ANNUAL REPORT
2022
FOR YEAR ENDING 31 DECEMBER 2022 CORPORATE DIRECTORY
STOCK EXCHANGE
Australian Securities Exchange (ASX)
Code: LRS
Frankfurt Stock Exchange (FRA)
Code: XL5
BANKERS
ANZ
6/646 Hay Street, Subiaco 6008,
Western Australia
NAB
Central Business Banking Centre,
Perth 6000,
Western Australia
AUDITORS
Hall Chadwick Audit (WA) Pty Ltd
283 Rokeby Road, Subiaco 6008,
Western Australia
ARGENTINA OFFICE
(RECURSOS LATINOS S.A)
Maipú 1210 Piso 8 (C1006ACT)
CABA, Buenos Aires, Argentina
T: +54 11 4872 8142
PERU OFFICE
(PERUVIAN LATIN
RESOURCES S.A.C.)
Calle Cura Bejar 190.
Oficina 303, San Isidro
Lima, Peru
T: +51 1 421 2009
SHARE REGISTRY
Computershare Investor
Services Pty Limited
Level 11, 172 St Georges Terrace
Perth 6000, Western Australia
T: 1300 787 272
F: (+61) (8) 9323 2033
SOLICITORS
Steinepreis Paganin
Level 4, The Read Buildings
16 Milligan Street, Perth 6000,
Western Australia
DIRECTORS
David Vilensky
Non-Executive Chairman
Christopher Gale
Managing Director
Brent Jones
Non-Executive Director
Pablo Tarantini
Non-Executive Director
Peter Oliver
Non-Executive Director
COMPANY SECRETARY
Ms Sarah Smith
REGISTERED OFFICE
(LATIN R ESOURCES AUSTRALIA)
Unit 3, 32 Harrogate Street,
West Leederville 6007, Western
Australia
T: +61 8 6117 4798
E: info@latinresources.com.au
LATIN R ESOURCES BR AZIL
(BELO LITHIUM)
Belo Horizonte Office
Rua Ministro Orozimbo Nonato, 102,
room 701 Block A,
Bairro Vila da Serra, Nova Lima-MG,
ZIP Code: 34006-053
T: + 55 31 3370 3521
Salinas Office
Rua Virgílio Grão Mogol, 185,
Centro, CEP: 39560-000
Salinas - MG
CONTENTS
Chairman's Letter
Review of Operations
Mineral Resources and Reserves
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 Financial Statements
Directors' Declaration
Auditor’s Independence Declaration
Independent Auditor’s Report
ASX Additional Information
Tenement Schedule
2
5
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32
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48
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50
51
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88
1
CHAIRMAN’S LETTER
LATIN RESOURCES
ANNUAL REPORT 2022
CHAIRMAN’S LETTER
Dear Shareholders
The financial year ending 31 December 2022 has
been a year of tremendous growth and achievements
for Latin Resources Limited ("Company"). In a word it
has been a year of transformation for the Company.
In my last Chairman's letter dated 11 March 2022, I
stated that the Board was focused on delivering on
its strategic goals and providing our shareholders
with long term growth. I predicted that the year ahead
would demonstrate what the Company was capable
of accomplishing.
Enhancing shareholder value and rewarding our
shareholders has been a core focus of the Company.
Success in the ground is inevitably the driver of an
improved share price and market capitalisation. The
significant achievements of the Company over the
past 12 months have been evidence of this success.
When the Company's share price edged towards
$0.20 in April 2022 the Company raised $35m @
$0.16 in a heavily oversubscribed placement on the
back of early drilling success at its now world class
100% owned Salinas hard rock lithium project located
in the emerging lithium province of Minas Gerais in
Brazil. Significantly, the majority of the funds raised
were from North American investors who have a
greater understanding of South America than do their
Australian counterparts.
Without doubt this capital raising was the largest and
most successful the Company has ever undertaken
and amounted to a vote of great confidence in the
Company's projects and its management team. To
put this into context, the Company has to date spent
close to $12m of the funds raised on its drilling
program at Salinas which has increased the market
capitalisation of the Company by more than $200m.
Put simply, an enormous amount of shareholder value
has been generated from the funds raised.
A significant watershed moment was the
announcement by the Company on 8 December 2022
of its maiden JORC indicated and inferred resource
estimate of 13.3Mt grading 1.2% lithium oxide for the
Colina deposit located within the Company's Salinas
Lithium Project based on assay results for a total of
47 diamond drill holes for some 10,528 metres of
drilling. This is a tremendous milestone coming only
10 months since the commencement of drilling in
early 2022.
The Company is currently pursuing its accelerated
eight rig 65,000 metre drilling program to significantly
grow its resource largely at our Colina West discovery
just 500 metres to the west of our Colina Deposit.
The strategic objective of the Company is to grow the
resource and provide resource updates throughout the
2023 calendar year as we work towards completing a
definitive feasibility study by the end of 2023.
Recent drilling at the Company's Colina West prospect
has confirmed the continuity of the thick-grade
spodumene pegmatites intersected in multiple holes
with further holes intersecting the newly identified
pegmatite swarm. The drilling campaign recently
commenced is well on track with over 3,000m of the
planned 65,000m drilling program already completed
confirming the high-grade mineralisation envelope at
Colina West that will underpin the rapid move towards
potential future development for the Company of this
world class project.
2
LATIN RESOURCES
LATIN RESOURCES
ANNUAL REPORT 2022
ANNUAL REPORT 2022
CHAIRMAN’S LETTER
Enhancing shareholder value and rewarding our
shareholders has been a core focus of the Company.
Importantly, the metallurgical test result work
undertaken to date shows an 80.5% recovery of
lithium concentrate from Heavy Liquid Separation
testwork and excellent consistency across the width
and depth of the known ore body. In other words,
the metallurgy results are indicative of a high quality
ore. As announced to the ASX on 24 August 2022,
recoveries and grade remain high, demonstrating
very course liberation of spodumene. The preliminary
metallurgical results have highlighted the benefits
of the course nature of the spodumene leaning to a
courser crush size and high recovery rates.
The Company's lithium credentials have been
demonstrated with the delivery of superior resource
grades in exploration results, and the metallurgical
testing results to date have been outstanding.
Relevantly, the Company's flagship Salinas project
is only 80 kms from our regional neighbour
Canadian listed Sigma Lithium which is expected
to be in production by April 2023, further enhancing
the credentials of Minas Gerais as the most pro-
mining, pro-investment and pro-business state in
Brazil, Minas Gerais is unashamedly committed to
establishing itself as a world class lithium jurisdiction
and becoming a major player in the global lithium
production chain.
With a market cap of around $250m, the Company is
increasingly attracting more coverage from analysts
and investment by larger institutional investors. Over
the past several months detailed research reports
on the Company have been published by the likes
of Canaccord, Bell Potter and PAC Partners with all
analysts concluding a current price target of between
$0.18 and $0.25 per share indicating a consensus
towards future upside for the Company.
Another significant achievement for the Company
during the year in question was the recruitment to
the Board of Peter Oliver as a Non-Executive Director
in September 2022. For more than 15 years Peter
was the CEO and then Director of Talison Lithium
which owns and runs the Greenbushes project, now
the world's largest hard rock lithium mine. During his
career Peter has built an extensive skill set in mining
operations and development in the lithium sector
and is one of Australia's most experienced lithium
executives who has brought tremendous experience
and expertise to the Board of the Company.
The Company is well positioned to capitalise on the
global consumption of lithium which has doubled over
the past two years with suppliers unable to keep pace
with the rising demand of global electrification.
Further adding to Brazil's credentials as an emerging
lithium jurisdiction is that Brazil has one of the
greenest electricity systems in the world made
by 65% low cost hydropower and 11% wind. The
obvious benefit to the Company is from low cost
and renewable energy in addition to the proximity to
emerging end markets such as North America.
The Company remains well funded to focus on
achieving its objective of upgrading and expanding
its lithium resource and securing its pathway to
development and maximizing its large future upside
in Brazil. We look forward to continuing exploration
success in the year ahead.
In addition to its flagship Salinas Lithium Project
in Brazil, the company also owns and continues to
develop its Cloud Nine Halloysite-Kaolin Deposit north
of Perth where halloysite from the project is being
identified for the reduction in methane emissions from
3
I would like to thank our shareholders for your
continued support and belief in the Company to
achieve the strategic goals it has set out. In particular
I welcome the many thousands of new investors who
have become shareholders of the Company over the
past 12 months.
I also thank our management and exploration team,
in particular Mauro Lopes, our staff and our external
consultants and drilling contractors for their efforts
during the past year where at last the Company has
been able to put behind it and move on from the
disruption and uncertainty caused by the COVID-19
pandemic.
I also take this opportunity to thank and note my
sincere appreciation of the collective efforts and
wisdom of my fellow Board members.
On 3 March 2023 the S&P Dow Jones announced
changes in the S&P/ASX Indices that with effect
from 20 March 2023, Latin Resources Ltd has been
added to the ASX All Ordinaries Index. This index
is considered the benchmark for Australian equity
performance and puts the Company into the top
500 ASX listed companies for the first time. This is a
milestone we can all be proud of.
I look forward to keeping you updated on our
progress of what is shaping up to be another very
exciting year ahead.
Yours sincerely
David Vilensky
Chairman
31 March 2023
cattle in a collaborative research project with CRC
CARE Pty Ltd which is being funded by the Company.
On 29 November 2022 the Company announced an
increase in its JORC-2012 halloysite-kaolin resource
for Cloud Nine to 280 million tonnes, an upgrade of
33%. More details regarding this project as well as the
Company's 50% joint venture interest in a hard rock
lithium project in Catamarca province, Argentina are
dealt with elsewhere in this Annual Report.
There is now substantial interest in the Company
globally as we embark on the next transformational
period of growing the size and scale of our lithium
resource at our flagship Salinas Project in Brazil. Over
the coming months there will be encouraging news
to report on our projects and activities which we hope
will continue the positive trajectory of the Company.
I am also pleased to report that over the past twelve
months the Company has further advanced its ESG
credentials and commitments to ESG principles. More
details about this are contained elsewhere in this
Annual Report.
The Company has been fortunate to be lead by
an exceptional and expanding management team
headed by our hard-working Managing Director Chris
Gale who is doing a tremendous job leaving no stone
unturned in his efforts to drive the strategic objectives
of the Company and achieve measurable success
in the shortest possible timeframes. The passion
and commitment which Chris has for the Company
at every level, which includes extensive travelling,
and the strong leadership he has displayed deserve
special mention and are to be commended.
Our General Manager of Geology Tony Greenaway
is also doing a tremendous job supervising and
managing our ever expanding Brazilian exploration
team and ensuring that the drilling program designed
to expedite the resource growth at the Colina and
Colina West deposits remains on time and on budget.
Having just returned from a visit to Brazil which
included a site visit to our Salinas Project, I could
not have been more impressed with what I saw and
the people I met. Chris and Tony have assembled a
world class exploration team who are passionate,
hardworking, extremely capable and importantly
are happy and totally committed to the project. The
Company is privileged to have such a team as well as
excellent facilities in Salinas all of which augurs well
for future success.
Importantly, the Company has the total support of
the Salinas local community including its elected
officials who have been warm and welcoming to the
Company and its expanding workforce comprised
almost exclusively of locals. The social licence of the
Company to execute its Salinas Lithium Project is well
and truly in place.
4
CHAIRMAN’S LETTERLATIN RESOURCESANNUAL REPORT 2022 LATIN RESOURCES
ANNUAL REPORT 2022
REVIEW OF OPERATIONS
REVIEW OF OPERATIONS
Latin Resources Limited (ASX: LRS) (“Latin” or “the Company”) is an
Australian-based mineral exploration company, with projects in South America
and Australia, that is developing mineral projects in commodities that progress
global efforts towards Net Zero emissions.
The Company is focused on its flagship Salinas
Lithium Project in the pro-mining district of Minas
Gerais Brazil, where the Company has defined a
Maiden Mineral Resource Estimate of 13.3Mt @
1.2% Li2O at its Colina Deposit. Latin has appointed
leading mining consultant SGS Geological Services to
undertake feasibility and metallurgical studies at the
Salinas Lithium Project.
Latin also holds the Catamarca Lithium Project in
Argentina and through developing these assets, aims
to become one of the key lithium players to feed the
world’s insatiable appetite for battery metals.
The Australian projects include the Cloud Nine
Halloysite-Kaolin Deposit. Cloud Nine Halloysite is
being tested by CRC CARE aimed at identifying and
refining halloysite usage in emissions reduction,
specifically for the reduction in methane emissions
from cattle.
5
1. OPERATIONS
1.1 SALINAS LITHIUM PROJECT, BRAZIL
The Salinas Lithium Project is located in the highly prospective Jequitinhonha Valley district of Minas Gerais
Provence of eastern Brazil. Minas Gerais hosts the eastern Brazilian lithium pegmatite province, home to TSX-V
listed Sigma Lithium Corporation and lithium producer Companhia Brasileira de Lítio (CBL).
The state of Minas Gerais is well serviced by infrastructure, roads, hydroelectric power, water and the port of Vitoria
in the neighbouring Espirito Santo State. The province is particularly efficient in its issuing of drilling permits and
environmental approvals.
Figure 1: Salinas Lithium Project location and tenements
The Company was pleased to recommence exploration activities at the Salinas Lithium Project in 2022, having been
restricted the year prior due to Covid-19 travel restrictions.
6
REVIEW OF OPERATIONSLATIN RESOURCESANNUAL REPORT 2022 1.1.1 EXPLORATION DRILLING
Drilling commenced in February 2022 with an initial 14-hole, 2,000m diamond drilling program designed to test
outcropping spodumene-bearing pegmatites where high-grade results including 2.71% Li2O and 1.45% Li2O were
returned from the Company’s previous mapping and geochemical sampling programs1.
Early results from six completed diamond drill holes covering 500m of strike, showed all holes intersecting multiple
spodumene bearing pegmatites. Logging confirmed that the individual pegmatites range in true thickness to a
maximum of 21.1m2, with a cumulative intersection of over 36m in hole SADD0042.
Figure 2: Salinas Lithium Project – Latin Resources Senior Geologist with spodumene rich pegmatite core, and core logging on site
Initial assay results confirmed the presence of high-grade lithium in pegmatites, with a peak grade of 3.22% Li2O
showing potential for a new lithium discovery3 4.
Major intersections included:
SADD004: 17.38m @ 1.46% Li2O from 119.80m
Including: 10.20m @ 2.05% Li2O from 120.95m
Including: 3.05m @ 2.26% Li2O from 120.95m
2.00m @ 3.07% Li2O from 127.00m
and:
SADD002: 8.13m @ 2.00% Li2O from 111.3m
Including: 1.0m @ 3.22% Li2O from 112.3m
3.0m @ 2.20% Li2O from 115.3m
and:
1
2
3
4
Refer to ASX Announcement 24 January 2022 & 8 February 2022
Refer to ASX Announcement 16 March 2022
Refer to ASX Announcement 30 March 2022
Refer to ASX Announcement 11 April 2022
Figure 3: Brazil Exploration Manager, Pedro
Fonseca, Hole 1 February 2022, Salinas
Lithium Project
7
REVIEW OF OPERATIONSLATIN RESOURCESANNUAL REPORT 2022
REVIEW OF OPERATIONS
8
8
Further drilling continued to show exceptional results5,
including the thickest intersection to date with 21.1m
@ 1.20% Li2O from 208.8m in hole SADD006. These
results reaffirmed the Company’s belief that the
Salinas Lithium Project may represent a significant
new lithium discovery.
Major intersections included:
SADD006: 21.1m @ 1.20% Li2O from 208.80m
Including: 14.00m @ 1.69% Li2O from 210.90m
Including: 3.00m @ 2.28% Li2O from 214.90m
SADD005: 4.25m @ 1.32% Li2O from 125.40m
Including: 1.05m @ 2.65% Li2O from 127.55m
4.01m @ 1.36% Li2O from 159.10m
and:
Including: 1.00m @ 1.92% Li2O from 161.10m
1.1.2 RESOURCE DEFINITION DRILLING
The resource definition drilling campaign comprised
an estimated 100 holes for approximately 22,000 -
25,000m, and focused on the original one kilometre
strike extent of the Colina Prospect, as well as new
tenure acquired which expanded this to over two
kilometres.
The resource definition drill program aimed to test the
strike extent, to approximately 400m down dip, with
100m x 50m drill spacing. Data from this drilling will
be used in the calculation of the maiden JORC Mineral
Resource Estimate (MRE) for the Salinas Lithium
Project.
Drilling results continued to show strong down dip
continuity of both grade and thickness of logged
pegmatites, with a peak grade of 4.22% lithium
recorded6.
Major intersections included:
SADD018: 9.16m @ 1.68% Li2O from 133.84m
Including: 6.00m @ 2.16% Li2O from 135.0m
Including: 1.00m @ 3.52% Li2O from 137.00m
16.00m @ 1.29% Li2O from 189.00m
Including: 1.00m @ 3.06% Li2O from 190.00m
1.00m @ 4.22% Li2O from 196.00m
and:
SADD019: 11.96m @ 1.64% Li2O from 206.24m
Including: 8.20m @ 1.82% Li2O from 210.00m
SADD020: 2.35m @ 3.57% Li2O from 120.33m
7.58m @ 1.45% Li2O from 143.77m
Including: 1.60m @ 2.45% Li2O from 144.40m
5
6
Refer to ASX Announcement 26 April 2022
Refer to ASX Announcement 27 July 2022
LATIN RESOURCESANNUAL REPORT 2022
1.1.3 MAIDEN MINERAL RESOURCE ESTIMATE
The Company commissioned Toronto based independent resource consultants SGS Geological Services (“SGS”), to
undertake the estimation of a JORC-2012 Mineral Resource Estimate (“MRE”), and a wider Exploration Target Range
(“ETR”) for the Company’s Colina Lithium Deposit7.
SGS, working closely with the Company’s geological team confirmed the presence of a series of moderately east
dipping pegmatite bodies, extending from near surface to a depth of over 350m. These pegmatites remain open
along strike to the north and south, and at depth.
Based on assay results from a total of 47 diamond drill holes for some 10,528 m of drilling, SGS independently
estimated the maiden Mineral Resource for the Colina Deposit in only 10 months since the commencement of
drilling in early 2022. Of the 57 diamond drill holes completed at the cut-off date, 47 drill holes have assay results
used for the MRE to produce a JORC Indicated and Inferred resource estimate of 13.3Mt @ 1.2% Li2O (2.08Mt
Indicated and 11.17Mt Inferred) (Table 1).
SGS has also estimated a JORC-2012 ETR of 13.5 – 22Mt with a grade range of 1.2 – 1.5% Li2O for the Colina
Deposit based on data from all the available 57 diamond drill holes. The current interpretation indicates that the
modelled pegmatites potentially increase in both thickness and grade with depth, additional drilling is required to
confirm these observations (Table 2).
*The potential quantity and grade of the lithium mineralisation at the wider Colina project is conceptual in nature,
there has been insufficient exploration to estimate a Mineral Resources and it is uncertain if further exploration will
confirm the target ranges.
Figure 4: 3D image showing Colina Deposit block model
7
Refer to ASX Announcement 8 December 2022
9
REVIEW OF OPERATIONSLATIN RESOURCESANNUAL REPORT 2022 The Company was pleased to report that the high‐
grade mineralisation envelope confirmed at Colina
West from further drilling results within this zone10.
Major results included:
SADD061:
20.70m @ 1.51% Li2O from 159.00m
SADD062:
10.00m @ 1.13% Li2O from 149.51m
SADD063:
4.03m @ 1.60% Li2O from 125.12m
and:
6.79m @ 1.52% Li2O from 267.37m
SADD070:
5.03m @ 1.64% Li2O from 192.97m
and:
and:
and:
5.52m @ 1.50% Li2O from 292.03m
16.43m @ 1.69% Li2O from 323.57m
18.89m @ 1.56% Li2O from 356.91m
1.1.4 POTENTIAL MINERAL
RESOURCE GROWTH AREAS
Latin reported after the year end that a 65,000m
diamond drilling program has commenced, which
will focus on fast-tracking the growth of the Colina
Deposit Indicated and Inferred Mineral Resource, and
also progress Mineral Resource Definition for the
Colina West Prospect.
Colina West was reported as a new discovery during
the year after regional mapping undertaken by the
Company highlighted a third outcropping pegmatite
system further to the west, and the potential
convergence of the Colina and Colina West pegmatite
systems8. Assay results confirmed multiple high-
grade lithium bearing pegmatites at the Colina West
Prospect located 500m to the west of the main Colina
Prospect.
Results include:
SADD033: 1.78m @ 1.33% Li2O (120.53 - 122.31m)
1.67m @ 1.36% Li2O (275.38 - 277.05m)
18.71m @ 1.32% Li2O (321.15 - 339.86m)
including: 4.00m @ 1.94% Li2O (322.00 - 326.00m)
and:
4.00m @ 1.58% Li2O (334.00 - 338.00m)
Subsequent to the year, assay results from drilling
completed in late 2022 at Colina West confirmed that
this prospect represents an exceptional resource
growth opportunity9.
Latin reported over 67 meters (cumulative) of
mineralised lithium pegmatites intersected in one
hole, SADD055 located approximately 200m along
strike to the south of the Colina West discovery hole,
intersections include:
SADD055: 13.73m @ 1.38% Li2O from 200.19m
and:
and:
and:
and:
16.08m @ 1.07% Li2O from 306.69m
10.85m @ 1.96% Li2O from 322.15m
11.16m @ 1.61% Li2O from 360.17m
16.00m @ 1.61% Li2O from 393.60m
Other significant intersections include:
SADD053: 14.00m @ 1.35% Li2O from 289.58m
SADD057: 20.17m @ 1.66% Li2O from 136.99m
SADD059: 14.70m @ 1.27% Li2O from 109.90m
SADD060: 15.96m @ 1.56% Li2O from 350.09m
Refer to ASX Announcement 16 August 2022
8
9
Refer to ASX Announcement 24 January 2023
10 Refer to ASX Announcement 16 February 2023
10
REVIEW OF OPERATIONSLATIN RESOURCESANNUAL REPORT 2022
REVIEW OF OPERATIONS
Figure 5: Colina Deposit potential mineral resource growth areas
Figure 6: Colina Deposit cross section
11
LATIN RESOURCESANNUAL REPORT 2022
Given pure spodumene has a theoretical grade
of 8.03% Li2O, this suggests that full liberation of
spodumene is achieved even at these coarse grind
sizes. It also indicates that spodumene is by far
the dominant lithium ore type, and the deposit is
not challenged by lower grade variants such as
Lepidolite or Petalite which can negatively impact final
concentrate grades.
Consistency in metallurgical performance: A key
objective of this round of test work was to investigate
variability within the deposit. A total of 10 samples
were composited and represented approximately 20m
of total intersection for each sample. The samples
were selected over approximately 500m of know
mineralisation. Five samples were taken from areas
within the top 50-100m of the deposit and the other
five samples were taken from depths of 100-150m
within the deposit. Results broadly demonstrated very
close correlation between the two groups of samples.
Fines Generation: Size distributions indicate that
the amount of Fines generated in a 12mm crush is
very low with an average of 12.25% of the material
reporting to the <0.5mm fraction. This is an important
aspect when considering a future Dense Media
Separation (DMS) plant as the <0.5mm fraction is
not suitable for DMS feed. Higher proportions of
fines result in less of the Li2O being presented to the
DMS circuit which has a direct bearing on the overall
expected Li2O recovery for the project.
The results for the program on the Salinas samples
suggest the -0.5mm fraction contains only 10% of
the Li2O and therefore potentially up to 90% of the
contained Li2O in the deposit would be processed
through a future DMS plant.
