Corporate Directory
Directors
Timothy Rupert Barr Goyder Chairman
David Ross Richards
Craig Russell Williams
Anthony James Cipriano
Managing Director
Non–executive Director
Non–executive Director
Company Secretary
Kym Verheyen
Principal Place of Business & Registered Office
Level 2, 1292 Hay Street
WEST PERTH, WESTERN AUSTRALIA 6005
(+61 8) 9322 7431
Tel:
(+61 8) 9322 5800
Fax:
www.ltresources.com.au
Web:
info@ltresources.com.au
Email:
Auditors
HLB Mann Judd
Level 4, 130 Stirling Street
PERTH, WESTERN AUSTRALIA 6000
Share Registry
Computershare Investor Services Pty Limited
Level 11, 172 St Georges Terrace
PERTH, WESTERN AUSTRALIA 6000
Tel: 1300 557 010
Home Exchange
Australian Securities Exchange Limited
Level 40, Central Park
152- 158 St Georges Terrace
PERTH, WESTERN AUSTRALIA 6000
ASX Codes
Share Code: LTR
Contents
Chairman’s Letter
Operating and Financial Review
Mineral Resource Statement
Tenement Schedule
Directors’ Report
Auditor’s Independence Declaration
Consolidated Statement of Comprehensive Income
Consolidated Statement of Financial Position
Consolidated Statement of Changes in Equity
Consolidated Statement of Cash Flows
Notes to the Consolidated Financial Statements
Directors’ Declaration
Independent Auditor’s Report
ASX Additional Information
1
3
16
18
19
29
30
31
32
33
34
55
56
61
Chairman’s Letter
Dear Fellow Shareholders,
THE PAST YEAR HAS SEEN LIONTOWN ACHIEVE NUMEROUS MILESTONES
ACROSS OUR AUSTRALIAN BATTERY METALS PORTFOLIO,
THE DEFINITION OF MAIDEN LITHIUM AND VANADIUM MINERAL
RESOURCES AT TWO OF OUR PROJECTS (IN WA AND QUEENSLAND)
AND CONFIRMATION OF A SECOND SIGNIFICANT LITHIUM DISCOVERY IN WA.
INCLUDING
I am confident that the strong foundations established during the year have positioned the Company to create
significant value for shareholders.
Most notably, exploration at the Kathleen Valley Lithium Project in WA resulted in the definition of a maiden
lithium-tantalum Mineral Resource of ~21 million tonnes grading 1.4% Li2O and 170ppm Ta2O5.
The delivery of this high-grade, high-value Resource has confirmed the significance of Kathleen Valley as an
emerging development asset in a premier mining location, capable of delivering a high-quality product into the
expanding raw material supply chain to the fast-growing lithium-ion battery industry.
The Kathleen Valley Project has a number of very positive attributes. Firstly, the lithium and tantalum grades, of
1.4% Li2O and 170ppm Ta2O5 respectively, exceed those of a number of lithium projects in the region which are
already in production. Secondly, it is surrounded by high-quality infrastructure including transport and energy.
Finally, the project is located on granted Mining Leases, which should reduce the development timeframe
significantly.
Given these favourable characteristics, we intend to advance the project as quickly as possible, with metallurgical
test work already underway and a Scoping Study planned for completion in the fourth quarter of 2018.
2018 HIGHLIGHTS
Portfolio of three outstanding battery
metals projects located close to
established infrastructure in tier-1
mining regions within Australia
Lithium-tantalum Mineral Resource
of 21Mt grading 1.4% Li2O and 170ppm
Ta2O5 at Kathleen Valley, WA
Second significant lithium discovery
at Buldania near Norseman, WA
~84Mt Vanadium Mineral Resource
at Toolebuc, NW Queensland
The group’s battery metals focus during 2018 has enabled us to maintain strong momentum across all three of our
key Australian projects, with recent drilling confirming a second outstanding lithium discovery in WA at the
Buldania Project.
Drilling at the Anna prospect, Buldania, has confirmed the potential for significant widths and grades (up to 58m at
1.2% Li2O) over a strike of 650m with the mineralisation remaining open in all directions. At the time of writing this
report, a major follow-up drilling program was in full swing, aimed at establishing a maiden Resource in Q1 2019.
LIONTOWN RESOURCES LIMITED | ANNUAL REPORT 2018 | PAGE 1
Chairman’s Letter
Importantly, the infrastructure in the area is excellent being located just 30km east of Norseman, WA and a
heavy-haulage railway line that services the mineral exporting port of Esperance 200km to the south. There are
also other operating lithium mines in the region.
Further afield, we have made significant progress during the year at the Toolebuc Project in Queensland, with
the announcement of a maiden vanadium Mineral Resource of ~84 million tonnes grading 0.3% V2O5 at the
Cambridge Deposit.
The Cambridge Mineral Resource, which was prepared using historical drilling data, has exceptional growth
potential which we intend to pursue with drilling programs over the year ahead.
Having a significant vanadium deposit on our books represents an excellent strategic fit with our Australian
battery metals focus. Vanadium has been one of the strongest performing commodities of the past two years,
with prices up more than 300% since 2017 to over US$20 a pound at the time of finalising this report.
Vanadium is in high demand for its traditional use as a strengthening agent in high-quality steels, as well as in
vanadium redox batteries, which are used in grid-scale energy storage applications.
The Toolebuc Project has excellent infrastructure links and has the potential to host very large vanadium
deposits. We will be working hard to advance this project as quickly as possible, alongside our WA lithium assets.
In summary, I am excited about the year ahead as the Company moves quickly towards a Scoping Study at
Kathleen Valley, a maiden JORC Resource estimate at Buldania and initial drilling programs aimed at growing
the existing resource at Toolebuc.
Independently, each of these three projects has progressed from early-stage exploration to confirmed
discoveries with defined Mineral Resources – or the potential for a Mineral Resource – in the space of less than 12
months. Collectively, these advances provide a strong foundation to transform Liontown into a high-quality raw
materials supplier to the booming global battery metals industry. Our small, but growing team is energised and
intent on progressing all of our assets to the next stage with the objective of unlocking the value of our emerging
strategic metals portfolio for the benefit of our shareholders.
We share the view of most of the mainstream lithium producers (and many respected analysts) that the market
fundamentals for lithium remain strong and that there will continue to be room for new, quality hard rock
lithium projects located in Tier-1 mining jurisdictions for many years to come.
We will continue to focus on our quality projects and advancing them towards commercial development as
quickly as possible.
The significant achievements of 2018 are testament to the hard work and leadership of our Managing Director,
David Richards, and I would like to acknowledge his contribution and efforts during the year. He has been well-
supported by a dedicated team of skilled employees.
In conclusion, I would also like to take this opportunity to also thank all of our shareholders, my fellow directors
and executives for their continued and valued support over the past year.
I look forward to another busy year ahead for Liontown, and I believe we have much more to achieve.
Yours faithfully
Tim Goyder
Chairman
LIONTOWN RESOURCES LIMITED | ANNUAL REPORT 2018 | PAGE 2
Operating and Financial Review
Highlights
Kathleen Valley Lithium Project, WA, Australia
Maiden Measured, Indicated and Inferred Mineral Resource announced following successful drilling
programs:
~21.2Mt @ 1.4% Li2O and 170ppm Ta2O5.
Scoping Study underway, estimate completion late 2018.
Buldania Lithium Project, WA, Australia
Significant spodumene-related lithium occurrence discovered with intercepts of up to 58m @ 1.2% Li2O.
Drilling has defined mineralisation over a minimum strike length of 650m and remains open.
New acquisitions significantly expand footprint in the region.
Norcott Lithium Project, WA, Australia
New project acquired 4km south of Buldania which includes strike extensions of same lithium-prospective
geology.
Reconnaissance rock chip sampling during the year recorded lithium values of up to 1.8% Li2O.
Killaloe Lithium Project, WA, Australia
New project acquired subsequent to year-end.
Located adjacent to and immediately north-west of Buldania and includes strike extensions of the lithium-
prospective stratigraphy.
Toolebuc Vanadium Project, Qld, Australia
Maiden Inferred Mineral Resource announced:
~84Mt @ 0.30% V2O5.
Additional Exploration Target estimated adjacent to the Mineral Resource.
Bynoe Lithium Project, NT, Australia
Sale to Core Exploration Limited finalised.
Corporate
Strong financial position at year-end means the Company can continue to progress all of its projects
through to key milestones.
LIONTOWN RESOURCES LIMITED | ANNUAL REPORT 2018 | PAGE 3
Operating and Financial Review
Business Strategy and Outlook
During the reporting period, Liontown continued to advance its highly prospective portfolio of battery-related
metal projects, which includes the Kathleen Valley Lithium Project and the Buldania Lithium Project in Western
Australia and the Toolebuc Vanadium Project in Queensland. The decision to target these metals followed a
recognition of their increasing importance in the global economy, with strong demand growth being driven in
particular by the fast-growing electric vehicle industry, the continued emergence of the renewable energy
sector, and the need for cost-effective power storage.
The Company’s strategy is to maintain a focused, consistent approach to explore for battery metals at projects
where drill targets can be quickly converted to Mineral Resources which can then be developed. Results to date
from these three key projects have been highly encouraging, highlighting their prospectivity to host potentially
economic lithium and vanadium mineralisation.
Following the release of a maiden Mineral Resource estimate at Kathleen Valley, metallurgical test work is
continuing with the results to be incorporated into a Scoping Study scheduled for completion by the end of 2018.
At the Buldania Lithium Project, drilling results to date have been impressive, highlighting the potential for
extensive shallow lithium mineralisation. Both exploratory and in-fill drilling is continuing at Buldania, where the
Company believes there is good potential to outline a maiden Mineral Resource.
In a very active period subsequent to the end of the financial year, Liontown also released a maiden Mineral
Resource estimate for the Toolebuc Vanadium Project. Work will now focus on metallurgical studies for the
Toolebuc deposit, which will be important in determining the economic viability of this potentially significant
asset.
The Company cautions that key risks associated with external factors (movements in commodity prices, foreign
exchange rates, interest rates and debt and equity markets) may adversely impact the achievement of these
objectives.
Kathleen Valley Lithium Project
Toolebuc Vanadium Project
North West Queensland
Eastern Goldfields, Western Australia
TOWNSVILLE
PERTH
KALGOORLIE
Buldania Lithium Project
Norseman, Western Australia
LIONTOWN RESOURCES LIMITED | ANNUAL REPORT 2018 | PAGE 4
Kathleen Valley Lithium Project
Western Australia (100% Liontown)
THE KATHLEEN VALLEY PROJECT IS A SIGNIFICANT, NEW HIGH-GRADE LITHIUM DISCOVERY LOCATED ON
GRANTED MINING LEASES IN A TIER-1 MINING JURISDICTION, IN CLOSE PROXIMITY TO EXISTING TO EXISTING
TRANSPORT, ENERGY AND CAMP INFRASTRUCTURE, APPROXIMATELY 670KM NORTH-EAST OF PERTH,
WESTERN AUSTRALIA (FIGURE 1). SPODUMENE-BEARING PEGMATITES WERE PREVIOUSLY DISCOVERED BY
HISTORICAL PROSPECTING AT KATHLEEN VALLEY AND RESOURCE DEFINITION DRILLING BY LIONTOWN
HAS RECENTLY DELINEATED A LARGE, HIGH-GRADE, LITHIUM-TANTALUM MINERAL RESOURCE.
Figure 1: Kathleen Valley Project – Location plan, tenure and regional geology
LIONTOWN RESOURCES LIMITED | ANNUAL REPORT 2018 | PAGE 5
Kathleen Valley Lithium Project
Western Australia (100% Liontown)
Exploration
Liontown re-commenced drilling at Kathleen Valley in January 2018 following the receipt of statutory approvals
to access the main pegmatite targets. The drilling targeted strike extensions of intersections (up to 58m @ 1.2%
Li2O) reported last year and down-dip of high-grade (>1.5% Li2O) outcropping mineralisation. Since acquiring the
Kathleen Valley Project, Liontown has drilled a total of 155 holes for 20,281m, comprising 146 RC holes for 18,671m
and nine diamond core holes for 1,610m.
Subsequent to the end of the year, data from these holes were used by independent consultants Optiro Pty Ltd
to prepare a maiden Mineral Resource estimate of 21.2Mt @ 1.4% Li2O and 170ppm Ta2O5 (Table 1). Of further
significance, 75% of the Mineral Resource is classified as Measured or Indicated, setting a strong foundation for
future evaluation studies. Further details of the maiden Mineral Resource estimate are provided in Tables 1 and 2
below.
Table 1: Kathleen’s Corner and Mt Mann Mineral Resource as at September 2018
Resource category
Measured
Million tonnes
3.02
Li2O %
1.3
Ta2O5 ppm
190
Indicated
Inferred
Total
12.7
5.3
21.2
1.4
1.3
1.4
160
150
170
Notes:
Reported above a Li2O cut-off grade of 0.5%
Tonnages and grades have been rounded to reflect the
relative uncertainty of the estimate
Table 2: Kathleen Valley Mineral Resource reported by Li2O% cut off grades
Cut-off Li2O %
Million tonnes
Li2O %
Ta2O5 ppm
0.3
0.4
0.5
0.6
0.7
0.8
0.9
1.0
1.1
1.2
1.3
1.4
1.5
21.2
21.2
21.2
21.2
21.0
20.7
20.1
18.9
17.3
15.1
12.3
9.3
6.6
1.37
1.37
1.37
1.37
1.37
1.38
1.40
1.43
1.46
1.51
1.56
1.63
1.71
166
166
166
166
166
166
167
167
167
168
170
174
177
The Mineral Resource estimate is reported and classified in accordance with the guidelines of the 2012
Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (the JORC Code;
2012).
The Kathleen Valley Lithium Project is located on the western edge of the Norseman-Wiluna Belt within the
Archaean Yilgarn Craton. The lithium mineralisation is hosted within spodumene-bearing pegmatites, which are
part of a series of LCT-type rare metal pegmatites that intrude mafic and sedimentary rocks in the region.
LIONTOWN RESOURCES LIMITED | ANNUAL REPORT 2018 | PAGE 6
Kathleen Valley Lithium Project
Western Australia (100% Liontown)
Eighteen mineralised pegmatites have been identified at the Kathleen Valley Project hosted by two pegmatite
swarms – Kathleen’s Corner and Mt Mann (Figure 2). The Resource remains open along strike and at depth –
providing outstanding potential for further growth. The mineralisation at Kathleen’s Corner and Mt Mann is such
that open pit mining methods can be appropriately considered.
Figure 2: Kathleen Valley– 3D views of the drill holes and mineralised pegmatites coloured by
domain code (top - side view, looking north-west, bottom - looking west) 2x vertical exaggeration
Future Exploration
Metallurgical test work is ongoing with results due in Q4 2018.
Liontown will use the data from the Mineral Resource estimation and metallurgical test work to complete a
financial scoping study for the Kathleen Valley Project.
Opportunities to expand the Mineral Resource by undertaking further drilling is also planned.
