FY 2020
ANNUAL REPORT
For personal use only LINDIAN RESOURCES LTD
ANNUAL REPORT
For the year ended 30 June 2020
Contents
Corporate Directory
Chairman’s Report
Directors’ Report
Remuneration Report
Consolidated Statement of Profit or Loss and Other 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
Auditors’ Independence Declaration
Auditors’ Report
Additional ASX Information
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LINDIAN RESOURCES LTD
ANNUAL REPORT
For the year ended 30 June 2020
Corporate Directory
Directors
Mr. Asimwe Kabunga (Chairman)
Mr. Matthew Bull (Non-Executive Director)
Mr. Giacomo Fazio (Non-Executive Director)
Mr Yves Occcello (Non-Executive Director)
Company Secretary
Ms Susan Hunter
Registered Office
Level 24
108 St Georges Terrace
Perth WA 6000
Telephone: + 61 8 6557 8838
Website: www.lindianresources.com.au
ABN 53 090 772 222
Share Registry
Automic Registry Services
Level 2
267 St Georges Terrace
Perth WA 6000
Telephone: + 61 8 9324 2099
Facsimile: + 61 8 9321 2337
Auditors
HLB Mann Judd
Level 4
130 Stirling Street
Perth WA 6000
Securities Exchange
Australian Securities Exchange
(Home Exchange: Perth, Western Australia)
ASX Code: LIN, LINO
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LINDIAN RESOURCES LTD
CHAIRMAN’S REPORT
For the year ended 30 June 2020
Chairman’s Report
It was a very busy year for Lindian with the focus being the identification and development of the Company’s
conglomerate bauxite asset on the Bouba Plateaux in Gaoual, Guinea. Just 65km from the world renowned mine
owned by Companie de Bauxite de Guinee (“CBG”) which was originally exploited as a conglomerate bauxite
deposit, the Bouba Project was identified as having the potential to be a significant addition to the Guinea
resource landscape.
The Bouba plateau sits close to major operating bauxite mining companies with significant infrastructure
including railways linked to a number of export locations. This makes it possible to develop a quick pathway to
market for the ore. This potential is enhanced by the desire of the Guinean Government for mutualization of
infrastructure to reduce the cost of development and time to market.
Following the completion of a successful due diligence program, Lindian entered into an agreement to acquire
the Gaoual asset and began the exploration program to establish a high grade JORC resource for the deposit.
Post year end, the Company was able to declare a successful maiden resource of over 100Mt at the Bouba
Plateaux confirming the high-quality nature of the deposit with the high alumina grades being particularly
exciting.
During the year, Lindian maintained its Tanzanian bauxite and gold assets in good standing as it considers the
most appropriate way to develop these assets for its stakeholders. While, in my view, Guinea remains the prime
location globally for bauxite due to the extent and quality of its resources, I believe that Tanzania could become
an important bauxite jurisdiction due to its existing infrastructure and proximity to potential end markets in
China and India. The recent increase in the gold price has resulted in increased attention on the Tanzanian gold
projects and the technical team are looking at preliminary exploration work that can help to define the potential
of these assets.
Post year end, the Company significantly increased the strength of our management team and board with the
addition of renowned bauxite asset developer Danny Keating as Chief Executive Officer and refinery and alumina
expert Yves Occello as Non-Executive Director. Consequently, I expect the 2021 Financial Year to be a significant
one for the Company as we look to deliver on our strategy of unlocking the value within our current diverse,
exciting portfolio of assets.
In closing, the Board and I would like to take this opportunity to thank all shareholders for their ongoing support
and we look forward to what is shaping up to be a transformational year ahead.
Yours sincerely,
Asimwe Kabunga | Chairman
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LINDIAN RESOURCES LTD
DIRECTORS’ REPORT
For the year ended 30 June 2020
Directors’ Report
The Directors present their report for Lindian Resources Limited (“Lindian” or “the Company”) and its
subsidiaries (“the Group”) for the year ended 30 June 2020.
DIRECTORS
Mr. Asimwe Kabunga
Non-Executive Chairman
Mr Kabunga is a Tanzanian born Australian entrepreneur who holds a Bachelor of Science, Mathematics and
Physics and has extensive technical and commercial experience in Tanzania, Australia, and the United States.
Mr Kabunga has been instrumental in establishing the Tanzania Community of Western Australia Inc, and
served as its first President. Mr Kabunga was also a founding member of Rafiki Surgical Missions and Safina
Foundation, both Non- Governmental Organisations dedicated to helping children in Tanzania.
Mr Kabunga’s professional qualifications include a Bachelor of Science Mathematics and Physics.
Mr Kabunga has been non-executive chairman of Volt Resources Limited since 4 August 2017 (ASX: VRC) and
was non-executive director of Strandline Resources Limited from 18 June 2015 to 8 October 2018 (ASX: STA).
He has not held any other listed directorships in the past three years.
Mr. Matthew Bull
Non-Executive Exploration Director
Mr Bull is an exploration geologist who has worked on a wide range of commodities including graphite, gold and
iron ore. He has considerable experience in greenfield exploration and resource development programs.
Mr Bull’s professional qualifications include Bachelor of Science Geology (hons).
Mr Bull was non-executive director of Volt Resources Limited from 1 June 2015 to 9 July 2018 (ASX: VRC) and is
currently a non-executive director of Paterson Resources Limited (ASX:PSL) and non-executive director of
Armadale Capital Plc. (AIM: ACP). He has not held any other listed directorships in the past three years.
Mr. Giacomo Fazio
Non-Executive Director (appointed 26 June 2020)
Mr Fazio is a highly experienced project, construction and contract/commercial management professional
having held senior project management roles with Primero Group Limited, Laing O’Rourke and Forge Group Ltd
and is currently a Non-executive Director of ASX listed Volt Resources Limited. His experience ranges
from feasibility studies through to engineering, procurement, construction, and commissioning of diverse
mining resources, infrastructure, oil & gas and energy projects.
Mr Fazio’s professional qualifications include a Graduate Certificate in Project, an Associate Diploma in Civil
Engineering and a Diploma in Quantity Surveying.
Mr Fazio has been non-executive director of Volt Resources Limited since 1 July 2019 (ASX: VRC). He has not
held any other listed directorships in the past three years.
Mr. Yves Occello
Non-Executive Director (appointed 29 July 2020)
Mr Occello is a 45-year veteran of the bauxite and alumina industry having been COO of Pechiney’s Bauxite and
Alumina Division and Director of Technical Projects at Alcan and Rio Tinto Alcan. He has held board positions at
a number of significant companies, including Compagnie de Bauxite de Guinee, (“CBG”), a conglomerate
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LINDIAN RESOURCES LTD
DIRECTORS’ REPORT
For the year ended 30 June 2020
bauxite project and Guinea’s largest bauxite producer for the past 30 years, Alufer Mining, the first junior
miner to construct and commence bauxite operations in Guinea, and Aluminium of Greece, one of
Europe’s largest alumina refinery and aluminium smelting complexes.
Further, Mr. Occello’s knowledge and expertise is well recognised within China’s bauxite and alumina industry
and he is an Honorary Director of the Chinese Academy of Sciences in Beijing.
Mr Occello’s is a Chemical Engineer with many years of practical, hands-on experience across the aluminium
value chain from understanding bauxite resources and their specific chemical and mineralogical composition,
through to the intricate technical requirements of alumina refining. He has not held any other listed
directorships in the past three years.
Mr. Shannon Green
Managing Director (appointed 14 June 2019, resigned 30 June 2020)
Mr Green has over 20 years resource development and mining operations experience, having managed several
world-class resource project developments and mines including, several of Australia’s largest iron ore mining
operations. Mr Green also has extensive experience working in Guinea, having held the role of General Manager
Project Delivery with Alliance Mining Commodities (2012-2015).
Most recently, Mr Green held the position of General Manager Project Implementation for ASX-listed bauxite
developer Canyon Resources (ASX: CAY).
Mr Green’s professional qualifications include Qld SSE Mine Managers Certificate, Graduate Diploma Mining
Engineering, Diploma of Mining (Surface & underground) and a Diploma of (Finance) and is currently completing
an MBA. He has not held any other listed directorships in the past three years.
Company Secretary
Ms Susan Hunter (appointed 17 March 2020)
Ms Hunter has 24 years’ experience in the corporate finance industry and extensive experience in Company
Secretarial and Non-Executive Director roles with ASX, AIM and TSX listed companies.
Ms Hunter holds a Bachelor of Commerce, is a Member of the Australian Institute of Chartered Accountants, a
Fellow of the Financial Services Institute of Australasia, a Graduate Member of the Australian Institute of
Company Directors and a Graduate Member of the Governance Institute of Australia and is currently Company
Secretary of several ASX listed companies.
DIRECTORS’ MEETINGS
During the financial year, in addition to regular Board discussions, the number of meetings of Directors held
during the year and the number of meetings attended by each Director, including circular resolutions, were as
follows:
Directors
Number of Meetings
Eligible to Attend
Number of Meetings
Attended
Mr. Asimwe Kabunga
Mr. Shannon Green
Mr. Matthew Bull
Mr. Giacomo Fazio
3
3
3
-
3
3
3
-
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LINDIAN RESOURCES LTD
REMUNERATION REPORT (AUDITED)
For the year ended 30 June 2020
Remuneration Report (Audited)
This report outlines the remuneration arrangements in place for Directors and executives of Lindian Resources
Limited in accordance with the requirements of the Corporation Act 2001 and its Regulations.
For the purpose of this report, Key Management Personnel (KMP) of the Company are defined as those persons
having authority and responsibility for planning, directing and controlling the major activities of the Group,
directly or indirectly, including any Director (whether executive or otherwise) of the Group. The remuneration
report is set out under the following main headings:
•
•
•
•
•
Principles used to determine the nature and amount of remuneration
Details of remuneration
Service agreements
Share-based compensation
Additional disclosures relating to key management personnel
Principles used to determine the nature and amount of remuneration
The Board is responsible for determining and reviewing compensation arrangements for the Directors. The
Board assesses the appropriateness of the nature and amount of emoluments of such officers on a periodic basis
by reference to relevant employment market conditions with the overall objective of ensuring maximum
stakeholder benefit from the retention of a high quality board and executive team. The Group does not link the
nature and amount of the emoluments of such officers to the Group’s financial or operational performance. The
expected outcome of this remuneration structure is to retain and motivate Directors.
As part of its Corporate Governance Policies and Procedures, the Board has adopted a formal Remuneration
Committee Charter. Due to the current size of the Group and number of directors, the Board has elected not to
create a separate Remuneration Committee but has instead decided to undertake the function of the Committee
as a full Board under the guidance of the formal charter.
The rewards for Directors have no set or pre-determined performance conditions or key performance indicators
as part of their remuneration due to the current nature of the business operations. The Board determines
appropriate levels of performance rewards as and when they consider rewards are warranted.
Details of remuneration
Details of Key Management Personnel
Key Management Personnel
Position
Mr. Asimwe Kabunga
Mr. Shannon Green
Mr. Matthew Bull
Chairman
Managing Director
Non-Executive Director
Details of the nature and amount of each element of the emolument of each Director and executive of the Group
for the financial year are as follows:
2020
Short term
Options
Post-
employment
Base salary
& annual
leave Director fees
$
$
Consulting
fees
$
Share based
payments
$
Super-
annuation
$
Performance
related
%
Total
$
Directors
Mr. Asimwe Kabunga
Mr. Shannon Green1
Mr. Matthew Bull
-
248,145
-
248,145
60,000
-
60,000
120,000
46,335
-
-
46,335
-
231,402
-
231,402
-
21,850
-
21,850
106,335
501,397
60,000
667,372
1.
Shannon Green appointed Managing Director on 14 June 2019, resigned 30 June 2020.
-
46%
-
35%
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LINDIAN RESOURCES LTD
REMUNERATION REPORT (AUDITED)
For the year ended 30 June 2020
2019
Short term
Options
Post-
employment
Directors
Mr. Asimwe Kabunga
Mr. Shannon Green1
Mr. Matthew Bull
Mr. Steve Formica2
Base salary
& annual
leave Director fees
$
$
Consulting
fees
$
Share based
payments
$
Super-
annuation
$
Performance
related
%
Total
$
-
11,290
-
-
11,290
60,000
-
60,000
57,132
177,132
30,000
-
60,000
17,868
107,868
-
-
-
28,299 3
28,299
-
1,001
-
-
1,001
90,000
12,291
120,000
103,299
325,590
-
-
-
-
-
1.
2.
3.
Shannon Green appointed Managing Director on 14 June 2019, resigned 30 June 2020.
Steve Formica resigned as Non-Executive Director on 13 June 2019.
In accordance with the Deed of Termination and Release between the Company and Steve Formica, the parties agreed to a
deferred payment in recognition of additional services completed consisting of:
a.
b.
The Company will seek shareholder approval for the issue of 10,000,000 options with an exercise price of $0.03 each
to expire on 31 December 2020; or
Issue of 10,000,000 options with an exercise price of $0.03 each to expire on 31 December 2020 to former director,
Steve Formica. Options were issued in recognition of additional services performed whilst a director.
There were no other executive officers of the Group during the financial years ended 30 June 2020 and 30 June
2019. During the 2020 financial year Mr Green was issued 20,000,000 options linked to performance milestones.
These options accounted for 46% of Mr Green’s remunerations for the year.
The Group did not employ the services of any remuneration consultants during the financial year ended 30 June
2020.
The Group has liabilities of $30,343 for unpaid Key Management Personnel remuneration at 30 June 2020 (2019:
$120,000).
Executive Directors
Shannon Green was appointed as Managing Director on 14 June 2019 and resigned on 30 June 2020.
Service Agreements
Mr Green and the Company have agreed to key terms to enter into an executive service agreement with the
Company. He was engaged to provide services in the capacity of Managing Director for an indefinite term.
Mr Green was entitled to a minimum notice period of three months from the Company and the Company was
entitled to a minimum notice period of three months from Mr Green. In the event that the Company gave notice
the Company would be required to make a payment equal to 3 months’ salary at the end of the notice period.
In the event of a change in control event including a redundancy due to a successful takeover or merger of the
Company, Mr Green would have been entitled to a payment equal to 6 months’ salary plus superannuation.
