ABN 93 141 175 493
2020
Annual
Report
CORPORATE DIRECTORY
DIRECTORS
Mr Peter Wall - Non-Executive Chairman
Mr Damian Black - Non-Executive Director
Mr William Oliver - Non-Executive Director
Ms Dganit Baldar - Non-Executive Director
Mr Lindsay Reed - Chief Executive Officer
Mrs Ashley Lim - Company Secretary
REGISTERED OFFICE
Suite 1, 245 Churchill Avenue
Subiaco, WA 6008
T: +61 (08) 6270 4610
F: +61 (08) 6270 4614
E-mail: info@minbos.com
Website: www.minbos.com
PRINCIPAL PLACE OF BUSINESS
Suite 1, 245 Churchill Avenue
Subiaco, WA 6008
PO Box 162
Subiaco, WA 6904
BANKERS
National Australia Bank
West Perth Business Banking Centre
Level 1, 1238 Hay Street
West Perth, WA 6005
Website: www.nab.com.au
AUDITORS
BDO Audit (WA) Pty Ltd
38 Station Street
Subiaco, WA 6008
Website: www.bdo.com.au
SHARE REGISTRY
Automic Registry Services
Level 2, 267 St Georges Terrace
Perth, WA 6000
Website: www.automic.com.au
SOLICITORS
Steinepreis Paganin
Level 4, The Read Buildings
16 Milligan street
Perth, WA 6000
DOMICILE AND COUNTRY OF INCORPORATION
Website: www.steinpag.com.au
Australia
AUSTRALIAN COMPANY NUMBER
ACN 141 175 493
AUSTRALIAN BUSINESS NUMBER
ABN 93 141 175 493
2 |
SECURITIES EXCHANGE
Australian Securities Exchange Limited (ASX)
Home Exchange - Perth
ASX Code - MNB (Ordinary Shares)
MINBOS RESOURCES LIMITED | 2020 ANNUAL REPORT
Contents
02
Corporate Directory
04
Chairman’s Letter
06
Director’s Report
33
Auditor’s Independence Declaration
34
Corporate Governance Statement
45
Consolidated Statement of Profit or Loss
& Other Comprehensive Income
46
Consolidated Statement of Financial Position
47
Consolidated Statement of Changes in Equity
48
Consolidated Statement of Cash Flows
49
Notes to the Consolidated Financial Statements
68
Directors’ Declaration
69
Independent Auditor’s Report
72
Shareholder Information
MINBOS RESOURCES LIMITED | 2020 ANNUAL REPORT
| 3
| 3
MINBOS RESOURCES LIMITED | 2020 ANNUAL REPORT CHAIRMAN’S
LETTER
DEAR FELLOW
SHAREHOLDERS
IT GIVES ME GREAT PLEASURE TO PRESENT THE
2020 ANNUAL REPORT FOR MINBOS RESOURCES
LIMITED (ASX:MNB) (MINBOS OR COMPANY).
It’s hard to imagine the Company being in a more different
position than it was in late 2018 when the Company
announced the joint venture had lost the mineral rights for
the Cabinda Phosphate Project, but the 2020 financial year
has been both a triumph of perseverance and process, with
the successful tender for the Cabinda licence.
With Cabinda now firmly ensconced, the Company has sought
to build on the strong platform our years of work in the region
has provided, our vision is to build a nutrient supply and
distribution business that stimulates agricultural production
and promotes food security in Angola and the broader Congo
Basin.
In the intervening periods between late 2018 and early 2020,
CEO Lindsay Reed ensured the Company’s relationship
with the Angolan Government remained strong and
despite not having any interest in the Cabinda Project, the
Company continued to undertake greenhouse and field
trials, demonstrating a commitment to the project which
culminated in the successful tender for the Cabinda Project
in March 2020.
Despite the challenges of the past
decade, the quality of the Cácata
Deposit has never been in question
and wholly represents the reason
Board and Management persevered
to achieve a successful tender
outcome.
In late May 2020, the Company announced it was undertaking
a Definitive Feasibility Study (DFS) for the Project, which
included a model for delivering locally produced Nitrogen (N),
Phosphorus (P) and Potassium (K) fertiliser to be sold within
Angola and regionally throughout Middle Africa.
To set the terms of reference for the DFS, an interim scoping
study was completed and released post reporting period.
The study demonstrated Cabinda to be both technically and
financially robust, delivering a low-capex/high -margin project
profile.
The Study also highlighted the regional potential for
agricultural development. In the last 10 years Angola was
importing almost 90% of its food, however, buoyed by strong
demand for local product, Angola is currently undergoing an
agricultural revolution, with more than US$2 Billion of Foreign
Direct Investment pouring into farms and farm infrastructure
projects.
4 |
MINBOS RESOURCES LIMITED | 2020 ANNUAL REPORT Agriculture is the main source of income for 90% of the 9.6
million Angolans living in rural areas with 44% of Angola’s 30.8
million population employed in agriculture. Angola has 35
million hectares of arable land with only 8% currently tilled for
farming. Currently, 100% of all NPK is imported.
Finally, I would like the thank the Government and people
of Angola, for awarding us custodianship of the of Cabinda
Project, which the Company strongly believes has the
potential to both change Angola and add significant value for
Minbos Shareholders.
Our objectives for the 2020-21 Financial Year are to complete
the Definitive Feasibility Study, secure local and international
environmental approvals, continue field and greenhouse trials,
secure an offtake agreement with Government of Angola and
secure funding. The DFS is expected to take nine (9) months to
complete including obtaining all approvals for construction and
operations of the project. Once this is complete, the Company
will then be able to make a Final Investment Decision (FID), and
then subject to financing, commence construction.
I would like to take this opportunity to thank our technical
partners, the International Fertiliser Development Centre,
the Instituto de Investigação Agronómica (Angola’s National
Agricultural Research
Institute) and the Plant Nutrition
Science and Technology (Brazil), all who have made significant
contributions to our understanding of the agronomic potential
of the Cabinda Phosphate Blend during Financial Year 2020.
I would also like to make special mention of our in-country
attaché, Mr Camache Caturichi who worked tirelessly to assist
our tender.
As Chairman, I thank you for your support throughout 2019-20
and hope that our progress during the forthcoming year will
continue to add value to your investment in Minbos. I would
like to thank my fellow board members and management for
all their efforts and success during the past year.
Yours Sincerely
Mr Peter Wall
Non-Executive Chairman
| 5
MINBOS RESOURCES LIMITED | 2020 ANNUAL REPORT DIRECTORS’ REPORT
The Directors submit their report of the ‘Consolidated Entity’ or ‘Group’, being
Minbos Resources Limited (‘Minbos’ or ‘Company’) and its Controlled entities, for
the financial year ended 30 June 2020.
1.
INFORMATION ON THE BOARD OF DIRECTORS
The Directors of the Company at any time during or since the
end of the financial year are as follows:
During the past three years, Mr Black held the following
directorships in other ASX listed companies:
• Non-Executive Director of Antilles Oil and Gas NL (current).
Mr Peter Wall
Non-Executive Chairman (appointed 21 February 2014)
Mr Wall is a corporate lawyer and has been a Partner at
Steinepreis Paganin (Perth based corporate law firm) since
July 2005. Mr Wall graduated from the University of Western
Australia in 1998 with a Bachelor of Laws and Bachelor of
Commerce (Finance). Mr Wall has also completed a Masters
of Applied Finance and Investment with FINSIA.
Mr Wall has a wide range of experience in all forms of
commercial and corporate law, with a particular focus on
resources (hard rock and oil/gas), technology, equity capital
markets and mergers and acquisitions. He also has significant
experience in dealing in Africa.
During the past three years, Mr Wall held the following
directorships in other ASX listed companies:
Current:
Mr William (Bill) Oliver
Non-Executive Director (appointed 2 September 2013)
Mr Oliver is a geologist with 20 years of experience in the
international resources industry working for both major and
junior companies. He has substantial experience in the design
and evaluation of resource definition programmes as well as
co-ordinating all levels of feasibility studies. He has direct
experience with bulk commodities in various roles including
large scale resource definition for Rio Tinto Iron Ore.
Mr Oliver has spent recent years evaluating and assessing
several projects across Africa including being responsible
for the identification, acquisition and development into
production of the Konongo Gold Project while being the
Managing Director of Signature Metals, and the acquisition
of projects for Celsius Resources and Tando Resources. He is
also fluent in Portuguese having lived and worked in Portugal
while managing exploration across a range of commodities
for Iberian Resources.
• Non-Executive Chairman of MMJ Phytotech Ltd;
• Non-Executive Chairman of MyFiziq Limited;
• Non-Executive Chairman of Transcendence Technologies
Mr Oliver holds an honours degree in Geology from the
University of Western Australia as well as a Post-Graduate
Diploma in Finance and Investment from FINSIA.
Limited;
• Non-Executive Chairman of Pursuit Minerals Ltd; and
• Non-Executive Chairman of Argent Minerals Ltd.
Previous:
• Non-Executive Chairman of Mandrake Resources Limited
(formerly Bronson Group Ltd) (resigned 5 August 2019);
• Non-Executive Chairman of Sky and Space Global Ltd
(resigned 3 December 2018);
• Non-Executive Chairman of Activistic Limited (resigned 23
April 2018);
• Non-Executive Director of Ookami Limited (resigned 16
February 2018); and
• Non-Executive Chairman of Zyber Holdings Limited
(resigned 22 January 2018).
Mr Damian Black
Non-Executive Director (appointed 21 February 2014)
Mr Black is Founder/Director at Aesir Capital, a Sydney based
boutique investment bank. Prior to founding Aesir, he worked
as a director at Asia Principal Capital – Corporate Finance. Mr
Black has over 10 years’ experience in corporate finance and
investment banking having commenced with Tolhurst Limited
in 2006.
Mr Black graduated from Curtin University with a Bachelor
of Science in Physiotherapy in 1999 and also completed a
Graduate Diploma in Applied Finance and Investment at
FINSIA in 2005.
Mr Black is experienced in structuring corporate transactions,
focusing primarily on the technology and natural resources
sectors, and is currently engaged in a corporate advisory role
with a number of private and ASX listed companies.
During the past three years, Mr Oliver held the following
directorships in other ASX listed companies:
Current:
• Managing Director of Vanadium Resources Ltd (formerly
Tando Resources Limited); and
• Non-Executive Chairman of Celsius Coal Limited.
Previous:
• Executive Director of Aldoro Resources Limited (resigned
20 November 2019);
• Non-Executive Director of Vulcan Energy Resources
Limited (formerly Koppar Resources Limited) (resigned 19
November 2019); and
• Technical Director of Orion Minerals NL (formerly Orion
Gold NL) (resigned 17 April 2018).
Ms Dganit Baldar
Non-Executive Director (appointed 18 March 2016)
Ms Dganit Baldar is a qualified Israeli corporate lawyer with
approximately 20 years’ experience in the legal profession.
Ms Baldar was previously the General Counsel for Mitrelli
Group, a multinational organization which initiates, executes
and manages large turn-key projects in developing countries.
Ms Baldar graduated from Brunel University in London and
also completed an MBA through Tel Aviv University. She
has a wide range of experience in all forms of corporate
and commercial law with specific expertise in complex joint
ventures, mergers and acquisitions. In addition, she has
expertise in dealing with Angolan law and companies.
During the past three years, Ms Baldar has not held
directorships in any other ASX listed companies.
6 |
MINBOS RESOURCES LIMITED | 2020 ANNUAL REPORT
2.
INFORMATION ON OFFICERS OF THE
COMPANY
4.
REVIEW OF OPERATIONS
(a) HIGHLIGHTS & SIGNIFICANT CHANGES IN STATE OF
Mr Lindsay Reed
AFFAIRS
Chief Executive Officer (appointed 1 September 2014)
Mr Reed is an accomplished mining executive with over 30
years of experience in senior management roles in Australia
and overseas.
Mr Reed has extensive experience in managing mining
projects in a wide range of commodities and countries.
He was previously Director and Chief Executive Officer of
resource development company Aviva Corporation Limited
(‘Aviva’) which divested its West Kenyan gold and base metals
assets in late 2012 to Acacia Mining Plc
(previously African Barrick Plc) for $20m cash and a further
resource milestone payment of $10m. Mr Reed was
responsible for Joint Venturing into the asset with Lonmin
Plc and overseeing funding and exploration activities until
the divestment of the asset. Mr Reed also oversaw the
environmental approval of two power station projects
International
in Australia and Botswana and attracted
Joint
heavyweights GDF Suez and AES Corporation as
Development Partners.
Prior to joining Aviva, Mr Reed was Corporate Development
Manager at Murchison United Limited which acquired
the Renison Bell Tin mine from RGC Limited. During his
involvement Murchison grew from a market capitalisation of
$5m to over $100m.
Mr Reed is a Mining Engineer and has extensive experience
in international mine development, minerals marketing and
project funding.
Mrs Ashley Lim
Contract Company Secretary (appointed 5 October 2018)
Ms Lim is an accountant with over 10 years’ experience in the
resources and education industry in Australia and Singapore.
Ms Lim has assisted clients with ASX and ASIC compliance,
secretarial and accounting service to a number of listed and
unlisted companies.
3.
PRINCIPAL ACTIVITIES
Minbos Resources Limited is an ASX-listed exploration and
development company. The Company’s primary focus during
the financial year continued to be on the advancement of
its Phosphate Interests (Angola) and its Ambato Rare Earth
Project (Madagascar).
The Company’s strategy is to specifically target the exploration
and development of low-cost mineral projects.
The highlights and significant changes in state of affairs
during and subsequent to the yearend include:
Public tender for Mining Rights in Angola: On 18 March 2020
the Company announced that the Company’s bid for the
Cacata Phosphate Concession, located in Cabinda, Angola,
had been successful. Under the terms of the tender, it is
anticipated that Minbos will be granted the equivalent of an
exploration licence over the project area.
Definitive Feasibility Study (DFS) Underway: On 27 May
2020 the Company announced that the DFS for the Cabinda
Phosphate Project is underway, with the appointment of
Orelogy Consulting Pty Ltd (Orelogy). Orelogy is a respected
mine planning consultancy with extensive operational and
consulting experience in a range of different commodities
throughout the world, including specialist phosphate ore
experience.
On 1 September 2020 the Company announced that as part
of its DFS the Company has signed a contract with FEECO
International for the basic engineering package associated
with the planned granulation plant major equipment.
Scoping Study: On 26 August 2020 the Company announced
the results from the Scoping Study completed on its Cabinda
Phosphate Project in Angola, which demonstrates the Project
will generate strong cash returns for a relatively small capital
investment. With the initial scoping study complete, the
Company will move quickly to complete a DFS study, which
will be used to obtain funding with debt and equity financiers.
Drilling program complete at Ambato Rare Earth Project: 118-
hole auger drilling program was completed at the Ambato
Rare Earth Project, located in the Republic of Madagascar.
Drilling results targeted a ~2km-long zone of rare earth soil
anomalies at the Ankazohambo prospect, with a recent soil
sampling program returning grades of up to 11.7% Total Rare
Earth Oxide (TREO), with 22% of all samples greater than 1%
TREO.
Covid-19: The impact of the Coronavirus (COVID-19) pandemic
is ongoing and while it has not significantly impacted the
entity up to 30 June 2020, it is not practicable to estimate
the potential impact, positive or negative, after the reporting
date. The situation is rapidly developing and is dependent on
measures imposed by the Australian Government and other
countries, such as maintaining social distancing requirements,
quarantine, travel restrictions and any economic stimulus
that may be provided.
There were no other significant changes in the state of affairs
during the financial year.
| 7
MINBOS RESOURCES LIMITED | 2020 ANNUAL REPORT DIRECTORS’ REPORT
CAMEROON
POPULATION (M): 15.40
NPK USE (KG/HA): N/A*
EQUATORIAL GUINEA
POPULATION (M): 1.30
NPK USE (KG/HA): N/A*
SÃO TOMÉ & PRINCIPE
POPULATION (M): 2.10
NPK USE (KG/HA): 29.56
GABON
POPULATION (M): 2.10
NPK USE (KG/HA): 29.56
CHAD
POPULATION (M): 15.40
NPK USE (KG/HA): N/A*
CENTRAL
AFRICAN
REPUBLIC
POPULATION (M): 15.40
NPK USE (KG/HA): N/A*
DEMOCRATIC
REPUBLIC OF
THE CONGO
POPULATION (M): 84.00
NPK USE (KG/HA): 1.13
ANGOLA
POPULATION (M): 30.80
NPK USE (KG/HA): 7.46
Figure 1 – Angola, farm transport and
grain logistics truck in regional Cabinda
MAP
AREA
CONGO
REPUBLIC
POPULATION (M): 5.20
NPK USE (KG/HA): 2.06
PROJECTS
ANGOLAN PHOSPHATE INTEREST
ANGOLA
Angola has an abundance of fresh water and arable land making the country
particularly attractive for investments in agriculture and with one of the fastest-
growing populations in Africa, Angola has the potential to significantly scale-up
its agricultural production.
In Angola, agriculture is the main source of income for 90% of the 9.6 million
countrymen and women living in rural areas. There are 35 million hectares
of arable land (the size of France) with only 8% currently tilled for farming.
Furthermore, 100% of all nutrients (nitrogen, phosphate and potassium – NPK)
are imported.1
The region of Middle Africa (Angola, Cameroon, Central African Republic, Chad,
Congo Republic – Brazzaville, Democratic Republic of Congo, Equitorial Guinea,
Gabon, and São Tomé & Principe) has immense potential for sustainable
agriculture with only 25 million hectares of the regions potential 226 million
hectares currently being utilised. With virtually no local fertiliser production, and
a regional population of 168 million people, the opportunity for a socially-minded
company to deliver locally produced fertiliser to Middle Africa, remains immense.
1World Bank, Creating-Markets-in-Angola-Opportunities-for-Development-Through-the-Private-Sector - http://documents.worldbank.org/curated/
en/606291556800753914/pdf/Creating-Markets-in-Angola-Opportunities-for-Development-Through-the-Private-Sector.pdf
8 |
MINBOS RESOURCES LIMITED | 2020 ANNUAL REPORT CAMEROON
POPULATION (M): 15.40
NPK USE (KG/HA): N/A*
EQUATORIAL GUINEA
POPULATION (M): 1.30
NPK USE (KG/HA): N/A*
SÃO TOMÉ & PRINCIPE
POPULATION (M): 2.10
NPK USE (KG/HA): 29.56
GABON
POPULATION (M): 2.10
NPK USE (KG/HA): 29.56
MAP
AREA
CONGO
REPUBLIC
POPULATION (M): 5.20
NPK USE (KG/HA): 2.06
CHAD
POPULATION (M): 15.40
NPK USE (KG/HA): N/A*
CENTRAL
AFRICAN
REPUBLIC
POPULATION (M): 15.40
NPK USE (KG/HA): N/A*
DEMOCRATIC
REPUBLIC OF
THE CONGO
POPULATION (M): 84.00
NPK USE (KG/HA): 1.13
ANGOLA
POPULATION (M): 30.80
NPK USE (KG/HA): 7.46
MIDDLE AFRICA’S
EMERGING GREEN CORRIDOR
168M PEOPLE - POTENTIAL 226M ha ARABLE LAND
Country
Angola
Cameroon
Central African Republic
Chad
Congo Republic - Brazzaville
Democratic Republic of Congo
Equatorial Guinea
Gabon
São Tomé & Principe
land Area (ha)
124,670,000
47,544,000
62,298,000
128,400,000
34,200,000
234,486,000
2,805,000
26,767,000
96,000
661,266,000
Table 1 : Potential Arable Land in Middle Africa
Arable Land
use (%)
Potential
Arable land %
Potential
Arable land (ha)
3.39
13
2.8
3.8
1.6
3.1
4.27
1.2
9
51.64
14.99
33
33
29
34
30
4
50.73
64,380,100
7,125,000
20,766,000
42,800,000
10,000,000
80,000,000
850,000
1,000,000
48,700
226,969,800
| 9
MINBOS RESOURCES LIMITED | 2020 ANNUAL REPORT DIRECTORS’ REPORT
Investment in the Angolan agricultural sector is being
spearheaded by President João Lourenço, with the Angolan
Government actively supporting private agro-industrial
companies to strengthen the chain of agricultural supplies,
promote investment in the sector, and link small businesses
to agricultural markets. The Agriculture Minister of
Agriculture and Fisheries, António Francisco de Assis, has
also called on the national business community to invest
in the agri-business sector, with the aim of increasing food
production in Angola.
