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ANNUAL
REPORT
Contents
Company Directory
Chairman’s Report
Directors’ Review of Activities
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
1
2
3
21
28
29
30
31
32
55
56
57
61
62
Web
legendmining.com.au
Email
legend@legendmining.com.au
ASX Code
LEG – ordinary shares
ACN
060 966 145
Legend Mining Limited | Annual Report 2020
Company Directory
DIRECTORS
Michael Atkins (Chairman)
Mark Wilson (Managing Director)
Oliver Kiddie (Executive Director)
SECRETARY
Tony Walsh
REGISTERED OFFICE
Level 1
8 Kings Park Road
WEST PERTH WA 6005
Telephone:
Facsimile:
(08) 9212 0600
(08) 9212 0611
LAWYERS
Thomson Geer
Level 27, Exchange Tower
2 The Esplanade
PERTH WA 6000
AUDITORS
Ernst & Young
11 Mounts Bay Road
PERTH WA 6000
HOME EXCHANGE
Australian Securities Exchange
2 The Esplanade
PERTH WA 6000
BANKERS
SHARE REGISTRY
Australian and New Zealand Banking Group Ltd
1275 Hay Street
WEST PERTH WA 6005
Advanced Share Registry Services
110 Stirling Highway
NEDLANDS WA 6009
Telephone: (08) 9389 8033
(08) 9389 7871
Facsimile:
Legend Mining Limited | Annual Report 2020
1
Chairman’s Report
The Mawson discovery at the end of 2019 ensured that 2020 would start with great
anticipation. It was very exciting that we were able to continue the excellent work at
Mawson in the last year, with an increase of 300% in our exploration expenditure rate.
This has led to many outstanding diamond drillholes with significant nickel-copper
massive sulphides and culminating in Legend’s best hole to date at Mawson, RKDD034.
This diamond hole contained 43.1m of massive
sulphides including 31.1m of 2.8% Ni, 2.2% Cu from
only 200m downhole, and with nickel values up to
3.26%, copper values up to 3.84%, cobalt values
up to 0.17%. These are the thickest and highest-
grade nickel-copper sulphide intersections to date
at Mawson and are indicative of a major mineralised
intrusive system. The subsequent metallurgy results
from this hole have significantly enhanced and de-
risked the Rockford project.
It was also pleasing to see how our management
team and corporate facilities have increased during
the year. The addition of Oliver Kiddie as an Executive
Director, being a geological expert in the Fraser Range
area, has further enhanced our existing team. We were
also able to increase our corporate and administrative
capacity. As Chairman, it gives me great pleasure to
see how this management group continue to work
together as a strong team, focussed on growing
shareholder value.
We have also had regional success from innovative
EM and aircore programmes especially at Hurley and
Crean.
I have mentioned the increase in exploration spend
over the last year with our exploration rate having
increased from ~$4million pa to ~$12million pa.
This has been made possible by both financial and
operational factors. The combination of a successful
capital raise, exercise of options and receipt of R&D
tax refunds has resulted in our strong cash position at
year’s end, despite the increased exploration spend.
This places us in a very strong position to deliver our
planned exploration programs this coming year and
beyond.
I would like to take this opportunity to thank
our Executive team, led by Mark Wilson, for the
professional job they have done to continue the
systematic work at such a high technical and
professional standard to bring us closer to finding the
mineralised source at Mawson.
Your Board thanks you the shareholders for your
continuing support and we look forward to another
exciting year ahead.
Michael Atkins
Chairman
19 March 2020
2
Legend Mining Limited | Annual Report 2020
Directors’ Review of Activities
SUSTAINABILITY
Legend Mining Limited is dedicated to being a leading and sustainable Australian
Mining Company built on exploration and corporate success for the benefit of all of its
stakeholders.
During the year, the Company has reviewed and updated its Sustainability policies. These
policies apply to all our people and implementation of these policies and their supporting
standards and procedures are required across all Legend Mining operations.
Environment
Community
Legend aspires to being effective environmental
stewards and managing our impacts, whilst both
achieving operational excellence and fulfilling our
corporate social responsibilities. Legend is committed
to positive environmental management outcomes to
maintain and enhance performance.
Legend acknowledges the threat posed by climate
change and will work to decarbonise our business in a
measured, proportionate and sustainable manner.
Health & Safety
Legend seeks to minimise the harm caused by
workplace hazards whilst both achieving operational
excellence and fulfilling our corporate social
responsibilities. Legend is committed to leadership
in health and safety through the use of responsible
and reliable management systems to maintain and
enhance performance.
Legend aspires to create enduring value for our host
communities and limiting our negative impacts, whilst
both achieving operational excellence and fulfilling our
corporate social responsibilities.
Governance
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 (4th edition) published by the ASX
Corporate Governance Council.
The 2021 Corporate Governance Statement was
approved by the Board on 17 March 2021 and is
current as at 19 March 2021. 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
E
S
G
ENVIRONMENT | SOCIAL | GOVERNANCE
Legend Mining Limited | Annual Report 2020
3
For the year ended 31 December 2020 Directors’ Review of Activities
ROCKFORD PROJECT – FRASER RANGE DISTRICT
(Nickel-Copper-Cobalt, Copper-Zinc-Silver, Gold)
The Rockford Project is located within the highly
prospective Fraser Range district of Western Australia,
with tenure covering a total area of 3,088km2 (see
Figures 1 & 2). Exploration is primarily focussed on
magmatic nickel-copper-cobalt (Nova-Bollinger style),
along with volcanogenic massive sulphide (VMS) style
zinc-copper-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 deposit,
both located within the Fraser Zone, are situated on
a similar tenor gravity ridge to that of the Rockford
Project.
The Rockford Project comprises 14 contiguous granted
exploration licences with a detailed breakdown of
ownership, area and manager given below:
During 2020, Legend’s exploration activities
undertaken were on two fronts (see Figure 2);
1. Advanced exploration at the Mawson Ni-Cu-Co
■
■
■
■
Legend (100%) 238km2;
discovery,
Legend (70%)/Creasy Group (30%) Three JVs
covering 2,192km2 with Legend manager;
IGO (60%)/Creasy Group (30%)/Legend (10%
free carry) JV covering 633km2 with IGO manager;
IGO (70%)/Legend (30% free carry) JV covering
24km2 with IGO manager.
2. Regional exploration over aeromagnetic, gravity,
and geochemical targets, including Hurley, Crean,
and Worsley prospects, and tenements E28/1716
and E28/1717 which contain the advanced
Magnus and Octagonal Ni-Cu-Co prospects.
FIGURE 1: ROCKFORD PROJECT LOCATION
4
Legend Mining Limited | Annual Report 2020
For the year ended 31 December 2020 Directors’ Review of Activities
MAWSON PROSPECT
A summary of 2020 exploration activities and results
for Mawson are provided below.
The Mawson prospect is within the central intrusion of
the larger Mawson Intrusive Complex, characterised
by a 16km x 6km aeromagnetic feature interpreted to
be a cluster of mafic-ultramafic intrusions (see Figure
4). Innovative high power moving loop (MLTEM) and
fixed loop (FLTEM) electromagnetic surveys have
identified 17 significant bedrock conductors (D1-
D17) outlining a broad synformal structure. Highly
anomalous Ni-Cu results in aircore drilling over a
400m x 200m area were returned to the east of D5
associated with mafic/ultramafic intrusives host
rocks. This was subsequently named the Western
Aircore Geochemical Anomaly. Highly anomalous
Ni-Cu results in aircore drilling over a 1200m x 200m
area were returned central to the Mawson intrusion
associated with mafic/ultramafic intrusives host rocks.
This was subsequently named the Eastern Aircore
Geochemical Anomaly.
Exploration completed at Mawson during 2020 included:
■ Diamond drilling – 27 holes for 10,370.3m
■
RC drilling – 31 holes for 9,347m
Aircore drilling – 180 holes for 14,257m
■
■ Detailed gravity surveying and associated
modelling
■ MLTEM surveying and associated modelling
■ DHTEM surveying and associated modelling
Phase 1 sighter metallurgical testwork
■
Level 1 reconnaissance environmental surveying
■
■ Generation of the first 3D model of the Mawson
intrusion
■
External geochemical assessment
The first interpretive geological map of Mawson
■
■ Detailed petrology of host lithologies and
associated primary Ni-Cu-Co mineralisation
■ Comprehensive interpretation of all data collected
for 2020.
FIGURE 2: ROCKFORD PROJECT - PROSPECT LOCATIONS
Legend Mining Limited | Annual Report 2020
5
For the year ended 31 December 2020 Directors’ Review of Activities
The field season commenced during the March 2020
quarter, with diamond drilling at Mawson. The initial
drilling was following up significant Ni-Cu sulphide
mineralisation intersected in drillhole RKDD007 and
anomalous Ni-Cu geochemistry in previous aircore
drillholes. Subsequent drilling was following up
massive sulphide mineralisation in RKDD008 and
targeting identified offhole downhole electromagnetic
(DHTEM) conductors.
Exploration culminated in December 2020, with
RKDD034 delivering the best hole to date. Drillhole
RKDD0034 intersected a total of 43.1m of massive
Ni-Cu downhole, including 31.1m @ 2.80% Ni, 2.04%
Cu, 0.15% Co from 200.7m (see Figure 3 and Table 1).
Mawson Diamond Drilling Summary
Drillholes RKDD0012-018 were following up massive
sulphide Ni-Cu mineralisation intersected in drillholes
RKDD007, RKDD008 and RKDD011, while RKDD019-
020 were targeting fixed loop electromagnetic
(FLTEM) conductors at NE Mawson.
Further significant massive sulphide intervals were
intersected in drillholes RKDD013 and RKDD017,
while broad intervals containing disseminated to semi-
massive sulphides were intersected in RKDD012,
RKDD014, RKDD015, RKDD016 and RKDD018 (see
Figure 3 and Table 1).
FIGURE 3: MAWSON DRILL INTERCEPTS WITH MLTEM CONDUCTORS
ON AEROMAGNETICS
6
Legend Mining Limited | Annual Report 2020
For the year ended 31 December 2020 Directors’ Review of Activities
Diamond drillholes RKDD021-RKDD027 were
following up massive sulphide Ni-Cu mineralisation
intersected in previous drillholes as well as targeting
DHTEM conductors generated from diamond and RC
drilling. Further significant massive sulphide intervals
were intersected in drillholes RKDD023 and RKDD027,
while broad intervals containing disseminated to semi-
massive sulphides were intersected in RKDD021,
RKDD022, RKDD024, and RKDD025 (see Figure 3 and
Table 1).
RKDD028-RKDD034 were also following up massive
sulphide Ni-Cu mineralisation intersected in previous
drillholes, targeting DHTEM conductors generated
from diamond and RC drilling, and a metallurgical
drillhole. Significant massive sulphide intervals
were intersected in drillholes RKDD029, RKDD032,
and RKDD034, while broad intervals containing
disseminated to semi-massive sulphides were
intersected in RKDD028, RKDD030, RKDD032,
RKDD033, and RKDD034 (see Figure 3 and Table 1).
Assay results from the massive sulphide intersected
in RKDD034 have resulted in the thickest and
highest-grade massive Ni-Cu sulphide intercept at
Mawson to date. This speaks to the potential for
more mineralisation to be discovered at Mawson
as the drilling footprint expands. The focus of the
2021 drilling program at Mawson will be to chase
the mineralised intrusive package across the greater
Mawson intrusion, driven by targeting generated
from the compilation of datasets including geology,
structure, geochemistry, and geophysics.
Selected drill sections displaying geology and
mineralised intervals are presented in Figures 5, 6,
7, and 8.
PHOTO 1 - MASSIVE Ni-Cu SULPHIDE WITH LOOP TEXTURE FROM
RKDD034 FROM 223M, NQ2
Legend Mining Limited | Annual Report 2020
7
For the year ended 31 December 2020 Directors’ Review of Activities
Mawson RC Drilling Summary
A 3,000m RC drilling programme was designed at
Mawson with an initial west to east traverse testing
three targets; the upper Ni-Cu sulphide zone between
diamond holes RKDD007 and RKDD015, the main
gravity high and the Eastern Aircore Geochemical
Anomaly (see Figure 4). The initial programme was
extended due to the effective coverage achieved by
the RC drill rig. A total of 31 RC holes (RKRC011 –
RKRC041) were completed for 9,347m between June
and October 2020.