LIONTOWN RESOURCES LIMITED | ANNUAL REPORT 2018 | PAGE 7
Buldania Lithium Project
Western Australia (100% Liontown)
THE BULDANIA PROJECT IS THE COMPANY’S SECOND LITHIUM DISCOVERY IN WESTERN AUSTRALIA, AND
IS LOCATED IN THE SOUTHERN PART OF THE EASTERN GOLDFIELDS PROVINCE. THE PROJECT IS LOCATED
CLOSE TO MAJOR INFRASTRUCTURE IN A REGION IS WELL-KNOWN FOR HOSTING SIGNIFICANT LITHIUM
DEPOSITS INCLUDING THE OPERATING MT MARION AND BALD HILL LITHIUM MINES. THE BULDANIA
PROJECT IS PART OF A LARGE, STRATEGIC LAND POSITION HIGHLY PROSPECTIVE FOR LITHIUM INCLUDING
THE NEIGBOURING NORCOTT PROJECT AND KILLALOE PROJECT, ACQUIRED BY LIONTOWN THIS YEAR.
Figure 3: Regional geology plan of SE Goldfields, WA showing Liontown project areas
LIONTOWN RESOURCES LIMITED | ANNUAL REPORT 2018 | PAGE 8
Buldania Lithium Project
Western Australia (100% Liontown)
Exploration
Since acquiring the Buldania Project, Liontown has drilled a total of 68 holes for 7,371m confirming the
discovery of significant new spodumene-related lithium bearing pegmatite at the Anna prospect.
The mineralisation is open in all directions, with the Anna pegmatite body covering a minimum strike length
of 650m with surface widths varying between 50m in the north-west to 250m in the south-east and 200m
down-dip (~150m vertical) (Figures 4 and 5)
Better intersections are shown in Figures 4 and 5.
Figure 4: Buldania Project/Anna Prospect – Drill hole plan showing better drill results
LIONTOWN RESOURCES LIMITED | ANNUAL REPORT 2018 | PAGE 9
Buldania Lithium Project
Western Australia (100% Liontown)
Figure 5: Buldania Project – Drill section A (Anna Prospect) – see Figure 4 for position.
Future Exploration
The current drilling program has been expanded and was ongoing at the time of reporting. Final results from
the current program will be combined with those from previous drilling to fast-track a maiden Mineral Resource
estimate. A diamond drilling program designed to provide geological data and samples for metallurgical test
work is due shortly.
Land Status and Acquisition Terms - Buldania
The Buldania Project area totals ~55km2 and comprises one granted Exploration Licence (EL 63/856) and one
granted Prospecting Licence (PL63/1977).
The licences are held by Westgold Resources Ltd (ASX: WGX). Liontown, has acquired the lithium and related
metals rights for the Buldania Project by meeting certain minimum expenditure commitments and paying
Avoca $2 per tonne of ore mined and 1.5% of the gross sales revenues in respect to any lithium or related metals
extracted from the tenements.
Westgold retains the rights to all other metals (excluding lithium and related metals) and has priority access for
exploration.
LIONTOWN RESOURCES LIMITED | ANNUAL REPORT 2018 | PAGE 10
Buldania Lithium Project
Western Australia (100% Liontown)
Norcott Lithium Project
Western Australia (100% Liontown)
The Norcott Project is located immediately south-east of the Buldania Project and covers the strike extension of
the same lithium-prospective stratigraphy (Figure 3). Liontown has acquired two Exploration Licences, including
the rights to all metals, covering a total area of 370km2.
There has been no previous lithium exploration on the Norcott Project; however, reconnaissance geological
mapping and limited rock chip sampling has identified lithium- and tantalum-bearing pegmatites (with grades
of up to 1.8% Li2O and 92ppm Ta2O5), confirming the potential of the project to host significant mineralisation.
Bedrock exposure is obscured by shallow cover and a soil sampling program designed to define possible drill
targets is planned for Q4 2018.
Killaloe Lithium Project
Western Australia (Up to 100% Liontown)
The ~163km2 Killaloe Project is located immediately north-west of the Buldania Project and covers the strike
extension of the same lithium-prospective stratigraphy (Figure 3).
Subsequent to year end, Liontown entered into a sale agreement to acquire the Killaloe Project from Matsa
Resources Limited (ASX: MAT) in consideration for 20 million Liontown shares and a 1% NSR Royalty. The
acquisition significantly expands Liontown’s lithium-prospective footprint in the region. Completion of the Sale
Agreement has been achieved with all conditions satisfied.
Liontown will undertake a review of historic data, geological mapping and geochemical sampling to define
targets for drill testing in the coming year.
LIONTOWN RESOURCES LIMITED | ANNUAL REPORT 2018 | PAGE 11
Toolebuc Vanadium Project
Queensland (100% Liontown)
THE 100%-OWNED TOOLEBUC VANADIUM PROJECT HAS AN INFERRED MINERAL RESOURCE (TABLE 3)
LOCATED IN NW QUEENSLAND, APPROXIMATELY 440KM WEST OF TOWNSVILLE (FIGURE 5). THE REGION
HOSTS A NUMBER OF LARGE VANADIUM DEPOSITS AND OFFERS EXCELLENT ROAD, RAIL AND CAMP
INFRASTRUCTURE. LIONTOWN HAS FIVE, WHOLLY-OWNED TENEMENTS WHICH ADJOIN EXISTING
RESOURCES AND THE PROJECT REPRESENTS A LOW-COST ENTRY INTO VANADIUM, A COMMODITY THAT IS
CRITICAL TO THE FUTURE OF ENERGY STORAGE.
Figure 6: Toolebuc Vanadium Project – Location, regional geology and tenure
Exploration
Subsequent to the end of the Year, Liontown announced a maiden Inferred Mineral Resource estimate of
approximately 83.7Mt @ 0.30% V2O5 for the Cambridge deposit, located within the Toolebuc Project (Figure 6).
The Mineral Resource was prepared by independent specialist resource and mining consulting group Optiro Pty
Ltd and is summarised below:
LIONTOWN RESOURCES LIMITED | ANNUAL REPORT 2018 | PAGE 12
Toolebuc Vanadium Project
Queensland (100% Liontown)
Table 3: Cambridge Deposit Mineral Resource as at July 2018 reported above a cut-off of 0.25% V2O5
Resource category
Million tonnes
V2O5 %
MoO3 ppm
Inferred
Total
83.7
83.7
0.30
0.30
188
188
Notes:
Reported above a V2O5 cut-off grade of 0.25
Tonnages and grades have been rounded to reflect the
relative uncertainty of the estimate
Table 4: Cambridge Deposit Mineral Resource reported by V2O5 grades
Cut-off V2O5 %
Million tonnes
V2O5 %
MoO3 ppm
0.15
0.20
0.25
0.30
0.35
0.40
185.4
148.1
83.7
34.5
7.9
1.7
0.25
0.27
0.30
0.34
0.38
0.42
161
172
188
202
217
226
The Mineral Resource estimate is reported and classified in accordance with the guidelines of the 2012
Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (the JORC Code;
2012).
Vanadium mineralisation at the Cambridge deposit is located within marine sediments of the Early Cretaceous
Toolebuc Formation, a stratigraphic unit that occurs throughout the Eromanga Basin in Central Northern
Queensland. The Toolebuc Formation is a flat-lying, early Cretaceous age sediment that consists predominantly
of black carbonaceous and bituminous shale and minor siltstone with limestone lenses and coquinites. The
mineralisation at Cambridge extends from 1m to 22m below surface (average 10m) and ranges in thickness from
2m to 17m, with an average thickness of 9.7m
The Cambridge deposit is 5km long, up to 3km wide, and lies adjacent to and immediately east of the Lilyvale
vanadium deposit, owned by Intermin Resources Ltd.
Preliminary metallurgy also indicated that the mineralised material is oxidized, shallow, soft, friable and probably
free-digging. The vanadium is largely contained within the finer fraction (<38um) meaning it may be suitable for
pre-concentration and the mineralisation is also amenable to acid leaching. The Company is currently reviewing
advancements in processing technologies.
Cambridge Exploration Target
The Inferred Mineral Resource at Cambridge is open in all directions and Liontown has defined an Exploration
Target area (Figure 7) based on the continuity of the mineralisation indicated by resource drilling by Intermin on
the adjacent Lilyvale deposit and the extent of outcropping Toolebuc Formation shown on Queensland
government geological maps.
Within this area it is estimated that there is an Exploration Target of 100Mt to 110Mt at an average grade of 0.28%
to 0.32% V2O5. The Exploration Target is additional to and adjacent to the Cambridge Inferred Mineral Resource.
Liontown intends to drill this area to extend the Mineral Resource.
The potential quantity and grade of the Exploration Target is conceptual in nature as there has been insufficient
exploration within these areas to estimate a Mineral Resource and it is uncertain if further exploration will result in
the definition of Mineral Resources within these areas.
LIONTOWN RESOURCES LIMITED | ANNUAL REPORT 2018 | PAGE 13
Toolebuc Vanadium Project
Queensland (100% Liontown)
Figure 7: Cambridge area – Drill hole plan showing Inferred Mineral Resource and Exploration Target Areas
Future Exploration
Further drilling is planned to extend the current resource area, collect samples for further metallurgical test
work and test other targets within project area. This work is conditional on finalising access negotiations with
local land owners.
Sale of Bynoe Lithium Project
The sale of the Bynoe Lithium Project in the Northern Territory to Core Exploration Limited was completed
during the year.
Liontown received $1.5 million in cash and 39,232,025 shares in Core. In addition, a further $1.5 million is payable
in cash or Core shares (at Core’s election) upon the definition of a JORC compliant Mineral Resource exceeding 5
million tonnes within Liontown’s Bynoe tenure. Liontown has since disposed of all Core Shares received.
Tanzania
Due to the ongoing success of exploration and resource development activities at its key Australian lithium and
vanadium projects, Liontown is currently in the process of relinquishing its interests in the Jubilee Reef Gold
Project in Tanzania. Upon completion of this process Liontown will cease to have any further interests in
Tanzania, and the Company’s focus will remain on its growing Australian battery-metal projects.
LIONTOWN RESOURCES LIMITED | ANNUAL REPORT 2018 | PAGE 14
Operating and Financial Review
Financial Review
Financial Performance
The group reported a net loss from continuing operations of $0.853 million for the year compared to a net loss of
$3.283 million in 2017. Exploration expenditure increased by $0.647 million and corporate administrative
expenditure by $0.564 million. This was offset by the sale of the Group’s Bynoe lithium project for $3.579 million
and Kathleen Valley tenements for $0.235 million.
Statement of Cash Flows
Cash and cash equivalents at 30 June 2018 were $2.857 million (2017: $1.416 million). The increase in cash of $1.441
million is due primarily to the Company selling its Bynoe lithium project and also completing a placement in
June 2018 raising $3 million by the issuance of 111,111,111 shares at $0.027 per share offset by increases in
exploration expenditure and corporate administrative expenditure.
Financial Position
At balance date the group had net assets of $3.887 million (2017: $1.502 million), and an excess of current assets
over current liabilities of $3.788 million (2017: $1.350 million). Current assets increased 189% from $1.491 million in
2017 to $4.314 million in 2018 due to an increase in cash at bank and the Group’s investment in Core Exploration
Limited. The Group received in addition to $1.500 million cash, 39,232,025 in Core Exploration Limited shares for
the sale of its Bynoe lithium project.
At balance date the Group had 26,154,683 shares in Core Exploration Limited remaining, which were
subsequently sold in July 2018.
Current liabilities increased by 273% from $0.141 million in 2017 to $0.526 million in the 2018 financial year. The
significant increase in current liabilities is mainly a result of the level of exploration activity still in progress at 30
June 2018.
Corporate
Capital Raisings
In June 2018, the Company completed a placement for 111,111,111 fully paid ordinary shares at $0.027 per share
raising $3 million.
In May 2018, the Company acquired the Norcott Lithium Project from Galahad Resources Pty Ltd in consideration
for issuing 1,785,714 fully paid ordinary shares at an issue price of $0.028 per share.
In September 2018, the Company issued 10,000,000 shares (tranche 1) to Matsa Resources Ltd in part
consideration for the Killaloe Lithium Project. A further 10,000,000 shares (tranche 2) will be issued shortly,
pending the finalisation of relevant documentation.
LIONTOWN RESOURCES LIMITED | ANNUAL REPORT 2018 | PAGE 15
Mineral Resource Statement
As at 30 June 2018
The Company reviews and reports its mineral resources at least annually. The date of reporting is 30 June each
year, to coincide with the Company’s end of financial year balance date. If there are any material changes to its
material mineral resources over the course of the year, the Company is required to report these changes.
Jubilee Reef Gold Project
During the 30 June 2017 reporting period the Company issued a maiden mineral resource statement for the
Jubilee Reef Project in Tanzania. There has been no movement during the year.
Reconciliation of Jubilee Reef Gold Project Mineral Resource
Mineral Resources
June 2017
June 2018
Deposit
Classification
Million
Tonnes
Grade
g/t gold
Contained
metal
(koz gold)
Million
Tonnes
Grade g/t
gold
Contained
metal
(koz gold)
Simba
Inferred
Panapendesa
Inferred
Total
Inferred
7.4
1.1
8.5
1.4
2.0
1.4
320
70
390
7.4
1.1
8.5
1.4
2.0
1.4
320
70
390
Governance Arrangements and Internal Controls
The Company has ensured that the mineral resources quoted are subject to good governance arrangements and
internal controls. The mineral resources reported have been generated by Mrs Christine Standing of Optiro Pty
Ltd, an independent external consultant who is experienced in this style of gold deposit and who undertakes
best practices in modelling and estimation methods. The consultant has also undertaken reviews of the quality
and suitability of the underlying information used to generate the resource estimation. In addition, Liontown’s
management carries out regular reviews and audits of internal processes and external consultants that have
been engaged by the Company.
Subsequent to year end, the Company announced with the ASX, maiden Mineral Resources located at the
Kathleen Valley Lithium Project and Toolebuc Vanadium Project on 4th September 2018 and 30th July 2018
respectively. Refer to pages 6 and 13 for full details.
The Company also announced on 13 September 2018 that it is in the process of relinquishing its interests in the
Jubilee Reef Gold Project in Tanzania and will focus on its Australian battery-metal projects.
LIONTOWN RESOURCES LIMITED | ANNUAL REPORT 2018 | PAGE 16
Competent Persons Statement
Kathleen Valley Lithium Project
The Information in this report that relates to the Exploration Results for the Kathleen Valley Project is extracted
from ASX announcement entitled “Final assays expand Kathleen Valley lithium deposit ahead of maiden
Resource” released on the 6th August 2018 which is available on www.ltresources.com.au. The company confirms
that it is not aware of any new information or data that materially affects the information included in the original
market announcements. The Company confirms that the form and context in which the Competent Persons’
findings are presented have not been materially modified from the original market announcement.
The information in this report which relates to Mineral Resources for the Kathleen Corner’s and Mt Mann deposits
is based upon information compiled by Mrs Christine Standing who is a Member of the Australasian Institute of
Mining and a Member of the Australian Institute of Geoscientists. Mrs Standing is an employee of Optiro Pty Ltd
and has sufficient experience relevant to the style of mineralisation, the type of deposit under consideration and
to the activity undertaken to qualify as a Competent Person as defined in the 2012 edition of the ‘Australasian
Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’. Mrs Standing consents to the
inclusion in the report of a summary based upon her information in the form and context in which it appears.
Buldania Lithium Project
The Information in this report that relates to the Exploration Results for the Buldania Project is extracted from
the ASX announcements entitled “Liontown confirms second significant lithium discovery in WA with new thick,
high-grade hits at Buldania” release on the 19th September 2018 and “More strong assays confirm significant
lithium discovery at Buldania Project in WA” released on the 26th March 2018 which are available on
www.ltresources.com.au.
