ABN: 81 131 405 144
2017
ANNUAL REPORT
ARGENTINA’S NEXT
LITHIUM COMPANY
DIRECTORS
REGISTERED OFFICE
SHARE REGISTRY
BANKERS
Mr David Vilensky
Unit 3, 32 Harrogate Street,
West Leederville
Mr Christopher Gale
(Managing Director)
Mr Brent Jones
Western Australia
Telephone
+61 8 6181 9798
Perth, 6000
Computershare Investor
ANZ
Services Pty Limited
6/646 Hay Street
Level 11
Subiaco 6008
172 St Georges Terrace
Western Australia
Facsimile
+61 8 9321 6666
COMPANY SECRETARY
Ms Sarah Smith
E-mail
PERU OFFICE
Calle Cura Bejar 190.
Oficina 303,
San Isidro / Lima - Perú
Teléfono
51 (1) 2070-490
Western Australia
SOLICITORS
Steinepreis Paganin
Level 4
The Read Buildings
16 Milligan Street
Perth 6000
NAB
Central Business
Banking Centre
Perth 6000
Western Australia
AUDITORS
Stantons
Western Australia
Level 2
STOCK EXCHANGE
Australian Stock Exchange
Limited (LRS)
1 Walker Avenue
West Perth 6005
Western Australia
ARGENTINA’S NEXT LITHIUM COMPANY
CONTENTS
1.
2.
3.
4.
5.
6.
7.
8.
9.
Company Overview
Review of operations
Directors’ report
Consolidated statement of profit or loss and other comprehensive income
Consolidated statement of financial position
Consolidated statement of changes in equity
Consolidated statement of cash flows
Notes to the consolidated financial statements
Directors’ declaration
10.
Auditors’ independence declaration
11.
Independent auditor’s report
12.
Additional information required by the ASX
13.
Tenement schedule
Page
2
3
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71
72
73
77
79
COMPANY OVERVIEW
During the year the Company continued to expand its portfolio of Argentinean tenements with the
acquisition of several prospective lithium exploration concessions and mining licences.
At the date of this report, the Company has access to approximately 294,000 hectares of pegmatite
bearing ground prospective for lithium within the Catamarca, San Luis and Salta regions of Argentina.
In addition, during the period the Company acquired the La Rioja concessions prospective for cobalt.
In Catamarca province exploration reverse circulation drilling program of was completed. A total of
forty reverse circulation drill holes completed, for a total of 2,680 meters producing a total of 223
samples all of which all were assayed.
There were very encouraging results and Latin will continue with detailed mapping with further
sampling of the project area will continue at Catamarca to identify high priority pegmatite drill
targets. This will include mapping and sampling at the highly prospective but under explored Lomo
Pelada prospect where there is known to be extensive multiple pegmatite dykes in close proximity to
each other.
Latin Resources will continue to focus its attention on its Lithium projects in Argentina and its
objective of defining a JORC resource in 2018.
The Company continues to progress the Joint Venture with First Quantum Minerals in the
Pachamanca concessions in Peru. During the year First Quantum gained approvals to commence field
work and geophysical assessment of the area in preparation and planning of initial drill plans on the
area.
The Company also successfully concluded the sale of the Ilo Copper Project with Toronto listed
Westminster Resources Ltd (WMR). On financial settlement of the sale agreement, the Company will
receive USD$250,000 together with 19 million shares in WMR. On receipt of the WMR shares the
Company will have a 40% direct interest in WMR.
In keeping with the Company’s long term strategy of identifying and developing projects with
suitable JV partners, the Company commenced preliminary discussions with a number of different
parties in relation to potential joint venture agreements or offtake arrangements in respect of its
lithium assets in Argentina.
Latin Resources Limited (ABN 81 131 405 144)
2
REVIEW OF OPERATIONS
Highlights for the year ended 31 December 2017
CATAMARCA – (ARGENTINA)
Geochemical analysis of 29 rock chip samples taken at the end of 2016 confirms the presence of
significant lithium oxide (Li2O) in the historical Ancasti and Villisman spodumene mines with grades
of up to 4.46% Li2O received.
EIR/DIA issued and approved allowing for the completion of 2,680 meters of reverse circulation
drilling at five prospects.
o At Reflejos del Mar, drilled 986 meters in 13 holes of which 8 intercepted pegmatites with
true thicknesses between 0.8m and 4.7m and Li2O grade between 0.55% and 2.40%.
o At Campo el Abra, drilled 393 meters in 8 holes of which 6 intercepted pegmatites with
true thicknesses between 0.8m and 4.7m and Li2O grade between 0.87% and 2.02%.
o At La Culpable, drilled 369 meters in 5 holes of which 4 intercepted pegmatites with true
thicknesses between 0.8m and 4.7m and Li2O grade between 1.62% and 4.61%.
o At Santa Gertrudis, drilled 560 meters in 8 holes of which 8 intercepted pegmatites with
true thicknesses between 0.8m and 4.7m and Li2O grade between 0.67% and 1.42%.
o At Ipizca II, 372 meters were drilled from 5 holes of which 3 intercepted pegmatites with
true thicknesses of 1m. No significant grades were encountered.
An initial mapping project completed at the Lomo Pelada prospect 3km to the west of Villisman
Village with multiple pegmatites identified and sampled.
SAN LUIS – (ARGENTINA)
Binding agreement gives a direct path to 100% ownership of the prized Geminis Mine and
surrounding LRS Don Gregorio exploration concessions.
Spectacular spodumene mineralisation within the main pegmatite which is up to 18m thick, more
than 200m long and gently dipping at 20-30 degrees.
The area contains multiple similar unexplored pegmatites.
Non-invasive mapping activity confirms two pegmatite zones containing multiple pegmatites in the
vicinity of Geminis mine covering an area of 2.1km by 1.7km.
Reconnaissance of the northeast of the San Francisco concession shows strike length continuation of
the Geminis group pegmatites of 7.5km.
Sample analysis collected from exposed pegmatites reports grades up to 3.83% Li2O with
fractionation levels of pegmatites measured using geochemical K/Rb ratios showing all pegmatites
prospective for lithium mineralisation.
The Maria del Huerto mine was mapped in detail and sampled to provide information used in the
design of a preliminary drilling program.
Analysis of the twenty samples from Maria del Huerto have reported grades of up to 1.93% Li2O.
Latin Resources Limited (ABN 81 131 405 144)
3
REVIEW OF OPERATIONS
The EIA drill permit was completed and submitted in March and then approved in October 2017
allowing for the issuance of the DIA by the San Luis Department of Mines, which is yet to occur.
Satellite imagery analysis of vacant ground and field follow up has led to ten new concession
applications being submitted covering an area of over 76,000 hectares.
LA RIOJA – (ARGENTINA)
Three exploration concessions covering 28,220 hectares have been applied for in La Rioja
Province that surrounds the King Tut mine.
The King Tut mine was a historic producer of cobalt and gold ore and has been documented by
various authors since at least 1922.
The exploration concessions have never been subject to systematic exploration and the area,
being in such close proximity to a known high-grade cobalt-gold deposit is considered highly
prospective.
SALTA – (ARGENTINA)
Two due diligence field trips to the Ansotana Projects San Elena, El Quemado and Tres Tetas
completed.
ILO COPPER PROJECTS – (PERU)
In September 2017, LRS entered into a binding agreement to sell the Ilo copper projects in Peru to
TSX listed Westminster Resources Limited.
The total sale value exceed $6.8m in cash and shares.
The transaction enables LRS to focus resources on the development of its lithium projects in
Argentina.
Sale does not include Pachamanca/MT-03 which is under a JV agreement with First Quantum
Minerals.
TECHNOLOGY
Agreement with National University of Cuyo (UnCuyo) has secured first option to acquire an
exclusive license of the University’s patented technology to produce lithium carbonate to
spodumene.
Spodumene to lithium carbonate pilot plant construction has commenced
Latin Resources has appointed Primero Consulting Engineers to carry out a high level scoping study
for its lithium pegmatite projects.
Latin Resources Limited (ABN 81 131 405 144)
4
REVIEW OF OPERATIONS
Projects
CATAMARCA – (ARGENTINA)
Ancasti Rock Chip Geochemical Analysis
In January 2017, geochemical results were received for samples taken during a detailed mapping
program conducted at the end of 2016 which targeted areas historically mined for spodumene in
both Villisman and Ancasti districts. The aim of the sampling and mapping was to confirm the
presence of lithium and other elements of interest and to estimate the size and orientation of the
pegmatite dykes containing the mineralisation.
Latin collected a total of twenty-nine rock chip samples from seven of its prospects. Thirteen
samples taken from Ancasti (southern) prospects Ipizca II and Santa Gertrudis, and fourteen
samples taken from the Villisman (northern) prospects La Herrumbrada, Lay Joyita, Lomo Pelada,
Reflejos de Mar and Campo el Abra.
The samples were sent to the internationally recognised laboratory ALS in Mendoza for sample
preparation followed by analysis by ALS in Vancouver using Multi-Element Analysis by Sodium
Peroxide Fusion and ICP-MS and Li Analysis by Sodium Peroxide Fusion and ICP-ES for sample over
2.5% lithium.
The results confirmed that significant grades of lithium contained within the Ancasti prospects with
19 of the 29 samples being 1% Li2O or higher, the best grades ranging from 2.02 Li2O to 4.46 Li2O,
with an average grade of all samples being 1.42% Li2O.
The analysis also shows that the pegmatites contain significant values of tantalum and niobium.
Figure 1. Ancasti and Villisman Rock Chip Geochemical Analysis
Latin Resources Limited (ABN 81 131 405 144)
5
REVIEW OF OPERATIONS
Table 1. Assay and location table of rock chip samples taken in November-December 2016
Ancasti Reverse Circulation Drilling
From early February until the end of March 2017 a reverse circulation drilling program was
completed by the top tier drilling company, Major Drilling, using a multi-purpose UDR-650 rig. The
Catamarca drilling program aimed to test the depth continuity and lithium content of the
pegmatites that are exposed at surface both within old open pits and along strike extensions from
the pit exposures on five of the eleven historically mined pegmatites that make up the Ancasti
Lithium project.
Latin Resources Limited (ABN 81 131 405 144)
6
Sample IDProjectEastingNorthingLi %Li2OBe ppmNb ppmTa ppmDescriptionCEA-M1Campo el Abra255,521 6,846,058 0.030.07611.40.29Rock chip taken from pegmatite in the pit wall. Spodumene content is very lowCEA-M2Campo el Abra255,513 6,846,085 0.631.3562.52236.7Rock chip taken from pegmatite in the pit wall. Fresh green and altered white spodumene content is moderateCEA-M3Campo el Abra255,519 6,846,100 0.290.6222811.10.57Rock chip taken from pegmatite in the pit wall. Fresh green spodumene content lowCEA-M4Campo el Abra255,516 6,846,114 0.942.022055.5<0.04Rock chip taken from pegmatite in the pit wall. Fresh green spodumene content is moderateCEA-M5Campo el Abra255,504 6,846,210 0.721.564519.20.35Rock chip taken from pegmatite in the pit wall. Tabular crystals of altered white spodumene content is moderateIP2-ZN-M1Ipizca II253,396 6,813,618 0.270.5718.655.253.2Rock chip taken from pegmatite in the pit wall. Highly altered white spodumene content is lowIP2-ZN-M2Ipizca II253,394 6,813,621 0.671.4314396.9166Rock chip taken from pegmatite in the pit wall. Highly altered white spodumene content is moderateIP2-ZN-M3Ipizca II253,392 6,813,628 0.070.14552289100Rock chip taken from pegmatite in the pit wall. Spodumene content very lowIP2-ZN-M4Ipizca II253,391 6,813,645 0.020.0513.990.79.18Rock chip taken from pegmatite in the pit wall. Spodumene content very lowIP2-ZN-M5Ipizca II253,387 6,813,649 1.142.4445810195.2Rock chip taken from pegmatite in the pit wall. Fresh light green and altered white spodumene content is moderateIP2-ZS-M1Ipizca II253,411 6,813,572 0.040.098.774.733.6Rock chip taken from pegmatite in the pit wall. No visible spodumene IP2-ZS-M2Ipizca II253,416 6,813,560 0.410.8833.6143.588.9Rock chip taken from heavily oxidised pegmatite in the pit wall. White altered spodumene content is lowLH-M1La Herrumbrada259,366 6,845,583 1.382.964.79.32.81Rock chip taken from pegmatite in the pit wall. Spodumene content moderateLH-M2La Herrumbrada259,379 6,845,581 0.531.151099.43.25Rock chip taken from pegmatite in the pit wall. Light green large prismatic spodumene content is moderateLJ-M1La Joyita256,174 6,850,510 0.430.9222.2180536Rock chip taken from pegmatite in the pit wall. Spodumene content is moderateLJ-M2La Joyita256,177 6,850,528 2.074.4626.222.941.8Rock chip taken from pegmatite in the pit wall. Prismatic green spodumene content is highLP-M1Loma Pelada259,278 6,843,647 0.932.00118.56041.9Rock chip taken from pegmatite in the pit wall. Altered white spodumene content is very lowLP-M2Loma Pelada259,356 6,843,956 0.631.35180.523.911Rock chip taken from pegmatite in the pit wall. Altered white spodumene content is moderateLP-M3Loma Pelada259,361 6,843,907 0.471.011267.72.87Rock chip taken from pegmatite in the pit wall. Altered white s podumene content is low-moderateLP-M4Loma Pelada259,361 6,843,907 1.082.3313311.74.99Rock chip taken from pegmatite in the pit wall. Spodumene content very lowRM-M1Reflejos de Mar259,939 6,849,149 0.932.0036610.631.4Rock chip taken from pegmatite in the pit wall. Fresh pale green spodumene content is moderateRM-M2Reflejos de Mar259,935 6,849,148 1.062.2735639.436.3Rock chip taken from pegmatite in the pit wall. Spodumene content is moderateRM-M3Reflejos de Mar259,950 6,849,188 1.413.026.99.617.75Rock chip taken from pegmatite in the pit wall. Fresh prismatic green spodumene content is moderate - highSG-M1Santa Gertrudis255,990 6,804,006 0.240.52198.5105.541.8Rock chip taken from pegmatite in the pit wall. Altered white spodumene content lowSG-M2Santa Gertrudis255,989 6,804,009 0.481.0420963.943Rock chip taken from pegmatite in the pit wall. Spodumene content very lowSG-M3Santa Gertrudis255,991 6,804,018 0.270.59156.58.44.14Rock chip taken from pegmatite in the pit wall. Spodumene content lowSG-M4Santa Gertrudis255,986 6,804,062 1.032.2214024.413.9Rock chip taken from pegmatite in the pit wall. Fresh green and altered white spodumene content is moderateSG-M5Santa Gertrudis255,986 6,804,078 0.471.0019826.34.57Rock chip taken from pegmatite in the pit wall. Highly altered white spodumene content is lowSGMC-M1Santa Gertrudis255,993 6,803,990 0.461.001394817Rock chip taken from pegmatite in the pit wall. Altered white spodumene content is low
REVIEW OF OPERATIONS
A total of thirty nine 41/2 inch reverse circulation holes were drilled, for a total of 2,680 meters
producing a total of 223 samples submitted in five batches to ALS Mendoza for sample preparation
and then transported to Vancouver for analysis using multi-element analysis by sodium peroxide
fusion.
Figure 2. Ancasti Projects Drilled in 2017
Reflejos del Mar
Of the thirteen holes drilled, eight intercepted pegmatites of between 1 and 7 meters in apparent
thickness. The drilling successfully intersected the down dip extension of the pegmatite orebody
exploited in the historic mine and confirmed the LRS geological model.
These first pass exploration results show several significant intercepts containing lithium grades
that may be suitable for further investigation and possible development in conjunction with other
similar deposits. There are also elevated niobium and tantalum grades which may contribute to any
future operation with by-product credits.
The drilling has closed off the deposit in all directions.
Latin Resources Limited (ABN 81 131 405 144)
7
From
To
Intercept
Thickness
True
Thickness
Li2O
%
BeO
ppm
Na2O5
ppm
Ta2O5
ppm
REVIEW OF OPERATIONS
Hole
Number
RDMRC001
Including
RDMRC002
Including
RDMRC003
RDMRC007
Including
RDMRC008
RDMRC009
20
21
39
39
29
39
40
53
86
25
24
46
45
30
45
44
57
87
RDMRC012
67
Table 2. Significant Assay Results at Reflejos del Mar
68
5
3
7
6
1
6
4
4
1
1
4.7
2.8
4.6
3.9
1.0
4.7
3.1
2.8
0.9
0.8
1.29
1.74
2.17
2.40
1.24
1.39
1.90
0.84
0.55
0.75
493
414
444
489
907
537
540
503
184
616
82
100
37
36
107
76
88
73
64
22
51
54
55
58
446
55
52
46
55
49
Figure 3. Reflejos del Mar Drill Hole Collar Locations
Figures 4 and 5. Reflejos del Mar Cross sections A – A’ and B – B’
Latin Resources Limited (ABN 81 131 405 144)
8
REVIEW OF OPERATIONS
Campo el Abra
Of the eight holes drilled at Campo el Abra, six intercepted pegmatites of between 6 and 15
meters in apparent thickness which translates to between 4m and 9m in true thickness.
Intercepts contain between trace visual spodumene up to 30% spodumene. The pegmatite
intercepted is the down-dip extension of the outcropping pegmatite that was the subject of
small-scale historical mining. Its location and orientation is consistent with what was expected
from the pre-drilling surface outcrop and mine mapping.
The grades support further investigation and possible developmental studies. The mineralisation
is of acceptable thickness when considering possible theoretical mining scenarios and it is open
to the north, south and at depth and has a strike length of 150m+.
From
To
Intercept
Thickness
True
Thickness
Li2O
%
BeO
ppm
Na2O5
ppm
Ta2O5
ppm
Hole
Number
CEARC001
Including
CEARC002
CEARC003
Including
CEARC004
Including
CEARC007
Including
CEARC008
7
13
15
11
16
29
30
10
11
26
15
14
30
18
17
41
34
14
13
34
8
1
15
7
1
12
4
4
2
8
Including
2
Table 3. Significant Assay Results at Campo el Abra
27
29
7.6
1.0
9.2
6.7
1.0
7.6
2.5
3.8
1.9
5.2
1.3
1.02
1.55
0.87
1.07
1.57
1.38
2.02
1.33
1.76
1.33
1.66
476
401
463
411
422
499
573
342
327
426
368
35
24
35
30
22
34
21
19
19
31
20
17
9
15
12
10
28
7
9
9
16
5
Figure 6. Campo el Abra Drill Hole Collar Locations
Latin Resources Limited (ABN 81 131 405 144)
9
REVIEW OF OPERATIONS
Figures 7,8,9. Campo el Abra Cross section A - A', B – B’ and C – C’
Latin Resources Limited (ABN 81 131 405 144)
10
REVIEW OF OPERATIONS
Santa Gertrudis
Of the eight holes drilled, all holes intercepted pegmatites of between 1 and 5 meters in apparent
thickness containing between trace visual spodumene up to 20%. The drilling successfully intersected
the down dip extension of the pegmatite orebody exploited in the historic mine and was as expected
from mapping. The pegmatite is open to the north, south and at depth, however, the Li2O grades are a
little low.
Hole Number
From
To
SGRC001
Including
31
33
50
SGRC002
27
SGRC003
46
SGRC003
47
SGRC004
50
SGRC004
SGRC005
22
Table 4. Significant Assay Results at Santa Gertrudis
35
34
52
32
47
48
52
23
Intercept
Thickness
4
1
2
5
1
1
2
1
True
Thickness
3.7
0.9
1.3
4.7
1.0
0.6
1.2
0.9
Li2O
%
0.85
1.42
1.06
0.89
0.67
0.79
0.70
0.73
Na2O5
ppm
Ta2O5
ppm
94
66
97
53
120
143
86
75
68
19
48
31
195
58
68
38
Figure 10. Campo el Abra Drill Hole Collar Locations
Latin Resources Limited (ABN 81 131 405 144)
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REVIEW OF OPERATIONS
Figure 11 and 12. Santa Gertrudis Cross sections A - A', B – B’
La Culpable
Of the five holes drilled four holes intercepted pegmatites of between 3 and 6 meters in apparent
thickness containing between trace visual spodumene up to 20% as logged. The location of the
pegmatites was as expected the thicknesses however did not expand nor did it continue to the south.
The bifurcation did not continue to the north. The grades at La Culpable, however, were very high for
Li2O and for tantalum.
Hole Number
From
To
LCRC001
Including
LCRC002
Including
LCRC004
Including
18
20
30
32
90
90
24
21
34
33
93
91
Intercept
Thickness
True
Thickness
6
1
4
1
3
1
5.2
0.9
2.3
0.9
2.8
0.9
Li2O
%
1.62
3.38
2.03
4.22
2.98
4.61
Na2O5
ppm
Ta2O5
ppm
75
93
104
58
219
232
193
193
160
152
453
623
Table 5. Significant Assay Results at La Culpable
Latin Resources Limited (ABN 81 131 405 144)
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REVIEW OF OPERATIONS
Figure 13. La Culpable Drill Hole Collar Locations
Figure 14 and 15. La Culpable Cross section A - A' and B – B’
The results can now be used to help prioritise the long-term plans for LRS and assist in deciding which
projects to develop further into the future. Please refer to Table 1 for details of the number of holes and
quantity of meters drilled at each of the five projects and a summary of the results and current thinking
regarding the next phase for each prospect drilled thus far.
Latin Resources Limited (ABN 81 131 405 144)
13
REVIEW OF OPERATIONS
In summary:
Campo el Abra (CEA) shows the thickest intercepts thus far drilled at the Ancasti projects. At 150m+ in
strike length, it is also the longest prospect delineated thus far, it is open in all directions except to the west
(which is up dip), and it also has a good Li2O grade that possibly justifies further delineation work toward
developmental studies.
Santa Gertrudis is also open to the north, south and at depth. While the grades are a little low they are
sufficient to warrant follow up, and recent mapping and satellite interpretation show the pegmatite
possibly extends up to 500m from the known mineralisation.