The RC drilling provides a time-effective alternative
to diamond drilling, whilst also providing broader
coverage of geology as well as DHTEM platforms at
Mawson. The programme was focused on expanding
the geological knowledge of the Mawson intrusion,
with drillholes completed north, south, and east of the
Mawson Ni-Cu discovery (see Figure 4). RC drillholes
RKRC038 and RKRC039 confirm that the prospective
Mawson intrusive package extends south and east
of the Mawson discovery zone, and also occur
below areas with no aircore geochemical anomalism
(see Figure 8). In addition, a single RC drillhole
RKRC041 was drilled targeting primary Ni-Cu sulphide
mineralisation below anomalous aircore geochemistry,
approximately 2km south of the Mawson intrusion (see
Figure 4). Highly encouraging geochemistry received
suggests the intrusion encountered is identical to the
ultramafic at the Mawson discovery.
FIGURE 4: AEROMAGNETIC IMAGE OF THE MAWSON INTRUSION
IN RELATION TO THE MAWSON INTRUSIVE COMPLEX
8
Legend Mining Limited | Annual Report 2020
For the year ended 31 December 2020 Directors’ Review of Activities
TABLE 1: BEST DD & RC INTERCEPTS 2020
Hole
Intercept
RKDD007
RKDD008
RKDD011
70.15m @ 0.52% Ni, 0.36% Cu, 0.03% Co from 88.2m
incl. 14.9m@ 1.07% Ni, 0.75% Cu, 0.06% Co from 114m
incl. 2.1m@ 2.03% Ni, 1.34% Cu, 0.11% Co from 115.5m
5.8m @ 0.97% Ni, 0.61% Cu, 0.05% Co from 148m
10.4m @ 1.32% Ni, 1.11% Cu, 0.07% Co from153.8m
5.6m @ 2.85% Ni, 1.86% Cu, 0.15% Co from 199.4m
6.9m @ 2.55% Ni, 1.67% Cu, 0.14% Co from 218.2m
12.8m @ 2.76% Ni, 1.36% Cu, 0.14% Co from 234.9m
15m @ 0.65% Ni, 0.53% Cu, 0.04% Co from 129.25m
21.6m @ 1.93% Ni, 1.09% Cu, 0.10% Co from 217.5m
incl. 1.9m @ 2.97% Ni, 1.10% Cu, 0.15% Co from 217.5m
incl. 4.2m @ 2.68% Ni, 1.36% Cu, 0.14% Co from 221.7m
incl. 6.3m @ 2.62% Ni, 1.62% Cu, 0.14% Co from 232.8m
RKDD013
12.0m @ 2.36% Ni, 1.36% Cu, 0.12% Co from 239.2m
1.5m @ 2.33% Ni, 3.76% Cu, 0.12% Co from 257.5m
RKDD014
3.45m @ 1.92% Ni, 0.83% Cu, 0.10% Co from 251.75m
RKDD015
RKDD017
RKDD018
RKDD021
RKDD023
RKDD027
73.5m @ 0.32% Ni, 0.29% Cu, 0.02% Co from 87.5m
24.3m @ 0.22%, Ni, 0.26% Cu, 0.02% Co from 279m
9.55m @ 2.07% Ni, 1.27% Cu, 0.11% Co from 158.6m
2.80m @ 2.84% Ni, 2.06% Cu, 0.15% Co from 193.1m
19.80m @ 2.71% Ni, 1.79% Cu, 0.13% Co from 227.8m
19.2m @ 1.69% Ni, 1.23% Cu, 0.09% Co from 97.9m
incl. 4.5m @ 3.05% Ni, 2.32% Cu, 0.19% Co from 103.7m
34.65m @ 0.51% Ni, 0.35% Cu, 0.03% Co from 130.7m
9.3m @ 0.34% Ni, 0.21% Cu, 0.03% Co from 132.2m
incl. 1.5m @ 0.79% Ni, 0.48% Cu, 0.07% Co from 140m
15.35m @ 0.51% Ni, 0.28% Cu, 0.05% Co from 219.1m
incl. 1.9m @ 0.99% Ni, 0.43% Cu, 0.08% Co from 219.1m
24.7m @ 1.35% Ni, 0.77% Cu, 0.11% Co from 219.2m
incl. 3.05m @ 1.11% Ni, 0.81% Cu, 0.09% Co from 219.2m
incl. 8.2m @ 1.83% Ni, 0.86% Cu, 0.15% Co from 228.7m
2.85m @ 1.71% Ni, 1.23% Cu, 0.14% Co from 237.75m
14.45m @ 2.63% Ni, 2.09% Cu, 0.14% Co from 162.05m
11.60m @ 0.75% Ni, 0.67% Cu, 0.04% Co from 187.4m
incl. 1.60m @ 2.48% Ni, 1.50% Cu, 0.12% Co from 188.85m
6.0m @ 1.70% Ni, 1.44% Cu, 0.09% Co from 214m
incl. 3.75m @ 2.60% Ni, 2.23% Cu, 0.13% Co from 215.8m
6.0m @ 1.07% Ni, 0.82% Cu, 0.05% Co from 229m
incl. 1.75m @ 2.75% Ni, 1.90% Cu, 0.13% Co from 231.8m
RKDD029
2.0m @ 2.75% Ni, 1.63% Cu, 0.15% Co from 171.2m
RKDD034
RKRC011
RKRC012
RKRC037
RKRC038
RKRC039
31.1m @ 2.80% Ni, 2.04% Cu, 0.15% Co from 200.7m
incl. 12m@ 3.00% Ni, 1.96% Cu, 0.16% Co from 204m
19m @ 0.17% Ni, 0.08% Cu, 0.02% Co from 50m
12m @ 0.16% Ni, 0.11% Cu, 0.02% Co from 106m
5m @ 1.63% Ni, 1.29% Cu, 0.09% Co from 141m
86m @ 0.44% Ni, 0.36% Cu, 0.03% Co from 51m to EOH
incl. 19m@ 0.57% Ni, 0.62% Cu, 0.04% Co from 74m
incl. 5m@ 0.66% Ni, 1.31% Cu, 0.05% Co from 78m
incl. 20m@ 0.52% Ni, 0.36% Cu, 0.03% Co from 117m to EOH
33m @ 0.14% Ni, 0.09% Cu, 0.03% Co from 61m
incl. 4m@ 0.22% Ni, 0.36% Cu, 0.03% Co from 66m
3m @ 0.10% Ni, 0.13% Cu, 0.03% Co from 205m
8m @ 0.88% Ni, 0.41% Cu, 0.04% Co from 267m
incl. 4m@ 1.19% Ni, 0.44% Cu, 0.06% Co from 271m
12m @ 0.10% Ni, 0.08% Cu, 0.02% Co from 100m
4m @ 0.11% Ni, 0.12% Cu, 0.02% Co from 140m
74m @ 0.17% Ni, 0.11% Cu, 0.02% Co from 159m
incl. 5m @ 0.55% Ni, 0.29% Cu, 0.05% Co from 224m
Legend Mining Limited | Annual Report 2020
9
For the year ended 31 December 2020 Directors’ Review of Activities
FIGURE 5: DRILL SECTION 6,598,655N LOOKING NORTH
FIGURE 6: DRILL SECTION 6,598,540N LOOKING NORTH
*Note – this section does not accurately depict the actual 3D hole separation.
10
Legend Mining Limited | Annual Report 2020
For the year ended 31 December 2020 Directors’ Review of Activities
FIGURE 7: DRILL SECTION 6,598,560N LOOKING NORTH
FIGURE 8: SECTION 6,598,400mN LOOKING NORTH
Legend Mining Limited | Annual Report 2020
11
For the year ended 31 December 2020 Directors’ Review of Activities
Mawson Aircore Drilling
An infill aircore drill programme commenced over
selected areas at the Mawson Intrusive Complex,
including the Mawson prospect, during the March
2020 quarter (see Figure 9). The holes were drilled
on a nominal 200m x 200m grid and were designed
to give a better understanding of the geochemistry,
rock type and depth of cover in areas which have
already produced modelled MLTEM conductors and/
or anomalous geochemistry from previous aircore
programmes.
A total of 180 holes for 14,257m were drilled across
the Mawson Intrusive Complex between March and
August 2020.
aircore drillholes (RKAC763 - RKAC868) at Mawson
returned numerous anomalous Ni-Cu values and
are associated with olivine bearing mafic/ultramafic
host rocks, deemed very important as these are the
host lithologies of the massive Ni-Cu-Co sulphide
discovered at Mawson.
The drilling was designed to give a better
understanding of the geochemistry, rock type and
depth of cover in areas which have already produced
modelled MLTEM conductors and/or anomalous
geochemistry from previous aircore programmes. In
addition, the lithogeochemical data collected allowed
for the compilation of the first interpretative geological
map of Mawson (see Figure 9).
The drilling resulted in defining a large 1,200m x 200m
NE-SW trending coherent Ni-Cu-Co geochemical
anomaly situated to the east of the main Mawson
sulphide mineralisation, called the Eastern Aircore
Geochemical Anomaly (see Figure 3 and Figure 9).
The position of this geochemical feature coincides
with the centre of an oval shaped magnetic feature
and a 4mgal gravity high. Assay results from
Mawson Detailed Gravity
The Mawson gravity survey comprising 2,325 stations
at 50m x 50m and 100m x 100m spacings covering
10.8km2 has been completed and the data processed
(see Figure 10). The survey was aimed at providing
high resolution data to better define the main 4mgal
gravity high and to be used in conjunction with aircore
drilling to assist deep drill targeting.
FIGURE 9: INTERPRETED AIRCORE GEOLOGY MAP OF MAWSON
12
Legend Mining Limited | Annual Report 2020
For the year ended 31 December 2020 Directors’ Review of Activities
discovery of further Ni-Cu sulphide mineralisation not
only at the Mawson Intrusion, but the greater 16km x
6km Mawson Intrusive Complex. These models form
an exploration model foundation for Mawson, and will
continue to evolve as additional geological, structural,
geophysical, and geochemical data is continually
added through ongoing exploration.
FIGURE 10: MAWSON DETAILED GRAVITY
Figure 10 shows three discrete gravity highs (pink/
red colour) within a larger 3km long arcuate feature
with elevated gravity response. The main southern
gravity high has a N-S trend and is situated ~300m
east of the Ni-Cu sulphide mineralisation intersected
in diamond drilling. The two other gravity highs trend
NE-SW and lie 650m and 1,100m respectively NE of
the mineralisation. 2D gravity modelling of the three
gravity highs indicates densities associated with mafic
and ultramafic lithologies as the likely source and
represent highly favourable Ni-Cu-Co mineralisation
host rocks.
Mawson 3D Model
During the September 2020 Quarter datasets
including detailed aeromagnetics and detailed gravity
were combined to create the first constrained and
unconstrained 3D inversion models over the Mawson
Ni-Cu discovery (see Figure 11). The resultant 3D
models give the first depiction of the scale of the
Mawson Intrusion and the associated prospectivity for
FIGURE 11: MAWSON 3D INVERSION MODEL
Legend Mining Limited | Annual Report 2020
13
For the year ended 31 December 2020 Directors’ Review of Activities
Metallurgy
Phase 1 Sighter Metallurgical Results
Strategic Metallurgy Pty Ltd were engaged by Legend
Mining Ltd to conduct preliminary flotation test work
to assess the ability to produce saleable nickel and
copper concentrates from the Mawson massive
sulphide (see Tables 2, 3, and 4). The metallurgical
samples were taken from diamond drillhole RKDD034
at Mawson.
Highlights
■
■
■
Preliminary test work confirms Mawson massive
sulphide responds well to conventional flotation.
Rougher recovery up to 98% for copper and 97%
for nickel was achieved.
Recovery of 99% for copper and 88% for nickel
to a bulk concentrate grade of 12.0% (Cu+Ni).
■
Selective flotation demonstrated the ability to
produce separate saleable copper and nickel
concentrates:
■ Copper concentrate 31.8% Cu
■ Nickel concentrate 13.1% Ni
■ Nickel concentrate highly desirable to market
due to high Fe:MgO ratio (>300) with no other
deleterious elements noted.
■ Optimisation expected to yield further
improvement on current results.
Metallurgical samples were crushed to -3.35mm
and split into 1kg sub-samples for flotation test
work. The test work utilised depression of iron
sulphides to selectively float separate copper and
nickel concentrates. The flotation regime utilised
common flotation reagents, similar to that used at
IGO’s Nova Nickel mine.