With fertiliser consumption on the African continent
projected to reach 13.6 million tonnes by 2030 compared to
7.6 million tonnes currently, and spending on food in Angola
expected to increase from US$15 billion in 2017 to US$21
billion by 2021, their remains a strong economic incentive
for companies to produce locally mined and manufactured
fertilisers. The potential to scale-up its agriculture output
will deliver Angola the diversification of its economy away
from traditional oil and diamond revenues.
Producing fertilizers locally improves the availability of
nutrients, reduces transport costs, and protects against
exchange rate fluctuations. Locally produced fertilizer
projects are
the continent. Local
production facilities allow multiple product mixes (NPK and
micronutrients) to be manufactured at small scale. This is
a significant advantage over imports, which of necessity,
arrive in large shipments of a single product.
taking off across
The Company’s vision is to build a nutrient supply and
distribution business that stimulates agricultural production
and promotes food security in Angola and the broader Middle
Africa region. The Company’s plan is to mine Phosphate
Rock from the Cácata Deposit and transport it to Porto de
Caio where a granulation plant will be built and operated
at the industrial site to produce Enhanced Phosphate Rock
(EPR) granules (Phosphate Rock + MAP) (Figure 2).
10 |
MINBOS RESOURCES LIMITED | 2020 ANNUAL REPORT Figure 2 – Minbos Cabinda Phosphate Project Scope and activity flow
In general, these conditions are acidic and phosphate poor
soils, high rainfall, and crops that uptake nitrogen as NH4++
and create a favourable rhizosphere for phosphate rock
dissolution. These conditions are typical in tropical and sub-
tropical climates and predominate the Angolan agricultural
regions.
Greenhouse and field trials to quantify the commercial RAE
are ongoing as part of the Company’s DFS. The Company’s
market strategy will target soils and crops where the RAE of
enhanced phosphate rock is most effective.
The EPR granules will become the P nutrient feed stock
to blend with imported Nitrogen (N), and Potassium (K)
granules in NPK blending plants to exact specifications
suited to Angolan crops and soils.
By feeding the soils that feed us, Minbos’ nutrient and
distribution project will directly
lives of
employees, local businesses, the agriculture sector, Angolan
national food security, Government revenues, and the local
population for many years to come, all the while promoting
Angola as an attractive investment destination and delivering
value for Minbos Shareholders.
impact the
The Cabinda Project is most sensitive to Relative Agronomic
Effectiveness (RAE) of the enhanced phosphate rock in
comparison to imported MAP product on a contained
Phosphate basis. Greenhouse trials undertaken by the
International Fertiliser Development Centre (IFDC) have
identified the soils, climate conditions and crop types for
optimal RAE.
| 11
MINBOS RESOURCES LIMITED | 2020 ANNUAL REPORTANGOLACONGODRCCACATAPorto de CaioAngolan Markets50km sealed dual carriageway to Porto de Caio2Granulation Plant3Proposed NPK Blending Plant4Proposed Rock Mine1DingeRegional MarketsDistribution ChannelProcess FlowRoadsFarmingCabinda DIRECTORS’ REPORT
PROJECTS
Figure 3 - Cabinda Phosphate
Fertilizer Blend Greenhouse
Trials at the International
Fertilizer Development Center
(Muscle Shoals, Alabama)
CABINDA PHOSPHATE PROJECT - ACTIVITIES
Greenhouse Trials
International Fertiliser Development Centre
In 2019, the IFDC commenced a second trial of two consecutive
crops of maize harvested at 8 weeks, and compared the dry
matter yield of Cácata Blend vs MAP for initial and residual
yields. Again, the RAE was similar and the relative economic
effect (REE), taking into account the relative cost of the Cácata
Blend vs Map was superior to MAP for the combined dry
matter yields.
When dismantling the maize trial in 2019, IFDC staff noticed
that remnant P granules were still present in the pots.
Laboratory testing of the granules confirmed little or no
nitrogen content suggesting the P content of the granules
was Phosphate Rock not MAP. After the second maize crop
had been harvested a third trial with sorghum was installed
and grown to maturity. The results suggested that the blend
granules continued to offer agronomic effect in a third crop.
Further greenhouse trials are progressing to quantify the RAE
in three consecutive crops grown to maturity.
Greenhouse trials completed by the IFDC confirmed that
Cabinda Phosphate Rock blended with MAP (Cabinda Blend)
returned similar agronomic performance to MAP in crops and
soils typical for Angola.
The Company has completed four (4) greenhouse trials
with the IFDC 2, with the broad aim of maximising the EPR
agronomic potential and ensuring the suitability of the crops
for use in Angola and the surrounding Congo Basin.
In 2017, the IFDC suggested a greenhouse trial at its Alabama
campus to test a blend of Cácata Phosphate Rock with MAP
(monoammonium phosphate), a commercially available
water-soluble phosphate (WSP) fertilizer.
The trial was a logical extension of 40 years of experimental
work by the IFDC with phosphate rock in directly application,
and in conjunction with other WSP fertilisers such as Single
Super Phosphate (SSP) and Triple Super Phosphate (TSP).
The IFDC hypothesised that a blend of MAP with Phosphate
Rock would be successful in typical Angolan soils and crops
because the water-soluble MAP would quickly provide the P
nutrient necessary for the plant to establish its root system.
This is known as the ‘Starter Effect’.
MAP has a low pH of dissolution (4.8) which has been shown
to accelerate the dissolution of the Phosphate Rock making it
available for plant uptake. This is termed the ‘Enhancement
Effect’. Angolan soils are generally acidic, subject to high
rainfall and deficient in P nutrient and therefore potentially
suitable for EPR.
The initial trial conducted with winter wheat (due to the
season) indicated that the RAE of Cácata Phosphate Rock
blended with MAP was similar to MAP in acidic soils and
warranted further investigation.
12 |
MINBOS RESOURCES LIMITED | 2020 ANNUAL REPORT PROJECTS
Figure 3 - Cabinda Phosphate
Fertilizer Blend Greenhouse
Trials at the International
Fertilizer Development Center
(Muscle Shoals, Alabama)
Figure 4 – IIA Field trials
underway in Huambo, Angola
Field Trials
Instituto de Investigação Agronómica
The in-country field trials are being co-ordinated by the
Angolan Institute of Agrononomic Investigations in Huambo
(IIA), with the initial concept and design being undertaken by
the Plant Nutrition Science and Technology Company (NPCT)
in consultation with the IFDC 3. Crops of maize and beans
have were planted in 2019 and harvested earlier in 2020.
The objective of this trial was to prove the effectiveness of the
Cabinda Blend in Angolan field conditions. Field trials for the
next growing season are being undertaken in collaboration
with NPCT, IFDC and the IIA to compare the Cabinda Blend
to commercially available fertilisers 4.
This season’s field trials will evaluate a wider range of
MAP/Cabinda Phosphate Rock blends, compare tableted
(compacted) product versus granulated, and determine
residual effect of Cabinda EPR on grain yield and P uptake
with crops grown to maturity.
Greenhouse and Field Trials have proved to be an important
and independent measuring stick for the agronomic potential
of Cabinda Phosphate Rock. To have the IFDC, NPCT and IIA
all involved in the design and implementation of the trials
delivers world-class fertilizer research and development
expertise to our fertilizer development and an important
third-party validation of the potential for Cabinda Blend.
Successful tender bid for Cácata
Phosphate Concession
The Cabinda Phosphate Project
Despite not having any ownership interest after the Notice
of Termination was received, Minbos continued to push
ahead with the Cabinda phosphate agronomic research
and development programs, which played a key role in our
successful tender. The Company’s hard work and passion
for the Cabinda Project paid off, with the announcement
that the Minbos bid for the Cabinda Phosphate Project had
been successful 5.
As part of the partnership with the IFDC, 500kg’s of improved
Cabinda Phosphate Rock was successfully processed at the
IFDC’s world-class trial plant in Muscle Shoals, Alabama. The
granulation testing was designed to identify plant flow and
design and produced 400kg’s of Cabinda blend to be used
for field trials in Angola.
The successful bid was the culmination of more than two (2)
years of work by the Board and the Minbos team to firstly,
re-build government support lost during the joint venture
years and secondly, to successfully present a plan for the
Cabinda Phosphate Project that unlocks its potential for the
region.
2,3 ASX Announcements - PHOSPHATE AND RARE EARTH ACTIVITY UPDATE https://www.investi.com.au/api/announcements/mnb/626e5ca4-2c7.pdf
4 ASX Announcement - MINBOS TARGETS IMPROVED PROJECT ECONOMICS WITH FURTHER GREENHOUSE TRIALS TO OPTIMISE PRODUCT VALUE-IN-USE
https://www.investi.com.au/api/announcements/mnb/675f3ad6-40b.pdf
5 ASX Announcement - SUCCESSFUL TENDER BID FOR CACATA PHOSPHATE CONCESSION https://www.investi.com.au/api/announcements/mnb/ee358823-380.pdf
| 13
MINBOS RESOURCES LIMITED | 2020 ANNUAL REPORT DIRECTORS’ REPORT
CABINDA PHOSPHATE PROJECT
Definitive Feasibility Study
Post reporting period
In late May the Company announced that the Definitive
Feasibility Study (DFS) for the Cabinda Phosphate Project
was underway, with the appointment of Orelogy Consulting
Pty Ltd who were engaged to complete a JORC 2012 compliant
Ore Reserve Estimate for the Cácata Phosphate Deposit 6.
The Ore Reserve report is designed to generate a robust
mining strategy that maximises project value and efficiency.
The scope of work includes but is not limited to:
•
JORC 2012 Ore Reserve Estimate: The Company has
previously released a phosphate resource estimate
of 13Mt @ 26% P2O5, including 7Mt @ 30% P2O5. The
Orelogy report will allow Minbos to release a JORC
(2012) Ore Reserve Statement based on this previously
announced Measured and Indicated Mineral Resource
Estimate.
• Mine Schedule and Stockpile Design: A total material
movement schedule will be developed for the life of
the project to maximise NPV, minimise upfront costs
by minimising pre-strip and ensuring all plant feed
requirements are met in terms of tonnes and grades.
Stockpile designs will be prepared for topsoil, overburden
and ore.
• Mine
Infrastructure Design: All mining
related
infrastructure, including ex-pit haul roads, fuel supply
facilities and administration infrastructure. Cost Modelling
(OPEX and CAPEX) will be designed in sufficient detail to
produce a new mine model for the Ore Reserve report.
This includes all costs related to the mining activities
including clearing, stripping, topsoil, stockpiling, loading,
hauling, rehandle, production support, maintenance,
supervision, management, administration and technical
support, de-watering and dust suppression.
Post reporting period, the Company released results from a
Scoping Study which demonstrated that the Company could
generate strong cash returns on the Cabinda Phosphate
Project for a relatively small capital investment (Table 2) 7.
The pre-production CAPEX (capital expenditure) is between
US$22-28M, with the payback period just three (3) years, and
a Life of Mine (LoM) of 21 years. The After Tax NPV of the
Project is US$159M-$260M.
The Scoping Study results will be used to initiate discussions
with debt and equity financiers for the construction of the
project and frame the scope of work for a Definitive Feasibility
Study (DFS), which is currently underway.
SCOPING STUDY OUTCOMES
LOW
EBITDA LoM (US$M)
Pre-tax NPV (US$M)
Pre-tax IRR (US$M)
After-tax NPV (US$M)
After-tax IRR (%)
Pre-production Capex (US$M)
Average Selling Price (US$/t)
$747
$191
41%
$159
40%
$27.9
$222
Cash Operating Costs LoMa (US$/t)
$121b
Payback Period (Years)
Life of Mine (Years)
Average Annual Production (ktpa)
3
21
368
HIGH
$1,101
$308
59%
$260
58%
$22.4
$290
$141
a Cash operating costs include all mining, transport, granulation, shipping, government
royalties, site administration and raw material purchase costs.
b The low case contemplates a lower MAP price which decreases revenues, but because MAP
comprises approximately 50% of the operating costs it also decreases the operating costs in
the low case. The reverse is reflected in the high case.
Table 2 : Cabinda Project Scoping Study - base case key metric
6 ASX Announcement - CABINDA PROJECT DEFINITIVE FEASIBILITY STUDY UNDERWAY WITH KEY APPOINTMENT https://www.investi.com.au/api/announcements/mnb/e38c0171-6df.pdf
7 ASX Announcement - CABINDA PHOSPHATE PROJECT SCOPING STUDY https://www.investi.com.au/api/announcements/mnb/2252c2e1-51d.pdf
14 |
MINBOS RESOURCES LIMITED | 2020 ANNUAL REPORT Next Steps
The Company is currently continuing with a DFS on the
Project. Activities planned for the current year include:
• Mine design and Reserves
• Granulation Plant Design
•
•
•
Transport and Logistic Studies
Infrastructure Design
CAPEX and OPEX to +/- 15%
• Marketing Studies including greenhouse & field trials
•
•
•
•
Economic Analysis
Environmental and Social Impact Assessment (ESIA)
including further baseline studies
Completion of all approvals
The Company anticipates signing an off-take agreement
with the Angolan Government as part of the DFS before
the Final Investment Decision (FID). Initial discussions
with the Angolan Government have commenced in
relation to an off-take agreement. In its winning tender
submission Minbos proposed developing export markets
for up to half the product in neighbouring countries in
Middle Africa and has initiated discussions along this line.
The DFS is expected to be complete within nine (9) months with
several areas currently underway. Subject to long lead items
associated with the granulation plant, which may be ordered
prior to the completion of the DFS, construction is expected to
take six (6) months, with first production estimated to occur
shortly thereafter. It is expected that approvals will be the
critical element in the development schedule although global
factors such as COVID-19 may also impact the schedule.
Cabinda Project Funding
Based on the Scoping Study, there are reasonable grounds
to believe that the Project can be financed in the future.
The initial capital of US$22 - 28M is modest relative to the
Company’s market capitalisation and the A$20M invested by
the Company in phosphate exploration and feasibility studies
in the Congo Basin region.
It is most likely that any financing would be a combination of
debt and equity which may only be available on terms that are
dilutive to or otherwise affect the value of Minbos’s existing
shares. Alphier Capital LLP (Alphier) has been appointed
Financial Advisors to the Company and have expressed a firm
view that capital can be obtained for the Project.
| 15
MINBOS RESOURCES LIMITED | 2020 ANNUAL REPORT DIRECTORS’ REPORT
Figure 5 – Generalised geologic map of the
Mountain Pass District (Left) with interpreted
geological map of the Ankazohambo deposit (Right)
PROJECTS
AMBATO RARE EARTHS PROJECT
MADAGASCAR
The Ambato Rare Earth Project is located approximately 200km to the
southwest of Antananarivo, in the Ambatofinandrahana Municipal area of
the South-Central Highlands of Madagascar.
Bastnaesite is one of only three (3) rare earth minerals (bastnaesite,
monazite, and zenotime), along with ionic clays in China, that have been
commercially processed. Bastnaesite mineralisation is clearly visible in
outcrops at Ambato (Figure 5) with mineralogical tests on grab samples
from the Ankazohambo prospect indicating that 90% of the contained rare
earth mineralisation consists of bastnaesite.
The Mountain Pass Bastnaesite Mine in California is the largest known rare
earth deposit in the USA. A carbonatite body called the Sulphide Queen
carbonatite forms the core of the Mountain Pass igneous complex and hosts
the bulk of the rare earth mineralisation in the district. The Sulphide Queen
carbonatite has an overall length of 730m, and an average width of 120m8.
The Ambato Rare Earth Project is currently on hold as field access is not
possible. The Company has earned its option to purchase 90% of holding
company Tana Minerals and is exploring options to extract value from its
interest.
8 USGS 2010, The Principal Rare Earth Elements Deposits of the United States – a Summary of Domestic Deposits and a Global Perspective
16 |
MINBOS RESOURCES LIMITED | 2020 ANNUAL REPORT
Competent Person’s Statement for the Cabinda Phosphate Project
The Competent Person with responsibility for the total Mineral
Resources of this report is Mrs Kathleen Body, Pr. Sci. Nat, who is an
employee of Red Bush Analytics. Mrs Body was a full-time employee of
Coffey Mining at the time the original Mineral Resource estimation was
completed in 2013. Mrs Body has 25 years’ experience in the mining
industry and has sufficient experience which is relevant to the style
of mineralization and type of deposit under consideration and to the
activity which she is undertaking to qualify as a Competent Person as
defined in the 2012 Edition of the “Australasian Code for Reporting of
Exploration Results, Mineral Resources and Mineral Reserves. Kathleen
Body consents to the inclusion in the report of the matters based on
her information in the form and context in which it appears.
The information in the “Review of Operations” that relates to the
Mineral Resources contained within the Production Target, complies
with the 2012 Edition of the Australasian Code for Reporting of
Exploration Results, Mineral Resources and Ore Reserves (JORC Code)
and has been complied, and assessed by Ross Cheyne BEng (Hons),
Mining, a Fellow of the Australian Institute of Mining and Metallurgy
(AusIMM) and Technical Director at Orelogy Mine Consulting Pty Ltd,
consultants to the Company. Mr Cheyne has sufficient experience that
is relevant to the style of mineralisation and type of deposit under
consideration and to the activity being undertaken to qualify as a
Competent Person as defined in the 2012 Edition of the JORC Code. Mr
Cheyne is the competent Person for the Mineral Resources contained
with the Production Target and the Production Target itself and has
relied on provided information and data from the Company, including
but not limited to the Resource model and database. Mr Cheyne
consents to the inclusion in this review of operations of matters based
on his information in the form and context in which it appears.
Competent Person’s Statement for the Ambato Rare Earths Project
The information in this Report that relates to Exploration Results
and Data Quality is based on, and fairly represents, information and
supporting documentation prepared by Rebecca Morgan, who is a
member of the Australian Institute of Geoscientists. Miss Morgan is
a consultant to Minbos. Miss Morgan has sufficient experience which
is relevant to the style of mineralisation and type of deposit under
consideration and to the activity she is undertaking 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’. Miss Morgan consents to the inclusion in this Report of the
matters based on her information in the form and context in which it
appears.
| 17
MINBOS RESOURCES LIMITED | 2020 ANNUAL REPORT Directors’ Report
Minbos Resources Limited – Annual Report
For the year ended 30 June 2020
DIRECTORS’ SHAREHOLDINGS (DIRECT AND INDIRECT HOLDINGS)
5.
The following table sets out each current Director’s relevant interest in shares and options to acquire shares of
the Company or a related body corporate as at the date of this report.
Directors
Mr Peter Wall
Mr Damian Black
Mr William Oliver
Ms Dganit Baldar
Total
Fully Paid
Ordinary Shares
224,490,192
194,182,332
18,456,000
-
437,128,524
Unlisted
Share Options
-
-
-
-
-
DIRECTORS’ MEETINGS
6.
The number of Directors’ meetings held during the financial year and the number of meetings attended by each
Director during the time the Director held office are:
Number Eligible
to Attend
3
3
3
3
Directors
Mr Peter Wall
Mr Damian Black
Mr William Oliver
Ms Dganit Baldar
Due to the size and scale of the Company, there is no Remuneration and Nomination Committee or Audit
Committee at present. Matters typically dealt with by these Committees are, for the time being, managed by the
Board. For details of the function of the Board please refer to the Corporate Governance Statement.
Number
Attended
3
3
3
3
CORPORATE GOVERNANCE
7.
Board recognises the recommendations of the Australian Securities Exchange Corporate Governance Council and
has disclosed its level of compliance with those guidelines within the Corporate Governance Statement which is
included as part of this annual report.
OPERATING AND FINANCIAL REVIEW
8.
A Operations
Minbos Resources Limited is an exploration and development company with interests in phosphate ore within
the Cabinda Province of Angola and Rare Earth Elements in Madagascar.
The Group creates value for shareholders, through exploration activities which develop and quantify phosphate
assets. Once an asset has been developed and quantified within the framework of the JORC guidelines the
Company may elect to move to production, to extract and refine ore which is then sold as a primary product.
Financial Performance & Financial Position
B
The financial results of the Group for the year ended 30 June 2020 are:
Financial Performance / Position
Cash and cash equivalents
Net assets
Income
Net loss after tax
Loss per share
30-Jun-20
$
748,455
572,559
16,704
(1,566,274)
(0.0003)
30-Jun-19
$
2,232,905
2,138,833
56,284
(1,715,313)
(0.0003)
Change
%
(66%)
(73%)
(70%)
9%
-
18 |
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MINBOS RESOURCES LIMITED | 2020 ANNUAL REPORT
Minbos Resources Limited – Annual Report
For the year ended 30 June 2020
Directors’ Report
Financial Performance & Financial Position
The financial result for the year ended 30 June 2020 is a net loss after tax of $1,566,274 (2019: $1,715,313). At
30 June 2020, the Group’s net assets decreased by 73% compared to the previous financial year, and the
Group’s cash and cash equivalents decreased by 66% to $748,455. During the financial year the Company spent
$97,582 on project development for its Ambato project, $388,247 on exploration expenditure on its Cabinda
Project, $657,284 on administration expenditure and $428,944 on personnel expenditure and director fees.