Toolebuc Vanadium Project
The Information in this report that relates to Exploration Results for the Toolebuc Vanadium Project is extracted
from the ASX announcements entitled “Initial fieldwork confirms outstanding potential of Toolebuc Vanadium
Project in Queensland” and “Extensive Vanadium Mineralisation Defined – Toolebuc Project” released on the 4th
and 23rd April 2018 which are available on www.ltresources.com.au . The company confirms that it is not aware of
any new information or data that materially affects the information included in the original market
announcements. The Company confirms that the form and context in which the Competent Persons’ findings
are presented have not been materially modified from the original market announcement.
The information in this report which relates to Mineral Resources for the Cambridge Deposit is based upon
information compiled by Mrs Christine Standing who is a Member of the Australasian Institute of Mining and a
Member of the Australian Institute of Geoscientists. Mrs Standing is an employee of Optiro Pty Ltd and has
sufficient experience relevant to the style of mineralisation, the type of deposit under consideration and to the
activity undertaken to qualify as a Competent Person as defined in the 2012 edition of the ‘Australasian Code for
Reporting of Exploration Results, Mineral Resources and Ore Reserves’. Mrs Standing consents to the inclusion in
the report of a summary based upon her information in the form and context in which it appears.
Forward Looking Statement
This report contains forward-looking statements which involve a number of risks and uncertainties. These
forward looking statements are expressed in good faith and believed to have a reasonable basis. These
statements reflect current expectations, intentions or strategies regarding the future and assumptions based on
currently available information. Should one or more of the risks or uncertainties materialise, or should underlying
assumptions prove incorrect, actual results may vary from the expectations, intentions and strategies described
in this announcement.
No obligation is assumed to update forward looking statements if these beliefs, opinions and estimates should
change or to reflect other future developments.
LIONTOWN RESOURCES LIMITED | ANNUAL REPORT 2018 | PAGE 17
Tenement No.
Registered Holder
Nature of interests
Tenement Schedule
Project
Buldania
Killaloe
Kathleen Valley
E63 / 856
P63 / 1977
M63 / 177
E63 / 1018*
E63 / 1199*
E63 / 1655
E63 / 1646
E63 / 1660
E63 / 1661
E63 / 1662
E63 / 1713
M36 / 264
M36 / 265
M36 / 459
M36 / 460
E36 / 879
Toolebuc Vanadium
EPM / 26490
Moora
Norcott
EPM / 26491
EPM / 26492
EPM / 26494
EPM / 26495
E70 / 5217
E63 / 1824
E63 / 1863
Norseman Regional
P63 / 2127
P63 / 2128
P63 / 2129
Avoca Resources Pty Ltd
100% of rights to lithium
and related metals
secured by Lithium
Rights Agreement
100% Killaloe Minerals
Pty Ltd
* 20% held by Cullen
Exploration Pty Ltd
100% of Killaloe Minerals
interests - subject to
transfer
LRL (Aust) Pty Ltd
(wholly owned
subsidiary of Liontown
Resources Limited)
100% - gold and nickel
rights retained by other
parties
Liontown Resources
Limited
100% - all metal rights
Liontown Resources
Limited
100%
ERL (Aust) Pty Ltd
0% - application
Galahad Resources
Limited
0% - application. Right to
100% of all metal rights
secured by Agreement
LRL (Aust) Pty Ltd
(wholly owned
subsidiary of Liontown
Resources Limited)
LRL (Aust) Pty Ltd
(wholly owned
subsidiary of Liontown
Resources Limited)
100%
0% - applications
LIONTOWN RESOURCES LIMITED | ANNUAL REPORT 2018 | PAGE 18
Director’s Report
The Directors present their report together with the financial statements of the Group consisting of Liontown
Resources Limited (‘Liontown Resources’ or ‘the Company’) and its controlled entities for the financial year ended
30 June 2018 and the independent auditor’s report thereon.
1. Directors
The names and details of the Company’s directors in office during the financial year and until the date of this report
are as follows. Directors were in office for the entire period unless otherwise stated.
Mr T R B Goyder
Non-Executive
Chairman
Experience:
Mr Goyder was a Non-Executive Director for the whole of the financial year. Mr
Goyder was appointed as Non-Executive Chairman on 2 February 2006.
Mr Goyder has considerable years’ experience in the resource industry. He has
been involved in the formation and management of a number of publicly-listed
companies.
Interests in Shares and
Options at the date of
this report:
226,184,982 ordinary shares
6,000,000 unlisted options
Special Responsibilities: None
Directorships held in
other listed entities in
the last three years:
Mr Goyder is currently Executive Chairman of Chalice Gold Mines Limited,
Chairman of DevEx Resources Limited and Non-Executive Director of Strike
Energy Limited.
Mr D R Richards
Managing Director
Mr Richards was Managing Director for the whole of the financial year. Mr
Richards was appointed as Managing Director on 1 May 2010.
Qualifications:
BSc (Hons), MAIG
Experience:
Mr Richards has over 30 years’ experience in mineral exploration in Australia,
Southeast Asia and western USA. His career includes exploration and resource
definition for a variety of gold and base metal deposit styles and he led the team
that discovered the multi-million ounce, high grade Vera-Nancy gold deposits in
North Queensland. He has held senior positions with Battle Mountain Australia Inc,
Delta Gold Limited, AurionGold Limited and was Managing Director of ASX-listed
Glengarry Resources Limited from 2003-2009.
Interests in Shares and
Options at the date of
this report:
3,431,500 ordinary shares
10,000,000 unlisted options
Special Responsibilities: None
Directorships held in
other listed entities in
the last three years:
None
LIONTOWN RESOURCES LIMITED | ANNUAL REPORT 2018 | PAGE 19
Director’s Report
Mr C R Williams
Non-Executive Director Mr Williams was a Non-Executive Director for the whole of the financial year. Mr
Williams was appointed as a Non-Executive Director on 14 November 2006.
Qualifications:
BSc (Hons)
Experience:
Mr Williams is a Geologist with over 40 years’ experience in mineral exploration and
development. Mr Williams co-founded Equinox Minerals Limited in 1993 and was
President, Chief Executive Officer and Director prior to Barrick Gold’s takeover of
Equinox. He has been directly involved in several significant discoveries, including
the Ernest Henry Deposit in Queensland and a series of gold deposits in Western
Australia. In addition to his technical capabilities, he also has extensive corporate
management and financing experience.
Interests in Shares and
Options at the date of
this report:
14,663,122 ordinary shares
3,000,000 unlisted options
Special Responsibilities: Member of the Audit Committee.
Mr Williams is currently Chairman of OreCorp Limited.
Directorships held in
other listed entities in
the last three years:
Mr A J Cipriano
Non-Executive Director Mr Cipriano was a Non-Executive Director for the whole of the financial year. Mr
Cipriano was appointed as a Non-Executive Director on 1 July 2014.
Qualifications:
B.Bus, CA, GAICD
Experience:
Mr Cipriano is a Chartered Accountant with over 30 years accounting and finance
experience. Mr Cipriano was formerly a partner at Deloitte and at the time of his
retirement in 2013 he was the Deloitte National Tax Leader for Energy & Resources
and leader of its Western Australian Tax Practice. Mr Cipriano has significant
experience working across tax, accounting, legal and financial aspects of corporate
transactions.
Interests in Shares and
Options at the date of
this report:
6,370,479 ordinary shares
3,000,000 unlisted options
Special Responsibilities: Chairman of the Audit Committee.
Directorships held in
other listed entities in
the last three years:
None
LIONTOWN RESOURCES LIMITED | ANNUAL REPORT 2018 | PAGE 20
Director’s Report
2. Company secretary
The names and details of the Company Secretary in office during the financial year and until the date of this report
are as follows:
Ms K A Verheyen
Company Secretary
Ms Verheyen was appointed as Company Secretary on 15 September 2017.
Qualifications:
B.Com, CA
Experience:
Ms L Stevens
Ms Verheyen is a Chartered Accountant with over 20 years’ experience gained in
both public practice and commerce. Ms Verheyen commenced her career with
Deloitte and has since held finance positions in a diverse range of industries. Ms
Verheyen is also the Company Secretary of DevEx Resources Limited.
Company Secretary
Ms Stevens was Company Secretary until her resignation on 15 September 2017.
Qualifications:
B.Com, CA
Experience:
Leanne is a Chartered Accountant who has over 15 years of accounting and
governance experience within the mining and energy industries. Leanne resigned
from the position of Company Secretary effective 15 September 2017.
3. Directors’ meetings
The number of meetings of directors (including meetings of committees of directors) held during the year and the
number of meetings attended by each director were as follows:
Directors’ Meetings
Audit Committee
Risk Committee
Held
Attended
Held
Attended
Held
Attended
T R B Goyder
D R Richards
C R Williams
A J Cipriano
7
7
7
7
7
7
6
7
-
-
4
4
-
-
4
4
1
1
1
1
1
1
1
1
Given the current size and composition of the Board, the Company has not established a separate remuneration or
nomination committee. The full Board did not officially convene as a nomination committee during the reporting
period, however, nomination discussions occurred at Board meetings as required.
4. Principal activities
The principal activities of the Company during the course of the financial year were mineral exploration and
evaluation.
5. Review of operations
Refer to the Operating and Financial Review from pages 3 to 15 of the Annual Report.
6. Significant changes in the state of affairs
There were no significant changes in the state of affairs other than as noted elsewhere in this financial report.
7. Dividends
No dividends were declared or paid during the period and the directors recommend that no dividend be paid.
8. Events subsequent to reporting date
In July 2018, the Company sold its remaining 26,154,683 shares in Core Exploration Limited at a weighted average
sales price of $0.042, for total proceeds of $1.098 million before costs. Subsequent to year end, Liontown entered
into a sale agreement to acquire the Killaloe Project from Matsa Resources Limited (ASX: MAT) in consideration for
20 million Liontown shares and a 1% NSR Royalty. The acquisition significantly expands Liontown’s lithium-
prospective footprint in the region. Completion of the Sale Agreement has been achieved with all conditions
satisfied.
LIONTOWN RESOURCES LIMITED | ANNUAL REPORT 2018 | PAGE 21
Director’s Report
In September 2018, the Company issued 10,000,000 shares (tranche 1) to Matsa Resources Ltd in part consideration
at $0.027 per share. The remaining 10,000,000 shares (tranche 2) will be issued shortly, pending the finalisation of
relevant documentation.
9. Likely developments
There are no likely developments that will impact on the Company other than as disclosed elsewhere in this report.
10. Indemnification and insurance of directors and officers
The Company has taken out an insurance policy insuring Directors and Officers of the Company against any liability
arising from a claim bought by a third party against the Company or its current or former Directors or Officers and
against liabilities for costs and expenses incurred by them in defending any legal proceedings arising out of their
conduct while acting in their capacity as a Director or Officer of the Company, other than conduct involving a wilful
breach of duty in relation to the Company.
The Company indemnifies each of the Directors and Officers of the Company. Under its Constitution, the Company
will indemnify those Directors or Officers against any claim or for any expenses or costs which may arise as a result
of work performed in their respective capacities as Directors or Officers of the Company and any related entity.
11. Proceedings on behalf of the Company
No person has applied for leave of court to bring proceedings on behalf of the Company or intervene in any
proceedings to which the Company is a party for the purpose of taking responsibility on behalf of the Company for
all or part of those proceedings.
12. Environmental Regulations
The Company is subject to material environmental regulation in respect to its exploration activities. The Company
aims to ensure the appropriate standard of environmental care is achieved, and in doing so, that it is aware of and
is compliant with all environmental legislation. The directors of the Company are not aware of any breach of
environmental legislation for the period under review.
13. Non-audit services
During the year HLB Mann Judd, the Company’s auditor has performed no other services in addition to their
statutory audit duties.
14. Options granted over unissued shares
At the date of this report 34,750,000 fully paid ordinary shares of the Company are under option on the following
terms and conditions:
Options
Exercisable at $0.035 each on or before 31 March 2021
Exercisable at $0.02 each on or before 31 October 2022
Exercisable at $0.026 each on or before 22 October 2020
Exercisable at $0.05 each on or before 30 April 2021
Exercisable at $0.038 each on or before 29 August 2021
Total Options
Remuneration report – audited
15.
15.1 Introduction
Number
9,300,000
18,700,000
5,000,000
750,000
1,000,000
34,750,000
This remuneration report for the year ended 30 June 2018 outlines remuneration arrangements in place for directors
and other members of the key management personnel (“KMP”) of Liontown Resources in accordance with the
requirements of the Corporations Act 2001 (the Act) and its regulations. This information has been audited as
required by section 308(3C) of the Act.
LIONTOWN RESOURCES LIMITED | ANNUAL REPORT 2018 | PAGE 22
Director’s Report
The remuneration report details the remuneration for KMP who 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 parent company, or any controlled entity. KMP’s during or since
year end were:
(i) Directors
T R B Goyder (Chairman)
C R Williams (Non-executive Director)
A J Cipriano (Non-executive Director)
D R Richards (Managing Director)
(ii) Executives
Richard Hacker (CFO)
There were no other changes to KMP after the reporting date and before the date the financial report was authorised
for issue.
15.1.1
Remuneration philosophy
The performance of the Company depends upon the quality of the directors and executives. The philosophy of the
Company in determining remuneration levels is to set competitive remuneration packages to attract and retain
high calibre employees and to link a significant component of executive rewards to shareholder value creation. The
size, nature and financial strength of the Company are also taken into account when setting remuneration levels so
as to ensure that the operations of the Company remain sustainable.
Remuneration committee
The Board performs the role of the Remuneration Committee and is responsible for determining and reviewing
compensation arrangements for the directors, the Managing Director and any executives.
15.1.2 Remuneration structure
In accordance with best practice corporate governance, the structure of non-executive and executive remuneration
is separate and distinct.
Non-executive director remuneration
The Board recognises the importance of attracting and retaining talented non-executive directors and aims to
remunerate these directors in line with fees paid to directors of companies of a similar size and complexity in the
mining and exploration industry. The Board seeks to set aggregate remuneration at a level that provides the
Company with the ability to attract and retain directors of the highest calibre, whilst incurring a cost that is
acceptable to shareholders.
The Company’s Constitution and the ASX Listing Rules specify that the aggregate fees to be paid to non-executive
directors for their role as a director are to be approved by shareholders at a general meeting. Shareholders have
approved an aggregate amount of up to $300,000 per year (including superannuation).
The amount of total compensation apportioned amongst directors is reviewed annually and the Board considers
advice from external shareholders as well as the fees paid to non-executive directors of comparable companies
when undertaking the annual review process. The Board will not seek any increase for the non-executive pool at the
2018 AGM.
The remuneration of non-executive directors consists of directors’ fees. Each director receives a fee for being a
director of the Company. During the year, the Board approved an additional $5,000 per annum to be paid to
members of the Audit Committee. The non-executive directors are not entitled to receive retirement benefits and,
at the discretion of the Board, may participate in the Employee Share Option Plan, subject to the usual approvals
required by shareholders.
The Board considers it may be appropriate to issue options to non-executive directors given the current nature and
size of the Company as, until profits are generated, conservation of cash reserves remain a high priority. Any options
issued to directors will require separate shareholder approval.
