advisory services to their clients and/or refers to one or more member firms, as the context requires. Grant Thornton Australia Ltd is a member firm of Grant Thornton International Ltd (GTIL). GTIL and the member firms are not a worldwide partnership. GTIL and each member firm is a separate legal entity. Services are delivered by the member firms. GTIL does not provide services to clients. GTIL and its member firms are not agents of, and do not obligate one another and are not liable for one another’s acts or omissions. In the Australian context only, the use of the term ‘Grant Thornton’ may refer to Grant Thornton Australia Limited ABN 41 127 556 389 and its Australian subsidiaries and related entities. GTIL is not an Australian related entity to Grant Thornton Australia Limited. Liability limited by a scheme approved under Professional Standards Legislation. Central Park, Level 43 152-158 St Georges Terrace Perth WA 6000 Correspondence to: PO Box 7757 Cloisters Square Perth WA 6850 T +61 8 9480 2000 F +61 8 9480 2050 E info.wa@au.gt.com W www.grantthornton.com.au Independent Auditor’s Report To the Members of Jupiter Mines Limited Report on the audit of the financial report Opinion We have audited the financial report of Jupiter Mines Limited (the Company) and its subsidiaries (the Group), which comprises the consolidated statement of financial position as at 29 February 2020, the consolidated statement of profit or loss and other comprehensive income, consolidated statement of changes in equity and consolidated statement of cash flows for the year then ended, and notes to the consolidated financial statements, 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: a giving a true and fair view of the Group’s financial position as at 29 February 2020 and of its performance for the year ended on that date; and b complying with Australian Accounting Standards and the Corporations Regulations 2001. Basis for opinion We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Report section of our report. We are independent of the Group in accordance with the auditor independence requirements of the Corporations Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional Accountants (the Code) that are relevant to our audit of the financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Emphasis of matter – COVID-19 We draw attention to Note 24 of the financial report, which describes the circumstances relating to the material subsequent event regarding COVID-19 and the uncertainty surrounding any potential financial impact on the financials. Our opinion is not modified in respect of this matter. 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. Grant Thornton Audit Pty Ltd ACN 130 913 594 a subsidiary or related entity of Grant Thornton Australia Ltd ABN 41 127 556 389 www.grantthornton.com.au ‘Grant Thornton’ refers to the brand under which the Grant Thornton member firms provide assurance, tax and advisory services to their clients and/or refers to one or more member firms, as the context requires. Grant Thornton Australia Ltd is a member firm of Grant Thornton International Ltd (GTIL). GTIL and the member firms are not a worldwide partnership. GTIL and each member firm is a separate legal entity. Services are delivered by the member firms. GTIL does not provide services to clients. GTIL and its member firms are not agents of, and do not obligate one another and are not liable for one another’s acts or omissions. In the Australian context only, the use of the term ‘Grant Thornton’ may refer to Grant Thornton Australia Limited ABN 41 127 556 389 and its Australian subsidiaries and related entities. GTIL is not an Australian related entity to Grant Thornton Australia Limited. Liability limited by a scheme approved under Professional Standards Legislation. Key audit matter Impairment on Investments accounted for using the equity method Note 1(b) and Note 14 The Group recorded an investment accounted for under the equity method totalling $437,601,406 (2019: $422,841,742) at 29 February 2020 in relation to its 49.9% ownership in Tshipi e’Ntle Manganese Mining Proprietary Limited. How our audit addressed the key audit matter Our procedures included, amongst others: Considering the appropriateness of the method applied by the Group to perform the valuation of the investment utilising the equity method in accordance with the requirements of the accounting standards; The Group recognises this investment as a joint venture using the equity method in accordance with AASB 128: Investment in Associates and Joint Ventures, and is considered for impairment in the event of significant or prolong decline in value. Procedures included obtaining the key valuation inputs, including the long term manganese price, ore reserves, discount rates and critically assessing the inputs and assumptions; and Assessed the applicability of internal and external Management assesses impairment on an annual basis in accordance with AASB 136 “Impairment of Assets”. This area is a key audit matter due to the significant balance carried by the Group that management have assess using estimates and judgements that required specific valuation expertise and analysis. Exploration and evaluation assets - Notes 1(e) & Note 13 At 29 February 2020 the carrying value of exploration and evaluation assets was $11,774,238 (2019: $10,800,000). In accordance with AASB 6 Exploration for and Evaluation of Mineral Resources, the Group is required to assess at each reporting date if there are any triggers for impairment which may suggest the carrying value is in excess of the recoverable value. The process undertaken by management to assess whether there are any impairment triggers in each area of interest involves an element of management judgement. This area is a key audit matter due to the significant judgement involved in determining the existence of impairment triggers. impairment indicators detailed in AASB 136 “Impairment of Assets”; and Assessing the adequacy of related disclosures in Note 1(b) and Note 14. Our procedures included, amongst others: obtaining the management reconciliation of capitalised exploration and evaluation expenditure and agreeing to the general ledger; reviewing management’s area of interest considerations against AASB 6; conducting a detailed review of management’s assessment of trigger events prepared