The Group is creating value for shareholders by asset development through its exploration expenditure and
currently has no revenue generating operations. Income is generated from interest income from funds held on
deposit.
C
Business Strategies and Prospects for future financial years
The Group is actively evaluating the prospects of the Cabinda project and Ambato project. These updates are
announced via the ASX platform for shareholders information. The Group then assesses the continued strategy
and further asset development.
There are specific risks associated with the activities of the Group and general risks which are largely beyond the
control of the Group and the Directors. The risks identified below, or other risk factors, may have a material
impact on the future financial performance of the Group and the market price of the Company’s shares.
The Board reviews the risks of the Group and the action plans to address these risks on a regular basis.
a) Operating Risks
The operations of the Company may be affected by various factors, including failure to locate or identify
mineral deposits, failure to achieve predicted grades in exploration and mining, operational and technical
difficulties encountered in mining. In addition, difficulties in commissioning and operating plant and
equipment, mechanical failure or plant breakdown, unanticipated metallurgical problems which may affect
extraction costs, adverse weather conditions, industrial and environmental accidents, industrial disputes and
unexpected shortages or increases in the costs of consumables, spare parts, plant and equipment.
b) Environmental Risks
The operations and proposed activities of the Company are subject to the environmental laws and
regulations of Angola and Madagascar. As with most exploration projects and mining operations, the
Company’s activities are expected to have an impact on the environment, particularly if mine development
proceeds. It is the Company’s intention to conduct its activities to the highest standard of environmental
obligation, including compliance with all environmental laws.
c) Economic
General economic conditions, movements in interest and inflation rates and currency exchange rates may
have an adverse effect on the Company’s exploration, development and production activities, as well as on
its ability to fund those activities.
d) Market conditions
Share market conditions may affect the value of the Company’s quoted securities regardless of the
Company’s operating performance. Share market conditions are affected by many factors such as:
i.
ii.
iii.
iv.
v.
vi.
general economic outlook;
introduction of tax reform or other new legislation;
interest rates and inflation rates;
changes in investor sentiment toward particular market sectors;
the demand for, and supply of, capital; and
terrorism or other hostilities.
The market price of securities can fall as well as rise and may be subject to varied and unpredictable
influences on the market for equities in general and resource exploration stocks in particular. Neither the
Company nor the Directors warrant the future performance of the Company or any return on an investment
in the Company.
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MINBOS RESOURCES LIMITED | 2020 ANNUAL REPORT
Minbos Resources Limited – Annual Report
For the year ended 30 June 2020
Directors’ Report
e) Additional requirements for capital
The Company’s capital requirements depend on numerous factors. Depending on the Company’s ability to
generate income, the Company will require further financing. Any additional equity financing will dilute
shareholdings, and debt financing, if available, may involve restrictions on financing and operating activities.
If the Company is unable to obtain additional financing as needed, it may be required to reduce the scope of
its operations and scale back its development programmes as the case may be. There is no guarantee that
the Company will be able to secure any additional funding or be able to secure funding on terms favourable
to the Company.
f) Speculative investment
Potential investors should consider that the investment in the Company is speculative and should consult
their professional advisers before deciding whether invest.
The above list of risk factors ought not to be taken as exhaustive of the risks faced by the Company or by
investors in the Company. The above factors, and others not specifically referred to above, may in the future
materially affect the financial performance of the Company and the value of the Company’s shares.
g) Risks with Operating in Angola and Madagascar
The Company operates out of Angola and Madagascar which have been subject to civil unrest in the recent
past. The Company believes that although tension has eased, civil and political unrest and an outbreak of
hostilities remains a risk in both countries.
The effect of unrest and instability on political, social or economic conditions in Angola or Madagascar could
result in the impairment of the exploration, development and mining operations of the Company’s projects.
There is also a high level of corruption in Angola and Madagascar, especially in the extractive industries. This
corruption often influences the awarding of contracts or the granting of licenses. Furthermore, Angola and
Madagascar do not have laws that specifically address corruption, bribery and conflict of interest.
Other possible sovereign risks include, without limitation:
i.
ii.
iii.
iv.
v.
changes in the terms of the relevant mining statutes and regulations;
changes to royalty arrangements;
changes to taxation rates and concessions;
changes in the ability to enforce legal rights; and
expropriation of property rights.
Any of these factors may, in the future, adversely affect the financial performance of the Company and the
market price of its Shares.
No assurance can be given regarding the future stability in Angola, Madagascar or any other country in which
the Company may have an interest.
h) The Legal Environment in Angola and Madagascar
The Company’s projects are located in Angola and Madagascar. Angola and Madagascar are considered to be
developing countries and are subject to emerging legal and political systems as compared with the system in
place in Australia. This could result in the following risks:
i.
ii.
iii.
iv.
political difficulties in obtaining effective legal redress in the courts whether in respect of a breach of
law or regulation or in an ownership dispute;
a higher degree of discretion held by various government officials or agencies;
the lack of political or administrative guidance on implementing applicable rules and regulations,
particularly in relation to taxation and property rights;
inconsistencies or conflicts between and within various laws, regulations, decrees, orders and
resolutions; or
v.
relative inexperience of the judiciary and court in matters affecting the Company.
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MINBOS RESOURCES LIMITED | 2020 ANNUAL REPORT
Minbos Resources Limited – Annual Report
For the year ended 30 June 2020
Directors’ Report
i) Lack of Specific Infrastructure
The Company’s projects are located in areas of Angola and Madagascar. Generally, these areas lack specific
infrastructure such as:
i.
ii.
sources of third party supplied power; and
sources of third party supplied water.
The lack of availability of this infrastructure may affect mining feasibility.
j) Workforce and Labour risks
The skill base of the local labour force in Angola and Madagascar is extremely limited. There is a severe
shortage of workers with good managerial or technical skills.
HIV/AIDS, malaria and other diseases represent a serious threat to maintaining a skilled workforce in the
mining industry throughout Africa. HIV/AIDS, malaria and other diseases are a major healthcare challenge
faced by the Company’s operations in Angola and Madagascar. There can be no assurance that the Company
will not lose members of its workforce, workforce man hours or incur increased medical costs which may
have a material adverse effect on the Company’s operations.
k) Renewal of permits in Madagascar
As announced on 29 March 2018, the Company entered into an option agreement to acquire a 90% interest
in MRE Mining (Mauritius) Limited who owns two exploration permits in central Madagascar. The agreement
is conditional on the renewal of the exploration permits.
The renewal of the terms of each exploration permit is at the discretion of the relevant government authority
and currently the mining authority in Madagascar is not renewing permits. Renewals could be subject to a
number of specific legislative conditions. The inability to meet these conditions could affect the standing of a
permit or restrict its ability to be renewed.
If a permit is not renewed, the Company may suffer significant damage through the loss of opportunity to
develop and discover mineral resources on those permits.
9.
DIVIDENDS
No dividend has been paid during the financial year and no dividend is recommended for the financial year.
10.
CORPORATE STRUCTURE
Minbos Resources Limited is a Company limited by shares that is incorporated and domiciled in Australia. The
Company is listed on the Australian Securities Exchange (‘ASX’) under ASX code MNB and whose shares are
publicly traded on the Australian Securities Exchange Limited. An overview of the ownership structure for
Minbos Resources Limited is shown below:
Minbos Resources Ltd
Tunan Mining Ltd (BVI)
50%
Mongo Tando
Limited (BVI)
100%
Agrim SPRL (DRC)
KEY:
BVI
DRC Incorporated in the Democratic Republic of Congo.
Incorporated in the British Virgin Isles.
Refers to Minbos Resources Limited and its Controlled entities.
Mongo Tando Limited (BVI) is a dormant entity.
* Minbos has entered into an option with Tana Minerals Ltd (Tana) whereby Minbos can acquire 90% of the shares in MRE Mining
(Mauritius) Limited (MRE). MRE’s sole asset is a wholly owned subsidiary in Madagascar which holds the exploration permits for the
Ambato Project covering 440 square kilometres. MRE and its wholly owned Madagascan subsidiary are not included in the above
structure.
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MINBOS RESOURCES LIMITED | 2020 ANNUAL REPORT
Minbos Resources Limited – Annual Report
For the year ended 30 June 2020
Directors’ Report
REMUNERATION REPORT (Audited)
11.
This report for the year ended 30 June 2020 outlines the remuneration arrangements of the Group 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.
The remuneration report details the remuneration arrangements for key management personnel (‘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.
For the purposes of this report, the term ‘Executive’ includes the Chief Executive Officer (‘CEO’) and Chief
Financial Officer (‘CFO’), whilst the term ‘NED’ refers to Non-Executive Directors only.
Individual KMP disclosure
Details of KMP of the Group who held office during the year are as follows:
Directors
Peter Wall
Damian Black
William Oliver
Dganit Baldar
Position
Non-Executive Chairman
Non-Executive Director
Non-Executive Director
Non-Executive Director
Other KMP
Lindsay Reed
Position
Chief Executive Officer
Appointment
21/02/2014
21/02/2014
02/09/2013
18/03/2016
Resignation
-
-
-
-
Appointment
01/09/2014
Resignation
-
There have been no other changes after the reporting date and up to the date that the financial report was
authorised for issue.
The Remuneration Report is set out under the following main headings:
Remuneration Philosophy
Remuneration Governance, Structure and Approvals
Remuneration and Performance
Contractual Arrangements
Share-based Compensation
Equity Instruments Issued on Exercise of Remuneration Options
A
B
C
D Details of Remuneration
E
F
G
H Value of Shares to KMP
I
J
K
L Other transactions with KMP
Voting and comments made at the Company’s 2019 Annual General Meeting
Loans to KMP
Loans from KMP
Remuneration Philosophy
A
KMP have authority and responsibility for planning, directing and controlling the activities of the Group. KMP of
Minbos comprise the Board of Directors and the CEO.
The performance of the Group depends upon the quality of its KMP. To prosper the Company must attract,
motivate and retain appropriately skilled Directors and Executives.
The Group’s broad remuneration policy is to ensure the remuneration package properly reflects the person’s
duties and responsibilities and that remuneration is competitive in attracting, retaining and motivating people of
the highest quality.
No remuneration consultants were employed during the financial year.
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MINBOS RESOURCES LIMITED | 2020 ANNUAL REPORT
Minbos Resources Limited – Annual Report
For the year ended 30 June 2020
Directors’ Report
Remuneration Governance, Structure and Approvals
B
Remuneration of Directors is currently set by the Board of Directors. The Board has not established a separate
Remuneration Committee at this point in the Group's development, nor has the Board engaged the services of
an external remuneration consultant. It is considered that the size of the Board along with the level of activity of
the Group renders this impractical. The Board is primarily responsible for:
• The over-arching executive remuneration framework;
• Operation of the incentive plans which apply to executive directors and senior executives (the executive
team), including key performance indicators and performance hurdles;
• Remuneration levels of executives, and
• Non-executive director fees.
Their objective is to ensure that remuneration policies and structures are fair and competitive and aligned with
the long-term interests of the Company.
Ø Non-Executive Remuneration Structure
The remuneration of Non-Executive Directors consists of Directors’ fees, payable in arrears. The Board, in
accordance with the Company’s Constitution and the ASX listing rules specify that the Non-Executive Directors
fee pool shall be determined from time to time by a general meeting. The latest determination was at the 2010
Annual General Meeting (‘AGM’) held on 30 November 2010 when shareholders approved an aggregate fee pool
of $300,000 per year (in accordance with the terms and conditions set out in the Explanatory Statement that
accompanied the Notice of Meeting). The Board will not seek any increase for the Non-Executive Director pool
at the 2020 AGM.
Remuneration of Non-Executive Directors is based on fees approved by the Board of Directors and is set at levels
to reflect market conditions and encourage the continued services of the Directors. Non-Executive Directors do
not receive retirement benefits but are able to participate in share-based incentive programmes in accordance
with Company policy.
The remuneration of Non-Executives is detailed in Table 1a and Table 1b, and their contractual arrangements
are disclosed in “Section E – Contractual Arrangements”.
Ø Non-Executive Remuneration Approvals
The Board, in accordance with the Company’s Constitution, sets the aggregate remuneration of Non-Executive
Directors, subject to shareholder approval. Within this pre-approved aggregate remuneration pool, fees paid to
Non-Executive Directors are approved by the Board of Directors in the absence of the Remuneration Committee
and is set at levels to reflect market conditions and encourage the continued services of the Directors.
Remuneration may also include an invitation to participate in share-based incentive programmes in accordance
with Company policy.
The nature and amount of remuneration is collectively considered by the Board of Directors with reference to
relevant employment conditions and fees commensurate to a company of similar size and level of activity, with
the overall objective of ensuring maximum stakeholder benefit from the retention of high performing Directors.
Ø Executive Remuneration Structure
The nature and amount of remuneration of executives are assessed on a periodic basis with the overall objective
of ensuring maximum stakeholder benefit from the retention of a high performing Executives.
The main objectives sought when reviewing executive remuneration is that the Company has:
• Coherent remuneration policies and practices to attract and retain Executives;
• Executives who will create value for shareholders;
• Competitive remuneration offered benchmarked against the external market; and
•
Fair and responsible rewards to Executives having regard to the performance of the Group, the
performance of the Executives and the general pay environment.
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MINBOS RESOURCES LIMITED | 2020 ANNUAL REPORT
Minbos Resources Limited – Annual Report
For the year ended 30 June 2020
Directors’ Report
The remuneration of Executives is detailed in Table 1a and Table 1b, and their contractual arrangements are
disclosed in “Section E – Contractual Arrangements”.
Ø Executive Remuneration Approvals
The Company aims to reward Executives with a level and mix of remuneration commensurate with their position
and responsibilities within the Company and aligned with market practice. Executive contracts are reviewed
annually by the Board, in the absence of a Remuneration Committee, for their approval. The process consists of
a review of company, business unit and individual performance, relevant comparative remuneration internally
and externally and, where appropriate, external advice independent of management.
Executive remuneration and incentive policies and practices must be aligned with the Company’s vision, values
and overall business objectives. Executive remuneration and incentive policies and practices must be designed
to motivate management to pursue the Company’s long-term growth and success and demonstrate a clear
relationship between the Company’s overall performance and the performance of executives.
Remuneration & Performance
C
The following table shows the gross income, losses and share price of the Group as at 30 June for the last five
financial years:
Income ($)
Net loss after tax ($)
Share Price ($)
30-Jun-20
16,704
(1,566,274)
0.001
30-Jun-19
30-Jun-18
30-Jun-17
30-Jun-16
56,284
(1,715,313)
0.001
30,759
(17,624,018)
0.003
59,805
(2,202,012)
0.005
9,957
(1,654,054)
0.004
Relationship between Remuneration and Company Performance
Given the current phase of the Company’s development the Board does not consider earnings during the current
and previous financial years when determining, and in relation to, the nature and amount of remuneration of
KMP.
Short Term Incentive Package
There were no short-term incentive-based payments made during the financial year (2019: $nil).
Long Term Incentive Package
Employee Share Plan:
There were no Employee Share Plan shares approved or issued during the financial year (2019: nil).
Options:
The Board considers that for each KMP who receive options, their experience in the Mining industry will greatly
assist the Company in achieving its strategy and objectives.
The Board is of the opinion that the expiry date and exercise price of the options currently on issue to the
Directors, other KMP and its Executives is a sufficient, long term incentive to reward Executives in a manner
which aligns the element of remuneration with the creation of shareholder wealth. Subsequently, the issue of
options is not linked to performance conditions because by setting the option price at a level above the current
share price at the time the options are granted, provides incentive for management to improve the Group’s
performance.
During the 2020 and 2019 financial years there were no employee or director options issued or exercised.
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MINBOS RESOURCES LIMITED | 2020 ANNUAL REPORT
Minbos Resources Limited – Annual Report
For the year ended 30 June 2020
Directors’ Report
Details of Remuneration
D
During the financial year ended 30 June 2020 and 30 June 2019 KMP received short-term employee benefits,
post-employment benefits, share-based payments and employee benefits expenses.
Table 1a: Remuneration of KMP of the Group for the year ended 30 June 2020 is set out below:
Short-term employee benefits
Non-
Salary
monetary
& fees
$
$
Other (1)
$
Post-
employment
benefits
Super-
annuation
$
Share-
based
payments
Options
& rights
$
Total
$
36,000
36,000
36,000
36,000
144,000
253,255
253,255
397,255
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
6,163
6,163
6,163
22,451
22,451
22,451
-
36,000
-
36,000
-
36,000
-
36,000
- 144,000
-
-
-
281,869
281,869
425,869
30-Jun-20
Directors
Peter Wall
Damian Black
William Oliver
Dganit Baldar
Sub-total
Other Key Management
Lindsay Reed
Sub-total
Total
(1) Other amounts relate to annual leave paid out during the financial year and movements in annual leave
entitlements.
Table 1b: Remuneration of KMP of the Group for the year ended 30 June 2019 is set out below:
Post-
employment
benefits
Super-
annuation
$
Share-
based
payments
Options
& rights
$
Total
$
30-Jun-19
Directors
Peter Wall
Damian Black
William Oliver
Dganit Baldar
Domingos Catulichi (1)
Sub-total
Other Key Management
Lindsay Reed
Nick Day (2)
Sub-total
Total
Short-term employee benefits
Non-
Salary
monetary
& fees
$
$
Other (3)
$
36,000
36,000
36,000
36,000
9,000
153,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
225,198
54,875
280,073
433,073
-
-
-
-
20,180
3,562
23,742
23,742
25,670
4,794
30,464
30,464
-
36,000
-
36,000
-
36,000
-
36,000
-
9,000
- 153,000
- 271,048
-
63,231
- 334,279
- 487,279
(1) Mr Domingos Catulichi passed away on 1 October 2018.
(2) Nick Day resigned as Chief Financial Officer and Company Secretary on 5 October 2018.
(3) Other amounts relate to annual leave paid out during the financial year and movements in annual leave
entitlements.
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MINBOS RESOURCES LIMITED | 2020 ANNUAL REPORT
Directors’ Report
The relative proportions of remuneration that are linked to performance and those that are fixed are as follows:
Minbos Resources Limited – Annual Report
For the year ended 30 June 2020
Fixed remuneration
2019
2020
At risk - STI (%)
At risk - LTI (%)
2020
2019
2020
2019
Name
Directors
Peter Wall
Damian Black
William Oliver
Dganit Baldar
Domingos Catulichi
100%
100%
100%
100%
-
100%
100%
100%
100%
100%
Other Key Management
Lindsay Reed
Nick Day
100%
-
100%
100%
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Option holdings of KMP (Direct and Indirect Holdings)
At 30 June 2020 no key management personnel held listed or unlisted options.
Table 2: Shareholdings of KMP (Direct and Indirect Holdings)
30-Jun-20
Directors
Peter Wall
Damian Black
William Oliver
Dganit Baldar
Sub-total
Other Key Management
Lindsay Reed
Sub-total
Total
Balance at
1/07/2019
Granted as
remuneration
On market
trade
Balance at
30/06/2020
174,490,192
194,182,332
18,456,000
-
387,128,524
217,000,000
217,000,000
604,128,524
-
-
-
-
-
-
-
-
50,000,000
-
-
-
50,000,000
224,490,192
194,182,332
18,456,000
-
437,128,524
-
-
50,000,000
217,000,000
217,000,000
654,128,524
E
Contractual Arrangements
Ø Mr Peter Wall – Non-Executive Chairman
- Contract: Commenced on 21 February 2014.
- Director’s Fee: $3,000 per month (plus GST). Remuneration levels of Non-Executive Directors (‘NED’s’) are
discussed further in Note 1 below.
- Term: See Note 2 below for details pertaining to re-appointment and termination.
Ø Mr Damian Black – Non-Executive Director
- Contract: Commenced on 21 February 2014.
- Director’s Fee: $3,000 per month (plus GST).
- Term: See Note 2 below for details pertaining to re-appointment and termination.
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MINBOS RESOURCES LIMITED | 2020 ANNUAL REPORT
Minbos Resources Limited – Annual Report
For the year ended 30 June 2020
Directors’ Report
Ø Mr William Oliver – Non-Executive Director
- Contract: Commenced on 2 September 2013.
