2020 Annual Report
Latrobe Magnesium Limited and its Controlled Entities
ABN 52 009 173 611
Magnesum
Page
Company Directory ................................................................................................................. 3
Review of Operations ............................................................................................................ 4
Directors’ Report .................................................................................................................. 14
Auditor’s Independence Declaration .................................................................................... 21
Directors’ Declaration ........................................................................................................... 22
Statement of Profit or Loss and Other Comprehensive Income ............................................ 23
Statement of Financial Position ............................................................................................ 24
Statement of Changes in Equity ........................................................................................... 25
Statement of Cash Flows ..................................................................................................... 26
Notes to the Financial Statements ........................................................................................ 27
Independent Auditor’s Report ............................................................................................... 51
Additional Information ........................................................................................................... 54
2
Directors
Jock Murray, Chairman
David Paterson, CEO
Kevin Torpey
Philip Bruce
John Lee
Registered Office and
Principal Place of Business
Suite 307
16-20 Barrack Street
Sydney NSW 2000
Telephone: (02) 8097 0250
Facsimile: (02) 9279 3854
Auditors
Nexia Sydney Partnership
Level 16
1 Market Street
Sydney NSW 2000
Chief Executive Officer
David Paterson
Secretary
John Lee
Bankers
National Australia Bank Limited
Mezzanine Level
255 George Street
Sydney NSW 2000
Solicitors
Minter Ellison
Level 40
1 Farrer Place
Sydney NSW 2000
Share Registry
Stock Exchange
Computershare Investor Services Pty Ltd
Australian Securities Exchange
Level 3
60 Carrington Street
Sydney NSW 2000
20 Bridge Street
Sydney NSW 2000
Telephone: 1 300 850 505
ASX CODE: LMG
www.latrobemagnesium.com
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LATROBE MAGNESIUM PROJECT
1. Overview
During the year, the Company has made significant progress with its Latrobe Magnesium Project in the
following areas:
achieving positive results on processing Yallourn fly ash;
completing feasibility study using Yallourn fly ash;
securing 10 year ash supply agreement with EnergyAustralia, Yallourn;
engaging GHD undertaking extensive environmental and traffic assessment; and
achieving Latrobe City Council and EPA approvals of building the initial magnesium plant.
2. Magnesium Markets
In the calendar year ended 31 December 2019, the primary world production of magnesium increased
to 974,000 tonnes. China’s estimated primary production for the calendar year 2019 was approximately
86% of the world’s production. Some 50% of China’s production is used locally. World growth in
demand is expected to continue at an annual rate between 6% and 7% until 2024 when it is projected
the market will produce some 1.7 million tonnes.
Australian and New Zealand consumption of magnesium has been recorded in the order of 7,000 tonnes
per annum. All this magnesium is imported.
During the year, the magnesium price traded at a lower level that the previous year’s high in line with
many commodities, owing to the effects of the corona virus on the reduction in the worldwide production
of cars. The spot prices as at 30 June were, as follows:
FOB China
US$ per tonne
30-Jun-20
2,207
30-Jun-19
2,650
Owing to United States anti-dumping duties, the annual delivered price for 2020 was in the order of
US$2.30 per lb or US$5,071 per tonne.
In China, the operating costs of production stayed within the range between US$2,000 to US$2,500 per
tonne. However, a number of China plants were either closed or scaled back production due to this low
magnesium price.
With the adoption of light-weighting of motor vehicles and the legislated emission standards in many
countries in the World, there is a growing demand by car companies to use more magnesium and
aluminium sheet in cars. The car business has adopted aluminium sheet in outside panels and with this
sheet there is up to 6 percent of magnesium. With the development of new magnesium alloys and new
production techniques, the use of magnesium car parts and sheet provides many exciting opportunities.
3.
Feasibility Study
In September 2019, LMG announced that its 3,000 tpa magnesium plant was estimated to generate
EBITDA of up to $5.6 million per annum when it is operating at its name plate capacity. This estimate
was revised in an updated feasibility study completed in May 2020 to be in the range between $4 million
to $5 million per annum due mainly to increase in energy usage. The initial plant is estimated to employ
up to 54 on-going direct employees and contractors and 50 to 75 construction jobs.
The initial and updated feasibility studies estimate the capital cost to be in the order of $54 million. This
estimate includes design growth and contingencies of $6 million. LMG is currently carrying out a value
engineering exercise and it hopes to reduce this capital cost down to $50 million.
4
4.
Ash Supply Agreement
In October 2019, Latrobe Magnesium Limited signed an agreement with EnergyAustralia Yallourn Pty
Ltd (Yallourn) to secure ash supply to LMG’s initial 3,000 tonnes per annum (tpa) magnesium plant for
the next ten years.
The agreement requires certain approvals and conditions to be satisfied. It also deals with the principal
issues in relation to Yallourn increasing its supply of ash to LMG’s 40,000 tpa planned expanded
magnesium plant. There are a number of conditions that need to be addressed before this expansion
can occur.
The ash supplied to LMG’s initial plant represents only 12% of Yallourn’s current annual production.
LMG has identified other sources of feed stock for its 40,000 tpa plant should the power station be
closed earlier for any reason.
5.
Community Briefing
In December 2019, LMG organised a community briefing to outline the project to all stakeholders in the
Latrobe Valley so that they had the opportunity to be fully informed and understand the benefits of the
project. The briefing was well attended and the presentation was well received by the participants.
Due to COVID-19 restrictions on public gatherings, LMG could not hold a second public meeting. LMG
placed two advertisements in the Latrobe Valley Express notifying the public that project information in
relation to the EPA reports was available and could be accessed on its website.
LMG has also agreed to hold annual briefings in the Valley to advise all stakeholders on the development
of the project and report on the emissions and other matters that are interesting to the Community. LMG
believes in having a social licence with the Community in which it operates.
6.
The Magnesium Metal Production Facility
LMG plans to establish a “demonstration-scale” magnesium metal production facility using ash from the
Yallourn W power station as raw material. Construction will commence on site in the first quarter of
2021.
The chosen site, at 320 Tramway Road, Hazelwood North, is part of industrial zone, but still relatively-
close to the Yallourn Power Station, in order to minimise transport of the ash. The plan is to re-purpose
the existing buildings, bringing in new equipment and facilities. The bulk of the production facility is to
be housed within the existing building located at the southern end of the site. Truck access will be from
Second Avenue (not the main road) and loading/unloading will be on the west side of the existing
building.
The intention is that the facility would then operate for about 18 months, in order to demonstrate the
production process. Operations beyond that time are possible but LMG has made no decision and any
plan to do so would also need further Council and EPA approval.
The extraction of magnesium from brown coal fly ash is a new industrial process. It will involve dissolving
magnesium from the ash and its recovery as solid magnesium oxide. This can then be reduced to
magnesium metal using the conventional high-temperature process. Because the magnesium is
removed to a high degree, the material remaining should be able to be utilised as a cement substitute
in the construction industry.
The process is anticipated to have a least an estimated 50 percent reduction in carbon emissions
compared to the usual normal magnesium industry performance. This is due to the lower concentration
of carbonates in the fly ash, compared with the normal Dolomite ore feedstock. Also, the key chemical
consumable, ferrosilicon, is manufactured using hydro-electricity.
5
Commencing in January 2020, GHD (a consulting engineering company) has been working with LMG
to assess the potential impact on the local area in terms of air emissions, road traffic and noise levels.
The main findings are summarised in point 7 of this review of operations.
GHD has also been preparing the documentation required for Applications to the Latrobe Valley Council
and the EPA.
In March 2020, LMG submitted its Application to the Latrobe City Council for planning approval to build
its initial 3,000 t/a (tonnes per annum) magnesium plant at 320 Tramway Road. This application was
approved on 5 June 2020.
An Application to the EPA for an 18-month RD&D (Research, Development and Demonstration) Permit
was submitted on 8 June 2020. The EPA approval for the project was awarded on 16 September 2020.
The Project Site
The project site is located at 320 Tramway Road, Hazelwood North, Victoria. It is less than 3 km to the
east of the former Hazelwood Power Station and mine, approximately 5 km south of the township of
Morwell, and approximately 6 km north of the township of Churchill.
The site has a frontage to Tramway Road (on the east side) and frontages to Fourth Road to the south
and to Second Avenue to the west and has an area of 10.6 ha. Fourth Road connects to Tramway Road
via an existing roundabout near the south-eastern corner of the site.
The site is owned by D G & J Di Fabrizio Steel Fabrications Pty Ltd and is currently leased by Latrobe
Magnesium Limited for a three year term with a fixed price option to buy the site within that timeframe.
The site was previously used for a steel fabrication facility and includes existing buildings that are
currently vacant. There are other established industrial facilities located to the north, south and south-
west of the site including a fertiliser supplier and the Morwell Transfer Station.
6
Land immediately to the east of Tramway Road and west toward Monash Way is used for agricultural
purposes. The closest residence is located approximately 750m south-east of the site on Traralgon-
Churchill Road. The Hazelwood Primary School is located approximately 1.5km south-east of the site
on Church Road.
The site is not within an area identified as being of Aboriginal cultural heritage sensitivity. No clearance
of existing vegetation is proposed.
Planned Activities on the Site
The proposed land use at the site would be defined as “industry” under Clause 73.03 of the Latrobe
Planning Scheme. The purpose of the use is to extract saleable magnesium and other products from
waste fly ash.
The fly ash is to be sourced from the existing ash stockpile at Yallourn W Power Station, loaded into
trucks and transported to the LMG site. There the truck can discharge directly onto an apron feeder and
the ash is transported on a covered conveyor into the storage silo. Given its relatively close proximity
to Yallourn Power Station, only a small additional buffer stock is required to be held inside the building
to provide supply security during wet weather.
Other reagents include quicklime and dolomite (brought in from South Australia) and these are to be
directly unloaded pneumatically from their tankers and into silos.
Magnesium Production Process
The first step in processing the ash is the Leaching Section where the ash reacts with hydrochloric acid
to dissolve the magnesium, iron and calcium as their soluble metal chlorides. The remaining solids
(mainly silica and char) are to be filtered off, dried and bagged.
The solution is then heated and neutralised with milled dolomite to precipitate the iron, which is
separated off as a marketable hematite (iron oxide). Calcium is to be removed by reaction with carbon
dioxide sourced from the combustion of natural gas in the steam boiler. The precipitated calcium
carbonate is to be filtered off, dried and bagged.
The aqueous solution after purification will contain mostly magnesium chloride. An evaporator will be
used to increase the solution strength to the optimum for the next step of the Spray Roaster. In this, the
concentrated solution is sprayed in as fine droplets which, in contact the hot combustion gases, react to
form magnesium oxide, which settles to the bottom as a fine powder, and hydrogen chloride gas which
exits the Roaster with the combustion gases.
The gas from the Roaster passes through two packed towers to where the hydrogen chloride is
absorbed in water. The product hydrochloric acid is returned to the Leaching section.
The magnesium oxide is then mixed with calcium oxide (quicklime) and ferrosilicon and formed into
dense briquettes. The magnesium oxide and the quicklime can be metered out from the intermediate
silo storage. The ferrosilicon (to be delivered and stored on site in 20-foot containers) is to be crushed
and milled ahead of being blended with the other materials. The blended material would be fed to the
briquetting press.
The briquettes are to then be transferred to the furnace area and loaded into the hot magnesium
reduction retorts. Under the reaction conditions in the retorts, the magnesium oxide slowly reacts with
the ferrosilicon producing magnesium vapour. This is condensed to solid metal in a cooled external
section of the retort. With removal of the magnesium, the remaining solids are suitable for use as a
cement substitute - becoming the second product from the high-temperature step.
The magnesium reduction step is a batch process with a nominal cycle time of about 12 hours. A large
number of retorts are required. An important feature of the furnace area will be the high level of
mechanisation, including automatic loading and unloading of the retorts and the movement of briquettes
to the furnaces and the reaction products away.
The solid magnesium is to be transferred to the metal refining area of the plant, where it is remelted,
refined and cast into small ingots. The magnesium ingots, stacked on pallets, are to leave the site in
20‐foot containers for export to overseas customers.
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The cement substitute is to be milled, and loaded pneumatically into road tankers for transport to
concrete manufacturers.
The processes described above will mostly operate continuously, 24 hours-per-day, with a shift crew of
eight. Support for the operating crew is to be provided by a further 16 employees, plus external
contractors on an as-needed basis. The facility is expected to stop for an annual refurbishment period
plus shorter stops for scheduled maintenance.
The plan is for all incoming and outgoing goods to be during daylight hours, excluding weekends.
Regular truck deliveries are expected to total 14 per day.
