C O N T E N T S
Company Directory
Chairman’s Report
Directors’ Review of Activities
Corporate Governance Statement
Directors’ Report
Consolidated Statement of Comprehensive Income
Consolidated Statement of Financial Position
Consolidated Statement of Cash Flows
Consolidated Statement of Changes in Equity
Notes to the Financial Statements
Directors’ Declaration
Declaration of Auditor’s Independence
Independent Auditor’s Report
Shareholder Information
Tenement Listing
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Web
www.legendmining.com.au
ASX Code
LEG – ordinary shares
Email
legend@legendmining.com.au
ACN
060 966 145
2 0 1 8 A N N U A L R E P O R T
C O R P O R AT E D I R E C T O R Y
Directors
Lawyers
Michael William Atkins (Chairman)
Mark William Wilson (Managing Director)
Derek William Waterfield (Executive Director-Technical)
DLA Piper
Level 31, Central Park
PERTH WA 6000
Secretary
Tony Walsh
Registered Office
Level 1
8 Kings Park Road
WEST PERTH WA 6005
Telephone:
Facsimile:
(08) 9212 0600
(08) 9212 0611
Bankers
Australian and New Zealand Banking Group Ltd
1275 Hay Street
WEST PERTH WA 6005
Auditors
Ernst & Young
11 Mounts Bay Road
PERTH WA 6000
Home Exchange
Australian Securities Exchange
2 The Esplanade
PERTH WA 6000
Share Registry
Advanced Share Registry Services
110 Stirling Highway
NEDLANDS WA 6009
L E G E N D M I N I N G L IM I T E D
1
1
LEGEND MINING LIMITED C H A I RM A N ’ S R E P O R T
Legend continues to carry out exploration at its Rockford Project in the Fraser Range in Western
Australia. The Fraser Range hosts Independence Group’s Nova- Bollinger mine and Creasy Group’s Silver
Knight deposit. Legend has circa 2,379 km2 wholly within the Fraser Zone, which Legend regards as the
most prospective area of the Fraser Range for a repeat of a Nova-Bollinger/Silver Knight style deposit.
During the last year, Legend made tremendous progress at area D, with the aircore drilling producing exciting
geochemical results and extensive moving loop electromagetic surveys (MLTEM) identifying nine new conductors
and better defining another two. Legend is very proud of the state-of-the-art exploration techniques that have been
employed in identifying and defining numerous conductors at Rockford and underscores our belief that we have a
real prospect at finding another Fraser Range orebody.
The initial field work for this year includes an Induced Polarisation survey and further infill aircore drilling at Area D,
to enable better selection and design of diamond drilling planned for mid-2019.
Your Board is most excited about the next few months, as we see progress towards the diamond drilling of the Area D
conductors. This is what we have all been waiting for, and I am confident that we have done the work to the highest
scientific and geological standard and underscores our belief that we have a real prospect of the discovery of another
Fraser Range orebody.
Legend has also carried out exploration at its Shackleton prospect in the southern portion of its Rockford tenement
holdings. The aircore drilling program intersected VMS pathfinder elements as well as elevated zinc values. The
following MLTEM survey identified two significant bedrock conductors. An RC drill program to test one of these
conductors and further MLTEM surveys are planned in this area during 2019.
Your company has a strong executive team, led by Mark Wilson and Derek Waterfield, and I also acknowledge the
support and encouragement of our major shareholder Mark Creasy and his technical team. I also would like to thank
all our contractors for the work they have done in challenging conditions.
Your Board thanks you the shareholders for your continuing support and we look forward to an exciting year ahead.
Yours sincerely
Michael Atkins
Chairman
20 March 2019
2
2018 ANNUAL REPORT ROCKFORD PROJECT – Fraser Range District
(Nickel-Copper, Copper-Zinc-Silver, Gold)
The Rockford Project is located in the highly prospective Fraser Range district of Western Australia and
covers a total area of 2,379km2 (see Figure 1). The majority of the project (2,117km2), comprising seven
contiguous granted exploration licences, is the subject of a joint venture between Legend (70%) and
Creasy Group (30%), with Legend operator and manager of the joint venture. The remaining 262km2 is
100% owned by Legend and includes five granted exploration licences. Exploration utilising innovative
ground electromagnetic surveying is primarily focussed on Nova-Bollinger style magmatic sulphide
nickel-copper, as well as targeting volcanogenic massive sulphide (VMS) copper-zinc-silver and Tropicana
style structurally controlled gold mineralisation.
The Rockford Project covers a strike length of 100km
over a regional gravity high “ridge” associated with
dense mafic/ultramafic intrusive rocks of the Fraser
Zone, within the larger Albany-Fraser Orogen. The Nova-
Bollinger deposit and the Silver Knight nickel-copper
discovery both located within the Fraser Zone, are
situated on a similar tenor gravity ridge to that of the
Rockford Project (see Figure 1).
During 2018 Legend undertook an extensive project
wide exploration programme involving:
• Further interpretation and integration of drilling,
aeromagnetic and gravity datasets
• Aircore drilling at Area D - 110 holes for 9,505m
• Area D innovative moving loop electromagnetic
survey - 38 lines, 832 stations, 23km2
• Regional aircore drilling over Shackleton, central and
south Rockford - 234 holes for 13,392m
• Petrology (15 bottom of hole aircore samples)
• Shackleton innovative moving loop electromagnetic
survey - 11 lines, 278 stations, 9.6km2
Figure 1: Rockford Project Location
3
DIRECTORS’ REVIEW OF ACTIVITIESFor the year ended 31 December 2018LEGEND MINING LIMITED D I R E C T O R S ’ R E V I EW O F A C T I V I T I E S
F o r t h e y e a r e n d e d 3 1 D e c e m b e r 2 0 1 8
Exploration activities initially involved aircore drilling
following up the highly anomalous drill results in RKAC151
and RKAC167 from November 2017 and broad spaced
holes aimed at providing geological and geochemical
data over a wider Area D region (see Figure 2). This
drilling programme identified four zones with anomalous
nickel-copper associated with intrusive host rocks and
significantly, disseminated sulphides were observed
in nine drillholes associated with a gabbronorite host.
An extensive innovative moving loop electromagnetic
(MLTEM) survey over Area D identified nine new bedrock
conductors (D9-D17) and provided better definition on
the previously identified D3 and D5 conductors.
Regional aircore drilling predominantly over the
central and southern part of the Rockford Project
was undertaken in the second half of 2018 targeting
a combination of aeromagnetic/gravity features and
previously identified conductors J1-J2, Q1, S1 and U1 (see
Figure 2). This programme highlighted the Shackleton
prospect and returned anomalous geochemical results
in drillholes RKAC505 (Cu-Zn-Ag) and RKAC520 (Ni-
Cu-Co). Exploration activities at Area D and over the
regional targets are discussed in further detail below.
Figure 2: Exploration Prospect Locations
4
2018 ANNUAL REPORT Area D Prospect
Exploration activities completed during 2018 at Area
D comprised infill and broad spaced aircore drilling
programmes followed by an extensive MLTEM survey.
These activities were designed to define the extent
of the anomalous Ni-Cu-Co identified in previous
aircore drilling, identify further geochemical anomalies
regionally, then test these anomalies with MLTEM for
associated bedrock conductors.
The aircore drilling comprised 110 holes (RKAC181-290)
for 9,505m with drilling initially focussed around highly
anomalous drillholes RKAC151 and RKAC167 (November
2017), then at a broader nominal spacing of 800m x
400m (see Figure 3).
Drillhole RKAC151 intersected 47m @ 0.30% Ni,
0.11% Cu and 0.03% Co from 64m to EOH associated
with goethitic/Fe-clay weathering over an olivine
gabbronorite cumulate. Follow up hole RKAC183 (200m
north of RKAC151) then intersected disseminated
sulphides comprising pyrrhotite-chalcopyrite-
pentlandite associated with the same olivine
gabbronorite host rock returning 14m @ 0.37% Ni, 0.43%
Cu and 0.03% Co from 72m to EOH.
Figure 3: Area D Aircore Drillholes on Aeromagnetics
5
DIRECTORS’ REVIEW OF ACTIVITIESFor the year ended 31 December 2018LEGEND MINING LIMITED Subsequent 50m spaced infill drilling (RKAC205-209)
was completed on Section 638600E (see Figures 3 & 4)
to test the continuity of the mineralisation, with all
holes intersecting gabbronorite and containing up to 1%
total sulphides. Four of the five holes returned broad
intersections of 26m to 41m with nickel values ranging
between 0.17-0.34% Ni and associated copper between
0.10-0.31% Cu, (see Table 1). Additional infill drilling
significantly defined a 100m wide zone (RKAC183,
224-225) containing disseminated magmatic sulphides
within a larger ~300m x ~100m anomalous Ni-Cu (>0.2%
Ni and >0.1% Cu) footprint.
Figure 4: Area D Aircore Drill Section 638,600E
6
DIRECTORS’ REVIEW OF ACTIVITIESFor the year ended 31 December 20182018 ANNUAL REPORT Table 1: Area D - Aircore Drillhole Results (4m Composites)
Drillhole
*RKAC151
Incl.
Incl.
Incl.
*RKAC167
Incl.
*RKAC183
Incl.
RKAC205
RKAC206
RKAC207
RKAC208
RKAC209
RKAC225
Incl.
RKAC226
RKAC249
RKAC253
Incl.
RKAC255
From
64
64
96
106
56
59
72
77
68
56
56
76
56
52
70
66
64
64
72
78
To
111 EOH
74
102
111 EOH
66 EOH
63
86 EOH
79
109 EOH
93 EOH
89 EOH
83 EOH
82 EOH
71 EOH
71 EOH
102
82 EOH
85 EOH
76
115 EOH
Int.
Ni %
Cu %
Co %
Ag g/t
47
10
6
5
10
4
14
2
41
37
33
7
26
19
1
36
18
21
4
37
0.30
0.23
0.38
0.43
0.09
0.14
0.37
0.46
0.17
0.34
0.21
0.05
0.28
0.23
0.31
0.39
0.22
0.34
0.64
0.25
0.11
0.25
0.15
0.06
0.09
0.16
0.43
1.44
0.10
0.22
0.10
0.02
0.31
0.33
0.68
0.23
0.03
0.05
0.07
0.03
0.03
0.03
0.03
0.02
0.01
0.02
0.03
0.04
0.03
0.03
0.02
0.01
0.03
0.02
0.02
0.04
0.03
0.04
0.06
0.04
0.19
0.39
0.06
0.44
<0.05
<0.05
1.36
5.12
0.80
0.40
0.25
0.09
0.86
3.16
3.24
0.40
0.19
0.52
0.31
0.10
* RKAC151, 167, 183 results based on 2018 1m resampling
The broad spaced aircore drilling returned coherent
anomalous Ni-Cu-Co geochemistry from four zones
centred around drillholes; RKAC151 and 183, RKAC167,
RKAC249 and RKAC255, as shown on Figure 3 and
summarised in Table 1. Two of these zones (RKAC167
and RKAC 249) are interpreted as within the same
intrusive body.
Following the completion of the aircore drilling
programme an extensive innovative MLTEM survey
was undertaken over Area D covering an area of 23km2.
The survey was designed to test for massive sulphide
mineralisation associated with the four zones of
coherent anomalous Ni-Cu-Co geochemistry defined in
aircore drilling, as well as the wider Area D region where
numerous mafic/ultramafic intrusions were identified.
7
DIRECTORS’ REVIEW OF ACTIVITIESFor the year ended 31 December 2018LEGEND MINING LIMITED The survey successfully delineated nine new bedrock
conductors (D9-D17) and provided better definition on
the previously identified D3 and D5 conductors (see
Figure 5 & Table 2).
Figure 5: Area D MLTEM Conductor Plates and Anomalous Aircore Drillholes on Aeromagnetics
Table 2: Area D MLTEM Modelled Parameters
Conductor
Conductance
Dimensions
Depth to Top
Plate Orientation
D3*
D5*
D9
D10
D11
D12
D13
D14
D15
D16
D17
~8,000-12,000S+
~1,000m x 700m
200-250m
55-650 NW dip
~1,500-2,500S
~1,000m x 1,500m
~1,500-2,500S
~1,000m x 1,500m
~1,500-2,500S
~1,200m x 1,400m
~2,000-3,000S
~1,200m x 1,500m
~3,000-6,000S
~600m x 1,000m
~2,000-3,000S
~300 x 800m
~7,000-12,000S+
~200m x 50-75m
~9,000-12,000S+
~250m x 500m
~5,000-6,000S
~900m x 1,000m
400-750S
~700m x 800m+
125-175m
125-175m
125-175m
125-175m
150-200m
125-150m
100-150m
275-350m
125-175m
150-200m
~800 ESE dip
75-800 SE dip
~80-900 SSE dip
~750 SSE dip
60-700 NW dip
~80-900 NNW dip
60-700 N dip
70-800 N dip
75-850 SE dip
~600 WNW dip
* Conductors D3 and D5 originally identified in the November 2015 survey have been remodelled with
infill data from the November 2018 survey.
8
DIRECTORS’ REVIEW OF ACTIVITIESFor the year ended 31 December 20182018 ANNUAL REPORT
A total of 17 conductors with varying parameters have
now been identified at Area D by the original MLTEM
survey in November 2015, a FLTEM survey in April 2016
and the November 2018 MLTEM survey. Conductor
D5 is considered a high priority conductor given its
close proximity to aircore drillhole RKAC183, which
intersected disseminated pyrrhotite-chalcopyrite-
pentlandite in a gabbronorite host rock. Conductors
D14 and D15 are also high priority conductors based on
their high conductances (7,000-12,000S) and relatively
small dimensions.