As part of Mr Green’s commencement package, the Company issued to Mr Green 20,000,000 unlisted options
exercisable in accordance with the milestones below at $0.02 on or before 30 June 2021 (“Executive Options”):
Milestones:
(a) 10,000,000 Executive Options exercisable upon the Company receiving shareholder approval at the
shareholder meeting for the purpose of proceeding with the Gaoual Bauxite Project in Guinea on similar
terms to those set out in the Company’s ASX announcement dated 10 April 2019; and
(b) 10,000,000 Executive Options exercisable upon close of trade the date the Company achieves a 10 day
VWAP share price of $0.03 or above.
In June 2019, Mr Green’s salary was set at $230,000 per annum plus minimum statutory superannuation
contribution. As at the date of this report, the executive service agreement has not been signed and Mr Green
has resigned, the Executive Options were issued on 21 November 2019 and vested on completion of the above
milestones.
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LINDIAN RESOURCES LTD
REMUNERATION REPORT (AUDITED)
For the year ended 30 June 2020
Non-Executive Directors
Each non-executive director has a written agreement with the Company that covers all aspects of their
appointment including term, time commitment required, remuneration, disclosure of interests that may affect
independence, guidance on complying with the Company’s corporate governance policies and the right to seek
independent advice, indemnity and insurance arrangements, rights of access to the Company’s information and
ongoing confidentiality obligations as well as roles on the Company’s committees.
The aggregate remuneration that can be paid to Non-Executive Directors excluding share-based payments or
other employee benefits, has been set at an amount not to exceed $240,000 per annum. This amount may only
be increased with the approval of Shareholders at a general meeting.
Share-based compensation
Issue of shares
There were no shares issued to directors and other key management personnel as part of compensation during
the year ended 30 June 2020 (2019: nil).
Options
Except for the options issued to Mr Green, there were no unlisted options granted over ordinary shares during
the current year affecting remuneration of directors and other key management personnel.
Additional disclosures relating to key management personnel
Key Management Personnel Options
The numbers of options over ordinary shares in the company held during the financial year by each key
management personnel of Lindian Resources Limited, including their personally related parties, are set out
below:
2020
Vested option
Directors
Mr. Asimwe Kabunga
Mr. Shannon Green1
Mr. Matthew Bull
Balance at
the start of
the
year/
appointment
10,000,000
-
4,000,000
14,000,000
Options
purchased
Options
granted
Options
expired
Balance at
the end of
the
year/
resignation
-
-
-
-
12,500,000
20,000,000
-
32,500,000
-
-
-
-
22,500,000
20,000,000
4,000,000
46,500,000
1.
Shannon Green appointed Managing Director on 14 June 2019, resigned 30 June 2020.
Exercisable
22,500,000
20,000,000
4,000,000
46,500,000
Non-
exercisable
-
-
-
-
2019
Vested option
Directors
Mr. Asimwe Kabunga
Mr. Shannon Green1
Mr. Matthew Bull
Mr. Steve Formica2
Balance at
the start of
the
year/
appointment
21,000,000
-
16,500,000
13,133,334
50,633,334
Options
purchased
Options
granted
Options
expired
Balance at
the end of
the
year/
resignation
-
-
-
-
-
-
-
-
-
-
(11,000,000)
-
(12,500,000)
(5,633,334)
(29,133,334)
10,000,000
-
4,000,000
7,500,000
21,500,000
1.
2.
Shannon Green appointed Managing Director on 14 June 2019, resigned 30 June 2020.
Steve Formica resigned as Non-Executive Director on 13 June 2019.
Exercisable
10,000,000
-
4,000,000
7,500,000
21,500,000
Non-
exercisable
-
-
-
-
-
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LINDIAN RESOURCES LTD
REMUNERATION REPORT (AUDITED)
For the year ended 30 June 2020
Key Management Personnel Share holdings (including Performance Shares)
The number of shares in the Company held during the financial year by each key management personnel of
Lindian Resources Limited, including their personally related parties, is set out below. There were no shares
granted during the reporting period as compensation.
2020
Directors
Mr. Asimwe Kabunga2
Mr. Shannon Green1
Mr. Matthew Bull3
Balance at
the start of the
year/
appointment
64,775,000
-
28,500,000
93,275,000
Shares
purchased
Shares disposed /
transferred
Performance shares
granted / (expired)
Balance at the end
of the
year/
resignation
16,750,000
-
-
16,750,000
-
-
-
-
25,500,000
-
-
25,500,000
107,025,000
-
28,500,000
135,525,000
1.
2.
3.
Shannon Green appointed Managing Director on 14 June 2019, resigned 30 June 2020.
Shares held by Asimwe Kabunga includes 70,275,000 ordinary shares and 36,750,000 Performance shares. During the year the
company issued 10,625,000 Stage 1 Performance rights and 14,875,000 Stage 2 Performance right in respect of the Gaoual
Bauxite Project (Refer to Note 15f).
Shares held by Matthew Bull includes 24,250,000 ordinary shares and 4,250,000 Class B Performance shares.
2019
Directors
Mr. Asimwe Kabunga1
Mr. Shannon Green2
Mr. Matthew Bull3
Mr. Steve Formica4
Balance at
the start of the
year/
appointment
76,025,000
-
32,750,000
14,687,689
123,426,689
Shares
purchased
Shares disposed /
transferred
Performance
shares granted /
(expired)
Balance at the end
of the
year/
resignation
-
-
-
-
-
-
-
-
(14,687,689)
(14,687,689)
(11,250,000)
-
(4,250,000)
-
(15,500,000)
64,775,000
-
28,500,000
-
93,275,000
1.
2.
3.
4.
Shares held by Asimwe Kabunga includes 53,525,000 ordinary shares and 11,250,000 Class B Performance shares.
Shannon Green appointed Managing Director on 14 June 2019.
Shares held by Matthew Bull includes 24,250,000 ordinary shares and 4,250,000 Class B Performance shares.
Steve Formica resigned as Non-Executive Director on 13 June 2019.
Other transactions with key management personnel
There were no other transactions with key management personnel during the year.
Group performance and its consequences on shareholder wealth
It is not possible at this time to evaluate the Group’s financial performance using generally accepted measures
such as profitability and total shareholder return as the Group is focussed on exploration activities with no
significant revenue stream. This assessment will be developed as and when the Groups moves from explorer to
producer.
The table below shows the gross revenue, losses and loss per share for the last five years for the Group:
2020
2019
2018
2017
2016
Revenue and other income
Net loss
Loss per share
Share price at year end
$
$
Cents
Cents
58,703
(1,862,151)
(0.35)
0.011
719
(765,688)
(0.21)
0.011
4,810
1,541
2,247
(2,621,576)
(872,075)
(462,003)
(0.98)
0.015
(0.43)
0.018
(0.05)
0.010
End of remuneration report
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LINDIAN RESOURCES LTD
DIRECTORS’ REPORT
For the year ended 30 June 2020
INTERESTS IN THE SECURITIES OF THE COMPANY
As at the date of this report, the interests of the Directors in the securities of Lindian Resources Limited are:
Director
Ordinary Shares
Class B Performance
shares
Unlisted Options over
Ordinary Shares
exercisable at 2 cents
each
Mr. Asimwe Kabunga
Mr. Shannon Green
Mr. Matthew Bull
Mr. Giacomo Fazio
Mr. Yves Occello
70,275,000
-
24,250,000
-
-
11,250,000
-
4,250,000
-
-
22,500,000
20,000,000
4,000,000
-
-
RESULTS OF OPERATIONS
The Group’s net loss after taxation attributable to the members for the year to 30 June 2020 was $1,796,601
(2019: $737,085) and the net assets of the Group at 30 June 2020 were $2,514,450 (2019: $737,368).
DIVIDENDS
No dividend was paid or declared by the Company during the year and up to the date of this report.
CORPORATE STRUCTURE
Lindian Resources Limited is a company limited by shares, which is incorporated and domiciled in Australia.
NATURE OF OPERATIONS AND PRINCIPAL ACTIVITIES
During the financial year, the principal activity was mineral exploration.
REVIEW OF OPERATIONS
Operations Report June 2020
Gaoual Bauxite Project - Guinea
The Gaoual Bauxite Project is located in the north west of Guinea, West Africa. The project area is located within
a known bauxite mining province, is relatively close to the coastal port of Kamsar, the mining centre of Sangaredi,
and is a day’s drive from the capital of Guinea, Conakry.
The Project is Permit No. 22584 as labelled within the Ministry of Mines Geology database and is owned by KB
Bauxite Guinee SARLU,a registered Guinean company. The Permit was applied for on 12 March 2019 and the
application was approved by the Ministry of Mines in August 2019. Lindian Resources has held an exclusive
option agreement with KB Bauxite Guinee SARLU since 10 April 2019.
The Project is close to essential infrastructure, a key requirement for all direct shipping ore projects. The Gaoual
Bauxite Project is very well strategically placed to take advantage of this infrastructure given its location in an
existing high-quality significant bauxite mining province.
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LINDIAN RESOURCES LTD
DIRECTORS’ REPORT
For the year ended 30 June 2020
Figure 5: Proximity to Large scale Bauxite mining operations connected to railway operations
Mapping and reconnaissance sampling undertaken during 2019 identified two mineralised zones, the Bouba
conglomeratic bauxite deposit and the Mamaya bauxite deposit. During the first half of 2020, an extensive drill
program was undertaken on both deposits; the Bouba deposit on a 300m drill spacing and the Mamaya deposit
on a 600m drill spacing suitable for mineral resource estimation.
The drilling program included 131 shallow HQ auger drill holes over the Bouba deposit and these intersected
very high grade material and continuous mineralisation. Drilling of the Mamaya deposit also showed continuous
intersections and mineralised bauxite results from most of the 34 holes completed.
Figure 1 – Drill rig in action at the Gaoual project
All samples were logged, weighed, and sub-sampled by Lindian Resources contractors with a chain of ownership
from the drill rig through to the sample analysis facilities. Sample preparation and sample analysis was
completed by the Bureau Veritas (Bamako) and Bureau Veritas (Perth) laboratories respectively. Duplicate
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LINDIAN RESOURCES LTD
DIRECTORS’ REPORT
For the year ended 30 June 2020
samples, blanks and certified bauxite standards were inserted into the sample sequence to test and validate
sampling methodologies and laboratory sample preparation and analysis methods and practices.
Post-Year End
The field work conducted during the financial year culminated in the reporting of a significant and high grade
maiden JORC mineral resource on the Bouba Conglomerate Bauxite deposit in July 2020, post the end of the
financial year.
All 1,374 samples were analysed through XRF and a smaller population of 126 samples was selected for low and
high temperature micro digest test work. At every level of the testing of the repeatability of the analysis, there
was a very high level of confirmation, from the sample preparation duplicates through to the standards.
Deposit
Drill spacing
No of drill holes
Bouba
Mamaya
300m
600m
Table 1 – Drill hole and sample overview
131
34
Total metres
drilled (m)
871
295
No of samples analysed:
XRF
1027 (153 QAQC)
347 (52 QAQC)
Bomb digest
106 (6 QAQC)
20 (2 QAQC)
Figure 2 – Location of drill holes at the Gaoual Project
Micro digest testwork was performed to give insight into the suitability of the ore for low and high temperature
digestion. Results from the testwork performed on the 106 samples taken from the Bouba plateau indicated
that gibbsite was the dominant alumina hydrate containing mineral.
Al2O3
SiO2
Fe2O3
LOI
Total Available
Alumina
Reactive Silica
Bouba Main
Bouba North
Bouba South
%
56.1
51.8
56.2
%
6.2
11.0
10.0
%
7.9
9.9
7.4
%
Low Temp High Temp
Low Temp High Temp
26.3
24.1
21.7
80%
76%
63%
92%
82%
85%
49%
54%
38%
95%
92%
89%
Table 2 – Digestion Testwork Results
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LINDIAN RESOURCES LTD
DIRECTORS’ REPORT
For the year ended 30 June 2020
Cube Consulting (Cube) was engaged by the Company to produce a mineral resource estimate (MRE) for the
Gaoual Bauxite Project. The estimate was undertaken for the Bouba Conglomerate Bauxite deposit. The resource
has been estimated using ordinary kriging, and a total resource using a 40% Al2O3 cut-off grade and a higher-
grade component at 45% Al2O3 cut-off grade was determined.
The process and procedures that were used for the MRE included geological interpretation of the base of
bauxite, data selection, exploratory data analysis and variography, estimation by ordinary kriging (OK) for Al2O3,
Fe2O3, LOI, SiO2 and TiO2, and model validation. The outputs for this estimate by Cube was two Datamine block
models.
Cut off
Total Resource
(40% Al2O3)
High Grade Resource
(45% Al2O3)
Resource
Classification
Resource
(Mt)
Al2O3
Fe2O3
SiO2
TiO2
LOI
Indicated
101.5
49.8%
12.3%
11.5%
3.0%
23.0%
Indicated
83.8
51.2%
11.0%
11.0%
3.0%
23.5%
Table 3 -Resource at different cut-off grades
Resource estimation work completed upon the Bouba deposit shows all of the bauxite is near surface and
contains no lower grade bauxite as overburden or intraburden material.
Tanzania - Lushoto and Pare Bauxite Projects & Uyowa Gold Project
The Gaoual bauxite asset in Guinea was defined as the Company’s primary focus and so the decision was made
for the Company to focus all of its resources and efforts on this asset. Consequently, there were no activities on
the bauxite or the gold projects in Tanzania during the Financial Year. As a result, the Company has fully impaired
the expenditure on these projects.
Kangankunde Rare Earth Project – Malawi
Lindian has previously announced the commencement of legal action in Malawi in respect of an exclusive option
agreement entered into with Michael Saner and Rift Valley Resource Developments Limited regarding the
Kangankunde Rare Earths Project in Malawi.
The Company obtained an injunction from the High Court of Malawi in November 2018 to prevent Michael Saner
and Rift Valley dealing with the Kangankunde Rare Earths Project and or the shares in Rift Valley, as well as
commenced legal proceedings seeking specific performance/damages. As part of the formal court process, a
mediation hearing was conducted on 16 April 2019 with no resolution agreed to by the parties.
On 4 November 2019 and 5 November 2019, the High Court of Malawi hearing was held and the Company filed
its closing submissions in accordance with the required 21 day timeframe.
On 7 May 2020, the Company announced that the High Court of Malawi had not ruled in favour of its legal action
in respect of the exclusive option agreement. The Company had six weeks from the date of the judgment to file
an appeal.
