ANNUAL REPORT
FOR THE YEAR ENDED
30 JUNE 2020
Okapi Resources Limited
Corporate Directory
ABN
DIRECTORS
21 619 387 085
Rhoderick Grivas – Non-executive Chairman
Andrew Shearer – Executive Director
David Nour – Non-executive Director
Raymond (Jinyu) Liu – Non-executive Director
COMPANY SECRETARY
Leonard Math
REGISTERED OFFICE &
PRINCIPAL PLACE OF BUSINESS
POSTAL ADDRESS
AUDITORS
SHARE REGISTRY
London House
Level 3, 216 St Georges Terrace, Perth
Western Australia 6000
Telephone: (08) 6117 9338
PO Box 520
West Perth Western Australia 6872
Butler Settineri (Audit) Pty Ltd
Unit 16, First Floor Spectrum Offices
100 Railway Road
Subiaco Western Australia 6008
Advanced Share Registry Limited
trading as Advanced Share Registry Services
110 Stirling Highway,
Nedlands, Western Australia 6009
WEBSITE
www.okapiresources.com
STOCK EXCHANGE LISTING
Australian Securities Exchange Limited
(ASX Code OKR)
P a g e | 1
Okapi Resources Limited
Contents
Contents
Corporate Directory
Review of Operations
Directors’ Report
Auditor’s Independence Declaration
Consolidated Statement of Comprehensive Income
Consolidated Statement of Financial Position
Consolidated Statement of Changes in Equity
Consolidated Statement of Cash Flows
Notes to the Financial Statements
Directors' Declaration
Independent Auditor's Report
ASX Additional Information
1
3
9
20
21
22
23
24
25
45
46
51
P a g e | 2
Okapi Resources Limited
Review of Operations
Mount Day Project (Western Australia)
(Farm-In to earn 75%)
On 3rd September 2020, the Company entered into a Farm-In Agreement and tenement application to secure
an under explored 10km open file gold in soil anomaly in the Lake Johnston Greenstone Belt, Western Australia.
The binding Farm-In Agreement is with Lithium Australia NL (ASX:LIT) on tenements in the Lake Johnston area,
Western Australia. The tenements are located at the southern end of the Lake Johnston Greenstone Belt in
central Western Australia. The belt hosts Lake Johnston nickel mines (Poseidon Nickel, ASX:POS) (Figure 1).
In addition, Okapi has applied for an adjacent tenement, to cover a coincident structural and geochemical defined
target. The area has been the focus of nickel and lithium exploration with limited follow up on the gold potential.
The key terms of the agreement with Lithium Australia for
the exclusive right to earn an undivided 75% interest in
mineral rights, other than lithium, over the Maggie Hays
tenements, are:
• Okapi will pay a $20,000 deposit to secure the option
and has 10 business days from the date of the
Agreement to complete legal due diligence.
• Okapi has 30 days from the date of agreement to
complete the technical due diligence. Upon satisfaction
of the legal and technical due diligence, Okapi may
exercise the option to proceed with the farm-in.
• Okapi will undertake a minimum expenditure of
A$150,000 on the tenements.
• Okapi will be entitled to earn a 75% interest in the
Tenements by undertaking exploration expenditure of
not less than $1,200,000 (inclusive of the $150,000 Minimum Expenditure) on the Tenements within 60
months of the date that the option is exercised.
If Okapi acquires the Farm-in Interest, Okapi must free carry Lithium Australia until completion of a definitive
feasibility study.
Figure 1. Mount Day Project Location
•
There has been very limited drilling undertaken on the main prospect areas with seven drill holes on Okapi’s
exploration licence application, 5 of those reported encouraging pathfinder elements and the best intercept
included 2m @ 11.04g/t Au (see ASX release: Okapi enters into Western Australian Gold Project, 3/9/2020).
In addition to the gold opportunity the region hosts nickel deposits in the same geological sequence present in
the Mount Day Project.
The main target at the Mount Day Project straddles the Okapi tenement application and the Farm-in tenement
with Lithium Australia. A potential regional strike slip structure has been interpreted from the magnetics (Figure
2). Open file geological mapping has interpreted the greenstone lithologies as being coincident with the
geophysical and geochemical anomalies.
P a g e | 3
Okapi Resources Limited
Review of Operations
Figure 2. Interpreted strike slip structure based on regional aeromagnetic data.
In conjunction with the interpreted regional structure a semi continuous 10km long by 1 km wide anomalous zone
has been identified in open file geochemical data (Figure 3). The soil sample results also coincide with a number
of anomalous rock chip samples and historical workings. Most of the available rock chip samples appear to have
been focussed on old workings and not on the main gold in soils trend, presenting an opportunity for Okapi.
Historical drilling in the late 1990’s appears to have been focussed on rock chip results and not the adjacent soil
anomaly.
Figure 3. Anomalous gold zone from open file data
P a g e | 4
Okapi Resources Limited
Review of Operations
The Crackerjack Project
(100% owned)
The Crackerjack Project (“Crackerjack”) is located approximately 85 kilometres south-west of Halls Creek in the
Kimberley District of Western Australia (Figure 4).
There had previously been very limited modern exploration work undertaken at Crackerjack, with historic results
indicating the presence of high-grade gold mineralisation. The Mount Dockrell area has been worked for alluvial
gold and hard rock gold for decades with significant amounts of gold being won.
Exploration Activities
In the previous year, the Company
completed a Phase 2 mapping and
sampling program, that focused upon
following up on the initial program so as
to better understand those initial results.
This follow-up program consisted of 77
hard rock samples. The assay results
have further defined the initial results at
and around several prospects (Figure 5)
on
the
following significant Phase 2 assay
results;
tenement and
included
the
The Sisters - 5.0 g/t Au;
Crackerjack NE – up to 3.8 g/t Au;
Crackerjack – up to 1.9 g/t Au; and
‘Crackerjack Shear’ – results included 1.5
g/t Au & 0.9 g/t Au
Figure 4: Location Map of the Crackerjack Project
No exploration activity was undertaken during the year.
Figure 5: Location Map of the Crackerjack Project
P a g e | 5
Okapi Resources Limited
Review of Operations
Mambasa Project
(Option to earn in to 70% interest)
The Mambasa Gold Project is a brownfields project with several historical colonial gold workings and current
artisanal gold activity covering over a 600m strike length and up to 25m in depth. The Mambasa Project consists
of two granted licences, PE364 and PE480, located approximately 18km to the south of the town of Mambasa,
in the Mambasa District of Ituri Province in the north-eastern DRC.
The Company executed the Mambasa Joint Venture Agreement with Kalubamba SARL and Medidoc FZE which
granted Okapi the right to earn a 70% interest in the Mambasa Project and to act as the manager. The Mambasa
Joint Venture Agreement provides for an exploration expenditure earn-in by the Company over an approximate
4-year period, with a minimum spend of US$150,000 on exploration work (Phase 1 Assessment) within 12
months of the ASX listing date having already been achieved.
Figure 6: Regional Location Map of the Mambasa Gold
Project
In the previous year, the Company completed Stage 1 & 2 Soil Sampling programs, after receiving the assay
results from the 2nd Stage infill sampling program. This program was designed around areas of interest defined
in the initial Stage 1 program. This second round of sampling infilled previous lines at an approximate 125 metre
line spacing and at 50 metre centres, with a total of 500 samples analysed returning gold results up to 0.31 g/t
gold in soils (Figure 7).
showing Nearby Significant Gold Projects.
The latter results further supported the regional northwest fabric and added more detail to the north-south
trending structure identified in the initial in Stage 1 program. The confluence of these 2 orientations is of particular
interest as it possibly defines a control on gold mineralisation in the district. This observation is supported by the
fact that Mount Pede, an area of significant artisanal mining activity, is located at this juncture.
Desktop analysis of these results was carried out as well as planning of follow up exploration programs.
Okapi has met the Year 1 expenditure commitments for the Mambasa Gold Project as defined by the Joint
Venture Agreement.
During the year, Okapi has not conducted any exploration activities in the Mambasa Project.
P a g e | 6
Okapi Resources Limited
Review of Operations
Figure 7: Mambasa Phase 1 Exploration Program – Gold Soil Sampling Results – Stages 1 & 2
Tendao Gold Project
During the year, the Company secured an initial 50% equity holding in the Tendao Gold Project (“Tendao
Project”) in the multi-million ounce Kilo-Moto Greenstone Belt of the Haut Uele Province, Democratic Republic
of Congo.
As announced on the 26 September 2019, Okapi has executed a Binding Term Sheet to earn an initial 50%
equity right in Wanga Mining Company SARL (WMC). WMC holds a 100% interest in mineral licences PE5045,
PE5050, PE5054, PE5069 and PE13062 located in the Democratic Republic of Congo (“DRC”).
The tenements comprise the Tendao Gold Project, which was first mined in the early 1900’s and has recorded
historical drill intercepts of up to 43.3g/t Au. It should be noted that these results are from the 1940/50’s and
were obtained from the archives of SOKIMO in Watsa, DRC and no details regarding the nature of the results
are available.
In March 2020, the Company has decided to cease negotiations in acquiring an equity interest in the Tendao
Gold Project. The Company is in discussions with the vendor to assess recouping any funds forwarded to them
as part consideration for the acquisition.
(Refer to ASX announcement dated 26 September 2019 titled “Okapi Secures Controlling Project Interest –
Tendao Project” for full details of the transaction.)
P a g e | 7
Okapi Resources Limited
Review of Operations
CORPORATE
During the year, the Company continued to assess mineral resources projects and investment opportunities that
would complement its existing portfolio of assets.
In September 2019, the Company executed a Binding Term Sheet to earn 50% equity right in Wanga Mining
Company SARL (WMC). WMC holds a 100% interest in mineral licences PE5045, PE5050, PE5054, PE5069 and
PE13062 located in the Democratic Republic of Congo (“DRC”).
Following completion of its due diligence on WMC and after discussions on the proposed transaction with major
shareholders, the Company has decided to cease negotiations and disinclined to proceed with the acquisition.
During the first-half of the year, Okapi participated in a placement ($450,000 investment at $0.003 per share) in
ASX listed Amani Gold Limited (“Amani”). Amani owns the Giro Gold Project (“Giro”), which comprises two
exploration permits covering a surface area of 497km² and lying within the Kilo-Moto Belt (Democratic Republic of
Congo), a significant under-explored greenstone belt and which hosts Randgold Resources’ 16 million-ounce Kibali
group of deposits within 35km of Giro.
Okapi also participated in a placement (CND$200,000 investment at CND$0.25 per share) in CSE listed AJN
Resources Inc (“AJN”). AJN is a junior exploration company. AJN’s management and directors possess over 75
years of collective industry experience and have been very successful from exploration, to financing, to developing
major mines throughout the world with a focus on Africa and especially the DRC.
Board Changes
Messrs Klaus Eckhof and Michael Montgomery retired as Directors after the Company’s Annual General Meeting
in November 2019.