An Induced Polarisation survey and infill aircore drilling
is planned at Area D to assist in the final selection
of targets and design of a follow up diamond drilling
programme.
Shackleton Prospect
A 51 hole aircore programme was completed at
Shackleton over a magnetically distinct stratigraphic
package considered prospective for VMS deposits
similar to IGO’s recently discovered Andromeda Cu-Zn
prospect some 7km to the SW (see Figure 6). The drilling
intersected a weathered pyritic black shale (possible
exhalite horizon) in drillhole RKAC417 returning elevated
zinc values (0.06% Zn) coincident with a range of VMS
pathfinder elements Ag±S±Mo±Bi±Sn±In±Tl. MLTEM
surveys at Shackleton identified two significant bedrock
conductors (Shackleton 1 and 2), with Shackleton
1 associated with the interpreted exhalite horizon
and magnetic high (see Figure 6). These surveys were
undertaken over two separate priority target areas and
cover only 30% of the 24km magnetic trend considered
prospective for VMS mineralisation.
An RC drillhole to test the Shackleton 1 conductor and
further MLTEM surveying over this magnetic trend are
planned for 2019.
Figure 6: Shackleton Prospect MLTEM Conductor Locations and Aircore Drillholes
9
DIRECTORS’ REVIEW OF ACTIVITIESFor the year ended 31 December 2018LEGEND MINING LIMITED Regional Aircore Drilling Programme
An extensive regional aircore drilling programme was
completed during 2018 as part of Legend’s systematic
exploration approach across the entire Rockford Project
and involved 344 holes for 22,897m testing 27 separate
targets. The drilling was predominantly over the central
and southern part of Rockford targeting a combination
of aeromagnetic/gravity features, structural positions
and previously identified conductors J1-J2, Q1, S1 and U1
(see Figure 7).
Figure 7: Regional Aircore Drillhole Locations
The programme returned anomalous geochemical results in drillholes RKAC505 (Cu-Zn-Ag) and RKAC520 (Ni-Cu-Co)
(see Figure 8).
• RKAC505:
• RKAC520:
9m @ 0.09% Cu, 0.06% Zn, 1.47g/t Ag from 88m to EOH
Incl. 4m @ 0.12% Cu, 0.08% Zn, 1.89g/t Ag from 88m
11m @ 0.42% Ni, 0.01% Cu, 0.03% Co from 32m to EOH
Incl. 3m @ 0.71% Ni, 0.01% Cu, 0.04% Co from 40m to EOH
1 0
DIRECTORS’ REVIEW OF ACTIVITIESFor the year ended 31 December 20182018 ANNUAL REPORT
The anomalous results in RKAC505 coincide with the up
dip projection of the previously identified S1 conductor
plate and an increased depth of weathering/alteration
potentially due to the presence of sulphides (see Figure
8). This hole displays characteristics of a Cu-Zn-Ag VMS
system and is supported by a suite of VMS pathfinder
elements.
The anomalous results in RKAC520 are related to an
olivine-rich ultramafic host rock with strong silica
alteration and serpentinisation. These results and the
favourable intrusive host rock further highlights the
potential for Nova style Ni-Cu mineralisation in the
Rockford South region.
Infill aircore drilling is planned around both RKAC505
and RKAC520 to determine the extent of the anomalous
geochemistry and assist with the design of future
exploration activities.
Figure 8: Anomalous Aircore Drillholes and S1 Conductor on Aeromagnetic Image
1 1
DIRECTORS’ REVIEW OF ACTIVITIESFor the year ended 31 December 2018LEGEND MINING LIMITED CORPORATE
Annual Tax Return – R & D Claim
Cameroon Project Sale
In November 2018 Legend submitted its 2018 annual
tax return, which included a research and development
(R&D) claim for reimbursement of $1.28M. The
cornerstone of Legend’s exploration activities at the
Rockford Project is using innovative geo-sensing MLTEM
surveys. These surveys qualify Legend for R&D cash
reimbursement for these surveys and other associated
activities via the annual tax return. In December 2018,
Legend received the R&D refund of $1.28M.
Legend announced on 4 January 2017 that it had
received a request from Jindal to consider a further
deferral of the payment of the final amount of $3
million owing to Legend from the sale of the Cameroon
Iron Ore project. Legend agreed to this request in
principle, and will report to the ASX as soon as an
agreement of new payment terms is reached.
Since this time, Legend has remained actively in contact
with Jindal on its debt restructuring, which once
completed, will enable Jindal to focus on matters such
as the amount owing to Legend. In the meantime, the
amount owing from Jindal continues to attract interest
at the rate of 4% per annum paid quarterly and Jindal
has paid each interest payment of $30,000 per quarter
since January 2017.
The information in this report that relates to Exploration Results is based on information compiled by Mr Derek Waterfield, a Member
of the Australian Institute of Geoscientists and a full time employee of Legend Mining Limited. Mr Waterfield has sufficient experience
that is relevant to the styles of mineralisation and types of deposit under consideration, and to the activity being undertaken, to qualify
as a Competent Person as defined in the 2012 Edition of the “Australasian Code for Reporting of Exploration Results, Mineral Resources
and Ore Reserves” (JORC Code). Mr Waterfield consents to the inclusion in the report of the matters based on his information in the
form and context in which it appears.
The information in this report that relates to Legend’s Exploration Results is a compilation of previously released to ASX by Legend
Mining (22 January 2018, 9 April 2018, 3 May 2018, 6, 20 & 26 June 2018, 2 & 17 July 2018, 7 & 14 August 2018, 6 September 2018, 23 October
2018, 19 November 2018, 5 & 21 December 2018) and Mr Derek Waterfield consents to the inclusion of these Results in this report. Mr
Waterfield has advised that this consent remains in place for subsequent releases by Legend of the same information in the same form
and context, until the consent is withdrawn or replaced by a subsequent report and accompanying consent. Legend confirms that it
is not aware of any new information or data that materially affects the information included in the original market announcements
and that all material assumptions and technical parameters in the market announcements continue to apply and have not materially
changed. Legend confirms that the form and context in which the Competent Person’s findings are presented have not been materially
modified from the original market announcements.
1 2
DIRECTORS’ REVIEW OF ACTIVITIESFor the year ended 31 December 20182018 ANNUAL REPORT CORPORATE GOVERNANCE STATEMENT
Legend Mining Limited and the Board are committed to achieving and demonstrating the highest standards of
corporate governance. Legend Mining Limited has reviewed its corporate governance practices against the
Corporate Governance Principles and Recommendations (3rd edition) published by the ASX Corporate
Governance Council.
The 2018 Corporate Governance Statement was approved by the Board on 20 March 2019 and is current as at
20 March 2019. A description of the Group’s current corporate governance practices is set out in the Group’s
Corporate Governance Statement which can be viewed at www.legendmining.com.au
13
DIRECTORS’ REPORT
F o r t h e y e a r e n d e d 3 1 D e c e m b e r 2 0 1 8
The Directors submit their report for the year ended 31 December 2018.
1.
DIRECTORS
The names and details of the Company’s directors in office during the financial year and until the date of this report are as
below. Directors were in office for this entire period unless otherwise stated.
Michael Atkins (Chairman, Non-Executive Director)
Mark Wilson (Managing Director)
Derek Waterfield (Executive Director - Technical)
2.
INFORMATION ON DIRECTORS AND COMPANY SECRETARY
Michael Atkins is a Fellow of the Australian Institute of Company Directors.
Mr Atkins was a founding partner of a national Chartered Accounting practice from 1979 to 1987 and was a Fellow of the
Institute of Chartered Accountants in Australia between 1984 and 2012.
Between 1987 and 1998 he was involved in the executive management of several publicly listed resource companies with
operations in Australia, USA, South East Asia and Africa. From 1990 to 1995 he was managing director and later a non-executive
director of Claremont Petroleum NL and Beach Petroleum NL during their reconstruction, and then remained as a non-
executive director until 1995. He was also founding executive chairman of Gallery Gold Ltd until 1998, and remained a non-
executive director until 2000.
Since February 2009 Mr Atkins has been a Director – Corporate Finance at Patersons Securities Limited where he advises on
the formation of, and capital raising for, emerging companies in the Australian resources sector.
He is currently non-executive chairman of Australian listed companies Azumah Resources Ltd and Castle Minerals Ltd, and non-
executive director of SRG Global Limited. Mr Atkins has not held any former public company directorships in the last three
years.
Mark Wilson is a Member of the Institution of Engineers, Australia and a Chartered Professional Engineer with an Associateship
in Civil Engineering from Curtin University in Western Australia. He has an extensive business background, mainly in corporate
management and project engineering. This has included site management of remote construction projects, ten years of
commercial construction as a founding proprietor of a Perth based company and the past twenty years in executive, non-
executive, consulting and owner roles in resource focused companies. During the past three years, Mr Wilson has also served
as non-executive director of Australian listed company Tanga Resources Limited (resigned July 2017).
Derek Waterfield is a Member of the Australian Institute of Geoscientists and a graduate of the University of Queensland (B.Sc.
Hons). He has 30 years experience in gold, base metals, iron ore, nickel and uranium exploration throughout Australia and
Cameroon.
He started his career with CRA Exploration Pty Ltd and has held senior exploration leadership positions with Normandy Mining
and Newmont Australia, and led the team that discovered the Moolart Well gold deposit in the Duketon Belt 350km north of
Kalgoorlie. He was Exploration Manager at Legend Mining for five years managing Legend’s WA and Cameroon projects. More
recently he has been Exploration Manager for Enterprise Metals Ltd, responsible for gold, iron ore, uranium and base metal
exploration in WA. Mr Waterfield has not held any former public company directorships in the last three years.
Tony Walsh (Company Secretary) was appointed Company Secretary effective on 12 December 2016.
Mr Walsh has over 30 years’ experience in dealing with listed companies, ASX, ASIC and corporate transactions including 14
years with the ASX in Perth where he acted as ASX liaison with the JORC committee, four years as Chairman of an ASX listed
mining explorer and as a director of a London AIM listed explorer. Tony is also currently Company Secretary of Battery Minerals
Mining Ltd and is a Director of Entek Energy Limited.
Mr Walsh is a member of the Australian Institute of Company Directors, a Fellow of the Governance Institute of Australia, the
Institute of Chartered Secretaries and the Institute of Chartered Accountants in Australia.
He is currently a non-executive director of the Women’s and Infants Research Foundation.
3.
EARNINGS PER SHARE
Basic loss per share:
Diluted loss per share:
0.062 cents
0.0555 cents
14
DIRECTORS’ REPORT
F o r t h e y e a r e n d e d 3 1 D e c e m b e r 2 0 1 8
4.
DIVIDENDS
No dividend has been paid or recommended during the financial year.
5.
CORPORATE INFORMATION
Corporate Structure
Legend Mining Limited is a Company limited by shares that is incorporated and domiciled in Australia. Legend Mining Limited
has prepared a consolidated financial report incorporating the entities that it controlled during the financial year, which are
outlined in the following illustration of the Group’s corporate structure.
Legend Mining Limited
100%
100%
Gibson Metals Pty Ltd
Legend Cameroon Pty Ltd
Nature of Operations and Principal Activities
The principal activities during the year of the entities within the consolidated entity were:
•
exploration for nickel and copper deposits in Australia.
Employees
The consolidated entity had a staff of four employees at 31 December 2018 (2017: four employees).
6. OPERATING AND FINANCIAL REVIEW
Results of Operations
The net loss after income tax of the consolidated entity for the year was $1,267,602 (2017: loss of $567,068).
Review of Operations
The Directors’ Review of Activities for the year ended 31 December 2018 is contained on pages 3 to 12 of the Annual Report.
Summarised Operating Results
Impairment of Deferred Exploration Costs: There was nil impairment of deferred expenditure expensed to the income
statement during the year (2017: $NIL).
Deferred Exploration Costs: Total acquisition costs and deferred expenditure on tenements capitalised during the year, net of
amounts reimbursed through the research and development incentive grant amounted to $336,032 (2017: $1,964,401).
7.
SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS
There have been no significant changes during the year.
8.
ENVIRONMENTAL REGULATION AND PERFORMANCE
The consolidated entity’s operations are subject to various environmental regulations under both Commonwealth and State
legislation in Australia. The Directors have complied with these regulations and are not aware of any breaches of the legislation
during the financial year which are material in nature.
9.
LIKELY DEVELOPMENTS AND EXPECTED RESULTS
Likely developments in the operations of the consolidated entity, and expected results of those operations in subsequent
financial years have been discussed, where appropriate, in the Chairman’s Report and Review of Activities.
15
DIRECTORS’ REPORT
F o r t h e y e a r e n d e d 3 1 D e c e m b e r 2 0 1 8
10. SHARE OPTIONS
Unissued shares
As at the date of this report, there were 238,000,000 unissued ordinary shares under options. Refer to note 17 for further
details of the options outstanding at 31 December 2018.
Option holders do not have any right, by virtue of the option, to participate in any share issue of the Company or any related
body corporate.
Shares issued as a result of the exercise of options
There were no shares issued as a result of the exercise of options during the financial year.
11. SIGNIFICANT EVENTS AFTER THE BALANCE DATE
No other matters or circumstance has arisen since the end of the financial year which has significantly affected, or may
significantly affect the operations of the Group, the result of those operations, or the state of affairs of the Group in subsequent
financial years.
12.