PHOTOS: LEFT - COPPER CONCENTRATE, RIGHT – NICKEL CONCENTRATE FROM MAWSON SULPHIDE SAMPLES
14
Legend Mining Limited | Annual Report 2020
For the year ended 31 December 2020 Directors’ Review of Activities
Head Assay
Cu (%)
1.66
Ni (%)
2.61
Fe (%)
56.2
S (%)
35.8
MgO (%)
0.16
Table 2: Composite Head Assay
The target minerals in the Mawson massive sulphide are primarily chalcopyrite and pentlandite. No deleterious
silicate gangue minerals were noted during testing. Flotation of the massive sulphide sample yielded both bulk
and separate saleable copper and nickel concentrates at moderately high recoveries. A simple bulk concentrate
flotation flowsheet can produce saleable concentrates at the nominal grade of 12% (Cu+Ni) whilst achieving a
high recovery of copper (99.0%) and nickel (88.2%).
Table 3: Preliminary Concentrates Produced
Bulk Concentrate
Copper Concentrate
Nickel Concentrate
Nickel
Copper
Grade
Recovery
Grade
Recovery
Grade
Fe:MgO
Rougher
Cleaner
99.2
88.2
99.9
99.0
4.5
12.0
93.1
84.1
24.2
31.8
91.7
80.0
2.68
13.1
1884
380
Table 4: RKDD034 - Assay Results
Hole
From
To
RKDD034
200.7
231.8
Incl.
204.0
216.0
Int.
31.1
12.0
Ni%
2.80
3.00
Cu%
Co%
2.04
1.96
0.15
0.16
Sulphide
Mode
Massive
sulphide
Massive
sulphide
Environmental
A Level 1 reconnaissance flora and fauna environmental survey was completed across the Mawson prospect
area in October 2020. The survey area covered >1,600 hectares of the Great Victoria Desert and Nullarbor Plain
bioregions. The objective of the initial survey was to provide baseline data for environmental impact assessment
of the proposed impact area, in order to support any future environmental approvals if required.
A more focused Level 2 survey will be conducted once the area of impact is better defined at the Mawson
prospect.
Legend Mining Limited | Annual Report 2020
15
For the year ended 31 December 2020 Directors’ Review of Activities
REGIONAL EXPLORATION
A summary of 2020 Regional Rockford exploration
activities and results are provided below.
metasediment/granulite. Importantly these holes are
located adjacent to the 4,000-7,000S H3 MLTEM
conductor making this a priority target for deep drill
testing.
Regional Rockford Aircore Drilling
A total of 291 aircore holes (RKAC0916 – RKAC1206)
for 14,797m were drilled at selected regional target
areas across the Rockford Project during the 2020
field season (see Figure 12). The drilling has been
designed to test the geochemistry, rock type and
depth of cover in areas which have received minimal
or no previous exploration. Assay and geological
results have resulted in three new Ni-Cu targets areas
across the Rockford Project area (see Figure 12).
Aircore drilling also focused on infill around high-
ranked prospects Hurley and Crean (see Figures 12
and 14). Drill traverses at Hurley and Crean were
designed to test the up-dip projection of the H1-H3
and C1 conductors (see Table 5). Four drillholes at
Hurley (RKAC1029, 1032, 1100 and 1103) returned
elevated Ni-Cu associated with mafic intrusive and
In addition, a project-wide geochemical review of the
historic aircore drilling across the Rockford Project,
including Mawson, was completed. This resulted
in over 30 new Ni-Cu targets generated (see Figure
13), the highest-ranked of which will be followed
up with innovative MLTEM followed by infill aircore
drilling. The most compelling of these targets will be
prioritised for possible RC or diamond drilling during
the 2021 field season.
MLTEM Surveys – Hurley, Crean, Worsley,
Octagonal, and Magnus Prospects
MLTEM surveys were completed over the Worsley,
Crean and Hurley prospects in May 2020 (see
Figure 14). These surveys were targeting a
combination of aeromagnetic and gravity features
and identified conductors W1 (Worsley), C1 (Crean)
and H1-H2 (Hurley).
FIGURE 12: REGIONAL AIRCORE DRILLING PROGRAMME ANOMALOUS
DRILLHOLE LOCATIONS
16
Legend Mining Limited | Annual Report 2020
For the year ended 31 December 2020 Directors’ Review of Activities
Further infill surveying subsequently completed at Hurley over the H1-H2 conductors aimed at providing
additional data to enable accurate modelling of the features. This surveying also identified a new strong
conductor H3 in the southern part of the prospect (see Table 5 & Figure 14).
Both the H1 and H3 conductors are considered priority targets based on their modelled conductance and
dimensions, association with aeromagnetic features, and aircore Ni-Cu geochemical anomalism.
The previously identified Worsley conductor corresponds closely with anomalous Zn-Cu-Ag results in aircore
drillholes and a 400m diamond drillhole has been designed to test this conductor. The Crean conductor requires
follow up aircore to better define the extent of previously identified anomalous Ni-Cu geochemistry and FLTEM
to enable constrained modelling of the C1 conductor.
Prospect
*Hurley
*Hurley
Hurley
^Worsley
^Crean
Table 5: Rockford South MLTEM - Modelled Plate Parameters
Conductor
Conductance
Dimensions
Depth to Top
Orientation
H1
H2
H3
W1
C1
2,500-4,000S
250 x 1,250m
200-300S
1,000 x 750m
4,000-7,000S
500 x 300m
400-800S
>1,000 x 1,000m
500-1,500S
>1,000 x 1,000m
225-275m
100-150m
100-150m
200-250m
500-600m
15-250 NNE
70-800 SE
~900 Strike NNE
50-600 E/ESE
60-700 E/ESE
* Remodelled conductor reported to ASX 22 May 2020
^ Original conductor report to ASX 22 May 2020
FIGURE 13: REGIONAL ROCKFORD PROSPECT LOCATIONS ON REGIONAL GRAVITY
Legend Mining Limited | Annual Report 2020
17
For the year ended 31 December 2020 Directors’ Review of Activities
MLTEM surveying was completed over the entire
Magnus prospect. The survey identified the M1
conductor with the following modelled parameters;
low-moderate conductance of ~300-500S, 200m x
>250m dimensions, a dip of 50-600 to the SE and
a depth to top of 75-125m (see Table 5). Further
assessment of this conductor is required prior
to possible drill testing. A number of other low
conductance features were identified, however are
considered low priority targets.
As with Magnus, MLTEM surveying was completed
over the entire Octagonal prospect aimed at detecting
extensions to previously identified nickel-copper
mineralisation and identifying additional bedrock
targets to a depth ~500m (beyond conventional EM
depth penetration of 250-300m). The survey identified
a number of large low to moderate stratigraphic
features associated with the main mafic/ultramafic
intrusive, however no new significant bedrock
conductors were identified.
FIGURE 14: MLTEM SURVEY OVER HURLEY, WORSLEY AND CREAN PROSPECTS
18
Legend Mining Limited | Annual Report 2020
For the year ended 31 December 2020 Directors’ Review of Activities
FIGURE 15: ROCKFORD PROJECT – TENURE INCLUDING JOINT VENTURES
JVA Title
Tenement
Area km2
Ownership
Rockford JVA 2019
E28/2190
E28/2191
E28/2675
Legend/IGO JVA 2019
E28/2676
Ponton JVA 2019
Ponton JVA 2015
Rockford JVA 2015
NA
E28/2677
E28/1716
E28/1617
E28/1718
E28/1727
E28/2188
E28/2189
E28/2192
E28/2404
E28/2405
355
278
11.8
5.9
5.9
355
354
353
353
354
331
91
58.8
179.7
IGO 60% / Creasy 30% / Legend 10%
IGO 70% / Legend 30%
Legend 70% / Creasy 30%
Legend 70% / Creasy 30%
Legend 70% / Creasy 30%
Legend 100%
Competent Person Statement
The information in this report that relates to Exploration Results is based on information compiled by Mr Oliver Kiddie, a
Member of the Australasian Institute of Mining and Metallurgy and a full-time employee of Legend Mining Limited. Mr Kiddie
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 Kiddie 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 (15 January 2020, 23 January 2020, 23 February 2020, 31 March 2020, 21 April 2020, 4 May 2020, 21 May
2020, 22 May 2020, 26 May 2020, 11 June 2020, 22 June 2020, 30 June 2020, 7 July 2020, 21 July 2020, 14 August 2020,
27 August 2020, 8 September 2020, 1 October 2020, 5 October 2020, 21 October 2020, 9 November 2020, 1 December
2020, and 15 December 2020) and Mr Derek Waterfield and Mr Oliver Kiddie consent to the inclusion of these Results in
this report. Mr Waterfield and Mr Kiddie have 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.
Legend Mining Limited | Annual Report 2020
19
For the year ended 31 December 2020 Directors’ Review of Activities
CORPORATE
Director Appointment
During the year, Legend bolstered its team with the
appointment of highly experienced ex-Creasy Group
Geologist and Albany-Fraser Orogen expert, Mr
Oliver Kiddie as Executive Director of the Company
effective from 10 August 2020. Following Mr Kiddie’s
commencement as Executive Director, Mr Derek
Waterfield stepped down from the Board and
assumed the position of General Manager Exploration.
Placement
In June 2020 the Company completed a capital raising
of $20 million from existing major shareholders, and
a range of institutional and sophisticated investors
(“Placement”). The funds raised via the Placement will
be applied to progress the Company’s exploration
activities at its Rockford Project in the Fraser Range,
in particular on the Mawson Prospect and general
working capital. The Placement was corner stoned
by the Company’s two largest shareholders, Creasy
Group and IGO Limited. Euroz Securities Limited
acted as Sole Lead Manager to the Placement with
Canaccord Genuity (Australia) Limited as Co-Manager.
Exercise of Options
During the year, 13.1 million 4 cent March 2021
unlisted options, 150 million 4 cent September 2020
unlisted options and 150,000 7.2 cent September
2022 unlisted options were exercised by a number
of parties including the Creasy Group and Musgrave
Minerals Limited, adding $6.5 million to the
Company’s Cash at Bank.
All Ordinaries Index
The Company was pleased to note that S&P Dow
Jones Indices announced in their June 2020 Quarterly
rebalance of S&P/ASX Indices that Legend Mining
would join the All-Ordinaries Index effective 22 June
2020.
Jindal Receivable
During the 2020 year, Legend and Jindal agreed to a
revised repayment schedule of the outstanding debt
of A$2.25M. On 23 December 2020, Legend received
A$294,372 from Jindal, being a principal repayment of
$250,000 and interest of $44,372 for the September
and December 2020 Quarters. This leaves a balance of
A$2M which continues to accrue interest at 4%pa (see
note 9 to the Financial Statements for further details).
Annual Tax Return – R & D Claim
In December 2020 Legend submitted its 2020
annual tax return, which included a research and
development (R&D) claim for reimbursement of $2.6
million. 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. On 2 February 2021, Legend received the
R&D refund of $2.6 million.
Annual General Meeting
On 14 May 2020, the Annual General Meeting
(AGM) was held in compliance with the Australian
government’s restrictions on public gatherings. Due
to the evolving COVID-19 situation, shareholders who
wished to attend the meeting were required to register
with the Company and were able to attend the AGM
by phone if they so wished. All AGM resolutions were
passed on a poll.
20
Legend Mining Limited | Annual Report 2020
For the year ended 31 December 2020 Directors’ Report
D i r e c t o r s ’ R e p o r t
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 2 0
The Directors submit their report for the year ended 31 December 2020.
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)
Oliver Kiddie (Executive Director) appointed 10 August 2020
Derek Waterfield (Executive Director - Technical) resigned and appointed General Manager Exploration 10 August 2020
2.
INFORMATION ON DIRECTORS AND COMPANY SECRETARY
Michael Atkins, BComm FAICD, is a Fellow of the Australian Institute of Company Directors and was previously a Fellow of the
Institute of Chartered Accountants in Australia.
Since 1987 he has been involved in the executive management and as a non-executive Chairman of numerous publicly listed
resource companies with operations in Australia, USA, South East Asia and Africa, including as managing director of Claremont
Petroleum NL and Beach Petroleum NL during their reconstruction phase, and as founder and executive chairman of Botswana
gold company Gallery Gold Ltd. Michael has been non-executive Chairman of numerous ASX listed companies, including
Westgold Resources and Azumah Resources.
He is currently a Senior Corporate Advisor to Canaccord Genuity (Australia) Ltd, and non-executive chairman of Castle Minerals
Ltd, and non-executive director of SRG Global Limited, both ASX listed. Mr Atkins was non-executive Chairman of Azumah
Resources Limited from October 2009 until his resignation in December 2019 and has not held any other former public
company directorships in the last three years.