Iron Content: The Colina composite samples
demonstrated very low iron content in the raw feed
sample. Cumulative recoveries of the results for each
SG cut point enabled the calculation of expected iron
grades for a concentrate of 6% Li2O.
In the conversion of lithium concentrates into lithium
chemicals any iron must be removed and so a lithium
concentrate with iron content well below 1% would be
attractive to any potential offtake partner.
1.1.5 FEASIBILITY STUDIES
AND METALLURGY
Latin Resources appointed leading mining
consultant SGS Geological Services (SGS) to carry
out Metallurgical test work, JORC Mineral Resource
Estimation and a Preliminary Economic Assessment
(PEA) on the Colina Prospect, an important milestone
in the future development of the Salinas Lithium
Project in Brazil11.
The PEA commenced during the year to run in parallel
with the resource definition drilling campaign, where
the MRE which will feed into the broader PEA studies.
The Company expects to be positioned to fast track
the project from PEA directly to Definitive Feasibility
Study (DFS), targeting the DFS for late 2023.
Latin Resources also plans to commission SGS to
build a pilot plant to produce a representative sample
of lithium concentrate product as ongoing testwork
demonstrated exceptional metallurgy of the Salinas
Lithium Project.
Latin commissioned SGS GEOSOL laboratories, Belo
Horizonte Brazil to undertake a program of Heavy
Liquid Separation (“HLS”) test work on 10 samples
representing the total strike length of the current
resource drilling program12. A total of 367kg of
representative sample was collected and each of the
samples included interstitial waste between ore zones
to simulate expected mining dilution.
One of the main objectives of this program was
to investigate potential variability in metallurgical
performance across the deposit, and at varying
depths. Half of the samples were targeted in the
top 50-100m of the ore body with the other half
of the samples taken from the bottom 100-150 of
the deposit. Results were independently reviewed
and interpreted by Met Assist Pty Ltd, whose key
personnel have significant experience in lithium
processing, metallurgy, and process plant design.
Results of the test work has shown that simple HLS
test work was able to recover an average of 80.5%
of the Li2O into a concentrate grading a very high
average of 6.30% Li2O.
Key observations of the test work are
outlined below:
Very coarse spodumene liberation: The Company
conducted test work at a coarse top size of 12.5mm
based on results of initial sighter testing reported
in August 2022. HLS results for the coarse fraction
demonstrated extremely high-grades in excess
of 7% Li2O.
11 Refer to ASX Announcement 9 August 2022
12 Refer to ASX Announcement 5 December 2022
12
REVIEW OF OPERATIONSLATIN RESOURCESANNUAL REPORT 2022 LATIN RESOURCES
ANNUAL REPORT 2022
REVIEW OF OPERATIONS
The Company also secured the rights to additional
mining rights directly adjacent to the South of Colina,
where drilling by the Company has confirmed the
extension of the Colina host lithologies and pegmatitic
intrusive bodies (assay results pending), by signing a
new option agreement.
Latin’s regional exploration team will be undertaking
initial reconnaissance mapping and geochemical
sampling over the new project tenements as a part of
its exploration strategy in the now expanded Salinas
district.
1.1.6 EXPANDED TENURE AT SALINAS
LITHIUM PROJECT
The Company expanded the Salinas Lithium Project
over the year, with additional tenure increasing the
lithium ground position to over 6,230 hectares13 by
the end of May 2022. A further 1.2 kilometres of the
southern strike extension at the Colina Prospect14 was
secured in July 2022, doubling the strike length from
1km to over 2km.
Subsequent to the year, Latin submitted 17 new
applications covering over 29,940 hectares with
the Brazilian National Mining Agency (ANM) over
what the Company believes to be areas that contain
favourable basement lithologies to host lithium
bearing pegmatites, similar to those found at Colina15.
The new tenements represent an expansion of
approximately 367% over the Company’s previous
holdings, to a total of over 38,000 hectares now under
Latin’s control.
13 Refer to ASX Announcements 6 April 2022, 11 May 2022, 17 May 2022
14 Refer to ASX Announcement 13 July 2022
15 Refer to ASX Announcement 8 February 2023
13
Figure 7: Salinas Lithium Project tenure, showing new tenement application to the north of the Company’s
100% owned Colina Lithium Deposit, existing LRS tenure, and tenements currently under LRS option agreements
14
REVIEW OF OPERATIONSLATIN RESOURCESANNUAL REPORT 2022 1.1.7 ONGOING WORKS AT COLINA
The Company’s board has approved an aggressive exploration budget for the wider Salinas Lithium Project. This
includes the addition of four diamond drilling rigs, taking the total rigs on site to eight, operating on a double shift
basis, with an estimated 65,000m planned to be drilling in the 2023.
Drilling in the new year will target:
• Infilling drilling on the main Colina Deposit pegmatites;
• The newly discovered “Colina West” pegmatite swarm;
• The southwestern extension of Colina’s high-grade pegmatite lenses; and
• The regional Salinas South Project area.
The Company will continue to review and update the Colina resource model as more drilling information becomes
available. The next major update and re-estimation for the Colina and Colina West areas is expected to be
undertaken in 2023.
1.2 CLOUD NINE HALLOYSITE-KAOLIN DEPOSIT
– MERREDIN, WESTERN AUSTRALIA
The Company’s 100%-owned Cloud Nine Halloysite-Kaolin Deposit (“Cloud Nine”) is located east-southeast of
Merredin, Western Australia. The Company controls a commanding regional tenement package (Noombenberry
Project), covering over 560 km2 (Figure 7) of what the Company believes is the most prospective ground in the
region to identify repetitions of the high‐grade Cloud Nine Deposit.
Figure 8: Noombenberry Project location
15
REVIEW OF OPERATIONSLATIN RESOURCESANNUAL REPORT 2022 Figure 9: Cloud Nine Deposit within regional tenement package
During the year, the Company progressed metallurgical, mineral resource and other studies as part of its ongoing
evaluation of the deposit, including preparation for a maiden core drilling campaign to collect metallurgical and
geotechnical samples.
1.2.1 SONIC GEOTECHNICAL DRILLING
The Company completed a program of sonic geotechnical diamond drilling16, aimed to provide sufficient
representative core samples from within the footprint of the existing JORC MRE, for detailed density and
geotechnical analysis. The density data is an integral part of the ongoing resource estimate work at Cloud Nine
aimed at increasing the confidence levels in the current Inferred JORC Resource, while the geotechnical data is
required for the mine design and scheduling work currently underway as a part of the Company’s Pre-Feasibility
Studies (“PFS”) and other studies.
16 Refer to ASX Announcement 22 March 2022
16
REVIEW OF OPERATIONSLATIN RESOURCESANNUAL REPORT 2022 1.2.2 MINERAL RESOURCE UPGRADE
1.2.3 TRIAL MINING AND OFFTAKE
During the year, the Company progressed a campaign
of resource infill drilling, where significant thicknesses
of exceptionally bright kaolinised granite were
intersected, further highlighting the quality of the
world class Cloud Nine Halloysite‐Kaolin deposit17.
Significant intersections include:
• NBAC459: 43m @ 85.4 ISO‐B from 7m
• NBAC397: 38m @ 85.3 ISO‐B from 12m
• NBAC413: 25m @ 85.2 ISO‐B from 17m
• NBAC442: 21m @ 85.2 ISO‐B from 6m
On completion of drilling, the Company reported a
33% increase in the global Mineral Resource Estimate
(JORC 2012)18 to 280Mt of kaolinised granite. This
included 70Mt upgraded from Inferred to Indicated;
and 201Mt of Inferred Mineral Resource comprised of
125Mt of bright white kaolinite-bearing material and
85Mt of halloysite-bearing material.
The Company previously reported a JORC (2012)
Inferred Mineral Resource of 207Mt of kaolinised
granite, including separate domains containing 123Mt
of bright-white kaolinite and 84Mt of kaolin/halloysite-
bearing material19.
The updated Mineral Resource for the Cloud Nine
Deposit includes an in situ Indicated Mineral Resource
of 70Mt kaolinised granite at an average Brightness
(“ISO‐B”) grade of 81. In addition to the Indicated
Mineral Resource is an in situ Inferred Mineral
Resource of 210Mt kaolinised granite at an average
ISO‐B grade of 79, for a total global in situ Indicated
and Inferred Mineral Resource of 280Mt, an increase
of ~33% from the May 2021 global estimate of 207Mt.
The Inferred Mineral Resource includes an 85Mt high‐
grade (>3%) portion with an average halloysite grade
of 4% (Table 3).
The Mineral Resource upgrade contains a total of
26.7Mt of bright white kaolinised granite, classified as
Indicated, with an ISO‐B grade of 81, reporting to the
<45 µm size fraction. In addition, the global Mineral
Resource contains 90 Mt kaolinised granite classified
as Inferred, reporting to the <45 µm size fraction, with
an average ISO‐B of 79. This domain also includes
35Mt halloysite, averaging 10% halloysite, estimated
using a 3% halloysite cut‐off and reported to the <45
µm size fraction (Table 4). The deposit contains low
Fe contamination averaging 0.8% Fe2O3 (Table 5).
All Mineral Resources are reported to the <45 µm
fraction at a cut‐off grade of 75 ISO‐B in accordance
with Clause 49 of the JORC Code (2012).
17 Refer to ASX Announcement 29 June 2022
18 Refer to ASX Announcement 29 November 2022
19 Refer to ASX Announcement 31 May 2021
20 Refer to ASX Announcement 13 October 2022
Latin reported the excavation of a test pit to advance
mine pit design planning and discussions with offtake
partners20.
Kaolinite extracted from the test-pit will be used in
bulk scale metallurgical testing, and importantly will
be used to prepare bulk product samples which will
be sent to two separate groups currently in discussion
with the Company in respect to potential offtake
agreements to allow them to undertake their own
product qualification testing.
The Company has provided multiple small-scale
samples from Cloud Nine to the two parties.
Preliminary discussions with both groups have
included options to supply short term Direct Shipping
Ore (“DSO”) products, as well as supplying value-
added processed kaolinite and halloysite products in
the longer term.
Excavation of the test pit has also provided the
Company with valuable information to further refine
preliminary assumptions, including mining and
stockpile designs, mining method and equipment
selection and preliminary geotechnical assumptions.
Material samples will also assist with further testing
and analysis to continue improving the understanding
of the deposit including the overlying material.
Figure 10: Test-pit in progress
17
REVIEW OF OPERATIONSLATIN RESOURCESANNUAL REPORT 2022
1.2.4 RARE EARTH ELEMENT (REE)
During the year, the company reported results from
rare earth element (REE) analyses at the Cloud Nine
Halloysite‐Kaolin Deposit21. The results confirmed REE
mineralisation with anomalous REE concentrations in
38% of the samples.
Analysis was conducted on a small random selection
(one out of every 20) of existing <45 µm fraction
samples collected from the recent infill drill program
at Cloud Nine22. Results from 30 of 78 samples
submitted for analysis returned anomalous total rare
earth oxide (TREO) concentrations of >1000 ppm;
five returned TREO concentrations >3500 ppm, with a
maximum TREO value of 3617 ppm.
Importantly, a large proportion of the TREO
encountered in analysis are the in‐demand magnetic
rare earth oxides (MREO), which are a critical
component of high‐performance magnets used for
climate economy products such as electric vehicles
and wind turbines. The key magnetic rare earth oxides
are neodymium (Nd) and praseodymium (Pr) which
form the majority of the MREO mix in the samples.
The first year of this project is coming to an end
and significant advancements have been made
towards these objectives. Laboratory testing has
been underway with a synthesised cow’s stomach
using various modified clay formulas. The results
show significant reduction of methane when used
as a feedstock additive, these formulas have been
submitted for a provisional patent.
Methane reduction in the cattle industry is becoming
an issue on government agendas to support their
reduced carbon emissions goals. Methane is the
number one source of agricultural gases worldwide
and a cow will belch about 100 kilograms of
methane per annum. New Zealand, for example,
has already introduced a new policy that will tax
farmers for animal generated methane, therefore
the market for developing methane-inhibiting feed
additives and capture technologies is a significant
prospect. The Company is pleased to progress this
initiative and continue to affirm its commitment to
its Environmental, Social and Governance (ESG)
credentials.
The Company believes these results are encouraging
and warrant further analyses to identify the extent of
the REE mineralisation encountered at Cloud Nine.
1.3 ARGENTINIAN
LITHIUM PROJECTS
Latin has engaged RSC, an experienced geological
consulting service company, to provide an
independent review of the REE data.
1.2.5 CRC CARE HALLOYSITE
R&D PROJECT
Latin is pleased to report progress on the research
agreement with CRC CARE23 which was announced in
November 2021 and commenced in January 2022.
The three-year, $3.2m project is focused on
modifying Latin Resources’ halloysite/kaolinite
minerals to develop innovative technologies that
lead to commercial applications for the capture and
reduction of methane using the clays from the
Cloud Nine Halloysite-Kaolin Deposit.
In particular, the research is focused on reducing
methane emissions in the cattle industry by modifying
the Cloud Nine clays to achieve reduction through
(1) a feed additive for cows to reduce the emissions
produced and released from the stomach and (2) a
carbon capture technology to be used in feedlots to
contain and capture gases emitted from cows.
Latin has a joint venture agreement on the
Company’s Catamarca lithium pegmatite projects
with Argentinian investment group Integra Capital
S.A. Integra has a diversified portfolio in more than
10 countries and is one of Argentina’s largest lithium
explorers, holding more than 400,000 hectares of
lithium brines projects in Jujuy and Catamarca
provinces.
In 2022, the Company completed on-ground
reconnaissance field work to identify priority areas
for ongoing exploration work, which included new
areas of outcropping spodumene pegmatites in the
Northwest Alto Project area24. Historical drill results
intersected high-grade lithium bearing pegmatites
including25:
• LCRC004: 3.0m @ 2.98% Li2O from 90m
• LCRC002: 4.0m @ 2.3% Li2O from 30m
• LCRC001: 6.0m @ 1.62% Li2O from 18m
The 2023 field work program has the objective
of defining new drill targets for the next drilling
campaign. This will include detailed and systematic
geological mapping and follow-up geochemical
surface sampling to better understand the nature
and scale of the high-grade lithium pegmatite system
encountered in previous drilling completed by the
Company in 2017.
21 Refer to ASX Announcement 3 November 2022
22 Refer to ASX Announcement 29 November 2022
23 Refer to ASX Announcement 30 January 2023
24 Refer to ASX Announcement 24 November 2022
25 Refer to ASX Announcement 13 April 2017 and 16 April 2017
18
REVIEW OF OPERATIONSLATIN RESOURCESANNUAL REPORT 2022 As part of the ongoing progress at Catamarca, the Company met with the Catamarca Mines Department to discuss
intentions of Latin and its joint venture partner, Integra Capital, for the Catamarca Lithium Project. The meeting was
very well received and productive, as a result the Company will embark on a campaign of community engagement
with information relating to the recommencement of planned exploration activities. The Company will also
establish a network of liaison offices within the local communities to assist in the dissemination of the exploration
information, and act as a conduit for feedback for the various community stakeholders.
This network will extend across both the Northwest Alto Project area as well as the Ancasti Project area to the south,
where the Company is planning to undertake similar reconnaissance mapping and sampling work in due course.
Figure 11: Northwest Alto Tenement area showing 2017 RC drilling collars, and the priority area for the Company’s
planned mapping and geochemical surface sampling campaign
19
REVIEW OF OPERATIONSLATIN RESOURCESANNUAL REPORT 2022 1.4 MT-03 COPPER PROJECT – PERU
The MT-03 Copper Project is a large-scale target in an established copper mineralised district, MT-03 with first class
infrastructure on the doorstep, located central to a major copper producing region, along trend from an existing
porphyry deposit at Southern Copper’s Tia Maria (639Mt @ 0.39% Cu & 0.19g/t Au)26.
The Company commenced drilling on the MT-03 Copper Project, reporting that there will be two holes drilled initially
in an overall 2000m diamond drilling program. The objective of the drilling is to test the target to ascertain the
geology and to determine if the target has any indication of a copper porphyry style mineralisation setting.
The Company commenced
drilling on the MT-03 Copper
Project, reporting that there
will be two holes drilled
initially in an overall 2000m
diamond drilling program.
26 Source: Quantitative Mineral Resource Assessment of Copper, Molybdenum, Gold and Silver in Undiscovered Porphyry Copper Deposits in the Andes Mountains of
South America (2008). Prepared and published jointly by the geological surveys of Argentina, Chile, Colombia, Peru and the United States. Open-File Report 2008-1253,
version 1.0
Figure 12: Drill rig on the MT-03 Project southern Peru, November 2022
20
REVIEW OF OPERATIONSLATIN RESOURCESANNUAL REPORT 2022 1.5 OTHER PROJECTS
The Company’s portfolio of NSW projects comprises of five separate granted, 100% owned tenements covering
a total of approximately 751 square kilometres in the central and southern Lachlan Fold Belt, which are highly
prospective for copper-gold and Ni-Cu-PGE mineralisation.
Work completed by the Company and previous explorers has highlighted multiple priority target areas, several of
which are at a drill ready status27, including:
• The Peep O’Day Gold Prospect;
• The Mackey’s Copper Prospect;
• The Gosper Mine Copper Prospect; and
• The Dairy Hill Copper (Porphyry) Prospect.
The Company has adopted a divestment strategy for these non-core projects28, while it focuses its efforts on
progressing two core projects: the high-grade hard-rock lithium Salinas Project in Brazil toward a maiden JORC
Resource by the end of the year; and the high-purity Cloud Nine Halloysite-Kaolin Project in Merredin, WA.
The Company is currently in discussion with several third-party groups in relation to the potential divestment of the
non-core NSW Lachlan Fold Projects.
Figure 13: Latin Resources Limited – NSW Lachlan Fold Belt Project, tenement location map
27 Refer to ASX Announcements 5 November 2020, 17 June 2021 and 24 June 2021
28 Refer to ASX Announcement 8 July 2022
21
REVIEW OF OPERATIONSLATIN RESOURCESANNUAL REPORT 2022 2.3 APPOINTMENT OF
NON-EXECUTIVE DIRECTOR
On 4 October 2022, the Company appointed Peter
Oliver as Non-Executive Director. Mr Oliver is a highly
accomplished C-suite leader, with nearly 20 years’
experience in lithium leadership roles which includes,
global M&A and financing as well as managing mining
operations.
Most recent to this appointment, Mr Oliver has acted as
an Advisor to Tianqi Lithium and prior to that was Chief
Executive Officer / Managing Director of Talison Lithium
which owns and operates the worlds largest lithium
mine – Greenbushes in Western Australia.
Mr Oliver has a background in Chemistry and has spent
many years working in the Western Australian Mining
industry. In 2003 Mr Oliver joined Talison Lithium
(then Sons of Gwalia). In his time at Talison, he had
several roles including General Manager of Wodgina
and Greenbushes, Chief Operating officer and Chief
Executive Officer/Managing Director.
2. CORPORATE
2.1 FUND RAISING
In April 2022, Latin raised $35 million in a placement
from institutional and sophisticated investors to
subscribe for new ordinary shares at an issue price of
$0.16.
Demand for the Placement was strong, supported by a
cornerstone investment of $15 million by Electrification
and Decarbonization AIE LP Fund (“E&D Fund”), a
100% owned subsidiary of Toronto based Waratah
Capital Advisers (“Waratah”). The Placement was also
supported by several institutional investors in Australia
and Asia.
The Waratah Electrification and Decarbonization
fund invests in equities of critical battery materials
companies and related decarbonisation investment
opportunities. Waratah is the sponsor and general
partner of Lithium Royalty Corp, a leading North
American royalty corporation focused on lithium assets,
which holds royalties on projects operated by Sigma
Lithium, Zijin Mining, Core Lithium, Allkem and Sayona
Mining.
As a condition of the cornerstone investment of $15
million by Waratah in the Placement, the Company
agreed to grant to Lithium Royalty Corp, a company
associated with Waratah, a right of first refusal in
respect of any royalty that the Company may sell to
any party, limited to the Company’s tenements in Brazil
on which lithium or similar projects are extracted or
recovered. This right of first refusal was confirmed in
a Deed dated 14 July 2022.
Euroz Hartleys Limited and PAC Partners Securities Pty
Ltd acted as Joint Lead Managers to the Placement,
with Jett Capital Advisors being a Co-Manager to the
Placement in North America.
2.2 OPTIONS EXERCISE
During the year, the Company further solidify its cash
balance, receiving $4.8 million in cash from option
holders exercising in-the-money LRSOC Options ($0.012
LRSOC, Expiry 31 Dec 2022) and $3.2 million from the
exercise of 3c and 5c unlisted options.
22
REVIEW OF OPERATIONSLATIN RESOURCESANNUAL REPORT 2022 REVIEW OF OPERATIONS
3. INVESTMENTS
3.1 SOLIS MINERALS LTD.
Solis Minerals is a Latin American-focused mining
exploration company.
The company holds a 100% interest in the Borborema
Lithium Project in NE Brazil, covering 24,800 ha,
and holds a 100% interest in 34,400 ha of combined
licences and applications of prospective IOCG (iron
oxide copper/gold) and porphyry copper projects in
southwestern Peru within the country’s prolific coastal
copper belt — a source of nearly half of Peru’s copper
production.
Latin currently holds a 13% shareholding in Solis
(consisting of shares and CDIs), which is valued at
$595,000 as at 31 December 2022 and is represented
on the Board by Latin’s Managing Director, Chris Gale.
Further information on Solis Minerals can be found at
solisminerals.com.
23
LATIN RESOURCESANNUAL REPORT 2022 4. ENVIRONMENTAL SOCIAL
GOVERNANCE (ESG) REVIEW
Latin Resources is pleased to confirm its commitment to its Environmental, Social, and
Governance (ESG) framework. The Company is committed to complying with applicable laws
and regulations relating to health, safety, environment and community impacts by meeting and
exceeding metrics within its Environmental, Social and Governance (ESG) framework including
the 21 core metrics and disclosures created by the World Economic Forum (WEF).
Latin Resources is a minerals explorer, committed to
developing its lithium spodumene project in Brazil,
as well as progressing early-stage exploration at
its Catamarca Project in Argentina. Lithium is a key
mineral used in electric vehicles and battery storage
to decarbonise the world by directly contributing to
technology driven GHG emission reduction targets.
Latin has invested significant time and geological
resources investigating the lithium potential of the
Bananal Valley region of Minas Gerais, which hosts
the eastern Brazilian pegmatite province.
24
REVIEW OF OPERATIONSLATIN RESOURCESANNUAL REPORT 2022
Regional success story Sigma Lithium is the most
active explorer in the region, currently in development
of a world-class lithium mineral resource base with
a “Greentech” processing plant and strong ESG
credentials.
With the announcement of the maiden JORC Mineral
Resource Estimate for the Colina Deposit of 13.3Mt
@ 1.2% Li2O and moving into feasibility studies for the
project, the Company is excited by the opportunities
this may present in the future for battery grade
lithium hydroxide production using renewable energy,
recycled water and dry-stack tailings.
In addition to this, Latin is transitioning into a developer
at its Cloud Nine Halloysite-Kaolin Deposit, 300km east
of Perth in Western Australia. The Cloud Nine deposit
has an upgraded Mineral Resource Estimate of 280
million tonnes (Mt) of kaolinised granite with 125Mt of
bright white kaolinite and 85Mt of halloysite bearing
material. Kaolinite is a plate-like clay with a wide range
of uses including paper and ceramics.
In contrast, halloysite has a unique property and
occurs as halloysite nanotubes (HNT) and maintains
several key environmentally friendly properties, can be
utilised to assist with the management of Greenhouse
Gases (GHG) and can be mined with extremely low
environmental impact.
As part of our evolving emissions project, Latin has
secured an agreement with CRC CARE Pty Ltd to
develop innovative methane reduction technologies
to exploit the clay mineral halloysite from the
Company’s Cloud Nine Halloysite-Kaolin Deposit near
Merredin, WA.