La Culpable demonstrated that very high Li2O grades were contained there along with interesting elevated
tantalum and niobium grades that warrant more work to delineate these zones further. These grades
represent the highest grades within pegmatites so far encountered at Ancasti.
Detailed mapping with further sampling of the project area will continue at Catamarca to identify high
priority pegmatite drill targets.
Project
Number
Holes
Total
Meters
Min True
Thickness
Max True
Thickness
Open
to
North
Open to
South
Open
at
Depth
Contains
Promising
Grade
Follow Up
Work
Warranted
Campo
el Abra
Ipizca II
La
Culpable
Reflejos
del Mar
Santa
Gertrudis
8
5
5
393
372
369
13
986
8
560
3.8
1.0
2.3
0.8
0.6
Total
39
2680
Table 6. Summary of Ancasti Drilling and Results
The Lomo Pelada Prospect
9.2
1.0
5.2
4.7
4.7
Yes
Yes
Yes
Yes
No
Yes
No
Yes
Yes
No
No
No
Yes
No
Yes
Yes
Yes
Yes
Yes
Yes
Yes
No
Yes
No
Yes
Mapping and sampling have been completed at the Lomo Pelada project approximately 3km west from the
village of Villisman. Historical mapping and a first pass visit in early 2017 showed the possibility of the
existence of multiple sub-parallel pegmatites. This has now been confirmed with drill targets currently being
determined with drilling to commence first-quarter 2018.
SAN LUIS – (ARGENTINA)
The Geminis Mine and Don Gregorio Exploration Concession
LRS secured a path to the 100% ownership of the Geminis Lithium Mine and Don Gregorio concessions in
the western part of the Libertador del San Martin region of San Luis, through the initial signing of a
Binding Letter of Intent and subsequent signing of the Sale Agreement.
The Geminis mine has been historically linked to lithium mining in San Luis and contains known high-grade
lithium bearing pegmatites. It was recognized by geologists from the National Development Bank whose
work has been reflected in unpublished reports as one of the main lithium deposits in the province of San
Luis with lithium ore produced dfuring the period 1935 - 1980.
The Geminis Mine (12 Ha) and surrounding Don Gregorio (388 Ha) exploration concessions are located
approximately 8km to the south-east of the village of San Francisco del Monte de Ore and 18km to the
north of the historical gold mining centre of La Carolina in the Sierra Grande de San Luis mountain range.
Latin Resources Limited (ABN 81 131 405 144)
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REVIEW OF OPERATIONS
Latin Resources’ San Francisco exploration concession surrounds the Geminis and Don Gregorio
concessions (See Figure 16). There are two possible access routes to the mine. The first is via a 4WD track
directly to the south of San Francisco village; the second is via the original access track by which ore was
transported from the Geminis mine to the south to reach the main road to the La Toma processing
facilities.
Figure 16 Location of Geminis, Don Gregorio and San Francisco concessions
Mining at Geminis began in the 1930’s and continued until 1959. Since then very sporadic mining has
taken place, but there has been no recent activity. Apart from a small quarry to the south of the
operations all of the mining was carried out using underground methods. The underground workings
observed consist of three adits which access a series of tunnels that vary in size and length. The most
northerly adit named Pozon Blanco is quite small and collapsed. The central adit named Cantera Grande is
6m long, 2.8m wide and 2.5m high. The main adit further to the south is named Poniente Labors and
contains approximately 70m of tunnels with an entrance chamber measuring 5m x 7.6m. Mining activity
was small scale and carried out in campaigns. It is thought that on average the mine produced
approximately 5-10 tonnes of spodumene per month (Barrio, Raul E. and Echeveste, Horacio J.). The
mine workings are spread over a strike distance of approximately 150m.
The San Francisco, Geminis Mine and Don Gregorio concessions are located within the Totoral Pegmatite
Field which is the southernmost pegmatite field of the Pampean Pegmatite Province Pegmatites are
intruded into Pringles Metamorphic Complex host rocks which comprise mostly fine grade gneisses and
schists of Ordovician age (456 – 488 million years).
The TPF comprises a 17 km long swarm of rare-element pegmatites of the LCT (Li-CS-Ta) family that
trends NNE – SSW that was intruded into the PMC between 465 and 317 million years ago (Galliski, M.A.
and Cerny, P., 2006).
Latin Resources Limited (ABN 81 131 405 144)
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REVIEW OF OPERATIONS
Figure 17. Regional geology map of the Totoral Pegmatite Field within the Pampean Pegmatite Province
The pegmatites located at the Geminis mine are of the complex spodumene type. A broad range of
economic minerals is present. Most significantly there is intense spodumene mineralisation with parts of
the mine comprising up to 80% of the material. During mining individual spodumene crystals have been
measured to have a length of up to 4m. Other minerals which are significant and may contribute to the
overall value are the lithium minerals amblygonite and lithiophilite which are found within the pegmatites
non-nucleus zones as are other minerals tantalite, columbite and beryl. The non-lithium minerals present
are significant as they may contribute as credits within any future concentrate.
LRS staff have recently entered and inspected the central and southern adits. Each adit and the mine
workings within have exposed walls that contain extremely high percentages of oxidised spodumene (See
Figures 18 and 19).
Figure 18 and 19. Exposed pegmatite in mine adits at the Geminis Mine
Latin Resources Limited (ABN 81 131 405 144)
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REVIEW OF OPERATIONS
From preliminary studies the main pegmatite is between 12-18 meters thick and has a known strike
length of more than 200m which is visible from the mine exposures and the satellite image (See Figure 2).
It is possible that other pegmatites along strike from the mine are in fact connected to the main mine
pegmatite and that the strike length is in fact much longer.
in
from
there
is
area
Also
preliminary
mapping and the satellite
image,
the
other
immediate
pegmatites above and below
the mine pegmatite. The
orientation of the known
pegmatites
is also very
favourable as it dips gently
at 20-30 degrees to the
south-east.
Figure 20. Satellite image showing the Geminis Mine Entrance Location with the known pegmatite outcrops
The final agreement is made up of three stages with the following terms and conditions;
Stage 1:
I.
II.
Within five days of signing the Final Agreement, Latin must pay the vendor US$15,000
From the time of signing the Final Agreement Latin has at its own cost to meet the following
milestones;
a. Approval of the Environmental Impact Report (EIR).
b. Obtaining the registration by the competent authority of the Manifestations of Discovery.
c. The approval of the reactivation plan requested by the competent authority of the Geminis
Mine.
Stage 2:
I.
At the completion of Stage 1 or sooner at Latin’s discretion Stage 2 begins with the following
payment obligations:
a. Within five days of the start of Stage 2, Latin must pay the vendor US$20,000
b. Within five days of the beginning of the third month of Stage 2, Latin must pay the vendor
US$20,000
II.
The objective of stage 2 is to complete the necessary permits and initial exploration drilling.
Stage 3:
I.
At the completion of Stage 2, Stage 3 commences with the following payment obligations:
a. Within five days of the commencement, Latin must pay the Vendor US$50,000
b. Within five days of the beginning of the third, sixth and ninth month Latin must pay the
Vendor US$50,000 for a total of US$150,000.
III.
The purpose of Stage 3 is to allow Latin to complete resource definition drilling aimed at defining
a mineral resource containing a minimum of one million tonnes of spodumene.
Once Stages 1, 2 and 3 are completed, and all payments have been made (US$260,000), Latin then has the
right to exercise its option to acquire 100% of the project with the payment to the Vendor of
US$2,000,000.
Latin Resources Limited (ABN 81 131 405 144)
17
REVIEW OF OPERATIONS
Non-invasive geological mapping and sampling was carried out at the Geminis Mine after the binding
letter of intent was signed on the 1st August 2017. The initial work concentrated efforts in and around the
Geminis Mine workings and then expanded out into the Don Gregorio exploration concession.
In the mine area, six pegmatite bodies have been mapped sometimes as discreet structures over a strike
length of 1.6km following the significant trend of the orebody exploited through historical mining. The
individual pegmatites vary from 4m up to 20m in thickness and dip relatively gently to the south-east at
between 15 to 30 degrees which is an ideal orientation for any future possible open pit mining. The
overall zone has a thickness of 400m.
Approximately 800m to the north west of the main mine pegmatite group is another packet of eight
sheeted pegmatites with a similar orientation to the mining group and thicknesses of between 4m to 25m.
Both zones together cover an area of 2.1km by 1.7km.
The results from the sampling have confirmed that the spodumene zones that have been exposed by the
historical mining contain very encouraging lithium grades even after having been significantly weathered.
The grades of lithium
in the fresh material
should be higher as
lithium is very mobile
and is usually highly
the
depleted
host
the
weathering process.
from
rock by
For pegmatites that
been
not
have
excavated and do not
have the spodumene
bearing intermediate
and nuclei zones, the
lithium
exposed
grades are
low as
expected.
Figure 21. Rock Chip sample locations showing Li2O grade at the at Geminis Mine Project
For these pegmatites, it is necessary to judge their prospectivity for lithium minerals by estimating the
level of fractionation of each pegmatite. Fractionation is the process of mineral crystallisation as the
magma evolves and cools. Compatible elements are the first to drop out and crystallise.
Non-compatible elements form minerals as the magma becomes more fractionated. Lithium minerals
and other economic minerals such as tantalum and niobium are non-compatible elements, and the
more fractionated a pegmatite, the more likely it is to contain concentrations of these elements.
Several geochemical signatures can be used to estimate the level of fractionation in a pegmatite.
One of the more reliable indicators is the potassium-rubidium ratio (K/Rb). Pegmatites with a K/Rb
ratio of less than 270 are thought to be fractionated sufficiently to be prospective for rare metals such
as lithium (Cerny, 1989). All of the rock chip samples taken at Geminis and Don Gregorio show K/Rb
ratio’s above this level with some showing extremely high levels of fractionation. This is very
encouraging for the prospectivity of the area.
Latin Resources Limited (ABN 81 131 405 144)
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REVIEW OF OPERATIONS
84-C-2016 Reconnaissance Exploration
During the field work at Geminis and Don Gregorio, the LRS geology team also made a field
reconnaissance trip to the north eastern part of the San Francisco exploration concession to visit and
confirm the presence of
in the
pegmatites seen
satellite
imagery of the
area. Significant pegmatite
mineralisation
was
identified during this visit.
The pegmatites appear to
be directly along strike in
the same trend as the
Geminis and Don Gregorio
pegmatites which
are
extremely encouraging as
this represents a strike
distance of approximately
7.5km (Figure 6). Further
detailed geological and
sampling work undertaken
here and
the gap
in
between the zones shortly
Figure 22. Concession 84-C-2016 7.5km pegmatite strike length
Maria del Huerto
Sampling and mapping have produced positive results at the Maria del Huerto mining tenements.
Geochemical samples were taken during a first pass mapping and sampling field program at the end of
January 2017 and in May completing detailed 1:1000 geological mapping of the old workings and other
pegmatite outcrops to finalise a drilling program. This work supports the original mapping which shows
the presence of at least three sub-parallel 5-6m thick pegmatite sheets 20-30m apart that dip at 50-60
degrees.
Pegmatites one and two occur as outcrop and subcrop and have not been mined to any great extent. Only
the external and marginal zones of the pegmatites are exposed, and they are heavily weathered.
Pegmatite three has previously been mined to a depth of approximately ten meters and is exposed for
approximately 110m within the mine workings. Here the spodumene bearing intermediate zone and
nucleus is well exposed. It has also undergone only limited weathering.
A total of twenty samples were taken from three pegmatites within and adjacent to the old mine
workings. The samples were sent to the internationally recognised laboratory ALS in Mendoza for sample
preparation followed by analysis by ALS in Vancouver. The results returned have confirmed expectations
that economic grades of lithium are contained within the mine exposure with adjacent pegmatite
outcrops showing elevated lithium grades in the outer zones despite being heavily weathered.
Latin Resources Limited (ABN 81 131 405 144)
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REVIEW OF OPERATIONS
Table 7. Maria del Huerto Geochemical Results
The detailed mapping and sampling allowed the design of targets/drill collar locations for the initial
exploration and resource development drilling. Approximately 1,200m of diamond drilling and 3,000m of
reverse circulation drilling has been planned to target the sheeted pegmatite mineralisation.
The company has received notification that the Environmental Impact Report submitted in March for the
Maria del Huerto project has been accepted and approved by the San Luis Mineria Department. The
acceptance of the EIR allows the department to now issue the DIA which is the actual approval for drilling.
The Company is awaiting issue of the DIA prior to mobilising the drill programme.
Latin Resources Limited (ABN 81 131 405 144)
20
Sample NumberEastingNorthingLithologyPegmatite ZonationVisible SpodumeneLi2O %Be ppmNb ppmTa ppmDescriptionMH1-S12739166398167Pegmatite 1ExternalNone0.01%9234Feldspar crystals of 25 -35 cm length containing small grains of quartz. Moderate presence of muscovite books.MH1.S22739126398168Pegmatite 1ExternalNone0.01%11152Feldspar crystals 20 cm length with quartz veinlet 1 cm width, forming graphic texture. Scarce muscovite.MH1-S32739216398166Pegmatite 1ExternalNone0.00%781Feldspar crystals in a quartz and plagioclase matrix. Scarce muscovite.MH1-S42739296398174Pegmatite 1ExternalNone0.00%1671Quartz and plagioclase crystals. No mica and spodumene identification.MH1-S52739116398174GraniteNANone0.01%792Very fine grained quartz containing green muscovite (80% - 20%). Apparently this is the granite.MH2-S62740096398302Pegmatite 2MarginalNone0.03%496918Big quartz crystals (10 – 12 cm) associated with feldspar and some zones containing abundant green muscovite books.MH2-S72740116398305Pegmatite 2MarginalNone0.03%1027016Quartz crystals in a green muscovite zone. Minor feldspar. MH2-S82739966398309Pegmatite 2MarginalNone0.01%7101Fine grained quartz forming matrix with green muscovite crystals. Minor plagioclase. MH2-S92739916398292Pegmatite 2ExternalNone0.01%972Big crystals of feldspar, quartz and green muscovite.MH2-S102740186398313Pegmatite 2ExternalNone0.02%42277Quartz veinlets 5-7 cm in a matrix of feldspar. Moderate presence of green muscovite. MH3-S112740456398393Pegmatite 3ExternalMinor0.13%189013Grey and green muscovite sector in the intermediate zone. All books are dipping in different angles. Minor quartz crystals. MH3-S122740446398398Pegmatite 3IntermediateHigh1.91%9833Quartz, spodumene crystals (6 cm width), plagioclase and mica from intermediate zone. High abundance of spodumene.MH3-S132740486398394Pegmatite 3IntermediateModerate1.27%214610Quartz, spodumene crystals (8 cm width), plagioclase and mica from the intermediate zone. MH3-S142740506398398Pegmatite 3NucleusHigh1.67%17352White crystals of quartz, very solid, with highly weathered pink spodumene crystals and mica.MH3-S152740576398400Pegmatite 3IntermediateModerate1.38%549104White crystals of quartz, some feldspar and moderate presence of spodumene. Accessory minerals are apatite and tourmaline. MH3-S162740586398403Pegmatite 3IntermediateHigh1.93%52652White crystals of quartz, plagioclase and moderate presence of mica. Green spodumene, apparently not weathered. Some apatite.MH3-S172740686398410Pegmatite 3MarginalNone0.06%495257Crystals of quartz and plagioclase forming a hard matrix. High abundance of mica and some apatite.MH3-S182740666398412Pegmatite 3ExternalNone0.04%5343510Grey and green mica zone. MH3-S192740786398413Pegmatite 3MarginalNone0.04%15503124Plagioclase crystals and quartz containing grey muscovite.MH3-S202740796398419Pegmatite 3MarginalNone0.06%584317Crystals of quartz and mica
REVIEW OF OPERATIONS
Figure 23. Maria del Huerto Geological Map, Geochemical Results and Planned Drill Hole Collars
New Exploration Concession Applications
Latin Resources Limited (ABN 81 131 405 144)
21
REVIEW OF OPERATIONS
In the San Luis area, there are many pegmatites occurring in swarms. Some have been previously mined for
spodumene, and many have been exploited or are still being mined for quartz and feldspar to support a
sizeable ceramics industry.
The LRS geological team has systematically evaluated these zones by identifying possible pegmatitic outcrops
using satellite imagery analysis and then ground-truthing these outcrops to confirm the lithology. As a result of
this work, ten new exploration zones have been identified, and exploration concession applications totalling
76,309 hectares have been submitted for these areas.
Figure 24. New San Luis Concessions
Latin Resources Limited (ABN 81 131 405 144)
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REVIEW OF OPERATIONS
SALTA – (ARGENTINA)
El Quemada and San Elena
From the 15th of May until the 20th a field trip was undertaken to visit El Quemada and San Elena deposits
which make up two of the four projects held by Antosana group in Salta, north-west Argentina. The aim
was to check the geology, potential size,
logistics issues and to take samples to give
information on
lithium grades as previous
samples were not analyzed for Li. The mining
property El Quemado
in the
departments of Cachi and La Poma; the Santa
Elena mining
is
property
located
in the
department of
Poma.
La
Access to the
located
is
Figure 25. San Elena and El Quemada Location
project is via a
one day's horse
ride from the village through a series of east-west valleys to the site. The
altitude of the project ranges between 4,200 and 5,000m.
The El Quemado Pegmatitic District belongs to the geological province of
Cordillera Oriental, Northwest of Argentina. The oldest rocks belong to a
metamorphic basement affected by different deformation phases; This
basement is constituted by metasedimentary rocks of Neoproterozoic-
Lower Cambrian age from the La Paya and Puncoviscana Formations
(Aceñolaza 1975, Adams 2008). The predominant outcrop in the mining concessions of El Quemado and
Santa Elena consists of fine-grained metasediments in the middle of quartzites, muscovite and biotite
shales, laminar bundles of strata 5 to 20 cm thick. In the Santa Elena mining concession, pegmatites were
identified that vary from 0.30 to 11.00 meters of power with outcrop up to 750 meters long. The average
thickness of the pegmatites identified on the surface is 3.50 meters in width.
Figure 265. Lepidolite in Pegmatite
Near San Elena Mine
Figure 27. San Elena Pegmatite with quartz, albite, k-feld, Muscovite and clay
Latin Resources Limited (ABN 81 131 405 144)
23
REVIEW OF OPERATIONS
Figure 28. San Elena Pegmatite Outcrop Map
El Quemado was also visited. It is approximately three km from San Elena and reaches an altitude of 5,000
(see figure 4). In the El Quemado mining concession, pegmatites were identified that vary from 0.20 to 2.50
meters of power with outcrop up to 700 meters long. The average thickness of the pegmatites identified on
the surface is 2 meters. Compositionally they are complex pegmatites, with albite, milky quartz, muscovite
biotite and microcline.
Tres Tetas
Tres Teta's mining concession was visited by LRS geologists from November 30 to December 3, 2017.
The exploration work focused on the identification of pegmatitic bodies within the Tres Tetas 42 hectare
concession
geological-
where
structural mapping and geochemical
sampling work were undertaken.
The Tres Tetas mining property is
located in the department of Cachi.
Access to the mining properties is
made from the city of Salta to the
town of Cachi (paved road 160 km),
then by horse from Cachi to the
Huaico Hondo post (20 km); from this
point, it is continued by a bridle path
(29 km) to the mining property.
Figure 29. Tres Tetas Location
Latin Resources Limited (ABN 81 131 405 144)
24
REVIEW OF OPERATIONS
In the Tres Tetas mining concession, intrusive rocks, metasediments of the Fm Paya, sills and pegmatite dykes,
dacite sills, milky quartz veins and quaternary deposits appear. The main host lithology in the Tres Tetas
concession are the metasediments of the Paya formation, which is composed of fine-grained sediments amidst
quartzites, muscovite and biotite shales, laminar packages of 3 to 30 cm layers. The sequence has an NW - SE
direction and dips to the SW. It is displaced by local NE - SW faults. To the NW of the Tres Tetas concession, the
intrusive Dioritic Quartzite emerges,
intruding the
metasediments of the Paya formation. It presents a
porphyritic texture - medium grain, composed of
plagioclase altering to clays, translucent quartz and fresh
biotite. In parallel with the metasediments of the Paya
formation, it presents a mid-grain porphyritic texture,
composed of plagioclase, quartz and hornblende. In the
Tres Tetas mining concession, pegmatites were identified
that vary between 0.10 to 3 meters width with outcrops
of up to 150 meters length. The average thickness of the
Figure 30. Typical Tres Tetas Pegmatite
pegmatites identified on the surface is 1.00 meter. The
pegmatites presented as sills and dykes cutting the
metasediments of the Paya formation, with a preferred orientation of NW - SE and less frequent N – S. The dip
angles vary from 25 ° to 82 °. The pegmatites are composed of milky quartz, albite, weak Muscovite and traces
of tourmaline.
Figure 31. Tres Tetas Geology Map
Latin Resources Limited (ABN 81 131 405 144)
25
REVIEW OF OPERATIONS
LA RIOJA – (ARGENTINA)
In June LRS applied for exploration concessions in the known cobalt province of La Rioja. The three
tenements which total 28,220 hectares adjoined and fully encompass an area that contains the historic
King Tut Cobalt - Gold Mine that operated between 1901 – 1902 and produced 80 tonnes of ore at 1.3%
Co.
The King Tut Mine and LRS’ three new concession applications
are located on the western slopes of a large massif in the Valle
Hermoso district, Department Sarmento, La Rioja province in
North West Argentina. The closest population centre is Vinchina
which is approximately 58km to the south-west. It is on the
eastern bank of the El Salto ravine, averaging approximately
2,800 m above sea level.
Table 8. LRS Concession Areas
The massif, which is comprised of metamorphosed slates, shales and psammites of the Lower Ordovician
Suri Formation and the andesitic volcanics of the La Ojota Formation. The Ordovician Suri Formation
represents shallow marine sedimentation events in a volcanic arc-related setting. These rocks which
generally trend N – S have a sub-vertical dip and are often stained with black spots of manganese oxide.