Apart from their duties as directors, some non-executive directors may undertake work for the Company on a
consultancy basis pursuant to the terms of any consultancy services agreement. The nature of the consultancy work
may vary depending on the expertise of the relevant non-executive director. Under the terms of any consultancy
agreements non-executive directors would receive a daily rate or a monthly retainer for the work performed at a
rate comparable to market rates that they would otherwise receive for their consultancy services. No fees were paid
this year under any such consultancy services agreement in the year ended 30 June 2018 and 30 June 2017.
LIONTOWN RESOURCES LIMITED | ANNUAL REPORT 2018 | PAGE 23
Director’s Report
Executive remuneration
The Company’s executive remuneration strategy is designed to attract, motivate and retain high performance
individuals and align the interests of executives and shareholders. Remuneration consists of fixed remuneration
and variable remuneration (comprising short-term and long-term incentive schemes).
Fixed remuneration
Fixed remuneration is reviewed annually by the Board by a process which consists of a review of relevant
comparative remuneration in the market and, where appropriate, external advice on policies and practices.
Variable remuneration - Long term incentive scheme
Options may be issued under the Employee Share Option Plan to directors, employees and consultants of the
Company and must be exercised within 3 months of termination. Other than the vesting period, there is no
performance hurdle required to be achieved by the Company to enable the options to be exercised. The Employee
Share Option Plan was approved by shareholders on 24 November 2015.
The Company believes that the issue of share options in the Company aligns the interests of directors, employees
and shareholders alike. As no formal performance hurdles are set on options issued to executives, the Company
believes that as options are issued at a price in excess of the Company’s current share price at the date of issue of
those options, there is an inherent performance hurdle as the share price of the Company’s shares has to increase
before any reward can accrue to the executive.
Short term incentive schemes
The Company currently has no formal performance related remuneration policy which governs the payment of
annual cash bonuses upon meeting pre-determined performance targets. However, the board may consider
performance related remuneration in the form of cash or share options when they consider these to be warranted.
There were no bonuses paid or received in the years ended 30 June 2018 and 30 June 2017.
LIONTOWN RESOURCES LIMITED | ANNUAL REPORT 2018 | PAGE 24
Director’s Report
15.2 Remuneration of key management personnel
The table below shows the fixed and variable remuneration for key management personnel.
2018
Short-term benefits
Post-
employment
benefits
Share-based
payments
Salary & fees Other fees1
Superannuation
Options2
Total
Proportion of
remuneration
performance
based
$
$
$
$
$
%
Directors
T R Goyder 3,4
32,110
D R Richards
204,338
C R Williams
A J Cipriano
Executive
34,610
34,610
3,201
9,291
3,201
3,201
3,050
19,412
3,288
3,288
88,381
126,742
176,762
409,803
44,190
85,289
44,190
85,289
R K Hacker 4
-
-
-
11,569
11,569
Total
305,668
18,894
29,038
365,092
718,692
2017
Short-term benefits
Post-
employment
benefits
Share-based
payments
Salary & fees Other fees1
Superannuation
Options2
Total
Proportion of
remuneration
performance
based
$
$
$
$
$
%
Directors
T R Goyder 3,4
-
D R Richards
200,913
C R Williams
A J Cipriano
Executive
32,110
32,110
2,599
7,608
2,599
2,599
R K Hacker 4
-
-
Total
265,133
15,405
-
19,087
3,050
3,050
-
25,187
-
-
-
-
-
-
2,599
227,608
37,759
37,759
-
305,725
-
-
-
-
-
-
-
-
-
-
-
-
1 Other fees, where applicable, includes the cost to the Company of providing fringe benefits and the attributable
non-cash benefit applied by virtue of the Company’s Directors and Officers Liability policy.
2 The fair value of the options is calculated using a Black-Scholes valuation model and allocated to each reporting
period starting from grant date to vesting date.
3 Mr Goyder suspended his directors’ fees from 1 January 2015 to 30 June 2017 to assist in conserving the Company’s
cash reserves. From 1 July 2017 Mr Goyder received a non-executive director’s fee of $35,160 per annum (inclusive of
superannuation) and from 1 August 2018 Mr Goyder’s non-executive director’s fee increased to $151,500 per annum
(inclusive of superannuation). The increase reflects the increase in time by Mr Goyder to assist the Managing
Director over the next 12 months.
4 Mr Goyder and Mr Hacker did not receive any salary and wages for the 2018 and 2017 financial year as Mr Goyder
and Mr Hacker are remunerated by Chalice Gold Mines Limited and their services are recovered through a corporate
services agreement between the Company and Chalice Gold Mines Limited.
LIONTOWN RESOURCES LIMITED | ANNUAL REPORT 2018 | PAGE 25
Director’s Report
15.3 Key management personnel shareholdings
The relevant interest of each of the key management personnel in the share capital of the Company as at 30 June
2018 was:
Directors
Balance
1 July 2017
Granted as
remuneration
Received on
exercise of
options
Other changes
1
Balance
30 June 2018
T R Goyder
226,184,982
D R Richards
C R Williams
A J Cipriano
R K Hacker
3,431,500
14,663,122
6,370,479
5,487,190
-
-
-
-
-
Directors
Balance
1 July 2016
Granted as
remuneration
Received on
exercise of
options
T R Goyder
180,487,483
D R Richards
C R Williams
A J Cipriano
R K Hacker
2,859,583
12,219,268
5,308,732
4,333,333
-
-
-
-
-
1 Other changes refer to shares purchased and sold on the open market.
15.3.1
Share-based payments
-
-
-
-
-
-
-
-
-
-
-
-
-
-
226,184,982
3,431,500
14,663,122
6,370,479
(1,237,190)
4,250,000
Other changes
1
Balance
30 June 2017
45,697,499
226,184,982
571,917
3,431,500
2,443,854
14,663,122
1,061,747
6,370,479
1,153,857
5,487,190
As outlined in 15.1.13, Directors, key employees and consultants may be eligible to participate in equity-based
compensation schemes.
Employee Share Option Plan
Under the terms and conditions of the options issued to employees, each option gives the holder the right to
subscribe to one fully paid ordinary share. Any option not exercised before the expiry date will lapse on the expiry
date.
Options granted to KMP during the reporting period have been valued using the Black-Scholes option valuation
method. The following table lists the inputs to the model for options granted during the period:
Dividend yield
Expected volatility
Risk-free interest rate
Expected life of options
Exercise price
Grant date share price
Expiry date
Number
Executive
Directors
Nil
100%
2.3%
5 years
$0.02
$0.009
Nil
100%
2.3%
5 years
$0.02
$0.028
31 October 2022
31 October 2022
2,000,000
16,000,000
Fair value at grant date
$0.0058
$0.0221
LIONTOWN RESOURCES LIMITED | ANNUAL REPORT 2018 | PAGE 26
Director’s Report
There are no participating rights or entitlements inherent in the options and the holders will not be entitled to
participate in new issues of capital offered to shareholders during the currency of the options. All shares allotted
upon the exercise of options will rank pari passu in all respect with other shares.
The below table shows a reconciliation of options held by each KMP during the year:
2018
Grant
date
Opening
balance
vested and
exercisable
Granted as
compen-
sation
Vested
Vested
%
Expired /
forfeited
T R Goyder
28 Nov 17
2,000,000
4,000,000 4,000,000
100%
D R Richards
28 Nov 17
2,000,000
8,000,000
8,000,000
100%
C R Williams
28 Nov 17
1,000,000
2,000,000
2,000,000
100%
A J Cipriano
28 Nov 17
1,000,000
2,000,000
2,000,000
100%
R K Hacker
10 Oct 17
1,000,000
2,000,000
2,000,000
100%
2017
Grant
date
Opening
balance
vested and
exercisable
Granted as
compen-
sation
Vested
Vested
%
Expired /
forfeited
-
-
-
-
-
Closing
balance
vested and
exercisable
6,000,000
10,000,000
3,000,000
3,000,000
3,000,000
Closing
balance
vested and
exercisable
T R Goyder
24 May 16
2,000,000
D R Richards
24 May 16
6,000,000
C R Williams
24 May 16
1,000,000
A J Cipriano
24 May 16
1,000,000
R K Hacker
8 Apr 16
1,750,000
15.4 Employment contracts
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
2,000,000
(4,000,000)
2,000,000
-
-
1,000,000
1,000,000
(750,000)
1,000,000
Remuneration arrangements for KMP are generally formalised in employment agreements. Details of these
contracts are provided below.
Name and job title
Employment contract
duration
D R Richards 1
Unlimited
R K Hacker 2
n/a
n/a
3 months by the
Company and employee
Nil
n/a
Notice period
Termination provisions
1 Mr Richards yearly salary review resulted in an increase of $50,000 to $300,000 per year including superannuation
effective from 1 September 2018.
2 Chalice Gold Mines Limited provides corporate services to the Company which from 2006, includes the services of
Mr Hacker. Details of the Corporate Services Agreement between the two companies is outlined below.
15.5 Other transactions with key management personnel
A number of key management persons, or their related parties, hold positions in other entities that result in them
having control or significant influence over the financial or operating policies of those entities.
A number of these entities transacted with the Group during any given reporting period. The terms and conditions
of the transactions with management persons and their related parties were no more favourable than those
available, or which might reasonably be expected to be available, on similar transactions to non-Director related
entities on an arm’s length basis.
LIONTOWN RESOURCES LIMITED | ANNUAL REPORT 2018 | PAGE 27
Director’s Report
The Group receives corporate services including office rent and facilities, management and accounting services
under a Corporate Services Agreement with Chalice Gold Mines Limited. Mr Goyder is the Executive Chairman. Mr
Hacker was also the CFO of Chalice Gold Mines Limited during the year. Amounts billed are based on a proportionate
share of the cost to Chalice Gold Mines Limited of providing the services and have normal payment terms. The
amount recognised in the statement of comprehensive income for the year is $99,825 (2017: $66,000) and the
amount unpaid as at 30 June 2018 was $22,825 (2017: $5,500).
The Group received database administrative services and field services from related parties to the Managing
Director, Mr Richards. These services are provided on arm’s length commercial terms. The total value of these
services was $44,096 (2017: nil) and the amount unpaid as at 30 June 2018 was $8,760 (2017: nil).
This is the end of the audited information.
16. Auditor’s independence declaration
The auditor’s independence declaration is set out on page 29 and forms part of the Directors’ Report for the year
ended 30 June 2018.
17. Corporate Governance
The directors of the Group support and adhere to the principles of corporate governance, recognising the need for
the highest standard of corporate behaviour and accountability.
Please refer to the corporate governance statement dated 19th September 2018 released to ASX and posted on
the Company website at www.ltresources.com.au/corporate-governance.
This report is made with a resolution of the directors:
David R Richards
Managing Director
Dated at Perth the 19th day of September 2018
LIONTOWN RESOURCES LIMITED | ANNUAL REPORT 2018 | PAGE 28
AUDITOR’S INDEPENDENCE DECLARATION
As lead auditor for the audit of the consolidated financial report of Liontown Resources Limited for the
year ended 30 June 2018, I declare that to the best of my knowledge and belief, there have been no
contraventions of:
a)
the auditor independence requirements as set out in 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
19 September 2018
L Di Giallonardo
Partner
HLB Mann Judd (WA Partnership) ABN 22 193 232 714
Level 4 130 Stirling Street Perth WA 6000 | PO Box 8124 Perth BC WA 6849 | Telephone +61 (08) 9227 7500 | Fax +61 (08) 9227 7533
Email: mailbox@hlbwa.com.au | Website: www.hlb.com.au
Liability limited by a scheme approved under Professional Standards Legislation
HLB Mann Judd (WA Partnership) is a member of
International, a world-wide organisation of accounting firms and business advisers
LIONTOWN RESOURCES LIMITED | ANNUAL REPORT 2018 | PAGE 29
Consolidated Statement of Comprehensive Income
For the year ended 30 June 2018
Note
2018
$
2017
$
Continuing operations
Revenue
Proceeds on sale of exploration and evaluation tenements
Profit on sale of shares
Profit on sale of assets
Exploration and evaluation expenditure expensed
Business development expenses
Fixed assets written off
Corporate administrative expenses
Impairment loss on available-for-sale financial assets
Impairment loss on loan
Loss from continuing operations
Net financing income
Loss before income tax
Income tax expense
Loss after tax from continuing operations
Discontinued operations
Loss from discontinued operations
Net loss after tax
Other comprehensive loss:
Items reclassified to profit or loss
Exchange differences on translation of foreign operations
- Members of the parent
-
Transferred to profit and loss – disposed subsidiaries
Total comprehensive loss after tax attributable to owners of
the parent
Earnings per share from continuing operations
Basic and diluted loss per share (cents per share)
Earnings per share from total operations
Basic and diluted loss per share (cents per share)
5
5
5
5
5
5
6
5
7
7
742
3,814,297
85,768
812
(3,283,313)
(53,359)
(230)
(1,181,033)
(156,928)
(48,358)
7,077
-
-
-
(2,636,602)
(46,072)
-
(616,788)
-
-
(821,602)
(3,292,385)
28,424
9,792
(793,178)
(3,282,593)
(59,375)
-
(852,553)
(3,282,593)
(6,514)
(977)
(859,067)
(3,283,570)
9,408
(4,469)
(3,168)
-
(854,128)
(3,286,738)
(0.086)
(0.379)
(0.087)
(0.379)
The statement of comprehensive income is to be read in conjunction with the notes to the financial statements.
LIONTOWN RESOURCES LIMITED | ANNUAL REPORT 2018 | PAGE 30
Consolidated Statement of Financial Statement
As at 30 June 2018
Current assets
Cash and cash equivalents
Trade and other receivables
Available-for-sale financial assets
Total current assets
Non-current assets
Trade and other receivables
Property, plant and equipment
Total non-current assets
Total assets
Current liabilities
Trade and other payables
Employee benefits
Total current liabilities
Total liabilities
Net assets
Equity
Issued capital
Accumulated losses
Reserves
Total equity
Note
10
11
12
11
13
14
8
15
16
2018
$
2,856,744
227,653
1,229,270
4,313,667
50,000
49,718
99,718
2017
$
1,415,601
75,272
-
1,490,873
107,081
45,030
152,111
4,413,385
1,642,984
482,685
43,259
525,944
98,614
42,104
140,718
525,944
140,718
3,887,441
1,502,266
37,199,397
(33,982,669)
670,713
3,887,441
34,347,020
(33,144,913)
300,159
1,502,266
The statement of financial position is to be read in conjunction with the notes to the financial statements.
LIONTOWN RESOURCES LIMITED | ANNUAL REPORT 2018 | PAGE 31
Balance at 1 July 2016
30,194,966
(29,920,254)
176,806
142,813
594,331
Note
Issued
capital
$
Accumulated
losses
Share based
payments reserve
Foreign currency
translation reserve
$
$
$
Total equity
$
Loss for the year
Other comprehensive loss
Total comprehensive loss for the year
Transactions with Owners in their capacity as Owners:
Issue of shares (net of costs)
Share-based payments
Transfer between equity items
Balance as at 30 June 2017
Loss for the period
Other comprehensive loss
Total comprehensive loss for the year
Transactions with Owners in their capacity as Owners:
Issue of shares (net of costs)
Share-based payments
Transfer between equity items
Balance as at 30 June 2018
-
-
-
(3,283,570)
-
(3,283,570)
4,152,054
-
-
-
-
58,911
34,347,020
(33,144,913)
-
-
-
(859,067)
-
(859,067)
2,852,377
-
-
-
-
21,311
37,199,397
(33,982,669)
-
-
-
-
42,619
(58,911)
160,514
-
-
-
-
386,926
(21,311)
526,129
-
(3,283,570)
(3,168)
(3,168)
(3,168)
(3,286,738)
-
-
-
4,152,054
42,619
-
139,645
1,502,266
-
4,939
4,939
-
-
-
(859,067)
4,939
(854,128)
2,852,377
386,926
-
144,584
3,887,441
F
o
r
t
h
e
y
e
a
r
e
n
d
e
d
3
0
J
u
n
e
2
0
1
8
The statement of changes in equity is to be read in conjunction with the notes to the financial statements.