The development of these projects will provide Latin
with the platform to reduce carbon emissions and are
key to Latin’s ESG Purpose Statement of “developing
minerals to provide the planet with environmentally
sustainable products”.
25
REVIEW OF OPERATIONSLATIN RESOURCESANNUAL REPORT 2022 4.1 COMMUNITY ENGAGEMENT ACTIVITIES
During the year, a range of community engagement activities were undertaken to inform, consult and involve
participants across the community.
This included the opening of an information office in Salinas town to provide information to the local community to
learn about the Salinas Lithium Project.
26
REVIEW OF OPERATIONSLATIN RESOURCESANNUAL REPORT 2022 The Latin team visited the Salinas Nursery to talk about potential future partnerships for donations of tree seedlings,
and educational events with the neighbouring communities of the Salinas Lithium Project.
The Company hosted a lecture about Mining & Environment to students, teachers and educational supervisors at
the local public school in Minas Gerais, Escola Estadual Vicente Jose Ferreira.
In addition, Latin Resources Limited invested US$100,000 to assist with a flood fund to build a new levy wall. Now
under construction, the purpose of the levy wall project is to create a significant barrier to protect the town of
Salinas in Brazil against future river overflows.
Latin Resources Exploration Manager Brazil, Pedro Fonseca, and Engineer, Leandro Nunes, visited in September to
review the works. Also present at this visit to support the new wall was the president of the municipal council and
the municipal engineer.
Latin has recently opened an information office in Salinas town, available for the community to answer any queries
on the Salinas Lithium Project and the Company’s ESG initiatives.
27
REVIEW OF OPERATIONSLATIN RESOURCESANNUAL REPORT 2022 ESG PERFORMANCE
Latin Resources makes ESG disclosures in the form of a set of universal, comparable stakeholder capitalism
metrics focused on people, planet, prosperity and principles of governance that organisations can report on
regardless of industry or region.
We use this universal ESG framework to align our mainstream reporting on performance against ESG indicators.
By integrating ESG metrics into our governance, business strategy, and performance management process,
we diligently consider all pertinent risks and opportunities in running our business. We continue to look for
opportunities for further transparency on the topics which are material to our business.
Latin has made significant progress over 2022 across all areas of our sustainability performance as outlined in the
dashboard below. This table represents our reporting against the 21 core metrics over the year. These metrics are
reviewed quarterly and updated periodically.
28
REVIEW OF OPERATIONSLATIN RESOURCESANNUAL REPORT 2022 MINERAL RESOURCES AND RESERVES
5. MINERAL RESOURCES AND RESERVES
5.1 COLINA LITHIUM DEPOSIT
Table 1: Maiden Mineral Resource Estimate for the Colina Lithium Deposit (reported above a 0.5% Li2O cut-off)
effective 25 November 2022
Deposit
Colina
Resource
Category
Indicated
Inferred
Total
Grade
Cut-off
0.50
0.50
Tonnes
(Mt)
2.08
11.17
13.25
Grade
(Li2O %)
1.21
1.21
1.21
Li2O
(Kt)
25.1
135.2
160.3
Contained
LCE(Kt)
60
334
396
The ETR estimated by SGS is presented in Table 2 below29:
Table 2: Summary of exploration target ranges at various grade cut-off grades
Exploration Zone
Colina Deposit
Lower Range
Upper Range
(Mt)
13.5
(Mt)
22
Grade Range
(Li2O %)
1.2 – 1.5
5.2 CLOUD NINE
Table 3: Cloud Nine in situ Mineral Resource estimate summary. Reported at a >75 ISO-B cut-off
Classification
Mineral
Inferred
Indicated
Kaolinite
Halloysite
Total
Kaolin
Indicated + Inferred
Mass
Mt
125
85
210
70
280
Brightness
ISO-B
<45 µm
%
79
80
79
81
80
44
44
44
39.8
43.1
Notes:
1. The Mineral Resource is classified in accordance with the JORC Code (2012)
2. The effective date of the Mineral Resource is 31 October 2022
3. The Mineral Resource is contained within exploration licence E77/2622
4. Estimates are rounded to reflect the level of confidence in these Mineral Resources at the time of reporting
5. The Mineral Resource is reported at a >75 Brightness cut-off
29 The potential quantity and grade of the lithium mineralisation at the wider Colina project is conceptual in nature, there has been insufficient exploration to estimate a
Mineral Resources and it is uncertain if further exploration will confirm the target ranges
29
LATIN RESOURCESANNUAL REPORT 2022 MINERAL RESOURCES AND RESERVES
Table 4: Cloud Nine Mineral Resource estimate summary classified in the Indicated and Inferred categories. Reported at a >75
ISO-B cut-off for the <45 µm fraction
Classification Mineral
Kaolinite
Inferred
Halloysite
Indicated
Total
Kaolin
Indicated + Inferred
Mass
Mt
55
35
90
26.7
116
Brightness
ISO-B
Kaolinite
%
Halloysite
%
Kaolinite
kt
Halloysite
kt
79
80
79
81
80
81
77
79
77.9
79
0.3
10
4
-
4
44,000
29,000
73,000
21,000
94,000
150
3,600
3,800
-
3,800
Notes:
1. The Mineral Resource is classified in accordance with the JORC Code (2012).
2. The effective date of the Mineral Resource is 31 October 2022
3. The Mineral Resource is contained within exploration licence E77/2622.
4. Estimates are rounded to reflect the level of confidence in these Mineral Resources at the time of reporting.
5. In accordance with Clause 49 of the JORC Code (2012), for minerals that are defined by a specification, the Mineral Resource is
reported for the <45 µm size fraction.
6. The Mineral Resource is reported at a >75 Brightness cut-off.
7. The Inferred Halloysite Mineral Resource is reported at a >3% halloysite cut-off.
Table 5: Cloud Nine in-situ Mineral Resource estimate summary for Al2O3, Fe2O3, SiO2, TiO2, and LOI.
Reported at a >75 brightness cut-off for the <45 µm fraction
Classification
Mineral
Kaolinite
Halloysite
Average
Kaolinite
Inferred
Indicated
Average
Al2O3
%
35
35
35
35.5
35
Fe2O3
%
0.8
0.8
0.8
0.70
0.8
SiO2
%
49
49
49
49.2
49
TiO2
%
0.7
0.6
0.7
0.47
0.6
LOI
%
12
12
12
12.1
12
30
LATIN RESOURCESANNUAL REPORT 2022 LATIN RESOURCES
ANNUAL REPORT 2022
Competent Person Statement
The information in this report that relates to Geological Data and Exploration Results is based on information
compiled by Mr Anthony Greenaway, who is a Member of the Australian Institute of Mining and Metallurgy.
Mr Greenaway 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
Greenaway 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.
Competent Person Statement – Salinas Lithium Project
The information in this report that relates to Geological Data and Exploration Results for the Salinas Lithium
Project is based on information compiled by Mr Anthony Greenaway, who is a Member of the Australian Institute
of Mining and Metallurgy. Mr Greenaway 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 Greenaway 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.
The information in this report that relates the Mineral Resource Estimate and exploration targets for the Salinas
Lithium Project are based on the information compiled by Mr Marc-Antoine Laporte M.Sc., P.Geo, who is an
employee of SGS Canada Ltd and a member of the L’Ordre des Géologues du Québec. He is a Senior Geologist
for the SGS Geological Services Group and as more than 15 years of experience in industrial mineral, base and
precious metals exploration as well as Mineral Resource evaluation and reporting. Mr Laporte 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 quality as a Competent Person as defined in the 2012 Edition of the ‘Australasian Code for
Reporting of Exploration Results, Mineral Resources and Ore Reserves’.
Competent Person Statement – Cloud Nine Project
The information in this report that relates to Exploration Results at the Cloud Nine Project in Western Australia
is based on information compiled by Mr Ross Cameron, a Competent Person who is a Member of the Australian
Institute of Mining and Metallurgy. Mr Cameron is a full‐time employee of Latin Resources Ltd. The full nature of
the relationship between Mr Cameron and Latin Resources Ltd., including any issue that could be perceived as
a conflict of interest has been disclosed. Mr Cameron 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 Cameron consents to the inclusion in this release of the matters based on
his information, and information presented to him, in the form and context in which it appears.
The information in this report that relates to Mineral Resources at the Cloud Nine Project in Western Australia
is based on information compiled under the supervision of Mr Louis Fourie. Mr Fourie is a licenced Professional
Geoscientist registered with APEGS (Association of Professional Engineers and Geoscientists of Saskatchewan) in
the Province of Saskatchewan, a ‘Recognised Professional Organisation’ (RPO) included in a list that is posted on
the ASX website from time to time. Mr Fourie is owner and Principal of Terra Modelling Services. The full nature of
the relationship between Mr Fourie and Latin Resources Ltd., including an issue that could be perceived as a conflict
of interest has been disclosed. Mr Fourie has sufficient experience which is relevant to the style of mineralisation
and type of deposit under consideration and to the activity of resource estimation to qualify as a Competent
Person as defined in the 2012 Edition of the JORC Australasian Code for Reporting of Exploration Results, Mineral
Resources and Ore Reserves. Mr Fourie consents to the inclusion in the release of the matters based on their
information in the form and context in which it appears.
31
Latin Resources Limited – Annual Report 2022
32
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 2022.
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)
David Vilensky is a practising corporate lawyer and an experienced listed company director. He is the Managing Director
of Perth law firm Bowen Buchbinder Vilensky and has more than 35 years’ experience in the areas of corporate and
business law and in commercial and corporate management. Mr Vilensky practises in the areas of corporate and
commercial law, corporate advisory, mergers and acquisitions, mining and resources and complex dispute resolution.
Mr Vilensky acts for a number of listed and public companies and advises on directors’ duties, due diligence, capital
raisings, compliance with ASX Listing rules, corporate governance and corporate transactions generally.
Mr Vilensky is also a non-executive director of ASX listed telecommunications company, Vonex Ltd (ASX:VN8) and Oar
Resources Limited (ASX: OAR).
Mr Vilensky holds a BA LLB degree from the University of Cape Town and is a Member of the Law Society of Western
Australia.
CHRISTOPHER GALE (Managing Director)
Christopher (Chris) Gale is the Managing Director of Latin Resources. 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 several mining and technology companies during his career.
Mr Gale is also a non-executive Chairman of Solis Minerals Limited (ASX:SLM TSXV: SLMN) (appointed July 2018) and
Oar Resources Limited (ASX: OAR). Chris is the former Chairman of the Council on Australian Latin American Relations
(COALAR) established by the Australian Government Department of Foreign Affairs and Trade (DFAT) from 2012 to 2018.
He is 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).
BRENT JONES (Non-Executive Director)
Mr Jones is an experienced financial services professional who has held numerous directorships and managerial
positions. Currently Mr Jones acts as Managing Director of Professional Services at Sequoia Financial Group (ASX:SEQ).
A national supplier of diversified professional services to the Accounting and Advice industry.
As a professional and personal investor Mr Jones has been exposed to numerous M&As, IPOs, capital raisings, early seed
funding and development funding activities.
Mr Jones has a degree in Information Technology from Monash University, 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
PABLO TARANTINI (Non-Executive Director)
Mr Tarantini is experienced professional in the mining industry. He has served as Executive Director of the Argentinian
Bureau of Investment and International Trade, coordinating investment initiatives, and contributing with his vast
experience in several industries and countries. In that role, Mr Tarantini worked together with mining companies settled
in the country and supported the promotion of the mining activity in Argentina, along with the Argentinian Secretary of
Mining.
He has served as President and Executive Director of SAPISA and Minera Don Nicolás, an Argentinian private fund and
one of its investments in the mining sector, respectively. Minera Don Nicolas is the first mining project based on
Argentinian capital. He has also served as M&A Director at General Electric and Advent International Corporation for
Latin America, and as Manager at A.T. Kearney. In all these roles, he carried out businesses and projects at the regional
level.
Mr Tarantini is a Public Accountant and holds a Bachelor’s Degree in Business Administration from Universidad Católica
Argentina (UCA) and a Master in Business Administration from Harvard Business School.
Other directorships of Australian listed companies held by Mr Tarantini in the last three years are: Nil
32
DIRECTORS' REPORTLATIN RESOURCESANNUAL REPORT 2022 Latin Resources Limited – Annual Report 2022
32
Latin Resources Limited – Annual Report 2022
33
Directors' Report
DIRECTORS
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 2022.
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)
David Vilensky is a practising corporate lawyer and an experienced listed company director. He is the Managing Director
of Perth law firm Bowen Buchbinder Vilensky and has more than 35 years’ experience in the areas of corporate and
business law and in commercial and corporate management. Mr Vilensky practises in the areas of corporate and
commercial law, corporate advisory, mergers and acquisitions, mining and resources and complex dispute resolution.
Mr Vilensky acts for a number of listed and public companies and advises on directors’ duties, due diligence, capital
raisings, compliance with ASX Listing rules, corporate governance and corporate transactions generally.
Mr Vilensky is also a non-executive director of ASX listed telecommunications company, Vonex Ltd (ASX:VN8) and Oar
Mr Vilensky holds a BA LLB degree from the University of Cape Town and is a Member of the Law Society of Western
Resources Limited (ASX: OAR).
Australia.
CHRISTOPHER GALE (Managing Director)
Christopher (Chris) Gale is the Managing Director of Latin Resources. 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 several mining and technology companies during his career.
Mr Gale is also a non-executive Chairman of Solis Minerals Limited (ASX:SLM TSXV: SLMN) (appointed July 2018) and
Oar Resources Limited (ASX: OAR). Chris is the former Chairman of the Council on Australian Latin American Relations
(COALAR) established by the Australian Government Department of Foreign Affairs and Trade (DFAT) from 2012 to 2018.
He is 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).
BRENT JONES (Non-Executive Director)
Mr Jones is an experienced financial services professional who has held numerous directorships and managerial
positions. Currently Mr Jones acts as Managing Director of Professional Services at Sequoia Financial Group (ASX:SEQ).
A national supplier of diversified professional services to the Accounting and Advice industry.
As a professional and personal investor Mr Jones has been exposed to numerous M&As, IPOs, capital raisings, early seed
funding and development funding activities.
Mr Jones has a degree in Information Technology from Monash University, 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
PABLO TARANTINI (Non-Executive Director)
Mr Tarantini is experienced professional in the mining industry. He has served as Executive Director of the Argentinian
Bureau of Investment and International Trade, coordinating investment initiatives, and contributing with his vast
experience in several industries and countries. In that role, Mr Tarantini worked together with mining companies settled
in the country and supported the promotion of the mining activity in Argentina, along with the Argentinian Secretary of
Mining.
level.
He has served as President and Executive Director of SAPISA and Minera Don Nicolás, an Argentinian private fund and
one of its investments in the mining sector, respectively. Minera Don Nicolas is the first mining project based on
Argentinian capital. He has also served as M&A Director at General Electric and Advent International Corporation for
Latin America, and as Manager at A.T. Kearney. In all these roles, he carried out businesses and projects at the regional
Mr Tarantini is a Public Accountant and holds a Bachelor’s Degree in Business Administration from Universidad Católica
Argentina (UCA) and a Master in Business Administration from Harvard Business School.
Other directorships of Australian listed companies held by Mr Tarantini in the last three years are: Nil
PETER OLIVER (Non-Executive Director)
Mr Oliver is a highly accomplished C-suite leader, with nearly 20 years’ experience in lithium leadership roles which
includes global M&A and financing as well as managing mining operations. Mr Oliver has a background in Chemistry and
has spent many years working in the Western Australian Mining Industry. Mr Oliver joined Talison Lithium (then Sons
of Gwalia) in 2003. In his time at Talison, he had several roles including General Manager of Wodgina and Greenbushes,
Chief Operating Officer and Chief Executive Officer/ Managing Director. As Chief Executive Officer he led the IPO process
that successfully led to Talison Lithium being listed on the Toronto Stock Exchange in 2010. Mr Oliver acted as an advisor
to Tianqi Lithium between 2013 until March 2022. This included advising on the acquisition of 24% of SQM for in excess
of $4 Billion USD, significant further expansions of Talison Lithium’s Greenbushes lithium concentrate production
capacity and the building of Tianqi Lithium’s Kwinana Lithium Hydroxide plant.
Mr Oliver has extensive skill set in the lithium sector as well as his experience in leading strong corporate teams,
managing a public company, and acting in an advisory capacity in corporate structures, and global M&A and financing.
Other directorships of Australian listed companies held by Mr Oliver 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 are as follows:
Ordinary shares
Number
Share rights
Number
Loan funded shares
Number
Share options
Number
18,375,015
46,492,327
29,400,768
836,648
-
-
-
7,500,000
-
12,000,000
1,000,000
1,000,000
2,000,000
-
-
-
-
-
-
-
Director
David Vilensky
Brent Jones
Chris Gale
Pablo Tarantini
Peter Oliver
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.
PRINCIPAL ACTIVITIES
The principal activities during the year of entities within the consolidated entity were the exploration and evaluation of
mining projects in Australia, Peru, Argentina and Brazil.
FINANCIAL REVIEW
Results
The consolidated loss after tax of the Group for the year ended 31 December 2022 was $7,265,201 (2021: loss of
$4,366,344).
The result comprises of finance expenses of $1.3 million (2021: $0.7 million), employee benefits expense of $3.4 million
(2021: $1.4 million) and other income and expense items $2.1 million (2021: $2.4 million).
Assets
Total assets increased by $41 million during the year to $56 million. The movement primarily comprised of an increase
in cash of $25.6 million, an increase in exploration expenditure of $15.8 million, an increase in furniture, equipment and
right of use asset of $0.6 million, which were offset with the decrease in investments of $1.0 million.
During the year, the Company secured an additional 1.2 kilometres of tenure covering the interpreted southern strike
extension of the Company’s 100% owned high-grade Colina Lithium Prospect as announced on 13 July 2022. The
Company issued a total of 772,962 shares to Vendors as part of the considerations of the tenure acquisitions.
During the year, the Company announced the exercise of its option to secure 100% ownership over the Peep O’Day gold
prospect. Under the terms and conditions of the Tenement Sale Agreement, the Company will issue 6,000,000 shares
to the vendor. The Company issued the 6,000,000 shares to the Vendor following the grant of the Peep O’Day tenement
on 15 July 2022.
33
DIRECTORS' REPORTLATIN RESOURCESANNUAL REPORT 2022 Latin Resources Limited – Annual Report 2022
34
Liabilities
Total liabilities increased by $3.7 million to $5.4 million during the year. The increase was due to an increase in trade
and other payables.
The Company established an Option Funding Agreement of $2,500,000 with Lind Asset Management XII, LLC during
February 2022 with a 14-month term and face value of $2,750,000. The Company has fully repaid the facility during the
reporting period.
Equity
Total equity increased by $36.6 million during the year to $49.9 million. The increase reflects the current period loss of
$7.2 million for the year together with an increase in share capital of $41.8 million.
In April 2022, Latin raised $35 million in a placement anchored by Canadian cornerstone investor, Electrification and
Decarbonization AIE LP Fund (Waratah Capital Advisors).
During the year, the Company further solidify its cash balance, receiving $4.8 million in cash from option holders
exercising in-the-money LRSOC Options ($0.012 LRSOC, Expiry 31 Dec 2022) and $3.2 million from the exercise of 3c and
5c unlisted options. The Company concludes the reporting period in a strong financial position with $6.0 million trade
payable liability, $26.2 million in cash at bank and $0.6 million in investments as of 31 December 2022.
Shareholder returns
The Company’s share price increased during the period. The increased market capitalisation is due to significant
progress made with regard to the Company’s strategic direction concerning mineral exploration in South America, in
addition to share and placement issues to support funding.
Shareholder returns for the last 5 years is as follows:
December
2022
December
2021
December
2020
December
2019
December
2018
(7,265,201)
(4,366,344)
2,323,304
(5,539,154)
(5,553,476)
(0.4)
Nil
$0.098
(0.3)
Nil
$0.029
0.4
Nil
$0.033
(3.7)
Nil
$0.005
(0.2)
Nil
0.003
Profit/(Loss) attributable
to the Group ($)
Basic earning/(loss) per
share (Cents)
Dividends ($)
Closing share price ($)
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 2022.
LIQUIDITY AND CAPITAL RESOURCES
The Group’s principal source of liquidity as at 31 December 2022 is cash and cash equivalents of $26,276,726 (2021:
$642,784).
Funding for 2023 is expected from a combination of capital raisings, and the conversion of options.
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DIRECTORS' REPORTLATIN RESOURCESANNUAL REPORT 2022
Latin Resources Limited – Annual Report 2022
34
Latin Resources Limited – Annual Report 2022
35
Total liabilities increased by $3.7 million to $5.4 million during the year. The increase was due to an increase in trade
The Company established an Option Funding Agreement of $2,500,000 with Lind Asset Management XII, LLC during
February 2022 with a 14-month term and face value of $2,750,000. The Company has fully repaid the facility during the
Liabilities
and other payables.
reporting period.
Equity
Total equity increased by $36.6 million during the year to $49.9 million. The increase reflects the current period loss of
$7.2 million for the year together with an increase in share capital of $41.8 million.
In April 2022, Latin raised $35 million in a placement anchored by Canadian cornerstone investor, Electrification and
Decarbonization AIE LP Fund (Waratah Capital Advisors).
During the year, the Company further solidify its cash balance, receiving $4.8 million in cash from option holders
exercising in-the-money LRSOC Options ($0.012 LRSOC, Expiry 31 Dec 2022) and $3.2 million from the exercise of 3c and
5c unlisted options. The Company concludes the reporting period in a strong financial position with $6.0 million trade
payable liability, $26.2 million in cash at bank and $0.6 million in investments as of 31 December 2022.
Shareholder returns
The Company’s share price increased during the period. The increased market capitalisation is due to significant
progress made with regard to the Company’s strategic direction concerning mineral exploration in South America, in
addition to share and placement issues to support funding.
Shareholder returns for the last 5 years is as follows:
December
December
December
December
December
2022
2021
2020
2019
2018
(7,265,201)
(4,366,344)
2,323,304
(5,539,154)
(5,553,476)
(0.4)
Nil
$0.098
(0.3)
Nil
$0.029
0.4
Nil
$0.033
(3.7)
Nil
$0.005
(0.2)
Nil
0.003
No amounts have been paid or declared by way of a dividend since the end of the previous financial period and up until
the date of this report. The Directors do not recommend the payment of any dividend for the financial year ended 31
Profit/(Loss) attributable
to the Group ($)
Basic earning/(loss) per
share (Cents)
Dividends ($)
Closing share price ($)
DIVIDENDS
December 2022.
LIQUIDITY AND CAPITAL RESOURCES
$642,784).
The Group’s principal source of liquidity as at 31 December 2022 is cash and cash equivalents of $26,276,726 (2021:
Funding for 2023 is expected from a combination of capital raisings, and the conversion of options.
SHARES, SHARE RIGHTS AND OPTIONS
As at 31 December 2022 the Company had 2,144,314,127 fully paid shares on issue, 4,000,000 loan funded unquoted
shares on issue, 198,239,058 share options on issue.
Shares
A total of 725,537,864 fully paid ordinary shares were issued during the year. A breakdown of the shares issued is shown
at Note 18 of the financial statements.
Share rights
During the year 2,809,091 deferred share rights, 1,856,250 retention share rights and 41,625,000 incentive rights were
issued to directors, employees and consultant and 5,893,271 deferred share rights and 17,050,373 incentive rights were
converted in accordance with the share right plan approved by the shareholders.
Options
During the year 158,955,262 options were issued and 469,286,371 options were exercised during the period.