Subsequent to the year end
On July 8, 2020 the Company announced that it had filed a notice of appeal. The opinion of the Company’s legal
counsel is that the Company has a strong case and are still awaiting a date for a hearing from the Supreme Court
of Appeals.
On 23 July 2020, the Company received further correspondence from legal counsel representing Saner and RVR
which detailed an out-of-court offer to settle. The Company is currently reviewing this information and will
continue its legal appeals process. Lindian remains committed to seeking to enforce specific performance of the
agreement or financial damages which will include actual and consequential losses.
13
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LINDIAN RESOURCES LTD
DIRECTORS’ REPORT
For the year ended 30 June 2020
Competent Person’s Statement – Guinea
The information in this report that relates to exploration results for the Gaoual Bauxite Project is based on
information compiled or reviewed by Mr Mark Gifford, an independent Geological expert consulting to Lindian
Resources Limited. Mr Mark Gifford is a Fellow of the Australian Institute of Mining and Metallurgy and has
sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and
to the activity which he is undertaking to qualify as a Competent Person as defined in the December 2012 edition
of the “Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves” (JORC
Code). Mr Gifford consents to the inclusion in the announcement of the matters based on his information in the
form and context in which it appears.
Competent Person’s Statement – Tanzania
The information in this report that relates to exploration results for the Lushoto, Pare and Uyowa Projects is
based on information compiled or reviewed by Mr Matt Bull, who is a director of Lindian Resources Limited. Mr
Bull is a member of the Australian Institute of Geoscientists and has sufficient experience which is relevant to the
style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to
qualify as a Competent Person as defined in the December 2012 edition of the “Australasian Code for Reporting
of Exploration Results, Mineral Resources and Ore Reserves” (JORC Code). Mr Bull consents to the inclusion in
the announcement of the matters based on his information in the form and context in which it appears.
Tenement Listing
Project
Country
Licence Number
Status
Licence Type
Area
Gaoual Project*
Lushoto Project**
Lushoto Project**
Lushoto Project**
Lushoto Project**
Lushoto Project**
Lushoto Project**
Lushoto Project**
Pare Project**
Pare Project**
Pare Project**
Pare Project**
Uyowa Project
Uyowa Project
Uyowa Project
Uyowa Project
Uyowa Project
Uyowa Project
Uyowa Project
Uyowa Project
Guinea
Tanzania
Tanzania
Tanzania
Tanzania
Tanzania
Tanzania
Tanzania
Tanzania
Tanzania
Tanzania
Tanzania
Tanzania
Tanzania
Tanzania
Tanzania
Tanzania
Tanzania
Tanzania
Tanzania
22584
PL 11176/2018
PL 11177/2018
PL 11178/2018
PL 11262/2019
PL 12194/2017
PL 12195/2017
PL 12227/2017
PL 11263/2019
PL 14098/2019
PL 14099/2019
PL 14100/2019
PL 10918/2016
PML002241CWZ
PML002237GWZ
PML002240CWZ
PML002238CWZ
PML002242CWZ
PML002243CWZ
PML002239CWZ
Granted
Granted
Granted
Granted
Granted
Application
Application
Application
Granted
Application
Application
Application
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Prospecting
Prospecting
Prospecting
Prospecting
Prospecting
Prospecting
Prospecting
Prospecting
Prospecting
Prospecting
Prospecting
Prospecting
Prospecting
Primary Mining
Primary Mining
Primary Mining
Primary Mining
Primary Mining
Primary Mining
Primary Mining
332.32 km2
0.26 km2
49.3 km2
3.64 km2
23.02 km2
90.25 km2
44.94 km2
24.87 km2
73.84 km2
1.52 km2
1.47 km2
1.36 km2
27.08 km2
0.08 km2
0.08 km2
0.03 km2
0.06 km2
0.07 km2
0.08 km2
0.08 km2
* Lindian Resources interest in this license is subject to completion occurring under an option agreement. Refer
to the ASX announcement dated 10 April 2019 for full details of the consideration payable under the option
agreement.
** Lindian Resources interest in these licenses is via a 51% stake in East Africa Bauxite Limited.
14
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LINDIAN RESOURCES LTD
DIRECTORS’ REPORT
For the year ended 30 June 2020
Corporate
In August 2019, the Company completed a $1.3M Placement raising circa $1.1M through the issue of 70,937,500
shares at $0.016 per share. Each share under the Placement received a 1:1 free option exercisable at $0.02 per
share expiring three years from date of issue.
In November 2019, the Company completed a $500k Placement through the issue of 31.25 million shares at
$0.016 per share. Each share under the Placement received a 1:2 free option (15,625,000 unlisted options)
exercisable at $0.02 per share expiring three years from date of issue.
At the Company’s Annual General Meeting on 15 November 2019 the following share and option issues were
approved and have been subsequently allotted:
•
•
•
•
•
•
•
10,000,000 shares issued as part of the Lushoto Bauxite Project consideration of which 7 million shares
are subject to voluntary 6 month escrow;
5,000,000 shares issued as part consideration for the Gaoul Bauxite Project in Guinea subject to
voluntary 3 month escrow;
Issue of 68,750,000 unlisted options with an exercise price of $0.02 with a tenor of three years from
the date of issue as part of the $1.3M Placement announced to the market on 24 July 2019;
Issue of 5,000,000 unlisted broker options with an exercise price of $0.02 and a tenor of three years
from the date of issue;
Issue of 20,000,000 unlisted Managing Director incentive options which vested on completion of the
two milestones:
o 10,000,000: When the Company received shareholder approval for the purpose of proceeding
with the Gaoual Bauxite Project in Guinea on similar terms to those set out in the Company’s
ASX announcement dated 10 April 2019;
o 10,000,000: The Company achieved a 10 day VWAP share price of $0.03 or above.
(both milestones have an expiry date of 30 June 2021)
Issue of 10,000,000 unlisted options with an exercise price of $0.03 and an expiry date of 31 Dec 2021
issued to a former Director.
Issue of 12,500,000 Stage 1 Performance Rights and 17,500,000 Stage 2 Performance Rights that
convert on the satisfaction of the following milestones. Each Performance Right converts into 1 share
for nil consideration.
o
o
Stage 1 Milestone: The Company identifying and establishing an initial JORC Code compliant
resource containing a minimum of 65m tonnes with an average grade greater than 45% AI203
with less than 5% SI02 reactive silica being defined in relation to the Gaoual Bauxite Project
and announced on ASX;
Stage 2 Milestone: The Company completing a Preliminary Feasibility Study in relation to the
Gaoual Bauxite Project.
•
•
(Both Milestones expire 24 months after Completion of the Guinea Bauxite Agreement).
Issue of 2,000,000 unlisted incentive options to the Company’s long term consulting project geologist.
Issue of 76,637,500 shares on the valid exercise of unlisted options at $0.02 per share to raise
$1,532,750.
On 17 March 2020, Mr Nick Day resigned as Company Secretary and CFO, Ms Susan Hunter was appointed
Company Secretary.
On 26 May 2020, the Company announced the resignation of Managing Director, Mr Shannon Green and
appointment of Non-Executive Director Mr Giacomo Fazio.
SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS
There have been no other significant changes in the state of affairs of the Group during the financial year.
SIGNIFICANT EVENTS AFTER THE BALANCE DATE
On 8 July 2020, the Company announced that a notice of appeal had been filed in respect of the exclusive option
agreement for the Kangankunde Rare Earths Project in Malawi. After receiving the record, the Supreme Court
15
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LINDIAN RESOURCES LTD
DIRECTORS’ REPORT
For the year ended 30 June 2020
of Appeal will set a date for hearing the arguments of both parties and will then make its judgement. A further
update to market will be made at that time.
On 15 July 2020, the Company announced a maiden resource for the Bouba Plateaux at the Company’s Gaoual
Project in Guinea. A total JORC compliant Indicated Resource of 102M at 49.8% Al2O3 has been defined using a
cut-off of 40% Al2O3. The Resource includes high grade areas with 84Mt at 51.2% Al2O3 using a higher cut-off
of 45% Al2O3.
On 24 July 2020, the Company announced receipt of an offer to settle out of court in respect of the exclusive
option agreement for the Kangankunde Rare Earths Project in Malawi. The Company is reviewing the offer and
will discuss with legal counsel before taking action.
On 29 July 2020, the Company announced the appointment of Yves Occello as Non-Executive Director.
On 10 August 2020, the Company announced the appointment of Danny Keating to the role of Chief Executive
Officer.
LIKELY DEVELOPMENTS AND EXPECTED RESULTS OF OPERATIONS
The Directors have excluded from this report any further information on the likely developments in the
operations of the Company and the expected results of those operations in future financial years, as the
Directors believe that it would be speculative and prejudicial to the interests of the Company.
ENVIRONMENTAL REGULATIONS AND PERFORMANCE
The Group is not aware of any breaches in relation to environmental matters.
SHARE OPTIONS
As at the date of this report, there were 222,237,501 unissued ordinary shares under options. The details of the
options at the date of this report are as follows:
Number
Exercise Price $
Expiry Date
112,025,001
10,000,000
20,000,000
80,212,500
0.02
0.03
0.02
0.02
31 December 2020
31 December 2020
30 June 2021
20 November 2022
No option holder has any right under the options to participate in any other share issue of the company or any
other entity.
A total of 133,875,000 (2019:125,000,001) options were issued during the year, 76,637,500 options were
exercised (2019: nil) during the year and no options expired (2019: 60,284,027) during the year.
INDEMNIFICATION AND INSURANCE OF DIRECTORS AND OFFICERS
The Company has made an agreement indemnifying all the Directors and officers of the Company against all
losses or liabilities incurred by each Director or officer in their capacity as Directors or officers of the Company
to the extent permitted by the Corporations Act 2001. The indemnification specifically excludes wilful acts of
negligence. The Company paid insurance premiums in respect of Directors’ and Officers’ Liability Insurance
contracts for current officers of the Company, including officers of the Company’s controlled entities. The
liabilities insured are damages and legal costs that may be incurred in defending civil or criminal proceedings
that may be brought against the officers in their capacity as officers of entities in the Group. The total amount
of insurance premiums paid has not been disclosed due to confidentiality reasons.
16
For personal use only
LINDIAN RESOURCES LTD
DIRECTORS’ REPORT
For the year ended 30 June 2020
PROCEEDINGS ON BEHALF OF COMPANY
No person has applied for leave of court to bring proceedings on behalf of the Company or intervene in any
proceedings to which the Company is a party for the purpose of taking responsibility on behalf of the Company
for all or any part of those proceedings. The Company was not a party to any such proceedings during the year.
INDEMNITY AND INSURANCE OF AUDITOR
The Company has not, during or since the end of the financial year, indemnified or agreed to indemnify the
auditor of the company or any related entity against a liability incurred by the auditor.
CORPORATE GOVERNANCE
A copy of Lindian’s 2020 Corporate Governance Statement, which provides detailed information about
governance, and a copy of Lindian’s Appendix 4G which sets out the Company’s compliance with the
in the fourth edition of the ASX Corporate Governance Council’s Principles and
recommendations
is available on the corporate governance section of the Company’s website at
Recommendations
https://www.lindianresources.com.au/corporate.
AUDITOR INDEPENDENCE AND NON-AUDIT SERVICES
Section 307C of the Corporations Act 2001 requires the Company’s auditors to provide the Directors of Lindian
Resources Limited with an Independence Declaration in relation to the audit of the full year financial report. A
copy of that declaration forms part of this report.
There were no non-audit services provided by the Company’s auditor.
Signed on behalf of the Board in accordance with a resolution of the Directors.
Asimwe Kabunga | Executive Chairman
11 September 2020
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LINDIAN RESOURCES LTD
FINANCIAL STATEMENTS
For the year ended 30 June 2020
Consolidated Statement of Profit or Loss and Other Comprehensive
Income
For the year ended 30 June 2020
Revenue
Interest income
Other income
Expenses
Depreciation / immediate asset write-off
Consulting and directors’ fees
Share based payments
Impairment of exploration and evaluation assets
Exploration and evaluation expenses
Finance costs
Other expenses
Loss before income tax
Income tax (expense)/benefit
Loss after income tax
Other comprehensive income, net of income tax
Items that may be reclassified subsequently to profit or
loss
Exchange differences on translation of foreign
operations
Other comprehensive loss for the year, net of income
tax
Total comprehensive loss for the year
Loss attributable to:
Owners of Lindian Resources Limited
Non-controlling interests
Total comprehensive loss attributable to:
Owners of Lindian Resources Limited
Non-controlling interests
Note
4
5
2020
$
378
58,325
(10,704)
(137,585)
(336,464)
(511,876)
(75,853)
(1,954)
(846,418)
(1,862,151)
-
(1,862,151)
2019
$
719
-
(9,693)
(195,000)
(28,299)
-
(46,412)
(26,314)
(460,689)
(765,688)
-
(765,688)
4,310
(2,323)
4,310
(1,857,841)
(2,323)
(768,011)
(1,796,601)
(65,550)
(1,862,151)
(1,794,146)
(63,695)
(1,857,841)
(737,085)
(28,603)
(765,688)
(738,270)
(29,741)
(768,011)
Loss per share attributable to owners of Lindian
Resources Limited
Basic and diluted loss per share (cents per share)
21
(0.35)
(0.21)
The accompanying notes form part of these financial statements.
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LINDIAN RESOURCES LTD
FINANCIAL STATEMENTS
For the year ended 30 June 2020
Consolidated Statement of Financial Position
As at 30 June 2020
Current Assets
Cash and cash equivalents
Trade and other receivables
Prepayments
Total current assets
Non-current Assets
Deferred exploration and evaluation expenditure
Property, plant and equipment
Total non-current assets
Total assets
Current Liabilities
Trade and other payables
Unearned income
Provisions
Borrowings
Total current liabilities
Net assets
Equity
Share capital
Reserves
Accumulated losses
Non-controlling interests
Total equity
Note
6
7
8
9
10
11
12
13
14
15
16
17
2020
$
614,098
40,042
18,507
672,647
1,938,156
30,741
1,968,897
2,641,544
104,639
11,665
-
10,790
127,094
2,514,450
2019
$
37,019
6,163
45,636
88,818
1,031,706
41,445
1,073,151
1,161,969
258,853
-
748
165,000
424,601
737,368
32,424,788
9,717,466
(39,534,368)
2,607,886
(93,436)
2,514,450
29,126,329
9,378,547
(37,737,767)
767,109
(29,741)
737,368
The accompanying notes form part of these financial statements.