L
I
O
N
T
O
W
N
R
E
S
O
U
R
C
E
S
L
I
M
I
T
E
D
|
A
N
N
U
A
L
R
E
P
O
R
T
2
0
1
8
|
P
A
G
E
3
2
C
o
n
s
o
l
i
d
a
t
e
d
S
t
a
t
e
m
e
n
t
o
f
C
h
a
n
g
e
s
i
n
E
q
u
i
t
y
Consolidated Statement of Cash Flows
For the year ended 30 June 2018
Cash flows from operating activities
Cash paid to suppliers and employees
Payments for exploration and evaluation and business
development costs
Proceeds from sale of exploration assets
Interest received
Income tax paid
Other
Net cash used in operating activities
10
Cash flows from investing activities
Proceeds from sale of property, plant and equipment
Proceeds from sale of financial assets
Loan to other entity
Net cash disposed from disposal of subsidiary
Acquisition of property, plant and equipment
Net cash from/(used in) investing activities
Cash flows from financing activities
Proceeds from issue of shares
Transaction costs of issue of shares
Security deposits
Net cash from financing activities
Net increase in cash and cash equivalents
Effect of exchange rate fluctuations on cash held
Cash and cash equivalents at the beginning of the year
Note
2018
$
2017
$
(842,744)
(548,648)
(3,046,038)
1,525,000
28,382
(59,375)
744
(2,394,031)
2,879
988,866
(7,717)
(1,930)
(20,451)
961,647
3,076,250
(202,044)
-
2,874,206
1,441,822
(679)
1,415,601
(2,496,126)
-
9,542
-
7,077
(3,028,155)
-
-
-
-
(9,948)
(9,948)
3,918,902
(239,849)
(25,000)
3,654,053
615,950
(1,297)
800,948
1,415,601
Cash and cash equivalents at 30 June
10
2,856,744
The statement of cash flows is to be read in conjunction with the notes to the financial statements.
LIONTOWN RESOURCES LIMITED | ANNUAL REPORT 2018 | PAGE 33
Contents of the Notes to the Financial Statements
For the year ended 30 June 2018
BASIS OF PREPARATION
Note 1: Corporate information
Note 2: Reporting entity
Note 3: Basis of preparation
PERFORMANCE FOR THE YEAR
Note 4: Segment reporting
Note 5: Revenue and expenses
Note 6: Income tax
Note 7: Loss per share
EMPLOYEE BENEFITS
Note 8: Employee benefits
Note 9: Share-based payments
ASSETS
Note 10: Cash and cash equivalents
Note 11: Trade and other receivables
Note 12: Available-for-sale financial assets
Note 13: Property, plant and equipment
EQUITY AND LIABILITIES
Note 14: Trade and other payables
Note 15: Capital and capital management
Note 16: Reserves
FINANCIAL INSTRUMENTS
Note 17: Financial instruments
GROUP COMPOSITIION
Note 18: List of subsidiaries
Note 19: Parent entity information
OTHER INFORMATION
Note 20: Contingent liabilities
Note 21: Remuneration of auditors
Note 22: Commitments
Note 23: Related party transactions
Note 24: Events occurring after the reporting period
ACCOUNTING POLICIES
Note 25: Changes in accounting policies
Note 26: New accounting standards and interpretations
LIONTOWN RESOURCES LIMITED | ANNUAL REPORT 2018 | PAGE 34
Notes to the Consolidated Financial Statements
For the year ended 30 June 2018
BASIS OF PREPARATION
This Section of the financial report sets out the Group’s (being Liontown Resources Limited and its controlled
entities) accounting policies that relate to the Financial Statements as a whole. Where accounting policy is specific
to one Note, the policy is described in the Note to which it relates.
The Notes include information which is required to understand the Financial Statements and is material and
relevant to the operations and the financial position and performance of the Group.
Information is considered relevant and material if:
The amount is significant due to its size or nature
The amount is important in understanding the results of the Group
It helps to explain the impact of significant changes in the Group’s business
It relates to an aspect of the Group’s operations that is important to its future performance.
Note 1:
Corporate information
The consolidated financial report of Liontown Resources Limited for the year ended 30 June 2018 was authorised for
issue on 19 September 2018.
Liontown Resources Limited (the ‘Company’ or ‘Liontown’) is a for-profit company limited by shares whose shares
are publicly traded on the Australian Securities Exchange. The Company and its subsidiaries were incorporated and
domiciled in Australia. The registered office and principal place of business of the Company is Level 2, 1292 Hay
Street, West Perth, WA 6005.
The nature of the operations and principal activities are disclosed in the Directors’ Report.
Note 2:
Reporting entity
The Financial Statements are for the Group consisting of Liontown Resources Limited and its subsidiaries. A list of
the Group’s subsidiaries is provided at Note 18.
Note 3:
Basis of preparation
These general purpose Financial Statements have been prepared in accordance with Australian Accounting
Standards, which include Australian equivalents to International Financial Reporting Standards (‘AIFRS’).
Compliance with AIFRS ensures that the financial report, comprising the financial statements and notes thereto,
complies with International Financial Reporting Standards (‘IFRS’).
These Financial Statements have been prepared under the historical cost convention except for certain financial
assets and liabilities which are required to be measured at fair value.
(a)
Basis of consolidation
Subsidiaries are all entities over which the Group has control. The Group controls an entity when the Group 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. Subsidiaries are fully consolidated from the date on
which control is transferred to the Group. They are deconsolidated from the date that control ceases.
The acquisition method of accounting is used to account for business combinations by the Group.
Intercompany transactions, balances and unrealised gains on transactions between Group companies are
eliminated. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the
transferred asset. Accounting policies of the subsidiaries have been changed where necessary to ensure
consistency with the policies adopted by the Group.
Non-controlling interests in the results and equity of subsidiaries are shown separately in the consolidated
statement of profit or loss, statement of comprehensive income, statement of changes in equity and statement of
financial position respectively.
(b)
Functional currency translation
The functional currency of the Company is Australian dollars and the functional currency of the controlled entities
based in Tanzania are United States dollars (US$). The presentation currency of the Group is Australian dollars.
LIONTOWN RESOURCES LIMITED | ANNUAL REPORT 2018 | PAGE 35
Notes to the Consolidated Financial Statements
For the year ended 30 June 2018
Note 3:
Basis of preparation (Continued)
Foreign currency transactions
Transactions in foreign currencies are translated to the respective functional currencies of Group entities at
exchange rates at the dates of the transactions. Monetary assets and liabilities denominated in foreign currencies
at reporting date are retranslated to the functional currency at the exchange rate at that date. The foreign currency
gain or loss on monetary items is the difference between amortised cost in the functional currency at the beginning
of the period, adjusted for effective interest and payments during the period, and the amortised cost in foreign
currency translated at the exchange rate at the end of the year.
Non-monetary assets and liabilities denominated in foreign currencies that are measured at fair value are
retranslated to the functional currency at the exchange rate at the date that the fair value was determined. Non-
monetary items in a foreign currency that are measured in terms of historical cost are translated using the exchange
rate at the date of the transaction.
Foreign currency differences arising on retranslation are recognised in profit or loss, except for the following
differences which are recognised in other comprehensive income arising on the retranslation of:
available-for-sale equity investments (except on impairment in which case foreign currency differences that
are recognised in other comprehensive income are reclassified to profit or loss);
a financial liability designated as a hedge of the net investment in a foreign operation to the extent that the
hedge is effective; or
qualifying cash flow hedges to the extent the hedge is effective.
Foreign Operations
The assets and liabilities of foreign operations, including goodwill and fair value adjustments arising on acquisition,
are translated to the functional currency at exchange rates at the reporting date. The income and expenses of
foreign operations are translated to Australian dollars at average exchange rates.
Foreign currency differences are recognised in other comprehensive income, and presented in foreign currency
translation reserve (translation reserve) in equity upon translation to presentation currency. When a foreign
operation is disposed of such that control, significant influence or joint control is lost, the cumulative amount in the
translation reserve related to that foreign operation is reclassified to profit or loss as part of the gain or loss on
disposal. When the Group disposes of only part of its interest in a subsidiary that includes a foreign operation while
retaining control, the relevant proportion of the cumulative amount is reattributed to non-controlling interests.
When the Group disposes of only part of its investment in an associate or joint venture that includes a foreign
operation while retaining significant influence or joint control, the relevant proportion of the cumulative amount is
reclassified to profit or loss.
When settlement of a monetary item receivable from or payable to a foreign operation is neither planned or likely
in the foreseeable future, foreign exchange gains and losses arising from such a monetary item are considered to
form part of a net investment in a foreign operation and are recognised in other comprehensive income, and are
presented in the translation reserve in equity.
(c)
Goods and Services Tax (‘GST’)
Revenue, expenses and assets are recognised net of the amount of goods and services tax (‘GST’), except where the
amount of GST incurred is not recoverable from the taxation authority. In these circumstances, the GST is recognised
as part of the cost of acquisition of the asset or as part of the expense.
Receivables and payables are stated with the amount of GST included. The net amount of GST recoverable from, or
payable to, the Australia Taxation Office (‘ATO’) is included as a current asset or liability in the statement of financial
position.
Cash flows are included in the statement of cash flows on a gross basis. The GST components of cash flows arising
from investing and financing activities which are recoverable from, or payable to, the ATO are classified as operating
cash flows.
LIONTOWN RESOURCES LIMITED | ANNUAL REPORT 2018 | PAGE 36
Notes to the Consolidated Financial Statements
For the year ended 30 June 2018
PERFORMANCE FOR THE YEAR
This section provides additional information about those individual line items in the Statement of Comprehensive
Income that the Directors consider most relevant in the context of the operations of the entity.
Note 4:
Segment reporting
The Group has identified its operating segments based on internal reports that are reviewed and used by the Board
of Directors in assessing performance and in determining the allocation of resources. The operating segments are
identified by management based on the allocation of costs; whether they are corporate related costs or exploration
costs. Results of both segments are reported to the Board of Directors at each board meeting.
Exploration and
Evaluation
2018
$
2017*
$
-
7,077
3,814,297
-
812
-
-
-
(3,283,313)
(2,636,602)
(53,359)
(46,072)
Unallocated
Total
2018
$
2017
$
2018
$
2017*
$
742
-
85,768
-
-
-
-
-
-
-
-
-
742
7,077
3,814,297
85,768
812
-
-
-
(3,283,313)
(2,636,602)
(53,359)
(46,072)
-
-
-
-
-
-
-
-
-
-
(1,181,033)
(616,788)
(1,181,033)
(616,788)
(230)
(156,928)
(48,358)
28,424
-
-
-
9,792
(230)
(156,928)
(48,358)
28,424
-
-
-
9,792
478,437
(2,675,597)
(1,271,615)
(606,996)
(793,178)
(3,282,593)
39,788
101,132
1,290,147
75,758
1,329,935
176,890
3,083,450
1,466,094
4,413,385
1,642,984
Other income
Profit on sale of
exploration tenement
Profit on sale of shares
Profit on sale of assets
Exploration and
evaluation expenses
Business development
expenses
Corporate and
administration expenses
Fixed assets written off
Impairment of available-
for-sale financial assets
Impairment on Loan
Net financing income
Loss from continuing
operations before
income tax
Segment asset
Unallocated assets
Total assets
Segment liabilities
378,931
46,918
147,013
93,800
525,944
140,718
Unallocated liabilities
Total liabilities
-
-
525,944
140,718
* Comparative figures have been restated to exclude the effect of the discontinued operation.
Note 5:
Revenue and expenses
Revenue
Refund of relinquished tenement rents and rates
Other
2018
$
2017
$
-
742
742
6,092
985
7,077
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Group and the
revenue can be reliably measured. The following specific recognition criteria must also be met before revenue is
recognised:
LIONTOWN RESOURCES LIMITED | ANNUAL REPORT 2018 | PAGE 37
Notes to the Consolidated Financial Statements
For the year ended 30 June 2018
Note 5:
Revenue and expenses (Continued)
Revenue is recognised when the significant risks and rewards of ownership of the goods/exploration assets have
passed to the buyer and the costs incurred or to be incurred in respect of the transaction can be reliably measured.
Risks and rewards of ownership are considered passed to the buyer at the time of delivery of the goods/exploration
assets to the buyer.
Revenue from services rendered is recognised in the statement of comprehensive income in proportion to the
stage of completion of the transaction at balance date.
Profit on sale of exploration and evaluation tenements
Bynoe lithium project 1
Kathleen Valley tenements 2
2018
$
2017
$
3,579,297
235,000
3,814,297
-
-
-
1 In November 2017, the Company completed the sale of its Bynoe Lithium Project in the Northern Territory to Core
Exploration Limited (“Core”). Consideration for the sale was as follows:
$1,500,000 in cash;
39,232,025 Core Shares (subject to certain escrow restrictions); and
A contingent payment of $1,500,000 in cash or Core shares (at Core’s election) upon Core defining a JORC
compliant Mineral resource totalling 5 million tonnes within Liontown’s Bynoe tenure.
At the date of sale, the fair value of the Core shares received as part consideration was $2,079,297.
2 During the period the Company divested seven non-core mining leases at its Kathleen Valley Project to Bellevue
Gold Limited (formerly Draig Resources Limited) (“Bellevue Gold”) in consideration for 1,000,000 Bellevue Gold
shares and $25,000 cash.
At the date of sale, the fair value of the Bellevue Gold shares received as part consideration was $210,000.
Profit on sale of shares
Profit on sale of Core Exploration Limited shares
Loss on sale of Bellevue Gold Limited shares
2018
$
2017
$
116,775
(31,007)
85,768
-
-
-
During the year, the Company sold 13,077,342 shares in Core for a weighted average sales price of $0.062, resulting
in proceeds of $809,874.
During the year, the Company sold 1,000,000 shares in Bellevue Gold for a weighted average sales price of $0.179,
resulting in proceeds of $178,992.
