A.C.N. 006 639 514
ANNUAL REPORT AND
FINANCIAL STATEMENTS
FOR THE YEAR ENDED
30 JUNE 2019
For personal use only
Reedy Lagoon Corporation Limited
Contents
30 June 2019
Chairman's letter
Review of operations
Corporate directory
Directors' report
Auditor's independence declaration
Statement of profit or loss and other comprehensive income
Statement of financial position
Statement of changes in equity
Statement of cash flows
Notes to the financial statements
Directors' declaration
Independent auditor's report to the members of Reedy Lagoon Corporation Limited
Shareholder information
Tenement schedule
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For personal use only
26 September 2019
Dear Shareholders,
Annual Report 2019
The long term outlook for lithium demand remains strong.
Demand from battery applications is forecast to increase 25% per year through to 2028. Several countries
have committed to banning motor vehicles with internal combustion engines from their cities in the coming
years and the principal alternative is electric vehicles. Lithium is likely to be the basis of electric vehicle
technology for some time.
Importantly for Reedy Lagoon there have been developments in the direct extraction of lithium from brines
which supports the Company’s aim to produce lithium from brines at greatly reduced water consumption
rates and without the need for costly and inefficient evaporation ponds.
The outlook for iron-ore has improved. China dominates the market for iron-ore and its imports are at record
levels having imported more than 1,000 Mt in both 2017 and 2018, up from less than 500 Mt in 2008. The
high levels of production are depleting the global supply of high quality ores (high iron with low impurities).
Quality impacts upon steel mill costs. Smelters using low quality ores emit more pollution and more CO2.
China is implementing strategies to reduce pollution from its smelters which are placing increased demand
for higher quality iron-ore.
Importantly for Reedy Lagoon these developments will likely increase the demand for the high quality iron
product being targeted at the Burracoppin project.
Work on the projects is described in more detail in the Review of Operations.
Yours sincerely
Jonathan Hamer
Chairman
Reedy Lagoon Corporation Limited
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Reedy Lagoon Corporation Limited
Review of Operations
30 June 2019
Overview
Reedy Lagoon explored for lithium, wound-up its Edward Creek uranium project and resumed an iron-ore
project in Western Australia during its 33rd year of operations.
The Company’s focus on lithium is in brines. New
process pathways that enable direct extraction of
lithium from brines (that is, saline ground-water)
are anticipated by Reedy Lagoon to deliver the
most efficient way to produce battery grade lithium
compounds. Most importantly, direct extraction
enables the residual brine to be returned to the
environment after harvesting its lithium rather than
lost to evaporation as is the case with more
conventional processing that relies upon the
extensive use of evaporation ponds. Reduced
water consumption improves the potential to gain
approvals to pump and process ground water in the
event that “consumptive use” is used as the
measure of the water allocation as opposed to the
gross water extracted.
The four lithium brine projects explored during the
period were:
Alkali Lake North;
Clayton Valley;
Big Smoky South (since divested); and
Columbus Salt Marsh (since divested).
During the reporting period the Company carried
out 3D AMT electrical surveys at Clayton Valley
and Alkali Lake North with positive results as
strong conductive brine targets were indicated on
both properties.
Other lithium projects were assessed.
During the reporting period Reedy Lagoon held other projects targeting uranium in South Australia and iron-
ore in Western Australia.
The Edward Creek uranium project, which had been held for the last few years while waiting for improvement
in the uranium price, was closed following completion of all rehabilitation and other statutory requirements.
The iron-ore project (Burracoppin) was part of Reedy Lagoon’s Bullamine Iron-ore project which was
previously joint ventured with Cliffs, Nippon Steel and Sojitz. Burracoppin is considered to be the best of the
magnetite iron-ore prospects discovered by our previous joint venture. A new tenement covering the project
area was granted to the Company in early 2019.
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Reedy Lagoon Corporation Limited
Review of Operations
30 June 2019
Exploration
Lithium Exploration
Nevada Lithium Brine Projects *
Alkali Lake North:
Clayton Valley:
Big Smoky South:
Columbus Salt Marsh:
*as at 30 June 2019; subsequent to 30 June, Big Smoky South and Columbus Salt Marsh were divested.
LITHIUM BRINES
128 claims – 2,554 acres (1,033 ha)
112 claims – 2,240 acres ( 906 ha)
245 claims – 4,677 acres (1,893 ha)
167 claims – 3,291 acres (1,332 ha)
Nevada, USA
RLC 100%
The Nevada lithium brine projects comprised: Alkali Lake North, Clayton Valley, Big Smoky South and
Columbus Salt Marsh. The projects are located in 3 large and separate ground water catchment areas in
Nevada, USA. The projects are all within 50 kilometres of the Silver Peak Lithium brine operation owned by
Albemarle Corp. which is located 360 kilometres by road (US-95 route) from the Tesla Gigafactory (Lithium-
ion batteries) in Reno.
Following the end of the report period it was decided to relinquish the Big Smoky South and Columbus Salt
Marsh projects which the Company had drill tested in the previous report period.
The two remaining projects, Alkali Lake North and Clayton Valley, cover a combined area of 1,939 hectares
(4,794 acres) under 240 placer claims. All the placer claims are 100% owned and there are no royalty
arrangements.
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Reedy Lagoon Corporation Limited
Review of Operations
30 June 2019
Alkali Lake North Project
LITHIUM in BRINE
Nevada, USA
RLC 100%
Alkali Lake North Project covers part of a discrete sub basin located 30 kilometres northeast of Silver Peak
and it occurs within an extensive 30 kilometres long, northwest trending basin that drains to the south towards
Alkali Lake. Satellite and gravity imagery suggest that a deep basin is masked by recent alluvium. Several
hot springs discharge alkaline salts onto the surface of the playa lake located 10 kilometres to the south west
of the project area.
3-dimensional audio magnetotelluric (3D AMT) survey was conducted over the project during the report
period (refer ASX release 28 August 2018).
3D AMT surveys measure electromagnetic responses which can be processed and interpreted to indicate
the presence and location of conductive zones which have potential to be caused by salty water (brine) in
the ground. In an area where the presence of lithium is known, either dissolved in ground water or in minerals
occurring in rocks or sediments, it can be the case that the higher the salt content of a ground water the
higher is the concentration of lithium in that water. Under these conditions and because conductivity of a
ground water is correlated with salt content (the higher the salt content the higher is its conductivity), high
conductivity is a positive indication for higher lithium concentration in that water. Other factors however can
operate to reduce the amount of lithium in brine notwithstanding the presence of lithium sources. For
example, lithium may be removed from a brine by precipitation of lithium minerals and or deposition of lithium
ions, in clays.
Data collected by the 3D AMT survey are interpreted to indicate a linear conductive body extending more
than 2,000 metres horizontally at a depth of about 500 metres adjacent to a major fault. The conductive body
is indicated in the 3D-AMT data to have a vertical thickness of over 100 metres. The Company interprets the
conductor to be potentially caused by multiple brine aquifers within sediments over a vertical interval of more
than 100 metres (refer ASX release 30 October 2018).
Drilling is warranted to test the conductive body identified by the 3D AMT surveys. Such a conductive body
may be comprised of multiple brine aquifers within sediments over a vertical interval from 500 to 600 metres
below ground surface (refer ASX release 25 January 2019).
Clayton Valley Project
LITHIUM in BRINE
Nevada, USA
RLC 100%
Clayton Valley Project is located within 10 kilometres northwest of the Silver Peak lithium operation where
the southern end of Big Smoky Valley meets the western side of Clayton Valley.
3-dimensional audio magnetotelluric (3D AMT) survey was conducted over the project during the report
period (refer ASX release 18 August 2018).
Processing and interpretation of the 3D AMT data recovered from the project indicate a substantial tabular
conductive body the top of which is at a depth of 250 metres and having a vertical thickness of approximately
200 metres. The Company interprets the conductive body to potentially comprise a 200 metre thick interval
of sediments containing multiple brine filled aquifers. The geophysicist has estimated the volume of this
conductive body to be one cubic kilometre. Importantly, we see similarities between the geology indicated in
our 3D AMT survey with the geology that has been determined and reported for the Silver Peak lithium brine
production area located a few kilometres to the south east.
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Reedy Lagoon Corporation Limited
Review of Operations
30 June 2019
Big Smoky South Project
LITHIUM in BRINE
Nevada, USA
RLC 100%
Big Smoky South Project is located 10 kilometres northwest of the Silver Peak lithium operation where the
southern end of Big Smoky Valley meets the western side of Clayton Valley.
Core drilling conducted by RLC during the prior period investigated a highly conductive zone extending from
600 metres to more than 850 meters below surface interpreted in 2D AMT survey data. Drill hole MBD-01
was terminated at a depth of 401 metres after intersecting a thick sequence of lake sediments which the
Company interpreted as being beneath the geological horizons that are prospective for lithium bearing brines.
Pump testing using a double packer system and sampling of four selected zones was attempted in MDB-01,
including in a zone of volcanic ash layers intersected between 59 and 100 metres down hole depth from
surface. However, fluid flow rates were too low to allow effective sampling (ASX 30 July 2018).
Assay results from 100 samples of core from drill hole MBD-01 drilled in the prior period were received (refer
ASX release 5 October 2018). Results range from 10 ppm to 40 ppm lithium and from 10 ppm to 40 ppm
boron. These levels are anomalous but not commercial.
All tracks and drill pads constructed as part of the drilling conducted in during April - May 2018 were
decommissioned and rehabilitated by earthworks towards the end of calendar 2018 in preparation for seeding
in spring.
Following the end of the report period it was decided to divest the Big Smoky South project.
Columbus Salt Marsh
LITHIUM in BRINE
Nevada, USA
RLC 100%
The Columbus Salt Marsh project is located 45 kilometres northwest of Clayton Valley. The Columbus Salt
Marsh valley represents a closed basin with extensive Tertiary volcanic deposits in the surrounding hills.
USGS open file gravity data indicates that the centre of the valley has subsided up to 3.5km. The valley is
fault bounded and several geothermal springs discharge alkali salts onto the lake surface. These alkali
deposits have in the past been mined for borax.
Core drilling conducted by RLC during the prior period investigated a highly conductive zone extending from
600 metres to more than 1,000 meters below surface interpreted in 2D AMT survey data. Drill hole CBD-01
was completed on reaching target depth at 1,000 metres. Assays from samples of brine collected from six
aquifers below 400 metres downhole and located within zones of volcanic ash and tuff reported a maximum
detected lithium concentration of 10 mg/L. This level is not considered by the Company to be high enough to
indicate potential for economic recovery of lithium (ASX release 23 April 2018).
Assay results from 90 samples of core from drill hole CBD-01 were received during the period (refer ASX
release 28 August 2018). Results range from 20 ppm to 200 ppm lithium and from 10 ppm to 150 ppm boron.
These levels are anomalous but not commercial (ASX release 28 August 2018).