Mark Wilson, MIEAust CPEng, 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 and ten years of commercial construction as a founding proprietor of a Perth based company. Since 1995
he has held executive, non-executive, consulting and owner roles in resource focused companies.
Oliver Kiddie, BSc App Geol, MAusIMM, MAICD, (appointed 10 August 2020) is a geologist with over 18 years’ experience
across exploration, resource definition, project development, and production throughout Australia and internationally. He has
extensive experience in base metal and gold exploration through senior management and executive positions, working for
companies including Dominion Mining, European Goldfields, and most recently as GM Exploration for the Creasy Group. He led
the exploration team of the Fraser Range project for the Creasy Group, including the discovery, resource definition, and mining
lease application for the Silver Knight Ni-Cu-Co deposit. Mr Kiddie possesses a strong corporate background having managed
numerous transactions and joint ventures as key responsibilities of senior management and executive positions. Mr Kiddie is a
member of the Australasian Institute of Mining and Metallurgy and a member of the Australian Institute of Company Directors.
Mr Kiddie has not held any former public company directorships in the last three years.
Derek Waterfield, BSc(Hons), (resigned and appointed General Manager, Exploration, 10 August 2020) is a Member of the
Australian Institute of Geoscientists and a graduate of the University of Queensland. He has over 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, BComm, MBA, FCIS, 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 Great Western Exploration Limited and was a Director of XCD Energy Limited until his resignation in July 2020.
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.
Legend Mining Limited | Annual Report 2020
21
21
For the year ended 31 December 2020 Directors’ Report
D i r e c t o r s ’ R e p o r t
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 2 0
3.
EARNINGS PER SHARE
Basic loss per share:
Diluted loss per share:
4.
DIVIDENDS
0.0383cents
0.0383cents
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. At the date
of this report Legend Mining Limited had one wholly owned subsidiary, Legend Cameroon Pty Ltd.
Nature of Operations and Principal Activities
The principal activities during the year of the entities within the consolidated entity were:
(cid:120)
exploration for nickel and copper deposits in Australia.
Employees
The consolidated entity had a staff of fourteen employees at 31 December 2020 (2019: five employees).
6.
OPERATING AND FINANCIAL REVIEW
Results of Operations
The net loss after income tax of the consolidated entity for the year was $1,062,610 (2019: loss of $401,801).
Review of Operations
The Directors’ Review of Activities for the year ended 31 December 2020 is contained on pages 3 to 20 of the Annual Report.
Summarised Operating Results
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 $7,673,641 (2019: $2,474,909).
7.
SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS
Since the first quarter of 2020, the Company has seen macro-economic uncertainty with regards to prices and demand for
commodities including nickel and copper as a result of the COVID-19 (coronavirus) outbreak. Furthermore, the scale and
duration of these developments remain uncertain but could impact the Company’s cash flow and financial condition.
There have been no other 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.
10.
SHARE OPTIONS
Unissued shares
As at the date of this report, there were 153,961,111 unissued ordinary shares under options. Refer to note 17 for further
details of the options outstanding at 31 December 2020.
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.
22
Legend Mining Limited | Annual Report 2020
22
For the year ended 31 December 2020
Directors’ Report
D i r e c t o r s ’ R e p o r t
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 2 0
10.
SHARE OPTIONS (CONTD)
Shares issued as a result of the exercise of options
There were 163,250,000 shares issued as a result of the exercise of options during the financial year. See Note 17 for full details.
11.
SIGNIFICANT EVENTS AFTER THE BALANCE DATE
On 3 March 2021, 74,900,000 4 cent 30 March 2021 and 2,000,000 7.2 cent 30 September 2022 unlisted options were
exercised. This exercise of options added $3,140,000 to the Company’s cash at bank.
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
O Kiddie
D Waterfield
Chairman (non-executive)
Managing Director
Executive Director
Executive Director – Technical (resigned)
Following Mr Kiddie’s commencement as Executive Director on 10 August 2020, Mr Derek Waterfield stood down from the
Board and assumed the position of General Manager, Exploration.
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:
(cid:120)
Provide competitive rewards to attract high-calibre executives.
(cid:120) Group Performance
(cid:120)
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
2020
$262,488
($1,062,610)
(0.0383)
(0.0383)
$49,863,081
$0.115
December
2019
$231,690
($401,801)
(0.0152)
(0.0152)
$24,795,193
$0.09
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
Legend Mining Limited | Annual Report 2020
23
23
For the year ended 31 December 2020 Directors’ Report
D i r e c t o r s ’ R e p o r t
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 2 0
14.
REMUNERATION REPORT (CONTD)
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 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:
(cid:120)
(cid:120)
(cid:120)
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 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 2020 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.
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 2020 year.
Structure
Executive Directors 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.
24
Legend Mining Limited | Annual Report 2020
24
For the year ended 31 December 2020 Directors’ Report
D i r e c t o r s ’ R e p o r t
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 2 0
14.
REMUNERATION REPORT (CONTD)
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:
(cid:120) Mr Wilson receives remuneration of $360,000 per annum exclusive of superannuation;
(cid:120) Mr Wilson may resign from his position and thus terminate his contract by giving one month written notice;
(cid:120)
(cid:120)
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:
(cid:120) Mr Atkins receives remuneration of $90,000 per annum exclusive of superannuation;
(cid:120) 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.
(cid:120) Mr Atkins’ appointment is contingent upon satisfactory performance and successful re-election by shareholders of the
Company;
(cid:120) Mr Atkins may resign from his position and thus terminate his engagement by giving written notification of his resignation
as a director; and
(cid:120)
The Company may terminate Mr Atkins’ engagement by way of resolution of the Company’s shareholders.
Mr Oliver Kiddie, (Executive Director effective from 10 August 2020), is employed under contract. The current contract
commenced on 10 August 2020 and is effective until terminated in accordance with the contract. The significant terms of the
contract are:
(cid:120) Mr Kiddie receives remuneration of $300,000 per annum exclusive of superannuation;
(cid:120) Mr Kiddie may resign from his position and thus terminate his contract by giving three months’ written notice;
(cid:120)
(cid:120)
The Company may terminate Mr Kiddie’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 Kiddie’s contract at any time without notice if serious misconduct has occurred.
Mr Derek Waterfield, (Executive Director - Technical until 10 August 2020) is employed under contract. The current contract
as General Manager, Exploration, commenced on 10 August 2020 and is effective until terminated in accordance with the
contract. The significant terms of the contract are:
(cid:120) Mr Waterfield receives remuneration of $220,000 per annum exclusive of superannuation;
(cid:120) Mr Waterfield may resign from his position and thus terminate his contract by giving one month written notice;
(cid:120)
(cid:120)
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 (ESOP) 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 the 2020 Annual General Meeting (AGM) on 14 May 2020, shareholders approved the implementation of the current
Employee Share Option Plan. A summary of the current Employee Share Option Plan was included in the 2020 Notice of AGM.
Share-based Payments
During the year the Company granted 7,000,000 zero exercise price incentive options to a director. See Note 18 for full details.
(2019: $NIL).
Legend Mining Limited | Annual Report 2020
25
25
For the year ended 31 December 2020
Directors’ Report
D i r e c t o r s ’ R e p o r t
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 2 0
14.
REMUNERATION REPORT (CONTD)
Compensation of Key Management Personnel for Years Ended 31 December 2020 and 31 December 2019
Name
Year
Short term
Salary and
Fees(1)
Post-
Employment
Super-
annuation
$
$
Long-term
benefits
Long
Service
Leave
$
Director
M Atkins
M Wilson
O Kiddie
D Waterfield
Total
2020
2019
2020
2019
2020
2019
2020
2019
2020
2019
83,333
80,000
352,468
338,462
122,436
-
132,282
230,154
690,519
648,616
7,917
7,600
27,083
22,300
11,310
-
15,675
20,900
61,985
50,800
-
-
13,667
5,333
-
-
2,139
3,667
15,806
9,000
Total
Share
based
payments
options
% of
compen-
sation
granted as
options
% of
performance
related
remuneration
$
$
-
-
-
-
236,621
-
236,621
-
91,250
87,600
393,218
366,095
370,367
-
150,096
254,721
1,004,931
708,416
-
-
-
-
64
-
-
-
-
-
-
-
-
-
-
-
(1)
Short term salary and fees includes net movements in annual leave provisions.
Option holdings of Key Management Personnel
Options held in Legend Mining Limited (number) during the year ended 31 December 2020
Name
Balance at
beginning
of year
1 Jan 2020
Granted as
Remuneration
Exercised
during
the year
Net Change
Other
Balance at
end
of year
31 Dec 2020
Not Vested
& Not
Exercisable
Vested &
Exercisable
Directors
M Atkins
M Wilson
O Kiddie
D Waterfield
Total
10,000,000
40,000,000
-
20,000,000
70,000,000
-
-
7,000,000
-
7,000,000
-
-
-
-
-
Shareholdings of Key Management Personnel(1)(2)
-
-
-
-
-
10,000,000
40,000,000
7,000,000
20,000,000
77,000,000
-
-
7,000,000
-
7,000,000
10,000,000
40,000,000
-
20,000,000
70,000,000
Shares held in Legend Mining Limited (number) during the year ended 31 December 2020
Name
Balance
1 Jan 20
Granted as
remuneration
On exercise
of options
Net change
other(2)
Balance
31 Dec 2020
Directors
M Atkins (Windamurah P/L),
(Alkali Exploration P/L)
M Wilson (Chester Nominees WA P/L)
(Mrs MM Wilson)
O Kiddie (held by spouse: LSJ Windsor)
D Waterfield
Total
7,108,334
128,748,200
-
1,000,000
136,856,534
Includes shares held directly, indirectly and beneficially by KMP.
(1)
(2) On-market purchases made during the year.
END OF REMUNERATION REPORT
-
-
-
-
-
-
-
-
-
-
-
7,108,334
1,000,000
129,748,200
3,000,000
-
3,000,000
1,000,000
4,000,000
140,856,534
26
Legend Mining Limited | Annual Report 2020
26
For the year ended 31 December 2020
Directors’ Report
D i r e c t o r s ’ R e p o r t
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 2 0
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
Oliver Kiddie
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
8
8
3
5
8
8
3
5
2
2
1
1
2
2
1
1
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
Ordinary shares
M Atkins
(Windamurah P/L), (MW Atkins)
M Wilson
(Chester Nominees WA P/L)
(Hostyle Pty Ltd) (SMT Investments WA P/L)
O Kiddie
(held by spouse LSJ Windsor)
17,108,334
169,748,200
Options over
ordinary shares
-
-
3,000,000
7,000,000
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 2020 financial year.