Mr David Nour was appointed as Non-Executive Director of Okapi following the conclusion of the AGM.
On 30 June 2020, Mr Nigel Ferguson resigned as Managing Director and Mr Rhoderick Grivas was appointed as
Non-Executive Chairman on the same day.
COMPETENT PERSON
The information in this report that relates to Exploration Results is based on information compiled from DMIRS open
file reports system, WAMEX, by Mr David Crook. Mr Crook is a geological consultant to Okapi Resources Limited.
Mr Crook is a member of The Australasian Institute of Mining and Metallurgy and the Australian Institute of
Geoscientists and has sufficient experience which is relevant to the exploration processes undertaken to qualify
as a Competent Person as defined in the 2012 Editions of the ‘Australasian Code for Reporting of Exploration
Results, Mineral Resources and Ore Reserves’. Mr Crook consents to the inclusion in this report of the matters
based on this information in the form and context in which it appears.
P a g e | 8
Okapi Resources Limited
Directors’ Report For the year ended 30 June 2020
The directors present their report on the consolidated entity comprising Okapi Resources Limited (“Okapi” or “the
Company”) and its controlled entities (“the consolidated entity” or “Group”) for the financial year ended 30 June
2020.
DIRECTORS
The following persons were directors of the Company during the whole of the financial period and up to the date
of this report unless otherwise indicated:
Rhoderick Grivas – Non-executive Chairman (appointed 30 June 2020)
Andrew Shearer – Executive Director (appointed 20 July 2020)
David Nour – Non-executive Director (appointed 28 November 2019)
Raymond (Jinyu) Liu – Non-executive Director
Klaus Eckhof – Non-executive Chairman (retired 28 November 2019)
Nigel M Ferguson – Managing Director (resigned 30 June 2020)
Michael Montgomery – Technical Director (retired 28 November 2019)
INFORMATION ON DIRECTORS
Mr. Rhoderick Grivas – Non-executive Chairman
Appointed 30 June 2020
Mr Grivas is a geologist with over 30 years of experience in the resource industry, including 20 years of board
experience on ASX listed companies. Mr Grivas has held a number of director and management positions with
publicly listed mining and exploration companies, including Managing Director of ASX and TSX listed gold miner
Dioro Exploration NL where he oversaw the discovery and development of a gold resource through feasibility to
production. Mr Grivas has a strong combination of equity market, M&A, commercial, strategic, and executive
management capabilities. Mr Grivas is a member of the Australian Institute of Mining and Metallurgy and the
Australian Institute of Company Directors and is currently Non-Executive Chairman of several ASX listed
companies.
During the past three years, Mr. Grivas has also served as a Director of the following listed companies:
Company
Date Appointed
Date Ceased
Andromeda Metals Limited
27 October 2017
Aldoro Resources Limited
20 November 2019
Golden Mile Resources Limited
30 March 2017
-
-
-
Mr. Grivas does not hold any securities in Okapi Resources Limited.
P a g e | 9
Okapi Resources Limited
Directors’ Report For the year ended 30 June 2020
Mr. Andrew Shearer – Executive Director
Appointed 20 July 2020
Mr. Shearer has over 25 years’ experience in the finance and resource sectors, with an ability to combine both
technical and financial experience in the assessment of investment opportunities. He has an extensive network of
contacts from both the mining and finance communities, providing opportunities to develop new projects and
source market information. Most recently Andrew held the position of Senior Resources Analyst at PAC Partners,
a well-respected and trusted analyst and corporate advisor of companies with extensive experience in reporting
accurately and concisely on findings with an ability to tailor reports to the target audience. Industry experience has
included senior management and technical roles with Mount Isa Mines, Glengarry Resources and the South
Australian Government.
During the past three years, Mr. Shearer has also served as a Director of the following listed companies:
Company
Date Appointed
Date Ceased
Andromeda Metals Limited
27 October 2017
Investigator Resources Limited
14 July 2020
Resolution Minerals Limited
6 March 2017
-
-
-
Mr. Shearer does not hold any securities in Okapi Resources Limited
Mr. David Nour – Non-executive Director
Appointed 28 November 2019
Mr Nour comes from private business and has a strong commercial background having worked in private wealth
management and professional investment over the past 25 years with CBA & Bluestone Group.
Mr. Nour has not held any other directorship in the past three years.
Interest in shares and performance rights:
3,054,846 ordinary fully paid shares
Mr. Jinyu (Raymond) Liu – Non-executive Director
Appointed 25 October 2017
Mr Liu is a qualified mining engineer with a commercial background and received his degree in Mining Engineering
from University of Western Australia. He also holds a Master of Mineral Economics from Curtin University and a
Western Australia Unrestricted Quarry Manager’s licence. Mr Liu is the founding Managing Partner of Havelock
Mining Investment, a Hong Kong investment company and has been involved with numerous investments in ASX
listed companies. Previously, he has served as a Director of Fosun International Australia, a Chinese conglomerate
and investment company and prior to this, he held technical roles at Rio Tinto, KCGM and Mt Gibson Iron.
P a g e | 10
Okapi Resources Limited
Directors’ Report For the year ended 30 June 2020
During the past three years, Mr. Liu has also served as a Director of the following listed companies:
Company
Date Appointed
Date Ceased
Galan Lithium Limited
25 June 2018
-
Interest in shares and performance rights:
300,000 ordinary fully paid shares
COMPANY SECRETARY
Mr. Leonard Math (BCom, CA)
Appointed 26 April 2019
Mr. Math is a Chartered Accountant with more than 14 years of resources industry experience. He previously
worked as an auditor at Deloitte and is experienced with public company responsibilities including ASX and ASIC
compliance, control and implementation of corporate governance, statutory financial reporting and shareholder
relations. He has previously acted as a Director, Chief Financial Officer and Company Secretary of a number of
ASX listed Company.
Interest in shares and performance rights:
Nil
Craig Nelmes resigned as Company Secretary on 31 July 2019.
PRINCIPAL ACTIVITIES
The Group is in the business of mineral exploration with a specific focus on gold and/or base metals exploration.
The Group's primary aim in the near-term is to explore for, discover and develop gold deposits on the mineral
exploration projects within Australia.
The Group continues to actively review other resource projects, with a focus on advanced project opportunities
that offer the best potential to generate wealth for the Group and its shareholders.
FINANCIAL REVIEW
The result of the Group for the financial year ended 30 June 2020 was a loss after tax of $2,830,305 (2019:
$1,071,307).
EARNINGS PER SHARE
The basic loss per share for the year ended 30 June 2020 was 7.89 cents (2019: 3.12 cents).
P a g e | 11
Okapi Resources Limited
Directors’ Report For the year ended 30 June 2020
Audited Remuneration Report
This report details the nature and amount of remuneration for all key management personnel of Okapi Resources
Limited and its subsidiaries. The information provided in this remuneration report has been audited as required by
section 308(C) of the Corporations Act 2001. For the purposes of this report, key management personnel of the
Group are defined as those persons having authority and responsibility for planning, directing and controlling the
major activities of the Group and the Company, directly or indirectly, including any Director (whether executive or
otherwise) of the Group.
The individuals included in this report are:
Rhoderick Grivas – Non-executive Chairman (appointed 30 June 2020)
Andrew Shearer – Executive Director (appointed 20 July 2020)
David Nour – Non-executive Director (appointed 28 November 2019)
Raymond (Jinyu) Liu – Non-executive Director
Klaus Eckhof – Non-executive Chairman (retired 28 November 2019)
Nigel M Ferguson – Managing Director (resigned 30 June 2020)
Michael Montgomery – Technical Director (retired 28 November 2019)
Leonard Math – Company Secretary
(a)
Remuneration Policy
The remuneration policy of Okapi Resources Limited has been designed to align director objectives with
shareholder and business objectives by providing a fixed remuneration component which is assessed on an annual
basis in line with market rates. By providing components of remuneration that are indirectly linked to share price
appreciation (in the form of options and/or performance rights), executive, business and shareholder objectives
are aligned. The board of Okapi Resources Limited believes the remuneration policy to be appropriate and effective
in its ability to attract and retain the best directors to run and manage the Group, as well as create goal congruence
between directors and shareholders. The board’s policy for determining the nature and amount of remuneration
for board members is as follows:
(i) Executive Directors & Other Key Management Personnel
The remuneration policy and the relevant terms and conditions has been developed by the full Board of
Directors as the Group does not have a Remuneration Committee due to the size of the Group and the Board.
In determining competitive remuneration rates, the Board reviews local and international trends among
comparative companies and industry generally. It examines terms and conditions for employee incentive
schemes, benefit plans and share plans. Reviews are performed to confirm that executive remuneration is in
line with market practice and is reasonable in the context of Australian executive reward practices.
The Group is an exploration entity, and therefore speculative in terms of performance. Consistent with
attracting and retaining talented executives, directors and senior executives are paid market rates associated
with individuals in similar positions, within the same industry.
Mr. Shearer was appointed as Executive Director on 20 July 2020 and received an annual remuneration
package of $135,000 plus 9.5% statutory superannuation through an Executive Services Agreement. Mr
Shearer’s employment may be terminated without reason by the Group giving 4 months’ notice. The Group
may otherwise terminate his employment with one month notice for cause.
P a g e | 12
Okapi Resources Limited
Directors’ Report For the year ended 30 June 2020
There are no other service or consulting agreements in place with key management personnel. At this stage
due to the size of the Group, no remuneration consultants have been used. The Board’s remuneration
policies are outlined below:
Fixed Remuneration
All executives receive a base cash salary which is based on factors such as length of service and experience
as well as other fringe benefits. If entitled, all executives also receive a superannuation guarantee
contribution required by the government, which is currently 9.50% and do not receive any other retirement
benefits.
Short-term Incentives (STI)
Under the Group’s current remuneration policy, executives can from time to time receive short-term
incentives in the form of cash bonuses. No short-term incentives were paid in the current financial year. The
Board is currently determining the criteria of eligibility for short-term incentives and will set key performance
indicators to appropriately align shareholder wealth and executive remuneration.
Long-term Incentives (LTI)
Executives are encouraged by the Board to hold shares in the Group and it is therefore the Group’s objective
to provide incentives for participants to partake in the future growth of the Group and, upon becoming
shareholders in the Group, to participate in the Group’s profits and dividends that may be realised in future
years. The Board considers that this equity performance linked remuneration structure is effective in aligning
the long-term interests of Group executives and shareholders as there exists a direct correlation between
shareholder wealth and executive remuneration.
(ii)
Non-Executive Directors
The board policy is to remunerate non-executive directors at market rates for comparable companies for
time, commitment and responsibilities. In determining competitive remuneration rates, the Board review
local and international trends among comparative companies and the industry generally. Typically, the
Group will compare non-executive remuneration to companies with similar market capitalisations in the
exploration and resource development sector.
(b) Group Performance, Shareholder Wealth and Directors’ and Executives’ Remuneration
No relationship exists between the Group performance, earnings, shareholder wealth and Directors’ and
Executive remuneration for this financial period. No remuneration is currently performance related.