- Director’s Fee: $3,000 per month (plus GST). Remuneration levels of NED’s are discussed further in Note 1
below.
- Term: See Note 2 below for details pertaining to re-appointment and termination.
Ø Ms Dganit Baldar – Non-Executive Director
- Contract: Commenced on 18 March 2016.
- Director’s Fee: $3,000 per month. Remuneration levels of NED’s are discussed further in Note 1 below.
- Term: See Note 2 below for details pertaining to re-appointment and termination.
Note 1: Remuneration of NED’s are reviewable annually by the Board and subject to shareholder approval (if
applicable). The latest determination was at the 2010 AGM held on 30 November 2010 when shareholders
approved an aggregate fee pool of $300,000 per year.
Note 2: The term of each NED is open to the extent that they hold office subject to retirement by rotation, as per
the Company’s Constitution, at each AGM and are eligible for re-election as a Director at that meeting.
Appointment shall cease automatically in the event that the Director gives written notice to the Board, or the
Director is not re-elected as a Director by the shareholders of the Company. There are no entitlements to
termination or notice periods.
Other KMP that have service contracts in place with the Company are as follow:
Ø Mr Lindsay Reed – Chief Executive Officer
- Contract: Commenced on 1 September 2014.
- Base Salary: From 1 August 2018 to 31 August 2019 Mr Reed was employed as a part time employee, for a
minimum two days per week, at a daily rate of $1,200 per day (plus statutory superannuation
entitlements). From 1 September 2019 Mr Reed’s employment changed to full-time and he was paid
$250,000 per annum (plus statutory superannuation entitlements).
- Termination: Either party may terminate the employment agreement with three months written notice.
- Performance Based Bonuses: The Company may at any time pay Mr Reed a performance based bonus
over and above his salary. In determining the extent of any performance based bonus, the Company shall
take into consideration the key performance indicators of Mr Reed and the Company, as the Company
may set from time to time, and any other matter that it deems appropriate. Mr Reed did not receive any
short term incentive remuneration during the financial year.
- Short Term and Long Term Incentive Package: Mr Reed or his nominees will be entitled to ordinary shares
under the existing Employee Share Loan Plan for up to 2.5% of the fully diluted capital. The Company
approved remuneration of 37,000,000 shares to Mr Reed during the 2015 financial year at an exercise
price of $0.003.
Share-based Compensation
F
The Company rewards Directors and senior management for their performance and aligns their remuneration
with the creation of shareholder wealth by issuing share options and or shares. Share-based compensation is at
the discretion of the Board and no individual has a contractual right to participate in any share-based plan or to
receive any guaranteed benefits.
Ø Options
No performance incentive-based options were issued as remuneration to Directors or other KMP during the
current financial year.
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MINBOS RESOURCES LIMITED | 2020 ANNUAL REPORT
Minbos Resources Limited – Annual Report
For the year ended 30 June 2020
Directors’ Report
Shares
Ø
Short and Long-term incentives
No short or long term incentive based shares were issued as remuneration to Directors or other KMP during the
current financial year.
Issue of shares in lieu of services to KMP
There were no shares issued as compensation to KMP during the year ended 30 June 2020.
G
Equity Instruments Issued on Exercise of Remuneration Options
No remuneration options were exercised during the year ended 30 June 2020.
Value of Shares to KMP
H
There were no shares issued to KMP during the year ended 30 June 2020.
Voting and comments made at the Company’s 2019 AGM
I
The adoption of the Remuneration Report for the financial year ended 30 June 2019 was put to the shareholders
of the Company at the AGM held on 26 November 2019. The resolution was passed without amendment, on a
show of hands. The Company did not receive any specific feedback at the AGM or throughout the year on its
remuneration practices.
Loans to KMP
J
There were no loans made to any KMP during the year ended 30 June 2020 (2019: $nil).
Loans from KMP
K
There were no loans from any KMP during the year ended 30 June 2020 (2019: $nil).
Other transactions with KMP
L
Legal fees paid to Steinepreis Paganin Lawyers & Consultants
Legal fees of $24,336 were paid to Steinepreis Paganin Lawyers & Consultants during the financial year (2019:
$18,165), of which Mr Peter Wall, Chairman, is a partner.
Consulting fees paid to Billandbry Consulting Pty Ltd
Consulting fees of nil were paid to Billandbry Consulting Pty Ltd during the financial year (2019: $5,000), of
which Mr William Oliver, Director, is a Director and shareholder. The fee is an industry standard fee and
negotiated on arm’s length commercial terms.
There were no other transactions with KMP during the financial year ended 30 June 2020.
End of Audited Remuneration Report
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MINBOS RESOURCES LIMITED | 2020 ANNUAL REPORT
Minbos Resources Limited – Annual Report
For the year ended 30 June 2020
Directors’ Report
12. OPTIONS
At the date of this report, there were no unissued ordinary shares of Minbos under option.
No person entitled to exercise these options had or has any right by virtue of the option to participate in any
share issue of any other body corporate. There were no shares issued on the exercise of any options during the
financial year.
PROCEEDINGS ON BEHALF OF THE COMPANY
13.
No person has applied to the Court under section 237 of the Corporations Act 2001 for leave to bring
proceedings on behalf of the Company, or to intervene in any proceedings to which the Company is a party, for
the purposes of taking responsibility on behalf of the Company for all or part of those proceedings.
INDEMNIFYING OFFICERS
14.
During the financial year, the Company paid a premium in respect of a contract insuring all its Directors and
current and former executive officers against a liability incurred as such a Director or executive officer to the
extent permitted by the Corporations Act 2001. The contract of insurance prohibits disclosure of the nature of
the liability and the amount of the premium.
The Company has not otherwise, during or since the financial year, indemnified or agreed to indemnify an officer
or auditor of the Company against a liability incurred as such an officer or auditor.
ENVIRONMENTAL REGULATIONS
15.
The Directors have considered compliance with the National Greenhouse and Energy Reporting Act 2007 which
requires entities to report annual greenhouse gas emissions and energy use. The Directors have assessed that
there are no current reporting requirements under the National Greenhouse and Energy Reporting Act 2007.
The Group is subject to environmental regulation in respect to its activities in Angola and Madagascar. The
Group aims to ensure that appropriate standard of environmental care is achieved, and in doing so, that it is
aware of and is in compliance with all environmental legislation. The Directors of the Group are not aware of any
breach of environmental legislations as they apply to the Group during the year.
16.
LIKELY DEVELOPMENTS AND EXPECTED RESULTS OF OPERATIONS
The likely developments of the Company are anticipated to be as follows:
•
•
•
•
•
A Scoping Study based on the Orelogy mine schedule was prepared and will be used to guide the DFS
consultants, provide project indicative metrics to project finances, support offtake discussions with the
Angolan Government and inform investors of our plans.
The Company will engage its preferred contractors and consultants for the major DFS activities and
revise its DFS schedule and budget accordingly.
Field Trials for the next growing season in Angola are being planned in collaboration with NPCT, IFDC
and the IIA to compare the Cabinda Blend to commercially available fertilizers.
The Company is moving quickly to realise the potential of the Cabinda Phosphate Project, moving
rapidly to produce first supply of nutrients in late-2021/early-2022.
The Ambato Rare Earth project will remain on hold until field access is possible.
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MINBOS RESOURCES LIMITED | 2020 ANNUAL REPORT
Minbos Resources Limited – Annual Report
For the year ended 30 June 2020
Directors’ Report
EVENTS SINCE THE END OF THE FINANCIAL YEAR
17.
On 20 July 2020 the Company incorporated a private Company limited by shares, Phobos Ltd, a wholly owned
Mauritian subsidiary.
On 26 August 2020 the Company announced the results from the Scoping Study completed on its Cabinda
Phosphate Project in Angola, which demonstrates the Project will generate strong cash returns for a relatively
small capital investment. With the initial scoping study complete, the Company will move quickly to complete a
DFS study, which will be used to obtain funding with debt and equity financiers.
On 1 September 2020 the Company announced that as part of its Cabinda Phosphate Definitive Feasibility Study
the Company has signed a contract with FEECO International for the basic engineering package associated with
the planned granulation plant major equipment.
On 10 September 2020 the Company announced that it had received binding commitments from sophisticated
investors to raise $2.265m (before costs) through a two-tranche placement at $0.0015 per share.
• A total of 848,000,000 Tranche 1 pre consolidation shares were issued on 15 September 2020 utilising the
Company’s existing placement capacity under ASX Listing Rules 7.1 for $1.272m.
• A total of 662,000,000 Tranche 2 pre consolidation shares will be issued subject to shareholder approval
for $993,000.
On 10 September 2020 the Company announced that it would seek shareholder approval to consolidate the
issued capital of the Company at the Shareholder Meeting. The consolidation will be on the basis of one (1)
share for every twenty (20) shares currently held.
On 10 September 2020 the Company agreed to issue the following unlisted options (post consolidation) to
directors and management, with each option having an exercise price of $0.05 (post consolidation) and expiring
4 years from the issue date, subject to shareholder approval at the Shareholder Meeting:
Personnel
Lindsay Reed
Peter Wall
Damian Black
William Oliver
Dganit Baldar
Position
Chief Executive Officer
Non-Executive Chairman
Non-Executive Director
Non-Executive Director
Non-Executive Director
Total
Options
10,500,000
6,500,000
6,000,000
3,500,000
3,500,000
30,000,000
The impact of the Coronavirus (COVID-19) pandemic is ongoing and while it has not significantly impacted the
entity up to 30 June 2020, it is not practicable to estimate the potential impact, positive or negative, after the
reporting date. The situation is rapidly developing and is dependent on measures imposed by the Australian
Government and other countries, such as maintaining social distancing requirements, quarantine, travel
restrictions and any economic stimulus that may be provided.
No other matter or circumstance has arisen since 30 June 2020 that has significantly affected, or may
significantly affect the entity's operations, the results of those operations, or the entity's state of affairs in future
financial years.
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MINBOS RESOURCES LIMITED | 2020 ANNUAL REPORT
Minbos Resources Limited – Annual Report
For the year ended 30 June 2020
Directors’ Report
18. NON-AUDIT SERVICES
The Company may decide to employ the auditor on assignments additional to their statutory audit duties where
the auditor’s expertise and experience with the Company and/or the group are important.
There were no non-audit services provided by the auditor (BDO Audit (WA) Pty Ltd) during the year.
The Board of Directors has considered the position and is satisfied that the provision of the non-audit services is
compatible with the general standard of independence for auditors imposed by the Corporations Act 2001. The
directors are satisfied that the provision of non-audit services by the auditor, as set out below, did not
compromise the auditor independent requirements of the Corporations Act 2001 for the following reasons:
• All non-audit services have been reviewed by the Board of Directors to ensure they do not impact the
impartiality and objectivity of the auditor; and
• None of the services undermine the general principles relating to auditor independence as set out in
APES 110 Code of Ethics for Professional Accountants.
LEAD AUDITOR’S INDEPENDENCE DECLARATION
19.
The Lead Auditor’s Independence Declaration is set out on page 32 and forms part of the Directors’ Report for
the financial year ended 30 June 2020.
Signed in accordance with a resolution of the Board of Directors.
Mr Peter Wall
Non-Executive Chairman
18 September 2020
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MINBOS RESOURCES LIMITED | 2020 ANNUAL REPORT
Auditor’s Independence Declaration
BDO TO INSERT
Minbos Resources Limited – Annual Report
For the year ended 30 June 200
Tel: +61 8 6382 4600
Fax: +61 8 6382 4601
www.bdo.com.au
38 Station Street
Subiaco, WA 6008
PO Box 700 West Perth WA 6872
Australia
DECLARATION OF INDEPENDENCE BY JARRAD PRUE TO THE DIRECTORS OF MINBOS RESOURCES
LIMITED
As lead auditor of Minbos Resources Limited for the year ended 30 June 2020, I declare that, to the
best of my knowledge and belief, there have been:
1. No contraventions of the auditor independence requirements of the Corporations Act 2001 in
relation to the audit; and
2. No contraventions of any applicable code of professional conduct in relation to the audit.
This declaration is in respect of Minbos Resources Limited and the entities it controlled during the
period.
Jarrad Prue
Director
BDO Audit (WA) Pty Ltd
Perth, 18 September 2020
BDO Audit (WA) Pty Ltd ABN 79 112 284 787 is a member of a national association of independent entities which are all members of BDO Australia Ltd ABN 77 050 110 275,
an Australian company limited by guarantee. BDO Audit (WA) Pty Ltd and BDO Australia Ltd are members of BDO International Ltd, a UK company limited by guarantee, and
form part of the international BDO network of independent member firms. Liability limited by a scheme approved under Professional Standards Legislation.
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MINBOS RESOURCES LIMITED | 2020 ANNUAL REPORT
Minbos Resources Limited – Financial Report
For the year ended 30 June 2020
Corporate Governance Statement
CORPORATE GOVERNANCE
The Board of Directors of Minbos is responsible for the corporate governance of the Company. The Board guides
and monitors the business and affairs of Minbos on behalf of the security holders by whom they are elected and
to whom they are accountable.
This Corporate Governance Statement sets out the Company’s current compliance with the ASX Corporate
Governance Council’s Corporate Governance Principles and Recommendations
(Principles and
Recommendations). The Principles and Recommendations are not mandatory. The Statement below discloses
the extent to which the Company has followed the Principles and Recommendations, furthermore, the Board of
the Company currently has in place a Corporate Governance Plan which is located on the Company’s website at
www.minbos.com.
PRINCIPLES AND RECOMMENDATIONS
1.
Lay solid foundations for management and oversight
1.1
a. the respective roles and responsibilities of its board and management; and
b. those matters expressly reserved to the board and those delegated to management.
The Board of Directors guide and monitor the business affairs of the Company on behalf of Security
holders and have formally adopted a corporate governance plan, including a Board Charter and a
delegation of authority framework, which is designed to encourage Directors to focus their attention
on accountability, risk management and ethical conduct. The corporate governance plan is available on
the Company’s website www.minbos.com.
The roles and responsibilities of the Board include:
• appointment of the Chairman, Chief Executive Officer and other senior executives and the
determination of their terms and conditions including remuneration and termination;
• assessing the performance of the Chief Executive Officer and other senior executives;
• driving the strategic direction of the Company, ensuring appropriate resources are available to
meet objectives and monitoring management’s performance;
• reviewing and ratifying systems of risk management and internal compliance and control, codes of
conduct and legal compliance;
• approving and monitoring the progress of major capital expenditure, capital management and
significant acquisitions and divestments;
• approving and monitoring the business plan, budget and the adequacy and integrity of financial
and other reporting;
• approving the annual, half yearly and any other significant announcements;
• approving significant changes to the organisational structure;
• approving the issue of any shares, options, equity instruments or other securities in the Company
(subject to compliance with ASX Listing Rules);
• ensuring a high standard of corporate governance practice and regulatory compliance and
promoting ethical and responsible decision making;
• recommending to security holders the appointment and/or removal of the external auditor;
• meeting with the external auditor, at their request, without management being present;
• determining the size and composition of the Board;
• reporting to security holders, stakeholders and the investment community on the performance of
the Board; and
• approving the entity’s remuneration framework.
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MINBOS RESOURCES LIMITED | 2020 ANNUAL REPORT
Minbos Resources Limited – Financial Report
For the year ended 30 June 2020
Corporate Governance Statement
The roles and responsibilities of management include:
• develop and recommend internal control and accountability systems;
• develop, implement and maintain systems, corporate strategy and performance objectives;
•
implement and maintain systems of risk management, internal compliance and controls, codes of
conduct, legal compliance and any other regulatory compliance to meet statutory deadlines;
• monitor employee performance and manage appropriate human resources;
• prepare required financial reports, tax lodgements, budgets and other financial reports;
• monitor company performance against budget;
• protect the assets of the Company,
including through
recommendations on acquisitions and divestment of assets; and
insurance and prepare Board
• undertake best endeavours to add value to the Company in a professional, ethical and
accountable manner.
1.2
a. undertake appropriate checks before appointing a person, or putting forward to security holders a
candidate for election, as a director; and
b. provide security holders with all material information in its possession relevant to a decision on
whether or not to elect or re-elect a director.
The Company undertakes appropriate checks before appointing a new Director or executive. These
include checks about the person’s character, experience, and education, any criminal record or
bankruptcy record.
The Company provides all required material information to security holders to assist them in their
decision to elect or re-elect a Director. The information provided includes:
• biographical details; including relevant qualifications and skills;
• details of any other material directorships;
• any material adverse information revealed by background checks;
• positions or interest that might impact independent judgement;
• if the candidate is an Independent Director; and
• term of the office currently served by the Director.
1.3
A listed entity should have a written agreement with each director and senior executive setting out
the terms of their appointment
All Directors and senior executives are appointed through a written agreement that sets out their
duties, rights and responsibilities.
Directors Deed of Appointments include the following matters:
• time commitment required;
• requirement to disclose Director interests and any other matters that might influence Directors
independence;
• indemnity and insurance arrangements;
• rights to seek independent professional advice;
• access to company secretary and corporate records; and
• remuneration.
1.4
The company secretary of a listed entity should be accountable directly to the board, through the
chair on all matters to do with the proper functioning of the board.
The Board Charter provides that the Company Secretary is accountable to the Board through the
Chairman and that each Director is able to communicate directly with the Company Secretary.
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MINBOS RESOURCES LIMITED | 2020 ANNUAL REPORT
Minbos Resources Limited – Financial Report
For the year ended 30 June 2020
Corporate Governance Statement
The Company Secretary is responsible for:
• advising the Board on Corporate Governance matters;
• managing the Company Secretarial function;
• ensuring compliance with regulatory requirements;
• to facilitate the induction of new Directors and Board policies and procedures; and
• organize Board and Shareholder meetings, taking minutes and communicating with the ASX.
1.5
A listed entity should:
(a) have and disclose a diversity policy;
(b) through its board or a committee of the board set measurable objectives for achieving gender
diversity in the composition of its board, senior executives and workforce generally; and
(c) disclose in relation to each reporting period:
(1) the measurable objectives set for that period to achieve gender diversity;
(2) the entity’s progress towards achieving those objectives; and
(3) either:
(A) the respective proportions of men and women on the board, in senior executive
positions and across the whole workforce (including how the entity has defined “senior
executive” for these purposes); or
(B) if the entity is a “relevant employer” under the Workplace Gender Equality Act, the
entity’s most recent “Gender Equality Indicators”, as defined in and published under
that Act.
If the entity was in the S&P / ASX 300 Index at the commencement of the reporting period, the
measurable objective for achieving gender diversity in the composition of its board should be to
have not less than 30% of its directors of each gender within a specified period.
The Company has a diversity policy in place which forms part of Minbos’ Corporate Governance Plan.
The Company recognises the benefits arising from board diversity, and is committed to providing a
diverse workplace that embraces and promotes diversity.
Minbos Resources Limited is an equal opportunity employer and welcomes people from different
backgrounds. Full details of the Company’s diversity policy that is included in the corporate governance
plan can be found on the Company website www.minbos.com.
The Company has one female Director and three male Directors. The Company intends to appoint
additional female Directors and managers should a vacancy arise, and appropriately qualified and
experienced individuals are available.
The Company is not a “relevant employer” under the Workplace Gender Equality Act, as it is not a non-
public sector employer with 100 or more employees in Australia
A listed entity should:
1.6
(a) have and disclose a process for periodically evaluating the performance of the board, its
committees and individual directors; and
(b) disclose for each reporting per iod whether a performance evaluation has been undertaken in
accordance with that process during or in respect of that period.
The Board Charter that forms part of the Corporate Governance plan requires that an annual
performance evaluation be undertaken by the Board to ensure that the responsibilities of the Board
are discharged in an appropriate manner. The performance review includes a comparison of the
performance of the Board with the requirements of the Board Charter, critically reviewing the mix of
the Board, and amending the Board Charter as appropriate. The performance review is led by the
Chairman that is a Non-Executive Director.
The performance of the Board will be reviewed and evaluated internally during the period.
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MINBOS RESOURCES LIMITED | 2020 ANNUAL REPORT
Minbos Resources Limited – Financial Report
For the year ended 30 June 2020
Corporate Governance Statement
1.7
A listed entity should:
(a) have and disclose a process for evaluating the performance of its senior executives at
least once every reporting period; and
(b) disclose for each reporting period whether a performance evaluation has been
undertaken in accordance with that process during or in respect of that period.