19
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LINDIAN RESOURCES LTD
FINANCIAL STATEMENTS
For the year ended 30 June 2020
Consolidated Statement of Cash Flows
For the year ended 30 June 2020
Cashflows from Operating Activities
Government incentive received
Payments to suppliers and employees
Interest received
Finance costs
Net cash used in operating activities
Cashflows from Investing Activities
Payments for exploration expenditure
Payments for plant and equipment
Net cash used in investing activities
Cashflows from Financing Activities
Proceeds from issue of shares
Proceeds from borrowings
Repayment of borrowings
Share issue costs
Net cash from financing activities
Net increase/(decrease) in cash held
Cash and cash equivalents at beginning of period
Cash and cash equivalents as at year end
Note
2020
$
2019
$
19,950
(1,167,218)
378
(1,954)
(1,148,844)
(1,298,326)
-
(1,298,326)
3,152,750
35,966
(25,176)
(139,291)
3,024,249
577,079
37,019
614,098
6
14
14
6
-
(597,680)
719
(45,914)
(642,875)
(551,911)
(3,040)
(554,951)
1,500,000
174,139
(349,139)
(94,584)
1,230,416
32,590
4,429
37,019
The accompanying notes form part of these financial statements.
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LINDIAN RESOURCES LTD
FINANCIAL STATEMENTS
For the year ended 30 June 2020
Consolidated Statement of Changes in Equity
For the year ended 30 June 2020
Accumulated
Share capital
$
losses Option reserve
$
$
Share-based
payment
reserve
$
Foreign
currency
translation
reserve
$
Attributable to
the owners of
Lindian
Resources
$
Non-controlling
interests
$
At 1 July 2018
Loss for the year
Other comprehensive loss
Total comprehensive loss
Transactions with owners in their
capacity as owners
Shares issued
Cost of share issue
Share based payments
Options issued
At 30 June 2019
At 1 July 2019
Loss for the year
Other comprehensive loss
Total comprehensive loss
Transactions with owners in their
capacity as owners
Shares issued
Cost of share issue
Share based payments
At 30 June 2020
27,492,524
-
-
-
(37,000,682)
(737,085)
-
(737,085)
1,890,000
(256,195)
-
-
29,126,329
29,126,329
-
-
-
-
-
-
-
(37,737,767)
(37,737,767)
(1,796,601)
-
(1,796,601)
3,437,750
(139,291)
-
32,424,788
-
-
-
(39,534,368)
The accompanying notes form part of these financial statements.
4,106,626
-
-
-
-
-
-
-
4,106,626
4,106,626
-
-
-
-
-
-
4,106,626
4,861,778
-
-
-
-
-
28,299
383,029
5,273,106
5,273,106
-
-
-
-
-
336,464
5,609,570
-
-
(1,185)
(1,185)
-
-
-
-
(1,185)
(1,185)
-
2,455
2,455
-
-
-
1,270
(539,754)
(737,085)
(1,185)
(738,270)
1,890,000
(256,195)
28,299
383,029
767,109
767,109
(1,796,601)
2,455
(1,794,146)
3,437,750
(139,291)
336,464
2,607,886
-
(28,603)
(1,138)
(29,741)
-
-
-
-
(29,741)
(29,741)
(65,550)
1,855
(63,695)
-
-
-
(93,436)
Total equity
$
(539,754)
(765,688)
(2,323)
(768,011)
1,890,000
(256,195)
28,299
383,029
737,368
737,368
(1,862,151)
4,310
(1,857,841)
3,437,750
(139,291)
336,464
2,514,450
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LINDIAN RESOURCES LTD
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2020
Corporate Information
Notes to the Financial Statements
1.
The financial report of Lindian Resources Limited (“Lindian Resources” or “the Company”) and its controlled
entities (“the Group”) for the year ended 30 June 2020 was authorised for issue in accordance with a resolution
of the Directors 11 September 2020.
Lindian Resources Limited is a company limited by shares incorporated in Australia whose shares are publicly
traded on the Australian Securities Exchange.
Summary of Significant Accounting Policies
Basis of preparation
2.
(a)
The financial report is a general-purpose financial report, which has been prepared in accordance with Australian
Accounting Standards, Australian Accounting Interpretations, other authoritative pronouncements of the
Australian Accounting Standards Board and the Corporations Act 2001. The Group is a for-profit entity for
financial reporting purposes under Australian Accounting Standards.
The financial report has been prepared on an accrual basis and is based on historical costs, modified, where
applicable, by the measurement at fair value of selected non-current assets, financial assets and financial
liabilities. Material accounting policies adopted in preparation of this financial report are presented below and
have been consistently applied unless otherwise stated.
The presentation currency is Australian dollars.
Going Concern
This report has been prepared on the going concern basis, which contemplates the continuity of normal business
activity and the realisation of assets and settlement of liabilities in the normal course of business.
The Group incurred a net loss after tax for the year ended 30 June 2020 of $1,862,151 and experienced net cash
outflows from operating activities of $1,148,844. At 30 June 2020, the cash and cash equivalents balance was
$614,098.
The ability of the Group to continue as a going concern is principally dependent upon the ability of the Company
raising capital from equity and debt markets as completed during the year and subsequent to the year ended 30
June 2020 and managing cashflow in line with available funds.
The Directors have prepared a cash flow forecast, which indicates that the Group will have sufficient cash flows
to meet all currently forecasted commitments and working capital requirements for the 12 month period from
the date of signing this financial report.
During the year the Company raised $3,152,750 from equity markets and the exercise of options (before costs)
The Company may need to raise further capital in order to fund future exploration programs.
Based on the cash flow forecasts, and other factors referred to above, the directors are satisfied that the going
concern basis of preparation is appropriate. In particular, given the Company’s history of raising capital to date,
the Directors are confident of the Company’s ability to raise additional funds as and when they are required,
should the need arise.
However, if the Group is not successful in securing sufficient funds through capital raising or exercise of options,
there is a material uncertainty that may cast significant doubt on whether the Group is able to continue as a
going concern and as to whether the Group will be able to realise its assets and extinguish its liabilities in the
normal course of business and at amounts stated in the financial statements. The financial statements do not
include any adjustments relating to the recoverability and classification of asset carrying amounts or to the
amount and classification of liabilities that might result should the Group be unable to continue as a going
concern and meet its debts as and when they fall due.
22
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LINDIAN RESOURCES LTD
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2020
Parent entity information
(b)
In accordance with the Corporations Act 2001, these financial statements present the results of the Group only.
Supplementary information about the parent entity is disclosed in note 28.
Compliance statement
(c)
Australian Accounting Standards set out accounting policies that the AASB has concluded would result in a
financial report containing relevant and reliable information about transactions, events and conditions.
Compliance with Australian Accounting Standards ensures that the financial statements and notes also comply
with International Financial Reporting Standards.
Adoption of new and revised standards
(d)
Standards and Interpretations applicable to 30 June 2020
In the year ended 30 June 2020, the Directors have reviewed all new and revised Standards and Interpretations
issued by the AASB that are relevant to the Group and effective for the current annual reporting period. Those
which are relevant to the Group are set out below.
AASB 16 Leases supersedes AASB 117 Leases.
The Group has adopted AASB 16 from 1 July 2019 which has resulted in changes in the classification,
measurement and recognition of leases. The changes result in almost all leases where the Group is the lessee
being recognised in the Statement of Financial Position and removes the former distinction between `operating'
and `finance' leases. The new standard requires recognition of a right-of-use asset (the leased item) and a
financial liability (to pay rentals). The exceptions are short-term leases and leases of low value assets.
The Group has adopted AASB 16 using the modified retrospective approach under which the reclassifications
and the adjustments arising from the new leasing rules are recognised in the opening Condensed Statement of
Financial Position on 1 July 2019. Under this approach, there is no initial impact on accumulated losses, and
comparatives have not been restated.
Impact on adoption of AASB 16
All Group leases have a term of less than 12 months or relate to low value assets and the Group has applied the
optional exemptions to not capitalise these leases and instead account for the lease expense on a straight-line
basis over the lease term.
The Company has no such lease arrangements that require recognition under AASB 16 and therefore, the
adoption of AASB 16 resulted in the recognition of right-of-use assets of $nil and lease liabilities of $nil in respect
of all operating leases. The net impact on accumulated losses on 1 July 2019 was $nil.
Basis of consolidation
(e)
The consolidated financial statements comprise the financial statements of Lindian Resources Limited and its
subsidiaries as at 30 June each year (‘the Company’).
Subsidiaries are all those entities (including special purpose entities) over which the Company has control. The
Company controls an entity when the company is exposed to, or has rights to, variable returns from its
involvement with the entity and has the ability to affect those returns through its power to direct the activities
of the entity.
The financial statements of the subsidiaries are prepared for the same reporting period as the parent Company,
using consistent accounting policies.
In preparing the consolidated financial statements, all intercompany balances and transactions, income and
expenses and profit and losses resulting from intra-company transactions have been eliminated in full.
Subsidiaries are fully consolidated from the date on which control is obtained by the Company and cease to be
consolidated from the date on which control is transferred out of the Company.
23
For personal use only
LINDIAN RESOURCES LTD
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2020
The acquisition of subsidiaries is accounted for using the acquisition method of accounting. The acquisition
method of accounting involves recognising at acquisition date, separately from goodwill, the identifiable assets
acquired, the liabilities assumed and any non-controlling interest in the acquiree. The identifiable assets
acquired, and the liabilities assumed are measured at their acquisition date fair values.
The difference between the above items and the fair value of the consideration (including the fair value of any
pre-existing investment in the acquiree) is goodwill or a discount on acquisition.
A change in the ownership interest of a subsidiary that does not result in a loss of control is accounted for as an
equity transaction.
Foreign currency translation
(f)
Functional and presentation currency
Items included in the financial statements of each of the Company’s entities are measured using the currency of
the primary economic environment in which the entity operates (‘the functional currency’). The functional and
presentation currency of Lindian Resources Limited is Australian Dollars. The functional currency of the
Tanzanian subsidiary is Tanzanian shilling and the functional currency of the Cameroonian subsidiary is Central
African Franc.
Transactions and balances
Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at
the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such
transactions and from the translation at year end exchange rates of monetary assets and liabilities denominated
in foreign currencies are recognised in the statement of comprehensive income.
Group entities
The results and financial position of all the Company entities (none of which has the currency of a
hyperinflationary economy) that have a functional currency different from the presentation currency are
translated into the presentation currency as follows:
•
•
•
assets and liabilities for each statement of financial position presented are translated at the closing rate
at the date of that statement of financial position;
income and expenses for each statement of comprehensive income are translated at average exchange
rates (unless this is not a reasonable approximation of the rates prevailing on the transaction dates, in
which case income and expenses are translated at the dates of the transactions); and
all resulting exchange differences are recognised as a separate component of equity.
On consolidation, exchange differences arising from the translation of any net investment in foreign entities are
taken to foreign currency translation reserve.
When a foreign operation is sold or any borrowings forming part of the net investment are repaid, a
proportionate share of such exchange differences are recognised in profit or loss, as part of the gain or loss on
sale where applicable.
Impairment of non-financial assets
(g)
The Group assesses at each reporting date whether there is an indication that an asset may be impaired. If any
such indication exists, or when annual impairment testing for an asset is required, the Group makes an estimate
of the asset’s recoverable amount. An asset’s recoverable amount is the higher of its fair value less costs to sell
and its value in use and is determined for an individual asset, unless the asset does not generate cash inflows
that are largely independent of those from other assets of the Group and the asset's value in use cannot be
estimated to be close to its fair value. In such cases the asset is tested for impairment as part of the cash
generating unit to which it belongs. When the carrying amount of an asset or cash-generating unit exceeds its
recoverable amount, the asset or cash-generating unit is considered impaired and is written down to its
recoverable amount.
24
For personal use only
LINDIAN RESOURCES LTD
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2020
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. Impairment losses relating to continuing operations are recognised in the statement of comprehensive
income.
An assessment is also made at each reporting date as to whether there is any indication that previously
recognised impairment losses may no longer exist or may have decreased. If such indication exists, the
recoverable amount is estimated. A previously recognised impairment loss is reversed only if there has been a
change in the estimates used to determine the asset’s recoverable amount since the last impairment loss was
recognised. If that is the case the carrying amount of the asset is increased to its recoverable amount. That
increased amount cannot exceed the carrying amount that would have been determined, net of depreciation,
had no impairment loss been recognised for the asset in prior years. Such reversal is recognised in profit or loss.
After such a reversal, the depreciation charge is adjusted in future periods to allocate the asset’s revised carrying
amount, less any residual value, on a systematic basis over its remaining useful life.
Deferred exploration and evaluation expenditure
(h)
Exploration and evaluation expenditure incurred by or on behalf of the Group is accumulated separately for each
area of interest. Such expenditure comprises net direct costs and an appropriate portion of related overhead
expenditure but does not include general overheads or administrative expenditure not having a specific nexus
with a particular area of interest.
Each area of interest is limited to a size related to a known or probable mineral resource capable of supporting
a mining operation.
Exploration and evaluation expenditure for each area of interest is carried forward as an asset provided that one
of the following conditions is met:
•
•
such costs are expected to be recouped through successful development and exploitation of the area
of interest or, alternatively, by its sale; or
exploration and evaluation activities in the area of interest have not yet reached a stage which permits
a reasonable assessment of the existence or otherwise of economically recoverable reserves, and active
and significant operations in relation to the area are continuing.
Expenditure which fails to meet the conditions outlined above is written off. Furthermore, the Directors regularly
review the carrying value of exploration and evaluation expenditure and make write downs if the values are not
expected to be recoverable.
Identifiable exploration assets acquired are recognised as assets at their cost of acquisition, as determined by
the requirements of AASB 6 Exploration for and Evaluation of Mineral Resources. Exploration assets acquired
are reassessed on a regular basis and these costs are carried forward provided that at least one of the conditions
referred to in AASB 6 is met.
Exploration and evaluation expenditure incurred subsequent to acquisition in respect of an exploration asset
acquired, is accounted for in accordance with the policy outlined above for exploration expenditure incurred by
or on behalf of the entity.
Acquired exploration assets are not written down below acquisition cost until such time as the acquisition cost
is not expected to be recovered.
When an area of interest is abandoned, any expenditure carried forward in respect of that area is written off.
Expenditure is not carried forward in respect of any area of interest/mineral resource unless the Group’s rights
of tenure to that area of interest are current.