P a g e | 13
(c) Details of Key Management Personnel Remuneration
Name
Fees
Post-Employment
Share Based Payments
Total
Remuneration as
Share payments
Okapi Resources Limited
Directors’ Report For the year ended 30 June 2020
2019
Nigel Ferguson – Managing Director
Klaus Eckhof - Non-executive Chairman
Michael Montgomery¹ – Technical Director
Jinju (Raymond) Liu – Non-executive Director
Leonard Math2
Craig Nelmes
TOTAL
$
$
$
$
%
139,375
84,583
135,400
30,000
389,358
4,000
68,306
461,664
-
-
-
-
-
-
-
-
25,041
41,736
-
-
66,777
-
15,363
82,140
164,416
126,319
135,400
30,000
456,135
4,000
83,669
543,804
15
33
15
¹ Mr. Montgomery appointed on 26 April 2019. During the financial year, Mr. Montgomery provided consulting services to Okapi Resources Limited through Geosure Geological Consultants.
² Mr. Math appointed on 26 April 2019
2020
Nigel Ferguson – Managing Director
Klaus Eckhof - Non-executive Chairman1
David Nour – Non-executive Director2
Jinju (Raymond) Liu – Non-executive Director
Michael Montgomery1
Leonard Math
Craig Nelmes3
TOTAL
¹ Mr. Eckhof and Mr. Montgomery resigned on 28 November 2019
² Mr. Nour appointed on 28 November 2019
³ Mr. Nelmes resigned on 31 July 2019
167,250
50,000
17,750
21,250
131,855
388,105
55,227
5,037
448,369
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
167,250
50,000
17,750
21,250
131,855
388,105
55,227
5,037
448,369
P a g e | 14
Okapi Resources Limited
Directors’ Report For the year ended 30 June 2020
(d) Share based compensation
During the year, a total of 1,699,999 Class A Performance Rights vested. The Class A vesting conditions were
met on 14 December 2017 and the Class A performance rights were subsequently exercised on 9 August
2019.
The number of performance rights exercised by directors and key management personnel during the year are
set out below:
Directors/KMP
Class A
No.
Klaus Eckhof – Non-executive Chairman
833,333
Nigel Ferguson – Managing Director
500,000
During the year ended 30 June 2020, there was no performance rights granted to directors and key
management personnel.
On 30 June 2020, all outstanding Performance Rights totalling 4,300,001 expiring 31 December 2021 have
lapsed.
(e) Key Management Personnel Compensation – other transactions
(i) Options provided as remuneration and shares issued on exercise of such options.
No options were provided as remuneration during the year.
(ii) Loans to key management personnel
No loans were made to any director or other key management personnel of the Group, including related parties
during the financial year.
(iii) Other transactions with key management personnel
No other transactions with key management personnel occurred during the financial year.
Terms and conditions of related party transactions
Transactions between related parties are on commercial terms and conditions, no more favourable than those
available to other parties unless otherwise stated.
P a g e | 15
Okapi Resources Limited
Directors’ Report For the year ended 30 June 2020
(iv) Share-holdings of Key Management Personnel
The number of shares in the Company held during the financial year by each director of Okapi Resources
Limited and other key management personnel of the Company, including related parties, are set out below.
There were no shares granted during the year as remuneration.
2020
Directors
Rhoderick Grivas1
David Nour2
Klaus Eckhof3
Nigel Ferguson5
Michael Montgomery3
Junju (Raymond) Liu
Other executives
Leonard Math
Craig Nelmes4
Total
Opening Balance
1 July 2019
Other changes
during the year
Closing Balance
30 June 2020
No.
No.
No.
-
-
1,000,000
2,154,911
100,000
300,000
-
100,000
3,654,911
-
2,955,133
833,333
500,000
-
-
-
-
4,288,466
-
2,955,133
1,833,333
2,654,911
100,000
300,000
-
100,000
7,943,377
1 Mr Grivas was appointed on 30 June 2020.
2 Mr Nour was appointed on 28 November 2019 and held those shares at the time of appointment.
3 Mr Eckhof and Mr Montgomery held those shares at the time of resignation – 28 November 2019.
4 Mr Nelmes held those shares at the time of resignation - 31 July 2019.
5 Mr Ferguson held those shares at the time of resignation – 30 June 2020.
2019
Directors
Klaus Eckhof
Nigel Ferguson
Michael Montgomery¹
Junju (Raymond) Liu
Other executives
Leonard Math2
Craig Nelmes3
Total
Opening Balance
1 July 2018
Other changes
during the year
Closing Balance
30 June 2019
No.
No.
No.
1,000,000
2,000,010
-
300,000
-
100,000
3,400,010
-
154,901
100,000
-
-
-
254,901
1,000,000
2,154,911
100,000
300,000
-
100,000
3,654,911
P a g e | 16
Okapi Resources Limited
Directors’ Report For the year ended 30 June 2020
1Mr Montgomery was appointed on 26 April 2019 and held those shares at the time of appointment.
2Mr Math was appointed as Company Secretary on 26 April 2019.
3Mr Nelmes resigned on 31 July 2019.
This is the end of the audited remuneration report.
SHARE OPTIONS
As at 30 June 2020, there were no options over unissued ordinary shares in the Company outstanding, with no
options having been issued from incorporation up to the date of this report.
There have been no options issued subsequent to balance date and up to the date of this report.
LIKELY DEVELOPMENTS
The Group’s focus over the next financial year will be carry out early stage exploration works on its mineral resource
projects and to review additional projects that may be presented to the Group.
SIGNIFICANT CHANGES IN STATE OF AFFAIRS
Messrs Klaus Eckhof and Michael Montgomery retired as Directors after the Company’s Annual General Meeting
on 28 November 2019.
Mr David Nour was appointed as Non-executive Director of Okapi following the conclusion of the AGM.
Mr Nigel Ferguson resigned as Managing Director of Okapi on 30 June 2020.
Mr Rhoderick Grivas was appointed as Non-executive Chairman on 30 June 2020.
There were no other significant changes in the state of affairs of the Group during the financial year.
SUBSEQUENT EVENTS
Mr Andrew Shearer was appointed as Executive Director of Okapi on 20 July 2020.
On 3 September 2020, the Company entered into a binding Farm-In Agreement with Lithium Australia NL on
tenements in the Lake Johnston area, Western Australia. The tenements are located at the southern end of the
Lake Johnston Greenstone Belt in central Western Australia.
In addition, Okapi has applied for an adjacent tenement, to cover a coincident structural and geochemical defined
target. The area has been the focus of nickel and lithium exploration with limited follow up on the gold potential.
Farm-in Terms:
Okapi has entered into an agreement with Lithium Australia for the exclusive right to earn an undivided 75% interest
in mineral rights, other than lithium, over the Maggie Hays tenements. They key terms are:
• Okapi will pay a $20,000 deposit to secure the option and has 10 business days from the date of the
Agreement to complete legal due diligence.
• Okapi has 30 days from the date of agreement to complete the technical due diligence. Upon satisfaction
of the legal and technical due diligence, Okapi may exercise the option to proceed with the farm-in.
• Okapi will undertake a minimum expenditure of A$150,000 on the tenements.
P a g e | 17
Okapi Resources Limited
Directors’ Report For the year ended 30 June 2020
• Okapi will be entitled to earn a 75% interest in the Tenements by undertaking exploration expenditure of
not less than $1,200,000 (inclusive of the $150,000 Minimum Expenditure) on the Tenements within 60
months of the date that the option is exercised.
If Okapi acquires the Farm-in Interest, Okapi must free carry Lithium Australia until completion of a definitive
feasibility study.
Since the end of the financial period and to the date of this report, no other matter or circumstance has arisen
which has significantly affected, or may significantly affect, the operations of the Group, the results of those
operations or the state of affairs of the Group in the subsequent financial year.
DIVIDENDS PAID OR RECOMMENDED
The directors do not recommend the payment of a dividend and no amount has been paid or declared by way of
a dividend to the date of this report.
ENVIRONMENTAL REGULATION
The Group is aware of its environmental obligations with regards to its exploration activities and ensures that it
complies with all regulations when carrying out any exploration work.
INSURANCE OF DIRECTORS AND OFFICERS
During the financial year, Okapi Resources Limited paid a premium to insure the directors and officers of the Group.
The total amount of insurance contract premiums paid is confidential under the terms of the insurance policy.
The liabilities insured are legal costs that may be incurred in defending civil or criminal proceedings that may be
brought against the officers in their capacity as officers of the Group, and any other payments arising from liabilities
incurred by the officers in connection with such proceedings. This does not include such liabilities that arise from
conduct involving a wilful breach of duty by the officers or the improper use by the officers of their position or of
information to gain advantage for themselves or someone else or to cause detriment to the Group. It is not possible
to apportion the premium between amounts relating to the insurance against legal costs and those relating to other
liabilities.
PROCEEDINGS ON BEHALF OF THE CONSOLIDATED ENTITY
No person has applied for leave of court to bring proceedings on behalf of the Group or intervene in any
proceedings to which the Group is a party for the purpose of taking responsibility on behalf of the Group for all or
any part of those proceedings. The Group was not a party to any such proceedings during the year.
AUDITOR’S INDEPENDENCE DECLARATION
The lead auditor’s independence declaration for the year ended 30 June 2020 has been received and forms part
of the Directors’ report and can be found on page 20 of the financial report.
P a g e | 18
Okapi Resources Limited
Directors’ Report For the year ended 30 June 2020
NON-AUDIT SERVICES
There have been no non-audit services provided by the Group’s auditor during the year.
Signed in accordance with a resolution of the directors.
On behalf of the Directors.
Andrew Shearer
Executive Director
30 September 2020
Perth, Western Australia
P a g e | 19
AUDITOR’S INDEPENDENCE DECLARATION
As lead auditor for the audit of Okapi Resources Limited and its controlled entity for
the year ended 30 June 2020, I declare that, to the best of my knowledge and belief,
there have been:
a)
b)
No contraventions of
Corporations Act 2001 in relation to the audit; and
the auditor
independence requirements of
the
No contraventions of any applicable code of professional conduct in relation
to the audit.
This declaration is in respect of Okapi Resources Limited and the entity it controlled
during the year.