During the financial year, the senior manager of the Company, excluding Directors, was Lindsay Reed
(CEO).
The evaluation of the performance of the senior management is assessed annually by the Board in
conjunction with the CEO and in accordance with the terms and conditions of the service agreements
entered into by the Company with these individual managers.
The performance of senior management will be reviewed and evaluated internally during the period.
2. Structure the Board to be effective and add value
2.1
The board of a listed entity should:
(a) have a nomination committee which:
(1) has at least three members, a majority of whom are independent directors; and
(2) is chaired by an independent director,
and disclose:
(3) the charter of the committee;
(4) the members of the committee; and
(5) as at the end of each reporting period, the number of times the committee met throughout
the period and the individual attendances of the members at those meetings; or
(b) if it does not have a nomination committee, disclose that fact and the processes it employs to
address board succession issues and to ensure that the board has the appropriate balance of
skills, knowledge, experience, independence and diversity to enable it to discharge its duties and
responsibilities effectively.
The Company is currently not of a relevant size that requires the formation of a separate Nomination
Committee.
The Board has developed a nomination committee charter and the matters typically dealt with by such
a committee are dealt with by the Board of Directors. The charter is included in the Company’s
corporate governance plan which is available on the Company’s website www.minbos.com.
The Company does not comply with ASX Principle 2.1 as the majority of the Board is not independent
and the Board performs the role of the committee. The Company intends to seek out and appoint
additional independent Directors to the Board when the size and scale of the Company justify and
warrant their inclusion, for the time being the Company maintains a mix of Directors from different
backgrounds with complementary skills and experience.
When a board vacancy becomes available, the Board will consider the existing mix of skills of the
existing Board and define the skill set that will be sought in candidates to fill the vacancy. Directors will
review a range of suitable candidates and may obtain the services of a reputable recruitment agent to
assist with candidate selection. The most appropriate candidate will be appointed to the role until the
Director is elected by members at the next annual general meeting of the Company.
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MINBOS RESOURCES LIMITED | 2020 ANNUAL REPORT
Minbos Resources Limited – Financial Report
For the year ended 30 June 2020
Corporate Governance Statement
2.2
A listed entity should have and disclose a board skills matrix setting out the mix of skills that the
board currently has or is looking to achieve in its membership.
The table below shows the skills and experience the Board considers to be important for the company
and the amount of Board members that have the relevant skills and experience:
EXPERIENCE, SKILLS AND ATTRIBUTES
Total Directors
EXPERIENCE
Resources industry experience
Experience in exploration phase of mining industry, specifically phosphate
Board level experience
Board member of other listed entities (last 3 years)
Geographic experience
Africa
Capital market experience
Feasibility studies and Project development
SKILLS AND ATTRIBUTES
Strategic
Risk and Compliance
Mergers and Acquisitions
Legal, corporate finance and tax
BOARD
4
4
3
4
3
4
4
4
4
3
2.3
A listed entity should disclose:
(a) the names of the directors considered by the board to be independent directors;
(b)
if a director has an interest, position, affiliation or relationship of the type described in Box 2.3
but the board is of the opinion that it does not compromise the independence of the director,
the nature of the interest, position or relationship in question and an explanation of why the
board is of that opinion; and
(c) the length of service of each director.
In making this assessment, the Board considers all relevant facts and circumstances. Relationships that
the Board will take into consideration when assessing independence are whether a Director:
• is a substantial shareholder of the Company or an officer of, or otherwise associated directly
with, a substantial shareholder of the Company;
• is employed, or has previously been employed in an executive capacity by the Company or
another Company member, and there has not been a period of at least three years between
ceasing such employment and serving on the Board;
• has within the last three years been a principal of a material professional advisor or a material
consultant to the Company or another Company member, or an employee materially associated
with the service provided;
• is a material supplier or customer of the Company or other Company member, or an officer of
or otherwise associated directly or indirectly with a material supplier or customer; or
• has a material contractual relationship with the Company or another Company member other
than as a Director.
All 4 Directors are Non-Executive Directors but only Mr Bill Oliver is considered to be an independent
Director. Mr Oliver has been a Director of Minbos since September 2013.
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MINBOS RESOURCES LIMITED | 2020 ANNUAL REPORT
Minbos Resources Limited – Financial Report
For the year ended 30 June 2020
Corporate Governance Statement
2.4
A majority of the board of the company should be independent directors.
The Company does not currently comply with this recommendation as only one of the 4 Directors, Mr
Bill Oliver, is regarded as an independent Director.
2.5
2.6
3.
3.1
3.2
The Company currently maintains a mix of Directors from different backgrounds with complementary
skills and experience, however, is aware of the importance of having a Board with a majority of its
Directors being independent. In the future, the Company intends to seek out and appoint independent
directors to the Board when additional directors are required in order to meet the ASX recommendation
of maintaining a majority of independent Non-Executive Directors.
Messrs Peter Wall and Damian Black were both substantial security holders until May 2016. In addition,
Mr Wall is a partner at Steinepreis Paganin Lawyers and Consultants that provides legal services to the
Company.
Ms Dganit Baldar was appointed as a Director following substantial security holder Green Services
Innovations Ltd exercising their right to appoint a Director to the Board.
The chair of the board of a listed entity should be an independent director and, in particular, should
not be the same person as the CEO of the entity.
Mr Lindsay Reed is the CEO of Minbos and Mr Peter Wall the Chairman. Mr Wall is not an independent
director. The Company intends to seek out and appoint an independent chairman in the future as
operations expand; however, the Company believes that the current Board structure is best suited to
enable the Company to deliver Shareholder value at present.
A listed entity should have a program for inducting new directors and for periodically reviewing
whether there is a need for existing directors to undertake professional development to maintain the
skills and knowledge needed to perform their role as directors effectively.
All new Directors are appointed through a written agreement that sets out their duties, rights and
responsibilities. The Company Secretary through the Board is responsible for the program to induct new
Directors.
The Board encourages directors to continue their education and maintain the skills required to discharge
their duties by providing professional development opportunities.
The Board, Board Committees or individual Directors may seek independent external professional advice
as considered necessary at the expense of the Company, subject to prior consultation with the
Chairman. A copy of any such advice received is made available to all members of the Board.
Instil a culture of acting lawfully, ethically and responsibly
A listed entity should articulate and disclose its values.
The Board is bound by the Company’s values that is included in the Company’s corporate governance
plan which is available on the Company’s website www.minbos.com
A listed entity should:
(a) have and disclose a code of conduct for its directors, senior executives and employees; and
(b) ensure that the board or a committee of the board is informed of any material breaches of that
code.
The Board is bound by the Company’s Corporate Code of Conduct that is included in the Company’s
corporate governance plan which is available on the Company’s website www.minbos.com. The Board
understands the obligations for ethical and responsible decision making. All Directors, senior executives
and employees are expected to:
a) comply with the law;
b) act in the best interests of the Company;
c) be responsible and accountable for their actions;
d) observe the ethical principles of honesty and fairness, including prompt disclosure of potential
conflicts; and
e) respect the rights of employees and create a safe and non-discriminatory workplace.
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MINBOS RESOURCES LIMITED | 2020 ANNUAL REPORT
Minbos Resources Limited – Financial Report
For the year ended 30 June 2020
Corporate Governance Statement
3.3
A listed entity should:
(a) have and disclose a whistleblower policy; and
(b) ensure that the board or a committee of the board is informed of any material incidents reported
under that policy.
The Board is bound by the Company’s Whistleblower policy that is included in the Company’s corporate
governance plan which is available on the Company’s website www.minbos.com
3.4
A listed entity should:
(a) have and disclose an anti-bribery and corruption policy; and
(b) ensure that the board or committee of the board is informed of any material breaches of that
policy.
The Board is bound by the Company’s Antibribery and Corruption policy that is included in the
Company’s corporate governance plan which is available on the Company’s website www.minbos.com
4.
4.1
Safeguard the integrity of corporate reports
The board of a listed entity should:
(a) have an audit committee which:
(1) has at least three members, all of whom are non-executive directors and a majority of whom are
independent directors; and
(2)
is chaired by an independent director, who is not the chair of the board,
and disclose:
(3) the charter of the committee;
(4) the relevant qualifications and experience of the members of the committee; and
(5)
in relation to each reporting period, the number of times the committee met throughout the
period and the individual attendances of the members at those meetings; or
(b)if it does not have an audit committee, disclose that fact and the processes it employs that
independently verify and safeguard the integrity of its corporate reporting, including the processes for
the appointment and removal of the external auditor and the rotation of the audit engagement
partner.
The Company is not of a size at the moment that requires having a separate audit committee and there
are not a sufficient number of independent Directors to form a separate committee.
Matters typically dealt with the Audit Committee are currently dealt with by the Board of Directors.
The Company does not comply with ASX Principle 4.1 as the majority of the Board is not independent
and the Board performs the role of the committee. The Company intends to seek out and appoint
additional independent Directors to the Board when the size and scale of the Company justify and
warrant their inclusion, for the time being the Company maintains a mix of Directors from different
backgrounds with complementary skills and experience.
The Board has adopted a formal audit committee charter, as disclosed in the Corporate Governance Plan
available on the Company’s website www.minbos.com.
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MINBOS RESOURCES LIMITED | 2020 ANNUAL REPORT
Minbos Resources Limited – Financial Report
For the year ended 30 June 2020
Corporate Governance Statement
4.2
4.3
5.
5.1
5.2
5.3
The board of a listed entity should, before it approves the entity’s financial statements for a
financial period, receive from its CEO and CFO a declaration that, in their opinion, the financial
records of the entity have been properly maintained and that the financial statements comply with
the appropriate accounting standards and give a true and fair view of the financial position and
performance of the entity and that the opinion has been formed on the basis of a sound system of
risk management and internal control which is operating effectively
A written declaration has been provided by the Chief Executive Officer in accordance with section
295A of the Corporations Act to the Board in regards to the preparation of financial reports.
The declaration confirms that the financial records of the entity have been properly maintained and
that the financial statements comply with the appropriate accounting standards and give a true and
fair view of the financial performance of the entity and that the opinion has been formed on the basis
of a sound system of risk management and internal control which is operating effectively.
A listed entity should disclose its process to verify the integrity of any periodic corporate report it
releases to the market that is not audited or reviewed by an external auditor.
The Company has a process where the reports are prepared by an accountant, reviewed by the
Company Secretary and CEO before the Board approves the release to the ASX.
Make timely and balanced disclosure
A listed entity should have and disclose a written policy for complying with its continuous disclosure
obligations under listing rule 3.1.
The Company has a continuous disclosure policy that is included in the charter is included in the
the Company’s website
Company’s corporate governance plan which
www.minbos.com.
is available on
The Company is committed to ensuring that security holders and the market are provided with full
and timely information. The Company has a continuous disclosure program in place designed to
ensure the compliance with ASX Listing Rule disclosure and to ensure accountability at a senior
executive level for compliance and factual presentation of the Company’s financial position.
The Executive Chairman and the Company Secretary are responsible for co-ordinating the disclosure
requirements. To ensure appropriate procedure all directors, officers and employees of the Company
coordinate disclosures through the Executive Chairman and the Company Secretary, including: (a)
Media releases; (b) Analyst briefings and presentations; and (c) The release of reports and operational
results.
A listed entity should ensure that its board receives copies of all material market announcements
promptly after they have been made.
Any announcement is drafted by the appropriate department then reviewed by the CEO and Company
Secretary before board approval. The announcement is then released to ASX.
A listed entity that gives a new and substantive investor or analyst presentation should release a
copy of the presentation materials on the ASX Market Announcements Platform ahead of the
presentation.
All investor presentations are released to ASX ahead of meetings.
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MINBOS RESOURCES LIMITED | 2020 ANNUAL REPORT
Corporate Governance Statement
Minbos Resources Limited – Financial Report
For the year ended 30 June 2020
6.
6.1
Respect the rights of security holders
A listed entity should provide information about itself and its governance to investors via its
website.
Information can be found on the Company’s website www.minbos.com
6.2
A listed entity should have an investor relations program that facilitates effective two-way
communication with investors.
The Company has a shareholder communication strategy that is included in the Company’s corporate
governance plan which is available on the Company’s website www.minbos.com.
Pursuant to Principle 6, the Company’s objective is to ensure effective communication with its
security holders at all time and that security holders are informed of all major developments affecting
the Company’s website. The Company’s website has a dedicated Investors & Media section which
publishes all important Company information and relevant announcements made to the market.
Security holders are encouraged to attend and participate at general meetings and are given the
opportunity to ask questions at the meetings.
All ASX announcements including annual, quarterly half yearly reports, and Notice of Meetings are
placed on the Company’s website. The lead engagement partner of the Company’s auditor BDO
attends the Annual General Meeting and answer questions from security holders about the conduct
of the audit and the preparation and content of the auditor’s report.
The Company has made available the relevant contact details (via the website) for security holders to
make their enquires and have also included contact details of the share registry in the Corporate
Directory section.
6.3
A listed entity should disclose how it facilitates and encourages participation at meetings of
security holders.
The Company is committed to provide security holders with the opportunity to participate in all
general meetings and annual general meetings.
At any general meeting or annual general meeting, the Chairman allows a reasonable opportunity for
security holders to ask questions or make comments on the management of the company and about
the audit to the lead engagement partner of the company’s auditors
Security holders are also encouraged to submit questions before meetings. These questions will be
distributed before the meeting and the Board, management or the auditor will respond to these
questions at the meeting.
A listed entity should ensure that all substantive resolutions at a meeting of security holders are
decided by a poll rather than by a show of hands.
With the 4th Edition of Corporate Governance Principles and Recommendations, all resolutions
dealing with ASX Listing Rules issues will be decided based on a poll.
A listed entity should give security holders the option to receive communications from, and send
communications to, the entity and its security registry electronically.
6.4
6.5
All Shareholders are offered electronic communications.
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MINBOS RESOURCES LIMITED | 2020 ANNUAL REPORT
Minbos Resources Limited – Financial Report
For the year ended 30 June 2020
Corporate Governance Statement
7.
Recognise and manage risk
7.1
The board of a listed entity should:
(a) have a committee or committees to oversee risk, each of which:
is chaired by an independent director,
(1) has at least three members, a majority of whom are independent directors; and
(2)
and disclose:
(3) the charter of the committee;
(4) the members of the committee; and
(5) as at the end of each reporting period, the number of times the committee met throughout
the period and the individual attendances of the members at those meetings; or
if it does not have a risk committee or committees that satisfy (a) above, disclose that fact and
(b)
the processes it employs for overseeing the entity’s risk management framework.
The Company is not of a size at the moment that requires having a separate risk committee and there
are not a sufficient number of independent Directors to form a separate committee.
Matters typically dealt with the Risk Committee are currently dealt with by the Board of Directors.
As the majority of the Board is not independent and the Board performs the role of the committee.
Though the Company intends to seek out and appoint additional independent Directors to the Board
when the size and scale of the Company justify and warrant their inclusion, for the time being the
Company maintains a mix of Directors from different backgrounds with complementary skills and
experience.
The Board has adopted a formal audit and risk committee charter as disclosed in the Corporate
Governance Plan available on the Company’s website.
7.2
The Company has a risk management framework in place that is reviewed on an annual basis by the
Board. The Company also has adequate policies in relation to risk management, compliance and
internal control systems. The Company’s policies have a risk matrix which is reviewed regularly and
ensures that strategic, operational, legal, reputational and financial risks are identified, assessed
effectively, efficiently managed and monitored to enable achievement of the Company’s business
objectives.
The board or a committee of the board should:
(a) review the entity’s risk management framework at least annually to satisfy itself that it
continues to be sound and that the entity is operating with due regard to the risk appetite set by
the board; and
(b) disclose, in relation to each reporting period, whether such a review has taken place.
The Company manages the implementation of the risk management and internal control system to
manage the Company’s material business risks, and report to it on whether those risks are being
managed effectively. Under the audit and risk management charter, a review is carried out annually.
7.3 A listed entity should disclose:
(a)
if it has an internal audit function, how the function is structured and what role it performs; or
(b) if it does not ha ve an internal audit function, that fact and the processes it employs for
evaluating and continually improving the effectiveness of its governance, risk management and
internal control processes.
The Company is not of a size at the moment that requires a separate internal audit function. The
Company has a risk management framework and audit and risk committee charter in place that is
reviewed by the Board on an annual basis and amended as required. The Company also has adequate
policies in relation to risk management, compliance and internal control systems. The Company’s has
a risk register in place which is reviewed regularly and ensures that strategic, operational, legal,
reputational and financial risks are identified, assessed effectively, efficiently managed and monitored
to enable achievement of the Company’s business objectives.
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MINBOS RESOURCES LIMITED | 2020 ANNUAL REPORT
Minbos Resources Limited – Financial Report
For the year ended 30 June 2020
Corporate Governance Statement
7.4 A listed entity should disclose whether it has any material exposure to environmental or social risks
and, if it does, how it manages or intends to manage those risks.
The Company is an ASX listed exploration company focussed on rock phosphate and rare earth
elements. Due to the nature of its business the company is exposed to economic, environmental and
social sustainability risks.
The Company has a risk management framework in place and a risk register and polices to ensure
compliance and sufficient internal control systems. The risk register is reviewed and assessed on a
regular basis and embedded in the culture and practices of the company. Risk treatment plans are in
place to identify how risk identified will be mitigated.
8.
Remunerate fairly and responsibly
8.1
The board of a listed entity should:
(a) have a remuneration committee which:
(1) has at least three members, a majority of whom are independent directors; and
(2)
is chaired by an independent director,
and disclose:
(3) the charter of the committee;
(4) the members of the committee; and
(5) as at the end of each reporting period, the number of times the committee met throughout
the period and the individual attendances of the members at those meetings; or
(b) if it does not have a remuneration committee, disclose that fact and the processes it employs for
setting the level and composition of remuneration for directors and senior executives and ensuring
that such remuneration is appropriate and not excessive.
The Board has not established a remuneration committee at this point in the Company’s development.
It is considered that the size of the Board along with the level of activity of the Company and the
number of Independent Directors renders this impractical. The full Board considers in detail all of the
matters for which the Directors are responsible.
The remuneration philosophy, structure and approvals process are explained in detail in Section 11 of
the audited Remuneration Report contained within the Directors’ Report.
8.2 A listed entity should separately disclose its policies and practices regarding the remuneration of
non-executive directors and the remuneration of executive directors and other senior executives.
The Board has adopted a formal charter of a remuneration committee, as disclosed in the Corporate
Governance Plan available on the Company’s website. www.minbos.com
The policies and practices regarding the remuneration of Non–Executive Directors and the
remuneration of Executive Directors and other senior executives is explained in Section 11 of the
audited Remuneration Report contained within the Directors’ Report.
8.3 A listed entity which has an equity-based remuneration scheme should:
(a) have a policy on whether participants are permitted to enter into transactions (whether through
the use of derivatives or otherwise) which limit the economic risk of participating in the scheme;
and
(b) disclose that policy or a summary of it.
In terms of the Company’s security trading policy all persons offered equity-based remuneration or
incentives by the Company are prohibited from entering into transactions in associated products which
limit economic risk of participating in unvested entitlements under equity-based remuneration
schemes.
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MINBOS RESOURCES LIMITED | 2020 ANNUAL REPORT
Consolidated Statement of Profit or Loss & Other Comprehensive Income
Minbos Resources Limited – Financial Report
For the year ended 30 June 2020
Other income from continuing operations
Administration expenses
Business development
Depreciation expense
Due diligence & exploration expenditure on the Ambato project
Exploration expenditure Cabinda project
Foreign exchange gain
Loss on disposal of plant and equipment
Personnel expenses and director fees
Loss from continuing operations before income tax
Income tax (expense) / benefit
Loss from continuing operations after income tax
Notes
30-Jun-20
$
30-Jun-19
$
7
8
9
8
10
16,704
(657,284)
-
(13,951)
(97,582)
(388,247)
3,555
(525)
(428,944)
(1,566,274)
56,284
(462,336)
(10,575)
(18,509)
(744,471)
(49,357)
16,732
-
(503,081)
(1,715,313)
-
-
(1,566,274)
(1,715,313)
Total comprehensive loss for the year
(1,566,274)
(1,715,313)
Loss for the year is attributable to the owners of
Minbos Resources Limited
(1,566,274)
(1,715,313)
Total comprehensive loss for the year is attributable to the owners of
Minbos Resources Limited
(1,566,274)
(1,715,313)
Loss per share attributable to ordinary equity holders
- Basic loss per share
- Diluted loss per share
11
11
(0.0003)
(0.0003)
(0.0003)
(0.0003)
The Consolidated Statement of Profit or Loss & Other Comprehensive Income is to be read in
conjunction with the accompanying notes.