INDEMNIFICATION AND INSURANCE OF DIRECTORS AND OFFICERS
The Company has not, during or since the financial year, in respect of any person who is or has been an officer of the Company
or a related body corporate:
(i)
(ii)
indemnified or made any relevant agreement for indemnifying against a liability incurred as an officer, including costs
and expenses in successfully defending legal proceedings; or
paid or agreed to pay a premium in respect of a contract insuring against a liability incurred as an officer for the costs
or expenses to defend legal proceedings.
13.
INDEMNIFICATION OF AUDITORS
To the extent permitted by law, the Company has agreed to indemnify its auditors, Ernst & Young Australia, as part of the terms
of its audit engagement agreement against claims by third parties arising from the audit (for an unspecified amount). No payment
has been made to indemnify Ernst & Young during or since the financial year.
14. REMUNERATION REPORT (AUDITED)
The compensation arrangements in place for key management personnel of Legend are set out below:
Details of key management personnel
Directors
M Atkins
M Wilson
D Waterfield
Chairman (non-executive)
Managing Director
Executive Director - Technical
Compensation Philosophy
The performance of the Company depends upon the quality of its directors and executives. To prosper, the Company must
attract, motivate and retain highly skilled directors and executives.
The Company embodies the following principle in its compensation framework:
•
Provide competitive rewards to attract high-calibre executives.
16
DIRECTORS’ REPORT
F o r t h e y e a r e n d e d 3 1 D e c e m b e r 2 0 1 8
14.
REMUNERATION REPORT (CONTD)
Group Performance
The Group’s financial performance for the last five years has been as follows:
Revenue
Net loss after tax
Basic loss per share (cents per share)
Diluted loss per share (cents per share)
Net assets
Share price (at balance date)
December
2018
$223,469
($1,267,602)
(0.062)
(0.062)
$13,082,152
$0.03
December
2017
$267,989
($567,068)
(0.028)
(0.028)
$14,349,754
$0.03
December
2016
$407,180
($2,599,591)
(0.128)
(0.128)
$14,734,111
$0.01
December
2015
$575,162
($1,311,284)
(0.066)
(0.066)
$17,127,502
$0.008
December
2014
$371,332
($2,618,326)
(0.128)
(0.128)
$17,067,286
$0.007
As the Group is currently in exploration and evaluation phases, historical earnings are not yet an accurate reflection of Group
performance and cannot be used as a long term incentive measure. Consideration of the Group’s earnings will be more relevant
as the Group matures.
Remuneration Committee
Due to the size of Legend, remuneration is considered by the full Board. The Board reviews remuneration packages and policies
applicable to the directors and senior executives. Remuneration levels are competitively set to attract the most qualified and
experienced directors and senior executives.
Compensation Structure
In accordance with best practice corporate governance, the structure of non-executive director and other senior manager
remuneration is separate and distinct.
Objective of Non-Executive Director Compensation
The Board seeks to set aggregate compensation at a level that provides the company with the ability to attract and retain
directors of the highest calibre, whilst incurring a cost that is acceptable to shareholders.
Structure of Non-Executive Director Compensation
The Constitution and the ASX Listing Rules specify that the aggregate compensation of non-executive directors shall be
determined from time to time by a general meeting. An amount not exceeding the amount determined is then divided between
the directors as agreed. The latest determination was at the Annual General Meeting held on 16 May 2012 when shareholders
approved the aggregate remuneration of $300,000 per year.
The amount of aggregate compensation sought to be approved by shareholders and the manner in which it is apportioned
amongst directors is reviewed annually. The Board considers the fees paid to non-executive directors of comparable companies
when undertaking the annual review process.
Objective of Senior Management and Executive Director Compensation
The company aims to reward executives with a level and mix of compensation commensurate with their position and
responsibilities within the company and so as to:
•
•
•
reward executives for Company and individual performance against targets set by reference to appropriate benchmarks;
align the interests of executives with those of shareholders; and
ensure total compensation is competitive by market standards.
Structure of Senior Management and Executive Director Compensation
In determining the level and make-up of executive compensation, the Board may engage external consultants to provide
independent advice. No external advice was obtained during the 2018 year.
It is the Board’s policy that an employment contract is entered into with key executives.
Compensation consists of a fixed compensation element and the issue of options from time to time at the directors’ discretion
under the Employee Share Option Plan. Any issue of options to directors under the Employee Share Option Plan requires prior
shareholder approval.
17
DIRECTORS’ REPORT
F o r t h e y e a r e n d e d 3 1 D e c e m b e r 2 0 1 8
14.
REMUNERATION REPORT (CONTD)
Fixed Compensation
Fixed compensation is reviewed annually by the Board. The process consists of a review of company and individual performance,
relevant comparative compensation in the market and internally and, where appropriate, external advice on policies and
practices. No external advice was obtained during the 2018 year.
Structure
Senior managers are given the opportunity to receive their fixed (primary) compensation in a variety of forms including cash
and fringe benefits. It is intended that the manner of payment chosen will be optimal for the recipient without creating undue
cost for the Company.
Employment Contracts
The Managing Director, Mr Mark Wilson, is employed under contract. The current contract commenced on 1 July 2011 and is
effective until terminated in accordance with the contract. The significant terms of the contract are:
• Mr Wilson receives remuneration of $320,000 per annum exclusive of superannuation;
• Mr Wilson may resign from his position and thus terminate his contract by giving one month written notice;
•
•
The company may terminate Mr Wilson’s employment contract by providing six months’ written notice if the position has
become redundant, or three months’ written notice in all other circumstances; and
The Company may terminate Mr Wilson’s contract at any time without notice if serious misconduct has occurred.
Mr Michael Atkins, is employed under contract. The current contract commenced on 1 July 2012 and is effective until
terminated in accordance with the contract. The significant terms of the contract are:
• Mr Atkins receives remuneration of $80,000 per annum exclusive of superannuation;
• Mr Atkins’ agreement provides for engagement of consultancy services outside of the scope of the ordinary duties of a
non-executive chairman. In addition to the director’s fees above, Mr Atkins is paid $2,000 per day (inclusive of
superannuation) for the provision of these consultancy services.
• Mr Atkins’ appointment is contingent upon satisfactory performance and successful re-election by shareholders of the
Company;
• Mr Atkins may resign from his position and thus terminate his contract by giving written notice; and
•
The Company may terminate Mr Atkins’ contract by way of resolution of the Board.
Mr Derek Waterfield, is employed under contract. The current contract commenced on 1 November 2012 and is effective
until terminated in accordance with the contract. The significant terms of the contract are:
• Mr Waterfield receives remuneration of $220,000 per annum exclusive of superannuation;
• Mr Waterfield may resign from his position and thus terminate his contract by giving one month written notice;
•
•
The company may terminate Mr Waterfield’s employment contract by providing three months’ written notice if the
position has become redundant, or one months’ written notice in all other circumstances; and
The Company may terminate Mr Waterfield’s contract at any time without notice if serious misconduct has occurred.
Employee Share Option Plan
The Board has in place an Employee Share Option Plan allowing share options to be issued to eligible employees in order to
provide them with an incentive to provide growth and value to all shareholders.
At a General Meeting on 4 December 2009 shareholders approved the implementation of Employee Share Option Plan No 3.
The new plan differs from the previous plans in that there is no 12 month vesting period on any new options received under
plan No 3. There is a significant change in the context of recent proposals by the Federal Government to change the tax
treatment of options issued under incentive schemes. Removal of the vesting period requirement allows the Board maximum
flexibility to make offers of options on the terms of the plans appropriate at the time, having regard for the tax environment
which the proposed participants find themselves in when an offer of options is received from the company.
18
DIRECTORS’ REPORT
F o r t h e y e a r e n d e d 3 1 D e c e m b e r 2 0 1 8
14.
REMUNERATION REPORT (CONTD)
Share-based Payments
During the year the Company did not grant any incentive options to directors (2017: $NIL).
Compensation of Key Management Personnel for Years Ended 31 December 2018 and 31 December 2017
Name
Year
Short term
Salary and
Fees(1)
$
Post-
Employment
Super-
annuation
$
Long-term
benefits
Long
Service
Leave
$
Share
based
payments
options
$
Total
$
% of
compen-
sation
granted as
options
% of
performance
related
remuneration
Director
M Atkins
M Wilson
80,000
80,000
332,308
332,308
236,923
243,692
649,231
656,000
(1) Short term salary and fees includes net movements in leave provisions.
7,600
7,600
30,400
30,400
20,900
20,900
58,900
58,900
2018
2017
2018
2017
2018
2017
2018
2017
-
-
5,333
5,333
3,667
18,944
9,000
24,277
D Waterfield
Total
Option holdings of Key Management Personnel
-
-
-
-
-
-
-
-
87,600
87,600
368,041
368,041
261,490
283,536
717,131
739,177
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Options held in Legend Mining Limited (number) during the year ended 31 December 2018
Name
Balance at
beginning
of year
1 Jan 2018
Granted as
Remuneration
Exercised
during
the year
Net Change
Other
Balance at
end
of year
31 Dec 2018
Not Vested
& Not
Exercisable
Vested &
Exercisable
Directors
M Atkins
M Wilson
D Waterfield
Total
10,000,000
40,000,000
20,000,000
70,000,000
-
-
-
-
-
-
-
-
-
-
-
-
10,000,000
40,000,000
20,000,000
70,000,000
-
-
-
-
10,000,000
40,000,000
20,000,000
70,000,000
Shareholdings of Key Management Personnel(1)(2)
Shares held in Legend Mining Limited (number) during the year ended 31 December 2018
Name
Balance
1 Jan 18
Granted as
remuneration
On exercise
of options
Net change
other(3)
Balance
31 Dec 18
Directors
M Atkins
(Windamurah P/L), (Alkali Exploration P/L)
M Wilson
(Chester Nominees WA P/L)
D Waterfield
Total
7,108,334
126,000,000
1,000,000
134,108,334
Includes shares held directly, indirectly and beneficially by KMP.
(1)
(2) On-market purchases made during the year.
(3) Power of Attorney over parent’s interests.
END OF REMUNERATION REPORT
-
-
-
-
-
-
-
-
-
7,108,334
2,748,200
128,748,200
-
2,748,200
1,000,000
136,856,534
19
DIRECTORS’ REPORT
F o r t h e y e a r e n d e d 3 1 D e c e m b e r 2 0 1 8
15. DIRECTORS’ MEETINGS
The number of Meetings of Directors held during the year and the number of Meetings attended by each Director was as
follows:
Name
Attended by:
Michael Atkins
Mark Wilson
Derek Waterfield
16. DIRECTORS’ INTERESTS
No. of Board
Meetings
Attended
No. of Meetings
Held Whilst A
Director
No of Audit
Committee
Meetings Attended
No of Audit
Committee
Meetings Held
7
7
5
7
7
7
2
2
0
2
2
2
The relevant interest of each director in the shares and options issued by the company in accordance with the Corporations
Act 2001, at the date of signing this report is as follows:
Name
M Atkins
(Windamurah P/L), (Alkali Exploration P/L)
M Wilson
(Chester Nominees WA P/L)
D Waterfield
Ordinary shares
7,108,334
Options over
ordinary shares
10,000,000
128,748,200
40,000,000
1,000,000
20,000,000
17. AUDITOR INDEPENDENCE AND NON-AUDIT SERVICES
Non-audit services
There were no non-audit services provided by the Company’s auditor, Ernst & Young during the 2018 financial year.
We have received the Declaration of Auditor Independence from Ernst & Young, the Company’s Auditor. This is available for
review on page 49 and forms part of this report.
