A
N
N
U
A
L
R
E
P
O
R
T
2
0
2
0
2020
ANNUAL
REPORT
ASX:NTU
CONTENTS
CHAIRMAN’S REPORT ...............................................................................................................................................................................................................1
CEO’S REPORT ............................................................................................................................................................... 3
SAFETY .............................................................................................................................................................................. 6
ENVIRONMENT & STAKEHOLDER ENGAGEMENT ...................................................................................... 8
PEOPLE .............................................................................................................................................................................10
COO REPORT ................................................................................................................................................................12
CFO REPORT ..................................................................................................................................................................17
EXPLORATION & GEOLOGY REPORT ...............................................................................................................20
ORE RESERVE AND MINERAL RESOURCE STATEMENT ........................................................................27
ORE RESERVE ..................................................................................................................................................28
MINERAL RESOURCE ..................................................................................................................................29
FINANCIAL REPORT ..................................................................................................................................................32
DIRECTORS’ REPORT ..................................................................................................................................33
REMUNERATION REPORT ........................................................................................................................44
CORPORATE GOVERNANCE STATEMENT ......................................................................................55
STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME ...............57
STATEMENT OF FINANCIAL POSITION ............................................................................................58
STATEMENT OF CHANGES IN EQUITY...............................................................................................59
STATEMENT OF CASH FLOWS ...............................................................................................................60
NOTES TO THE FINANCIAL STATEMENTS .......................................................................................61
DIRECTORS DECLARATION .................................................................................................................104
AUDITORS DECLARATION OF INDEPENDENCE .................................................................................... 105
INDEPENDENT AUDITORS REPORT ...............................................................................................................106
SHAREHOLDER INFORMATION ....................................................................................................................... 111
CORPORATE DIRECTORY .................................................................................................................................... 114
1
Chairman’s
Report
NORTHERN MINERALS _ ANNUAL REPORT 2020
2
CHAIRMAN ’S REPORT
Dear Shareholder,
I am pleased to present to you the
Company’s 2020 annual report.
It has been a challenging year, but I am extremely
proud of the Company’s achievements over the past
12 months.
This time last year, the Browns Range Pilot Plant was
one of only a few producers of heavy rare earths
outside of China. In January, we made our first
shipment of heavy rare earth carbonate to German
heavy industries major thyssenkrupp, and our second
in March. This was a significant achievement for our
company, for Browns Range and for Australia, and we
look forward to continuing our relationships with
offtake partners into the future.
In March, we made the difficult decision to put
operations at Browns Range temporarily on care
and maintenance, due to the COVID-19 crisis and
the inclusion of Browns Range in the
Commonwealth biosecurity restrictions applied to
the Kimberley region. After closely following the
impact of the virus around the world, we made
what we believe to be the right decision for our
business, our people, and for the community in
which we operate by closing down operations.
As of 1 July, following the lifting of the
Commonwealth biosecurity restrictions in the
Kimberley region, Browns Range has partially
resumed testwork through the beneficiation section
of the Pilot Plant and we are greatly encouraged that
we will also be able to restart the hydrometallurgical
section of the Pilot Plant in due course.
In my note to shareholders last year, I also noted
issues around the Company’s research and
development tax offset claims over several financial
years. We have worked closely with the ATO and
other stakeholders to resolve these matters and in
August 2020, we have reached a settlement for
R&D claims for the financial years ended 30 June
2017, 2018 and 2019, resulting in a net refund of
$9.9 million payable to the Company.
consider the viabilty of a full size heavy rare earths
processing plant at Browns Range.
We will also now take the opportunity to get back
out on the ground and ramp-up exploration across
our highly prospective tenement package, as we aim
to lift the overall life of mine available for inclusion in
the next stage of assessing the feasibility a full scale
mining and processing operation at Browns Range.
The full exploration potential of Browns Range
remains unfulfilled with many targets yet to be drilled.
The tenement package, with an area of 30km by
60km, hosts one of the largest occurrences of the
heavy rare earth mineral xenotime in the world.
Pleasingly, our safety performance and environmental
record at the Browns Range Project remains at a high
standard. It is testament to the talented and
committed team, whose strong culture has
contributed to our safety and environmental record.
In June we said goodbye to our long-time CEO and
Managing Director George Bauk, who spearheaded
the development of the Pilot Plant Project which
transitioned us from explorer to producer.
Our long-term CFO, Mark Tory, has stepped up into
the role of CEO. Mark has been with the Company
for eight years and brings an intimate knowledge
of Northern Minerals and more than 35 years’
professional experience to the role to ensure
the Company continues to grow and prosper
for shareholders.
I would like to take this opportunity to thank our staff,
consultants and contractors for their tireless effort
throughout 2019/20 and I thank you, our shareholders,
for your patience and continuing support.
I would also like to thank our partners, the Jaru
people, for their continuing support, assistance and
cooperation – together we hope to make Browns
Range the longest-life, most reliable producer of
Heavy Rare Earths in Australia and the world.
The settlement of our R&D claims with the ATO will
allow us to further reduce the Company’s debt
position and to clean up our balance sheet as we
Colin McCavana
Chairman
NORTHERN MINERALS _ ANNUAL REPORT 2020 3
CEO’S
Report
NORTHERN MINERALS _ ANNUAL REPORT 2020 4
CEO’S REPORT
Well what a year we have seen
– who would have predicted the
devastation, the pandemic and
global reaction that has seen
the world transform into a very
different place.
Northern Minerals was impacted by the pandemic
and the enacting of the Biosecurity Act to protect
remote indigenous communities which heavily
restricted travel into and within the Kimberley
region. The pilot plant was put on care and
maintenance in March 2020 and the company used
this opportunity to discuss the learnings from the
first 18 months of the operation of the plant. In
August 2020 the plant was partially restarted to
continue test-work within the beneficiation plant.
The last year has been very challenging, as most have
been over this journey. I recently took over as CEO
from George Bauk in July 2020, who had dedicated
over 10 years of his life to driving Northern Minerals
to the position it is in today. George gave his heart
and soul to the company and I am personally
grateful for the energy and time he spent and the
absolute dedication and care he had for the people
and the company.
Again, over the last 12 months the company has seen
financial crisis and been able to weather the storm to
get to the position where the company will be debt
free with cash in the bank by the end of December
2020. To this end, I would like to personally thank all
new and existing shareholders for the support shown
to help grow Northern Minerals. In particular, I would
like to express my gratitude to Jeff Easton and the
team at Lind Partners for their continued support of
the company in difficult times.
A great group of people who are very dedicated and
work together ensured the company moved forward
and made the decisions necessary to survive and
grow. In particular, I would like to thank the Board
of Directors who made tough decisions during
very difficult times. Secondly, the executive team
at Northern who work long hours to ensure the
operation is on track, the finances are in order, the
exploration work is continuing and the people in
the organisation are cared for. All staff helped the
company get through the pandemic as they were
either stood down or took significant pay cuts to
ensure the company survived.
Finally, to our contractors and suppliers who
continue to stick by us, extending terms of credit and
continuing to help us every way possible – a huge
thank you.
The last financial year threw up many obstacles.
The FIRB rejected an investment by the largest rare
earth company in the world, through Boagang Group
Investment (Australia) Pty Ltd, who were going to
invest A$20 million for a 10% stake in the company at
6.2 cents per share. The company had to replace this
financing with a placement at 2 cents per share which
was highly dilutive to existing shareholders.
In addition, the company worked tirelessly during
the year to get AusIndustry to set aside its negative
finding in relation to its research and development
(R&D) finding. In February 2020, the company
received formal notification that AusIndustry
had reversed its initial finding in relation to the
company’s R&D claims and the company’s registered
activities were in fact eligible for the R&D incentive.
Following this reversal, the company then engaged in
a process with the ATO in relation to the settlement
of claims for the 2017, 2018 and 2019 tax years.
This negotiation concluded in August 2020 with the
company to wipe off the $9 million debt in the books
and received just under $9.9 million cash from the
ATO in mid-September.
Subsequent to the end of the financial year and as
part of the partial restart of operations, construction
in relation to the ore sorter has commenced. The
inclusion of ore sorting into the circuit aims to
significantly increase the head grade to the mill by
approximately 2.2x, which if successfully tested
following implementation, would improve the
project economics.
Separation test-work at a Scoping Study level with
K-Tech in the USA of our mixed rare earth carbonate
continued during the year. The pandemic has
slowed the process with the company expected to
see results at the end of the 2020 year. This is an
essential step in the advancement of the project
to ensure that we can produce many separated
products that will open many markets globally.
NORTHERN MINERALS _ ANNUAL REPORT 2020 5
The company is also looking
at further studies around
separated product utilising
various technologies.
The $51 million road upgrade from Halls Creek to
Ringer Soak which was announced by the Federal
and State Governments in May 2019, continued
during the year and great progress has been made.
This project should allow for a 20% increase in
throughput for a full-scale operation through
increased access to site during the wet season.
Exploration was suspended during the year following
the excitement of 2019 discoveries of Dazzler and
Iceman as a result of financial uncertainty and the
pandemic, but is now ramping back up. We have
recently announced that the company will focus
on exploration over the next 12 to 18 months to
endeavour to double the existing reserves and
resources used in the mine life for a potential full-
scale operation.
Shipments continued through our offtake partner
thyssenkrupp during the year which saw the
company receive just over $3 million in revenue.
It is important to note that the throughputs and
production will vary over the three-year Pilot Plant
Project as we assess various methods, processes and
equipment. As a pilot plant project, we have planned
and are undertaking 271 different experiments
aimed at assessing the economic and technical
feasibility of a larger-scale development.
Financing has continued to be a major focus for the
company in 2019-20. During this period, we have
achieved further milestones including:
• Raised $52.0 million in equity (net of fees);
• Raised $2.5 million in an unsecured
convertible note; and
• Closure of the $7.5 million convertible note.
Northern Minerals is continually striving to
strengthen our balance sheet to drive our core
activities to determine whether or not the process
is technically and economically viable so we can
Above: Browns Range Pilot Plant.
decide on the development of a larger-scale
operation. In addition to move downstream into
separation of product and expand the resource base
to add mine life to a full-scale project.
Rare earths have continued to become globally
significant and it continues to be an education
process with governments and industry in relation
to the supply chain of rare earths and the dominance
of China in this area. The trade tensions continue
between the US and China and this has led to
continued media coverage in relation to heavy rare
earths and increased interactions with industry
and government.
At Northern Minerals, we are doing our bit, in
developing alternative global supply chains and
providing environmentally safe dysprosium. In
the coming year, we will build on our knowledge of
our operation and the markets, continue studies in
downstream processing, look for exploration success
to expand our resource and reserve base with the
aim of being in a much stronger position at the end of
2020–21.
Thank you again to all the board members,
employees, contractors, suppliers, federal, state
and local governments, the Jaru and the
broader community.
Mark Tory
Chief Executive Officer
NORTHERN MINERALS _ ANNUAL REPORT 2020 6
HEALTH AND SAFET Y
Northern Minerals encourages a
culture of openness, teamwork
and integrity in everything we do.
We believe that through effective
consultation, visible leadership,
clear communication and the
active involvement of all
employees and contractors, we
will achieve the best possible
Health & Safety outcomes.
The Kimberley biosecurity zone, in response to
COVID-19, effectively restricted travel to site from
26 March 2020 to 5 June 2020 with the Browns
Range Pilot Plant placed on care and maintenance
for most of the June quarter.
Northern Minerals put in place an Infectious Diseases
Management Plan in-line with the Department of
Mines Industry Regulation and Safety requirements
and this continues to be implemented at site post the
lifting of Biosecurity order. There have been no cases
of COVID-19 at the Browns Range site and no-one has
presented with COVID-19 symptoms.
Through our value system SPIRIT, which stands
for Safety, People, Integrity, Results, Initiative and
Team, we are committed to providing a safe working
environment and instilling a strong culture of safety
within the Company.
Over the course of the year, we have continued to
develop and implement a set of policies, standards,
procedures and management plans, which sets our
focus on managing risks and injury prevention.
The STEMS system continued to be used during
the year for reporting and tracking the Company’s
safety performance, which combined with a process
of investigating and reviewing incidents and hazards
to continuously improve safety performance and
minimise risk to personnel, is a key component to
providing a safe working environment.
Good progress continued to be made on the Safety
Improvement Plan actions during the year.
Northern Minerals’ overall safety performance for
Financial Year 2020 was acceptable, but having
two Recordable Injuries in January 2020 served
as a constant reminder for the Company and all
personnel to be focused on their safety and that of
their colleagues every day of the year.
During FY20, there was no Lost Time Injury (LTI) and
the LTI frequency rate has remained at 0 as it was
for the two previous years. For the reporting year,
the Company had the two Recordable Injuries (one
Restricted Work Injury and one Medical Treatment
Injury) with the Total Recordable Injury Frequency
Rate (TRIFR) then trending up and reaching a TRIFR
of 12.09 in June 2020.
A key focus area this year has been on emergency
response capability and training. Mettle Crisis Leaders
provided onsite training and a mock scenario in
November for the Emergency Response Plan (ERP)
in conjunction with Crisis Management Plan (CMP)
training in the Perth office. The ERP and CMP have
subsequently been refined and the site risk register
has been updated. To complement this, several ‘hands-
on’ training exercises were conducted during the year
by the Emergency Response Team to prepare for
incidents that could occur on site including, working at
heights, confined space rescue training and the use of
self-contained breathing apparatus.
Above: Browns Range Pilot Plant.
NORTHERN MINERALS _ ANNUAL REPORT 2020 7
To improve the emergency and medical response
on site, a new medical building was procured and
delivered to site after year end, with the facility
capable of hosting the emergency response
equipment, medical equipment, occupational hygiene
equipment, the site ambulance, fire truck and
associated safety equipment.
The Company upgraded road signage on the mine
access road in October to identify corners that need
to be driven at a lower speed to improve safety for
people travelling to and from the Browns Range site,
while a Traffic Management Plan was developed to
reinforce this.
Another key focus area has been
general health and wellbeing, with
the Company implementing an
Occupational Health and Hygiene
Management Plan which now also
provides for mental health aspects.
A new gym at the camp and the 1.5km nature
trail was established between the village and the
processing plant continue to be popular healthy
exercise options for employees.
Above: Emergency response training.
Moving forward
In the year ahead, Northern Minerals is determined
and committed to ensure that visible and proactive
safety leadership is continued at all levels. We will
strengthen our commitment to further health and
safety improvements, and we will continue to focus
on working safely and providing our people with
the necessary skills, systems, processes and work
environment to perform their tasks safely.
NORTHERN MINERALS _ ANNUAL REPORT 2020 8
ENVIRONMENT & STAKEHOLDER ENGAGEMENT
Environment
Northern Minerals is committed to producing
ethically mined rare earth carbonate and integrating
risk-based environmental management throughout
our operations. We also strive for continual
improvement of our environmental performance,
efficient use of resources, prevention or minimisation
of pollution and consider high environmental
standards a critical part of our operations.
Northern Minerals has received environmental
permitting for the installation of an ore sorter
in the process circuit. The 2019 calendar year
saw significant effort dedicated to undertaking
environmental and radiological impact assessment
studies and then communicating the proposed
changes and associated risk to key community and
government stakeholders. The overall findings of
the impact assessment studies undertaken were
that the proposed changes are associated with a low
level of risk if the Project continues to be managed
in accordance with existing legal requirements and
standard industry practices currently in place.
Our Environmental Management System (EMS)
ensures that we operate in accordance with our
approvals and statutory requirements and continue
to identify areas for continual improvement. Key
improvement initiatives during the annual period
have focussed on refining the Project water balance
to better manage risk related to mine affected
water in a climate with a monsoonal influence; as
well as further implementation of the Dingo Risk
Management Strategy via training and awareness
initiatives and installation of an improved dog-proof
fence around the landfill facility.
Good reporting is an important part of environmental
management and we prepared and submitted all our
statutory reports to the DMIRS and Department
of Water and Environmental Regulation. Internally,
environmental incidents and issues are included in
the daily report and environmental performance is
also included in the monthly report to the Board. We
believe in honest, open and timely communication
with regulators and reported one breach of
environmental licence conditions during the reporting
period related to an unplanned stormwater discharge
from the Pilot Plant Event Ponds.
The discharge was relatively small in volume
and occurred following heavy rainfall in March
2020. Monitoring of water quality during the
event demonstrated it was of good quality and no
environmental harm occurred as a result.
We believe that rehabilitation and preparing for
closure is an integral part of the mining process
and we will continue to undertake progressive
rehabilitation as areas become available to do so.
Currently, all available mining activity-related areas
have been rehabilitated and there are currently no
further opportunities for progressive rehabilitation.
The exploration rehabilitation program was however,
delayed due to COVID-19 pandemic related
disruptions and a dedicated effort has commenced
to complete all outstanding rehabilitation prior to
the upcoming 2020 drilling program. A revised Mine
Closure Plan was approved during 2020 and our
ongoing closure studies, which include rehabilitation
trials and in-situ kinetic leach trials will continue to
provide valuable information that will inform future
closure planning.
Stakeholder Engagement
We believe in open and honest stakeholder
engagement to ensure that there is a clear
understanding of the project and its current and
future impacts. Our stakeholders include regulators,
local government, traditional owners, pastoralists,
customers, contractors, employees, shareholders,
interest groups, and the general community.
No complaints were received during the
reporting period.
During the reporting period, we
continued to have a good
relationship with the Jaru people,
who are the traditional owners of
the Browns Range Project area.
We recognise and respect that there are areas
of special heritage and cultural significance and
continue to honour our agreement with the Jaru
when managing land clearing, protecting heritage
values and environmental management and
reporting. This includes the ongoing training and
support of several Jaru representatives to conduct
pre-clearance surveys for conservation significant
fauna which include the Greater Bilby, Spectacled
Hare Wallaby and Brush-tailed Mulgara.
NORTHERN MINERALS _ ANNUAL REPORT 2020 9
Training to Work program
Northern Minerals also employed a training
coordinator to implement the Training to Work
program in partnership with the Wunan organisation
in the East Kimberley.
The inaugural course was scheduled for May 2020,
but was postponed due to COVID-19. A modified
course is now scheduled to be held in October 2020.
This course will give six local Aboriginal community
members the opportunity to live and train at the
Browns Range site while gaining the skills and
experience needed to be successful in a full time
position with Northern Minerals.
Successful graduates will be
supported to apply for positions
with Northern Minerals or with
our contractors working at site
and assist us to meet our
targets regarding local
Aboriginal employment.
Above: Cleaning supplies donated to Ringer Soak
community.
We continue to give preference to employing
members of the local community who have
equivalent skills and experience. The Company
has also continued to engage a local Jaru-owned
company to provide a front-end loader and operator
for the loading of ore from the ROM pad to the
crusher. The contractor employs several local Jaru
traditional owners as operators of the machinery.
The majority of the project area is located on the
Gordon Downs Pastoral Lease and we seek to maintain
the good relationship with the pastoralist that has
been developed since the early phase of the Project.
Northern Minerals remains committed to keeping
the Halls Creek Shire Council and communities
of Halls Creek and Ringer Soak informed of the
Project’s environmental performance and we will
continue to consult with the community regarding
any proposed changes to the Project.
Visits to the community were limited in the second
half of the 2020 Financial Year due to Remote
Aboriginal Community Directions, which were put in
place by the Commonwealth to protect communities
from COVID-19.
Ahead of those biosecurity measures being put in
place, Northern Minerals appointed a Community
Liaison in February 2020 to be the primary point of
contact between the Company and the traditional
owners. Contact during the restricted period
continued via phone and email. Regular visits to
the community are expected to resume once all
remaining restrictions are removed.
Having a dedicated community liaison will allow
community members to communicate more
frequently and directly with Northern Minerals.
While Browns Range was on care-and-maintenance
as a result of restrictions, Northern Minerals
donated a significant quantity of cleaning products
to the nearby Ringer Soak community to assist with
COVID-19 prevention. These products assisted in
limiting outbreaks of skin disease and improving the
overall health of the community.
Northern Minerals put in place a strict policy
regarding interactions with the local Aboriginal
population during the restricted period to ensure that
the ongoing risk of spreading COVID-19 is minimised.
NORTHERN MINERALS _ ANNUAL REPORT 2020 10
PEOPLE
Northern Minerals encountered
periods of uncertainty and rapid
change during 2020.
The global COVID-19 pandemic, changes in
leadership (both executive and site based), critical
funding issues and the partial restart of the Browns
Range operation highlight some of the challenges
faced by Northern Minerals and our People. After a
period of stand-down in the second half of the year
for site operations, the partial restart of operations
resulted in an unavoidable restructure with thirteen
roles across the business being made redundant.
At the forefront of every decision during the difficult
and uncertain times was the care for our people.
Our SPIRIT values (Safety, People, Integrity, Results,
Initiative and Teams) is the framework that guides
expectations and standards and provides the
foundation on which Northern Minerals operates.
Northern Minerals recognises and values the
critical contribution each person makes toward
the Company. The capability of our people and the
culture we’ve developed continues to be the key
driver of our success.
Despite the uncertainty during the last 12 months,
Northern Minerals continues to be committed to the
continued support and development of our people
and keeping our SPIRIT at the forefront of everything
we do.
Executive Team
One of the core strengths of the Company has been
the loyal and dedicated service of our executive
team, taking Browns Range from discovery through
to operation of the Browns Range Pilot Plant and
now on to the next exciting phase. The team is
accountable for upholding our SPIRIT values and
leading the business to achieve its vision of becoming
the next significant producer of Dysprosium outside
of China.
George Bauk - Managing Director and Chief
Executive Officer
George Bauk led Northern Minerals from 2010,
providing the driving force in establishing Browns
Range as a significant heavy rare earth producer.
Through the process, George has become a strong
advocate for the sector, leading and participating
in various forums and industry groups aimed at
improving knowledge of the sector. In June 2020,
after 10 years of dedicated service, George resigned
from his role as MD / CEO.
Robin Jones - Chief Operating Officer
Robin Jones joined the Company in June 2012 and was
charged with turning Browns Range from a concept
into reality. Under Robin’s leadership, the Pilot Plant
Project has been constructed and is now operational.
Mark Tory - Chief Executive Officer
In July 2020 Mark Tory was appointed to the role of
Chief Executive Officer for Northern Minerals.
- Chief Financial Officer and Company Secretary
For the period prior to the appointment to the CEO
role, Mark has been Northern Minerals long-serving
CFO and Company Secretary. Mark has taken the
lead in financing discussions and negotiations for
the Browns Range Project. As a new industry in
Australia, traditional finance was difficult to achieve,
therefore a range of alternative financing structures
were developed and negotiated that resulted in the
project being fully financed.
Robin Wilson - Geology and Exploration Manager
Robin Wilson discovered heavy rare earths at Browns
Range and has led the geological team from discovery
through to mining. Robin is now charged with new
discoveries, with Dazzler the first of what the
Company hopes is many more to come.
Bin Cai - Alternate Director
Bin Cai joined the Board in 2013 and, as well as being
a supportive shareholder, he has provided significant
advice and introductions to funding and offtake
partners in Asia. Bin’s contacts have been invaluable
to getting Browns Range financed and developed.
Hayley Patton - HR Manager
Hayley Patton joined the
Company in early 2019 and
has over 15 years experience
in senior leadership and
management roles withing the
mining and resource sector and
other industries. Hayley has a
strong background in strategic,
value driven HR practices.
NORTHERN MINERALS _ ANNUAL REPORT 2020 11
Board of Directors
The Board of Northern Minerals has a diverse set
of backgrounds and skills that has been invaluable
in providing support to the executive team. The
following Board members are current as at the date
of this report.
Colin McCavana - Non-executive Chairman
(appointed 2006)
Mr McCavana has more than 35 years of
management experience worldwide in the
earthworks, construction and mining industries.
Mr McCavana was temporarily appointed to the role
of Executive Chairman between June and July 2020
during the transition of Company leadership.
Adrian Griffin - Non-executive Director
(appointed 2006)
An Australian trained mining professional with
exposure to metal mining and processing throughout
the world, Mr Griffin has been involved in the
development of extraction technology for platinum
group metals and agricultural commodities.
Yanchung Wang - Non-executive Director
(appointed 2013)
Ms Wang acts as a strategic investor for a number
of Chinese based companies. Ms Wang is Vice
Chairman of Conglin Baoyuan International
Investment Group and also a Director of Huachen.
Bin Cai - Non-executive Director (alternate)
(appointed 2013)
Bin is the MD of Conglin International Investment
Group Pty Ltd based in Brisbane. He has a record
of successful strategic investments in emerging
Australian resources companies.
Browns Range Leadership Team
General Manager Operations, Tony Hadley,
resigned from his role in January 2020. Engineering
Manager, Eben Van Rooyen, who played an integral
role in the construction of the processing plant,
has taken on the role as Acting General Manager
Operations for Browns Range. Eben has provided
strong leadership, guidance and direction for site
operations during this period. Louis de Klerk, R&D
Manager, brings extensive experience to the team
and drives our research and development process.
Kurt Warburton has been an integral part of the
exploration team since the first discovery of the
Browns Range deposits and provided the expertise
and leadership behind the recent Dazzler discovery.
Karen Fairweather, Environment and Approvals
Manager, continues to provide strategic leadership
and direction in all areas relating to environmental
approvals, performance and strategy. Financial
Controller, Belinda Pearce, adds value in the finance
and accounting role and assists the CFO with
financing strategies.
Northern Minerals SPIRIT
framework drives our culture
Safety
Safety is our leading core value. It encompasses the physical
health of every employee and the success and profitability
of the Company. Safety and production are considered
inseparable and equally important.
People
Our strategy is to employ and retain talented and motivated
people to lead the organisation.
Integrity
The Company is committed to responsible and ethical business
practices. We care about safety, the environment and local
communities, and act with honesty and integrity.
Results
We deliver on commitment and take accountability to achieve
our long-term objectives.
Initiative
The Company moves forward in its operations by encouraging
and rewarding creativity, and initiative among its employees.
We embrace great ideas and lateral thinking from everywhere
and everyone.
Teams
All company functions are equally important. It’s only by
working together productively and sharing ideas, technologies
and talent that we achieve and sustain profitable growth.
NORTHERN MINERALS _ ANNUAL REPORT 2020 12
COO
Report
NORTHERN MINERALS _ ANNUAL REPORT 2020 13
COO REPORT
The 12 months to July 2020 have
been operationally challenging
for Northern Minerals, as we
continued to pursue our testwork
program at the Browns Range
Pilot Plant Project despite
financial limitations and significant
logistical challenges.
Operations continued with the research and
development (R&D) testwork program in the first
half of the year, however, a bigger than usual wet
season which limited site access, combined with
the restrictions imposed by COVID-19 resulted in
operations being shut down for most of the second
half of the year.
The logistical challenges we faced as a result of
Commonwealth biosecurity restrictions in response
to COVID-19 are well documented elsewhere in
this report, but from an operations perspective
ultimately left us with no other choice than to
place the Pilot Plant on temporary care and
maintenance and reduce personnel and activities on
site to an absolute minimum.
Due to Browns Range’s proximity to remote
indigenous communities in the East Kimberley and
travel restrictions in and out of the region and local
government area, it was not feasible to maintain
operations without supply of fuel, reagents and
consumables as well as a reasonable and safe
roster for the quantum of personnel required to
maintain operations.
The Kimberley biosecurity zone, in response to
COVID-19, effectively restricted travel to site
from 26 March 2020 to 5 June 2020. Northern
Minerals announced it was moving to care and
maintenance on 25 March 2020 and continued the
suspension of operations through to the subsequent
announcement of a partial restart on 1 July 2020.
Pilot Plant Operations
During FY20, the Pilot Plant milled 19,314 tonnes
of ore and produced 124,607 kg of rare earth
carbonate. These operations occurred mostly in the
first half of the year and allowed us to continue to
test the pilot plant operation and collect valuable
data to drive innovative solutions and improvements
in the plant.
A major shutdown was undertaken during the first
half of the year to enable modifications to the kiln
feed system. These modifications addressed scale
build up in the kiln, throughput rates and availability.
These works were successful, with a notable increase
in kiln performance when operations recommenced
after the shut.
Prior to the Browns Range Pilot Plant being placed
on care and maintenance from late March to year
end, the operation was impacted by extended access
road closures which resulted from significant rainfall
events over the wet season, which shuttered the
operation for the second half of the year.
Following Board approval post year end for a partial
restart of the Pilot Plant, planning and logistics
commenced to support the restart of operations in
August 2020 which will initially focus on testwork
in the beneficiation circuit followed by tests in
the hydrometallurgical circuit. The partial restart
allowed us to bring three-quarters of our site-based
personnel back to work in late July 2020.
Lessons learnt workshops were completed with
our operations and technical staff during the care
and maintenance period which together with the
information gathered from the R&D testwork programs
will provide data for future feasibility studies on a full-
scale, commercial processing operation.
Work on the Browns Range access road (Duncan
Road and Gordon Downs Road) commenced during
the third quarter, following the allocation of $51
million in funding by the Federal and WA State
Governments. The three-year staged project will
provide for improved access to Browns Range
and potentially allow for the operation to run
continuously once completed.
NORTHERN MINERALS _ ANNUAL REPORT 2020 14
Above: Browns Range Pilot Plant flowsheet.
Research & Development (R&D)
A total of 271 individual Research and Development
(R&D) experiments were originally planned for the
duration of the three-year Pilot Plant stage and
additional experiments have been done based on
new information obtained from the experiments
done to date.
In the 2020 financial year, experiments were
conducted on all areas of the plant, including fine
grinding, magnetic separation, flotation, sulphation
bake, leaching, purification, ion exchange, rare earth
precipitation and waste water treatment.
Major breakthroughs were achieved in improving
the efficiency and operation of the sulphation bake
kiln. These resulted from tests on the kiln that led
to significant changes to the equipment, including:
seals, feed system, materials of construction, and
mechanical devices designed to limit scaling in the
kiln to improve availability and throughput.
In the coming financial year, R&D will continue in
most areas of the process plant with a continued
focus on the kiln’s systems to provide a consistent
feed to the downstream hydromet circuit.
Test work to improve understanding
of the beneficiation circuit behaviour
on different ore types, and the impact
on the hydromet circuit will be
undertaken as well as the impact of
recirculating streams in the hydromet
circuit on impurity rejection.
Above: The Wolverine open pit at Browns Range.
NORTHERN MINERALS _ ANNUAL REPORT 2020 15
Ore Sorting
Product Separation
In July 2019, Northern Minerals committed to
implementation of the ore sorter project with the
procurement of the ore sorting equipment and
commencement of engineering design. The project
progressed on schedule but was put on hold in the
second half of the year.
Post the close of the reporting period in August,
the Board decided to proceed with the mechanical
construction and installation of ore-sorting
equipment. Subject to procurement of the electrical
systems, installation and commissioning of the
system is expected to be completed by the end of the
March quarter 2021.
The system concentrates ore in the
beneficiation circuit by selecting
ore and rejecting waste based on
x-ray transmission. Previous trials
of ore sorting at Browns Range
identified the potential to double
the feed grade to the mill.
Once the ore sorting system is commissioned, we
intend to run additional testwork at the Pilot Plant
scale on all ore types to establish base line data on
feed grade improvements as well as the material
flow-through benefits for processing the Brown
Range ore. This data will also feed into any future
feasibility studies.
Above: A sample of Xenotime mineralisation at
Browns Range.
Browns Range has to date only produced a mixed
heavy rare earth carbonate for small scale export
to our early off-take partners. The next stage in the
supply chain is to separate the mixed heavy rare
earth carbonate into individual rare earth products.
The Company announced in August 2019 it had
commenced a scoping study to investigate a
separation technology on intermediate mixed rare
earths materials produced at Browns Range with
United States based K-Technologies, Inc. (K-Tech).
K-Tech’s technology is focused on continuous ion
exchange (CIX), continuous ion-chromatography
(CIC) and related advanced separation methodologies.
The study is progressing well with positive test
results being achieved at K-Tech’s facilities in
Florida, USA, albeit slower than planned due to the
constraints associated with COVID-19. This work
will result in development of a CIX/CIC process
flowsheet with associated capital and operating
cost estimates.
Post year end, the Company also commenced studies
into traditional solvent extraction separation and
variants thereof, for separating the mixed heavy
rare earth material produced at Browns Range into
individual rare earth products.
If we can prove-up the technology
and economics of downstream
processing our mixed heavy rare
earth carbonate to individual
oxides or metals it will be an
important step in the development
of an alternative supply chain for
heavy rare earth oxides and it will
significantly increase both the
value of the product we are
producing as well as the number of
potential end-customers we can
target for off-take agreements.
NORTHERN MINERALS _ ANNUAL REPORT 2020 16
Upstream
Midstream
Downstream
Refining/recycling
Extraction
Beneficiation
Hydrometallurgy
Separation
Oxide
to metal
Alloy and
magnet
manufacture
Component
manufacture
End-use
manufacture
Mixed
Carbonate
Dy Oxide
Tb Oxide
DyFe Metal
Tb Metal
Product offerings
Browns Range Pilot Plant
Above: Rare earth magnet supply chain.
Offtake Agreement
Northern Minerals entered into an offtake
agreement with thyssenkrupp Materials Trading
GmbH (thyssenkrupp) for all mixed heavy rare earth
carbonate from the Browns Range Pilot Plant Project
in August 2019.
Importantly, the agreement included an option for
thyssenkrupp to participate in the potential future
commercial, full-scale project as an offtake partner
as well as the flexibility for us to supply separated
rare earth products in the future, if the Company
decided to go down that path.