25
For personal use only
LINDIAN RESOURCES LTD
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2020
Trade and other receivables
(i)
Trade receivables, which generally have 30 – 90 day terms, are recognised and carried at original invoice amount
less an allowance for any uncollectible amounts.
The Group measures the loss allowance for trade and other receivables at an amount equal to lifetime expected
credit loss. The expected credit losses on trade and other receivables are estimated with reference to past
default experience of the debtor and an analysis of the debtor’s current financial position, adjusted for factors
that are specific to the debtor, general economic conditions of the industry in which the debtor operates and an
assessment of both the current and the forecast direction of conditions at the reporting date.
The Group writes off a trade receivable when there is information indicating that the debtor is in severe financial
difficulty and there is no realistic prospect of recovery; for example, when the debtor has been placed under
liquidation or has entered into bankruptcy proceedings, or when the trade receivables are over two years past
due, whichever occurs earlier.
Bad debts are written off when identified.
Cash and cash equivalents
(j)
Cash and cash equivalent in the statement of financial position include cash on hand, deposits held at call with
banks and other short term highly liquid investments with original maturities of three months or less. Bank
overdrafts are shown as current liabilities in the statement of financial position. For the purpose of the statement
of cash flows, cash and cash equivalents consist of cash and cash equivalents as described above and bank
overdrafts.
Property, plant & equipment
(k)
Each asset of property, plant and equipment is carried at cost, less where applicable, any accumulated
depreciation and impairment losses. Plant and equipment are measured on the cost basis less depreciation and
impairment losses.
Plant and equipment
Plant and Equipment is shown at cost less subsequent depreciation for plant and equipment.
Depreciation
Items of plant and equipment are depreciated using the diminishing value method over their estimated useful
lives to the consolidated entity. The depreciation rates used for this class of asset for the current period is as
follows:
•
Plant and Equipment
20%
Assets are depreciated from the date the asset is ready for use. The assets’ residual values and useful lives are
reviewed, and adjusted if appropriate, at each reporting date. An asset’s carrying amount is written down
immediately to its recoverable amount if the asset’s carrying amount is greater than its estimated recoverable
amount. The recoverable amount is assessed on the basis of expected net cash flows that will be received from
the assets continual use or subsequent disposal. The expected cash flows have been discounted to their present
value in determining the recoverable amount. Gains and losses on disposals are determined by comparing
proceeds with the carrying amount. These gains and losses are included in the consolidated statement of profit
or loss and other comprehensive income. When re-valued assets are sold, amounts included in the revaluation
reserve relating to that asset are transferred to retained earnings.
Provisions
(l)
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.
Where the Group expects some or all of a provision to be reimbursed, for example under an insurance contract,
the reimbursement is recognised as a separate asset but only when the reimbursement is virtually certain. The
26
For personal use only
LINDIAN RESOURCES LTD
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2020
expense relating to any provision is presented in the statement of comprehensive income net of any
reimbursement.
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.
Where discounting is used, the increase in the provision due to the passage of time is recognised as a finance
cost.
Trade and other payables
(m)
Liabilities for trade creditors and other amounts are measured at amortised cost, which is the fair value of the
consideration to be paid in the future for goods and services received that are unpaid, whether or not billed to
the Group.
Income tax
(n)
Deferred income tax is provided for on all temporary differences at balance date between the tax base of assets
and liabilities and their carrying amounts for financial reporting purposes.
No deferred income tax will be recognised from the initial recognition of goodwill or of an asset or liability,
excluding a business combination, where there is no effect on accounting or taxable profit or loss.
No deferred income tax will be recognised in respect of temporary differences associated with investments in
subsidiaries if the timing of the reversal of the temporary difference can be controlled and it is probable that the
temporary differences will not reverse in the near future.
Deferred tax is calculated at the tax rates that are expected to apply to the period when the asset is realised or
liability is settled. Deferred tax is charged or credited in the statement of comprehensive income except where
it relates to items that may be charged or credited directly to equity, in which case the deferred tax is adjusted
directly against equity.
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 future tax profits will be available against which
deductible temporary differences can be utilised.
The amount of benefits brought to account or which may be realised in the future is based on tax rates (and tax
laws) that have been enacted or substantially enacted at the balance date and the anticipation that the Group
will derive sufficient future assessable income to enable the benefit to be realised and comply with the
conditions of deductibility imposed by the law.
The carrying amount of deferred tax assets is reviewed at each balance date and only recognised to the extent
that sufficient future assessable income is expected to be obtained.
Income taxes relating to items recognised directly in equity are recognised in equity and not in the statement of
comprehensive income.
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.
Issued capital
(o)
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or
options are shown in equity as a deduction, net of tax, from the proceeds.
27
For personal use only
LINDIAN RESOURCES LTD
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2020
Revenue
(p)
Revenue is recognised to the extent that control of the goods or services has passed and it is probable that the
economic benefits will flow to the Group and the revenue is capable of being reliably measured. The following
specific recognition criteria must also be met before revenue is recognised:
Interest income
Revenue is recognised as the interest accrues (using the effective interest method, which is the rate that exactly
discounts estimated future cash receipts through the expected life of the financial instrument) to the net
carrying amount of the financial asset.
Segment information
(q)
Operating segments are reported in a manner consistent with the internal reporting provided to the chief
operating decision maker. The chief operating decision maker, who is responsible for allocating resources and
assessing performance of the operating segments, has been identified as the Board of Directors of Lindian
Resources Limited.
Earnings per share
(r)
Basic earnings/loss per share
Basic earnings/loss per share is calculated by dividing the profit or loss attributable to equity holders of the
Company, excluding any costs of servicing equity other than dividends, by the weighted average number of
ordinary shares, adjusted for any bonus elements.
Diluted earnings/loss per share
Diluted earnings/loss per share is calculated as net profit or loss attributable to members of the Company,
adjusted for:
•
•
•
the costs of servicing equity (other than dividends);
the after tax effect of dividends and interest associated with dilutive potential ordinary shares that have
been recognised as expenses; and
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 elements.
Goods and services tax (“GST”)
(s)
Revenues, expenses and assets are recognised net of the amount of GST, except where the amount of GST
incurred is not recoverable from the Australian Tax Office. In these circumstances, the GST is recognised as part
of the cost of acquisition of the asset or as part of an item of the expense. Receivables and payables in the
statement of financial position are shown inclusive of GST.
The net amount of GST recoverable from, or payable to, the Australian Tax Office is included as part of
receivables or payables in the statement of financial position.
Cash flows are presented in the statement of cash flows on a gross basis, except for the GST component of
investing and financing activities, which are disclosed as operating cash flows.
Share based payment transactions
(t)
The Group provides benefits to individuals acting as, and providing services similar to employees (including
Directors) of the Group in the form of share based payment transactions, whereby individuals render services in
exchange for shares or rights over shares (“Equity Settled Transactions”).
There is currently an Employee Share Option Plan (ESOP) in place, which provides benefits to Directors and
individuals providing services similar to those provided by an employee.
28
For personal use only
LINDIAN RESOURCES LTD
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2020
The cost of these equity settled transactions with employees is measured by reference to the fair value at the
date at which they are granted. The fair value is determined by using the Black Scholes formula, taking into
account the terms and conditions upon which the instruments were granted.
In valuing equity settled transactions, no account is taken of any performance conditions, other than conditions
linked to the price of the shares of Lindian Resources Limited (“Market Conditions”).
The cost of the equity settled transactions 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
employees become fully entitled to the award (“Vesting date”).
The cumulative expense recognised for equity settled transactions at each reporting date until Vesting Date
reflects (i) the extent to which the vesting period has expired and (ii) the number of awards that, in the opinion
of the Directors of the Group, will ultimately vest. This opinion is formed based on the best available information
at balance date. No adjustment is made for the likelihood of the market performance conditions being met as
the effect of these conditions is included in the determination of fair value at grant date. The statement of
comprehensive income charge or credit for a period represents the movement in cumulative expense recognised
at the beginning and end of the period. No expense is recognised for awards that do not vest, except for awards
where vesting is conditional upon a market condition.
Where 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 increase in the value of the transaction as
a result of the modification, as measured at the date of the modification.
Where an equity settled award is cancelled, it is treated as if it had vested on the date of the 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.
The cost of equity-settled transactions with non-employees is measured by reference to the fair value of goods
and services received unless this cannot be measured reliably, in which case the cost is measured by reference
to the fair value of the equity instruments granted.
Comparative figures
(u)
When required by Accounting Standards, comparatives have been adjusted to conform to changes in
presentation for the current financial year.
Fair value measurement
(v)
When an asset or liability, financial or non-financial, is measured at fair value for recognition or disclosure
purposes, the fair value is based on the price that would be received to sell an asset or paid to transfer a liability
in an orderly transaction between market participants at the measurement date; and assumes that the
transaction will take place either: in the principle market; or in the absence of a principal market, in the most
advantageous market.
Fair value is measured using the assumptions that market participants would use when pricing the asset or
liability, assuming they act in their economic best interest. For non-financial assets, the fair value measurement
is based on its highest and best use. Valuation techniques that are appropriate in the circumstances and for
which sufficient data are available to measure fair value, are used, maximising the use of relevant observable
inputs and minimising the use of unobservable inputs.
Assets and liabilities measured at fair value are classified, into three levels, using a fair value hierarchy that
reflects the significance of the inputs used in making the measurements. Classifications are reviewed each
reporting date and transfers between levels are determined based on a reassessment of the lowest level input
that is significant to the fair value measurement.
29
For personal use only
LINDIAN RESOURCES LTD
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2020
For recurring and non-recurring fair value measurements, external valuers may be used when internal expertise
is either not available or when the valuation is deemed to be significant. External valuers are selected based on
market knowledge and reputation. Where there is a significant change in fair value of an asset or liability from
one period to another, an analysis is undertaken, which includes a verification of the major inputs applied in the
latest valuation and a comparison, where applicable, with external sources of data.
Critical accounting estimates and judgements
(w)
Estimates and judgements are continually evaluated and are based on historical experience and other factors,
including expectations of future events that may have a financial impact on the entity and that are believed to
be reasonable under the circumstances.
The Group makes estimates and assumptions concerning the future. The resulting accounting estimates will, by
definition, seldom equal the related actual results. The estimates and assumptions that have a significant risk of
causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are
discussed below.
Capitalised exploration and evaluation expenditure
The future recoverability of capitalised exploration and evaluation expenditure is dependent on a number of
factors, including whether the Group decides to exploit the related lease itself or, if not, whether it successfully
recovers the related exploration and evaluation asset through sale.
Factors which could impact the future recoverability include the level of proved, probable and inferred mineral
resources, future technological changes which could impact the cost of mining, future legal changes (including
changes to environmental restoration obligations) and changes to commodity prices.
To the extent that capitalised exploration and evaluation expenditure is determined not to be recoverable in the
future, this will reduce profits and net assets in the period in which this 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.
Share based payment transactions
The Group measures the cost of equity settled transactions with employees or external parties subject to certain
criteria, by reference to the fair value of the equity instruments at the date at which they are granted. The fair
value is determined by using the Black Scholes formula, taking into account the terms and conditions upon which
the instruments were granted.
Borrowings
(x)
Borrowings are presented as current liabilities unless the Group has an unconditional right to defer settlement
for at least 12 months after the balance sheet date. Borrowings are initially recognised at fair value (net of
transaction costs) and subsequently carried at amortised cost. Any difference between the proceeds (net of
transaction costs) and the redemption value is recognised in profit or loss over the period of the borrowings
using the effective interest method.
Segment Information
3.
AASB 8 Operating Segments requires operating segments to be identified on the basis of internal reports about
components of the Group that are regularly reviewed by the Chief Operating Decision Maker in order to allocate
resources to the segment and to assess its performance.
For management purposes, the Group is organised into one main operating segment, being exploration of
mineral projects and in four geographical areas, being Tanzania (gold and bauxite), Guinea (bauxite), Malawi
(rare earths elements) and Australia (corporate office).
30
For personal use only
LINDIAN RESOURCES LTD
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2020
30 June 2020
Revenue
Interest income
Other income
Total segment revenue
Expenditure
Depreciation expense
Impairment of exploration and
evaluation assets
Exploration and evaluation expenses
Finance costs
Other expenses
Total segment expenditure
Loss before income tax
SEGMENT ASSETS
Segment operating assets
Total segment assets
SEGMENT LIABILITIES
Segment operating liabilities
Total segment liabilities
Movement in non-current assets
30 June 2019
Revenue
Corporate interest revenue
Total segment revenue
Expenditure
Depreciation expense
Impairment of exploration and
evaluation assets
Exploration and evaluation expenses
Finance costs
Other expenses
Total segment expenditure
Loss before income tax
SEGMENT ASSETS
Segment operating assets
Total segment assets
Tanzania
$
Guinea
$
Malawi
$
Australia
$
Total
$
-
-
-
7,712
511,876
-
-
39,621
559,209
(559,209)
-
-
-
-
-
75,853
-
-
75,853
(75,853)
-
-
-
-
-
-
-
-
-
-
378
58,325
58,703
378
58,325
58,703
2,992
10,704
-
-
1,954
1,280,846
1,285,792
(1,227,089)
511,876
75,853
1,954
1,320,467
1,920,854
(1,862,151)
57,243
57,243
1,292,104
1,292,104
646,045
646,045
646,152
646,152
2,641,544
2,641,544
6,292
6,292
(453,756)
-
-
1,292,104
-
-
60,389
120,802
120,802
(2,991)
127,094
127,094
895,746
Tanzania
$
Guinea
$
Malawi
$
Australia
$
Total
$
719
719
719
719
47
9,693
-
-
26,314
683,988
710,349
(709,630)
-
46,412
26,314
683,988
766,407
(765,688)
-
-
9,646
-
-
-
-
9,646
(9,646)
-
-
-
-
46,412
-
-
46,412
(46,412)
-
-
-
-
-
-
-
-
-
484,503
484,503
-
-
585,656
585,656
91,810
91,810
1,161,969
1,161,969
31
For personal use only
LINDIAN RESOURCES LTD
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2020
30 June 2019
SEGMENT LIABILITIES
Segment operating liabilities
Total segment liabilities
Movement in non-current assets
4.
Other Expenses
Accounting, audit and tax fees
Insurance
Legal fees
Listing and share registry costs
Travel
Marketing and corporate advisor fees
Salary and superannuation
Other
Total other expenses
Income Tax
5.