in accordance with AASB 6 including; o o o tracing projects to statutory registers, exploration licenses and third party confirmations to determine whether a right of tenure existed; enquiry of management regarding their intentions to carry out exploration and evaluation activity in the relevant exploration area, including review of management’s budgeted expenditure; understanding whether any data exists to suggest that the carrying value of these exploration and evaluation assets are unlikely to be recovered through development or sale; evaluating the competence, capabilities and objectivity of management’s experts in the evaluation of potential impairment triggers; engaging the services of an independent valuation specialist to determine the market value of the Group’s exploration projects; and assessing the appropriateness of the related financial statement disclosures. Information other than the financial report and auditor’s report thereon The Directors are responsible for the other information. The other information comprises the information included in the Group’s annual report for the year ended 29 February 2020, but does not include the financial report and our auditor’s report thereon. Our opinion on the financial report does not cover the other information and 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. Responsibilities of the Directors for the financial report The Directors of the Company are responsible for the preparation of the financial report that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal control as the Directors determine is necessary to enable the preparation of the financial report that gives a true and fair view and is free from material misstatement, whether due to fraud or error. In preparing the financial report, the Directors are responsible for assessing the Group’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Directors either intend to liquidate the Group or to cease operations, or have no realistic alternative but to do so. Auditor’s responsibilities for the audit of the financial report Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the Australian Auditing Standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of 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 at: http://www.auasb.gov.au/auditors_responsibilities/ar1.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 27 of the Directors’ report for the year ended 29 February 2020. In our opinion, the Remuneration Report of Jupiter Mines Limited, for the year ended 29 February 2020 complies with section 300A of the Corporations Act 2001. Responsibilities The Directors of the Company are responsible for the preparation and presentation of the Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on the Remuneration Report, based on our audit conducted in accordance with Australian Auditing Standards. GRANT THORNTON AUDIT PTY LTD Chartered Accountants M J Hillgrove Partner – Audit & Assurance Perth, 27 May 2020 Additional Information for Listed Companies Additional information required by the ASX listing rules and not disclosed elsewhere in this report is set out below. The information is effective as at 18 May 2020. Substantial shareholders The number of substantial shareholders and their associates are set out below: Name Number of fully paid ordinary shares % holding Stichting Pensioenfonds ABP (and its associate Pallinghurst EMG African Queen L.P.) 289,075,945 Hans J. Mende Fritz R. Kundrun AMCI Euro Holdings B.V. POSCO Australia GP Pty Ltd (and its associate POSCO Australia Pty Ltd) 252,458,801 240,251,826 145,845,372 134,992,472 14.76 12.91 12.26 7.44 6.89 Voting rights Ordinary Shares: On a show of hands, every member present at a meeting in person or by proxy shall have one vote and upon a poll each share shall have one vote. Distribution of equity security holders Holding 1 – 1,000 1,001 – 5,000 5,001 – 10,000 10,001 – 100,000 100,001 and over Number of shareholders Number of shares % of capital 150 817 685 2,216 598 40,135 2,519,304 5,662,831 86,540,894 1,864,227,869 0.00 0.13 0.29 4.42 95.16 Shareholders with less than a marketable parcel As at 18 May 2020 there were 288 shareholders on the register holding less than a marketable parcel ($500) based on the closing market price of $0.27. 7 9 Additional Information for Listed Companies JUPITER MINES LIMITED Twenty largest shareholders Shareholder Number of shares held % of issued capital 1 2 3 4 5 6 7 8 9 HSBC Custody Nominees (Australia) Limited Stichting Pensioenfonds ABP (and its associate Pallinghurst EMG African Queen L.P.) AMCI Euro Holdings B.V. POSCO Australia GP Pty Ltd (and its associate POSCO Australia Pty Ltd) J P Morgan Nominees Australia Pty Limited HJM Jupiter L.P. Citicorp Nominees Pty Limited FRK Jupiter L.P. Priyank Thapliyal 10 Ntsimbintle Holdings (Pty) Ltd 11 12 13 14 National Nominees Limited BNP Paribas Noms Pty Ltd BNP Paribas Nominees Pty Ltd Ilwella Pty Ltd 15 Mr Kenneth Joseph Hall 16 17 18 19 HSBC Custody Nominees (Australia) Limited - A/C 2 E-Tech Capital Pty Ltd Red Rock Resources plc CS Third Nominees Pty Limited 20 Cunact Pty Ltd Unissued equity securities There are no unissued equity securities. Securities exchange The Company is listed on the Australian Securities Exchange. 393,529,705 289,075,945 145,845,372 134,992,472 115,806,959 107,113,430 101,177,101 94,406,454 57,437,584 56,987,165 27,825,077 22,452,988 20,320,850 19,100,589 15,100,000 11,016,852 9,612,354 9,524,914 6,905,425 6,000,000 20.09 14.76 7.44 6.89 5.91 5.47 5.16 4.82 2.93 2.91 1.42 1.15 1.04 0.98 0.77 0.56 0.49 0.49 0.35 0.31 Additional Information for Listed Companies 8 0 ANNUAL REPORT 2020 Glossary of Terms and Abbreviations Term/Abbreviation Definition AASB CIF CYIP EPS FOB FVOCI FY2019 FY2020 JKPL LTI LTIR TRIFR Australian Accounting Standards Board Cost, Insurance and Freight Central Yilgarn Iron Projects Earnings per share Free on Board Fair value through other comprehensive income Financial year ended 28 February 2019 Financial year ended 29 February 2020 Jupiter Kalahari Pty Ltd Lost time injuries Lost time injury rate Total recordable injury frequency rate 81 Glossary of Terms and Abbreviations JUPITER MINES LIMITED J u p i t e r M i n e s L i m i t e d | A n n u a l R e p o r t 2 0 2 0 Level 10, 16 St Georges Terrace Perth, Western Australia, 6000 T +61 8 9346 5500 www.jupitermines.com