During the year, Northern Minerals
sold and exported from
Darwin 157 tonnes of heavy rare
earth carbonate.
The thyssenkrupp offtake agreement replaced the
earlier offtake agreement Northern Minerals had
with Lianyugang Zeyu New Materials Sales Co Ltd,
which was terminated on signing with thyssenkrupp.
Robin Jones
Chief Operating Officer
NORTHERN MINERALS _ ANNUAL REPORT 2020 17
CFO
Report
NORTHERN MINERALS _ ANNUAL REPORT 2020 18
CFO REPORT
The 2020 financial year was once
again predominately focused on
financing and strengthening the
balance sheet. With a number
of challenges along the way, it is
pleasing that the Company has
overcome the challenges of the
last 12 months and is a strong
position to move forward with our
plans for the 2021 financial year.
The most significant event in February 2020 was the
decision by AusIndustry to reverse its initial findings
to find most activities in Northern Minerals R & D tax
offset claims in FY17 and FY18 were eligible for the
R & D tax offset.
The ATO had previously released 50% (A$10.78
million) of the retained R & D refundable tax
offset for the FY18 year. Pending the decision by
AusIndustry whilst the Company was undertaking
the appeals process, the Company had negotiated to
repay the ATO the required A$14 million (for FY17
& FY18) over 24 equal monthly installments. The
Company negotiated with the ATO to immediately
stop payments of amounts owing as a result of the
initial finding whilst working closely with the ATO to
confirm the final refundable tax amounts.
As announced in August 2020, a settlement
agreement was entered into with the ATO, settling
all matters relating to the Company’s refundable R &
D tax offset claims for the financial years ended 30
June 2017 and 2018. The settlement agreement also
agreed the 30 June 2019 refundable R & D tax offset
position. The net effect of the settlement agreement
is a net refund to the Company of A$9.9 million
payable to the Company and was received in mid-
September. The Company no longer has any amounts
owing to the ATO in respect of these financial years
and are currently working with the ATO regarding
the 2020 refundable R & D tax offset of which a
framework for reviewing was documented in the
settlement agreement.
In August 2019, the Company announced that a
subscription agreement had been entered into with
Baogang Group Investment (Australia) Pty Ltd (BGIA)
to raise A$20 million ( before costs ) under a private
placement The placement was subject to approval
of the Company’s shareholders and BGIA obtaining
Australian Foreign Investment Review Board (FIRB)
approval. After a number of voluntary extensions to
the statutory deadline, the transaction was prohibited
by the Treasurer of the Commonwealth of Australia
and the agreement did not proceed.
Non-Renounceable Entitlements Offer
In July 2019, the Company completed the retail
component of its accelerated non-renounceable 1 for
13 pro-rata entitlement offer as announced in June
2019. The offer closed on 8 July 2019 and raised A$4.27
million before costs, at an offer price of A$0.045 per
new share. The Company received strong demand for
additional new shares in excess of entitlements under
the Top -Up Facility and were required to scale-back
applications for additional new shares.
Equity Placements
In July 2019 the Company announced it had entered
into subscription agreements with sophisticated and
institutional investors to raise a further A$30 million
(before costs) at an issue price of A$0.062 per share.
The total amount raised under the Placement was
$25.68 million (before costs), issuing 414,271,362
shares. The remaining funds were not received by the
completion date.
In April 2020 the Company entered into subscription
agreements with various sophisticated investors
to raise A$22 million (before costs) at A$0.02 per
share. Final funds were received post period close in
September to complete this placement.
JHY Convertible Note
The A$4 million convertible note held with JHY was
due to mature on 31 December 2019. The Company
successfully negotiated an extension of the maturity
date on the convertible notes for a further year, the
maturity date is now 31 December 2020 and the
interest rate payable was also renegotiated from
16% to 10% from 1 January 2020.
NORTHERN MINERALS _ ANNUAL REPORT 2020 19
The Company will be debt free
with cash reserves in the bank by
the end of the 2020 calendar year,
this represents a significant
reduction in debt in this timeframe
and places the Company in a
strong position to achieve our
goals in the second half of the
2021 financial year.
Lind Financing Facility
The Company entered into a Convertible Security
Funding Agreement with Lind Global Macro Fund, LP
(Lind) in March 2020 to assist with short term cash
requirements. The Company received a net amount
of A$2.50 million. At the date of this report the full
amount has been repaid after the final conversion
subsequent to the year end.
Share Purchase Plan
In April 2020 the Company announced a Share
Purchase Plan (SPP) allowing all eligible existing
shareholders to participate at A$0.02 per share, with
the target of raising A$5 million (before costs). The
SPP offer closed with total funds raised of A$9.98
million (before costs). The received applications were
well in excess of the Company’s targeted amount and
the Board decided to accept applications beyond the
targeted amount.
Financing Summary
The following is a table of the debt position (excluding accrued interest) as at 14 September 2020,
compared to 30 June 2019.
Creditor
Balance as at
1 September 2020
Balance as at
30 June 2019
Repayment Date
Sinosteel (EPC Contract)
A$2.1 million
A$10.1 million
23 October 2020
JHY Convertible Note
A$2.0 million
A$4.0 million
31 December 2020
ATO
Other Convertible Notes
-
-
A$13.5 million
A$7.5 million
Total
A$4.1 million
A$35.1 million
Mark Tory
Chief Financial Officer
NORTHERN MINERALS _ ANNUAL REPORT 2020 20
Exploration
& Geology
Report
NORTHERN MINERALS _ ANNUAL REPORT 2020 EXPLOR ATION & GEOLOGY REPORT
21
The 2019-20 financial year saw significant exploration activity at Browns
Range. Several drilling programs have been undertaken during the
reporting period with the main focus continuing to be the Dazzler deposit
and the immediate surrounding area.
The proposed full-scale project has a mine life of approximately 11 years based on existing Ore Reserves
and Mineral Resources. The Company is targeting a mine life of at least 20 years with increased exploration
over the next twelve to eighteen months. Higher-grade resources of the Dazzler unconformity related type
will be the priority target over that period.
WA and NT Project Locations: John Galt, Browns Range and Boulder Ridge Projects.
NORTHERN MINERALS _ ANNUAL REPORT 2020 22
Dazzler
The Dazzler deposit is located less than 15km south of the Browns Range Pilot Plant on the edge of a small scarp
slope. A maiden Mineral Resource was estimated for Dazzler in March 2019. During 2019-20 further reverse
circulation (RC) and diamond drilling programs were completed at the deposit. In April 2020 an updated Mineral
Resource estimate was completed for Dazzler. An Inferred Mineral Resource of 214,000 tonnes at 2.33% TREO
comprising 5,000,000 kg contained TREO using a cut-off of 0.15% TREO was estimated. The new estimate
represents a 50% increase in the contained TREO from the maiden Mineral Resource Estimate. The grade of the
Dazzler deposit is more than 3 times the average for the Total Browns Range Project Mineral Resource with 95%
of the rare earths being heavy rare earths and the average grade of dysprosium being 2,170ppm.
Brown’s Range Project: Deposits and Prospects
NORTHERN MINERALS _ ANNUAL REPORT 2020 23
The high-grade mineralisation occurs predominantly within an argillaceous metasediment (argillite) which lies
immediately below the Gardiner Sandstone unit and directly above the unconformity with the older Archean
Browns Range Metamorphics. The resource estimate includes four separate zones one of them being the Iceman
prospect. Mineralisation also occurs within the Browns Range Metamorphics but this tends to be lower grade
and has not been included in the resource estimate. Further drilling is planned in the second half of 2020 with
infill drilling and step out drilling to the northwest.
Brown’s Range Project: Dazzler and Iceman Prospects - Drill Hole Location Plan
NORTHERN MINERALS _ ANNUAL REPORT 2020 24
Other Browns Range WA prospects
The continued exploration success at the Dazzler prospect has highlighted the potential for significant
mineralisation to occur in the Gardiner Sandstone and argillite adjacent to the unconformity with the underlying
Browns Range Metamorphics. The “structural corridor” from Dazzler extending northwest and southeast
towards the NT border (a strike length of approximately 12km), close to the unconformity, is considered
prospective for this style of deposit. Within this corridor lies the Rogue and Quiksilver prospects where
mineralisation has already been identified.
During 2019-20 RC drilling was completed at a number of prospects and deposits besides Dazzler, including
Banshee South, Gambit West, Rogue, Cyclops and Longshot. Eight RC drillholes were completed at Banshee
South, with the final hole, BRBR0044, returning the broadest mineralisation intersected at the prospect to
date, with 22m @ 0.52% TREO from 15m and a MHREO/TREO ratio of 0.91, which included 4m @ 1.52% TREO
from 31m. The drillhole is located outside the defined surface geochemical anomaly at the northwest end of the
prospect. There is no drilling immediately to the west or northwest of BRBR0044 and further drilling is required
to follow up on this mineralisation in 2020.
Brown’s Range Project: Dazzler Prospect - Oblique Drill Hole Cross Section
NORTHERN MINERALS _ ANNUAL REPORT 2020 25
Browns Range NT
The Browns Range Dome is a large oval-shaped structure, approximately 60km x 30km in extent, that lies on the
Western Australian (WA) and Northern Territory (NT) border. To date nearly all the Company’s exploration at
Browns Range has been focussed on the WA side of the Browns Range Dome, which only covers approximately
15% of the total area of the Dome. In 20-21 the Company plans to recommence exploration on the NT side of the
Dome, initially focussed on the southern margin of the Browns Range Dome.
Brown’s Range Project: Browns Range Dome location on WA and NT border.
Boulder Ridge
The Boulder Ridge Project is in the Northern Territory, approximately 110km from Browns Range. Drill ready
targets have been identified with xenotime mineralisation in a similar geological setting as Browns Range. On-
ground exploration was cancelled in 2020 due to travel restrictions imposed by the NT and WA governments in
response to the COVID-19 pandemic, but first-pass drilling is now being planned for mid-2021.
NORTHERN MINERALS _ ANNUAL REPORT 2020 26
John Galt
The Company’s 100%-owned John Galt Project near Warmun, WA has high-grade heavy rare earth
mineralisation with a drill ready target. However, exploration work in recent years has been focused on the
copper mineralisation.
In October 2019, the Company undertook a selective rock chip sampling program over an area of 2.0km x 0.5km,
located 3-4km to the south of the John Galt Heavy Rare Earth Prospect, which was focused on previously
identified copper occurrences.
Of the 24 samples collected and analysed, 12 returned assays of greater than 1.0% Cu. The higher-grade copper
samples mostly occurred in a cluster over 500m of strike length. Anomalous gold and silver assays were also
associated with some of the anomalous copper samples.
Follow-up work is planned in 2020-21 which will include ground geophysics.
John Galt Project: Tenement location plan.
Robin Wilson
Exploration Manager
NORTHERN MINERALS _ ANNUAL REPORT 2020 27
Ore Reserve
and Mineral
Resource
Statement
NORTHERN MINERALS _ ANNUAL REPORT 2020 28
ORE RESERVE AND MINERAL RESOURCE STATEMENT
Ore Reserve
The Ore Reserve at 30 June 2020, reported in accordance with the JORC 2012 code, is detailed in Table 1.
Table 1– Browns Range Ore Reserve Statement as at 30 June 2020
Deposit
Class
Mt
TREO
Kg/t
TREO Kg
Dy2 O3
Kg/t
Dy2 O3 Kg
Tb407
Kg/t
Tb407
Kg
Y2 O3
Kg/t
Y2 O3
Kg
OPEN PIT
Wolverine
Probable
0.722
6.17
4,458,000
0.55
400,000
0.08
57,000
3.60
2,598,000
Area 5
Probable
0.467
2.24
1,048,000
0.14
65,000
0.02
10,000
0.99
463,000
UNDERGROUND
Wolverine
Probable
2.104
8.00
16,833,000
0.70
1,483,000
0.10
221,000
4.71
9,908,000
Total
Probable1
3.293
6.78
22,339,000
0.59
1,948,000
0.09
288,000
3.94
12,969,000
1 Rounding may cause some computational discrepancies
NORTHERN MINERALS _ ANNUAL REPORT 2020 29
Mineral Resource
The Mineral Resource at 30 June 2020, reported in accordance with the JORC 2012 Code, is stated below in
Table 2. The Mineral Resource is inclusive of the Ore Reserves
Table 2 – Browns Range Mineral Resource Estimate as at 30 June 2020
Deposit
Classification
Mt
TREO %
Dy2O3 kg/t
Y2O3 kg/t
Tb4O7 kg/t
HREO
%
Wolverine
Indicated
Inferred
Total1
Gambit West
Indicated
Pilot Plant
Stockpiles
Gambit
Area 5
Cyclops
Banshee
Dazzler
Total1
Inferred
Total1
Indicated
Inferred
Total1
Indicated
Inferred
Total1
Indicated
Inferred
Total1
Indicated
Inferred
Total1
Indicated
Inferred
Total1
Indicated
Inferred
Total1
Indicated
Inferred
Total1
2.88
1.97
4.85
0.12
0.13
0.25
0.18
0.03
0.21
0.21
0.21
1.38
0.14
1.52
0.33
0.33
1.66
1.66
0.21
0.21
4.56
4.68
9.24
0.84
0.89
0.86
1.8
0.51
1.11
0.95
0.26
0.84
0.89
0.89
0.29
0.27
0.29
0.27
0.27
0.21
0.21
2.33
2.33
0.7
0.64
0.67
0.74
0.76
0.75
1.62
0.4
0.97
0.83
0.2
0.73
0.83
0.83
0.18
0.17
0.18
0.18
0.18
0.16
0.16
2.17
2.17
0.6
0.54
0.57
4.89
5.15
4.99
10.98
2.67
6.56
5.53
1.35
4.84
5.62
5.62
1.27
1.17
1.26
1.24
1.24
1.17
1.17
13.93
13.93
3.98
3.67
3.81
0.11
0.11
0.11
0.22
0.05
0.13
0.12
0.03
0.1
0.11
0.11
0.03
0.03
0.03
0.03
0.03
0.02
0.02
0.29
0.29
0.09
0.08
0.08
89
88
89
94
81
91
89
79
88
96
96
69
70
69
70
70
87
87
95
95
87
88
87
TREO Kg
24,195,000
17,588,000
41,786,000
2,107,000
674,000
2,781,000
1,661,000
89,000
1,750,000
1,878,000
1,878,000
3,953,000
394,000
4,347,000
891,000
891,000
3,484,000
3,484,000
5,000,000
5,000,000
31,916,000
29,998,000
61,917,000
1 Rounding may cause some computational discrepancies
TREO = Total Rare Earth Oxides – Total of: La2O3, CeO2, Pr6O11, Nd2O3, Sm2O3, Eu2O3, Gd2O3, Tb4O7, Dy2O3, Ho2O3, Er2O3, Tm2O3, Yb2O3, Lu2O3, Y2 O3
HREO = Heavy Rare Earth Oxides – Total of: Sm2O3, Eu2O3, Gd2O3, Tb4O7, Dy2O3, Ho2O3, Er2O3, Tm2O3, Yb2O3, Lu2O3, Y2O3
HREO % = HREO/TREO x 100
NORTHERN MINERALS _ ANNUAL REPORT 2020
30
Comparison with previous years Mineral Resource estimate
For comparison to 30 June 2020, the Mineral Resource at the Browns Range Project as at 30 June 2019 is
presented in Table 3 (below). The Mineral Resource in Table 3 is inclusive of the Ore Reserves.
Changes to the Mineral Resource between 30 June 2019 and 30 June 2020 are due to:
• Depletion of Pilot Plant Stockpile Mineral Resource by processing.
• Estimation and reporting of the updated Dazzler Mineral Resource.
Table 3 – Browns Range Mineral Resource Estimate as at 30 June 2019
Deposit
Classification
Mt
TREO %
Dy2O3 kg/t
Y2O3 kg/t
Tb4O7 kg/t
HREO
%
Wolverine
Indicated
Inferred
Total1
Gambit West
Indicated
Pilot Plant
Stockpiles
Gambit
Area 5
Cyclops
Banshee
Dazzler
Total1
Inferred
Total1
Indicated
Inferred
Total1
Indicated
Inferred
Total1
Indicated
Inferred
Total1
Indicated
Inferred
Total1
Indicated
Inferred
Total1
Indicated
Inferred
Total1
Indicated
Inferred
Total1
2.88
1.97
4.85
0.12
0.13
0.25
0.2
0.03
0.23
0.21
0.21
1.38
0.14
1.52
0.33
0.33
1.66
1.66
0.14
0.14
4.58
4.61
9.19
0.84
0.89
0.86
1.8
0.51
1.11
0.99
0.26
0.88
0.89
0.89
0.29
0.27
0.29
0.27
0.27
0.21
0.21
2.23
2.23
0.71
0.61
0.66
0.74
0.76
0.75
1.62
0.4
0.97
0.86
0.2
0.76
0.83
0.83
0.18
0.17
0.18
0.18
0.18
0.16
0.16
2.08
2.08
0.6
0.51
0.56
4.89
5.15
4.99
10.98
2.67
6.56
5.73
1.35
5.08
5.62
5.62
1.27
1.17
1.26
1.24
1.24
1.17
1.17
12.79
12.79
4
3.47
3.73
0.11
0.11
0.11
0.22
0.05
0.13
0.12
0.03
0.11
0.11
0.11
0.03
0.03
0.03
0.03
0.03
0.02
0.02
0.27
0.27
0.09
0.07
0.08
89
88
89
94
81
91
89
79
89
96
96
69
70
69
70
70
87
87
93
93
86
87
86
TREO Kg
24,195,000
17,588,000
41,786,000
2,107,000
674,000
2,781,000
1,934,000
89,000
2,022,000
1,878,000
1,878,000
3,953,000
394,000
4,347,000
891,000
891,000
3,484,000
3,484,000
3,200,000
3,200,000
32,189,000
28,198,000
60,389,000
1 Rounding may cause some computational discrepancies
TREO = Total Rare Earth Oxides – Total of: La2O3, CeO2, Pr6O11, Nd2O3, Sm2O3, Eu2O3, Gd2O3, Tb4O7, Dy2O3, Ho2O3, Er2O3, Tm2O3, Yb2O3, Lu2O3, Y2 O3
HREO = Heavy Rare Earth Oxides – Total of: Sm2O3, Eu2O3, Gd2O3, Tb4O7, Dy2O3, Ho2O3, Er2O3, Tm2O3, Yb2O3, Lu2O3, Y2O3
HREO % = HREO/TREO x 100
NORTHERN MINERALS _ ANNUAL REPORT 2020
31
Comparison with previous years Ore Reserve estimate
For comparison to 30 June 2020, the Ore Reserve at the Browns Range Project as at 30 June 2019 is
presented in Table 4 (below).
There were no changes to the Ore Reserve between 30 June 2019 and 30 June 2020.
Table 4 – Browns Range Ore Reserve Estimate as at 30 June 2019
Deposit
Class
Mt
TREO
Kg/t
TREO Kg
Dy2 O3
Kg/t
Dy2 O3 Kg
Tb407
Kg/t
Tb407
Kg
Y2 O3
Kg/t
Y2 O3
Kg
OPEN PIT
Wolverine
Probable
0.722
6.17
4,458,000
0.55
400,000
0.08
57,000
3.60
2,598,000
Area 5
Probable
0.467
2.24
1,048,000
0.14
65,000
0.02
10,000
0.99
463,000
UNDERGROUND
Wolverine
Probable
2.104
8.00
16,833,000
0.70
1,483,000
0.10
221,000
4.71
9,908,000
Total
Probable1
3.293
6.78
22,339,000
0.59
1,948,000
0.09
288,000
3.94
12,969,000
1 Rounding may cause some computational discrepancies
COMPETENT PERSON AND COMPLIANCE STATEMENT
The information in this report that relates to the Mineral Resource and Ore Reserve Estimates was compiled and approved as a whole by Mr Bill Rayson who
is a Member of the Australasian Institute of Mining and Metallurgy. Mr Rayson is a consultant to Northern Minerals, employed by Total Earth Science Pty
Ltd, and has sufficient experience relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking
to qualify as a Competent Person as defined in the 2012 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore
Reserves’ (the JORC Code). Mr Rayson consents to the inclusion of this information in the form and context in which it appears.
The Mineral Resource and Ore Reserves statement is based on, and fairly represents, information and supporting documentation prepared by competent persons.
For Pilot Plant Stockpiles, Wolverine, Gambit, Gambit West, Cyclops, Banshee and Area 5, further information that relates to the Mineral Resource
Estimates and Ore Reserves is available in the report entitled “Mineral Resource and Ore Reserve Update” dated 28 September 2018 and is available to
view on the company’s website (www.northernminerals.com.au).
For Dazzler, further information that relates to the Mineral Resource Estimates is available in the report entitled “Over 50% Increase In Dazzler High-Grade
Mineral Resource” dated 7 April 2020 and is available to view on the company’s website (www.northernminerals.com.au).
The Company confirms that it is not aware of any new information or data that materially affects the information included in the original market
announcement and that all material assumptions and technical parameters underpinning the estimates in the relevant market announcement continue to
apply and have not materially changed. The Company confirms that the form and context in which the Competent Person’s findings are presented have not
been materially modified from the original market announcement.
CORPORATE GOVERNANCE AND INTERNAL CONTROLS – MINERAL RESOURCES AND ORE RESERVES
Northern Minerals has ensured that the Mineral Resources estimates quoted above are subject to governance arrangements and internal controls.
The Mineral Resource estimates have been derived by various practitioners and then reviewed by Northern Minerals’ employees who have substantial
knowledge of best practice in modelling and estimation techniques. Internal reviews of the Mineral Resource estimate have been completed by Northern
Minerals’ management and executives prior to public release. All Mineral Resource estimates that are disclosed by the Company are subject to review and
approval by the Company’s Board of Directors whose qualifications are disclosed in the Directors Report.
Northern Minerals has ensured that the Ore Reserve estimates quoted above are subject to governance arrangements and internal controls. The Ore
Reserve estimates have been derived by external consultants and then reviewed by Northern Minerals’ employees who have substantial knowledge of mine
design and Ore Reserve estimation techniques. Internal reviews of the Ore Reserve estimate have been completed by Northern Minerals management and
executives prior to public release. All Ore Reserve estimates that are disclosed by the Company are subject to review and approval by the Company’s Board
of Directors whose qualifications are disclosed in the Directors Report.
NORTHERN MINERALS _ ANNUAL REPORT 2020 32
Financial
Report
NORTHERN MINERALS _ ANNUAL REPORT 2020 33
NORTHERN MINERALS LIMITED
DIRECTORS’ REPORT FOR THE YEAR ENDED 30 JUNE 2020
The directors present their report together with the consolidated financial report of the Group, being
Northern Minerals Limited (the “parent entity” or “Company’) and its controlled entities, for the financial
year ended 30 June 2020 and the independent auditors report thereon.
DIRECTORS
The names and details of the Company’s directors in office during the financial year and until the date
of this report are as follows. Directors and officers were in office for the entire period unless otherwise
stated.
Colin James McCavana – Non-executive Chairman
Mr McCavana has more than 30 years of management experience worldwide in the earthworks,
construction and mining industries. Much of this has been related to acquisition, development and
operation of mining and mineral recovery projects. Mr McCavana is a member of the remuneration and
nomination committee. During the past three years Mr McCavana has served as a director of the
following listed company:
•
Reward Minerals Limited (Director February 2010 – Present)
George Bauk – Managing Director / Chief Executive Officer – resigned 5 June 2020
Mr Bauk is an experienced executive, with over 25 years’ experience in the resources industry. Mr Bauk
holds a Bachelor of Business from Edith Cowan University and an MBA from the University of New
England. Prior to Northern Minerals, Mr Bauk held global operational and corporate roles with WMC
Resources, Arafura Resources and Western Metals and has a strong background in strategic
management, business planning, building teams, finance and capital/debt raising, and experience with
a variety of commodities in particular rare earths and nickel.
As Managing Director of Northern Minerals since 2010, he has led its rapid development from a
greenfields heavy rare earth explorer to the first commercial-scale heavy rare earths project outside of
China, mainly producing dysprosium and terbium. During the past three years Mr Bauk has served as
a director of the following listed companies:
•
•
Lithium Australia NL (Non-executive Chairman July 2015 – Present)
Blackearth Minerals NL (Non-executive Director January 2018- Present)
Adrian Christopher Griffin – Non-executive Director
Mr Griffin is an Australian trained mining professional with exposure to metal mining and processing
throughout the world. Mr Griffin has been involved in the development of extraction technology for a
range of metals and was a pioneer of the WA lateritic nickel processing industry. He specialises in mine
management and production. Mr Griffin is a member of the remuneration and nomination committee.
During the past three years Mr Griffin has also served as a director of the following listed companies:
•
•
•
Lithium Australia NL (Director February 2011 – Present)
Parkway Minerals NL (October 2010 – Present)
Reedy Lagoon Corporation Ltd (June 2014 – Present)
Yanchun Wang – Non-executive Director
Ms Wang acts as a strategic investor for a number of Chinese based companies. Ms Wang is Vice
Chairman of Conglin Baoyuan International Investment Group and also a Director of Huachen. During
the past three years Ms Wang has not served as a director of any other listed companies.
1
NORTHERN MINERALS _ ANNUAL REPORT 2020
34
NORTHERN MINERALS LIMITED
DIRECTORS’ REPORT FOR THE YEAR ENDED 30 JUNE 2020
DIRECTORS (Continued)
Ming Lu – Non-executive Director
Mr Lu is a CPA qualified senior finance leader with over a decade of commercial experience in
successful multinational businesses worldwide, and is a member of the Australian Institute of Company
Directors. Mr Lu has extensive experience in working with investors, boards and senior executive teams
in modelling, strategic planning, providing financial support and delivering returns. Throughout his
career as a finance professional, he has had hands-on experience in leading finance functions in
multinational businesses worldwide. Mr Lu has versatile industry experience in manufacturing,
engineering and R&D, education, mining services and private equity, spanning privately owned SMEs,
private equity backed ventures to listed public listed companies and Fortune 500s. Mr Lu was appointed
as a nominee of Huatai Mining. Mr. Lu is not a Director of any other listed companies.
Congyan Xue – Non-executive Director – resigned 7 November 2019
Mr Xue is a corporate finance executive, with over 15 years’ experience in fundraising, corporate
advisory and mergers and acquisitions, predominantly in China. Mr Xue has a Masters in Global
Finance from the Hong Kong University of Science and Technology and the NYU Stern School of
Business. He also holds a Master’s degree in International Finance from the University of Leeds. Mr.
Xue is not a director of any other listed companies.
Xiaohua Liu – Non-executive Director – resigned 7 October 2019
Ms Liu is an investment banker with over 7 years’ experience in corporate advisory and equity markets,
predominately in China. Ms Liu has a Masters of Law from the China University of Geosciences in
Beijing and a Bachelor of Law from Tianjin University of Commerce. Ms Liu is not a director of any other
listed companies.
Bin Cai – Alternate Director
Mr Cai is the Managing Director of Mr Conglin Yue’s Brisbane-based, Australia Conglin International
Investment Group Pty Ltd. Mr Cai has an outstanding record of successful strategic investments in
emerging Australian resource companies based on his long experience in global resource industry
investment. Prior to joining the Conglin Group, Mr Cai had eight years’ experience with The China
Investment Bank. Mr Cai is currently a director of the following listed companies:
• Orion Metals Limited (Director July 2012 - present)
• Carpentaria Exploration Limited (Director May 2011 – May 2018)
CHIEF EXECUTIVE OFFICER AND COMPANY SECRETARY – appointed CEO on 29 July 2020
Mark Tory
Mr Tory is a Chartered Accountant with an MBA majoring in finance. He is a highly experienced
executive in the mining and resources sector having held senior finance and strategic positions with
both large and small resource companies. He has been CFO and Company Secretary since Dec 2012
until recently appointed as CEO. Previously he was Managing Director of Crescent Gold Limited after
two years as CFO and Company Secretary. Before this Mr Tory held executive positions with Anglo
American Exploration and Homestake Gold of Australia (now Barrick Gold).
2
NORTHERN MINERALS _ ANNUAL REPORT 2020
35
NORTHERN MINERALS LIMITED
DIRECTORS’ REPORT FOR THE YEAR ENDED 30 JUNE 2020
DIRECTORS’ MEETINGS & AUDIT AND REMUNERATION COMMITTEE MEETINGS
The numbers of meetings of the company’s board of directors and of each board committee held during
the year ended 30 June 2020, and the number of meetings attended by each director while they were
a director was as follows:
Director
Board Meetings
Audit Committee
Colin McCavana
George Bauk
Adrian Griffin
Yanchun Wang
Ming Lu
Congyan Xue
Xiaohua Liu
Bin Cai
A
14
11
14
0
13
8
8
14
B
14
11
14
14
14
8
8
14
A
2
2
2
0
2
1
1
2
B
2
2
2
2
2
1
1
2
A – meetings attended
B – meetings held during the time the director held office
Remuneration
Committee
A
2
N/A
2
N/A
N/A
N/A
N/A
N/A
B
2
N/A
2
N/A
N/A
N/A
N/A
N/A
DIRECTORS’ INTERESTS IN THE SHARES AND OPTIONS OF THE COMPANY
As at the date of this report, the interests of the directors in the shares and options of the Company
were:
Director (direct and
indirect holdings)
Colin McCavana
Adrian Griffin
Yanchun Wang1
Ming Lu
Bin Cai
Ordinary Shares
Performance Rights
Options
2,953,847
3,500,626
211,157,999
-
5,700,000
1,000,000
1,000,000
1,000,000
-
1,000,000
-
-
-
-
-
1 Includes Ordinary shares held by Australian Conglin International Investment Group Pty Ltd
DIVIDENDS
No dividends have been paid or declared by the Company during the financial year or subsequent to
the year end.
PRINCIPAL ACTIVITIES
The principal activity of the Company during the course of the financial year was the operation of a pilot
scale project aimed at assessing the technical and economic feasibility of a full-scale commercial
operation at its Browns Range Pilot Plant Project.
REVIEW OF OPERATIONS
During the period, the Company continued operation at the Browns Range Pilot Plant Project. The pilot
plant project is a three-year research and development project, to assess the economic and technical
feasibility of a full-scale plant and forms part of a broader ongoing economic and technical feasibility
study underpinning the Browns Range Pilot Plant Project.
3
NORTHERN MINERALS _ ANNUAL REPORT 2020
36
NORTHERN MINERALS LIMITED
DIRECTORS’ REPORT FOR THE YEAR ENDED 30 JUNE 2020
Browns Range Pilot Plant Operations
During FY20, the Pilot Plant milled 19,314 tonnes of ore and produced 124,607 kg of rare earth
carbonate. These operations allowed us to continue to test the pilot plant operation and collect valuable
data to drive innovative solutions and improvement.
A major shutdown was undertaken in the first quarter to enable modifications to the kiln feed system.
These modifications addressed scale build up in the kiln, throughput rates and availability. These works
were successful, with a notable increase in kiln performance when operations recommenced after the
shutdown.
On 22 November 2019 the Company officially opened the Training2Work facility as a part of a program
that is being jointly undertaken with the Wunan Foundation. The Training2Work facility was established
to enable members of the local indigenous community at Ringer Soak and Halls Creek to be trained in
the skills that are required for positions in and around the mine site.
In March 2020, a decision was made to temporarily suspend operations at the Browns Range Pilot
Plant and move to care and maintenance due to the Covid-19 restrictions. This suspension involved
the temporary stand down of most site based staff (except for a small care and maintenance team),
along with corporate office staff as well as the implementation of several cashflow saving measures.
On 1 July 2020, the Company made the decision to partially restart operations at the Browns Range
Pilot Plant Project. This decision was made following the lifting of Commonwealth biosecurity
restrictions applied to the Kimberley region as a part of Covid-19 control measures. The partial return
of pilot plant operations at Browns Range resulted in about three quarters of the previous Project
workforce being re-mobilised. Initial operations will focus on test work in the beneficiation circuit followed
by tests in the hydrometallurgical circuit along with mechanical construction and installation of the ore
sorter.
Research & Development (R&D) Projects
A total of 271 individual R&D experiments were originally planned for the duration of the three-year Pilot
Plant stage and additional experiments have been performed based on new information obtained from
the experiments done to date.
In the 2020 financial year, experiments were conducted on all areas of the plant, including fine grinding,
magnetic separation, flotation, sulphation bake, leaching, purification, ion exchange, rare earth
precipitation and waste water treatment.
Major breakthroughs were achieved in improving the efficiency and operation of the sulphation bake
kiln. These resulted from tests on the kiln that led to significant changes to the equipment, including:
seals, feed system, materials of construction, and mechanical devices designed to limit scaling in the
kiln to improve availability and throughput.
A rare earth separation study was commenced early in the year with US company K-Technologies, Inc.
(K-Tech) to assess the possibility of producing separated rare earth oxides that currently require
separation in China. K-Tech is focussed on processes which involve continuous ion exchange,
continuous ion-chromatography and other related advanced separation methodologies.
Initial bench scale test work completed by K-Tech showed that the Stage 1 continuous ion exchange
process was successful with the rare earths (RE) loading in preference to the non-RE on the resin.
Regeneration was successful and the composition and the regeneration solution showed that final non-
RE/RE ratio is in the range that would allow for the regeneration solution to be used as the feed for the
Stage 2 continuous ion chromatography step, where initial separation of the rare earths by group
begins.