We have received the Declaration of Auditor Independence from Ernst & Young, the Company’s Auditor. This is available for
review on page 56 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 19th day of March 2021
Legend Mining Limited | Annual Report 2020
27
27
For the year ended 31 December 2020 Consolidated Statement of Comprehensive Income
Note
4(a)
4(b)
4(c)
4(d)
4(d)
4(e)
16
6
Finance revenue
Other Income
Employee benefit expenses
Financial expenses
Other expenses
Corporate and administra€on expenses
Share-based payments expense
Loss before income tax
Income tax expense
Net loss for the year a(cid:14)ributable to Members of Legend Mining
Limited
Other comprehensive income for the year, net of tax
Total comprehensive loss for the year a(cid:14)ributable to Members of
Legend Mining Limited
2020
$
262,488
371,384
(212,456)
(2,158)
(48,845)
(976,976)
(236,621)
(843,184)
(219,426)
2019
$
231,690
750,000
(306,383)
(5,160)
(51,686)
(808,362)
(211,900)
(401,801)
-
(1,062,610)
(401,801)
-
-
(1,062,610)
(401,801)
EARNINGS PER SHARE (cents per share)
Basic loss per share
Diluted loss per share
5
5
(0.0383)
(0.0383)
(0.0152)
(0.0152)
The accompanying notes form part of these financial statements
28
Legend Mining Limited | Annual Report 2020
For the year ended 31 December 2020
C O N S O L I D A T E D S T A T EM E N T O F F I N A N C I A L P O S I T I O N
Consolidated Statement of Financial Position
A s a t 3 1 D e c e m b e r 2 0 2 0
As at 31 December 2020
ASSETS
Current Assets
Cash and cash equivalents
Receivables
Other financial assets
Total Current Assets
Non-current Assets
Other financial assets
Property, plant & equipment
Right of use assets
Deferred exploration costs
Total Non-current Assets
TOTAL ASSETS
LIABILITIES
Current Liabilities
Trade and other payables
Employee benefit provisions
Lease liability
Total Current Liabilities
Non-current Liabilities
Provisions
Lease liability
Deferred tax liability
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
Note
2020
$
2019
$
8
9
10
10
11
12
13
14
13
14
13
6
15
16
25,191,146
2,707,333
50,000
27,948,479
5,775
536,121
54,187
22,296,113
22,892,196
50,840,675
582,959
170,154
39,357
792,470
129,469
16,377
39,278
185,124
977,594
49,863,081
10,133,887
333,471
148,273
10,615,631
5,775
84,777
81,345
14,622,473
14,794,370
25,410,001
230,464
195,148
67,234
492,846
108,258
13,704
-
121,962
614,808
24,795,193
98,373,061
23,851,799
(72,361,779)
49,863,081
72,479,184
23,615,178
(71,299,169)
24,795,193
The accompanying notes form part of these financial statements
Legend Mining Limited | Annual Report 2020
29
29
Consolidated Statement of Cash Flows
C O N S O L I D A T E D S T A T EM EN T O F C A S H F L OW 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 2 0
CASH FLOWS FROM OPERATING ACTIVITIES
Note
Payments to suppliers and employees
Proceeds from Jindal Receivable
Interest received
ATO Cash Flow Boost received
Payment for financial assets
Net cash flows from/(used) in operating activities
20(ii)
2020
$
2019
$
(799,646)
(1,301,781)
500,000
312,257
100,000
(2,402)
110,209
500,000
188,429
-
(6,599)
(619,951)
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property, plant and equipment
Proceeds from the sale of investments
Proceeds from sale of property, plant and equipment
Payments for deferred exploration costs
Receipt of research and development tax incentive grant
11
(561,872)
(7,500)
75,179
200
-
-
(10,288,306)
(3,519,570)
-
1,259,160
Net cash flows used in investing activities
(10,774,799)
(2,267,910)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from Capital Raising
Payment of transaction costs relating to capital raising
Principal elements of lease payments
Net cash flows from financing activities
26,534,800
9,800,000
(733,105)
(79,846)
(32,058)
(70,023)
25,721,849
9,697,919
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)
15,057,259
10,133,887
25,191,146
6,810,058
3,323,829
10,133,887
The accompanying notes form part of these financial statement
30
Legend Mining Limited | Annual Report 2020
30
For the year ended 31 December 2020 C O N S O L I D A T E D S T A T EM E N T O F C H A N G E S I N E Q U I T Y
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 2 0
Contributed
Equity
Share
Option
Premium
Reserve
Accumulated
Losses
Total Equity
At 1 January 2020
72,479,184
23,615,178
(71,299,169)
24,795,193
Loss for the year
Total comprehensive loss for the
year
Issued capital (note 15)
Capital raising cost (note 15)
Contingent shares issued for
tenement acquisition
Employee and director options
At 31 December 2020
-
-
26,534,800
(640,923)
-
-
-
-
-
-
236,621
(1,062,610)
(1,062,610)
(1,062,610)
(1,062,610)
-
-
-
-
26,534,800
(640,923)
236,621
98,373,061
23,851,799
(72,361,779)
49,863,081
At 1 January 2019
60,711,242
23,268,278
(70,897,368)
13,082,152
Loss for the year
Total comprehensive loss for the
year
Issued capital
Capital raising cost
Contingent shares issued for
tenement acquisition
Employee and director options
At 31 December 2019
-
-
11,800,000
(32,058)
-
-
-
-
-
-
135,000
211,900
(401,801)
(401,801)
(401,801)
(401,801)
-
-
-
-
11,800,000
(32,058)
135,000
211,900
72,479,184
23,615,178
(71,299,169)
24,795,193
The accompanying notes form part of these financial statements
Legend Mining Limited | Annual Report 2020
31
31
For the year ended 31 December 2020
Notes to the Financial Statements
N O T E S T O T H E F I N A N C I A L S T A T EM E N T 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 2 0
NOTE 1:
CORPORATE INFORMATION
The consolidated financial statements of Legend Mining Limited and its subsidiaries (collectively, the Group) for the year ended
31 December 2020 were authorised for issue in accordance with a resolution of the Directors on 17 March 2021.
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.
New and amended standards and interpretations
The Group applied for the first-time certain standards and amendments, which are effective for annual periods beginning on or
after 1 January 2020. The Group has not early adopted any other standard, interpretation or amendment that has been issued
but is not yet effective.
Amendments to IAS 1 and IAS 8 Definition of Material
The amendments provide a new definition of material that states, “information is material if omitting, misstating or obscuring it
could reasonably be expected to influence decisions that the primary users of general purpose financial statements make on the
basis of those financial statements, which provide financial information about a specific reporting entity.” The amendments
clarify that materiality will depend on the nature or magnitude of information, either individually or in combination with other
information, in the context of the financial statements. A misstatement of information is material if it could reasonably be
expected to influence decisions made by the primary users. These amendments had no impact on the consolidated financial
statements of, nor is there expected to be any future impact to the Group.
Conceptual Framework for Financial Reporting issued on 29 March 2018
The Conceptual Framework is not a standard, and none of the concepts contained therein override the concepts or
requirements in any standard. The purpose of the Conceptual Framework is to assist the IASB in developing standards, to help
preparers develop consistent accounting policies where there is no applicable standard in place and to assist all parties to
understand and interpret the standards. This will affect those entities which developed their accounting policies based on the
Conceptual Framework. The revised Conceptual Framework includes some new concepts, updated definitions and recognition
criteria for assets and liabilities and clarifies some important concepts. These amendments had no impact on the consolidated
financial statements of the Group.
Amendments to IFRS 16 Covid-19 Related Rent Concessions
On 28 May 2020, the IASB issued Covid-19-Related Rent Concessions - amendment to IFRS 16 Leases The amendments provide
relief to lessees from applying IFRS 16 guidance on lease modification accounting for rent concessions arising as a direct
consequence of the Covid-19 pandemic. As a practical expedient, a lessee may elect not to assess whether a Covid-19 related
rent concession from a lessor is a lease modification. A lessee that makes this election accounts for any change in lease
payments resulting from the Covid-19 related rent concession the same way it would account for the change under IFRS 16, if
the change were not a lease modification. The amendment applies to annual reporting periods beginning on or after 1 June
2020. Earlier application is permitted. This amendment had no impact on the consolidated financial statements of the Group.
32
Legend Mining Limited | Annual Report 2020
32
For the year ended 31 December 2020 Notes to the Financial Statements
N O T E S T O T H E F I N A N C I A L S T A T EM E N T 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 2 0
NOTE 2: SIGNIFICANT ACCOUNTING POLICIES (CONTD)
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 but are not deemed to have an impact on the consolidated financial statements of the Group. The
Group intends to adopt these new standards and interpretations, if applicable, when they become effective.
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 2020. 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:
(cid:120)
(cid:120)
(cid:120)
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.
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:
(cid:120)
(cid:120)
(cid:120)
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.
Legend Mining Limited | Annual Report 2020
33
33
For the year ended 31 December 2020 Notes to the Financial Statements
N O T E S T O T H E F I N A N C I A L S T A T EM E N T 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 2 0
NOTE 2: SIGNIFICANT ACCOUNTING POLICIES (CONTD)
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 diminishing value 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%
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.
34
Legend Mining Limited | Annual Report 2020
34
For the year ended 31 December 2020 Notes to the Financial Statements
N O T E S T O T H E F I N A N C I A L S T A T EM E N T 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 2 0
NOTE 2: SIGNIFICANT ACCOUNTING POLICIES (CONTD)
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.
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.
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. The Group receives grants in
relation to Research and Development expenditure.
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.
Farm-outs and carried interest— in the exploration and evaluation phase
The Group does not record any expenditure made by the farmee on Legend’s account. The Group also does not recognise any
gain or loss on its exploration and evaluation farm-out arrangements. Any cash consideration received directly from the farmee
is credited against costs previously capitalised in relation to the whole interest with any excess accounted for by the Group as a
gain on disposal.
For carried interests Legend recognises the expenditure when they are providing the carry to the other parties. Where the Group
are being carried Legend does not recognise any expenditure paid for on their behalf.
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.
Legend Mining Limited | Annual Report 2020
35
35
For the year ended 31 December 2020 Notes to the Financial Statements
N O T E S T O T H E F I N A N C I A L S T A T EM E N T 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 2 0
NOTE 2: SIGNIFICANT ACCOUNTING POLICIES (CONTD)
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 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.
(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:
(cid:120)
(cid:120)
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:
(cid:120)
(cid:120)
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.
36
Legend Mining Limited | Annual Report 2020
36
For the year ended 31 December 2020
Notes to the Financial Statements
N O T E S T O T H E F I N A N C I A L S T A T EM E N T 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 2 0
NOTE 2: SIGNIFICANT ACCOUNTING POLICIES (CONTD)
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:
(cid:120) 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.
(cid:120)
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.
(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)
(b) Capital raising costs, which provide payment to stockbrokers and finance institutions for capital raising services and
‘Employees Share Option Plan’, which provides benefits to eligible persons;
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.
Legend Mining Limited | Annual Report 2020
37
37
For the year ended 31 December 2020
Notes to the Financial Statements
N O T E S T O T H E F I N A N C I A L S T A T EM E N T 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 2 0
NOTE 2: SIGNIFICANT ACCOUNTING POLICIES (CONTD)
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 tr ansactions 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 an nual 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.
Expected future payments are discounted using market yields at the reporting date on high quality corporate 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.
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.
38
Legend Mining Limited | Annual Report 2020
38
For the year ended 31 December 2020
Notes to the Financial Statements
N O T E S T O T H E F I N A N C I A L S T A T EM E N T 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 2 0
NOTE 2: SIGNIFICANT ACCOUNTING POLICIES (CONTD)
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).
(xvii)
Leases
Right-of-use asset
The Group recognises right-of-use assets at the commencement date of the lease (i.e., the date the underlying asset is available
for use). Right-of-use assets are measured at cost, less any accumulated depreciation and impairment losses, and adjusted for any
remeasurement of lease liabilities. The cost of right-of-use assets includes the amount of lease liabilities recognised, initial direct
costs incurred, and lease payments made at or before the commencement date less any lease incentives received and associated
restoration provisions. Unless the Group is reasonably certain to obtain ownership of the leased asset at the end of the lease term,
the recognised right-of-use assets are depreciated on a straight-line basis over the shorter of its estimated useful life and the lease
term (between one and two years). Right-of-use assets are subject to impairment.
Lease liabilities
At the commencement date of the lease, the Group recognises lease liabilities measured at the present value of lease payments
to be made over the lease term. The lease payments include fixed payments (including in-substance fixed payments) less any lease
incentives receivable, variable lease payments that depend on an index or a rate, and amounts expected to be paid under residual
value guarantees. The lease payments also include the exercise price of a purchase option reasonably certain to be exercised by
the Group and payments of penalties for terminating a lease, if the lease term reflects the Group exercising the option to
terminate. The variable lease payments that do not depend on an index or a rate are recognised as expense in the period on which
the event or condition that triggers the payment occurs.
In calculating the present value of lease payments, the Group uses the incremental borrowing rate at the lease commencement
date if the interest rate implicit in the lease is not readily determinable. After the commencement date, the amount of lease
liabilities is increased to reflect the accretion of interest and reduced for the lease payments made. In addition, the carrying
amount of lease liabilities is remeasured if there is a modification, a change in the lease term, a change in the in-substance fixed
lease payments or a change in the assessment to purchase the underlying asset.
Short-term leases and leases of low-value assets
The Group applies the short-term lease recognition exemption (i.e., those leases that have a lease term of 12 months or less from
the commencement date and do not contain a purchase option). It also applies the lease of low-value assets recognition exemption
to leases that are considered of low value (i.e., below $5,000). Lease payments on short-term leases and leases of low-value assets
are recognised as expense on a straight-line basis over the lease term.
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.