Corporate and administration expenses
Depreciation and amortisation
Insurance
Legal fees
Office costs – corporate service charge and reimbursements
Personnel expenses
Promotions and Investor relations
Regulatory and compliance
Other
2018
$
2017
$
9,801
28,642
12,302
91,691
687,746
144,785
119,528
86,538
1,181,033
7,555
27,160
14,560
68,698
283,735
64,603
111,436
39,041
616,788
LIONTOWN RESOURCES LIMITED | ANNUAL REPORT 2018 | PAGE 38
Notes to the Consolidated Financial Statements
For the year ended 30 June 2018
Note 5:
Revenue and expenses (Continued)
Personnel expenses
Directors’ fees, wages and salaries
Other associated personnel expenses
Annual leave
Share-based payments
Exploration and evaluation expenditure
Australia
-
-
Toolebuc Vanadium
Kathleen Valley
- Buldania
- Norcott
- Bynoe
-
Lake Percy
- Other
Tanzania
-
Jubilee Reef
- Mohanga
- Other
2018
$
2017
$
294,993
4,671
1,156
386,926
687,746
153,669
32,567
54,880
42,619
283,735
2018
$
2017
$
104,199
2,163,585
487,427
163,157
136,843
10,395
6,978
50,614
980,649
-
-
806,211
284,033
68,003
3,072,584
2,189,510
115,589
98,552
(3,412)
210,729
3,283,313
258,061
150,692
38,339
447,092
2,636,602
Costs incurred in the exploration and evaluation stages of specific areas of interest are expensed against profit or
loss as incurred. All exploration and evaluation expenditure, including general permit activity, geological and
geophysical costs, project generation and drilling costs, is expensed as incurred. The costs of acquiring interests in
new exploration licences is also expensed. Once the technical feasibility and commercial viability of extracting a
mineral resource are demonstrable in respect to an area of interest, development expenditure is capitalised to the
Statement of Financial Position.
Net financing income
Interest income
2018
$
2017
$
28,424
28,424
9,792
9,792
Net financing costs comprise interest payable on borrowings calculated using the effective interest method, the
discount unwind on rehabilitation provisions and interest receivable on funds invested.
Interest income is recognised in the statement of comprehensive income as it accrues, using the effective interest
method. The interest expense component of finance lease payments is recognised in the statement of
comprehensive income using the effective interest method.
LIONTOWN RESOURCES LIMITED | ANNUAL REPORT 2018 | PAGE 39
Notes to the Consolidated Financial Statements
For the year ended 30 June 2018
Note 5:
Revenue and expenses (Continued)
Loss from discontinued operations
In the March 2018 quarter, the Company disposed of its beneficial
interest in Chela Resources Limited (Tanzania) for nil value. Chela
Resources Limited has been classified as a discontinued operation.
Results from discontinued operation
Exploration and evaluation expenses
Results from operating activities, net of tax
Loss on disposal of subsidiary
Foreign currency translation reserve disposed of
Loss from discontinued operations, net of tax
2018
$
2017
$
(261)
(819)
(1,080)
(850)
(4,584)
(6,514)
(857)
(120)
(977)
-
-
-
Basic and diluted loss per share (cents per share)
(0.0001)
(0.0001)
Cash flows from/(used in) discontinued operations
Net cash flows used in operating activities
Net cash flows from financing activities
Net cash flow for the period
Note 6:
Income tax
Numerical reconciliation between tax (expense)/benefit and pre-tax net loss:
Loss before tax
Income tax benefit using the domestic corporation tax rate of 27.5%
Decrease in income tax benefit due to:
Non-deductible expenses
Deferred tax assets and liabilities not recognised
Exploration development incentive – current year
Exploration development incentive – clawback adjustment on assets
sold
Change in tax rate
Effect of different tax rates of subsidiaries operating other jurisdictions
Income tax expense on loss before tax
(7,043)
6,753
(290)
(24,220)
25,600
1,380
2018
$
2017
$
(799,692)
(219,915)
(3,283,570)
(902,982)
246,231
(256,911)
235,522
59,375
-
(4,927)
(59,375)
155,201
550,288
102,121
-
105,287
(9,915)
-
Income tax in the statement of comprehensive income comprises current and deferred tax. Income tax is
recognised in the statement of comprehensive income except to the extent that it relates to items recognised
directly in equity, in which case it is recognised in equity.
Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantively
enacted at the balance date, and any adjustment to tax payable in respect of previous years.
Deferred tax is provided on all temporary differences at balance date between the tax bases of assets and liabilities
and their carrying amounts for financial reporting purposes. The amount of deferred tax provided is based on the
expected manner of realisation or settlement of the carrying amount of assets and liabilities, using tax rates enacted
or substantively enacted at the balance date.
LIONTOWN RESOURCES LIMITED | ANNUAL REPORT 2018 | PAGE 40
Notes to the Consolidated Financial Statements
For the year ended 30 June 2018
Note 6:
Income tax (Continued)
Deferred tax assets and liabilities for the Group are attributable to the following:
Assets
Revenue losses available to offset against future taxable income
3,301,294
3,502,178
2018
$
2017
$
Available-for-sale asset impairment
Share issue expenses
Accrued expenses and liabilities
Liabilities
Exploration expenditure amortised for tax purposes
Accrued interest
Foreign exchange differences
Prepayments
43,155
96,033
109,099
-
54,491
26,193
3,549,581
3,582,862
(47,887)
147
53,266
11,619
17,145
(20,081)
136
(19,072)
2,266
(36,751)
The unrecognised benefit from temporary differences on capital items amounts to $61,565 (2017: $65,959).
Deferred tax liabilities have not been recognised in respect of these taxable temporary differences as the entity is
able to control the timing of the reversal of the temporary difference and it is probable that the temporary difference
will not reverse in the foreseeable future.
A deferred tax asset is recognised only to the extent that it is probable that future taxable profits will be available
against which the asset can be utilised. Deferred tax assets are reduced to the extent that it is no longer probable
that the related tax benefit will be realised.
Note 7:
Loss per share
The calculation of basic and diluted loss per share at 30 June 2018 was based on the loss attributable to ordinary
shareholders of the parent entity of $859,067 (2017: (3,283,570)).
The weighted average number of ordinary shares outstanding during the financial years comprised the following:
Weighted average number of ordinary shares on issue at the end of
the year (Basic)
Weighted average number of ordinary shares on issue at the end of
the year (Diluted)
2018
No.
2017
No.
992,271,011
864,339,335
996,513,113
864,339,335
At 30 June 2018 there were 19,450,000 unlisted options (2017: nil) included in the diluted weighted average number
of ordinary shares calculation as their effect is anti-dilutive.
Basic earnings/loss per share is calculated as net profit/loss attributable to members of the parent, adjusted to
exclude any costs of servicing equity (other than dividends) and preference share dividends, divided by the weighted
average number of ordinary shares, adjusted for any bonus element.
Diluted earnings/loss per share is calculated as net profit/loss attributable to members of the parent, adjusted for:
costs of servicing equity (other than dividends) and preference share 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 element.
LIONTOWN RESOURCES LIMITED | ANNUAL REPORT 2018 | PAGE 41
Notes to the Consolidated Financial Statements
For the year ended 30 June 2018
EMPLOYEE BENEFITS
This section of the Notes includes information that must be disclosed to comply with accounting standards and
other pronouncements relating to the remuneration of employees and consultants of the Group, but that is not
immediately related to individual line items in the Financial Statements.
Note 8:
Employee benefits
Annual leave
Long service leave
2018
$
2017
$
12,755
30,504
43,259
15,334
26,770
42,104
Liabilities for employee benefits for wages, salaries, annual leave represent present obligations resulting from
employees' services provided to reporting date, calculated at undiscounted amounts based on remuneration wage
and salary rates that the consolidated entity expects to pay as at reporting date including related on-costs, such as,
workers compensation insurance and payroll tax.
The Group’s obligation in respect of long-term employee benefits such as long service leave is the amount of future
benefit that employees have earned in return for their service in the current and prior periods; that benefit is
discounted to determine its present value using corresponding government bond yields as a discount rate.
Obligations for contributions to defined contribution pension plans are recognised as an expense in the statement
of comprehensive income as incurred.
Note 9:
Share-based payments
The Company provides benefits to employees (including directors) in the form of share-based payment transactions,
whereby employees render services in exchange for shares or rights over shares (‘equity-settled transactions’).
The Company currently provides benefits under an Employee and Consultants Share Option Plan.
The cost of these equity-settled transactions with employees and directors is measured by reference to the fair value
at the date at which they are 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 the Company (‘market conditions’). The cost of 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)
(ii)
the extent to which the vesting period has expired; and
the number of awards that, in the opinion of the directors, will ultimately vest. This opinion is formed based
on the best available information at balance date. No adjustment is made for the likelihood of market
performance conditions being met as the effect of these conditions is included in the determination of fair
value at grant date.
No expense is recognised for awards that do not ultimately 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 modification.
Where an equity-settled award is cancelled, it is treated as if it had vested on the date of cancellation, and any
expense not yet recognised for the award is recognised immediately. However, if a new award is substituted for the
cancelled award, and designated as a replacement award on the date that it is granted, the cancelled and new
award are treated as if they were a modification of the original award, as described in the previous paragraph.
The dilutive effect, if any, of outstanding options and rights is reflected as additional share dilution in the
computation of earnings per share.
LIONTOWN RESOURCES LIMITED | ANNUAL REPORT 2018 | PAGE 42
Notes to the Consolidated Financial Statements
For the year ended 30 June 2018
Note 9:
Share-based payments (Continued)
The preparation of a financial report in conformity with Australian Accounting Standards requires management to
make judgements, estimates and assumptions that affect the application of policies and reported amounts of assets
and liabilities, income and expenses. The estimates and associated assumptions are based on historical experience
and various other factors that are believed to be reasonable under the circumstances, the results of which form the
basis of making the judgements about carrying values of assets and liabilities that are not readily apparent from
other sources. Actual results may differ from these estimates. These accounting policies have been consistently
applied by the Group.
The Group measures the cost of equity-settled share-based payments at fair value at the grant date using a Black
Scholes option-pricing model taking into account the terms and conditions upon which the instruments were
granted.
Employee and Consultant Share Option Plan
Under the terms of the Employees and Consultants Option Plan (ESOP), the Board may offer options at no
consideration to full-time or part-time employees (including persons engaged under a consultancy agreement) and
executive and non-executive directors.
Each option entitles the holder, on exercise, to one ordinary fully paid share in the Company. There is no issue price
for the options. The exercise price for the options is such price as determined by the Board. An option may only be
exercised after that option has vested and any other conditions imposed by the Board on exercise are satisfied. The
Board may determine the vesting period, if any.
There are no voting or dividend rights attached to the options. There are no voting rights attached to the unissued
ordinary shares. Voting rights will be attached to the unissued ordinary shares when the options have been
exercised.
The number and weighted average exercise prices of share options under the ESOP is as follows:
Weighted
average
exercise
price
2018
$
Number of
options
2018
Weighted
average
exercise
price
2017
$
Outstanding at beginning of the year
0.040
10,800,000
Granted during the period
Exercised during the period
Lapsed/expired during the period
Outstanding at the end of the year
Exercisable at the end of the year
0.022
0.035
0.035
0.026
0.026
24,450,000
(750,000)
(750,000)
33,750,000
33,750,000
0.030
0.040
-
0.035
0.040
0.040
Number of
options
2017
14,650,000
3,000,000
-
(6,850,000)
10,800,000
10,800,000
The weighted average contractual life remaining as at 30 June 2018 is 2.85 years (2017: 3.8 years).
Non-market performance conditions are not taken into account in the grant date fair value measurement of the
services received.
The total expenditure recognised in the statement of comprehensive income is $386,926 (2017: $42,619).
The fair value of the options is estimated at the grant date using a Black Scholes option-pricing model. Refer to the
table below for inputs to the Black Scholes option-pricing model:
Share price at grant date (weighted average)
Exercise price (weighted average)
Expected volatility (expressed as weighted
average used in the modelling under Black
Scholes option pricing model)
Expected life (expressed as weighted average
used in the modelling under Black Scholes
option pricing model)
Expected dividends
Risk-free interest rate (weighted average)
2018
2017
$0.023
$0.026
100%
$0.022
$0.035
100%
5 years
5 years
Nil
2.19%
Nil
2.02%
LIONTOWN RESOURCES LIMITED | ANNUAL REPORT 2018 | PAGE 43
Notes to the Consolidated Financial Statements
For the year ended 30 June 2018
ASSETS
This section provides additional information about those individual line items in the Statement of Financial
Position that the Directors consider most relevant in the context of the operations of the entity.
Note 10:
Cash and cash equivalents
Cash at bank
Petty cash
2018
$
2,850,712
6,032
2,856,744
2017
$
1,409,592
6,009
1,415,601
Cash and cash equivalents comprise cash balances and term deposits which are readily convertible to cash. Bank
overdrafts that are repayable on demand and form an integral part of the consolidated entity’s cash management
are included as a component of cash and cash equivalents for the purpose of the statement of cash flows.
The reconciliation to loss after income tax for the year to net cash flows from operations is below:
Loss for the period
Depreciation and amortisation
Foreign exchange (gain)/losses
Share-based payments
Loss from disposal of subsidiary
Profit on sale of available-for-sale financial assets
Profit on sale of assets
Proceeds from sale of exploration and evaluation tenements (non
cash)
Fixed assets written off
Impairment loss on available-for-sale financial assets
Impairment of loan
Equity settled exploration asset acquisition
Equity settled consulting fees
Changes in operating assets and liabilities:
Decrease/(increase) in trade and other receivables
Decrease/(increase) in trade and other payables
(Increase/(decrease) in other financial assets
Decrease in provisions
Net operating cash flows
2018
$
2017
$
(859,067)
(3,283,570)
11,776
(39,963)
386,926
6,514
(85,768)
(812)
(2,289,297)
230
156,928
48,358
-
-
(95,302)
364,291
-
1,155
12,533
1,294
42,619
-
-
-
-
-
-
-
425,000
48,000
20,170
(265,081)
(57,081)
27,961
(2,394,031)
(3,028,155)
LIONTOWN RESOURCES LIMITED | ANNUAL REPORT 2018 | PAGE 44
Notes to the Consolidated Financial Statements
For the year ended 30 June 2018
Note 11:
Trade and other receivables
Current
Other trade receivables
Prepayments
Non-current
Bank guarantee deposits
Security deposits
2018
$
2017
$
182,103
45,550
227,653
50,000
-
50,000
63,221
12,051
75,272
50,000
57,081
107,081
Trade and other receivables are initially recognised at fair value and subsequently at amortised cost less impairment
losses.
Note 12:
Available-for-sale financial assets
Current
Shares held in publicly listed company 1
2018
$
2017
$
1,229,270
1,229,270
-
-
1 The Company has a remaining investment of 26,154,683 listed equity shares in Core Exploration Limited.
The fair value movement in the asset during the period was a loss of $156,270 which has been recognised as
Impairment of available-for-sale financial assets in the Profit or Loss Statement.
Available-for-sale financial assets are non-derivative financial assets that are designated as available-for-sale or are
not classified in another category of financial assets. Available-for-sale financial assets are recognised initially at fair
value plus any directly attributable transaction costs.
Subsequent to initial recognition, these shares are measured at fair value being the published price quotation in an
active market. Changes therein are recognised in Other Comprehensive Income (unless it represents impairment)
and presented as an unrealised gain/(loss) in equity. When the investment is derecognised, the cumulative gain or
loss in equity is reclassified to profit or loss.
Available-for-sale financial assets comprise equity securities. The fair value of investments in quoted equity
securities is determined by reference to their quoted closing bid price at the reporting date (Level 1).
Note 13:
Property, plant and equipment
At cost
Less accumulated depreciation
Plant and equipment
Carrying amount at the beginning of the year
Exchange differences
Additions
Disposals/write offs
Depreciation
Carrying amount at the end of the year
2018
$
2017
$
165,175
(115,457)
49,718
45,030
25
20,452
(4,013)
(11,776)
49,718
254,151
(209,121)
45,030
52,052
(376)
5,887
-
(12,533)
45,030
Property, plant and equipment is stated at cost less accumulated depreciation and any accumulated impairment
losses. Such cost includes the cost of replacing parts that are eligible for capitalisation when the cost of replacing
the parts is incurred.