Services
Dust Handling
Some of the process steps involve handling powdered solids and could be dusty. Equipment is planned
to capture dust close to its source and to enclose conveying and other equipment to minimise fugitive
emissions. All this ventilation air is to pass through filter bags to ensure the air emissions have very-low
levels of dust.
Exhaust Gas Utilisation
The Reduction Furnace exhaust gas is at a high temperature and will be used to raise steam, as a
source of heat to the Evaporator and to the Iron Precipitation stages. The cooled exhaust gas will also
be the source of carbon dioxide for the Calcium Precipitation reaction – diverting some carbon dioxide
from being emitted to the atmosphere.
Utilities
There is an existing HV electricity supply to the site; the existing transformer can be refurbished. There
is an existing Gippsland Water supply connection for treated water. New pipelines will need to be laid,
alongside Tramway road south from Firmins Lane for raw (industrial untreated) water and for natural
gas supply.
There are existing easements and drains for stormwater and waste water from the buildings. Rainwater
falling on bunded areas is to flow to a new one megalitre dam to capture any contamination. The plant
will have filtering equipment and reverse osmosis desalination equipment to reuse rainwater captured
in the plant.
Site Improvements
The existing building footprint is more than enough to accommodate all of the processing plant and
equipment. The exception being tall items which include the Spray Roaster and the silos for materials
receiving and despatch. The structure is of steel construction, with metal wall and roof sheeting and
skylights to provide natural light. The roof of the building closest to the proposed administration office
is of ‘sawtooth’ construction with vertical windows in the roof for natural lighting.
Administration and staff amenities will also be located in existing premises on site. These are to be
refurbished.
The site is to have a number of access points:
Three along the southern boundary to Fourth Road, including two access points to loading areas,
and one access to an internal road and car park
Two access points along the western boundary to Second Avenue for truck access to the
loading/unloading area (one crossover existing and a second to be constructed)
The two access points to Tramway Road are not proposed to be used
New works on the site consist of:
New crossover the Second Avenue
8
Graded concreted areas behind, and for the length of, the existing building with a 150mm high bund
to contain drainage
A 1.0 ML stormwater retention facility measuring 20 m by 20 m and 3 m deep. With ancillary pumps
to facilitate reuse of the water
A car park at the front of the existing building facing Tramway Road to accommodate 55 car parking
space including two accessible spaces
The following equipment items to be installed on site at the rear of the existing building (facing
Second Avenue and to be accessed off Second Avenue):
o Silos (5)
o Fly Ash apron feed and hopper
o Spray Roaster and Absorption Towers
o Area for containers storage
o Acid storage containers to be located a separate bunded area.
The proposed configuration of processing equipment is detailed on the engineering drawing below. As
noted earlier, plant and equipment will mostly be installed within the existing building. The paddock to
the north of the existing buildings on the site would remain undeveloped.
The image below is a 3-D model view of the completed project site, looking from the west. The 3-D
Image of the site, with the equipment installed, looking east to Tramway Road
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Landscaping
The landscape design outcomes sought are to:
provide adequate screening, over time, of the proposed facility when viewed from the surrounding
roads
lift the level of amenity and shade within the site for the staff and visitors
The screening is to be planted native vegetation comprising a mix of fast growing flowering shrubs and
over storey trees to help create a continuous screen from ground level to the canopy of the proposed
trees. This linear landscape feature will also provide a level of amenity along the heavily travelled
Tramway Road and several hundred metres of habitat for local fauna.
The species chosen for the screen were selected from the local EVC lists found in the Gippsland Plain
bioregion, the Council’s revegetation guide; Indigenous Plants of Latrobe City (Latrobe City) and cross
referenced with what is commercially available and a suitable screening specimen. A portion of the
proposed tree planting will be installed as semi mature stock to aid the establishment of a screen in the
short term.
All existing trees along the eastern and southern boundary have been proposed for retention and
protection. A temporary tree protection fence will protect the root zone of these trees during the
construction phase. These trees are a mixture of exotic Pinus species and native Eucalyptus species,
in varying condition. However, their retention is prioritised to provide much needed augmentation of the
proposed screening, shade to the carpark and motorbike parking structure and amenity.
7. GHD Environmental and Traffic Assessments
Noise Report
This report considered the potential noise impacts of the type and scale of the proposed facility within
the general area of Tramway Road and surrounding community. It assessed potential noise impacts
against relevant Victoria noise guidelines, legislation and policy, in particular EPA’s Noise for Industry
in Regional Victoria guidelines. As part of these studies, GHD undertook unattended noise monitoring
and measurements at the nearest noise sensitive receiver.
GHD found that “results of the noise impact predictions show that operational noise from the site is
expected to comply with applicable noise criteria.”
Air Emissions Report
This report included an assessment of the likely emissions to air from the facility and the ground level
concentration (GLC) impacts within the surrounding area. Air dispersion modelling was used to assess
the incremental impact (applying emissions from the LMG plant alone) and the cumulative impact
(applying emissions from both the LMG plant and ambient (background) concentrations of pollutants)
on GLCs within a six km radius of the proposed plant.
GHD used the Victorian EPA regulatory air dispersion model, AERMOD, to assess the likely air quality
impacts. Dispersion modelling was conducted for each of the five years 2013 to 2017, using
meteorological data files prepared in accordance with EPA guidelines.
The GHD Report found:
“The LMG plant to be of low risk to human health given the low incremental results in regard to the
SEPP AQM [State Environment Protection Policy Air Quality Management] and the low relative increase
in particulates compared with the existing ambient environment”.
and
“The likelihood of exposure to emissions from the LMG plant is low due to the location of the LMG plant
and the rapid decline in pollutant concentrations with distance from the maximum GLC”.
10
Energy Use and Greenhouse Gas Emissions (GHG) Assessment
LMG also commissioned an energy and greenhouse gas assessment of the proposed facility. There are
three major sources of quantifiable GHG emissions; combustion of stationary fuels, combustion of
transport fuels and the consumption of electricity. The table below provides a summary of emissions
from these three sources.
Summary of GHG emissions
Emission Source
Stationary energy emissions
Transport emissions
Consumption of electricity
t CO2-e / Tonne of Mg
11.39
0.02
3.89
t CO2-e / year
34,190
52.50
11,681
At the 2019 community briefing, LMG’s estimated direct CO2 emissions in the order of 10 tonnes per
tonne of magnesium produced. This has increased slightly due to increased energy usage in the latest
production flowsheet.
In summary, the magnesium plant is estimated to emit up to 34,190 tonnes of CO2 per annum. In
contrast, the three existing Latrobe Valley power stations emit in excess of 50 million tonnes of CO2 per
annum. Further, the lifecycle impacts of use of lightweight magnesium metals, e.g. in cars, will decrease
net greenhouse gas emissions.
Traffic
Trucks transporting fly ash from the Yallourn Power Station to the proposed site will utilise the following
route:
Eastern Road (access road to Yallourn Power Station)
De Campo Drive (C471)
Haunted Hills Road (C471)
Princes Freeway (M1)
Firmins Lane (C475)
Tramway Road (C476)
Fourth Road
The above roads (with the exception of Fourth Road) are part of Department of Transports Gazetted B-
Double Routes. Trucks exiting the site will generally access Princes Freeway via Tramway Road. The
traffic assessment noted the route was driven by GHD’s experienced traffic engineers during a site visit
in December 2019 and did not identify any problematic locations along the route.
GHD reviewed the potential traffic impact of the proposed magnesium plant at Tramway Road. There
will be 55 car parking and bicycle spaces. There will be 14 truck deliveries per on weekdays, with the
largest vehicle being 26 metre long B-Double, which will include:
4 trucks from Yallourn power station – only on weekdays
2 trucks from Melbourne
3 trucks travelling to Melbourne, and
4 trucks travelling to local destinations.
This is the same number of truck traffic movements as estimated by LMG at the December 2019
community briefing.
GHD concluded that:
the proposed on-site car parking provision is appropriate
the proposed bicycle parking provision exceeds planning scheme requirements
the proposed car park design meets planning scheme requirements with satisfactory access
the proposed hard stand area for trucks can accommodate vehicles of up to B-Double size
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The volume of additional traffic generated by the development in the AM and PM peak times, is
predicted to be up to 59 vehicle movements. This is based on 55 vehicle movements by staff and
4 movements by trucks
analysis shows that this traffic volume can be accommodated by the surrounding road network
Overall, the proposed magnesium plant is not expected to create adverse traffic or parking impacts in
the area.
Conclusion
On 5 June 2020, the Latrobe City Council issued the planning permit for LMG’s initial 3,000tpa
magnesium plant.
8. Warrant Issue
Under the October 2018 funding agreement with RnD Funding Pty Ltd, LMG issued 12,495,000 unlisted
warrants. The warrants have an exercise price of $0.02 and are exercisable for a period up to 3 years
post the drawdown dates.
Under the October 2019 funding agreement with RnD Funding Pty Ltd, LMG has issued 35,889,199
unlisted warrants. The warrants have an exercise price of $0.03 and are exercisable for a period up to
3 years post the drawdown date.
9.
Company Funding
On 30 July 2020, LMG received an Advance Finding Certificate under Section 28A of the Industry
Research and Development Act 1986 (Act) for its 3,000tpa magnesium plant using its new acid
hydromet process. LMG will be entitled to receive a cash rebate for 43.5% of all eligible expenditure
spent on its seven experimental activities. This rebate should be up to $24 million over the next three
years. 2020 is the first of these three years.
In October 2020, LMG’s funding provided by RnD Funding is expected to total some $3.9 million.
10. Project Funding
LMG intends to fund up to $50 million of its capital costs by raising the following finances:
Type of Finance
Project Finance
Equity Placement
Total Funds
(i)
Project Finance
A$M’s
30
20
50
The Company has received non-binding Term Sheets from two separate parties who have agreed
to provide these funds. The Company is currently still in negotiations with these parties.
(ii)
Equity Placement
The Company is in discussion with a potential investor who is looking to invest $20 million in the
Company. Final terms have not yet been agreed and the investor has certain conditions that
need to be met before the transaction can proceed.
The Company is also in discussions with other parties in relation to this capital raising.
12
11. Capital Issue
On 27 October 2020, the Company entered into a non-binding term sheet for an Equity Placement
Facility with Long State Investment Limited where they committed to purchase from the Company up to
$5 million of shares over the next 24 months subject to execution of a subscription agreement.
13
The Directors present their report together with the financial report of Latrobe Magnesium Limited
(“Company”) and of the Group, being the Company and its subsidiaries for the financial year ended 30
June 2020 and the auditor’s report thereon.
DIRECTORS
The following persons were Directors of Latrobe Magnesium Limited during the financial year and up to
the date of this report.
Jock Murray
David Paterson
K A Torpey
P F Bruce
J R Lee
Chairman
CEO & Executive Director
Non Executive Director
Non Executive Director
Non Executive Director
PRINCIPAL ACTIVITIES
During the year the principal continuing activities of the Group consisted of:
achieving positive results on processing Yallourn fly ash;
completing feasibility study using Yallourn fly ash;
securing 10 year ash supply agreement with EnergyAustralia, Yallourn;
engaging GHD undertaking extensive environmental and traffic assessment; and
achieving Latrobe City Council and EPA approvals of building the initial magnesium plant.
OPERATING RESULTS
The consolidated net loss of the Group after providing for income tax amounted to $2,080,171 compared
to a net loss of $1,515,472 for the previous corresponding period. The loss was mainly due to the costs
of conducting further test works, feasibility study on the Latrobe magnesium plant, design of the initial
plant and environmental studies.
Further information on review of operations of the Group is shown separately in the Directors’ Review
of Operations on Page 4 to 13 of this report.
Dividends
The Directors have not recommended the payment of a final dividend.
Significant Changes in the State of Affairs
There is no significant change in the state of affairs of the Group during the financial year.
MATTERS SUBSEQUENT TO BALANCE DATE
Since Balance date the Group has completed a number of significant post balance date events being:
On 30 July 2020, the receipt of an Advance Finding under the under Section 28A of the Industry
Research and Development Act 1986 (Act) for its 3,000tpa magnesium plant using its new acid
hydromet process;
On 16 September 2020, LMG received its EPA approval to develop the Project;
On 27 October 2020, LMG signed a non-binding term sheet for a $5 million equity placement facility.
On 27 October 2020, the financial report was authorised to be signed by a resolution of Directors.
14
LIKELY DEVELOPMENTS
Except for information disclosed on certain developments and the expected results of those
developments included in this report under review of operations, further information on likely
developments in the operations of the Group and the expected results of those operations have not
been disclosed in this report because the Directors believe it would be likely to result in unreasonable
prejudice to the Group.
At the date of completion of the financial report, the Group is continuing to monitor and respond to the
effects of COVID-19. The Group has implemented appropriate COVID-19 policies designed to minimise
the risk of transmission of COVID-19 among its workforce and local communities while minimising the
risk of disruption to its ongoing business activities.