SIGNED in accordance with a Resolution of the Directors on behalf of the Board
_______________________________
Mark Wilson
Managing Director
Dated this 21st day of March 2019
20
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
F o r t h e y e a r e n d e d 3 1 D e c e m b e r 2 0 1 8
Finance revenue
Net gain/(loss) on revaluation of financial assets held for
Trading
Employee benefit expenses
Other expenses
Corporate and administration expenses
Share-based payments expense
Loss before income tax
Income tax benefit
Net loss for the year attributable to Members of Legend Mining
Limited
Other comprehensive income for the year, net of tax
Total comprehensive loss for the year attributable to Members of
Legend Mining Limited
Note
4(a)
4(b)
4(c)
4(d)
4(e)
18(a)
6
2018
$
2017
$
223,469
267,989
(172,588)
(301,634)
(47,097)
(969,752)
-
(1,267,602)
-
353,632
(569,415)
(39,199)
(561,575)
(18,500)
(567,068)
-
(1,267,602)
(567,068)
-
-
(1,267,602)
(567,068)
EARNINGS PER SHARE (cents per share)
Basic loss per share
Diluted loss per share
5
5
(0.062)
(0.0555)
(0.028)
(0.028)
The accompanying notes form part of these financial statements
21
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
A s a t 3 1 D e c e m b e r 2 0 1 8
ASSETS
Current Assets
Cash and cash equivalents
Receivables
Other financial assets
Total Current Assets
Non-current Assets
Other financial assets
Property, plant & equipment
Deferred exploration costs
Total Non-current Assets
TOTAL ASSETS
LIABILITIES
Current Liabilities
Trade and other payables
Employee benefit provisions
Total Current Liabilities
Non-current Liabilities
Provisions
Total Non-current Liabilities
TOTAL LIABILITIES
NET ASSETS
EQUITY
Equity attributable to equity holders of the parent
Contributed equity
Share option premium reserve
Accumulated losses
TOTAL EQUITY
Notes
2018
$
2017
$
8
9
10
10
11
12
13
14
14
15
16
3,323,829
64,012
117,279
3,505,120
5,775
109,099
10,012,564
10,127,438
13,632,558
4,469,964
39,630
289,868
4,799,462
5,775
149,039
9,676,532
9,831,346
14,630,808
288,483
164,498
452,981
62,580
131,882
194,462
97,425
97,425
550,406
13,082,152
86,592
86,592
281,054
14,349,754
60,711,242
23,268,278
(70,897,368)
13,082,152
60,711,242
23,268,278
(69,629,766)
14,349,754
The accompanying notes form part of these financial statements
22
CONSOLIDATED STATEMENT OF CASH FLOWS
F o r t h e y e a r e n d e d 3 1 D e c e m b e r 2 0 1 8
CASH FLOWS FROM OPERATING ACTIVITIES
Note
Payments to suppliers and employees
Interest received
2018
$
2017
$
(1,062,034)
(1,161,546)
251,932
254,552
Net cash flows used in operating activities
20(ii)
(810,102)
(906,994)
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property, plant and equipment
11
Proceeds from the sale of investments
Payments for deferred exploration costs
Receipt of research and development tax incentive grant
-
-
(2,921,850)
2,585,817
(43,282)
466,072
(2,756,591)
1,037,085
Net cash flows used in investing activities
(336,033)
(1,296,716)
Net decrease in cash and cash equivalents
Cash and cash equivalents at the beginning of year
Cash and cash equivalents at end of year
20(i)
(1,146,135)
(2,203,710)
4,469,964
3,323,829
6,673,674
4,469,964
The accompanying notes form part of these financial statement
23
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
F o r t h e y e a r e n d e d 3 1 D e c e m b e r 2 0 1 8
Contributed
Equity
Share
Option
Premium
Reserve
Accumulated
Losses
Total Equity
At 1 January 2018
60,711,242
23,268,278
(69,629,766)
14,349,754
Loss for the year
Total comprehensive loss for the
year
-
-
-
-
(1,267,602)
(1,267,602)
(1,267,602)
(1,267,602)
At 31 December 2018
60,711,242
23,268,278
(70,897,368
13,082,152
At 1 January 2017
60,588,031
23,208,778
(69,062,698)
14,734,111
Loss for the year
Total comprehensive loss for the
year
Issue of share capital and options
for tenement acquisition
Share-based payments
At 31 December 2017
-
-
-
-
(567,068)
(567,068)
(567,068)
(567,068)
123,211
-
41,000
18,500
-
-
164,211
18,500
60,711,242
23,268,278
(69,629,766)
14,349,754
The accompanying notes form part of these financial statements
24
NOTES TO THE F INANCIAL STATEMENTS
F o r t h e y e a r e n d e d 3 1 D e c e m b e r 2 0 1 8
NOTE 1:
CORPORATE INFORMATION
The consolidated financial statements of Legend Mining Limited and its subsidiaries (collectively, the Group) for the year ended
31 December 2018 were authorised for issue in accordance with a resolution of the Directors on 20 March 2019.
Legend Mining Limited (the Company or the parent) is a for profit company limited by shares incorporated in Australia whose
shares are publicly traded on the Australian Securities Exchange.
The nature of the operations and principal activities of the Group are described in note 3.
NOTE 2:
SIGNIFICANT ACCOUNTING POLICIES
Basis of preparation
The financial report is a general-purpose financial report, which has been prepared in accordance with the requirements of the
Corporations Act 2001, Australian Accounting Standards and other authoritative pronouncements of the Australian Accounting
Standards Board. The financial report has also been prepared on a historical cost basis, except for certain financial assets carried
at fair value.
The financial report is presented in Australian dollars and all values are expressed as whole dollars.
The consolidated financial statements have been prepared on a going concern basis which assumes the continuity of normal
business activity and the realisation of assets and settlement of liabilities in the ordinary course of business.
The financial report also complies with International Financial Reporting Standards (‘IFRS’) as issued by the International
Accounting Standards Board.
Changes in accounting policy, disclosures, standards and interpretations
The accounting policies adopted are consistent with those of the previous financial year except for the impact of new and
amended accounting standards and interpretations as discussed below.
(i)
New and amended standards and interpretations
The Group applied AASB 15 Revenue from Contracts with Customers and AASB 9 Financial Instruments for the first time. The
nature and effect of the changes as a result of adoption of these new accounting standards are described below.
Several other amendments and interpretations apply for the first time in 2018, but do not have an impact on the consolidated
financial statements of the Group.
AASB 9 Financial Instruments (AASB 9)
Classification and measurement
AASB 9 replaces AASB 139 Financial Instruments: Recognition and Measurement (AASB 139) for annual periods beginning
on or after 1 January 2018, bringing together all three aspects of the accounting for financial instruments: classification
and measurement; impairment; and hedge accounting.
The Group has applied AASB 9 retrospectively, with the initial application date of 1 January 2018. The Group has elected
to restate the comparative period.
AASB 9 sets out requirements for recognising and measuring financial assets, financial liabilities and some contracts to
buy or sell non-financial items. Changes in accounting policies resulting from the adoption of AASB 9 did not have a
material impact on the Goup’s consolidated financial statements.
AASB 9 largely retains the existing requirements of AASB 139 for the classification and measurement of financial liabilities,
however, it eliminates the previous AASB 139 categories for financial assets held to maturity, receivables and available
for sale. Under AASB 9, on initial recognition a financial asset is classified as measured at:
a. Amortised cost;
b. Fair Value through Other Comprehensive Income (FVOCI) – debt investment;
c. FVOCI – equity investment; or
d. Fair Value through Profit or Loss (FVTPL)
The classification of financial assets under AASB 9 is based on two criteria: the Group’s business model for managing the
assets; and whether the instruments’ contractual cash flows represent ‘solely payments of principal and interest’ on the
principal amount outstanding (the ‘SPPI criterion’). A financial asset (unless it is a trade receivable without a significant
financing component that is initially measured at the transaction price) is initially measured at fair value plus, for an item
not at FVTPL, transaction costs that are directly attributable to its acquisition. For financial assets measured at amortised
cost, these assets are subsequently measured at amortised cost using the effective interest method. The amortised cost
is reduced by impairment losses.
25
NOTES TO THE F INANCIAL STATEMENTS
F o r t h e y e a r e n d e d 3 1 D e c e m b e r 2 0 1 8
NOTE 2: SIGNIFICANT ACCOUNTING POLICIES (CONTD)
Interest income, foreign exchange gains and losses and impairment are recognised in profit or loss. Any gain or loss on
derecognition is recognised in profit or loss.
As of 1 January 2018, the Company’s financial instruments consist of cash and cash equivalents, trade and other receivables,
bank term deposits investments in listed entities and trade and other payables.
Cash and cash equivalents, trade and other receivables, bank term deposits previously designated as loans and receivables
under AASB 139 are now classified as a financial asset at amortised cost under AASB 9. The trade and other payables are
designated as other financial liabilities, which are measured at amortised cost.
Classification of the Group’s investments in listed equities which was previously classified as held for trading and is now
classified as a financial asset at fair value through profit and loss. The changes in classification have not resulted in any re-
measurement adjustments at 1 January 2018 or 1 January 2017.
Class of financial instrument
presented in the statement of
financial position
Cash and cash equivalents
Loans and receivables
Original measurement
category under AASB 139
New measurement
category under AASB 9
Carrying value at
1 January 2018
($)
4,469,964
39,630
50,000
239,868
62,580
Financial assets at
amortised cost
Financial assets at
amortised cost
Financial assets at
amortised cost
Financial asset at fair value
through profit and loss
Financial liability at
amortised cost
Trade and other receivables
Loans and receivables
Bank deposits and environmental
rehabilitation security bonds
Investments in listed equities
Trade and other payables
Loans and receivables
Held for trading
Financial Liability at
amortised cost
Impairment
The adoption of AASB 9 has fundamentally changed the Group’s accounting for impairment losses for financial assets by replacing
AASB 139’s incurred loss approach with a forward-looking expected credit loss (ECL) approach. AASB 9 requires the Group to
record an allowance for ECLs for all loans and other debt financial assets not held at FVPL. ECLs are based on the difference
between the contractual cash flows due in accordance with the contract and all the cash flows that the Group expects to receive.
The shortfall is then discounted at an approximation to the asset’s original effective interest rate. For receivables, with short term
maturities the Group has has calculated ECLs based on lifetime expected credit losses. The Group has established a provision
matrix that is based on the Group’s historical credit loss experience, adjusted for forward-looking factors specific to the debtors
and the economic environment. Based on this approach, the lifetime ECL model has an immaterial impact on the Company.
Cash balances, other than immaterial petty cash balances, are being held with reputable financial institutions with sound credit
ratings, which reduces credit risk and the expected credit loss to be insignificant.
AASB 15 Revenue from Contracts (AASB 15)
AASB 15 supersedes AASB 118 Revenue and related Interpretations and it applies to all revenue arising from contracts with
customers, unless those contracts are in the scope of other standards. The new standard establishes a five-step model to account
for revenue arising from contracts with customers. Under AASB 15, revenue is recognised at an amount that reflects the
consideration to which an entity expects to be entitled in exchange for transferring goods or services to a customer. As the Group
is in the exploration and evaluation stage of operations and does not recognise revenue from contracts with customers, the
adoption of this standard does not have an impact on the consolidated financial statements of the Group.
Accounting Standards and Interpretations issued but not yet effective
Australian Accounting Standards and Interpretations that are issued, but are not yet effective, up to the date of issuance of the
Group’s financial statements are disclosed below. The Group intends to adopt these new standards and interpretations, if
applicable, when they become effective. Several other amendments and interpretations have been issued but are not yet
effective, but are not deemed to have an impact on the consolidated financial statements of the Group.
26
NOTES TO THE F INANCIAL STATEMENTS
F o r t h e y e a r e n d e d 3 1 D e c e m b e r 2 0 1 8
NOTE 2: SIGNIFICANT ACCOUNTING POLICIES (CONTD)
AASB 16 Leases
AASB 16 was issued in February 2016 and it replaces AASB 117 Leases, Interpretation 4 Determining whether an Arrangement
contains a Lease, Interpretation 115 Operating Leases-Incentives and Interpretation 127 Evaluating the Substance of Transactions
Involving the Legal Form of a Lease. AASB 16 sets out the principles for the recognition, measurement, presentation and disclosure
of leases and requires lessees to account for all leases under a single on-balance sheet model similar to the accounting for finance
leases under AASB 117. The standard includes two recognition exemptions for lessees – leases of ’low-value’ assets (e.g., personal
computers) and short-term leases (i.e., leases with a lease term of 12 months or less). At the commencement date of a lease, a
lessee will recognise a liability to make lease payments (i.e., the lease liability) and an asset representing the right to use the
underlying asset during the lease term (i.e., the right-of-use asset). Lessees will be required to separately recognise the interest
expense on the lease liability and the depreciation expense on the right-of-use asset.
Lessees will be also required to remeasure the lease liability upon the occurrence of certain events (e.g., a change in the lease
term, a change in future lease payments resulting from a change in an index or rate used to determine those payments). The
lessee will generally recognise the amount of the remeasurement of the lease liability as an adjustment to the right-of-use asset.
Lessor accounting under AASB 16 is substantially unchanged from today’s accounting under AASB 117. Lessors will continue to
classify all leases using the same classification principle as in AASB 117 and distinguish between two types of leases: operating and
finance leases.
AASB 16 also requires lessees and lessors to make more extensive disclosures than under AASB 117.
AASB 16 is effective for annual periods beginning on or after 1 January 2019. Early application is permitted, but not before an
entity applies AASB 15. A lessee can choose to apply the standard using either a full retrospective or a modified retrospective
approach.
The Group is in the process of assessing the potential effect of the amendments on its consolidated financial statements.
AASB Interpretation 23 Uncertainty over Income Tax Treatment
The Interpretation addresses the accounting for income taxes when tax treatments involve uncertainty that affects the application
of AASB 112 and does not apply to taxes or levies outside the scope of AASB 112, nor does it specifically include requirements
relating to interest and penalties associated with uncertain tax treatments. The Interpretation specifically addresses the following:
• Whether an entity considers uncertain tax treatments separately
•
•
•
The assumptions an entity makes about the examination of tax treatments by taxation authorities
How an entity determines taxable profit (tax loss), tax bases, unused tax losses, unused tax credits and tax rates
How an entity considers changes in facts and circumstances
An entity must determine whether to consider each uncertain tax treatment separately or together with one or more other
uncertain tax treatments. The approach that better predicts the resolution of the uncertainty should be followed. The
interpretation is effective for annual reporting periods beginning on or after 1 January 2019, but certain transition reliefs are
available. The Group will apply interpretation from its effective date. The Group has not yet assessed the impact of the adoption
of this interpretation.
Summary of significant accounting policies
(i)
Basis of consolidation
The consolidated financial statements comprise the financial statements of Legend Mining Limited and its subsidiaries (‘the
Group’) as at 31 December 2018. Control is achieved when the Group is exposed, or has rights, to variable returns from its
involvement with the investee and has the ability to affect those returns through its power over the investee. Specifically, the
Group controls an investee if and only if the Group has:
•
•
•
Power over the investee (ie existing rights that give it the current ability to direct the relevant activities of the investee);
Exposure, or rights, to variable returns from its involvement with the investee; and
The ability to use its power over the investee to affect its returns.
27
NOTES TO THE F INANCIAL STATEMENTS
F o r t h e y e a r e n d e d 3 1 D e c e m b e r 2 0 1 8
NOTE 2: SIGNIFICANT ACCOUNTING POLICIES (CONTD)
When the Group has less than a majority of the voting or similar rights of an investee, the Group considers all relevant facts and
circumstances in assessing whether it has power over an investee, including:
•
The contractual arrangement with the other vote holders of the investee;
• Rights arising from other contractual arrangements; and
•
The Group’s voting rights and potential voting rights.