Legend Mining Limited | Annual Report 2020
39
39
For the year ended 31 December 2020
Notes to the Financial Statements
N O T E S T O T H E F I N A N C I A L S T A T EM E N T 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 2 0
NOTE 4:
REVENUE AND EXPENSES
a)
Finance Revenue
Bank interest received and receivable
Other finance income
b) Other
Other income - ATO Cashflow Boost
Other income
Other income - impairment loss recovery (note 9)
c)
Employee Benefits Expense
Salaries, on-costs and other employee benefits
d) Other Expenses
Depreciation
Exploration expenditure not capitalised
Financial expenses
Depreciation – Office Lease
Other
e) Corporate and administration expenses
Fees – Audit/Tax
Fees – ASX
Fees – Share Registry
Consultancy Fees
Legal expenses
Sale of fixed assets
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
Note
2020
$
173,342
89,146
262,488
100,000
21,384
250,000
371,384
212,456
212,456
4,650
-
2,158
55,904
(11,709)
51,003
414,923
56,225
-
111,248
-
1,649
8,344
384,587
976,976
2020
$
2019
$
109,032
122,658
231,690
-
-
750,000
750,000
306,383
306,383
2,574
700
5,159
48,413
-
56,846
249,752
45,734
11,559
78,522
21,172
678
43,392
357,553
808,362
2019
$
(1,062,610)
(401,801)
(1,062,610)
(401,801)
(b) Weighted average number of shares on issue during the financial year used
in the calculation of basic loss per share
Weighted average number of ordinary shares on issue used in the
calculation of diluted loss per share
2,772,382,838
2,642,257,182
2,772,382,838
2,642,257,182
(c)
Information on classification of options
For the year ended 31 December 2020, all options on issue were antidilutive as the Group made a loss. 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 2020 is
230,861,111. (31 December 2019: 387,111,111)
40
Legend Mining Limited | Annual Report 2020
40
For the year ended 31 December 2020
N O T E S T O T H E F I N A N C I A L S T A T EM E N T 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 2 0
Notes to the Financial Statements
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
Other assessable income
Non-assessable income
Current year capital losses not recognised
Recognition of previously unrecognised prior period 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)
2020
$
2019
$
-
-
219,426
-
219,426
(843,184)
(843,184)
(252,955)
1,086,001
182
(30,000)
18,570
(440,903)
(86,641)
(74,828)
219,426
(180,148)
(180,148)
-
-
-
-
-
-
(401,801)
(401,801)
(120,540)
558,355
-
(169,986)
-
(202,555)
(64,312)
(962)
-
(962)
(962)
-
Legend Mining Limited | Annual Report 2020
41
41
For the year ended 31 December 2020 Notes to the Financial Statements
N O T E S T O T H E F I N A N C I A L S T A T EM E N T 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 2 0
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
Property, Plant & Equipment
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
Share based costs on equity
Other future blackhole deductions
Other
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
2020
$
30%
2019
$
30%
(5,227,466)
(111,547)
(1,398)
(5,340,411)
5,301,133
(39,278)
4,914,041
204,697
180,148
2,247
-
5,301,133
(5,301,133)
-
(2,797,329)
(2,115)
(6,531)
(2,805,975)
2,805,975
-
2,702,959
100,022
-
-
2,994
2,805,975
(2,805,975)
-
817,800
-
2,242,325
3,060,125
914,597
440,903
2,223,755
3,579,255
Legend Mining Limited and its 100% owned Australian resident subsidiary 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 co ntribution from (or distribution to) equity participants. There were no contributions (or
distributions) made during the year ended 31 December 2020.
2020 Tax Return
On 15 December 2020, the Company lodged its tax return for the tax year ended 30 June 2020 and claimed a refundable Research
and Development (R&D) tax offset of $2,598,393.97. On 2 February 2021, the Company received this refund.
42
Legend Mining Limited | Annual Report 2020
42
For the year ended 31 December 2020 Notes to the Financial Statements
N O T E S T O T H E F I N A N C I A L S T A T EM E N T 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 2 0
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
2020
$
2,191,146
23,000,000
25,191,146
2019
$
633,887
9,500,000
10,133,887
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 1.84%.
NOTE 9:
RECEIVABLES
Current
Other receivables (b)
Receivable from Jindal Mining & Exploration Limited (a)
Provision for Jindal receivable
2020
$
2,707,333
2,000,000
(2,000,000)
2,707,333
2019
$
50,813
2,537,658
(2,255,000)
333,471
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.
On 8 May 2019 Legend announced that it and Jindal had agreed to a payment schedule for the final amount of $3
million owing to Legend from the sale of the Cameroon Iron Ore project. Legend and Jindal agreed that payments of
$250,000 per month will be made commencing 31 October 2019 until 31 August 2020 (11 payments) with the final
payment of $250,000 being made on 15 October 2020, totalling $3 million in full. The outstanding amounts owing
continue to attract interest at the rate of 4% per annum paid quarterly. Legend received $250,000 in each of October
and November 2019, reducing the outstanding amount to $2,500,000 as at 31 December 2019.
On 22 January 2020 Legend received a payment of $282,658 (principal and interest) from Jindal representing the
December 2019 principal of $250,000 and interest of $32,658. On 23 March 2020 Legend and Jindal agreed to a revised
payment schedule for the remaining $2,250,000. This revision was caused by business disruption of COVID-19 in India.
On 17 July 2020, the Company agreed to another revised proposal from Jindal to repay the outstanding $2.25 million
receivable over 21 months. On 22 July 2020 Legend received a payment of $44,774 from Jindal representing March
2020 interest of $22,397 and June 2020 interest of $22,377. On 23 December 2020, Legend received a payment of
$294,372 (principal and interest) from Jindal representing the September 2020 interest of $22,623, the November 2020
principal of $250,000 and the December 2020 interest of $21,749. As at 31 December 2020 the loan amount
outstanding was $2,000,000 and interest payments were as per the agreed 17 July 2020 repayment schedule.
Due to the continued uncertainty of the receipt of funds from Jindal, Legend have applied an expected credit loss rate
of 100% (2019 89%) on the estimated gross carrying amount at default resulting in an expected credit loss of $2,000,000
(2019 $2,255,000).
(b) R&D receivable of $2,598,394 relating to 30 June 2020 - received on the 2 February 2021. Other receivables are non-
interest bearing and have repayment terms of between 30 and 60 days.
Legend Mining Limited | Annual Report 2020
43
43
For the year ended 31 December 2020
Notes to the Financial Statements
N O T E S T O T H E F I N A N C I A L S T A T EM E N T 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 2 0
NOTE 10: OTHER FINANCIAL ASSETS
Current
Shares in S2 Resources Ltd – at fair value (a)
Security bond – at amortised cost (b)
Non-current
Rental property bond (c)
Details of the above financial instruments:
2020
$
-
50,000
50,000
2019
$
98,273
50,000
148,273
5,775
5,775
(a)
The equity investments are all classified as financial assets at fair value through profit and loss. The market value of all
equity investments represents 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 2020, this deposit is held on a 6 month term
deposit with an interest rate of .40% per annum (31 December 2019, 6 months at 1.57%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
2020
$
2019
$
824,625
(288,504)
536,121
315,329
(230,552)
84,777
84,777
538,497
(1,649)
(4,650)
(80,854)
109,099
7,500
(878)
(2,574)
(28,370)
536,121
84,777
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
Expenditure incurred during the year
At 31 December, at cost
Note
(i)
(ii)
2020
$
22,296,113
14,622,473
-
(2,598,394)
10,272,034
22,296,113
44
Legend Mining Limited | Annual Report 2020
2019
$
14,622,473
10,012,564
2,135,000
(1,259,160)
3,734,069
14,622,473
44
For the year ended 31 December 2020 Notes to the Financial Statements
N O T E S T O T H E F I N A N C I A L S T A T EM E N T 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 2 0
NOTE 12: DEFERRED EXPLORATION COSTS (CONT)
Note:
(i) During 2019 Legend entered into a new JVA (“Ponton JVA 2019”) with Creasy Group over tenements E28/1716 and E28/1717
for a 70% interest in the tenements. Legend paid the upfront consideration of $2,000,000, being 55,555,555 Legend shares
at the price of 3.6 cents per share, to Creasy Group on 30 September 2019. The issue price was reflective fair value of the
share price at acquisition date.
The acquisition included contingent consideration of 277,777,775 Legend shares at the price of 3.6 cents per share payable
on completion of the first Bankable Feasibility Study and a Decision to Mine has been made. The contingent consideration
of $135,000 represents a share based payment and has been fair valued at acquisition date based on a probability of 1.35%
of the contingent issuance being made. The fair value of the asset cannot be reliably estimated as it is an exploration and
evaluation asset which is in its early stages and there is still a significant amount of exploration and evaluation work required
to progress the asset to a point where the contingent issuance would be required. In addition, at the date of this report
there are no ore reserves or mineral resources estimated or being estimated for this joint venture asset and this joint venture
is not part of the Mawson project tenure.
The Ponton JVA 2019 has the Royalty Option to convert its 30% interest into a 2% net smelter royalty. No value has been
assigned to this option given this is linked to the Bankable Feasibility Study being completed and the Decision to Mine being
made.
During 2019 Legend farmed-out a portion of the Group’s interest in E28/2190, E28/2191, E28/2675, E28/2676 and E28/2677
(collectively the Rockford JVA 2019 and Legend/IGO JVA 2019) for a free carry until mining joint venture for nil consideration
in line with the Group’s accounting policy, no gain or loss has been recognised on these farm-outs. The Group retains the
following interest in the tenements:
(cid:120)
(cid:120)
Rockford JVA 2019 – E28/2190 and E28/2191 – 10% free carried interest (previously 70% interest)
Legend/IGO JVA 2019 – E28/2675, E28/2676 and E28/2677 – 30% free carried interest (previously 100% interest)
(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
Lease liability
Non-Current
Lease liability
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.
2020
$
582,959
39,357
622,316
16,377
16,377
2019
$
230,464
67,234
297,698
13,704
13,704
Legend Mining Limited | Annual Report 2020
45
45
For the year ended 31 December 2020
Notes to the Financial Statements
N O T E S T O T H E F I N A N C I A L S T A T EM E N T 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 2 0
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
55,555,555 Creasy JVA
272,222,222 IGO Limited
142,857,143 raised via Euroz
6,534,800 raised by exercising of options
(cid:120)
(cid:120)
(cid:120)
10,000,000 Musgrave options
3,250,000 ESOP options
150,000,000 Creasy options
Capital raising costs (net of tax)
Movement in ordinary shares on issue 2020
At 1 January 2020
142,857,143 share via Euroz
163,250,000 exercising of options
Capital raising costs
At 31 December 2020
Movement in ordinary shares on issue 2019
At 1 January 2019
55,555,555 Shares issued for tenement acquisition
272,222,222 IGO Limited
Capital raising costs
At 31 December 2019
Fully paid ordinary shares carry one vote per share and carry the right to dividends.
NOTE 16: RESERVES
Movement in reserves
At 1 January 2020
Options issued to employees (refer note 18)
At 31 December 2020
At 1 January 2019
Options issued to employees(refer note 18)
Contingent shares issued for tenement acquisition (refer note 12 (i))
At 31 December 2019
46
Legend Mining Limited | Annual Report 2020
2020
$
2019
$
170,154
195,148
129,469
108,258
14
5
2020
$
72,479,184
-
-
20,000,000
400,000
134,800
6,000,000
(640,923)
98,373,061
No.
2,372,128,578
142,857,143
163,250,000
-
2,678,235,721
No.
2,044,350,801
55,555,555
272,222,222
-
2,372,128,578
Share option
premium reserve
$
23,615,178
236,621
23,851,799
23,268,278
211,900
135,000
23,615,178
2019
$
60,711,242
2,000,000
9,800,000
-
-
-
-
(32,058)
72,479,184
$
72,479,184
20,000,000
6,534,800
(640,923)
98,373,061
$
60,711,242
2,000,000
9,800,000
(32,058)
72,479,184
46
For the year ended 31 December 2020
Notes to the Financial Statements
N O T E S T O T H E F I N A N C I A L S T A T EM E N T 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 2 0
NOTE 16: RESERVES (CONT)
Share option premium reserve
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 and contingent share issues as part of the acquisition of tenements.
On 10 August 2020, 7,000,000 zero exercise priced options expiring on 10 August 2025 issued under the Company’s Employee
Incentive Plan Rules approved at the 2020 AGM (ESOP) (note 18 (a)).