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MINBOS RESOURCES LIMITED | 2020 ANNUAL REPORT
Consolidated Statement of Financial Position
Minbos Resources Limited – Financial Report
As at 30 June 2020
ASSETS
Current assets
Cash and cash equivalents
Trade and other receivables
Total current assets
Non-current assets
Plant and equipment
Total non-current assets
Total assets
LIABILITIES
Current liabilities
Trade and other payables
Provisions
Total current liabilities
Total liabilities
Net assets
EQUITY
Issued capital
Reserves
Accumulated losses
Total equity
Notes
30-Jun-20
$
30-Jun-19
$
12
13
748,455
23,425
771,880
2,232,905
22,787
2,255,692
4,383
4,383
776,263
21,222
21,222
2,276,914
179,097
24,607
203,704
203,704
572,559
119,637
18,444
138,081
138,081
2,138,833
40,567,812
4,614,510
(44,609,763)
572,559
40,567,812
4,614,510
(43,043,489)
2,138,833
14
15
16
17
18
The Consolidated Statement of Financial Position is to be read in
conjunction with the accompanying notes.
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MINBOS RESOURCES LIMITED | 2020 ANNUAL REPORT
Consolidated Statement of Changes in Equity
Minbos Resources Limited – Financial Report
For the year ended 30 June 2020
Employee
Share
Plan
Reserve
$
Foreign
Currency
Translation
Reserve
$
Issued
Capital
$
Accumulated
Losses
$
Total
Equity
$
At 1 July 2019
40,567,812
459,184
4,155,326
(43,043,489)
2,138,833
Comprehensive loss:
Loss for the year
Other comprehensive income
Total comprehensive loss for the year
-
-
-
-
-
-
(1,566,274)
-
- -
-
(1,566,274)
(1,566,274)
-
(1,566,274)
At 30 June 2020
40,567,812
459,184
4,155,326
(44,609,763)
572,559
Employee
Share
Plan
Reserve
$
Foreign
Currency
Translation
Reserve
$
Issued
Capital
$
Accumulated
Losses
$
Total
Equity
$
At 1 July 2018
40,567,812
459,184
4,155,326
(41,328,176)
3,854,146
Comprehensive loss:
Loss for the year
Other comprehensive income
Total comprehensive loss for the year
-
-
-
-
-
-
(1,715,313)
-
- -
-
(1,715,313)
(1,715,313)
-
(1,715,313)
At 30 June 2019
40,567,812
459,184
4,155,326
(43,043,489)
2,138,833
The Consolidated Statement of Changes in Equity is to be read in
conjunction with the accompanying notes.
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MINBOS RESOURCES LIMITED | 2020 ANNUAL REPORT
Consolidated Statement of Cash Flows
Cash flows from operating activities
Payment to suppliers and employees
Payment for exploration and evaluation expenditure
Interest received
Net cash outflow from operating activities
Cash flows from investing activities
Payment for plant and equipment
Net cash outflow from investing activities
Cash flows from financing activities
Proceeds from the issue of shares and payment for issue costs
Net cash outflow from financing activities
Minbos Resources Limited – Financial Report
For the year ended 30 June 2020
30-Jun-20
$
30-Jun-19
$
(1,060,521)
(447,796)
20,211
(1,488,106)
(962,790)
(780,658)
53,786
(1,689,662)
12(c)
-
-
(3,371)
(3,371)
-
-
(16,763)
(16,763)
Net decrease in cash and cash equivalents
(1,488,106)
(1,709,796)
Cash and cash equivalents at the beginning of the year
Effect of exchange rate fluctuations on cash held
Cash and cash equivalents at the end of the year
2,232,905
3,656
748,455
3,925,570
17,131
2,232,905
12(a)
The Consolidated Statement of Cash Flows is to be read in
conjunction with the accompanying notes.
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MINBOS RESOURCES LIMITED | 2020 ANNUAL REPORT
Minbos Resources Limited – Financial Report
For the year ended 30 June 2020
Notes to the Consolidated Financial Statements
1. CORPORATE INFORMATION
Minbos Resources Limited (referred to as ‘Minbos’ or the ‘Company’ or ‘Parent Entity’) is a company domiciled
in Australia. The address of the Company’s registered office and principal place of business is disclosed in the
Corporate Directory of the Annual Report. The consolidated financial statements of the Company as at and for
the year ended 30 June 2020 comprise the Company and its subsidiaries (together referred to as the
‘Consolidated Entity’ or the ‘Group’). The Group is primarily involved in phosphate exploration in Africa and rare
earth elements in Madagascar.
2. BASIS OF PREPARATION
The financial report is a general purpose financial report which has been prepared in accordance with Australian
Accounting Standards and Interpretations issued by the Australian Accounting Standards Board and the
Corporations Act 2001. Minbos Resources Limited is a for-profit entity for the purpose of preparing the financial
statements.
The financial report was authorised for issue by the Directors on 18 September 2020.
(a) Compliance with IFRS
The consolidated financial statements of the Consolidated Entity also comply with International Financial
Reporting Standards (‘IFRS’) as issued by the International Accounting Standards Board (‘IASB’).
(b) Basis of measurement
The consolidated financial statements have been prepared on a going concern basis in accordance with the
historical cost convention, unless otherwise stated.
(c) Going Concern
For the year ended 30 June 2020 the group recorded a loss of $1,566,274, net cash outflows from operating
activities of $1,488,106 and had net working capital of $568,176. Furthermore, the Consolidated Entity has
not generated revenues from operations during the year. These conditions indicate the existence of
material uncertainty that may cast significant doubt about the Group’s ability to continue as a going
concern and, therefore, that it may be unable to realise its assets and discharge its liabilities in the normal
course of business.
The ability of the entity to continue as a going concern is dependent on securing additional funding through
capital raising or other fund-raising activities in the near future to continue its operational activities.
These financial statements have been prepared on the going concern basis, which contemplates the
continuity of normal business activities and the realisation of assets and settlement of liabilities in the
normal course of business for the following reasons:
On 10 September 2020 the Company had received binding commitments from sophisticated investors to
raise $2.265m (before costs) through a two-tranche placement at $0.0015 per share.
• A total of 848,000,000 Tranche 1 pre consolidation shares were issued on 15 September 2020 utilising
the Company’s existing placement capacity under ASX Listing Rules 7.1 for $1.272m.
• A total of 662,000,000 Tranche 2 pre consolidation shares will be issued subject to shareholder
approval for $993,000.
The Directors are therefore satisfied that the funds raised will meet the Company’s expenditure
commitments and thus it is appropriate to prepare the financial statements on a going concern basis.
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MINBOS RESOURCES LIMITED | 2020 ANNUAL REPORT
Minbos Resources Limited – Financial Report
For the year ended 30 June 2020
Notes to the Consolidated Financial Statements
Should the group not be able to continue as a going concern, it may be required to realise its assets and
discharge its liabilities other than in the ordinary course of business, and at amounts that differ from those
stated in the financial statements or raise additional capital through equity raisings and that the financial
report does not include any adjustments relating to the recoverability and classification of recorded asset
amounts or liabilities that might be necessary should the group not continue as a going concern and meet
its debts as and when they become due and payable.
(d) New and revised Accounting Standards and Interpretations adopted by the Group
During the current financial year, the following new or amended standard became applicable and the
Group had to change its accounting policy as a result of the adoption of the following standard:
• AASB 16: Leases (issued February 2016)
The impact of the adoption of this standard and the new accounting policy are disclosed below. The impact
of this standard has not had a material impact on the amounts presented in the Group's financial
statements.
AASB 16: Leases (issued February 2016)
AASB 16 eliminates the operating and finance lease classifications for lessees currently accounted for under
AASB 117 Leases. It instead requires an entity to bring most leases into its statement of financial position in
a similar way to how existing finance leases are treated under AASB 117. An entity will be required to
recognise a lease liability and a right of use asset in its statement of financial position for most leases.
There are some optional exemptions for leases with a period of 12 months or less and for low value leases.
The adoption of AASB 16 from 1 July 2019 resulted in no material changes in accounting policies and
adjustments to the amounts recognised in the financial statements. The Company assessed its leases and
noted that all leases held are for a period of 12 months or less and there is therefore no impact on the
amounts recognised in the financial statements as a result of adoption.
3. PRINCIPLES OF CONSOLIDATION
(i) Subsidiaries
The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of Minbos
Resources Limited (‘Company’ or ‘Parent Entity’) as at 30 June 2020 and the results of all subsidiaries for
the year then ended. Minbos Resources Limited and its subsidiaries together are referred to in this financial
report as the Group or the Consolidated Entity.
Subsidiaries are all entities (including structured 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.
Intercompany transactions, balances and unrealised gains on transactions between group companies are
eliminated. Unrealised losses are also eliminated unless the transaction provides evidence of the
impairment of the asset transferred. Accounting policies of 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 & Other Comprehensive Income and Consolidated Statement of Financial
Position respectively.
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MINBOS RESOURCES LIMITED | 2020 ANNUAL REPORT
Minbos Resources Limited – Financial Report
For the year ended 30 June 2020
Notes to the Consolidated Financial Statements
(ii) Associates
Associates are entities over which the consolidated entity has significant influence but not control or joint
control. Investments in associates are accounted for using the equity method. Under the equity method,
the share of the profits or losses of the associate is recognised in profit or loss and the share of the
movements in equity is recognised in other comprehensive income. Investments in associates are carried in
the statement of financial position at cost plus post-acquisition changes in the consolidated entity's share
of net assets of the associates. Cost includes equity contribution and loan advances (interest free with no
set term of repayment). Dividends received or receivable from associates reduce the carrying amount of
the investment.
When the consolidated entity’s share of losses in an associate equals or exceeds its interest in the
associate, including any unsecured long-term receivables, the consolidated entity does not recognise
further losses, unless it has incurred obligations or made payments on behalf of the associate.
(iii) Changes in ownership interests
The Group treats transactions with non-controlling interests that do not result in a loss of control as
transactions with equity owners of the Group. A change in ownership interest results in an adjustment
between the carrying amounts of the controlling and non-controlling interests to reflect their relative
interest in the subsidiary. Any differences between the amount of the adjustment to non-controlling
interests and any consideration paid or received is recognised in a separate reserve within equity
attributable to owners of Minbos Resources Limited.
When the Group ceases to have control, joint control or significant influence, any retained interest in the
entity is remeasured to its fair value with the change in carrying amount recognised in profit or loss. The
fair value is the initial carrying amount for the purposes of subsequently accounting for the retained
interest as an associate, jointly controlled entity or financial asset. In addition, any amounts previously
recognised in other comprehensive income in respect of that entity are accounted for as if the Group had
directly disposed of the related assets or liabilities. This may mean that amounts previously recognised in
other comprehensive income are reclassified to profit or loss.
If the ownership interest in a jointly-controlled entity or an associate is reduced but joint control or
significant influence is retained, only a proportionate share of the amounts previously recognised in other
comprehensive income are reclassified to profit or loss where appropriate.
FOREIGN CURRENCY TRANSLATION
4.
(i) Functional and presentation currency
These consolidated financial statements are presented
in Australian dollars. The functional and
presentation currency of the Company is Australian dollars (AUD). The functional currency of the
subsidiaries is United States dollars (USD).
(ii) Transactions and balances
Foreign currency transactions are translated into the functional currency using the exchange rates
prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement
of such transactions and from the translation at year end exchange rates of monetary assets and liabilities
denominated in foreign currencies are recognised in profit or loss, except when they are deferred in equity
as qualifying cash flow hedges and qualifying net investment hedges or are attributable to part of the net
investments in a foreign operation.
Foreign exchange gains and losses that relate to borrowings are presented in the Consolidated Statement
of Profit or Loss and Other Comprehensive Income, within finance costs. All other foreign exchange gains
and losses are presented in the Consolidated Statement of Profit or Loss and Other Comprehensive Income
on a net basis within other income or other expenses.
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MINBOS RESOURCES LIMITED | 2020 ANNUAL REPORT
Minbos Resources Limited – Financial Report
For the year ended 30 June 2020
Notes to the Consolidated Financial Statements
(iii) Group companies
The results and financial position of foreign operations (none of which has the currency of a
hyperinflationary economy) that have a functional currency different from the presentation currency are
translated into the presentation currency as follows:
• Assets and liabilities for each Statement of Financial Position presented are translated at the closing
•
rate at the date of that Statement of Financial Position,
Income and expenses for each Statement of Profit or Loss and Other Comprehensive Income are
translated at average exchange rates (unless this is not a reasonable approximation of the cumulative
effect of the rates prevailing on the transaction dates, in which case income and expenses are
translated at the dates of the transactions), and
• All resulting exchange differences are recognised in other comprehensive income.
On consolidation, exchange differences arising from the translation of any net investment in foreign
entities, and of borrowings and other financial instruments designated as hedges of such investments, are
recognised in other comprehensive income. When a foreign operation is sold or any borrowings forming
part of the net investment are repaid, the associated exchange differences are reclassified to profit or loss,
as part of the gain or loss on sale.
5. KEY JUDGEMENTS AND ESTIMATES
The preparation of a financial report in conformity with Australian Accounting Standards requires management
to make judgments, 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 each entity in the Group.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates
are recognised in the year in which the estimate is revised if the revision affects only that year or in the year of
the revision and future years if the revision affects both current and future years. In particular, information
about significant areas of estimation uncertainty and critical judgments in applying accounting policies that have
the most significant effect on the amount recognised in the financial statements are described in the following
notes:
(i) Note 9: Exploration and evaluation expenditure – The Company incurred exploration expenditure on the
Ambato project of $97,582 (2019: $744,471), which was reclassified through the profit or loss as Minbos only
has an option with Tana Minerals Ltd (Tana) whereby Minbos can acquire 90% of the shares in MRE Mining
(Mauritius) Limited (MRE). MRE’s sole asset is a wholly owned subsidiary in Madagascar which holds the
exploration permits for the Ambato Project. During the 2019 financial year, Minbos gave notice to Tana that
it would extend the Exclusivity Period by making a cash payment of $25,000. The acquisition of MRE is
conditional upon Minbos obtaining all the required regulatory and shareholder approvals, completing due
diligence on the project and the renewal of the exploration permits.
The Company also incurred exploration expenditure on the Cabinda project of $388,247 (2019: $49,357),
which was reclassified through the profit or loss at 30 June 2020 as the Company has not yet been granted
the equivalent of an exploration licence over the project area. The work commitments on the exploration
licence are currently being negotiated with the Angolan Ministry of Mines and will be issued prior to the
execution of the Mining Investment Contracts.
6. OTHER ACCOUNTING POLICIES
Significant and other accounting policies that summarise the measurement basis used and are relevant to an
understanding of the financial statements are provided throughout the notes to the financial statements.
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MINBOS RESOURCES LIMITED | 2020 ANNUAL REPORT
Notes to the Consolidated Financial Statements
7. OTHER INCOME FROM CONTINUING OPERATIONS
Other income
Interest income
Minbos Resources Limited – Financial Report
For the year ended 30 June 2020
30-Jun-20
$
30-Jun-19
$
16,704
16,704
56,284
56,284
RECOGNITION AND MEASUREMENT
Interest Income
Interest income is recognised when the Company gains control of the right to receive the interest payment.
All income is stated net of the amount of goods and services tax.
8. EXPENSES
Administration expenses
Advertising and marketing expenses
Compliance and regulatory expenses
Computer expenses
Consulting and corporate expenses
Insurance expense
Legal expenses
Provision for doubtful debts
Rent expense
Seminar and conference expenses
Travel and accommodation expenses
Other administration expenses
Personnel expenses and director fees
Wages and salaries, including superannuation
Director fees and other benefits
Other employee expenses
30-Jun-20
$
30-Jun-19
$
53,114
150,093
9,946
134,179
28,268
27,599
-
45,300
56,939
103,648
48,198
657,284
281,869
144,000
3,075
428,944
7,361
158,759
9,923
4,492
28,008
21,718
3,000
55,660
54,371
65,823
53,221
462,336
333,458
153,000
16,623
503,081
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MINBOS RESOURCES LIMITED | 2020 ANNUAL REPORT
Notes to the Consolidated Financial Statements
9. DUE DILIGENCE & EXPLORATION EXPENDITURE ON THE AMBATO PROJECT
Minbos Resources Limited – Financial Report
For the year ended 30 June 2020
Due diligence & exploration expenditure on the Ambato project (i)
30-Jun-20
$
30-Jun-19
$
97,582
97,582
744,471
744,471
(i) Exploration expenditure in relation to the Ambato Project has not been capitalised on the Statement of
Financial Position at 30 June 2020 as Minbos has only entered into an option with Tana Minerals Ltd (Tana)
whereby Minbos can acquire 90% of the shares in MRE Mining (Mauritius) Limited (MRE). MRE’s sole asset is
a wholly owned subsidiary in Madagascar which holds the exploration permits for the Ambato Project.
During the 2019 financial year, Minbos gave notice to Tana that it would extend the Exclusivity Period by
making a cash payment of $25,000.
The acquisition of MRE is conditional upon Minbos obtaining all the required regulatory and shareholder
approvals, completing due diligence on the project and the renewal of the exploration permits.
Renewals of exploration licenses by the Bureau de Cadastre Minier de Madagascar have not received
ministerial approval for several years. It is expected the recently concluded National Assembly elections and
the appointment of a new Ministry will reinstate this process.
RECOGNITION AND MEASUREMENT
Exploration and evaluation expenditure, which are intangible costs, including the costs of acquiring licences, are
capitalised as exploration and evaluation assets on an area of interest basis. Costs incurred before the
Consolidated Entity has obtained the legal rights to explore an area are recognised in the Consolidated
Statement of Profit or Loss and Other Comprehensive Income.
Exploration and evaluation assets are only recognised if the rights of the area of interest are current and either:
(i)
the expenditures are expected to be recouped through successful development and exploitation of the
area of interest; or
(ii) activities in the area of interest have not at the reporting date, reached a stage which permits a reasonable
assessment of the existence or other wise of economically recoverable reserves and active and significant
operations in, or in relation to, the area of interest are continuing.
Exploration and evaluation assets are assessed for impairment if one or more of the following facts and
circumstances exist:
(i)
the period for which the entity has the right to explore in the specific area has expired during the period or
will expire in the near future and is not expected to be renewed.
(ii) substantive expenditure on further exploration for and evaluation of mineral resources in the specific area
is neither budgeted nor planned.
(iii) exploration for and evaluation of mineral resources in the specific area have not led to the discovery of
commercially viable quantities of mineral resources and the entity has decided to discontinue such
activities in the specific area.
(iv) sufficient data exist to indicate that, although a development in the specific area is likely to proceed, the
carrying amount of the exploration and evaluation asset is unlikely to be recovered in full, from successful
development or by sale.
For the purposes of impairment testing, exploration and evaluation assets are allocated to cash-generating units
to which the exploration activity relates. The cash generating unit shall not be larger than the area of interest.
Once the technical feasibility and commercial viability of the extraction of mineral resources in an area of
interest are demonstrable, exploration and evaluation assets attributable to that area of interest are first tested
for impairment and then reclassified from intangible assets to mineral property and development assets within
plant and equipment.
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MINBOS RESOURCES LIMITED | 2020 ANNUAL REPORT
Minbos Resources Limited – Financial Report
For the year ended 30 June 2020
Notes to the Consolidated Financial Statements
10. INCOME TAX EXPENSE
(a) Numerical reconciliation of accounting losses to income tax expense
A reconciliation between income tax expense and the accounting loss before income tax multiplied by the
entity's applicable income tax rate is as follows:
30-Jun-20
$
30-Jun-19
$
Accounting loss before income tax
(1,566,274)
(1,715,313)
At the entity's Australian statutory income tax rate of 30% (2019: 30%)
(469,882)
(514,594)
Adjusted for tax effect of the following amounts:
Non-deductible / taxable items
Non-taxable / deductible items
Income tax benefits not brought to account
Income tax expense / (benefit)
(b) Recognised deferred tax assets and liabilities
Deferred tax liabilities
Investment in associate
Opening balance
Charges / (credited) to income
Closing balance
190,573
-
279,309
-
240,544
-
274,050
-
30-Jun-20
$
30-Jun-19
$
-
-
-
-
-
-
Total deferred tax liability recognised
- -
(c) Deferred tax assets and liabilities not brought to account
The directors estimate that the potential deferred tax assets and liabilities carried forward but not brought to
account at year end at the Australian corporate tax rate of 30% are made up as follows:
On income tax account:
Carried forward tax losses
Deductible temporary differences
Unrecognised deferred tax assets
30-Jun-20
$
30-Jun-19
$
3,660,354
-
3,660,354
3,351,462
19,217
3,370,679
The Group has Australian carried forward tax losses of $12,201,181 (tax effected at 30%, $3,660,354) as at 30
June 2020 (2019: $11,171,539 (tax effected at 30%, $3,351,462)). In view of the Group's trading position, the
Directors have not included this tax benefit in the Group's Consolidated Statement of Financial Position. A tax
benefit will only be recognised to the extent that it has become probable that future taxable profit will allow the
deferred tax asset to be recovered.