The Group re-assesses whether or not it controls an investee if facts and circumstances indicate that there are changes to one
or more of the three elements of control. Consolidation of a subsidiary begins when the Group obtains control over the
subsidiary and ceases when the Group loses control of the subsidiary. Assets, liabilities, income and expenses of a subsidiary
acquired or disposed of during the year are included in the statement of comprehensive income from the date the Group gains
control until the date the Group ceases to control the subsidiary.
Profit or loss and each component of other comprehensive income (OCI) are attributed to the equity holders of the parent of
the Group and to the non-controlling interests, even if this results in the non-controlling interests having a deficit balance. When
necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies into line with the
Group’s accounting policies. All intra-group assets and liabilities, equity, income, expenses and cash flows relating to transactions
between members of the Group are eliminated in full on consolidation.
A change in the ownership interest of a subsidiary, without a loss of control, is accounted for as an equity transaction. If the
Group loses control over a subsidiary, it derecognises the related assets (including goodwill), liabilities, non-controlling interest
and other components of equity while any resultant gain or loss is recognised in profit or loss. Any investment retained is
recognised at fair value.
(ii)
Significant accounting judgements, estimates and assumptions
The carrying amounts of certain assets and liabilities are often determined based on estimates and assumptions of future events.
The key estimate and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of certain
assets and liabilities within the next annual reporting period are:
Share-based payment transactions
The Group measures the cost of equity-settled share-based payments at fair value at the grant date using a Black-Scholes formula
taking into account the terms and conditions upon which the instruments were granted.
Impairment of capitalised exploration and evaluation expenditure
The future recoverability of capitalised exploration and evaluation expenditure is dependent on a number of factors, including
whether the Group decides to exploit the related lease itself or, if not, whether it successfully recovers the related exploration
and evaluation asset through sale.
Factors which could impact the future recoverability include the level of proved, probable and inferred mineral resources, future
technological changes which could impact the cost of mining, future legal changes (including changes to environmental
restoration obligations) and changes to commodity prices.
To the extent that capitalised exploration and evaluation expenditure is determined not to be recoverable in the future, this will
reduce profits and net assets in the period in which the determination is made.
In addition, exploration and evaluation expenditure is capitalised if activities in the area of interest have not yet reached a stage
which permits a reasonable assessment of the existence or otherwise of economically recoverable reserves. To the extent that
it is determined in the future that this capitalised expenditure should be written off, this will reduce profits and net assets in the
period in which this determination is made.
(iii)
Property, plant and equipment
Property, plant and equipment are stated at cost less accumulated depreciation and any accumulated impairment losses.
Depreciation is calculated on a straight line basis over the useful life of the asset from the time the asset is held ready for use.
The depreciation rates used for each class are:
Buildings
10%
Plant and equipment
7.5% - 50%
28
NOTES TO THE F INANCIAL STATEMENTS
F o r t h e y e a r e n d e d 3 1 D e c e m b e r 2 0 1 8
NOTE 2: SIGNIFICANT ACCOUNTING POLICIES (CONTD)
Impairment
The carrying values of property, plant and equipment are reviewed for impairment as required, with recoverable amount being
estimated when events or changes in circumstances indicate the carrying value may not be recoverable.
For an asset that does not generate largely independent cash inflows, the recoverable amount is determined for the cash-
generating unit to which the asset belongs.
If any indication of impairment exists and where the carrying values exceed the estimated recoverable amount, the assets or
cash-generating units are written down to their recoverable amounts.
The recoverable amount of property, plant and equipment is the greater of fair value less costs to sell and value in use. In
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.
Derecognition and disposal
An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected to
arise from the continued use of the asset. Any gain or loss arising on derecognition of the asset (calculated as the difference
between the net disposal proceeds and the carrying amount of the item) is included in the income statement in the period the
item is derecognised.
(iv)
Cash and cash equivalents
Cash and cash equivalents in the statement of financial position comprise cash at bank and in hand and short-term deposits with
a maturity of three months or less, which are subject to an insignificant risk of changes in value.
For the purposes of the Statement of Cash Flows, cash and cash equivalents consist of cash and cash equivalents as defined
above.
(v)
Financial Assets
Financial assets at amortised cost (debt instruments)
Trade receivables are initially recognised at their transaction price and other receivables at fair value. Receivables that are held
to collect contractual cash flows and are expected to give rise to cash flows representing solely payments of principal and interest
are classified and subsequently measured at amortised cost. Receivables that do not meet the criteria for amortised cost are
measured at fair value through profit or loss.
The group assesses on a forward-looking basis the expected credit losses associated with its debt instruments carried at
amortised cost. The amount of expected credit losses is updated at each reporting date to reflect changes in credit risk since
initial recognition of the respective financial instrument. The Group always recognises the lifetime expected credit loss for trade
receivables carried at amortised cost. The expected credit losses on these financial assets are estimated based on the Group’s
historic credit loss experience, adjusted for factors that are specific to the debtors, general economic conditions and an
assessment of both the current as well as forecast conditions at the reporting date.
For all other receivables measured at amortised cost, the Group recognises lifetime expected credit losses when there has been
a significant increase in credit risk since initial recognition. If the credit risk on the financial instrument has not increased
significantly since initial recognition, the Group measures the loss allowance for that financial instrument at an amount equal to
expected credit losses within the next 12 months.
The Group considers an event of default has occurred when a financial asset is more than 90 days past due or external sources
indicate that the debtor is unlikely to pay its creditors, including the Group. A financial asset is credit impaired when there is
evidence that the counterparty is in significant financial difficulty or a breach of contract, such as a default or past due event has
occurred. The Group writes off a financial asset when there is information indicating the counterparty is in severe financial
difficulty and there is no realistic prospect of recovery. Refer note 2(i) above for policy adopted.
Financial assets at fair value through profit or loss (equity investments)
Financial assets at fair value through profit or loss include financial assets held for trading, e.g., financial assets designated upon
initial recognition at fair value through profit or loss, e.g., debt or equity instruments, or financial assets mandatorily required to
be measured at fair value, i.e., where they fail the SPPI test. Financial assets are classified as held for trading if they are acquired
for the purpose of selling or repurchasing in the near term. Financial assets with cash flows that do not pass the SPPI test are
required to be classified and measured at fair value through profit or loss, irrespective of the business model. Notwithstanding
the criteria for debt instruments to be classified at amortised cost or at fair value through OCI, as described above, debt
instruments may be designated at fair value through profit or loss on initial recognition if doing so eliminates, or significantly
reduces, an accounting mismatch.
29
NOTES TO THE F INANCIAL STATEMENTS
F o r t h e y e a r e n d e d 3 1 D e c e m b e r 2 0 1 8
NOTE 2: SIGNIFICANT ACCOUNTING POLICIES (CONTD)
Financial assets at fair value through profit or loss are carried in the statement of financial position at fair value with net changes
in fair value recognised in profit or loss.
(vi) Government grants
Government grants are recognised where there is reasonable assurance that the grant will be received and all attached
conditions will be complied with. When the grant relates to an expense item, it is recognised as income on a systematic basis
over the periods that the related costs, for which it is intended to compensate, are expensed. When the grant relates to an asset,
it is recognised as income in equal amounts over the expected useful life of the related asset.
When the Group receives grants of non-monetary assets, the asset and the grant are recorded at nominal amounts and released
to profit or loss over the expected useful life of the asset, based on the pattern of consumption of the benefits of the underlying
asset by equal annual instalments.
(vii) Deferred exploration costs
Deferred exploration and evaluation costs
Exploration and evaluation expenditure is stated at cost and is accumulated in respect of each identifiable area of interest.
Such costs are only carried forward to the extent that they are expected to be recouped through the successful development of
the area of interest (or alternatively by its sale), or where activities in the area have not yet reached a stage which permits a
reasonable assessment of the existence or otherwise of economically recoverable reserves, and active operations are continuing.
Accumulated costs in relation to an abandoned area are written off to the income statement in the period in which the decision
to abandon the area is made.
A regular review is undertaken of each area of interest to determine the appropriateness of continuing to carry forward costs in
relation to that area of interest.
Impairment
The carrying values of exploration and evaluation costs are reviewed for impairment when facts and circumstances indicate the
carrying value may not be recoverable.
The recoverable amount of exploration and evaluation costs is the greater of fair value less costs to sell and value in use. In
assessing the 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 fair value of money and the risks specific to the asset.
Accumulated costs in relation to an abandoned area are written off in full against the income statement in the year in which the
decision to abandon the area is made. A regular review is undertaken of each area of interest to determine the appropriateness
of continuing to carry forward costs in relation to that area of interest. Each area of interest is limited to the size related to
known or probable mineral resources capable of supporting a mining operation.
(viii) Provisions
Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past event, it is probable
that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can
be made of the amount of the obligation.
If 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. When discounting is used, the increase in the provision due to the passage of time is recognised as a finance cost.
(ix)
Interest and rental income
Interest revenue is recognised as it accrues, using the effective interest rate 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.
30
NOTES TO THE F INANCIAL STATEMENTS
F o r t h e y e a r e n d e d 3 1 D e c e m b e r 2 0 1 8
NOTE 2: SIGNIFICANT ACCOUNTING POLICIES (CONTD)
(x)
Taxes
Current income tax
Current tax assets and liabilities for the current and prior periods are measured at the amount expected to be recovered from
or paid to the taxation authorities. The tax rates and tax law used to compute the amount are those that are enacted or
substantively enacted by the reporting date.
Deferred tax
Deferred income tax is provided on all temporary differences at the reporting date between the tax bases of assets and liabilities
and their carrying amounts for financial reporting purposes.
Deferred income tax liabilities are recognised for all taxable temporary differences:
•
•
Except where the deferred income tax liability arises from the initial recognition of goodwill or of an asset or liability in a
transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor
taxable profit or loss; and
In respect of taxable temporary differences associated with investments in subsidiaries, associates and interests in joint
ventures, except where the timing of the reversal of the temporary differences can be controlled and it is probable that the
temporary differences will not reverse in the foreseeable future.
Deferred income tax assets are recognised for all deductible temporary differences, carry-forward of unused tax assets and
unused tax losses, to the extent that it is probable that taxable profit will be available against which the deductible temporary
differences, and the carry-forward of unused tax assets and unused tax losses can be utilised:
•
•
Except where the deferred income tax asset relating to the deductible temporary differences arises from the initial
recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction,
affects neither the accounting profit nor taxable profit or loss; and
In respect of deductible temporary differences associated with investments in subsidiaries, associates and interests in joint
ventures, deferred tax assets are only recognised to the extent that it is probable that the temporary differences will reverse
in the foreseeable future and taxable profit will be available against which the temporary differences can be utilised.
The carrying amounts of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer
probable that sufficient taxable profit will be available to allow all or part of the deferred income tax assets to be utilised.
Unrecognised deferred tax assets are reassessed at each reporting date and are recognised to the extent that it has become
probable that future taxable profit will allow the deferred tax asset to be recovered.
Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply to the year when the asset is
realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the
reporting date.
Deferred tax relating to items recognised outside profit or loss is recognised outside profit or loss. Deferred tax items are
recognised in correlation to the underlying transaction either in other comprehensive income or directly in equity.
Deferred tax assets and deferred tax liabilities are offset only if a legally enforceable right exists to set off current tax assets
against current tax liabilities and the deferred tax assets and liabilities relate to the same taxable entity and the same taxation
authority.
Goods and services tax (GST)
Revenue, expenses and assets are recognised net of the amount of GST except:
• Where the amount of the GST incurred is not recoverable from the Australian Taxation Office. In these circumstances the
GST is recognised as part of the cost of acquisition of the asset or as part of the expense.
• Receivables and payables are stated with the amount of GST included.
The net amount of GST recoverable from, or payable to, the ATO is included as a current asset or liability in the Statement of
Financial Position. Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to, the
taxation authority.
Cash flows are included in the Consolidated Statement of Cash Flows on a gross basis. The GST components of cash flows arising
from investing or financing activities which are recoverable from, or payable to, the ATO are classed as operating cash flows.
31
NOTES TO THE F INANCIAL STATEMENTS
F o r t h e y e a r e n d e d 3 1 D e c e m b e r 2 0 1 8
NOTE 2: SIGNIFICANT ACCOUNTING POLICIES (CONTD)
(xi)
Trade and or other payables
Liabilities for trade creditors and other amounts are carried at amortised cost and represent liabilities for goods and services
provided to the Group prior to the end of the financial year that are unpaid and arise when the Group becomes obliged to make
future payments in respect of these goods and services. The amounts are unsecured and are usually paid within 30 days.
(xii)
Share based payment transactions
The Group provides benefits to employees (including directors) of the Group and to the providers of services to the Group in the
form of share based payment transactions, whereby employees or service providers render services in exchange for shares or
rights over shares (‘equity-settled transactions’).
There are currently three scenarios in place to provide these services:
(a) ‘Employees Share Option Plan’, which provides benefits to eligible persons;
(b) Capital raising costs, which provide payment to stockbrokers and finance institutions for capital raising services and
commissions; and
(c) Other grants of options to directors on an ad hoc basis.
The cost of the equity-settled transactions with stockbrokers and finance institutions is measured by reference to the fair value
of the service received at the date they are granted.
For transactions with employees (including directors), the cost of these equity-settled transactions is measured by reference to
the fair value of the options provided. The fair value is determined by an external valuer using a Black-Scholes model.
The cost of these equity-settled transactions with employees is recognised, together with a corresponding increase in equity,
over the period in which the performance conditions are fulfilled, ending on the date on which the relevant employee becomes
fully entitled to the award (‘vesting date’).