Following the end of the report period it was decided to divest the Columbus Salt Marsh project.
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Reedy Lagoon Corporation Limited
Review of Operations
30 June 2019
Iron Ore Exploration
Burracoppin Project
100%
IRON ORE – MAGNETITE
Western Australia
RLC
The Burracoppin project was re-commenced in early 2019.
The project area was held by the Company as part of the Bullamine Iron-ore project from 2010 to
relinquishment in 2016. During this period the Burracoppin Magnetite prospect was discovered by the
Bullamine Joint Venture (2011 to 2014) comprising Cliffs Natural Resources, Nippon Steel, Sojitz and RLC.
Metallurgical studies on core samples produced concentrate with high iron levels (67% to 70% Fe) and low
levels of impurities at a relatively coarse grind size (P80 -150 micron) (refer to ASX releases 23 November
2012 and 17 November 2014).
During the report period an agreement setting out protocols for conducting heritage surveys was executed
by the South West Aboriginal Land & Sea Council Aboriginal Corporation for and on behalf of the Ballardong
Agreement Group and the Company’s wholly owned subsidiary Bullamine Magnetite Pty Ltd.
Access and compensation agreements were executed with key land owners following the end of the report
period.
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Reedy Lagoon Corporation Limited
Review of Operations
30 June 2019
The location of our previous joint venture drilling completed in 2012 is shown in the image below. Three
diamond holes were completed to investigate the magnetic anomaly shown coloured red (refer to ASX
release 23 November 2012 and https://www.reedylagoon.com.au/projects/burracoppin/).
Following the end of the report period a study found that processing Burracoppin magnetite mineralization
using HIsmelt to produce a high-quality Pig Iron for export may be an avenue for development of the
project (refer ASX release 10 September 2019).
Additional drilling is required to establish a resource as the first step in extending the investigations into the
project’s viability.
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Reedy Lagoon Corporation Limited
Review of Operations
30 June 2019
Uranium Exploration
Edward Creek Project
URANIUM
South Australia
RLC 100%
RLC’s past exploration at Edward Creek identified uranium and
Rare Earth Element (REE) mineralization at its Victory Prospect in
2010 (refer ASX release 30 January 2017).
Planned exploration had been held pending an improvement in the
market conditions for uranium.
All interest in diamond in the project area had been farmed-out to
DiamondCo Limited which conducted diamond exploration
independently from RLC. The Diamond Farm Out Agreement
terminated when DiamondCo withdrew on 20 July 2018 and all
interest in diamond reverted to RLC. The work conducted by
DiamondCo fulfilled the expenditure requirements for the tenement
allowing Reedy Lagoon to hold the tenement at no cost.
Following the termination of the joint venture with DiamondCo and in the absence of sufficient improvement
in the uranium market the project was terminated and the tenement was not renewed past its November
2018 expiry date. All environmental and statutory work on the tenement has been completed.
Geoffrey Fethers
Managing Director
Competent Person’s Statements:
The information in the section headed “Lithium Exploration” of this report as it relates to exploration results and geology was compiled
by Mr Geoff Balfe who is a Member of the Australasian Institute of Mining and Metallurgy. Mr Balfe is a consultant to Reedy Lagoon
Corporation Limited and a Competent Person. Mr Balfe has sufficient experience which is relevant to the style of mineralisation and
type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2012
Edition of the 'Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves'. Mr Balfe consents to the
inclusion in the report of the matters based on the information in the form and context in which it appears.
The information in the sections headed “Iron-ore Exploration” and “Uranium Exploration” of this report as it relates to exploration results
and geology was compiled by Mr Geoffrey Fethers who is a Member of the Australasian Institute of Mining and Metallurgy. Mr Fethers
is a director of Reedy Lagoon Corporation Limited and a Competent Person. Mr Fethers has sufficient experience which is relevant to
the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent
Person as defined in the 2012 Edition of the 'Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore
Reserves'. Mr Fethers consents to the inclusion in the report of the matters based on the information in the form and context in which it
appears.
Where Exploration Results have been reported in earlier RLC ASX Releases referenced in this report, those releases are available to
view on https://www.reedylagoon.com.au/investors/asx-announcements/. The company confirms that it is not aware of any new
information or data that materially affects the information included in those earlier releases. The company confirms that the form and
context in which the Competent Person’s findings are presented have not been materially modified from the original market
announcement.
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Reedy Lagoon Corporation Limited
Corporate Directory
30 June 2019
Directors
Contact details
Jonathan M. Hamer
Chairman, Non-Executive Director
Geoffrey H. Fethers
Managing Director and Company Secretary
Adrian C. Griffin
Non-Executive Director
Phone : 03 8420 6280
Fax : 03 8420 6299
Email : info@reedylagoon.com.au
Company secretary
Geoffrey H. Fethers
Share register
Auditor
Solicitors
Link Market Services Limited (ABN 54 063 214 537)
Level 1, 333 Collins Street
Melbourne, Victoria 3000
Telephone : 1300 554 474
www.linkmarketservices.com.au
Moore Stephens
Level 18, 530 Collins Street
Melbourne, Victoria 3000
www.moorestephens.com.au
King & Wood Mallesons
Level 50, 600 Bourke Street
Melbourne, Victoria 3000
Stock exchange listing
Reedy Lagoon Corporation Limited shares are listed on the
Australian Securities Exchange (ASX code: RLC)
Website
www.reedylagoon.com.au
Corporate Governance Statement Refer to www.reedylagoon.com.au/about-us/corporate-governance/
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Reedy Lagoon Corporation Limited
Directors' Report
30 June 2019
The directors present their report, together with the financial statements, on the consolidated entity (referred to
hereafter as the 'consolidated entity') consisting of Reedy Lagoon Corporation Limited (referred to hereafter as
the 'company' or 'parent entity') and the entities it controlled at the end of, or during, the year ended 30 June
2019.
Directors
The following persons were directors of Reedy Lagoon Corporation Limited during the whole of the financial
year and up to the date of this report, unless otherwise stated:
Jonathan M. Hamer
Geoffrey H. Fethers
Adrian C. Griffin
Principal activities
During the financial year the principal continuing activities of the consolidated entity consisted of:
●
exploration for minerals in the United States of America and Australia.
Dividends
There were no dividends paid, recommended or declared during the current or previous financial year.
Review of operations
The loss for the consolidated entity after providing for income tax amounted to $875,403 (30 June 2018: Loss
$4,615,766).
Refer to the separate review of operations that comes directly before this directors' report.
Significant changes in the state of affairs
There were no significant changes in the state of affairs of the consolidated entity during the financial year.
Matters subsequent to the end of the financial year
Big Smoky South and Columbus Salt Marsh projects were divested subsequent to the end of the period.
No other matter or circumstance has arisen since 30 June 2019 that has significantly affected, or may
significantly affect the consolidated entity's operations, the results of those operations, or the consolidated
entity's state of affairs in future financial years.
Likely developments and expected results of operations
At the date of this report, there are no future developments of the Company which warrant disclosure.
Environmental regulation
The Company's operations are subject to environmental regulations in relation to its exploration activities under
State legislation in Australia and Federal legislation in USA.
The directors are not aware of any breaches of environmental regulations during the period covered by this
report.
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Reedy Lagoon Corporation Limited
Directors' Report
30 June 2019
Information on directors
Name:
Title:
Age:
Qualifications:
Experience and expertise:
Jonathan M. Hamer
Chairman – Non Executive
64
BA, LLB.
A former partner of King & Wood where he practised in the areas of
corporate and finance law. Jonathan has been advising RLC since 1988
on a range of legal and commercial issues, including in its various joint
venture agreements and capital raisings. Jonathon has served on the
RLC board for 12 years.
Other current directorships:
Former directorships):
Interests in shares:
Interests in options:
Nil
Nil (last 3 years)
13,661,946 fully paid ordinary shares
2,200,907 options
Name:
Title:
Age:
Qualifications:
Experience and expertise:
Geoffrey H. Fethers
M AusIMM
62
B.Sc.(Hons), M AusIMM
Manages the operations of RLC. He is a geologist with over 25 years
exploration experience. He was employed by De Beers Australia
Exploration Limited (formerly Stockdale Prospecting Limited) from 1980
to 1985. He founded RLC in 1986. He is a Member of the Geological
Society of Australia and the Australian Institute of Mining and Metallurgy.
Geoffrey is a founding director.
Other current directorships:
Former directorships:
Special responsibilities:
Interests in shares:
Interests in options:
Nil
Nil (last 3 years)
Manages the operations of RLC.
33,301,385 fully paid ordinary shares
5,375,000 options
Name:
Title:
Age:
Qualifications:
Experience and expertise:
Adrian C. Griffin
Director
66
B.Sc.(Hons), M AusIMM
Adrian Griffin, aged 66, has accumulated extensive experience in the
resource sector over the past 35 years. During that time he has held
directorships in a number of private and listed resource companies and
overseen the operation of large, integrated mining and processing
facilities, including the Bulong nickel-cobalt operation in the late 1990s to
his current position as Managing Director of Lithium Australia NL, a
company developing lithium extraction and recovery technologies. Mr
Griffin was a director of Reedy Lagoon from 9 May 2007 until resigning
on 27 November 2009 to act as technical director of Ferrum Crescent,
an iron-ore developer in South Africa. He re-joined RLC as a director on
30 June 2014.
Mr Griffin was also a founding director of Northern Uranium and Parkway
Minerals (developer of the KMax process to recover potassium and other
metals from glauconite). Recently, he was instrumental in identifying the
global opportunity to establish lithium micas as a source feed for the
lithium chemical industry.
Other current directorships:
Managing Director-Lithium Australia NL; Non-executive Director-
Northern Minerals Ltd; Chairman-Parkway Minerals NL
Former directorships:
Special responsibilities:
Interests in shares:
Interests in options:
Nil (last 3 years)
Nil
34,011,037 fully paid ordinary shares
4,342,652 options
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Reedy Lagoon Corporation Limited
Directors' Report
30 June 2019
'Other current directorships' quoted above are current directorships for listed entities only and excludes
directorships of all other types of entities, unless otherwise stated.
'Former directorships (last 3 years)' quoted above are directorships held in the last 3 years for listed entities
only and excludes directorships of all other types of entities, unless otherwise stated.
‘Interests in shares and options’ quoted above are as at the date of this report.
Company secretary
Geoffrey H. Fethers is the company's secretary. Details of his qualifications and experience are disclosed in
the information on directors section above.
Meetings of directors
The number of meetings of the company's Board of Directors ('the Board') held during the year ended 30 June
2019, and the number of meetings attended by each director were:
Jonathan M. Hamer
Geoffrey H. Fethers
Adrian C. Griffin
Full Board
Attended
Held
4
4
4
4
4
4
Held: represents the number of meetings held during the time the director held office.