Income tax expense
Tanzania
$
Guinea
$
Malawi
$
Australia
$
Total
$
68,192
68,192
446,050
5,040
5,040
-
-
-
585,656
351,369
351,369
3,039
424,601
424,601
1,034,745
2020
$
118,496
33,152
10,821
38,644
37,120
210,649
270,283
127,253
846,418
2020
$
-
-
-
2019
$
109,215
22,916
46,402
41,416
-
218,302
12,291
10,147
460,689
2019
$
-
-
-
Major component of tax expense/(benefit) for the year:
Current tax
Deferred tax
Numerical reconciliation between aggregate tax expense recognised in the statement of comprehensive income
and tax expense calculated per the statutory income tax rate.
2020
$
2019
$
A reconciliation between tax expense and the product of
accounting loss before income tax multiplied by the Group’s
applicable tax rate is as follows:
Total loss before income tax expense
(1,862,151)
(765,688)
32
For personal use only
LINDIAN RESOURCES LTD
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2020
Tax at the group rate of 30% (2019: 30%)
Non-deductible expenses
Non-assessable income
Movement in unrecognised temporary differences
Debt equity raising costs
Adjustment in respect of prior years
Income tax benefit not brought to account
Income tax benefit
Unrecognised deferred tax balances:
The following deferred tax assets and liabilities have not
been brought to account:
Deferred tax assets
Losses available for offset against future taxable income
- revenue
Other deferred tax balances
2020
$
(558,646)
116,776
(17,498)
117,157
(18,703)
402
360,512
-
2019
$
(229,706)
67,423
-
(2,209)
(6,437)
-
170,929
-
4,425,116
662,265
5,087,381
4,064,604
614,597
4,679,201
The benefit for tax losses will only be obtained if:
(i)
the Group derives future assessable income in Australia of a nature and of an amount sufficient to
enable the benefit from the deductions for the losses to be realised;
(ii) the Group continues to comply with the conditions for deductibility imposed by tax legislation in
Australia; and
(iii) no changes in tax legislation in Australia, adversely affect the Group in realising the benefit from the
deductions for the losses
6.
Cash and Cash Equivalents
2020
$
2019
$
Reconciliation of operating loss after tax to the net cash
flows from operations:
Loss after tax
(1,862,151)
(765,688)
Non-cash items
Depreciation and impairment charges
Foreign currency (gain)/loss
Share based payments
Impairment of exploration and evaluation assets
Change in assets and liabilities
Trade and other receivables
Trade and other payables
Provisions
Net cash outflow from operating activities
10,704
4,311
336,464
511,876
(5,750)
(143,549)
(749)
(1,148,844)
9,693
1,073
158,837
-
(42,559)
(4,979)
748
(642,875)
33
For personal use only
LINDIAN RESOURCES LTD
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2020
Reconciliation of cash:
Cash at bank
2020
$
614,098
614,098
Cash at bank earns interest at floating rates based on daily bank deposit rates.
7.
Trade and Other Receivables - Current
GST receivable
Other receivable
2020
$
14,355
25,687
40,042
2019
$
37,019
37,019
2019
$
6,163
-
6,163
Goods and services tax is non-interest bearing and generally receivable on 30 day terms. They are neither past
due nor impaired. The amount is fully collectible. Due to the short-term nature of these receivables, their
carrying value is assumed to approximate their fair value.
8.
Prepayments
Prepaid expenditure
9.
Deferred Exploration and Evaluation Expenditure
Exploration and evaluation phase – at cost
At beginning of the year
Exploration expenditure during the year settled by cash
Exploration expenditure during the year settled by issue
of shares and options (refer to Note 27)
Proposed issue of shares for acquisition of Batan
Australia Pty Ltd (refer to Note 15)
Impairment expense1
Total exploration and evaluation
2020
$
18,507
18,507
2019
$
45,636
45,636
2020
$
2019
$
1,031,706
1,298,326
-
550,827
120,000
280,879
-
(511,876)
1,938,156
200,000
-
1,031,706
The deferred exploration and evaluation expenditure consists of expenditure on the Group’s Kangankunde Rare
Earths Project in Malawi and the Gaoual Bauxite Project in Guinea. The recoupment of costs carried forward in
relation to areas of interest in the exploration and evaluation phases is dependent on the successful
development and commercial exploitation or sale of respective areas. The ongoing legal issues with Michael
Saner and Rift Valley Resources outlined in Note 31 gives rise to a material uncertainty on the recoverability of
the Kangankunde Rare Earths Project in Malawi.
34
For personal use only
LINDIAN RESOURCES LTD
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2020
1. The impairment expense in the year ended 30 June 2020 of $511,876 relates to the expenditure on the
Groups Lushoto Bauxite Project in Tanzania.
10.
Plant and Equipment
Plant and equipment – at cost
Accumulated depreciation
Net book amount
Balance at the beginning of the year
Acquisitions
Immediate write-off
Depreciation expense
Balance at the end of the year
11.
Trade and Other Payables
Trade payables and accruals
2020
$
55,000
(24,259)
30,741
41,445
-
(3,039)
(7,665)
30,741
2020
$
104,639
104,639
2019
$
58,039
(16,594)
41,445
48,099
3,039
-
(9,693)
41,445
2019
$
258,853
258,853
Trade creditors, other creditors and goods and services tax are non-interest bearing and generally payable on
30-day terms. Due to the short-term nature of these payable, their carrying value is assumed to approximate
their fair value.
12. Unearned Income
Cashflow boost
2020
$
11,665
11,665
2019
$
-
-
Unearned income consists of the July component of the cashflow boost included on the June 2020 Business
Activity Statement. The cashflow boost is a temporary injection of capital from the Australian Government to
support small land medium businesses during the economic downturn associated with COVID-19.
13.
Provisions
Employee entitlements
2020
$
-
-
2019
$
748
748
35
For personal use only
LINDIAN RESOURCES LTD
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2020
14.
Borrowings
Short term debt
Balance at the beginning of the year
Drawdown of loan facility
Finance charges
Drawdown on Insurance Premium Funding
Interest Insurance Premium Funding
Repayment of borrowings
Repayment of finance charges
Balance at the end of the year
Reconciliation of changes in liabilities from financing activities
Balance at the beginning of the year
Non-cash repayment of debt
Changes in liabilities from operating activities
Finance costs
Changes in liabilities from financing activities
Proceeds from borrowings
Repayment of borrowings
Balance at the end of the year
2020
$
2019
$
165,000
-
-
38,757
(2,791)
(175,176)
(15,000)
10,790
2020
$
165,000
(165,000)
357,500
174,139
17,414
-
-
(349,139)
(34,914)
165,000
2019
$
357,500
(17,500)
-
(17,500)
35,966
(25,176)
10,790
174,139
(349,139)
165,000
On 1 April 2019 the Company announced that it had entered into an unsecured $1M loan facility with Rose Lawn
Limited for a 12-month term. The lender is entitled to a 6% fee payable upon receipt of each draw down and
110% of the loan amount is repayable on maturity. During the year ended 30 June 2019 $150,000 was drawn
under this facility and on 2 August 2019 was repaid by way of a share issue.
On 3 December 2019 the Company entered into an Insurance Premium Funding Agreement with IQumulate
Premium Funding for a principal balance of $35,966, interest is charged at a flat rate of 7.7607% on the funded
amount and payments are made in equal instalments over a 10 month period.
15.
Share Capital
a) Share capital
Ordinary shares fully paid
2020
$
2019
$
32,424,788
32,424,788
29,126,329
29,126,329
36
For personal use only
LINDIAN RESOURCES LTD
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2020
b) Movement in shares on issue
Balance at the beginning of the year
Shares issued – placement August 2019
Shares issued – placement November 2019
Shares issued – part consideration for
introduction of the Kangankunde Rare Earths
Project (refer note 27)
Shares issued – corporate advisor (refer note
27)
Issue of shares for acquisition of Batan
Australia Pty Ltd (i)
Issue of share in settlement of short-term debt
Issue of shares as part consideration for the
Guinea Bauxite Acquisition
Exercise of options
Less fundraising costs
Balance at the end of the year
2020
number
2020
$
2019
number
2019
$
377,812,124
70,937,500
31,250,000
29,126,329 267,812,123
1,135,000 100,000,000
-
500,000
27,492,524
1,500,000
-
-
-
-
-
6,666,667
113,333
3,333,334
76,667
10,000,000
10,312,500
-
165,000
-
-
200,000
-
5,000,000
76,637,500
-
581,949,624
105,000
1,532,750
(139,291)
-
-
-
32,424,788 377,812,124
-
-
(256,195)
29,126,329
(i) Shareholder approval was granted to issue of 10,000,000 shares to the vendors of the Lushoto Bauxite Project
for the completion of the 51% Stage 1 acquisition of Batan Australia Pty Ltd which in turn owns 100% of East
Africa Bauxite Limited, holder of the Lushoto and Pare Bauxite Projects (refer to ASX announcements dated 3
August 2017, 11 January 2018, 8 October 2018 and 20 March 2019 for further detail). The shares to be issued
for the Stage 1 acquisition were previously approved by shareholders in November 2018. This approval had
expired and accordingly shareholder “re-approval” was sought at the shareholder meeting and the shares were
issued on 22 November 2019.
c) Ordinary shares
Ordinary shares have the right to receive dividends as declared and, in the event of winding up the Company, to
participate in the proceeds from sale of all surplus assets in proportion to the number of and amounts paid up
on shares held. Ordinary shares entitle their holder to one vote, either in person or proxy, at a meeting of the
Company.
d) Capital risk management
The Group’s capital comprises share capital, reserves less accumulated losses amounting to a surplus of
$2,514,450 at 30 June 2020 (2019: surplus of $737,368). The Group manages its capital to ensure its ability to
continue as a going concern and to optimise returns to its shareholders. The Group was geared to the extent
indicated in Note 14 at the financial year end and not subject to any externally imposed capital requirements.
e) Share options
At 30 June 2020, there were 222,237,501 unissued ordinary shares under option (2019: 165,000,001 options).
The details of the options are as follows:
Number
Exercise $
Expiry
112,025,001
10,000,000
20,000,000
80,212,500
0.02
0.03
0.02
0.02
31 December 2020
31 December 2020
30 June 2021
20 November 2022
37
For personal use only
LINDIAN RESOURCES LTD
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2020
The movement in options is set out below.
At beginning of period
Options expired
Options issued – free attaching options for placement
Options issued – capital raising fee
Options issued – part consideration for introduction of
the Kangankunde Rare Earths Project
Options issued – MD for Gaoual Bauxite
Options issued – corporate advisor services
Options issued – consideration for consultancy fee
Options issued – previous director
Options exercised during the period
At end of period
f) Performance shares
2020
number
2019
number
165,000,001
-
81,250,000
15,625,000
-
20,000,000
2,000,000
5,000,000
10,000,000
(76,637,500)
222,237,501
100,284,027
(60,284,027)
100,000,000
10,000,000
6,666,667
-
3,333,334
5,000,000
-
-
165,000,001
At 30 June 2020, there were 55,000,000 performance shares on issue (2019: 25,000,000 performance shares).
The details of the performance shares are as follows:
Number
Expiry
Vesting conditions
25,000,000
class B
12,500,000
6 December 2020
24 months after Completion
as defined in the 2019 Notice
of Annual General Meeting
17,500,000
24 months after Completion
as defined in the 2019 Notice
of Annual General Meeting
Conditional on conversion of the Class A Performance Shares
and an independent third party expert producing a positive
Pre-Feasibility Study for the development of the Tanzanian
Gold Projects, expiring on 6 December 2020.
Conditional on the Company identifying and establishing an
initial JORC Code compliant resource containing a minimum
of 65million tonnes with an average grade greater than 45%
AI203 with less than 5% SI02 reactive silica being defined in
relation to the Gaoual Bauxite Project and announced on
ASX.
Conditional on the Company completing a Preliminary
Feasibility Study in relation to the Gaoual Bauxite Project.
Each Performance Right converts into 1 share for nil
consideration.
The movement in performance shares is set out below. No performance shares vested during the period.
2019
$
2020
$
At beginning of period – Class A
At beginning of period – Class B
Performance shares expired – Class A (expired 6
December 2018)
Performance shares issued
At end of period
-
25,000,000
-
30,000,000
55,000,000
25,000,000
25,000,000
(25,000,000)
-
25,000,000
As part of the consideration for the acquisition of Tangold Pty Ltd, the Group had previously issued contingent
consideration to the Tangold vendors in the form of performance shares.
38
For personal use only
LINDIAN RESOURCES LTD
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2020
No value has been assigned to the performance shares as achievement of the vesting conditions has not been
deemed probable, at the date of this report.
During the year 12,500,000 Stage 1 Performance Rights and 17,500,000 Stage 2 Performance Rights were issued
and will convert on the satisfaction of the following milestones. Each Performance Right converts into 1 share
for nil consideration.
•
•
Stage 1 Milestone: The Company identifying and establishing an initial JORC Code compliant resource
containing a minimum of 65m tonnes with an average grade greater than 45% AI203 with less than 5%
SI02 reactive silica being defined in relation to the Gaoual Bauxite Project and announced on ASX;
Stage 2 Milestone: The Company completing a Preliminary Feasibility Study in relation to the Gaoual
Bauxite Project.
(Both Milestones expire 24 months after Completion of the Guinea Bauxite Agreement).
16.
Reserves
Share based payments reserve
Option reserve
Foreign currency translation reserve
Movement in reserves
Share based payments reserve
Balance at the beginning of the year
Recognition of share-based payments for options issued for / to
Capital raising fee
Introduction of the Kangankunde Rare Earths Project
Corporate advisor fees
Consultancy fees
Upon resignation of director1
Managing Director
Exploration Geologist
Balance at the end of the year
2020
$
5,609,570
4,106,626
1,270
9,717,466
2019
$
5,273,106
4,106,626
(1,185)
9,378,547
2020
$
2019
$
5,273,106
4,861,778
-
-
-
72,702
-
231,402
32,360
5,609,570
161,612
107,742
53,871
59,804
28,299
-
5,273,106
The share-based payment reserve is used to record the fair value of options issued.
1.
Issue of 10,000,000 options with an exercise price of $0.03 each to expire on 31 December 2020 to former director,
Steve Formica. Options were issued in recognition of additional services performed whilst a director.
Option reserve
2020
$
Balance at the beginning of the year
Balance at the end of the year
4,106,626
4,106,626
The option reserve is used to record the premium paid on the issue of listed options.