According to Angelelli (1984), The King Tut Mine consists of “a main vein and several others”. This vein
system occurs in an area of siliceous alteration. Mineralisation consists of pyrrhotite, cobaltiferous
arsenopyrite and cobaltite with some associated with pyrite and Chalcopyrite.
Figure 32. LRS La Rioja Concession Applications Locations
Latin Resources Limited (ABN 81 131 405 144)
26
Concession NameHectaresGladys10,048 Cecilia9,280 Anita9,103 Total28,431
REVIEW OF OPERATIONS
ILO COPPER PROJECT – SOUTHERN PERU
Sale Agreement of Copper Assets
On the 4th of September, the company entered into a Binding Sale Agreement with Westminster Resources
Limited (“TSX-V: WMR”) a publicly listed company on the Toronto Venture Exchange, Canada to sell its Ilo
Copper assets in Moquegua, Southern Peru.
The binding agreement entitled Westminster to 100% ownership of 44 concessions totalling over 36,000
hectares held by Latin’s 100% owned subsidiary, Peruvian Latin Resources SAC. The agreement does not
include the Pachamanca/MT03 project, that is the subject of a Joint Venture agreement with First Quantum
Minerals Ltd.
The main terms of the agreement are as follow:
Upon completion of due diligence and receiving the necessary approvals, the necessary acceptance for filing by
the TSX-V and effecting the transfer of the Projects, the following terms and conditions will be met under a
formal Sale Agreement to be completed between Westminster Resources and Peruvian Latin Resources Ltd:
a. Upon signing of the Sale Agreement, the issue to Latin of a total of 19,000,000 common shares in the
capital of WMR ("Purchase Shares").
b. The Purchase Shares will be placed into voluntary escrow and held until the Concessions representing
the Projects have been effectively transferred to WMR or its subsidiary but shall vest with the following
milestones:
i. 1,000,000 shares vest 6 months from the date of the Sale Agreement;
ii. 3,000,000 shares vest 12 months from the date of the Sale Agreement; and
iii. 15,000,000 shares vest 18 months from the date of the Sale Agreement.
c. A lump sum of USD$150,000 on the signing of the Sale Agreement;
d. A final payment of USD$100,000 on the 12 month anniversary of the signing of the Sale Agreement.
Upon completion of the contemplated transaction, Peruvian Latin Resources will be the most significant
shareholder of the Company, holding approximately 43% of the issued share capital on an undiluted basis.
The objective of the sale was to secure tangible material value for shareholders upon completion of a
transaction about the Ilo Copper projects. Latin expects to deliver consistent value to shareholders through its
diversified portfolio of assets through joint ventures and to develop its projects inclusive of niche commodities
in lithium and cobalt, as well as mainstream commodities in copper, at various stages of exploration.
Subsequent to year end, the Sale Agreement was executed and the Company received the first instalment of
USD$150,000.
Pachamanca/MT-03 (Under Joint Venture – First Quantum Minerals earning 80%)
Approvals and permits were obtained allowing First Quantum Minerals to perform an
induced
polarization/resistivity geophysical survey of the area. Initial results were impacted by nitrate layers within the
overlying caliche sediments. However, sufficient data was obtained to identify preliminary drill targets.
Completion of drill design continues for a diamond drilling program to be conducted once drill permits have
been approved.
Latin Resources Limited (ABN 81 131 405 144)
27
REVIEW OF OPERATIONS
TECHNOLOGY
License Option Agreement for Patented Lithium Extraction Technology in Argentina
The company has secured the first option to acquire on an exclusive basis the license of the patented
technology from the National University of UnCuyo (UnCuyo) in Mendoza Argentina for commercial use and
exploitation in Argentina, Australia, China, Canada and the USA.
UnCuyo through the Secretariat of Science, Technology and Postgraduate, the Secretariat of Institutional
Development and the Foundation of the National University of UnCuyo, has identified, protected and
promoted a now patented technology to be licensed which consists of the process of obtaining Lithium
Carbonate from Lithium Aluminosilicates including spodumene.
The UnCuyo researchers discovered and developed the Technology as an alternative to the current method of
lithium extraction. During this process, the rock is crushed and, through chemical treatments, the lithium is
recovered in the form of salts. The method is environmentally friendly, and without the environmental legacies
of current procedures currently used for lithium carbonate production.
The Technology was developed at the UnCuyo University using lithium spodumene samples from the San Luis
province of Argentina meaning it will be reflective of the correct metallurgical samples for LRS projects. The
Technology would, therefore, prove to be highly valuable to Latin if proven successful at a scalable size as Latin
controls a large number of concessions that host lithium spodumene pegmatites in the San Luis province.
Primero - High-Level Scoping Study
Latin Resources has appointed Primero Consulting Engineers to carry out a high level scoping study for its
lithium pegmatite projects in Argentina. The metallurgical test work will be carried out on material derived
from drill core at the Maria Del Huerto project. The Company strategy is to run the scoping study in parallel
with the drilling to determine a JORC resource in respect of its lithium projects in Argentina.
The purpose of this work is to provide Latin Resources with an indicative CAPEX for a stand‐alone 1.2Mt
process plant, based on benchmark data located in Argentina.
Through its Corporate Social Responsibility (CSR), Environment and Safety
Peruvian and Argentinian subsidiaries, Latin Resources Limited applies some of the most comprehensive and
advanced policies in Corporate Social Responsibility in the Peruvian and Argentinian Exploration and Mining
Sector and shareholders can be assured that these provide Latin with a definite competitive advantage over
other explorers in the Peruvian and Argentinian socio-environmental context. Also the company strives to
comply fully with international environmental and safety standards that are the basis for Peruvian and
Argentinian legislation governing the Mining Industry.
Safety is paramount in all Latin’s activities, and the Group has had an exemplary record to date with no lost
time injuries of the Group’s employees on any Project.
Competent person statements
The mineral resources statement in this Annual Report is based on, and fairly represents, information and supporting documentation
prepared by a competent person or persons. The mineral resources statement as a whole has been approved by Mr Kerry Griffin, who is
a consultant of Latin Resources Limited. Mr Griffin consents to the inclusion of the mineral resources statement in the form and context
in which it appears in the Annual Report.
The information in this report that relates to Geological Data and Exploration Results is based on information compiled by Mr Kerry
Griffin, who is a Member of the Australian Institute of Geoscientists. Mr Griffin has sufficient experience which is relevant to the style of
mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as
defined in the 2012 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’. Mr
Griffin is the Exploration and Development Manager of Latin Resources Limited and consents to the inclusion in this report of the
matters based on his information, and information presented to him, in the form and context in which it appears.
Latin Resources Limited (ABN 81 131 405 144)
28
DIRECTORS’ REPORT
The directors present their report together with the financial statements of the Group consisting of Latin Resources
Limited (Latin or the Company) and its subsidiaries (together the Group) for the year ended 31 December 2017.
Directors
The names and details of the Company’s directors in office during the financial period and until the date of this report
are set out below. The directors were in office for this entire period unless otherwise stated.
DAVID VILENSKY (Independent Non-Executive Chairman)
Mr Vilensky is a practising corporate lawyer and the managing director of Perth law firm Bowen Buchbinder Vilensky. He
has more than 30 years experience in the areas of corporate and business law and in commercial and corporate
management. Mr Vilensky practises mainly in the area of mining and resources, corporate and commercial law, trade
practices law, contract law and complex dispute resolution. Mr Vilensky acts for a number of listed and private
companies and is also the non–executive chairman of Zambezi Resources Limited, an ASX listed company focusing on
copper exploration in Zambia.
Other directorships of Australian listed companies held by Mr Vilensky in the last three years are:
Current: Zambezi Resources Limited
CHRISTOPHER GALE (Managing Director)
Mr Gale has extensive experience in senior management roles in both the public and private sectors, especially in
commercial and financial roles. He has also held various board and executive roles at a number of mining and technology
companies during his career.
Chris is the current Chairman of the Council on Australian Latin American Relations (COALAR) established by the
Australian Government Department of Foreign Affairs and Trade (DFAT). He is also a founding director of Allegra Capital,
a boutique corporate advisory firm based in Perth and is a member of the Australian Institute of Company Directors
(AICD).
Other directorships of Australian listed companies held by Mr Gale in the last three years are: Nil
BRENT JONES (Non-Executive Director)
Mr. Jones is an experienced financial services professional who has held operating roles at Woolworths, AFL, Civil
Engineers - Ostojic Group and the National Tax and Accountants’ Association prior to his current management position.
Over the past 15 years, Mr. Jones has been the joint Managing Director of InterPrac Limited, an unlisted public company,
specializing in providing the accounting industry access to financial services products and distribution capabilities.
Mr. Jones has a degree in information technology, is a member of the National Tax and Accountants Association and is a
Graduate of the Australian Institute of Company Directors (AICD).
Other directorships of Australian listed companies held by Mr Jones in the last three years are: Nil
Directors’ shares and share rights
As at the date of this report, the interests of the Directors in the shares and options of Latin were as follows:
Director
David Vilensky
Chris Gale
Brent Jones
Ordinary shares
Number
10,913,122
9,345,028
41,966,653
Share rights
Number
4,236,923
57,877,796
3,269,231
Share options
Number
-
-
-
Company secretary
SARAH SMITH
Ms Smith holds a Bachelor of Business and is a Chartered Accountant with significant experience in the administration of
ASX listed companies, as well as capital raisings and IPOs, due diligence reviews and ASIC compliance.
Latin Resources Limited (ABN81 131 405 144)
29
DIRECTORS’ REPORT
Principal activities
The principal activities during the year of entities within the consolidated entity were the exploration and evaluation of
mining projects in Peru and Argentina.
Financial review
RESULTS
The consolidated loss after tax of the Group for the year ended 31 December 2017 was $2,381,967 (2016: $7,844,976).
The result comprises the impairment of exploration and evaluation expenditure of $nil (2016: $4.9m), finance expenses
of $0.9m (2016: $1.5m) and other income and expense items $1.5m (2016: $1.5m).
ASSETS
Total assets increased by 12% or $1.3 million during the year to $12.5 million. The movement primarily comprised an
increase in exploration expenditure (net of currency loss) of $1.4m and a reduction in cash ($0.3 million). The carrying
value of exploration and evaluation assets was affected by the transfer of $2.9 million for the value of Ilo copper assets
to Current Assets held for sale.
LIABILITIES
Total liabilities marginally reduced by 2% or $0.2 million to $7.4 million during the year. The fall was mainly due to a
reduction in interest bearing loans and borrowings ($0.4m) offset against the increase in deferred consideration for the
Guadalupito project resulting from foreign exchange movements ($0.3m) and unwinding of interest.
EQUITY
Total equity increased by 40% or $1.5 million during the year to $5.2 million. The increase reflects the increases in
Contributed equity of $4.4 million from placements partially offset by loss of $2.4 million for the year and a decrease in
Reserves of $0.5 million from foreign currency translation movements of $0.8 million and increase in share based
payments and transaction costs of $0.3million.
SHAREHOLDER RETURNS
The Company’s share price decreased marginally during the period however the market capitalisation of the company
increased due to share and placement issues to fund the Company’s defined strategic direction in the area of lithium in
line with its long term strategy of mineral exploration in South America.
Shareholder returns for the last 5 years is as follows:
Loss attributable to the Group ($)
Basic loss per share (Cents)
Dividends ($)
Closing share price ($)
Total shareholder return (%)
December
2017**
(2,381,967)
(0.12)
Nil
0.011
(8)
December
2016**
(7,844,976)
(0.63)
Nil
0.012
140
December
2015**
(12,183,490)
(2.41)
Nil
0.005
(78)
December
2014**
(5,828,378)
(2.17)
Nil
0.023
(67)
December
2013^*
(1,093,216)
(0.49)
Nil
0.070
(13)
* Denotes six months period
** Denotes twelve month period
^ The results have been restated to reflect a prior period adjustment
Dividends
No amounts have been paid or declared by way of a dividend since the end of the previous financial period and up until
the date of this report. The Directors do not recommend the payment of any dividend for the financial year ended 31
December 2017.
Latin Resources Limited (ABN 81 131 405 144)
30
DIRECTORS’ REPORT
Liquidity and capital resources
The Group’s principal source of liquidity as at 31 December 2017 is cash and cash equivalents of $995,492 (2016:
$1,338,668).
Funding for 2018 is expected from a combination of proceeds from the sale or joint venturing of interests in existing
projects, further capital raisings and potential conversion of options.
Shares, share rights and options
As at 31 December 2017 the Company had 2,622,366,170 fully paid Shares on issue, 259,375,000 Share Options and
65,031,642 Share Rights on issue.
SHARES
A total of 1,044,968,072 shares were issued during the year. A breakdown of the shares issued is shown at Note 19 of
the financial statements
SHARE RIGHTS
During the year no share rights were issued to directors or employees and 6,971,657 share rights were cancelled due to
resignations and 6,095,832 share rights converted in accordance with the deferred rights plan approved by shareholders
on 27 May 2014.
OPTIONS
During the year 250,000,000 options were issued and 14,054,768 were exercised. A total of 366,939,885 options expired
in the period unexercised. Options totalling 125 million were issued to investors who participated in the placement
announced in July 2017, and 125 million options were issued to brokers associated with the July 2017 placement.
As at the date of this report there were 750,446,442 share options on issue.
Option holders do not have the right, by virtue of the option, to vote or participate in any share issue of the Company or
any related body corporate.
Significant changes in the state of affairs
There have been no significant changes in the state of affairs of the Group other than those listed above.
Risk management
The Board is responsible for identifying business risks and implementing actions to manage those risks and corporate
systems to assure quality. The Board delegates these tasks to management who provide the Board with periodic reports
identifying areas of potential risks and the safeguards in place to efficiently manage material business risks. Strategic and
operational risks are reviewed at least annually as part of the forecasting and budgeting process.
The Managing Director and Chief Financial Officer have provided assurance in writing to the Board that they believe that
the Company’s material business risks are being managed effectively and that the Company’s financial reporting, risk
management and associated compliance and controls have been assessed and are operating effectively so far as they
relate to the financial report.
Significant events after balance date
Please refer to Note 27 for details of significant events after date.
Latin Resources Limited (ABN 81 131 405 144)
31
DIRECTORS’ REPORT
Likely developments and expected results
In 2018 the Group intends to continue to progress its mineral projects in Argentina and Peru via JV arrangements or via
the sale of its interests in the projects. The Group will also continue to look for other opportunities that will create value
for its shareholders.
Environmental regulation and performance
The Group carries out exploration and evaluation activities at its operations in Peru and Argentina which are subject to
environmental regulations. During the year there has been no significant breach of these regulations.
Indemnification and insurance of directors and officers
During the year insurance premiums were paid to insure the Directors and officers against certain liabilities arising out of
their conduct while acting as a director or an officer of the Company. Under the terms and conditions of the insurance
contract, the nature of the liabilities insured against and the premium paid cannot be disclosed.
Directors’ meetings
The number of meetings of directors (including meetings of committees of directors) held for the year ended 31
December 2017 and the number of meetings attended by each director is as follows:
Director
David Vilensky
Chris Gale
Brent Jones
Committee membership
Board meetings held
Board meetings attended
8
8
8
8
8
8
During the year the Board did not set up separate Committees. The Board carried out the duties that would ordinarily be
carried out by the Nomination, Remuneration and Audit and Risk Management Committees.
Corporate governance statement
The Company’s Corporate Governance statement is located on the Company’s website at www.latinresources.com.
Diversity
Latin strives to be an equal opportunity employer and we will not discriminate against prospective employees based on
gender or any other non-skill related characteristic. We pride ourselves on the diversity of our staff and encourage
suitably qualified young people, women, people from cultural minorities and people with disabilities to apply for
positions.
Whilst efforts will be made to identify suitably qualified female candidates and candidates from a diversity of
backgrounds when seeking to fulfil positions, the Company does not believe it is meaningful, nor in the best interests of
shareholders to set formal targets for the composition of employees based on gender or any other non-skill related
characteristic nor detailed policies in this regard.
The Board has established a policy regarding diversity and details of the policy are available on the Company’s website.
Gender composition of the Group’s workforce for the 2017 year is as follows:
Board
Executive
Group
31 December 2017
31 December 2016
Female
-
-
62%
Male
100%
100%
38%
Female
-
-
60%
Male
100%
100%
40%
Latin Resources Limited (ABN 81 131 405 144)
32
DIRECTORS’ REPORT
Auditors’ independence declaration
The auditors’ independence declaration is set out on page 46 and forms part of the Directors’ report for the year ended
31 December 2017.
Non-audit services
Non-audit services provided by the Group’s auditor Stantons International during the year ended 31 December 2017 is
shown at Note 28 of the financial statements.
The directors are satisfied that the provision of non-audit services, during the year by the auditor is compatible with the
general standard of independence for auditors imposed by the Corporation Act 2001. The nature and scope of each type
of non-audit service provided means that auditor independence was not compromised.
Remuneration report (Audited)
This remuneration report for the year ended 31 December 2017 outlines the remuneration arrangements of the Group in
accordance with the requirements of the Corporations Act 2001 (the Act) and its regulations. This information has been
audited as required by section 308(3C) of the Act.
The remuneration report details the remuneration arrangements for key management personnel (KMP) who are defined
as those persons having authority and responsibility for planning, directing and controlling the major activities of the
Group, directly and indirectly, including any director (whether executive or otherwise) of the parent company.
For the purposes of this report, the term executive includes executive directors and other senior management of the
Group.
DIRECTOR AND SENIOR MANAGEMENT
Non-executive directors
David Vilensky
Brent Jones
Non-Executive Chairman
Non-Executive Director
Executive director
Chris Gale
Other Executives
Sarah Smith
Kerry Griffin
Managing Director
Company Secretary
Exploration and Development Manager
REMUNERATION GOVERNANCE
Remuneration Committee
The Board carries out the duties that would ordinarily be carried out by the Remuneration Committee under the
Remuneration Committee Charter including the following processes to set the level and composition of remuneration for
Directors and senior executives and ensuring that such remuneration is appropriate and not excessive.
The Board approves the remuneration arrangements of the Managing Director and other executives and all awards made
under incentive plans following recommendations from the Remuneration Committee.
The Board also sets the remuneration of Non-executive directors, subject to the fee pool approved by shareholders.
The Board approves, having regard to the recommendations of the Managing Director, the level of incentives to other
personnel and contractors.
Latin Resources Limited (ABN 81 131 405 144)
33
DIRECTORS’ REPORT
The Board seeks external remuneration advice as and when required to ensure it is fully informed when making
remuneration decisions. Remuneration advisors are engaged by and report directly to the Board. No consultants were
used or paid by the Group during the year.
NON-EXECUTIVE DIRECTOR REMUNERATION ARRANGEMENTS
The Board seeks to set aggregate remuneration at a level that provides the Group with the ability to attract and retain
directors of the highest calibre, whilst incurring a cost that is acceptable to shareholders.
The Constitution and the ASX listing rules specify that the aggregate remuneration of Non-executive directors shall be
determined from time to time by a general meeting of shareholders. The current limit is $350,000 which remains
unchanged from when the company first listed on the ASX.
Non-executive directors are remunerated by way of fees based on-executive directors of comparable companies and
scope and extent of the Company’s activities. Non-executive directors are also entitled to participate in the Non-
executive director Deferred Rights plan which was approved by shareholders on 27 May 2014 but do not receive
retirement benefits, nor do they participate in any incentive programs.
No options or share rights were awarded to non-executive directors as remuneration during the year.
Non-executive director Deferred rights plan
The Non-executive director Deferred rights plan was approved by shareholders on 27 May 2014 for the purpose of
retaining Non-executive directors, controlling the cash cost of directors fees and aligning the interests of Non-executive
directors with shareholders and providing them with the opportunity to participate in the future growth of the Group.
Under the plan the Group may offer share rights to Non–executive directors of the Company. Share rights issued under
the Deferred rights plan comprise of retention rights being rights that vest and may be exercised into Restricted Shares,
based on completion of a period of service.
The Board in their absolute discretion determine the number of share rights to be offered and the criteria that may
apply. Offers made under the Deferred rights plan must set out the number of share rights, the vesting conditions and
the measurement period.
The retention rights are issued for no consideration, however, the vesting of the benefits are conditional on achieving
certain measurable performance measures. The performance measure used in 2014 was the completion of service for
the year. Vesting of the share rights is measured over a three year interval after the commencement of the respective
measurement period. At the end of the measurement period and subject to the performance measures, each share right
will convert into one ordinary share in the Company. The Group is aware that the vesting of share rights is treated as
income to executives and attracts tax in a similar manner to cash payments irrespective of the executive selling or
retaining the resulting shares.
The maximum percentage of base remuneration that a Non-executive director may receive in share rights is 100% which
is pre-determined based on the advice of the remuneration consultant.
Where a non-executive director or employee ceases employment prior to their incentives vesting due to resignation or
termination for cause, incentives will be forfeited. Where a non-executive director or employee ceases employment for
any other reason, they may at the Board’s discretion, retain a number of unvested share rights on a pro-rata basis to
reflect their period of service during the measurement period. These unvested share rights only vest subject to meeting
the relevant performance measures.
The Board will not seek any increase in the aggregate remuneration for the Non-executive director pool at the 2018
AGM.
Latin Resources Limited (ABN 81 131 405 144)
34
DIRECTORS’ REPORT
EXECUTIVE REMUNERATION ARRANGEMENTS
The Group aims to reward executives with a level and mix of remuneration commensurate with their position and
responsibilities within the Group that is competitive by market standards and aligns their interests with those of
shareholders.
Executive remuneration consists of fixed remuneration and variable remuneration comprising short term incentives and
long term incentives.
Fixed remuneration
The level of fixed remuneration is set so as to provide a base level of remuneration which is both appropriate to the
position and is competitive in the market.
Fixed remuneration is reviewed annually by the Remuneration Committee through a process that considers individual
performance, Group performance and market conditions.
Variable remuneration
The Company established an Incentive Rights Plan (the Plan) that was re-approved by shareholders on 27 November
2015 and applies to full time and permanent part time employees and contractors.