The assets' residual values, useful lives and amortisation methods are reviewed, and adjusted if appropriate, at each
financial year end.
LIONTOWN RESOURCES LIMITED | ANNUAL REPORT 2018 | PAGE 45
Notes to the Consolidated Financial Statements
For the year ended 30 June 2018
Note 13:
Property, plant and equipment (Continued)
An item of plant and equipment is derecognised upon disposal or when no further future economic benefits are
expected from its use or disposal.
Any gain or loss arising on de-recognition of the asset (calculated as the difference between the net disposal
proceeds and the carrying amount of the asset) is included in profit or loss in the year the asset is derecognised
Depreciation is charged to the statement of comprehensive income on a diminishing value basis over the estimated
useful lives of each part of an item of property, plant and equipment. The depreciation rates used in the current and
comparative periods are as follows:
plant and equipment
5%-50%
motor vehicles
18.75%-37.5%
The depreciation rates, useful lives and residual values, if not insignificant, are reassessed annually.
At each reporting date, the Group assesses whether there is any indication that an asset may be impaired. Where
an indicator of impairment exists, the Group makes a formal estimate of recoverable amount. Where the carrying
amount of an asset exceeds its recoverable amount the asset is considered impaired and is written down to its
recoverable amount.
Recoverable amount is the greater of fair value less costs to sell and value in use. Value in use is the present value of
the future cash flows expected to be derived from the asset or cash generating unit. In estimating value in use, a
pre-tax discount rate is used which reflects current market assessments of the time value of money and the risks
specific to the asset. For an asset that does not generate largely independent cash flows, the recoverable amount is
determined for the cash generating unit to which the asset belongs.
Impairment losses are recognised in the statement of comprehensive income unless the asset has previously been
revalued, in which case the impairment loss is recognised as a reversal to the extent of that previous revaluation
with any excess recognised through the statement of comprehensive income. Receivables with a short duration are
not discounted.
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 unless the asset is carried at revalued amount,
in which case the reversal is treated as a revaluation increase. 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.
LIABILITIES
This section provides additional information about those individual line items in the Statement of Financial
Position that the Directors consider most relevant in the context of the operations of the entity.
Note 14:
Trade and other payables
Trade and other payables
2018
$
482,685
482,685
2017
$
98,614
98,614
Trade and other payables are initially recognised at fair value and subsequently measured at amortised cost.
Note 15:
Capital and capital management
Issued share capital is recognised at the fair value of the consideration received by the Company. Any transaction
costs arising on the issue of ordinary shares are recognised, net of tax, directly in equity as a reduction of the share
proceeds received.
Ordinary shares entitle the holder to participate in dividends in proportion to the number of and amounts paid on
the shares held.
On a show of hands, every holder of ordinary shares present at a meeting in person or by proxy is entitled to one
vote and upon a poll, each share is entitled to one vote.
LIONTOWN RESOURCES LIMITED | ANNUAL REPORT 2018 | PAGE 46
Notes to the Consolidated Financial Statements
For the year ended 30 June 2018
Note 15:
Capital and capital management (Continued)
Ordinary shares on issues:
2018
2017
No.
$
No.
$
On issue at the beginning of the year
990,340,635
34,347,020
696,450,401
30,194,966
Rights issues and placements 1
111,111,111
3,000,000
265,890,234
3,918,902
Issue of shares for unlisted options
Issue of shares for Norcott acquisition 2
Issue of shares in lieu of consulting fees 3
Issue of shares to acquire Kathleen Valley
Lithium Project 4
Share issue costs
750,000
1,785,714
26,250
50,000
-
-
-
-
-
-
-
-
-
3,000,000
25,000,000
48,000
425,000
(223,873)
-
(239,848)
On issue at the end of the year
1,103,987,460
37,199,397
990,340,635
34,347,020
1 In June 2018, the Company completed a placement to raise $3,000,000 by issuing 111,111,111 fully paid ordinary shares
at an issue price of $0.027 per share.
In October 2016, the Company completed a 1 for 5 non-renounceable rights issue raising $1,398,902 (before costs) by
issuing 139,890,234 shares at an issue price of $0.01 per share.
In January 2017, the Company completed a placement to raise $2,520,000 by issuing 126,000,000 fully paid ordinary
shares at an issue price of $0.02 per share.
2 In May 2018, the Company acquired the Norcott Lithium Project from Galahad Resources Pty Ltd in consideration
for issuing 1,785,714 fully paid ordinary shares at an issue price of $0.028 per share.
3 In August 2016, the Company issued 3,000,000 fully paid ordinary shares to a consultant of the Company in
consideration for the provision of corporate communications and investor relations support.
4 In December 2016, 25,000,000 fully paid ordinary shares were issued to Ramelius Resources Limited in
consideration for the acquisition of the Kathleen Valley Lithium Project.
The Group manages its capital to ensure that it will be able to continue as a going concern while maximising the
return to shareholders.
The capital structure of the Group consisting of equity attributable to equity holders, comprising issued capital,
reserves and accumulated losses and the Consolidated Statement of Changes in Equity. The Board reviews the
capital structure on a regular basis and considers the cost of capital and the risks associated with each class of
capital. The Group will balance its overall capital structure through new share issues as well as the issue of debt, if
the need arises.
Note 16:
Reserves
Nature and purpose of reserves:
Share-based payments
This reserve is used to record the value of equity benefits provided to employees and directors as part of their
remuneration.
Foreign currency translation reserve
This reserve is used to record the exchange differences arising from the translation of the financial statements of
foreign subsidiaries.
LIONTOWN RESOURCES LIMITED | ANNUAL REPORT 2018 | PAGE 47
Notes to the Consolidated Financial Statements
For the year ended 30 June 2018
FINANCIAL INSTRUMENTS
This section of the Notes discusses the Group’s exposure to various risks and shows how these could affect the
Group’s financial position and performance.
Note 17:
Financial instruments
a)
Capital risk management
The capital structure of the Group consists of equity attributable to equity holders, comprising issued capital,
reserves and retained earnings as disclosed in notes 15 and 16.
The Board reviews the capital structure on a regular basis and considers the cost of capital and the risks associated
with each class of capital. The Group will balance its overall capital structure through new share issues as well as the
issue of debt, if the need arises.
b)
Market risk
Market risk is the risk that changes in market prices such as foreign exchange rates, equity prices and interest rates
will affect the Group’s income or value of its holdings of financial instruments.
(i)
Foreign exchange rate risk
The Group undertakes certain transactions denominated in foreign currencies, hence has exposure to exchange
rate fluctuations. The Group does not hedge this exposure. The Group currently has no significant expose to foreign
exchange rates.
(ii)
Equity prices
Equity investments held for sale are recorded at their fair value being either the quoted price or last known traded
price on the balance date (see note 12). There is a risk that changes in prices effect the fair value of investments held
by the consolidated entity. A plus or minus 10% change in equity prices from the year end valuation would impact
equity by plus or minus $122,927.
(iii)
Interest rate risk
Interest rate risk is the risk that changes in bank deposit rates affect the consolidated entity’s income and future
cash flow from interest income. The exposure to interest rate risk and the effective weighted average interest rate
for classes of financial assets and financial liabilities is set out below:
2018
Fixed interest maturing
in:
>1 year
1-5 years
Floating
interest
Non-
interest
bearing
Total
Weighted
average
interest
rate
Financial assets
Bank balances
Trade and other
receivables
Available-for-sale
financial assets
Financial liabilities
Trade and other
payables
$
$
$
$
$
%
-
50,000
-
-
-
-
-
-
2,850,712
6,032
2,856,744
-
-
-
227,653
277,653
1,229,270
1,229,270
482,685
482,685
1.31%
2.29%
-
-
LIONTOWN RESOURCES LIMITED | ANNUAL REPORT 2018 | PAGE 48
Notes to the Consolidated Financial Statements
For the year ended 30 June 2018
Note 17:
Financial instruments – fair value and risk management (Continued)
2017
Fixed interest maturing
in:
>1 year
1-5 years
Floating
interest
Non-
interest
bearing
Total
Weighted
average
interest
rate
Financial assets
Bank balances
Trade and other
receivables
Financial liabilities
Trade and other
payables
$
$
$
$
$
%
-
107,081
-
-
-
-
1,345,676
-
-
69,925
75,272
1,415,601
182,353
0.59%
1.26%
98,614
98,614
-
A change of 100 basis points in interest rates on bank balances and term deposits over the reporting period would
have increased/(decreased) the Group’s profit and loss by $17,969 (2017: $6,029)
c)
Credit risk
Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to
meet its contractual obligations. The consolidated entity’s exposure to credit risk is not significant and currently
arises principally from sundry receivables which represent an insignificant proportion of the Group’s activities and
cash and cash equivalents.
The maximum exposure to credit risk, excluding the value of any collateral or other security, at balance date to
recognised financial assets is the carrying amount, net of any provision for doubtful debts, as disclosed in the notes
to the financial statements
d)
Liquidity risk
Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due. The Board
actively monitors the Group’s ability to pay its debts as and when they fall due by regularly reviewing the current
and forecast cash position based on the expected future activities.
The Group has non-derivative financial liabilities which include trade and other payables of $482,685 (2017: $98,614)
all of which are due within 60 days.
e)
Net fair values of financial instruments
AASB 7 Financial Instruments: Disclosures requires disclosure of fair value measurements by level of the following
fair value measurement hierarchy:
• quoted prices (unadjusted) in active markets for identical assets or liabilities (level 1)
• inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly
(as prices) or indirectly (derived from prices) (level 2), and
• inputs for the asset or liability that are not based on observable market data (unobservable inputs) (level 3).
All financial assets and liabilities approximate their net fair values and are disclosed as level 1 fair values. The carrying
amount of all financial assets and liabilities approximate their net fair values.
GROUP COMPOSITION
This section of the Notes includes information that must be disclosed to comply with accounting standards and
other pronouncements relating to the structure of the Group, but that is not immediately related to individual line
items in the Financial Statements.
LIONTOWN RESOURCES LIMITED | ANNUAL REPORT 2018 | PAGE 49
Notes to the Consolidated Financial Statements
For the year ended 30 June 2018
Note 18:
List of subsidiaries
Country of
Incorporation
Ownership Interest
Parent entity
Liontown Resources Limited
Australia
Subsidiaries
Liontown Resources (Tanzania) Limited
LRL (Aust) Pty Ltd
ERL (Aust) Pty Ltd
Chela Resources Ltd 1
Tanzania
Australia
Australia
Tanzania
2018
%
100%
100%
100%
0%
2017
%
100%
100%
100%
0%
1 The Company held a beneficial interest in Chela Resources Ltd. On 23 January 2018, the Company disposed of its
beneficial interest in Chela Resources Ltd.
Note 19:
Parent entity information
The financial information for the parent entity, Liontown Resources Limited, has been prepared on the same basis
as the consolidated financial statements, except as set out below.
Investments in subsidiaries, associates and joint venture entities
(i)
Investments in subsidiaries, associates and joint venture entities are accounted for at cost in the parent entity’s
financial statements. Dividends received from associates are recognised in the parent entity’s profit or loss, rather
than being deducted from the carrying amount of these investments.
(ii)
Share-based payments
The grant by the Company of options over its equity instruments to the employees of subsidiary undertakings in the
group is treated as a capital contribution to that subsidiary undertaking. The fair value of employee services
received, measured by reference to the grant date fair value, is recognised over the vesting period as an increase to
investment in subsidiary undertakings, with a corresponding credit to equity.
LIONTOWN RESOURCES LIMITED | ANNUAL REPORT 2018 | PAGE 50
Notes to the Consolidated Financial Statements
For the year ended 30 June 2018
Note 19:
Parent entity information (Continued)
Statement of comprehensive income
Loss for the year
Total comprehensive loss
Statement of financial position
Assets
Current assets
Non-current assets
Total assets
Liabilities
Current liabilities
Total liabilities
Net assets
Equity
Share capital
Reserves
Accumulated losses
Total equity
OTHER INFORMATION
2018
$
2017
$
(1,513,066)
(1,560,940)
(2,251,090)
(2,310,001)
4,302,383
107,296
4,409,679
1,471,954
1,132,254
2,604,208
223,830
223,830
123,285
123,285
4,185,849
2,480,923
37,199,397
526,129
(33,539,677)
4,185,849
34,347,021
160,513
(32,026,611)
2,480,923
This section of the Notes includes other information that must be disclosed to comply with accounting standards
and other pronouncements, but that is not immediately related to individual line items in the Financial Statements.
Note 20:
Contingent liabilities
There are no contingent assets or liabilities.
Note 21:
Remuneration of auditors
Auditor’s remuneration
Audit services
HLB Mann Judd
2018
$
2017
$
28,500
28,500
28,000
28,000
LIONTOWN RESOURCES LIMITED | ANNUAL REPORT 2018 | PAGE 51
Notes to the Consolidated Financial Statements
For the year ended 30 June 2018
Note 22:
Commitments
In order to maintain current rights of tenure to exploration tenements, the Group together with its joint venture
partners is required to perform exploration work to meet the minimum expenditure requirements specified by
various State governments. These amounts are subject to negotiation when application for a lease application and
renewal is made and at other times. These amounts are not provided for in the financial report and are payable:
Within 1 year
1-5 years
>5 years
2018
$
508,062
891,580
261,184
1,660,826
2017
$
765,224
1,877,846
1,927,937
4,571,007
To the extent that expenditure commitments are not met, tenement areas may be reduced and other arrangements
made in negotiation with the relevant state and territory government departments on renewal of tenements to
defer expenditure commitments or partially exempt the Company.
Note 23:
Related party transactions
a)
Key management personnel
The following were key management personnel of the Group at any time during the reporting period and unless
otherwise indicated were key management personnel for the entire period:
T R B Goyder
D R Richards
C R Williams
A J Cipriano
R K Hacker
The key management personnel compensation is as follows:
Short-term employee benefits
Post-employment benefits
Share-based payments
2018
$
2017
$
324,562
29,038
365,092
718,692
280,538
25,187
-
305,725
Loans made to key management personnel and related parties
No loans were made to key management personnel and their related parties.
Other transactions with key management personnel
A number of key management personnel, or their related parties, hold positions in other entities that result in them
having control or significant influence over the financial or operating policies of those entities.
A number of these entities transacted with the Company or its subsidiaries in the reporting period. The terms and
conditions of the transactions with key management personnel and their related parties were no more favourable
than those available, or which might reasonably be expected to be available, on similar transactions to non-key
management personnel related entities on an arm’s length basis.
The aggregate amounts recognised during the year relating to key management personnel and their related parties
were as follows:
Corporate service charge and provision of KMP services 1
Database management and field services 2
2018
$
2017
$
99,825
44,096
143,921
66,000
-
66,000
LIONTOWN RESOURCES LIMITED | ANNUAL REPORT 2018 | PAGE 52
Notes to the Consolidated Financial Statements
For the year ended 30 June 2018
Note 23:
Related party transactions (Continued)
1 The Group receives corporate services including office rent and facilities, management and accounting services
under a Corporate Services Agreement with Chalice Gold Mines Limited and KMP services. Messrs Goyder and
Hacker are KMP’s of Chalice Gold Mines Limited. Amounts billed are based on a proportionate share of the cost to
Chalice Gold Mines Limited of providing the services and have normal payment terms.