NOTE 17: SHARE OPTIONS
Number
Exercise price
cents per share
2020
Unlisted options – Expiry date 23 September 2020
At 1 January 2020
Exercised 21 September 2020
At 31 December 2020
Unlisted options – Expiry date 30 March 2021
At 1 January 2020
Exercised 17 April 2020
Exercised 3 August 2020
At 31 December 2020
Unlisted options – Expiry date 11 July 2022
At 1 January 2020
At 31 December 2020
Unlisted options – Expiry date 30 September 2022
At 1 January 2020
Exercised 21 September 2020
At 31 December 2020
Unlisted zero exercise price options – Expiry date 10 August
2025 subject to vesting criteria (see Note 18)
At 1 January 2020
Granted on 10 August 2020
Exercised
Vested
At 31 December 2020
2019
Unlisted options – Expiry date 23 September 2020
At 1 January 2019
At 31 December 2019
Unlisted options – Expiry date 30 March 2021
At 1 January 2019
At 31 December 2019
Unlisted options – Expiry date 11 July 2022
At 1 January 2019
Issued during the year
At 31 December 2019
Unlisted options – Expiry date 30 September 2022
At 1 January 2019
Issued during the year
At 31 December 2019
150,000,000
(150,000,000)
-
88,000,000
(10,000,000)
(3,100,000)
74,900,000
102,217,540
102,217,540
46,893,571
(150,000)
46,743,571
-
7,000,000
-
-
7,000,000
150,000,000
150,000,000
88,000,000
88,000,000
-
102,217,540
102,217,540
-
46,893,571
46,893,571
4 cents
4 cents
7.2 cents
7.2 cents
Zero cents
4 cents
4 cents
7.2 cents
7.2 cents
Legend Mining Limited | Annual Report 2020
47
47
For the year ended 31 December 2020 Notes to the Financial Statements
N O T E S T O T H E F I N A N C I A L S T A T EM E N T 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 2 0
NOTE 18: SHARE BASED PAYMENT PLANS
(a) Recognised share-based payment expenses
During the 2020 year there were 7,000,000 options issued (2019: 13,000,000).
On 10 August 2020, pursuant to exception 12 of ASX Listing Rule 10.12, 7 million zero exercise price options expiring on 10 August
2025 issued under the Company’s Employee Incentive Plan Rules approved at the 2020 AGM (ESOP) to Mr Oliver Kiddie, (subject
to Mr Kiddie remaining in employment during the relevant vesting period) as follows:
(cid:120)
(cid:120)
(cid:120)
1,500,000 zero exercise price options vesting 12 months after they are issued (Incentive Options Class A);
1,500,000 zero exercise price options vesting 24 months after they are issued (Incentive Options Class B); and
4,000,000 zero exercise price options vesting when the 20 day VWAP of share is greater than the Vesting Price of 28 cents per
share for a minimum period of 20 continuous ASX trading days during the life of the zero exercise price options, and other
terms and conditions determined by the Company’s ESOP (Incentive Options Class C).
The fair values of the 1,500,000 Incentive Options Class A and 1,500,000 Incentive Options Class B, were calculated by using the
Black-Scholes European Option Pricing Model applying the following inputs:
Exercise price (cents)
Life of the option (years)
Share price on grant date (cents)
Expected share price volatility
Risk free interest rate
Fair value at measurement date
Incentive Option
Class A
0.0
5.0
.1350
80%
.4259
.1350
Incentive Options
Class B
0.0
5.0
.1350
80%
.4259
.1350
The fair values of the 4,000,000 Incentive Options Class C, were calculated by using the Monte Carlo Valuation Model applying the
following inputs:
Exercise price (cents)
Life of the option (years)
Share price on grant date (cents)
Expected share price volatility
Risk free interest rate
Fair value at measurement date
Incentive-Options
Class C
0.0
5.0
.1350
80%
.4259%
.1135
In 2019, 13,000,000 incentive options with an exercise price of 7.2 cents and expiring on 30 September 2022 were issued to
employees and contractors under the Company’s Employee Share Option Plan. The fair value of the incentive options granted at
the grant date was 0.0163 cents, for a total value of $211,900 included within share based payments expense.
The fair values of these 13,000,000 incentive options 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
(b) Types of share-based payment plans
Employee Share Option Plan, ‘ESOP’
Incentive Options
7.2
3.0
4.6
75.0%
0.68%
Share options are granted to Eligible Persons in the absolute discretion of the Board. Eligible Persons are determined by the
Board after taking into account the following considerations:
(i) the seniority of the Eligible Person and the position the Eligible Person occupies within the Group;
(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.
48
Legend Mining Limited | Annual Report 2020
48
For the year ended 31 December 2020
Notes to the Financial Statements
N O T E S T O T H E F I N A N C I A L S T A T EM E N T 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 2 0
NOTE 18. SHARE BASED PAYMENT PLAN (CONTD)
The Board has in place an Employee Share Option Plan (ESOP) 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 the 2020 Annual General Meeting (AGM) on 14 May 2020 shareholders approved the implementation of the current ESOP. A
summary of the current ESOP was included in the 2020 Notice of AGM.
(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
Granted during the year (see Note 16)
Exercised during the year (i), (ii)
Expired/lapsed during the year
Outstanding at the end of the year
Exercisable at the end of the year
Unvested at the end of the year
2020
No.
91,000,000
7,000,000
(3,250,000)
-
94,750,000
87,750,000
7,000,000
2020
WAEP
($)
0.045
-
0.042
-
0.041
0.045
-
2019
No.
78,000,000
13,000,000
-
-
91,000,000
91,000,000
-
2019
WAEP
($)
0.040
0.072
-
-
0.045
0.045
-
Other Options: 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
Granted during the year
Exercised during the year (iii), (iv)
Expired/lapsed during the year
Outstanding at the end of the year
Exercisable at the end of the year
2020
No.
2020
WAEP
296,111,111
0.055
2019
No.
160,000,000
-
-
136,111,111
2019
WAEP
0.040
0.072
160,000,000
0.040
-
136,111,111
136,111,111
-
0.072
0.072
-
296,111,111
296,111,111
-
0.055
0.055
The following options were exercised during the year:
(i)
(ii)
3,100,000 ESOP options over ordinary shares with an exercise price of $0.04 each, exercisable immediately and expiring on
30 March 2021;
150,000 ESOP options over ordinary shares with an exercise price of $0.072 each, exercisable immediately and expiring on
30 September 2022;
(iii) 150,000,000 Other Options over ordinary shares with an exercise price of $0.04 each, exercisable immediately and expiring
on 30 September 2020;
(iv) 10,000,000 Other Options over ordinary shares with an exercise price of $0.04 each, exercisable immediately and expiring
on 30 March 2021
Legend Mining Limited | Annual Report 2020
49
49
For the year ended 31 December 2020 Notes to the Financial Statements
N O T E S T O T H E F I N A N C I A L S T A T EM E N T 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 2 0
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
Long term benefits
Post-employment benefits
Share-based payments expense
Total compensation paid to Key Management Personnel
2020
$
690,519
15,806
61,985
236,621
1,004,931
2019
$
648,616
9,000
50,800
-
708,415
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
Net loss on disposal of property, plant & equipment
Depreciation
Depreciation – Lease
Interest expense capitalised to deferred exploration
Share-based payments expense
Fair value (gain)/loss on investments
Impairment of Jindal receivables
Deferred exploration expenses
Movement in provisions and other
Income Tax Expense
Change in operating assets and liabilities:
(Increase)/decrease in receivables
Increase/(decrease) in payables
Net cash from/(used) in operating activities
Non-cash financing and investing activities
2020
$
500
2,190,646
23,000,000
25,191,146
(1,062,610)
1,649
4,651
59,994
(838)
236,621
23,094
-
(11,710)
(3,783)
219,426
(533,506)
267,813
375,902
110,209
2019
$
500
633,387
9,500,000
10,133,887
(401,801)
678
2,574
48,413
(1,439)
211,900
(30,994)
(250,000)
700
41,483
-
(378,486)
(17,216)
(224,249
(619,951)
Other than listed above there were no other non-cash financing or investing activities during the 2020 or 2019 years.
50
50
Legend Mining Limited | Annual Report 2020
For the year ended 31 December 2020 Notes to the Financial Statements
N O T E S T O T H E F I N A N C I A L S T A T EM E N T 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 2 0
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
$2,333,000 (2019: $2,207,500) 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.
NOTE 22:
INVESTMENTS IN CONTROLLED ENTITIES
Details of subsidiaries
Set out below are the Group’s subsidiaries at 31 December 2020 and 31 December 2019. 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
Legend Cameroon Pty Ltd
Australia
NOTE 23: FINANCIAL INSTRUMENTS DISCLOSURE
2020
%
100
2019
%
100
2020
%
-
2019
%
-
The Group’s principal financial instruments comprise cash and short-term deposits, receivables 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 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.
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 Group has provided for all of the $2,000,000 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. The Group trades with investment grade institutions with a credit rating of AA-.
Since the Group only trades with recognised third parties, there is no requirement for collateral.
Legend Mining Limited | Annual Report 2020
51
51
For the year ended 31 December 2020 Notes to the Financial Statements
N O T E S T O T H E F I N A N C I A L S T A T EM E N T 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 2 0
NOTE 23(cid:855) FINANCIAL INSTRUMENTS DISCLOSURE (CONTD)
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 cash flow interest rate risk is as follows:
2020
Financial assets:
Cash and cash equivalents
Other financial assets
2019
Financial assets:
Cash and cash equivalents
Other financial assets
Weighted
Average
Interest Rate
Floating
Interest
$
Fixed
Interest
$
Non-Interest
Bearing
$
1.84%
3.40%
2,190,646
-
2,190,646
23,000,000
55,775
23,055,775
633,387
-
633,387
9,500,000
55,775
9,555,775
500
-
500
500
-
500
Total
$
25,191,146
55,775
25,246,921
10,133,887
55,775
10,189,662
The maturity date for all financial instruments included in the above tables is 1 year or less from balance date.
A change of 50 basis points in interest rates would result in a net gain/loss before taxation of $142,575(2019: $67,289). This is
based on the interest bearing financial assets as detailed above.
(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
2020
$
25,191,146
2,707,333
55,775
27,954,254
2019
$
10,133,887
333,471
55,775
10,523,133
Except for the amount receivable from Jindal, all other trade and other receivables are current, apart from the rental bond
$5,775 (2019: $5,775) and have not been impaired.
52
Legend Mining Limited | Annual Report 2020
52
For the year ended 31 December 2020
Notes to the Financial Statements
N O T E S T O T H E F I N A N C I A L S T A T EM E N T 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 2 0
NOTE 23: FINANCIAL INSTRUMENTS DISCLOSURE (CONTD)
(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 2020
Non-derivative financial liabilities
Trade and other payables
Lease liability
31 December 2019
Non-derivative financial liabilities
Trade and other payables
Lease liability
Carrying
Amount
582,959
55,734
638,693
Carrying
Amount
230,464
80,938
311,402
Contractual cash
6 mths or less
flows
582,959
55,734
638,693
582,959
55,734
638,693
Contractual cash
6 mths or less
flows
230,464
80,938
311,402
230,464
80,938
311,402
(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:
31 December 2020
31 December 2019
Carrying
Amount
$
-
25,191,146
55,775
108,939
(582,959)
(55,734)
24,717,167
Fair Value
$
-
25,191,146
55,775
108,939
(582,959)
(55,734)
24,717,167
Carrying
Amount
$
98,273
10,133,887
55,775
333,471
(230,464)
(80,938)
10,310,004
Fair Value
$
98,273
10,133,887
55,775
333,471
(230,464)
(80,938)
10,310,004
Held for trading financial assets
Cash and cash equivalents
Security bond
Trade and other receivables
Trade and other payables
Lease liability
NOTE 24: FAIR VALUES
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.
Fair value of the quoted equity instruments is based on price quotations at the reporting date.
Legend Mining Limited | Annual Report 2020
53
53
For the year ended 31 December 2020 Notes to the Financial Statements
N O T E S T O T H E F I N A N C I A L S T A T EM E N T 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 2 0
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
2020
$
27,948,479
50,840,675
792,470
977,594
49,863,081
98,373,061
(72,361,779)
23,851,799
49,863,081
(1,062,610)
(1,062,610)
2019
$
10,615,631
25,410,001
492,846
614,808
24,795,193
72,479,184
(71,299,169)
23,615,178
24,795,193
(401,801)
(401,801)
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.
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
NOTE 27: CONTINGENT LIABILITIES
There are no contingent liabilities at the date of this report.
Consolidated
2020
$
2019
$
36,539
36,539
31,731
31,731
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
On 3 March 2021, 74,900,000 4 cent 30 March 2021 and 2,000,000 7. 2 cent 30 September 2022 unlisted options were exercised.
This exercise of options added $3.14M to the Company’s cash at bank.
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.