Completion of this work was ultimately delayed as a result of the impacts of shutdown orders in the US
as a result of the Covid-19 pandemic.
4
NORTHERN MINERALS _ ANNUAL REPORT 2020
37
NORTHERN MINERALS LIMITED
DIRECTORS’ REPORT FOR THE YEAR ENDED 30 JUNE 2020
Offtake
During the reporting period, the Company terminated the offtake agreement with Lianyugang Zeyu New
Materials Sale Co., Ltd. (JFMAG) and entered into a new offtake agreement with German conglomerate,
thyssenkrupp Materials Trading Gmbh (TK).
The new offtake agreement included all mixed heavy rare earth carbonate stockpiled at Browns Range
as well as future production from the Browns Range Pilot Plant Project.
A total of 3 shipments comprising 157,076kg of Rare Earth Carbonate were sold to TK during the year.
EXPLORATION
In August 2019, the Company released assay results from diamond drilling completed at the Dazzler
and Iceman prospects. The diamond drilling programme, which comprised 3 drill holes at Dazzler and
one at Iceman was designed to twin and validate the reverse circulation drilling programmes undertaken
in 2018 and early 2019. One of the diamond drill holes at Dazzler was drilled to provide samples for
metallurgical test work. Results from the first twinned hole shows the interval as being narrower but
much higher grade, while the second showed an interval width approximately the same as the twinned
hole but a significantly lower grade.
Further drilling commenced in September 2019, including 3,797m of infill and exploration RC drilling in
the Dazzler-Iceman area and 641m exploration RC drilling at four other prospects. Significant results
from this drill programme included 52m @ 4.15% TREO from 20m and 20m @ 0.62% TREO from 16m.
In January 2020, the Company announced high grade copper assays following a selective rock chip
sampling program at the Company’s 100% owned John Galt Project. A selective rock chip sampling
program was conducted during October 2019 over an area of 2.0km x 0.5km and of the 24 samples
collected and analysed, 12 returned assays of greater than 1.0% Cu.
In April 2020 an update to the Mineral Resource estimate for Dazzler was released. The inferred Mineral
Resource was estimated at 214,000 tonnes at 2.33% TREO comprising 5,000,000kg TREO using a
cut-off grade of 0.15% TREO. This was a 50% increase in the contained TREO from the maiden Mineral
Resource estimate reported in March 2019.
Exploration activities were temporarily suspended along with other activities at Browns Range as a
result of the impacts of Covid-19.
Following the restart of operations at Browns Range, the Company announced that exploration would
be ramped up over the next 12 months with a budget of $4.5 - $5.0 million being allocated for greenfields
exploration, further evaluation of identified mineralisation and to boost confidence in resources, with the
objective of increasing the overall life-of-mine potential of the project.
CORPORATE
R&D Funding
In early 2019, the Company lodged a formal appeal with AusIndustry regarding its initial decision that
the Company’s activities were ‘ineligible R&D claims’ for the FY17 and FY18 periods. On 24 February
2020 the Company was advised that AusIndustry had completed a review of its initial decision and
subsequently found that most of the Company’s R&D activities for these periods were in fact eligible.
In August 2020, the Company announced that it had reached a settlement agreement with the
Australian Taxation Office (ATO) that settled all matters relating to the FY17 and FY18 R&D tax offset
claims. The settlement agreement also documented the agreed refundable R&D offset claim for the
FY19 as well as a framework for reviewing the Company’s refundable R&D offset claim for FY20.
Capital Raising
In June 2019 the Company announced a A$21.95 million placement and Accelerated Non-
Renounceable Entitlement Offer. The placement was completed for A$15 million via the issue of
5
NORTHERN MINERALS _ ANNUAL REPORT 2020
38
NORTHERN MINERALS LIMITED
DIRECTORS’ REPORT FOR THE YEAR ENDED 30 JUNE 2020
333,333,333 fully paid ordinary shares at $0.045 per share. The Entitlements offer for A$6.95 million
was offered on a 1 for 13 basis at a price of $0.045 per fully paid ordinary share. A total of A$2.66 million
was received during FY19 with the balance (A$ 4.29 million) received in FY20.
In July 2019, the Company announced it had entered multiple subscription agreements with
sophisticated investors, for the placement of 483,870,970 fully paid ordinary shares at an issue price of
$0.062 per share to raise A$30 million before costs. A total of A$25.7 million of the A$30 million was
received before the agreement was terminated on 31 January 2020 due to non-payment of the
remaining balance.
In August 2019, the Company entered into a subscription agreement with Baogang Investment
(Australia) Pty Ltd (BGIA) to raise A$20 million at A$0.062 million per share via the issue of 322,580,645
fully paid ordinary shares. The investment by BGIA was subject to shareholder approval, Australian
Foreign Investment Review Board (FIRB) approval as well as regulatory approvals in the People’s
Republic of China. On 20 April 2020, the Company was advised by BGIA that the Treasurer of the
Commonwealth of Australia, following an assessment by the FIRB, had prohibited the transaction.
In December 2019, an amendment was made to the JHY Investments Pty Ltd (JHY) convertible note
terms. The $4.0 million convertible note subscription was due to mature on 31 December 2019. The
Company successfully negotiated an extension of the maturity date for the notes for a further year and
at a lower interest rate of 10% (previously 16%). The maturity date for the notes is now 31 December
2020 and the interest rate was reduced to 10% from 1 January 2020. As consideration for agreeing to
amend the terms of the notes, the Company issued 2 million fully paid ordinary shares in the Company
to JHY.
On 2 March 2020 the Company entered into a Convertible Security Funding Agreement with Lind Global
Macro Fund, LP (Lind). Under the funding agreement the Company received a net amount of A$2.5
million (after deduction of commitment fees payable to Lind of $125,000), from the issue of one
unsecured convertible note with a face value of A$3 million. The A$2.5 million funding was received on
6 March 2020. As a part of this transaction, the Company also agreed to issue Lind with 34,000,000
unlisted options with an exercise price of $0.045 and expiry date of 2 March 2024 along with 60,000,000
fully paid ordinary shares which were to be used as collateral for the purposes of the funding agreement.
On 7 May 2020, the Company issued 52,631,579 fully paid ordinary shares to a nominee of Lind in
respect of the conversion of A$1 million of the face value of the convertible security.
On 22 June 2020 a replacement convertible security was issued to Lind in accordance with the
Convertible Security Funding Agreement announced on 2 March 2020 following shareholder approval
being obtained at the Company’s general meeting held on 18 June 2020. The replacement convertible
security was issued with a face value of A$2 million.
On 20 April 2020 the Company announced it had entered into subscription agreements with various
sophisticated investors to raise A$22 million (before costs) via private placement and in 4 tranches as
detailed below:
Tranche
# Shares
Issue Price
Subscription
Amount
Tranche 1
Tranche 2
Tranche 3
Tranche 4
Total
450,000,000
210,000,000
170,000,000
270,000,000
1,100,000,000
$0.02
$0.02
$0.02
$0.02
$0.02
$9,000,000
$4,200,000
$3,400,000
$5,400,000
$22,000,000
By the end of the year, the Company had received a total of A$15.43 million of the total of A$22 million
with the balance of A$6.57 million received post year end. Of the shares issued, 225,000,000 were
issued to Yuzhen Ma in full repayment of the remaining amounts owing (A$4.5 million) on the
convertible notes issued on 26 June 2019, which had an initial aggregate face value of A$7.5 million,
(which was reduced to A$4.5 million after completion of tranche 1 of the placement).
6
NORTHERN MINERALS _ ANNUAL REPORT 2020
39
NORTHERN MINERALS LIMITED
DIRECTORS’ REPORT FOR THE YEAR ENDED 30 JUNE 2020
In conjunction with the Placement, the Company also launched a Share Purchase Plan (SPP) for
eligible shareholders. Under the SPP, eligible shareholders were able to subscribe for up to A$30,000
in Ordinary shares at $0.02, the same price as the placement. The SPP closed on 2 June 2020 with
total funds raised of A$9.98 million (before costs) and the issue of 499,020,000 fully paid ordinary
shares.
Board & Management
There were a number of director resignations during the year. Non-Executive Directors Ms Xiaohua Liu
resigned on 7 October 2019 while Mr Congyan Xue resigned on 7 November 2019. Long-standing
Managing Director and CEO George Bauk announced his resignation on 5 June 2020, with existing
Non-Executive Chairman Colin McCavana temporarily assuming the role of Executive Chairman while
replacement CEO candidates were considered. Mark Tory (CFO and Company Secretary) was
appointed CEO on 29 July 2020.
SUMMARY OF FINANCIAL PERFORMANCE
A summary of key financial indicators for the Company, with prior year comparisons, is set out in the
following table:
Total income
Net loss after tax
Basic EPS (cents)
30 June
2020
$
30 June
2019
$
30 June
2018
$
28,426,653
2,002,375
4,564,718
(54,328,360)
(63,966,330)
(18,497,161)
(2.04)
(4.7)
(2.0)
Net cash used in operating activities
(31,756,314)
(19,693,943)
(15,058,308)
Net cash used in investing activities
(15,844,542)
(11,932,810)
(29,781,958)
Net cash from financing activities
46,152,294
29,411,876
46,658,629
The net loss of the Group for the year ended 30 June 2020 of A$54.3 million (2019: A$64.0 million)
mainly consisted of the R&D rebates being accounted for, as mentioned below, partially offsetting a
A$24.8 million impairment on the beneficiation and hydrometallurgical assets at Browns Range after
completing an impairment review.
Current year income is comprised of A$23.3 million relating to R&D rebates for the current tax year
along with the FY17, FY18 and FY19 tax years. In 2019 the Company received notification from
AusIndustry that it was their opinion that the R&D activities of Northern Minerals were ineligible R&D
activities and therefore would not be eligible for the R&D tax rebate for the 2016/2017 and 2017/2018
income years. The Company appealed this finding and was successful in having the original decision
from AusIndustry overturned. Previously, in accordance with applicable accounting standards, Income
from Government Grants, revenue was not accrued for the 2019 financial year and amounts that were
recognised as income in prior periods were reversed as a change in estimate totalling $6.2 million.
Refer Note 5.
2020 also represented the Company’s first sales revenue from 3 shipments comprising 156,848kg of
Rare Earth Carbonate that were sold to TK during the year. Sales revenue totalled A$3.0 million.
Depreciation expenses increased to A$24.4 million (2019: A$19.4 million) due to the completion of the
pilot plant construction and supporting infrastructure in 2019, and therefore depreciation being charged
for a full year on the assets.
Processing costs totalled A$18.0 million (2019: A$20.6 million), with the most significant expenditure
relating to wages and salaries, camp accommodation and messing costs and travel and maintenance
7
NORTHERN MINERALS _ ANNUAL REPORT 2020
40
NORTHERN MINERALS LIMITED
DIRECTORS’ REPORT FOR THE YEAR ENDED 30 JUNE 2020
costs. This was slightly lower due to the impacts of the temporary suspension of operations at Browns
Range Pilot Plant due to the Covid-19 virus.
The Company’s cash receipts were A$3.6 million (2019: A$12.4 million). Receipts in 2020 included
A$2.6 million received from the sale of rare earth carbonate as well as A$0.85 million in receipts from
government grants (including A$0.48 million for the Federal Government’s Building Better Regions
Fund (BBRF) and A$0.37 million related to the Federal Governments jobkeeper and other related
cashflow boost programmes). 2019’s cash receipts included a A$1.43 million receipt for the 3rd
milestone payment awarded under the BBRF to develop an Aboriginal training-to-work (T2W) program
at the Browns Range Pilot Plant Project as part of a consortium led by the Wunan Foundation.
Investing cash flows increased from A$11.9 million in 2019 to A$15.8 million in FY20. The focus of this
investing cash flows was related to the additional improvement works at the Browns Range Pilot Plant
and also included A$6.5 million in payments under the original EPC contract with Sinosteel.
Financing cash inflows for the year ended 30 June 2020 included A$51.8 million for the issue of shares
(net of costs). In addition A$2.6 million was received from the issue of convertible notes, while A$8.3
million was repaid in cash in the year.
SUMMARY OF FINANCIAL POSITION
30 June
2020
$
30 June
2019
$
30 June
2018
$
Total assets
42,479,796
61,577,238
101,231,091
Debt (current and non - current)
5,853,678
25,908,071
24,393,876
Other liabilities
24,969,604
24,989,227
45,109,868
Shareholder funds/net assets
11,656,514
10,679,938
31,727,347
Number of shares on issue (million)
Share price at reporting date (cents)
3,987M
1.8
2,083M
7.50
1,114M
8.72
The Company’s cash reserves at 30 June 2020 totalled A$6.6 million compared to A$8.1 million as at
30 June 2019.
The Company’s receivables balance has increased from A$2.1 million to A$24.3 million due to the
reversal of AusIndustry’s previous decision to disallow R&D claims by the Company and recognition of
R&D receivables for the 2017, 2018, 2019 and 2020 financial years. Refer to Note 5 for additional
information.
Property, plant and equipment has decreased from A$50.5 million to A$10.4 million. Additions for the
year totalled A$9.1 million while the depreciation charge for the period was A$24.4 million. An
impairment loss of A$24.7 million was also recognised in the current year.
Total interest bearing liabilities reduced by A$20.1 million from A$25.9 million to A$5.8 million mainly
due to the settlement of the liability due to the ATO for repayment of previous R&D claims along with
conversion and repayment of convertible notes.
Total deferred revenue increased from A$2.7 million to A$7.5 million as a result of the recognition of
the deferred revenue relating to the R&D rebate during the year.
SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS
There were no significant changes in the state of affairs of the Group during the year other than as
disclosed elsewhere in this report.
8
NORTHERN MINERALS _ ANNUAL REPORT 2020
41
NORTHERN MINERALS LIMITED
DIRECTORS’ REPORT FOR THE YEAR ENDED 30 JUNE 2020
FINANCIAL POSITION
The financial report has been prepared on the going concern basis, which contemplates the continuity
of normal business activity and the realisation of assets and the settlement of liabilities in the normal
course of business.
The Group has incurred a loss for the year ended 30 June 2020 of $54,328,360 (2019: $63,966,330)
and experienced net cash outflows from operating activities of $31,756,314 (2019: $19,693,943). As at
30 June 2020 the Group had cash on hand of $6,660,568 (2019: $8,140,422) and a net working capital
surplus of $6,147,783 (2019: deficit of $22,124,648). The loss mainly reflects the impairment loss on
property, plant and equipment and depreciation expense.
Subsequent to year end the Group received funding from the following sources:
•
In August 2020, the Company announced it had reached a settlement agreement with the ATO
that settled all matters relating to the FY17, FY18 and FY19 R&D tax offset claims. In
September 2020, the Company received the net refund from the ATO of $10.0 million in relation
to the FY17 to FY19 tax offset claims.
• As at the date of this report, a further $6.57 million had been received post year end for the
outstanding tranches of the A$22 million placement announced on the ASX on 20 April
2020. This now completes the placement in full.
• On 21 August 2020, the Company issued fully paid ordinary shares as a result of the conversion
of the final amounts outstanding under the Lind convertible note (which has now been
redeemed in full). Lind also elected to reduce its collateral shareholding number (under the
original funding agreement) from 60,000,000 shares to nil by paying the Company $1.08 million
in cash.
In addition the claim for the refundable R&D tax offset for FY20 of is currently under review by the ATO
and is expected to be lodged and received within the December 2020 quarter. The ATO settlement
agreement also documented a framework for reviewing the Company’s refundable R&D offset claim for
FY20 to ensure there were no significant delays.
The directors carefully manage discretionary expenditure in line with the Group’s cash flow forecast.
Based on the matters described above, the Directors consider the going concern basis of preparation
appropriate.
LIKELY DEVELOPMENTS AND EXPECTED RESULTS
The Company proposes to continue with its development of the Browns Range Pilot Plant Project as
detailed in the Review of Operations in the Annual Report.
ENVIRONMENTAL REGULATION AND PERFORMANCE
The exploration and mining activities of the Company are subject to environmental regulations imposed
by various regulatory authorities, particularly those relating to ground disturbance and the protection of
rare and endangered flora and fauna. The Company has complied with all material environmental
requirements up to the date of this report. The Directors believe that the Company has adequate
systems in place for the management of its environmental responsibilities and are not aware of any
breaches of the regulations during the period covered by this report.
RISK MANAGEMENT
The Group takes a proactive approach to risk management. The Board is responsible for ensuring that
risks, and opportunities are identified on a timely basis and that the Group’s objectives and activities
are aligned with the risks and opportunities identified by the Board.
Northern Minerals has developed a framework for a risk management policy and internal compliance
and control system that covers the organisational, financial and operational aspects of the Company's
affairs. The responsibility for undertaking and assessing risk management and internal control
effectiveness is delegated to management, and management are required to regularly report back to
9
NORTHERN MINERALS _ ANNUAL REPORT 2020
42
NORTHERN MINERALS LIMITED
DIRECTORS’ REPORT FOR THE YEAR ENDED 30 JUNE 2020
the Board. This involves the tabling of a risk register which is monitored and updated by management
periodically. The CEO is responsible for ensuring the maintenance of, and compliance with, appropriate
systems. The Board adopts practices to identify significant areas of risk and to effectively manage those
risks in accordance with the Group’s risk profile. Where appropriate the Board draws on the expertise
of appropriate external consultants to assist in dealing with or mitigating risk.
OPTIONS AND PERFORMANCE RIGHTS
As at the date of this report, there were the following unissued ordinary shares for which options and
performance rights were outstanding:
Unlisted options
Unlisted options1
Unlisted options
Unlisted performance rights2,3
Total
Number of
options/rights
Exercise price
– (cents)
Expiry date
3,000,000
10,000,000
34,000,000
13,307,000
60,307,000
$0.15
$0.1225
$0.045
Nil
24 May 2021
20 December 2021
2 March 2024
Based on
performance
conditions
1 - As advised per the ASX announcement on 31 July 2019, the exercise prices of these unquoted options over
fully paid ordinary shares in the capital of the Company have been recalculated in accordance with their terms of
issue, which are consistent with the formula set out in ASX Listing Rule 6.22, as a result of the accelerated non-
renounceable 1 for 13 pro-rate entitlement offer announced by the Company on 6 June 2019.
2 - Included in these performance rights were rights issued as remuneration to the Directors and the five most highly
remunerated officers during the 2017 financial year. Details of performance rights granted to key management
personnel are referred to in the remuneration report.
3 - Vesting of the rights are subject to the Company meeting numerous performance conditions beginning on grant
of the performance right and subject to meeting various hurdles. The performance conditions are set out in Note
11(c).
Option holders do not have any right, by virtue of the option, to participate in any share issue of the
Company or any other entity.
No ordinary shares were issued during the financial year, or since the end of the financial year, as a
result of the exercise of options.
The following ordinary shares were issued during the year ended 30 June 2020 on the exercise of
performance rights issued as remuneration to the Directors, key management personnel and
employees of the Company (no amounts are unpaid on any of the shares):
Date performance rights
were granted
30 November 2016
21 May 2019
Exercise price of shares –
(cents)
Nil
Nil
Number of shares issued
1,000,000
3,361,150
The following ordinary shares were issued after the year ended 30 June 2020 on the exercise of
performance rights issued as remuneration to the Directors, key management personnel and
employees of the Company (no amounts are unpaid on any of the shares):
Date performance rights
were granted
30 November 2016
Exercise price of shares –
(cents)
Nil
Number of shares issued
4,000,000
INDEMNIFICATION AND INSURANCE OF DIRECTORS
The Company has entered into an Access, Indemnity and Insurance Deed with the Directors to
indemnify them to the maximum extent permitted by law against liabilities and legal expenses incurred
10
NORTHERN MINERALS _ ANNUAL REPORT 2020
43
NORTHERN MINERALS LIMITED
DIRECTORS’ REPORT FOR THE YEAR ENDED 30 JUNE 2020
in, or arising out of, the conduct of the business of the Company or the discharge of their duties as
Directors.
Also, pursuant to the Deed, the Company has paid premiums to insure the directors against liabilities
incurred in the conduct of the business of the Company and has provided the right of access to
Company records. In accordance with common commercial practice, the insurance policy prohibits
disclosure of the amount of the premium and the nature of the liability insured against. The amount of
the premium is included as part of the directors’ remuneration in the Remuneration Report.
PROCEEDINGS ON BEHALF OF COMPANY
No person has applied for leave of Court to bring proceedings on behalf of the Company or intervene
in any proceedings to which the Company is a party for the purpose of taking responsibility on behalf
of the Company for all or any part of those proceedings.
The Company was not a party to any such proceedings during the year.
11
NORTHERN MINERALS _ ANNUAL REPORT 2020
44
NORTHERN MINERALS LIMITED
DIRECTORS’ REPORT FOR THE YEAR ENDED 30 JUNE 2020
REMUNERATION REPORT (Audited)
This Remuneration Report for the year ended 30 June 2020 outlines the remuneration arrangements
of the Company in accordance with the requirements of the Corporations Act 2001 and its Regulations.
This information has been audited as required by section 308(3C) of the Act.
This 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 Company, directly or indirectly.
Northern Minerals Limited (the Company) received more than 75% of the votes in favour of the
Remuneration Report for the 2019 financial year.
Details of directors and key management personnel
Non-executive and Executive directors of Northern Minerals Limited during the year were:
• Colin McCavana (Non-executive Chairman – took on the role of Executive Chairman from 5
June 2020 until 29 July 2020)
• George Bauk (Managing Director/ Chief Executive Officer) – resigned 5 June 2020
• Adrian Griffin (Non-executive Director)
• Yanchun Wang (Non-executive Director)
• Ming Lu (Non-executive Director)
• Congyan Xue (Non-executive Director) – resigned 7 November 2019
• Xiaohua Liu (Non-executive Director) – resigned 7 October 2019
• Bin Cai (Alternate Director)
Other key management personnel were:
• Robin Wilson (Geology and Exploration Manager)
• Robin Jones (Chief Operating Officer)
• Mark Tory (Company Secretary and Chief Financial Officer – appointed Chief Executive Officer
on 29 July 2020)
Other than indicated above, there were no changes to KMP after the reporting date and before the date
the financial report was authorised for issue.
1. Remuneration Policy
The Remuneration Committee of the Board of Directors is responsible for determining and reviewing
compensation arrangements for the Directors and executives. The Remuneration Committee assesses
the appropriateness of the nature and amount of remuneration on a periodic basis by reference to
relevant employment market conditions with the overall objective of ensuring maximum stakeholder
benefit from the retention of a high-quality board and executive team.
Remuneration levels for Directors and executives are competitively set to attract the most qualified and
experienced candidates, taking into account prevailing market conditions and individual's experience
and qualifications.
12
NORTHERN MINERALS _ ANNUAL REPORT 2020
45
NORTHERN MINERALS LIMITED
DIRECTORS’ REPORT FOR THE YEAR ENDED 30 JUNE 2020
Remuneration packages contain the following key elements:
1. Short-term benefits − salary/fees and non-monetary benefits including the provision of motor
vehicles;
2. Post-employment benefits – including superannuation; and
3. Share-based payments − including participation in option and share plans (refer to Note 17 for
more information).
Remuneration is not linked to profit performance. The Company’s remuneration policy seeks to
encourage alignment between the performance of the Company and total shareholder returns, and the
remuneration of executives. Short term and, in particular, long term ‘at risk’ incentives only vest when
predetermined Company performance objectives are achieved. These performance objectives are
operational in nature (production outcomes) but are linked to financial performance and Company value
indirectly.
In accordance with best practice corporate governance, the structure of non-executive director and
executive remuneration is separate and distinct.
The Company does not currently have a policy pertaining to Directors hedging their exposure to risks
associated with the Company’s securities they receive as compensation.
The Company has not used any remuneration consultants in the year.
2. Non-executive Director Remuneration
The Board seeks to set aggregate remuneration at a level which provides the Company with the ability
to attract and retain directors of the highest calibre, whilst incurring a cost which is acceptable to the
shareholders.
Each of the Non-executive directors receive a fixed fee for their services as a director. There is no direct
link between cash remuneration paid to any of the directors and corporate performance such as bonus
payments for achievement of certain key performance indicators.
The Constitution and the ASX Listing Rules specify that the aggregate remuneration of Non-executive
directors must be determined from time to time by a general meeting. An amount not exceeding the
amount determined is then divided between the directors as agreed. The latest determination was on
29 November 2013 when shareholders approved an aggregate remuneration of $500,000 per year.
Annual Non-executive Chairman and Non-executive Directors’ base fees are presently $85,000 and
$65,000 respectively, inclusive of superannuation, with $5,000 per annum paid for representation on
each board committee.
The amount of aggregate remuneration sought to be approved by shareholders and the manner in
which it is apportioned amongst Directors is reviewed annually. The Board considers the fees paid to
non-executive directors of comparable companies when undertaking the annual review process.
3. Executive Remuneration
Executives receive a fixed remuneration set to provide a base level commensurate with their position
and responsibilities within the Company and so as to align the interests of executives with those of
shareholders and ensure total remuneration is competitive by market standards. There is no direct link
between remuneration paid and corporate performance such as bonus payments for achievement of
certain key performance indicators.
In addition, executives are entitled to participate in equity-based remuneration plans to recognise ability
and effort, provide incentive to improve company performance, attract appropriate persons and promote
loyalty.
Remuneration levels are reviewed annually by the Remuneration Committee by reviewing Company
performance, personal performance, market trends, industry comparisons, employment market
conditions and, where appropriate, external advice.
13
NORTHERN MINERALS _ ANNUAL REPORT 2020
46
NORTHERN MINERALS LIMITED
DIRECTORS’ REPORT FOR THE YEAR ENDED 30 JUNE 2020
4. Service agreements
Employment Contract – Mr George Bauk (Managing Director/Chief Executive Officer) – Resigned 5
June 2020
The employment contract commenced on 1 August 2019 for a fixed term period of two years.
The main terms of the employment contract with Mr Bauk for the year under review are as follows:
• Remuneration package of $673,425 pa (inclusive of superannuation).
• Salary may be reviewed during the 2 year term.
• The Company is entitled to terminate the agreement at any time during the first 12 months of the
•
term by giving 12 months’ notice.
If the Company terminates the agreement at any time within 12 months of the expiry of the fixed
term period, the amount of notice required to be given to Mr Bauk is equivalent to the number of
months remaining until the expiry of the term, with a minimum of 3 months notice.
• Mr Bauk is entitled to terminate the agreement by giving no less than 4 months’ notice.
•
If the agreement comes to an end automatically at the end of the 2 year term, Mr Bauk will be
entitled to a one off completion payment equivalent to 3 months base salary including
superannuation.
• On 1 April 2020 Mr Bauks salary was reduced by 50% to $336,712 pa by way of a temporary
variation agreement due to the impact of COVID-19.
• On 5th June 2020 Mr Bauk resigned from his position as Managing Director / Chief Executive Officer.
The Company paid Mr Bauk 4 months in lieu of notice plus an additional 2 months on the basis that
Mr Bauk provided consultancy and advice for a period of 6 months.
Employment Contract – Mr Robin Wilson (Exploration Manager)
The employment contract commenced on 26 June 2006 and is not for a fixed period.
The main terms of the employment contract with Mr Wilson for the year under review are as follows:
• Remuneration package of $240,000 pa (inclusive of superannuation).
• Salary reviewed in June each year.
• The Company is entitled to terminate the agreement by giving no less than 3 months’ notice.
• Mr Wilson is entitled to terminate the agreement by giving no less than 3 months’ notice.
• On 1 April 2020 Mr Wilson’s salary was reduced by 30% to $168,000 pa by way of a temporary
variation agreement due to the impact of COVID-19.
• On 1 July 2020 Mr Wilson returned to his remuneration package of $240,000 pa (inclusive of
superannuation).
Employment Contract – Mr Robin Jones (Chief Operating Officer)
The employment contract commenced on 1 June 2012 and is not for a fixed period.
The main terms of the employment contract with Mr Jones for the year under review are as follows:
• Remuneration package of $366,825 pa (inclusive of superannuation).
• Salary reviewed in June each year.
• The Company is entitled to terminate the agreement by giving no less than 3 months’ notice.
• Mr Jones is entitled to terminate the agreement by giving no less than 3 months’ notice.
• On 1 April 2020 Mr Jones’ salary was reduced by 50% to $183,412 pa by way of a temporary
variation agreement due to the impact of COVID-19.
• On 27 May 2020 Mr Jones returned to his remuneration package of $366,825 pa (inclusive of
superannuation).
Employment Contract – Mr Mark Tory (CFO/Company Secretary)
The employment contract commenced on 3 December 2012 and is not for a fixed period.
The main terms of the employment contract with Mr Tory for the year under review are as follows:
• Remuneration package of $383,250 pa (inclusive of superannuation).
• Salary reviewed in June each year.
14
NORTHERN MINERALS _ ANNUAL REPORT 2020
47
NORTHERN MINERALS LIMITED
DIRECTORS’ REPORT FOR THE YEAR ENDED 30 JUNE 2020
• The Company is entitled to terminate the agreement by giving no less than 3 months’ notice.
• Mr Tory is entitled to terminate the agreement by giving no less than 3 months’ notice.
• On 1 April 2020 Mr Tory’s salary was reduced by 50% to $191,625 pa by way of a temporary
variation agreement due to the impact of COVID-19.
• On 27 May 2020 Mr Tory returned to his remuneration package of $383,250 pa (inclusive of
superannuation).
• On 29 July 2020 Mr Tory was appointed as Managing Director. There were no changes to his terms
of employment.
Consultancy Agreement – Mr Bin Cai (Alternate Director)
The contract commenced on 1 November 2013 and is not for a fixed period.
The main terms of the contract with Australian Cayenne Holdings Pty Ltd, of which Mr Bin Cai is a
director for the year under review are as follows:
• Remuneration package of $285,000 pa (Inclusive of superannuation).
• On 1 April 2020 Mr Cai’s remuneration package was reduced by 50% to $142,500 pa due to the
impact of COVID-19.
• On 1 July 2020 Mr Cai returned to his remuneration package of $285,000 pa (inclusive of
superannuation).
• Continues until completion of services required by the agreement.
15
NORTHERN MINERALS _ ANNUAL REPORT 2020
48
%
0
%
0
%
0
%
0
%
0
%
0
%
0
%
0
%
0
%
0
%
0
%
0
%
0
0
1
%
0
0
1
%
0
0
1
%
0
0
1
%
0
0
1
%
0
0
1
%
0
0
1
%
0
0
1
%
0
0
1
%
0
0
1
%
0
0
1
%
0
0
1
%
%
n
o
i
t
a
r
e
n
u
m
e
R
d
e
x
i
F
o
t
d
e
k
n
i
l
e
c
n
a
m
r
o
f
r
e
p
n
o
i
t
a
r
e
n
u
m
e
r
$
7
8
1
,
8
8
1
8
9
9
,
8
7
9
7
8
6
,
1
8
7
3
9
,
2
7
7
3
4
,
5
6
2
6
3
9
,
2
7
5
0
6
,
8
2
5
4
2
,
9
2
1
0
6
,
8
2
2
4
0
7
,
7
4
3
6
2
5
,
7
7
3
3
6
8
,
1
7
6
,
2
-
-
-
-
-
-
-
-
-
-
-
-
$
s
t
h
g
R
i
$
-
-
-
-
-
-
-
-
-
-
-
-
/
s
n
o
i
t
p
O
e
c
n
a
m
r
o
f
r
e
P
n
a
l
P
e
r
a
h
S
-
-
-
-
-
-
$
-
g
n
o
L
e
v
a
e
L
e
c
i
v
r
e
S
)
9
2
5
,
3
1
(
2
3
9
,
4
6
9
1
,
9
8
0
6
,
9
$
-
-
2
1
2
,
7
2
5
2
,
9
1
4
9
6
,
5
-
-
4
3
9
,
4
0
6
2
,
9
1
3
0
0
,
1
2
3
0
0
,
1
2
7
0
2
,
0
1
8
5
3
,
8
9
l
a
t
o
T
s
t
n
e
m
y
a
P
d
e
s
a
b
-
e
r
a
h
S
t
n
e
m
y
o
p
m
E
l
-
t
s
o
P
s
t
i
f
e
n
e
B
n
o
i
t
a
u
n
n
a
r
e
p
u
S
h
s
a
C
s
u
n
o
B
$
-
-
-
-
-
-
-
-
-
-
-
-
$
$
r
e
h
t
O
s
t
i
f
e
n
e
B
m
r
e
t
-
t
r
o
h
S
s
e
e
F
&
y
r
a
l
a
S
2
6
0
,
6
1
2
6
9
,
4
1
2
6
0
,
6
1
2
6
0
,
6
1
2
6
0
,
6
1
2
6
0
,
6
1
7
7
6
,
5
3
1
3
,
4
3
1
9
,
4
6
1
3
1
3
,
8
5
9
1
3
9
,
9
5
5
7
8
,
6
5
5
7
3
,
9
4
2
0
4
9
,
1
5
8
2
9
,
2
2
2
3
9
,
4
2
-
6
0
2
,
4
2
6
0
,
6
1
3
0
2
,
0
0
2
5
0
5
,
7
1
3
3
5
8
,
0
3
3
0
3
5
,
5
2
1
8
6
7
,
7
3
4
,
2
7
,
5
,
4
a
n
a
v
a
C
c
M
n
i
l
o
C
s
r
o
t
c
e
r
i
D
6
,
4
,
1
k
u
a
B
e
g
r
o
e
G
5
,
4
n
i
f
f
i
r
G
n
a
i
r
d
A
5
,
4
g
n
a
W
n
u
h
c
n
a
Y
2
e
u
X
n
a
y
g
n
o
C
3
u
L
i
a
u
h
o
a
X
i
5
,
4
i
a
C
n
B
i
4
u
L
g
n
M
i
t
n
e
m
e
g
a
n
a
M
y
e
K
l
e
n
n
o
s
r
e
P
l
i
5
,
4
n
o
s
W
n
b
o
R
i
5
,
4
s
e
n
o
J
n
b
o
R
i
5
,
4
y
r
o
T
k
r
a
M
L
A
T
O
T
:
s
e
t
o
N
I
I
D
E
T
M
L
S
L
A
R
E
N
M
N
R
E
H
T
R
O
N
I
0
2
0
2
E
N
U
J
0
3
D
E
D
N
E
R
A
E
Y
E
H
T
R
O
F
T
R
O
P
E
R
’
S
R
O
T
C
E
R
D
I
0
2
0
2
e
n
u
J
0
3
d
e
d
n
E
r
a
e
Y
e
h
t
r
o
f
n
o
i
t
a
r
e
n
u
m
e
R
f
o
s
l
i
a
t
e
D
.