The Plan provides the Company with a range of incentives to attract, retain and align the interest of shareholders and
employees and contractors.
Short term incentives
Short term incentives (STI) may include cash and shares and are awarded to executives based on the achievement of
KPI’s. Given the current stage of the Company’s evolution and the market conditions for mineral exploration and
development companies, no STI targets were established at the start of the reporting period, and hence no STI’s were
issued for the year ended 31 December 2017.
Long term incentives
Long term incentives (LTI) are considered annually by the Remuneration Committee to align remuneration with the
creation of shareholder value over the long term.
LTI’s can include:
cash;
retention rights being rights that vest and may be exercised into Restricted Shares, based on completion of a period of
service and comprise no more than third of the LTI value; and
performance rights, being rights that vest and may be exercised into Restricted Shares, based on achievement of
specified performance objectives and comprise no more than two thirds of the LTI value.
The retention and performance rights are issued for no consideration, however, the vesting of the benefits are
conditional on achieving specific measurable performance measures that are aligned with the Group’s strategic
objectives.
The following performance measures were used in 2017, in equal weighting:
Completion of service for the year; and
Shareholder returns (Total shareholder return of 15% per annum or greater).
Vesting of the LTI is measured over a three year interval after the commencement of the respective measurement
period. At the end of the measurement period and subject to the performance measures, each share right will convert
into one ordinary share in the Company. The Group is aware that the vesting of share rights is treated as income to
executives and attracts tax in a similar manner to cash payments irrespective of the executive selling or retaining the
resulting shares.
The maximum percentage of base remuneration that an executive may receive as a LTI is pre-determined based on the
advice of the remuneration consultant. The maximum percentage of base remuneration that the Managing Director can
receive is 60% and for other executives it is 45%.
Where a director or employee ceases employment prior to their incentives vesting due to resignation or termination for
cause, incentives will be forfeited. Where a director or employee ceases employment for any other reason, they may at
the Board’s discretion, retain a number of unvested share rights on a pro-rata basis to reflect their period of service
during the LTI grant performance period. These unvested share rights only vest subject to meeting the relevant LTI
performance measures.
Latin Resources Limited (ABN 81 131 405 144)
35
DIRECTORS’ REPORT
Employment agreements and contracts
The Group has entered into contracts and agreements with executives the details of which are provided below.
Non Executive Directors
The Chairman and Non Executive Directors are elected to the Board by shareholders on rotation. The pool of directors’
remuneration, including cash payments for directors’ fees and share based incentive remuneration, is approved by
shareholders in Annual Meeting.
In accordance with the total directors’ fees approved by shareholders, the Board has agreed the following directors’ fees
to be paid:
-
Chairman - $64,800 per annum
- Non Executive directors - $50,000 per annum.
No committee fees are paid.
Managing Director
The Managing Director is currently employed under a consultancy agreement for a three year term ending on 30
September 2019 which can be extended by mutual consent. Mr Gale is paid a fixed remuneration of A$300,000 per
annum with an uplift in remuneration in the event of an increase in the market capitalisation of the Company.
The Group may terminate the agreement with or without cause by giving one month and six months’ notice respectively.
The Managing director may terminate the agreement with or without cause by giving 21 days and three months’ notice
respectively. If the agreement is terminated without cause or due to a change of control the Managing Director is
entitled to a payment equivalent to fees for one year, the value of any annual fringe benefits and any vested entitlement
under a LTI plan.
The Group retains the right to terminate the agreement immediately by making a payment in lieu of notice for
termination by either party without cause.
Exploration and Development Manager
The Exploration and Development Manager is employed under a consultancy agreement with a fee of USD$1,000 per day
for a six month term ending on 1 August 2019 which can be extended by mutual agreement.
Company Secretary
The Company Secretary is employed under a consultancy agreement which is ongoing. Either party may terminate the
agreement by giving 60 days written notice. The monthly retainer fee for the Company Secretary is $3,000 per month
plus GST with additional fees charged for shareholder meetings and corporate actions.
Chief Financial Officer (CFO)
The CFO services are supplied by a third party consultancy group under a consultancy agreement which is ongoing. Either
party may terminate the agreement by giving 1 months’ notice. The CFO services are supplied at the rate of $1,600 per
day plus GST on an as needs basis and a minimum of 1 day per week.
Prohibition on trading
The Remuneration policy prohibits directors and employees that are granted shares as a result of share rights from
entering into arrangements that limit their exposure to losses that would result from share price decreases. The policy
also requires directors, and employees to seek approval from the Company prior to that individual buying or selling any
company securities. Directors and employees are not permitted to trade during a closed period. Procedures are in place
where trading during a closed period is sought in exceptional circumstances.
Latin Resources Limited (ABN 81 131 405 144)
36
DIRECTORS’ REPORT
REMUNERATION OF KEY MANAGEMENT PERSONNEL AND EXECUTIVES FOR THE YEAR ENDED 31 DECEMBER 2017
Short-term benefits
Post
employment
Other long-
term benefits
Share-based payments
Total
Performance
related
Equity
compensation
12 months to
31 Dec 2017
Salary &
Fees
Bonus
Non-cash
benefits
$
$
$
Super
$
Long service
leave
Share rights
Shares
$
$
$
$
%
%
Directors
D. Vilensky
C. Gale
B. Jones
Other KMP
64,800
15,000
312,500
15,000
50,000
15,000
S. Smith
J. Grygorcewicz2
K. Griffin
47,070
89,850
324,363
-
-
-
Total
888,583
45,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
164,5571
-
-
-
-
164,557
-
-
-
-
-
-
-
79,800
492,057
65,000
47,070
89,850
324,363
19%
22%
23%
-
-
-
-
33%
-
-
-
-
1,098,140
11%
15%
1 These amounts refer to share rights issued in accordance with the Incentive rights plan approved by shareholders on 30 November 2014. Out of the total of $164,557, a portion of
$41,140 was expensed during the year with the balance being capitalised.
2 Mr Grygorcewicz joined the Company on 21 February 2017.
Latin Resources Limited (ABN 81 131 405 144)
37
DIRECTORS’ REPORT
REMUNERATION OF KEY MANAGEMENT PERSONNEL AND EXECUTIVES FOR THE YEAR ENDED 31 DECEMBER 2016
12 months to
31 Dec 2016
Directors
D. Vilensky
C. Gale
B. Jones
Other KMP
A. Begovich4
A. Bristow5
C. Spier6
S. Smith7
K. Griffin8
Total
Short-term benefits
Post employment
Salary &
Fees
$
Bonus
$
Non-cash
benefits
$
Super
Other
$
$
Other long-term
benefits
Long service
leave
$
64,800
403,20010
52,361³
66,294
72,932
11,355
22,400
22,866
716,208
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
7,075
-
1,079
-
-
8,154
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Share-based
payments
Total
Performance
related
Equity
compensation
Share
rights
$
58,6821
124,6602
-
10,7671
30,0931
14,3591
-
-
238,561
Shares
$
$
%
%
-
-
-
123,482
527,860
52,361
4,2689
-
-
-
-
4,268
88,404
103,025
26,793
22,400
22,866
967,191
-
16
-
-
-
-
-
-
9%
48
24
-
17
29
54
-
-
25%
1 These amounts refer to share rights issued in accordance with the Deferred rights plan issued in April 2014 as approved by shareholders on 27 May 2014.
2 These amounts refer to share rights issued in accordance with the Incentive rights plan approved by shareholders on 30 November 2014.
3 This amount includes shares issued to directors in settlement of director fees payable. No value has been attributable to the listed options issued at the same time.
4 Mr Begovich resigned 31 May 2016.
5 Mr Bristow resigned in December 2016.
6 Mr Spier resigned on 4 April 2016.
7 Ms Smith joined the Company on 31 May 2016.
8 Mr Griffin joined the Company on 16 November 2016.
9 These amounts refer to shares issued to KMP to reward employees for services to the Company.
10 Included in this amount is $66,000 relating to arrears of consulting fees for the 2015 year paid in the current year.
Latin Resources Limited (ABN 81 131 405 144)
38
DIRECTORS’ REPORT
ADDITIONAL DISCLOSURES RELATING TO REMUNERATION
(a) Share holdings of key management personnel
31 Dec 2017
Directors
D. Vilensky
C. Gale
B. Jones
Other KMP
S. Smith
J. Grygorcewicz1
K. Griffin
Balance at
start of year
Granted as
remuneration
On exercise of
options/conversion
of rights
Net change
other
Balance at
end of year
6,589,479
9,367,615
41,466,653
-
-
-
57,423,747
-
-
-
-
-
-
-
4,323,4632
977,4132
-
180
(1,000,000)
500,000
10,913,122
9,345,028
41,966,653
-
-
-
5,300,876
-
1,000,000
-
500,180
-
1,000,000
-
63,224,803
1 Mr Grygorcewicz joined the Company on 21 February 2017.
2 The shares were issued for rights approved and issued in prior years. Share rights are converted according to the
calculation criteria as per the Share Rights Plan as approved by shareholders on 27 May 2014.
31 Dec 2016
D. Vilensky
C. Gale
B. Jones
Other KMP
A. Begovich
A. Bristow
C. Spier
S. Smith
K. Griffin
Balance at
start of year
6,589,479
19,367,615
32,587,343
Granted as
remuneration
-
-
3,906,2342
On exercise of
options
-
-
-
Net change
other
-
(10,000,000)
4,973,076
Balance at
end of year
6,589,479
9,367,615
41,466,653
8,330,340
2,033,854
4,156,868
-
-
73,065,499
355,7083
-
-
-
-
4,261,942
-
-
-
-
-
-
(8,686,048)1
(2,033,854) 1
(4,156,868) 1
-
-
(19,903,694)
-
-
-
-
-
57,423,747
1 This represents KMP entitlements to share rights in the Company up until their resignation.
2 The value of these shares at the date of issue was $25,000.
3 The value of these shares at the date of issue was $4,268.
(b) Share right holdings of key management personnel
31 Dec 2017
Directors
D. Vilensky
C. Gale
B. Jones
Other KMP
S. Smith
J. Grygorcewicz
K. Griffin
Balance at
start of year
Granted as
remuneration
Converted to
Shares
Net change
other
Balance at
end of year
4,414,552
58,099,964
-
-
-
-
62,514,516
-
-
-
-
-
-
-
(4,414,552)1
(1,068,322)1
-
-
-
-
(5,482,874)
-
-
-
-
-
-
-
-
57,031,642
-
-
-
-
57,031,642
1 Share rights were converted according to the calculation criteria as per the Share Rights Plan as approved by
shareholders on 27 May 2014.
Latin Resources Limited (ABN 81 131 405 144)
39
DIRECTORS’ REPORT
31 Dec 2016
D. Vilensky
C. Gale
B. Jones
Other KMP
A. Begovich
A. Bristow
C. Spier
S. Smith
K. Griffin
Balance at
start of year
4,414,552
5,406,355
-
Granted as
remuneration2
-
60,693,609⁴
-
Converted to
Shares
-
-
-
Net change
other
-
(8,000,000)¹
-
Balance at
end of year
4,414,552
58,099,964
-
2,237,350
3,101,937
2,964,402
-
-
18,124,596
-
-
-
-
-
60,693,609
-
-
-
-
-
-
(2,237,350)³
(3,101,937)³
(2,964,402)³
-
-
(16,303,689)
-
-
-
-
-
62,514,516
1 This relates to the transfer of 8 million incentive rights to an unrelated third party.
2 The performance share rights issued in April 2014 as approved by shareholders on 27 May 2014 continued to be
expensed in the current year. No rights were granted in the current year.
³ This represents KMP entitlements to share rights in the Company up until their resignation.
⁴ The total value of these share rights is $493,673 which will be expensed over the vesting period.
(c) Vesting profile of share rights granted to key management personnel
Number
Grant date
Vested in
year (%)
Net
change
other (%)
Date at which
share rights are
to be vested
Directors
D. Vilensky
C. Gale – Retention rights
C. Gale – Performance rights1
B. Jones
-
8,005,323
49,026,319
-
-
31/10/2016
31/10/2016
-
Other KMP
S. Smith
J. Grygorcewicz
K. Griffin
-
-
-
-
-
-
-
67%
-
-
-
-
-
-
-
-
-
-
-
-
-
31/12/2018
31/1/2019
-
-
-
-
1 Performance rights are subject to the vesting conditions being satisfied after the Measurement Period of 3 years
commencing 1 January 2016.
(d) Option holdings of key management personnel
The number of options held by directors and other key management personnel both directly and indirectly are set out
below.
Balance at
start of year
Granted as
remuneration
Exercised
Net change
other
Balance at
end of year
Vested
exercisable
Vested not
exercisable
31 Dec 2017
Directors
D. Vilensky
C. Gale
B. Jones
Other KMP
S. Smith
J. Grygorcewicz
K. Griffin
1,502,370
2,926,073
1,562,494
-
-
-
5,990,937
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(1,502,370)1
(2,926,073)1
(1,562,494)2
-
-
-
(5,990,937)
-
-
-
-
-
-
-
1 Options expired during the period unexercised. The options were initially granted on 7 August 2015.
2 Options expired during the period unexercised. The options were initially granted on 26 February 2016.
Latin Resources Limited (ABN 81 131 405 144)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
40
DIRECTORS’ REPORT
31 Dec 2016
Directors
D. Vilensky
C. Gale
B. Jones
Other KMP
A. Begovich
A. Bristow
C. Spier
S. Smith
K. Griffin
Balance at
start of year
Granted as
remuneration
Exercised
Net change
other
Balance at
end of year
Vested
exercisable
Vested not
exercisable
1,502,370
2,926,073
4,125,000
-
-
1,562,494¹
-
-
-
-
- (4,125,000)
1,502,370
2,926,073
1,562,494
1,502,370
2,926,073
1,562,494
1,416,062
1,226,322
1,364,515
-
-
12,560,342
-
-
-
-
-
1,562,494
- (1,416,062)²
- (1,226,322)²
- (1,364,515)²
-
-
-
-
- (8,131,899)
-
-
-
-
-
5,990,937
-
-
-
-
-
5,990,937
-
-
-
-
-
-
-
-
-
1 Listed options issued to B. Jones during the year. No value has been assigned to them as it was immaterial in nature.
² This represents KMP entitlements to options in the Company up until their resignation.
(e) Loans to key management personnel
During the period the Company advanced a total of $50,000 to Bowen Buchbinder Vilensky, a firm related to Mr Vilensky.
The short term advance was for a period of 4 months at commercial terms attracting an interest rate of 10% per annum and
secured by personal guarantee. The advance was fully repaid during the period, including interest accruing to the advance.
(f) Other transactions with key management personnel
Refer Note 23 for details of other transactions with directors. There were no other transactions with other key management
personnel during the current or prior year.
This Report is signed in accordance with a resolution of the Board of Directors.
------------------------------------------
David Vilensky
Chairman
Signed on 29 March 2018
Latin Resources Limited (ABN 81 131 405 144)
41
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
For the twelve months ended 31 December 2017
Interest revenue
Other income
Gain from settlement of liabilities
Depreciation and amortisation expense
Employee benefits expense
Finance expenses
Exploration and evaluation expenditure
Profit/(Loss) on fair value of financial assets through profit or loss
Other expenses
Loss before tax
Income tax benefit
Loss for the year
Notes
31 Dec 2017
$
31 Dec 2016
$
5
13
6(a)
6(b)
14
6(c)
7
4,550
116,945
-
(18,526)
(490,704)
(882,727)
-
264,500
(1,376,005)
(2,381,967)
49,515
345,843
85,560
(28,480)
(803,711)
(1,493,387)
(4,861,649)
(50,000)
(1,088,667)
(7,844,976)
-
-
(2,381,967)
(7,844,976)
Loss attributable to owners of the Parent Company
(2,381,967)
(7,844,976)
Other comprehensive income
Items that cannot be reclassified to profit or loss in subsequent periods:
Items that may be reclassified to profit or loss in subsequent periods:
Exchange differences on translating foreign operations
-
-
(822,997)
441,165
Total comprehensive loss for the year attributable to owners of the
Parent Company
(3,204,964)
(7,403,811)
Basic and diluted loss per share (Cents)
8
(0.12)
(0.63)
The above consolidated statement of profit or loss and other comprehensive income should be read in conjunction with
the accompanying notes.
Latin Resources Limited (ABN 81 131 405 144)
42
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at 31 December 2017
ASSETS
Current assets
Cash and cash equivalents
Trade and other receivables
Assets held for sale
Other financial assets
Total current assets
Non-current assets
Trade and other receivables
Plant and equipment
Exploration and evaluation assets
Total non-current assets
Total assets
LIABILITIES
Current liabilities
Trade and other payables
Interest bearing loans and borrowings
Deferred consideration
Provisions
Total current liabilities
Non-current liabilities
Deferred consideration
Total non-current liabilities
Total liabilities
Net assets
EQUITY
Contributed equity
Reserves
Accumulated losses
Total equity
Notes
31 Dec 2017
$
31 Dec 2016
$
9(a)
10(a)
11
12
10(b)
13
14
15
16
17(a)
18
17(b)
995,492
141,193
2,898,233
348,610
4,383,528
1,338,668
152,275
-
177,481
1,668,424
1,700,263
65,541
6,368,500
8,134,304
12,517,832
1,603,327
76,827
7,842,533
9,522,687
11,191,111
855,801
65,000
22,000
45,885
988,686
917,433
500,000
9,222
42,995
1,469,650
6,364,308
6,364,308
7,352,994
5,164,838
6,036,695
6,036,695
7,506,345
3,684,766
19
20
21
46,437,382
7,557,481
(48,830,025)
5,164,838
42,041,903
8,090,921
(46,448,058)
3,684,766
The above consolidated statement of financial position should be read in conjunction with accompanying notes
Latin Resources Limited (ABN 81 131 405 144)
43
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the twelve months ended 31 December 2017
Contributed
equity
Share based
payment
reserve
$
$
Foreign
currency
translation
reserve
$
Accumulated
losses
Total
$
$
Balance at 1 January 2016
36,202,047
2,247,712
5,117,180
(38,603,082)
4,963,857
Loss for the year
Other comprehensive income
Total comprehensive loss
Issue of shares
Share based payments
Exercise of options
Transaction costs
Balance at 31 December 2016
Loss for the year
Other comprehensive loss
Total comprehensive loss
Issue of shares
Share based payments
Transaction costs
Balance at 31 December 2017
-
-
-
6,450,612
-
-
(610,756)
42,041,903
-
-
-
4,874,890
-
(479,411)
46,437,382
-
-
-
-
-
441,165
441,165
-
284,864
-
-
2,532,576
-
-
-
5,558,345
-
-
-
-
164,557
125,000
2,822,133
-
(822,997)
(822,997)
-
-
-
4,735,348
(7,844,976)
-
(7,844,976)
-
-
-
-
(46,448,058)
(2,381,967)
-
(2,381,967)
-
-
-
(48,830,025)
(7,844,976)
441,165
(7,403,811)
6,450,612
284,864
-
(610,756)
3,684,766
(2,381,967)
(822,997)
(3,204,964)
4,874,890
164,557
(354,411)
5,164,838
The above consolidated statement of changes in equity should be read in conjunction with accompanying notes.
Latin Resources Limited (ABN 81 131 405 144)
44
CONSOLIDATED STATEMENT OF CASH FLOWS
For the twelve months ended 31 December 2017
Cash flows from operating activities
Receipts from other income
Payments to suppliers and employees
Interest received
Interest paid
R&D refund (net of fees)
Net cash flows used in operating activities
Cash Flows from investing activities
Payments for plant and equipment
Proceeds from plant and equipment
Proceeds from sale of investments
Purchase of equity investments in listed entities
Payments for exploration and evaluation assets
Proceeds from security deposits
Net cash flows used in investing activities
Cash flows from financing activities
Proceeds from the issue of equity
Transaction costs of issuing shares
Proceeds from borrowing
Repayment of borrowings
Net cash from financing activities
Notes
31 Dec 2017
$
31 Dec 2016
$
9(b)
27,926
(1,976,425)
4,548
(30,000)
-
(1,973,951)
(12,929)
-
208,372
-
(2,623,514)
2,629
(2,425,442)
4,849,738
(354,411)
-
(435,000)
4,060,327
(339,066)
1,338,668
(4,110)
995,492
296,884
(1,762,879)
49,515
(7,096)
761,357
(662,219)
-
17,886
-
(200,000)
(1,788,401)
603
(1,969,912)
4,830,128
(295,756)
-
(595,793)
3,938,579
1,306,448
32,076
144
1,338,668
Net (decrease)/increase in cash and cash equivalents
Cash and cash equivalents at the beginning of the year
Net foreign exchange difference
Cash and cash equivalents at the end of the year
9(a)
The above consolidated statement of cash flows should be read on conjunction with accompanying notes.
Latin Resources Limited (ABN 81 131 405 144)
45
NOTES TO THE FINANCIAL STATEMENTS
1. Corporate information
The consolidated financial statements of the Group, being Latin Resources Limited (the Company or Parent) and its
subsidiaries (collectively, the Group), for the year ended 31 December 2017 were authorised for issue in accordance
with a resolution of the directors on 29 March 2018.
Latin Resources Limited is a company limited by shares incorporated in Australia whose shares are publicly traded on the
Australian Securities Exchange.
The nature of the operations and principal activities of the Group are described in the directors’ report. Information on the
Group’s structure and other related party relationships is provided in Note 23.
2. Summary of significant accounting policies
(a) BASIS OF PREPARATION
The financial report is a general purpose financial report, which has been prepared in accordance with the requirements
of the Corporations Act 2001, Australian Accounting Standards and other authoritative pronouncements of the Australian
Accounting Standards Board. The financial report has also been prepared on a historical cost basis except for certain
financial instruments which are fair value.
The financial report is presented in Australian dollars and all values are rounded to the nearest dollar unless otherwise
stated.
(b) COMPLIANCE WITH IFRS
The financial report also complies with International Financial reporting Standards (‘IFRS’) as issued by the
International Accounting Standards Board.
(c)
CHANGE IN ACCOUNTING POLICY AND DISCLOSURES.