54
Legend Mining Limited | Annual Report 2020
54
For the year ended 31 December 2020 D I R E C T O R S ’ D E C L A R A T I O N
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 28-54, and the remuneration disclosures that are
contained in the Remuneration report in the Directors report pages 21-27, of the consolidated
entity, are in accordance with the Corporations Act 2001, including;
i
ii
iii
Giving a true and fair view of the consolidated entity’s financial position as at 31
December 2019 and of its performance for the year ended on that date; and
Complying with Australian Accounting Standards’ and the Corporations Regulations 2001;
and
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 2020.
On behalf of the Board.
Mark Wilson
Managing Director
Dated this 19th day of March 2021
55
Legend Mining Limited | Annual Report 2020
55
Ernst & Young
11 Mounts Bay Road
Perth WA 6000 Australia
GPO Box M939 Perth WA 6843
Tel: +61 8 9429 2222
Fax: +61 8 9429 2436
ey.com/au
Auditor’s independence declaration to the directors of Legend Mining
Limited
As lead auditor for the audit of the financial report of Legend Mining Limited for the financial year
ended 31 December 2020, I declare to the best of my knowledge and belief, there have been:
a. No contraventions of the auditor independence requirements of the Corporations Act 2001 in
relation to the audit; and
b. No contraventions of any applicable code of professional conduct in relation to the audit.
This declaration is in respect of Legend Mining Limited and the entities it controlled during the
financial year.
Ernst & Young
Darryn Hall
Partner
19 March 2021
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
Ernst & Young
11 Mounts Bay Road
Perth WA 6000 Australia
GPO Box M939 Perth WA 6843
Tel: +61 8 9429 2222
Fax: +61 8 9429 2436
ey.com/au
Independent auditor’s report to the members of Legend Mining Limited
Report on the audit of the financial report
Opinion
We have audited the financial report of Legend Mining Limited (the Company) and its subsidiaries
(collectively the Group), which comprises the consolidated statement of financial position as at 31
December 2020 the consolidated statement of comprehensive income, consolidated statement of
changes in equity and consolidated statement of cash flows for the year then ended, notes to the
financial statements, including a summary of significant accounting policies, and the directors
declaration.
In our opinion, the accompanying financial report of the Group is in accordance with the Corporations
Act 2001, including:
a. Giving a true and fair view of the consolidated financial position of the Group as at 31 December
2020 and of its consolidated financial performance for the year ended on that date; and
b.
Complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under
those standards are further described in the Auditor’s responsibilities for the audit of the financial
report section of our report. We are independent of the Group in accordance with the auditor
independence requirements of the Corporations Act 2001 and the ethical requirements of the
Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional
Accountants (including Independence Standards) (the Code) that are relevant to our audit of the
financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with
the Code.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our opinion.
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in
our audit of the financial report of the current year. These matters were addressed in the context of
our audit of the financial report as a whole, and in forming our opinion thereon, but we do not provide
a separate opinion on these matters. For each matter below, our description of how our audit
addressed the matter is provided in that context.
We have fulfilled the responsibilities described in the Auditor’s responsibilities for the audit of the
financial report section of our report, including in relation to these matters. Accordingly, our audit
included the performance of procedures designed to respond to our assessment of the risks of
material misstatement of the financial report. The results of our audit procedures, including the
procedures performed to address the matters below, provide the basis for our audit opinion on the
accompanying financial report.
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
Accounting for and carrying value assessment of deferred exploration costs
Why significant
How our audit addressed the key audit matter
We evaluated the Group’s assessment of the carrying value
of exploration and evaluation assets. In obtaining sufficient
audit evidence, we:
►
►
►
►
►
Considered the Group’s right to explore in the relevant
exploration area which included obtaining and
assessing supporting documentation such as license
agreements and extension of term applications
Considered the Group’s intention to carry out
significant exploration and evaluation activity in the
relevant exploration area which included assessment
of the Group’s cash-flow forecast models, enquiries
with senior management and Directors as to the
intentions and strategy of the Group
Assessed the carrying value of intangible assets where
recent exploration activity in a given exploration
license provided negative indicators as to the
recoverability of other intangible costs that remain
capitalised
Assessed the ability to finance any planned future
exploration and evaluation activity
Assessed the work of management’s external expert in
measuring and preparing the Group’s R&D tax
incentive claims and engaged our own tax specialists
to review the form and nature of the claim submitted;
and agreed the receipt of R&D tax incentive claims
monies by the Group to supporting documentation
► Assessed the adequacy of the disclosure included in
the financial report.
disclosed in Note 12 of the financial report, at 31 December
2020 the Group recognised deferred exploration and
evaluation expenditure asset of $22.3 million,
predominantly related to its Rockford Project exploration
tenements.
Included in deferred exploration and evaluation expenditure,
and treated as a reduction in the amount capitalised, is
research and development (R&D) tax incentive benefits
received in respect of deferred exploration and evaluation
expenditure of $2.6 million.
The carrying value of exploration and evaluation expenditure
is assessed for impairment by the Group when facts and
circumstances indicate that the exploration and evaluation
expenditure may exceed its recoverable amount.
The determination as to whether there are any indicators to
require deferred exploration and evaluation expenditure to
be assessed for impairment, involves a number of
judgements, including assessing the intention of the Group
to carry out significant exploration and evaluation activity in
the near future, and, whether there is sufficient information
available to conclude that the area of interest is not
commercially viable.
Due to the size of the deferred exploration and evaluation
expenditure asset relative to the Group’s total assets and the
judgement involved in assessing whether indicators of
impairment exist at 31 December 2020, this was a key audit
matter.
Refer to Note 2 Significant accounting policies to the
financial report for accounting policies in relation to
exploration and evaluation assets and Note 12 Deferred
exploration costs for the amounts held on the Statement of
financial position by the Group as at 31 December 2020 and
related disclosure.
Information other than the financial report and auditor’s report thereon
The directors are responsible for the other information. The other information comprises the
information included in the Company’s 2020 annual report, but does not include the financial report
and our auditor’s report thereon.
Our opinion on the financial report does not cover the other information and accordingly we do not
express any form of assurance conclusion thereon, with the exception of the Remuneration Report
and our related assurance opinion.
In connection with our audit of the financial report, our responsibility is to read the other information
and, in doing so, consider whether the other information is materially inconsistent with the financial
report or our knowledge obtained in the audit or otherwise appears to be materially misstated.
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
If, based on the work we have performed, we conclude that there is a material misstatement of this
other information, we are required to report that fact. We have nothing to report in this regard.
Responsibilities of the directors for the financial report
The directors of the Company are responsible for the preparation of the financial report that gives a
true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001
and for such internal control as the directors determine is necessary to enable the preparation of the
financial report that gives a true and fair view and is free from material misstatement, whether due to
fraud or error.
In preparing the financial report, the directors are responsible for assessing the Group’s ability to
continue as a going concern, disclosing, as applicable, matters relating to going concern and using the
going concern basis of accounting unless the directors either intend to liquidate the Group or to cease
operations, or have no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the financial report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is
free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that
includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an
audit conducted in accordance with the Australian Auditing Standards will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered material
if, individually or in the aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of this financial report.
As part of an audit in accordance with the Australian Auditing Standards, we exercise professional
judgement and maintain professional scepticism throughout the audit. We also:
►
Identify and assess the risks of material misstatement of the financial report, whether due to
fraud or error, design and perform audit procedures responsive to those risks, and obtain audit
evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not
detecting a material misstatement resulting from fraud is higher than for one resulting from
error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the
override of internal control.
► Obtain an understanding of internal control relevant to the audit in order to design audit
procedures that are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Group’s internal control.
► Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by the directors.
► Conclude on the appropriateness of the directors’ use of the going concern basis of accounting
and, based on the audit evidence obtained, whether a material uncertainty exists related to
events or conditions that may cast significant doubt on the Group’s ability to continue as a going
concern. If we conclude that a material uncertainty exists, we are required to draw attention in
our auditor’s report to the related disclosures in the financial report or, if such disclosures are
inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up
to the date of our auditor’s report. However, future events or conditions may cause the Group to
cease to continue as a going concern.
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
► Evaluate the overall presentation, structure and content of the financial report, including the
disclosures, and whether the financial report represents the underlying transactions and events
in a manner that achieves fair presentation.
We communicate with the directors regarding, among other matters, the planned scope and timing of
the audit and significant audit findings, including any significant deficiencies in internal control that we
identify during our audit.
We also provide the directors with a statement that we have complied with relevant ethical
requirements regarding independence, and to communicate with them all relationships and other
matters that may reasonably be thought to bear on our independence, and where applicable, actions
taken to eliminate threats or safeguards applied.
From the matters communicated to the directors, we determine those matters that were of most
significance in the audit of the financial report of the current year and are therefore the key audit
matters. We describe these matters in our auditor’s report unless law or regulation precludes public
disclosure about the matter or when, in extremely rare circumstances, we determine that a matter
should not be communicated in our report because the adverse consequences of doing so would
reasonably be expected to outweigh the public interest benefits of such communication.
Report on the audit of the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included in pages 23 to 26 of the directors’ report for the
year ended 31 December 2020.
In our opinion, the Remuneration Report of Legend Mining Limited for the year ended 31 December
2020, complies with section 300A of the Corporations Act 2001.
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the
Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our
responsibility is to express an opinion on the Remuneration Report, based on our audit conducted in
accordance with Australian Auditing Standards.
Ernst & Young
Darryn Hall
Partner
Perth
19 March 2021
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
Shareholder Information
S H A R E H O L D E R I N F O RM A T I O N
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 2 0
SHAREHOLDER INFORMATION AT 12 MARCH 2021
The issued capital of the company is 2,755,135,721 ordinary fully paid shares.
Distribution of Share Holders
Fully Paid Shares
1 – 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,001 and over
Total
Number of holdings less than a marketable parcel
Top 20 Shareholders
Name
CREASY GROUP
IGO LIMITED
WILSON GROUP
BAILEY GROUP
HSBC CUSTODY NOMINESS (AUSTRALIA)LIMITED
MR PLATON CONSTANTINE MANIOTIS
MR MATTHEW MCLEISH
THREE CHEEKY MONKEYS HOLDINGS PTY LTD
PHH PTY LIMITED
ATKINS GROUP
CITICORP NOMINEES PTY LIMITED
WATERFIELD GROUP
NINO CONSTRUCTIONS PTY LTD
MUSGRAVE MINERALS LIMITED
BNP PARIBAS NOMINEES PTY LTD
MICHAELMAS ISLAND PTY LTD
LISTOGA PTY LTD
MATTHEW & KIM LI HOWARD SUPERANNUATION PTY LTD
J P MORGAN NOMINEES AUSTRALIA PTY LIMITED
MR THOMAS BENJAMIN WILSON
TOTAL
Substantial shareholders
Name
CREASY GROUP
IGO LIMITED
WILSON GROUP
BAILEY GROUP
Unlisted Option holders
Class of options
11 July 2022 exercisable at 7.2 cents per share
30 September 2022 exercisable at 7.2 cents per share
10 August 2025 zero exercise price subject to three relevant vesting
periods
Shares
28,569
2,967,562
10,139,939
149,540,180
2,592,459,471
Holders
130
752
1,240
3,583
1,513
2,755,135,721
7,218
1,187,662
493
Shares
% of Units
823,153,914
356,578,323
169,748,200
148,652,091
77,076,384
25,000,000
24,000,000
19,404,000
17,800,000
17,108,334
14,994,509
14,100,000
13,161,547
12,500,000
11,685,697
11,216,945
10,000,000
9,455,844
9,071,915
9,000,000
29.88
12.94
6.16
5.4
2.8
0.91
0.87
0.7
0.65
0.62
0.54
0.51
0.48
0.45
0.42
0.41
0.36
0.34
0.33
0.33
1,793,707,703
65.1
Shares
823,153,914
356,578,323
169,748,200
148,652,091
Options
102,217,540
44,743,571
7,000,000
% of Units
29.88
12.94
6.16
5.4
Holders
1
4
1
Legend Mining Limited | Annual Report 2020
61
61
For the year ended 31 December 2020 Tenement Listing
T E N EM E N T L I S T I N G
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 2 0
AUSTRALIA – FRASER RANGE – ROCKFORD PROJECT
Tenements held at 12 March 2021
Tenement
E28/1716
E28/1717
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
Granted
Granted
Percentage Interest
70%
70%
70%
70%
70%
70%
10%
10%
70%
100%
100%
30%
30%
30%
62
Legend Mining Limited | Annual Report 2020
62
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legendmining.com.au