5
n
e
e
b
t
o
n
e
v
a
h
y
e
h
t
h
c
u
s
s
A
.
s
t
n
e
m
y
a
p
d
e
s
a
b
e
r
a
h
s
d
e
s
n
g
o
c
e
r
i
l
y
s
u
o
v
e
r
p
i
6
1
f
o
l
a
s
r
e
v
e
r
a
g
n
i
t
a
e
r
c
,
n
o
i
t
a
n
g
s
e
r
i
m
o
r
f
g
n
i
t
l
u
s
e
r
s
t
h
g
i
r
f
o
e
r
u
t
i
e
f
r
o
f
e
h
t
o
t
e
u
d
s
e
c
n
a
a
b
l
t
i
d
e
r
c
e
r
a
s
t
n
e
m
y
a
p
d
e
s
a
b
e
r
a
h
S
.
6
l
.
e
b
a
t
e
v
o
b
a
e
h
t
n
i
n
w
o
h
s
.
n
a
m
r
i
a
h
C
e
v
i
t
u
c
e
x
E
s
a
e
m
i
t
s
a
l
l
e
w
s
a
s
e
e
f
y
c
n
a
t
l
u
s
n
o
c
r
o
f
i
d
a
p
s
t
n
u
o
m
a
l
a
n
o
i
t
i
d
d
a
s
e
d
u
c
n
I
l
.
7
e
r
a
h
s
d
e
s
n
g
o
c
e
r
i
l
y
s
u
o
v
e
r
p
i
f
o
l
a
s
r
e
v
e
r
a
g
n
i
t
a
e
r
c
l
s
e
d
r
u
h
e
c
n
a
m
r
o
f
r
e
p
g
n
v
e
h
c
a
f
o
y
t
i
l
i
i
i
b
a
b
o
r
p
e
h
t
n
i
e
g
n
a
h
c
a
o
t
e
u
d
s
t
h
g
i
r
l
f
o
n
o
i
t
a
u
a
v
e
r
e
h
t
o
t
e
u
d
s
e
c
n
a
a
b
l
t
i
d
e
r
c
e
r
a
s
t
n
e
m
y
a
p
d
e
s
a
b
e
r
a
h
S
.
5
l
.
e
b
a
t
e
v
o
b
a
e
h
t
n
i
n
w
o
h
s
n
e
e
b
t
o
n
e
v
a
h
y
e
h
t
h
c
u
s
s
A
.
s
t
n
e
m
y
a
p
d
e
s
a
b
.
s
t
n
e
m
e
e
r
g
a
i
e
c
v
r
e
s
f
o
s
l
i
a
t
e
d
n
i
d
e
t
o
n
s
a
e
c
a
p
l
n
i
s
a
w
t
n
e
m
e
e
r
g
a
n
o
i
t
a
i
r
a
v
y
r
a
r
o
p
m
e
t
a
e
l
i
l
h
w
y
r
a
a
s
%
0
5
i
d
e
v
e
c
e
R
.
4
.
d
o
i
r
e
p
e
c
i
t
o
n
d
n
a
e
v
a
e
l
l
a
u
n
n
a
f
o
t
u
o
y
a
p
s
e
d
u
c
n
l
i
s
e
e
f
d
n
a
y
r
a
a
S
l
.
0
2
0
2
e
n
u
J
5
n
o
i
d
e
n
g
s
e
R
.
1
.
9
1
0
2
r
e
b
m
e
v
o
N
7
n
o
d
e
n
g
s
e
R
i
.
2
.
9
1
0
2
r
e
b
o
t
c
O
7
n
o
d
e
n
g
s
e
R
i
.
3
NORTHERN MINERALS _ ANNUAL REPORT 2020
49
7
1
%
0
%
0
%
0
%
0
%
3
8
.
4
3
%
8
4
.
3
2
%
2
1
.
0
2
%
2
6
.
5
2
%
7
3
.
9
%
1
0
.
0
1
%
6
9
.
6
%
1
3
.
4
3
%
7
1
.
5
6
%
2
5
.
6
7
%
8
8
.
9
7
%
8
3
.
4
7
%
3
6
.
0
9
%
0
0
1
%
0
0
1
%
0
0
1
%
0
0
1
%
9
9
.
9
8
%
4
0
.
3
9
%
9
6
.
5
6
%
%
n
o
i
t
a
r
e
n
u
m
e
R
d
e
x
i
F
o
t
d
e
k
n
i
l
e
c
n
a
m
r
o
f
r
e
p
n
o
i
t
a
r
e
n
u
m
e
r
$
4
3
2
,
9
7
8
6
1
7
,
9
1
1
6
1
7
,
9
3
1
6
1
7
,
9
0
1
3
1
0
,
0
0
3
0
9
0
,
6
5
7
7
7
,
6
1
1
7
1
,
9
6
9
4
,
1
2
$
s
t
h
g
R
i
1
2
2
,
6
5
1
1
1
,
8
2
1
1
1
,
8
2
1
1
1
,
8
2
1
1
1
,
8
2
-
-
-
-
9
7
7
,
0
8
2
6
0
1
,
4
0
4
5
6
3
,
7
7
5
1
1
1
,
8
2
1
1
1
,
8
2
1
1
1
,
8
2
%
1
4
.
9
1
%
9
5
.
0
8
9
7
1
,
4
1
9
,
2
8
9
9
,
2
5
2
g
n
i
t
r
o
p
e
r
e
h
t
n
i
s
t
n
e
m
y
a
p
d
e
s
a
b
-
e
r
a
h
s
f
o
l
a
s
r
e
v
e
r
a
g
n
i
t
a
e
r
c
,
n
o
$
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
$
g
n
o
L
e
v
a
e
L
e
c
i
v
r
e
S
7
7
2
,
4
2
$
7
0
5
,
6
2
4
2
,
8
1
3
5
,
0
2
-
-
1
8
8
,
3
-
-
-
0
0
0
,
6
0
7
1
,
9
2
1
2
,
7
1
1
3
5
,
0
2
1
3
5
,
0
2
1
3
5
,
0
2
$
$
$
-
-
-
-
-
-
-
-
-
-
0
0
0
,
0
5
2
5
0
6
,
6
1
5
0
6
,
6
1
5
0
6
,
6
1
5
0
6
,
6
1
5
0
6
,
6
1
9
5
3
,
1
1
1
2
4
,
3
0
7
8
,
1
6
4
2
,
5
-
8
6
6
,
6
0
0
0
,
0
7
1
5
0
6
,
6
1
3
9
4
,
8
6
8
5
7
,
6
8
0
0
0
,
5
6
0
0
6
,
1
1
5
7
9
2
,
5
5
2
0
5
8
,
0
4
6
5
3
,
3
1
1
0
3
,
7
0
5
2
,
6
1
9
6
4
,
9
1
2
4
9
2
,
6
4
3
6
0
9
,
4
2
3
1
k
u
a
B
e
g
r
o
e
G
n
i
f
f
i
r
G
n
a
i
r
d
A
s
r
o
t
c
e
r
i
D
a
n
a
v
a
C
c
M
n
i
l
o
C
g
n
a
W
n
u
h
c
n
a
Y
3
e
u
X
n
a
y
g
n
o
C
4
u
L
i
a
u
h
o
a
X
i
6
,
5
g
n
a
Y
n
a
N
2
u
L
g
n
M
i
i
a
C
n
B
i
t
n
e
m
e
g
a
n
a
M
y
e
K
l
e
n
n
o
s
r
e
P
l
i
n
o
s
W
n
b
o
R
i
s
e
n
o
J
n
b
o
R
i
1
y
r
o
T
k
r
a
M
L
A
T
O
T
:
s
e
t
o
N
9
5
6
,
6
5
4
5
7
,
0
0
1
0
0
0
,
0
2
4
4
9
1
,
8
2
1
4
7
5
,
5
5
9
,
1
i
t
a
n
g
s
e
r
i
i
s
h
o
t
e
u
d
s
t
h
g
i
r
e
c
n
a
m
r
o
f
r
e
p
f
o
e
r
u
t
i
e
f
r
o
f
o
t
e
u
d
d
o
i
r
e
p
e
h
t
r
o
f
s
e
c
n
a
a
b
l
t
i
d
e
r
c
e
r
a
g
n
a
Y
n
a
N
r
o
f
s
t
n
e
m
y
a
p
d
e
s
a
b
-
e
r
a
h
S
.
6
.
l
e
b
a
t
e
v
o
b
a
e
h
t
n
i
n
w
o
h
s
n
e
e
b
t
o
n
e
v
a
h
y
e
h
t
h
c
u
s
s
A
.
d
o
i
r
e
p
.
9
1
0
2
h
c
r
a
M
n
i
n
o
i
l
l
i
m
0
1
$
f
o
g
n
s
a
r
i
i
l
a
t
i
p
a
c
l
u
f
s
s
e
c
c
u
s
e
h
t
n
o
d
e
s
a
b
i
d
a
p
e
r
e
w
s
e
s
u
n
o
b
h
s
a
C
1
.
.
8
1
0
2
r
e
b
o
t
c
O
h
t
4
2
d
e
t
n
o
p
p
a
i
s
a
w
u
L
g
n
M
i
.
2
.
9
1
0
2
l
i
r
p
A
6
1
d
e
t
n
o
p
p
a
i
s
a
w
e
u
X
n
a
y
g
n
o
C
.
3
.
9
1
0
2
y
a
M
0
2
d
e
t
n
o
p
p
a
i
s
a
w
u
L
i
a
u
h
o
a
X
i
.
4
.
8
1
0
2
r
e
b
o
t
c
O
h
t
4
2
d
e
n
g
s
e
r
i
g
n
a
Y
n
a
N
.
5
l
a
t
o
T
s
t
n
e
m
y
a
P
d
e
s
a
b
-
e
r
a
h
S
t
n
e
m
y
o
p
m
E
l
-
t
s
o
P
/
s
n
o
i
t
p
O
e
c
n
a
m
r
o
f
r
e
P
n
a
l
P
e
r
a
h
S
s
t
i
f
e
n
e
B
n
o
i
t
a
u
n
n
a
r
e
p
u
S
h
s
a
C
s
u
n
o
B
r
e
h
t
O
s
t
i
f
e
n
e
B
m
r
e
t
-
t
r
o
h
S
s
e
e
F
&
y
r
a
l
a
S
0
2
0
2
E
N
U
J
0
3
D
E
D
N
E
R
A
E
Y
E
H
T
R
O
F
T
R
O
P
E
R
I
I
D
E
T
M
L
S
L
A
R
E
N
M
N
R
E
H
T
R
O
N
I
’
S
R
O
T
C
E
R
D
I
9
1
0
2
e
n
u
J
0
3
d
e
d
n
E
r
a
e
Y
e
h
t
r
o
f
n
o
i
t
a
r
e
n
u
m
e
R
f
o
s
l
i
a
t
e
D
NORTHERN MINERALS _ ANNUAL REPORT 2020
50
NORTHERN MINERALS LIMITED
DIRECTORS’ REPORT FOR THE YEAR ENDED 30 JUNE 2020
6.
Employee share/performance rights plan
6.1
Options/Performance Rights and Shares granted as compensation to key management
personnel
Terms and conditions of share-based payment arrangements affecting remuneration of key management
personnel in the current financial year or future financial years:
Options/ Performance Rights
Vesting
and
exercise
date
Expiry
date
Value per
performance
right at grant
date
Grant date
Performance
achieved
% vested
30/11/2016
Various
Various
$0.12
To be determined
60%
There have been no alteration of the terms and conditions of the above share-based payment
arrangements since the grant date.
No share-based payments were granted as compensation to key management personnel during the 2019
or 2020 financial years.
During the year, key management personnel exercised their rights that were granted to them as part of
their compensation in previous years. A number of performance rights were also forfeited due to
performance conditions not being met. The number of performance rights exercised and forfeited are
shown in section 6.2, the value of performance rights exercised and forfeited are shown below.
30 June 2020
Directors
George Bauk
Adrian Griffin
Colin McCavana
Yanchun Wang
Bin Cai
Ming Lu
Congyan Xue
Xiaohua Liu
Nan Yang
Key Management
Personnel
Robin Wilson
Robin Jones
Mark Tory
TOTAL
Value of
options/performance
rights granted during
the year
$
Value of
options/performance
rights exercised
during the year
$
Value of
options/performance
rights forfeited during
the year
$
-
60,000
-
-
-
-
-
-
-
60,000
-
-
120,000
200,321
-
-
-
-
-
-
-
-
-
-
-
200,321
-
-
-
-
-
-
-
-
-
-
-
-
-
18
NORTHERN MINERALS _ ANNUAL REPORT 2020
51
-
-
-
-
0
0
0
,
0
0
0
,
3
0
0
0
,
0
0
5
,
1
0
0
0
,
0
0
5
,
1
0
0
0
,
0
0
5
,
1
0
0
0
,
0
0
5
,
1
0
0
0
,
0
0
5
,
1
0
0
0
,
0
0
5
,
1
0
0
0
,
0
0
5
,
1
0
0
0
,
0
0
5
,
3
1
-
-
-
-
-
-
-
-
-
-
-
0
0
0
,
0
0
5
0
0
0
,
0
0
5
.
i
e
s
c
r
e
x
e
n
o
-
-
-
-
0
0
0
,
0
0
0
,
3
0
0
0
,
0
0
0
,
2
0
0
0
,
0
0
5
,
1
0
0
0
,
0
0
5
,
1
0
0
0
,
0
0
5
,
1
0
0
0
,
0
0
5
,
1
0
0
0
,
0
0
5
,
1
0
0
0
,
0
0
5
,
1
0
0
0
,
0
0
0
,
4
1
)
0
0
0
,
0
0
5
(
-
-
-
-
-
)
0
0
0
,
0
0
5
(
)
0
0
0
,
0
0
0
,
1
(
-
-
-
-
-
-
-
)
0
0
0
,
0
0
0
,
2
(
-
-
-
-
)
0
0
0
,
0
0
5
(
)
0
0
0
,
0
0
5
(
)
0
0
0
,
0
0
5
(
)
0
0
0
,
0
0
5
(
)
0
0
0
,
0
0
5
,
2
(
)
0
0
0
,
0
0
5
,
3
(
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
0
0
0
,
0
0
0
,
4
0
0
0
,
0
0
0
,
2
0
0
0
,
0
0
0
,
2
0
0
0
,
0
0
0
,
2
0
0
0
,
0
0
0
,
2
0
0
0
,
0
0
0
,
2
0
0
0
,
0
0
0
,
2
0
0
0
,
0
0
0
,
2
0
0
0
,
0
0
0
,
2
0
0
0
,
0
0
0
,
0
2
i
a
C
n
B
o
i
9
1
t
d
e
r
r
e
f
s
n
a
r
t
g
n
a
W
n
u
h
c
n
a
Y
r
o
f
s
t
h
g
i
r
e
c
n
a
m
r
o
f
r
e
p
d
n
a
g
n
a
Y
n
a
N
r
o
f
n
o
i
t
a
n
g
s
e
r
i
n
o
s
t
h
g
i
r
e
c
n
a
m
r
o
f
r
e
p
d
e
t
i
e
f
r
o
f
e
d
u
c
n
l
i
-
-
-
-
0
0
0
,
0
0
0
,
1
0
0
0
,
0
0
0
,
1
0
0
0
,
0
0
0
,
1
0
0
0
,
0
0
0
,
1
0
0
0
,
0
0
0
,
1
0
0
0
,
0
0
0
,
1
0
0
0
,
0
0
0
,
1
0
0
0
,
0
0
0
,
7
0
0
0
,
0
0
5
0
0
0
,
0
0
5
0
0
0
,
0
0
5
0
0
0
,
0
0
5
0
0
0
,
0
0
0
,
1
-
-
-
-
0
0
0
,
0
0
5
0
0
0
,
0
0
5
0
0
0
,
0
0
0
,
4
-
-
-
0
0
0
,
0
0
0
,
1
0
0
0
,
0
0
5
,
1
0
0
0
,
0
0
5
,
1
0
0
0
,
0
0
5
,
1
0
0
0
,
0
0
5
,
1
0
0
0
,
0
0
0
,
1
0
0
0
,
0
0
5
,
1
0
0
0
,
0
0
5
,
1
0
0
0
,
0
0
0
,
1
1
)
0
0
0
,
0
0
0
,
2
(
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
)
0
0
0
,
0
0
5
(
-
-
)
0
0
0
,
0
0
5
(
)
0
0
0
,
0
0
0
,
2
(
)
0
0
0
,
0
0
0
,
1
(
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
0
0
0
,
0
0
0
,
3
0
0
0
,
0
0
0
,
2
0
0
0
,
0
0
5
,
1
0
0
0
,
0
0
5
,
1
0
0
0
,
0
0
5
,
1
0
0
0
,
0
0
5
,
1
0
0
0
,
0
0
5
,
1
0
0
0
,
0
0
5
,
1
0
0
0
,
0
0
0
,
4
1
9
1
0
2
r
o
f
l
e
n
n
o
s
r
e
P
t
n
e
m
e
g
a
n
a
M
y
e
K
d
e
t
s
e
v
n
U
d
e
t
s
e
V
0
3
t
a
d
l
e
H
9
1
0
2
e
n
u
J
r
e
h
t
O
1
s
e
g
n
a
h
C
s
t
h
g
R
i
n
o
i
t
a
s
n
e
p
m
o
C
r
a
e
Y
f
o
e
s
i
c
r
e
x
E
e
c
n
a
m
r
o
f
r
e
P
/
s
n
o
i
t
p
O
s
a
d
e
t
n
a
r
G
t
a
d
l
e
H
i
f
o
g
n
n
n
g
e
B
i
I
I
D
E
T
M
L
S
L
A
R
E
N
M
N
R
E
H
T
R
O
N
I
0
2
0
2
E
N
U
J
0
3
D
E
D
N
E
R
A
E
Y
E
H
T
R
O
F
T
R
O
P
E
R
’
S
R
O
T
C
E
R
D
I
d
e
t
s
e
v
n
U
d
e
t
s
e
V
0
3
t
a
d
l
e
H
0
2
0
2
e
n
u
J
r
e
h
t
O
1
s
e
g
n
a
h
C
s
t
h
g
R
i
n
o
i
t
a
s
n
e
p
m
o
C
r
a
e
Y
f
o
e
s
i
c
r
e
x
E
e
c
n
a
m
r
o
f
r
e
P
/
s
n
o
i
t
p
O
s
a
d
e
t
n
a
r
G
0
2
0
2
r
o
f
l
e
n
n
o
s
r
e
P
t
n
e
m
e
g
a
n
a
M
y
e
K
i
f
o
g
n
n
n
g
e
B
i
t
a
d
l
e
H
i
l
f
o
s
g
n
d
o
H
s
t
h
g
R
e
c
n
a
m
r
o
f
r
e
P
i
2
.
6
l
e
n
n
o
s
r
e
P
t
n
e
m
e
g
a
n
a
M
y
e
K
a
n
a
v
a
C
c
M
n
i
l
o
C
g
n
a
W
n
u
h
c
n
a
Y
k
u
a
B
e
g
r
o
e
G
n
i
f
f
i
r
G
n
a
i
r
d
A
:
s
r
o
t
c
e
r
i
D
e
u
X
n
a
y
g
n
o
C
u
L
i
a
u
h
o
a
X
i
i
a
C
n
B
i
u
L
g
n
M
i
l
i
n
o
s
W
n
b
o
R
i
n
o
i
t
a
n
g
s
e
r
n
o
i
d
e
t
i
e
f
r
o
F
.
1
s
e
n
o
J
n
b
o
R
i
y
r
o
T
k
r
a
M
i
l
f
o
s
g
n
d
o
H
s
t
h
g
R
e
c
n
a
m
r
o
f
r
e
P
i
l
e
n
n
o
s
r
e
P
t
n
e
m
e
g
a
n
a
M
y
e
K
a
n
a
v
a
C
c
M
n
i
l
o
C
g
n
a
W
n
u
h
c
n
a
Y
k
u
a
B
e
g
r
o
e
G
n
i
f
f
i
r
G
n
a
i
r
d
A
:
s
r
o
t
c
e
r
i
D
e
u
X
n
a
y
g
n
o
C
u
L
i
a
u
h
o
a
X
i
g
n
a
Y
n
a
N
i
a
C
n
B
i
u
L
g
n
M
i
s
e
g
n
a
h
c
r
e
h
t
O
.
1
s
e
n
o
J
n
b
o
R
i
y
r
o
T
k
r
a
M
l
i
n
o
s
W
n
b
o
R
i
NORTHERN MINERALS _ ANNUAL REPORT 2020
d
e
t
s
e
V
t
o
N
d
e
t
s
e
V
0
2
0
2
e
n
u
J
0
3
t
a
d
e
H
l
2
s
e
g
n
a
h
C
r
e
h
t
O
f
o
e
s
i
c
r
e
x
E
e
c
n
a
m
r
o
f
r
e
P
s
n
o
i
t
p
O
/
s
a
d
e
t
n
a
r
G
t
a
d
l
e
H
i
f
o
g
n
n
n
g
e
B
i
52
I
I
D
E
T
M
L
S
L
A
R
E
N
M
N
R
E
H
T
R
O
N
I
0
2
0
2
E
N
U
J
0
3
D
E
D
N
E
R
A
E
Y
E
H
T
R
O
F
T
R
O
P
E
R
’
S
R
O
T
C
E
R
D
I
0
2
0
2
r
o
f
l
e
n
n
o
s
r
e
P
t
n
e
m
e
g
a
n
a
M
y
e
K
l
i
f
o
s
g
n
d
o
h
e
r
a
h
S
3
.
6
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
6
2
6
,
0
0
0
,
5
1
0
0
,
0
0
1
,
4
6
1
6
,
4
8
4
,
5
9
9
9
,
7
5
6
,
0
1
2
5
9
4
,
0
4
8
,
1
4
5
1
,
2
1
5
4
1
5
,
2
5
8
,
1
5
0
4
,
8
4
4
,
9
2
2
-
-
-
-
6
2
6
,
0
0
0
,
5
1
0
0
,
0
0
1
,
4
6
1
6
,
4
8
4
,
5
9
9
9
,
7
5
6
,
0
1
2
5
9
4
,
0
4
8
,
1
4
5
1
,
2
1
5
4
1
5
,
2
5
8
,
1
5
0
4
,
8
4
4
,
9
2
2
-
6
7
4
,
1
2
4
)
0
5
6
1
8
2
,
,
6
(
)
9
9
9
9
9
0
,
,
1
(
1
0
0
,
7
4
0
,
5
1
6
1
6
,
4
8
3
)
0
6
7
,
4
3
1
,
4
3
1
(
)
0
0
0
,
0
0
0
,
0
1
1
(
-
-
-
-
-
-
s
t
h
g
R
i
-
0
0
0
,
0
0
5
)
4
1
1
,
0
9
5
(
)
4
5
1
,
8
9
4
(
6
0
5
,
5
4
1
-
-
0
0
0
,
0
0
5
)
8
7
0
,
6
0
6
,
6
3
2
(
,
0
0
0
0
0
0
,
1
n
o
i
t
a
s
n
e
p
m
o
C
r
a
e
Y
-
-
-
-
-
-
-
-
-
-
-
-
-
0
5
6
,
1
8
2
,
6
0
5
1
,
9
7
0
,
4
0
0
0
,
0
0
2
,
5
0
0
0
,
0
0
1
,
5
8
9
9
,
0
1
6
,
5
9
1
0
6
7
,
4
3
1
,
4
3
1
0
0
0
,
0
0
0
,
0
1
1
9
0
6
,
0
3
9
,
1
8
0
3
,
0
1
0
,
1
8
0
0
,
7
0
7
,
1
3
8
4
,
4
5
0
,
5
6
4
3
,
1
k
u
a
B
e
g
r
o
e
G
n
i
f
f
i
r
G
n
a
i
r
d
A
a
n
a
v
a
C
c
M
n
i
l
o
C
g
n
a
W
n
u
h
c
n
a
Y
:
s
r
o
t
c
e
r
i
D
2
i
a
C
n
B
i
u
L
g
n
M
i
t
n
e
m
e
g
a
n
a
M
y
e
K
l
e
n
n
o
s
r
e
P
3
e
u
X
n
a
y
g
n
o
C
3
u
L
i
a
u
h
o
a
X
i
l
i
n
o
s
W
n
b
o
R
i
s
e
n
o
J
n
b
o
R
i
y
r
o
T
k
r
a
M
l
e
b
a
r
u
o
v
a
f
e
r
o
m
o
n
s
n
o
i
t
i
d
n
o
c
d
n
a
s
m
r
e
t
r
e
d
n
u
o
t
n
i
d
e
r
e
t
n
e
n
e
e
b
e
v
a
h
n
o
i
t
a
s
n
e
p
m
o
c
s
a
d
e
t
n
a
r
g
s
n
o
i
t
p
o
f
i
o
e
s
c
r
e
x
e
e
h
t
m
o
r
f
i
g
n
s
i
r
a
e
s
o
h
t
n
a
h
t
r
e
h
t
o
l
e
n
n
o
s
r
e
P
t
n
e
m
e
g
a
n
a
M
y
e
K
h
t
i
w
s
n
o
i
t
c
a
s
n
a
r
t
y
t
i
u
q
e
l
l
A
.
t
h
g
n
e
l
'
s
m
r
a
t
a
g
n
i
l
a
e
d
f
i
d
e
t
p
o
d
a
e
v
a
h
l
d
u
o
w
y
n
a
p
m
o
C
e
h
t
e
s
o
h
t
n
a
h
t
l
l
.
s
e
u
r
n
a
P
e
r
a
h
S
e
h
t
h
t
i
w
e
c
n
a
d
r
o
c
c
a
n
i
y
n
a
p
m
o
C
e
h
t
o
t
k
c
a
b
t
r
e
v
e
r
d
n
a
y
r
i
p
x
e
n
a
o
l
o
t
e
u
d
r
a
e
y
e
h
t
n
i
d
e
r
i
p
x
e
e
v
a
h
t
a
h
t
s
e
r
a
h
s
l
n
a
p
e
r
a
h
s
s
e
d
u
c
n
l
i
k
u
a
B
e
g
r
o
e
G
r
o
f
s
e
g
n
a
h
c
r
e
h
t
O
s
e
g
n
a
h
c
r
e
h
t
o
n
i
s
t
n
e
m
e
v
o
m
s
a
n
w
o
h
s
e
r
a
n
o
i
t
a
n
g
s
e
r
n
o
i
s
e
r
a
h
s
r
i
e
h
t
–
r
a
e
y
e
h
t
n
i
d
e
n
g
s
e
r
i
s
r
o
t
c
e
r
i
D
t
e
k
r
a
m
-
n
o
s
e
s
a
h
c
r
u
p
d
n
a
s
e
a
s
l
s
e
d
u
c
n
l
i
o
s
a
l
s
e
g
n
a
h
c
r
e
h
t
O
.
1
.
2
.
3
0
2
NORTHERN MINERALS _ ANNUAL REPORT 2020
d
e
t
s
e
V
t
o
N
d
e
t
s
e
V
9
1
0
2
e
n
u
J
0
3
t
a
d
l
e
H
5
s
e
g
n
a
h
C
r
e
h
t
O
s
t
h
g
R
i
n
o
i
t
a
s
n
e
p
m
o
C
r
a
e
Y
-
-
-
-
-
-
-
-
-
-
-
-
-
-
0
5
6
,
1
8
2
,
6
0
5
1
,
9
7
0
,
4
0
0
0
,
0
0
2
,
5
0
0
0
,
0
0
1
,
5
8
9
9
,
0
1
6
,
5
9
1
-
0
6
7
,
4
3
1
,
4
3
1
0
0
0
,
0
0
0
,
0
1
1
9
0
6
,
0
3
9
,
1
8
0
3
,
0
1
0
,
1
8
0
0
,
7
0
7
,
1
3
8
4
,
4
5
0
,
5
6
4
-
0
5
6
,
1
8
2
,
6
0
5
1
,
9
7
0
,
4
0
0
0
,
0
0
2
,
5
0
0
0
,
0
0
1
,
5
8
9
9
,
0
1
6
,
5
9
1
-
0
6
7
,
4
3
1
,
4
3
1
0
0
0
,
0
0
0
,
0
1
1
9
0
6
,
0
3
9
,
1
8
0
3
,
0
1
0
,
1
8
0
0
,
7
0
7
,
1
3
8
4
,
4
5
0
,
5
6
4
-
-
-
0
0
0
,
0
0
5
)
0
0
0
,
0
0
0
,
3
(
)
0
0
0
,
0
0
5
(
0
6
7
,
4
3
1
,
4
3
1
0
0
0
,
0
0
0
,
0
1
1
)
0
0
0
,
0
0
2
(
)
0
0
0
,
0
0
3
(
0
0
0
,
0
4
3
-
-
-
-
-
-
0
0
0
,
0
0
5
0
0
0
,
0
0
5
0
0
0
,
0
0
5
0
0
0
,
0
0
5
0
0
0
,
0
0
5
)
0
0
0
,
0
0
0
,
4
(
0
0
0
,
0
0
0
,
1
0
6
7
,
4
7
9
,
6
3
2
0
0
0
,
0
0
5
,
3
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
0
0
0
,
0
0
5
0
5
6
,
1
8
2
,
9
0
5
1
,
9
7
0
,
4
0
0
0
,
0
0
7
,
4
0
0
0
,
0
0
1
,
4
8
9
9
,
0
1
6
,
8
9
1
8
0
3
,
0
1
8
8
0
0
,
7
6
8
9
0
6
,
0
3
6
,
1
3
2
7
,
9
7
5
,
4
2
2
1
k
u
a
B
e
g
r
o
e
G
n
i
f
f
i
r
G
n
a
i
r
d
A
a
n
a
v
a
C
c
M
n
i
l
o
C
g
n
a
W
n
u
h
c
n
a
Y
:
s
r
o
t
c
e
r
i
D
2
i
a
C
n
B
i
u
L
g
n
M
i
t
n
e
m
e
g
a
n
a
M
y
e
K
l
e
n
n
o
s
r
e
P
3
e
u
X
n
a
y
g
n
o
C
3
u
L
i
a
u
h
o
a
X
i
4
3
n
a
Y
n
a
N
l
i
n
o
s
W
n
b
o
R
i
s
e
n
o
J
n
b
o
R
i
y
r
o
T
k
r
a
M
0
2
0
2
E
N
U
J
0
3
D
E
D
N
E
R
A
E
Y
E
H
T
R
O
F
T
R
O
P
E
R
I
I
D
E
T
M
L
S
L
A
R
E
N
M
N
R
E
H
T
R
O
N
I
’
S
R
O
T
C
E
R
D
I
9
1
0
2
r
o
f
l
e
n
n
o
s
r
e
P
t
n
e
m
e
g
a
n
a
M
y
e
K
l
i
f
o
s
g
n
d
o
h
e
r
a
h
S
f
o
e
s
i
c
r
e
x
E
e
c
n
a
m
r
o
f
r
e
P
/
s
n
o
i
t
p
O
s
a
d
e
t
n
a
r
G
t
a
d
l
e
H
i
f
o
g
n
n
n
g
e
B
i
l
l
.
s
e
u
r
n
a
P
e
r
a
h
S
e
h
t
h
t
i
w
e
c
n
a
d
r
o
c
c
a
n
i
y
n
a
p
m
o
C
e
h
t
o
t
k
c
a
b
t
r
e
v
e
r
d
n
a
y
r
i
p
x
e
n
a
o
l
o
t
e
u
d
r
a
e
y
e
h
t
n
i
d
e
r
i
p
x
e
e
v
a
h
t
a
h
t
s
e
r
a
h
s
l
n
a
p
e
r
a
h
s
s
e
d
u
c
n
l
i
k
u
a
B
e
g
r
o
e
G
r
o
f
s
e
g
n
a
h
c
r
e
h
t
O
.
s
e
g
n
a
h
c
r
e
h
t
o
n
i
s
t
n
e
m
e
v
o
m
s
a
n
w
o
h
s
e
r
a
t
n
e
m
t
n
o
p
p
a
i
n
o
l
s
e
c
n
a
a
b
r
i
e
h
t
–
r
a
e
y
e
h
t
n
i
i
d
e
t
n
o
p
p
a
s
r
o
t
c
e
r
i
D
.
s
e
g
n
a
h
c
r
e
h
t
o
n
i
t
n
e
m
e
v
o
m
a
s
a
n
w
o
h
s
e
r
a
e
t
a
d
n
o
i
t
a
n
g
s
e
r
i
t
a
s
a
s
e
c
n
a
a
b
l
i
s
h
–
r
a
e
y
n
i
d
e
n
g
s
e
r
i
g
n
a
Y
n
a
N
s
t
h
g
i
r
e
c
n
a
m
r
o
f
r
e
p
f
o
i
e
s
c
r
e
x
e
n
o
g
n
a
W
n
u
h
c
n
a
Y
m
o
r
f
r
e
f
s
n
a
r
t
e
d
u
c
n
l
i
s
e
g
n
a
h
c
r
e
h
t
O
t
e
k
r
a
m
-
n
o
s
e
s
a
h
c
r
u
p
d
n
a
s
e
a
s
l
s
e
d
u
c
n
l
i
o
s
a
l
s
e
g
n
a
h
c
r
e
h
t
O
.