ENVIRONMENTAL REGULATIONS
The Group’s operations will be subject to normal State and Federal Environmental Regulations. There
were no breaches of these regulations during the year or to the date of this report.
INFORMATION ON DIRECTORS
John Stephen Murray AO – Non-Executive Chairman
Mr Murray studied economics and history with the Royal Military College at Duntroon before studying
engineering management at the Royal Military College of Science in the UK. He also holds qualifications
in international politics from Deakin University. Prior to his foray into business, Mr Murray had a
distinguished military career over almost 30 years before retiring as a Colonel in 1994. He brings a
wealth of senior management and directorship experience with a particular focus on infrastructure,
project management and freight logistics.
Roles currently held by Mr Murray include strategic adviser for law firm, King & Wood Mallesons in the
government infrastructure sector. He managed numerous large projects in his role with NSW
Department for Transport including the production of a ten-year development plan for the State's
transport infrastructure and services as well as chairing the $2 billion Parramatta Rail Link Company
project. He acted as an adviser for operational planning and infrastructure for the Sydney, Beijing and
London Olympic Games. In addition to these roles he held numerous directorships including non-
executive chairman of Omni Tanker Holding Pty Ltd for 8 years and for The Hills Motorway (M2) Limited
prior to its takeover by Transurban in 2005 and also the non-executive chairman for Country Pipelines
Pty Ltd for 3 years prior to its takeover by APA in 2008. He was on the board of Terminals Australia for
five years up until its sale to Asciano in 2008.
Date of appointment as Director
Other current Public company
directorships
Former public company directorships in
last 3 years
Special responsibilities
Interests in securities
1 May 2015
None
None
Chairman of the Board of Directors
16,351,923 ordinary shares in Latrobe Magnesium
Limited, registered in the name of MurraySetter Pty
Limited as trustee for the MurraySetter Trust.
15
David Oliver Paterson – Chief Executive Officer
Mr Paterson is a qualified non-practising Chartered Accountant and a graduate from the University of
Queensland. Prior to forming Europacific in 1990, he was a group manager of the Corporate Services
Division of Tricontinental Corporation Limited responsible for NSW and Queensland. He also worked
for Coopers & Lybrand in Brisbane and Sydney in their Corporate Services Division. He has been
involved in a wide range of corporate advisory assignments and underwritings for both debt and equity
for a number of public and private companies. Mr Paterson has experience in the property and mining
industries, in relation to project financing financial analysis, valuations; and the raising of debt and equity.
Date of appointment as Director
Other current public company
directorships
Former public company directorships in
last 3 years
Special responsibilities
Interests in securities
23 August 2002
None
None
Chief Executive Officer
Member of Audit Committee
123,095,740 ordinary shares in Latrobe Magnesium
Limited, 13,843,400 held as a direct interest and
109,252,340 registered in the name of Rimotran Pty
Limited as trustee for the David Paterson Super Fund.
Kevin Anthony Torpey – Non-Executive Director
Mr Torpey is a chartered professional engineer and a graduate from Sydney University. Over the last
40 years he has been involved in the development of many diverse major projects involving oil, iron ore,
aluminium, nickel, lead/zinc, uranium, magnesite, coal and gold, located locally, in Ireland and
Indonesia. These projects have been associated with major companies such as Consolidated
Goldfields, EZ Industries, Alcan, International Nickel, Tara Minerals Limited (Ireland), Noranda, Denison
Mines (Canada), Toyota, Mitsubishi and Iwatani. For the last 20 years his association has mainly been
as a corporate officer initially as managing director of Denison Mines (Australia) and then managing
director of Devex Limited. Over the last few years he has acted as a consultant to a number of
companies involved in mining projects and new technologies.
Date of appointment as Director
Other current public company
directorships
Former public company directorships in
last 3 years
Special responsibilities
Interests in securities
11 April 2002
None
None
None
102,450,189 ordinary shares in Latrobe Magnesium
Limited, held by Famallon Pty Ltd and Famallon Pty Ltd
ATF Famallon No.2 Super Fund. Mr Torpey is a
principal of Famallon Pty Ltd and a beneficiary of the
fund.
Philip Francis Bruce – Non-Executive Director
Mr Bruce is a director of P F Bruce & Associates, which provides corporate and project management
services. He is a mining engineer with over thirty years resource industry experience in Australia, South
Africa, West Africa, South America and Indonesia in operations, project development and corporate
management. He was the CEO of PT BHP Indonesia, managing director of Triako Resources Limited
and was the general manager – development for Plutonic Resources Limited, where he was technically
responsible for acquisition and development of resource projects during the Company’s period of growth
from $35 million to over $1 billion in market capitalisation.
Date of appointment as Director
4 September 2003
16
Other current public company
directorships
Former public company directorships in
last 3 years
Special responsibilities
Interests in securities
Director of Bassari Resources Limited
Managing Director / Chairman of Hill End Gold Ltd.
None
12,853,622 ordinary shares in Latrobe Magnesium
Limited, which are registered in the name of Diazill Pty
Limited as trustee for the PB Superannuation Fund.
John Robert Lee – Non-Executive Director
Mr Lee has a broad range of commercial skills and experiences in both the public and private sectors.
He has held senior management roles in the Federal Department of Employment and Industrial
Relations. He was also senior private secretary and principal adviser to Tony Street, a senior federal
cabinet minister. In the private sector, Mr Lee has held a number of senior management positions with
a number of major corporations including Henry Jones IXL, Elders Building Supplies and Woolworths
Limited. He is the founder of Stockholder Relations Pty Ltd, a management consultancy specialising in
corporate advisory, investor relations and corporate governance.
Date of appointment as Director
Other current public company
directorships
Former public company directorships in
last 3 Years
Special responsibilities
Interests in securities
10 December 2010
None
None
Chairman of Audit Committee
in Latrobe Magnesium
6,461,933 ordinary shares
Limited, registered in the name of Stockholder Relations
Pty Limited of which Mr Lee is a Director.
Company Secretary
Mr John Lee who has been a Director to the Company since 10 December 2010 became Company
Secretary on 1 July 2013.
MEETINGS OF DIRECTORS
The number of meetings of the Company’s Board of Directors and of each Board Committee held during
the year ended 30 June 2020 and the number of meetings attended by each Director was:
Director
Attended
Held Whilst in Office
Attended
Held Whilst in Office
Directors’ Meetings
Audit Committee Meetings
J S Murray
D O Paterson
K A Torpey
P F Bruce
J R Lee
8
8
8
8
8
8
8
8
8
8
-
2
-
-
2
-
2
-
-
2
The Board has yet to appoint a Nomination and a Remuneration Committee. The matters that would
normally be the responsibility of these committees are dealt with by the full Board of Directors.
Retirement, Election and Continuation in Office of Directors
Mr P F Bruce is the Director retiring by rotation at the next Annual General Meeting of the Company. Mr
Bruce being eligible in accordance with Article 12.2 of the Company’s constitution offer himself for re-
election. His background, experience and qualification are detailed on Pages 16 and 17.
17
REMUNERATION REPORT - AUDITED
This report outlines the Remuneration Arrangements in place for each key management person of
Latrobe Magnesium Limited. Principles used to determine the nature and amount of remuneration are:
Competitiveness and reasonableness
Acceptability to shareholders
Performance linkage / alignment of executive compensation
Transparency
Appropriateness for level of operations
Remuneration Committee
The Board has not yet formed a separate Remuneration Committee and all matters that would normally
be the responsibility of a Remuneration Committee are dealt with by the full Board of Directors.
Key Management Personnel
The full Board of Directors sets remuneration policies and practices generally and makes specific
recommendations on remuneration packages and other terms of employment for Executive Directors,
other Senior Executives and Non-Executive Directors.
Executive remuneration and other terms of employment are reviewed annually having regard to
performance against goals set at the start of the year, relevant comparative information and independent
expert advice. As well as basic salary, remuneration packages include superannuation.
Directors and executives are also able to participate in an Employee Share Acquisition Plan.
Remuneration packages are set at levels that are intended to attract and retain executives capable of
managing the Group’s operations.
Remuneration of Non-Executive Directors is determined by the Board within the maximum amount
approved by shareholders from time to time. The Board undertakes an annual review of its performance
and the performance of the Board Committees against goals set at the start of the year.
Details of the nature and amount of each element of the emoluments of each Director of Latrobe
Magnesium Limited and each specified officer of the Company and the Group receiving the highest
emoluments are set out in the following tables.
The information which follows through to the section titled “Share Options Granted to Key Management
Personnel” is subject to audit by the external auditors.
2020
Directors
J S Murray
D O Paterson
K A Torpey
P F Bruce
J R Lee
2019
Directors
J S Murray
D O Paterson
K A Torpey
P F Bruce
J R Lee
Base
Emoluments
$
45,000
311,604
26,808
26,808
26,808
437,028
Base
Emoluments
$
52,500
311,604
24,306
24,306
24,306
437,022
Equity Options
Total
$
-
-
-
-
-
-
$
45,000
311,604
26,808
26,808
26,808
437,028
Equity Options
Total
$
-
-
-
-
-
-
$
52,500
311,604
24,306
24,306
24,306
437,022
Performance
Related
%
-
-
-
-
-
-
Performance
Related
%
-
-
-
-
-
-
18
There are no additional executives employed by Latrobe Magnesium Limited other than those already
disclosed.
Service Agreements
There are currently no service agreements in place formalising the terms of remuneration of Directors
or other key management personnel of the Company and the Group. It was agreed by the Board to
review all Directors’ emoluments once the project moved into the construction phase.
Shareholdings
Number of shares held by Directors and Other Key Management Personnel of Parent Entity
Directors & Other
Key Management
Personnel
J S Murray
D O Paterson
K A Torpey
P F Bruce
J R Lee
Balance at
1 July 2019
16,351,923
123,095,740
102,450,189
12,853,622
6,461,933
Acquired under
Share Purchase
Plan for
Shareholders
Acquired
Under Debt
Conversion
to Equity
Net
Change
Other
Balance at
30 June
2020
-
-
-
-
-
-
-
-
-
-
-
16,351,923
- 123,095,740
- 102,450,189
12,853,622
-
6,461,933
-
Share Options Granted to Key Management Personnel
Granted - No options were granted to key management personnel over unissued shares during the
financial year.
Exercised - No options were exercised by key management personnel during or in the period since the
end of the financial year and up to the date of this report.
Expiry -
No options expired during or since the end of the financial year.
Balance - No options outstanding as at 30 June 2020
END OF AUDITED REMUNERATION REPORT
UNLISTED WARRANTS
Under the terms of the warrant loan facility of $1.5 million, LMG issued 12,495,000 unlisted warrants.
The warrants have an exercise price of $0.02 and are exercisable for a period up to 3 years post the
draw down dates which were 10 October 2018, 14 December 2018 and 29 March 2019. The value of
the warrants using Black-Scholes Option Value method is $50,201.
Under the terms of the increased warrant loan facility of $2.7 million, LMG issued 35,889,199 unlisted
warrants. The warrants have an exercise price of $0.03 and are exercisable for a period up to 3 years
post the draw down date which was 21 October 2019. The value of the warrants using Black-Scholes
Option Value method is $332,039.
Unlisted Warrants
Total warrants outstanding at beginning of the period
Granted in the period
Exercised in the period
Lapsed in the period
Outstanding at the end of the period
12,495.000
35,889,199
-
-
48,384,199
19
INDEMNIFICATION
During or since the end of financial year, the Company has not been indemnified or made a relevant
agreement to indemnify an officer or auditor of the Company or any related body corporate against
liability incurred as such an officer or auditor. The Company maintains a Directors and Officers Liability
Insurance, including company securities cover.
PROCEEDINGS ON BEHALF OF THE COMPANY
No person has applied for leave of court to bring proceedings on behalf of the Company or intervene in
any proceedings to which the Company is a party for the purpose of taking responsibility on behalf of
the Company for all or any part of those proceedings. The Company was not a party to any such
proceedings during the year.
NON-AUDIT SERVICES
The Company may decide to employ the auditor on assignments additional to their statutory audit duties
where the auditor’s expertise and experience with the Company and/or the Group are important.
Details of the amounts paid or payable to Nexia Sydney Partnership for services provided during the
year are set out below:
Audit and Review of Financial Reports
Taxation Services
$
37,500
7,000
---------
44,500
=====
The Board of Directors ensure that the provision of the non-audit services is compatible with the general
standard of independence for auditors imposed by the Corporations Act 2001.
AUDITORS’ INDEPENDENT DECLARATION
A copy of the auditors’ independence declaration as required under Section 307C of the Corporations
Act 2001 is set out on Page 21 and forms part of this report.
This report is made in accordance with a resolution of the Directors.