BUTLER SETTINERI (AUDIT) PTY LTD
MARIUS VAN DER MERWE CA
Director
Perth
Date: 30 September 2020
Okapi Resources Limited
Consolidated Statement of Comprehensive Income
For the year ended 30 June 2020
Note
16
8
11
2020
$
5,973
14,948
20,921
(18,224)
(30,529)
(65,037)
(60,857)
(17,484)
(397,677)
(1,427,806)
(74,331)
(77,136)
(108,935)
(573,210)
2019
$
46,077
23,662
69,739
(19,218)
(40,127)
(57,988)
(50,801)
(10,580)
(357,491)
(178,213)
(79,392)
(153,015)
(94,221)
(100,000)
(2,851,226)
(1,071,307)
3
-
-
Revenue
Interest income
Other income
Expenditure
Audit fees
Compliance expenses
Consulting expenses
Corporate expenses
Depreciation
Director and employee fees
Exploration expenses
Promotional & website
Share based payments
Administration
Fair value adjustment to financial asset
Loss before income tax
Income tax expense
Loss after income tax from continuing operations
(2,851,226)
(1,071,307)
Other Comprehensive income
Items that may be reclassified to profit or loss
-
-
Total comprehensive income for the year
(2,830,305)
(1,071,307)
Loss per share attributable to the ordinary security
holders of the Company (cents per share)
7.89
3.12
The accompanying notes form part of these financial statements
P a g e | 21
Okapi Resources Limited
Consolidated Statement of Financial Position
As at 30 June 2020
Note
2020
$
2019
$
4
5
6
7
8
9
879,405
57,631
937,036
715,945
249,250
26,276
991,471
3,210,759
53,719
3,264,478
620,695
750,405
43,760
1,414,860
1,928,507
4,679,338
98,129
98,129
98,129
95,792
95,792
95,792
1,830,378
4,583,546
10
11(a)
11(b)
6,236,474
-
(4,406,096)
1,830,378
6,236,473
593,170
(2,246,097)
4,583,546
ASSETS
Current assets
Cash and cash equivalents
Trade and other receivables
Total current assets
Non-current assets
Financial assets
Deferred exploration & evaluation expenditure
Property plant & equipment
Total assets
LIABILITIES
Current liabilities
Trade and other payables
Total current liabilities
Total liabilities
Net assets
Equity
Issued capital
Reserves
Accumulated losses
Total equity
The accompanying notes form part of these financial statements
P a g e | 22
Okapi Resources Limited
Consolidated Statement of Changes in Equity
For the year ended 30 June 2020
2020
Opening Balance
Loss for the year
Total comprehensive income for the period
Share based payments (Note 11)
Share based payments lapsed
(Performance Rights – Note 11)
Issued
Capital
$
Reserves
Accumulated
Losses
$
$
Total
$
6,236,473
593,170
(2,246,097)
4,583,546
-
-
-
-
-
-
(2,830,305)
(2,830,305)
(2,830,305)
(2,830,305)
77,136
-
77,136
(670,306)
670,306
-
Balance as at 30 June 2020
6,236,473
-
(4,406,096)
1,830,378
2019
Opening Balance
Loss for the year
Total comprehensive income for the year
Shares issued during the year
Share based payments (Note 11)
6,236,473
440,155
(1,174,790)
5,501,838
-
-
-
-
-
(1,071,307)
(2,830,305)
(1,071,307)
(2,830,305)
153,015
-
153,015
Balance as at 30 June 2019
6,236,473
593,170
(2,246,097)
4,583,546
P a g e | 23
Okapi Resources Limited
Consolidated Statement of Cash Flows
For the year ended 30 June 2020
Note
2020
$
2019
$
Cash flows from operating activities
Interest received
Payments for suppliers and employees
5,973
(932,030)
46,077
(1,020,956)
Net cash outflows from operating activities
19
(926,057)
(974,879)
Cash flows from investing activities
Payments for tenement acquisitions / option fees
Payments for shares in listed entity
Payments for purchases of other fixed assets
(729,683)
(668,460)
-
-
(711,320)
(30,000)
Net cash inflows from investing activities
(1,398,143)
(741,320)
Cash flows from financing activities
Proceeds from share issue
Net cash inflows from financing activities
-
-
-
-
Net (decrease)/increase in cash and cash equivalents
held
(2,324,200)
(1,716,199)
Cash and cash equivalents at the beginning of the
period
3,210,759
4,926,958
Cash and cash equivalents at the end of the period
4
886,559
3,210,759
P a g e | 24
Okapi Resources Limited
Notes to the Financial Statements For the year ended 30 June 2020
1.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(a) General information
The principal accounting policies adopted in the preparation of the financial statements are set out below.
These policies have been consistently applied, unless otherwise stated. The financial statements are for
Okapi Resources Limited and its controlled entity.
The financial statements are presented in the Australian currency.
Okapi Resources Limited is a Company limited by shares, domiciled and incorporated in Australia. The
financial statements were authorised for issue by the directors on 30 September 2020. The directors have
the power to amend and reissue the financial statements.
(b)
Basis of preparation
These general purpose financial statements have been prepared in accordance with Australian Accounting
Standards and Interpretations issued by the Australian Accounting Standards Board and the Corporations
Act 2001. Okapi Resources Limited is a for-profit entity for the purpose of preparing the financial statements.
Historical cost convention
These financial statements have been prepared on an accrual basis under the historical cost convention.
Cost is based on the fair values of the consideration given in exchange for assets. All amounts are presented
in Australian dollars, unless otherwise noted.
New standards and interpretations adopted in the 2020 financial year
The Company has adopted AASB 16: Leases which became effective for financial reporting periods
commencing on or after 1 July 2019.
AASB 16: Leases applies to annual reporting periods beginning on or after 1 January 2019.
This Standard supersedes AASB 117 Leases, Interpretation 4 Determining whether an Arrangement
contains a Lease, AASB interpretation 115 Operating Leases-Incentives and AASB interpretation 127
Evaluating the Substance of Transactions Involving the Legal Form of lease. AASB 16 sets out the principles
for the recognition, measurement, presentation and disclosure of leases and requires lessees to account
for all leases under a single on-balance sheet model similar to the accounting for finance leases under AASB
117.
The key features of AASB 16 are as follows:
-
Lessees are required 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 measures right-of-use assets similarly to other non-financial assets and lease liabilities
similarly to other financial liabilities.
- Assets and Liabilities arising from the lease are initially measured on a present value basis. The
measurement includes non-cancellable lease payments (including inflation-linked payments), and also
includes payments to be made in optional periods if the lessee is reasonably certain to exercise an
option to extend to lease, or not to exercise an option to terminate the lease.
- AASB 16 contains disclosure requirements for leases.
P a g e | 25
Okapi Resources Limited
Notes to the Financial Statements For the year ended 30 June 2020
(i) Lessor accounting
- AASB 16 substantially carries forward the lessor accounting requirements in AASB 117. Accordingly, a
lessor continues to classify its leases as operating leases or finance leases, and to account for those two
types of leases differently.
- AASB 16 also requires enhanced disclosures to be provided by lessors that will improve information
disclosed about a lessor’s risk exposure, particularly to residual value risk.
(ii) Other standards not yet applicable
There are no other standards that are not yet effective and that would be expected to have a material impact
on the entity in the current or future reporting periods and on foreseeable future transactions.
(c)
Principals of consolidation
(i) Subsidiaries
The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of Okapi
Resources Limited (“Company” or “Parent Entity”) as at 30 June 2020 and the results of all subsidiaries
for the year. Okapi Resources Limited and its subsidiaries together are referred to in this financial report
as the Group or the consolidated entity.
Subsidiaries are entities the parent controls when it is exposed to, or has rights to, variable returns from
its involvement with the entity and has the ability to affect those returns through its power over the entity.
Subsidiaries are fully consolidated from the date on which control is transferred to the Group and are de-
consolidated from the date that control ceases.
The acquisition method of accounting is used to account for business combinations by the Group.
Intercompany transactions, balances and unrealised gains on transactions between Group companies are
eliminated. Unrealised losses are also eliminated unless the transaction provides evidence of the
impairment of the asset transferred.
Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the
policies adopted by the Group.
Non-controlling interests in the results and equity of subsidiaries are shown separately in the consolidated
statement of comprehensive income, statement of changes in equity and statement of financial position
respectively.
(i) Changes in ownership interests
The Group treats transactions with non-controlling interests that do not result in a loss of control as
transactions with equity owners of the Group. A change in ownership interest results in an adjustment
between the carrying amounts of the controlling and non-controlling interests to reflect their relative
interests in the subsidiary. Any difference between the amount of the adjustment to non-controlling
interests and any consideration paid or received is recognised in a separate reserve within equity
attributable to owners of Okapi Resources Limited.
When the Group ceases to have control, joint control or significant influence, any retained interest in the
entity is remeasured to its fair value with the change in carrying amount recognised in profit or loss. The
fair value is the initial carrying amount for the purposes of subsequently accounting for the retained interest
as an associate, jointly controlled entity or financial asset. In addition, any amounts previously recognised
in other comprehensive income in respect of that entity are accounted for as if the Group had directly
disposed of the related assets or liabilities. This may mean that amounts previously recognised in other
comprehensive income are reclassified to profit or loss.
If the ownership interest in a jointly controlled entity or associate is reduced but joint control or significant
P a g e | 26
Okapi Resources Limited
Notes to the Financial Statements For the year ended 30 June 2020
influence is retained, only a proportionate share of the amounts previously recognised in other
comprehensive income are reclassified to profit or loss where appropriate.
These accounting policies are consistent with Australian Accounting Standards and with International
Financial Reporting Standards.
(d)
Segment reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the chief
operating decision maker. The chief operating decision maker, who is responsible for allocating resources
and assessing performance of the operating segments, has been identified as the full Board of Directors.
(e)
Revenue recognition
Revenue from contract(s) 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 consolidated entity: 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 or services promised.
Interest Revenue
Interest revenue is recognised on a time proportionate basis that takes into account the effective yield on
the financial assets
(f)
Financial instruments
Classification of financial instruments
The Group classifies its financial assets into the following measurement categories:
•
those to be measured at fair value (either through other comprehensive income, or through profit or
loss); and
those to be measured at amortised cost.
•
The classification depends on the Group’s business model for managing financial assets and the
contractual terms of the financial assets' cash flows.
The Group classifies its financial liabilities at amortised cost unless it has designated liabilities at fair value
through profit or loss or is required to measure liabilities at fair value through profit or loss such as derivative
liabilities.
Debt instruments
Investments in debt instruments are measured at amortised cost where they have:
•
contractual terms that give rise to cash flows on specified dates, that represent solely payments of
principal and interest on the principal amount outstanding; and
are held within a business model whose objective is achieved by holding to collect contractual cash
flows.
•
These debt instruments are initially recognised at fair value plus directly attributable transaction costs and
subsequently measured at amortised cost. The measurement of credit impairment is based on the three-
stage expected credit loss model described below regarding impairment of financial assets.
P a g e | 27
Okapi Resources Limited
Notes to the Financial Statements For the year ended 30 June 2020
Financial instruments designated as measured at fair value through profit or loss
Financial instruments held at fair value through profit or loss are initially recognised at fair value, with
transaction costs recognised in the income statement as incurred. Subsequently, they are measured at
fair value and any gains or losses are recognised in the income statement as they arise.
Where a financial asset is measured at fair value, a credit valuation adjustment is included to reflect the
credit worthiness of the counterparty, representing the movement in fair value attributable to changes in
credit risk.