1
.
2
.
3
.
4
.
5
l
e
b
a
r
u
o
v
a
f
e
r
o
m
o
n
s
n
o
i
t
i
d
n
o
c
d
n
a
s
m
r
e
t
r
e
d
n
u
o
t
n
i
d
e
r
e
t
n
e
n
e
e
b
e
v
a
h
n
o
i
t
a
s
n
e
p
m
o
c
s
a
d
e
t
n
a
r
g
s
n
o
i
t
p
o
f
o
e
s
c
r
e
x
e
e
h
t
i
i
m
o
r
f
g
n
s
i
r
a
e
s
o
h
t
n
a
h
t
r
e
h
t
o
l
e
n
n
o
s
r
e
P
t
n
e
m
e
g
a
n
a
M
y
e
K
h
t
i
w
s
n
o
i
t
c
a
s
n
a
r
t
y
t
i
u
q
e
A
l
l
53
1
2
.
h
t
g
n
e
l
'
s
m
r
a
t
a
g
n
i
l
a
e
d
f
i
d
e
t
p
o
d
a
e
v
a
h
l
d
u
o
w
y
n
a
p
m
o
C
e
h
t
e
s
o
h
t
n
a
h
t
NORTHERN MINERALS _ ANNUAL REPORT 2020
54
NORTHERN MINERALS LIMITED
DIRECTORS’ REPORT FOR THE YEAR ENDED 30 JUNE 2020
6.4 Other transactions with key management personnel
Northern Minerals have entered into agreements with companies associated with Non-executive
Director Adrian Griffin and ex-Managing Director George Bauk, for them to rent office accommodation
at 675 Murray Street, West Perth. The rent has been set at a rate which is at arms-length commercial
rate for comparable premises.
Rental Income
2020
$
125,941
2019
$
95,294
The following balances are outstanding at the end of the reporting
period in relation to transactions with related parties:
Current receivables
20,767
12,452
During the year ended 30 June 2019, Northern Minerals entered into a consultancy agreement with Go
& Company Ltd, a company associated with Non-executive Director Congyan Xue, under which Go &
Company Ltd advised the Company on equity raisings. The Company issued 10,000,000 fully paid
ordinary shares to Go & Company Ltd as partial consideration for entry into the consultancy agreement
upon receipt of the $3 million placement for 50,000,000 fully paid ordinary shares in the Company at
an issue price of $0.06 per share as announced on 1 February 2019. A further 20,000,000 fully paid
ordinary shares were issued upon receipt of the $3 million placement for 60,000,000 fully paid ordinary
shares in the Company at an issue price of $0.05 per share. The value of these shares issued in relation
to this consultancy agreement totalled $1,270,000 for FY19.
No such services were provided during the year ended 30 June 2020.
*** End of Remuneration Report ***
22
NORTHERN MINERALS _ ANNUAL REPORT 2020
55
NORTHERN MINERALS LIMITED
DIRECTORS’ REPORT FOR THE YEAR ENDED 30 JUNE 2020
CORPORATE GOVERNANCE STATEMENT
The Board of Northern Minerals Limited is committed to achieving and demonstrating the highest
standards of corporate governance. The Board is responsible to its shareholders for the performance
of the Company and seeks to communicate extensively with shareholders. The Board believes that
sound corporate governance practices will assist in the creation of shareholder wealth and provide
accountability.
In accordance with ASX Listing Rule 4.10.3, the Company has elected to disclose its corporate
governance policies and its compliance with them on its website, rather than in the Annual Report.
Accordingly, information about the Company’s corporate governance practices is set out on the
Company’s website at www.northernminerals.com.au.
AUDITOR’S INDEPENDENCE DECLARATION
A copy of the auditor’s independence declaration as required under section 307C of the Corporations
Act 2001 is set out on page 105.
NON-AUDIT SERVICES
There were no non-audit services carried out in the year ended 30 June 2020.
SIGNIFICANT EVENTS AFTER THE BALANCE DATE
On 1 July 2020, the Company made the decision to partially restart operations at the Browns Range
Pilot Plant Project. This decision was made following the lifting of Commonwealth biosecurity
restrictions applied to the Kimberley region as a part of Covid-19 control measures. The partial return
of pilot plant operations at Browns Range resulted in about three quarters of the previous project
workforce being re-mobilised. Initial operations will focus on test work in the beneficiation circuit followed
by tests in the hydrometallurgical circuit along with mechanical construction and installation of the ore
sorter.
On 22 July 2020, the Company issued 183,500,000 fully paid ordinary shares upon receipt of $3.67
million relation to the outstanding tranches of the $22 million placement announced on the ASX on 20
April 2020. A further 145,000,000 fully paid ordinary shares were issued on 16 September following the
receipt of the final $2.9 million of the placement.
In August 2020, the Company announced it had reached a settlement agreement with the ATO that
settled all matters relating to the FY17 and FY18 R&D tax offset claims. The settlement agreement also
documented the agreed refundable R&D offset claim for FY19 as well as a framework for reviewing the
Company’s refundable R&D offset claim for FY20. On 14 September 2020, the Company received
$8.64 million from the ATO in relation to the refundable R&D tax offset claims for FY17 to FY19. The
final $1.3 million relating to these claims was received on 17 September.
On receipt of the first tranche of R&D funding the Company made a repayment of $2 million of the
outstanding $4 million of convertible notes issued to JHY Investments Pty Ltd. The final balance of $2
million payable to JHY is due on 31 December 2020.
On 17 July 2020 Lind issued a notice for the conversion of $0.8 million owing under the convertible note
agreement and as a result the Company issued 50,000,000 fully paid ordinary shares.
On 21 August 2020 the Company issued a further 66,666,667 fully paid ordinary shares as a result of
the conversion of $1.2 million of the face value of the convertible note. Following this conversion, there
are no amounts outstanding under the convertible note (which has now been redeemed in full). In
addition, Lind also elected to reduce its collateral shareholding number (under the original funding
agreement) from 60,000,000 shares to zero by paying the Company $10.8 million in cash.
The impact of the Coronavirus (COVID-19) pandemic is ongoing as at 30 June 2020 and 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
23
NORTHERN MINERALS _ ANNUAL REPORT 2020 56
NORTHERN MINERALS LIMITED
DIRECTORS’ REPORT FOR THE YEAR ENDED 30 JUNE 2020
countries, such as maintaining social distancing requirements, quarantine, travel restrictions and any
economic stimulus that may be provided.
Signed in accordance with a resolution of the directors.
_____________________
Colin McCavana
Director
24 September 2020
24
NORTHERN MINERALS _ ANNUAL REPORT 2020
57
NORTHERN MINERALS LIMITED
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE
INCOME
FOR THE YEAR ENDED 30 June 2020
Revenue from continuing operations
Revenue from contracts with customers
Interest
Research and development rebate
Other income
Total revenue
Corporate expenses
Note
5
6
5
5
2020
$
3,069,070
24,432
23,272,772
2,060,379
2019
$
-
2,307
-
2,000,068
28,426,653
2,002,375
Administration expenses
Depreciation expense
Share based payments expense
Legal and professional expenses
Occupancy expenses
Employee benefits expense
Other corporate expenditure
Royalty expense
Research and development rebate reversal
Impairment loss on property, plant and equipment
Changes in the fair value of interest bearing liabilities at
fair value through profit & loss
10(a)
17
5
10
8(g)
1,334,803
24,430,719
(586,159)
2,364,618
247,176
3,385,067
1,684,557
125,926
-
24,763,044
(189,162)
935,836
19,415,157
2,124,684
2,297,026
286,825
3,076,389
261,013
1,228
6,198,937
-
(90,182)
Total corporate expenses
57,560,589
34,506,913
Exploration and evaluation expenditure
Exploration costs
Project evaluation and pre-feasibility
Mining expenditure
Total exploration and evaluation expenditure
expenses
Total expenses
Operating loss
Finance costs / (Income)
Loss before income tax
Income tax expense
Loss for the year
Other comprehensive income
Total comprehensive loss for the year attributable
to members of the entity
Loss per share attributable to ordinary equity
holders of the company:
Basic and diluted loss per share (cents per share)
4
4
4
6
7
2,605,662
19,618,647
116,319
1,591,966
21,221,271
-
22,340,628
22,813,237
79,901,217
57,320,150
(51,474,564)
(55,317,775)
2,853,796
8,648,555
(54,328,360)
(63,966,330)
-
-
(54,328,360)
(63,966,330)
-
-
(54,328,360)
(63,966,330)
19
(2.04)
(4.67)
The above consolidated statement of profit and loss and other comprehensive income should be read
in conjunction with the accompanying notes
25
NORTHERN MINERALS _ ANNUAL REPORT 2020
58
NORTHERN MINERALS LIMITED
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 June 2020
Current assets
Cash and cash equivalents
Trade and other receivables
Inventories
Total Current Assets
Non-current assets
Other financial assets
Property, plant and equipment
Note
8 (a)
8 (b)
10 (b)
2020
$
6,660,568
24,315,603
992,099
2019
$
8,140,422
2,118,577
722,015
31,968,270
10,981,014
8 (c)
10 (a)
60,523
10,451,003
89,272
50,506,952
Total Non-Current Assets
10,511,526
50,596,224
Total assets
Current liabilities
Trade and other payables
Interest bearing liabilities
Deferred revenue
Provisions
Total Current Liabilities
Non-current liabilities
Trade and other payables
Interest bearing liabilities
Deferred revenue
Provisions
42,479,796
61,577,238
11,364,370
5,828,193
7,521,406
1,106,518
12,365,446
18,435,416
1,333,680
971,120
25,820,487
33,105,662
-
25,485
-
4,977,310
4,269,253
7,472,655
1,333,589
4,716,141
8 (d)
8 (e)
8 (f)
10 (c)
8 (d)
8 (e)
8 (f)
10 (c)
Total Non-Current Liabilities
5,002,795
17,791,638
Total liabilities
Net assets
Equity
Issued Capital
Reserves
Accumulated losses
Total equity
30,823,282
50,897,300
11,656,514
10,679,938
11 (a)
11 (g)
243,671,335
12,521,187
(244,536,008)
188,482,276
12,405,310
(190,207,648)
11,656,514
10,679,938
The above consolidated statement of financial position should be read in conjunction with the
accompanying notes
26
NORTHERN MINERALS _ ANNUAL REPORT 2020
7
4
3
,
7
2
7
,
1
3
5
2
0
,
8
7
2
,
1
1
5
4
,
8
9
3
,
8
0
8
3
,
7
4
3
,
4
)
8
1
3
,
1
4
2
,
6
2
1
(
9
0
8
,
4
4
9
,
3
4
1
$
$
L
A
T
O
T
R
E
H
T
O
S
E
V
R
E
S
E
R
$
S
N
O
T
P
O
I
E
V
R
E
S
E
R
D
N
A
S
T
H
G
R
I
E
V
R
E
S
E
R
S
T
N
E
M
Y
A
P
S
E
S
S
O
L
$
$
$
E
C
N
A
M
R
O
F
R
E
P
D
E
S
A
B
E
R
A
H
S
D
E
T
A
L
U
M
U
C
C
A
I
L
A
T
P
A
C
D
E
U
S
S
I
e
t
o
N
I
Y
T
U
Q
E
N
I
I
I
D
E
T
M
L
S
L
A
R
E
N
M
N
R
E
H
T
R
O
N
I
0
2
0
2
e
n
u
J
0
3
T
A
S
A
S
E
G
N
A
H
C
F
O
T
N
E
M
E
T
A
T
S
D
E
T
A
D
L
O
S
N
O
C
I
59
)
0
3
3
,
6
6
9
,
3
6
(
-
)
0
3
3
,
6
6
9
,
3
6
(
1
6
9
,
7
7
6
7
6
4
,
7
3
5
,
4
4
)
0
0
0
,
0
4
5
,
1
(
)
2
9
8
,
1
0
7
,
1
(
5
8
3
,
5
4
9
8
3
9
,
9
7
6
,
0
1
8
3
9
,
9
7
6
,
0
1
-
)
0
6
3
,
8
2
3
,
4
5
(
)
0
6
3
,
8
2
3
,
4
5
(
)
9
5
1
,
0
1
1
(
6
3
0
,
6
2
2
9
5
0
,
9
8
1
,
5
5
4
1
5
,
6
5
6
,
1
1
-
-
-
-
-
-
5
8
3
,
5
4
9
)
2
9
8
,
1
0
7
,
1
(
8
1
5
,
1
2
5
8
1
5
,
1
2
5
-
-
-
-
-
6
3
0
,
6
2
2
4
5
5
,
7
4
7
-
-
-
-
-
-
-
1
6
9
,
7
7
6
-
-
-
-
-
-
-
)
0
0
0
,
0
4
5
,
1
(
-
-
-
-
-
)
9
5
1
,
0
1
1
(
-
-
-
-
-
-
3
5
2
,
6
6
9
,
8
0
8
3
,
7
0
8
,
2
)
8
0
0
,
6
3
5
,
4
4
2
(
5
3
3
,
1
7
6
,
3
4
2
-
-
-
-
-
9
5
0
,
9
8
1
,
5
5
)
a
(
1
1
)
g
(
1
1
2
1
4
,
6
7
0
,
9
0
8
3
,
7
0
8
,
2
)
8
4
6
,
7
0
2
,
0
9
1
(
6
7
2
,
2
8
4
,
8
8
1
2
1
4
,
6
7
0
,
9
0
8
3
,
7
0
8
,
2
)
8
4
6
,
7
0
2
,
0
9
1
(
6
7
2
,
2
8
4
,
8
8
1
-
)
0
6
3
,
8
2
3
,
4
5
(
)
0
6
3
,
8
2
3
,
4
5
(
-
-
-
r
a
e
y
l
i
a
c
n
a
n
i
f
s
a
y
t
i
c
a
p
a
c
r
i
e
h
t
n
i
s
r
e
n
w
o
h
t
i
w
s
n
o
i
t
c
a
s
n
a
r
T
s
t
s
o
c
n
o
i
t
c
a
s
n
a
r
t
f
o
t
e
n
d
e
u
s
s
i
s
e
r
a
h
S
:
s
r
e
n
w
o
d
e
u
s
s
i
s
e
t
o
n
l
e
b
i
t
r
e
v
n
o
C
d
e
u
s
s
i
s
n
o
i
t
p
o
/
s
e
r
a
h
S
0
2
0
2
e
n
u
J
0
3
t
a
e
c
n
a
l
a
B
e
h
t
r
o
f
s
s
o
l
i
e
v
s
n
e
h
e
r
p
m
o
c
l
a
t
o
T
e
m
o
c
n
i
i
e
v
s
n
e
h
e
r
p
m
o
c
r
e
h
t
O
r
a
e
y
l
i
a
c
n
a
n
i
f
e
h
t
r
o
f
s
s
o
L
9
1
0
2
e
n
u
J
0
3
t
a
e
c
n
a
a
B
l
9
1
0
2
y
u
J
1
l
t
a
e
c
n
a
a
B
l
)
0
3
3
,
6
6
9
,
3
6
(
-
)
0
3
3
,
6
6
9
,
3
6
(
-
-
-
r
a
e
y
l
i
a
c
n
a
n
i
f
e
h
t
r
o
f
s
s
o
l
i
e
v
s
n
e
h
e
r
p
m
o
c
l
a
t
o
T
e
m
o
c
n
i
i
e
v
s
n
e
h
e
r
p
m
o
c
r
e
h
t
O
d
o
i
r
e
p
e
h
t
r
o
f
s
s
o
L
8
1
0
2
y
u
J
1
l
t
a
e
c
n
a
a
B
l
y
t
i
t
n
E
d
e
t
a
d
i
l
o
s
n
o
C
-
-
-
-
-
-
-
-
-
7
6
4
,
7
3
5
,
4
4
)
a
(
1
1
)
g
(
1
1
)
g
(
1
1
)
g
(
1
1
s
a
y
t
i
c
a
p
a
c
r
i
e
h
t
n
i
s
r
e
n
w
o
h
t
i
w
s
n
o
i
t
c
a
s
n
a
r
T
s
t
s
o
c
n
o
i
t
c
a
s
n
a
r
t
f
o
t
e
n
d
e
u
s
s
i
s
e
r
a
h
S
:
s
r
e
n
w
o
d
e
u
s
s
e
r
i
s
e
r
a
h
s
l
a
r
e
t
a
l
l
o
c
n
i
l
e
u
a
v
n
i
e
s
a
e
r
c
e
D
d
e
u
s
s
i
s
e
t
o
n
l
e
b
i
t
r
e
v
n
o
C
d
e
u
s
s
i
s
n
o
i
t
p
o
/
s
e
r
a
h
S
d
e
u
s
s
i
t
o
n
s
e
r
a
h
S
7
2
s
e
t
o
n
i
g
n
y
n
a
p
m
o
c
c
a
e
h
t
h
t
i
w
n
o
i
t
c
n
u
n
o
c
j
n
i
d
a
e
r
e
b
l
d
u
o
h
s
y
t
i
u
q
e
n
i
s
e
g
n
a
h
c
f
o
t
n
e
m
e
t
a
t
s
d
e
t
a
d
i
l
o
s
n
o
c
e
v
o
b
a
e
h
T
NORTHERN MINERALS _ ANNUAL REPORT 2020
60
NORTHERN MINERALS LIMITED
CONSOLIDATED STATEMENT OF CASH FLOWS
AS AT 30 June 2020
NOTE
2020
$
2019
$
Cash flows from operating activities
Receipts from customers
Payments to suppliers and employees
Interest paid
Research & development rebate on eligible expenditure
Other income received
2,661,735
(29,732,767)
(1,218,134)
(4,401,712)
934,564
-
(27,987,212)
(4,083,593)
-
12,376,862
Net cash outflow from operating activities
12(a)
(31,756,314)
(19,693,943)
Cash flows from investing activities
Payments for property, plant and equipment
(15,844,542)
(11,932,810)
Net cash outflow from investing activities
(15,844,542)
(11,932,810)
Cash flows from financing activities
Proceeds from issues of shares
Proceeds from issue of convertible notes
Repayment of convertible notes
Share issue costs
Proceeds from borrowings
Repayment of borrowings
55,522,026
2,625,000
-
(3,708,166)
-
(8,286,566)
40,161,541
13,500,000
(1,653,099)
(1,831,158)
3,187,894
(23,953,302)
Net cash inflow from financing activities
46,152,294
29,411,876
Net (decrease) / increase in cash and cash equivalents
(1,448,562)
(2,214,877)
Cash and cash equivalents at beginning of the financial
year
Effects of exchange rate changes on cash and cash
equivalents
Cash and cash equivalents at the end of the financial
year
8,140,422
10,394,113
8(a)
(31,292)
(38,814)
6,660,568
8,140,422
The above consolidated statement of cash flows should be read in conjunction with the accompanying
notes.
28
NORTHERN MINERALS _ ANNUAL REPORT 2020
61
NORTHERN MINERALS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
This section sets out the accounting policies that relate to the financial statements of Northern Minerals
Limited (“the Company”) and its subsidiaries (“the Group”). Where an accounting policy, critical
accounting estimate, assumption and judgement is specific to a note, these are described within the
note to which they relate. These policies have been consistently applied to all periods presented, except
as described in Note 23 New standards and Interpretations.
The consolidated financial statements of Northern Minerals Limited (“the Company”) and its subsidiaries
(“the Group”) for the year ended 30 June 2020 were authorised for issue in accordance with a resolution
of the directors on 24 September 2020.
1.
Reporting Entity
Northern Minerals Limited is a company limited by shares incorporated and domiciled in Australia where
its shares are publicly traded on the Australian Securities Exchange (ASX), and the entity is a for profit
entity.
The nature of the operations and principal activities of the Company are described in the Directors'
Report.
2.
Basis of Preparation
The financial report is a general purpose financial report, which has been prepared in accordance with
the requirements of the Corporations Act 2001, Australian Accounting Standards and other authoritative
pronouncements of the Australian Accounting Standards Board. The financial report has also been
prepared on a historical cost basis, except for derivative financial instruments and certain other financial
assets and liabilities, which are required to be measured at fair value.
The financial report complies with Australian Accounting Standards, as issued by the Australian
Accounting Standards Board and International Financial Reporting Standards (IFRS) as issued by the
International Accounting Standards Board.
The financial report is presented in Australian dollars which is the Group’s functional currency and all
values are rounded to the nearest dollar.
The Group has, where applicable, adopted all of the new and revised Standards and Interpretations
issued by the Australian Accounting Standards Board (the AASB) that are relevant to their operations
and effective for the year ended 30 June 2020. Refer to Note 23 New Standards and Interpretations for
further details. The Group did not early adopt any Accounting Standards and Interpretations that have
been issued or amended but are not yet effective.
a)
Financial Position
The financial report has been prepared on the going concern basis, which contemplates the continuity
of normal business activity and the realisation of assets and the settlement of liabilities in the normal
course of business.
The Group has incurred a loss for the year ended 30 June 2020 of $54,328,360 (2019: $63,966,330)
and experienced net cash outflows from operating activities of $31,756,314 (2019: $19,693,943). As at
30 June 2020 the Group had cash on hand of $6,660,568 (2019: $8,140,422) and a net working capital
surplus of $6,147,783 (2019: deficit of $22,124,648). The loss mainly reflects the impairment loss on
property, plant and equipment and depreciation expense.
Subsequent to year end the Group received funding from the following sources:
•
In August 2020, the Company announced it had reached a settlement agreement with the ATO
that settled all matters relating to the FY17, FY18 and FY19 R&D tax offset claims. In
September 2020, the Company received the net refund from the ATO of $10.0 million in relation
to the FY17 to FY19 tax offset claims.
• As at the date of this report, a further $6.57 million had been received post year end for the
outstanding tranches of the A$22 million placement announced on the ASX on 20 April
2020. This now completes the placement in full.
29
NORTHERN MINERALS _ ANNUAL REPORT 2020
62
NORTHERN MINERALS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
2.
Basis of Preparation (continued)
• On 21 August 2020, the Company issued fully paid ordinary shares as a result of the conversion
of the final amounts outstanding under the Lind convertible note (which has now been
redeemed in full). Lind also elected to reduce its collateral shareholding number (under the
original funding agreement) from 60,000,000 shares to nil by paying the Company $1.08 million
in cash.
In addition the claim for the refundable R&D tax offset for FY20 is currently under review by the ATO
and is expected to be lodged and received within the December 2020 quarter. The ATO settlement
agreement also documented a framework for reviewing the Company’s refundable R&D offset claim for
FY20 to ensure there were no significant delays.
The directors carefully manage discretionary expenditure in line with the Group’s cash flow forecast.
Based on the matters described above, the Directors consider the going concern basis of preparation
appropriate.
b)
Basis of Consolidation
The consolidated financial statements comprise the financial statements of Northern Minerals Limited
and its subsidiaries as at and for the year ended 30 June 2020. A list of controlled entities at year end
is contained within note 13.
The financial statements of subsidiaries are prepared for the same reporting period as the parent
company, using consistent accounting policies.
3.
Critical Accounting Judgements, Estimates, Assumptions and Errors
(a)
Significant estimates and judgements
In applying the Group’s accounting policies management continually evaluates judgements, estimates
and assumptions based on experience and other factors, including expectations of future events that
may have an impact on the Group. All judgements, estimates and assumptions made are believed to
be reasonable based on the most current set of circumstances available to management. Actual results
may differ from the judgements, estimates and assumptions. Significant judgements, estimates and
assumptions made by management in the preparation of these financial statements are outlined below:
Taxation
Balances disclosed in the financial statements and the notes thereto related to taxation are based on
the best estimates of the Directors. These estimates take into account both the financial performance
and position of the Group as they pertain to current income taxation legislation, and the Directors
understanding thereof. No adjustment has been made for pending or future taxation legislation. The
current income tax position represents the directors’ best estimate, in respect of R & D and the decline
in value of the pilot plant.
Details of the tax assessment are further discussed in Note 7.
Share-based payment transactions
The Company measures the cost of equity-settled transactions with employees, vendors and suppliers
by reference to the fair value of the equity instruments at the date at which they are granted. The fair
value is determined by an internal valuation using a Black-Scholes option pricing model, using the
assumptions detailed in Note 17.
Rehabilitation provision
The recognition of closure and rehabilitation provisions require significant estimates and assumptions
such as requirements of the relevant legal and regulatory framework and the timing, extent and costs
30
NORTHERN MINERALS _ ANNUAL REPORT 2020
63
NORTHERN MINERALS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
3. Critical Accounting Judgements, Estimates, Assumptions and Errors (continued)
of required closure and rehabilitation activity. These uncertainties may result in future actual expenditure
differing from the amounts currently provided. Refer to Note 10(c).
Convertible notes
The fair value of convertible notes is determined at the end of each reporting date. The fair value is
determined using a market interest rate. The compound convertible notes are subsequently recognised
on an amortised cost basis until extinguished on conversion or maturity of the bonds. The remainder of
the proceeds is allocated to the conversion option and recognised in shareholders equity. All other
convertible notes are recognised at fair value through profit and loss. Refer to Note 8(e).
Impairment of Property, Plant and Equipment
During the year, the Browns Range Pilot Plant (“BRPP”) was placed into care and maintenance due to
the effects of Covid-19. Post year end, the board made the decision to partially restart operations at the
BRPP rather than resuming full operations. The Board is therefore of the view that indications of
impairment exist due to this planned reduction to overall activities and estimates of future cash flows
were determined in order to assess the recoverable amount of the BRPP. In assessing the recoverable
amount the board was required to exercise judgement in order to calculate the BRPP’s fair value as
well as its estimated value in use. Refer to note 10(a) for additional information.
Coronavirus (COVID-19) pandemic
Judgement has been exercised in considering the impacts that the Coronavirus (COVID-19) pandemic
has had, or may have, on the consolidated entity based on known information. This consideration
extends to the nature of the activities and geographic regions in which the consolidated entity operates.
Other than as addressed in specific notes, there does not currently appear to be either any significant
impact upon the financial statements or any significant uncertainties with respect to events or conditions
which may impact the consolidated entity unfavourably as at the reporting date or subsequently as a
result of the Coronavirus (COVID-19) pandemic.
4.
Exploration and evaluation expenditure
The Company’s accounting policy for exploration expenditure is to expense costs as incurred in
accordance with AASB 6 Exploration for and Evaluation of Mineral Resources. The Company has
determined that expenditure in relation to the pilot plant can still be accounted for under AASB 6, given
the main activity of the Company relates to evaluating the technical feasibility and commercial viability
of extracting the mineral resource. Items of plant and equipment purchased as part of the pilot plant are
capitalised.
31
NORTHERN MINERALS _ ANNUAL REPORT 2020
64
NORTHERN MINERALS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
5.
Revenue
The Group derives the following types of revenue:
Consolidated
2020
$
3,069,070
23,272,772
583,000
1,333,680
143,699
28,402,221
2019
$
-
-
-
1,813,682
186,386
2,000,068
Revenue from contracts with customers
R&D rebate on eligible expenditure
Covid-19 grant programs
Other government grants
Other
Total revenue from continuing operations
Revenue Recognition
Revenue from contracts with customers
Revenue is recognised at an amount that reflects the consideration to which the Group is expected to
be entitled in exchange for transferring goods or services to a customer. For each contract with a
customer, the Group:
identifies the contract with a customer;
identifies the performance obligations in the contract;
−
−
− determines the transaction price which takes into account estimates of variable consideration
and the time value of money;
− allocates the transaction price to the separate performance obligations on the basis of the
−
relative stand-alone selling price of each distinct good or service to be delivered; and
recognises revenue when or as each performance obligation is satisfied in a manner that
depicts the transfer to the customer of the goods and services promised.
Current year revenue from contracts with customers has resulted from the sale of Rare Earth Carbonate
(“REC”) to a single external customer. Revenue from REC sales is brought to account when the
significant risks and rewards of ownership have transferred to the buyer and selling prices are known
or can be reliably estimated.
R&D rebates and government grants
The Company’s accounting policy for R&D rebates and government grants is to recognise these when
there is reasonable assurance that:
• The expenditure incurred during the financial period complies with relevant legislation and
activities; and
• The rebates claimed will be received.
Rebates and grants relating to costs are deferred and recognised in the profit or loss over the period
necessary to match them with the costs that they are intended to compensate.
Government grants relating to the purchase of property, plant and equipment are included in liabilities
as deferred revenue and are credited to profit or loss on a straight-line basis over the expected lives of
the related assets.
For details of unfulfilled conditions or other contingencies attaching to these grants see Note 14.
A government grant is not recognised until there is reasonable assurance that the entity will comply
with the conditions attaching to it, and that the grant will be received. Receipt of a grant does not of
itself provide conclusive evidence that the conditions attaching to the grant have been or will be fulfilled.
32
NORTHERN MINERALS _ ANNUAL REPORT 2020
65
NORTHERN MINERALS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
5.
Revenue (continued)
In early 2019, the Company lodged a formal appeal with AusIndustry regarding its initial decision that
the Company’s activities were ‘ineligible R&D claims’ for the FY17 and FY18 periods. On 24 February
2020 the Company was advised that AusIndustry had completed a review of its initial decision and
subsequently found that most of the Company’s R&D activities for these periods were in fact eligible.
In August 2020, the Company announced that it had reached a settlement agreement with the ATO that
settled all matters relating to the FY17 and FY18 R&D tax offset claims. The settlement agreement also
documented the agreed refundable R&D offset claim for the FY19 as well as a framework for reviewing
the Company’s refundable R&D offset claim for FY20
In the current financial year, the Company has recognised the R&D rebate attributable to the FY17 to
FY19 periods in addition to accruing the expected R&D offset claim for FY20 as described above.
6.
Finance Income and Costs
Finance income
Interest income
Total finance income
Finance costs
Interest for financial liabilities
Provisions: unwinding of discount
Net exchange losses on foreign currency borrowings
Financing transactions and costs
Total finance costs
Amount capitalised
Finance costs expensed
Net finance costs/(income)
Interest income
2020
$
24,432
24,432
2,531,274
34,306
-
288,216
2,853,796
-
2,853,796
2,853,796
2019
$
2,307
2,307
5,949,198
89,988
1,221,552
3,151,627
10,412,365
(1,763,810)
8,648,555
8,648,555
Interest income is recognised as interest accrues using the effective interest method. This is a method
of calculating the amortised cost of a financial asset and allocating the interest income over the relevant
period using the effective interest rate, which is the rate that exactly discounts estimated future cash
receipts through the expected life of the financial asset to the net carrying amount of the financial asset.
For credit impaired financial assets the effective interest rate is applied to the net carrying amount of
the financial asset (after deduction of the loss allowance).
Interest income on financial assets at amortised cost is recognised in the statement of profit or loss as
other income.
Capitalised borrowing costs
Borrowing costs capitalised include costs that are directly attributable to the acquisition and construction
of the Browns Range Pilot Plant Project. The rate used is the actual borrowing costs eligible for
capitalisation.
33
NORTHERN MINERALS _ ANNUAL REPORT 2020
66
NORTHERN MINERALS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
7.
Income Tax Expense
(a)
Income tax expense
Reconciliation of income tax expense to prima facie tax
payable:
Loss from continuing operations before income tax expense
Tax calculated at 27.5% (2019: 27.5%) on loss before income
tax
Add tax effect of:
Share-based payments
Non-deductible expenses
Unused tax losses and temporary differences not recognised
R & D adjustments
Income tax expense/(benefit)
(b)
Unrecognised deferred tax balances
temporary differences
comprises
The balance
attributable to:
Deferred tax assets
Unused tax losses
Unused capital losses
Property, plant & equipment
Deductible temporary differences
Total unrecognised deferred tax assets
Deferred tax liabilities
Property, plant and equipment
Taxable temporary differences - other
Total unrecognised deferred tax liabilities
2020
$
2019
$
(54,328,360)
(63,966,330)
(14,940,299)
(17,590,740)
(161,194)
7,446
12,266,875
2,827,172
-
592,925
3,430
16,994,385
-
-
35,794,404
175,661
4,574,990
5,913,705
34,891,210
175,661
-
2,700,734
46,458,760
37,767,605
-
-
-
(3,550,196)
(25,520)
(3,575,716)
Net unrecognised deferred tax balances
46,458,760
34,191,889
The net deferred tax balances are not recognised since it is not probable at the reporting date that
future taxable profits will be available to utilise deductible temporary differences and losses.