The tax benefits of the above deferred tax assets will only be obtained if:
(a) The Consolidated Entity derives future assessable income of a nature and of an amount sufficient to
enable the benefits to be utilised;
(b) The Consolidated Entity continues to comply with the conditions for deductibility imposed by law; and
(c) No changes in income tax legislation adversely affect the Consolidated Entity from utilising the benefits.
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MINBOS RESOURCES LIMITED | 2020 ANNUAL REPORT
Minbos Resources Limited – Financial Report
For the year ended 30 June 2020
Notes to the Consolidated Financial Statements
RECOGNITION AND MEASUREMENT
Current taxes
Current income tax expense charged to the profit or loss is the tax payable on taxable income calculated using
applicable income tax rates enacted, or substantially enacted, as at the end of the reporting date. Current tax
liabilities (assets) are therefore measured at the amounts expected to be paid to (recovered from) the relevant
taxation authority.
Deferred taxes
Deferred income tax expense reflects movements in deferred tax asset and deferred tax liability balances during
the year as well as unused tax losses.
Current and deferred tax expense (income) is charged or credited directly to equity instead of the profit or loss
when the tax relates to items that are credited or charged directly to equity.
Deferred tax assets and liabilities are ascertained based on temporary differences arising between the tax bases
of assets and liabilities and their carrying amount in the financial statements. Deferred tax assets also result
where amounts have been fully expensed but future tax deductions are available. No deferred income tax will be
recognised from the initial recognition of an asset or liability, excluding a business combination, where there is
no effect on accounting or taxable profit or loss.
Deferred tax assets and liabilities are calculated at the tax rates that are expected to apply to the period when
the asset is realised or the liability is settled, based on tax rates enacted or substantively enacted at the end of
the reporting period. Their measurements also reflect the manner in which management expects to recover or
settle that carrying amount of the related asset or liability.
Deferred tax assets relating to temporary differences and unused tax losses are recognised only to the extent
that it is probable that future taxable profit will be available against which the benefits of the deferred tax asset
can be utilised.
Current assets and liabilities are offset where a legally enforceable right of set-off exists and it is intended that
net settlement or simultaneous realisation and settlement of the respective asset and liability will occur.
Deferred tax assets and liabilities are offset where a legally enforceable right of set-off exists, the deferred tax
assets and liabilities relate to income taxes levied by the same taxation authority on either the same taxable
entity or different taxable entities where it is intended that net settlement or simultaneous realisation and
settlement of the respective asset and liability will occur in the future periods in which significant amounts of
deferred tax assets or liabilities are expected to be recovered or settled.
11. EARNINGS PER SHARE
(a) Basic loss per share
The calculation of basic loss per share at 30 June 2020 was based on the loss attributable to ordinary
shareholders of $1,566,274 (2019: $1,715,313) and a weighted average number of ordinary shares outstanding
during the financial year ended 30 June 2020 of 5,654,561,320 (2019: 5,654,561,320) calculated as follows:
30-Jun-20
30-Jun-19
Net loss attributable to the ordinary equity holders of the Group ($)
Weighted average number of ordinary shares for basis per share (No)
(1,566,274)
5,654,561,320
(1,715,313)
5,654,561,320
Continuing operations
- Basic and diluted loss per share ($)
(0.0003)
(0.0003)
RECOGNITION AND MEASUREMENT
Basic earnings per share is calculated by dividing the profit attributable to equity holders of the Company,
excluding any costs of servicing equity other than ordinary shares, by weighted average number of ordinary
shares outstanding during the financial year, adjusted for the bonus elements in ordinary shares issued during
the year.
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MINBOS RESOURCES LIMITED | 2020 ANNUAL REPORT
Notes to the Consolidated Financial Statements
Minbos Resources Limited – Financial Report
For the year ended 30 June 2020
(b) Diluted loss per share
Potential ordinary shares are not considered dilutive, thus diluted loss per share is the same as basic loss per
share.
RECOGNITION AND MEASUREMENT
Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into
account the after income tax effect of interest and other financing costs associated with dilutive potential
ordinary shares and the weighted average number of shares assumed to have been issued for no consideration
in relation to dilutive potential ordinary shares.
12. CASH AND CASH EQUIVALENTS
(a) Reconciliation to cash at the end of the year
Cash at bank and in hand
Short-term deposit
30-Jun-20
$
30-Jun-19
$
728,455
20,000
748,455
212,905
2,020,000
2,232,905
(b) Interest rate risk exposure
The Group’s exposure to interest rate risk is discussed in Note 19: Financial Risk Management.
(c) Reconciliation of net cash flows from operating activities to loss for the year after tax
Loss for the financial year
Adjustments for:
Depreciation expense
Foreign currency translation
Loss on disposal of plant and equipment
Change in assets and liabilities
(Increase) / decrease in trade and other receivables
Increase in trade and other payables
Increase / (decrease) in provisions
Net cash used in operating activities
30-Jun-20
$
30-Jun-19
$
(1,566,274)
(1,715,313)
13,951
(3,555)
525
18,509
(16,732)
-
(2,127)
63,211
6,163
(1,488,106)
27,152
24,149
(27,427)
(1,689,662)
RECOGNITION AND MEASUREMENT
Cash and cash equivalents comprise cash balances, short term bills and call deposits. Bank overdrafts that are
repayable on demand and form an integral part of the Group’s cash management are included as a component
of cash and cash equivalents for the purpose of the Consolidated Statement of Cash Flows.
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MINBOS RESOURCES LIMITED | 2020 ANNUAL REPORT
Notes to the Consolidated Financial Statements
13. TRADE AND OTHER RECEIVABLES
Minbos Resources Limited – Financial Report
For the year ended 30 June 2020
Trade receivables
Other receivables
Indirect taxes receivable
Prepayments
Accrued interest
14. TRADE AND OTHER PAYABLES
Trade creditors
Accruals
Superannuation payable
PAYG payable
30-Jun-20
$
30-Jun-19
$
2,599
1,500
9,593
9,733
-
23,425
-
1,500
7,575
10,205
3,507
22,787
30-Jun-20
$
30-Jun-19
$
62,303
103,304
5,938
7,552
179,097
66,002
35,239
6,865
11,531
119,637
RECOGNITION AND MEASUREMENT
These amounts represent liabilities for goods and services provided to the Group prior to the end of the financial
year which are unpaid. The amounts are unsecured and are usually paid within 30 days of recognition.
For trade and other payables, the fair value is approximate to their carrying value amount, due to their short-term
nature.
15. PROVISIONS
Provision for annual leave
30-Jun-20
$
30-Jun-19
$
24,607
24,607
18,444
18,444
RECOGNITION AND MEASUREMENT
Provisions are recognised when:
-
-
-
the Company has a present obligation (legal or constructive) as a result of a past event;
it is probably that resources will be expended to settle the obligation; and
a reliable estimate can be made of the amount of the obligation.
Employee Benefits
Short-term employee benefits
Provision is made for the Company’s obligation for short-term employee benefits. Short-term employee benefits
are benefits (other than termination benefits) that are expected to be settled wholly before twelve months after
the end of the annual reporting period in which the employees render the related service, including wages,
salaries and sick leave. Short-term employee benefits are measured at the (undiscounted) amounts expected to
be paid when the obligation is settled.
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MINBOS RESOURCES LIMITED | 2020 ANNUAL REPORT
Minbos Resources Limited – Financial Report
For the year ended 30 June 2020
Notes to the Consolidated Financial Statements
A provision is recognised in the Consolidated Statement of Financial Position when the Consolidated Entity has a
present legal or constructive obligation as a result of a past event, and it is probable that an outflow of economic
benefits will be required to settle the obligation. If the effect is material, provisions are determined by
discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time
value of money and, when appropriate, the risks specific to the liability.
16. CONTRIBUTED EQUITY
(a) Issued and fully paid
30-Jun-20
$
No.
30-Jun-19
$
No.
Ordinary shares
40,567,812
40,567,812
5,654,561,320
5,654,561,320
40,567,812
40,567,812
5,654,561,320
5,654,561,320
Ordinary shares
Ordinary shares entitle the holder to participate in dividends and the proposed winding up of the company in
proportion to the number and amount paid on the share hold.
(b) Movement Reconciliation
ORDINARY SHARES
Balance 30 June 2019
Balance 30 June 2020
Date
Quantity
5,654,561,320
5,654,561,320
Issue price
$
40,567,812
40,567,812
(c) Capital risk management
The Group's objectives when managing capital are to:
• safeguard their ability to continue as a going concern, so that it can continue to provide returns for
shareholders and benefits for other stakeholders, and
• maintain an optimal capital structure to reduce the cost of capital.
In order to maintain or adjust the capital structure, the Group may adjust the amount of dividends paid to
shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt.
Given the stage of the Company’s development there are no formal targets set for return on capital. There were
no changes to the Company’s approach to capital management during the year. The Company is not subject to
externally imposed capital requirements. The net equity of the Company is equivalent to capital. Net capital is
obtained through capital raisings on the Australian Securities Exchange.
RECOGNITION AND MEASUREMENT
Ordinary shares are classified as equity.
Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction,
net of tax, from the proceeds. Incremental costs directly attributable to the issue of new shares or options for
the acquisition of a business are not included in the cost of the acquisition as part of the purchase consideration.
If the entity reacquires its own equity instruments, for example as a result of a share buy-back, those
instruments are deducted from equity and the associated shares are cancelled. No gain or loss is recognised in
the profit or loss and the consideration paid including any directly attributable incremental costs (net of income
taxes) is recognised directly in equity.
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MINBOS RESOURCES LIMITED | 2020 ANNUAL REPORT
Minbos Resources Limited – Financial Report
For the year ended 30 June 2020
Notes to the Consolidated Financial Statements
17. RESERVES
Employee share plan reserve
Foreign currency translation reserve
Movement reconciliation
Employee share plan reserve
Balance at the beginning of the year
Equity settled share-based payment transactions
Balance at the end of the year
30-Jun-20
$
No.
30-Jun-19
$
No.
459,184
4,155,326
4,614,510
-
-
-
459,184
4,155,326
4,614,510
-
-
-
30-Jun-20
$
30-Jun-19
$
459,184
-
459,184
459,184
-
459,184
Foreign currency translation reserve
Balance at the beginning of the year
Effect of translation of foreign currency operations to group presentation currency
Balance at the end of the year
4,155,326
-
4,155,326
4,155,326
-
4,155,326
Nature and purpose of reserves
Employee share plan reserve
The reserve represents the value of shares issued under the Group’s Employee Share Plan that the Consolidated
Entity is required to include in the consolidated financial statements. No gain or loss is recognised in the profit or
loss on the purchase, sale, issue or cancellation of the Consolidated Entity’s own equity instruments.
Foreign currency translation reserve
The translation reserve comprises all foreign exchange differences arising from the translation of the financial
statements of foreign operations where their functional currency is different to the presentation currency of the
reporting entity.
18. ACCUMULATED LOSSES
Movement in accumulated losses
Balance at the beginning of the financial year
Net loss in current year
Balance at the end of the financial year
30-Jun-20
$
30-Jun-19
$
(43,043,489)
(1,566,274)
(44,609,763)
(41,328,176)
(1,715,313)
(43,043,489)
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MINBOS RESOURCES LIMITED | 2020 ANNUAL REPORT
Minbos Resources Limited – Financial Report
For the year ended 30 June 2020
Notes to the Consolidated Financial Statements
19. FINANCIAL RISK MANAGEMENT
The Group’s activities expose it to a variety of financial risks: market risk (including foreign exchange risk and
interest rate risk), credit risk and liquidity risk. The Group’s overall risk management programme focuses on the
unpredictability of the financial markets and seeks to minimise potential adverse effects on the financial
performance of the Group. The Group uses different methods to measure and manage different types of risks to
which it is exposed. These include monitoring levels of exposure to interest rate and foreign exchange risk and
assessments of market forecasts for interest rate and foreign exchange prices. Ageing analyses and monitoring
of specific credit allowances are undertaken to manage credit risk. Liquidity risk is monitored through the
development of future cash flow forecasts.
Risk management is carried out by Management and overseen by the Board of Directors with assistance from
suitably qualified external advisors.
The main risks arising for the Group are foreign exchange risk, interest rate risk, credit risk and liquidity risk. The
Board reviews and agrees policies for managing each of these risks and they are summarised below.
The carrying values of the Group’s financial instruments are as follows:
Financial assets
Cash and cash equivalents
Trade and other receivables
Financial liabilities
Trade and other payables
Net exposure
(a) Market Risk
(i) Foreign exchange risk
30-Jun-20
$
30-Jun-19
$
748,455
23,425
771,880
179,097
179,097
592,783
2,232,905
22,787
2,255,692
119,637
119,637
2,136,055
The Group operates internationally and is exposed to foreign exchange risk arising from various currency
exposures, primarily with respect to the US dollar.
Foreign exchange risk arises from future commercial transactions and recognised assets and liabilities
denominated in a currency that is not the entity’s functional currency.
(ii)
Interest rate risk
The Group is exposed to interest rate risk due to variable interest being earned on its interest-bearing bank
accounts. At the end of the reporting period, the Group had the following interest-bearing financial
instruments:
30-Jun-20
30-Jun-19
Weighted average
interest rate
Balance
$
Weighted average
interest rate
Balance
$
Cash and cash equivalents
0.22%
748,455
1.87%
2,232,905
Sensitivity
Within this analysis, consideration is given to potential renewals of existing positions and the mix of fixed and
variable interest rates. The following sensitivity analysis is based on the interest rate risk exposures in existence
at the reporting date. The 1% increase and 1% decrease in rates is based on reasonably expected possible
changes over a financial year, using the observed range of historical rates for the preceding five-year period.
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MINBOS RESOURCES LIMITED | 2020 ANNUAL REPORT
Notes to the Consolidated Financial Statements
At 30 June 2020, if interest rates had moved, as illustrated in the table below, with all other variables held
constant, post-tax losses and equity would have been affected as follows:
Minbos Resources Limited – Financial Report
For the year ended 30 June 2020
Post tax profit
higher/(lower)
Other comprehensive
higher/(lower)
30-Jun-20
$
30-Jun-19
$
30-Jun-20
$
30-Jun-19
$
Judgements of reasonably possible movements:
+ 1.0% (100 basis points)
- 1.0% (100 basis points)
5,239
(5,239)
15,630
(15,630)
-
-
-
-
The other financial instruments of the Group that are not included in the above tables are non-interest bearing
and are therefore not subject to interest rate risk.
(b) Credit risk
Credit risk is the risk of financial loss to the Group if a counter party to a financial instrument fails to meet its
contractual obligations. During the year credit risk has principally arisen from the financial assets of the Group,
which comprise cash and cash equivalents and trade and other receivables. The Group’s exposure to credit risk
arises from potential default of the counter party, with the maximum exposure equal to the carrying amount of
these instruments.
The carrying amount of financial assets included in the Consolidated Statement of Financial Position represents
the Group’s maximum exposure to credit risk in relation to those assets. The Group does not hold any credit
derivatives to offset its credit exposure. The Group trades only with recognised, credit worthy third parties and
as such collateral is not requested nor is it the Group’s policy to securitise its trade and other receivables.
Receivable balances are monitored on an ongoing basis with the result that the Group does not have a
significant exposure to bad debts.
The Group has no significant concentrations of credit risk within the Group except for the following:
• Note 12: Cash and cash equivalents: Cash held with National Australia Bank and Bankwest.
(i) Cash
The Group’s primary bankers are National Australia Bank and Bankwest. The Board considers the use of these
financial institutions, which have a rating of AA- from Standards and Poor’s, respectively, to be sufficient in the
management of credit risk with regards to these funds.
Cash at bank and short-term bank deposits:
Financial institutions - Standard & Poor's rating of AA-
Financial institutions - Other
30-Jun-20
$
30-Jun-19
$
748,378
77
748,455
2,232,833
72
2,232,905
(ii) Trade Debtors
While the Group has policies in place to ensure that transactions with third parties have an appropriate credit
history, the management of current and potential credit risk exposures is limited as far as is considered
commercially appropriate. Up to the date of this report, the Board has placed no requirement for collateral on
existing debtors.
The credit quality of financial assets that are neither past due nor impaired can be assessed by reference to
external credit ratings (if available) or to historical information about counterparty default rates.
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MINBOS RESOURCES LIMITED | 2020 ANNUAL REPORT
Minbos Resources Limited – Financial Report
For the year ended 30 June 2020
Notes to the Consolidated Financial Statements
(c) Liquidity risk
Prudent liquidity risk management implies maintaining sufficient cash and marketable securities and the
availability of funding through an adequate amount of committed credit facilities to meet obligations when due
and to close out market positions.
The Directors and Management monitor the cash outflow of the Group on an on-going basis against budget and
the maturity profiles of financial assets and liabilities to manage its liquidity risk.
The financial liabilities the Group had at reporting date were trade payables and employee provisions incurred in
the normal course of the business. Trade payables were non-interest bearing and were paid within the normal
30-60 day terms of creditor payments.
The table below reflects the respective undiscounted cash flows for financial liabilities existing at 30 June 2020.
Contractual maturities
of financial liabilities
30-Jun-20
Trade and other payables
30-Jun-19
Trade and other payables
<6
months
$
>6-12
months
$
>12
months
$
Total
contractual
cash flows
$
Carrying
amount
$
179,097
179,097
119,637
119,637
-
-
-
-
-
-
-
-
179,097
179,097
179,097
179,097
119,637
119,637
119,637
119,637
(d) Fair value hierarchy
AASB 13 requires disclosure of fair value measurements by level of the following fair value measurement
hierarchy:
(i)
Level 1 - the instrument has quoted prices (unadjusted) in active markets for identical assets and liabilities;
(ii) Level 2 - a valuation technique using inputs other than quoted prices within Level 1 that are observable for
the financial instrument, either directly (i.e. as prices), or indirectly (i.e. derived from prices); or
(iii) Level 3 - a valuation technique using inputs that are not based on observable market data (unobservable
inputs).
At 30 June 2020 and 30 June 2019 the Group did not have financial liabilities measured and recognised at fair
value. Due to their short-term nature, the carrying amount of the current receivables and payables is assumed
to approximate their fair value.
The Group does not have any level 2 or 3 assets or liabilities.
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MINBOS RESOURCES LIMITED | 2020 ANNUAL REPORT
Minbos Resources Limited – Financial Report
For the year ended 30 June 2020
Notes to the Consolidated Financial Statements
RECOGNITION AND MEASUREMENT
Non-derivative financial instruments
Non-derivative financial instruments are recognised initially at fair value plus, for instruments not at fair value
through profit or loss, any directly attributable transaction costs, except as described below. Subsequent to
initial recognition non-derivative financial instruments are measured as described below.
A financial instrument is recognised if the Group becomes a party to the contractual provisions of the
instrument. Financial assets are derecognised if the Group’s contractual rights to the cash flows from the
financial assets expire or if the Group transfers the financial asset to another party without retaining control or
substantially all risks and rewards of the asset. Regular way purchases and sales of financial assets are accounted
for at trade date, i.e., the date that the Group commits itself to purchase or sell the asset. Financial liabilities are
derecognised if the Group’s obligations specified in the contract expire or are discharged or cancelled.
Cash and cash equivalents comprise cash balances and call deposits. Bank overdrafts that are repayable on
demand and form an integral part of the Group’s cash management are included as a component of cash and
cash equivalents for the purpose of the Consolidated Statement of Cash Flows.
Subsequent measurement
Loans and receivables and held-to-maturity investments are carried at amortised cost using the effective
interest method.
Impairment
The Group assesses at the end of each reporting period whether there is objective evidence that a financial asset
or group of financial assets is impaired. A financial asset or a group of financial assets is impaired and
impairment losses are incurred only if there is objective evidence of impairment as a result of one or more
events that occurred after the initial recognition of the assets (a ‘loss event’) and that loss event (or events) has
an impact on the estimated future cash flows of the financial asset or group of financial assets that can be
reliably estimated. In the case of equity investments classified as available-for-sale, a significant or prolonged
decline in the fair value of the security below its cost it considered an indicator that the assets are impaired.