J S Murray
Chairman
Sydney
29 October 2020
D O Paterson
Chief Executive Officer
20
To the Board of Directors of Latrobe Magnesium Limited
Auditor’s Independence Declaration under section 307C of the Corporations Act 2001
As lead audit partner for the audit of the financial statements of Latrobe Magnesium Limited for the
financial year ended 30 June 2020, I declare that to the best of my knowledge and belief, there have
been no contraventions of:
(a)
the auditor independence requirements of the Corporations Act 2001 in relation to the audit;
and
(b)
any applicable code of professional conduct in relation to the audit.
Yours sincerely
Nexia Sydney Partnership
Stephen Fisher
Partner
Dated: 29 October 2020
Sydney
21
In the directors' opinion:
the attached financial statements and notes comply with the Corporations Act 2001, the Accounting
Standards, the Corporations Regulations 2001 and other mandatory professional reporting
requirements;
the attached financial statements and notes comply with International Financial Reporting Standards
as issued by the International Accounting Standards Board as described in note 1 to the financial
statements;
the attached financial statements and notes give a true and fair view of the consolidated entity's
financial position as at 30 June 2020 and of its performance for the financial year ended on that date;
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.
The directors have been given the declarations required by section 295A of the Corporations Act 2001.
Signed in accordance with a resolution of directors made pursuant to section 295(5)(a) of the Corporations
Act 2001.
On behalf of the directors
J S Murray
Chairman
Sydney
29 October 2020
D O Paterson
Chief Executive Officer
22
Revenue
Finance income
Other income
Expenses
Administration expenses
Finance cost
Research and evaluation expenses
Total expenses
Income tax expense
Note
GROUP
2020
$
2019
$
3,634
4,352
705,147
705,430
3
708,781
709,782
(1,149,612)
(943,775)
(821,161)
(311,714)
(818,179)
(969,765)
(2,788,952)
(2,225,254)
-
-
3
4
Loss attributable to members of the parent entity
(2,080,171)
(1,515,472)
Other Comprehensive Income
Other Comprehensive Income for the year
-
-
Total Comprehensive Income
(2,080,171)
(1,515,472)
Basic and diluted loss per share (cents per share)
18
(0.16)
(0.12)
GROUP
Note
2020
2019
The above statement should be read in conjunction with the accompanying notes.
23
CURRENT ASSETS
Cash and cash equivalents
Trade and other receivables
Total Current Assets
NON-CURRENT ASSETS
Trade and other receivables
Plant and equipment
Intangible assets
Right-of-use Asset
Total Non-Current Assets
TOTAL ASSETS
CURRENT LIABILITIES
Borrowings
Trade and other payables
Lease Liability
Total Current Liabilities
NON CURRENT LIABILITIES
Lease Liabilities
Deferred Income
Total Non Current Liabilities
Note
GROUP
2020
$
2019
$
5
6
6
7
8
14
9
10
14
14
15
38,529
8,856,461
401,750
839,848
8,894,990
1,241,598
19,287
1,571
16,993
2,270
6,897,535
6,891,729
80,455
-
6,998,848
6,910,992
15,893,838
8,152,590
3,655,688
2,471,710
386,018
274,285
56,392
-
4,098,098
2,745,995
32,582
8,104,695
8,137,277
-
-
-
TOTAL LIABILITIES
12,235,375
2,745,995
NET ASSETS
EQUITY
Issued capital
Warrant Reserves
Accumulated losses
TOTAL EQUITY
3,658,463
5,406,595
11
12
33,562,283
33,562,283
382,240
50,201
(30,286,060)
(28,205,889)
3,658,463
5,406,595
The above statement should be read in conjunction with the accompanying notes.
24
GROUP
Note
Issued
Capital
Warrant Accumulated
Reserves
Losses
Total
$
$
$
$
Balance at 1 July 2018
33,243,049
-
(26,690,417)
6,552,632
Warrants Issued
50,201
50,201
Total comprehensive income
-
Shares issued during the period
11
319,234
-
-
(1,515,472)
(1,515,472)
-
319,234
Balance at 1 July 2019
33,562,283
50,201
(28,205,889)
5,406,595
Warrants Issued
332,039
332,039
Total comprehensive income
Shares issued during the period
11
-
-
-
-
(2,080,171)
(2,080,171)
-
-
Balance at 30 June 2020
33,562,283
382,240
(30,286,060)
3,658,463
The above statement should be read in conjunction with the accompanying notes.
25
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from operations
Payments to suppliers and employees
Interest and other financial costs paid
Interest received
GROUP
2020
$
2019
$
Note
721,430
996,194
(1,719,105)
(2,106,713)
(60,434)
(95,691)
1,378
2,185
Net cash used in operating activities
18b
(1,056,731)
(1,204,025)
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of plant and equipment
Payment of International Patent expenditure
Net cash used in investing activities
CASH FLOWS FROM FINANCING ACTIVITIES
Repayment of Borrowing
Proceeds from Borrowing
Repayment of lease liabilities
Net cash from financing activities
Net (decrease)
equivalent held
/
increase
in cash and cash
Cash and cash equivalent at beginning of the financial
year
(117)
-
(8,117)
(25,312)
(8,217)
(25,312)
(640,000)
(660,000)
1,390,000
2,240,000
(48,273)
-
701,727
1,580,000
(363,221)
350,663
401,750
51,087
Cash and cash equivalent at end of financial year
18a
38,529
401,750
The above statement should be read in conjunction with the accompanying notes.
26
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES
The principal accounting policies adopted in the preparation of the financial statements are set out
below. These policies have been consistently applied to all the years presented, unless otherwise stated.
New or amended Accounting Standards and Interpretations adopted
The consolidated entity has adopted all of the new or amended Accounting Standards and
Interpretations issued by the Australian Accounting Standards Board ('AASB') that are mandatory for
the current reporting period.
Any new or amended Accounting Standards or Interpretations that are not yet mandatory have not been
early adopted.
The following Accounting Standards and Interpretations are most relevant to the consolidated entity:
AASB 16 Leases
AASB 16 standard applies to annual periods beginning on or after 1 January 2019. The standard
replaces AASB 117 'Leases' and for lessees will eliminate the classifications of operating leases and
finance leases.
Subject to exceptions, a 'right-of-use' asset will be capitalised in the statement of financial position,
measured at the present value of the unavoidable future lease payments to be made over the lease
term. The exceptions relate to short-term leases of 12 months or less and leases of low-value assets
(such as personal computers and small office furniture) where an accounting policy choice exists
whereby either a 'right-of-use' asset is recognised or lease payments are expensed to profit or loss as
incurred. A liability corresponding to the capitalised lease will also be recognised, adjusted for lease
prepayments, lease incentives received, initial direct costs incurred and an estimate of any future
restoration, removal or dismantling costs.
Straight-line operating lease expense recognition will be replaced with a depreciation charge for the
leased asset (included in operating costs) and an interest expense on the recognised lease liability
(included in finance costs). In the earlier periods of the lease, the expenses associated with the lease
under AASB 16 will be higher when compared to lease expenses under AASB 117.
However, EBITDA (Earnings Before Interest, Tax, Depreciation and Amortisation) results will be
improved as the operating expense is replaced by interest expense and depreciation in profit or loss
under AASB 16. For classification within the statement of cash flows, the lease payments will be
separated into both a principal (financing activities) and interest (either operating or financing activities)
component. For lessor accounting, the standard does not substantially change how a lessor accounts
for leases.
The consolidated entity has adopted AASB 16 from 1 July 2019. The directors of the Company
anticipate that the application of AASB 16 in the future will have an insignificant impact on the amounts
reported and disclosures made in the Group’s consolidated financial statements. The impact of its
adoption is shown in Note 14.
Basis of Preparation
These general-purpose financial statements have been prepared in accordance with Australian
Accounting Standards and Interpretations issued by the Australian Accounting Standards Board
('AASB') and the Corporations Act 2001, as appropriate for for-profit oriented entities. These financial
statements also comply with International Financial Reporting Standards as issued by the International
Accounting Standards Board ('IASB').
Historical cost convention
The financial statements have been prepared under the historical cost convention, except for, where
applicable, the revaluation of financial assets and liabilities at fair value through profit or loss, financial
assets at fair value through other comprehensive income, investment properties, certain classes of
property, plant and equipment and derivative financial instruments.
27
Critical accounting estimates
The preparation of the financial statements requires the use of certain critical accounting estimates. It
also requires management to exercise its judgement in the process of applying the consolidated entity's
accounting policies. The areas involving a higher degree of judgement or complexity, or areas where
assumptions and estimates are significant to the financial statements, are disclosed in note 1(u).
Parent entity information
In accordance with the Corporations Act 2001, these financial statements present the results of the
consolidated entity only. Supplementary information about the parent entity is disclosed in note 25.
a.
Principles of Consolidation
The consolidated financial statements comprise the financial statements of Latrobe Magnesium
Limited and its subsidiaries at 30 June each year ("the Group"). Subsidiaries are entities over
which the Group has exposure to variable returns from its involvement with the subsidiaries and
has the ability to affect those returns through its power over the subsidiaries. Consolidated
financial statements include all subsidiaries from the date that control commences until the date
that control ceases. The financial statements of subsidiaries are prepared for the same reporting
period as the parent, using consistent accounting policies.
All inter-Company balances and transactions between entities in the Group, including any
unrealised profits or losses, have been eliminated on consolidation.
Minority interests in the results and equity of subsidiaries are shown separately in the consolidated
income statement and balance sheet respectively.
Subsidiaries are accounted for in the parent entity financial statements at cost.
A list of controlled entities is contained in Note 13 to the financial statements.
b.
Income Tax
The Group adopts the liability method of tax-effect accounting whereby the income tax expense
is based on the profit from ordinary activities adjusted for any non-assessable or disallowed items.
It is calculated using the tax rates that have been enacted or are substantially enacted by the
balance sheet date.
Deferred tax is accounted for using the balance sheet liability method in respect of temporary
differences arising between the tax bases of assets and liabilities and their carrying amounts in
the financial statements. No deferred income tax will be recognised from the initial recognition of
an asset or liability, excluding a business combination, where there is no effect on accounting or
taxable profit or loss.
Deferred tax is calculated at the tax rates that are expected to apply to the period when the asset
is realised or liability is settled. Deferred tax is credited in the income statement except where it
relates to items that may be credited directly to equity, in which case the deferred tax is adjusted
directly against equity.
Deferred income tax assets are recognised to the extent that it is probable that future tax profits
will be available against which deductible temporary differences can be utilised. Deferred tax
assets in relation to tax losses are not brought to account unless there is convincing evidence of
realisation of the benefit.
The amount of benefits brought to account or which may be realised in the future is based on the
assumption that no adverse change will occur in income tax legislation and the anticipation that
the Group will derive sufficient future assessable income to enable the benefit to be realised and
comply with the conditions of deductibility imposed by the law.
Latrobe Magnesium Limited and its wholly-owned Australian subsidiaries have formed an income
tax group under the Tax Consolidation Regime. Each entity in the Group recognises its own
current and deferred tax liabilities, except for any deferred tax liabilities resulting from unused tax
losses and tax credits, which are immediately assumed by the parent entity. The current tax
28
liability of each Group entity is then subsequently assumed by the parent entity. The Group
notified the ATO on 2 January 2003 that it had formed an income tax group to apply from 1 July
2002. The tax group has entered a tax sharing agreement whereby each Company in the Group
contributes to the income tax payable in proportion to their contribution to the net profit before tax
of the tax group.
c.
Foreign Currency Transactions and Balances
Functional and presentation currency
The functional currency of each of the Group’s entities is measured using the currency of the
primary economic environment in which that entity operates. The consolidated financial
statements are presented in Australian dollars which is the parent entity’s functional and
presentation currency.
Transaction and balances
Foreign currency transactions are translated into functional currency using the exchange rates
prevailing at the date of the transaction. Foreign currency monetary items are translated at the
year-end exchange rate. Non-monetary items measured at historical cost continue to be carried
at the exchange rate at the date of the transaction. Non-monetary items measured at fair value
are reported at the exchange rate at the date when fair values were determined.
Exchange differences arising on the translation of monetary items are recognised in the income
statement, except where deferred in equity as a qualifying cash flow or net investment hedge.
Exchange differences arising on the translation of non-monetary items are recognised directly in
equity to the extent that the gain or loss is directly recognised in equity otherwise the exchange
difference is recognised in the income statement.
d.
Plant and Equipment
Plant and equipment is stated at historical cost, including costs directly attributable to bringing the
asset to the location and condition necessary for it to be capable of operating in the manner
intended by management, less depreciation and any impairment.