The accounting policies adopted are consistent with those of the previous financial year except as noted below.
(d) NEW ACCOUNTING STANDARDS AND INTERPRETATIONS
Application of new and revised Accounting Standards
The Group has considered the implications of new and amended Accounting Standards applicable for the annual
reporting periods beginning after 1 January 2017 but determined that their application to the financial statements is
either not relevant or not material.
A number of new standards, amendments to standards and interpretations issued by the AASB which are not yet
mandatorily applicable to the Group have not been applied in preparing these consolidated financial statements.
Those which may be relevant to the Group are set out below. The Group does not plan to adopt these standards
early.
Standards and Interpretations issued but not yet adopted:
AASB 9 Financial Instruments and associated Amending Standards (applicable for annual reporting period
commencing 1 January 2018)
The Standard will be applicable retrospectively (subject to the comment on hedge accounting below) and
includes revised requirements for the classification and measurement of financial instruments, revised
recognition and derecognition requirements for financial instruments and simplified requirements for hedge
accounting.
Key changes made to this standard that may affect the Group on initial application include certain simplifications
to the classification of financial assets, simplifications to the accounting of embedded derivatives, and the
irrevocable election to recognise gains and losses on investments in equity instruments that are not held for
trading in other comprehensive income.
Although the directors anticipate that the adoption of AASB 9 may have an impact on the Group’s financial
instruments it is impractical at this stage to provide a reasonable estimate of such impact.
Latin Resources Limited (ABN 81 131 405 144)
46
NOTES TO THE FINANCIAL STATEMENTS
AASB 15: Revenue from Contracts with Customers (applicable to annual reporting periods commencing on or after 1
January 2018).
When effective, this Standard will replace the current accounting requirements applicable to revenue with a single,
principles-based model. Except for a limited number of exceptions, including leases, the new revenue model in AASB 15
will apply to all contracts with customers as well as non-monetary exchanges between entities in the same line of
business to facilitate sales to customers and potential customers.
The core principle of the Standard is that an entity will recognise revenue to depict the transfer of promised goods or
services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange
for the goods or services. To achieve this objective, AASB 15 provides the following five-step process:
-
-
-
-
-
identify the contract(s) with a customer;
identify the performance obligations in the contract(s);
determine the transaction price;
allocate the transaction price to the performance obligations in the contract(s); and
recognise revenue when (or as) the performance obligations are satisfied.
This Standard will require retrospective restatement, as well as enhanced disclosures regarding revenue.
Although the directors anticipate that the adoption of AASB 15 may have an impact on the Group's financial statements,
it is impracticable at this stage to provide a reasonable estimate of such impact
AASB 16: Leases
This Standard supersedes AASB 117 Leases, Interpretation 4 Determining whether an Arrangement contains a
Lease, IC-15 Operating Leases—Incentives and SIC-27 Evaluating the Substance of Transactions Involving the
Legal Form of a lease.
The new standard will be effective for annual periods beginning on or after 1 January 2019. Early application is
permitted, provided the new revenue standard, AASB 15 Revenue from Contracts with Customers, has been
applied, or is applied at the same date as AASB 16
The key features of AASB 16 are as follows:
Lessee accounting
-
-
-
-
Lessees are required to recognise assets and liabilities for all leases with a term of more than 12 months, unless
the underlying asset is of low value.
A lessee measures right-of-use assets similarly to other non-financial assets and lease liabilities similarly to other
financial liabilities.
Assets and liabilities arising from a lease are initially measured on a present value basis. The measurement
includes non-cancellable lease payments (including inflation-linked payments), and also includes payments to
be made in optional periods if the lessee is reasonably certain to exercise an option to extend the lease, or not
to exercise an option to terminate the lease.
AASB 16 contains disclosure requirements for lessees.
Lessor accounting
-
-
AASB 16 substantially carries forward the lessor accounting requirements in AASB 117. Accordingly, a lessor
continues to classify its leases as operating leases or finance leases, and to account for those two types of leases
differently.
AASB 16 also requires enhanced disclosures to be provided by lessors that will improve information disclosed
about a lessor’s risk exposure, particularly to residual value risk.
AASB 2014-10: Amendments to Australian Accounting Standards – Sale or Contribution of Assets between an
Investor and its Associate or Joint Venture (applicable to annual reporting periods commencing on or after 1 January
2018).
This Standard amends AASB 10: Consolidated Financial Statements with regards to a parent losing control over a
subsidiary that is not a “business” as defined in AASB 3: Business Combinations to an associate or joint venture and
requires that:
-
-
a gain or loss (including any amounts in other comprehensive income (OCI) be recognised only to the extent of
the unrelated investor’s interest in that associate or joint venture;
the remaining gain or loss be eliminated against the carrying amount of the investment in that associate or joint
venture; and
Latin Resources Limited (ABN 81 131 405 144)
47
NOTES TO THE FINANCIAL STATEMENTS
-
any gain or loss from remeasuring the remaining investment in the former subsidiary at fair value also be
recognised only to the extent of the unrelated investor’s interest in the associate or joint venture. The
remaining gain or loss should be eliminated against the carrying amount of the remaining investment.
The Company is still reviewing the impact the adoption of AASB 2014-10 may have on the Group's financial statements.
Other standards not yet applicable
There are no other standards that are not yet effective and that would be expected to have a material impact on the
entity in the current or future reporting periods and on foreseeable future transactions.
(e) BASIS OF CONSOLIDATION
The consolidated financial statements comprise the financial statements of Latin Resources Limited and its subsidiaries as at the
end of each reporting period.
Subsidiaries are all those entities over which the Group has the power to govern the financial and operating policies
so as to obtain benefits from their activities. Information regarding subsidiaries is disclosed in Note 23(d).
The financial statements of subsidiaries are prepared for the same reporting period as the Parent company, using
consistent accounting policies or adjustments are made to the financial statements of subsidiaries to bring their
accounting policies into line with those used by other members of the Group.
In preparing the consolidated financial statements, all inter-company balances and transactions, income and expenses
and profits and losses resulting from inter-group transactions, have been eliminated in full.
Subsidiaries are fully consolidated from the date on which control is obtained by the Group and cease to be
consolidated from the date on which control is transferred out of the Group.
The acquisition of subsidiaries is accounted for using the acquisition method of accounting. The acquisition method of
accounting involves recognising at acquisition date, separately from goodwill, the identifiable assets acquired, the
liabilities assumed and any non-controlling interest in the acquiree. The identifiable assets acquired and the liabilities
assumed are measured at their acquisition date fair values.
The difference between the above items and the fair value of the consideration (including the fair value of any pre-
existing investment in the acquiree) is goodwill or a discount on acquisition.
(f) COMPARATIVE INFORMATION
Certain comparative information in the financial report may have been reclassified to aid comparability with the
current year.
(g) GOING CONCERN
The financial report has been prepared on the going concern basis, which assumes continuity of normal business
activities and the realisation of assets and settlement of liabilities in the ordinary course of business.
For the year ended 31 December 2017 the consolidated entity incurred a loss of $2,381,967 (2016: $7,844,976), had
net cash outflows from operating and investing activities of $4,424,544 (2016: $2,632,131) and had net working
capital surplus of $496,609 (excludes assets held for sale) as at 31 December 2017 (2016: surplus $198,774).
These conditions indicate a material uncertainty that may cast significant doubt about the company and the
consolidated entity’s ability to continue as a going concern.
At the date of this report, the directors are satisfied there are reasonable grounds to believe that the Group will be
able to continue its planned operations and the Group will be able to meet its obligations as and when they fall due
because the directors are confident that the Group will be able to realise certain of its assets or seek alternative
sources of funding if required. Should the Group not achieve the matters set out above, there is uncertainty whether
the Group would continue as a going concern and therefore whether it would realise its assets and extinguish its
Latin Resources Limited (ABN 81 131 405 144)
48
NOTES TO THE FINANCIAL STATEMENTS
liabilities in the normal course of business and at the amounts stated in the financial report. The consolidated
financial statements do not include any adjustment relating to the recoverability or classification of recorded asset
amounts or to the amounts or classification of liabilities that might be necessary should the Group not be able to
continue as a going concern.
(h) SEGMENT REPORTING
An operating segment is a component of an entity that engages in business activities from which it may earn
revenues and incur expenses (including revenues and expenses relating to transactions with other components of
the same entity), whose operating results are regularly reviewed by the entity’s chief operating decision maker to
make decisions about resources to be allocated to the segment and assess its performance and for which discrete
financial information is available.
Operating segments have been identified based on the information provided to the chief operating decision
makers being the Board.
Operating segments that meet the quantitative criteria as prescribed by AASB 8 are reported separately. However,
an operating segment that does not meet the quantitative criteria is still reported separately where information
about the segment would be useful to users of the financial statements.
The Group determines and presents operating segments based on the information internally provided to the
Board.
(i) REVENUE
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Group and the
revenue can be reliably measured, regardless of when the payment is being made. Revenue is measured at fair value
of the consideration received or receivable, taking into account contractually defined terms of payment and excluding
taxes or duties. The following specific recognition criteria must also be met before revenue is recognised:
Interest income
Revenue is recognised as the interest accrues (using the effective interest method, which is the rate that exactly
discounts estimated future cash receipts through the expected life of the financial instrument) to the net carrying
amount of the financial asset.
(j) CURRENT VERSUS NON-CURRENT CLASSIFICATION
The Group presents assets and liabilities in the statement of financial position based on current/non-current
classification.
An asset is current when it is:
Expected to be realized or intended to be sold or consumed in normal operating cycle;
Held primarily for the purpose of trading;
Expected to be realized within twelve months after the reporting period; or
Cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve months
after the reporting period.
All other assets are classified as non-current.
A liability is current when:
It is expected to be settled in a normal operating cycle;
It is held primarily for the purpose of trading;
It is due to be settled within twelve months after the reporting period; or
There is no unconditional right to defer the settlement of the liability for at least twelve months after the reporting
period.
Latin Resources Limited (ABN 81 131 405 144)
49
NOTES TO THE FINANCIAL STATEMENTS
The Group classifies all other liabilities as non-current. Deferred tax assets and liabilities are classified as non-current
assets and liabilities.
(k) INCOME TAX
Current tax assets and liabilities for the current and prior periods are measured at the amount expected to be
recovered from or paid to the taxation authorities based on the current period’s taxable income. The tax rates and
tax laws used to compute the amount are those that are enacted or substantively enacted by the balance sheet date.
Deferred income tax is provided using the liability method on temporary differences at the balance sheet date
between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes.
Deferred income tax liabilities are recognised for all taxable temporary differences except:
• when the deferred income tax liability arises from the initial recognition of goodwill or of an asset or liability in a
transaction that is not a business combination and that, at the time of the transaction, affects neither the
accounting profit nor taxable profit or loss; or
• when the taxable temporary difference is associated with investments in subsidiaries, associates or interests in
joint ventures, and the timing of the reversal of the temporary differences can be controlled and it is probable
that the temporary difference will not reverse in the foreseeable future.
Deferred income tax assets are recognised for all deductible temporary differences, carry-forward of unused tax credits
and unused tax losses, to the extent that it is probable that taxable profit will be available against which the
deductible temporary differences and the carry-forward of unused tax credits and unused tax losses can be utilised,
except:
• when the deferred income tax asset relating to the deductible temporary difference arises from the initial
recognition of an asset or liability in a transaction that is not a business combination and, at the time of the
transaction, affects neither the accounting profit nor taxable profit or loss; or
• when the deductible temporary difference is associated with investments in subsidiaries, associates or
interests in joint ventures, in which case a deferred tax asset is only recognised to the extent that it is
probable that the temporary difference will reverse in the foreseeable future and taxable profit will be available
against which the temporary difference can be utilised.
The carrying amount of deferred income tax assets is reviewed at each balance sheet date and reduced to the extent
that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred income tax
asset to be utilised.
Unrecognised deferred income tax assets are reassessed at each balance sheet date and are recognised to the extent
that it has become probable that future taxable profit will allow the deferred tax asset to be recovered.
Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply to the year when
the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively
enacted at the balance sheet date.
Income taxes relating to items recognised directly in equity are recognised in equity and not in profit or loss.
Deferred tax assets and deferred tax liabilities are offset only if a legally enforceable right exists to set off current tax
assets against current tax liabilities and the deferred tax assets and liabilities related to the same taxable entity and
the same taxation authority.
(l) GOODS AND SERVICES TAX
Revenues, expenses and assets are recognised net of the amount of GST except:
• when the GST incurred on a purchase of goods and services is not recoverable from the taxation authority, in
which case the GST is recognised as part of the cost of acquisition of the asset or as part of the expense item as
applicable; and
receivables and payables are stated with the amount of GST included.
•
Latin Resources Limited (ABN 81 131 405 144)
50
NOTES TO THE FINANCIAL STATEMENTS
The net amount of GST recoverable from, or payable to, the taxation authority is included as part of receivables or
payables in the statement of financial position.
Cash flows are included in the cash flow statement on a gross basis and the GST component of cash flows arising from
investing and financing activities, which is recoverable from, or payable to, the taxation authority are classified as
operating cash flows.
Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to, the taxation
authority.
(m) LEASES
Leases in which a significant portion of the risks and rewards of ownership benefits are retained by the lessor are
classified as operating leases. Payments made under operating leases (net of any incentives received from the lessor)
are charged to Profit or Loss on a straight lined basis over the life of the lease.
(n) BORROWING COSTS
Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes a
substantial period of time to get ready for its intended use or sale are capitalised as part of the cost of the asset. All
other bowing costs are expensed in the period in which they occur. Borrowing costs consist of interest and other
costs that an entity incurs in connection with the borrowing of funds.
(o) EARNINGS PER SHARE
Basic earnings per share
Basic earnings per share is calculated by dividing the profit or loss attributable to equity holders of the Company,
excluding any costs of servicing equity other than ordinary shares, by the weighted average number of ordinary
shares outstanding during the year, adjusted for bonus elements in ordinary shares issued during the year.
Diluted earnings per share
Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into
account the after income tax effect of interest and other financing costs associated with dilutive potential ordinary
shares and the weighted average number of shares assumed to have been issued for no consideration in relation
to dilutive potential ordinary shares.
(p) CASH AND CASH EQUIVALENTS
Cash and cash equivalents includes cash on hand, deposits held at call with banks, other short-term highly liquid
investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within
short-term borrowings in current liabilities in the Statement of Financial Position.
(q) FINANCIAL ASSETS
Shares held for trading have been classified as financial assets at fair value through profit or loss. Financial assets
held for trading purposes are stated at fair value, with any resultant gain or loss recognised in profit or loss. The
fair value of investments that are actively traded in organised financial markets is determined by reference to quoted
market bid prices at the close of business on the reporting date. Assets in this category are classified as current assets
if they are expected to be realised within 12 months otherwise they are classified as non-current assets.
(r) PROPERTY, PLANT & EQUIPMENT
Plant and equipment is stated at cost less accumulated depreciation and any impairment in value. Depreciation is
calculated on a straight-line basis over the estimated useful life of the asset as follows:
Plant and equipment - over 3 to 5 years; and
Motor Vehicles - over 8 years
The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at each balance sheet date.
An item of plant and equipment is derecognised upon disposal or when no future economic benefits are expected
from its use or disposal. Any gain or loss arising on derecognition of the asset (calculated as the difference between the
net disposal proceeds and the carrying amount of the asset) is included in profit or loss in the period the item is
derecognised.
Latin Resources Limited (ABN 81 131 405 144)
51
NOTES TO THE FINANCIAL STATEMENTS
(s) EXPLORATION AND EVALUATION EXPENDITURE
Expenditure on exploration and evaluation expenditure is accounted for in accordance with the ‘area of interest’
method. Exploration and evaluation expenditure is capitalised provided the rights to tenure of the area of interest is
current and either:
the exploration and evaluation activities are expected to be recouped through successful development and exploitation
of the area of interest or, alternatively, by its sale; or
exploration and evaluation activities in the area of interest have not, at the reporting date, reached a stage that permits
a reasonable assessment of the existence or otherwise of economically recoverable reserves, and active and significant
operations in, or relating to, the area of interest are continuing.
When technical feasibility and commercial viability of extracting a mineral resource have been demonstrated then any
capitalised exploration and evaluation expenditure is reclassified as capitalised ‘Mine properties in development’.
Prior to reclassification, capitalised exploration and evaluation expenditure is assessed for impairment.
The carrying value of capitalised exploration and evaluation expenditure is assessed for impairment at the cash
generating unit level whenever facts and circumstances suggest that the carrying value of the asset may exceed its
recoverable amount.
An impairment exists when the carrying amount of an asset or cash generating unit exceeds its estimated recoverable
amount. The asset or cash generating unit is then written down to its recoverable amount. Any impairment losses are
recognised in the statement of profit or loss and other comprehensive income.
Refer Note 3 for details regarding the impairment charge for the reporting period.
(t) TRADE AND OTHER PAYABLES
Trade payables and other payables are carried at amortised cost and represent liabilities for goods and services
provided to the Group prior to the end of the financial year that are unpaid and arise when the Group becomes
obliged to make future payments in respect of the purchase of these goods and services. The amounts are unsecured
and are usually paid within 30 days of recognition.
(u) DEFERRED CONSIDERATION
Deferred consideration arises when settlement of all or any part of the cost of an exploration and evaluation properties is
deferred.
It is stated at fair value at the date of acquisition, which is determined by discounting the amount due to present value at
that date.
Interest is imputed on the fair value of non-interest bearing deferred consideration at the discount rate and capitalised as
part of exploration and evaluation properties.
At each balance sheet date deferred consideration comprises the remaining deferred consideration valued at acquisition
plus interest imputed on such amounts from acquisition to the balance sheet date.
(v) PROVISIONS
Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past event,
it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a
reliable estimate can be made of the amount of the obligation.
When the Group expects some or all of a provision to be reimbursed, for example under an insurance contract,
the reimbursement is recognised as a separate asset but only when the reimbursement is virtually certain. The
expense relating to any provision is presented in the income statement net of any reimbursement.
Provisions are measured at the present value of managements best estimate of the expenditure required to settle the
present obligation at the balance sheet date. If the effect of the time value of money is material, provisions are
discounted using a current pre-tax rate that reflects the time value of money and the risks specific to the liability.
The increase in the provision resulting from the passage of time is recognised in finance costs.
Latin Resources Limited (ABN 81 131 405 144)
52
NOTES TO THE FINANCIAL STATEMENTS
(w) INTEREST BEARING LOANS AND BORROWINGS
Interest bearing loans are recognised initially at fair value, net of transaction costs incurred on the date at which the
Group becomes a party to the contractual obligations of the instrument. Subsequent to initial recognition, these
financial liabilities are measured at amortised cost using the effective interest rate method.
The Group derecognises a financial liability when its contractual obligations are discharged, cancelled or expire.
(x) EMPLOYEE BENEFITS
Wages, salaries, annual leave and sick leave
Liabilities for wages and salaries, including non-monetary benefits and annual leave expected to be settled within 12
months of the reporting date are recognised in respect of employees’ services up to the reporting date. They are
measured at the amounts expected to be paid when the liabilities are settled. Liabilities for non-accumulating sick
leave are recognised when the leave is taken and are measured at the rates paid or payable.
Long service leave and other employment entitlements
The liability for long service leave and other employment entitlements is recognised and measured as the present
value of expected future payments to be made in respect of services provided by employees up to the reporting
date using the projected unit credit method.
Consideration is given to expected future wage and salary levels, experience of employee departures, and periods of
service. Expected future payments are discounted using market yields at the reporting date on national government
bonds with terms to maturity and currencies that match, as closely as possible, the estimated future cash outflows.
(y) FOREIGN CURRENCY TRANSLATION
Functional and presentation currency
The consolidated financial statements are presented in Australian dollars, which is Latin Resources Limited’s
functional and presentation currency.
Each entity in the Group determines its own functional currency based on the primary economic environment and
items included in the financial statements of each entity are measured using that functional currency.
Transactions and balances
Transactions in foreign currencies are initially recorded by the Group entities at their respective functional currency at
the exchange rates prevailing at the date of the transaction. Monetary assets and liabilities denominated in foreign
currencies are retranslated at a rate of exchange ruling at the reporting date.
All exchange differences in the consolidated financial statements are taken to the profit or loss with the exception of
differences on foreign currency borrowings that provide a hedge against a net investment in a foreign operation.
These are taken directly to equity until the disposal of the net investment, at which time they are recognised in the
profit or loss. On disposal of a foreign operation, the cumulative amount recognised in equity relating to that
particular foreign operation is recognised in the profit or loss. Tax charges and credits attributable to exchange
differences on those borrowings are also recognised in equity.
Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the
exchange rate as at the date of the initial transaction. Non-monetary items measured at fair value in a foreign
currency are translated using the exchange rates at the date when the fair value was determined.
Group companies
The functional currency of Peruvian Latin Resources SAC, Minera Dylan SAC, Recursos Latinos S.A. and Mineracao
Ferro Nordeste Ltda is United States dollars.
The functional currency of these subsidiaries has been translated into Australian dollars for presentation purposes.
The assets and liabilities of this subsidiary are translated using the exchange rates prevailing at the reporting
date; revenues and expenses are translated using average exchange rates for the period; and equity transactions
eliminated on consolidation are translated at exchange rates prevailing at the dates of transactions.
The resulting difference from translation is recognised in a foreign currency translation reserve through other
comprehensive income.
Latin Resources Limited (ABN 81 131 405 144)
53
NOTES TO THE FINANCIAL STATEMENTS
(z) SHARE-BASED PAYMENT TRANSACTIONS
Equity-settled share-based payments are measured at the fair value determined at the grant date of the equity-settled
share-based payments is expensed on a straight-line basis over the vesting period, based on the Group’s estimate of
equity instruments that will eventually vest, with a corresponding increase in equity. At the end of each reporting
period, the Group revises its estimate of the number of equity instruments expected to vest. The impact of the revision
of the original estimates, if any, is recognised in the Statement of comprehensive income such that the cumulative
expense reflects the revised estimate, with a corresponding adjustment to reserves.