Remuneration report (audited)
This remuneration report outlines the Director and Executive remuneration arrangements of the Company in
accordance with the Corporations Act 2001 and its Regulations. It also provides the remuneration disclosures
required by paragraphs AUS25.4 and AUS 25.7.2 of AASB 124 Related Party Disclosures which have been
transferred to the Remuneration Report in accordance with the Corporations Regulation 2M 6.04.
This report outlines the remuneration arrangements in place for the Directors (both Executive and Non-
Executive) and Executives of the Company.
This report is audited as the entity has transferred the disclosures from the financial statements.
For the purposes of this report the term ‘Senior Executive‘ encompasses the Managing Director, Executive
Directors and Secretary of the Company.
The remuneration report is set out under the following main headings:
●
●
●
●
●
Principles used to determine the nature and amount of remuneration
Details of remuneration
Service agreements
Share-based compensation
Additional disclosures relating to key management personnel
Principles used to determine the nature and amount of remuneration
Currently, the Company does not have a separate remuneration committee. Because of the size of the Board
and the operations of the Company, the Directors are of the view that there is no need for a separate
remuneration committee.
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Reedy Lagoon Corporation Limited
Directors' Report
30 June 2019
The Board as a whole reviews the remuneration packages and policies applicable to the Chairman, Senior
Executives and Non-Executive Directors on an annual basis. Remuneration levels are set to attract or retain,
as appropriate, qualified and experienced Directors and Senior Executives. From time to time and as required,
the Board will seek independent professional advice on the appropriateness of remuneration packages.
The current nature and amount of remuneration payable to Chairman, Executives and Non-Executive Directors
is not dependent upon the satisfaction of a performance condition. Instead part of the remuneration takes the
form of options which will have value if the Company’s share price increases.
Use of remuneration consultants
The Company did not make use of remuneration consultants during the 2019 financial year.
Voting and comments made at the company's 13 November 2018 Annual General Meeting ('AGM')
At the 13 November 2018 AGM, 97% of the votes received supported the adoption of the remuneration report
for the year ended 30 June 2019. The company did not receive any specific feedback at the AGM regarding its
remuneration practices.
Details of remuneration
Amounts of remuneration
Details of the remuneration of key management personnel of the consolidated entity are set out in the following
tables.
The key management personnel of the consolidated entity consisted of the following directors of Reedy Lagoon
Corporation Limited:
●
●
●
J Hamer
G Fethers
A Griffin
Short-term benefits
Post-
employ-
ment
benefits
Long-
term
benefits
Share-
based
payments
2018
Non-Executive Directors:
J Hamer
A Griffin
Executive Directors:
G Fethers *
Cash
salary
and fees
$
60,000
40,000
132,000
232,000
Bonus
$
Non-
monetary
$
Super-
annuation
$
Long
service
leave
$
Equity-
settled
$
Total
$
-
-
-
-
-
-
-
-
-
-
-
-
8,276
2,758
68,276
42,758
12,540
12,540
2,537
2,537
13,792 160,869
24,826 271,903
*
Mr Fethers was the sole executive employee of the company for the year ended 30 June 2018.
As at 30 June 2018, $0 (2017: $208,945) of short term employee benefits remain unpaid.
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Reedy Lagoon Corporation Limited
Directors' Report
30 June 2019
Short-term benefits
Post-
employ-
ment
benefits
Long-
term
benefits
Share-
based
payments
2019
Non-Executive Directors:
J Hamer
A Griffin
Executive Directors:
G Fethers *
Cash
salary
and fees
$
73,059
40,000
119,542
232,601
Bonus
$
Non-
monetary
$
Super-
annuation
$
Long
service
leave
$
Equity-
settled
$
Total
$
-
-
-
-
-
-
-
-
6,941
-
1,469
490
81,469
40,490
25,000
31,941
2,555
2,555
2,449
4,408
149,546
271,505
*
Mr Fethers was the sole executive employee of the company for the year ended 30 June 2019.
The proportion of remuneration linked to performance and the fixed proportion are as follows:
Name
Non-Executive Directors:
J Hamer
A Griffin
Executive Directors:
G Fethers
Fixed remuneration
2019
2018
At risk - STI
At risk - LTI
2019
2018
2019
2018
98%
99%
88%
94%
98%
91%
-
-
-
-
-
-
2%
1%
12%
6%
2%
9%
Service agreements
Remuneration and other terms of employment for key management personnel are formalised in service
agreements. Details of these agreements are as follows:
Name:
Title:
Agreement commenced:
Details:
G Fethers
Managing Director
1 May 2007
Mr G Fethers is the Company’s Executive Managing Director under a
contract of employment which commenced on 1 May 2007. Under the
contract Mr Fethers is entitled to $132,000 per annum plus statutory
superannuation. The contract does not have any fixed term and may be
terminated by the Company or Mr Fethers on reasonable notice. Mr Fethers
also receives options under the terms of the Directors Options Scheme. No
payments or retirement benefits are payable on termination.
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Reedy Lagoon Corporation Limited
Directors' Report
30 June 2019
Name:
Title:
Agreement commenced:
Details:
Name:
Title:
Agreement commenced:
Term of agreement:
J Hamer
Chairman - Non Executive
1 May 2007
Mr J Hamer is employed as the Company’s Non-executive Chairman. His
appointment as a Director commenced on 9 May 2007 with agreed director
fees payable at an annual rate of $40,000 plus options under the terms of
the Directors Options Scheme. From 1 January 2018 the annual rate was
increased to $80,000. There is no fixed term and no set retirement benefits
are payable on termination.
Mr Adrian Griffin
Director
30 June 2014
Mr A Griffin is employed as a Non-executive Director. His appointment as
a Director commenced on 30 June 2014 with agreed director fees payable
at an annual rate of $40,000 plus options under the terms of the Directors
Options Scheme. There is no fixed term and no set retirement benefits are
payable on termination.
Key management personnel have no entitlement to termination payments, other than accrued leave balances,
in the event of removal for misconduct.
Share-based compensation
Issue of shares
There were no shares issued to directors and other key management personnel as part of compensation during
the year ended 30 June 2019. Shares were issued to two directors in lieu of cash payable for fees/salary/super.
Options
Subject to approval by shareholders each year directors receive options under The Directors’ Option Scheme
approved by shareholders at the 2000 Annual General Meeting. Under the Scheme options are offered as part
of the directors’ annual remuneration to compensate for the directors’ salary which has been set at less than
market and to provide incentive for the directors to increase shareholder value by setting the exercise price of
the options at 30% above the market value of the Company’s shares at the time the options are issued.
The terms and conditions of each grant of options over ordinary shares affecting remuneration of directors and
other key management personnel in this financial year or future reporting years are as follows:
Grant date
Vesting date and
exercisable date
Expiry date
Fair value
per option
at grant
date
Exercise
price
7 December 2018
31 December 2021
31 December 2021
$0.0116
$0.0049
Options granted carry no dividend or voting rights.
15
For personal use only
Reedy Lagoon Corporation Limited
Directors' report
30 June 2019
The number of options over ordinary shares granted to and vested by directors and other key management
personnel as part of compensation during the year ended 30 June 2019 are set out below:
Name
J Hamer
G Fethers
A Griffin
Number of
options
granted
during the
year
2019
Number of
options
granted
during the
year
2018
Number of
options
vested
during the
year
2019
Number of
options
vested
during the
year
2018
300,000
500,000
100,000
300,000
500,000
100,000
300,000
500,000
100,000
300,000
500,000
100,000
Additional disclosures relating to key management personnel
Shareholding
The number of shares in the company held during the financial year by each director and other members of
key management personnel of the consolidated entity, including their personally related parties, is set out
below:
Ordinary shares
G Fethers
J Hamer
A Griffin
Balance at
the start of
the year
Received
in lieu of
Remuner-
ation
Additions
Disposals
Balance at
the end of
the year
32,881,031
13,661,946
33,568,559
80,111,536
420,354
-
442,478
862,832
-
-
-
-
-
33,301,385
- 13,661,946
- 34,011,037
- 80,974,368
Option holding
The number of options over ordinary shares in the company held during the financial year by each director and
other members of key management personnel of the consolidated entity, including their personally related
parties, is set out below:
Options over ordinary shares
G Fethers
J Hamer
A Griffin
Balance at
the start of
the year
4,875,000
1,900,907
4,242,652
11,018,559
Granted &
Acquired
Exercised
Expired /
Forfeited
500,000 -
-
300,000
-
100,000
-
900,000
Balance at
the end of
the year
5,375,000
2,200,907
4,342,652
11,918,559
This concludes the remuneration report, which has been audited.
16
For personal use only
Reedy Lagoon Corporation Limited
Directors' report
30 June 2019
Shares under option
Unissued ordinary shares of Reedy Lagoon Corporation Limited under option at the date of this report are as
follows:
Grant date
Expiry date
29 December 2017
6 April 2018
7 December 2018
31 December 2020
6 April 2021
31 December 2021
Exercise
price
Number
under
option
$0.0375
$0.08
$0.0116
900,000
37,710,515
900,000
39,510,515
No person entitled to exercise the options had or has any right by virtue of the option to participate in any share
issue of the company or of any other body corporate.
Shares issued on the exercise of options
There were no ordinary shares of Reedy Lagoon Corporation Limited issued on the exercise of options during
the year ended 30 June 2019 and up to the date of this report.
Indemnity and insurance of officers
During the financial year, the Company paid a premium in respect of a contract insuring the directors of the
Company (as named above) and all executive officers of the Company and of any related body corporate
against a liability incurred in such capacity of director, secretary or executive officer to the extent permitted by
the Corporations Act 2001. The contract of insurance prohibits disclosure of the nature of the liability and the
amount of the premium.
The Company has not otherwise, during or since the financial year, except to the extent permitted by law,
indemnified or agreed to indemnify an officer or auditor of the Company or of any related body corporate against
a liability incurred as such an officer.
Indemnity and insurance of auditor
During the financial year, the Company paid a premium in respect of a contract insuring the directors of the
Company (as named above) and all executive officers of the Company and of any related body corporate
against a liability incurred in such capacity of director, secretary or executive officer to the extent permitted by
the Corporations Act 2001. The contract of insurance prohibits disclosure of the nature of the liability and the
amount of the premium.
The Company has not otherwise, during or since the financial year, except to the extent permitted by law,
indemnified or agreed to indemnify an officer or auditor of the Company or of any related body corporate against
a liability incurred as such an officer or auditor.
Proceedings on behalf of the company
No person has applied for leave of Court to bring proceedings on behalf of the Company or intervene in any
proceedings to which the Company is a party for the purpose of taking responsibility on behalf of the Company
for all or any part of those proceedings.