2019
$
4,106,626
4,106,626
39
For personal use only
LINDIAN RESOURCES LTD
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2020
Foreign currency translation reserve
Balance at the beginning of the year
Exchange difference on translation of foreign operation
attributable to owners of Lindian Resources Limited
Balance at the end of the year
2020
$
(1,185)
2,455
1,270
2019
$
-
(1,185)
(1,185)
The foreign currency translation reserve is used to record exchange differences arising on translation of foreign
controlled entities. The reserve is recognised in profit and loss when the net investment is disposed of.
17.
Accumulated Losses
At beginning of the year
Loss for the year attributable to owners of Lindian
Resources Limited
Balance at the end of the year
2020
$
2019
$
37,737,767
37,000,682
1,796,601
39,534,368
737,085
37,737,767
Asset Acquisition
18.
During the year ended 30 June 2019 the Group acquired a 51% interest in Batan Australia Pty Ltd (“Batan”)
pursuant to a Farm-in and Joint Venture Agreement (“the Joint Venture Agreement”) dated 20 March 2019.
Batan owns 100% of East Africa Bauxite Limited, holder of the tenements for the Lushoto and Pare Bauxite
Projects in Tanzania. The Group met the requirement to spend $400,000 on the project tenements to acquire
the 51% stage 1 interest. Pursuant to the Agreement and following shareholder approval, the Group issued
10,000,000 shares to the vendors of Batan in consideration for the completion of the 51% stage 1 acquisition of
the Lushoto and Pare Bauxite Projects. Details of the fair value of the assets acquired on 20 March 2019 are as
follows:
Purchase Consideration
Shares consideration and exploration spend
Total
Net Assets Acquired
Deferred exploration and evaluation expenditure
Total
20 March
2019
$
400,000
400,000
400,000
400,000
The Group is required to spend a further $1,400,000 on the project tenements which includes completion of a
bankable Feasibility Study and issue 10 million shares at a deemed issue price of $0.02 each to earn a further
24% interest in Batan (Stage 2 Interest). During the year the Company announced its decision not to pursue the
75% Stage 2 interest and as per the agreement the interest would revert to 49%. Subsequent to this the new
management team requested an extension of the notice period by 12 months, to enable a full and considered
review of the project prior to any decisions being made. Under the variation Lindian is required to give notice to
Batan on or before 31 December 2020 to elect to continue to sole fund the project to acquire the Stage 2
40
For personal use only
LINDIAN RESOURCES LTD
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2020
Interest. If the Group does not elect to proceed to acquire the Stage 2 Interest, Lindian’s Stage 1 interest will
revert to 49%.
19. Non-controlling Interests
As set out in Note 18, there is a 49% non-controlling interest in Batan Australia Pty Ltd.
Opening balance
Loss allocated to non-controlling interest
Other comprehensive loss allocated to non-controlling
interest
Closing balance
The summarised financial information is as follows:
Non-current assets
Total Assets
Current liabilities
Total Liabilities
Net Assets/(Liabilities)
2020
$
(29,741)
(65,550)
1,855
(93,436)
2020
$
-
-
500,113
500,113
(500,113)
2019
$
-
(28,603)
(1,138)
(29,741)
2019
$
66,340
66,340
127,036
127,036
(60,696)
Investments in Subsidiaries
20.
The consolidated financial statements incorporate the assets, liabilities and results of the following subsidiaries:
West African Exploration Pty Ltd
West African Exploration Cameroon Pty Ltd
Tangold Pty Ltd
Hapa Gold Limited
Batan Australia Pty Ltd
East Africa Bauxite Limited
Country of
Incorporation
Australia
Cameroon
Australia
Tanzania
Australia
Tanzania
2020
%
100%
100%
100%
100%
51%
51%
2019
%
100%
100%
100%
100%
51%1
51%1
1 Refer to note 18 for details of the acquisition of the subsidiaries.
21.
Loss per Share
Loss attributable to owners of Lindian Resources Limited
used in calculating basic and dilutive EPS
(1,796,601)
(737,085)
2020
$
2019
$
41
For personal use only
LINDIAN RESOURCES LTD
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2020
2020
number
2019
number
Weighted average number of ordinary shares used in
calculating basic and diluted earnings / (loss) per share
(*):
518,611,524
358,076,964
* There is no impact from the 222,237,501 options outstanding at 30 June 2020 (2019: 165,000,001 options) on
the loss per share calculation because they are antidilutive. These options could potentially dilute basic EPS in
the future. There have been no transactions involving ordinary shares or potential ordinary shares that would
significantly change the number of ordinary shares or potential ordinary shares outstanding between the
reporting date and the date of completion of these financial statements.
Expenditure Commitments
22.
Exploration commitments contracted for at reporting date but not recognised as liabilities are as follows:
Within one year
After one year but not longer than 5 years
2020
$
378,497
1,400,000
1,778,497
2019
$
466,667
933,333
1,400,000
See Note 18 for detail on expenditure commitments relating to Batan Australia Pty Ltd and the Tanzania bauxite
assets.
Auditor’s Remuneration
23.
The auditor of Lindian Resources Limited is HLB Mann Judd (2019: HLB Mann Judd).
Amounts received or due and receivable by the auditor
for :
an audit or review of the financial report of the entity
and any other entity in the Group
2020
$
2019
$
31,948
31,948
24,180
24,180
Key Management Personnel Disclosures
24.
The aggregate compensation made to Directors and other Key Management Personnel of the Group is set out
below:
Short term employee benefits
Share based payments
Post-employment benefits (superannuation)
Total remuneration
2020
$
414,480
231,402
21,850
667,732
2019
$
296,290
28,299
1,001
325,590
The Group has liabilities of $30,343 for unpaid Key Management Personnel remuneration at 30 June 2020 (2019:
$120,000).
42
For personal use only
LINDIAN RESOURCES LTD
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2020
Related Party Disclosures
25.
The ultimate parent entity is Lindian Resources Limited. Refer to note 20 for list of all subsidiaries within the
Group. There were no other related party transactions to report on for the period.
As part of Mr Green’s commencement package, the Company issued to Mr Green (or nominee), 20,000,000
unlisted options exercisable in accordance with the milestones below at $0.02 on or before 30 June 2021
(“Executive Options”):
Milestones:
a) 10,000,000 Executive Options exercisable upon the Company receiving shareholder approval at the
shareholder meeting for the purpose of proceeding with the Gaoual Bauxite Project in Guinea on similar
terms to those set out in the Company’s ASX announcement dated 10 April 2019; and
b) 10,000,000 Executive Options exercisable upon close of trade the date the Company achieves a 10 day
VWAP share price of $0.03 or above.
As disclosed in Note 27, 10,000,000 options with an exercise price of $0.03 each to expire on 31 December 2020
were issued to former director, Steve Formica. The options were issued in recognition of additional services
performed whilst a director. Shareholder approval was granted at the Annual General Meeting held on 15
November 2019.
Lindian announced on 10 April 2019 that it had signed an exclusive option agreement with KB Bauxite Guinea
SARLU (“KB”) and its sole shareholder Guinea Bauxite Pty Ltd (“GB”) to acquire the Gaoual Bauxite Project
(approximately 332km2 in Guinea) (“Project”) which is wholly owned by KB. KB and GB are related parties of
Lindian Chairman, Mr Asimwe Kabunga, and as such, the Company will need to comply with the relevant
provisions of both the Corporations Act and the ASX Listing Rules and accordingly shareholder approval will be
sought to proceed with the option to earn up to 75% of the Project.
On 6 August 2019 the company issued 937,500 shares at $0.016 for a total of $15,000 to Leticia Kabunga for
services provided in respect of the Tanzanian bauxite project.
Financial Risk Management
26.
Exposure to interest rate, liquidity, and credit risk arises in the normal course of the Group’s business. The Group
does not hold or use derivative financial instruments. The totals for each category of financial instruments,
measured in accordance with AASB 9 as detailed in the accounting policies to these financial statements, are as
follows:
Financial Assets
Cash and cash equivalents
Trade and other receivables
Financial Liabilities
Trade and other payables
Unearned income
Short term debt
2020
$
614,098
40,042
104,639
11,665
10,790
2019
$
37,019
6,163
258,853
-
165,000
The fair value of financial assets and liabilities at balance date approximate their carrying values.
43
For personal use only
LINDIAN RESOURCES LTD
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2020
Financial Risk Management Policies
The board’s overall risk management strategy seeks to assist the consolidated group in meeting its financial
targets, while minimising potential adverse effects on financial performance. Its functions include the review of
future cash flow requirements.
Specific Financial Risk Exposure and Management
The main risks arising from the Group’s financial instruments are interest rate risk, credit risk and liquidity risk.
a) Liquidity Risk
Liquidity risk is the risk that the Group will encounter difficulty in meeting obligations associated with financial
liabilities.
The Group manages liquidity risk by maintaining sufficient cash facilities to meet the operating requirements of
the business and investing excess funds in highly liquid short term investments. The responsibility for liquidity
risk management rests with the Board of Directors.
Alternatives for sourcing the Group’s future capital needs include the cash position and the issue of equity
instruments. These alternatives are evaluated to determine the optimal mix of capital resources for our capital
needs. We expect that, absent a material adverse change in a combination of our sources of liquidity, present
levels of liquidity along with future capital raisings will be adequate to meet our expected capital needs.
Maturity analysis for financial liabilities
Financial liabilities of the Group comprise trade and other payables and borrowings. At 30 June 2020, all trade
and other payables and borrowings are expected to contractually mature within 30 days.
b) Interest Rate Risk
Interest rate risk arises from the possibility that changes in interest rates will affect future cash flows or the fair
value of financial instruments.
The Group’s exposure to market risk for changes to interest rate risk relates primarily to its earnings on cash and
term deposits. The Group manages the risk by investing in short term deposits.
2020
$
2019
$
Cash and cash equivalents
614,098
37,019
At balance date the Group’s exposure to interest rate risk is not material.
c) Credit Risk Exposures
Credit risk represents the risk that the counterparty to the financial instrument will fail to discharge an obligation
and cause the Group to incur a financial loss. The Group’s maximum credit exposure is the carrying amounts on
the statement of financial position. The Group holds financial instruments with credit worthy third parties.
At 30 June 2020, the Group held cash at bank. These were held with a financial institution with a rating from
Standard & Poors of AA or above (long term). The Group has no past due or impaired debtors as at 30 June 2020.
d) Foreign Currency Risk Exposures
The consolidated entity undertakes certain transactions denominated in foreign currency and is exposed to
foreign currency risk through foreign exchange rate fluctuations.
44
For personal use only
LINDIAN RESOURCES LTD
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2020
Foreign exchange risk arises from future commercial transactions and recognised financial assets and financial
liabilities denominated in a currency that is not the entity's functional currency. The risk is measured using
sensitivity analysis and cash flow forecasting. The foreign currency risk is not material.
27.
Share Based Payments
a) Recognised share based payment transactions
Share based payment transactions recognised either as operating expenses in the statement of comprehensive
income, capital raising expenses in equity or exploration expenditure on the statement of financial position as
follows:
Operating expenses
Share based payment1,8,12
Other Expenses – corporate advisor services2,3,9
Exploration expenditure
Part consideration for introduction of the Kangankunde
Rare Earths Project4,5
Part consideration for the Gaoual Bauxite Project
Guinea10
Consideration for consultancy fee6,13
Borrowings
Repayment of short term borrowings11
Equity
Issued capital3,4,10,11
Share issue expenses7
Share-based payments reserve1,2,5,6,7,8,9
2020
$
263,762
72,702
336,464
2019
$
28,299
130,538
158,837
-
221,075
105,000
15,000
120,000
165,000
165,000
621,464
285,000
-
336,464
621,464
-
59,804
280,879
-
-
439,176
190,000
(161,612)
411,328
439,716
1.
The issue of 10,000,000 options with an exercise price of $0.03 each to expire on 31 December 2020 to former director, Steve
Formica. Options were issued in recognition of additional services performed whilst a director.
2. On 5 October 2018, the Group issued 3,333,334 unlisted options exercisable at $0.02 on or before 31 December 2020 pursuant
to a corporate advisor mandate.
3. On 5 October 2018, the Group issued 3,333,334 fully paid ordinary shares pursuant to a corporate advisor mandate. The shares
were valued using the closing share price on the last trading day prior to the issue date of $0.023 per share.
4. On 14 August 2018, the Group issued 6,666,667 fully paid ordinary shares as part consideration for the introduction of the
Kangankunde Rare Earths Project. The shares were valued using the closing share price on the issue date of $0.017 per share.
5. On 5 October 2018, the Group issued 6,666,667 unlisted options exercisable at $0.02 on or before 31 December 2020 as part
consideration for the introduction of the Kangankunde Rare Earths Project.
6. On 23 October 2018, the Group issued 5,000,000 unlisted options exercisable at $0.02 on or before 31 December 2020 pursuant
to a consultancy agreement. 2,500,000 options are subject to a vesting condition that the 5 day volume weighted average price
of shares as traded on ASX after the date of issue of the Options is not less than $0.04.
7. On 5 October 2018, the Group issued 10,000,000 unlisted options exercisable at $0.02 on or before 31 December 2020 pursuant
8.
to a capital raising mandate.
As part of the terms of Mr Green’s commencement package, the Company issued to Mr Green 20,000,000 unlisted options
Executive Options (refer to Note 25) (a).
9. On 21 November 2019, the Group issued 5,000,000 fully unlisted options exercisable at $0.02 on or before 20 November 2022
to Baker Young as announced in the Notice to Annual General Meeting for 2019 (c).
45
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LINDIAN RESOURCES LTD
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2020
10. On 21 November 2019 the Company issued of 5 million shares as part consideration of the acquisition of the Guinea Bauxite
Project. 4.25 million shares to Kabunga Holdings Pty Ltd and 750 thousand shares to Mr. Kaba.
11. On 2 August 2019, 10,312,500 shares at $0.16 per share were issued to settle $150,000 in respect of the Rose Lawn facility
including interest of $15,000 due to the terms of the facility which required 110% of the amount drawn to be repaid. Refer to
Note 14.
12. On 21 November 2019, the Group issued 2,000,000 unlisted options exercisable at $0.02 on or before 20 November 2022 to the
Company’s geological consultant in Africa (b).
13. On 6 August 2019, the Company issued 937,500 shares at $0.016 for a total of $15,000 to Leticia Kabunga for services provided
in respect of the Tanzanian bauxite project.