As at the date of this report there were 198,239,058 Shared 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 Executive Director and Chief Financial Officer have provided assurance in writing to the Board that they believe that
the Group’s material business risks are being managed effectively and that the Group’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
13 January 2023, the Company received proceeds of $110,205 from the final allotment of LRSOC listed options and
issued 40,372,690 shares. The remaining 11,413,722 listed options lapsed unexercised on 13 January 2023.
On 13 January 2022, the Company issued 10,970,717 shares (issued on vesting of Deferred Rights and Incentive Rights),
and 2,000,000 shares (issued on the vesting of performance incentive rights).
Other than above, there are no other significant events that have occurred after the reporting date.
IMPACT OF COVID-19
The Group has exploration projects in Latin America (Peru, Argentina and Brazil) where the region has been badly
affected by COVID-19. Despite the situation, the Group has managed to undertake ground exploration in some areas
during the period and made the assessment that there has been no significant impact on the performance or financial
position of the Group as at 31 December 2022 due to COVID-19.
LIKELY DEVELOPMENTS AND EXPECTED RESULTS
In 2023, the Group intends to continue to progress its mineral projects in commodities that progress global efforts
towards Net Zero emissions both in Australia and Latin America. The Group will also continue to look for other
opportunities that will create value for its shareholders.
35
DIRECTORS' REPORTLATIN RESOURCESANNUAL REPORT 2022
Latin Resources Limited – Annual Report 2022
36
ENVIRONMENTAL, SOCIAL AND GOVERNANCE (ESG)
The Company has adopted Socialsuite for the management and reporting of ESG metrics. Following the establishment
of a baseline dashboard, the Company adhered to a developed action plan throughout 2022.
The Company’s action plan was formulated around the Company’s ESG purpose statement “Developing minerals to
provide the planet with environmentally sustainable products”.
As progress continues on exploration programs, in parallel with increased measuring/reporting of ESG metrics, the
Company’s employees and contractors remain committed to ensuring all activities are completed to a high ESG level.
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 2022 and the number of meetings attended by each director is as follows:
Director
Board meetings held
Board meetings attended
David Vilensky
Chris Gale
Brent Jones
Pablo Tarantini
Peter Oliver
COMMITTEE MEMBERSHIP
8
8
8
8
2
7
8
8
6
2
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.au.
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 2022 year is included in the Company’s Corporate Governance
Statement.
AUDITOR'S INDEPENDENCE DECLARATION
The auditor's independence declaration is set out on page 79 and forms part of the Directors’ report for the year ended
31 December 2022.
NON-AUDIT SERVICES
Non-audit services provided by the Group’s auditor Hall Chadwick during the year ended 31 December 2022 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.
36
DIRECTORS' REPORTLATIN RESOURCESANNUAL REPORT 2022 Latin Resources Limited – Annual Report 2022
36
Latin Resources Limited – Annual Report 2022
37
ENVIRONMENTAL, SOCIAL AND GOVERNANCE (ESG)
REMUNERATION REPORT (AUDITED)
This remuneration report for the year ended 31 December 2022 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
Non-Executive Chairman
The number of meetings of directors (including meetings of committees of directors) held for the year ended 31
Brent Jones
Non-Executive Director
Pablo Tarantini
Non-Executive Director
Peter Oliver
Non-Executive Director
Executive director
Chris Gale
Managing Director
Other Executives
Sarah Smith
Yugi Gouw
Company Secretary
Chief Financial Officer
Anthony Greenaway
General Manager of Geology
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 Executive 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 Executive Director, the level of incentives to other
personnel and contractors.
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 remuneration of 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 re-approved by shareholders on 31 July 2020. Directors do
not receive retirement benefits nor do they participate in any incentive programs.
During the year 2,809,091 deferred share rights were issued to directors and 5,893,271 deferred share rights were
converted in accordance with the share right plan approved by the shareholders on 30 May 2022.
37
The Company has adopted Socialsuite for the management and reporting of ESG metrics. Following the establishment
of a baseline dashboard, the Company adhered to a developed action plan throughout 2022.
The Company’s action plan was formulated around the Company’s ESG purpose statement “Developing minerals to
provide the planet with environmentally sustainable products”.
As progress continues on exploration programs, in parallel with increased measuring/reporting of ESG metrics, the
Company’s employees and contractors remain committed to ensuring all activities are completed to a high ESG level.
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.
December 2022 and the number of meetings attended by each director is as follows:
Director
Board meetings held
Board meetings attended
8
8
8
8
2
7
8
8
6
2
DIRECTORS’ MEETINGS
David Vilensky
Chris Gale
Brent Jones
Pablo Tarantini
Peter Oliver
COMMITTEE MEMBERSHIP
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.au.
DIVERSITY
positions.
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
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 2022 year is included in the Company’s Corporate Governance
Statement.
AUDITOR'S INDEPENDENCE DECLARATION
31 December 2022.
NON-AUDIT SERVICES
The auditor's independence declaration is set out on page 79 and forms part of the Directors’ report for the year ended
Non-audit services provided by the Group’s auditor Hall Chadwick during the year ended 31 December 2022 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.
DIRECTORS' REPORTLATIN RESOURCESANNUAL REPORT 2022 Latin Resources Limited – Annual Report 2022
38
Non-Executive Director Deferred Rights Plan
The Non-Executive Director Deferred Rights Plan was re-approved by shareholders on 31 July 2020 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 for retention rights is 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 AGM.
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 Board 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 31 July 2020 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
KPIs. Given the current stage of the Company’s evolution and the market conditions for mineral exploration and
development companies, any entitlement to STI is determined at the discretion of the Board (Remuneration
Committee).
38
DIRECTORS' REPORTLATIN RESOURCESANNUAL REPORT 2022 The Non-Executive Director Deferred Rights Plan was re-approved by shareholders on 31 July 2020 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 for retention rights is 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 AGM.
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
Executive remuneration consists of fixed remuneration and variable remuneration comprising short term incentives and
shareholders.
long-term incentives.
Fixed remuneration
position and is competitive in the market.
performance and market conditions.
Variable remuneration
employees and contractors.
Short term incentives
Fixed remuneration is reviewed annually by the Board through a process that considers individual performance, Group
The Company established an Incentive Rights Plan (the Plan) that was re-approved by shareholders on 31 July 2020 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
Short term incentives (STI) may include cash and shares and are awarded to executives based on the achievement of
KPIs. Given the current stage of the Company’s evolution and the market conditions for mineral exploration and
development companies, any entitlement to STI is determined at the discretion of the Board (Remuneration
Committee).
Latin Resources Limited – Annual Report 2022
38
Latin Resources Limited – Annual Report 2022
39
Non-Executive Director Deferred Rights Plan
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 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 Executive 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.
EMPLOYMENT AGREEMENTS AND CONTRACTS
The Group has entered into contracts and agreements with executives the details of which are provided below.
The level of fixed remuneration is set so as to provide a base level of remuneration which is both appropriate to the
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
$102,000 per annum
Non-Executive Directors
$96,000 per annum
No committee fees are paid.
39
DIRECTORS' REPORTLATIN RESOURCESANNUAL REPORT 2022 Latin Resources Limited – Annual Report 2022
40
Managing Director
The Managing Director is currently employed under a renewed consultancy agreement for a three-year term ending on
30 September 2024. Mr Gale’s remuneration is in accordance with the consultancy agreement, where Mr Gale is paid a
base consultancy fee of $270,000 per annum which increases based on the following performance matrix:
•
•
•
•
•
If the Company achieves a market capitalisation of $50M for three consecutive months, the consultancy fee
will increase to $330,000 per annum;
If the Company achieves a market capitalisation of $70M for three consecutive months, the consultancy fee
will increase to $400,000 per annum;
If the Company achieves a market capitalisation of $100M for three consecutive months, the consultancy fee
will increase to $450,000 per annum;
If the Company achieves a market capitalisation of $200M for three consecutive months, the consultancy fee
will increase to $500,000 per annum;
If the market capitalisation of the Company decreases for three consecutive months, the consultancy fee will
similarly decrease to the level commensurate with the market capitalisation.
The Group may terminate the agreement with or without cause by giving one month and six months’ notice respectively.
The Executive 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 of up to two years fees, 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.
General Manager of Geology
The GM of Geology is employed under an employment agreement with no fixed term where either party may terminate
the agreement with or without cause by giving one month notice.
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 $4,500 per month
excluding GST with additional fees charged for shareholder meetings and corporate actions.
Chief Financial Officer (CFO)
The CFO is employed under an employment agreement with no fixed term where either party may terminate the
agreement with or without cause by giving one month and three months’ notice respectively.
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.
40
DIRECTORS' REPORTLATIN RESOURCESANNUAL REPORT 2022
Latin Resources Limited – Annual Report 2022
40
Managing Director
The Managing Director is currently employed under a renewed consultancy agreement for a three-year term ending on
30 September 2024. Mr Gale’s remuneration is in accordance with the consultancy agreement, where Mr Gale is paid a
base consultancy fee of $270,000 per annum which increases based on the following performance matrix:
If the Company achieves a market capitalisation of $50M for three consecutive months, the consultancy fee
•
•
•
•
•
will increase to $330,000 per annum;
will increase to $400,000 per annum;
will increase to $450,000 per annum;
will increase to $500,000 per annum;
If the Company achieves a market capitalisation of $70M for three consecutive months, the consultancy fee
If the Company achieves a market capitalisation of $100M for three consecutive months, the consultancy fee
If the Company achieves a market capitalisation of $200M for three consecutive months, the consultancy fee
If the market capitalisation of the Company decreases for three consecutive months, the consultancy fee will
similarly decrease to the level commensurate with the market capitalisation.
The Group may terminate the agreement with or without cause by giving one month and six months’ notice respectively.
The Executive 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 of up to two years fees, the value of any annual fringe benefits and any vested
The Group retains the right to terminate the agreement immediately by making a payment in lieu of notice for
entitlement under a LTI plan.
termination by either party without cause.
General Manager of Geology
The GM of Geology is employed under an employment agreement with no fixed term where either party may terminate
the agreement with or without cause by giving one month notice.
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 $4,500 per month
excluding GST with additional fees charged for shareholder meetings and corporate actions.
The CFO is employed under an employment agreement with no fixed term where either party may terminate the
agreement with or without cause by giving one month and three months’ notice respectively.
Company Secretary
Chief Financial Officer (CFO)
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.
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42
DIRECTORS' REPORTLATIN RESOURCESANNUAL REPORT 2022
Latin Resources Limited – Annual Report 2022
43
ADDITIONAL DISCLOSURES RELATING TO REMUNERATION
(a)
Share holdings of key management personnel
31 Dec 2022
Directors
D. Vilensky
C. Gale
B. Jones
P. Tarantini
Other KMP
S. Smith
Y. Gouw
A. Greenaway
31 Dec 2021
Directors
D. Vilensky
C. Gale
B. Jones
Other KMP
S. Smith
Y. Gouw
A. Greenaway
Loan Funded Shares
31 Dec 2022
D. Vilensky
C. Gale
B. Jones
31 Dec 2021
D. Vilensky
C. Gale
B. Jones
Balance at
start of year
Granted as
remuneration
On exercise of
options/conversion
of rights
Net change
other
Balance at
end of year
14,848,259
15,844,182
23,979,817
-
-
500,000
1,100,000
56,272,258
-
-
-
-
-
-
-
-
2,795,569
13,450,630
22,978,935
836,648
250,000
1,000,000
1,000,000
42,311,782
-
(4,800,000)
(1,800,000)
-
-
-
-
(6,600,000)
17,643,828
24,494,812
45,158,752
836,648
250,000
1,500,000
2,100,000
91,984,040
Balance at
start of year
Granted as
remuneration
On exercise of
options/conversion
of rights
Net change
other
Balance at
end of year
9,131,579
8,857,778
22,055,438
368,906
500,000
100,000
41,013,701
Balance at
start of year
1,000,000
2,000,000
1,000,000
4,000,000
Balance at
start of year
1,000,000
2,000,000
1,000,000
4,000,000
-
-
-
10,550,013
19,065,193
1,757,712
(4,833,333)
(12,078,789)
166,667
14,848,259
15,844,182
23,979,817
-
-
1,000,000
1,000,000
-
-
-
31,372,918
(368,906)
-
-
(17,114,361)
Granted as
remuneration
-
-
-
-
Granted as
remuneration
-
-
-
-
On exercise of
options
-
-
-
-
On exercise of
options
-
-
-
-
Net change
other
-
-
-
-
Net change
other
-
-
-
-
-
500,000
1,100,000
56,272,258
Balance at
end of year
1,000,000
2,000,000
1,000,000
4,000,000
Balance at
end of year
1,000,000
2,000,000
1,000,000
4,000,000
There were no loans to key management personnel during the financial year 2022 and 2021.
In 2018, at the Annual General Meeting held 28 May 2018, shareholders approved the adoption of the Latin Resources Limited
Loan Funded Share Plan and also approved the issue of 100,000,000 loan funded shares to directors. The loan funded shares
were issued at cost of 1.1 cents per share which is funded by a loan from the Company (Pre 1:25 share consolidation). The
loans are interest free and with limited recourse to the participant and are unquoted shares until the loan has been repaid.
The Plan requires the loan to be repaid before the participant can sell their shares. The reduction in the loan funded shares is
due to the 1:25 share consolidation done in 2019.
43
DIRECTORS' REPORTLATIN RESOURCESANNUAL REPORT 2022 Latin Resources Limited – Annual Report 2022
44
ADDITIONAL DISCLOSURES RELATING TO REMUNERATION
(b)
Share right holdings of key management personnel
31 Dec 2022
Directors
D. Vilensky
C. Gale
B. Jones
P. Tarantini
P. Oliver
Other KMP
S. Smith
Y. Gouw
A. Greenaway
Balance at
start of year
Granted as
remuneration 1,2
Converted to
Shares
Net change other
3,481,791
15,850,746
2,686,567
-
-
-
-
-
22,019,104
1,104,5451
5,625,0001
852,2731
852,2731
12,000,0002
500,0003
1,500,0003
7,000,0003
29,434,091
(2,845,441)
(13,550,373)
(2,195,557)
(852,273)
-
(250,000)
(1,000,000)
(1,000,000)
(21,693,644)
-
-
-
-
-
-
-
-
-
Balance at
end of year
1,740,895
7,925,373
1,343,283
-
12,000,000
250,000
500,000
6,000,000
29,759,551
1 At the Annual General Meeting held on 30 May 2022, shareholders approved 1,104,545 deferred rights to Mr Vilensky, 852,273 deferred rights to Mr
Jones and 852,273 deferred rights to Mr Tarantini and 1,856,250 retention rights, together with 3,768,750 performance rights to Mr Gale. These rights
were vested and converted into shares on 15 July 2022.
2 At the General Meeting held on 19 December 2022, shareholders approved 12,000,000 incentive rights to Mr Oliver. Refer the details of the vesting
conditions in additional disclosures relating to remuneration (c).
3 At the General Meeting held on 19 December 2022, shareholders also approved the Securities Incentive Plan. Various tranches have since vested and
converted into ordinary shares upon achievement of milestones.
31 Dec 2021
Directors
D. Vilensky
C. Gale
B. Jones
Other KMP
S. Smith
Y. Gouw
A. Greenaway
Balance at
start of year
Granted as
remuneration
Converted to
Shares
Net change other
-
-
-
-
-
-
-
5,802,985
26,417,910
4,477,612
(2,321,194)
(10,567,164)
(1,791,045)
-
-
-
36,698,507
-
-
-
(14,679,403)
-
-
-
-
-
-
-
Balance at
end of year
3,481,791
15,850,746
2,686,567
-
-
-
22,019,104
At the Annual General Meeting held on 10 February 2021, shareholders approved 5,802,985 deferred rights to Mr Vilensky
and 4,477,612 deferred rights to Mr Jones and 8,717,910 retention rights, together with 17,700,000 performance rights to
Mr Gale.
44
DIRECTORS' REPORTLATIN RESOURCESANNUAL REPORT 2022 Balance at
start of year
Granted as
Converted to
remuneration 1,2
Shares
Net change other
3,481,791
15,850,746
2,686,567
1,104,5451
5,625,0001
852,2731
852,2731
12,000,0002
(2,845,441)
(13,550,373)
(2,195,557)
(852,273)
-
500,0003
1,500,0003
7,000,0003
(250,000)
(1,000,000)
(1,000,000)
22,019,104
29,434,091
(21,693,644)
1 At the Annual General Meeting held on 30 May 2022, shareholders approved 1,104,545 deferred rights to Mr Vilensky, 852,273 deferred rights to Mr
Jones and 852,273 deferred rights to Mr Tarantini and 1,856,250 retention rights, together with 3,768,750 performance rights to Mr Gale. These rights
were vested and converted into shares on 15 July 2022.
2 At the General Meeting held on 19 December 2022, shareholders approved 12,000,000 incentive rights to Mr Oliver. Refer the details of the vesting
conditions in additional disclosures relating to remuneration (c).
3 At the General Meeting held on 19 December 2022, shareholders also approved the Securities Incentive Plan. Various tranches have since vested and
converted into ordinary shares upon achievement of milestones.
Balance at
start of year
Granted as
remuneration
Converted to
Shares
Net change other
5,802,985
26,417,910
4,477,612
(2,321,194)
(10,567,164)
(1,791,045)
-
-
-
-
-
-
At the Annual General Meeting held on 10 February 2021, shareholders approved 5,802,985 deferred rights to Mr Vilensky
and 4,477,612 deferred rights to Mr Jones and 8,717,910 retention rights, together with 17,700,000 performance rights to
36,698,507
(14,679,403)
22,019,104
Balance at
end of year
1,740,895
7,925,373
1,343,283
-
12,000,000
250,000
500,000
6,000,000
29,759,551
Balance at
end of year
3,481,791
15,850,746
2,686,567
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
31 Dec 2022
Directors
D. Vilensky
C. Gale
B. Jones
P. Tarantini
P. Oliver
Other KMP
S. Smith
Y. Gouw
A. Greenaway
31 Dec 2021
Directors
D. Vilensky
C. Gale
B. Jones
Other KMP
S. Smith
Y. Gouw
A. Greenaway
Mr Gale.
-
-
-
-
-
-
-
-
-
-
-
-
Latin Resources Limited – Annual Report 2022
44
Latin Resources Limited – Annual Report 2022
45
ADDITIONAL DISCLOSURES RELATING TO REMUNERATION
(b)
Share right holdings of key management personnel
ADDITIONAL DISCLOSURES RELATING TO REMUNERATION
(c)
Vesting profile of share rights granted to key management personnel
Share rights
Number
Grant date
Vested in year
(%)
Net change
other (%)
Measurement
date of share
rights
Directors
D. Vilensky
Deferred Rights Tranche 1
Deferred Rights Tranche 2
Deferred Rights Tranche 3
Deferred Rights Tranche 4
C. Gale
Retention Rights Tranche 1
Retention Rights Tranche 2
Retention Rights Tranche 3
Retention Rights Tranche 4
Performance Rights Tranche 1
Performance Rights Tranche 2
Performance Rights Tranche 3
Performance Rights Tranche 4
B. Jones
Deferred Rights Tranche 1
Deferred Rights Tranche 2
Deferred Rights Tranche 3
Deferred Rights Tranche 4
P. Tarantini
Deferred Rights Tranche 4
P. Oliver
Performance Rights
Other KMP
S. Smith
Y. Gouw
A. Greenaway
2,321,194
1,740,895
1,740,896
1,104,545
10/02/2021
10/02/2021
10/02/2021
30/05/2022
3,487,164
2,615,373
2,615,373
1,856,250
7,080,000
5,310,000
5,310,000
3,768,750
10/02/2021
10/02/2021
10/02/2021
30/05/2022
10/02/2021
10/02/2021
10/02/2021
30/05/2022
1,791,045
1,343,284
1,343,283
852,273
10/02/2021
10/02/2021
10/02/2021
30/05/2022
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
852,273
30/05/2022
100
12,000,000
23/12/2022
-
500,000
1,500,000
7,000,000
23/12/2022
23/12/2022
23/12/2022
50%
67%
29%
1Tranche 1 share rights were converted to shares on 2 March 2021.
2Tranche 2 share rights were converted to shares on 8 March 2022.
3Tranche 3 share rights were converted to shares on 13 January 2023.
4Tranche 4 share rights were converted to shares on 15 July 2022.
5Various employee and consultant share rights were converted to shares on 23 December 2022.
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
31/12/20201
31/12/20212
31/12/20223
01/07/20224
31/12/20201
31/12/20212
31/12/20223
01/07/20224
31/12/20201
31/12/20212
31/12/20223
01/07/20224
31/12/20201
31/12/20212
31/12/20223
01/07/20224
01/07/20224
various5
various5
various5
various5
45
DIRECTORS' REPORTLATIN RESOURCESANNUAL REPORT 2022 Latin Resources Limited – Annual Report 2022
46
ADDITIONAL DISCLOSURES RELATING TO REMUNERATION
(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.
31 Dec 2022
Directors
D. Vilensky
C. Gale
B. Jones
Other KMP
S. Smith
Y. Gouw
A. Greenaway
Balance at
start of year
Granted as
remuneration
Exercised
Net change
other1
Balance at
end of year
Vested
exercisable
Vested not
exercisable
-
40,000
20,833,250
-
-
-
20,873,250
-
-
-
-
-
-
-
-
-
(20,833,250)
-
(40,000)
-
-
-
-
(20,833,250)
-
-
-
(40,000)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1 Listed LRSOC options expire on 31 December 2022.
31 Dec 2021
Balance at
start of year
Granted as
remuneration
Exercised
Net change
other
Balance at
end of year
Vested
exercisable
Vested not
exercisable
Directors
D. Vilensky
C. Gale
B. Jones
Other KMP
S. Smith
Y. Gouw
A. Greenaway
8,262,152
15,053,748
20,833,250
-
-
-
44,149,150
-
-
-
-
-
-
-
(8,262,152)
(5,013,748)
-
-
-
-
(13,275,900)
-
-
-
-
-
-
-
-
40,000
20,833,250
-
-
-
20,873,250
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(e)
Loans to key management personnel
There were no loans to key management personnel during 2022 and 2021 financial years.
(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 31 March 2023
46
DIRECTORS' REPORTLATIN RESOURCESANNUAL REPORT 2022 Latin Resources Limited – Annual Report 2022
46
Latin Resources Limited – Annual Report 2022
47
ADDITIONAL DISCLOSURES RELATING TO REMUNERATION
(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
Granted as
start of year
remuneration
Exercised
Net change
Balance at
Vested
other1
end of year
exercisable
Vested not
exercisable
31 Dec 2022
Directors
D. Vilensky
C. Gale
B. Jones
Other KMP
S. Smith
Y. Gouw
A. Greenaway
Directors
D. Vilensky
C. Gale
B. Jones
Other KMP
S. Smith
Y. Gouw
A. Greenaway
40,000
20,833,250
(20,833,250)
(40,000)
20,873,250
(20,833,250)
(40,000)
1 Listed LRSOC options expire on 31 December 2022.
31 Dec 2021
Balance at
Granted as
start of year
remuneration
Exercised
Net change
Balance at
Vested
other
end of year
exercisable
Vested not
exercisable
8,262,152
15,053,748
20,833,250
(8,262,152)
(5,013,748)
40,000
20,833,250
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
44,149,150
(13,275,900)
20,873,250
(e)
Loans to key management personnel
There were no loans to key management personnel during 2022 and 2021 financial years.