In valuing these equity-settled transactions, no account is taken of any performance conditions, other than conditions linked to
the price of the shares of Legend Mining Limited (market conditions) if applicable.
The cumulative expense recognised for these equity-settled transactions at each reporting date until vesting date reflects (i) the
extent to which the vesting period has expired and (ii) the Group’s best estimate of the number of equity instruments that will
ultimately vest. No adjustment is made for the likelihood of market conditions being met as the effect of these conditions is
included in the determination of fair value at grant date. The income statement charge or credit for a period represents the
movement in cumulative expenses recognised as at the beginning and end of the period.
No expense is recognised for awards that do not ultimately vest, except for awards where vesting is only conditional upon a
market condition.
If the terms of an equity-settled award are modified, as a minimum an expense is recognised as if the terms had not been
modified. In addition, an expense is recognised for any modification that increases the total fair value of the share-based
payment arrangement, or is otherwise beneficial to the employee, as measured at the date of modification.
If an equity-settled award is cancelled, it is treated as if it had vested on the date of cancellation, and any expense not yet
recognised for the award is recognised immediately. However , if a new award is substituted for the cancelled award and
designated as a replacement award on the date that it is granted, the cancelled and new award are treated as if they were a
modification of the original award, as described in the previous paragraph.
For transactions with other service providers, the cost of these equity-settled transactions is measured by reference to the value
of the services provided. The cost of these equity-settled transactions is recognised, together with a corresponding increase in
equity, at the time the services are provided unless they are transaction costs arising on the issue of ordinary shares, in which
case the transaction costs are recognised directly in equity as a reduction of the proceeds received on the issue of shares.
(xiii)
Contributed Equity
Issued and paid up capital is recognised at the fair value of the consideration received by the Company. Any transaction costs
net of tax arising on the issue of ordinary shares are recognised directly in equity as a reduction of the proceeds received.
(xiv) Employee Benefits
Provision is made for employee benefits accumulated as a result of employee services up to the reporting date. These employee
benefits include wages, salaries, annual leave and include related on-costs such as superannuation and payroll tax.
The Group does not expect its long service leave or annual leave benefits to be settled wholly within 12 months of each reporting
date. The Group recognises a liability for long service leave and annual leave measured as the present value of expected future
payments to be made in respect of services provided by employees up to the reporting date using the projected unit credit
method. Consideration is given to expected future wage and salary levels, experience of employee departures, and periods of
service.
32
NOTES TO THE F INANCIAL STATEMENTS
F o r t h e y e a r e n d e d 3 1 D e c e m b e r 2 0 1 8
NOTE 2: SIGNIFICANT ACCOUNTING POLICIES (CONTD)
Expected future payments are discounted using market yields at the reporting date on national government bonds with terms
to maturity and currencies that match, as closely as possible, the estimated future cash outflows.
No provision is made for non-vesting sick leave, as the anticipated pattern of future sick leave taken indicates that accumulated
non-vesting sick leave will never be paid.
The liability for long service leave is recognised and measured as the present value of expected future payments to be made in
respect of services provided by employees up to the reporting date using the projected unit credit method. Consideration is
given to expected future wage and salary levels, experience of employee departures, and period of service. Expected future
payments are discounted using market yields at the reporting date on national government bonds with terms to maturity and
currencies that match, as closely as possible, the estimated future cash outflow.
Contributions to employee superannuation funds of choice are expensed as incurred.
(xv)
Earnings per share
Basic earnings per share (EPS) is calculated as net profit or loss attributable to members, adjusted to exclude costs of servicing
equity (other than dividends), divided by the weighted average number of ordinary shares, adjusted for any bonus element.
Diluted EPS is calculated as net profit or loss attributable to members, adjusted for:
(a) Costs of servicing equity (other than dividends).
(b) The after tax effect of dividends and interest associated with the dilutive potential ordinary shares that have been
recognised as expenses; and
(c) Other non-discretionary changes in revenues or expenses during the period that would result from the dilution of potential
ordinary shares;
divided by the weighted average number of ordinary shares and dilutive potential ordinary shares, adjusted for any bonus
element.
(xvi) Foreign currency translation
(a) Functional and presentation currency
The Group’s consolidated financial statements are presented in Australian dollars, which is also the Company’s functional
currency. For each entity, the Group determines the functional currency and items included in the financial statements of each
entity are measured using that functional currency.
(b) Transactions and balances
Transactions in foreign currencies are initially recorded by the Group’s entities at their respective functional currency spot rates
at the date the transaction first qualifies for recognition.
Monetary assets and liabilities denominated in foreign currencies are retranslated at the functional currency spot rates of
exchange at the reporting date.
Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchanges rates
at the dates of the initial transactions. Non-monetary items measured at fair value in a foreign currency are translated using the
exchange rates at the date when the fair value is determined. The gain or loss arising on translation of non-monetary items
measured at fair value is treated in line with the recognition of gain or loss on change in fair value of the item (ie translation
differences on items whose fair value gain or loss is recognised in other comprehensive income or profit or loss are also
recognised in other comprehensive income or profit or loss respectively).
33
NOTES TO THE F INANCIAL STATEMENTS
F o r t h e y e a r e n d e d 3 1 D e c e m b e r 2 0 1 8
NOTE 3: NATURE OF OPERATIONS AND PRINCIPAL ACTIVITIES
The principal activities during the year of the entities within the consolidated entity were exploration for nickel and copper
deposits in Australia.
NOTE 4:
REVENUE AND EXPENSES
a)
Finance Revenue
Bank interest received and receivable
Other finance income
Note
9
b) Other
Net gain/(loss) on revaluation of financial assets held for trading
c)
Employee Benefits Expense
Salaries, on-costs and other employee benefits
d) Other Expenses
Depreciation
Exploration expenditure not capitalised
e) Corporate and administration expenses
Fees – Audit/Tax
Fees – ASX
Fees – Share Registry
Consultancy Fees
Office Rent
Legal expenses
Travel expenses
Other expenses
NOTE 5:
EARNINGS PER SHARE
(a)
Reconciliation of earnings to net loss:
Net Loss
Loss used in the calculation of basic earnings per share
2018
$
103,469
120,000
223,469
(172,588)
(172,588)
301,634
301,634
3,633
43,464
47,097
452,077
46,184
15,096
73,830
114,906
1,880
48,146
217,633
969,752
2018
$
2017
$
147,989
120,000
267,989
353,632
353,652
587,915
587,915
35,184
4,015
39,199
215,407
36,734
13,617
74,748
88,944
5,493
38,005
88,627
561,575
2017
$
(1,267,602)
(567,068)
(1,267,602)
(567,068)
(b) Weighted average number of shares on issue during the financial year used
in the calculation of basic loss per share
2,044,350,801
2,042,487,787
Weighted average number of ordinary shares on issue used in the
calculation of diluted loss per share
2,044,350,801
2,042,487,787
(c)
Information on classification of options
For the year ended 31 December 2018, all options on issue were antidilutive as the various exercise prices were all greater
than the average market price of the Company’s shares during the year. This has resulted in the diluted earnings per share
being the same as the basic earnings per share. These options could potentially dilute basic earnings per share in the future.
The number of anti-dilutive potentially issuable ordinary shares at 31 December 2018 is 238,000,000. (31 December 2017:
238,000,000)
34
NOTES TO THE F INANCIAL STATEMENTS
F o r t h e y e a r e n d e d 3 1 D e c e m b e r 2 0 1 8
NOTE 6:
INCOME TAX
The major components of income tax expense are:
Income Statement
Current income tax
Current year income tax charge (benefit)
Under/Over provision of prior tax year
Deferred income tax
Relating to origination and reversal of temporary differences
Under/Over provision of prior tax year
Income tax benefit reported in the income statement
A reconciliation between tax expense and the product of accounting
profit/(loss) before income tax multiplied by the Group’s applicable
income tax rate is as follows:
Accounting loss before tax from ordinary activities
Accounting loss before income tax
At the Group’s statutory income tax rate of 30%
Expenditure not allowed for income tax purposes
Current year tax losses not recognised
Non-assessable income
Utilisation of previous unrecognised tax losses
Deferred tax assets not brought to account
Deductible equity raising costs
Income tax expense attributable to entity reported in the consolidated income
statement
Income tax expensed directly to equity
Relating to equity costs
Deferred tax expense/(income) recognised in equity
Current Income Tax Asset/(Liability)
2018
$
2017
$
-
-
-
-
-
-
-
-
-
-
(1,267,602)
(1,267,602)
(380,280)
111,160
217,343
(343,220)
-
394,997
-
-
-
-
-
(567,068)
(567,068)
(170,120)
56,141
-
(106,090)
(85,822)
305,891
-
-
-
-
-
35
NOTES TO THE F INANCIAL STATEMENTS
F o r t h e y e a r e n d e d 3 1 D e c e m b e r 2 0 1 8
NOTE 6:
INCOME TAX (CONTD)
Deferred Income Tax
Deferred income tax at 31 December related to the following:
Consolidated
Recognised deferred tax liabilities
Capitalised exploration and evaluation expenditure
Investments
Other
Amounts disclosed as deferred tax liability
Set-off of deferred tax assets
Net deferred tax liabilities disclosed
Recognised deferred tax assets
Tax losses available to offset against future taxable income
Other provisions
Plant and Equipment
Other future blackhole deductions
Gross deferred tax assets
Set-off of deferred tax assets
Net deferred tax assets recognised
Unrecognised deferred tax assets
Deferred tax assets have not been recognised in respect of the
following as the statutory requirements for recognising those deferred
tax assets have not been met
Deductible temporary differences
Tax revenue losses
Tax capital losses
Net deferred tax assets not recognised
Tax Consolidation
2018
$
30%
2017
$
30%
(2,011,121)
-
(3,350)
(2,014,471)
2,014,471
-
1,894,220
89,461
790
30,000
2,014,471
(2,014,471)
-
(1,825,825)
-
(2,889)
(1,828,714)
1,828,714
-
1,664,086
74,542
86
90,000
1,828,714
(1,828,714)
-
1,140,240
643,458
2,223,755
4,007,453
1,088,464
426,114
2,223,755
3,738,333
Legend Mining Limited and its 100% owned Australian resident subsidiaries formed a tax consolidated group with effect from 1
July 2004. Legend Mining Limited is the head entity of the tax consolidated group. Members of the group have entered into a
tax sharing agreement in order to allocate the income tax liabilities between the entities within the Group should the head entity
default on its tax payment obligations. At the balance date, the possibility of default is remote.
Tax effect accounting by members of the tax consolidated group
Tax expense / income, deferred tax liabilities and deferred tax assets arising from temporary differences are recognised in the
separate financial statements of the members of the tax consolidated group using the separate taxpayer within a group method.
Current tax liabilities and assets and deferred tax assets arising from unused tax losses and tax credits of the members of the tax
consolidated group are recognised by the Company (as head entity in the tax consolidated group).
Members of the tax consolidated group have not entered into a tax funding agreement. As a result, the aggregate of the current
tax liability or asset and any deferred tax asset arising from unused tax losses and tax credits in respect of that period, assumed
by the Company, are recognised as a contribution from (or distribution to) equity participants. There were no contributions (or
distributions) made during the year ended 31 December 2018.
2018 Tax Return
On 22 November 2018, the Company lodged its tax return for the tax year ended 30 June 2018 and claimed a refundable
Research and Development (R&D) tax offset of $1,282,355. In December 2018, the Company received this refund.
36
NOTES TO THE F INANCIAL STATEMENTS
F o r t h e y e a r e n d e d 3 1 D e c e m b e r 2 0 1 8
NOTE 7:
SEGMENT INFORMATION
Operating Segments
The group has one reportable operating segment, being exploration and evaluation activities in Australia.
NOTE 8: CASH AND CASH EQUIVALENTS
Cash at bank and in hand
Deposits
2018
$
323,829
3,000,000
3,323,829
Cash at bank earns interest at floating rates based on daily bank deposit rates.
Deposits at call earn interest on a 30, 60 and 90 day term basis at bank deposit rates at an average rate of 2.65%.
NOTE 9:
RECEIVABLES
Current
Other receivables (b)
Non-current
Receivable from Jindal Mining & Exploration Limited (a)
Provision for Jindal receivable
2018
$
64,012
64,012
3,005,000
(3,005,000)
-
2017
$
969,964
3,500,000
4,469,964
2017
$
39,630
39,630
3,005,000
(3,005,000)
-
Terms and conditions relating to the above financial instruments:
(a) On 4 January 2017, the Company announced that it has received a request from Jindal Steel and Power (Mauritius)
Limited (“Jindal”) to consider a further deferral of the payment of the final amount of $3 million owing to Legend from
the sale of the Cameroon Iron Ore project. At that time, Legend agreed to this request in principle, and expected to
report to the ASX as soon as an agreement of new payment terms was reached. Legend has since been advised by Jindal
that it is undergoing a major debt rescheduling with its creditors and is unable to make any payments to creditors,
including Legend, nor finalise any rescheduling of the Legend debt until its own debt rescheduling is complete. At the
date of this report, Legend has yet to complete an agreement on new payment terms with Jindal. Since January 2017,
Jindal has continued to pay the 4% interest due on the $3 million owing to Legend each quarter.
(b) Other receivables are non-interest bearing and have repayment terms of between 30 and 60 days.