A financial liability may be designated at fair value through profit or loss if it eliminates or significantly
reduces an accounting mismatch or:
•
•
if a host contract contains one or more embedded derivatives; or
if financial assets and liabilities are both managed and their performance evaluated on a fair value
basis in accordance with a documented risk management or investment strategy.
Where a financial liability is designated at fair value through profit or loss, the movement in fair value
attributable to changes in the Group’s own credit quality is calculated by determining the changes in credit
spreads above observable market interest rates and is presented separately in other comprehensive
income.
Impairment of financial assets
The entity 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 entity's assessment at the end of each reporting period as to whether
the financial instrument's 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 asset's 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 asset's 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.
Recognition and derecognition of financial instruments
A financial asset or financial liability is recognised in the balance sheet when the Group becomes a party
to the contractual provisions of the instrument, which is generally on trade date. Loans and receivables
are recognised when cash is advanced (or settled) to the borrowers.
Financial assets at fair value through profit or loss are recognised initially at fair value. All other financial
assets are recognised initially at fair value plus directly attributable transaction costs.
The Group derecognises a financial asset when the contractual cash flows from the asset expire or it
transfers its rights to receive contractual cash flows from the financial asset in a transaction in which
substantially all the risks and rewards of ownership are transferred. Any interest in transferred financial
assets that is created or retained by the Group is recognised as a separate asset or liability.
A financial liability is derecognised from the balance sheet when the Group has discharged its obligations,
or the contract is cancelled or expires.
Offsetting
Financial assets and liabilities are offset and the net amount is presented in the balance sheet when the
Group has a legal right to offset the amounts and intends to settle on a net basis or to realise the asset
and settle the liability simultaneously.
P a g e | 28
Okapi Resources Limited
Notes to the Financial Statements For the year ended 30 June 2020
(g) Income tax
The income tax expense or revenue for the period is the tax payable on the current period’s taxable income
based on the applicable income tax rate for each jurisdiction adjusted by changes in deferred tax assets
and liabilities attributable to temporary differences and to unused tax losses.
The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted
at the end of the reporting period in the countries where the Group’s subsidiaries and associates operate
and generate taxable income. Management periodically evaluates positions taken in tax returns with respect
to situations in which applicable tax regulation is subject to interpretation. It establishes provisions where
appropriate on the basis of amounts expected to be paid to the tax authorities.
Deferred income tax is provided in full, using the liability method, on temporary differences arising between
the tax bases of assets and liabilities and their carrying amounts in the consolidated financial statements.
However, the deferred income tax is not accounted for if it arises from 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. Deferred income tax is determined using tax rates (and laws) that have
been enacted or substantially enacted by the reporting date and are expected to apply when the related
deferred income tax asset is realised or the deferred income tax liability is settled.
Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it is
probable that future taxable amounts will be available to utilise those temporary differences and losses.
Deferred tax liabilities and assets are not recognised for temporary differences between the carrying amount
and tax bases of investments in controlled entities where the parent entity is able to control the timing of the
reversal of the temporary differences and it is probable that the differences will not reverse in the foreseeable
future.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax
assets and liabilities and when the deferred tax balances relate to the same taxation authority. Current tax
assets and tax liabilities are offset where the entity has a legally enforceable right to offset and intends either
to settle on a net basis, or to realise the asset and settle the liability simultaneously.
Current and deferred tax is recognised in profit or 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.
(h)
Exploration, evaluation and development expenditure
Exploration and evaluation expenditures in relation to each separate area of interest are recognised as an
exploration and evaluation asset in the year in which they are incurred where the following conditions are
satisfied:
(i)
the rights to tenure of the area of interest are current; and
(ii)
at least one of the following conditions is also met:
(a) the exploration and evaluation expenditures are expected to be recouped through successful
development and exploration of the area of interest, or alternatively, by its sale; or
(b) exploration and evaluation activities in the area of interest have not at the reporting date reached
a stage which permits a reasonable assessment of the existence or otherwise of economically
recoverable reserves, and active and significant operations in, or in relation to, the area of interest
are continuing.
P a g e | 29
Okapi Resources Limited
Notes to the Financial Statements For the year ended 30 June 2020
Exploration and evaluation assets are initially measured at cost and include acquisition of rights to explore,
studies, exploratory drilling, trenching and sampling and associated activities and an allocation of
depreciation and amortisation of assets used in exploration and evaluation activities. General and
administrative costs are only included in the measurement of exploration and evaluation costs where they
are related directly to operational activities in a particular area of interest.
Exploration and evaluation assets are assessed for impairment when facts and circumstances suggest that
the carrying amount of an exploration and evaluation asset may exceed its recoverable amount. The
recoverable amount of the exploration and evaluation asset (for the cash generating unit(s) to which it has
been allocated being no larger than the relevant area of interest) is estimated to determine the extent of the
impairment loss (if any). Where an impairment loss subsequently reverses, the carrying amount of the asset
is increased to the revised estimate of its recoverable amount, but only to the extent that the increased
carrying amount does not exceed the carrying amount that would have been determined had no impairment
loss been recognised for the asset in previous years.
(i)
Employee benefits
Wages and salaries, annual leave and long service leave
Liabilities for wages and salaries, including non-monetary benefits, annual leave and long service leave
expected to be settled within 12 months of the reporting date are measured at the amounts expected to be
paid when the liabilities are settled. The liability for annual leave and long service leave is recognised in the
provision for employee benefits. All other short-term employee benefit obligations are presented as payables.
(j)
Cash and cash equivalents
Cash reserves in the statement of financial position comprise cash on hand.
(k) Goods and services tax (GST)
Revenues, expenses and assets are recognised net of the amount of associated GST, unless the GST
incurred is not recoverable from the taxation authority. In this case it is recognised as part of the cost of
acquisition of the net asset or part of the expense.
Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net amount
of GST recoverable from, or payable to, the taxation authority is included with other receivables or payables
in the balance sheet.
Cash flows are presented on a gross basis. The GST component of cash flows arising from investing or
financing activities which are recoverable from, or payable to, the taxation authority, are presented as
operating cash flows.
(l)
Trade and other payables
Trade and other payables are carried at cost and represent liabilities for goods and services provided to the
Group prior to the end of the financial year that are unpaid and arise when the Group becomes obliged to
make future payments in respect of the purchase of these goods and services.
(m) Contributed equity
Ordinary shares and options are classified as contributed equity. Incremental costs directly attributable to
the issue of new shares or options are shown in equity as a deduction, net of tax, from the proceeds.
P a g e | 30
Okapi Resources Limited
Notes to the Financial Statements For the year ended 30 June 2020
Significant accounting judgements and key estimates
The preparation of the financial statements requires management to make judgements, estimates and
assumptions that affect the reported amounts in the financial statements. Management continually
evaluates its judgements and estimates in relation to assets, liabilities, contingent liabilities, revenue and
expenses.
Management bases its judgements, estimates and assumptions on historical experience and on other
various factors, including expectations of future events, management believes to be reasonable under the
circumstances.
Exploration expenditure
Exploration and evaluation costs are assessed on the basis of whether or not it is appropriate to carry as a
Deferred exploration asset – refer to (e) above.
(n) Share based payments
The Group provides benefits to employees (including directors) of the Group in the form of share-based payment
transactions, whereby employees render services in exchange for shares or rights over shares (‘equity-settled
transactions’), refer to note 11.
The cost of these equity-settled transactions with employees is measured by reference to the fair value at the
date at which they are granted. The fair value is determined by an internal valuation using a Black-Scholes option
pricing model.
The cost of equity-settled transactions is recognised, together with a corresponding increase in equity, over the
period in which the performance conditions are fulfilled, ending on the date on which the relevant employees
become fully entitled to the award (‘vesting date’).
The cumulative expense recognised for equity-settled transactions at each reporting date until vesting date
reflects (i) the extent to which the vesting period has expired and (ii) the number of options that, in the opinion of
the directors of the Group, will ultimately vest. This opinion is formed based on the best available information at
balance date. No adjustment is made for the likelihood of market performance conditions being met as the effect
of these conditions is included in the determination of fair value at grant date.
No expense is recognised for awards that do not ultimately vest, except for awards where vesting is conditional
upon a market condition.
Where an equity-settled award is cancelled, it is treated as if it had vested on the date of cancellation, and any
expense not yet recognised for the award is recognised immediately. However, if a new award is substituted for
the cancelled award and designated as a replacement award on the date that it is granted, the cancelled and
new award are treated as if they were a modification of the original award.
Options over ordinary shares have also been issued as consideration for the acquisition of interests in tenements
and other services. These options have been treated in the same manner as employee options described above,
with the expense being included as part of exploration expenditure.
(o) Earnings per share
Basic earnings per share
Basic earnings per share is calculated by dividing the profit attributable to owners of the company, excluding any
costs of servicing equity other than ordinary shares, by the weighted average number of ordinary shares
outstanding during the financial year, adjusted for bonus elements in ordinary shares issued during the year.
P a g e | 31
Okapi Resources Limited
Notes to the Financial Statements For the year ended 30 June 2020
2.
FINANCIAL RISK MANAGEMENT
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.
Risk management is carried out by the full Board of Directors as the Group believes that it is crucial for all Board
members to be involved in this process. The Board, with the assistance of senior management as required, has
responsibility for identifying, assessing, treating and monitoring risks and reporting to the Board on risk
management.
(a) Market risk
(i) Foreign exchange risk
The Group has minimal operations internationally and there are currently limited exposures to foreign exchange
risk arising from currency exposures.
Foreign exchange risk arises from future commercial transactions and recognised assets and liabilities
denominated in a currency that is not the entity’s functional currency and net investments in foreign operations.
The Group has not formalised a foreign currency risk management policy, however it monitors its foreign currency
expenditure in light of exchange rate movements.
(ii) Price risk
Given the current level of operations, the Group is not exposed to price risk.
(iii) Interest rate risk
The Group is exposed to movements in market interest rates on cash and cash equivalents.
The proportional mix of floating interest rates and fixed rates to a maximum of six months fluctuate during the year
depending on current working capital requirements. The weighted average interest rate received on cash and
cash equivalents by the Group was 0.75%. (2019: 1.15%). Balance subject to fixed rates is nil. Balance subject
to variable rates is $886,559 and balances subject to zero rates is nil.
(b) Credit risk
The maximum exposure to credit risk at reporting date is the carrying amount (net of provision for impairment) of
those assets as disclosed in the statement of financial position and notes to the financial statements. The only
significant concentration of credit risk for the Group is the cash and cash equivalents held with financial institutions.
All bank deposits are held with the major Australian banks for which the Board evaluate credit risk to be minimal.
As the Group does not presently have any trade debtors, lending, significant stock levels or any other credit risk,
a formal credit risk management policy is not maintained.