17
For personal use only
For personal use only AUDITOR’S INDEPENDENCE DECLARATION
UNDER S 307C OF THE CORPORATIONS ACT 2001
TO THE DIRECTORS OF REEDY LAGOON CORPORATION LIMITED AND CONTROLLED ENTITIES
I declare that, to the best of my knowledge and belief, during the year ended 30 June 2019, there have been:
i.
ii.
no contraventions of the auditor independence requirements as set out in the Corporations Act 2001
in relation to the audit; and
no contraventions of any applicable code of professional conduct in relation to the audit.
MOORE STEPHENS AUDIT (VIC)
ABN 16 847 721 257
RYAN LEEMON
Partner
Audit & Assurance Services
Melbourne, Victoria
26 September 2019
19
For personal use only
Reedy Lagoon Corporation Limited
Statement of Profit or Loss and Other Comprehensive Income
For the Year Ended 30 June 2019
Revenue
Expenses
Corporate and administration expenses
Employee and director benefits expense
Exploration expenditure
Share based payments expense
Other expenses
Loss before income tax expense
Note
Consolidated
2019
$
2018
$
6
7
2,350
15,567
(56,532)
(242,163)
(425,166)
(4,408)
(149,484)
(134,199)
(240,917)
(4,088,781)
(24,826)
(142,610)
(875,403) (4,615,766)
Income tax expense
8
-
-
Loss after income tax expense for the year attributable to the owners
of Reedy Lagoon Corporation Limited
(875,403)
(4,615,766)
Items that may be reclassified subsequently to profit or loss
Foreign Currency Translation
Other comprehensive income for the year, net of tax
Total comprehensive loss for the year attributable to the owners of
Reedy Lagoon Corporation Limited
Basic earnings per share
Diluted earnings per share
16,145
16,145
970
970
(859,258)
(4,614,796)
Cents
Cents
29
29
(0.218)
(0.218)
(1.574)
(1.574)
The above statement of profit or loss and other comprehensive income should be read in conjunction with
the accompanying notes
20
For personal use only
Reedy Lagoon Corporation Limited
Statement of Financial Position
As at 30 June 2019
Assets
Current assets
Cash and cash equivalents
Trade and other receivables
Other
Total current assets
Non-current assets
Deposits and Bonds
Total non-current assets
Total assets
Liabilities
Current liabilities
Trade and other payables
Employee benefits
Provision for site restoration
Total current liabilities
Non-current liabilities
Employee benefits
Total non-current liabilities
Total liabilities
Net Assets (liabilities)
Equity
Issued capital
Option Reserves
Exchange Reserves
Accumulated losses
Total Equity (deficiency in equity)
Note
Consolidated
2019
$
2018
$
9
10
11a
11b
12
13
14
366,627
3,832
10,795
381,254
1,248,204
35,203
10,256
1,293,663
231,891
231,891
613,145
216,891
216,891
1,510,554
17,477
122,783
10,000
150,260
33,805
85,910
54,120
173,835
-
-
28,873
28,873
150,260
462,885
202,708
1,307,846
15
16
20,928,910
785,083
16,145
(21,267,253)
462,885
20,919,160
780,536
-
(20,391,850)
1,307,846
The above statement of financial position should be read in conjunction with the accompanying notes
21
For personal use only
Reedy Lagoon Corporation Limited
Statement of Changes in Equity
For the Year Ended 30 June 2019
Consolidated
Issued
capital
$
Accumulated
Losses
$
Exchange
Reserves
$
Option
Reserves
$
Total deficiency
in equity
$
Balance at 1 July 2018
20,919,160
(20,391,850)
-
780,536
1,307,846
Loss after income tax expense for
the year
Other comprehensive income for
the year, net of tax
Total comprehensive loss for the
year
Transactions with owners in their
capacity as owners:
Contributions of equity, net of
transaction costs (note 15)
Share-based payments (note 19)
Lapse of options
Balance at 30 June 2019
Consolidated
-
-
-
9,750
(875,403)
16,145
(875,403)
16,145
(875,403)
16,145
-
(859,258)
4,547
9,750
4,547
20,928,910
(21,267,253)
16,145
785,083
462,885
Issued
capital
$
Accumulated
losses
$
Option
Reserves
$
Total
deficiency in
equity
$
Balance at 1 July 2017
15,666,091
(15,777,052)
5,875
(105,086)
Loss after income tax expense for the year
Rounding adjustment
Other comprehensive income for the year, net of
tax
Total comprehensive loss for the year
-
-
-
-
(4,615,766)
(2)
(970)
(4,614,798)
-
-
-
-
(4,615,766)
(2)
(970)
(4,614,798)
Transactions with owners in their capacity as
owners:
Contributions of equity, net of transaction costs
(note 15)
Share-based payments (note 19)
Exercise of options (note 15)
Lapse of options
Balance at 30 June 2018
5,248,164
-
4,905
-
20,919,160
-
-
-
-
(20,391,850)
755,710
24,826
(4,905)
(970)
780,536
6,003,874
24,826
-
(970)
1,307,846
The above statement of changes in equity should be read in conjunction with the accompanying notes
22
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Reedy Lagoon Corporation Limited
Statement of Cash Flows
For the Year Ended 30 June 2019
Cash flows from operating activities
Receipts from customers (inclusive of GST)
Payments to suppliers and employees (inclusive of GST)
Interest received
Payments for exploration activities
Net cash used in operating activities
Cash flows from investing activities
Payments for deposits and bonds
Net cash from investing activities
Cash flows from financing activities
Proceeds from issue of shares
Capital raising costs
Repayment of borrowings
Net cash from financing activities
Note
Consolidated
2019
$
2018
$
28
15
4,461
(429,999)
2,350
14,830
(716,243)
4,722
(471,850) (2,024,269)
(894,938) (2,720,960)
-
-
(216,891)
(216,891)
9,750
-
-
9,750
4,356,995
(351,709)
(3,500)
4,001,786
Net increase (decrease) in cash and cash equivalents
Impact of exchange rates on foreign cash balances
Cash and cash equivalents at the beginning of the financial year
Cash and cash equivalents at the end of the financial year
3,611
1,248,204
(885,188) 1,063,935
970
183,299
366,627 1,248,204
9
The above statement of cash flows should be read in conjunction with the accompanying notes
23
For personal use only
Reedy Lagoon Corporation Limited
Notes to the Financial Statements
30 June 2019
Note 1. General information
The financial statements cover Reedy Lagoon Corporation Limited as a consolidated entity consisting of Reedy
Lagoon Corporation Limited and the entities it controlled at the end of, or during, the year. The financial
statements are presented in Australian dollars, which is Reedy Lagoon Corporation Limited's functional and
presentation currency.
Reedy Lagoon Corporation Limited is a listed public company limited by shares, incorporated and domiciled in
Australia. Its registered office and principal place of business is:
Level 18
530 Collins Street
Melbourne VIC 3121
A description of the nature of the consolidated entity's operations and its principal activities are included in the
directors' report, which is not part of the financial statements.
The financial statements were authorised for issue, in accordance with a resolution of directors, on 26
September 2019. The directors have the power to amend and reissue the financial statements.
Note 2. Significant accounting policies
The principal accounting policies adopted in the preparation of the financial statements are set out below.
These policies have been consistently applied to all the years presented, unless otherwise stated.
New or amended Accounting Standards and Interpretations adopted
The consolidated entity has adopted all of the new or amended Accounting Standards and Interpretations
issued by the Australian Accounting Standards Board ('AASB') that are mandatory for the current reporting
period which includes AASB 9 Financial Instruments and AASB 15 Revenue from Contracts with Customers.
This adoption has not resulted in any change to prior year figures, however has resulted in a change in
accounting policies as noted below.
Any new or amended Accounting Standards or Interpretations that are not yet mandatory have not been early
adopted.
Going concern
For the year ended 30 June 2019 the Group made a loss of $875,403 (2018: loss of $4,615,766), has net
assets of $462,885 (2018: Net assets $1,307,846), and had operating cash outflows $894,938 (2018:
$2,720,960). All project assets are valued in the accounts at $0 (refer to Exploration, Evaluation and
Development Expenditure below).
Notwithstanding this, the financial report has been prepared on a going concern basis. At the date of this report
the Group had approximately $163k in bank deposits. An additional amount of $232k was held in bonds
retained by the Bureau Land Management (“BLM”) which the Group expects to be returned within the coming
12 month period (refer note 11b). At the date of this report the Group’s Alkali Lake North and Clayton Valley
lithium brine project tenements, comprising 240 Placer Claims in Nevada, were current to 31 August 2020 and
the only known committed liability (other than trade payable and employee provisions) was an estimated A$10k
to complete rehabilitation of one drill site (refer note 11b). Annual overheads have been budgeted at $380k
excluding contingencies. At the date of this report directors believe the Group has sufficient funds to meet all
commitments as and when they fall due for at least 12 months other than discretionary expenditure (which can
be deferred or discontinued). Exploration and associated additional overheads will be undertaken only if
funded by capital raising in the form of new securities and/or by joint venture partners.
24
For personal use only
Reedy Lagoon Corporation Limited
Notes to the Financial Statements
30 June 2019
Note 2. Significant accounting policies (continued)
Subsequent to year end the Group received a letter from directors agreeing their fees and wages would only
be paid in cash on the date they are due if the Group is able to make the payments in a manner not detrimental
to other third party creditors and remain solvent. It has also been agreed that any payments not paid when due
would only become payable when the Group is able to make the payments and remain solvent.
In the event the above matters do not eventuate as expected or the Group is not able to raise additional funding,
it may be required to discontinue exploration and may not be able to continue its operations as a going concern.
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 ('AASB') and the
Corporations Act 2001, as appropriate for for-profit oriented entities. These financial statements also comply
with International Financial Reporting Standards as issued by the International Accounting Standards Board
('IASB').
Historical cost convention
The financial statements have been prepared under the historical cost convention, except for, where applicable,
the revaluation of available-for-sale financial assets, financial assets and liabilities at fair value through profit
or loss, investment properties, certain classes of property, plant and equipment and derivative financial
instruments.
Critical accounting estimates
The preparation of the financial statements requires the use of certain critical accounting estimates. It also
requires management to exercise its judgement in the process of applying the consolidated entity's accounting
policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and
estimates are significant to the financial statements, are disclosed in note 3.
Parent entity information
In accordance with the Corporations Act 2001, these financial statements present the results of the
consolidated entity only. Supplementary information about the parent entity is disclosed in note 24.
Principles of consolidation
The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of Reedy Lagoon
Corporation Limited ('company' or 'parent entity') as at 30 June 2019 and the results of all subsidiaries for the
year then ended. Reedy Lagoon Corporation Limited and its subsidiaries together are referred to in these
financial statements as the 'consolidated entity'.
Subsidiaries are all those entities over which the consolidated entity has control. The consolidated entity
controls an entity when the consolidated entity is exposed to, or has rights to, variable returns from its
involvement with the entity and has the ability to affect those returns through its power to direct the activities of
the entity. Subsidiaries are fully consolidated from the date on which control is transferred to the consolidated
entity. They are de-consolidated from the date that control ceases.