(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 31 March 2023
Consolidated Statement of Profit or Loss
and Other Comprehensive Income
For the twelve months ended 31 December 2022
Interest revenue
Other income and losses
Depreciation and amortisation expense
Employee benefits expense
Finance expenses
Equity share of associated company loss
Profit/(loss) on fair value of financial assets through profit or loss
Profit/(loss) on derecognition of payables
Exploration and evaluation expenditure
Other expenses
Loss continuing operations before tax
Notes
31 Dec 2022
$
31 Dec 2021
$
5
6(d)
6(a)
6(b)
12(b)
12(b)
14
6(c)
345,961
196,678
(106,819)
(3,391,346)
(1,301,391)
-
(1,031,960)
691,357
(266,311)
(2,491,879)
(7,355,710)
83
99,038
(24,573)
(1,404,909)
(722,073)
(108,140)
246,033
-
-
(2,451,803)
(4,366,344)
Income tax benefit
7
90,509
-
Loss for the year from continuing operations
(7,265,201)
(4,366,344)
Loss attributable to owners of the Parent Company
(7,265,201)
(4,366,344)
Net loss for the period
(7,265,201)
(4,366,344)
Other comprehensive income/(expense)
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
19(a)
(507,048)
(38,908)
Total comprehensive loss for the year attributable to owners of the
Parent Company
(7,772,249)
(4,405,252)
Loss attributable to:
Owners of the Parent Company
Non-Controlling Interests
Total comprehensive loss attributable to:
Owners of the Parent Company
Non-Controlling Interests
Basic earning/(loss) per share (Cents)
Diluted earning/(loss) per share (Cents)
21
21
8
8
(7,240,972)
(24,229)
(7,265,201)
(4,355,427)
(10,917)
(4,366,344)
(7,748,020)
(24,229)
(7,772,249)
(4,394,335)
(10,917)
(4,405,252)
(0.4)
(0.4)
(0.3)
(0.2)
The above consolidated statement of profit or loss and other comprehensive income should be read in conjunction with
the accompanying notes.
47
FINANCIAL STATEMENTSLATIN RESOURCESANNUAL REPORT 2022 Latin Resources Limited – Annual Report 2022
48
Consolidated Statement of Financial Position
For the twelve months ended 31 December 2022
ASSETS
Current assets
Cash and cash equivalents
Trade and other receivables
Other assets
Total current assets
Non-current assets
Investments
Right of use asset
Plant and equipment
Exploration and evaluation assets
Total non-current assets
Total assets
LIABILITIES
Current liabilities
Trade and other payables
Office lease liabilities
Provisions
Total current liabilities
Non-current liabilities
Office lease liabilities
Total non-current liabilities
Total liabilities
Net assets
EQUITY
Contributed equity
Reserves
Accumulated losses
Parent’s Interest
Non-Controlling Interests
Total equity
Notes
31 Dec 2022
$
31 Dec 2021
$
9(a)
10
11
12(a)
16(a)
13(a)
14
15
16(b)
17
16(b)
18(a)
19
20
21
26,276,726
629,453
116,742
27,022,921
642,784
765,713
82,555
1,491,052
595,363
299,323
465,989
27,595,780
28,956,455
55,979,376
1,627,323
-
116,462
11,760,126
13,503,911
14,994,963
5,027,943
121,651
76,739
5,226,333
1,660,416
-
60,654
1,721,070
181,265
181,265
5,407,598
50,571,778
-
-
1,721,070
13,273,893
103,163,413
15,899,366
(69,195,750)
49,867,029
704,749
50,571,778
59,835,942
15,156,535
(61,954,778)
13,037,699
236,194
13,273,893
The above consolidated statement of financial position should be read in conjunction with accompanying notes.
48
FINANCIAL STATEMENTSLATIN RESOURCESANNUAL REPORT 2022 ASSETS
Current assets
Cash and cash equivalents
Trade and other receivables
Other assets
Total current assets
Non-current assets
Investments
Right of use asset
Plant and equipment
Exploration and evaluation assets
Total non-current assets
Total assets
LIABILITIES
Current liabilities
Trade and other payables
Office lease liabilities
Provisions
Total current liabilities
Non-current liabilities
Office lease liabilities
Total non-current liabilities
Total liabilities
Net assets
EQUITY
Contributed equity
Reserves
Accumulated losses
Parent’s Interest
Non-Controlling Interests
Total equity
31 Dec 2022
31 Dec 2021
Notes
$
$
9(a)
10
11
12(a)
16(a)
13(a)
14
15
16(b)
17
16(b)
18(a)
19
20
21
26,276,726
629,453
116,742
642,784
765,713
82,555
27,022,921
1,491,052
595,363
299,323
465,989
27,595,780
28,956,455
55,979,376
1,627,323
-
116,462
11,760,126
13,503,911
14,994,963
5,027,943
1,660,416
121,651
76,739
60,654
5,226,333
1,721,070
181,265
181,265
5,407,598
1,721,070
50,571,778
13,273,893
-
-
-
103,163,413
15,899,366
59,835,942
15,156,535
(69,195,750)
(61,954,778)
49,867,029
13,037,699
704,749
236,194
50,571,778
13,273,893
The above consolidated statement of financial position should be read in conjunction with accompanying notes.
Latin Resources Limited – Annual Report 2022
48
Latin Resources Limited – Annual Report 2022
Consolidated Statement of Financial Position
Consolidated Statement of Changes in Equity
For the twelve months ended 31 December 2022
For the twelve months ended 31 December 2022
Contributed
equity
$
Share-based
payment
reserve
$
Foreign
currency
translation
reserve
$
Accumulated
losses
$
Non-
Controlling
Interests
$
49
Total
$
Balance at 1 January 2021
56,467,554
6,753,489
5,408,672
(57,599,351)
-
11,030,364
Loss for the year
Other comprehensive loss
Total comprehensive loss
Issue of shares
Share-based payments
Issue of equity in
subsidiary
Transaction costs
Balance at 31 December
2021
-
-
-
-
-
-
-
(38,908)
(38,908)
(4,355,427)
-
(4,355,427)
(10,917)
-
(10,917)
(4,366,344)
(38,908)
(4,405,252)
2,302,439
1,093,516
-
3,033,282
-
(27,567)
-
-
-
-
-
-
-
-
-
-
-
-
2,302,439
4,126,798
247,111
-
247,111
(27,567)
59,835,942
9,786,771
5,369,764
(61,954,778)
236,194
13,273,893
Balance at 1 January 2022
59,835,942
9,786,771
5,369,764
(61,954,778)
236,194
13,273,893
Loss for the year
Other comprehensive loss
Total comprehensive loss
Issue of shares
Share-based payments
Issue of equity in
subsidiary
Transaction costs
Balance at 31 December
2022
-
-
-
-
-
-
-
(507,048)
(507,048)
(7,240,972)
-
(7,240,972)
(24,229)
-
(24,229)
(7,265,201)
(507,048)
(7,772,249)
44,882,084
317,105
(1,914,981)
3,164,860
-
(1,871,718)
-
-
-
-
-
-
-
-
-
-
-
-
42,967,103
3,481,965
492,784
-
492,784
(1,871,718)
103,163,413
11,036,650
4,862,716
(69,195,750)
704,749
50,571,778
The above consolidated statement of changes in equity should be read in conjunction with accompanying notes.
49
FINANCIAL STATEMENTSLATIN RESOURCESANNUAL REPORT 2022 Latin Resources Limited – Annual Report 2022
50
Consolidated Statement of Cash Flows
For the twelve months ended 31 December 2022
Cash flows from operating activities
Receipts from other income
Payments to suppliers and employees
Interest received
Interest and other charges paid
Net cash flows used in operating activities
Cash Flows from investing activities
Payments for plant and equipment
Payments to acquire investments
Payments for exploration and evaluation assets
Proceeds from disposal of fixed assets
Payments for security deposits
Net cash flows used in investing activities
Cash flows from financing activities
Proceeds from the issue of equity
Proceeds from options exercised
Transaction costs of issuing shares
Proceeds from borrowings
Repayment of borrowings
Finance costs associated with borrowings
Payments of office lease liabilities
Proceeds from share issues in subsidiary to outside equity
interest
Net cash from financing activities
9(b)
13(b)
18(b)
Notes
31 Dec 2022
$
31 Dec 2021
$
90,509
(3,496,200)
328,678
(11,565)
(3,088,578)
(400,940)
-
(12,855,649)
-
(34,188)
(13,290,777)
35,000,000
8,332,339
(1,545,826)
2,425,000
(2,425,000)
(200,000)
(66,000)
641,187
42,161,700
25,782,346
642,784
(148,403)
26,276,726
40,077
(1,790,825)
83
(10,614)
(1,761,279)
(97,705)
(564,570)
(3,046,001)
36
(38,855)
(3,747,095)
-
2,298,357
(27,567)
-
(900,000)
-
-
247,111
1,617,901
(3,890,473)
4,533,257
-
642,784
Net decrease in cash and cash equivalents
Cash and cash equivalents at the beginning of the year
Effects of foreign exchange movements
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.
50
FINANCIAL STATEMENTSLATIN RESOURCESANNUAL REPORT 2022
Net cash flows used in operating activities
9(b)
Cash flows from operating activities
Receipts from other income
Payments to suppliers and employees
Interest received
Interest and other charges paid
Cash Flows from investing activities
Payments for plant and equipment
Payments to acquire investments
Payments for exploration and evaluation assets
Proceeds from disposal of fixed assets
Payments for security deposits
Net cash flows used in investing activities
Cash flows from financing activities
Proceeds from the issue of equity
Proceeds from options exercised
Transaction costs of issuing shares
Proceeds from borrowings
Repayment of borrowings
Finance costs associated with borrowings
Payments of office lease liabilities
Proceeds from share issues in subsidiary to outside equity
interest
Net cash from financing activities
Net decrease in cash and cash equivalents
Cash and cash equivalents at the beginning of the year
Effects of foreign exchange movements
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.
90,509
(3,496,200)
328,678
(11,565)
(3,088,578)
-
-
(12,855,649)
(34,188)
(13,290,777)
35,000,000
8,332,339
(1,545,826)
2,425,000
(2,425,000)
(200,000)
(66,000)
641,187
42,161,700
25,782,346
642,784
(148,403)
26,276,726
40,077
(1,790,825)
83
(10,614)
(1,761,279)
(97,705)
(564,570)
(3,046,001)
36
(38,855)
(3,747,095)
2,298,357
(27,567)
(900,000)
-
-
-
-
247,111
1,617,901
(3,890,473)
4,533,257
-
642,784
Latin Resources Limited – Annual Report 2022
50
Latin Resources Limited – Annual Report 2022
51
Consolidated Statement of Cash Flows
For the twelve months ended 31 December 2022
Notes to the financial statements
1.
CORPORATE INFORMATION
31 Dec 2022
31 Dec 2021
Notes
$
$
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 2022 were authorised for issue in accordance with
a resolution of the directors on 31 March 2023.
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(c).
13(b)
(400,940)
2.
(a)
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
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.
18(b)
(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)
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(c).
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 in to 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.
(e)
Comparative information
Certain comparative information in the financial report may have been reclassified to aid comparability with the current
year.
51
NOTES TO THE FINANCIAL STATEMENTSLATIN RESOURCESANNUAL REPORT 2022
Latin Resources Limited – Annual Report 2022
52
(f)
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.
The Group incurred a loss for the period of $7,265,201 (2021: $4,366,344) and net operating cash outflow of $3,088,578
(2021: $1,761,279). As at 31 December 2022, the Group's cash and cash equivalents increased to 26,276,726 (2021:
$642,784) and had a working capital surplus of $21,796,588 (2021: deficit of $230,018).
The directors have prepared a cash flow forecast, which indicates that the Consolidated Group will have sufficient cash
flows to meet all commitments and working capital requirements for the 12-month period from the date of signing this
report. The ability of the Group to continue as a going concern is principally dependent upon the ability of the Group to
secure funds by raising capital from equity markets and managing cash flow in line with available funds.
On 13 January 2023, the Company received proceeds of $110,205 from the final allotment of LRSOC listed options and
issued 40,372,690 shares. The remaining 11,413,722 listed options lapsed unexercised on 13 January 2023. (Note 27:
Events After The Reporting Period).
Based on the cash flow forecast and other factors referred to above, the Directors are satisfied that the going concern
basis of preparation is appropriate. In particular, given the Group’s history of raising capital to date and the support
from its shareholders, the directors are confident of the Group’s ability to raise additional funds as and when they are
required.
Should the Group be unable to continue as a going concern it may be required to realise its assets and extinguish its
liabilities other than in the normal course of business and at amounts different to those stated in the financial
statements. The financial statements do not include any adjustments relating to the recoverability and classification of
asset carrying amounts or to the amount and classification of liabilities that might result should the Group be unable to
continue as a going concern and meet its debts as and when they fall due.
(g)
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.
(h)
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.
52
NOTES TO THE FINANCIAL STATEMENTSLATIN RESOURCESANNUAL REPORT 2022 The Group incurred a loss for the period of $7,265,201 (2021: $4,366,344) and net operating cash outflow of $3,088,578
(2021: $1,761,279). As at 31 December 2022, the Group's cash and cash equivalents increased to 26,276,726 (2021:
$642,784) and had a working capital surplus of $21,796,588 (2021: deficit of $230,018).
The directors have prepared a cash flow forecast, which indicates that the Consolidated Group will have sufficient cash
flows to meet all commitments and working capital requirements for the 12-month period from the date of signing this
report. The ability of the Group to continue as a going concern is principally dependent upon the ability of the Group to
secure funds by raising capital from equity markets and managing cash flow in line with available funds.
On 13 January 2023, the Company received proceeds of $110,205 from the final allotment of LRSOC listed options and
issued 40,372,690 shares. The remaining 11,413,722 listed options lapsed unexercised on 13 January 2023. (Note 27:
Events After The Reporting Period).
Based on the cash flow forecast and other factors referred to above, the Directors are satisfied that the going concern
basis of preparation is appropriate. In particular, given the Group’s history of raising capital to date and the support
from its shareholders, the directors are confident of the Group’s ability to raise additional funds as and when they are
required.
Should the Group be unable to continue as a going concern it may be required to realise its assets and extinguish its
liabilities other than in the normal course of business and at amounts different to those stated in the financial
statements. The financial statements do not include any adjustments relating to the recoverability and classification of
asset carrying amounts or to the amount and classification of liabilities that might result should the Group be unable to
continue as a going concern and meet its debts as and when they fall due.
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.
being the Board.
(h)
Revenue
Interest income
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.
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:
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.
Latin Resources Limited – Annual Report 2022
52
Latin Resources Limited – Annual Report 2022
53
(f)
Going concern
(i)
Current versus non-current classification
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.
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 realised or intended to be sold or consumed in normal operating cycle;
Held primarily for the purpose of trading;
Expected to be realised 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.
The Group classifies all other liabilities as non-current. Deferred tax assets and liabilities are classified as non-current
assets and liabilities.
(g)
Segment reporting
(j)
Income tax
Operating segments have been identified based on the information provided to the chief operating decision makers
Deferred income tax liabilities are recognised for all taxable temporary differences except:
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.
•
•
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.
53
NOTES TO THE FINANCIAL STATEMENTSLATIN RESOURCESANNUAL REPORT 2022 Latin Resources Limited – Annual Report 2022
54
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.
(k)
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.
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.
(l)
Leases
At inception of a contract, the Group assess if the contract contains or is a lease. If there is a lease present, a right of
use asset and a corresponding lease liability are recognised by the Group where the Group is a lessee. 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-line basis over the life of the lease.
Initially the lease liability is measured at the present value of the lease payments that are not paid at the commencement
date. The lease payments are discounted at the interest rate implicit in the lease. If this rate cannot be readily
determined, the Group uses the incremental borrowing rate.
Lease payments included in the measurement of the lease liability comprise the following:
•
•
•
•
•
Fixed lease payments less any lease incentives;
Variable lease payments that depend on an index or rate, initially measured using the index or rate at the
commencement date;
Amounts expected to be payable by the lessee under residual value guarantees;
The exercise price of a purchase options, if the lessee is reasonably certain to exercise the options; or
Payments of penalties for terminating the lease, if the lease term reflects the exercise of an option to terminate
the lease.
Right of use assets are depreciated over the lease term.
(m)
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 borrowing 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.
(n)
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.
54
NOTES TO THE FINANCIAL STATEMENTSLATIN RESOURCESANNUAL REPORT 2022 Latin Resources Limited – Annual Report 2022
54
Latin Resources Limited – Annual Report 2022
55
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.
(k)
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.
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.
authority.
(l)
Leases
•
•
•
•
•
•
•
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.
(o)
Cash and cash equivalents
Cash and cash equivalents include cash on hand, deposits held at call with banks, other short-term highly liquid
investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within
short-term borrowings in current liabilities in the Statement of Financial Position.
(p)
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.
(q)
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:
Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to, the taxation
Plant and equipment - over 3 to 5 years; and
•
• Motor vehicles - over 8 years
At inception of a contract, the Group assess if the contract contains or is a lease. If there is a lease present, a right of
use asset and a corresponding lease liability are recognised by the Group where the Group is a lessee. 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-line basis over the life of the lease.
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.
(r)
Exploration and evaluation expenditure
Initially the lease liability is measured at the present value of the lease payments that are not paid at the commencement
date. The lease payments are discounted at the interest rate implicit in the lease. If this rate cannot be readily
determined, the Group uses the incremental borrowing rate.
Expenditure on exploration and evaluation 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:
Lease payments included in the measurement of the lease liability comprise the following:
Fixed lease payments less any lease incentives;
Variable lease payments that depend on an index or rate, initially measured using the index or rate at the
commencement date;
Amounts expected to be payable by the lessee under residual value guarantees;
The exercise price of a purchase options, if the lessee is reasonably certain to exercise the options; or
Payments of penalties for terminating the lease, if the lease term reflects the exercise of an option to terminate
the lease.
Right of use assets are depreciated over the lease term.
(m)
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 borrowing 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.
(n)
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.
•
•
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 and 14 for details regarding the impairment charge for the reporting period.
(s)
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.
55
NOTES TO THE FINANCIAL STATEMENTSLATIN RESOURCESANNUAL REPORT 2022
Latin Resources Limited – Annual Report 2022
(t)
Deferred consideration
56
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.
(u)
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.
(v)
Financial liabilities
Initial recognition and measurement
Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through profit or loss, loans and
borrowings, payables, or as derivatives designated as hedging instruments in an effective hedge, as appropriate.
All financial liabilities are recognised initially at fair value and, in the case of loans and borrowings and payables, net of
directly attributable transaction costs.
The Group’s financial liabilities include trade and other payables, loans and borrowings including bank overdrafts, and
derivative financial instruments.
Subsequent measurement
The Group derecognises a financial liability when its contractual obligations are discharged, cancelled or expire.
Loans and borrowings
After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortised cost using the
Effective Interest Rate method (EIR). Gains and losses are recognised in profit or loss when the liabilities are
derecognised as well as through the EIR amortisation process.
Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are
an integral part of the EIR. The EIR amortisation is included as finance costs in the statement of profit or loss.
This category generally applies to interest-bearing loans and borrowings.
(w)
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.
56
NOTES TO THE FINANCIAL STATEMENTSLATIN RESOURCESANNUAL REPORT 2022 Latin Resources Limited – Annual Report 2022
(t)
Deferred consideration
is deferred.
at that date.
Deferred consideration arises when settlement of all or any part of the cost of an exploration and evaluation properties
It is stated at fair value at the date of acquisition, which is determined by discounting the amount due to present value
56
Latin Resources Limited – Annual Report 2022
57
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.
(x)
Foreign currency translation
Functional and presentation currency
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.
The consolidated financial statements are presented in Australian dollars, which is Latin Resources Limited’s functional
and presentation currency.
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.
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.
(u)
Provisions
Transactions and balances
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.
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 overseas subsidiaries within the Group is United States dollars and Brazilian Reals.
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.
The Group derecognises a financial liability when its contractual obligations are discharged, cancelled or expire.
(y)
Investment in associates
An associate is an entity over which the Group has significant influence. Significant influence is the power to participate
in the financial and operating policy decisions of the investee, but is not control over those policies.
The considerations made in determining significant influence are similar to those necessary to determine control over
subsidiaries. The Group’s investment in its associates is accounted for using the equity method. Under the equity
method, the investment in an associate is initially recognised at cost. The carrying amount of the investment is adjusted
to recognise changes in the Group’s share of net assets of the associate since the acquisition date. The statement of
profit or loss reflects the Group’s share of the results of operations of the associate.
(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.
57
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.
Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through profit or loss, loans and
borrowings, payables, or as derivatives designated as hedging instruments in an effective hedge, as appropriate.
All financial liabilities are recognised initially at fair value and, in the case of loans and borrowings and payables, net of
The Group’s financial liabilities include trade and other payables, loans and borrowings including bank overdrafts, and
(v)
Financial liabilities
Initial recognition and measurement
directly attributable transaction costs.
derivative financial instruments.
Subsequent measurement
Loans and borrowings
After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortised cost using the
Effective Interest Rate method (EIR). Gains and losses are recognised in profit or loss when the liabilities are
derecognised as well as through the EIR amortisation process.
Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are
an integral part of the EIR. The EIR amortisation is included as finance costs in the statement of profit or loss.
This category generally applies to interest-bearing loans and borrowings.
(w)
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.
NOTES TO THE FINANCIAL STATEMENTSLATIN RESOURCESANNUAL REPORT 2022 Latin Resources Limited – Annual Report 2022
58
(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.
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.
(bb)
Discontinued operation
Recognition and measurement
A discontinued operation is a component of the Group that has either been disposed of, or is held for sale, and;
•
•
•
Represents a separate major line of business or geographical area of operations;
Is part of a single coordinated plan to dispose of a separate major line of business or geographical area of
operations; or
Is a subsidiary acquired exclusively with a view to resale.
Profit or loss from discontinued operations, including prior year components of profit or loss, are presented in a single
amount in the statement of profit or loss and other comprehensive income. This amount, which comprises the post-tax
profit or loss of discontinued operations.
(cc)
Application of new and revised accounting standards
The Group has adopted all of the new, revised or amending Accounting Standards and Interpretations issued by the
Australian Accounting Standards Board (AASB) that are mandatory for the current reporting period. The adoption of
these Accounting Standards and Interpretations did not have any significant impact on the financial performance or
position of the Group during the financial year.
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.
58
NOTES TO THE FINANCIAL STATEMENTSLATIN RESOURCESANNUAL REPORT 2022 (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.
measurement as a whole:
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
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.
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.
(bb)
Discontinued operation
Recognition and measurement
•
•
•
•
•
•
•
•
Latin Resources Limited – Annual Report 2022
58
Latin Resources Limited – Annual Report 2022
59
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 2(r)).
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.
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.
A discontinued operation is a component of the Group that has either been disposed of, or is held for sale, and;
IGV/VAT recoverability
Represents a separate major line of business or geographical area of operations;
Is part of a single coordinated plan to dispose of a separate major line of business or geographical area of
operations; or
Is a subsidiary acquired exclusively with a view to resale.
Included in the Expenditure and evaluation assets (Note 14) is an amount that relates to VAT paid by the group that will
only be recovered by Peruvian subsidiary through making future sales. A portion of this amount relates to VAT
expenditure on Guadalupito Project. The Directors have confirmed that the termination of the Guadalupito project does
not impact the rights of the Group to benefit from the total VAT recoverable from future sales.
Tax impact on discontinued operation
Profit or loss from discontinued operations, including prior year components of profit or loss, are presented in a single
amount in the statement of profit or loss and other comprehensive income. This amount, which comprises the post-tax
The Group has consulted with tax consultant in regards to the gain and loss arising from the discontinued operation.
With that understanding, the Group has determined that there is no taxation impact from the discontinued operation.
profit or loss of discontinued operations.
(cc)
Application of new and revised accounting standards
The Group has adopted all of the new, revised or amending Accounting Standards and Interpretations issued by the
Australian Accounting Standards Board (AASB) that are mandatory for the current reporting period. The adoption of
these Accounting Standards and Interpretations did not have any significant impact on the financial performance or
position of the Group during the financial year.
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.
Share-based payments
The Group measures the cost of equity-settled transactions with employees by reference to the fair value of the equity
instruments at the date at which they are granted. The fair value is determined by an external valuation using a Monte
Carlo simulation model, using the assumptions detailed in Note 22 share-based payments.