(c) Liquidity risk
The Group manages liquidity risk by continuously monitoring forecast and actual cash flows and ensuring sufficient
cash and marketable securities are available to meet the current and future commitments of the Group. Due to
the nature of the Group’s activities, being mineral exploration, the Group does not have ready access to credit
facilities, with the primary source of funding being equity raisings. The Board of Directors constantly monitor the
state of equity markets in conjunction with the Group’s current and future funding requirements, with a view to
initiating appropriate capital raisings as required.
The financial liabilities of the Group are confined to trade and other payables as disclosed in the Statement of
financial position. All trade and other payables are non-interest bearing and due within 12 months of the reporting
date.
P a g e | 32
Okapi Resources Limited
Notes to the Financial Statements For the year ended 30 June 2020
(d) Fair value estimation
The fair value of financial assets and financial liabilities must be estimated for recognition and measurement or for
disclosure purposes. All financial assets and financial liabilities of the Group at the balance date are recorded at
amounts approximating their carrying amount.
The carrying value less impairment provision of trade receivables and payables are assumed to approximate their
fair values due to their short-term nature.
3.
INCOME TAX
(a) Income tax expense
Current tax
Deferred tax
2020
$
2019
$
-
-
-
-
-
-
(b) Numerical reconciliation of income tax expense to prima facie
tax payable
Loss from continuing operations before income tax expense
(2,830,304)
(1,071,307)
Prima facie tax benefit at Australian tax rate of 27.5% (2019:
27.5%)
Tax effect of amounts which are not deductible (taxable) in
calculating taxable income:
Capital raising fees
Non-deductible expenses
Other allowable expenditure
Overseas projects income & expenses
Provisions
Tax effect of current year tax losses for which no deferred tax asset
has been recognised
Income tax expense
(c) Unrecognised deferred tax assets (i)
Capital raising costs
Revaluation of assets
Accruals & provisions
Carry forward tax losses
Gross deferred tax assets
(778,333)
(294,609)
(25,575)
178,845
(1,145)
392,647
(894)
(25,575)
27,500
(12,388)
49,009
(13,185)
(234,455)
(269,248)
234,455
269,248
-
-
47,574
157,633
8,903
802,854
1,016,964
73,149
624,690
697,839
(i) No deferred tax asset has been recognised for the above balance as at 30 June 2020 as it is not considered
probable that future taxable profits will be available against which it can be utilised.
P a g e | 33
Okapi Resources Limited
Notes to the Financial Statements For the year ended 30 June 2020
4.
CURRENT - CASH AND CASH EQUIVALENTS
Cash at bank & on hand
Cash – at call deposits (i)
2020
$
2019
$
30,636
848,769
879,405
90,416
3,120,343
3,210,759
(i) At call deposits earn interest at floating rates based on daily bank deposit rates.
5.
CURRENT - TRADE AND OTHER RECEIVABLES
Prepayments
GST receivables
Sundry debtors (i)
Exploration advances
-
46,767
3,710
7,154
57,631
-
13,319
5,445
34,955
53,719
(i) Exploration advances & sundry debtors are non-interest bearing and have repayment terms
between 30 and 60 days.
6.
NON-CURRENT – FINANCIAL ASSETS
Financial assets at fair value through profit or loss:
Listed Shares
715,945
715,948
620,695
620,695
7.
NON-CURRENT – DEFERRED EXPLORATION & EVALUATION EXPENDITURE
Deferred exploration and evaluation – at cost (i)
Beginning of financial year/(period)
Exploration & evaluation costs for the year
Exploration & project due diligence costs written-off (ii)
End of financial year
750,405
926,651
(1,427,806)
249,250
594,161
334,457
(178,213)
750,405
(i) The Group has capitalised all costs associated with its 100% Crackerjack (Australia). The recoverability
of the carrying amount of these exploration and evaluation assets is dependent on successful
development and commercial exploitation, or alternatively, sale of the respective areas of interest.
(ii) The Group has fully impaired the capitalised costs associated with the Mambasa Project. The Company
is currently seeking a joint venture partner to develop the Mambasa Project.
P a g e | 34
Okapi Resources Limited
Notes to the Financial Statements For the year ended 30 June 2020
8.
NON-CURRENT – PROPERTY PLANT & EQUIPMENT
Office Equipment – at cost (i)
Cost
Accumulated depreciation
Net book amount
Reconciliation
2020
$
2019
$
59,940
(33,664)
26,276
59,940
(16,180)
43,760
A reconciliation of the carrying amounts of property, plant and equipment at the beginning and end
of the current financial period.
Property, Plant & Equipment
Carrying amount at beginning of the year
Additions
Disposal
Depreciation
Carrying amount at end of the year
43,760
-
-
(17,484)
26,276
25,731
30,000
(1,391)
(10,580)
43,760
9.
TRADE AND OTHER PAYABLES
Current
Trade payables (i)
Accruals and other payables (i)
2020
$
2019
$
64,449
33,680
98,129
58,768
37,024
95,792
(i) Trade and other payables amounts represent liabilities for goods and services provided to the Group
with respect to the financial period and which are unpaid. The amounts are unsecured and are usually
paid within 30 days of invoice date.
P a g e | 35
Okapi Resources Limited
Notes to the Financial Statements For the year ended 30 June 2020
10.
ISSUED CAPITAL
Ordinary shares - fully paid
Total Share Capital
(a) Movements in share capital
Balance at beginning of year
Issued during the year:
Issue Price
($)
2020
Number
2020
$
2019
Number
2019
$
34,342,867
6,236,473
34,342,867
6,236,473
34,342,867
6,236,473
34,342,867
6,236,473
34,342,867
6,236,473
34,342,867
6,236,473
Vesting of Performance Rights
1,699,999
-
-
-
Balance at the end of year
36,042,866
6,236,473
34,342,867
6,236,473
(b) Ordinary Performance rights on issue for the year
There were no Performance Rights issued during the year.
As at 30 June 2020, there was no outstanding Performance Rights. Performance Rights were issued in
prior year to directors, employees and/or key consultants of the Group, and for which there were three
Class each with specific performance hurdles:
Opening – 1 July 2018
Closing – 30 June 2018
Vested during the period
Lapsed during the period
Closing – 30 June 2020
Class A
No.
Class B
No.
Class C
No.
Total
No.
1,699,999 2,149,999
2,150,002
6,000,000
1,699,999
2,149,999
2,150,002
6,000,000
(1,699,999)
-
-
-
-
(2,149,999)
(2,150,002)
(6,000,000)
-
-
-
-
As at 30 June 2020, the Performance Rights have lapsed as the participants were no longer employed
or contracted with the Company.
(c) Performance rights – Vesting Conditions
The Performance Rights shall vest upon satisfaction of the following milestones:
Class A - the Company achieving and maintaining a market capitalisation of $12m or more for a continuous
period of 30 days on or before 31 December 2021, and the vesting condition was met on 14 December
2017 and these Performance Rights were exercised during the year.
Class B - the Company achieving and maintaining a market capitalisation of $18m or more for a continuous
period of 30 days on or before 31 December 2021.
P a g e | 36
Okapi Resources Limited
Notes to the Financial Statements For the year ended 30 June 2020
Class C - the Company achieving and maintaining a market capitalisation of $24m or more for a
continuous period of 30 days on or before 31 December 2021.
(d) Performance Rights Plan
The Incentive Performance Rights Plan, was approved by shareholders at the 2017 AGM, held in
November 2017.
(e) Ordinary shares
Ordinary shares entitle the holder to participate in dividends and the proceeds on winding up of the
Company in proportion to the number of and amounts paid on the shares held. On a show of hands every
holder of ordinary shares present at a meeting in person or by proxy, is entitled to one vote, and upon a
poll each share is entitled to one vote.
Ordinary shares have no par value and the Company does not have a limited amount of authorised capital.
(f) Capital risk management
The Group’s objectives when managing capital are to safeguard their ability to continue as a going
concern, so that they may continue to provide returns for shareholders and benefits for other stakeholders.
Due to the nature of the Group’s activities, being mineral exploration, the Group does not have ready
access to credit facilities, with the primary source of funding being equity raisings. Therefore, the focus of
the Group’s capital risk management is the current working capital position against the requirements of
the Group to meet exploration programmes and corporate overheads. The Group’s strategy is to ensure
appropriate liquidity is maintained to meet anticipated operating requirements, with a view to initiating
appropriate capital raisings as required.
The working capital position of the Group at 30 June 2020 and 30 June 2019 are as follows:
Cash and cash equivalents
Trade and other receivables
Trade and other payables
Working capital position
2020
$
2019
$
879,405
57,631
(98,129)
838,907
3,210,759
53,719
(95,792)
3,168,686
P a g e | 37
Okapi Resources Limited
Notes to the Financial Statements For the year ended 30 June 2020
11. RESERVES & ACCUMULATED LOSSES
(a) Reserves
Share based payments reserve (i)
Movements:
Share based payments reserve
Balance at the beginning of the year
Share based payments (performance rights)
Share based payments lapsed (performance rights)
Balance as at the end of the year
(b) Accumulated losses - movements
Balance at beginning of year
Net loss for the year
Share based payments lapsed (performance rights)
Balance at end of year
2020
$
2019
$
-
593,170
593,170
77,136
(670,306)
-
440,155
153,015
-
593,170
(2,246,097)
(2,830,305)
670,306
(4,406,096)
(1,174,790)
(1,071,307)
-
(2,246,097)
(c) Share based payments – performance rights expense for the period
Class A
Class B
Class B
Class C
Class C
Number Issued (No.)
1,699,999
1,699,999
450,000
1,700,002
450,000
Grant Date
28-Sep-2017
28-Sep-2017 21-Dec-2017
28-Sep-2017 21-Dec-2017
Expiry/Amortisation Date
14-Dec-2017¹
31-Dec-2021 31-Dec-2021
31-Dec-2021 31-Dec-2021
Volatility percentage (%)
100%
100%
100%
100%
100%
Risk free rate (%)
1.5%
1.5%
1.5%
1.5%
1.5%
Underlying Fair Value on Grant ($)
$0.20
$0.1112
$0.3187
$0.1007
$0.2958
Total Fair Value ($) – Life of Right
$340,000
$189,040
$143,415
$171,190
$133,110
Total Fair Value ($) – Expensed to
30 June 2020
-
$22,340
$17,927
$20,231
$16,638
$77,136
¹ The vesting condition achieved on 14 December 2017 and shares were issued on 9 August 2019 (Note 10 (d))
12. CONTINGENT LIABILITIES
The Group does not have any contingent liabilities as at reporting date.
P a g e | 38
Okapi Resources Limited
Notes to the Financial Statements For the year ended 30 June 2020
13. COMMITMENTS
(a) Exploration commitments
The Group has certain commitments to meet minimum expenditure on the mineral assets it has an interest
in or an option to earn an interest in.
Annual commitment Crackerjack Project – WA
Less than one year (i)
2020
$
2019
$
15,000
15,000
(i) Okapi, through its wholly owned subsidiary Panex Resources WA Pty Ltd is the 100% owner of the
tenement. In the current financial year, minimum expenditure commitments were not met. The Company
has applied to the Department of Mines to seek relief to allow the Company to maintain 100% of the
tenement size.