Intercompany transactions, balances and unrealised gains on transactions between entities in the consolidated
entity 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 consolidated entity.
The acquisition of subsidiaries is accounted for using the acquisition method of accounting. A change in
ownership interest, without the loss of control, is accounted for as an equity transaction, where the difference
between the consideration transferred and the book value of the share of the non-controlling interest acquired
is recognised directly in equity attributable to the parent.
25
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Reedy Lagoon Corporation Limited
Notes to the Financial Statements
30 June 2019
Note 2. Significant accounting policies (continued)
Where the consolidated entity loses control over a subsidiary, it derecognises the assets including goodwill,
liabilities and non-controlling interest in the subsidiary together with any cumulative translation differences
recognised in equity. The consolidated entity recognises the fair value of the consideration received and the
fair value of any investment retained together with any gain or loss in profit or loss.
Operating segments
Operating segments are presented using the 'management approach', where the information presented is on
the same basis as the internal reports provided to the Chief Operating Decision Makers ('CODM'). The CODM
is responsible for the allocation of resources to operating segments and assessing their performance.
Exploration, Evaluation and Development Expenditure
Expenditure incurred on the acquisition of exploration properties and exploration, evaluation and development
costs (refer note 3) are written off as incurred where the activities in the areas of interest have not yet reached
a stage that permits reasonable assessment of the existence of economically recoverable reserves. Once it is
determined that the costs can be recouped through sale or successful development and exploitation of the
area of interest then the on-going costs are accumulated and carried forward for each area of interest.
Amortisation is not charged on costs carried forward in respect of areas of interest in the development phase
until production commences. When production commences, carried forward exploration, evaluation and
development costs are amortised over the life of the area according to the rate of depletion of the economically
recoverable reserves.
Accumulated costs in relation to an abandoned area are written off in full against profit in the year in which the
decision to abandon the area is made. Each area of interest is also reviewed annually and accumulated costs
written off to the extent that they will not be recoverable in the future.
Provision for restoration costs is made at the reporting date based on the net present value of the estimated
costs of restoration at that date. The Group assesses its provision for restoration costs at each reporting date.
Revenue recognition
Revenue is recognised when it is probable that the economic benefit will flow to the consolidated entity and the
revenue can be reliably measured. Revenue is measured at the fair value of the consideration received or
receivable.
Rendering of services
Revenue from the rendering of a service is recognised upon the delivery of the service to the customers or in
accordance with contractual rights.
Stage of completion is measured by reference to labour hours incurred to date as a percentage of total
estimated labour hours for each contract. Where the contract outcome cannot be reliably estimated, revenue
is only recognised to the extent of the recoverable costs incurred to date.
Interest
Interest revenue is recognised as interest accrues using the effective interest method. This is a method of
calculating the amortised cost of a financial asset and allocating the interest income over the relevant period
using the effective interest rate, which is the rate that exactly discounts estimated future cash receipts through
the expected life of the financial asset to the net carrying amount of the financial asset.
Other revenue
Other revenue is recognised when it is received or when the right to receive payment is established, less
expected credit loss.
26
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Reedy Lagoon Corporation Limited
Notes to the Financial Statements
30 June 2019
Note 2. Significant accounting policies (continued)
Income tax
The income tax expense or benefit for the period is the tax payable on that period's taxable income based on
the applicable income tax rate for each jurisdiction, adjusted by the changes in deferred tax assets and liabilities
attributable to temporary differences, unused tax losses and the adjustment recognised for prior periods, where
applicable.
Deferred tax assets and liabilities are recognised for temporary differences at the tax rates expected to be
applied when the assets are recovered or liabilities are settled, based on those tax rates that are enacted or
substantively enacted, except for:
●
●
When the deferred income tax asset or liability arises from the initial recognition of goodwill or an asset
or liability in a transaction that is not a business combination and that, at the time of the transaction,
affects neither the accounting nor taxable profits; or
When the taxable temporary difference is associated with interests in subsidiaries, associates or joint
ventures, and the timing of the reversal can be controlled and it is probable that the temporary difference
will not reverse in the foreseeable future.
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.
The carrying amount of recognised and unrecognised deferred tax assets are reviewed at each reporting date.
Deferred tax assets recognised are reduced to the extent that it is no longer probable that future taxable profits
will be available for the carrying amount to be recovered. Previously unrecognised deferred tax assets are
recognised to the extent that it is probable that there are future taxable profits available to recover the asset.
Deferred tax assets and liabilities are offset only where there is a legally enforceable right to offset current tax
assets against current tax liabilities and deferred tax assets against deferred tax liabilities; and they relate to
the same taxable authority on either the same taxable entity or different taxable entities which intend to settle
simultaneously.
Current and non-current classification
Assets and liabilities are presented in the statement of financial position based on current and non-current
classification.
An asset is classified as current when: it is either expected to be realised or intended to be sold or consumed
in the consolidated entity's normal operating cycle; it is held primarily for the purpose of trading; it is expected
to be realised within 12 months after the reporting period; or the asset is cash or cash equivalent unless
restricted from being exchanged or used to settle a liability for at least 12 months after the reporting period. All
other assets are classified as non-current.
A liability is classified as current when: it is either expected to be settled in the consolidated entity's normal
operating cycle; it is held primarily for the purpose of trading; it is due to be settled within 12 months after the
reporting period; or there is no unconditional right to defer the settlement of the liability for at least 12 months
after the reporting period. All other liabilities are classified as non-current.
Deferred tax assets and liabilities are always classified as non-current.
Cash and cash equivalents
Cash and cash equivalents includes cash on hand, deposits held at call with financial institutions, other short-
term, highly liquid investments with original maturities of three months or less that are readily convertible to
known amounts of cash and which are subject to an insignificant risk of changes in value.
27
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Reedy Lagoon Corporation Limited
Notes to the Financial Statements
30 June 2019
Note 2. Significant accounting policies (continued)
Trade and other receivables
The consolidated entity applies the AASB 9 simplified approach to measuring expected credit losses which
uses a lifetime expected loss allowance for all trade receivable. To measure the expected credit losses, trade
receivables have been grouped based on shared credit risk characteristics and the days past due.
The consolidated entity has concluded that the expected loss rates for trade receivables are a reasonable
approximation of the loss rates for the contract assets. The expected loss rates are based on the payment
profiles and the corresponding historical credit losses experienced within this period. The historical loss rates
are adjusted to reflect current and forward looking information.
On that basis, the loss allowance as at 30 June 2019 (on adoption of AASB 9) was determined to be 0% for
trade receivables.
Property, plant and equipment
Plant and equipment is stated at historical cost less accumulated depreciation and impairment. Historical cost
includes expenditure that is directly attributable to the acquisition of the items.
Depreciation is calculated on a straight-line basis to write off the net cost of each item of property, plant and
equipment (excluding land) over their expected useful lives as follows:
Plant and equipment
5-10 years
The residual values, useful lives and depreciation methods are reviewed, and adjusted if appropriate, at each
reporting date.
An item of property, plant and equipment is derecognised upon disposal or when there is no future economic
benefit to the consolidated entity. Gains and losses between the carrying amount and the disposal proceeds
are taken to profit or loss. Any revaluation surplus reserve relating to the item disposed of is transferred directly
to retained profits.
Trade and other payables
These amounts represent liabilities for goods and services provided to the consolidated entity prior to the end
of the financial year and which are unpaid. Due to their short-term nature they are measured at amortised cost
and are not discounted. The amounts are unsecured and are usually paid within 30 days of recognition.
Employee benefits
Short-term employee benefits
Liabilities for wages and salaries, including non-monetary benefits, annual leave and long service leave
expected to be settled wholly within 12 months of the reporting date are measured at the amounts expected to
be paid when the liabilities are settled.
Other long-term employee benefits
The liability for annual leave and long service leave not expected to be settled within 12 months of the reporting
date are measured at the present value of expected future payments to be made in respect of services provided
by employees up to the reporting date using the projected unit credit method. Consideration is given to
expected future wage and salary levels, experience of employee departures and periods of service. Expected
future payments are discounted using market yields at the reporting date on corporate bonds with terms to
maturity and currency that match, as closely as possible, the estimated future cash outflows.
Share-based payments
Equity-settled and cash-settled share-based compensation benefits are provided to employees.
Equity-settled transactions are awards of shares, or options over shares that are provided to employees in
exchange for the rendering of services. Cash-settled transactions are awards of cash for the exchange of
services, where the amount of cash is determined by reference to the share price.
28
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Reedy Lagoon Corporation Limited
Notes to the Financial Statements
30 June 2019
Note 2. Significant accounting policies (continued)
The cost of equity-settled transactions is measured at fair value on grant date. Fair value is independently
determined using either the Binomial or Black-Scholes option pricing model that takes into account the exercise
price, the term of the option, the impact of dilution, the share price at grant date and expected price volatility of
the underlying share, the expected dividend yield and the risk free interest rate for the term of the option,
together with non-vesting conditions that do not determine whether the consolidated entity receives the
services that entitle the employees to receive payment. No account is taken of any other vesting conditions.
The cost of equity-settled transactions is recognised as an expense with a corresponding increase in equity
over the vesting period. The cumulative charge to profit or loss is calculated based on the grant date fair value
of the award, the best estimate of the number of awards that are likely to vest and the expired portion of the
vesting period. The amount recognised in profit or loss for the period is the cumulative amount calculated at
each reporting date less amounts already recognised in previous periods.
The cost of cash-settled transactions is initially, and at each reporting date until vested, determined by applying
either the Binomial or Black-Scholes option pricing model, taking into consideration the terms and conditions
on which the award was granted. The cumulative charge to profit or loss until settlement of the liability is
calculated as follows:
●
during the vesting period, the liability at each reporting date is the fair value of the award at that date
multiplied by the expired portion of the vesting period;
●
from the end of the vesting period until settlement of the award, the liability is the full fair value of the
liability at the reporting date.
All changes in the liability are recognised in profit or loss. The ultimate cost of cash-settled transactions is the
cash paid to settle the liability.
Market conditions are taken into consideration in determining fair value. Therefore, any awards subject to
market conditions are considered to vest irrespective of whether or not that market condition has been met,
provided all other conditions are satisfied.
If equity-settled awards are modified, as a minimum an expense is recognised as if the modification has not
been made. An additional expense is recognised, over the remaining vesting period, for any modification that
increases the total fair value of the share-based compensation benefit as at the date of modification.
If the non-vesting condition is within the control of the consolidated entity or employee, the failure to satisfy the
condition is treated as a cancellation. If the condition is not within the control of the consolidated entity or
employee and is not satisfied during the vesting period, any remaining expense for the award is recognised
over the remaining vesting period, unless the award is forfeited.
If equity-settled awards are cancelled, it is treated as if it has vested on the date of cancellation, and any
remaining expense is recognised immediately. If a new replacement award is substituted for the cancelled
award, the cancelled and new award is treated as if they were a modification.