The carrying amount of plant and equipment is reviewed annually by Directors to ensure it is not
in excess of the recoverable amount from these assets. The recoverable amount is assessed on
the basis of the expected net cash flows that will be received from the assets employment and
subsequent disposal. The expected net cash flows have been discounted to their present value
in determining recoverable amounts.
Depreciation
The depreciable amount of all fixed assets is depreciated on a diminishing value basis over their
useful lives to the Group commencing from the time the asset is held ready for use.
The depreciation rates used for each class of depreciable assets are:
Class of Fixed Asset
Depreciation Rate
Plant and equipment - diminishing value
35%
The asset’s residual values and useful lives are reviewed and adjusted if appropriate, at each
balance sheet date.
Gains and losses on disposals are calculated as the difference between the net disposal proceeds
and the asset's carrying amount and are included in the income statement in the year that the
item is derecognised.
An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s
carrying amount is greater than its estimated recoverable amount.
e.
Intangible assets
Intangible assets acquired as part of a business combination, other than goodwill, are initially
measured at their fair value at the date of the acquisition. Intangible assets acquired separately
29
are initially recognised at cost. Indefinite life intangible assets are not amortised and are
subsequently measured at cost less any impairment. Finite life intangible assets are
subsequently measured at cost less amortisation and any impairment. The gains or losses
recognised in profit or loss arising from the derecognition of intangible assets are measured as
the difference between net disposal proceeds and the carrying amount of the intangible asset.
The method and useful lives of finite life intangible assets are reviewed annually. Changes in the
expected pattern of consumption or useful life are accounted for prospectively by changing the
amortisation method or period.
Research and development
Research costs are expensed in the period in which they are incurred. Development costs are
capitalised when it is probable that the project will be a success considering its commercial and
technical feasibility; the consolidated entity is able to use or sell the asset; the consolidated entity
has sufficient resources; and intent to complete the development and its costs can be measured
reliably. Capitalised development costs are amortised on a straight-line basis over the period of
their expected benefit, once the project is complete and ready to use, being their finite life of 10
years.
Patents
Significant costs associated with patents and trademarks are deferred and amortised on a
straight-line basis over the period of their expected benefit, being their finite life of 20 years.
f.
Government grants
Government grants relating to costs are deferred and recognised in profit or loss over the period
necessary to match them with the costs that they are intended to compensate. Grants relating
to expense items are recognised as income immediately.
g.
Impairment of Non-Financial Assets
At each reporting date the Group assesses whether there is any indication that individual assets
are impaired. Where impairment indicators exist, recoverable amount is determined and
impairment losses are recognised in the income statement where the asset's carrying value
exceeds its recoverable amount. Recoverable amount is the higher of an asset's fair value less
costs to sell and value in use. For the purpose of assessing value in use, the estimated future
cash flows are discounted to their present value using a pre-tax discount rate that reflects current
market assessments of the time value of money and the risks specific to the asset.
Where it is not possible to estimate recoverable amount for an individual asset, recoverable
amount is determined for the cash-generating unit to which the asset belongs.
h.
Investments and other financial assets
Investments and other financial assets are initially measured at fair value. Transaction costs are
included as part of the initial measurement, except for financial assets at fair value through profit
or loss. Such assets are subsequently measured at either amortised cost or fair value depending
on their classification. Classification is determined based on both the business model within which
such assets are held and the contractual cash flow characteristics of the financial asset unless,
an accounting mismatch is being avoided.
Financial assets are derecognised when the rights to receive cash flows have expired or have
been transferred and the consolidated entity has transferred substantially all the risks and rewards
of ownership. When there is no reasonable expectation of recovering part or all of a financial
asset, it's carrying value is written off.
Financial assets at fair value through profit or loss
Financial assets not measured at amortised cost or at fair value through other comprehensive
income are classified as financial assets at fair value through profit or loss. Typically, such
financial assets will be either: (i) held for trading, where they are acquired for the purpose of selling
in the short-term with an intention of making a profit, or a derivative; or (ii) designated as such
upon initial recognition where permitted. Fair value movements are recognised in profit or loss.
30
Financial assets at fair value through other comprehensive income
Financial assets at fair value through other comprehensive income include equity investments
which the consolidated entity intends to hold for the foreseeable future and has irrevocably elected
to classify them as such upon initial recognition.
Impairment of financial assets
The consolidated entity recognises a loss allowance for expected credit losses on financial assets
which are either measured at amortised cost or fair value through other comprehensive income.
The measurement of the loss allowance depends upon the consolidated entity's assessment at
the end of each reporting period as to whether the financial instrument's credit risk has increased
significantly since initial recognition, based on reasonable and supportable information that is
available, without undue cost or effort to obtain.
Where there has not been a significant increase in exposure to credit risk since initial recognition,
a 12-month expected credit loss allowance is estimated. This represents a portion of the asset's
lifetime expected credit losses that is attributable to a default event that is possible within the next
12 months. Where a financial asset has become credit impaired or where it is determined that
credit risk has increased significantly, the loss allowance is based on the asset's lifetime expected
credit losses. The amount of expected credit loss recognised is measured on the basis of the
probability weighted present value of anticipated cash shortfalls over the life of the instrument
discounted at the original effective interest rate.
For financial assets measured at fair value through other comprehensive income, the loss
allowance is recognised within other comprehensive income. In all other cases, the loss allowance
is recognised in profit or loss.
i.
Finance Costs
Finance costs directly attributable to the acquisition, construction or production of assets that
necessarily take a substantial period of time to prepare for their intended use or sale, are added
to the cost of those assets, until such time as the assets are substantially ready for their intended
use or sale.
All other finance costs are recognised in income in the period in which they are incurred.
j.
Cash and Cash Equivalents
Cash and cash equivalents include cash on hand, deposits held at call with banks, other short-
term highly liquid investments with original maturities of three months or less, and bank overdrafts.
Bank overdrafts are shown within short-borrowings in current liabilities on the balance sheet.
k.
Revenue
Interest
Interest revenue is recognised as interest accrues using the effective interest method. This is a
method of calculating the amortised cost of a financial asset and allocating the interest income
over the relevant period using the effective interest rate, which is the rate that exactly discounts
estimated future cash receipts through the expected life of the financial asset to the net carrying
amount of the financial asset.
Research and development tax rebate
Research and development tax rebate is recognised when it is received or when the right to
receive payment is established.
l.
Trade and Other Payables
Trade and other payables represent liabilities for goods and services provided to the Group prior
to the year end and which are unpaid. These amounts are unsecured and have up to 60-day
payment terms.
31
m.
Interest bearing liabilities
All loans and borrowings are initially recognised at fair value, net of transaction costs incurred.
Borrowings are subsequently measured at amortised cost. Any difference between the proceeds
(net of transaction costs) and the redemption amount is recognised in the income statement over
the period of the loans and borrowings using the effective interest method.
All borrowings are classified as current liabilities unless the Group has an unconditional right to
defer settlement of the liability for at least 12 months after the balance sheet date.
n.
Other liabilities
Other liabilities comprise non-current amounts due to related parties that do not bear interest and
are repayable in more than 366 days from balance sheet date. As these are non-interest bearing,
fair value at initial recognition requires an adjustment to discount these loans using a market-rate
of interest for a similar instrument with a similar credit rating (Group's incremental borrowing rate).
The discount is credited to the income statement immediately and amortised using the effective
interest method.
The component parts of compound instruments (convertible securities) issued by the Group are
classified separately as financial liabilities and equity in accordance with the substance of the
contractual arrangements and the definitions of a financial liability and an equity instrument. A
conversion option that will be settled by the exchange of a fixed amount of cash or another
financial asset for a fixed number of the Company’s own equity instruments is an equity
instrument.
At the date of issue, the fair value of the liability component is estimated using the prevailing
market interest rate for similar non-convertible instruments. This amount is recognised as a
liability on an amortised cost basis using the effective interest method until extinguished upon
conversion or at the instrument’s maturity date.
The conversion option classified as equity is determined by deducting the amount of the liability
component from the fair value of the compound instrument as a whole. This is recognised and
included in equity, net of income tax effects, and is not subsequently remeasured.
o.
Provisions
Provisions for legal claims, service warranties and make good obligations are recognised when
the Group has a present legal or constructive obligation as a result of a past event, it is probable
that an outflow of economic resources will be required to settle the obligation and the amount can
be reliably estimated. For service warranties, the likelihood that an outflow will be required to
settle the obligation is determined by considering the class of obligations as a whole. Provisions
are not recognised for future operating losses.
Where the effect of the time value of money is material, provisions are determined by discounting
the expected future cash flows at a pre-tax rate that reflects current market assessments of the
time value of money and, where appropriate, the risks specific to the liability.
p.
Share-based payments
For equity-settled share-based payment transactions, the Company measures the goods or
services received, and the corresponding increase in equity, directly, at the fair value of the goods
or services received.
q.
Comparative Figures
When required by Accounting Standards, comparative figures have been adjusted to conform to
changes in presentation for the current financial year.
r.
Contributed equity
Ordinary shares are classified as equity (refer Note 11).
32
Costs directly attributable to the issue of new shares or options are shown as a deduction from
the equity proceeds. Costs directly attributable to the issue of new shares or options associated
with the acquisition of a business are included as part of the purchase consideration.
s.
Dividends
Provision is made for dividends declared and no longer at the discretion of the Group, on or before
the end of the financial year but not distributed at balance date.
t.
Earnings per share
Basic earnings per share
Basic earnings per share is calculated by dividing the profit attributable to members of Latrobe
Magnesium Limited, adjusted for the weighted average number of ordinary shares outstanding
during the financial year, adjusted for bonus elements in ordinary shares during the year.
The weighted average number of issued shares outstanding during the financial year does not
include shares issued as part of the Employee Share Loan Plan that are treated as in-substance
options.
Diluted earnings per share
Earnings used to calculate diluted earnings per share are calculated by adjusting the basic
earnings by the after-tax effect of dividends and interest associated with dilutive potential ordinary
shares. The weighted average number of shares used is adjusted for the weighted average
number of ordinary shares that would be issued on the conversion of all the dilutive potential
ordinary shares into ordinary shares.
u.
Goods and Services Tax (GST)
Revenues, expenses are recognised net of GST except where 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.
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 balance sheet.
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.
v.
Critical Accounting Estimates and Judgments
The Directors evaluate, estimate and make judgements which are incorporated into the financial
report based on historical knowledge and best available current information.
Estimates assume a reasonable expectation of future events and are based on current trends
and economic data, obtained both externally and within the Group.
Impairment
The Group assesses impairment at each reporting date by evaluating conditions specific to the
Group that may lead to an impairment of assets. Where an impairment trigger exists, the
recoverable amount of the asset is determined. Value in use calculations performed in
recoverable amounts incorporate a number of key estimates.
No impairment has been recognised in respect of the intangible assets for the year ended 30
June 2020 because:
1.
the Company's internal valuations indicate that the recoverable amounts of the assets are
greater than the book value of the assets;
2.
the magnesium price supports this valuation; and
33
3.
the Company is utilising the proven Thermal Reduction Process in its process with estimates
of its capital and operating costs which are based on its preliminary feasibility study and
subsequent reports.
The key assumptions are adjusted to incorporate risks with a particular segment, and are
summarised as follows:
budgeted cash flow period of 20 years, which approximates the project’s life, based on current
inputs;
initial production of 3,000 tonnes increasing to 40,000 tonnes;
magnesium metal price of US$4,829 per tonne is used which represents the current weighted
average price between China and the United States.
market information for forward exchange rates;
operating costs and inputs based upon third party consultant’s estimates and the feasibility
study;
capital costs based upon the detailed feasibility study; and
pre-tax discount rates of 10% and 15%.
w.
New Accounting Standards and Interpretations not yet mandatory or early adopted
Australian Accounting Standards and Interpretations that have recently been issued or amended
but are not yet mandatory, have not been early adopted by the consolidated entity for the annual
reporting period ended 30 June 2020. The consolidated entity's assessment of the impact of these
new or amended Accounting Standards and Interpretations, most relevant to the consolidated
entity, are set out below. The Group is still assessing but does not currently expect these new
Standards to have a material financial impact on its financial statements:
AASB 2018-7: Amendments to Australian Accounting Standards – Definition of Material
The amendments refine the definition of material in AASB 101. The amendments clarify the
definition of material and includes guidance relating to obscuring information that could be
reasonably expected to influence decisions of the primary users of the financial information. The
amendments include additional guidance to the definition of material, gives it more prominence,
and clarifies the explanation accompanying the definition of material. This Standard applies to
annual reporting periods beginning on or after 1 January 2020.