Equity-settled share-based payment transactions with parties other than employees are measured at the fair value of
the goods or services received, except where that fair value cannot be estimated reliably, in which case they are
measured at the fair value of the equity instruments granted, measured at the date the entity obtains the goods or the
counterparty renders the service.
For cash-settled share-based payments, a liability equal to the portion of the goods or services received is recognised at the
current fair value determined at each reporting date.
(aa) FAIR VALUE OF ASSETS AND LIABILITIES
The Group measures some of its assets and liabilities at fair value on either a recurring or non-recurring basis,
depending on the requirements of the applicable Accounting Standard.
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction
between market participants at the measurement date. The fair value measurement is based on the presumption
that the transaction to sell the asset or transfer the liability takes place either:
In the principal market for the asset or liability; or
In the absence of a principal market, in the most advantageous market for the asset or liability.
The principal or the most advantageous market must be accessible by the Group.
The fair value of an asset or a liability is measured using the assumptions that market participants would use when
pricing the asset or liability, assuming that market participants act in their economic best interest.
A fair value measurement of a non-financial asset takes into account a market participant's ability to generate
economic benefits by using the asset in its highest and best use or by selling it to another market participant
that would use the asset in its highest and best use.
The Group uses valuation techniques that are appropriate in the circumstances and for which sufficient data are
available to measure fair value, maximising the use of relevant observable inputs and minimising the use of
unobservable inputs.
All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorised
within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair
value measurement as a whole:
Level 1 — Quoted (unadjusted) market prices in active markets for identical assets or liabilities;
Level 2 — Valuation techniques for which the lowest level input that is significant to the fair value measurement is
directly or indirectly observable; or
Level 3 — Valuation techniques for which the lowest level input that is significant to the fair value measurement is
unobservable.
For assets and liabilities that are recognised in the financial statements on a recurring basis, the Group determines
whether transfers have occurred between Levels in the hierarchy by re-assessing categorisation (based on the
lowest level input that is significant to the fair value measurement as a whole) at the end of each reporting period.
Latin Resources Limited (ABN 81 131 405 144)
54
NOTES TO THE FINANCIAL STATEMENTS
For the purpose of fair value disclosures, the Group has determined classes of assets and liabilities on the basis of the
nature, characteristics and risks of the asset or liability and the level of the fair value hierarchy as explained above.
3. SIGNIFICANT ACCOUNTING JUDGEMENTS, ESTIMATES AND ASSUMPTIONS
In the process of applying the Group’s accounting policies management makes judgements. In addition the carrying
amounts of certain assets and liabilities are often determined based on estimates and assumptions of future events.
The key judgements, estimates and assumptions that have a significant risk of causing a material adjustment to the
carrying amounts of certain assets and liabilities within the next annual reporting period are:
Determination of mineral resources and ore reserves
The Group reports its mineral resources and ore reserves in accordance with the Australasian Code for Reporting of
Exploration Results, Mineral Resources and Ore Reserves, 2004 Edition (the JORC code) as a minimum standard. The
information on mineral resources and ore reserves were prepared by or under the supervision of Competent Persons
as defined in the JORC code.
There are numerous uncertainties inherent in estimating mineral resources and ore reserves and assumptions that are
valid at the time of estimation may change significantly when new information becomes available.
Changes in the forecast prices of commodities, exchange rates, production costs or recovery rates may change the
economic status of reserves and may, ultimately, result in reserves or resources being restated.
Impairment of Exploration and evaluation assets
The Group accounts for Exploration and evaluation assets in accordance with its policy (refer Note 1(s)).
An impairment exists when the carrying amount of an asset or cash generating unit exceeds its estimated recoverable
amount. The asset or cash generating unit is then written down to its recoverable amount. Any impairment losses are
recognised in the statement of profit or loss and other comprehensive income.
The Group’s projects are considered to not be at the stage that permits a reasonable assessment of the existence or
otherwise of economically recoverable reserves.
The future recoverability of Exploration and evaluation assets is dependent on a number of factors, including
whether the Group decides to exploit the related concession itself or, if not, whether it can successfully recover the
related exploration and evaluation asset through sale.
Factors that could impact the future recoverability include the level of reserves and resources, future technological
changes, which could impact the cost of mining, future legal changes (including changes to environmental
restoration obligations) and changes to commodity prices.
To the extent that capitalised Exploration and evaluation expenditure is determined not to be recoverable in the
future, profits and net assets will be reduced in the period in which this determination is made.
As at 31 December 2017 the Group recorded an impairment charge of $nil (2016: $4.9 million) (refer Note 14) to
reflect concessions that management relinquished during 2016. No concessions were relinquished during 2017 and
no impairment charge was made.
Share-based payment transactions
The Group measures the cost of equity-settled and cash-settled transactions by reference to the fair value of the
equity instruments at the date at which they are granted. The fair value is determined by using the Black-Scholes
model and the assumptions and carrying amount at the reporting date.
Deferred income tax benefit from carried forward tax losses
The future recoverability of the carried forward tax losses are dependent upon Group’s ability to generate taxable
profits in the future in the same tax jurisdiction in which the losses arise. This is also subject to determinations and
assessments made by the taxation authorities.
The recognition of a deferred tax asset on carried forward tax losses (in excess of taxable temporary differences) is
dependent on management’s assessment of these two factors. The ultimate recoupment and the benefit of these tax
losses could differ materially from management’s assessment.
Latin Resources Limited (ABN 81 131 405 144)
55
NOTES TO THE FINANCIAL STATEMENTS
4. OPERATING SEGMENT INFORMATION
The Group has identified its operating segments in accordance with its accounting policy as set out in Note 2(h) and
based on the internal reports that are reviewed and used by the Board (chief operating decision maker) in assessing
performance and in determining the allocation of resources. The Group’s four operating segments are Australia,
Brazil, Peru and Argentina.
The following is an analysis of the Group’s revenues, results, assets, liabilities by reportable operating segment.
2017
Revenue
Interest revenue
Other income1
Total revenue
Australia
$
4,550
354,006
358,556
Peru
$
Argentina
$
Brazil
$
-
27,439
27,439
-
-
-
1 Includes the fair value gain of $264,500 on financial assets through profit or loss
Results
Depreciation & amortisation expense
Share based payments
Interest expense
Unwinding of interest
Net foreign exchange gain
(16,501)
-
(2,343)
(821,314)
-
(2,025)
(41,140)
(45,588)
-
(23,352)
-
-
(1,567)
-
-
Segment loss
(1,060,774)
(973,586)
(347,607)
Total
$
4,550
381,445
385,995
(18,526)
(41,140)
(49,498)
(821,314)
(23,352)
(2,381,967)
-
-
-
-
-
-
-
-
-
Segment assets
Segment liabilities
2,213,640
7,168,759
3,103,949
31,484
12,517,832
(198,211)
(7,082,203)
(27,075)
(45,505)
(7,352,994)
Additions to non-current assets
Plant & equipment
Exploration & evaluation assets
Total additions to non-current assets
2016
Revenue
Interest revenue
Gain from settlement of liabilities
Other income
Total revenue
Results
Depreciation & amortisation expense
Share based payments
Interest expense
Unwinding of interest
Net foreign exchange gain
-
-
-
12,929
452,841
465,770
-
2,170,673
2,170,673
-
-
-
12,929
2,623,514
2,636,443
Australia
Peru
Argentina
Brazil
Total
49,140
85,560
13,660
148,360
375
-
332,183
332,558
(13,903)
(14,577)
(190,910)
(115,528)
-
5,062
-
(5,518)
(894,892)
32,921
-
-
-
-
-
-
-
-
(7,485)
-
-
-
-
-
-
-
-
-
49,515
85,560
345,843
480,918
(28,480)
(190,910)
(121,046)
(894,892)
30,498
Segment loss
Segment assets
(2,044,449)
(5,707,945)
(88,362)
(4,220)
(7,844,976)
3,159,558
8,052,480
(55,000)
34,073
11,191,111
Segment liabilities
(627,871)
(6,805,956)
(23,268)
(49,250)
(7,506,345)
Additions to non-current assets
Plant & equipment
Exploration & evaluation assets
Total additions to non-current assets
Latin Resources Limited (ABN 81 131 405 144)
-
-
-
-
654,651
654,651
-
610,869
610,869
-
-
-
-
1,265,520
1,265,520
56
NOTES TO THE FINANCIAL STATEMENTS
Segment loss represents the loss incurred by each segment without allocation of corporate overhead costs. This is the
information reported to the chief operating decision maker for the purposes of resource allocation and assessment of
segment performance.
5. OTHER INCOME
Sundry income¹
Profit on sale of shares
Net foreign exchange gain
2017
$
27,926
112,371
(23,352)
116,945
¹ Sundry income includes debt condonation and penalties relating to the resolution of a contract in Peru.
6.
EXPENSES
(a) Employee benefits expense
Employee benefits and Director Fees
Share based payments (refer note 22)
1 Out of share based payments of $164,557, a portion of $41,140 was
expensed during the year with balance being capitalised.
(b) Finance expenses
Bank fees and charges
Interest expense
Unwinding of the effective interest rate1
Other finance charges2
2017
$
449,564
41,1401
490,704
2017
$
8,490
49,498
821,314
3,425
882,727
2016
$
296,883
-
48,960
345,843
2016
$
612,801
190,910
803,711
2016
$
11,771
121,046
894,892
465,678
1,493,387
1 Unwinding of the effective interest rate refers to the discounting of the Convertible securities $nil (2016: $152,586)
and the remaining cost of the concessions relating to the Guadalupito project $821,314 (2016: $742,306).
2 Other finance charges relate to the premium to the market price of the Company’s shares used to extinguish
liabilities during the prior year.
(c) Other expenses
Administration expenses
Corporate expenses
Net foreign exchange loss
Occupancy expenses
106,468
945,184
268,572
55,781
1,376,005
175,312
840,539
18,462
54,354
1,088,667
Latin Resources Limited (ABN 81 131 405 144)
57
NOTES TO THE FINANCIAL STATEMENTS
7.
INCOME TAXES
The components of income tax benefit comprise:
Current income tax benefit
Deferred income tax benefit
Income tax benefit reported in the consolidated statement of profit or
loss and other comprehensive income
Income tax expense recognised in equity
Accounting loss before tax
At the statutory income tax rate of 27.5% (in Australia and Peru)
Other non-deductible expenditure for income tax purposes
R&D tax rebate claim
Unrecognised tax losses
Income tax benefit reported in the consolidated statement
comprehensive income
Deferred tax assets
Carried forward revenue losses - Australia
Carried forward revenue losses - Peru
Carried forward revenue losses - Brazil
Carried forward revenue losses - Argentina
Exploration and evaluation assets
Provisions and accruals
Other
Gross deferred tax asset
Offset against deferred tax liability
Unrecognised tax losses
Deferred tax liabilities
Exploration and evaluation assets
Plant and equipment
Gross deferred tax liability
Offset against deferred tax asset
Net deferred tax liability
8.
EARNINGS PER SHARE
Basic and diluted earnings per share
2017
$
-
-
-
2016
$
-
-
-
(2,381,967)
(655,041)
(589,653)
-
1,244,694
(7,844,975)
(2,353,492)
-
-
2,353,492
-
-
4,542,919
(1,436,394)
197,776
44,872
13,485
(59,465)
315,577
3,618,770
-
3,618,770
-
-
-
-
-
2017
Cents
(0.12)
$
3,814,618
(1,286,700)
215,756
24,264
36,314
(50,731)
353,944
3,107,465
-
3,107,465
-
-
-
-
-
2016
Cents
(0.63)
$
Loss used in calculating basic and diluted earnings per share
(2,381,967)
(7,844,976)
Weighted average number of ordinary shares used in calculating basic
and diluted earnings per share*
Number
Number
1,944,631,751
1,248,666,743
* The weighted average number of shares takes into account the weighted average effect of changes in share
transactions during the year. At balance date there were 259,375,000 (2016: 390,369,653) share options and
65,031,642 (2016: 78,099,131) share rights on issue which were anti-dilutive and therefore excluded from the
weighted average number of ordinary shares used in calculating dilutive earnings per share.
Latin Resources Limited (ABN 81 131 405 144)
58
NOTES TO THE FINANCIAL STATEMENTS
9.
CASH
(a) Cash and short term deposits
Cash in hand
Cash at bank
2017
$
327
995,165
995,492
2016
$
310
1,338,358
1,338,668
1,338,668
(b) Reconciliation of net loss after income tax to net cash flows from operating activities:
Loss for the year
(2,381,967)
(7,844,976)
Adjustments to reconcile loss after tax to net cash flows from operating activities:
Loss from settlement of interest bearing loans and borrowings
(Gain) on sale of investments
(Gain) on fair value of financial assets through profit and loss
Depreciation
Shares issued to settle creditors
Share based payments
Net foreign exchange loss/(gain)
Exploration and evaluation assets impaired/written off
Loss on sale of plant & equipment
Unwinding of the effective interest rate
Working capital adjustments:
(Increase)/decrease in trade and other receivables
Increase/(decrease) in trade and other payables
Increase/(decrease) in provisions for annual leave
Net cash flows used in operating activities
-
(112,372)
(264,500)
18,526
25,151
41,140
23,352
-
-
821,314
(85,854)
(61,631)
2,890
(1,973,951)
362,044
-
50,000
28,480
-
190,910
(1,908)
4,861,649
-
894,892
957,062
(185,087)
24,715
(662,219)
Non-cash financing and investing activities
During the year the Company issued 6,209,549 shares to settle liabilities amounting to $25,171. There were no other
non-cash financing and investing activities.
10. TRADE AND OTHER RECEIVABLES
(a) Current
Trade receivables
Other receivables
Goods & services tax
Prepayments
2017
$
52,697
67,896
11,953
8,647
141,193
2016
$
3,715
71,309
26,593
50,658
152,275
The current trade and other receivables at 31 December 2017 were neither provided for or impaired and are
considered fully recoverable.
(b) Non-Current
Goods & services tax1
2017
$
2016
$
1,700,263
1,700,263
1,603,327
1,603,327
1 The Non-current Goods and services tax/value added tax (GST/VAT) refers to a receivable by the company’s
subsidiary in Peru which can only be offset against GST/VAT attributable to future sales.
Latin Resources Limited (ABN 81 131 405 144)
59
NOTES TO THE FINANCIAL STATEMENTS
11. ASSETS HELD FOR SALE
Assets held for sale
2017
$
2,898,2331
2016
$
-
1 Assets held for sale comprise the Group’s Peruvian Ilo Copper assets subject to the binding terms sheet signed with
Westminster Resources Ltd on 4 September 2017. The sale was subsequently concluded on 7 February 2018. Please
refer ASX announcement dated 6 September 2017 for details of consideration and Binding Terms of sale.
12. OTHER FINANCIAL ASSETS
Security deposits and bonds
Shares in listed entities¹
2017
$
30,110
318,500
348,610
1 Shares in listed entities have been fair valued using Level 1 inputs of the fair value hierarchy.
13. PLANT AND EQUIPMENT
Furniture and equipment
At cost
Less: Accumulated depreciation
Furniture and equipment
Balance at beginning of period
Additions
Disposals
Depreciation expense
Effects of exchange rate movements
Balance at end of period
Net book value
14. EXPLORATION AND EVALUATION ASSETS
Balance at beginning of period
Additions
Disposals
Transferred to assets held for sale3
Amounts written off1
Other²
Foreign currency translation movement
Balance at end of period
2017
$
179,319
(113,778)
65,541
76,827
12,929
-
(18,526)
(5,689)
65,541
65,541
2017
$
7,842,533
2,623,514
-
(2,898,233)
-
-
(1,199,314)
6,368,500
2016
$
27,481
150,000
177,481
2016
$
172,079
(95,252)
76,827
121,877
-
-
(28,480)
(16,570)
76,827
76,827
2016
$
11,170,432
1,265,520
-
-
(4,861,649)
126,535
141,695
7,842,533
1 Amounts written off includes an impairment charge of $nil (2016: $4,861,649) to reflect the recoverable amounts of
exploration and evaluation assets.
² Other refers to an adjustment to reflect the renegotiated terms for the acquisition of the concessions relating to the
Guadalupito project.
3The Group has agreed binding terms for the sale of the Peru Copper Project (excluding the areas under JV with First
Quantum Minerals) to Westminster Resources Ltd. The net carrying value of the areas subject to the Sale Agreement
have been reclassified to Current Assets under Assets Held for Sale. The sale was settled on 7 February 2018.
Latin Resources Limited (ABN 81 131 405 144)
60
NOTES TO THE FINANCIAL STATEMENTS
15. TRADE AND OTHER PAYABLES
Trade payables
Other payables
Accruals
16.
INTEREST BEARING LOANS AND BORROWINGS
Loan1
2017
$
753,711
60,874
41,216
855,801
2017
$
65,000
65,000
2016
$
833,981
30,676
52,776
917,433
2016
$
500,000
500,000
1 Loan with Junefield High Value Metals Investments Limited (JVHM) is unsecured and attracts interest at 12% per
annum. The loan was fully repaid on 9 January 2018.
17. DEFERRED CONSIDERATION
(a) Current
(b) Non-current
TOTAL
2017
$
22,000
2016
$
9,222
6,364,308
6,036,695
6,386,308
6,045,917
The deferred consideration balances reflect the current and non-current portions of the present value of the
remaining US$10.0 million (31 December 2016: US$10.1 million) the Group is required to pay in cash and shares for
the acquisition of the concessions relating to the Guadalupito project. The deferred consideration is payable as
follows:
Share issues
-
-
January 2018 2,000,000 fully paid shares
January 2019 2,000,000 fully paid shares
Cash Payments
-
-
-
-
-
The favourable feasibility study is to be published no later than July 2019.
Within 6 months of favourable feasibility study
US$250,000
Within 18 months of favourable feasibility study US$750,000
Within 30 months of favourable feasibility study US$1,000,000
Within 42 months of favourable feasibility study US$2,000,000
Within 54 months of favourable feasibility study US$6,000,000
18. PROVISIONS
Employee benefits – Leave entitlements
19. CONTRIBUTED EQUITY
(a) Issued capital
Issued shares
Option premium
2017
$
45,885
2017
$
2016
$
42,995
2016
$
44,699,938
1,737,444
46,437,382
40,304,459
1,737,444
42,041,903
Latin Resources Limited (ABN 81 131 405 144)
61
NOTES TO THE FINANCIAL STATEMENTS
(b) Movements in issued capital
Issued shares
Balance at 1 January 2016
Settlement of borrowings
Settlement of remuneration
Placement3
Settlement of borrowings
Settlement of creditors
Placement
Placement
Placement
Settlement of borrowings
Exercise of options
Transaction costs
Balance at 31 December 2016
Exercise of options
Deferred rights conversion
Placement1
Placement2
Settlement of creditors3
Placement4
Settlement of creditors5
Concession consideration 6
Placement7
Transaction costs
Number
$
892,568,828
88,381,944
4,961,942
45,000,000
12,000,000
54,732,591
77,000,000
82,500,000
309,090,911
1,155,507
10,006,375
-
1,577,398,098
14,054,768
7,403,798
213,728,500
250,000,000
2,522,049
428,571,457
1,687,500
2,000,000
125,000,000
-
2,622,366,170
34,464,603
809,750
37,668
212,500
190,000
473,233
385,000
825,000
3,400,000
17,333
100,128
(610,756)
40,304,459
281,095
-
1,068,644
1,000,000
10,401
1,500,000
6,750
8,000
1,000,000
(479,411)
44,699,938
1 The Company completed a placement on 10 May 2017 at a price of $0.005 per share.
2 The Company completed a placement on 26 July 2017 at a price of $0.004 per share. 125,000,000 options were issued to
placement participants and 125,000,000 options were issued to brokers to the placement. The broker options were
valued at $125,000.
3 During August 2017, 522,049 shares valued at $2,401 were issued to a former employee of the Company for services
provided during the term of employment. In addition, 2,000,000 shares were issued to a consultant in lieu of cash fees of
$8,000 for services provided.
⁴ The Company completed a placement on 18 October 2017 at a price of $0.0035 per share.
5 On 19 October 2017, 1,687,500 shares were issued in part settlement of a creditors invoice in lieu of cash for services
provided.
6 Consideration shares issued on acquisition of Guadalipito concessions.
7 The Company completed a placement on 27 November 2017 at a price of $0.08 per share.
Option premium
Balance at 1 January 2016
Balance at 31 December 2016
Balance at 31 December 2017
Total Contributed Equity
2017
$
14,812,500
14,812,500
14,812,500
2016
$
1,737,444
1,737,444
1,737,444
46,437,382
Latin Resources Limited (ABN 81 131 405 144)
62
NOTES TO THE FINANCIAL STATEMENTS
Options outstanding
(includes share based payment options and non share
based payment options)
Balance at 1 January 2016
Granted during the year
Exercised during the year
Exercised during the year
Balance at 31 December 2016
Exercised during the year
Issued during the year
Options lapsed
Balance at 31 December 2017
20. RESERVES
(a) Foreign currency translation reserve
Balance at beginning of year
Foreign currency translations
Balance at the end of the year
(b) Share based payments reserve
Balance at the beginning of year
Capital raising costs – issue of broker options
Share based payments
Balance at the end of the year
Total reserves
Nature and purpose of reserves
Number of
options
Weighted average
exercise price
214,768,078
185,607,950
(6,375)
(10,000,000)
390,369,653
(14,054,768)
250,000,000
(366,939,885)
259,375,000
2017
$
5,558,345
(822,997)
4,735,348
2017
$
2,532,576
125,000
164,557
2,822,133
$0.02
$0.02 - $0.04
$0.02
$0.01
$0.02
$0.02
$0.01
$0.02 - $0.04
$0.01
2016
$
5,117,180
441,165
5,558,345
2016
$
2,247,712
-
284,864
2,532,576
7,557,481
8,090,921
Foreign currency translation reserve
The foreign currency translation reserve is used to record exchange differences arising from the translation of the financial
statements of foreign subsidiaries.
Share based payments reserve
The share based payments reserve is used to recognise the value of equity benefits provided to directors, employees and
other parties. Refer Note 22 for further details regarding share based payments.