(c)
Income tax expense / (benefit)
The income tax expense / (benefit) for the period is the tax payable on the current period’s taxable
income / (loss) based on the applicable income tax rate adjusted for changes in deferred tax assets
and liabilities attributable to temporary differences and to unused tax losses. Current tax is calculated
using the tax rates enacted or substantively enacted at period end, and includes any adjustment to
tax payable in respect of previous years.
Deferred tax is provided using the balance sheet liability method, providing for the tax effect of
temporary differences between the carrying amount of assets and liabilities for financial reporting
purposes and the amounts used for tax assessment or deduction purposes.
34
NORTHERN MINERALS _ ANNUAL REPORT 2020
67
NORTHERN MINERALS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
7.
Income Tax Expense (continued)
The tax effect of certain temporary differences is not recognised, principally with respect to:
• Temporary differences arising on the initial recognition of an asset or liability in a transaction
other than a business combination that at the time of the transaction affects neither accounting
nor taxable profit or loss.
• Temporary differences relating to investments and undistributed earnings in subsidiaries, to the
extent that the company is able to control its reversal and it is probable that it will not reverse
in the foreseeable future.
Deferred tax assets are recognised only if it is probable that future taxable amounts will be available to
utilise those temporary differences and losses. Deferred tax assets are reviewed at each balance date
and amended to the extent it is no longer probable that the related tax benefit will be realised.
Deferred income tax assets and liabilities are measured 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 (and tax laws) that
have been enacted or substantively enacted at the balance sheet date.
Deferred tax assets and deferred tax liabilities are offset if a legally enforceable right exists to set off
current tax assets against current income tax liabilities and the deferred taxes relate to the same taxable
entity and the same taxation authority.
Current and deferred tax is recognised in profit and loss, except to the extent that it relates to items
recognised in other comprehensive income or directly in equity. In this case, the tax is also recognised
in other comprehensive income or directly in equity, respectively.
Based on the disclosure in Note 3, the current income tax position represents the Directors’ best
estimate, in respect of R&D and the decline in value of the pilot plant.
8.
Financial Assets and Financial Liabilities and other receivables and liabilities
(a) Cash and cash equivalents
Current
Cash at bank and on hand
2020
$
6,660,568
6,660,568
2019
$
8,140,422
8,140,422
Cash in the statement of financial position comprises cash at bank and in hand and short-term
deposits, with an original maturity of three months or less, that are readily convertible to known
amounts of cash, and that are subject to an insignificant risk of changes in value.
For the purposes of the Statement of Cash Flows, cash and cash equivalents consist of cash and
cash equivalents as defined above, net of outstanding bank overdrafts.
(b)
Trade and other receivables
Current
Trade receivables
GST receivable
Prepayments
Other receivables
R&D rebate receivable (Refer Note 5)
2020
$
407,335
516,718
2,664,719
318,843
20,407,988
24,315,603
2019
$
-
778,525
824,295
515,757
-
2,118,577
35
NORTHERN MINERALS _ ANNUAL REPORT 2020
68
NORTHERN MINERALS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
8.
Financial Assets and Financial Liabilities and other receivables and liabilities
(continued)
(i) Other receivables
Other receivables are amounts that generally arise from transactions outside the usual
operating activities of the Group. They are recognised at amortised cost, less any allowance for
expected credit losses. The Company assessed the balance in other receivables for expected
credit losses but they were deemed to have no material impact.
(ii) Research and development rebate receivable
In early 2019, the Company lodged a formal appeal with AusIndustry regarding its initial
decision that the Company’s activities were ‘ineligible R&D claims’ for the FY17 and FY18
periods. On 24 February 2020 the Company was advised that AusIndustry had completed its
review of its initial decision and subsequently found that most of the Company’s R&D activities
for these periods were in fact eligible and as a result, the Company has finalised its FY17 to
FY19 tax returns which include the relevant R&D rebate for those periods. The Company has
also estimated the R&D rebate for the 2020 financial year.
(iii) Trade receivables
Trade receivables are initially recognised at fair value and subsequently measured at amortised
cost using the effective interest method, less any allowance for expected credit losses as per
AASB 9 Financial Instruments. Trade receivables are generally due for settlement within 30
days.
Information about the methods and assumptions used in determining fair value is provided in
Note 8(g). Information about the impairment of trade and other receivables, their credit quality
and the group’s exposure to credit risk, foreign currency risk and interest rate risk can be found
in Note 9.
(iv) Fair values of trade and other receivables
Due to their short-term nature, their carrying amount is approximate to their fair value.
Information about the methods and assumptions used in determining fair value is provided in
Note 8(g). Information about the impairment of trade and other receivables, their credit quality
and the Group’s exposure to credit risk, foreign currency risk and interest rate risk can be found
in Note 9.
Prepayments include the following share-based payments:
Lind collateral shares issued in the year (refer Note 8 (e))
Lind options issued in the year (refer Note 8(e))
JHY Investments options issued in the year (refer Note 8(e))
(c)
Other financial assets
Non-Current
Security deposits – rent and performance bonds
2020
$
2,040,000
396,667
-
2,436,667
2019
$
-
-
49,539
49,539
60,523
89,272
36
NORTHERN MINERALS _ ANNUAL REPORT 2020
69
NORTHERN MINERALS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
8.
Financial Assets and Financial Liabilities and other receivables and liabilities (continued)
Other financial assets are recognised initially at fair value and subsequently measured at amortised
cost using the effective interest rate method.
(i) Fair values of other financial assets
Due to their short-term nature, the financial assets carrying amount is approximate to their fair
value. Information about the methods and assumptions used in determining fair value is provided
in Note 8(g). Information about the impairment of other financial assets, their credit quality and
the group’s exposure to credit risk, foreign currency risk and interest rate risk can be found in
Note 9.
(d)
Trade and other payables
Current
Trade and other payables
Trade and other payables (Refer to Note 8(e)) (Secured)
2020
$
2019
$
6,901,061
4,463,309
11,364,370
5,799,385
6,566,061
12,365,446
Non-Current
Trade and other payables (Refer to Note 8 (e)) (Secured)
-
4,269,253
Trade and other payables are classified as loans and are carried at amortised cost. They are non-
interest bearing and represent liabilities for goods and services provided to the Group prior to the end
of the financial period. They are unpaid and arise when the Group becomes obliged to make future
payments in respect of the purchase of these goods and services. The amounts are unsecured and are
usually paid within 30 days of recognition. These are included in current liabilities. Liabilities where
payment is not due within 12 months from the reporting date, which are classified as non-current
liabilities.
(i) Fair values of trade and other payables
Due to their short-term nature, current trade and other payables carrying amounts are
approximate to their fair value. Information about the methods and assumptions used in
determining fair value is provided in Note 8(g). Information about the group’s exposure to credit
risk, foreign currency risk and interest rate risk can be found in Note 9. Details of the fair values
of non-current trade and other payables can be found in Note 8(g).
37
NORTHERN MINERALS _ ANNUAL REPORT 2020
70
NORTHERN MINERALS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
8.
Financial Assets and Financial Liabilities and other receivables and liabilities
(continued)
(e)
Interest Bearing Liabilities
At Amortised Cost
Current
Convertible note (Unsecured) - JHY Inv Pty Ltd
Convertible note (Unsecured) - Yuzhen Ma
ATO Liability (Unsecured)
Equipment finance (Secured)
Insurance premium funding
Non-Current
Equipment finance (Secured)
ATO Liability (Unsecured – Refer Note 7)
Interest Rate
10%/16%
10%
4.96%
2.90%-6.50%
5.10%/3.15%
2.90%-6.50%
4.96%
2020
$
3,831,044
319,726
-
142,865
-
4,293,635
25,485
-
25,485
2019
$
4,016,650
7,037,622
6,602,568
138,855
639,721
18,435,416
176,341
7,296,314
7,472,655
At Fair value through profit and loss
Current
Convertible note (Unsecured) - Lind
Total Interest Bearing Liabilities
Current
Non-Current
0%
1,534,558
1,534,558
-
-
5,828,193
25,485
5,853,678
18,435,416
7,472,655
25,908,071
Commitments in relation to hire purchase leases are payable as
follows:
Within one year
Later than one year but not later than five years
Minimum lease payments
Future finance charges
Total lease liabilities
147,371
25,485
172,856
(4,506)
168,350
154,106
176,341
330,447
(15,251)
315,196
The present value of hire purchase lease liabilities is as follows:
Within one year
Later than one year but not later than five years
Minimum lease payments
147,753
20,597
168,350
150,060
165,136
315,196
Aside from amounts disclosed above as measured at Fair Value through profit and loss, borrowings are
classified as loans and are initially recognised at fair value net of directly attributable transaction costs.
Subsequent to initial recognition, interest bearing liabilities are measured at amortised cost using the
effective interest rate method. Gains and losses are recognised in the statement of profit or loss when
the liabilities are derecognised. Interest bearing liabilities are classified as current liabilities, except
when the Group has an unconditional right to defer settlement for at least 12 months after the reporting
date in which case the liabilities are classified as non-current.
Fees paid on the establishment of loan facilities are recognised as transaction costs of the loan to the
extent that it is probable that some or all of the facility will be drawn down. In this case, the fee is
deferred until the draw down occurs. The fee is capitalised as a prepayment and amortised over the
remaining period of the facility to which it relates once it is drawn down.
38
NORTHERN MINERALS _ ANNUAL REPORT 2020
71
NORTHERN MINERALS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
8.
Financial Assets and Financial Liabilities and other receivables and liabilities (continued)
Convertible notes issued by the Group can be converted to ordinary shares at the option of the holder
on or before the expiry date. The liability component of the convertible note is recognised initially at the
fair value of a similar liability that does not have a conversion option. Subsequent to initial recognition,
the liability component of the convertible note is measured at amortised cost using the effective interest
method. Interest relating to the financial liability is recognised in the statement of profit or loss as a non-
cash item. The conversion option is recognised initially as the difference between the consideration and
the value of the liability component and the conversion option is classified as equity.
The Convertible Note issued to Lind Global Macro Fund, LP is not convertible at a fixed conversion
price and includes a floor price in the contract so has been accounted for as fair value through profit or
loss. Financial liabilities designated at fair value through profit or loss are measured at fair value, with
any gains or losses arising on changes in fair value recognised in profit or loss. The net gain or loss
recognised in profit or loss incorporates any interest paid on the financial liability.
The amount of change in the fair value of the financial liability that is attributable to changes in the credit
risk of that liability is recognised in other comprehensive income, unless the recognition of the effects
of changes in the liability’s credit risk in other comprehensive income would create or enlarge an
accounting mismatch in profit or loss. The remaining amount of change in the fair value of liability is
recognised in profit or loss. Changes in fair value attributable to a financial liability’s credit risk that are
recognised in other comprehensive income are not subsequently reclassified to profit or loss; instead,
they are transferred to retained earnings upon de-recognition of the financial liability.
Leases, which transfer to the Group, substantially all the risks and benefits incidental to ownership of
the leased item, are capitalised at the inception of the lease at the fair value of the leased asset or, if
lower, at the present value of the minimum lease payments. Lease payments are apportioned between
the finance charges and reduction of the lease liability so as to achieve a constant rate of interest on
the remaining balance of the liability. Finance charges are recognised as an expense in profit or loss.
Convertible Note – JHY Investments Pty Ltd
In December 2018 a subscription agreement was entered into with JHY Investments Pty Ltd (JHY), for
the issue of 4,000,000 convertible notes over two tranches with a face value of $1.00 each. Tranche 1
was completed in December 2018 and 3,500,000 notes were issued. Tranche 2 for a further 500,000
notes was completed in January 2019.
The maturity date for the convertible notes was 31 December 2019 at a conversion price of $0.06 per
share. The interest rate was 16% per annum, accruing daily and payable monthly from immediately
available funds on the face value of the notes from the date the notes are issued until the earlier of the
date the note is converted into shares and the maturity date. Conversion can be at any time before the
maturity date at JHY’s election, and must be for a minimum 300,000 notes at any one time.
10,000,000 unlisted options were issued to JHY Investments Pty Ltd on 18 December 2018 as part of
the Convertible Security Funding Agreement. These options have an exercise price of $0.09 each and
have an expiry date of 31 December 2019.
During the year, the Company successfully negotiated an extension of the maturity date of the
convertible notes issued to JHY as well as a lower interest rate. The new maturity date for the notes is
31 December 2020 and the interest rate payable was reduced to 10% per annum from 1 January 2020.
Convertible Note – Yuzhen Ma
In April 2019 a subscription agreement was entered into with Yuzhen Ma for the issue of 7,500,000
convertible notes over two tranches with a face value of $1.00 each. Tranche 1 was completed with
$2.5 million received in April 2019 and 2,500,000 notes were issued. Tranche 2 for a further 5,000,000
notes was completed and $5.0 million received in June 2019.
The maturity date for the convertible notes is 30 June 2020 at a conversion price of $0.10 per share.
The interest rate is 10% per annum, accruing daily and payable monthly from immediately available
39
NORTHERN MINERALS _ ANNUAL REPORT 2020
72
NORTHERN MINERALS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
8.
Financial Assets and Financial Liabilities and other receivables and liabilities
(continued)
Funds on the face value of the notes from the date the notes are issued until the earlier of the date the
note is converted into shares and the maturity date. Conversion can be at any time before the maturity
date at the note holder’s election.
Equipment Finance
These loans are secured by a first charge over the equipment under finance and are for a period of
between 36-48 months.
Convertible Note – Lind Global Macro Fund, LP
On 2 March 2020, a Convertible Security Funding Agreement was entered with Lind Global Macro
Fund, LP (“Lind”) of $2.625 million. Under the Agreement, the Company received the net amount of
$2.5 million after the deduction of fees payable to Lind of $0.125 million from the issue of one unsecured
convertible note with a face value of $3.0 million.
The conversion price of the note is calculated as the lessor of: (i) 90% of the average of the five lowest
daily VWAPs during the 20 trading days prior to conversion; and (ii) $0.055, and the convertible security
may be converted into fully paid ordinary shares at the conversion price at any time before the maturity
date (2 March 2022). If a conversion would result in a conversion price of less than $0.03, the Company
may settle that conversion in cash. Lind may then elect to accept such cash payment or have the
conversion settled at a conversion price of $0.03.
The Company has the right to redeem the outstanding face value of the convertible note at any time by
giving 10 days notice by paying the amount outstanding on the convertible security. Upon receiving
such notice, Lind may convert up to (in aggregate) 33% of the face value of the convertible security.
As a part of the agreement, the Company also issued 60,000,000 fully paid ordinary shares with a value
of $2.04 million to Lind as collateral shares along with 34,000,000 unlisted options with an exercise
price of $0.045 and expiry date of 2 March 2024.
On 7 May 2020, the Company issued 52,631,579 fully paid ordinary shares to a nominee of Lind in
respect of the conversion of $1m of the face value of the convertible security.
On 22 June 2020 a replacement convertible security was issued to Lind in accordance with the
Convertible Security Funding Agreement announced on 2 March 2020 following shareholder approval
being obtained at the Company’s general meeting held on 18 June 2020. The replacement convertible
security was issued with a face value of $2.0 million.
A reconciliation of the balance at year end is as follows:
Opening Balance
Funding Received
Repayments made
Finance costs incurred
Fair value adjustments
Closing Balance
2020
$
-
2,625,000
(1,000,000)
98,720
(189,162)
1,534,558
2019
$
-
-
-
-
-
-
40
NORTHERN MINERALS _ ANNUAL REPORT 2020
73
NORTHERN MINERALS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
8.
Financial Assets and Financial Liabilities and other receivables and liabilities
(continued)
Assets pledged as security
The carrying amounts of assets pledged as security for current and non-current borrowings are:
Current
Fixed charge
Receivables
Floating charge
Cash and cash equivalents
Receivables
Derivative financial assets
Inventory
Total current assets pledged as security
Non-Current
Fixed charge
Property, plant and equipment *
Finance lease
Property, plant and equipment
Floating charge
Receivables
Property, plant and equipment
Total non-current assets pledged as security
Total assets pledged as security
2020
$
-
-
-
-
-
-
-
2019
$
-
8,140,422
1,289,602
-
722,015
10,152,039
42,028,642
312,023
479,971
-
-
7,998,337
-
312,023
50,506,950
60,658,989
* Sinosteel has a Specific Security Deed giving it security over the Company’s mechanical equipment,
electrical and instrumentation equipment, structural steel, platework and piping for the beneficiation and
hydrometallurgical process plants supplied and installed by the contractor as defined by the Process
Engineering package in the EPC Contract. These assets were fully impaired during the year hence
have a nil carrying value as at 30 June 2020.
(f)
Deferred revenue
Current
Deferred revenue
Non-Current
Deferred revenue
2020
$
2019
$
7,521,406
1,333,680
-
1,333,589
Refer to Note 5 for the accounting policy in relation to R&D rebates and government grants.
41
NORTHERN MINERALS _ ANNUAL REPORT 2020
74
NORTHERN MINERALS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
8.
Financial Assets and Financial Liabilities and other receivables and liabilities
(continued)
(g)
Accounting classification and fair value
Financial assets
A financial asset shall be measured at amortised cost if it is held within a business model whose
objective is to hold assets in order to collect contractual cashflows which arise on specified dates and
that are solely principal and interest. A debt investment shall be measured at fair value through other
comprehensive income if it is held within a business model whose objective is to hold both assets in
order to collect contractual cashflows which arise on specified dates that are solely principal and interest
as well as selling the asset on the basis of its fair value. Financial assets not measured at amortised
cost or at fair value through other comprehensive income are classified as financial assets at fair value
through profit or loss. Typically, such financial assets with be either:
• held for trading, where they are acquired for the purpose of selling in the short-term with an
intention of making a profit, or a derivative; or
• designated as such upon initial recognition where permitted.
Fair value movements are recognised in profit or loss. Despite these requirements, a financial asset
may be irrevocably designated as measured at fair value through profit or loss to reduce the effect of,
or eliminate, an accounting mismatch.
Financial assets are derecognised when the rights to receive cash flows have expired or have been
transferred and the Group has transferred substantially all the risks and rewards of ownership. When
there is no reasonable expectation of recovering part or all of a financial asset, its carrying value is
written off.
Impairment of financial assets
The Group recognises a loss allowance for expected credit losses on financial assets which are either
measured at amortised cost or fair value through other comprehensive income. The measurement of
the loss allowance depends upon the Group’s assessment at the end of each reporting period as to
whether the financial instruments credit risk has increased significantly since initial recognition, based
on reasonable and supportable information that is available, without undue cost or effort to obtain.
Where there has not been a significant increase in exposure to credit risk since initial recognition, a 12-
month expected credit loss allowance is estimated. This represents a portion of the assets lifetime
expected credit losses that is attributable to a default event that is possible within the next 12 months.
Where a financial asset has become credit impaired or where it is determined that credit risk has
increased significantly, the loss allowance is based on the assets lifetime expected credit losses. The
amount of expected credit loss recognised is measured on the basis of the probability weighted present
value of anticipated cash shortfalls over the life of the instrument discounted at the original effective
interest rate.
For financial assets measured at fair value through other comprehensive income, the loss allowance is
recognised within other comprehensive income. In all other cases, the loss allowance is recognised in
profit or loss.
Financial liabilities
Financial liabilities other than derivatives are initially recognised at fair value of consideration received
net of transaction costs as appropriate, and are subsequently carried at amortised cost. The Group
derecognises a financial liability when its contractual obligations are discharged or cancelled, or expire.
Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or
costs that are an integral part of the effective interest rate. The amortisation is included in finance costs
in the statement of profit or loss.
42
NORTHERN MINERALS _ ANNUAL REPORT 2020
75
NORTHERN MINERALS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
8.
Financial Assets and Financial Liabilities and other receivables and liabilities
(continued)
Derivatives, including those embedded in contractual arrangements but separated for accounting
purposes because they are not clearly and closely related to the host contract, are initially recognised
at fair value on the date the contract is entered into and are subsequently remeasured at their fair value.
Fair value changes are recognised immediately in the profit and loss.
For the interest bearing liabilities, the fair values are not materially different to their carrying amounts,
since the interest payable on those borrowings is either close to current market rates or the borrowings
are of a short-term nature.
The fair values of non-current borrowings are based on discounted cash flows using a current borrowing
rate.
Measurement
The following method and assumptions are used to estimate the fair values:
Fair values of the Group’s interest-bearing borrowings and loans are determined by using discounted
cash flow models that use discount rates to reflect the issuer’s borrowing rate as at the end of the
reporting period.
The Group uses the following hierarchy for determining and disclosing the fair value of financial
instruments which are measured at fair value by valuation technique:
Level 1: Quoted (unadjusted) prices in active markets for identical assets or liabilities
Level 2: Other techniques for which all inputs which have a significant effect on the recorded fair value
are observable, either directly or indirectly
Level 3: Techniques which use inputs that have a significant effect on the recorded fair value that are
not based on observable market data
All financial instruments measured at fair value use Level 2 valuation techniques in both years.
There have been no transfers between fair value levels during the reporting period.
9.
Financial Risk Management
The Group’s principal financial liabilities, comprise loans and borrowings and trade and other payables.
The main purpose of these financial liabilities is to finance the Group’s operations. The Group’s principal
financial assets include trade and other receivables and cash that derive directly from its operations.
The Group’s activities expose it to a variety of financial risks: market risk (including currency risk, interest
rate risk and price risk), credit risk and liquidity risk. The Group’s overall risk management program
focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on
the financial performance of the Group.
The Group takes a proactive approach to risk management. The Board is responsible for ensuring that
risks, and also opportunities are identified on a timely basis and that the Group’s objectives and
activities are aligned with the risks and opportunities identified by the Board. The Board provides
policies for overall risk management, as well as policies covering specific areas, such as foreign
exchange risk, interest rate risk and credit risk.
a) Market Risk
Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate
because of changes in market prices. Market risk comprises interest rate risk, currency risk and other
price risk.
43
NORTHERN MINERALS _ ANNUAL REPORT 2020
76
NORTHERN MINERALS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
9.
Financial Risk Management (continued)
Foreign Exchange Risk
The Group operates internationally and is exposed to foreign exchange risk arising from currency
exposures with respect to changes in USD/AUD exchange rates.
Foreign exchange risk arises from future commercial transactions and recognised assets and liabilities
denominated or linked to a currency that is not the entity’s functional currency. The Group’s revenue
from contracts with customers was invoiced in US dollars in FY2020. The Group did not enter into any
FX hedging agreements in relation to its revenue transactions.
In FY2019 the Group hedged the currency risk of the Brevet facility by hedging the entire value of the
notional value of the loan, which is mainly an exposure to US Dollar borrowings. The risk was measured
through forecasting the US dollar amounts required for repayments. The US dollar denominated
borrowings were to be repaid with receipt of the R&D Tax Incentive Offset which is receipted in
Australian dollars.
Under the terms of the loan agreement the Company must within two business days of each advance
enter into a FX hedging arrangement in respect of USD/AUD (“hedge”) for that advance in a form
reasonably acceptable to the lender. The lender must be named as payee in each hedge and the
Company must provide a copy of the trade confirmation to the lender as soon as possible. If the
company does not enter into a hedge for an advance the Company must deposit and maintain a Margin
of Deposit Account in accordance with the agreement. In respect of an advance the margin is the
positive difference multiplied by 105% calculated on the relevant margin calculation date (end of each
calendar month). The Company must pay the margin in AUD into the deposit account, within 2 business
days of the lender giving written notice to the Company of any obligation to pay margin. If there is a
negative difference and the sum of margin amounts in the deposit account exceeds the total of margin
amounts required, 90% of the surplus must be paid to the lender within 2 business days. This will be
applied in repayment of the outstanding monies upon the repayment date for the term loan in respect
of the relevant advance. The amount will be converted to USD at the current exchange rate quoted by
the Reserve Bank of Australia on the relevant day.
This facility was repaid in full and extinguished in the 2019 financial year.
The Group has used this combination of foreign currency option contracts and foreign exchange forward
contracts to hedge exposure to foreign currency risk. Derivatives are only used for economic hedging
purposes and not as speculative investments.
Certain operating and capital expenditure is linked to currencies other than the Company’s functional
currency.
The financial assets and liabilities that are exposed to foreign exchange risk at the end of the reporting
period, expressed in Australian dollars, are:
Cash and cash equivalents - USD
Trade receivables - USD
2020
$
168,601
407,335
575,936
2019
$
992
-
992
As shown in the table above, the group is primarily exposed to changes in USD/AUD exchange rates.
The sensitivity of profit or loss to changes in the exchange rates arises mainly from US-dollar
denominated financial instruments and foreign forward exchange contracts.
44
NORTHERN MINERALS _ ANNUAL REPORT 2020
77
NORTHERN MINERALS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
9.
Financial Risk Management (continued)
US / $ exchange rate – increase 10%
US / $ exchange rate – decrease 10%
Amounts recognised in the statement of profit or loss
Impact on post tax
profit/(loss)
2020
$
Impact on post tax
profit/(loss)
2019
$
(52,358)
57,594
(99)
99
During the year the following foreign exchange-related amounts were recognised in the statement of
profit or loss:
Net foreign exchange gain included in other income
Foreign exchange loss in administration expenses
Net foreign exchange gain/(loss)
2020
$
-
(31,292)
(31,292)
2019
$
-
(30,666)
(30,666)
Net gain/(loss) on foreign currency derivatives not
qualifying as hedges included in finance costs
-
90,182
Cash flow and fair value interest rate risk
Interest rate risk in relation to the fair value or future cash flow may arise from interest rate fluctuations.
The Group's exposure to interest rate risk and the effective weighted average interest rate for classes
is set out below:
Fixed Interest
$
-
-
60,523
60,523
Non-Interest
Bearing
$
Total
$
290,250
6,660,568
21,134,166
21,134,166
-
60,523
21,424,416
27,855,257
-
-
6,370,318
-
-
-
-
7,662,553
5,853,678
-
7,662,553
5,853,678
5,853,678
7,662,553
13,516,231
Weighted
average interest
rate
Floating Interest
Rate
%
$
30 June 2020
Financial Assets
Cash and cash equivalents
0.14%
6,370,318
Trade and other receivables
-
Other financial assets
1.55%
Total financial assets
Financial Liabilities
Trade and other payables
-
Interest bearing liabilities
7.20%
Total financial liabilities
45
NORTHERN MINERALS _ ANNUAL REPORT 2020
78
NORTHERN MINERALS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
9.
Financial Risk Management (continued)
Weighted
average interest
rate
Floating Interest
Rate
%
$
30 June 2019
Financial Assets
Cash and cash equivalents
0.00%
Trade and other receivables
-
Other financial assets
2.62%
Total financial assets
Financial Liabilities
Trade and other payables
-
547
-
-
547
-
Fixed Interest
$
-
-
89,272
89,272
Non-Interest
Bearing
$
Total
$
8,139,875
8,140,422
511,077
-
511,077
89,272
8,650,952
8,740,771
-
14,565,188
14,565,188
Interest bearing liabilities
8.03%
13,898,882
12,009,189
-
25,908,071
Total financial liabilities
13,898,882
12,009,189
14,565,188
40,473,259
Financial assets are subject to underlying interbank cash rate movements as determined by the
Reserve Bank of Australia.
The impact of a material movement of +/- 1% in the underlying cash rate will not have a material impact
on revenue and therefore shareholder equity. The assumed movement in basis point volatility for the
interest rate sensitivity analysis is based on the observable market movements in interest rates in the
recent past which have been relatively stable.
b)
Credit Risk
Credit risk is managed on a Group basis. Credit risk arises from cash and cash equivalents and
deposits with banks and financial institutions, as well as credit exposure relating to outstanding
receivables and committed transactions. The Group has minimal credit risk with regards to its bank
held deposits which are all held with reputable institutions. The Group has minimal credit risk in relation
to its receivables.
The maximum exposure to credit risk at the reporting date is the carrying amount of the receivables.
Collateral is not held as security. There are no significant concentrations of credit risk within the Group.
c)
Liquidity Risk
Prudent liquidity risk management implies maintaining sufficient cash and the availability of funding
through an adequate amount of committed credit facilities. The Group manages liquidity risk by
continuously monitoring forecast and actual cash flows and matching the maturity profiles of financial
assets and liabilities. Group management aims at maintaining flexibility in funding by keeping committed
credit lines available.
Management monitors rolling forecasts of the Group’s liquidity reserve and cash and cash equivalents.
In addition, the Group’s liquidity policy involves projecting cash flows in major currencies and
considering the level of liquid assets necessary to meet these and monitoring debt financing plans.
The Company:
•
currently has short term funding in place (refer Note 8). The Company continuously monitors
forecasts and actual cash flows and the maturity profiles of financial assets and liabilities to
manage its liquidity risk;
46
NORTHERN MINERALS _ ANNUAL REPORT 2020
79
NORTHERN MINERALS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
9.
Financial Risk Management (continued)
• manages liquidity risk by continuously monitoring forecast and actual cash flows and matching
the maturity profiles of financial assets and liabilities. Surplus funds are invested in short-term
bank deposits.
Financing arrangements
The Group has access to the following undrawn borrowing facilities at the end of the reporting period,
subject to the conditions outlined below:
Fixed rate
- Expiring within one year
- Expiring beyond one year
2020
$
-
-
-
2019
$
-
-
-
Maturities of financial liabilities
The tables below analyse the Group’s financial liabilities into relevant maturity groupings based on their
contractual maturities for all non-derivative financial liabilities.
The amounts disclosed in the table are the contractual undiscounted cash flows. Balances due within
12 months equal their carrying balances as the impact of discounting is not significant.
Total
contractual
cash flows
Carrying
amount
$
7,662,553
7,662,553
6,519,726
5,685,329
178,163
168,350
14,360,442 13,516,232
-
-
-
-
-
-
-
-
-
-
Contractual maturities
of financial liabilities
Less than 6
months
6-12 months
Between 1
and 2 years
Between 2-5
years
$
-
-
-
-
-
-
-
-
-
$
As at 30 June 2020
Non-derivatives
Trade payables
7,662,553
$
-
Interest bearing liabilities
(excluding
finance
leases)
5,319,726
1,200,000
$
-
-
Lease liabilities
78,798
73,880
Total non-derivatives
13,061,077
1,273,880
25,485
25,485
Derivatives
Other financial liabilities
Gross settled
exchange contracts
forward
-(Inflow)
-Outflow
Total derivatives
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
47
NORTHERN MINERALS _ ANNUAL REPORT 2020
80
NORTHERN MINERALS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
9.
Financial Risk Management (continued)
Contractual maturities of
financial liabilities
Less than 6
months
6-12 months
Between 1
and 2 years
Between 2-5
years
$
$
$
As at 30 June 2019
Non-derivatives
Trade payables
Interest bearing liabilities
(excluding finance leases)
5,918,561
4,377,374
4,269,253
8,071,738
11,176,284
7,296,314
$
-
-
Total
contractual
cash flows
Carrying
amount
$
14,565,188 14,565,188
26,544,336 25,592,875
Lease liabilities
78,798
78,798
155,122
18,291
331,009
315,196
Total non-derivatives
14,069,097
15,632,456
11,720,689
18,291
41,440,533 40,473,259
Derivatives
Other financial liabilities
Gross
exchange contracts
settled
forward
-(Inflow)
-Outflow
Total derivatives
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
48
NORTHERN MINERALS _ ANNUAL REPORT 2020
81
NORTHERN MINERALS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
10.
Non-financial Assets and Liabilities
(a) Property, plant and equipment
2020
Cost
Assets under
construction
Plant and
Equipment
Bulk
earthworks
Browns Range
Buildings
Total
$
$
$
$
$
At beginning of the financial year
290,264
64,462,597
5,634,400
3,561,145
73,948,406
Additions
Capitalised Interest
Transfers
Disposals
Impairment loss
8,256,009
565,837
54,732
270,058
9,146,636
-
-
-
-
(4,606,828)
2,644,867
1,714,504
247,457
-
-
-
-
(12,921)
-
(61,905,568)
(5,294,663)
-
-
(12,921)
(67,200,231)
At the end of the financial year
3,939,445
5,754,812
2,108,973
4,078,660
15,881,890
Accumulated Depreciation
At beginning of year
Depreciation charge for the year
Disposals
Impairment loss
Accumulated depreciation at end
of year
-
-
-
-
-
20,379,886
2,700,112
22,202,367
1,973,835
(4,100)
-
(38,917,462)
(3,519,725)
361,457
254,517
-
-
23,441,455
24,430,719
(4,100)
(42,437,187)
3,660,691
1,154,222
615,974
5,430,887
Carrying amount at end of the year
3,939,445
2,094,121
954,751
3,462,686
10,451,003
2019
Cost
At beginning of the financial year
50,116,533
4,999,158
4,991,608
3,492,247
63,599,546
Additions
Capitalised Interest
Transfers
8,536,255
1,763,810
48,797
-
-
-
-
-
(60,126,332)
59,414,642
642,792
68,898
8,585,052
1,763,810
-
At the end of the financial year
290,266
64,462,597
5,634,400
3,561,145
73,948,408
Accumulated Depreciation
At beginning of year
Depreciation charge for the year
Accumulated depreciation at end
of year
-
-
-
2,639,660
1,245,951
17,740,227
1,454,161
140,688
220,769
4,026,299
19,415,157
20,379,887
2,700,112
361,457
23,441,456
Carrying amount at end of the year
290,266
44,082,710
2,934,288
3,199,688
50,506,952
49
NORTHERN MINERALS _ ANNUAL REPORT 2020
82
NORTHERN MINERALS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
10.