AASB 2019-1: Amendments to Australian Accounting Standards – References to the Conceptual
Framework
This Standard sets out amendments to Australian Accounting Standards, Interpretations and
other pronouncements to reflect the issuance of the Conceptual Framework for Financial
Reporting (Conceptual Framework) by the AASB. The amendments to the Conceptual
Framework apply to for-profit private sector entities that have public accountability and are
required by legislation to comply with Australian Accounting Standards; and other for-profit
entities that voluntarily elect to apply the Conceptual Framework, which would permit compliance
with Australian Accounting Standards (Tier 1) and International Financial Reporting Standards
(IFRS Standards). This Standard applies to annual reporting periods beginning on or after 1
January 2020.
AASB 2019-5: Amendments to Australian Accounting Standards - Disclosure of the Effect of New
IFRS Standards Not Yet Issued in Australia
Amends AASB 1054 by adding a disclosure requirement of the potential effect of an IFRS
Standard that has not yet been issued by the AASB in accordance with paragraphs 30 and 31 of
AASB 108 Accounting Policies, Changes in Accounting Estimates and Errors. This will ensure
that for-profit publicly accountable entities complying with Australian Accounting Standards can
claim compliance with IFRS Standards. This Standard applies to annual reporting periods
beginning on or after 1 January 2020.
34
AASB 2020-1: Amendments to Australian Accounting Standards – Classification of Liabilities as
Current or Non-Current
Amends AASB 101 to clarify that liabilities are classified as either current or non-current,
depending on the rights that exist at the end of the reporting period. Classification is unaffected
by the expectations of the entity or events after the reporting date (for example, the receipt of a
waiver, a breach of covenant, or settlement of the liability). The mandatory application date of the
amendment has been deferred by 12 months to annual reporting periods beginning on or 1
January 2023.
35
NOTE 2: FINANCIAL RISK MANAGEMENT OBJECTIVES
The consolidated entity's activities expose it to a variety of financial risks: market risk (including foreign
currency risk, price risk and interest rate risk), credit risk and liquidity risk. The consolidated entity's
overall risk management program focuses on the unpredictability of financial markets and seeks to
minimise potential adverse effects on the financial performance of the consolidated entity. The
consolidated entity uses derivative financial instruments such as forward foreign exchange contracts to
hedge certain risk exposures. Derivatives are exclusively used for hedging purposes, i.e. not as trading
or other speculative instruments. The consolidated entity uses different methods to measure different
types of risk to which it is exposed. These methods include sensitivity analysis in the case of interest
rate, foreign exchange and other price risks, ageing analysis for credit risk and beta analysis in respect
of investment portfolios to determine market risk.
Risk management is carried out by senior finance executives ('finance') under policies approved by the
Board of Directors ('the Board'). These policies include identification and analysis of the risk exposure
of the consolidated entity and appropriate procedures, controls and risk limits. Finance identifies,
evaluates and hedges financial risks within the consolidated entity's operating units. Finance reports to
the Board on a monthly basis.
(i)
Liquidity risk
Liquidity risk arises from the Group’s management of working capital. It is the risk that the Group will
encounter difficulty in meeting its financial obligations as they fall due.
The Group’s policy is to ensure that it will always have sufficient cash or access to funds to allow it to
meet its liabilities when they become due. To achieve this aim, it seeks to maintain cash balances (or
agreed facilities) to meet expected requirements for a period of at least 90 days.
The Group’s exposure to liquidity risk has been assessed as minimal. There are no past due payables
at balance date.
The Board receives cash flow projections on a bimonthly basis as well as information regarding cash
balances. At the balance sheet date, these projections indicated that the Group expected to have
sufficient liquid resources to meet its obligations under all reasonably expected circumstances.
(ii)
Interest Rate Risk
The Group’s exposure to interest risk arises when the value of financial instruments fluctuates as a result
of changes in market interest rates and the effective weighted average interest rates on classes of
financial assets and financial liabilities.
The Group’s exposure to interest rate risk only extends to cash and cash equivalents at balance date.
The Group’s exposure to interest rate risk at 30 June 2020 and 30 June 2019 is set out in the following
tables:
CONSOLIDATED
Fixed Interest maturing in
Year ended
30 June 2020
Weighted
Average
Interest Rate
Floating
Interest
Rate
1 year or
less
Financial assets
Cash & cash equivalents
Trade & other receivables
Total Financial Assets
Financial liabilities
Borrowings
Trade and other payables
%
1
4
12
$
20,007
-
20,007
$
-
-
-
-
-
(3,655,688)
-
Net financial assets
20,007 (3,655,688)
Over
1 to 5
years
$
-
-
-
-
-
-
More
than 5
years
Non-interest
bearing
Total
$
-
-
-
-
-
-
$
$
18,522
8,856,461
38,529
8,856,461
8,874,983
8,894,990
-
(386,018)
(3,655,688)
(386,018)
8,488,965
4,853,284
36
Year ended
30 June 2019
Financial assets
Cash & cash equivalents
Trade & other receivables
Total Financial Assets
Financial liabilities
Borrowings
Trade and other payables
Weighted
Average
Interest Rate
Floating
Interest
Rate
Fixed Interest maturing in
More
Over
than 5
1 to 5
years
years
1 year or
less
Non-
interest
bearing
Total
%
1
4
12
$
$
350,077
-
-
55,344
350,077
55,344
$
-
-
-
-
-
(2,357,607) (114,103)
-
-
$
-
-
-
-
-
-
$
$
51,673
784,504
401,750
839,848
836,177
1,241,598
-
(274,285)
(2,471,710)
(274,285)
561,892
(1,504,397)
Net financial assets
350,077 (2,302,263) (114,103)
(iii)
Foreign exchange currency risk
The Group is exposed to fluctuations in foreign currencies arising from the sale and purchase of goods
and services in currencies other than the Group’s measurement currency.
There was no exposure to foreign currency risk at balance date.
(iv) Share market risk
The Company relies greatly on equity markets to raise capital for its magnesium project development
activities, and is thus exposed to equity market volatility.
When market conditions require prudent capital management, in consultation with its professional
advisers, the Group looks to alternative sources of funding, including debt financing and joint venture
participation.
(v) Credit risk
Credit risk arises principally when the other party to a financial instrument fails to discharge its
obligations in respect of that instrument.
The Group’s exposure to credit risk arises from potential default of the counter party, with the maximum
exposure equal to the carrying amount of these instruments.
Trade and receivable balances are monitored on an ongoing basis with the Group’s exposure to bad
debts minimal. There was no exposure to trade receivable credit risk at balance date.
The Group does not have any material credit risk exposure to any single receivable or Group of
receivables under financial instruments entered into by the Group.
Other receivables comprise GST. Credit worthiness of debtors is undertaken when appropriate.
(vi) Commodity risk
Commodity price risk arises when the fair value of future cash flows of a financial instrument will fluctuate
because of changes in commodity market prices.
The Group had no exposure to commodity price risk at balance date. The Group’s potential exposure
to commodity price risk will materialise in the event that development of the Group’s Latrobe Magnesium
Project proceeds.
(vii) Market risk
Market risk does not arise as the Group does not use interest bearing, tradeable or foreign currency
financial instruments.
37
As the financial assets held by the company as at 30 June 2020 were cash and cash equivalents and
trade and other receivables, and the value of these financial assets are not affected by the short-term
movement in interest rates, a market risk sensitivity has not been performed.
(viii) Equity price risk
Equity price risk arises from investments in equity securities and Latrobe Magnesium Limited’s issued
capital.
The Group had no exposure to investments in equity securities at balance date.
The capacity of the Company to raise capital from time to time may be influenced by either or both
market conditions and the price of the Company’s listed securities at that time.
Fair value of financial assets and liabilities
The fair value of all monetary financial assets and financial liabilities of Latrobe Magnesium approximate
their carrying value.
There are no off-balance sheet financial asset and liabilities at year-end. All financial assets and
liabilities are denominated in Australian dollars.
38
NOTE 3: LOSS FROM ORDINARY ACTIVITIES
The following revenue and expense items are relevant in explaining the
financial performance for the period.
(i)
(ii)
Revenue
Finance Income
Other Income
Research and development tax rebate
Government Grants
Expenses
Depreciation – Equipment
Depreciation – Lease
Research and evaluation expenses
Directors and CEO fees
NOTE 4:
INCOME TAX EXPENSE
GROUP
2020
$
2019
$
3,634
4,352
689,147
16,000
705,430
-
708,781
709,782
816
56,792
818,179
437,028
1,222
-
969,765
437,022
GROUP
2020
$
2019
$
The prima facie tax on loss from ordinary activities before income tax is
reconciled to the income tax benefit as follows:
Loss from ordinary activities before income tax
(2,080,171)
(1,515,472)
Prima facie tax benefit on loss from ordinary activities before income
tax at 27.5%
572,047
416,755
Permanent differences relating to R&D claim
(246,152)
(251,968)
Increase in income tax benefit due to timing differences
3,626
10,867
Tax losses not brought to account as future income tax benefit.
(329,521)
(175,654)
Income tax benefit attributable to loss from ordinary activities
before income tax
-
-
39
Net deferred tax asset not taken to account
The potential future income tax benefit arising from tax losses has not been taken to account because
of the absence of convincing evidence of the realisation of the benefit.
Benefit of tax losses carried forward:
Tax losses carried forward
Capital losses
GROUP
2020
$
2019
$
2,591,009
750,305
2,261,488
750,305
3,341,314
3,011,793
The deferred tax asset will only be released if:
i.
the Group derives future assessable income of a nature and an amount sufficient to enable the
benefit to be realised;
the Group continues to comply with the conditions for deductibility imposed by the law; and
ii.
iii. no changes in tax legislation adversely affect the Group in realising the benefit.
NOTE 5: CASH AND CASH EQUIVALENTS
Cash at bank
NOTE 6: TRADE AND OTHER RECEIVABLES
CURRENT
R&D tax concession
GST recoverable
Promissory Note
Prepayment
NON-CURRENT
Rent Bond held in bank deposit
GROUP
2020
$
2019
$
38,529
401,750
GROUP
2020
$
2019
$
8,793,842
42,202
-
20,417
705,430
64,491
55,344
14,583
8,856,461
839,848
19,287
16,993
19,287
16,993
There are no balances within trade and other receivable that are impaired and are past due. It is
expected these balances will be received when due. Impaired assets are provided for in full.
40
NOTE 7: PLANT AND EQUIPMENT
Plant and equipment at cost
Accumulated depreciation
Total Plant and Equipment
Movements in Carrying Amounts
GROUP
2020
$
7,897
2019
$
7,779
(6,326)
(5,509)
1,571
2,270
Between the beginning and the end of the current financial year, movements in the carrying amounts
for each class of plant and equipment are:
Balance at 1 July
Additions
Depreciation expense
Carrying amount at 30 June
NOTE 8:
INTANGIBLE ASSETS
Acquired in-process research and development, at cost
Acquired in 2017 with the Ecoengineers Pty Ltd acquisition
Closing balance
International Patent for the Hydromet Process.
Plant and
Equipment
2020
$
2,270
117
(816)
Plant and
Equipment
2019
$
3,492
-
(1,222)
1,571
2,270
GROUP
2020
$
5,684,000
1,080,000
6,764,000
133,535
2019
$
5,684,000
1,080,000
6,764,000
127,729
Total Intangible Assets
6,897,535
6,891,729
Latrobe Magnesium Project is based in the Latrobe Valley in Victoria. As the project is not held ready
for use, the Company is required to perform an annual impairment test. The key assumptions underlying
this impairment test have been based on data provided in the Company’s preliminary feasibility study
and subsequent reports. The key assumptions are adjusted to incorporate risks with a particular
segment, and are summarised as follows:
•
budgeted cash flow period of 20 years, which approximates the project’s life, based on current
inputs;
initial production of 3,000 tonnes per annum increasing to 40,000 tonnes;
•
• magnesium metal price of US$4,829 per tonne is used which represents the weighted average price
between China and the United States;
• market information for forward exchange rates;
•
•
•
operating costs based upon third party consultant’s estimates;
capital costs based upon the detailed feasibility study; and
pre-tax discount rates of 10% and 15%.