21. ACCUMULATED LOSSES
Balance at the beginning of the year
Loss after income tax
Balance at the end of the year
22. SHARE BASED PAYMENTS
(a) Expenses arising from share based payment transactions
Capital raising costs
Employee benefits expense
Out of share based payments of $164,557, a portion of $41,140 was
expensed during the year with balance being capitalised.
2017
$
(46,448,058)
(2,381,967)
(48,830,025)
2016
$
(38,603,082)
(7,844,976)
(46,448,058)
2017
$$
125,000
164,557
289,557
2016
$
-
190,910
190,910
Latin Resources Limited (ABN 81 131 405 144)
63
NOTES TO THE FINANCIAL STATEMENTS
(b) Share rights
Incentive rights plan
The Incentive rights plan was approved by shareholders on 30 November 2012 for the purpose of attracting, motivating
and retaining key employees and providing them with the opportunity to participate in the future growth of the Group.
Under the plan the Group may offer share rights to eligible persons. Executive directors and full time and permanent
part time employees are eligible persons for the purposes of the Incentive rights plan.
Share rights issued under the Incentive rights plan comprise of retention rights being rights that vest and may be
exercised into Restricted Shares, based on completion of a period of service and performance rights, being rights that
vest and may be exercised into Restricted Shares, based on achievement of specified performance objectives.
The Board, based on the recommendation of the Remuneration Committee, in their absolute discretion determine the
number of share rights to be offered and any performance criteria that may apply. Offers made under the Incentive
rights plan must set out the number of share rights, the vesting conditions and the measurement period.
The retention and performance rights are issued for no consideration, however, the vesting of the benefits are
conditional on achieving specific measurable performance measures that are aligned with the Group’s strategic
objectives.
Vesting of the share rights is measured over a three year interval after the commencement of the respective
measurement period. At the end of the measurement period and subject to the performance measures and each share
right will convert into one ordinary share in the Company.
Where a director or employee ceases employment prior to their incentives vesting due to resignation or termination for
cause, incentives will be forfeited. Where a director or employee ceases employment for any other reason, they may at
the Board’s discretion, retain a number of unvested share rights on a pro-rata basis to reflect their period of service
during the measurement period. These unvested shares only vest subject to meeting the relevant performance
measures.
Non-executive Director Deferred rights plan
The Deferred rights plan was approved by shareholders on 27 May 2014 for the purpose of retaining Non-executive
directors, controlling the cash cost of directors fees and aligning the interests of Non-executive directors with
shareholders and providing them with the opportunity to participate in the future growth of the Group.
Under the plan the Group may offer share rights to Non–executive directors of the Company. Share rights issued under
the Deferred rights plan comprise of retention rights being rights that vest and may be exercised into Restricted Shares,
based on completion of a period of service.
The Board based on the recommendation of the Remuneration Committee in their absolute discretion determine the
number of share rights to be offered and the criteria that may apply. Offers made under the Deferred rights plan must
set out the number of share rights, the vesting conditions and the measurement period.
The retention rights are issued for no consideration, however, the vesting of the benefits are conditional on achieving
certain measurable performance measures.
Vesting of the share rights is measured over a three year interval after the commencement of the respective
measurement period. At the end of the measurement period and subject to the performance measures and the share
rights will convert into one ordinary share in the Company.
Where a non-executive director ceases employment prior to their incentives vesting due to resignation or termination
for cause, incentives will be forfeited. Where a non-executive director ceases employment for any other reason, they
may at the Board’s discretion, retain a number of unvested share options on a pro-rata basis to reflect their period of
service during the measurement period. These unvested shares only vest subject to meeting the relevant performance
measures.
Valuation of Share rights
The assessed fair value of the share rights granted to individuals is allocated equally over the measurement period.
Fair values are determined using valuation model that takes into account the 10 day VWAP share price prior to grant
date. Share rights without market based vesting conditions are valued at the 10 day VWAP share price prior to the
grant date.
Latin Resources Limited (ABN 81 131 405 144)
64
NOTES TO THE FINANCIAL STATEMENTS
Share rights with market based vesting conditions are also valued at the 10 day VWAP share price prior to the grant
date however a 50% discount is applied to the valuation to take into account the likelihood of meeting any market
based vesting conditions.
The model inputs for share rights granted in the prior year ended 31 December 2016 are as follows:
Issued to
Grant date
Expiry date
Quantity
Exercise price
Consideration
Fair value at grant date
10 day VWAP at grant date
Discount
Maximum life
Managing Director
31 October 2016
31 October 2019
60,693,609
-
-
$0.0136
$0.0136
0% - 50%
3 Years
Shares issued as share based payments
No shares were issued as share based payments during the period.
Share rights outstanding
There were 65,031,642 share rights outstanding as at 31 December 2017 (2016: 78,099,131). 8,005,323 share rights
vest on 31 December 2018 and 57,026,319 which have a vesting date of 1 January 2019. The share rights that vested
on 31 December 2016 were converted into shares on 17 March 2017.
As at the date of this report, there were 86,383,950 share rights outstanding.
(c) Options
Valuation of Options
Options were priced using Black and Scholes valuation pricing model (or valued at the listed price where options are listed
options). Where relevant, the expected life used in the model has been adjusted based on management’s best estimate
for the effects of non-transferability, exercise restrictions (including the probability of meeting market conditions attached
to the option), and behavioural considerations.
Input variable
Grant date share price
Exercise price
Expected volatility
Risk-free interest rate
Option life
1 125,000,000 broker options issued in the year ended were valued at the listed price of the options on grant date or
31 Dec 2017
-1
-1
-1
-1
-1
31 Dec 2016
$0.012
$0.02 - $0.04
70%
1.67%
0.3 – 1.14 years
immediately after grant.
23. RELATED PARTY DISCLOSURES
Information regarding individual directors’ and executives’ compensation and equity instrument disclosures are
disclosed in the Remuneration report.
(a) Compensation of directors and other key management personnel
Short term employee benefits
Post-employment benefits
Share based payments
(b) Loans to key management personnel
As at 31 December 2017 there was a short term advance to Mr Chris Gale of $12,114.
2017
$
933,583
-
164,557
1,098,140
2016
$
716,208
8,154
242,829
967,191
Latin Resources Limited (ABN 81 131 405 144)
65
NOTES TO THE FINANCIAL STATEMENTS
(c) Transactions with related parties
Bowen Buchbinder Vilenksy, a related party of Mr David Vilensky, charged fees totaling $44,000 (exclusive of GST) for the year
ended 31 December 2017 in relation to legal fees.
During the period the Company, advanced a total of $50,000 to Bowen Buchbinder Vilensky, a firm related to Mr Vilensky. The
short term advance was for a period of 4 months at commercial terms attracting an interest rate of 10% per annum and
secured by personal guarantee. The advance was fully repaid during the period, including interest accruing to the advance.
Corp Cloud Pty Ltd, a related party of Mr Chris Gale, charged fees totaling $ 15,665 (exclusive of GST) for the year ended 31
December 2017 in relation to the provision of IT services.
(d) Subsidiaries
The consolidated financial statements include the financial statements of Latin Resources Limited and its subsidiaries
which are listed below.
Name of entity
Peruvian Latin Resources Limited SAC (PLR)
Minera Dilan SAC (MD)
Mineracao Ferro Nordeste Ltda (MFN)
Recursos Latinos S.A.
Country of incorporation
Peru
Peru
Brazil
Argentina
Equity holding
2017
%
100
100
100
100
2016
%
100
100
100
100
Peruvian Latin Resources Limited SAC (PLR) and Mineracao Ferro Nordeste Ltda (MFN) are effectively 100% owned by
the Company through 99.9% of shares held directly and 0.1% of shares are held in trust on behalf of the Company.
Minera Dilan SAC is 50% each owned by the Company and PLR.
The Company has advanced funds to Recursos Latinos S.A., PLR and MFN which at the date of this report do not attract
interest and are not subject to a repayment schedule.
(e) Ultimate parent company
Latin Resources Limited is the ultimate parent of the Group.
24. COMMITMENTS
Operating lease commitments:
Not later than one year
Later than one year but not later than five years
Later than five years
25. CONTINGENCIES
2017
$
220,563
-
-
220,563
2016
$
438,229
-
-
438,229
Guadalupito project – Royalty obligation
On February 8, 2011, Peruvian Latin Resources SAC (PLR) signed an agreement (Acquisition Agreement) with 14
different vendor companies (Vendors) all with a common principal shareholder to acquire additional mining
concessions for its Guadalupito project.
The Acquisition Agreement requires PLR to pay the Vendors a net smelting royalty of 1.5% which is calculated on all
extracted and commercialised minerals from the New concessions. The royalty is payable once commercial mining
operations have been initiated and mineral products are produced, at an average rate of not less than 70% of the
normal capacity of the mining facilities.
26. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES
The Group also has transactional currency exposures from operating costs and concession payments that are
denominated in currencies other than the Australian dollar (AUD). The currencies in which these transactions are
primarily denominated are the United States dollar (USD).
The Board attempts to mitigate the effect of its foreign currency exposure by acquiring USD in accordance with
Latin Resources Limited (ABN 81 131 405 144)
66
NOTES TO THE FINANCIAL STATEMENTS
budgeted expenditures when the exchange rate is favourable. Where possible receipts of USD are maintained in a USD
account as a natural hedge. The USD are converted to AUD at prevailing rates as AUD funds are required.
As at 31 December 2017, the Group had the following exposure to USD that is not designated in cash flow hedges:
Financial assets
Cash and cash equivalents
Trade and other receivables
Other financial assets
Financial liabilities
Trade and other payables
Provisions
Deferred consideration1
2017
$
855,093
1,782,467
6,410
2,643,970
(711,944)
(39,850)
(6,386,308)
(7,138,102)
2016
$
516,356
1,673,652
3,781
2,193,789
(774,888)
(39,487)
(6,045,917)
(6,860,292)
Net exposure
(4,494,132)
(4,666,503)
1 As at 31 December 2017, the Group has an obligation to pay US$10.0 million (2016: US$10.1 million) in various
instalments by 1 January 2024. The liability is recognised in the Group’s subsidiary in Peru whose functional currency is
US dollars.
The following sensitivity analysis is based on the judgements by management of reasonably possible movements in
foreign exchange rates after consideration of the views of market commentators. The sensitivity is also based on
foreign currency risk exposures to financial asset and liability balances as at 31 December 2017 which are on average
not expected to significantly increase over the next twelve months.
The following tables demonstrate the sensitivity to a reasonably possible change in the AUD/USD exchange rate with
all other variables held constant.
The impact on the Group’s pre-tax profit is due to changes in the fair value of monetary assets and liabilities. The
impact on the Group’s equity is due to changes in the fair value of the deferred consideration.
The Group’s exposure for all other currencies is not material.
31 December 2017
AUD/USD +10%
AUD/USD -10%
31 December 2016
AUD/USD +10%
AUD/USD -10%
Effect on loss
before tax
$
Effect on equity
$
189,194
(189,194)
(638,631)
638,631
137,942
(137,942)
(604,592)
604,592
The movement in pre-tax profit is a result of changes to the fair value of monetary assets and liabilities denominated in
USD.
The deferred consideration liability is recognised in the Group’s subsidiary in Peru whose functional currency is US
dollars. Hence the sensitivity of deferred consideration is recognised in equity. The sensitivity is measured based on
the carrying amount of the liabilities rather than the contractual cash outflows up to 1 January 2024.
(a) Interest rate risk
Interest rate risk is the risk that a financial instrument’s value will fluctuate as a result of changes in market interest
rates. The Group is exposed to interest rate risk on its cash and cash equivalent balances.
The Board constantly monitors its interest rate exposure and attempts to maximise interest income by using a mixture
of fixed and variable interest rates, whilst ensuring sufficient funds are available for the Group’s operating activities.
As at 31 December 2017 the Group had the following exposure to Australian variable interest rate risk.
Latin Resources Limited (ABN 81 131 405 144)
67
NOTES TO THE FINANCIAL STATEMENTS
Financial assets
Cash and cash equivalents
2017
$
2016
$
190,099
822,312
Movement of 50 basis points on the interest rate (considered a reasonably possible change) would not have a material
impact on the consolidated loss or equity.
(b) Credit risk
Credit risk is the risk to the Group if a counterparty will not meet its obligations under a financial instrument or
customer contract, leading to a financial loss.
The Group’s maximum exposure to credit risk at the reporting date in relation to each class of recognised financial
asset is the carrying amount of those assets as indicated in the Consolidated Statement of Financial Position.
Credit risk arises from the financial assets of the Group, which comprise cash and cash equivalents (refer Note 9(a))
and trade and other receivables (refer Note 10) and other financial assets (refer Note 12).
The Group only trades with recognised creditworthy third parties. The Group only invests in high credit quality
financial institutions with a credit rating of investment grade or better.
31 December 2017
Trade and other payables
Interest bearing liabilities
Deferred consideration
31 December 2016
Trade and other payables
Interest bearing liabilities
Deferred consideration
(c) Price risk
Less than
1 month
$
641,699
65,000
-
706,699
Less than
1 month
$
917,433
-
-
917,433
1-3
months
$
-
-
-
-
1-3
months
$
-
500,000
-
500,000
3-12
months
$
214,102
-
-
214,102
1-5
years
$
-
-
2,564,103
2,564,103
5+
years
$
-
-
10,256,410
10,256,410
Total
$
855,801
65,000
12,820,513
13,741,314
3-12
months
1-5
years
5+
years
Total
$
-
-
-
-
$
-
-
1,387,500
1,387,500
$
-
-
12,487,500
12,487,500
$
917,433
500,000
13,875,000
15,292,433
The Group is exposed to equity securities price risk. This arises from investments held and classified on the statement
of financial position as at fair value through profit or loss. The Group is not exposed to commodity price risk.
The Group’s equity investment is publicly traded on the Australian Securities Exchange (ASX).
A movement of 10% in the fair value of financial assets at fair value through profit and loss (considered a reasonably
possible change) on the Group’s post tax loss for the year and on equity would not have been material.
(d) Capital management
The Board is responsible for capital management of the Group. The Board’s objective is to ensure the entity continues
as a going concern as well as to maintain an optimal structure to reduce the cost of capital.
The Group is dependent from time to time on its ability to raise capital from the issue of new shares, obtain debt and
its ability to realise value from its existing assets. This involves the use of cashflow forecasts to determine future
capital management requirements.
Capital management is undertaken to ensure a secure, cost effective and flexible supply of funds is available to meet
the Group’s operating and capital expenditure requirements.
As at 31 December 2017 the Group is not subject to any external capital requirements.
Latin Resources Limited (ABN 81 131 405 144)
68
NOTES TO THE FINANCIAL STATEMENTS
27. EVENTS AFTER THE REPORTING PERIOD
On 8 February 2018 the Company completed the Sale Agreement with Westminster Resources Ltd for the sale of the
Group’s Peruvian Ilo Copper assets excluding the areas under joint venture with First Quantum Minerals. The Company
received the first payment of cash consideration of USD$150,000 with a further payment of USD$100,000 receivable
within 12 months and 19 million Westminster Resources Ltd shares.
On 16 February 2018, the Company secured rights to lithium projects within San Luis Argentina concluding a binding
terms sheet with Kontrarian Resources Fund No 1.
On 19 February 2018, shareholders in General Meeting passed all resolutions put to the Meeting. The resolutions
approved the issue of a total of 491,071,442 listed share options exercisable at $0.01 expiring 12 October 2019. In
addition, approval was granted for the issue of 4,569,231 share rights to Mr Vilensky, 3,269,231 share rights issued to
Mr Jones and 13,846,154 share rights issued to Mr Gale.
28. AUDITOR’S REMUNERATION
Amounts received or due and receivable by the auditor for:
An audit or review of the financial report of the consolidated group
Amounts received or due and receivable by related practices of the auditor for:
An audit or review of the financial report of the consolidated group
Other services in relation to the consolidated group
Amounts received or due and receivable by non related practices of the auditor for:
An audit or review of the financial report of the consolidated group
2017
$
2016
$
43,099
48,293
-
4,000
4,000
-
47,099
-
5,740
5,740
-
54,033
Latin Resources Limited (ABN 81 131 405 144)
69
NOTES TO THE FINANCIAL STATEMENTS
29. PARENT ENTITY INFORMATION
(a) Financial position
Assets
Current assets
Non-current assets
Total assets (i)
Liabilities
Current liabilities (ii)
Non-current liabilities
Net assets
Equity
Contributed equity
Reserves
Accumulated losses
(i) Assets
Balance per parent company
Provision for intercompany loans and consolidation entry
Balance per operating segment note (Note 4)
(ii) Liabilities
Balance per parent company
Movement relating to mineral projects (inter-company)
Balance per operating segment note (Note 4)
(b) Financial performance
2017
$
2016
$
1,308,443
13,287,448
14,595,891
214,655
-
214,655
14,381,236
1,524,199
12,000,506
13,524,705
646,053
-
646,053
12,878,652
46,437,382
2,822,134
(34,878,280)
14,381,236
42,041,903
2,532,576
(31,695,827)
12,878,652
14,595,891
(12,382,251)
2,213,640
13,524,705
(10,365,147)
3,159,558
214,655
(16,444)
198,211
646,053
(18,182)
627,871
(Loss)/Profit of the parent entity (i)
Total comprehensive profit/(loss) of the parent entity
(3,182,452)
(3,182,452)
1,790,075
1,790,075
(i) (Loss)/Profit for the year
(Loss)/Profit per parent company
Provision for intercompany loans and consolidation entry
Balance per operating segment note (Note 4)
(c) Contingencies and commitments
Operating lease commitments:
Not later than one year
Later than one year but not later than five years
(3,182,452)
(2,121,678)
(1,060,774)
1,790,075
(3,834,524)
(2,044,449)
211,382
-
211,382
3,700
-
3,700
Latin Resources Limited (ABN 81 131 405 144)
70
DIRECTORS’ DECLARATION
In accordance with a resolution of the directors of Latin Resources Limited, I state that:
1. In the opinion of the directors:
(a) The financial statements and notes of Latin Resources Limited for the financial year ended 31 December 2017 are in
accordance with the Corporations Act 2001, including:
(i) giving a true and fair view of the consolidated entity’s financial position as at 31 December 2017 and
of its performance for the year ended on that date; and
(ii) complying with Accounting Standards and the Corporations Regulations 2001;
(b)
(c)
the financial statements and notes also comply with International Financial Reporting Standards, as stated in note
2(b); and
there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become
due and payable.
2. This declaration has been made after receiving the declarations required to be made to the directors by the
chief executive officer and chief financial officer in accordance with section 295A of the Corporations Act 2001
for the financial year ended 31 December 2017.
On behalf of the Directors
------------------------------------------
David Vilensky
Chairman
Signed on 29 March 2018
Latin Resources Limited (ABN 81 131 405 144)
71
PO Box 1908
West Perth WA 6872
Australia
Level 2, 1 Walker Avenue
West Perth WA 6005
Australia
Tel: +61 8 9481 3188
Fax: +61 8 9321 1204
ABN: 84 144 581 519
www.stantons.com.au
Stantons International Audit and Consulting Pty Ltd
trading as
Chartered Accountants and Consultants
29 March 2018
Board of Directors
Latin Resources Limited
Unit 3, 32 Harrogate Street
West Leederville, WA 6007
Dear Sirs
RE: LATIN RESOURCES LIMITED
In accordance with section 307C of the Corporations Act 2001, I am pleased to provide the
following declaration of independence to the directors of Latin Resources Limited.
As Audit Director for the audit of the financial statements of Latin Resources Limited for the financial
year ended 31 December 2017, I declare that to the best of my knowledge and belief, there have
been no contraventions of:
(i)
the auditor independence requirements of the Corporations Act 2001 in relation to the audit;
and
(ii)
any applicable code of professional conduct in relation to the audit.
Yours faithfully,
STANTONS INTERNATIONAL AUDIT AND CONSULTING PTY LIMITED
(Trading as Stantons International)
(An Authorised Audit Company)
Martin Michalik
Director
Liability limited by a scheme approved
under Professional Standards Legislation
Stantons International Audit and Consulting Pty Ltd
trading as
Chartered Accountants and Consultants
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF
LATIN RESOURCES LIMITED
Report on the Audit of the Financial Report
Opinion
PO Box 1908
West Perth WA 6872
Australia
Level 2, 1 Walker Avenue
West Perth WA 6005
Australia
Tel: +61 8 9481 3188
Fax: +61 8 9321 1204
ABN: 84 144 581 519
www.stantons.com.au
We have audited the financial report of Latin Resources Limited, the Company and its subsidiaries
(the Group), which comprises the consolidated statement of financial position as at 31 December
2017, the consolidated statement of comprehensive income, the consolidated statement of changes
in equity and the consolidated statement of cash flows for the year then ended, and notes to the
financial 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:
(i)
giving a true and fair view of the Group's financial position as at 31 December 2017 and of
its financial performance for the year then ended; and
(ii)
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
Material Uncertainty Regarding Going Concern, Carrying Value of Exploration and
Evaluation Assets and Recoverability of the Peruvian GST Receivable
We draw attention to Note 2(g), Note 14 and Note 10(b) of the financial report, which describe the
going concern basis of preparation of the financial report, the carrying value of the Peruvian GST
and the exploration and evaluation assets respectively.
As referred to in Note 2(g) to the financial statements, the financial statements have been prepared
on a going concern basis. As at 31 December 2017, the Group had working capital of $496,609
(after excluding assets held for sale) and had incurred a loss for the year of $2,381,967. The ability
of the Group to continue as a going concern is subject to the successful recapitalisation of the
Group, commencement of profitable operations or sale of the underlying projects. In the event that
the Board is not successful in recapitalising the Group and in raising further funds, the Group may
not be able to pay its debts as and when they become due and may be required to realise its assets
and discharge its liabilities other than in the normal course of business, and at amounts different to
those stated in the financial report.