(ii) During the year, the Company has contractual exploration commitments under the Mambasa Joint
Venture Agreement (“Agreement”) between the Company and Kalubamba SARL and Medidoc FZE.
Since entering into this Agreement, Okapi has spent direct expenditures of $229,592 (approximately
USD$172,194) in the Mambasa Project and enabled it to meet its Phase 1 contractual commitment of
USD$150,000. For Okapi to acquire a 70% in the Mambasa Project, it must next have exploration
expenditure of up to USD$500,000 on or before 30 June 2021 (Refer 14 (a)). As at 30 June 2020, Okapi
has not met this commitment to earn 70% in the Mambasa Project and is currently seeking for a joint
venture partner for the Mambasa Project.
14.
INTEREST IN JOINT VENTURES
Mambasa Project – Democratic Republic of Congo (“DRC”)
Since entering into the Mambasa Joint Venture Agreement, Okapi completed the Phase 1 minimum
expenditure obligations, being USD $150,000.
As at the date of this report, Okapi has commenced the Phase 2 stage but yet to complete the Phase 2.
Phase 2 – to acquire a 70% Interest in the Mambasa Project:
(a) Okapi must fund as sole contributor an aggregate Expenditure of up to US$500,000 before 30 June
2021;
(b) produce a JORC compliant report outlining an indicated and inferred resource in excess of 500,000
ounces of gold at the Tenements (Resource 1); and
(c) within 14 days of the announcement of Resource 1 on the ASX:
issue 1,000,000 fully paid ordinary shares to Kalubamba; and
(i)
(ii) pay US$50,000 to Kalubamba.
P a g e | 39
Okapi Resources Limited
Notes to the Financial Statements For the year ended 30 June 2020
Phase 2 – Larger Resource:
If Okapi announces an indicated & inferred resource in excess of 1,000,000 ounces of gold at the
Tenements Resource 2, then Okapi must;
(a) within 14 days of the announcement of Resource 2 on the ASX:
issue a further 1,000,000 fully paid ordinary shares to Kalubamba; and
(i)
(ii) pay a further US$100,000 to Kalubamba.
Phase 3 – Decision to Mine
To retain its 70% Interest and having completed obligations under Phases 1 and 2, Okapi must;
(a) fund as sole contributor the production of a Definitive Feasibility Study on or before 31 December
2023; and
(b) within 14 days of the delivery of the Definitive Feasibility Study to Okapi:
issue 2,000,000 Okapi Shares to Kalubamba; and
(i)
(ii) pay US$250,000 to Kalubamba.
Okapi is currently seeking a joint venture partner for the Mambasa Project.
15. DIVIDENDS
No dividends were paid or recommended for payment during the financial year.
16. REMUNERATION OF AUDITORS
2020
$
2019
$
During the year the following fees were paid or payable for
services provided by the auditor of the parent entity, its related
practices and non-related audit firms:
(a) Audit services
Butler Settineri (Audit) Pty Ltd - audit and review of financial
reports
- Statutory audit – Okapi Resources Limited
18,224
19,218
Total remuneration for audit services
18,224
19,218
P a g e | 40
Okapi Resources Limited
Notes to the Financial Statements For the year ended 30 June 2020
17. RELATED PARTY TRANSACTIONS
(a) Parent entity
Okapi Resources Limited (ASX Code: OKR)
(b) Subsidiaries
Interests in subsidiaries are set out in note 18.
(c) Transactions with related parties
Transactions between related parties are on commercial terms and conditions, no more favourable than
those available to other parties unless otherwise stated. As at reporting date the following amounts were
payable to the directors of the Company and included to Trade and other creditors (Note 9)
Mr. Jinju (Raymond) Liu
Mr. Nigel Ferguson
Mr. David Nour
18. SUBSIDIARIES
2020
$
2019
$
8,750
15,000
45,993
3,146
-
-
The consolidated financial statements incorporate the assets, liabilities and results of the following
subsidiary in accordance with the accounting policy described in note 1(c):
Name
Country of
Incorporation
Class of Shares
Equity Holding¹
Panex Resources WA Pty Ltd
Australia
Ordinary
2020
2019
%
100
%
100
¹The proportion of ownership interest is equal to the proportion of voting power held.
P a g e | 41
Okapi Resources Limited
Notes to the Financial Statements For the year ended 30 June 2020
19. STATEMENT OF CASH FLOWS
(a) Reconciliation of net loss after income tax to net cash outflow from
operating activities
Net loss for the year
Exploration expenditure capitalised
Exploration expenditure written off
Depreciation of non-current assets
Net loss on available for sale asset
Share based payments – performance rights
Change in operating assets and liabilities
(Increase)/decrease in trade, other receivables and assets
Increase/(decrease) in trade and other payables
2020
$
2019
$
(2,830,305)
(1,071,307)
-
(156,244)
1,230,838
17,484
573,210
77,136
-
10,580
100,000
153,015
3,242
2,337
25,847
(36,770)
Net cash outflow from operating activities
(926,058)
(974,879)
(b) Non-cash investing and financing activities
There we no non-cash investing or financing transactions for the financial year.
20.
LOSS PER SHARE
2020
$
2019
$
(a) Reconciliation of earnings used in calculating loss per share
Loss attributable to the owners of the Company used in calculating the
loss per share
(2,830,305)
(1,071,308)
(b) Weighted average number of shares used as the denominator
Weighted average number of ordinary shares used as the denominator in
calculating basic and diluted loss per share
35,857,074
34,342,867
Number of
shares
Number of
shares
21.
EVENTS SUBSEQUENT TO REPORTING DATE
Mr Andrew Shearer was appointed as Executive Director of Okapi on 20 July 2020.
On 3 September 2020, the Company entered into a binding Farm-In Agreement with Lithium Australia NL
on tenements in the Lake Johnston area, Western Australia. The tenements are located at the southern end
of the Lake Johnston Greenstone Belt in central Western Australia.
In addition, Okapi has applied for an adjacent tenement, to cover a coincident structural and geochemical
defined target. The area has been the focus of nickel and lithium exploration with limited follow up on the
gold potential.
P a g e | 42
Okapi Resources Limited
Notes to the Financial Statements For the year ended 30 June 2020
Farm-in Terms:
Okapi has entered into an agreement with Lithium Australia for the exclusive right to earn an undivided 75%
interest in mineral rights, other than lithium, over the Maggie Hays tenements. They key terms are:
• Okapi will pay a $20,000 deposit to secure the option and has 10 business days from the date of the
Agreement to complete legal due diligence.
• Okapi has 30 days from the date of agreement to complete the technical due diligence. Upon satisfaction
of the legal and technical due diligence, Okapi may exercise the option to proceed with the farm-in.
• Okapi will undertake a minimum expenditure of A$150,000 on the tenements.
• Okapi will be entitled to earn a 75% interest in the Tenements by undertaking exploration expenditure of not
less than $1,200,000 (inclusive of the $150,000 Minimum Expenditure) on the Tenements within 60 months
of the date that the option is exercised.
If Okapi acquires the Farm-in Interest, Okapi must free carry Lithium Australia until completion of a definitive
feasibility study.
Since the end of the financial year and to the date of this report, there is no other matter or circumstance
has arisen other than disclosed above which has significantly affected, or may significantly affect, the
operations of the Group, the results of those operations or the state of affairs of the Group in the subsequent
financial year.
P a g e | 43
Okapi Resources Limited
Notes to the Financial Statements For the year ended 30 June 2020
22. SEGMENT INFORMATION
Management has determined the operating segments based on the reports reviewed by the Board of Directors that are used to make strategic decisions. For management purposes,
the Group has identified one reportable operating segment being exploration activities undertaken in two geographical segments being Australasia and Africa. These segments include
the activities associated with the determination and assessment of the existence of commercial economic reserves, from the Group’s mineral assets in the sole geographic location.
Segment performance is evaluated based on the operating profit and loss and cash flows and is measured in accordance with the Group’s accounting policies.
Australasia
Africa
Consolidated Total
2020
$
2019
$
Segment revenue
Reconciliation of segment revenue to total revenue before tax:
Interest revenue
Segment results
Reconciliation of segment result to net loss before tax:
Share based payments – performance rights
Other corporate and administration
Net loss before tax
-
-
-
-
-
-
-
-
-
-
Segment operating assets
249,250
244,351
Reconciliation of segment operating assets to total assets:
Other corporate and administration assets
Total assets
Segment operating liabilities
-
242
Reconciliation of segment operating liabilities to total liabilities:
Other corporate and administration liabilities
Total liabilities
2020
$
-
-
2019
$
-
-
2020
$
-
2019
$
-
5,973
46,077
(1,427,806)
(178,213)
(1,427,806)
(178,213)
-
-
(77,136)
(1,319,389)
(2,830,305)
(153,015)
(786,156)
(1,071,307)
541,009
249,250
785,360
1,679,257
1,928,507
3,893,978
4,679,338
2,332
-
2,574
-
-
98,129
98,129
93,217
95,791
P a g e | 44
Okapi Resources Limited
Directors’ Declaration For the year ended 30 June 2019
In the directors’ opinion:
(a) the financial statements and notes set out on pages 21 to 44 are in accordance with the Corporations Act
2001, including:
(i) complying with Accounting Standards, the Corporations Regulations 2001 and other mandatory professional
reporting requirements; and
(ii) giving a true and fair view of the company’s and the consolidated entity’s financial position as at 30 June
2020 and of their performance for the financial year ended on that date;
(b) the audited remuneration disclosures set out on the pages 10 to 15 of the directors' report complies with
section 300A of the Corporations Act 2001;
(c)
there are reasonable grounds to believe that the company will be able to pay its debts as and when they
become due and payable; and
(d) a statement that the attached financial statements are in compliance with Australian Accounting Standards
has been included in the notes to the financial statements.
The directors have been given the declarations by the chief executive officer and chief financial officer required by
section 295A of the Corporations Act 2001.
This declaration is made in accordance with a resolution of the directors.
On behalf of the Board.
Andrew Shearer
Director
30 September 2020
Perth, Western Australia
P a g e | 45
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF OKAPI RESOURCES LIMITED
Report on the Financial Report
Opinion
We have audited the financial report of Okapi Resources Limited (the Company) and its
controlled entity (“the Consolidated Entity”), which comprises the consolidated statement
of financial position as at 30 June 2020, the consolidated statement of profit and loss and
other comprehensive income, the consolidated statement of changes in equity and the
consolidated statement of cash flows for the period then ended, and notes to the financial
statements, including a summary of significant accounting policies, and the directors’
declaration.
In our opinion, the accompanying financial report of the Consolidated Entity is in
accordance with the Corporations Act 2001, including:
i) giving a true and fair view of the Consolidated Entity’s financial position as
at 30 June 2020 and of its financial performance for the period then ended;
and
ii) comply with Australian Accounting Standards and
the Corporations
Regulations 2001.