41
NOTE 9: BORROWINGS
CURRENT
R&D Loan Facility
Warrant Loan Facility
Directors Loan Facility
Total
GROUP
2020
$
2019
$
458,134
2,965,099
232,455
-------------
3,655,688
========
673,620
1,683,987
114,103
-------------
2,471,710
=======
i. R&D Loan Facility from RnD Funding Pty Ltd
Interest Rate:
Maturity Date:
Repayment:
0.9375% per month
31 October 2020
Cash in full from the 2020 R&D tax rebate
Balance as at 30 June 2019
Accrued financing costs to October 2019
Repaid from receipt of 2019 R&D tax rebate of $705,430
Loan drawdown in Feb-20
Finance fee capitalised at 30-Jun-20
Interest accrued at 30-Jun-20
Loan as at 30 June 2020
$673,620
21,524
-------------
$695,144
=======
$440,000
3,300
14,834
-------------
$458,134
=======
ii. Warrant Loan Facility from RnD Funding Pty Ltd
Interest Rate:
Maturity Date:
Repayment:
1.25% per month
31 October 2020
Cash in full or refinancing into a project finance facility
Balance as at 30 June 2019
Add back Warrant Reserve
Accrued financing costs to October 2019
Rollover to October 2019
Additional Loan Facility at October 2019
Total Warrant Loan Facility
Finance fee capitalised at 30-Jun-20
Interest accrued at 30-Jun-20
Warrant Expenses at 30 June 2020
Warrant Reserves
Loan as at 30 June 2020
$1,683,987
50,201
108,175
---------------
$1,842,363
$850,000
---------------
$2,692,363
156,925
320,674
177,377
(382,240)
--------------
$2,965,099
========
iii. Directors’ Loans
Interest Rate:
Maturity Date:
Repayment:
$200,000
1% per month
31 December 2020
Cash in full or by Issue of LMG shares
Loan balance at 30 June 2019
Loan drawdown in June 2020
Finance fee capitalised
Interest accrued at 30 June 2020
Loan as at 30 June 2020
$114,103
100,000
3,000
15,352
-------------
$232,455
=======
42
NOTE 10: TRADE AND OTHER PAYABLES
CURRENT
Trade creditors and accrued expenses
Loan from Directors and Consultant
Total
NOTE 11:
ISSUED CAPITAL
GROUP
2020
$
2019
$
236,761
274,285
149,257
-
386,018
274,285
GROUP
2020
$
2019
$
(a) Ordinary Shares Issued and Fully Paid
Balance at beginning of reporting period
33,526,283 33,243,049
10 Dec 2018
10 Dec 2018
31,865,750 shares issued at $0.008 to convert
outstanding fees owing to Directors.
8,038,500 shares issued at $0.008 to convert
outstanding fees owing to Project Director
-
-
254,926
64,308
(b) Shares on Issue
Balance at beginning of reporting period
Share on Issues:
•
•
10 December 2018
10 December 2018
33,526,283 33,526,283
No.
No.
1,296,503,069 1,256,598,819
-
-
31,865,750
8,038,500
Balance at end of reporting period
1,296,503,069 1,296,503,069
Fully paid ordinary shares
Ordinary shares participate in dividends and the proceeds on winding up of the parent entity in proportion
to the number of shares held.
At shareholder meetings each ordinary share is entitled to one vote when a poll is called, otherwise each
shareholder has one vote on a show of hands.
Options
There were no unissued shares under option.
Employee Share Plan Scheme
For information relating to the Latrobe Magnesium Limited Share Plan Acquisition Plan, refer to Note
21: Employee Benefits. No shares were issued during the financial year.
43
Capital Management
The Group considers its capital to comprise its ordinary share capital and reserves.
In managing its capital, the Group’s primary objective is to maintain a sufficient funding base to enable
the Group to meet its working capital and the development of its Latrobe magnesium project.
In making decisions to adjust its capital structure to achieve these aims, either through altering its
dividend policy, new share issues, or consideration of debt, the Group considers not only its short-term
position but also its long-term operational and strategic objectives.
In October 2019, the Group rolled over the warrant loan facility amounting to $1,842,363 and
secured an additional loan of $850,000, repayable in cash or refinancing into a project finance
facility.
The Group also secured a R&D loan facility of $440,000, repayable on receipt of 2020 R&D tax
rebate.
The loans from two directors of the Group totalling $200,000 were fully drawn as at 30 June 2020,
repayable on 31 December 2020 either by cash or converted to LMG securities.
NOTE 12: UNLISTED WARRANTS
Under the terms of the warrant loan facility of $1.5 million, LMG issued 12,495,000 unlisted warrants.
The warrants have an exercise price of $0.02 and are exercisable for a period up to 3 years post the
draw down dates which were 10 October 2018, 14 December 2018 and 29 March 2019. The value of
the warrants using Black-Scholes Option Value method is $50,201.
Under the terms of the increased warrant loan facility of $2.7 million, LMG issued 35,889,199 unlisted
warrants. The warrants have an exercise price of $0.03 and are exercisable for a period up to 3 years
post the draw down date which was 21 October 2019. The value of the warrants using Black-Scholes
Option Value method is $332,039.
Unlisted Warrants
Total warrants outstanding at beginning of the period
Granted in the period
Exercised in the period
Lapsed in the period
Outstanding at the end of the period
12,495.000
35,889,199
-
-
48,384,199
NOTE 13: CONTROLLED ENTITIES
Country of
Incorporation
Percentage Owned
2019
2020
Parent Entity:
Latrobe Magnesium Limited
Australia
Subsidiaries of Latrobe Magnesium Limited
Money Management WA Pty Ltd
Gold Mines of WA Pty Ltd
Magnesium Investments Pty Ltd
Ecoengineers Pty Ltd
Australia
Australia
Australia
Australia
%
-
100
100
100
100
%
-
100
100
100
100
44
NOTE 14: LEASING COMMITMENTS
Right of Use Assets
The Company’s office lease commenced on 1 December 2018 and is expiring on 30 November 2021.
This lease was finally executed in January 2020 due to change of building management. Rental
increase is 4% per annum in December. The monthly rent, outgoings and cleaning totalling $6,300 is
payable monthly in advance.
On initial application of AASB 16, the Group elected to record right-of-use assets based on the
corresponding lease liability in the statement of financial position as at 1 July 2019. Using the simplified
approach, right-of-use assets of $137,247 and lease obligations of $137,247 were recorded. When
measuring lease liabilities, the Group discounted lease payments using its incremental borrowing rate
at 1 July 2019, being 5.04%.
Right of Use Asset
Accumulated Depreciation
Lease Liability
Interest Expense for the year
Lease Payments during the year
Lease Liability at end of year
Current Lease Liability
Non Current Lease Liability
Total Lease Liability
GROUP
2019
2020
$
137,247
(56,792)
80,455
137,247
5,261
(53,534)
88,974
56,392
32,582
88,974
$
-
-
-
-
-
-
-
-
-
-
The Company extended its option agreement to lease a property at 320 Tramway Road, Morwell,
Victoria on 15 November 2020. This option agreement has been signed. This site is intended for the
installation of the future magnesium plant and associated facilities.
NOTE 15: DEFERRED INCOME
R&D Tax Concession Refund
Refund to be received and treated as income
Deferred Income as it relates to the plant
GROUP
2020
$
8,793,842
(689,147)
8,104,695
2019
&
-
-
-
Accounting Standard AASB120: Accounting for Government Grants prescribes that grants related to
assets should be recognised as a deferred income liability until such time as the plant is completed and
depreciation commences. As the plant is expected to be completed by 30 June 2022, this deferred
income liability is a non-current liability. Once the plant is constructed the deferred income will be
reclassified as an offset against the non-current plant asset.
45
NOTE 16: SEGMENT REPORTING
AASB 8: Operating Segments requires operating segments to be identified on the basis of internal
reports about components of the Group that are regularly reviewed by the chief operating decision maker
in order to allocate resources to the segments and to assess their performance. As a result, following
the adoption of AASB 8, the Board of Directors believes there is only one operating segment and this is
reflected in management’s reporting processes.
AASB 8 requires a management approach under which segment information is presented on the same
bases as that used for internal reporting purposes. The Group consists of one business segment being
the development of its Latrobe magnesium project.
NOTE 17: RELATED PARTY TRANSACTIONS
Transactions between related parties are on normal commercial terms and conditions, no more
favourable than those available to other parties unless otherwise stated. Transactions with and amounts
receivable from and payable to Directors of related parties or their director related entities which:
1.
2.
occur within a normal employee, customer or supplier relationship on terms and conditions no
more favourable than those which it is reasonable to expect the entity would have adopted if
dealing with the director or director related entities at arms length in the same circumstances;
do not have the potential to adversely affect decisions about the allocations of scarce resources
made by users of the financial report, or the discharge of accountability by the directors if
disclosed in the financial report only by general description; and
3.
are trivial or domestic in nature;
must be excluded from the detailed disclosures required. Such transactions and amounts receivable or
payable shall be disclosed in the financial report by general description.
Other related entities
Director’s fees were paid to J S Murray Pty Ltd of which J S
Murray is a principal.
GROUP
2020
$
2019
$
45,000
52,500
Director’s fees were paid to Famallon Pty Ltd of which K A Torpey
is a principal.
26,808
24,206
Director’s fees were paid to Stockholders Relation Pty Ltd of
which J R Lee is a principal.
26,808
24,306
Director’s loan provided by D O Paterson, principal loan plus
interest payable at 1% per month.
116,930
57,590
Director’s loan provided by Famallon Pty Ltd of which K A Torpey
is a principal, principal loan plus interest payable at 1% per
month.
115,525
56,513
(i)
(ii)
(iii)
(iv)
(v)
46
NOTE 18: CASH FLOW INFORMATION
a. Reconciliation of Cash
Cash at the end of the financial year as shown in the statement of
cash flow flows is reconciled to items in the statement of financial
position as follows:
Cash at Bank
38,529
401,750
GROUP
2020
$
2019
$
b. Reconciliation of cash flow from operating activities to
operating loss after income tax:
Net loss
Adjustment of non-cash items:
Depreciation
Convert Directors’ & Consultant’s outstanding fees to shares
Capitalised finance costs
Changes in Assets and Liabilities:
(Increase)/Decrease in receivables and other assets
Increase/(Decrease) in trade and other payables and deferred
income
Net Cash used in Operating Activities
c. Acquisition and Disposal of Entities
(2,080,171) (1,515,472)
57,608
-
821,190
1,222
319,234
-
(8,016,613)
290,522
8,161,255
(299,531)
(1,056,731) (1,204,025)
There was no acquisition and disposal of controlled entities during the 2020 or 2019 financial year.
4. Non-cash Financing and Investing Activities
2019-20
Fully Paid Ordinary Shares
None
2018-19
Fully Paid Ordinary Shares
December 2018
39,904,250 shares issued at $0.008 to convert outstanding fees owing to
Directors and officer.
$319,234
Increase in issued capital
Decrease in trade and other payables $319,234
NOTE 19: LOSS PER SHARE
GROUP
2020
2019
Reconciliation of loss to net loss:
(a) Basic and diluted gain / loss per share
cents per share
(0.16)
(0.12)
(b) Gain / Loss used in the calculation of EPS
$
(2,080,171)
(1,515,472)
(c) Weighted average number of ordinary
shares outstanding during the year used in
calculation of basic and diluted EPS
1,296,503,069
1,279,010,795
47
There were no unissued shares under option at 30 June 2020. The warrants issued have not been
taken into account for the diluted EPS calculation as their effect would be anti-dilutive.
NOTE 20: CONTINGENT LIABILITIES AND CONTINGENT ASSETS
There are no contingent liabilities for the year ended 30 June 2020 (2019: Nil).
NOTE 21: EMPLOYEE BENEFITS
Employees Share Acquisition Plan
The Directors have approved the implementation of a Share Acquisition Plan.
The Plan provides for eligible participants to purchase shares in the Company tax effectively through
salary sacrifice. Shares will be acquired on the Australian Stock Exchange at prevailing market prices
on or about the first trading day following the normal monthly pay day. The shares including transaction
costs will be met by the pre-tax remuneration forgone by the Plan participant. Administration costs of
the Plan will be met by the Company.
The minimum contribution under the Plan is $2,400 per annum. Participants can allocate up to 100% of
their gross remuneration.
During the period under review and the previous corresponding period, there were no shares purchased
in accordance with the employee share acquisition plan.
NOTE 22: EVENTS SUBSEQUENT TO REPORTING DATE
There are no significant events subsequent to reporting date which will affect the operations and state
of affairs of the Group except the matter mentioned below.
Since the Balance date the Group has completed a number of significant post balance date events
being:
On 30 July 2020, the receipt of an Advance Finding under the under Section 28A of the Industry
Research and Development Act 1986 (Act) for its 3,000tpa magnesium plant using its new acid
hydromet process;
On 16 September 2020, LMG received its EPA approval to develop the Project.
On 27 October 2020, LMG signed a non-binding term sheet for an equity placement facility for $5
million.
NOTE 23: GOING CONCERN
For the year ended 30 June 2020 the Group reported a loss of $2,080,171 (2019: $1,515,472) and net
cash outflows from operating activities of $1,056,731 (2019: $1,204,025). Furthermore, the Group has
a warrant loan facility maturing on 31 October 2020 with a current balance of $3.4 million. Negotiations
have commenced in relation to extending or rolling this loan for a further 6 months whilst alternative
funding is put in place. These matters give rise to a material uncertainty that may cast significant doubt
upon the Group’s ability to continue as a going concern.