Assets carried at amortised cost
For loans and receivables, the amount of loss is measured as the difference between the asset’s carrying amount
and the present value of estimated future cash flows (excluding future credit losses that have been incurred)
discounted at the financial asset’s original effective interest rate. The carrying amount of the asset is reduced
and the amount of the loss is recognised in the Consolidated Statement of Profit or Loss and Other
Comprehensive Income. If a loan or held-to maturity investment has a variable interest rate, the discount rate or
measuring any impairment loss is the current effective interest rate determined under the contract. As a
practical expedient, the Group may measure impairment on the basis of an instrument’s fair value using an
observable market price.
If, in a subsequent period, the amount of the impairment loss decreases, and the decrease can be related
objectively to an event occurring after the impairment was recognised (such as an improvement in the debtor’s
credit rating), the reversal of the previously recognised impairment loss is recognised in the Consolidated
Statement of Profit or Loss and Other Comprehensive Income.
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MINBOS RESOURCES LIMITED | 2020 ANNUAL REPORT
Minbos Resources Limited – Financial Report
For the year ended 30 June 2020
Notes to the Consolidated Financial Statements
20. SEGMENT INFORMATION
Operating segments are reported in a manner consistent with the internal reporting provided to the chief
operating decision makers. The chief operating decision makers, who are responsible for allocating resources
and assessing performance of the operating segments, have been identified as the Board of Directors and the
Chief Executive Officer.
On 18 March 2020 the Company announced that the Company’s bid for the Cacata Phosphate Concession,
located in Cabinda, Angola, had been successful. Under the terms of the tender, it is anticipated that Minbos will
be granted the equivalent of an exploration licence over the project area. As a result the Company currently has
two reportable segments, being phosphate in Angola and rare earth minerals in Madagascar. The Board
considers its business operations in phosphate to be its primary reporting function. Results are analysed as a
whole by the chief operating decision maker, this being the Chief Executive Officer and the Board of Directors.
Consequently revenue, profit, net assets and total assets for the operating segment are reflected in this financial
report.
21. PARENT ENTITY
Current Assets
Non-Current Assets
Total Assets
Current Liabilities
Total Liabilities
Net Assets
Contributed equity
Reserves
Accumulated losses
Total Equity
Loss for the year
Other comprehensive loss for the year
Total comprehensive loss for the year
22. COMMITMENTS
There are no material commitments as at 30 June 2020.
30-Jun-20
$
30-Jun-19
$
771,803
4,383
776,186
203,704
203,704
572,482
2,255,620
21,222
2,276,842
138,081
138,081
2,138,761
40,567,812
4,614,510
(44,609,840)
572,482
40,567,812
4,614,510
(43,043,561)
2,138,761
(1,566,279)
-
(1,566,279)
(1,715,313)
-
(1,715,313)
23. CONTINGENT LIABILITIES AND CONTINGENT ASSETS
There are no other contingent liabilities or contingent assets as at 30 June 2020.
24. DIVIDENDS
No dividend has been paid during the financial year and no dividend is recommended for the financial year.
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MINBOS RESOURCES LIMITED | 2020 ANNUAL REPORT
Minbos Resources Limited – Financial Report
For the year ended 30 June 2020
Notes to the Consolidated Financial Statements
25. RELATED PARTIES
(a) Ultimate parent
The ultimate Australian parent entity within the Group is Minbos Resources Limited. Minbos is limited by shares
and is incorporated and domiciled in Australia. In the 2011 financial year the Company acquired 100% of Tunan
Mining Limited and its subsidiaries
(b) Subsidiary companies
Interests in subsidiaries are set out in Note 26: Subsidiaries and Transactions with Non-Controlling Interests.
(c) KMP compensation
Short-term employee benefits
Post-employment benefits
Equity compensation benefits
30-Jun-20
$
30-Jun-19
$
403,418
22,451
456,815
30,464
- -
487,279
425,869
Information regarding individual Directors and Executive compensation and some equity instruments disclosures
as required by Corporations Regulation 2M.3.03 are provided in the remuneration report section of the
Directors’ report.
(d) Issue of shares in lieu of services of related parties
There were no shares issued in lieu of services of related parties during the financial year (2019: Nil).
(e) Transactions with other related parties
Legal services - Steinepreis Paganin Lawyers & Consultants (i)
(a firm in which Peter Wall is a partner)
30-Jun-20
$
30-Jun-19
$
24,336
18,165
Consulting services - Billandbry Consulting Pty Ltd (ii)
(a Company in which William Oliver is a Director / Shareholder)
-
5,000
Legal fees paid to Steinepreis Paganin Lawyers & Consultants
(i)
Legal fees of $24,336 were paid to Steinepreis Paganin Lawyers & Consultants during the financial year (2019:
$18,165), of which Mr Peter Wall, Chairman, is a partner.
(ii) Consulting fees paid to Billandbry Consulting Pty Ltd
Consulting fees of nil were paid to Billandbry Consulting Pty Ltd during the financial year (2019: $5,000), of
which Mr William Oliver, Director, is a Director and shareholder. The fee is an industry standard fee and
negotiated on arm’s length commercial terms.
There were no other transactions with KMP during the financial year ended 30 June 2020.
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MINBOS RESOURCES LIMITED | 2020 ANNUAL REPORT
Minbos Resources Limited – Financial Report
For the year ended 30 June 2020
Notes to the Consolidated Financial Statements
26. SUBSIDIARIES AND TRANSACTIONS WITH NON-CONTROLLING INTERESTS
Minbos Resources Limited owns the following subsidiaries:
100% of Tunan Mining Limited, a company incorporated in the British Virgin Islands. Through Tunan Mining
Limited, the Company has the following ownership as at 30 June 2020:
Name of entity
Parent entity
Country of incorporation
Class of
shares
Ownership interest
30/06/2020 30/06/2019
Minbos Resources Ltd (i)
Australia
Ordinary and
Preference
Subsidiary (direct)
Tunan Mining Limited (ii)
British Virgin Isles (BVI)
Ordinary
100%
100%
Subsidiaries (indirect – direct subsidiaries of Tunan Mining Limited)
Mongo Tando Limited
Agrim SPRL DRC (iii)
British Virgin Isles (BVI)
Democratic Republic of Congo
Ordinary
Ordinary
50%
100%
50%
100%
(i) Minbos is an Australian registered public listed Company on the ASX which undertakes the corporate
activities for the Group.
(ii) Tunan Mining Limited is a holding Company, incorporated in the British Virgin Isles.
(iii) Agrim SPRL is a Company incorporated in the Democratic Republic of Congo.
27. AUDITOR’S REMUNERATION
Amounts received or due & receivable by BDO Audit (WA) Pty Ltd for:
An audit or review of the financial report of the entity
Total auditor remuneration
30-Jun-20
$
30-Jun-19
$
35,816
35,816
35,217
35,217
Amounts received or due & receivable by related network practices of BDO (WA) Pty Ltd for:
BDO (SA) Pty Ltd - An audit or review of Tunan Mining Pty Ltd
-
BDO (SA) Pty Ltd - Taxation services of Tunan Mining Pty Ltd
-
-
Total
580
2,562
3,142
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MINBOS RESOURCES LIMITED | 2020 ANNUAL REPORT
Minbos Resources Limited – Financial Report
For the year ended 30 June 2020
Notes to the Consolidated Financial Statements
28. EVENTS SUBSEQUENT TO THE END OF THE FINANCIAL YEAR
On 20 July 2020 the Company incorporated a private Company limited by shares, Phobos Ltd, a wholly owned
Mauritian subsidiary.
On 26 August 2020 the Company announced the results from the Scoping Study completed on its Cabinda
Phosphate Project in Angola, which demonstrates the Project will generate strong cash returns for a relatively
small capital investment. With the initial scoping study complete, the Company will move quickly to complete a
DFS study, which will be used to obtain funding with debt and equity financiers.
On 1 September 2020 the Company announced that as part of its Cabinda Phosphate Definitive Feasibility Study
the Company has signed a contract with FEECO International for the basic engineering package associated with
the planned granulation plant major equipment.
On 10 September 2020 the Company announced that it had received binding commitments from sophisticated
investors to raise $2.265m (before costs) through a two-tranche placement at $0.0015 per share.
• A total of 848,000,000 Tranche 1 pre consolidation shares were issued on 15 September 2020 utilising the
Company’s existing placement capacity under ASX Listing Rules 7.1 for $1.272m.
• A total of 662,000,000 Tranche 2 pre consolidation shares will be issued subject to shareholder approval
for $993,000.
On 10 September 2020 the Company announced that it would seek shareholder approval to consolidate the
issued capital of the Company at the Shareholder Meeting. The consolidation will be on the basis of one (1)
share for every twenty (20) shares currently held.
On 10 September 2020 the Company agreed to issue the following unlisted options (post consolidation) to
directors and management, with each option having an exercise price of $0.05 (post consolidation) and expiring
4 years from the issue date, subject to shareholder approval at the Shareholder Meeting:
Personnel
Lindsay Reed
Peter Wall
Damian Black
William Oliver
Dganit Baldar
Position
Chief Executive Officer
Non-Executive Chairman
Non-Executive Director
Non-Executive Director
Non-Executive Director
Total
Options
10,500,000
6,500,000
6,000,000
3,500,000
3,500,000
30,000,000
The impact of the Coronavirus (COVID-19) pandemic is ongoing and while it has not significantly impacted the
entity up to 30 June 2020, it is not practicable to estimate the potential impact, positive or negative, after the
reporting date. The situation is rapidly developing and is dependent on measures imposed by the Australian
Government and other countries, such as maintaining social distancing requirements, quarantine, travel
restrictions and any economic stimulus that may be provided.
No other matter or circumstance has arisen since 30 June 2020 that has significantly affected, or may
significantly affect the entity's operations, the results of those operations, or the entity's state of affairs in future
financial years.
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MINBOS RESOURCES LIMITED | 2020 ANNUAL REPORT
Minbos Resources Limited – Financial Report
For the year ended 30 June 2020
Directors’ Declaration
The Directors of the company declare that:
1 The financial statements, comprising the consolidated statement of profit or
loss and other
comprehensive income, consolidated statement of financial position, consolidated statement of cash
flows, consolidated statement of changes in equity and accompanying notes, are in accordance with the
Corporations Act 2001; and
(a) comply with Accounting Standards, Corporations Regulations 2001 and other mandatory
professional reporting requirements; and
(b) give a true and fair view of the Consolidated Entity’s financial position as at 30 June 2020 and of its
performance for the year ended on that date.
2 In the Directors opinion, there are reasonable grounds to believe that the company will be able to pay its
debts as and when they become due and payable.
3 The Consolidated Entity has included in the notes to the financial statements an explicit and unreserved
statement of compliance with International Financial Reporting Standards.
4 The Directors have been given the declarations by the Chief Executive Officer required by section 295A of
the Corporations Act 2001.
This declaration is made in accordance with a resolution of the Board of Directors and is signed on behalf of the
Directors by:
Mr Peter Wall
Non-Executive Chairman
18 September 2020
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MINBOS RESOURCES LIMITED | 2020 ANNUAL REPORT
Independent Audit Report
Minbos Resources Limited – Financial Report
For the year ended 30 June 2020
Tel: +61 8 6382 4600
Fax: +61 8 6382 4601
www.bdo.com.au
38 Station Street
Subiaco, WA 6008
PO Box 700 West Perth WA 6872
Australia
INDEPENDENT AUDITOR'S REPORT
To the members of Minbos Resources Limited
Report on the Audit of the Financial Report
Opinion
We have audited the financial report of Minbos Resources Limited (the Company) and its subsidiaries
(the Group), which comprises the consolidated statement of financial position as at 30 June 2020, the
consolidated statement of profit or loss and other comprehensive income, the consolidated statement
of changes in equity and the consolidated statement of cash flows for the year then ended, and notes
to the financial report, including a summary of significant accounting policies and the directors’
declaration.
In our opinion the accompanying financial report of the Group, is in accordance with the Corporations
Act 2001, including:
(i)
Giving a true and fair view of the Group’s financial position as at 30 June 2020 and of its
financial performance for the year ended on that date; and
(ii)
Complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under
those standards are further described in the Auditor’s responsibilities for the audit of the Financial
Report section of our report. We are independent of the Group in accordance with the Corporations
Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board’s
APES 110 Code of Ethics for Professional Accountants (including Independence Standards) (the Code)
that are relevant to our audit of the financial report in Australia. We have also fulfilled our other
ethical responsibilities in accordance with the Code.
We confirm that the independence declaration required by the Corporations Act 2001, which has been
given to the directors of the Company, would be in the same terms if given to the directors as at the
time of this auditor’s report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our opinion.
Material uncertainty related to going concern
We draw attention to Note 1(c) in the financial report which describes the events and/or conditions
which give rise to the existence of a material uncertainty that may cast significant doubt about the
group’s ability to continue as a going concern and therefore the group may be unable to realise its
assets and discharge its liabilities in the normal course of business. Our opinion is not modified in
respect of this matter.
BDO Audit (WA) Pty Ltd ABN 79 112 284 787 is a member of a national association of independent entities which are all members of BDO Australia Ltd ABN 77 050 110 275,
an Australian company limited by guarantee. BDO Audit (WA) Pty Ltd and BDO Australia Ltd are members of BDO International Ltd, a UK company limited by guarantee, and
form part of the international BDO network of independent member firms. Liability limited by a scheme approved under Professional Standards Legislation.
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MINBOS RESOURCES LIMITED | 2020 ANNUAL REPORT
Independent Audit Report
Minbos Resources Limited – Financial Report
For the year ended 30 June 2020
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. Except for the matter described in the Material uncertainty
related to going concern section, we have determined there are no key audit matters to be
communicated in our report.
Other information
The directors are responsible for the other information. The other information comprises the
information contained in Directors’ report for the year ended 30 June 2020, but does not include the
financial report and our auditor’s report thereon, which we obtained prior to the date of this auditor’s
report, and the Directors’ report, which is expected to be made available to us after that date.
Our opinion on the financial report does not cover the other information and we do not express any
form of assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information
identified above 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 on the other information that we obtained prior to the date
of this auditor’s report, 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.
When we read the Directors’ report, if we conclude that there is a material misstatement therein, we
are required to communicate the matter to the directors and will request that it is corrected. If it is
not corrected, we will seek to have the matter appropriately brought to the attention of users for
whom our report is prepared.
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 has no realistic alternative but to do so.
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MINBOS RESOURCES LIMITED | 2020 ANNUAL REPORT
Independent Audit Report
Minbos Resources Limited – Financial Report
For the year ended 30 June 2020
Auditor’s responsibilities for the audit of the Financial Report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free
from material misstatement, whether due to fraud or error, and to issue an auditor’s report that
includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an
audit conducted in accordance with the Australian Auditing Standards will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered material
if, individually or in the aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of this financial report.
A further description of our responsibilities for the audit of the financial report is located at the
Auditing and Assurance Standards Board website (http://www.auasb.gov.au/Home.aspx) at:
https://www.auasb.gov.au/admin/file/content102/c3/ar1_2020.pdf
This description forms part of our auditor’s report.
Report on the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included in pages 22 to 28 of the directors’ report for the
year ended 30 June 2020.
In our opinion, the Remuneration Report of Minbos Resources Limited, for the year ended 30 June
2020, complies with section 300A of the Corporations Act 2001.
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the
Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our responsibility
is to express an opinion on the Remuneration Report, based on our audit conducted in accordance with
Australian Auditing Standards.
BDO Audit (WA) Pty Ltd
Jarrad Prue
Director
Perth, 18 September 2020
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MINBOS RESOURCES LIMITED | 2020 ANNUAL REPORT
Minbos Resources Limited – Financial Report
For the year ended 30 June 2020
Shareholder Information
The following additional information was applicable as at 1 September 2020.
1.
Fully paid ordinary shares
• There are a total of 5,654,561,320 ordinary fully paid shares on issue which are listed on the ASX.
• The number of holders of fully paid ordinary shares is 924.
• Holders of fully paid ordinary shares are entitled to participate in dividends and the proceeds on
winding up of the Company.
• There are no preference shares on issue.
2. Distribution of fully paid ordinary shareholders is as follows:
Spread of Holdings
1 - 1,000
1,001 - 5,000
5,001 - 10,000
10,001 - 100,000
100,001 - 9,999,999,999
Total
Holders
Securities
3,508
89,488
209,221
7,262,275
5,646,996,828
5,654,561,320
35
32
28
163
666
924
% of Issued
Capital
0.00%
0.00%
0.00%
0.13%
99.87%
100.00%
3. Holders of non-marketable parcels
Holders of non-marketable parcels are deemed to be those who shareholding is valued at less than $500.
There are 367 shareholders who hold less than a marketable parcel of shares, amounting to 0.47% of issued
capital.
4.
Substantial shareholders of ordinary fully paid shares
The Substantial Shareholders of the Company are:
Rank Holder Name
1
J P MORGAN NOMINEES AUSTRALIA PTY LIMITED
Securities
2,153,748,215
% of
Issued
37.91
5.
Share buy-backs
There is no current on-market buy-back scheme.
6. Voting Rights
Subject to any rights or restrictions for the time being attached to any class or classes (at present there are
none) at general meetings of shareholders or classes of shareholders:
(a) each shareholder is entitled to vote and may vote in person or by proxy, attorney or representative;
(b) on a show of hands, every person present who is a shareholder or a proxy, attorney or
representative of a shareholder has one vote; and
(c) on a poll, every person present who is a shareholder or a proxy, attorney or representative of a
shareholder shall, in respect of each fully paid share held, or in respect of which he/she has
appointed a proxy, attorney or representative, is entitled to one vote per share held.
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MINBOS RESOURCES LIMITED | 2020 ANNUAL REPORT
Minbos Resources Limited – Financial Report
For the year ended 30 June 2020
Shareholder Information
7. Top 20 Shareholders of ordinary fully paid shares
The top 20 largest fully paid ordinary shareholders together held 69% of the securities in this class and are
listed below:
5
Rank Holder Name
1
2
3
4
J P MORGAN NOMINEES AUSTRALIA PTY LIMITED
MRS ELEANOR JEAN REEVES
BRIJOHN NOMINEES PTY LTD
SUNSET CAPITAL MANAGEMENT PTY LTD
MR PETER CHRISTOPHER WALL & MRS TANYA-LEE WALL
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
CITICORP NOMINEES PTY LIMITED
MR LINDSAY GEORGE REED
MR LINDSAY REED & MRS JENNIE REED
ANDROLYN PTY LTD
PHEAKES PTY LTD
6
7
8
9
10
11
12 M & L NOMINEES PTY LTD
RAEJAN PTY LTD
13
14
BNP PARIBAS NOMINEES PTY LTD
15 WILGUS INVESTMENTS PTY LTD
16
17
18
19
20
HELMET NOMINEES PTY LTD
ROMFAL SIFAT PTY LTD
8TIVE TRADING PTY LTD
BRUCE SEVERIN & HELEN SEVERIN
SMARTEQUITY EIS PTY LTD
Total
Securities
% of
Issued
2,143,748,215 37.91%
3.74%
3.09%
2.84%
211,523,066
174,712,332
160,833,332
152,342,600
2.69%
144,811,508
133,821,421
98,000,000
82,000,000
80,000,000
72,147,592
65,461,580
60,000,000
56,195,413
55,029,734
54,778,688
50,000,000
47,601,886
45,320,134
41,000,000
2.56%
2.37%
1.73%
1.45%
1.41%
1.28%
1.16%
1.06%
0.99%
0.97%
0.97%
0.88%
0.84%
0.80%
0.73%
3,929,327,501 69.49%
8.
Interest in Mining Licence
The Company is an exploration entity, below is a list of its interest in licences, where the licences are
situated and the percentage of interest held.
Licence Number
No. 10868 (awaiting renewal)
No. 12013 (awaiting renewal)
Type
Exploration
(Option to Purchase)
Exploration
(Option to Purchase)
Interest
Location
Earning 90%
Madagascar
Earning 90%
Madagascar
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MINBOS RESOURCES LIMITED | 2020 ANNUAL REPORT
Phone: +61 8 6270 4610
Email: info@minbos.com
Suite 1, 245 Churchill Avenue
Subiaco WA 6008, Australia
@MinbosL
Minbos Resources
ASX: MNB
www.minbos.com
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MINBOS RESOURCES LIMITED | 2020 ANNUAL REPORT