Issued capital
Ordinary shares are classified as equity.
Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction,
net of tax, from the proceeds.
Earnings per share
Basic earnings per share
Basic earnings per share is calculated by dividing the profit attributable to the owners of Reedy Lagoon
Corporation Limited, 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 financial year.
29
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Reedy Lagoon Corporation Limited
Notes to the Financial Statements
30 June 2019
Note 2. Significant accounting policies (continued)
Diluted earnings per share
Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take
into account the after income tax effect of interest and other financing costs associated with dilutive potential
ordinary shares and the weighted average number of shares assumed to have been issued for no consideration
in relation to dilutive potential ordinary shares.
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 tax authority. In this case it is recognised as part of the cost of the acquisition of the
asset or as 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 tax authority is included in other receivables or other payables in
the statement of financial position.
Cash flows are presented on a gross basis. The GST components of cash flows arising from investing or
financing activities which are recoverable from, or payable to the tax authority, are presented as operating cash
flows.
Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to, the
tax authority.
New Accounting Standards and Interpretations not yet mandatory or early adopted
Australian Accounting Standards and Interpretations that have recently been issued or amended but are not
yet mandatory, have not been early adopted by the consolidated entity for the annual reporting period ended
30 June 2019. The consolidated entity's assessment of the impact of these new or amended Accounting
Standards and Interpretations, most relevant to the consolidated entity, are set out below.
AASB 16 Leases
This standard is applicable to annual reporting periods beginning on or after 1 January 2019. The standard
replaces AASB 117 'Leases' and for lessees will eliminate the classifications of operating leases and finance
leases. Subject to exceptions, a 'right-of-use' asset will be capitalised in the statement of financial position,
measured at the present value of the unavoidable future lease payments to be made over the lease term. The
exceptions relate to short-term leases of 12 months or less and leases of low-value assets (such as personal
computers and small office furniture) where an accounting policy choice exists whereby either a 'right-of-use'
asset is recognised or lease payments are expensed to profit or loss as incurred. A liability corresponding to
the capitalised lease will also be recognised, adjusted for lease prepayments, lease incentives received, initial
direct costs incurred and an estimate of any future restoration, removal or dismantling costs. Straight-line
operating lease expense recognition will be replaced with a depreciation charge for the leased asset (included
in operating costs) and an interest expense on the recognised lease liability (included in finance costs). In the
earlier periods of the lease, the expenses associated with the lease under AASB 16 will be higher when
compared to lease expenses under AASB 117. However, EBITDA (Earnings Before Interest, Tax, Depreciation
and Amortisation) results will be improved as the operating expense is replaced by interest expense and
depreciation in profit or loss under AASB 16. For classification within the statement of cash flows, the lease
payments will be separated into both a principal (financing activities) and interest (either operating or financing
activities) component. For lessor accounting, the standard does not substantially change how a lessor accounts
for leases. The consolidated entity will adopt this standard from 1 July 2019. The impact of its adoption is
assessed as immaterial.
30
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Notes to the financial statements
30 June 2019
Note 3. Critical accounting judgements, estimates and assumptions
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. The resulting accounting judgements and estimates will seldom equal the related actual results.
The judgements, estimates and assumptions that have a significant risk of causing a material adjustment to
the carrying amounts of assets and liabilities (refer to the respective notes) within the next financial year are
discussed below.
Share-based payment transactions
Equity-settled share-based payments are measured at fair value of the equity instrument at the grant date. Fair
value is measured by the use of either a Binomial or Black-Scholes model (as described at note 29) taking into
account the terms and conditions upon which the instruments were granted. The expected life used in the
model has been adjusted, based on management’s best estimate, for the effects of non-transferability, exercise
restrictions, and behavioural considerations.
Estimation of useful lives of assets
The consolidated entity determines the estimated useful lives and related depreciation and amortisation
charges for its property, plant and equipment and finite life intangible assets. The useful lives could change
significantly as a result of technical innovations or some other event. The depreciation and amortisation charge
will increase where the useful lives are less than previously estimated lives, or technically obsolete or non-
strategic assets that have been abandoned or sold will be written off or written down.
Recovery of deferred tax assets
Deferred tax assets are recognised for deductible temporary differences only if the consolidated entity
considers it is probable that future taxable amounts will be available to utilise those temporary differences and
losses. Management has determined not to recognise the deferred tax asset, given that the group has
experienced losses, on a historical basis.
Employee benefits provision
As discussed in note 2, the liability for employee benefits expected to be settled more than 12 months from the
reporting date are recognised and measured at the present value of the estimated future cash flows to be made
in respect of all employees at the reporting date. In determining the present value of the liability, estimates of
attrition rates and pay increases through promotion and inflation have been taken into account.
Exploration expenditures
The consolidated entity expenses expenditures relating to exploration where the activities in the areas of
interest have not yet reached a stage that permits reasonable assessment of the existence of economically
recoverable reserves. At the date of this report insufficient data has been recovered to permit an assessment
of the existence of economically recoverable reserves at any of the Company’s projects. The Company has
accordingly expensed all its expenditure relating to exploration during the report period.
Provision for restoration
Significant estimates and assumptions are made in determining this provision as there are a number of
factors that will affect the ultimate liability. These factors include estimates of the extent and costs of
rehabilitation activities, technological changes, regulatory changes, cost increases/decreases and changes in
discount rates. These uncertainties may result in future actual expenditure differing from the amounts
currently provided. The provision at balance date represents management’s best estimate of the present
value of the future restoration costs required.
31
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Reedy Lagoon Corporation Limited
Notes to the financial statements
30 June 2019
Note 4. Company’s operations in North America
Nevada Lithium Pty Ltd owned 4 lithium brine projects in Nevada, USA through its wholly-owned subsidiary,
Sierra Lithium LLC. All the Company’s operations in North America are run through Sierra Lithium LLC.
Please refer note 27 – Subsequent events for further detail on post balance date matters as they relate to
North American Brine Projects.
Note 5. Operating segments
Identification of reportable operating segments
The company is organised into one operating segment: mineral exploration in Australia and overseas. This
operating segment is based on the internal reports that are reviewed and used by the Board of Directors (who
are identified as the Chief Operating Decision Makers ('CODM')) in assessing performance and in determining
the allocation of resources.
Note 6. Revenue
Interest
Other
Revenue
Note 7. Expenses
Loss before income tax includes the following specific expenses:
Exploration
Tenement applications fees and rents
Lithium Brine Project Placer Claim costs
Wage expenses
Other exploration expenditure
Total exploration
Consolidated
2019
$
2018
$
2,350
-
2,350
4,722
10,845
15,567
Consolidated
2019
$
2018
$
-
50,018
- 1,973,118
30,902
-
394,264 2,065,645
425,166 4,088,781
32
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Reedy Lagoon Corporation Limited
Notes to the financial statements
30 June 2019
Note 8. Income tax expense
Consolidated
2019
$
2018
$
Numerical reconciliation of income tax expense and tax at the statutory rate
Loss before income tax expense
Tax at the statutory tax rate of 30%
(875,403) (4,615,766)
(262,621) (1,384,730)
Tax effect amounts which are not deductible/(taxable) in calculating taxable
income:
Capital allowances share issue costs
Non-deductible equity settled benefits expense
Non-deductible-Impairment of Placer Claims
Other non-deductible (deductible) expenses
Non-deductible overseas exploration expenditure
Deferred tax asset (on account of losses) not brought to account
Income tax expense
(21,698)
1,364
-
1,560
109,092
(172,303)
172,303
-
(22,359)
7,488
608,065
1,383
614,778
(175,415)
175,415
-
The above potential tax benefit, which excludes tax losses, for deductible temporary differences has not been
recognised in the statement of financial position as the recovery of this benefit is uncertain.
The potential future income tax benefit will only be obtained if:
a) The Company derives future assessable income of a nature and amount sufficient to enable the benefit to
be realised;
b) The Company continues to comply with the conditions for deductibility imposed by the law; and
c) No changes in tax legislation adversely affect the Company in realising the benefit.
Note 9. Current assets - cash and cash equivalents
Consolidated
2019
$
2018
$
366,627 1,248,204
Consolidated
2019
$
2018
$
-
3,832
3,832
4,461
30,741
35,203
Cash at bank
Note 10. Current assets - trade and other receivables
Trade receivables
GST receivable
33
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Reedy Lagoon Corporation Limited
Notes to the financial statements
30 June 2019
Note 11a. Current assets - other
Prepayments
Note 11b. Non-Current assets – deposits and bonds
Deposits and Bonds
Consolidated
2019
$
2018
$
10,795
10,256
Consolidated
2019
$
2018
$
231,891
216,891
The $231,891 are held in security bonds which were lodged with the Bureau of Land Management (“BLM”) as
part of the approvals process for drilling at Columbus Salt Marsh, Big Smoky South and Alkali Lake North.
The bonds are refundable to the Company following satisfactory rehabilitation of ground disturbances caused
by the Company including by construction of drill sites and access tracks. No ground was disturbed at Alkali
Lake North because the planned drilling has been postponed and the BLM has cleared the rehabilitation
completed at Big Smoky South. The Company has received notice from the BLM that the bonds in respect of
Alkali Lake North and Big Smoky South (total $154,753) are now fully refundable. The BLM has also advised
the bond held for Columbus Salt Marsh is partly refundable with the balance to be held pending final
clearance after some additional minor earthworks are completed and successful re-vegetation. The Company
estimates the cost for the remaining work at $10,000.
Note 12. Current liabilities - trade and other payables
Consolidated
2019
$
2018
$
17,477
17,477
33,805
33,805
Consolidated
2019
$
2018
$
91,355
31,428
122,783
85,910
-
85,910
Other payables and accruals
Refer to note 18 for further information on financial instruments.
Note 13. Current liabilities - employee benefits
Annual leave
Long service leave
34
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Reedy Lagoon Corporation Limited
Notes to the financial statements
30 June 2019
Note 14. Non-current liabilities - employee benefits
Long service leave
Note 15. Equity - issued capital
Consolidated
2019
$
2018
$
-
28,873
2019
Shares
Consolidated
2018
Shares
2019
$
2018
$
Ordinary shares - fully paid
402,271,710
401,408,878 20,928,910 20,919,160
Movements in ordinary share capital
Details
Date
Shares
Issue price
$
Balance
Shares issued to directors
30 June 2018
29 September 2018
401,408,878
862,832
20,919,160
$0.0113 9,750
Balance
30 June 2019
402,271,710
20,928,910
Ordinary shares
Ordinary shares entitle the holder to participate in dividends and the proceeds on the winding up of the company
in proportion to the number of and amounts paid on the shares held. The fully paid ordinary shares have no
par value and the company does not have a limited amount of authorised capital.
On a show of hands every member present at a meeting in person or by proxy shall have one vote and upon
a poll each share shall have one vote.