Basis for Opinion
We have conducted our audit in accordance with Australian Auditing Standards. Our
responsibilities under
the Auditor’s
in
those Standards are
Responsibilities for the Audit of the Financial Report section of our report.
further described
We are independent of the Consolidated Entity in accordance with the auditor
independence requirements of the Corporations Act 2001 and the ethical requirements of
the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for
Professional Accountants (including Independence Standards) (the Code) that are
relevant to our audit of the financial report in Australia. We have also fulfilled our ethical
requirements in accordance with the Code.
We confirm that the independence declaration required by the Corporations Act 2001,
which has been given to the directors of the Company, would be in the same terms if
given to the directors as at the date 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.
Key Audit Matters
Key audit matters are those matters that, in our professional judgement, were of most
significance in our audit of the financial report of the current period. These matters were
addressed in the context of our audit of the financial report as a whole, and in forming our
opinion thereon, and we do not provide a separate opinion on these matters. We have
determined the matters described below to be key audit matters to be communicated in
our report.
Key Audit Matter
Capitalised mineral exploration
expenditure
(refer note 7)
The Group operates as an exploration entity
and as such its primary activities entail
expenditure focussed on the exploration for
and evaluation of economically viable
mineral deposits. These activities currently
include the Mambasa Gold Project in DRC
and the Crackerjack Gold Project in WA.
All exploration and evaluation expenditure
incurred
and
recognised as an asset in the Statement of
Financial Position.
capitalised
been
has
The carrying value of capitalised mineral
exploration assets is subjective and is based
on the Group’s intention and ability, to
continue to explore the asset. The carrying
value may also be affected by the results of
ongoing exploration activity indicating that
the mineral reserves and resources may not
be commercially viable for extraction. This
creates a risk that the asset value included
within the financial statements may not be
recoverable.
Share based payments – performance
rights
(refer notes 10 and 11)
The Group has awarded performance rights
to
key management personnel and
employees. The rights vest subject to the
performance
achievement
milestones.
specific
of
The Group used both the Black-Scholes and
Binomial models in valuing the rights based
on the milestones attaching to each tranche
of rights awarded.
How our audit addressed the key audit
matter
Our audit procedures included:
for minerals
ensuring the Group’s continued right to
relevant
explore
exploration areas
including assessing
documentation such as exploration and
mining licences;
the
in
enquiring of management and the directors
as to the Group’s intentions and strategies
for future exploration activity and reviewing
budgets and cash flow forecasts;
assessing the results of recent exploration
activity to determine whether there are any
indicators suggesting a potential impairment
of the carrying value of the asset;
assessing the Group’s ability to finance the
planned exploration and evaluation activity;
and
assessing the adequacy of the disclosures
made by the Group in the financial report.
Our audit procedures included;
assessing the assumptions used in the
valuation of the performance rights;
assessing the recognition of the value of the
performance rights;
assessing the accuracy of the share based
payment expense for the year; and
assessing the adequacy of the disclosures
made by the Group in the financial report.
Other information
The directors are responsible for the other information. The other information comprises
the information in the Directors’ Report for the period ended 30 June 2020, but does not
include the financial report and the auditor’s report thereon.
Our opinion on the financial report does not cover the other information and accordingly
we do not express any form of assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other
information and, in doing so, consider whether the other information is materially
inconsistent with the financial report or our knowledge obtained in the audit or otherwise
appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material
misstatement of the other information, we are required to report that fact. We have
nothing to report in this regard.
Responsibilities of the Directors for the Financial Report
The directors of the Company are responsible for the preparation of the financial report
that gives a true and fair view in accordance with the Australian Accounting Standards
and the Corporations Act 2001 and for such internal control as the directors determine is
necessary to enable the preparation of the financial report that gives a true and fair view
and is free from material misstatement, whether due to fraud or error.
In preparing the financial report, the directors are responsible for assessing the
Company’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 Company or to cease operations, or have no
realistic alternative but to do so.
Auditor’s Responsibilities for the Audit of the Financial Report
Our objectives are to obtain reasonable assurance about whether the financial report as a
whole is free from material misstatement, whether due to fraud or error, and to issue an
auditor’s report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit
conducted in accordance with the Australian Auditing Standards will always detect a
material misstatement when it exists. Misstatements can arise from fraud or error and are
considered material if, individually or in the aggregate, they could reasonably be expected
to influence the economic decisions of users taken on the basis of the financial report.
As part of an audit in accordance with the Australia Auditing Standards, we exercise
professional judgement and maintain professional scepticism throughout the audit. We
also:
Identify and assess risks of material misstatement of the financial report, whether due
to fraud or error, design and perform audit procedures responsive to those risks, and
obtain audit evidence that is sufficient and appropriate to provide a basis for our
opinion. The risk of not detecting a material misstatement resulting from fraud is
higher than for one resulting from error, as fraud may involve collusion, forgery,
intentional omissions, misrepresentations, or the override of internal control.
Obtain and understanding of internal control relevant to the audit in order to design
audit procedures that are appropriate in the circumstances, but not for the purpose of
expressing an opinion on the effectiveness of the Consolidated Entity’s internal
control.
Evaluate the appropriateness of accounting policies used and the reasonableness of
accounting estimates and related disclosures made by the directors.
Conclude on the appropriateness of the directors’ use of the going concern basis of
accounting and, based on the audit evidence obtained, whether a material
uncertainty exists related to events or conditions that may cast significant doubt on
the Consolidated Entity’s ability to continue as a going concern. If we conclude that a
material uncertainty exists, we are required to draw attention in our auditor’s report to
the related disclosures in the financial report or, if such disclosures are inadequate, to
modify our opinion. Our conclusions are based on the audit evidence obtained up to
the date of our auditor’s report. However, future events or conditions may cause the
Consolidated Entity to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the financial report,
including the disclosures, and whether the financial report represents the underlying
transactions and events in a manner that achieves fair presentation.
Obtain sufficient appropriate audit evidence regarding the financial information of the
entities or business activities within the Consolidated Entity to express an opinion on
the financial report. We are responsible for the direction, supervision and
performance of the Consolidated Entity audit. We remain solely responsible for our
audit opinion.
We communicate with the directors regarding, among other matters, the planned scope
and timing of the audit and significant audit findings, including any significant deficiencies
in internal control that we identify during our audit.
We also provide the directors with a statement that we have complied with relevant ethical
requirements regarding independence, and to communicate with them all relationships
and other matters that may reasonably be thought to bear on our independence, and
where applicable, actions taken to eliminate threats or safeguards applied.
From the matters communicated with the directors, we determine those matters that were
of most significance in the audit of the financial report of the current period and are
therefore key audit matters. We describe these matters in our auditor’s report unless law
or regulation precludes public disclosure about the matter or when, in extremely rare
circumstances, we determine that a matter should not be communicated in our report
because the adverse consequences of doing so would reasonably be expected to
outweigh public interest benefits of such communication.
Report on the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included on pages 10 to 15 of the directors’
report for the period ended 30 June 2020.
In our opinion, the Remuneration Report of Okapi Resources Limited, for the period
ended 30 June 2020, complies with section 300A of the Corporations Act 2001.
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the
Remuneration Report in accordance with section 300A of the Corporations Act 2001.
Our responsibility is to express an opinion on the Remuneration Report, based on our
audit conducted in accordance with Australian Auditing Standards.
BUTLER SETTINERI (AUDIT) PTY LTD
MARIUS VAN DER MERWE CA
Director
Perth
Date 30 September 2020
Okapi Resources Limited
ASX Additional Information For the period ended 30 June 2020
(a) Shareholding
The distribution of members and their holdings of equity securities as at 25 September 2020 is as follows:
1
1,001
5,001
10,001
100,001
-
-
-
-
1,000
5,000
10,000
100,000
and over
The number of shareholders holding less than a
marketable parcel of shares are:
Ordinary shares
Number of holders
Number of shares
15
80
87
187
34
403
47
2,733
250,624
762,799
6,087,377
28,9393,333
36,042,866
63,031
(b) Twenty largest shareholders
The names of the twenty largest holders of quoted ordinary shares are as follows:
Kalubamba SARL
Ridgeback Holdings Pty Ltd
JP Morgan Nominees Australia Pty Ltd
1 Havelock Mining Investment Ltd
2 McNeil Nominees Pty Ltd
3 HSBC Custody Nominees (Australia) Limited
4 David Nour
5
6
7 Windhager Holding AG
8 Colin Weekes
9
10 Medidoc FZE
11 Christopher Robert Cannon
12
13 Mark Gasson
14 Quid Capital Pty Ltd
15 Hongtze Group Ltd
16 Durgavallabh Superfund A/C
17 Buckingham Investment Financial Services Pty Ltd
18 Ayers Capital Pty Ltd
19 Granet Superannuation and Investment Services PL
20 Allen Despotov
Ironside Pty Ltd
(c) Substantial shareholders
Havelock Mining Investment Ltd
McNeil Nominees Pty Ltd
David Nour
Ridgeback Holdings Pty Ltd
(d) On-Market Buy-back
There is no current on-market buy-back.
Listed ordinary shares
Number of shares
Percentage of
ordinary shares
4,799,143
4,725,121
3,140,851
3,054,846
2,654,901
1,958,363
1,200,000
1,044,416
1,000,000
1,000,000
475,000
430,000
400,000
330,029
300,000
242,574
235,000
200,000
180,000
173,000
27,543,244
13.32
13.11
8.71
8.47
7.37
5.43
3.33
2.90
2.77
2.77
1.32
1.19
1.11
0.92
0.83
0.67
0.65
0.55
0.50
0.48
76.40
Number of Shares
4,799,143
4,725,121
3,054,846
2,654,901
P a g e | 51
Okapi Resources Limited
ASX Additional Information For the period ended 30 June 2020
(e) Voting rights
The voting rights attaching to each class of equity securities are set out below:
(i) Ordinary shares
All ordinary shares (whether fully paid or not) carry one vote per share without restriction.
(f) Application of Funds
During the financial year, Okapi Resources Limited confirms that it has used its cash and assets (in a form readily
convertible to cash) in a manner which is consistent with the Company’s business objectives.
(g) Corporate Governance
The Board of Okapi Resources Limited is committed to Corporate Governance. The Board is responsible to its
Shareholders for the performance of the Company and seeks to communicate with Shareholders. 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 https://okapiresources.com/corporate-governance.
(h) Tenement Schedule
Project/Location
Country
Tenement(s)
Crackerjack
Mount Day
Mambasa Project
Australia
Australia
DRC
E80/4675
E63/1805-1808
PE364 & PE480
Percentage
held/earning
100%
0%1
0%2
1Okapi has executed a binding farm-in agreement with Lithium Australia NL to earn an undivided 75% interest in
the tenements.
2Okapi has executed the Mambasa Joint Venture Agreement with Kalubamba SARL and Medidoc FZE which
granted Okapi the right to earn a 70% interest in the Mambasa Project.
P a g e | 52