Non-financial Assets and Liabilities (continued)
Property, plant and equipment
Plant and equipment is stated at cost less accumulated depreciation and impairment charges. Cost is
the fair value of consideration given to acquire the asset at the time of its acquisition or construction
and includes the direct cost of bringing the asset to the location and condition necessary for operation
and its estimated future cost of closure and rehabilitation.
Subsequent costs are included in the assets carrying amount or recognised as a separate asset, as
appropriate, only when it is probable that future economic benefits associated with the item will flow to
the group and the cost of the item can be reliably measured. All other repairs and maintenance are
charged to the statement of profit or loss during the reporting period in which they are incurred.
Any item of property, plant and equipment is derecognised upon disposal or when no further economic
benefits are expected from its use or disposal.
Any gain or loss arising on derecognising of the asset (calculated as the difference between the net
disposal proceeds and the carrying amount of the asset) is included in the statement of profit or loss in
the year the asset is derecognised.
Depreciation and amortisation
The carrying amounts of property, plant and equipment are depreciated to their estimated residual value
over the estimated useful lives of the specific assets concerned, or the estimated life of the associated
project, if shorter. Estimates of residual values and useful lives are reassessed annually and any change
in estimate is taken into account in the determination of remaining depreciation charges. Depreciation
commences on the date the asset is ready and available for use. The major categories of property,
plant and equipment are depreciated on a straight-line basis using estimated lives indicated below.
Pilot plant in construction – based on life of pilot plant project – 3 years from being available for use
Office Equipment – 3 years
Fixtures and Fittings – 4 years
Exploration Equipment – 3 years
Vehicles – 4 years
Leasehold Improvements – 3-10 years
Buildings – 3-15 years for fixtures and fittings and portable building structures
Browns Range Site Equipment - 3-10 years and 20 years for mobile equipment
Site Plant Bulk Earthworks – 3-4 years based on life of pilot plant depending on commencement as
available for use
Beneficiation Plant – 3 years based on life of pilot plant
Hydrometallurgical Plant – 3 years based on life of pilot plant depending on commencement as available
for use.
Assets under construction
All assets included in assets under construction are reclassified to other categories in property, plant
and equipment when the asset is available and ready for use in the location and condition necessary
for it to be capable of operating in the manner intended.
Non-current assets pledged as security
Refer to Note 8 (e) for information on non-current assets pledged as security by the Group.
Impairment Losses
The impairment loss relates to the write down of assets associated with the Browns Range Pilot Plant
after it was determined that due to changes at the operation a clear indication of impairment existed at
year end. A subsequent assessment of the recoverable amount determined that this would not exceed
$nil and the decision was made to write down the carrying value of these assets to $nil.
50
NORTHERN MINERALS _ ANNUAL REPORT 2020
83
NORTHERN MINERALS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
10.
Non-financial Assets and Liabilities (continued)
Leases
The Company has purchased a number of items of plant and equipment under hire purchase lease
agreements. These are presented as part of property, plant and equipment in the statement of financial
position.
Plant and equipment – hire purchase
Less: Accumulated depreciation
Lease liability
Current lease liability
Non-current lease liability
2020
$
472,820
(160,797)
321,023
2019
$
472,820
(89,469)
383,351
2020
$
142,835
25,485
168,320
2019
$
138,855
176,341
315,196
Interest charged on hire purchase lease liabilities during the year was $10,295. The average interest
rate charged is 4.13%.
The Company leases offices in West Perth, Western Australia, under a non-cancellable lease which
expired on 31 March 2020. The Company subsequently entered into another lease agreement with a
term of 6 months.
As the original office lease was due to expire within 12 months of the first date of application of AASB
16, the Company has relied on the practical expedients outlined in AASB 16 as follows:
-
Leases with a remaining term of 12 months or less from the date of application have been accounted
for as short-term leases and have therefore not been recognised on the balance sheet.
The office leases have been recognised as an expense in the statement of profit or loss on a straight-
line basis over the lease term in accordance with AASB 16.
During the year ended 30 June 2020, a total of $216,469 was recognised as an expense in relation to
the office leases.
Income of $125,941 has been recognised for sub-leasing of the office premises.
Lease Commitments
Commitments for minimum lease payments are:
Within one year
Later than one year but less than five years
Later than five years
(b) Inventories
Current
2020
$
45,302
-
-
45,302
2020
$
2019
$
181,282
-
-
181,282
2019
$
Diesel fuel and consumables
992,099
722,015
Inventories are valued at the lower of cost and net realisable value. Cost is determined using weighted
average costs.
51
NORTHERN MINERALS _ ANNUAL REPORT 2020
84
NORTHERN MINERALS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
10
Non-financial Assets and Liabilities (continued)
(c) Provisions
Current
Employee benefits
Non-Current
Rehabilitation
(i)
Movements in provisions
2020
Balance at the beginning of year
Amounts expensed for the year
Utilisation
Balance at the end of year
Employee benefits
1,106,518
971,120
4,977,310
4,977,310
4,716,141
4,716,141
Employee
benefits
$
971,120
991,734
(856,336)
1,106,518
Rehabilitation
$
Total
$
4,716,141
261,169
-
4,977,310
5,687,261
1,252,903
(856,336)
6,083,828
Liabilities for unpaid wages and salaries are recognised in sundry creditors. Current entitlements to
annual leave accrued for services up to the reporting date are recognised in the provision for employee
benefits and are measured at the amounts expected to be paid. Entitlements to non-accumulating sick
leave are recognised when the leave is taken.
The current liability for long service leave (for which settlement within 12 months of the reporting date
cannot be deferred) is recognised in the current provision for employee benefits and is measured in
accordance with annual leave described above. The non-current liability for long service leave is
recognised in the non-current provision for employee benefits and measured as the present value of
expected future payments to be made in respect of services provided by employees up to the reporting
date. Consideration is given to current wage and salary levels to match as closely as possible, the
estimated future cash outflows.
Rehabilitation
The mining, exploration and construction activities of the Group give rise to obligations for site closure
and rehabilitation. Closure and rehabilitation works can include facility decommissioning and
dismantling, removal of waste materials, site and land rehabilitation.
Provisions for the cost of each closure and rehabilitation programme are recognised at the time the
environmental disturbance occurs. When the extent of disturbance increases over the life of an
operation, the provision is increased accordingly. Costs included in the provision encompass all closure
and rehabilitation activity expected to occur progressively over the life of the operation and at, or after,
the time of closure, for disturbance existing at the reporting date. Routine operating costs that may
impact the ultimate closure and rehabilitation activities, are not included in the provision.
Costs arising from unforeseen circumstances, are recognised as an expense and liability when the
event gives rise to an obligation which is probable and capable of reliable estimation.
The timing of the actual closure and rehabilitation expenditure is dependent upon a number of factors
such as the life and nature of the asset, the operating licence conditions and the environment in which
they operate. Expenditure may occur before and after closure and can continue for an extended period
of time dependent on closure and rehabilitation requirements.
52
NORTHERN MINERALS _ ANNUAL REPORT 2020
85
NORTHERN MINERALS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
10.
Non-financial Assets and Liabilities (continued)
Closure and rehabilitation provisions are measured at the expected value of future cash flows,
discounted to their present value. Significant judgements and estimates are involved in forming
expectations of future activities and the amount and timing of associated cash flows.
When provisions for closure and rehabilitation are initially recognised, the corresponding cost is
capitalised as an asset, representing part of the cost of acquiring the future economic benefits of the
operation, to the extent that the activity in which the provision is related to is capitalised. The capitalised
cost of rehabilitation and closure activities is recognised in property, plant and equipment accordingly.
The value of the provision is progressively increased over time due to the effect of discounting
unwinding creating an expense recognised in finance expenses. Where the activity in which the
provision relates is expensed in accordance with the exploration and evaluation expenditure, the
provision expense is also expensed.
Closure and rehabilitation provisions are also adjusted for changes in costs and estimates. Those
adjustments are accounted for as a change in the corresponding capitalised cost, except where a
reduction in the provision is greater than the undepreciated capitalised cost of the related assets, in
which case the capitalised cost is reduced to nil and the remaining adjustment is recognised first against
other items in property, plant and equipment and subsequently to the consolidated statement of profit
or loss.
Changes to the capitalised cost result in an adjustment to future depreciation.
Adjustments to the estimated amount and timing of future closure and rehabilitation cash flows are a
normal occurrence in light of significant judgements and estimates involved.
53
NORTHERN MINERALS _ ANNUAL REPORT 2020
86
NORTHERN MINERALS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
11.
Equity
(a) Ordinary Shares
Share Capital
Ordinary Shares
Movement in Ordinary Share Capital
Balance at the beginning of year
Rights issue
Share placement - $30 million placement (part)
Issue of securities – exercise of performance rights
Issue of shares for consultancy
Issue of shares to JHY Pty Ltd – extension of convertible note
Share placement - $30 million placement (part)
Lind Collateral Shares
Placement at $0.02
Lind – Partial repayment of Convertible Note
Share Purchase Plan
Conversion of Performance Rights
Shares issued in lieu of payment of vendor invoices
Issue of securities to Lind - Convertible Security repayment – July 2018
Placement Issue – July 2018
Issue of securities to Lind - Convertible Security repayment – October
2018
Issue of securities to Lind - Convertible Security repayment – November
2018
Issue of securities to Lind - Convertible Security repayment – December
2018
Shares issued to Sinosteel for Deed of Settlement dated December
2018
Shares issued to Primero for Deed of Settlement dated December 2018
Issue of shares to creditors
Issue of securities to Lind - Convertible Security repayment – December
2018
NRE Subscription
Share Placement – February 2019
Shares issued for consultancy agreement
Shares issued to creditors
Issue of securities to Lind - Convertible Security repayment – February
2019
Share Placement – March 2019
Shares issued for consultancy agreement
Share Placement – April/ May 2019
Shares issued on exercise of performance rights
Share issue for success fees on placements
Institutional Rights Issue
Share issue for success fees on placements
Share Placement – May 2019
Number
2020
$
Number
2019
$
3,987,080,431
243,671,335
2,083,027,096
188,482,276
2,083,027,096
188,482,276
1,114,820,770
143,944,809
95,039,889
411,045,556
2,859,500
2,419,355
2,000,000
3,225,806
60,000,000
771,500,000
52,631,579
499,020,000
1,501,650
2,810,000
-
-
-
4,276,801
25,484,824
-
181,500
122,000
200,000
2,040,000
15,430,000
1,000,000
9,980,400
-
61,800
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
7,440,477
38,461,538
17,434,876
-
-
-
-
-
-
-
-
-
-
-
-
572,917
3,000,000
1,245,833
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
9,615,386
625,000
13,020,836
729,167
15,000,000
1,095,000
10,000,000
5,900,000
14,719,205
11,111,111
50,000,000
10,000,000
2,500,000
15,746,126
60,000,000
20,000,000
400,000,000
4,100,000
38,000,000
59,156,771
16,000,000
150,000,000
620,000
295,000
677,083
1,000,000
3,000,000
470,000
120,000
677,083
2,999,487
800,000
20,000,000
-
1,900,000
2,662,055
800,000
7,500,000
Less: costs of issue
Balance at the end of year
3,987,080,431
-
3,987,080,431
247,259,601
(3,588,266)
243,671,335
2,083,027,096
-
2,083,027,096
194,733,434
(6,251,158)
188,482,276
54
NORTHERN MINERALS _ ANNUAL REPORT 2020
87
NORTHERN MINERALS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
11.
Equity (continued)
(i) Ordinary shares
Issued capital is recognised at the fair value of the consideration received by the Company. Any
transaction costs arising on the issue of ordinary shares are recognised directly in equity as a reduction
of the share proceeds received.
Ordinary shares entitle the holder to participate in dividends, and to share in the proceeds of winding
up the Company in proportion to the number of and amounts paid on the shares held.
Ordinary shares have no par value and the Company does not have a limited amount of authorised
capital.
On a show of hands every holder of ordinary shares present at a meeting in person or by proxy, is
entitled to one vote, and upon a poll each share is entitled to one vote.
Share Purchase Plan shares not taken up on termination are dealt with in accordance with the Share
Plan rules. For further details on the nature of these shares, refer to Note 17.
(b) Share Purchase Plan Shares
Included in ordinary shares are shares issued pursuant to the Share Purchase Plan as follows:
Balance at beginning of year
Shares reverted to company and reissued during the year
Balance at end of year
(c) Performance Rights over ordinary shares
Performance rights with conditions* with Nil exercise price
vesting and exercisable upon a number of conditions
(Unquoted)
Balance at beginning of year
Issued during the year
Forfeited/lapsed during the year
Exercised during the year
Balance at end of year
Performance rights with conditions** with Nil exercise price
vesting and exercisable upon a number of conditions
(Unquoted)
Balance at beginning of year
Issued during the year
Forfeited/lapsed during the year
Exercised during the year
Balance at end of year
2020
Number
5,303,400
(950,000)
4,353,400
2019
Number
5,303,400
-
5,303,400
2020
Number
2019
Number
14,000,000
-
(2,000,000)
(1,000,000)
11,000,000
18,000,000
-
-
(4,000,000)
14,000,000
-
-
-
-
-
2,000,000
-
(2,000,000)
-
-
55
NORTHERN MINERALS _ ANNUAL REPORT 2020
88
NORTHERN MINERALS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
11.
Equity (continued)
Performance rights with conditions*** with Nil exercise price
vesting and exercisable upon a number of conditions
(Unquoted)
Balance at beginning of year
Issued during the year
Forfeited/lapsed during the year
Exercised during the year
Balance at end of year
Performance rights with conditions**** with Nil exercise price
vesting and exercisable upon a number of conditions
(Unquoted)
Balance at beginning of year
Issued during the year
Forfeited/lapsed during the year
Exercised during the year
Balance at end of year
* Performance conditions
2020
Number
2019
Number
300,000
-
-
-
300,000
400,000
-
-
(100,000)
300,000
9,713,050
914,000
(1,086,000)
(3,361,150)
6,179,900
-
11,714,000
(2,000,950)
-
9,713,050
- 5,500,000 shares will vest and be exercisable upon the Company making a final investment decision to proceed with its Browns
Range Pilot Plant;
- 5,500,000 will vest and be exercisable upon practical completion being achieved under a contract for the construction of the
Browns Range Pilot Plant;
- 5,500,000 shares will vest and be exercisable upon the first accumulated 100 tonnes of mixed rare earth carbonate being
produced and sold from the Browns Range Pilot Plant;
- 11,000,000 shares will vest and be exercisable upon the Browns Range Pilot Plant achieving production of mixed rare earth
carbonate of at least 260 tonnes within a period of 90 consecutive days.
** Performance conditions
- 500,000 shares will vest and be exercisable upon the Company taking the first delivery of equipment and material from Sinosteel
arriving at an Australian Port under the Company’s EPC contract with Sinosteel for the construction of the Browns Range Pilot
Plant;
- 500,000 will vest and be exercisable upon practical completion being achieved under a contract for the construction of the
Browns Range Pilot Plant;
- 500,000 shares will vest and be exercisable upon the first accumulated 100 tonnes of mixed rare earth carbonate being produced
and sold from the Browns Range Pilot Plant;
- 1,000,000 shares will vest and be exercisable upon the Browns Range Pilot Plant achieving production of mixed rare earth
carbonate of at least 260 tonnes within a period of 90 consecutive days.
*** Performance conditions
- 100,000 shares will vest and be exercisable upon the completion of Civil Works (concrete) for the Browns Range Pilot Plant;
- 200,000 shares will vest and be exercisable upon the delivery of project EP portion and LTSC portion within budget, no lost time
injury and no reportable environmental incident;
- 300,000 shares will vest and be exercisable upon completion of the Pilot Plant performance test and practical completion by 30
June 2019;
- 50,000 shares will vest and be exercisable upon commencement of mining operations of the Browns Range Pilot Project;
- 300,000 shares will vest and be exercisable upon delivery of the mining scope of work for the Browns Range Pilot Plant on time
and within budget. No lost time injury at the site from the commencement to the completion of both the mining and earthworks
contracts, and no reportable environmental incidents from the commencement to the completion of both the mining and
earthworks contracts;
- 250,000 shares will vest and be exercisable upon completion of the mining and earthworks contracts at the discretion of the
CEO;
- 100,000 shares will vest and be exercisable upon commencement of employment with Northern Minerals;
- 200,000 shares will vest and be exercisable upon completion of process plant performance test and practical completion
achieved by 30 June 2019, and completion of necessary R&D tests and claim application for 2017/2018 R&D claim, and receipt
of R&D refund by the Company;
- 300,000 shares will vest and be exercisable upon completion of necessary R&D tests and claim application for 2018/2019 R&D
claim and receipt of refund by the Company.
56
NORTHERN MINERALS _ ANNUAL REPORT 2020
89
NORTHERN MINERALS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
11. Equity (continued)
**** Performance conditions
-2,858,500 shares will vest and be exercisable subject to vesting conditions that relate to OHS Positive Performance Indicators
(PPI) for the financial year ended 30 June 2020;
-2,858,500 shares will vest and be exercisable subject to vesting conditions that relate to Key Production Indicators (KPI) for the
financial year ended 30 June 2020;
-2,998,500 shares will vest and be exercisable subject to vesting conditions that relate to OHS Positive Performance Indicators
(PPI) for the financial year ended 30 June 2020;
-2,998,500 shares will vest and be exercisable subject to vesting conditions that relate to Key Production Indicators (KPI) for the
financial year ended 30 June 2020.
(d) Options over ordinary shares
Share options outstanding at the end of the year have the following expiry date and exercise prices:
Grant Date
Expiry date
Exercise
price
Share options
30 June 2020
Share options
30 June 2019
12 June 2014
12 June 2014
12 April 2017
14 June 2017
29 December 2017
29 December 2017
30 November 2018
17 December 2018
2 March 2020
Total
12 June 2020
12 June 2020
24 May 2021
20 June 2020
31 December 2019
31 December 2019
20 December 2021
31 December 2019
2 March 2024
$0.25
$0.25
$0.15
$0.2475
$0.1175
$0.1175
$0.1225
$0.0875
$0.045
-
-
3,000,000
-
-
-
10,000,000
-
34,000,000
47,000,000
1,921,870
10,890,600
3,000,000
22,500,000
30,000,000
5,023,076
10,000,000
10,000,000
-
93,335,546
Weighted average remaining contractual life of options outstanding
at end of period
3.03 years
0.94 years
The following options expired during the year:
Expiry date
Exercise price
12 June 2020
12 June 2020
20 June 2020
31 December 2019
31 December 2019
31 December 2019
$0.25
$0.25
$0.2475
$0.1175
$0.1175
$0.0875
Share options
30 June 2020
1,921,870
10,890,600
22,500,000
30,000,000
5,023,076
10,000,000
57
NORTHERN MINERALS _ ANNUAL REPORT 2020
90
NORTHERN MINERALS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
11.
Equity (continued)
(e) Capital management
When managing capital, the Board’s objective is to ensure the Group continues as a going concern as
well as to maintain optimal returns to shareholders and benefits for other stakeholders. Management
also aims to maintain a capital structure that ensures the lowest cost of capital available to the entity.
The Board may in the future adjust the capital structure to take advantage of favourable costs of capital
and issue further shares in the market.
Management monitors capital by reviewing the level of cash on hand, future revenue streams and
assessing the impact of possible future commitments in respect of the potential capital structure that
would be required to meet those potential commitments.
(f) Dividends
No dividends were paid or declared by the Company since the incorporation of the Company.
(g)
Other reserves
Reserves
Reserves comprise the following:
Performance Rights and options reserve
Balance at the beginning of year
Vesting charge on performance rights and options
Balance at the end of year
Share-based payment reserve
Balance at the beginning year
Share plan allocation
Other share-based payments -refer note below
Balance at the end of year
Other Reserves
Balance at the beginning year
Convertible notes issued during the year / (converted in year)
Change in value of collateral shares refunded and reissued
Balance at the end of year
2020
$
2019
$
12,521,187
12,405,310
9,076,412
(110,159)
8,966,253
8,398,451
677,961
9,076,412
2,807,380
-
-
2,807,380
4,347,380
-
(1,540,000)
2,807,380
521,518
226,036
-
747,554
1,278,025
945,385
(1,701,892)
521,518
Total Reserves
12,521,187
12,405,310
During 2017 a sales agreement with Lianyugang Zeyu New Materials Sales Co Ltd (JFMAG) was
entered into. Following execution of the sales agreement Northern Minerals were to issue 14 million
ordinary shares to JFMAG or its nominated beneficiary. This agreement has been terminated and the
shares will not be issued. This transaction was reversed in the share-based payments reserve in
2019.
58
NORTHERN MINERALS _ ANNUAL REPORT 2020
91
NORTHERN MINERALS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
11.
Equity (continued)
(h)
Nature and purpose of other reserves
The share option reserve is used to recognise the value of options or performance rights issued in lieu
of cash payments, issued to employees and Key Management Personnel as remuneration, and to
recognise the proceeds received on issue of options and performance rights.
The share-based payments reserve is used to recognise the value of shares issued in lieu of cash
payments and is allocated the vested portion of the employee share purchase plan over the vesting
period.
The other reserve covers the equity component of the issued convertible notes. The liability component
is reflected in financial liabilities. It also includes the change of value in the collateral shares issued,
refunded and reissued.
12.
Cash Flow Information
(a)
Reconciliation of loss after income tax to net
cash outflow from operating activities
Net Loss after tax
Adjustments
Depreciation expense
Amortisation of borrowing costs
Loss on disposal of assets
Unrealised foreign exchange
Share-based payments – (refer Note 17)
Repayment of Research & Development
Research & Development rebate reversal
Impairment of PPE
Non-cash fair value adjustments
Change in assets and liabilities
(Increase) /decrease in other receivables
(Increase) / decrease in inventory
Increase / (decrease) in trade and other payables
Increase / (decrease) in provisions
Net cash flows used in operating activities
2020
$
2019
$
(54,328,360)
(63,966,330)
24,430,720
1,017,578
(8,551)
-
(509,889)
(4,108,378)
-
24,763,044
92,793
19,415,157
2,503,415
-
1,256,376
2,784,684
-
6,198,937
-
1,097,743
(20,787,403)
(270,084)
(2,444,351)
396,567
(31,756,314)
11,272,368
284,254
(1,254,642)
714,095
(19,693,943)
(b) Non-cash investing and financing activities
Acquisition of property, plant and equipment by means of finance
leases
-
60,000
Conversion of debt to equity (refer note 17)
1,000,000
4,527,084
The above reflects the Lind facility where repayments have been made via the issue of ordinary shares.
59
NORTHERN MINERALS _ ANNUAL REPORT 2020
92
NORTHERN MINERALS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
12.
(c)
Cash Flow Information (continued)
Reconciliation of liabilities arising from financing activities
Opening
balance
2019
$
Cash flows
*
$
Foreign
exchange
movements
$
Conversion
of debt to
equity
$
Other non-cash
movements
$
Closing
balance
2020
$
Non-cash changes
11,054,262
315,196
639,721
(5,404,406)
(146,846)
(639,721)
-
-
-
(1,000,000)
-
-
1,035,473
-
-
5,685,329
168,350
-
12,009,179
(6,190,973)
-
(1,000,000)
1,035,473
5,853,679
Convertible notes
Equipment finance
Other loans
Total liabilities
from financing
activities
*Interest paid on liabilities has been included in the cash flows above, however, is shown as operating
cash flows in the Statement of Cash Flows.
13.
Subsidiaries
The following are wholly owned subsidiaries of the Company:
Northern Uranium Pty Ltd
Northern Commodities Pty Ltd
Northern P2O5 Pty Ltd
Northern Rare Earth Metals Pty Ltd; and
Northern Xenotime Pty Ltd.
Subsidiaries are entities controlled by the parent entity. Control exists where the parent entity is
exposed, or has rights to, variable returns from its involvement with the subsidiary and has the ability
to affect those returns through its power over the subsidiary. A parent entity has power over the
subsidiary, when it has existing rights to direct the relevant activities of the subsidiary which are those
which significantly affect the subsidiary returns.
14.
Contingent Liabilities
Co-Existence Agreement
Under the terms of the Browns Range Co-existence Agreement announced to ASX on 16 June 2014,
the Company has an obligation to make certain payments as well as maximising local employment.
The majority of payments are subject to the commencement of commercial production at the
Company’s Browns Range Project and cannot be reliably measured at this time.
During the Pilot Plant Phase, the payment obligations do not apply and are substituted with alternative
payment obligations.
Guarantees
The Group has guarantees in the form of security deposits for rent and performance bonds of $60,522
(2019: $89,272).
60
NORTHERN MINERALS _ ANNUAL REPORT 2020
93
NORTHERN MINERALS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
14.
Contingent Liabilities (continued)
Government Grants
On 7 August 2017, as part of a consortium led by the Wunan Foundation, Northern Minerals announced
that funding has been awarded under the Federal Government’s Building Better Regions Fund (BBRF)
to develop an Aboriginal training-to-work (T2W) program at the Browns Range Pilot Plant Project. The
Grant is paid as agreed milestones are achieved in arrears, based on actual eligible costs. Payments
are subject to satisfactory progress on the Project and compliance by the Grantee with its obligations
under the agreement. A final payment of at least 10% of the Grant will be withheld until the Grantee
submits a satisfactory final report demonstrating end of the Project reporting obligations have been met.
If the Grantee does not comply with an obligation under the agreement and the Commonwealth believes
that the non-compliance is incapable of remedy, or if the Grantee has failed to comply with a notice to
remedy, the Commonwealth may by written notice reduce the scope of the Agreement. This can include
return of any part of the Grant to the Commonwealth.
15.
Commitments
(i) Exploration Expenditure Commitments
In order to maintain current rights of tenure to exploration tenements, the Company is required to
perform minimum exploration work to meet the minimum expenditure requirements specified by various
State governments. These obligations can be reduced by selective relinquishment of exploration tenure
or renegotiation. Due to the nature of the Company's operations in exploring and evaluating areas of
interest, exploration expenditure commitments beyond twelve months cannot be reliably determined. It
is anticipated that expenditure commitments in subsequent years will be similar to that for the
forthcoming twelve months. These obligations are not provided for in the financial report and are
payable:
Exploration Tenements
Within one year
2020
$
2019
$
841,400
834,900
61
NORTHERN MINERALS _ ANNUAL REPORT 2020
94
NORTHERN MINERALS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
16.
Related Party Transactions
(a) Key management personnel compensation
The aggregate compensation made to directors and other key management personnel of the Group is
set out below:
Short-term employee benefits
Post-employment benefits
Other long-term benefits
Share-based payments
Total compensation
2020
$
2,563,298
98,358
10,206
(709,349)
1,962,513
2019
$
2,503,768
100,754
56,659
119,746
2,780,927
Detailed remuneration disclosures are provided in the Remuneration Report.
(b) Transactions with other related parties
Northern Minerals have entered into agreements with companies associated with Non-executive
Director Adrian Griffin and ex-Managing Director George Bauk, for them to rent office accommodation
at 675 Murray Street, West Perth. The rent has been set at a rate which is at arms-length commercial
rate for comparable premises.
Rental Income
125,941
95,294
The following balances are outstanding at the end of the reporting
period in relation to transactions with related parties:
Current receivables
20,767
12,452
62
NORTHERN MINERALS _ ANNUAL REPORT 2020
95
NORTHERN MINERALS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
17.
Share-based Payments
Total expenses arising from share-based payment transactions
recognised during the period:
Performance rights and options – refer to (i)
Share purchase plan shares – refer to (ii)
Total Options and Performance Rights
•
•
•
Included in share-based payments expense
Included in prepayments (refer Note 8(b))
Included in capitalised borrowing costs
Share-based payments by issuing shares
• Repayment of debt (refer Note 12(b))
•
•
•
•
•
•
Included in share-based payments expense
Included in borrowing costs
Included in share capital costs
Included in project development costs
Included in consulting fees
Included in prepayments (refer Note 8(b))
•
Total shares issued for payment of goods and services
2020
$
(110,159)
-
(110,159)
(586,159)
476,000
-
(110,159)
1,000,000
-
-
-
41,800
201,500
2,162,000
3,405,300
2019
$
677,961
-
677,961
377,790
300,171
-
677,961
4,527,084
1,746,893
750,000
3,220,000
-
-
-
10,243,977
Total share-based payments for the year
3,295,141
10,921,938
Total share-based payments recognised in profit and loss
Total share-based payments recognised in statement of
financial position
(202,526)
2,874,684
3,497,667
8,047,254
Equity settled transactions
The Group provides benefits to its employees (including Key Management Personnel) in the form of
share-based payments.
In valuing equity-settled transactions, vesting conditions, other than conditions linked to the price of the
shares of Northern Minerals Limited (market conditions) are considered if applicable.
The cost of equity-settled transactions is recognised, together with a corresponding increase in equity,
over the period in which the performance and / or service conditions are fulfilled (the vesting period),
ending on the date on which the relevant employees become fully entitled to the award (the vesting
date).
At each subsequent reporting date until vesting, the cumulative charge to the statement of profit or loss
is the product of:
(i) The grant date fair value of the award.
(ii) The expired portion of the vesting period.
The charge to the statement of profit or loss for the period is the cumulative amount as calculated above
less the amounts already charged in previous periods. There is a corresponding entry to equity.
Until an award has vested, any amounts recorded are contingent and will be adjusted if more or fewer
awards vest than were originally anticipated to do so.
The dilutive effect, if any, of outstanding options is reflected as additional share dilution in the
computation of diluted earnings per share (see Note 19).
The Group expenses equity-settled share-based payments such as share and option issues after
ascribing a fair value to the shares and/or options issued. The fair value of option and share plan issues
of option and share plan shares are recognised as an expense together with a corresponding increase
in the share based payments reserve or the share option reserve in equity over the vesting period. The
63
NORTHERN MINERALS _ ANNUAL REPORT 2020
96
NORTHERN MINERALS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
17.
Share-based Payments (continued)
proceeds received net of any directly attributable transaction costs are credited to share capital when
options are exercised.
The value of shares issued to employees, financed by way of a non-recourse loan under the employee
Share Plan, is recognised with a corresponding increase in equity when the company receives funds
from either the employees repaying the loan or upon the loan termination. All shares issued under the
plan with non-recourse loans are considered, for accounting purposes, to be options.
The initial undiscounted value of the performance rights is the value of an underlying share in the
Company as traded on ASX at the date of deemed date of grant of the performance right. As the
performance conditions are not market based performance conditions, no discount is applied.
(i) Options and Performance Rights
914,000 performance rights were granted to employees and directors during the year (2019:
11,714,000). 34,000,000 (2019: 20,000,000) options were granted to third parties. Details on the
performance rights and options issued are included in Note 11(c) and 11(d). Details on the performance
rights issues to key management personnel are included in the Remuneration Report section of the
Directors’ Report.
The number and weighted average exercise price of performance rights granted are as follows:
2020
Number
Weighted
average
exercise
price
2019 Number Weighted
average
exercise
price
Outstanding at the beginning of the year
Performance rights expired during the year
Performance rights issued during the year
Performance rights forfeited / lapsed during
the year
Performance rights exercised during the year
Outstanding at the end of the year
Exercisable at the end of the year
24,013,050
-
914,000
(3,086,000)
(4,361,150)
17,479,900
4,263,900
The outstanding balance as at 30 June 2020 is represented by:
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
20,400,000
-
11,714,000
(4,000,950)
(4,100,000)
24,013,050
4,216,050
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
• 17,479,900 performance rights with an exercise price of nil, with numerous performance
conditions – see Note 11(c) for details.
The weighted average remaining contractual life for the performance rights outstanding as at 30 June
2020 is 0.98 years (2019: 1.83 years).
(ii) Share Plan Shares
To ensure that the Company has appropriate mechanisms to continue to attract and retain the services
of Directors and employees of a high calibre, the Company has an established Share Plan.
The Directors and employees of the Company have been, and will continue to be, essential to the
growth of the Company.
The Directors considered the Plan an appropriate method to:
a) Reward Directors and employees for their past performance;
b) Provide long-term incentives to participate in the Company’s future growth;
c) Motivate Directors and employees and generate loyalty in employees; and
d) Assist to retain the services of valuable employees.
64
NORTHERN MINERALS _ ANNUAL REPORT 2020
97
NORTHERN MINERALS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
17.
Share-based Payments (continued)
The Plan is used as part of the remuneration planning for senior Employees. ASX corporate
governance guidelines recommend that executive remuneration packages involve a balance between
fixed and incentive pay reflecting short and long-term performance objectives appropriate to the
Company’s circumstances and goals.
The Plan is also to be used as part of the remuneration package for non-executive Directors. Although
this is not in accordance with the recommendations contained in the corporate governance guidelines,
the Company considers that it is appropriate for non-executive Directors to participate in the Plan from
time to time, given the size of the Company.
The Company obtained shareholder approval for the introduction of the Plan in November 2007 and
again in November 2013, and any Shares issued under the Plan within 3 years of approval of the Plan,
is an exception to Listing Rule 7.1.
Listing Rule 7.1 broadly provides, subject to certain exceptions, that a company may not issue or agree
to issue securities representing more than 15% of the nominal value of the company’s issued capital at
the beginning of any 12 month period without shareholder approval.
Pursuant to the terms of the Plan, the Board or a duly appointed committee of the Board ("Committee")
may, at such time as it determines, issue invitations to Directors and Employees of the Company to
apply for Shares.