59
NOTES TO THE FINANCIAL STATEMENTSLATIN RESOURCESANNUAL REPORT 2022 Latin Resources Limited – Annual Report 2022
60
4.
OPERATING SEGMENT INFORMATION
The Group has identified its operating segments in accordance with its accounting policy as set out in Note 2(g) 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.
Argentina
$
Brazil
$
Peru
$
-
2,686
2,686
-
11,048
11,048
2022
Revenue
Interest revenue
Other income
Total revenue
Result
Depreciation & amortisation expense
Share-based payments
Finance cost
Net foreign exchange gain/(loss)
Exploration and evaluation expenses
Other expenses
Gain on derecognition of payables
Revaluation (loss) on investment
Total expenses
Segment profit/(loss)
Australia
$
345,961
262,712
608,673
(102,725)
(3,232,951)
(221,372)
10,741
(178,839)
(2,176,914)
-
(1,031,960)
(6,934,020)
(3,818)
-
(125)
-
(87,473)
(31,120)
691,357
-
568,821
(276)
-
-
-
-
(1,522,133)
-
-
(1,522,409)
(6,325,347)
571,507
(1,511,361)
Total
$
345,961
276,446
622,407
(106,819)
(3,232,951)
(221,497)
10,741
(266,312)
(3,730,167)
691,357
(1,031,960)
(7,887,608)
(7,265,201)
-
-
-
-
-
-
-
-
-
-
-
-
-
Segment assets
Segment liabilities
34,764,553
(1,409,778)
3,116,947
(244,760)
3,965,113
(10,580)
14,132,763
(3,742,480)
55,979,376
(5,407,598)
Additions to non-current assets
Plant & equipment
Rights of use asset
Exploration & evaluation assets
Total additions to non-current
assets
48,681
371,570
3,075,892
6,819
-
646,086
-
-
107,612
345,440
-
12,320,037
400,940
371,570
16,149,627
3,496,143
652,905
107,612
12,665,477
16,922,137
60
NOTES TO THE FINANCIAL STATEMENTSLATIN RESOURCESANNUAL REPORT 2022 Latin Resources Limited – Annual Report 2022
60
Latin Resources Limited – Annual Report 2022
2021
Revenue
Interest revenue
Other income
Total revenue
Result
Depreciation & amortisation
expense
Finance cost
Net foreign exchange gain/(loss)
Other expenses
Share of Associate Company loss
Revaluation gain on investment
Total expenses
Segment loss
Australia
$
83
81,427
81,510
Peru
$
Argentina
$
Brazil
$
-
10,441
10,441
-
-
-
-
-
-
61
Total
$
83
91,868
91,951
(18,148)
(655,009)
7,979
(2,857,300)
(108,140)
246,033
(3,384,585)
(6,425)
(425)
(808)
(73,078)
-
-
-
-
(989,959)
-
-
(459)
-
(2,556)
-
(80,736)
(989,959)
(3,015)
(24,573)
(655,893)
7,171
(3,922,893)
(108,140)
246,033
(4,458,295)
(3,303,075)
(70,295)
(989,959)
(3,015)
(4,366,344)
Segment assets
Segment liabilities
8,096,357
(863,562)
2,500,549
(798,968)
3,680,019
(28,139)
718,037
(30,401)
14,994,963
(1,721,070)
Additions to non-current assets
Plant & equipment
Exploration & evaluation assets
Milestone consideration of
exploration assets – Cloud Nine
Project
Total additions to non-current
assets
97,814
2,898,223
-
227,910
1,347
68,352
-
121,732
99,161
3,316,217
985,875
-
-
-
985,875
3,981,912
227,910
69,699
121,732
4,401,253
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.
4.
OPERATING SEGMENT INFORMATION
The Group has identified its operating segments in accordance with its accounting policy as set out in Note 2(g) 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.
2022
Australia
Peru
Argentina
Depreciation & amortisation expense
(3,818)
(276)
Revenue
Interest revenue
Other income
Total revenue
Result
Share-based payments
Finance cost
Net foreign exchange gain/(loss)
Exploration and evaluation expenses
Other expenses
Gain on derecognition of payables
Revaluation (loss) on investment
Total expenses
Segment profit/(loss)
2,686
2,686
11,048
11,048
$
345,961
262,712
608,673
(102,725)
(3,232,951)
(221,372)
10,741
(178,839)
(2,176,914)
-
(1,031,960)
(6,934,020)
$
-
-
-
-
(125)
(87,473)
(31,120)
691,357
(1,522,133)
568,821
(1,522,409)
(6,325,347)
571,507
(1,511,361)
Brazil
$
Total
$
345,961
276,446
622,407
(106,819)
(3,232,951)
(221,497)
10,741
(266,312)
(3,730,167)
691,357
(1,031,960)
(7,887,608)
(7,265,201)
-
-
-
-
-
-
-
-
-
-
-
-
-
Segment assets
Segment liabilities
34,764,553
3,116,947
3,965,113
14,132,763
55,979,376
(1,409,778)
(244,760)
(10,580)
(3,742,480)
(5,407,598)
Additions to non-current assets
Plant & equipment
Rights of use asset
Exploration & evaluation assets
Total additions to non-current
assets
48,681
371,570
3,075,892
6,819
-
646,086
107,612
12,320,037
16,149,627
345,440
-
400,940
371,570
3,496,143
652,905
107,612
12,665,477
16,922,137
$
-
-
-
-
-
-
-
-
-
61
NOTES TO THE FINANCIAL STATEMENTSLATIN RESOURCESANNUAL REPORT 2022 Latin Resources Limited – Annual Report 2022
5.
OTHER INCOME AND LOSSES
Sundry income
Administration fees
Other
6.
(a)
EXPENSES
Employee benefits expense
Employee benefits and director fees
Employee and director share-based payments (refer note 22) 1
62
2021
$
14,632
77,235
7,171
99,038
2022
$
113,046
72,893
10,739
196,678
(1,616,960)
(1,774,386)
(3,391,346)
(830,842)
(574,067)
(1,404,909)
1 Employee share-based payments of $1,774,386 (2021: $574,067), of which the full amount was expensed during the year.
(b)
Finance expenses
Bank fees and charges
Interest expense on right of use asset
Interest expense
Share-based payment – Lind Partners2
Other finance charges
(11,373)
(8,346)
(125,127)
(1,079,894)
(76,651)
(1,301,391)
(7,305)
-
(3,216)
(652,621)
(58,931)
(722,073)
2 2022: 35,000,000 unlisted options exercisable at $0.05 on or before 31 March 2026 was issued on 8 March 2022 to Lind Asset Management XII, LLC as
part of the Option Funding Agreement (refer to ASX Announcement – 28 February 2022).
2021: 20,000,000 unlisted options exercisable at $0.03 on or before 1 December 2022 was issued on 29 January 2021 to Lind Partners New York as part
of the security funding settlement (Refer to ASX Announcement – 1 February 2021).
(c)
Other expenses
Administration expenses
Corporate expenses
Occupancy expenses
Share-based payment – corporate advisory service3
(492,417)
(1,602,466)
(18,323)
(378,673)
(2,491,879)
(267,592)
(835,121)
(33,044)
(1,316,046)
(2,451,803)
3 25,000,000 unlisted option exercisable at $0.03 on or before 12 February 2024 were issued to Euroz Hartleys on 12 February 2021 after receiving
shareholder approval on 10 February 2021. The share-based payment was amortised over 18 months in accordance with the agreement, with amount
in relation the remaining period classified as prepayment (Refer to Note 10 & 19).
(d)
Depreciation and amortisation expense
Furniture and equipment
Right of use asset
(34,572)
(72,247)
(106,819)
(24,573)
-
(24,573)
62
NOTES TO THE FINANCIAL STATEMENTSLATIN RESOURCESANNUAL REPORT 2022 Latin Resources Limited – Annual Report 2022
62
Latin Resources Limited – Annual Report 2022
5.
OTHER INCOME AND LOSSES
7.
INCOME TAXES
1 Employee share-based payments of $1,774,386 (2021: $574,067), of which the full amount was expensed during the year.
Sundry income
Administration fees
Other
EXPENSES
6.
(a)
Employee benefits expense
Employee benefits and director fees
Employee and director share-based payments (refer note 22) 1
(b)
Finance expenses
Bank fees and charges
Interest expense on right of use asset
Interest expense
Share-based payment – Lind Partners2
Other finance charges
(c)
Other expenses
Administration expenses
Corporate expenses
Occupancy expenses
Share-based payment – corporate advisory service3
(d)
Depreciation and amortisation expense
Furniture and equipment
Right of use asset
2 2022: 35,000,000 unlisted options exercisable at $0.05 on or before 31 March 2026 was issued on 8 March 2022 to Lind Asset Management XII, LLC as
part of the Option Funding Agreement (refer to ASX Announcement – 28 February 2022).
2021: 20,000,000 unlisted options exercisable at $0.03 on or before 1 December 2022 was issued on 29 January 2021 to Lind Partners New York as part
of the security funding settlement (Refer to ASX Announcement – 1 February 2021).
3 25,000,000 unlisted option exercisable at $0.03 on or before 12 February 2024 were issued to Euroz Hartleys on 12 February 2021 after receiving
shareholder approval on 10 February 2021. The share-based payment was amortised over 18 months in accordance with the agreement, with amount
in relation the remaining period classified as prepayment (Refer to Note 10 & 19).
2022
$
113,046
72,893
10,739
196,678
2021
$
14,632
77,235
7,171
99,038
(1,616,960)
(1,774,386)
(3,391,346)
(830,842)
(574,067)
(1,404,909)
(11,373)
(8,346)
(125,127)
(1,079,894)
(76,651)
(1,301,391)
(7,305)
-
(3,216)
(652,621)
(58,931)
(722,073)
(492,417)
(1,602,466)
(18,323)
(378,673)
(2,491,879)
(267,592)
(835,121)
(33,044)
(1,316,046)
(2,451,803)
(34,572)
(72,247)
(106,819)
(24,573)
-
(24,573)
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 profit/(loss) before tax
At the statutory income tax rate of 25% (26% in 2021)
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 - PLR (Peru)
Carried forward revenue losses - MFN (Brazil)
Carried forward revenue losses - MD (Peru)
Carried forward revenue losses - RL (Argentina)
Carried forward revenue losses - LDN (Argentina)
Carried forward revenue losses - BL (Brazil)
Exploration and evaluation assets
Provisions and accruals
Other
Deferred Consideration Write Back
Gross deferred tax asset
Offset against deferred tax liability
Unrecognised tax losses
Deferred tax liabilities
Exploration and evaluation assets
Plant and equipment
Carried forward revenue losses - Peru
Gross deferred tax liability
Offset against deferred tax asset
Net deferred tax liability
2022
$
-
-
-
-
(7,355,710)
(1,838,927)
90,509
1,838,927
90,509
5,850,414
-
179,797
103,579
482,641
(3,004)
(754)
4,851
32,777
475,460
-
7,125,761
-
7,125,761
-
-
-
-
-
-
63
2021
$
-
-
-
-
(4,366,344)
(1,135,249)
-
-
1,135,249
-
4,692,849
-
186,988
4,254
498,144
(22,841)
(784)
3,860
43,056
117,452
-
5,522,978
-
5,522,978
-
-
-
-
-
-
63
NOTES TO THE FINANCIAL STATEMENTSLATIN RESOURCESANNUAL REPORT 2022 Latin Resources Limited – Annual Report 2022
8.
EARNINGS/(LOSS) PER SHARE
Basic earnings/(loss) per share
Diluted earnings/(loss) per share
64
2021
Cents
(0.3)
(0.2)
$
2022
Cents
(0.4)
(0.4)
$
Loss used in calculating basic and diluted earnings/(loss) per share
(7,265,201)
(4,366,344)
Weighted average number of ordinary shares used in calculating basic
earnings/(loss) per share1
Number
Number
1,818,608,908
1,391,886,450
Weighted average number of ordinary shares used in calculating diluted
earnings/(loss) per share1
2,016,847,966
1,951,813,857
1 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 198,239,058 (2021:508,570,167) share options and 23,009,551 (2021: 14,546,071) share rights on issue which were considered dilutive
only for the current period and therefore included from the weighted average number of ordinary shares used in calculating dilutive earnings per share.
9.
CASH
(a)
Cash and short term deposits
Cash in hand
Cash at bank
2022
$
59
26,276,667
26,276,726
2021
$
306
642,478
642,784
(b)
Reconciliation of net loss after income tax to net cash flows from operating activities:
(Loss) for the year
(7,265,201)
(4,366,344)
Adjustments to reconcile loss after tax to net cash flows from operating activities:
(Gain) on sale of investments
Loss on fair value of financial assets through profit and loss
Gain on derecognition of payables
Depreciation and amortisation expenses
Options issued to corporate advisor
Accrued interest payable (receivable)
Share-based payments
Impairment of exploration expense
Net foreign exchange loss/(gain)
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
(c)
Non-cash financing and investing activities
-
1,031,960
(691,357)
106,819
1,458,564
(17,283)
1,774,387
266,311
-
(75,580)
302,002
20,800
(3,088,578)
(137,893)
-
-
24,573
1,694,719
652,621
574,067
-
1,099
(528,917)
308,053
16,743
(1,761,279)
During the year, the Group issued 8,000,000 fully paid ordinary shares to settle expenses and liabilities amounting to
$240,000. The Group issued total of 6,772,962 shares to vendors for the acquisitions of project tenements.
The Company established an Option Funding Agreement of $2,500,000 with Lind Asset Management XII, LLC during February
2022 with a 14-month term and face value of $2,750,000 The Company has fully repaid the facility during the reporting
period.
64
NOTES TO THE FINANCIAL STATEMENTSLATIN RESOURCESANNUAL REPORT 2022 Latin Resources Limited – Annual Report 2022
64
Latin Resources Limited – Annual Report 2022
8.
EARNINGS/(LOSS) PER SHARE
10.
TRADE AND OTHER RECEIVABLES
Basic earnings/(loss) per share
Diluted earnings/(loss) per share
2022
Cents
(0.4)
(0.4)
$
2021
Cents
(0.3)
(0.2)
$
Trade receivables
Other receivables
Related party receivables
Tax credits
Prepayments – other
Prepayments – corporate advisory services (Refer to Note 6c)
65
2021
$
230,394
68,498
14,735
54,116
19,297
378,673
765,713
2022
$
330,822
132,723
-
115,097
50,811
-
629,453
The Group applies a simplified approach to providing for expected credit losses prescribed by AASB 9, which permits the use
of the lifetime expected loss provision for all trade receivables. To measure the expected credit losses, trade receivables
have been grouped based on shared credit risk characteristics and the days past due. The expected credit losses also
incorporate forward-looking information.
11.
OTHER ASSETS
Security deposits and bonds
12.
INVESTMENT
(a)
Shares in listed entities
Associated Company Investment – at carrying value1
Equity share of associated company (loss) based on equity method
Profit/(loss) on investment measure at fair value
(b)
Movements in investment:
Balance at beginning of period
Additional investment
Equity share of operations (loss) of associate
Profit/(loss) on fair value of investment through Profit or Loss
Balance at end of period
116,742
82,555
1,627,323
-
(1,031,960)
595,363
1,627,323
-
-
(1,031,960)
595,363
1,489,430
(108,140)
246,033
1,627,323
924,860
564,570
(108,140)
246,033
1,627,323
1 The investment in Solis Minerals Limited formerly known as Westminster Resources Limited originated from the settlement of the sale of the Peru Ilo
copper project. At balance date the Company has a 13.14% (2021:13.14%) ownership interest. The valuation of the investment is currently measured at fair
value through Profit or Loss.
13.
PLANT AND EQUIPMENT
(a)
Furniture and equipment
At cost
Less: Accumulated depreciation
(b)
Movements in furniture and equipment
Balance at beginning of period
Additions
Depreciation expense
Effects of exchange rate movements
Balance at end of period
702,426
(236,437)
465,987
294,100
(177,638)
116,462
116,462
400,940
(34,572)
(16,841)
465,989
39,347
99,161
(24,573)
2,527
116,462
65
Loss used in calculating basic and diluted earnings/(loss) per share
(7,265,201)
(4,366,344)
Weighted average number of ordinary shares used in calculating basic
earnings/(loss) per share1
Number
Number
1,818,608,908
1,391,886,450
Weighted average number of ordinary shares used in calculating diluted
earnings/(loss) per share1
2,016,847,966
1,951,813,857
1 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 198,239,058 (2021:508,570,167) share options and 23,009,551 (2021: 14,546,071) share rights on issue which were considered dilutive
only for the current period and therefore included from the weighted average number of ordinary shares used in calculating dilutive earnings per share.
(b)
Reconciliation of net loss after income tax to net cash flows from operating activities:
(Loss) for the year
(7,265,201)
(4,366,344)
Adjustments to reconcile loss after tax to net cash flows from operating activities:
(Gain) on sale of investments
Loss on fair value of financial assets through profit and loss
9.
CASH
Cash in hand
Cash at bank
(a)
Cash and short term deposits
Gain on derecognition of payables
Depreciation and amortisation expenses
Options issued to corporate advisor
Accrued interest payable (receivable)
Share-based payments
Impairment of exploration expense
Net foreign exchange loss/(gain)
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
(c)
Non-cash financing and investing activities
2022
$
59
26,276,667
26,276,726
1,031,960
(691,357)
106,819
1,458,564
(17,283)
1,774,387
266,311
-
-
(75,580)
302,002
20,800
(3,088,578)
2021
$
306
642,478
642,784
(137,893)
-
-
-
24,573
1,694,719
652,621
574,067
1,099
(528,917)
308,053
16,743
(1,761,279)
During the year, the Group issued 8,000,000 fully paid ordinary shares to settle expenses and liabilities amounting to
$240,000. The Group issued total of 6,772,962 shares to vendors for the acquisitions of project tenements.
The Company established an Option Funding Agreement of $2,500,000 with Lind Asset Management XII, LLC during February
2022 with a 14-month term and face value of $2,750,000 The Company has fully repaid the facility during the reporting
period.
NOTES TO THE FINANCIAL STATEMENTSLATIN RESOURCESANNUAL REPORT 2022
Latin Resources Limited – Annual Report 2022
14.
EXPLORATION AND EVALUATION ASSETS
Balance at beginning of period
Additions
Milestone consideration for the Cloud Nine Project1
Acquisition of Burdett Project2
Acquisition of Peep O’Day gold prospect3
Acquisition of tenements at the Salinas Lithium Project4
Impairment of exploration and evaluation costs
Other expenses (GST/VAT movement)5
Effects of exchange rate movements
Balance at end of period
66
2021
$
7,082,034
3,254,912
985,875
376,000
-
-
-
100,164
(38,859)
11,760,126
2022
$
11,760,126
16,035,661
-
-
18,000
59,105
(266,311)
36,861
(47,662)
27,595,780
1 The Acquisition Agreement requires the Group to pay the Vendor 16.5 million fully paid ordinary shares and 4.125 million options exercisable at $0.012
on or before 31 December 2022 on a successful Kaolin/Halloysite JORC Inferred Resources of 3 million tonnes at 30% Ceramic Alumina or greater.
2 Group acquired the Burdett Project in 2020, the acquisition was previously classified under Other Assets due to the tenement only being granted in 2021.
3 Group exercised option agreement over the Peep O’Day gold prospect on 8 July 2022, the company issued the 6,000,000 shares to the Vendor following
the grant of the Peep O’Day tenement.
4 The company issued 772,962 shares as part of considerations for exercise of option to acquire tenements at the Company’s Salinas Lithium Project in
Brazil.
5 The goods and services tax/value added tax (GST/VAT) refers to a receivable by the company’s subsidiary in Peru and Argentina which can only be offset
against GST/VAT attributable to future sales.
15.
TRADE AND OTHER PAYABLES
Trade payables
Other payables
Accruals
Trade payables are generally 30 days term from end of month of supply.
4,199,091
798,852
30,000
5,027,943
1,396,645
173,516
90,255
1,660,416
16.
(a)
LEASE
) Right of use asset
Balance at beginning of period
Additions
Accumulated depreciation
Balance at end of period
(b)
(b) Lease liability
Balance at beginning of period
Additions
Interest amortisation
Repayment of liability
Balance at end of period
Current
Non-current
-
371,570
(72,247)
299,323
-
371,570
(8,346)
(60,308)
302,916
121,651
181,265
-
-
-
-
-
-
-
-
-
-
-
During the period, the Company entered an office lease with a three-year term commencing 1 June 2022.
The Company recognised the lease as a right of use asset and a corresponding liability at the date which the leased premise
is available for use by the Company. The right of use asset reflects the lease liability and is depreciated over the term of
the lease. The lease liability was measured at the present value basis, discounting using borrowing rate from RBA as of 31
May 2022 of 4.18%.
Lease payments are allocated between principal and finance cost. The finance cost is charged to Consolidated Statement
of Profit or Loss and Other Comprehensive income over the lease period.
66
NOTES TO THE FINANCIAL STATEMENTSLATIN RESOURCESANNUAL REPORT 2022 Latin Resources Limited – Annual Report 2022
66
Latin Resources Limited – Annual Report 2022
14.
EXPLORATION AND EVALUATION ASSETS
17.
PROVISIONS
Employee benefits – Leave entitlements
18.
(a)
CONTRIBUTED EQUITY
Issued capital
Issued shares
(b)
Movements in issued capital
Issued shares
Balance 1 January 2022
Placement
Listed options conversion
Unlisted options conversion
Shares issued in lieu of fees to consultant
Vesting and conversion of Directors incentive rights
Vesting and conversion of Directors deferred rights
Vesting and conversion of Employee share rights
Share issued for acquisition of Peep O’Day tenement
Share issued for acquisition of tenements at Salinas Lithium Projects
Costs of issue
Balance 31 December 2022
Balance 1 January 2021
Options conversion
Shares issued in lieu of fees to consultant
Vesting and conversion of incentive rights
Vesting and conversion of deferred rights
Director participation in Placement
Shares issued to employees and contractors
Milestone consideration to the Vendor of Electric Metals
Costs of issue
Balance 31 December 2021
Balance at beginning of period
Additions
Milestone consideration for the Cloud Nine Project1
Acquisition of Burdett Project2
Acquisition of Peep O’Day gold prospect3
Acquisition of tenements at the Salinas Lithium Project4
Impairment of exploration and evaluation costs
Other expenses (GST/VAT movement)5
Effects of exchange rate movements
Balance at end of period
1 The Acquisition Agreement requires the Group to pay the Vendor 16.5 million fully paid ordinary shares and 4.125 million options exercisable at $0.012
on or before 31 December 2022 on a successful Kaolin/Halloysite JORC Inferred Resources of 3 million tonnes at 30% Ceramic Alumina or greater.
2 Group acquired the Burdett Project in 2020, the acquisition was previously classified under Other Assets due to the tenement only being granted in 2021.
3 Group exercised option agreement over the Peep O’Day gold prospect on 8 July 2022, the company issued the 6,000,000 shares to the Vendor following
4 The company issued 772,962 shares as part of considerations for exercise of option to acquire tenements at the Company’s Salinas Lithium Project in
5 The goods and services tax/value added tax (GST/VAT) refers to a receivable by the company’s subsidiary in Peru and Argentina which can only be offset
the grant of the Peep O’Day tenement.
Brazil.
against GST/VAT attributable to future sales.
15.
TRADE AND OTHER PAYABLES
Trade payables
Other payables
Accruals
Trade payables are generally 30 days term from end of month of supply.