Share buy-back
There is no current on-market share buy-back.
Capital risk management
RLC’s objectives when managing capital are to safeguard the Company’s ability to continue as a going concern
and exploit the mineral assets under its control in order to provide future returns for shareholders and benefits
for other stakeholders.
Capital is regarded as total equity, as recognised in the statement of financial position, plus net debt. Net debt
is calculated as total borrowings less cash and cash equivalents.
The Company continuously reviews the capital structure to ensure:
•
•
sufficient funds are available to implement its exploration expenditure programs in accordance with
forecasted needs; and
sufficient funds for the other operational needs of the Company are maintained.
The capital risk management policy remains unchanged from the 30 June 2018 annual report.
35
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Reedy Lagoon Corporation Limited
Notes to the financial statements
30 June 2019
Note 16. Equity - reserves
Share-based payments reserve
Consolidated
2019
$
2018
$
785,083
780,536
Share-based payments reserve
The reserve is used to recognise the value of equity benefits provided to employees and directors as part of
their remuneration, and other parties as part of their compensation for services.
Movements in reserves
Movements in each class of reserve during the current and previous financial year are set out below:
Consolidated
Balance at 30 June 2017
Issue of 37,710,515 options at $0.02 each
Share based payments
Exercise of options
Expiry of options
Balance at 30 June 2018
Share based payments (refer to note 30)
Balance at 30 June 2019
Note 17. Equity - dividends
Total
$
5,875
755,710
24,826
(4,905)
(970)
780,538
4,547
785,083
There were no dividends paid, recommended or declared during the current or previous financial year.
Note 18. Financial instruments
Financial risk management objectives
The consolidated entity's activities expose it to a variety of financial risks: market risk (including foreign currency
risk, price risk and interest rate risk), credit risk and liquidity risk. The consolidated entity'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 consolidated entity. The consolidated entity uses different
methods to measure different types of risk to which it is exposed. These methods include sensitivity analysis
in the case of interest rate, foreign exchange and other price risks, ageing analysis for credit risk and beta
analysis in respect of investment portfolios to determine market risk.
Risk management is carried out by senior finance executives ('finance') under policies approved by the Board
of Directors ('the Board'). These policies include identification and analysis of the risk exposure of the
consolidated entity and appropriate procedures, controls and risk limits. Finance identifies, evaluates and
hedges financial risks within the consolidated entity's operating units. Finance reports to the Board on a monthly
basis.
Market risk
Foreign currency risk
The consolidated entity undertakes certain transactions denominated in foreign currency and is exposed to
foreign currency risk through foreign exchange rate fluctuations.
36
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Reedy Lagoon Corporation Limited
Notes to the Financial Statements
30 June 2019
Note 18. Financial instruments (continued)
Foreign exchange risk arises from future commercial transactions and recognised financial assets and financial
liabilities denominated in a currency that is not the entity's functional currency. The risk is measured using
sensitivity analysis and cash flow forecasting.
Price risk
The consolidated entity is not exposed to any significant price risk.
Interest rate risk
The consolidated entity is not exposed to significant interest rate risk.
Credit risk
Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial
loss to the consolidated entity. The consolidated entity has a strict code of credit, including obtaining agency
credit information, confirming references and setting appropriate credit limits. The consolidated entity obtains
guarantees where appropriate to mitigate credit risk. The maximum exposure to credit risk at the reporting date
to recognised financial assets is the carrying amount, net of any provisions for impairment of those assets, as
disclosed in the statement of financial position and notes to the financial statements. The consolidated entity
does not hold any collateral.
The consolidated entity trade and other receivables consist of GST receivable and interest receivable. For this
reason the consolidated entity is not exposed to significant credit risk.
Liquidity risk
Vigilant liquidity risk management requires the consolidated entity to maintain sufficient liquid assets (mainly
cash and cash equivalents) to pay debts as and when they become due and payable.
The consolidated entity manages liquidity risk by maintaining adequate cash reserves and available borrowing
facilities by continuously monitoring actual and forecast cash flows and matching the maturity profiles of
financial assets and liabilities.
Remaining contractual maturities
The following tables detail the consolidated entity's remaining contractual maturity for its financial instrument
liabilities. The tables have been drawn up based on the undiscounted cash flows of financial liabilities based
on the earliest date on which the financial liabilities are required to be paid. The tables include both interest
and principal cash flows disclosed as remaining contractual maturities and therefore these totals may differ
from their carrying amount in the statement of financial position.
Weighted
average
interest
rate
%
1 year or
less
$
Between 1
and 2 years
$
Between 2
and 5 years
$
Over 5
years
$
Remaining
contractual
maturities
$
-
-
33,805
-
33,805
-
-
-
-
-
-
-
-
-
33,805
-
33,805
Consolidated - 2018
Non-derivatives
Non-interest bearing
Trade other payables
Amounts payable to
directors
Total non-derivatives
37
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Reedy Lagoon Corporation Limited
Notes to the Financial Statements
30 June 2019
Note 18. Financial instruments (continued)
Weighted
average
interest
rate
%
1 year or
less
$
Between 1
and 2 years
$
Between 2
and 5 years
$
Over 5
years
$
Remaining
contractual
maturities
$
-
17,477
-
17,477
-
-
-
-
-
-
-
-
-
17,477
-
17,477
Consolidated - 2019
Non-derivatives
Non-interest bearing
Trade payables
Amounts payable to
directors
Total non-derivatives
The cash flows in the maturity analysis above are not expected to occur significantly earlier than contractually
disclosed above.
Fair value of financial instruments
Unless otherwise stated, the carrying amounts of financial instruments reflect their fair value.
Note 19. Key management personnel disclosures
Compensation
The aggregate compensation made to directors and other members of key management personnel of the
consolidated entity is set out below:
Short-term employee benefits
Post-employment benefits
Long-term benefits
Share-based payments
As at 30 June 2019, $0 (2018: $0) of short term employee benefits remain unpaid.
Consolidated
2019
$
2018
$
252,002
12,540
2,555
4,408
271,505
232,000
12,540
2,537
24,826
271,903
38
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Reedy Lagoon Corporation Limited
Notes to the financial statements
30 June 2019
Note 20. Remuneration of auditors
During the financial year the following fees were paid or payable for services provided by Moore Stephens
Audit (Vic), the auditor of the company:
Audit services - Moore Stephens Audit (Vic)
Audit or review of the financial statements
Other services - Moore Stephens Audit (Vic)
Tax and compliance services
Consolidated
2019
$
2018
$
22,000
23,000
14,765
36,765
37,925
60,925
It is the Company’s policy to engage the external auditor to provide services additional to their audit duties
where the external auditor’s experience and expertise with the Companies are important and it is logical and
efficient for them to provide those services. The provision of non-audit services during the year by the external
auditor is compatible with, and did not compromise, the auditor independence requirements of the Corporations
Act 2001.
Note 21. Contingent liabilities
The Company is not aware of any contingent liabilities other than the costs of completing rehabilitation of the
drill site and access track constructed by the Company for drilling at its Big Smoky South project (drill hole
MBD-01). Most of the rehabilitation work has been completed and a provision of A$10,000 (2018: A$54,120)
has been made for the work outstanding which is expected to be completed in the normal course of business
and when weather conditions are appropriate.
Note 22. Exploration expenditure commitments
Lithium Brine Projects
The Company held 240 Placer Claims in connection with its Alkali Lake North and Clayton Valley Lithium Brine
projects located in Nevada, USA. Annual Land Fees are payable to the Bureau of Land Management (“BLM”)
and Esmeralda County for these claims with payment required prior to 1 September. The amount payable in
2019 in respect of the 240 Placer Claims held by the Company was $61,114. At the date of this report all Land
Fees were paid up to 31 August 2020. There is no minimum exploration expenditure requirement for Placer
Claims located in Nevada, USA.
Burracoppin Iron Ore Project
The Company held one tenement, E70/4941 located in Western Australia. Ongoing annual exploration
expenditure is required to maintain title to the entirety of E70/4941. Tenement expenditure will be determined
by the Company and is dependent upon exploration results and available cash resources. The statutory
expenditure requirement is subject to negotiation with the relevant state department, and expenditure
commitments may be reduced subject to reduction of exploration area and/or relinquishment of non-
prospective tenements. Unless the Minister determines otherwise, if the minimum annual expenditure
($20,000) is not satisfied the licence would be forfeited. At the date of this report the minimum expenditure
requirement for the current term has been met. The renewal date for E70/4941 is 11/02/2020.
No provision has been made in the accounts for exploration commitments.
39
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Reedy Lagoon Corporation Limited
Notes to the financial statements
30 June 2019
Note 23. Related party transactions
Parent entity
Reedy Lagoon Corporation Limited is the parent entity.
Subsidiaries
Interests in subsidiaries are set out in note 25.
Joint ventures
Interests in joint ventures are set out in note 26.
Key management personnel
Disclosures relating to key management personnel are set out in note 19 and the remuneration report included
in the directors' report.
Transactions with related parties
DiamondCo Limited, a company of which Mr Fethers and Mr Hamer are directors and shareholders, held the
rights to diamonds located on EL 5580 through a joint venture agreement dated 26 March 2007. Opportunities
to reduce mobilisation costs and expand small scale programmes by combining field activities were exploited
where possible. Where services for combined RLC and DiamondCo programmes were contracted RLC
normally acted as principal and invoiced DiamondCo on a cost recovery basis. RLC provided the services of
Mr Fethers and office services to DiamondCo at normal commercial rates. Total fees invoiced by RLC during
the financial year to DiamondCo amounting to $0 (2018: $14,523). The joint venture with DiamondCo was
terminated when DiamondCo withdrew in August 2018 and EL 5580 expired at the end of its term on 11
November 2018.
Receivable from and payable to related parties
The amount of $0 (2018: $2,126) was payable by DiamondCo Limited at 30 June 2019 and no trade payables
to related parties at the current and previous reporting date.
Amount payable to directors at 30 June 2019 is $0 (2018: $ 0).
Loans to/from related parties
There were no loans to or from related parties at the current and previous reporting date.
Terms and conditions
All transactions were made on normal commercial terms and conditions and at market rates.
Note 24. Parent entity information
Set out below is the supplementary information about the parent entity.
Statement of profit or loss and other comprehensive income
Loss after income tax
Total comprehensive loss
Parent
2019
$
2018
$
(522,133) (2,724,964)
(522,133) (2,723,994)
40
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Reedy Lagoon Corporation Limited
Notes to the financial statements
30 June 2019
Note 24. Parent entity information (continued)
Statement of financial position
Total current assets
Total assets
Total current liabilities
Total liabilities
Equity
Issued capital
Share-based payments reserve
Accumulated losses
Total Equity
Parent
2019
$
2018
$
2,716,592 3,230,415
2,833,413 3,347,236
152,585
152,585
148,588
148,588
785,083
20,928,910 20,919,160
780,536
(19,023,181) (18,501,048)
2,690,812
3,198,648
Guarantees entered into by the parent entity in relation to the debts of its subsidiaries
The parent entity had no guarantees in relation to the debts of its subsidiaries as at 30 June 2019 and 30 June
2018.