It is at the discretion of the Committee who were issued invitations to apply for Shares under the Share
Plan and the number of Shares the subject of an invitation. Offers of Shares by the Board or the
Committee are subject to the limits imposed by the Plan. Except where necessary to comply with the
provisions of an employment contract or other contract approved by the Board whereby executive or
technical services are provided to the Company, neither the Board nor the Committee may offer or issue
Shares under the Plan where the effect would be that the number of Shares offered or granted, when
aggregated with the number of Shares issued on the same date or within the previous 5 years under
any share incentive scheme, would exceed 5% of the total number of Shares on issue at the date of
the proposed offer or issue.
The issue price for Shares offered under the Plan is at the discretion of the Board or the Committee,
provided that the issue price is not less than 1% below the weighted average sale price of Shares sold
through ASX during the one week period up to and including the offer date, or, if there were no
transactions in Shares during that one week period, the last price at which an offer was made to
purchase Shares on ASX.
A Director or Employee ("Participant") who is invited to subscribe for Shares under the Plan may also
be invited to apply for a loan up to the amount payable in respect of the Shares accepted, on the
following terms:
a) Loans must be made solely to the Participant or their nominee and in the name of either the
Participant or their nominee as the case may be.
b) The principal amount outstanding under a Loan will be interest free.
c) Any loan made available to a Participant will be applied by the Company directly towards
payment of the issue price of the Shares to be acquired under the Plan.
d) The term of the loan, the time in which repayment of the loan must be made by the Participant
and the manner for making such payments shall be determined by the Board or the Committee
and set out in the invitation.
e) The amount repayable on the loan by the Participant will be the lesser of:
i)
ii)
the issue price of the Shares less any cash dividends paid in respect of the Shares and
applied by the Company in accordance with paragraph (g) below and any amount of the
loan repaid by the Participant; and
the last sale price of the Shares on ASX on the date of repayment of the Loan or, if there
are no transactions on that day, the last sale price of the Shares prior to that date, or, if the
Shares are sold by the Company, the amount realised by the Company from the sale.
65
NORTHERN MINERALS _ ANNUAL REPORT 2020
98
NORTHERN MINERALS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
17.
Share-based Payments (continued)
f) A Participant may elect to repay the Loan in full prior to expiry of the term of the Loan but may
elect to repay the Loan amount in respect of any or all of the Shares (in multiples representing
not fewer than 1,000 Shares) at any time prior to expiry of the term of the Loan.
g) Cash dividends which are paid in respect of Shares the subject of a loan will be applied by the
Company on behalf of the Participant to repayment of the amount outstanding under the loan
and any surplus of the cash dividend will be paid to the Participant.
h) Any fees, charges and stamp duty payable in respect of a loan will be payable by the
Participant.
i)
j)
The Company shall have a lien over each Share acquired pursuant to the loan until such time
as the loan in respect of that Share is repaid. The Company shall be entitled to sell those
Shares in accordance with the terms of the Plan.
A Share issued under the Share Plan will not be tradeable by a Participant until the Loan
amount in respect of that Share has been repaid and the Company:
(i) will retain the Share Certificate in respect of the Loan Shares;
(ii) may apply a Holding Lock; and
(iii) may refuse to register a transfer of Loan Shares, until the Loan amount has been
repaid.
If, prior to repayment of a loan by a Participant, the Participant dies, becomes bankrupt or is no longer
a Director or Employee of the Company or its subsidiaries, then the Participant is required to either
repay the loan within one month or allow the Company to sell the Shares on ASX and apply the
proceeds of sale in repayment of the loan. If the proceeds of sale of the Shares are less than the
amount outstanding in relation to the loan (including the expenses associated with the sale of the
relevant Shares), the Company will forgive the amount of the shortfall.
The following shares were issued under the Northern Minerals Share Purchase Plan.
Opening Balance
Issued during the year
Shares for which loan has been repaid
Shares reverted back to the Company reissued in
accordance with the Share Plan rules
Closing Balance
2020
Number
5,303,400
-
-
2019
Number
5,303,400
-
-
(950,000)
4,353,400
-
5,303,400
4,353,400 shares have reverted to the Company under the terms of the share plan. The shares are
available to be issued by the Company as at 30 June 2020.
(iii) Valuation of Options, Performance Rights and Share Plan Shares
The fair value of the equity-settled share options granted under both the option and the loan plans, and
to third parties is estimated as at the date of grant using the Black-Scholes option pricing model taking
into account the terms and conditions upon which the options and shares were granted. The initial
undiscounted value of the performance rights is the value of an underlying share in the Company as
traded on ASX at the date of deemed date of grant of the performance right. As the performance
conditions are not market based performance conditions, no discount is applied.
The fair value of options, performance rights and share plan shares are recognised as an expense over
the period from grant to vesting date.
The Black-Scholes Option Pricing Model assumes that the securities subject to the valuation can be
sold on a secondary market. The terms and conditions of the Options and Share Plan shares state that
no application will be made for the Shares to be listed for official quotation on ASX, until certain
milestones are met.
66
NORTHERN MINERALS _ ANNUAL REPORT 2020
99
NORTHERN MINERALS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
17.
Share-based Payments (continued)
The expected life of the options is based on historical data and is not necessarily indicative of exercise
patterns that may occur. The expected volatility reflects the assumption that the historical volatility is
indicative of future trends, which may also not necessarily be the actual outcome. No other features of
options granted were incorporated into the measurement of fair value.
The following tables list the inputs to the model used for the years ended 30 June 2020 or 2019.
There were no Share Plan shares issued during the year ended 30 June 2020 or 2019.
The following relates to the unlisted options and performance rights issued during the year ended 30
June 2020:-
Issue Date
Vesting
Date
Number
Issued
Grant
Date
Stock
price
at
Grant
Date
Issue
Price
– at
date
of
issue
Risk
Free
Rate Volatility
Value Per
Option/Right
02/03/2020 02/03/2020 34,000,000 02/03/2020 $0.034 $0.045 0.5%
04/11/2019 Various
914,000 04/11/2019 $0.051
Nil Nil
65%
Nil
$0.014
$0.051
18.
Auditor’s Remuneration
Nexia Perth Audit Services Pty Ltd
During the year the following fees were paid or payable for services
provided by the auditor:
Audit and Other Assurance Services
Audit and review of financial reports under the Corporations Act
2001
Other assurance services - audit of government grant final report
Total remuneration of auditors
2020
$
2019
$
132,724
1,970
134,694
105,134
4,500
109,634
19.
Earnings per share
a) Basic loss per share
From continuing operations attributable to the ordinary
equity holders of the Company
b) Loss used in calculating loss per share
Loss attributable to ordinary equity holders of the
Company for basic and diluted earnings per share
c) Weighted average number of shares used as the
denominator
2020
$
2019
$
(2.04)
(4.67)
(54,328,360)
(63,966,330)
Number
Number
The weighted average number of ordinary shares on issue during
the financial year used in the calculation of basic loss per share
2,667,758,484
1,370,412,599
67
NORTHERN MINERALS _ ANNUAL REPORT 2020
100
NORTHERN MINERALS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
19.
Earnings per share (continued)
As the Company has incurred a loss, any exercise of options would be antidilutive, therefore the diluted
and basic earnings per share are equal.
Basic earnings / (loss) per share is calculated as net profit/(loss) attributable to members of the parent,
adjusted to exclude any costs of servicing equity (other than dividends) and preference share dividends,
divided by the weighted average number of ordinary shares, adjusted for any bonus element.
Diluted earnings/(loss) per share is calculated as net profit/(loss) attributable to members of the parent,
adjusted for:
•
•
costs of servicing equity (other than dividends) and preference share dividends;
the after-tax effect of dividends and interest associated with dilutive potential ordinary shares
that have been recognised as expenses;
• other non-discretionary changes in revenues or expenses during the period that would result
from the dilution of potential ordinary shares, divided by the weighted average number of
ordinary shares and;
• dilutive potential ordinary shares, adjusted for any bonus element.
20.
Parent Entity Information
Summary financial information
The individual financial statements for the parent entity,
Northern Minerals Limited, show the following aggregate
amounts:
Statement of financial position
Current assets
Total assets
Current liabilities
Total liabilities
Shareholder’s equity
Share capital
Reserves
Accumulated losses
Net Loss for the period
Contingent liabilities
2020
$
2019
$
31,968,270
42,479,796
10,981,013
61,577,237
25,820,487
30,823,282
33,105,662
50,897,298
243,671,335
12,521,187
(244,536,008)
11,656,514
188,482,276
14,023,856
(126,241,318)
10,679,940
(54,328,360)
(63,966,330)
Refer to Note 14
The Parent entity had no guarantees and commitments other than detailed in Notes 14 and 15.
21.
Segment Information
The Company operates in only one business and geographical segment, being the mineral exploration
industry in Australia.
An operating segment is a component of an entity that engages in business activities from which it may
earn revenues and incur expenses, whose operating results are regularly reviewed by the entity’s chief
operating decision maker (the Board of Directors) to make decisions about resources to be allocated to
the segment and assess its performance and for which discrete financial information is available. This
includes start-up operations which are yet to earn revenues. Management will also consider other
factors in determining operating segments such as the existence of a line manager and the level of
segment information presented to the board of directors.
68
NORTHERN MINERALS _ ANNUAL REPORT 2020
101
NORTHERN MINERALS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
22.
Events Occurring After the Reporting Period
On 1 July 2020, the Company made the decision to partially restart operations at the Browns Range
Pilot Plant Project. This decision was made following the lifting of Commonwealth biosecurity
restrictions applied to the Kimberly region as a part of Covid-19 control measures. The partial return of
pilot plant operations at Browns Range resulted in about three quarters of the previous Project
workforce being re-mobilised. Initial operations will focus on testwork in the beneficiation circuit followed
by tests in the hydrometallurgical circuit along with mechanical construction and installation of the ore
sorter.
On 22 July 2020, the Company issued 183,500,000 fully paid ordinary shares upon receipt of $3.67
million relation to the outstanding tranches of the $22 million placement announced on the ASX on 20
April 2020. A further 145,000,000 fully paid ordinary shares were issued on 16 September 2020
following the receipt of the final $2.9 million of the placement.
In August 2020, the Company announced it had reached a settlement agreement with the ATO that
settled all matters relating to the FY17 and FY18 R&D tax offset claims. The settlement agreement also
documented the agreed refundable R&D offset claim for the FY19 as well as a framework for reviewing
the Company’s refundable R&D offset claim for FY20. On 14 September 2020, the Company received
$8.64 million from the ATO in relation to the refundable R&D tax offset claims for FY17, FY18 and FY19.
The final $1.3 million relating to these claims was received on 17 September 2020.
On receipt of the first tranche of R&D funding the Company made a repayment of $2 million of the
outstanding $4 million of convertible notes issued to JHY Investments Pty Ltd. The final balance of $2
million payable to JHY is due on 31 December 2020.
On 17 July 2020 Lind issued a notice for the conversion of $0.8 million owing under the convertible note
agreement and as a result the Company issued 50,000,000 fully paid ordinary shares.
On 21 August 2020 the Company issued a further 66,666,667 fully paid ordinary shares as a result of
the conversion of $1.2 million of the face value of the convertible note. Following this conversion, there
are no amounts outstanding under the convertible note (which has now been redeemed in full). In
addition, Lind also elected to reduce its collateral shareholding number (under the original funding
agreement) from 60,000,000 shares to zero by paying the Company $1.08 million in cash.
The impact of the Coronavirus (COVID-19) pandemic is ongoing as at 30 June 2020 and 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.
23.
New Accounting Standards and Interpretations
The Group has where applicable, adopted all of the new and revised Standards and Interpretations
issued by the Australian Accounting Standards Board (the AASB) that are relevant to their operations
and effective for the year ended 30 June 2020 including:
AASB 16: Leases
AASB 16 replaces AASB 117 Leases and sets out the principles for the recognition, measurement,
presentation and disclosure of leases.
AASB 16 introduces a single lessee accounting model and requires a lessee to recognise assets and
liabilities for all leases with a term of more than 12 months, unless the underlying asset is of low value.
A lessee is required to recognise a right-of-use asset representing its right to use the underlying leased
asset and a lease liability representing its obligations to make lease payments.
69
NORTHERN MINERALS _ ANNUAL REPORT 2020
102
NORTHERN MINERALS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
23
New Accounting Standards and Interpretations (continued)
A lessee measures right-of-use assets similarly to other non-financial assets (such as property, plant
and equipment) and lease liabilities similarly to other financial liabilities. As a consequence, a lessee
recognises depreciation of the right-of-use asset and interest on the lease liability, and also classifies
cash repayments of the lease liability into a principal portion and an interest portion and presents them
in the statement of cash flows applying AASB 107 Statement of Cash Flows.
AASB 16 substantially carries forward the lessor accounting requirements in AASB 117 Leases.
Accordingly, a lessor continues to classify its leases as operating leases or finance leases.
The Company has relied upon the practical expedients in AASB 16 and has therefore recognised
operating leases with less than 12 months remaining at the time of adoption as short term leases (not
recognised on balance sheet). Refer to note 10(a) for additional information.
AASB 2018-1: Annual Improvements to IFRS Standards 2015 - 2017 Cycle
The amendments clarify certain requirements in:
a)
b)
AASB 3 Business Combinations and AASB 11 Joint Arrangements - previously held interest
in a joint operation;
AASB 112 Income Taxes - relating to the income tax consequences of dividend payments;
and
c)
AASB 123 Borrowing Costs - borrowing costs eligible for capitalisation.
Interpretation 23: Uncertainty over Income Tax Treatments
Interpretation 23 clarifies how to apply the recognition and measurement requirements in AASB 112
Income Taxes when there is uncertainty over income tax treatments.
Consequential amendments are made by AASB 2017-4 to AASB 1 First-time Adoption of Australian
Accounting Standards as a result of Interpretation 23.
The adoption of these amendments did not have any impact on the current period or any prior period
and is not likely to affect future periods.
As at the date of the authorisation of the financial statements, the Standards and Interpretations listed
below were in issue but not yet effective and have not been adopted by the Group for the annual
reporting year ending 30 June 2020:
Standard
AASB 2018-7 Amendments to Australian Accounting Standards –
Definition of Material
Effective date for
annual reporting
periods
beginning on or
after
1 January 2020
Application date
for the Company
1 July 2020
AASB 2020-3 Annual Improvements to IFRS Standards 2018–2020 and
Other Amendments
AASB 2020-1 Amendments to Australian Accounting Standards –
Classification of Liabilities as Current or Non-Current
1 January 2022
30 June 2023
1 January 2023
30 June 2024
The Company has decided not to early adopt any of the new and amended pronouncements. Of the
above new and amended Standards and Interpretations the Company's assessment of those new and
amended pronouncements that are relevant to the Company but applicable in future reporting periods
is set out below. The Group has not yet determined the impact of these pronouncements on its financial
statements.
70
NORTHERN MINERALS _ ANNUAL REPORT 2020
103
NORTHERN MINERALS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
23
New Accounting Standards and Interpretations (continued)
AASB 2018- 7: Amendments to Australian Accounting Standards – Definition of Material
The amendments refine the definition of material in AASB 101.The amendments clarify the definition of
material and include guidance relating to obscuring information that could be reasonably expected to
influence decisions of the primary users of the financial information. The amendments include additional
guidance to the definition of material, gives it more prominence, and clarifies the explanation;
accompanying the definition of material.
AASB 2020-3 Annual Improvements to IFRS Standards 2018–2020 and Other Amendments
This Standard amends:
(a)
(b)
(c)
(d)
(e)
(f)
the application of AASB 1 by a subsidiary that becomes a first-time adopter after its
parent in relation to the measurement of cumulative translation differences;
AASB 3 to update references to the Conceptual Framework for Financial Reporting;
AASB 9 to clarify when the terms of a new or modified financial liability are substantially
different from the terms of the original financial liability;
AASB 116 to require an entity to recognise the sales proceeds from selling items
produced while preparing property, plant and equipment for its intended use and the
related cost in profit or loss, instead of deducting the amounts received from the cost
of the asset;
AASB 137 to specify the costs that an entity includes when assessing whether a
contract will be loss-making; and
AASB 141 to align the fair value measurement requirements in AASB 141 with those
in other Australian Accounting Standards.
AASB 2020-1 Amendments to Australian Accounting Standards – Classification of Liabilities as Current
or Non- Current
Amends AASB 101 to clarify that liabilities are classified as either current or non-current, depending on
the rights that exist at the end of the reporting period. Classification is unaffected by the expectations
of the entity or events after the reporting date (for example, the receipt of a waiver, a breach of covenant,
or settlement of the liability). The mandatory application date of the amendment has been deferred by
12 months to 1 January 2023.
Management is currently assessing the effects of applying the new standards on the Group’s financial
statements. The Group will make more detailed assessments over the next 12 months.
71
NORTHERN MINERALS _ ANNUAL REPORT 2020
104
NORTHERN MINERALS LIMITED
DIRECTORS’ DECLARATION
In accordance with a resolution of the directors of Northern Minerals Limited I state that:
1.
In the opinion of the directors
(a) The financial statements and notes of Northern Minerals Limited for the financial year ended
30 June 2020 are 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 their
performance for the year then ended; and
(ii) complying with Australian Accounting Standards and the Corporations Regulations 2001;
and
(b) There are reasonable grounds to believe that the company will be able to pay its debts as and
when they become due and payable having regard to the matters disclosed in Note 2(a); and
(c) The financial statements and notes also comply with International Financial Reporting
Standards as disclosed in Note 2; and
2. This declaration has been made after receiving the declarations required to be made to the directors
in accordance with Section 295A of the Corporations Act 2001 for the financial year ended 30 June
2020.
On behalf of the Board
________________
Colin McCavana
Director
24 September 2020
72
NORTHERN MINERALS _ ANNUAL REPORT 2020
105
Auditor’s independence declaration under section 307C of the Corporations Act 2001
To the directors of Northern Minerals Ltd
I declare that, to the best of my knowledge and belief, in relation to the audit for the financial year
ended 30 June 2020 there have been:
Auditor’s independence declaration under section 307C of the Corporations Act 2001
(i) no contraventions of the auditor’s independence requirements as set out in the Corporations
To the directors of Northern Minerals Ltd
Act 2001 in relation to the audit; and
I declare that, to the best of my knowledge and belief, in relation to the audit for the financial year
ended 30 June 2020 there have been:
(ii) no contraventions of any applicable code of professional conduct in relation to the audit.
(i) no contraventions of the auditor’s independence requirements as set out in the Corporations
Act 2001 in relation to the audit; and
(ii) no contraventions of any applicable code of professional conduct in relation to the audit.
Nexia Perth Audit Services Pty Ltd
Nexia Perth Audit Services Pty Ltd
Muranda Janse Van Nieuwenhuizen
Director
Perth
24 September 2020
Muranda Janse Van Nieuwenhuizen
Director
Perth
24 September 2020
NORTHERN MINERALS _ ANNUAL REPORT 2020
106
Independent Audit Report to the Members of Northern Minerals Limited
Independent Audit Report to the Members of Northern Minerals Limited
Report on the financial report
Report on the financial report
Opinion
We have audited the financial report of Northern Minerals Limited (“the Company”), including its
Opinion
subsidiaries (“the Group”) which comprises the consolidated statement of financial position as at 30
We have audited the financial report of Northern Minerals Limited (“the Company”), including its
June 2020, the consolidated statement of comprehensive income, consolidated statement of changes
subsidiaries (“the Group”) which comprises the consolidated statement of financial position as at 30
in equity and consolidated statement of cash flows for the year then ended, and notes to the
June 2020, the consolidated statement of comprehensive income, consolidated statement of changes
consolidated financial statements, including a summary of significant accounting policies, and the
in equity and consolidated statement of cash flows for the year then ended, and notes to the
directors’ declaration.
consolidated financial statements, including a summary of significant accounting policies, and the
directors’ declaration.
In our opinion, the accompanying financial report of the Group is in accordance with the Corporations
Act 2001, including:
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 then ended; and
(i) giving a true and fair view of the Group’s financial position as at 30 June 2020 and of its financial
(ii) complying with Australian Accounting Standards and the Corporations Regulations 2001.
performance for the year then ended; 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
Basis for opinion
those standards are further described in the ‘auditor’s responsibilities for the audit of the financial
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under
report’ section of our report. We are independent of the Group in accordance with the Corporations Act
those standards are further described in the ‘auditor’s responsibilities for the audit of the financial
2001 and the ethical requirements of the Accounting Professional & Ethical Standards Board’s APES
report’ section of our report. We are independent of the Group in accordance with the Corporations Act
110 Code of Ethics for Professional Accountants (the Code) that are relevant to our audit of the financial
2001 and the ethical requirements of the Accounting Professional & Ethical Standards Board’s APES
report in Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code.
110 Code of Ethics for Professional Accountants (the Code) that are relevant to our audit of the financial
report in Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code.
We confirm that the independence declaration required by the Corporations Act 2001, which has been
given to the directors of the Group, would be in the same terms if given to the directors as at the time
We confirm that the independence declaration required by the Corporations Act 2001, which has been
of this auditor’s report.
given to the directors of the Group, 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.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our opinion.
Key audit matters
Key audit matters
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
Key audit matters are those matters that, in our professional judgement, were of most significance in
our audit of the financial report as a whole, and in forming our opinion thereon, and we do not provide
our audit of the financial report of the current period. These matters were addressed in the context of
a separate opinion on these matters.
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.
NORTHERN MINERALS _ ANNUAL REPORT 2020
Independent Audit Report to the Members of Northern Minerals Limited
Report on the financial report
Opinion
We have audited the financial report of Northern Minerals Limited (“the Company”), including its
subsidiaries (“the Group”) which comprises the consolidated statement of financial position as at 30
June 2020, the consolidated statement of comprehensive income, consolidated statement of changes
in equity and consolidated statement of cash flows for the year then ended, and notes to the
consolidated financial statements, including a summary of significant accounting policies, and the
In our opinion, the accompanying financial report of the Group is in accordance with the Corporations
directors’ declaration.
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 then ended; 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 & Ethical Standards Board’s APES
110 Code of Ethics for Professional Accountants (the Code) that are relevant to our audit of the financial
report in Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code.
We confirm that the independence declaration required by the Corporations Act 2001, which has been
given to the directors of the Group, would be in the same terms if given to the directors as at the time
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
of this auditor’s report.
for our opinion.
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in
our audit of the financial report of the current period. These matters were addressed in the context of
our audit of the financial report as a whole, and in forming our opinion thereon, and we do not provide
a separate opinion on these matters.
Key audit matter
Future Funding
(Refer to note 2(a) in the financial report)
The Group has not yet started to generate
revenue which is sufficient to cover their
operating expenditure and is therefore reliant
on the raising of capital or debt funding.
The adequacy of funding and liquidity as well as
the relevant impact on the going concern
assessment is a key audit matter due to the
inherent uncertainties associated with the
future development of the Group’s projects and
the level of funding required to support that
development.
Research and development (R&D) tax
incentive
(Refer to note 5 in the financial report)
In August 2020, the Group signed a settlement
agreement with the ATO in relation to it’s R&D
rebates for the financial years ending 30 June
2017, 2018 and 2019. This was treated as an
adjusting subsequent event and the Group has
recognised income of $16m for those years,
with a further $4m in deferred revenue.
Management engaged external experts to
prepare the R&D rebate assessment for the
year ending 30 June 2020. Accordingly, the
Group has also recognised income of $6.9m for
the year ending 30 June 2020, with a further
$2m in deferred revenue.
The settlement with the ATO and lodgement of
the 2020 claim is a key audit matter as the
amounts are material and significant to the
Group and users of the financial statements.
Rehabilitation Provision
(Refer to note 10(c) in the financial report)
As a consequence of its operations the Group
has an obligation to rehabilitate and restore the
disturbances to the environment arising from
the construction of the Pilot Plant.
107
How our audit addressed the key audit matter
Our audit procedures included, amongst others:
Assessing the financial position of the Group at 30
June 2020 and up to date of sign off;
Reviewing receipt of payments post year end;
Reviewing repayment of liabilities post year end;
and
Reviewing managements forecast for the 12
month period to 30 September 2021 and
inputs and
assessing the reliability of the
assumptions used.
Our audit procedures included, amongst others:
Obtaining a copy of
the ATO settlement
agreement and agreeing the amounts recognised
in the financial report;
Assessing
the
competence,
objectivity and experience of management’s
external expert;
professional
Obtaining a copy of the calculation of the R&D
claim prepared for the year ending 30 June 2020
and assessing the inputs and methodology used;
Checking the calculation and journal prepared by
management to record the R&D tax incentive
income;
Agreeing that the payments received from the
ATO post year end were in line with the settlement
agreement; and
Auditing the relevant disclosures in the financial
statements.
Our audit procedures included, amongst others:
Assessing
the competency, objectivity and
experience of management’s internal expert who
valued the rehabilitation provision;
Reconciling the expert’s calculations to the basis
of the rehabilitation provision in the financial
report;
Checking a sample of costs used in the Group’s
rehabilitation estimates against legislated rates;
NORTHERN MINERALS _ ANNUAL REPORT 2020
108
The nature of the rehabilitation activities that
will be required are governed by local legislative
requirements.
Agreeing the expected timing of the rehabilitation
works in the cash flow model to the expected life
of the Pilot Plant;
activities
rehabilitation
This matter is a key audit matter because
estimating the costs associated with these
requires
future
judgement and estimation for factors such as
the timing of when the rehabilitation works will
take place, the extent of the rehabilitation and
restoration activities that will be required and
inflation rates and discount rates pertinent to
the rehabilitation work.
Testing
the mathematical
accuracy
of
management's cash flow model; and
Auditing the relevant disclosures in the financial
statements.
Convertible securities issued in the year
Our audit procedures included, amongst others:
(refer to note 8(e) of the financial report)
Obtaining and reviewing a copy of the Convertible
On 2 March 2020, a Convertible Security
Funding Agreement was entered with Lind
Global Macro Fund, LP. The security included
multiple embedded derivatives.
The Group made the accounting policy choice
to account for the convertible security at fair
value through profit or loss.
The convertible security transaction is a key
audit matter due to the complexity of the
transaction and the judgement required by
management
the accounting
treatment.
in assessing
Security Funding Agreement;
Assessing the inputs and assumptions used in
managements calculations and vouching these to
supporting documentation;
Reviewing the journal entries raised to assess
whether they accurately reflected the transaction;
Assessing the accounting treatment in accordance
with AASB 9 Financial Instruments and AASB 132
Financial Instruments: Presentation; and
Auditing the relevant disclosures in the financial
statements.
NORTHERN MINERALS _ ANNUAL REPORT 2020
109
Other information
The directors are responsible for the other information. The other information comprises the information
in Northern Minerals Limited’s annual report for the year ended 30 June 2020, but does not include the
consolidated financial report and the auditor’s report thereon.
Our opinion on the consolidated 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 consolidated financial report, our responsibility is to read the other
information and, in doing so, consider whether the other information is materially inconsistent with the
financial report or our knowledge obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of the
other information we are required to report that fact. We have nothing to report in this regard.
Directors’ responsibility for the financial report
The directors of the Group are responsible for the preparation of the consolidated 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 consolidated financial report, the directors are responsible for assessing the Group’s
ability 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 entity or
to cease operations, or have no realistic alternative but to do so.
Auditor’s responsibility 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
at:
Australian
http://www.auasb.gov.au/auditors_files/ar2.pdf. This description forms part of our auditor’s report.
Assurance
Standards
Auditing
website
Board
and
We also provide the directors with a statement that we have complied with relevant ethical
requirements regarding independence, and to communicate with them all relationships and other
matters that may reasonably be thought to bear on our independence, and where applicable, actions
taken to eliminate threats or safeguards applied.
NORTHERN MINERALS _ ANNUAL REPORT 2020
110
Report on the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included in pages 44 to 54 of the Directors’ Report for the
year ended 30 June 2020.
In our opinion, the Remuneration Report of Northern Minerals Limited for the year ended 30 June 2020
complies with Section 300A of the Corporations Act 2001.
Responsibilities
The directors of the Group 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.
Nexia Perth Audit Services Pty Ltd
Muranda Janse Van Nieuwenhuizen
Director
Perth
24 September 2020
NORTHERN MINERALS _ ANNUAL REPORT 2020
SHAREHOLDER INFORMATION
111
As at 21 September 2020
Additional information required by the Australian Securities Exchange Ltd and not shown elsewhere in this
report is as follows.
1. Ordinary Shares (NTU)
a)
Distribution of shares
Category (size of holding)
Number of holders
% Issued Share Capital
1-1,000
1,001-5,000
5,001-10,000
10,001-100,000
100,000-and over
Total
The number of shareholdings held in less than marketable parcels is 3,005.
287
663
1,348
4,544
2,540
9,382
0.00%
0.06%
0.25%
4.43%
95.26%
100.00%
NORTHERN MINERALS _ ANNUAL REPORT 2020 112
b)
Twenty largest shareholders
The names of the twenty largest holders of quoted shares are:
Name of Holder
Citicorp Nom PL
Vastness Investment Group Limited
Yongquan He
Yuzhen Ma
Australia Conglin International Investment Group Pty Ltd
Jing Liu
Huatai Mining Pty Ltd
Chen Hui Yun
Xue Congyan
BNP Paribas Nominees Pty Ltd
JHY Investments Pty Ltd
1
2
3
4
5
6
7
8
9
10
11
12 Wenbao Li
13
14
15
16
17
18
19
20
Straits Investments Limited
Conglin Yue
Huatai Mining Pty Ltd
J P Morgan Nominees Australia Pty Limited
Joy And K Pty Ltd
RHE Investments Pty Ltd
Ronan Hee
Jo Holding Pty Ltd
Number of shares held
% Holding
507,794,378
375,000,000
250,000,000
225,000,000
156,833,095
150,000,000
129,387,914
107,692,308
107,692,308
72,072,891
66,105,367
64,516,130
56,923,077
50,615,385
50,000,000
39,321,047
35,038,462
33,758,065
33,758,065
33,258,065
11.45%
11.45%
5.64%
5.07%
3.54%
3.38%
2.92%
2.43%
2.43%
1.62%
1.49%
1.45%
1.28%
1.14%
1.13%
0.89%
0.79%
0.76%
0.76%
0.75%
As at 21 September 2020 the issued capital comprised 4,436,247,099 ordinary fully paid quoted shares.
2,544,766,557
45.92%
NORTHERN MINERALS _ ANNUAL REPORT 2020 113
2. Substantial Holders of Equity Securities
The names of substantial shareholders (NTU) are as follows:
Holder
Vastness Investment Group Limited
Yongquan He
Yuzhen Ma
3. Voting Rights
Number of shares
375,000,000
250,000,000
225,000,000
The voting rights attaching to each class of equity securities are set out below:
a)
Ordinary shares
On a show of hands every member present at a meeting in person or by proxy shall have one vote and
upon a poll each share shall have one vote.
b) Options
No voting rights
4. Stock Exchange Listing
Listing has been granted for ordinary shares (NTU) of the company on all Member Exchanges of the
Australian Stock Exchange Limited.
5. Unquoted Securities
Options expiring 24 May 2021
at $0.15 issued to Argonaut Investments Pty Ltd
Options expiring 20 December 2021
at $0.1225 to Lind Asset Management X LLC
Options expiring 2 March 2024
at $0.045 to Lind Global Macro Fund, LP
Unquoted performance rights
6. Restricted Securities
Number
Number of holders
3,000,000
10,000,000
34,000,000
13,307,000
1
1
1
45
As at 21 September 2020 there were 4,353,400 restricted securities on issue.
7. On-Market Buyback
The Company is not performing an on-market buyback at the time of this report.
NORTHERN MINERALS _ ANNUAL REPORT 2020
114
CORPOR ATE DIRECTORY
Northern Minerals Limited
Share Registry
Directors
Colin McCavana (Non-executive Chairman)
Adrian Griffin (Non-executive Director)
Yanchun Wang (Non-executive Director)
Ming Lu (Non-executive Director)
Bin Cai (Alternate Director)
CEO & Company Secretary
Mark Tory
Registered and Principal Office
Ground Floor, 34 Colin Street
West Perth WA 6005
PO Box 669
West Perth WA 6872
Telephone: + 61 8 9481 2344
Email: info@northernminerals.com.au
Website: www.northernminerals.com.au
ABN 61 119 966 353
Automic Group Pty Ltd
GPO Box 5193, Sydney NSW 2001
T 1300 288 664
F +61 2 9698 5414
hello@automic.com.au
ASX Code: NTU
Solicitors
Johnson Winter & Slattery
Level 4, Westralia Place
167 St Georges Terrace
Perth WA 6000
Auditors
Nexia Perth Audit Services Pty Ltd
Level 3, 88 William Street
Perth WA 6000
Investor & Media Relations
Cannings Purple
Level 1, Brookfield Tower 2
123 St Georges Terrace
Perth WA 6000
Bankers
National Australia Bank
NORTHERN MINERALS _ ANNUAL REPORT 2020 115
This page left blank intentionally
NORTHERN MINERALS _ ANNUAL REPORT 2020 116
This page left blank intentionally
NORTHERN MINERALS _ ANNUAL REPORT 2020 www.northernminerals.com.au
info@northernminerals.com.au
Telephone +61 8 9481 2344
Ground Floor, 34 Colin Street
West Perth WA 6005
A
N
N
U
A
L
R
E
P
O
R
T
2
0
2
0