2022
$
11,760,126
16,035,661
-
-
18,000
59,105
(266,311)
36,861
(47,662)
27,595,780
2021
$
7,082,034
3,254,912
985,875
376,000
-
-
-
100,164
(38,859)
11,760,126
4,199,091
798,852
30,000
5,027,943
1,396,645
173,516
90,255
1,660,416
-
371,570
(72,247)
299,323
-
371,570
(8,346)
(60,308)
302,916
121,651
181,265
-
-
-
-
-
-
-
-
-
-
-
LEASE
16.
(a)
) Right of use asset
Balance at beginning of period
Additions
Accumulated depreciation
Balance at end of period
(b)
(b) Lease liability
Balance at beginning of period
Additions
Interest amortisation
Repayment of liability
Balance at end of period
Current
Non-current
During the period, the Company entered an office lease with a three-year term commencing 1 June 2022.
The Company recognised the lease as a right of use asset and a corresponding liability at the date which the leased premise
is available for use by the Company. The right of use asset reflects the lease liability and is depreciated over the term of
the lease. The lease liability was measured at the present value basis, discounting using borrowing rate from RBA as of 31
May 2022 of 4.18%.
Lease payments are allocated between principal and finance cost. The finance cost is charged to Consolidated Statement
of Profit or Loss and Other Comprehensive income over the lease period.
67
2021
$
60,654
2022
$
76,739
101,598,432
59,835,942
Number
$
1,422,776,263
218,750,000
397,119,704
72,166,667
8,000,000
13,450,629
5,777,902
3,500,000
6,000,000
772,962
-
2,148,314,127
1,194,910,311
190,203,214
4,450,000
10,500,498
4,045,573
666,667
1,500,000
16,500,000
-
1,422,776,263
59,835,942
35,000,000
4,765,436
3,201,667
240,000
1,072,305
492,676
350,000
18,000
59,105
(1,871,718)
103,163,413
56,467,554
2,282,439
200,000
-
-
20,000
68,516
825,000
(27,567)
59,835,942
67
NOTES TO THE FINANCIAL STATEMENTSLATIN RESOURCESANNUAL REPORT 2022 Latin Resources Limited – Annual Report 2022
19.
RESERVES
(a)
Foreign currency translation reserve
Balance at beginning of year
Foreign currency translations
Balance at the end of the year
68
2021
$
5,408,672
(38,908)
5,369,764
2022
$
5,369,764
(507,048)
4,862,716
Nature and purpose of 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.
(b)
Share-based payments reserve
Balance at the beginning of year
Capital raising costs – issue of broker options1
Share-based payment – Lind Partners2
Share-based payment – corporate advisory service3
Share-based payments – share rights to directors4,5,6
Share-based payments – share rights to employees and consultants6
Share rights vested and converted to shares7
Project acquisition /milestone consideration
Balance at the end of the year
2022
$
9,786,771
310,581
1,079,894
-
1,216,569
557,816
(1,914,981)
-
11,036,650
2021
$
6,753,489
-
652,621
1,694,719
525,067
-
-
160,875
9,786,771
Total reserves
15,899,366
15,156,535
1 The Company has issued 3,580,262 unlisted options to the Lead Managers and Co-Manager in connection with the Placement. (Refer to ASX
Announcement – 14 April 2022). The share-based payment was fully expensed as part of share issue costs during the period.
2 2022: 35,000,000 unlisted Options exercisable at $0.05 on or before 31 March 2026 was issued on 8 March 2022 to Lind Asset Management XII LLC as
part of the Option Funding Agreement (refer to ASX Announcement – 28 February 2022). The share-based payment was fully expensed during the
period.
2021: The unlisted options exercisable at $0.03 on or before 1 December 2022 was issued on 29 January 2021 to Lind Partners New York as part of the
security funding settlement (Refer to ASX Announcement – 1 February 2021).
3 The terms and conditions of the options has been disclosed in the Notice of Meeting for the shareholder meeting held on 10 February 2021 and the
issue was approved by shareholders at the meeting.
4 The terms and conditions of the options has been disclosed in the Notice of Meeting for the shareholder meeting held on 10 February 2021 and the
issue was approved by shareholders at the meeting.
5 At the Annual General Meeting held on 30 May 2022, shareholders approved 1,104,545 deferred rights to Mr Vilensky, 852,273 deferred rights to Mr
Brent and 852,273 deferred rights to Mr Tarantini and 1,856,250 retention rights, together with 3,768,750 performance rights to Mr Gale. These rights
were vested and converted into shares on 15 July 2022.
6 At the General Meeting held on 19 December 2022, shareholders approved 12,000,000 incentive rights to Mr Oliver.
7 At the General Meeting held on 19 December 2022, shareholders also approved the employee share rights plan. Various tranches have since vested
and converted into ordinary shares upon achievement of milestones.
Nature and purpose of 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.
68
NOTES TO THE FINANCIAL STATEMENTSLATIN RESOURCESANNUAL REPORT 2022
Latin Resources Limited – Annual Report 2022
68
Latin Resources Limited – Annual Report 2022
Option outstanding (includes share-based payment options and non-share-based payment options)
Quoted options
Unquoted options
exercisable at $0.012 per share expiring 31 December 2022
exercisable at $0.03 per share expiring 12 February 2024
exercisable at $0.05 per share expiring 31 March 2026
exercisable at $0.22 per share expiring 27 April 2027
exercisable at $0.22 per share expiring 27 April 2027
exercisable at $0.22 per share expiring 27 April 2027
Nature and purpose of foreign currency translation reserve
The foreign currency translation reserve is used to record exchange differences arising from the translation of the financial
19.
RESERVES
(a)
Foreign currency translation reserve
Balance at beginning of year
Foreign currency translations
Balance at the end of the year
statements of foreign subsidiaries.
(b)
Share-based payments reserve
Balance at the beginning of year
Capital raising costs – issue of broker options1
Share-based payment – Lind Partners2
Share-based payment – corporate advisory service3
Share-based payments – share rights to directors4,5,6
Share-based payments – share rights to employees and consultants6
Share rights vested and converted to shares7
Project acquisition /milestone consideration
Balance at the end of the year
2022
$
5,369,764
(507,048)
4,862,716
2022
$
9,786,771
310,581
1,079,894
-
-
1,216,569
557,816
(1,914,981)
11,036,650
2021
$
5,408,672
(38,908)
5,369,764
2021
6,753,489
652,621
1,694,719
525,067
$
-
-
-
160,875
9,786,771
Total reserves
15,899,366
15,156,535
1 The Company has issued 3,580,262 unlisted options to the Lead Managers and Co-Manager in connection with the Placement. (Refer to ASX
Announcement – 14 April 2022). The share-based payment was fully expensed as part of share issue costs during the period.
2 2022: 35,000,000 unlisted Options exercisable at $0.05 on or before 31 March 2026 was issued on 8 March 2022 to Lind Asset Management XII LLC as
part of the Option Funding Agreement (refer to ASX Announcement – 28 February 2022). The share-based payment was fully expensed during the
period.
2021: The unlisted options exercisable at $0.03 on or before 1 December 2022 was issued on 29 January 2021 to Lind Partners New York as part of the
security funding settlement (Refer to ASX Announcement – 1 February 2021).
3 The terms and conditions of the options has been disclosed in the Notice of Meeting for the shareholder meeting held on 10 February 2021 and the
issue was approved by shareholders at the meeting.
issue was approved by shareholders at the meeting.
4 The terms and conditions of the options has been disclosed in the Notice of Meeting for the shareholder meeting held on 10 February 2021 and the
5 At the Annual General Meeting held on 30 May 2022, shareholders approved 1,104,545 deferred rights to Mr Vilensky, 852,273 deferred rights to Mr
Brent and 852,273 deferred rights to Mr Tarantini and 1,856,250 retention rights, together with 3,768,750 performance rights to Mr Gale. These rights
were vested and converted into shares on 15 July 2022.
6 At the General Meeting held on 19 December 2022, shareholders approved 12,000,000 incentive rights to Mr Oliver.
and converted into ordinary shares upon achievement of milestones.
Nature and purpose of 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.
Balance at 1 January 2022
Issued during the year – unquoted
Issued during the year – unquoted
Issued during the year – unquoted2
Issued during the year – unquoted1
Listed options exercised
Unlisted options exercised
Balance at 31 December 2022
20.
ACCUMULATED LOSSES
Balance at the beginning of the year
(Loss) after income tax
Balance at the end of the year
21.
NON-CONTROLLING INTEREST
Balance at the beginning of the year
Issue of Equity in Subsidiary
Loss for the period
Effect of exchange rate movements
7 At the General Meeting held on 19 December 2022, shareholders also approved the employee share rights plan. Various tranches have since vested
22.
SHARE-BASED PAYMENTS
Share-based payment transactions to employees and directors
Employee and consultant share benefits payments
Performance rights issued to Directors
Retention rights issued to Director
Deferred rights issued to Director
Number of options
508,570,167
109,375,000
11,000,000
35,000,000
3,580,262
(397,119,704)
(72,166,667)
198,239,058
2022
$
(61,954,778)
(7,240,972)
(69,195,750)
2021
$
(57,599,351)
(4,355,427)
(61,954,778)
236,194
492,784
(24,229)
-
704,749
557,816
533,767
280,597
402,206
1,774,386
-
247,111
(10,917)
-
236,194
49,000
232,490
134,256
158,321
574,067
69
51,783,796
12,500,000
10,000,000
109,375,000
3,580,262
11,000,000
198,239,058
Weighted average
exercise price
$0.012
$0.22
$0.22
$0.05
$0.22
$0.012
$0.041
$0.1014
Employees, consultants, and directors share-based payments benefits totalled $1,774,386 (2021: $574,067), of which the
full amount was expensed during the year.
69
NOTES TO THE FINANCIAL STATEMENTSLATIN RESOURCESANNUAL REPORT 2022
Latin Resources Limited – Annual Report 2022
70
Details of the employees and consultants issued share rights during the reporting period are as follows:
Grant date
23 December 2022
23 December 2022
23 December 2022
23 December 2022
23 December 2022
23 December 2022
Fair value per share rights
$0.1000
$0.1000
$0.1000
$0.1000
$0.1000
$0.1000
Measurement date
of share rights
31 December 20223
31 December 20233
23 December 20273
23 December 20273
23 December 20273
23 December 20273
Vesting conditions
Market/Non-market
non-market
non-market
non-market
non-market
non-market
non-market
The vesting of the employee and consultants share rights is conditional on non-market based performance conditions.
These performance conditions are key objectives specific to each employee and consultant.
Details of the Directors’ issued share rights during the reporting period are as follows:
Grant date
10 February 2021
10 February 2021
10 February 2021
10 February 2021
10 February 2021
10 February 2021
30 May 2022
30 May 2022
23 December 2022
23 December 2022
23 December 2022
23 December 2022
23 December 2022
23 December 2022
Fair value per share rights
$0.0550
$0.0550
$0.0550
$0.0550
$0.0531
$0.0517
$0.1150
$0.1149
$0.1150
$0.1150
$0.0694
$0.0607
$0.0572
$0.0514
Measurement date
of share rights
31 December 20201
31 December 20211
31 December 20221
31 December 20201
31 December 20211
31 December 20221
1 July 20222
1 July 20222
29 September 20233
29 September 20243
23 December 20273
23 December 20273
23 December 20273
23 December 20273
Vesting conditions
Market/Non-market
non-market
non-market
non-market
market
market
market
non-market
market
non-market
non-market
market
market
market
market
Director share rights in existence during the year ended 31 December 2022 (and prior comparative year) were approved
for granting at Annual General Meeting held on 10 February 2021, 30 May 2022 and General Meeting held on 19 December
2022.
1 At the Annual General Meeting held on 10 February 2021, shareholder approved the granting of a total 36,698,507 share rights to Directors. The market-
based share rights were value based on Hoadley’s Hybrid ESO model using the following assumptions:
•
$0.055 share price at grant date,
•
•
•
0-1.89 year measurement period,
0.09% risk-free interest rate,
195.50%-205.20% volatility.
The $0.055 per non-market share rights were valued based on share price at grant date.
Nil share rights remain outstanding at the date of report.
2 At the Annual General Meeting on 30 May 2022, shareholder approved the granting of 8,434,091 share rights to Directors. The market-based share
rights were value based on Hoadley’s Hybrid ESO model using the following assumptions:
•
$0.1150 share price at grant date,
•
•
•
0-0.088 year measurement period,
0.52% risk-free interest rate,
109.40% volatility.
The $0.1150 per non-market share rights were valued based on share price at grant date.
There were 11,009,552 share rights outstanding as at 31 December 2022. Nil share rights remain outstanding at the date of report.
3 At the General Meeting on 19 December 2022, shareholder approved the granting of 19,500,000 share rights to Directors. The market-based share rights
were value based on Hoadley’s Hybrid ESO model using the following assumptions:
•
$0.1150 share price at grant date,
•
•
•
5 years measurement period,
3.52% risk-free interest rate,
81.50% volatility.
The $0.1150 per non-market share rights were valued based on share price at grant date.
There were 19,500,000 share rights outstanding as at 31 December 2022.
70
NOTES TO THE FINANCIAL STATEMENTSLATIN RESOURCESANNUAL REPORT 2022 Latin Resources Limited – Annual Report 2022
70
Latin Resources Limited – Annual Report 2022
71
Details of the employees and consultants issued share rights during the reporting period are as follows:
Grant date
Fair value per share rights
of share rights
23 December 2022
23 December 2022
23 December 2022
23 December 2022
23 December 2022
23 December 2022
$0.1000
$0.1000
$0.1000
$0.1000
$0.1000
$0.1000
Measurement date
31 December 20223
31 December 20233
23 December 20273
23 December 20273
23 December 20273
23 December 20273
Vesting conditions
Market/Non-market
non-market
non-market
non-market
non-market
non-market
non-market
The vesting of the employee and consultants share rights is conditional on non-market based performance conditions.
These performance conditions are key objectives specific to each employee and consultant.
Details of the Directors’ issued share rights during the reporting period are as follows:
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.
Grant date
Fair value per share rights
Vesting conditions
Market/Non-market
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.
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.
SHARES ISSUED AS SHARE-BASED PAYMENTS
Loan funded shares
At the Annual General Meeting held 28 May 2018, shareholders approved the adoption of the Latin Resources Limited Loan
Funded Share Plan and also approved the issue of 100,000,000 loan funded shares to directors. The loan funded shares
were initially issued at 1.1 cents per share. The loans are interest free and with limited recourse to the participant and are
unquoted shares until the loan has been paid. The Plan requires the loan to be repaid before the participant can sell their
shares. As at 31 December 2019, after the 1:25 share consolidation, the balance of the loan funded shares to directors is
4,000,000 at 27.5 cents per share.
71
Measurement date
of share rights
31 December 20201
31 December 20211
31 December 20221
31 December 20201
31 December 20211
31 December 20221
1 July 20222
1 July 20222
29 September 20233
29 September 20243
23 December 20273
23 December 20273
23 December 20273
23 December 20273
non-market
non-market
non-market
market
market
market
non-market
market
non-market
non-market
market
market
market
market
10 February 2021
10 February 2021
10 February 2021
10 February 2021
10 February 2021
10 February 2021
30 May 2022
30 May 2022
23 December 2022
23 December 2022
23 December 2022
23 December 2022
23 December 2022
23 December 2022
2022.
$0.0550
$0.0550
$0.0550
$0.0550
$0.0531
$0.0517
$0.1150
$0.1149
$0.1150
$0.1150
$0.0694
$0.0607
$0.0572
$0.0514
•
•
•
•
•
•
•
•
•
•
•
•
$0.055 share price at grant date,
0-1.89 year measurement period,
0.09% risk-free interest rate,
195.50%-205.20% volatility.
$0.1150 share price at grant date,
0-0.088 year measurement period,
0.52% risk-free interest rate,
109.40% volatility.
$0.1150 share price at grant date,
5 years measurement period,
3.52% risk-free interest rate,
81.50% volatility.
Director share rights in existence during the year ended 31 December 2022 (and prior comparative year) were approved
for granting at Annual General Meeting held on 10 February 2021, 30 May 2022 and General Meeting held on 19 December
1 At the Annual General Meeting held on 10 February 2021, shareholder approved the granting of a total 36,698,507 share rights to Directors. The market-
based share rights were value based on Hoadley’s Hybrid ESO model using the following assumptions:
The $0.055 per non-market share rights were valued based on share price at grant date.
Nil share rights remain outstanding at the date of report.
2 At the Annual General Meeting on 30 May 2022, shareholder approved the granting of 8,434,091 share rights to Directors. The market-based share
rights were value based on Hoadley’s Hybrid ESO model using the following assumptions:
The $0.1150 per non-market share rights were valued based on share price at grant date.
There were 11,009,552 share rights outstanding as at 31 December 2022. Nil share rights remain outstanding at the date of report.
3 At the General Meeting on 19 December 2022, shareholder approved the granting of 19,500,000 share rights to Directors. The market-based share rights
were value based on Hoadley’s Hybrid ESO model using the following assumptions:
The $0.1150 per non-market share rights were valued based on share price at grant date.
There were 19,500,000 share rights outstanding as at 31 December 2022.
NOTES TO THE FINANCIAL STATEMENTSLATIN RESOURCESANNUAL REPORT 2022 Latin Resources Limited – Annual Report 2022
72
OPTIONS
Valuation of Options to Brokers
2022
35,000,000 unlisted options exercisable at $0.05 on or before 31 March 2026 were issued on 8 March 2022 to Lind Asset
Management XII, LLC as part of the Option Funding Agreement (refer to ASX Announcement – 28 February 2022). The
share-based payment was fully expensed during the period.1
The Company has issued 3,580,262 LRSAY options to the Lead Managers and Co-Manager in connection with the
Placement. (Refer to ASX Announcement – 14 April 2022). The share-based payment was fully expensed as part of share
issue costs during the period.2
Input variables
Grant date share/option price
Exercise price
Expected volatility
Risk-free interest rate
Option life
Grant date
Expiry date
Fair value at grant date
2021
31 December 20221
$0.04
$0.05
135%
2.19%
4.1 Years
8 March 2022
31 March 2026
$0.03
31 December 20222
$0.11
$0.22
135%
3.04%
5 Years
16 May 2022
27 April 2027
$0.09
4,125,000 listed LRSOC options were issued to Milestone securities for the acquisition of Electric Metals upon achievement
of milestone in June 2021.3
20,000,000 unlisted options were issued to Lind pursuant to the Deed of Settlement and Release relating to the settlement
of the outstanding debt in January 2021.4
25,000,000 unlisted options were issued to Euroz Hartleys Limited for the provision of corporate advisory services that
support the Company’s exploration activities in February 2021.5
Input variables
Grant date share/option price
Exercise price
Expected volatility
Risk-free interest rate
Option life
Grant date
Expiry date
Fair value at grant date
23.
RELATED PARTY DISCLOSURES
31 Dec 20213
$0.04
$0.01
-%
-%
1.5 Years
25-Jun-21
31-Dec-22
$0.04
31 Dec 20214
$0.05
$0.03
135%
0.08%
1.8 Years
28-Jan-21
1-Dec-22
$0.03
31 Dec 20215
$0.08
$0.03
135%
0.10%
3 Years
15-Feb-21
12-Feb-24
$0.07
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)
Transactions with related parties
2022
$
1,348,563
40,074
1,520,478
2,909,115
2021
$
801,014
25,337
525,067
1,351,418
Bowen Buchbinder Vilensky, a legal firm associated with Mr Vilensky, charged fees totalling $54,353 excluding GST for the
year ended 31 December 2022 in relation to legal fees.
72
NOTES TO THE FINANCIAL STATEMENTSLATIN RESOURCESANNUAL REPORT 2022 35,000,000 unlisted options exercisable at $0.05 on or before 31 March 2026 were issued on 8 March 2022 to Lind Asset
Management XII, LLC as part of the Option Funding Agreement (refer to ASX Announcement – 28 February 2022). The
share-based payment was fully expensed during the period.1
The Company has issued 3,580,262 LRSAY options to the Lead Managers and Co-Manager in connection with the
Placement. (Refer to ASX Announcement – 14 April 2022). The share-based payment was fully expensed as part of share
4,125,000 listed LRSOC options were issued to Milestone securities for the acquisition of Electric Metals upon achievement
20,000,000 unlisted options were issued to Lind pursuant to the Deed of Settlement and Release relating to the settlement
of the outstanding debt in January 2021.4
31 December 20221
31 December 20222
$0.04
$0.05
135%
2.19%
4.1 Years
8 March 2022
31 March 2026
$0.03
$0.11
$0.22
135%
3.04%
5 Years
16 May 2022
27 April 2027
$0.09
$0.04
$0.01
-%
-%
1.5 Years
25-Jun-21
31-Dec-22
$0.04
$0.05
$0.03
135%
0.08%
1.8 Years
28-Jan-21
1-Dec-22
$0.03
$0.08
$0.03
135%
0.10%
3 Years
15-Feb-21
12-Feb-24
$0.07
Valuation of Options to Brokers
OPTIONS
2022
issue costs during the period.2
Input variables
Grant date share/option price
Exercise price
Expected volatility
Risk-free interest rate
Option life
Grant date
Expiry date
Fair value at grant date
2021
of milestone in June 2021.3
Input variables
Grant date share/option price
Exercise price
Expected volatility
Risk-free interest rate
Option life
Grant date
Expiry date
Fair value at grant date
23.
RELATED PARTY DISCLOSURES
in the Remuneration report.
Short term employee benefits
Post-employment benefits
Share-based payments
(b)
Transactions with related parties
Information regarding individual directors’ and executives’ compensation and equity instrument disclosures are disclosed
(a)
Compensation of directors and other key management personnel
2022
$
1,348,563
40,074
1,520,478
2,909,115
2021
$
801,014
25,337
525,067
1,351,418
Bowen Buchbinder Vilensky, a legal firm associated with Mr Vilensky, charged fees totalling $54,353 excluding GST for the
year ended 31 December 2022 in relation to legal fees.
Latin Resources Limited – Annual Report 2022
72
Latin Resources Limited – Annual Report 2022
73
Oar Resource Limited, a listed company with Mr Gale and Mr Vilensky as Directors, was invoiced $174,606 excluding GST
for the shared administration and technical services provided by Latin Resources’ facilities and staff during the year ended
31 December 2022.
(c)
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 SAC
Minera Dylan SAC
Mineracao Ferro Nordeste Ltda
Recursos Latinos S.A.
Electric Metals Pty Ltd
Belo Lithium Mineracao Ltda
Litios del Norte S.A.
Country of
incorporation
Peru
Peru
Brazil
Argentina
Australia
Brazil
Argentina
2022
%
100
100
100
100
100
100
50
Equity holding
2021
%
100
100
100
100
100
100
88
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
Dylan SAC is 50% each owned by the Company and PLR.
The Company has advanced funds to Recursos Latinos S.A., PLR, Belo Lithium Mineracao Ltda and MFN which at the date
of this report do not attract interest and are not subject to a repayment schedule.
Litios del Norte S.A. has been incorporated as a wholly owned subsidiary which held the Group’s Catamarca lithium
pegmatite projects with Argentinian investment group Integra Capital S.A. subscribing for additional shares as joint venture
partner. At balance date the company has a 50% (2021: 88%) direct shareholding in the capital of Litios del Norte S.A.
25,000,000 unlisted options were issued to Euroz Hartleys Limited for the provision of corporate advisory services that
support the Company’s exploration activities in February 2021.5
(d)
Ultimate parent company
31 Dec 20213
31 Dec 20214
31 Dec 20215
Latin Resources Limited is the ultimate parent of the Group.
24.
COMMITMENTS
Exploration Commitments:
Not later than one year
Later than one year but not later than five years
Later than five years
Expenditure Commitments:
Not later than one year
Later than one year but not later than five years
Later than five years
2022
$
757,667
2,939,333
-
3,697,000
1,051,232
1,053,480
-
2,104,712
2021
$
682,500
2,784,500
-
3,467,000
796,002
2,381,212
-
3,177,214
73
NOTES TO THE FINANCIAL STATEMENTSLATIN RESOURCESANNUAL REPORT 2022 Latin Resources Limited – Annual Report 2022
74
25.