Notwithstanding the loss for the year, negative cash flow from operations, historical financial
performance and scheduled debt repayments, the financial report has been prepared on a going
concern basis. The assessment is based on a cash on hand balance at balance date and the collection
of trade and other receivables after year end. Directors believe that the collection of the trade receivables
will be more than sufficient to repay its current debt and provide some of the funding for the Group’s
48
next twelve months. Additional debt and equity funding will be required to develop its initial 3.000 tonnes
per annum magnesium plant.
The Group is currently in negotiations with a number of debt and equity providers in relation to providing
assistance for the refinancing of its existing debt, the $50 million of project finance and equity finance
required for the development of the project. The Company has received non-binding term sheets for
various alternative funding packages. The Company believes that a number of these term sheets will
be turned into binding agreements within the coming months. Two Directors have also provided the
Company with a $300,000 loan to provide time for this to occur. The Directors are therefore confident
that the Group will be able to continue to operate as a going concern and meet its objective to continue
the development of its project.
In the event that the Group’s funding plans are not achieved, then the Group may be unable to continue
as a going concern and it may be required to realise its assets and extinguish its liabilities other than in
the ordinary course of business, and at amounts that differ from those stated in the financial report.
The financial report does not include any adjustments relating to the recoverability and classification of
recorded asset amounts or the amounts or classification of liabilities and appropriate disclosures that
may be necessary should the Group be unable to continue as a going concern.
NOTE 24: CAPITAL COMMITMENT
On 19 June 2020, the Company committed to Mincore to provide design, engineering, procurement and
management services for LMG’s initial plant. Mincore issued an invoice for these services to be
performed by them over the next 12 months for an amount of $18,632,000 from 26 June 2020.
The research and development tax rebate calculated at the rate of 43.5% payable from these services
is $8,104,695 which is treated as a deferred income liability. See Note 15 for further details.
NOTE 25: PARENT ENTITY INFORMATION
As at, and throughout, the financial year ended 30 June 2020 the parent entity of the Group was Latrobe
Magnesium Limited.
Result of parent entity
Loss for the period
Other comprehensive income
Total comprehensive income for the period
Financial position of the financial entity at year end
Current assets
Non-current assets
Total assets
Current liabilities
Non-current liabilities
Total liabilities
Net Assets
2020
$
2019
$
(2,080,171)
-
(1,515,472)
-
(2,080,171)
(1,515,472)
8,894,990
7,060,187
1,241,598
6,972,331
15,955,177
8,213,929
4,098,098
8,137,277
2,745,995
-
12,235,375
2,745,995
3,719,802
5,467,934
49
Total equity of the parent entity comprising of
Issued capital
Warrant Reserves
Accumulated Losses
Total equity
Parent entity contingencies
The parent entity has no significant contingent liabilities.
33,562,283
382,240
(30,224,721)
33,562,283
50,201
(28,144,550)
3,719,802
5,467,934
Parent entity capital commitments for the acquisition of property, plant or equipment.
The parent entity has not entered any contractual commitments for the acquisition of property, plant or
equipment.
Parent entity guarantees in respect of the debts of the subsidiaries
The parent entity has entered into deed of guarantee with the effect that its subsidiaries guarantee the
secured loan detailed in Note 9, to Latrobe Magnesium Limited.
NOTE 26: AUDITOR’S REMUNERATION
Details of the amounts paid or payable to Nexia Sydney Partnership for services provided during the
year are set out below.
Audit and Review of Financial Reports
Taxation Services
GROUP
2020
$
37,500
7,000
2019
$
36,000
7,000
44,500
43,000
The Board of Directors ensure that the provision of the non-audit services is compatible with the general
standard of independence for auditors imposed by the Corporations Act 2001.
50
Independent Auditor’s Report to the Members of Latrobe Magnesium Limited
Report on the Audit of the Financial Report
Opinion
We have audited the financial report of Latrobe Magnesium Limited (the Company and its subsidiaries
(the Group)), which comprises the consolidated statement of financial position as at 30 June 2020, the
consolidated statement of profit or loss and other comprehensive income, consolidated statement of
changes in equity and consolidated statement of cash flows for the year then ended, and notes to the
financial statements, including a summary of significant accounting policies, and the directors’ declaration.
In our opinion, the accompanying financial report of the Group is in accordance with the Corporations Act
2001, including:
i) giving a true and fair view of the Group’s financial position as at 30 June 2020 and of its financial
performance for the year then ended; and
ii) complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those
standards are further described in the ‘auditor’s responsibilities for the audit of the financial report’ section
of our report. We are independent of the Group in accordance with the Corporations Act 2001 and the
ethical requirements of the Accounting Professional & Ethical Standards Board’s APES 110 Code of Ethics
for Professional Accountants (including Independence Standards) (the Code) that are relevant to our audit
of the financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance
with the Code.
We confirm that the independence declaration required by the Corporations Act 2001, which has been
given to the directors of the Company, would be in the same terms if given to the directors as at the time
of this auditor’s report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our opinion.
Material uncertainty related to going concern
We draw attention to Note 23 in the financial report, which indicates that for the year ended 30 June
2020 the Group reported a loss of $2,080,171 (2019: $1,515,472) and net cash outflows from operating
activities of $1,056,731 (2019: $1,204,025). Furthermore, the Group has a warrant loan facility maturing
on 31 October 2020 with a current balance of $3.4 million. As stated in Note 1, these events or
conditions, along with other matters as set forth in the note, indicate that a material uncertainty exists
that may cast significant doubt on the Group’s ability to continue as a going concern. Our opinion is not
modified in respect of this matter.
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our
audit of the financial report of the current period. These matters were addressed in the context of our
audit of the financial report as a whole, and in forming our opinion thereon, and we do not provide a
separate opinion on these matters.
51
Key audit matter
How our audit addressed the key audit matter
Capitalised Development Costs ($6,764,000)
Our audit procedures included, amongst others:
Refer to note 8 to the financial statements
We assessed the development costs against
Included in the Group’s intangible assets are
capitalised development costs of $6,764,000 in
respect of the acquired in-process research and
development cost in relation to extracting
magnesium from fly ash.
The capitalised development costs are considered
to be a key audit matter as they represent 43% of
the total assets of the Group and the determination
of whether the costs can be capitalised in
accordance with AASB 138 - Intangible Assets
and/or if an impairment charge is necessary
involves significant estimates and judgments made
by Management, including estimating future cash
flows.
the requirements for capitalisation
contained in AASB 138 Intangible Assets;
We reviewed the company’s updated
externally commissioned Feasibility Study
and management prepared Feasibility Study
Financial Summary and tested, where
appropriate, the capital investment and
chemical components amounts concluded in
these reports for consistency with the
“value in use” calculations;
We assessed and challenged management's
key assumptions and estimates used to
determine the recoverable amount of the
assets, including those relating to output
pricing, input costs, growth assumptions
and discount rates;
We performed sensitivity analysis in relation
to all the significant inputs to assess
whether the carrying value of the
capitalised development costs exceeded its
recoverable amount;
We compared the net assets of the Group
to the Group’s market capitalisation;
We tested the mathematical accuracy of the
underlying ‘value in-use’ calculations; and
We assessed whether appropriate
disclosure regarding significant areas of
uncertainty has been made in the financial
report.
Other information
The directors are responsible for the other information. The other information comprises the information
in Latrobe Magnesium Limited’s annual report for the year ended 30 June 2020, but does not include the
financial report and the auditor’s report thereon. Our opinion on the financial report does not cover the
other information and we do not express any form of assurance conclusion thereon. In connection with
our audit of the financial report, our responsibility is to read the other information and, in doing so,
consider whether the other information is materially inconsistent with the financial report or our
knowledge obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of the other
information we are required to report that fact. We have nothing to report in this regard.
Directors’ responsibility for the financial report
The directors of the Company are responsible for the preparation of the financial report that gives a true
and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for
such internal control as the directors determine is necessary to enable the preparation of the financial
52
report that gives a true and fair view and is free from material misstatement, whether due to fraud or
error.
In preparing the financial report, the directors are responsible for assessing the Group’s ability to continue
as a going concern, disclosing, as applicable, matters related to going concern and using the going
concern basis of accounting unless the directors either intend to liquidate the Group or to cease
operations, or have no realistic alternative but to do so.
Auditor’s responsibility for the audit of the financial report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free
from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes
our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit
conducted in accordance with the Australian Auditing Standards will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered material if,
individually or in the aggregate, they could reasonably be expected to influence the economic decisions of
users taken on the basis of this financial report.
A further description of our responsibilities for the audit of the financial report is located at The Australian
Auditing and Assurance Standards Board website at:
www.auasb.gov.au/admin/file/content102/c3/ar2_2020.pdf. This description forms part of our auditor’s
report.
Report on the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included in pages 18 to 19 of the directors’ Report for the year
ended 30 June 2020.
In our opinion, the Remuneration Report of Latrobe Magnesium Limited for the year ended 30 June 2020,
complies with section 300A of the Corporations Act 2001.
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the Remuneration
Report in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an
opinion on the Remuneration Report, based on our audit conducted in accordance with Australian Auditing
Standards.
Nexia Sydney Partnership
Stephen Fisher
Partner
Dated: 29 October 2020
Sydney
53
The following additional information is required by the Australian Securities Exchange Ltd in respect of
listed public companies only.
SHAREHOLDING
a.
Distribution of Shareholders as at 21 October 2020.
Range
Total holders
Units
% Units
1 - 1,000
1,001 - 5,000
5,001 - 10,000
10,001 - 100,000
100,001 Over
205
291
219
851
800
86,359
947,863
1,857,965
39,380,166
1,254,230,716
Total
2,366
1,296,503,069
0.01
0.07
0.14
3.04
96.74
100.00
b.
Unmarketable Parcels as at 21 October 2020.
Minimum Parcel Size
Holders
Units
Minimum $500.00 parcel at
$0.024 per unit
20,834
922
6,367,479
c.
Substantial Shareholders as at 21 October 2020.
No.
Shareholder Name
1 Rimotran Pty Ltd
56 Rimotran Pty Ltd
11 David Oliver Paterson
Total
2
Famallon Pty Ltd
106 Famallon Pty Ltd
8
Famallon Pty Ltd
Total
d.
Voting Rights
Number of Fully Paid
Ordinary Shares Held
Interest
(%)
105,207,340
4,045,000
13,843,400
123,095,740
80,194,358
2,339,875
19,915,956
102,450,189
8.11
0.31
1.07
9.49
6.19
0.18
1.54
7.91
The voting rights attached to each class of equity security are as follows:
Ordinary shares
(i)
At meetings of members each member is entitled to vote in person or by proxy or attorney
or, in the case of a member which is a body corporate, by representative duly authorized.
(ii) On a show of hands every member entitled to vote and be present in person or by proxy or
attorney or representative duly authorized shall have one (1) vote.
(iii) On a poll every member is entitled to vote and be present in person or by proxy or attorney
or representative duly authorized shall have one (1) vote for each fully paid share of which
they are a holder.
54
5.
Twenty largest shareholders as at 21 October 2020.
Rank
Top Shareholders – Ungrouped
Number of Fully Paid
Ordinary Shares Held
Holding
%
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
20
Rimotran Pty Ltd
Famallon Pty Ltd
CSH Engineering Pty Ltd
105,207,340
80,194,358
47,108,044
Gibbs Plumbing Services Pty Ltd
37,800,000
JJ Wolfe Holdings Pty Limited
Ableside Pty Ltd
Arco Investment Group P/L
Famallon Pty Ltd
25,020,969
23,685,730
21,893,534
19,915,956
8.11
6.19
3.63
2.92
1.93
1.83
1.69
1.54
Mr Brett Roy Morrison + Mrs Donna-Maree Earle Morrison
18,311,931
1.41
Murraysetter Pty Ltd
HSBC Custody Nominees (Australia) Limited
David Oliver Paterson
Diazill Pty Limited
Mrs Robyn Ann Lys
16,351,923
14,062,434
13,843,400
12,853,622
11,559,096
1.26
1.08
1.07
0.99
0.89
Mr Leslie Robert Knight + Mrs Heather Margery Knight + Mr
Timothy Paul Knight
10,983,500
0.85
Lyndcote Super Pty Ltd
Mrs Carmela Adele Murray
Mr Antonino Galipo
Mr Neville Masterton Hall
Fantapants Pty Ltd
10,961,538
10,580,777
10,310,000
10,257,500
10,000,000
0.85
0.82
0.80
0.79
0.77
Mr Neville Masterton Hall + Mrs Gwenda Aileen Hall
10,000,000
0.77
Total
520,901,652
40.18
CORPORATE GOVERNANCE STATEMENT
The Corporate Governance Statement can be viewed at the following location on the Company’s website:
http://latrobemagnesium.com/company/corporate-governance
55