2 The Group receives database management and field services from related parties of the Managing Director, Mr
Richards. Amounts paid are on normal commercial terms.
Amounts payable to key management personnel at reporting date arising from these transactions was $19,760 (2017:
$5,500).
Note 24:
Events occurring after the reporting period
In July 2018, the Company sold its remaining 26,154,683 shares in Core Exploration Limited at a weighted average
sales price of $0.042, for total proceeds of $1.098 million before costs.
Subsequent to year end, Liontown entered into a sale agreement to acquire the Killaloe Project from Matsa
Resources Limited (ASX: MAT) in consideration for 20 million Liontown shares and a 1% NSR Royalty. The acquisition
significantly expands Liontown’s lithium-prospective footprint in the region. Completion of the Sale Agreement has
been achieved with all conditions satisfied.
In September 2018, the Company issued 10,000,000 shares (tranche 1) to Matsa Resources Ltd in part consideration
at $0.027 per share. A further 10,000,000 shares (tranche 2) will be issued shortly, pending the finalisation of relevant
documentation.
ACCOUNTING POLICIES
This section of the Notes includes information that must be disclosed to comply with accounting standards and
other pronouncements relating to new and revised accounting standards and their impact.
Note 25:
Changes in accounting policies
In the year ended 30 June 2018, the Directors have reviewed all of the new and revised Standards and Interpretations
issued by the Australian Accounting Standards Board that are relevant to the Group and effective for the current
annual reporting period.
As a result of this review, the Directors have determined that there is no material impact of the new and revised
Standards and Interpretations on the Group and, therefore no material change is necessary to Group accounting
policies.
Note 26:
New accounting standards and interpretations
Australian Accounting Standards and Interpretations that have recently been issued or amended but are not yet
effective and have not been adopted by the Group for the year ended 30 June 2018 are outlined below.
a)
AASB 9 Financial Instruments (effective from 1 July 2018)
AASB 9 Financial Instruments addresses the classification, measurement and de-recognition of financial assets and
financial liabilities and introduces new rules for hedge accounting. All financial assets that are within the scope of
AASB 9 are required to be measured at either amortised cost or fair value, while financial liabilities measured at fair
value through profit and loss will require consideration as to the portion of change in fair value that is attributable
to changes in the credit risk of that liability. Such changes in value with a connection to change in credit risk will be
presented in other comprehensive income rather than profit and loss.
The requirements for hedge accounting under AASB 9 retain similar accounting treatments to those currently
available under AASB139. The new standard introduces greater flexibility to the types of transactions eligible for
hedge accounting while the previous requirement for hedge effectiveness testing has been replaced with the
principle of an ‘economic relationship’ and the requirement for retrospective assessment of hedge effectiveness has
been removed. The new standard has however introduced enhanced disclosure requirements regarding the entity’s
risk management activities.
The Group has considered the impact on its consolidated Financial Statements and assessed that the effect of the
new standard will be minimal.
b)
AASB 2016-5 Amendments to Australian Accounting Standards – Classification and Measurement of Share-
based payment Transactions (effective from 1 July 2018).
LIONTOWN RESOURCES LIMITED | ANNUAL REPORT 2018 | PAGE 53
Notes to the Consolidated Financial Statements
For the year ended 30 June 2018
Note 26:
New accounting standards and interpretations (Continued)
This standard amends AASB 2 Share-based payments clarifying how to account for certain types of share-based
payment transactions. The amendments provide requirements on the accounting for:
The effects of vesting and non-vesting conditions on the measurement of cash-settled share-based
payments;
Share-based payment transactions with a net settlement feature for withholding tax obligations;
A modification to the terms and conditions of a share-based payment that changes the classification of the
transaction from cash-settled to equity settled.
The Group has considered the impact on its consolidated Financial Statements and assessed that the effect of the
new standard will be minimal.
c)
AASB 15 Revenue from Contracts with Customers (effective 1 July 2018)
AASB 15 Revenue from Contracts with Customers is a new Standard introduced by AASB to replace existing revenue
recognition guidance, AASB 11 Construction Contracts, AASB 118 Revenue and AASB 1004 Contributions. The new
standard is aimed at improving financial reporting of revenue and comparability to provide better clarity on revenue
recognition. AASB 15 establishes principles for reporting useful information to users of financial statements about
the nature, amount, timing and uncertainty of revenue and cash flows arising from an entity’s contracts with
customers. It also introduces new cost guidance which requires certain costs of obtaining and fulfilling contracts to
be recognised as separate assets when specified criteria are met.
The core principle of AASB 15 is than an entity shall recognise revenue to depict the transfer of promised goods or
services to customers in an amount that reflects the consideration to which the entity expects to be entitled in
exchange for those goods or services.
The Standard introduces a 5-step approach to revenue recognition. Revenue is recognised upon satisfaction of these
performance obligations, which occur when control of goods or services is transferred, rather than on transfer of
risks and rewards. Revenue received for a contract that includes a variable amount is subject to revised conditions
for recognition, whereby it must be highly probable that no significant reversal of the variable component may occur
when the uncertainties around its measurement are removed.
The Group has considered the impact on its consolidated Financial Statements and assessed that the effect of the
new standard will be minimal.
d)
ASB 16 Leases (effective from 1 July 2019)
AASB16 distinguishes leases and service contracts on the basis of whether an identified asset is controlled by the
customer. Distinctions between operating leases (previously off balance sheet) and finance leases (previously on
balance sheet) are removed under the new standard and replaced by the concept of right of use. Where an entity
has control over and an ongoing right to use an asset, that asset will be recognised on the balance sheet as an asset
with a corresponding liability.
The Group has considered the impact on its consolidated Financial Statements and assessed that the effect of the
new standard will be minimal. The Group continues to assess its contracts and other arrangements that may be
impacted by the introduction of revised standard AASB16
e)
AASB Interpretation 23 Uncertainty over Income Tax Treatments (effective from 1 July 2019)
This interpretation clarifies the application of the recognition and measurement criteria in AASB 112 Income Taxes
when there is uncertainty over income tax treatments. The Interpretation specifically addresses the following:
Whether an entity considers uncertain tax treatments separately;
The assumptions an entity makes about the examination of tax treatments by taxation authorities;
How an entity determines taxable profit, tax bases, unused tax losses, unused tax credits and tax rates;
How an entity considers changes in facts and circumstances.
The Group has considered the impact on its consolidated Financial Statements and assessed that the effect of the
new standard will be minimal.
LIONTOWN RESOURCES LIMITED | ANNUAL REPORT 2018 | PAGE 54
Director’s Declaration
For the year ended 30 June 2018
1
In the opinion of the directors of Liontown Resources Limited (‘the Company’):
(a)
the financial statements, notes and additional disclosures of the Group are in accordance with the
Corporations Act 2001 including:
(i) giving a true and fair view of the financial position of the Group as at 30 June 2018 and of its
performance for the year then ended; and
(ii) complying with Australian Accounting Standards (including the Australian Accounting
Interpretations) and the Corporations Regulations 2001; and
(b)
there are reasonable grounds to believe that the Company will be able to pay its debts as and when
they become due and payable; and
(c)
the financial statements and notes thereto are in accordance with International Financial
Reporting Standards issued by the International Accounting Standards Board.
2
This declaration has been made after receiving the declarations required to be made to the directors in
accordance with section 295A of the Corporations Act 2001 for the financial year ended 30 June 2018.
This declaration is signed in accordance with a resolution of the Directors:
David R Richards
Managing Director
Dated this 19th day of September 2018
LIONTOWN RESOURCES LIMITED | ANNUAL REPORT 2018 | PAGE 55
Independent Auditor’s Report
To the Members of Liontown Resources Limited
REPORT ON THE AUDIT OF THE FINANCIAL REPORT
Opinion
We have audited the financial report of Liontown Resources Limited (“the Company”) and its
controlled entities (“the Group”), which comprises the consolidated statement of financial position as
at 30 June 2018, the consolidated statement of 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 2018 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.
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. We have determined the matters described below to
be the key audit matters to be communicated in our report.
HLB Mann Judd (WA Partnership) ABN 22 193 232 714
Level 4 130 Stirling Street Perth WA 6000 | PO Box 8124 Perth BC WA 6849 | Telephone +61 (08) 9227 7500 | Fax +61 (08) 9227 7533
Email: mailbox@hlbwa.com.au | Website: www.hlb.com.au
Liability limited by a scheme approved under Professional Standards Legislation
HLB Mann Judd (WA Partnership) is a member of
International, a world-wide organisation of accounting firms and business advisers
LIONTOWN RESOURCES LIMITED | ANNUAL REPORT 2018 | PAGE 56
Key Audit Matter
How our audit addressed the key audit matter
Sale of exploration and evaluation assets
(Note 5)
During the year, the Group disposed of its Bynoe
lithium project and its Kathleen Valley tenements
for total proceeds of $3,579,297 and $235,000
respectively.
The Group was required to
calculate the gain on disposal, which was
complex given that the consideration included
shares
the purchasers and contingent
consideration.
in
The disclosures of these transactions in the
financial report was also complex as the Group
needed to consider whether the assets disposed
should be disclosed as discontinued
of
operations.
We focussed on this matter because of the
importance to the readers of the financial report
of the potential allocation between continuing
operations and discontinued operations and the
material impact of the gain on disposal on the
financial report.
Our procedures included, but were not limited
to:
• We read the sale agreements for the
respective assets and found that the sale
in
transactions had been
accordance with the terms of the respective
sale agreements.
recorded
• We reviewed the Group’s assessment of the
consideration received and agreed the
calculation of the value ascribed to the
portion of the consideration comprising
shares in the purchasers. We also reviewed
the Group’s assessment of the contingent
consideration component of the Bynoe
lithium project agreement and agreed with
the conclusion that no value should be
ascribed to this portion of the consideration
at the date of sale.
• We reperformed the calculations of the
the
gain on disposal by comparing
consideration received to the carrying value
of the assets disposed of. As the Group’s
accounting policy
to expense all
is
exploration and evaluation expenditure,
the assets disposed of had no carrying
values, therefore the gain on disposal
equated to the proceeds received.
• We reviewed the Group’s assessment of
whether the assets disposed of should be
disclosed as discontinued operations and
agreed with the conclusion that the
disposals did not constitute discontinued
operations.
• We examined the disclosures included in
the financial report and found them to be in
accordance with Australian Accounting
Standards.
LIONTOWN RESOURCES LIMI TED | ANNUAL REPORT 2018 | PAGE 57
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 2018, 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.
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.
LIONTOWN RESOURCES L IMITED | ANNUAL REPORT 2018 | PAGE 58
•
•
•
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.
• Obtain sufficient appropriate audit evidence regarding the financial information of the entities or
business activities within the Group to express an opinion on the financial report. We are
responsible for the direction, supervision and performance of the Group audit. We remain solely
responsible for our audit opinion.
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.
REPORT ON THE REMUNERATION REPORT
Opinion on the Remuneration Report
We have audited the Remuneration Report included in the directors’ report for the year ended 30
June 2018.
In our opinion, the Remuneration Report of Liontown Resources Limited for the year ended 30 June
2018 complies with section 300A of the Corporations Act 2001.
LIONTOWN RESOURCES LIMI TED | ANNUAL REPORT 2018 | PAGE 59
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
19 September 2018
L Di Giallonardo
Partner
LIONTOWN RESOURCES LIMI TED | ANNUAL REPORT 2018 | PAGE 60
ASX Additional Information
As at 17 October 2018
Additional information required by the Australian Securities Exchange Limited Listing Rules and not disclosed
elsewhere in this report is set out below.
Shareholdings
Substantial shareholders
The number of shares held by substantial shareholders and their associated interests as at 17 October 2018 were:
Shareholder
Number of ordinary
shares held
Percentage of
capital held %
Number of
unlisted
options held
Percentage of
unlisted
options held %
Timothy R B Goyder
226,184,982
20.30
6,000,000
17.26
JP Morgan Nominees
Australia Ltd
62,396,620
5.60
-
-
Class of Shares and Voting Rights
At 17 October 2018 there were 1,788 holders of the ordinary shares of the Company, 10 holders of unlisted options
and 1 holder of performance rights. The Company has 34,750,000 unlisted options and 1,000,000 performance rights
on issue at 17 October 2018, all of which were issued under the Employee Share Option Plan.
The voting rights to the ordinary shares set out in the Company’s Constitution are:
“Subject to any rights or restrictions for the time being attached to any class or Classes of shares -
a)
b)
at meetings of members or classes of members each member entitled to vote in person or by proxy or
attorney: and
on a show of hands every person who is a member has one vote and on a poll every person in person
or by proxy or attorney has one vote for each ordinary share held.”
Holders of options do not have voting rights.
Restricted Securities
1,785,714 ordinary shares are subject to voluntary escrow until 1st May 2019.
Distribution of equity security holders as at 17 October 2018:
Category
1 – 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,001 and over
Total
Number of equity security holders
Ordinary Shares
Unlisted Share Options
119
14
30
797
828
1,788
-
-
-
-
10
10
The number of shareholders holding less than a marketable parcel at 17 October 2018 was 271.
LIONTOWN RESOURCES LIMITED | ANNUAL REPORT 2018 | PAGE 61
ASX Additional Information
As at 17 October 2018
Twenty Largest Ordinary Fully Paid Shareholders
Name
Mr Timothy Rupert Barr Goyder
J P Morgan Nominees Australia Limited
Graham Cluck Management & Investment Pty Ltd
Clement Pty Ltd
Delta Resource Management Pty Ltd
The Trust Company (Australia) Limited
Invia Custodian Pty Limited
Gremar Holdings Pty Ltd
Calm Holdings Pty Ltd
David Groom Ewan + Jennie Bar Goyder-Ewan
Botsis Holdings Pty Ltd
Capricorn Mining Pty Ltd
Mr Gregory Robert Hackshaw
Hazardous Investments Pty Ltd
Dog Trap Investments Pty Ltd
Matsa Resources Limited
Precision Opportunities Fund Ltd
Wapimala Pty Limited
Citicorp Nominees Pty Limited
Bellarine Gold Pty Ltd
Total
Number of ordinary
shares held
226,184,982
Percentage of
capital held
%
20.30
62,396,620
43,463,332
28,200,000
27,361,294
25,500,000
14,663,122
14,050,000
12,770,000
12,354,402
12,203,600
12,000,000
10,700,000
10,091,622
10,000,000
10,000,000
10,000,000
8,500,000
7,914,306
7,300,000
5.60
3.90
2.53
2.46
2.29
1.32
1.26
1.15
1.11
1.10
1.08
0.96
0.91
0.90
0.90
0.90
0.76
0.71
0.66
565,653,280
50.80
LIONTOWN RESOURCES LIMITED | ANNUAL REPORT 2018 | PAGE 62
Liontown Resources Limited
ABN 39 118 153 825
Level 2, 1292 Hay Street
West Perth, Western Australia 6005
T : + 61 8 9322 7431 F : + 61 8 9322 5 8 0 0
info@ltresources.com.au
https://twitter.com/LiontownRes
http://www.ltresources.com.au
https://www.linkedin.com/co m p a ny/liontow n-resources-limited