Liability limited by a scheme approved
under Professional Standards Legislation
As referred to in Note 14 and Note 10(b) respectively, the recoverability of the Group’s carrying
value of exploration and evaluation assets of $6,368,500 and GST receivable of $1,700,263 in its
subsidiary in Peru is dependent on the successful commercial exploitation of the exploration and
evaluation assets and/or sale of those assets at amounts in excess of the book values. In the event
that the Group is not successful in commercial exploitation and/or sale of the exploration and
evaluation assets, the realisable value of the Group’s assets including GST receivable in Peru may
be significantly less than their current carrying values.
Our opinion is not modified in respect of these matters.
Key Audit Matters
In addition to the matters described in the Emphasis of Matter paragraphs, we have defined the
matters described below to be key audit matters to be communicated in our report.
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.
Key Audit Matters
How the matter was addressed in the audit
Issued Capital and Share Based Payments
The Group’s Contributed Equity, amounted to
$46,437,382 at 31 December 2017. During
the year, this increased by the issuance of
1,044,968,072 ordinary
through
placements, the issue and exercise of options,
conversions of share rights, settlement of
liabilities and settlement of brokerage fees.
shares
Issued Capital and Share based payments
are key audit matters due to:
• the quantum of transactions having
been effected during the year; and
• the complexities involved in recognition
and measurement of these instruments.
We have spent significant audit effort on
ensuring the issued capital was appropriately
accounted for and that other share-based
payments were appropriately valued and
accounted for in accordance with AASB 2
Share-Based Payments (AASB 2).
Inter alia, our audit procedures included the
following:
i. Obtained an understanding of
the
underlying transactions;
ii. For share placements, traced funds raised
to bank statements and other relevant
supporting documentation;
iii. Audited
the option
assessed the assumptions used;
valuations and
iv. Checked that the fair-value of share rights
are appropriately charged over the vesting
to expenses or
period and allocated
capitalised exploration and evaluation
expenditure as appropriate, in accordance
with AASB 2; and
v. Discussed
with management
the
requirements of the relevant accounting
standards and need for disclosures to
achieve fair presentation and reviewed the
financial statements to ensure appropriate
disclosures are made.
Other Information
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 31 December 2017 but does
not include the financial report and our auditor’s report thereon.
Our opinion on the financial report does not cover the other information and accordingly we do not
express any form of assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information
and, in doing so, consider whether the other information is materially inconsistent with the financial
report or our knowledge obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this
other information, we are required to report that fact. We have nothing to report in this regard.
Responsibilities of the Directors for the Financial Report
The directors of the Company are responsible for the preparation of the financial report that gives a
true and fair view in accordance with Australian Accounting Standards and the Corporations Act
2001 and for such internal control as the directors determine is necessary to enable the preparation
of the financial report that gives a true and fair view and is free from material misstatement, whether
due to fraud or error.
In preparing the financial report, the directors are responsible for assessing the ability of the Group
to continue as a going concern, disclosing, as applicable, matters related to going concern and
using the going concern basis of accounting unless the directors either intend to liquidate the Group
or to cease operations, or has no realistic alternative but to do so.
Auditor's Responsibilities for the Audit of the Financial Report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is
free from material misstatement, whether due to fraud or error, and to issue an auditor's report that
includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that
an audit conducted in accordance with the Australian Auditing Standards will always detect a
material misstatement when it exists. Misstatements can arise from fraud or error and are
considered material if, individually or in the aggregate, they could reasonably be expected to
influence the economic decisions of users taken on the basis of this financial report.
As part of an audit in accordance with Australian Auditing Standards, we exercise professional
judgement and maintain professional scepticism throughout the audit. An audit involves performing
procedures to obtain audit evidence about the amounts and disclosures in the financial report.
The procedures selected depend on the auditor's judgement, including the assessment of the risks
of material misstatement of the financial report, whether due to fraud or error. In making those risk
assessments, the auditor considers internal control relevant to the entity's preparation of the
financial report that gives a true and fair view in order to design audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the entity's internal control.
The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting
from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the
override of internal control.
An audit also includes evaluating the appropriateness of accounting policies used and the
reasonableness of accounting estimates made by the Directors, as well as evaluating the overall
presentation of the financial report.
We conclude on the appropriateness of the Directors' use of the going concern basis of accounting
and, based on the audit evidence obtained, whether a material uncertainty exists related to events
or conditions that may cast significant doubt on the Group's ability to continue as a going concern. If
we conclude that a material uncertainty exists, we are required to draw attention in our auditor's
report to the related disclosures in the financial report or, if such disclosures are inadequate, to
modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our
auditor’s report. However, future events or conditions may cause the Group to cease to continue as
a going concern.
We evaluate the overall presentation, structure and content of the financial report, including the
disclosures, and whether the financial report represents the underlying transactions and events in a
manner that achieves fair presentation.
We obtain sufficient appropriate audit evidence regarding the financial information of the entities or
business activities within the Group to express an opinion on the financial report. We are
responsible for the direction, supervision and performance of the group audit. We remain solely
responsible for our audit opinion.
We communicate with the Directors regarding, among other matters, the planned scope and timing
of the audit and significant audit findings, including any significant deficiencies in Internal control
that we identify during our audit.
The Auditing Standards require that we comply with relevant ethical requirements relating to audit
engagements. We also provide the Directors with a statement that we have complied with relevant
ethical requirements regarding independence, and to communicate with them all relationships and
other matters that may reasonably be thought to bear on our independence, and where applicable,
related safeguards.
From the matters communicated with the Directors, we determine those matters that were of most
significance in the audit of the consolidated financial report of the current period and are therefore
key audit matters. We describe these matters in our auditor's report unless law or regulation
precludes public disclosure about the matter or when, in extremely rare circumstances, we
determine that a matter should not be communicated in our report because the adverse
consequences of doing so would reasonably be expected to outweigh the public interest benefits of
such communication.
Report on the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included in pages 7 to 15 of the directors’ report for the
year ended 31 December 2017.
In our opinion the Remuneration Report of Latin Resources Limited for the year ended 31
December 2017 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.
STANTONS INTERNATIONAL AUDIT AND CONSULTING PTY LTD
(Trading as Stantons International)
(An Authorised Audit Company)
Martin Michalik
Director
West Perth, Western Australia
29 March 2018
ASX ADDITIONAL INFORMATION
Additional information required by the ASX Limited Listing Rules not disclosed elsewhere in this Annual Report is set
out below. The information was applicable as at 27 March 2018.
Class of equity securities and voting rights
SHARES
There were 2,622,366,170 ordinary fully paid shares on issue. All issued ordinary shares carry one vote per share.
SHARE RIGHTS
There were share rights over 86,383,950 unissued shares. There are no voting rights attached to the share rights
however voting rights are attached to the unissued shares once all the share rights vesting criteria are met.
OPTIONS
The Company has the following classes of options on issue at 27 March 2018 as detailed below. Options do not carry
any rights to vote.
Code
Class
Terms
LRSOB
LRSAY (b)
Listed
Unlisted
Exercisable at $0.01 each and expiring on 12 October 2019
Exercisable at $0.008 each and expiring on 30 November 2018
Number
741,071,442
9,375,000
VOTING RIGHTS
In accordance with the Company’s Constitution:
on a show of hands every shareholder present in person or by proxy, attorney or representative of a shareholder has one
vote and
on a poll every shareholder present in person or by proxy, attorney or representative of a shareholder has in respect of
fully paid shares, one vote for every share held. No class of option holder has a right to vote, however the shares issued
upon exercise of options will rank parri passu with the then existing issued fully paid ordinary shares.
Distribution of equity securities
THE NUMBER OF EQUITY HOLDERS BY SIZE AND HOLDING, IN EACH CLASS ARE:
Range
1 – 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,001 and over
Total
Ordinary shares
(listed)
134
47
66
1,424
2,206
3,877
Share rights
(unlisted)
-
-
-
-
11
11
Options
(listed)
1
-
1
8
197
207
HOLDING LESS THAN A MARKETABLE PARCEL
Options
(unlisted)
-
-
-
-
1
1
713
-
27
-
RESTRICTED SECURITIES
The Company has no Restricted Securities on issue.
Substantial shareholders
The substantial shareholders in the Company, as disclosed in substantial shareholding notices given to the company
are:
Shareholder
Not applicable
No. of Shares Held
-
% Held
-
Latin Resources Limited (ABN 81 131 405 144)
77
ASX ADDITIONAL INFORMATION
Twenty largest holders of quoted shares
Rank
Shareholder
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
19.
20.
J P MORGAN NOMINEES AUSTRALIA LIMITED
MR ROBERT VEITCH + MRS ELAINE VEITCH
FORSYTH BARR CUSTODIANS LTD
JUNEFIELD HIGH VALUE METALS INVESTMENTS LIMITED
ELMER MOISES ROSALES CASTILLO
MR VESA ANDREW SAARIO
MR DAVID RONALDSON
DEMPSEY RESOURCES PTY LTD
BUBEVICH INVESTMENTS PTY LTD
MR GARRY CROLE
PARD INVESTMENTS PTY LTD
SUBURBAN HOLDINGS PTY LIMITED
CITICORP NOMINEES PTY LIMITED
MR KENNETH ROY GILBERT
MOONAH CAPITAL PTY LTD
BROCK MCLEAN INVESTMENTS PTY LTD
INTERPRAC LTD
HYDRONOMEES PTY LTD
MR ROBERT ANDREW VEITCH + MRS ELAINE VEITCH
BNP PARIBAS NOMINEES PTY LTD HUB24 CUSTODIAL SERV LTD DRP
Total
Twenty largest holders of quoted options
Rank
Shareholder
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
19.
20.
SHAPE WEALTH PTY LTD
MR CRAIG RUSSELL STRANGER
PAC PARTNERS PTY LTD
ZENIX NOMINEES PTY LTD
MRS BROOKE LAUREN PICKEN
RAVEN INVESTMENT HOLDINGS PTY LTD (RAVEN INVESTMENT)
PERSHING AUSTRALIA NOMINEES PTY LTD (ACCUM A/C)
MR ROBERT VEITCH + MRS ELAINE VEITCH
TWENTY TEN ENTERPRISES PTY LTD
MR ROBERT VEITCH + MRS ELAINE VEITCH
SEQUIOIA GROUP HOLDIONGS PTY LTD
MR TRAVIS FOUNTAIN
MR ANDREW VEITCH + MRS SAMANTHAE VEITCH
MR BIN LU
MR GREGORY MARTIN LYLE + MR BRADLEY GRANT LYLE (b LYLE S/F A/C)
MOONAH CAPITAL PTY LTD
MR PHILLIP MARK ANDRISKE
MR PHILLIP MARK ANDRISKE
MR PRADEEP ARUNDAVARAJA
KHE SANH PTY LTD (TRADING NO 1 A/C)
Total
No. of Shares
Held
255,015,135
66,873,615
35,150,000
30,699,323
28,302,055
26,008,143
25,000,000
20,622,129
20,000,000
20,000,000
20,000,000
20,000,000
19,697,730
19,500,000
18,380,250
16,900,000
16,548,076
16,533,565
15,774,286
% Held
9.72
2.55
1.34
1.17
1.08
0.99
0.95
0.79
0.76
0.76
0.76
0.76
0.75
0.74
0.70
0.64
0.63
0.63
0.60
15,497,175
706,501,482
0.59
26.91
No. of Options
Held
110,000,000
37,917,667
37,579,333
35,714,286
32,292,166
28,199,551
22,857,142
21,205,000
20,000,000
19,582,445
18,750,000
14,657,306
13,100,000
12,415,527
10,148,333
10,000,000
9,635,375
8,450,000
7,406,810
6,000,000
475,910,941
% Held
14.84
5.12
5.07
4.82
4.36
3.81
3.08
2.86
2.70
2.64
2.53
1.98
1.77
1.68
1.37
1.37
1.30
1.14
1.00
0.81
64.25
Latin Resources Limited (ABN 81 131 405 144)
78
TENEMENT SCHEDULE
PERU
AUXILIADORA II
GIANDERI XXXIII
MACARENA XXII
01-00586-07
01-01560-06
01-00588-07
SAN FRANCISCO XXIII
63-00026-10
SANTA XIX
SANTA XVIII
SANTA XX
SANTA XXIII
BLACKBURN 10
BLACKBURN 12
BLACKBURN 13
BLACKBURN 15
BLACKBURN 7
BLACKBURN 8
BLACKBURN 9
LOS CONCHALES
MATHEW 2
LATIN ILO ESTE I 1
LATIN ILO ESTE II 1
LATIN ILO ESTE III 1
LATIN ILO ESTE IV 1
LATIN ILO ESTE IX 1
LATIN ILO ESTE V 1
LATIN ILO ESTE VI 1
LATIN ILO ESTE VII 1
LATIN ILO NORTE 3 1
LATIN ILO NORTE 4 1
LATIN ILO NORTE 5 1
LATIN ILO NORTE 6 1
BRIDGETTE 1 1
ESSENDON 10 1
ESSENDON 14 1
ESSENDON 21 1
ESSENDON 26 1
ESSENDON 4 1
ESSENDON 5 1
ESSENDON 6 1
ESSENDON 7 1
ESSENDON 8 1
ESSENDON 9 1
LATIN ILO NORTE 7 1
LATIN ILO NORTE 8 1
MADDISON 1 1
RYAN 1 1
01.00590-07
63-00041-09
63-00042-09
01-00595-07
01-02897-12
01-02899-12
01-03176-12
01-03179-12
01-02850-12
01-02895-12
01-02896-12
01-02590-12
01.01635-11
01-05005-08
01-05003-08
01-05001-08
01-05007-08
01-01952-14
01.05008-08
01-05009-08
01-00335-10
01-00830-09
01-00831-09
01-02510-09
01-02511-09
01-01844-11
01-02249-10
01-01824-11
01-01841-11
01-01849-11
01-01897-10
01-01898-10
01-01899-10
01-02246-10
01-02247-10
01-02248-10
01-02512-09
01-02513-09
01-01845-11
01-01843-11
Peru
Peru
Peru
Peru
Peru
Peru
Peru
Peru
Peru
Peru
Peru
Peru
Peru
Peru
Peru
Peru
Peru
Peru
Peru
Peru
Peru
Peru
Peru
Peru
Peru
Peru
Peru
Peru
Peru
Peru
Peru
Peru
Peru
Peru
Peru
Peru
Peru
Peru
Peru
Peru
Peru
Peru
Peru
Peru
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
Concession
Title in the name of PLR is pending
Title in the name of PLR is pending
Concession
Concession
Concession
Concession
Concession
Concession
Concession
Concession
Concession
Concession
Concession
Concession
Concession
Concession
Concession
Concession
Concession
Concession
Concession
Concession
Concession
Concession
Concession
Concession
Concession
Concession
Concession
Concession
Concession
Concession
Concession
Concession
Concession
Concession
Concession
Concession
Concession
Concession
Concession
Concession
Concession
Latin Resources Limited (ABN 81 131 405 144)
79
TENEMENT SCHEDULE
DOCKERS 1
DOCKERS 2 2
DOCKERS 3 2
DOCKERS 4 2
FLEMANTLE 16 1
FREMANTLE 1 1
FREMANTLE 10 1
FREMANTLE 11 1
FREMANTLE 14 1
FREMANTLE 18 1
FREMANTLE 2 1
FREMANTLE 22 1
FREMANTLE 29 1
FREMANTLE 3 1
FREMANTLE 4 1
FREMANTLE 5 1
FREMANTLE 7
FREMANTLE 8 1
FREMANTLE 9 1
KELLY 00 1
KELLY 01 1
LATIN ILO SUR F 1
LATIN MORRITO 1 2
LATIN MORRITO 2 2
VANDALS 1 2
VANDALS 2 2
ARGENTINA
Catamarca
ANCASTI
ANCASTI
ANCASTI
VILLISMAN
VILLISMAN
VILLISMAN
VILLISMAN
VILLISMAN
LATINA 1
LATINA 2
LATINA 3
LATINA 4
LATINA 5
LATINA 6
LATINA 7
LATINA 8
LATINA 9
01-01865-11
01-01866-11
01-01867-11
01-01868-11
01-02431-10
01-02062-10
01-02425-10
01-02426-10
01-02429-10
01-02433-10
01-02063-10
01-01831-11
01-01838-11
01-02064-10
01-02065-10
01-02066-10
01-02068-10
01-02250-10
01-02424-10
01-01840-11
01-04977-11
01-02824-09
01-02827-09
01-02828-09
01-02437-10
01-02438-10
36M2016
37M2016
38M2016
39M2016
40M2016
41M2016
42M2016
57M2016
1/18
3/18
5/18
6/18
4/18
2/18
13/18
14/18
12/18
Peru
Peru
Peru
Peru
Peru
Peru
Peru
Peru
Peru
Peru
Peru
Peru
Peru
Peru
Peru
Peru
Peru
Peru
Peru
Peru
Peru
Peru
Peru
Peru
Peru
Peru
Argentina
Argentina
Argentina
Argentina
Argentina
Argentina
Argentina
Argentina
Argentina
Argentina
Argentina
Argentina
Argentina
Argentina
Argentina
Argentina
Argentina
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
Concession
Concession
Concession
Concession
Concession
Concession
Concession
Concession
Concession
Concession
Concession
Concession
Concession
Concession
Concession
Concession
Concession
Concession
Concession
Concession
Concession
Concession
Concession
Concession
Concession
Concession
Exploration Concession
Exploration Concession
Exploration Concession
Exploration Concession
Exploration Concession
Exploration Concession
Exploration Concession
Exploration Concession
Exploration Concession
Exploration Concession
Exploration Concession
Exploration Concession
Exploration Concession
Exploration Concession
Exploration Concession
Exploration Concession
Exploration Concession
Latin Resources Limited (ABN 81 131 405 144)
80
TENEMENT SCHEDULE
LATINA 10
LATINA 11
LATINA 12
LATINA 13
LATINA 14
MINA LA CULPABLE 3
Salta
SANTA ELENA
TRES TETAS I
EL QUEMADO
LA ELVIRITA V
AGUAS CALIENTES V
EL QUEMADO
PENAS BANCAS V
MIRKOS 4
MIRKOS 5
MIRKOS 6
MIRKOS 7
MIRKOS 10
CROSBY 1
CROSBY 2
CROSBY 3
CROSBY 4
CROSBY 5
CROSBY 6
MICROS 1
MICROS 3
MICROS 9
CROSBY 7
CROSBY 8
JOSEFINA VII
EL LATINO
EL LATINO I
EL LATINO II
La Rioja
GLADYS
CECILIA
ANITA
San Luis
PORTEZUELO
ESTANZUELA
LA META
TILISARAO
BAJO DE VELIZ
DE GEMINIS
MARIA DEL HUERTO
11/18
10/18
9/18
8/18
7/18
45/81
18159
18263
19516
20999
21992
21993
22045
20203
20204
20205
20206
20209
21648
21649
21650
21651
22116
22117
22143
22144
22142
22317
22318
22349
22769
22770
22771
03-F-17
04-F-17
05-F-17
65-C-2016
64-C-2016
63-C-2016
66-C-2016
76-C-2016
84-C-2016
85-C-2016
MARIA DEL HUERTO
134-Q-1936
Argentina
Argentina
Argentina
Argentina
Argentina
Argentina
Argentina
Argentina
Argentina
Argentina
Argentina
Argentina
Argentina
Argentina
Argentina
Argentina
Argentina
Argentina
Argentina
Argentina
Argentina
Argentina
Argentina
Argentina
Argentina
Argentina
Argentina
Argentina
Argentina
Argentina
Argentina
Argentina
Argentina
Argentina
Argentina
Argentina
Argentina
Argentina
Argentina
Argentina
Argentina
Argentina
Argentina
Argentina
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
Exploration Concession
Exploration Concession
Exploration Concession
Exploration Concession
Exploration Concession
Mining Concession
Exploration Concession
Exploration Concession
Exploration Concession
Exploration Concession
Exploration Concession
Exploration Concession
Exploration Concession
Exploration Concession
Exploration Concession
Exploration Concession
Exploration Concession
Exploration Concession
Exploration Concession
Exploration Concession
Exploration Concession
Exploration Concession
Exploration Concession
Exploration Concession
Exploration Concession
Exploration Concession
Exploration Concession
Exploration Concession
Exploration Concession
Exploration Concession
Exploration Concession
Exploration Concession
Exploration Concession
Exploration Concession
Exploration Concession
Exploration Concession
Exploration Concession
Exploration Concession
Exploration Concession
Exploration Concession
Exploration Concession
Exploration Concession
Exploration Concession
Mining Concession
Latin Resources Limited (ABN 81 131 405 144)
81
TENEMENT SCHEDULE
GEMINIS 3
DON GREGORIO 3
ESTANZUELA SUR
674-S-1968
470-O-2006
64-R-2017
LOS MEMBRILLOS
QUINES SUR
65-R-2017
66-R-2017
PASO GRANDE NORTE
67-R-2017
SOLITARIO
TRAPICHE NORTE
ESTANZUELA NORTE
QUINES
LA TOMA NORTE
QUINES ESTE
PASO GRANDE SUR
TRAPICHE SUR
LA TOMA SUR
68-R-2017
69-R-2017
70-R-2017
71-R-2017
72-R-2017
72-R-2017
1-R-2018
2-R-2018
3-R-2018
NOTES
1 Indirect interest via Westminster Resources Ltd
2Acquisition is pursuant to an option agreement.
3 Acquisition pursuant to option agreement.
Argentina
Argentina
Argentina
Argentina
Argentina
Argentina
Argentina
Argentina
Argentina
Argentina
Argentina
Argentina
Argentina
Argentina
Argentina
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
Mining Concession
Mining Concession
Exploration Concession
Exploration Concession
Exploration Concession
Exploration Concession
Exploration Concession
Exploration Concession
Exploration Concession
Exploration Concession
Exploration Concession
Exploration Concession
Exploration Concession
Exploration Concession
Exploration Concession
Latin Resources Limited (ABN 81 131 405 144)
82
REGISTERED OFFICE
Unit 3, 32 Harrogate Street
West Leederville, 6007
Western Australia
Tel (08) 6181 9798 Fax (08) 9380 9666