CONTINGENCIES
The Group has no contingent assets or contingent liabilities.
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 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 2022, 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
Financial liabilities
Trade and other payables
Provisions
2022
$
2,338,251
2,085,889
4,424,140
(3,991,789)
(20,365)
(4,012,154)
2021
$
124,984
1,931,965
2,056,949
(847,936)
(8,086)
(856,022)
Net exposure
411,986
1,200,927
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 2022.
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 2022
AUD/USD +10%
AUD/USD -10%
31 December 2021
AUD/USD +10%
AUD/USD -10%
Effect on loss before tax
$
Effect on equity
$
41,199
(41,199)
120,093
(120,093)
41,199
(41,199)
120,093
(120,093)
The movement in pre-tax profit is a result of changes to the fair value of monetary assets and liabilities denominated in
USD.
74
NOTES TO THE FINANCIAL STATEMENTSLATIN RESOURCESANNUAL REPORT 2022 Latin Resources Limited – Annual Report 2022
74
Latin Resources Limited – Annual Report 2022
75
25.
CONTINGENCIES
The Group has no contingent assets or contingent liabilities.
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 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 2022, the Group had the following exposure to USD that is not designated in cash flow hedges:
2022
$
2,338,251
2,085,889
4,424,140
(3,991,789)
(20,365)
(4,012,154)
2021
$
124,984
1,931,965
2,056,949
(847,936)
(8,086)
(856,022)
Financial assets
Cash and cash equivalents
Trade and other receivables
Financial liabilities
Trade and other payables
Provisions
31 December 2022
AUD/USD +10%
AUD/USD -10%
31 December 2021
AUD/USD +10%
AUD/USD -10%
USD.
Net exposure
411,986
1,200,927
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 2022.
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.
Effect on loss before tax
Effect on equity
$
41,199
(41,199)
120,093
(120,093)
$
41,199
(41,199)
120,093
(120,093)
(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 2022 the Group had the following exposure to Australian variable interest rate risk.
Financial assets
Cash and cash equivalents
2022
$
2021
$
25,095,071
517,494
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 investment in associates (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 2022
Trade and other payables
Lease liabilities
Interest bearing liabilities
31 December 2021
Trade and other payables
Interest bearing liabilities
Deferred consideration
(c)
Price risk
Less than
1 month
$
5,027,943
9,945
-
5,037,888
Less than
1 month
$
1,660,415
-
-
1,660,415
1-3
months
$
-
29,731
-
29,731
1-3
months
$
-
-
-
-
3-12
months
$
-
81,975
-
81,975
3-12
months
$
-
-
-
-
1-5
years
$
-
181,265
-
181,265
1-5
years
$
-
-
-
-
5+
years
$
-
-
-
-
5+
years
$
-
-
-
-
Total
$
5,027,943
302,916
-
5,330,859
Total
$
1,660,415
-
-
1,660,415
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 movement in pre-tax profit is a result of changes to the fair value of monetary assets and liabilities denominated in
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.
75
NOTES TO THE FINANCIAL STATEMENTSLATIN RESOURCESANNUAL REPORT 2022 Latin Resources Limited – Annual Report 2022
76
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 2022 the Group is not subject to any external capital requirements.
(e)
Net fair values
The net fair value of cash and cash equivalents and non-interest bearing monetary financial assets and liabilities
approximates their carrying value.
The net fair value of financial assets and financial liabilities is based upon market prices at which an asset could be
exchanged, or a liability settled, between knowledgeable, willing parties in arm’s length transaction or by discounting the
expected future cash flows by the current interest rates for assets and liabilities with similar risk profiles.
Listed equity investment has been valued by reference to market price prevailing at balance date.
27.
EVENTS AFTER THE REPORTING PERIOD
13 January 2023, the Company received proceeds of $110,205 from the final allotment of LRSOC listed options and issued
40,372,690 shares. The remaining 11,413,722 listed options lapsed unexercised on 13 January 2023.
On 13 January 2023, the Company issued 10,970,717 shares (issued on vesting of Deferred Rights and Incentive Rights),
and 2,000,000 shares (issued on the vesting of performance incentive rights).
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
Under provision for prior year audit
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
2022
$
33,500
-
-
-
33,500
-
33,500
2021
$
45,400
-
-
-
45,400
-
45,400
76
NOTES TO THE FINANCIAL STATEMENTSLATIN RESOURCESANNUAL REPORT 2022 Latin Resources Limited – Annual Report 2022
76
Latin Resources Limited – Annual Report 2022
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
29.
PARENT ENTITY INFORMATION
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.
(a)
Financial position
Assets
Current assets
Non-current assets
Total assets
Liabilities
Current liabilities
Non-current liabilities
Total liabilities
Net assets
Equity
Contributed equity
Reserves
Accumulated losses
Total equity
77
2021
$
1,161,813
12,954,883
14,116,696
842,803
-
842,803
13,273,893
59,715,942
8,552,373
(54,994,422)
13,273,893
2022
$
25,603,542
27,323,846
52,927,388
1,228,516
181,265
1,409,781
51,517,607
103,163,413
11,036,650
(62,682,456)
51,517,607
(b)
Financial performance
(Loss)/Profit of the parent entity
Total comprehensive profit/(loss) of the parent entity
(7,688,035)
(7,688,035)
(4,156,241)
(4,156,241)
30.
IMPACT OF COVID-19
The Group has exploration projects in Latin America (Peru, Argentina and Brazil) where the region had previously been
badly affected by COVID-19. Despite the situation, the Group has managed to undertake ground exploration in some areas
during the period and made the assessment that there has been no significant impact on the performance or financial
position of the Group as at 31 December 2022 due to COVID-19.
As at 31 December 2022 the Group is not subject to any external capital requirements.
(e)
Net fair values
approximates their carrying value.
The net fair value of cash and cash equivalents and non-interest bearing monetary financial assets and liabilities
The net fair value of financial assets and financial liabilities is based upon market prices at which an asset could be
exchanged, or a liability settled, between knowledgeable, willing parties in arm’s length transaction or by discounting the
expected future cash flows by the current interest rates for assets and liabilities with similar risk profiles.
Listed equity investment has been valued by reference to market price prevailing at balance date.
27.
EVENTS AFTER THE REPORTING PERIOD
13 January 2023, the Company received proceeds of $110,205 from the final allotment of LRSOC listed options and issued
40,372,690 shares. The remaining 11,413,722 listed options lapsed unexercised on 13 January 2023.
On 13 January 2023, the Company issued 10,970,717 shares (issued on vesting of Deferred Rights and Incentive Rights),
and 2,000,000 shares (issued on the vesting of performance incentive rights).
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
Under provision for prior year audit
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
2022
$
33,500
-
-
-
-
2021
$
45,400
-
-
-
-
33,500
45,400
33,500
45,400
77
NOTES TO THE FINANCIAL STATEMENTSLATIN RESOURCESANNUAL REPORT 2022 DIRECTORS' DECLARATION
Latin Resources Limited – Annual Report 2022
Directors’ Declaration
78
In accordance with a resolution of the directors of Latin Resources Limited, I state that:
1.
In the opinion of the directors:
a)
b)
c)
The financial statements and notes of Latin Resources Limited for the financial year ended 31
December 2022 are in accordance with the Corporations Act 2001, including:
i)
ii)
giving a true and fair view of the consolidated entity’s financial position as at 31 December
2022 and of its performance for the year ended on that date; and
complying with Accounting Standards and the Corporations Regulations 2001;
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
executive director and chief financial officer in accordance with section 295A of the Corporations Act 2001 for
the financial year ended 31 December 2022.
On behalf of the Directors
David Vilensky
Chairman
Signed on 31 March 2023
78
LATIN RESOURCESANNUAL REPORT 2022 Latin Resources Limited – Annual Report 2022
Directors’ Declaration
78
Latin Resources Limited – Annual Report 2022
AUDITOR’S INDEPENDENCE DECLARATION
79
Auditor's Independence 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 2022 are in accordance with the Corporations Act 2001, including:
i)
ii)
giving a true and fair view of the consolidated entity’s financial position as at 31 December
2022 and of its performance for the year ended on that date; and
complying with Accounting Standards and the Corporations Regulations 2001;
the financial statements and notes also comply with International Financial Reporting Standards, as
there are reasonable grounds to believe that the Company will be able to pay its debts as and when
b)
c)
stated in note 2(b); and
they become due and payable.
2.
This declaration has been made after receiving the declarations required to be made to the directors by the
executive director and chief financial officer in accordance with section 295A of the Corporations Act 2001 for
the financial year ended 31 December 2022.
On behalf of the Directors
David Vilensky
Chairman
Signed on 31 March 2023
79
LATIN RESOURCESANNUAL REPORT 2022 INDEPENDENT AUDITOR’S REPORT
Latin Resources Limited – Annual Report 2022
Independent Auditor’s Report
80
80
LATIN RESOURCESANNUAL REPORT 2022 Latin Resources Limited – Annual Report 2022
80
Latin Resources Limited – Annual Report 2022
INDEPENDENT AUDITOR’S REPORT
81
Independent Auditor’s Report
81
LATIN RESOURCESANNUAL REPORT 2022 INDEPENDENT AUDITOR’S REPORT
Latin Resources Limited – Annual Report 2022
82
82
LATIN RESOURCESANNUAL REPORT 2022 Latin Resources Limited – Annual Report 2022
82
Latin Resources Limited – Annual Report 2022
INDEPENDENT AUDITOR’S REPORT
83
83
LATIN RESOURCESANNUAL REPORT 2022 INDEPENDENT AUDITOR’S REPORT
Latin Resources Limited – Annual Report 2022
84
84
LATIN RESOURCESANNUAL REPORT 2022 Latin Resources Limited – Annual Report 2022
84
Latin Resources Limited – Annual Report 2022
INDEPENDENT AUDITOR’S REPORT
85
85
LATIN RESOURCESANNUAL REPORT 2022 ASX ADDITIONAL INFORMATION
Latin Resources Limited – Annual Report 2022
ASX Additional Information
86
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 17 March 2023.
CLASS OF EQUITY SECURITIES AND VOTING RIGHTS
Shares
There were 2,201,654,918 ordinary fully paid shares on issue. All issued ordinary shares carry one vote per share.
There were also 4,000,000 unquoted ordinary loan funded shares on issue.
Share rights
There were 30,500,000 share rights on issue.
Option
The Company has the following classes of options on issue as at 17 March 2023 as detailed below. Options do not carry
any rights to vote.
Code
Class
Terms
Unlisted
Unlisted
Unlisted
Exercisable at $0.03 each and expiring on 12 February 2024
Exercisable at $0.05 each and expiring on 31 March 2026
Exercisable at $0.22 each and expiring on 27 April 2027
Number
12,500,000
10,000,000
123,955,262
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)
175
1,118
1,906
6,783
2,381
12,363
Share rights
(unlisted)
-
-
-
-
8
8
HOLDING LESS THAN A MARKETABLE PARCEL
Loan funded
shares
(unquoted)
-
-
-
-
3
3
Options
(listed)
-
-
-
-
-
-
Options
(unlisted)
1
5
17
80
38
141
897
-
-
-
-
Restricted securities
The Company has no Restricted Securities on issue.
86
LATIN RESOURCESANNUAL REPORT 2022 Latin Resources Limited – Annual Report 2022
86
Latin Resources Limited – Annual Report 2022
ASX ADDITIONAL INFORMATION
87
SUBSTANTIAL SHAREHOLDERS
The substantial shareholders in the Company, as disclosed in substantial shareholding notices given to the company are:
Shareholder
Jose Luis Manzano
Twenty largest holders of quoted shares
No. of Shares Held
180,400,000
% Held
8.19%
Rank
1.
2.
3.
4.
5
6.
7.
8.
9.
10.
11.
12.
13.
14
15.
16.
17.
18.
19.
20.
Total
Shareholder
JOSE LUIS MANZANO
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED - A/C 2
BNP PARIBAS NOMINEES PTY LTD ACF CLEARSTREAM
UNRANDOM PTY LTD
CITICORP NOMINEES PTY LIMITED
BNP PARIBAS NOMINEES PTY LTD
MR BRYCE MATTHEW WILSON
BNP PARIBAS NOMS PTY LTD
COILENS CORPORATION PTY LTD
MR WILLIAM SCOTT ALDERS
CHRIS GALE + STEPHANIE GALE
MR PAUL NAGLE
MR GARETH JOHN EDWARDS
J P MORGAN NOMINEES AUSTRALIA PTY LIMITED
SUPERHERO SECURITIES LIMITED
ALLEGRA CAPITAL PTY LTD
MR HOANG HUY HUYNH
JSML PTY LTD
RAM SYSTEMS PTY LIMITED
MR SHERMAN ALVO FRANCIS PICARDO
No. of Shares Held
180,400,000
118,339,231
66,903,489
43,131,598
39,741,517
36,432,811
20,996,575
19,231,269
18,375,015
16,277,656
16,005,111
12,200,000
12,000,000
11,936,302
10,796,695
10,200,000
10,001,700
10,000,000
9,000,000
8,600,000
670,568,969
% Held
8.19
5.38
3.04
1.96
1.81
1.65
0.95
0.87
0.83
0.74
0.73
0.55
0.55
0.54
0.49
0.46
0.45
0.45
0.41
0.39
30.44
Additional information required by the ASX Limited Listing Rules not disclosed elsewhere in this Annual Report is set out
ASX Additional Information
below. The information was applicable as at 17 March 2023.
CLASS OF EQUITY SECURITIES AND VOTING RIGHTS
There were 2,201,654,918 ordinary fully paid shares on issue. All issued ordinary shares carry one vote per share.
There were also 4,000,000 unquoted ordinary loan funded shares on issue.
Shares
Share rights
Option
There were 30,500,000 share rights on issue.
The Company has the following classes of options on issue as at 17 March 2023 as detailed below. Options do not carry
any rights to vote.
Code
Class
Terms
Unlisted
Unlisted
Unlisted
Exercisable at $0.03 each and expiring on 12 February 2024
Exercisable at $0.05 each and expiring on 31 March 2026
Exercisable at $0.22 each and expiring on 27 April 2027
In accordance with the Company’s Constitution:
Voting rights
•
•
has one vote and
on a show of hands every shareholder present in person or by proxy, attorney or representative of a shareholder
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.
Number
12,500,000
10,000,000
123,955,262
DISTRIBUTION OF EQUITY SECURITIES
The number of equity holders by size and holding, in each class are:
Ordinary shares
Share rights
(unlisted)
Loan funded
shares
(unquoted)
Options
(listed)
Options
(unlisted)
Range
1 – 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,001 and over
Total
(listed)
175
1,118
1,906
6,783
2,381
12,363
897
HOLDING LESS THAN A MARKETABLE PARCEL
Restricted securities
The Company has no Restricted Securities on issue.
-
-
-
-
8
8
-
-
-
-
-
3
3
-
-
-
-
-
-
-
-
1
5
17
80
38
141
-
87
LATIN RESOURCESANNUAL REPORT 2022 Latin Resources Limited – Annual Report 2022
TENEMENT SCHEDULE
Tenement Schedule
88
Tenement Licences
Project Name
Registered Holder
Interest held
01-01865-11
01-01866-11
01-01867-11
01-01868-11
01-02068-10
01-02827-09
01-02828-09
01-02437-10
01-02438-10
Dockers 1
Dockers 2
Dockers 3
Dockers 4
Fremantle 7
Latin Morrito 1
Latin Morrito 2
Vandals 1
Vandals 2
Peru
Minera Dylan SAC
Minera Dylan SAC
Minera Dylan SAC
Minera Dylan SAC
Minera Dylan SAC
Minera Dylan SAC
Minera Dylan SAC
Minera Dylan SAC
Minera Dylan SAC
ARGENTINA – Catamarca 1
43101
43160
43221
43252
43191
43132
13/18
14/18
43435
43405
43374
43344
43313
43282
163/18
207/18
208/18
209/18
210/18
211/18
212/18
213/18
65-C-2016
64-C-2016
63-C-2016
66-C-2016
76-C-2016
84-C-2016
85-C-2016
134-Q-1936
64-R-2017
65-R-2017
66-R-2017
67-R-2017
68-R-2017
69-R-2017
70-R-2017
71-R-2017
72-R-2017
72-R-2017
Latina 1
Latina 2
Latina 3
Latina 4
Latina 5
Latina 6
Latina 7
Latina 8
Latina 9
Latina 10
Latina 11
Latina 12
Latina 13
Latina 14
Latina 15
Latina 16
Latina 17
Latina 18
Latina 19
Latina 20
Latina 21
Latina 22
Portezuelo
Estanzuela
La Meta
Tilisarao
Bajo De Veliz
De Geminis
Maria Del Huerto
Maria Del Huerto
Estanzuela Sur
Los Membrillos
Quines Sur
Paso Grande Norte
Solitario
Trapiche Norte
Estanzuela Norte
Quines
La Toma Norte
Quines Este
Litios del Norte SA
Litios del Norte SA
Litios del Norte SA
Litios del Norte SA
Litios del Norte SA
Litios del Norte SA
Litios del Norte SA
Litios del Norte SA
Litios del Norte SA
Litios del Norte SA
Litios del Norte SA
Litios del Norte SA
Litios del Norte SA
Litios del Norte SA
Litios del Norte SA
Litios del Norte SA
Litios del Norte SA
Litios del Norte SA
Litios del Norte SA
Litios del Norte SA
Litios del Norte SA
Litios del Norte SA
ARGENTINA - San Luis
Recursos Latinos SA
Recursos Latinos SA
Recursos Latinos SA
Recursos Latinos SA
Recursos Latinos SA
Recursos Latinos SA
Recursos Latinos SA
Recursos Latinos SA
Recursos Latinos SA
Recursos Latinos SA
Recursos Latinos SA
Recursos Latinos SA
Recursos Latinos SA
Recursos Latinos SA
Recursos Latinos SA
Recursos Latinos SA
Recursos Latinos SA
Recursos Latinos SA
88
100%
100%
100%
100%
100%
100%
100%
100%
100%
50%
50%
50%
50%
50%
50%
50%
50%
50%
50%
50%
50%
50%
50%
50%
50%
50%
50%
50%
50%
50%
50%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
LATIN RESOURCESANNUAL REPORT 2022 Latin Resources Limited – Annual Report 2022
88
Latin Resources Limited – Annual Report 2022
TENEMENT SCHEDULE
89
1-R-2018
2-R-2018
3-R-2018
830578/2019
830579/2019
830580/2019
830581/2019
830582/2019
832515/2021
Paso Grande Sur
Trapiche Sur
La Toma Sur
Minas Gerais Lithium
Minas Gerais Lithium
Minas Gerais Lithium
Minas Gerais Lithium
Minas Gerais Lithium
Minas Gerais Lithium
831219/2017
Bentes Mineração 2
830691/2017
831799/2015
830080/2022
Carlos André
Granitos Salinas 2
Monte Alto 2
E77/2622
E77/2624
E77/2719
E77/2725
E77/2724
E70/5650
E70/5649
E70/6013
E45/5246
EL9148
EL9172
EL9412
EL9273
EL9274
Noombenberry
Noombenberry
Mount Cramphorne
Noombenberry
Noombenberry
Noombenberry
Noombenberry
Noombenberry
Big Grey
Manildra
Burdett
Peep O’Day
Boree Creek
BC Gundagai
Recursos Latinos SA
Recursos Latinos SA
Recursos Latinos SA
BRAZIL
Mineracao Ferro Nordeste Ltda
Mineracao Ferro Nordeste Ltda
Mineracao Ferro Nordeste Ltda
Mineracao Ferro Nordeste Ltda
Mineracao Ferro Nordeste Ltda
Belo Lithium
Bentes Mineração Exportação e
Importação
Belo Lithium
Granitos Salinas Ltda
Mineração Salinas Ltda.
AUSTRALIA
Electric Metals Pty Ltd
Electric Metals Pty Ltd
Electric Metals Pty Ltd
Electric Metals Pty Ltd
Electric Metals Pty Ltd
Electric Metals Pty Ltd
Electric Metals Pty Ltd
Electric Metals Pty Ltd
Electric Metals Pty Ltd
Latin Resources Limited
Latin Resources Limited
Latin Resources Limited
Latin Resources Limited
Latin Resources Limited
1JV with Integra Capital SA
2Tenement Concession under Option Agreement
100%
100%
100%
100%
100%
100%
100%
100%
100%
0%
100%
0%
0%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
89
Tenement Licences
Project Name
Registered Holder
Interest held
Peru
Tenement Schedule
01-01865-11
01-01866-11
01-01867-11
01-01868-11
01-02068-10
01-02827-09
01-02828-09
01-02437-10
01-02438-10
Dockers 1
Dockers 2
Dockers 3
Dockers 4
Fremantle 7
Latin Morrito 1
Latin Morrito 2
Vandals 1
Vandals 2
43101
43160
43221
43252
43191
43132
13/18
14/18
43435
43405
43374
43344
43313
43282
163/18
207/18
208/18
209/18
210/18
211/18
212/18
213/18
134-Q-1936
65-C-2016
64-C-2016
63-C-2016
66-C-2016
76-C-2016
84-C-2016
85-C-2016
64-R-2017
65-R-2017
66-R-2017
67-R-2017
68-R-2017
69-R-2017
70-R-2017
71-R-2017
72-R-2017
72-R-2017
Latina 1
Latina 2
Latina 3
Latina 4
Latina 5
Latina 6
Latina 7
Latina 8
Latina 9
Latina 10
Latina 11
Latina 12
Latina 13
Latina 14
Latina 15
Latina 16
Latina 17
Latina 18
Latina 19
Latina 20
Latina 21
Latina 22
Portezuelo
Estanzuela
La Meta
Tilisarao
Bajo De Veliz
De Geminis
Maria Del Huerto
Maria Del Huerto
Estanzuela Sur
Los Membrillos
Quines Sur
Paso Grande Norte
Solitario
Trapiche Norte
Estanzuela Norte
Quines
La Toma Norte
Quines Este
ARGENTINA – Catamarca 1
ARGENTINA - San Luis
Minera Dylan SAC
Minera Dylan SAC
Minera Dylan SAC
Minera Dylan SAC
Minera Dylan SAC
Minera Dylan SAC
Minera Dylan SAC
Minera Dylan SAC
Minera Dylan SAC
Litios del Norte SA
Litios del Norte SA
Litios del Norte SA
Litios del Norte SA
Litios del Norte SA
Litios del Norte SA
Litios del Norte SA
Litios del Norte SA
Litios del Norte SA
Litios del Norte SA
Litios del Norte SA
Litios del Norte SA
Litios del Norte SA
Litios del Norte SA
Litios del Norte SA
Litios del Norte SA
Litios del Norte SA
Litios del Norte SA
Litios del Norte SA
Litios del Norte SA
Litios del Norte SA
Litios del Norte SA
Recursos Latinos SA
Recursos Latinos SA
Recursos Latinos SA
Recursos Latinos SA
Recursos Latinos SA
Recursos Latinos SA
Recursos Latinos SA
Recursos Latinos SA
Recursos Latinos SA
Recursos Latinos SA
Recursos Latinos SA
Recursos Latinos SA
Recursos Latinos SA
Recursos Latinos SA
Recursos Latinos SA
Recursos Latinos SA
Recursos Latinos SA
Recursos Latinos SA
100%
100%
100%
100%
100%
100%
100%
100%
100%
50%
50%
50%
50%
50%
50%
50%
50%
50%
50%
50%
50%
50%
50%
50%
50%
50%
50%
50%
50%
50%
50%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
LATIN RESOURCESANNUAL REPORT 2022 ASX:LRS | FRA:XL5 latinresources.com.au