NOTE 10: OTHER FINANCIAL ASSETS
Current
Shares in S2 Resources Ltd – at fair value (a)
Shares and options in Nemex Resources Ltd – at fair value (a)
Security bond – at amortised cost (b)
Non-current
Rental property bond (c)
2018
$
67,279
-
50,000
117,279
2017
$
173,868
66,000
50,000
289,868
5,775
5,775
37
NOTES TO THE F INANCIAL STATEMENTS
F o r t h e y e a r e n d e d 3 1 D e c e m b e r 2 0 1 8
NOTE 10: OTHER FINANCIAL ASSETS (CONTD)
Details of the above financial instruments:
(a) The equity investments are all classified as financial assets at fair value through profit and loss. The market value of all
equity investments represent the fair value based on quoted prices on active markets (ASX) as at the reporting date without
any deduction for transaction costs. These investments are classified as Level 1 financial instruments. There have been no
transfers between levels of the fair value hierarchy used in measuring the fair value of these financial instruments, or
changes in its classification as a result of a change in the purpose or use of these assets.
(b) Security bond – bank deposit held as security for credit cards. At 31 December 2018, this deposit is held on a 6 month term
deposit with an interest rate of 2.72% per annum (31 December 2017, 6 months at 2.46%pa).
(c) Rental Property Bond – this bond relates to a rental property in Boulder WA. No interest is received on this bond.
NOTE 11: PROPERTY, PLANT AND EQUIPMENT
Plant and equipment
At 31 December
Gross carrying amount at cost
Accumulated depreciation
Net carrying amount
At 1 January
Net of accumulated depreciation
Additions
Disposals
Depreciation expense - Admin
Depreciation expense - Exploration
At 31 December
Net of accumulated depreciation
2018
$
2017
$
324,726
(215,627)
109,099
324,726
(175,687)
149,039
149,039
-
-
(3,633)
(36,307)
156,479
43,282
-
(35,184)
(15,538)
109,099
149,039
NOTE 12: DEFERRED EXPLORATION COSTS
Deferred exploration costs
Deferred exploration and evaluation costs
At 1 January, at cost
Acquired during the year
Reimbursement of exploration expenditure – R&D Rebate
Impaired during the year
Expenditure incurred during the year
At 31 December, at cost
Note
(i)
(ii)
2018
$
2017
$
10,012,564
9,676,532
9,676,532
-
(2,585,817)
-
2,921,849
10,012,564
7,712,131
164,211
(1,037,085)
-
2,837,275
9,676,532
Note:
(i)
During 2017 Legend purchased two exploration licences from Musgrave Minerals Limited in the Fraser Range district of
Western Australia. Legend acquired 100% interest in the tenements E28/2404 and E28/2405 for the following
consideration:
•
•
10,000,000 Legend Shares
10,000,000 unlisted options to subscribe for a fully paid ordinary Legend share at an exercise price of $0.04 each,
exercisable by 30 March 2021.
38
NOTES TO THE F INANCIAL STATEMENTS
F o r t h e y e a r e n d e d 3 1 D e c e m b e r 2 0 1 8
NOTE 12:
DEFERRED EXPLORATION COSTS (CONTD)
(ii) The future recoverability of capitalised exploration and evaluation expenditure is dependent on a number of factors,
including whether the Group decides to exploit the related lease itself or, if not, whether it successfully recovers the related
exploration and evaluation asset through sale.
NOTE 13:
TRADE AND OTHER PAYABLES
Current – unsecured
Trade payables
Other payables and accruals
Terms and conditions relating to the above financial instruments
(i)
Trade payables are non-interest bearing and normally settled on 30 day terms.
(ii) Other payables are non-interest bearing and normally settled as they fall due.
(iii) There are no trade payables past due for payment.
NOTE 14:
EMPLOYEE BENEFITS PROVISIONS
Current
Employee benefits
Non-Current
Employee benefits
Number of employees at year end
NOTE 15: CONTRIBUTED EQUITY
Ordinary shares
Issued and fully paid
Movement in ordinary shares on issue 2018
At 1 January 2018
Nil Shares issued for tenement acquisition (refer note 12(i))
At 31 December 2018
Movement in ordinary shares on issue 2017
At 1 January 2017
Shares issued for tenement acquisition (refer note 12(i))
At 31 December 2017
2018
$
230,845
57,638
288,483
2017
$
32,580
30,000
62,580
2018
$
2017
$
164,498
131,882
97,425
4
2018
$
86,592
4
2017
$
60,711,242
60,711,242
60,711,242
60,711,242
No.
2,044,350,801
-
2,044,350,801
No.
2,034,350,801
10,000,000
2,044,350,801
$
60,711,242
-
60,711,242
$
60,588,031
123,211
60,711,242
Effective 1 July 1998, the Corporations’ legislation in place abolished the concept of authorised share capital and par value
shares. Accordingly the Company does not have authorised capital nor par value in respect of its issued shares.
Fully paid ordinary shares carry one vote per share and carry the right to dividends.
39
NOTES TO THE F INANCIAL STATEMENTS
F o r t h e y e a r e n d e d 3 1 D e c e m b e r 2 0 1 8
NOTE 16: RESERVES
Movement in reserves
At 1 January 2018
Options issued to employees(refer note 18)
Options issued for tenement acquisition (refer note 12 (i))
At 31 December 2018
At 1 January 2017
Options issued to employees(refer note 18)
Options issued for tenement acquisition (refer note 12 (i))
At 31 December 2017
Share option premium reserve
Share option
premium reserve
$
23,268,278
-
-
23,268,278
23,208,778
18,500
41,000
23,268,278
The share option premium reserve is used to record the value of share based payments provided to employees, directors and
contractors, as part of their remuneration.
NOTE 17: SHARE OPTIONS
Unlisted options – Expiry date 23 September 2020
At 1 January 2018
At 31 December 2018
Unlisted options – Expiry date 30 March 2021
At 1 January 2018
Issued during the year
At 31 December 2018
Unlisted options – Expiry date 23 September 2020
At 1 January 2017
At 31 December 2017
Unlisted options – Expiry date 30 March 2021
At 1 January 2017
Issued during the year
At 31 December 2017
NOTE 18: SHARE BASED PAYMENT PLANS
(a) Recognised share-based payment expenses
Number
Exercise price
cents per share
150,000,000
150,000,000
88,000,000
-
88,000,000
150,000,000
150,000,000
73,000,000
15,000,000
88,000,000
4 cents
4 cents
4 cents
4 cents
4 cents
During the 2018 year there were no options issued (2017: 5,000,000 options).
•
In 2017 5,000,000 incentive options with an exercise price of 4 cents and expiring on 30 March 2021 were issued to
employees. Under the Company’s Employee Share Option Plan. The fair value of the options granted at the grant date was
0.37 cents, for a total value of $18,500 included within share based payments expense in the prior period.
The fair values were calculated by using the Black-Scholes European Option Pricing Model applying the following inputs:
Exercise price (cents)
Life of the option (years)
Underlying share price (cents)
Expected share price volatility
Risk free interest rate
Incentive Options
4.0
5.0
1.2
75.0%
2.06%
40
NOTES TO THE F INANCIAL STATEMENTS
F o r t h e y e a r e n d e d 3 1 D e c e m b e r 2 0 1 8
18.
SHARE BASED PAYMENT PLAN (CONTD)
(b) Types of share-based payment plans
Employee Share Option Plan, ‘ESOP’
Share options are granted to Eligible Persons with more than 6 months service. Eligible Persons are determined by the Board after
taking into account the following considerations:
the seniority of the Eligible Person and the position the Eligible Person occupies within the Group;
(i)
(ii)
the length of service of the Eligible Person with the Group;
(iii) the record of employment of the Eligible Person with the Group;
(iv) the contractual history of the Eligible Person with the Group;
(v)
the potential contribution of the Eligible Person to the growth of the Group;
(vi) the extent (if any) of the existing participation of the Eligible Person in the Plan; and
(vii) any other matters which the Board considers relevant.
At a General Meeting on the 4 December 2009 shareholders approved the implementation of Employee Share Option Plan No 3.
The new plan differs from the previous plans in that there is no 12 month vesting period on any new options received under plan
No 3. There is a significant change in the context of recent proposals by the Federal Government to change the tax treatment of
options issued under incentive schemes. Removal of the vesting period requirement allows the Board maximum flexibility to make
offers of options on the terms of the plans appropriate at the time, having regard for the tax environment which the proposed
participants find themselves in when an offer of options is received from the company.
Vendor Options
In 2017 share options were granted, as opposed to cash payments, for the following expenses:
(i) Tenement acquisition – 10,000,000 options were granted as part consideration for the tenement acquisition from Musgrave
Minerals Limited in the Fraser Range district of Western Australia. Legend acquired 100% interest in the tenements E28/2404
and E28/2405.
(c) Summaries of options granted
ESOP: The following table illustrates the number (No.) and weighted average exercise prices (WAEP) of, and movements in, share
options issued during the year:
Outstanding balance at the beginning of the year
78,000,000
0.040
2018
No.
2018
WAEP
($)
Expense Share Option Plan ‘ExSOP: The following table illustrates the number (No.) and weighted average exercise prices
(WAEP) of, and movements in, share options issued during the year:
Outstanding balance at the beginning of the year
160,000,000
0.040
2018
No.
2018
WAEP
2017
No.
73,000,000
5,000,000
-
-
-
-
-
78,000,000
78,000,000
0.040
0.040
78,000,000
78,000,000
2017
No.
150,000,000
10,000,000
-
-
-
-
-
160,000,000
160,000,000
0.040
0.040
160,000,000
160,000,000
2017
WAEP
($)
0.040
0.040
-
0.040
0.040
2017
WAEP
0.040
0.040
-
0.040
0.040
Granted during the year
Expired/lapsed during the year
Outstanding at the end of the year
Exercisable at the end of the year
Granted during the year
Expired/lapsed during the year
Outstanding at the end of the year
Exercisable at the end of the year
The outstanding balance as at 31 December 2018 is represented by:
(i)
150,000,000 options over ordinary shares with an exercise price of $0.04 each, exercisable immediately and expiring on 23
September 2020.
(ii) 88,000,000 options over ordinary shares with an exercise price of $0.04 each, exercisable immediately and expiring on 30
March 2021.
41
NOTES TO THE F INANCIAL STATEMENTS
F o r t h e y e a r e n d e d 3 1 D e c e m b e r 2 0 1 8
NOTE 19: RELATED PARTIES
(i) Wholly-owned group transactions
Loans made by Legend Mining Limited to wholly-owned subsidiaries are repayable on demand and are not interest bearing.
(ii) Other 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.
(iii) Ultimate parent
Legend Mining Limited is the ultimate parent company.
(iv) Compensation of key management personnel of the Group
Short-term employee benefits
Post-employment benefits
Other long-term benefits
Termination benefits
Share-based payment
Total compensation paid to Key Management Personnel
2018
$
654,564
58,900
9,000
-
-
722,464
2017
$
656,000
58,900
24,277
-
-
739,177
The amounts disclosed in the table are the amounts recognised as an expense during the reporting period related to key
management personnel.
NOTE 20: CASH FLOW INFORMATION
(i) Reconciliation of Cash
For the purposes of the Cash Flow Statement, cash and cash equivalents includes cash on hand and at bank and short term
deposits at call, net of outstanding bank overdrafts. Cash as at the end of the financial year as shown in the Cash Flow Statement
is reconciled to the related items in the Statement of Financial Position as follows:
Cash on hand
Cash at bank
Deposits at call
Note
8
(ii) Reconciliation of net loss after income tax to net cash used in operating activities
Net loss after tax
Depreciation
Share-based payments expense
Fair value (gain)/loss on investments
Deferred exploration costs
Movement in provisions and other
Change in operating assets and liabilities:
(Increase)/decrease in receivables
Increase/(decrease) in payables
2018
$
500
323,329
3,000,000
3,323,829
(1,267,602)
39,940
-
172,588
-
43,448
(1,011,626)
15,913
185,611
2017
$
500
969,464
3,500,000
4,469,964
(567,068)
35,184
18,500
(353,632)
-
(5,150)
(872,166)
(8,387)
(26,441)
Net cash used in operating activities
(810,102)
(906,994)
42
NOTES TO THE F INANCIAL STATEMENTS
F o r t h e y e a r e n d e d 3 1 D e c e m b e r 2 0 1 8
20.
CASH FLOW INFORMATION (CONTD)
Non-cash financing and investing activities
In 2017 Legend purchased two exploration licences from Musgrave Minerals Limited in the Fraser Range district of Western
Australia. Legend acquired 100% interest in the tenements E28/2404 and E28/2405 for the following non-cash consideration:
•
•
10,000,000 Legend Shares;
10,000,000 unlisted options to subscribe for a fully paid ordinary Legend share at an exercise price of $0.04 each,
exercisable by 30 March 2021.
Other than listed above there were no other non-cash financing or investing activities during the 2018 or 2017 years.
NOTE 21: COMMITMENTS
(a) Exploration expenditure commitments
In order to maintain current rights of tenure to exploration tenements, the Group will be required to outlay approximately
$1,830,500 (2017: $2,110,500) in the following twelve months in respect of tenement lease rentals and to meet minimum
expenditure requirements of the Department of Industry & Resources. These obligations are expected to be fulfilled in the
normal course of operations and have not been provided for in the financial report.
(b) Operating Lease commitments
In March 2019 the company signed a lease commitment over its office premises located at 8 Kings Park Road, West Perth for a
term of two years commencing on 1 April 2019 with an option for a further term of two years. Total minimum lease payments
(including car bays) for the twelve months subsequent 31 December 2018 totals $50,820, with lease commitments from 1
January 2020 onward to the end of the lease term at 31 March 20221 totalling $59,147.
NOTE 22:
INVESTMENTS IN CONTROLLED ENTITIES
Details of subsidiaries
Set out below are the Group’s subsidiaries at 31 December 2018. All the subsidiaries as listed below have share capital consisting
solely of ordinary shares, which are held directly by the Group, and the proportion of ownership interests held equals to the
voting rights held by the Group. The country of incorporation or registration is also their principal place of business.