Fair value of options issued or proposed to be issued during the period calculated using the Black-Scholes option
pricing model applying the following inputs:
Valuation date
Valuation date fair value
Valuation date share price
Exercise price
Expected volatility
Option life
Expiry date
Risk-free interest rate
(a)
(b)
(c)
15 Nov 19
$0.0116
$0.021
$0.020
115.1%
1.6 years
30 Jun 21
0.78%
20 Nov 19
$0.0162
$0.023
$0.020
114.4%
3 years
20 Nov 22
0.72%
21 Nov 19
$0.0145
$0.021
$0.020
115.1%
3 years
20 Nov 22
0.75%
Details of the options on issue during the years ended 30 June 2020 and 30 June 2019 are set out below:
Grant Date Expiry Date Fair Value at
Valuation
Date
Exercise
Price
Number at
30 June
2019
Number
vested /
exercisable
at 30 June
2019
Number at
30 June
2020
Number
vested /
exercisable
at 30 June
2020
05 Oct 18
23 Oct 18
15 Nov 19
20 Nov 19
21 Nov 19
Total
31 Dec 20
31 Dec 20
30 Jun 21
20 Nov 22
20 Nov 22
$0.0162
$0.0120
$0.0116
$0.0162
$0.0145
$0.02
$0.02
$0.02
$0.02
$0.02
2,500,000
5,000,000
20,000,001 20,000,001 20,000,001 20,000,001
5,000,000
5,000,000
- 20,000,000 20,000,000
-
2,000,000
-
-
5,000,000
-
-
25,000,001 22,500,001 52,000,001 52,500,001
2,000,000
5,000,000
The movement in options on issue during the current and previous year is reconciled as follows:
Options
Weighted
Average
Exercise Price
Weighted
Average Fair
Value
number
$
$
Weighted
Average
Contractual
Life
days
Options outstanding at 30 June 2018
Issued during the year
Exercised during the year
Expired during the year
Options outstanding at 30 June 2019
Issued during the year
Exercised during the year
Expired during the year
Options outstanding at 30 June 2020
-
25,000,001
-
-
25,000,001
27,000,000
-
-
52,000,001
-
$0.020
-
-
$0.020
$0.020
-
-
$0.020
-
$0.0154
-
-
-
$0.0125
-
-
-
-
-
-
-
550
-
-
-
346
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LINDIAN RESOURCES LTD
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2020
Parent Entity Information
28.
The following details relate to the parent entity, Lindian Resources Limited, as at 30 June 2020. The
information presented here has been prepared using consistent accounting policies as presented in Note 2.
Current assets
Non-current assets
Total assets
Current liabilities
Total liabilities
Net assets/(liabilities)
Issued capital
Reserves
Accumulated losses
Total equity
Loss for the year
Other comprehensive income for the year
Total comprehensive loss for the year
2020
$
657,951
1,968,890
2,626,841
119,801
119,801
2,507,040
32,424,788
9,716,196
(39,633,944)
2,507,040
(1,925,948)
-
(1,925,948)
2019
$
88,818
1,073,151
1,161,969
424,601
424,601
737,368
29,126,329
9,379,732
(37,768,693)
737,368
(768,011)
-
(768,011)
Guarantees
Lindian Resources Limited has not entered into any guarantees in relation to the debts of its subsidiary.
Other Commitments and Contingencies
Refer to Note 22 and Note 31 for details of the parent company’s commitments and contingent liabilities.
Dividends
29.
No dividend was paid or declared by the Group in the period since the end of the financial year and up to the
date of this report. The Directors do not recommend that any amount be paid by way of dividend for the financial
year ended 30 June 2020. The balance of the franking account is nil as at 30 June 2020 (2019: Nil).
Events Subsequent to Balance Date
30.
On 8 July 2020, the Company announced that a notice of appeal had been filed in respect of the exclusive option
agreement for the Kangankunde Rare Earths Project in Malawi. After receiving the record, the Supreme Court
of Appeal will set a date for hearing the arguments of both parties and will then make its judgement. A further
update to market will be made at that time.
On 15 July 2020, the Company announced a maiden resource for the Bouba Plateaux at the Company’s Gaoual
Project in Guinea. A total JORC compliant Indicated Resource of 102M at 49.8% Al2O3 has been defined using a
cut-off of 40% Al2O3. The Resource includes high grade areas with 84Mt at 51.2% Al2O3 using a higher cut-off
of 45% Al2O3.
On 24 July 2020, the Company announced receipt of an offer to settle out of court in respect of the exclusive
option agreement for the Kangankunde Rare Earths Project in Malawi. The Company is reviewing the offer and
will discuss with legal counsel before taking action.
47
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LINDIAN RESOURCES LTD
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2020
On 29 July 2020, the Company announced the appointment of Yves Occello as Non-Executive Director.
On 10 August 2020, the Company announced the appointment of Danny Keating to the role of Chief Executive
Officer.
Contingent Consideration
31.
Kangankunde Rare Earths Project
Lindian has previously announced the commencement of legal action in Malawi in respect of an exclusive option
agreement (the “Exclusive Option Agreement”) (“Agreement”) entered into with Michael Saner (“Saner”) and
Rift Valley Resource Developments Limited (“RVR”) regarding the Kangankunde Rare Earths Project in Malawi
(“Project”).
The Company obtained an injunction from the High Court of Malawi in November 2018 to prevent Michael Saner
and Rift Valley dealing with the Kangankunde Rare Earths Project and or the shares in Rift Valley, as well as
commenced legal proceedings seeking specific performance/damages.
During the year the High Court of Malawi hearing was held in accordance with the scheduled dates of 4-5
November 2019, the Company then filed the closing submissions in accordance with the 21-day maximum
timeframe from 5th November 2019. The closing submission is an analysis of the evidence tendered in court
considering the applicable law from 5th November 2019.
On 7 May 2020, the Company announced that the High Court of Malawi had not ruled in favour of its legal action
in respect of the Exclusive Option Agreement for the Kangankunde Rare Earths Project in Malawi.
The Company had six weeks from the date of the judgment to file an appeal. On 8 July 2020, the Company
announced that a notice of appeal had been filed in respect of the Exclusive Option Agreement for the
Kangankunde Rare Earths Project in Malawi. The Supreme Court of Appeal will set a date for hearing the
arguments of both parties and will then make its judgement.
Subsequent to the lodgement of the appeal, the Company received an offer to settle out of court, the details of
which were included in the announcement released on 24 July 2020.
The Company maintains that it has a strong legal position and will pursue all legal avenues available to it. Legal
costs to date have been kept to a minimum and pursuit of the claim will not be a significant drain on the
Company’s ongoing cash requirements.
48
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LINDIAN RESOURCES LTD
DIRECTORS’ DECLARATION
For the year ended 30 June 2020
Directors’ Declaration
In accordance with a resolution of the Directors of Lindian Resources Limited, I state that:
1). In the opinion of the Directors:
(a)
the financial statements and notes of the Group are in accordance with the Corporations Act
2001, including:
(i)
(ii)
giving a true and fair view of the financial position of the Group as at 30 June 2020 and
of its performance, for the year ended on that date; and
complying with Accounting Standards
Interpretations) and the Corporations Regulations 2001.
(including the Australian Accounting
there are reasonable grounds to believe that the Company will be able to pay its debts as and
when they become due and payable; and
the financial statements and notes also comply with International Financial Reporting
Standards as disclosed in note 2(c).
(b)
(c)
2). This declaration has been made after receiving the declarations required to be made by the director in
accordance with sections 295A of the Corporations Act 2001 for the year ended 30 June 2020.
On behalf of the board
Asimwe Kabunga | Chairman
11 September 2020
49
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AUDITOR’S INDEPENDENCE DECLARATION
As lead auditor for the audit of the consolidated financial report of Lindian Resources Limited for
the year ended 30 June 2020, I declare that to the best of my knowledge and belief, there have
been no contraventions of:
a)
the auditor independence requirements of the Corporations Act 2001 in relation to the audit;
and
b)
any applicable code of professional conduct in relation to the audit.
Perth, Western Australia
11 September 2020
N G Neill
Partner
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INDEPENDENT AUDITOR’S REPORT
To the members of Lindian Resources Limited
Report on the Audit of the Financial Report
Opinion
We have audited the financial report of Lindian Resources Limited (“the Company”) and its
controlled entities (“the Group”), which comprises the consolidated statement of financial position
as at 30 June 2020, the consolidated statement of profit or loss and other comprehensive income,
the consolidated statement of changes in equity and the consolidated statement of cash flows for
the year then ended, and notes to the financial statements, including a summary of significant
accounting policies, and the directors’ declaration.
In our opinion, the accompanying financial report of the Group is in accordance with the
Corporations Act 2001, including:
a) giving a true and fair view of the Group’s financial position as at 30 June 2020 and of its
financial performance for the year then ended; and
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 (“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.
Material uncertainty related to going concern
We draw attention to Note 2 in the financial report, which indicates that a material uncertainty exists
that may cast significant doubt on the entity’s ability to continue as a going concern. Our opinion is
not modified in respect of this matter.
Emphasis of matter - material uncertainty related to carrying value of exploration expenditure
We also draw attention to Note 9 in the financial report, which indicates a material uncertainty in
relation to the recoverability of the Group’s capitalised exploration expenditure in relation to the
Kangankunde Rare Earths Project in Malawi. Our opinion is not modified in respect of this matter.
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance
in our audit of the financial report of the current period. These matters were addressed in the context
of our audit of the financial report as a whole, and in forming our opinion thereon, and we do not
provide a separate opinion on these matters. In addition to the matter described in the Material
Uncertainty Related to Going Concern we have determined the matters described below to be the
key audit matters to be communicated in our report.
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Key Audit Matter
How our audit addressed the key audit
matter
Deferred exploration and evaluation expenditure
Note 9
In accordance with AASB 6 Exploration for and
Evaluation of Mineral Resources,
the Group
capitalises acquisition costs of rights to explore as well
as subsequent exploration and evaluation expenditure
and applies the cost model after recognition.
Our audit focussed on the Group’s assessment of the
carrying value of the capitalised exploration and
evaluation expenditure. We considered this to be a key
audit matter because this is one of the significant
assets of the Group. There is a risk that the capitalised
expenditure no longer meets the recognition criteria of
the standard. In addition, we considered is necessary
to assess whether facts and circumstances existed to
suggest that the carrying amount of an exploration and
evaluation asset may exceed its recoverable amount.
Additionally, the Group has commenced legal action in
Malawi in respect of an exclusive option agreement
entered into with Michael Saner (“Saner”) and Rift
Valley Resources Developments Limited (“RVR”) to
earn up to 75% interest in the Kangankunde Rare
Earths Project in Malawi (“Project”). The carrying value
of this project at balance date is $646,045.
The Group obtained an injunction from the High Court
of Malawi in November 2018 to prevent RVR or Saner
from dealing with the Project and/or shares in RVR. In
May 2020, the High Court had ruled in favour of Saner
and RVR and the Group has lodged an appeal in July
2020.
Our procedures included but were not
limited to the following:
• We obtained an understanding of the
key processes associated with
management’s
the
exploration and evaluation asset
carrying values;
review
of
• We substantiated a sample of
• We
exploration expenditures;
the
considered
Director’
assessment of potential indicators of
impairment;
• We obtained evidence that the Group
has current rights to tenures of its area
of interest;
• We enquired about the current status
of the legal action in Malawi;
• We examined the exploration budget
and discussed with management the
nature of planned ongoing activities;
and
• We examined the disclosures made in
the financial report.
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 Group’s annual report for the year ended 30 June 2020, but does not
include the financial report and our auditor’s report thereon.
Our opinion on the financial report does not cover the other information and accordingly we do not
express any form of assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information
and, in doing so, consider whether the other information is materially inconsistent with the financial
report or our knowledge obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this
other information, we are required to report that fact. We have nothing to report in this regard.
Responsibilities of the directors for the financial report
The directors of the Company are responsible for the preparation of the financial report that gives
a true and fair view in accordance with Australian Accounting Standards and the Corporations Act
2001 and for such internal control as the directors determine is necessary to enable the preparation
of the financial report that gives a true and fair view and is free from material misstatement, whether
due to fraud or error.
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In preparing the financial report, the directors are responsible for assessing the ability of the Group
to continue as a going concern, disclosing, as applicable, matters related to going concern and
using the going concern basis of accounting unless the directors either intend to liquidate the Group
or to cease operations, or 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 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.
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,
related safeguards.
From the matters communicated with the directors, we determine those matters that were of most
significance in the audit of the financial report of the current period 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.
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Report on the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included within the directors’ report for the year ended
30 June 2020.
In our opinion, the Remuneration Report of Lindian Resources Limited for the year ended 30 June
2020 complies with section 300A of the Corporations Act 2001.
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the
Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our
responsibility is to express an opinion on the Remuneration Report, based on our audit conducted
in accordance with Australian Auditing Standards.
HLB Mann Judd
Chartered Accountants
Perth, Western Australia
11 September 2020
N G Neill
Partner
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LINDIAN RESOURCES LTD
ADDITIONAL ASX INFORMATION
Additional information required by the Australian Stock Exchange Ltd and not shown elsewhere in this report is
as follows. The information is current at 4 September 2020.
Number of Shareholders and Option Holders
Shares
As at 4 September 2020, there were 885 shareholders holding a total of 581,949,624 fully paid ordinary shares.
Options
As at 4 September 2020, there were 112,025,001 un-quoted Options exercisable at $0.02 on or before 31
December 2020, 10,000,000 un-quoted Options exercisable at $0.03 on or before 31 December 2020, 20,000,00
un-quoted Options exercisable at $0.02 on or before 30 June 2021 and 80,212,500 un-quoted Options
exercisable at $0.02 on or before 20 November 2021.
Distribution of Equity Securities
Ordinary Shares
Unlisted Options
Number of Holders
Number of Shares Number of Holders
1 - 1000
1001 - 5000
5001 - 10,000
10,001 - 100,000
100,001 and above
Total
There were 254 holders totalling 2,591,169 ordinary shares holding less than a marketable parcel.
25,082
96,638
100,315
17,126,796
564,600,793
581,949,624
101
33
13
344
394
885
-
-
-
-
70
70
Number of Shares
-
-
-
-
222,237,501
222,237,501
Top Twenty Share Holders
Shareholder name
Kabunga Holdings Pty Ltd
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