Name
Place of Business /
Country of
Incorporation
Ownership Interest Held by
the Group
Ownership Interest Held by
Non-Controlling Interests
Gibson Metals Pty Ltd
Legend Cameroon Pty Ltd
Australia
Australia
2018
%
100
100
2017
%
100
100
2018
%
-
-
2017
%
-
-
NOTE 23: FINANCIAL INSTRUMENTS DISCLOSURE
The Group’s principal financial instruments comprise cash and short-term deposits and investments held for trading.
The main purpose of these financial instruments is to finance the Group’s operations. The Group has various other financial
assets and liabilities such as trade receivables and trade payables, which arise directly from its operations. The main risks arise
from the Group’s financial instruments are fair value interest rate risks, liquidity risk, credit risk and equity price risk. The Board
reviews and agrees policies for managing each of these risks and they are summarised below.
Details of the significant accounting policies and methods adopted, including the criteria for recognition, the basis of
measurement and the basis on which income and expenses are recognised in respect of each class of financial asset, financial
liability and equity instrument are disclosed in note 2 to the financial statements.
Fair value interest risk
The Group’s exposure to fair value interest risk is minimal.
43
NOTES TO THE F INANCIAL STATEMENTS
F o r t h e y e a r e n d e d 3 1 D e c e m b e r 2 0 1 8
NOTE 23:
FINANCIAL INSTRUMENTS DISCLOSURE (CONTD)
Commodity price risk
The Group’s exposure to price risk is minimal as the group is still in an exploration phase and has no revenues from mining.
Credit risk
The Group trades only with recognised, creditworthy third parties.
The only significant concentration of credit risk within the Group is the loan receivable from Jindal. Exposure to credit risk is
managed through regular analysis of Jindal’s ability and willingness to meet payment obligations. The carrying amount of
financial assets represents the maximum credit exposure. The Company has provided in full for the $3 million receivable from
Jindal (see Note 9 for full details on this impairment). No collateral is held as security.
With respect to credit risk arising from the other financial assets of the Group, which comprise cash and cash equivalents, the
Group’s exposure to credit risk arises from default of the counter party, with a maximum exposure equal to the carrying amount
of these instruments.
Since the Group only trades with recognised third parties, there is no requirement for collateral.
Liquidity risk
The Group’s objective is to maintain a balance between continuity of funding and flexibility through the use of a mixture of
long and short term debt.
Equity price risk
Equity price risk is the risk that changes in equity prices will affect the fair value of the Group’s holdings of financial instruments.
The objective of equity price risk management is to manage and control the risk within acceptable parameters, while optimising
the return.
To minimise the risk the Group’s investments are of high quality and are publicly traded on the ASX. The investments are
managed on a day to day basis so as to pick up any significant adjustments to market prices.
(a)
Interest Rate Risk
The consolidated entity’s exposure to cashflow interest rate risk is as follows:
2018
Financial assets:
Cash and cash equivalents
Other financial assets
2017
Financial assets:
Cash and cash equivalents
Other financial assets
Weighted
Average
Interest Rate
Floating
Interest
$
Fixed
Interest
$
Non-Interest
Bearing
$
2.59%
2.55%
323,329
-
323,329
3,000,000
50,000
3,050,000
969,464
-
969,464
3,500,000
50,000
3,550,000
500
-
500
500
-
500
Total
$
3,323,829
50,000
3,373,829
4,469,964
50,000
4,519,964
The maturity date for all financial instruments included in the above tables is 1 year or less from balance date.
A change of 100 basis points in interest rates would result in a net gain/loss before taxation of $38,969 (2017: $55,716). This
is based on the interest bearing financial assets as detailed above.
44
NOTES TO THE F INANCIAL STATEMENTS
F o r t h e y e a r e n d e d 3 1 D e c e m b e r 2 0 1 8
NOTE 23:
FINANCIAL INSTRUMENTS DISCLOSURE (CONTD)
(b) Credit Risk
The carrying amount of the Group’s financial assets represents the maximum credit exposure. The Group’s maximum exposure
to credit risk at the reporting date was:
Cash and cash equivalents
Trade and other receivables
Rental Bond/Security bond
Note
8
9
10
Carrying Amount
2018
$
3,323,829
64,011
55,775
3,443,615
2017
$
4,469,964
39,630
55,775
4,565,369
The Company’s maximum exposure to credit risk at the reporting date was $3,443,615 (2017: $4,565,369).
Except for the amount receivable from Jindal, all other trade and other receivables are current and have not been impaired.
(c) Liquidity Risk
The following are the contractual maturities of financial liabilities, including estimated interest payments and excluding the
impact of netting agreements:
31 December 2018
Non-derivative financial liabilities
Trade and other payables
31 December 2017
Non-derivative financial liabilities
Trade and other payables
Carrying
Amount
288,483
288,483
Carrying
Amount
62,580
62,580
Contractual cash
6 mths or less
flows
288,483
288,483
288,483
288,483
Contractual cash
6 mths or less
flows
62,580
62,580
62,580
62,580
(d) Net Fair Value of Financial Assets and Liabilities
The fair values of financial assets and liabilities, together with the carrying amounts shown in the statement of financial position,
are as follows:
Held for trading financial assets
Cash and cash equivalents
Security bond
Trade and other receivables
Trade and other payables
(e) Equity price risk
31 December 2018
31 December 2017
Carrying
Amount
$
67,279
3,323,829
50,000
64,011
(288,483)
3,216,636
Fair Value
$
67,279
3,323,829
50,000
64011
(288,483)
3,216,636
Carrying
Amount
$
239,968
4,469,964
50,000
39,630
(62,580)
4,736,982
Fair Value
$
239,968
4,469,964
50,000
39,630
(62,580)
4,736,982
The Group’s exposure to equity securities is considered high as the company has significant investments in other listed
investments totalling $67,279 at 31 December 2018. Such risk is managed through diversification of investments and daily
monitoring of price movements.
A change of 10% in the market price of the shares would result in a gain/loss before taxation of $6,728 (2017: $23,997).
(f)
Foreign Exchange risk
At balance date, the group had no material foreign currency denominated liabilities and receivables.
45
NOTES TO THE F INANCIAL STATEMENTS
F o r t h e y e a r e n d e d 3 1 D e c e m b e r 2 0 1 8
NOTE 24: FAIR VALUES
The carrying amounts of the Group’s financial assets and financial liabilities at 31 December 2018 and 31 December 2017 are
reasonable approximations of its fair value.
Management assessed that cash and cash equivalents, trade and other receivables, and trade and other payables approximate
their carrying amounts largely due to the short-term maturities of these instruments.
The following table provides the fair value measurement hierarchy of the Group’s assets measured at fair value:
Asset measured at fair value
Date of
valuation
Total
Quoted prices
in active
market
(Level 1)
Significant
observable
inputs
(Level 2)
Significant
unobservable
inputs
(Level 3)
Quoted equity investments
(Note 10)
Recurring
31-Dec-2018
67,279
67,279
-
-
The fair value of the financial assets is included at the amount at which the instrument could be exchanged in a current
transaction between willing parties, other than in a forced or liquidation sale.
Fair value of the quoted equity instruments is based on price quotations at the reporting date.
NOTE 25:
INFORMATION RELATING TO LEGEND MINING LIMITED (“THE PARENT ENTITY”)
Current assets
Total assets
Current liabilities
Total liabilities
Net assets
Contributed equity
Accumulated losses
Share option premium reserve
Loss of the parent entity after tax
Total comprehensive loss of the parent entity
2018
$
3,505,120
13,632,558
452,981
550,406
13,082,152
60,711,242
(70,897,368)
23,268,278
13,082,152
(1,267,602)
(1,267,602)
2017
$
4,799,462
14,630,808
194,462
281,054
14,349,754
60,711,242
(69,629,766)
23,268,278
14,349,754
(567,068)
(567,068)
There have been no guarantees entered into by the Parent Entity in relation to any debts of its subsidiaries.
The Parent has no contingent liabilities as at date of this report.
The Parent Entity has no contractual commitments for the acquisition of property, plant or equipment.
46
NOTES TO THE F INANCIAL STATEMENTS
F o r t h e y e a r e n d e d 3 1 D e c e m b e r 2 0 1 8
NOTE 26: AUDITOR’S REMUNERATION
The auditor of Legend Mining Limited is Ernst & Young Australia.
Amounts received or due and receivable by Ernst & Young Australia for:
- An audit or review of the financial report of the entity and any other entity in the
consolidated group
Consolidated
2018
$
2017
$
31,673
31,673
30,900
30,900
NOTE 27: CONTINGENT LIABILITIES
There are no contingent liabilities at the date of this report.
The consolidated entity’s activities in Australia are subject to the Native Titles Act and the Department of Environment.
Uncertainty associated with Native Title issues may impact on the Group’s future plans.
There are no unresolved Native Title issues and the consolidated entity is not aware of any other matters that may impact upon
its access to the land that comprises its project areas.
NOTE 28: EVENTS AFTER THE BALANCE SHEET DATE
No other matter or circumstance has arisen since the end of the financial year which has significantly affected, or may
significantly affect the operations of the Group, the result of those operations, or the state of affairs of the Group in subsequent
financial years.
NOTE 29: DIVIDENDS PAID AND PROPOSED
No dividends were paid or proposed this financial year. There are no franking credits available for future reporting periods.
47
DIRECTORS’ DECLARATION
In accordance with a resolution of the Directors of Legend Mining Limited, I state that:
In the opinion of the Directors:
(a) the financial statements and notes on pages 21-47, and the remuneration disclosures that are
contained in the Remuneration report in the Directors report pages 14-20, of the consolidated
entity, are in accordance with the Corporations Act 2001, including;
i Giving a true and fair view of the consolidated entity’s financial position as at 31
December 2018 and of its performance for the year ended on that date; and
ii Complying with Australian Accounting Standards’ and the Corporations Regulations 2001;
and
iii The financial statements and notes also comply with International Financial Reporting
Standards as disclosed in note 2; and
(b) there are reasonable grounds to believe that the company will be able to pay its debts as and
when they become due and payable.
This declaration has been made after receiving the declarations required to be made to the
directors in accordance with section 295A of the Corporations Act 2001 for the financial year ended
31 December 2018.
On behalf of the Board.
Mark Wilson
Managing Director
Dated this 21st day of March 2019
48
DECLARATION OF AUDITOR’S INDEPENDENCE
49
INDEPENDENT AUDITOR’S REPORT
50
INDEPENDENT AUDITOR’S REPORT
51
INDEPENDENT AUDITOR’S REPORT
52
INDEPENDENT AUDITOR’S REPORT
53
INDEPENDENT AUDITOR’S REPORT
54
SHAREHOLDER INFORMATION
F o r t h e y e a r e n d e d 3 1 D e c e m b e r 2 0 1 8
The issued capital of the company as at 15 March 2019 is 2,044,350,801 ordinary fully paid shares.
Distribution of Share Holders as at 15 March 2019
Fully Paid Shares
1 – 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,001 and over
Total
Shares
26,680
443,211
2,500,035
81,334,075
1,960,046,800
2,044,350,801
Holders
104
120
293
1,737
1,259
3,513
Number of holdings less than a marketable parcel
6,665,074
782
Top 20 Shareholders as at 15 March 2019
Name
CREASY GROUP
WILSON GROUP
BAILEY GROUP
ZERO NOMINEES PTY LTD
BELLARINE GOLD PTY LTD
LISTOGA PTY LTD
MR MATTHEW MCLEISH
TOPAZ PTY LTD
PHH PTY LIMITED
MR PETER HAWKES WHITCOMBE
NINO CONSTRUCTIONS PTY LTD
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
CITICORP NOMINEES PTY LTD
THREE CHEEKY MONKEYS
MICHAELMAS ISLAND PTY LTD
MR ANDREW NICHOLAS VUKOSAV
MUSGRAVE MINERALS LIMITED
MR PHILIP ROY TRAFFORD
M & K LI HOWARD
IRONBRIDGE FARMS PTY LTD
Substantial shareholders as at 15 March 2019
Name
CREASY GROUP
WILSON GROUP
BAILEY GROUP
Unlisted Option holders as at 15 March 2019
Class of options
23 September 2020 exercisable at 4.0 cents per share
30 March 2021 exercisable at 4.0 cents per share
Shares
581,235,000
128,748,200
119,428,338
64,181,824
46,821,963
35,000,000
24,000,000
22,703,072
17,800,000
14,464,488
13,161,547
13,110,681
12,130,690
11,990,000
11,216,945
10,377,777
10,000,000
9,800,000
9,455,844
9,000,000
% of Units
28.43
6.30
5.84
3.14
2.29
1.71
1.17
1.11
0.87
0.71
0.64
0.64
0.59
0.59
0.55
0.51
0.49
0.48
0.46
0.44
1,164,626,369
56.96
Shares
581,235,000
128,748,200
119,428,338
% of Units
28.43
6.30
5.84
Options
150,000,000
88,000,000
Holders
2
7
55
TENEMENT LISTING
F o r t h e y e a r e n d e d 3 1 D e c e m b e r 2 0 1 8
AUSTRALIA – FRASER RANGE – ROCKFORD PROJECT
Tenements held at 20 March 2019
Tenement
E28/1718
E28/1727
E28/2188
E28/2189
E28/2190
E28/2191
E28/2192
E28/2404
E28/2405
E28/2675
E28/2676
E28/2677
Status
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Percentage Interest
70%
70%
70%
70%
70%
70%
70%
100%
100%
100%
100%
100%
56