Contingent liabilities
There are no contingent liabilities as at balance date.
Capital commitments - Property, plant and equipment
The parent entity had no capital commitments for property, plant and equipment at as 30 June 2019 and 30
June 2018.
Significant accounting policies
The accounting policies of the parent entity are consistent with those of the consolidated entity, as disclosed
in note 2, except for the following:
●
Investments in subsidiaries are accounted for at cost, less any impairment, in the parent entity.
Note 25. Interests in subsidiaries
The consolidated financial statements incorporate the assets, liabilities and results of the following subsidiary
in accordance with the accounting policy described in note 2:
Name
Bullamine Magnetite Pty Ltd
Nevada Lithium Pty Ltd
Sierra Lithium LLC
Ownership interest
2018
%
2019
%
100.00% 100.00%
100.00% 100.00%
100.00% 100.00%
Principal place of business /
Country of incorporation
Australia
Australia
USA
41
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Reedy Lagoon Corporation Limited
Notes to the financial statements
30 June 2019
Note 26. Interests in joint ventures
EL 5580 was subject to a joint venture agreement, the Diamond Farm Out Agreement, which transferred all
RLC’s interest in diamonds in this tenement to DiamondCo Limited. DiamondCo Limited withdrew form the
agreement following the end of the report period and EL 5580 expired at the end of its term on 11 November
2018.
Note 27. Events after the reporting period
Big Smoky South and Columbus Salt Marsh projects were divested subsequent to the end of the period.
Since 30 June 2019, the company has advanced amounts totalling A$67,740 to its American bank account to
fund its operations including payment of the Annual Land Fees in respect of the Alkali Lake North and Clayton
Valley project Placer Claims (refer note 22).
All Land Fees in respect of the Company’s Placer Claims for the Alkali Lake North and the Clayton Valley
Lithium Brine projects (BLM and Esmeralda County – refer to note 22 and Tenement Schedule) for the period
ending 31 August 2020 were paid during August 2019. Assessment of the Company’s existing projects and
exploration for additional lithium brine projects in North America was continuing at the date of this report.
No other matter or circumstance has arisen since 30 June 2019 that has significantly affected, or may
significantly affect the consolidated entity's operations, the results of those operations, or the consolidated
entity's state of affairs in future financial years.
Note 28. Reconciliation of loss after income tax to net cash used in operating activities
Consolidated
2019
$
2018
$
(875,403)
(4,615,766)
-
4,547
-
1,973,118
24,826
24,500
31,372
( 539)
(12,246)
1,730
(18,794) 23,067
8,000 14,233
54,120
(208,542)
(2,720,960)
(44,120)
-
(894,938)
Loss after income tax expense for the year
Adjustments for:
Impairment of Placer Claims
Share-based payments
Shares issued in lieu of fees
Change in operating assets and liabilities:
Decrease/(increase) in trade and other receivables
Decrease/(increase) in other assets
Increase/(decrease) in trade and other payables
Increase in employee benefits
Increase/(decrease) in provision for site restoration
Increase/(Decrease) in accrued salaries and director's fees
Net cash used in operating activities
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Reedy Lagoon Corporation Limited
Notes to the financial statements
30 June 2019
Note 29. Earnings per share
Loss after income tax attributable to the owners of Reedy Lagoon
Corporation Limited
Consolidated
2019
$
2018
$
(875,403)
(4,615,766)
Number
Number
Weighted average number of ordinary shares used in calculating basic
earnings per share
400,994,028
293,313,566
Weighted average number of ordinary shares used in calculating diluted
earnings per share
400,994,028
293,313,566
Basic earnings per share
Diluted earnings per share
Cents
Cents
(0.218)
(0.218)
(1.574)
(1.574)
The rights to options held by option holders have not been included in the weighted average number of ordinary
shares for the purposes of calculating diluted EPS as they do not meet the requirements for inclusion in AASB
133 ‘Earnings per Share’. The rights to options are non-dilutive as the Company has generated a loss for the
financial year.
43
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For personal use only INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF REEDY LAGOON CORPORATION LIMITED AND CONTROLLED ENTITIES
Report on the Audit of the Financial Report
Opinion
We have audited the financial report of Reedy Lagoon Corporation Ltd and controlled entities (the Company), which
comprises the (consolidated) statement of financial position as at 30 June 2019, the (consolidated) statement of
profit or loss and other comprehensive income, the (consolidated) statement of changes in equity and the
(consolidated) statement of cash flows for the year then ended, and notes to the financial statements, including a
summary of significant accounting policies, and the directors’ declaration.
In our opinion:
a)
the accompanying financial report of the Company is in accordance with the Corporations Act 2001, including:
i.
giving a true and fair view of the Company’s financial position as at 30 June 2019 and of its financial
performance for the year then ended; and
ii.
complying with Australian Accounting Standards and the Corporations Regulations 2001.
b)
the financial report also complies with International Financial Reporting Standards as disclosed in Note 2.
Basis for Opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those
standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Report section of our
report. We are independent of the Company in accordance with the auditor independence requirements of the
Corporations Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board’s
APES 110 Code of Ethics for Professional Accountants (the Code) that are relevant to our audit of the financial
report in Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
opinion.
Material Uncertainty Related to Going Concern
Without modifying the opinion expressed above, we draw attention to Note 2 “Significant Accounting Policies
– Going Concern” which indicates the company incurred a loss for the period ended 30 June 2019 of
$875,403 and operating cash outflows of $894,938. Further, the company’s ability to continue the exploration and
development of its mining tenements, continue to assess new projects and meet operational expenditure at
current levels is dependent upon recovery of bonds and future capital raising. These conditions along with other
matters as set forth in Note 2, indicate the existence of a material uncertainty that may cast significant doubt about
the company’s ability to continue as a going concern and therefore, the company may be unable to realise its
assets and discharge its liabilities in the normal course of business.
For personal use only
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 for the current period. Except for the matters described in the Material Uncertainty Related to
Going Concern section above we have determined that there are no other key audit matters to communicate in our
report.
Other Information
The directors are responsible for the other information. The other information comprises the information included
in the Company’s annual report for the year ended 30 June 2019, but does not include the financial report and our
auditor’s report thereon.
Our opinion on the financial report does not cover the other information and accordingly we do not express any
form of assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information and, in doing
so, consider whether the other information is materially inconsistent with the financial report or our knowledge
obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this other
information, we are required to report that fact. We have nothing to report in this regard.
Responsibilities of the Directors for the Financial Report
The directors of the Company are responsible for the preparation of the financial report that gives a true and fair
view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal
control as the directors determine is necessary to enable the preparation of the financial report that gives a true
and fair view and is free from material misstatement, whether due to fraud or error.
In preparing the financial report, the directors are responsible for assessing the ability of the Company 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 has 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 this financial
report.
A further description of our responsibilities for the audit of the financial report is located on the Auditing and
Assurance Standards Board website at: http://www.auasb.gov.au/auditors_responsibilities/ar1.pdf. This
description forms part of our auditor’s report.
46
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We also provide the directors with a statement that we have complied with relevant ethical requirements
regarding independence, and to communicate with them all relationships and other matters that may reasonably
be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with the directors, we determine those matters that were of most significance in
the audit of the financial report of the current period and are therefore the key audit matters. We describe these
matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in
extremely rare circumstances, we determine that a matter should not be communicated in our report because the
adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such
communication.
Report on the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included in pages 12 to 16 of the directors’ report for the year ended 30
June 2019.
In our opinion, the Remuneration Report of Reedy Lagoon Corporation Ltd, for the year ended 30 June 2019
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.
MOORE STEPHENS AUDIT (VIC)
ABN 16 847 721 257
RYAN LEEMON
Partner
Audit & Assurance Services
Melbourne, Victoria
26 September 2019
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Reedy Lagoon Corporation Limited
Shareholder Information
The shareholder information set out below was applicable as at 12 September 2019.
Distribution of quoted equitable securities
Analysis of number of equitable security holders by size of holding:
1 to 1,000
1,001 to 5,000
5,001 to 10,000
10,001 to 100,000
100,001 and over
Holding less than a marketable parcel
Equity security holders
Twenty largest quoted equity security holders
The names of the twenty largest security holders of quoted equity securities are listed below:
Number
of holders
of ordinary
shares
47
21
74
509
334
985
729
Ordinary shares
% of total
shares
Number
held
Issued
34,011,037
32,000,000
23,639,874
17,327,460
15,038,623
14,800,588
13,622,594
7,818,633
7,425,000
7,350,000
6,766,564
6,580,000
6,420,030
5,775,000
5,525,000
4,500,000
3,432,440
3,259,200
3,259,200
3,259,2000
222,285,443
8.45
7.95
5.88
4.31
3.74
3.68
3.39
1.94
1.85
1.83
1.68
1.64
1.60
1.44
1.37
1.12
0.85
0.81
0.81
0.81
55.26
Mr Adrian C. Griffin
Needmore Investments Pty Ltd
Chromite Pty Ltd (Spinel A/C)
Citycastle Pty Ltd
Jagen Pty Ltd
Sked Pty Ltd
Mr Jonathan M. Hamer
Pyrope Holdings Pty Ltd (Chromite Staff S/Fund A/C)
Wifam Investments Pty Ltd (Wischer Family S/F A/C)
Park Road SF Pty Ltd (Park Road Super Fund A/C)
M & K Korkidas Pty Ltd (M&K Korkidas P/L S/Fund A/C)
DJ Coughlan Drilling Pty Ltd
Mr Jamie Lai
Tromso Pty Limited
Tardis Victoria Pty Ltd
Dale Estates No 1 Pty Ltd
Gazump Resources Pty Ltd
Meadowhead Investments Pty Ltd
JHY Investments Pty Ltd
Ladyman Super Pty Ltd (Ladymansuperfund A/C)
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Reedy Lagoon Corporation Limited
Shareholder Information
Option holders
Quoted Options:
There were 37,710,515 quoted options on issue with an exercise price of 8 cents each and expiry date 6/04/2021.
Twenty largest quoted option holders
The names of the twenty largest holders of quoted options over securities as at 12 September 2019 are listed below:
Mr Adrian C. Griffin
Chromite Pty Ltd (Spinel A/C)
DJ Coughlan Drilling Pty Ltd
Mr Robert Peter Van Der Laan
Citycastle Pty Ltd
Sked Pty Ltd
Mr Jonathan M. Hamer
Wifam Investments Pty Ltd (Wischer Family S/F A/C)
BNP Paribas Nominees Pty Ltd
Mrs Tamara Jane Brown
Mr Christopher Lindsay Bollam
Mr Jamie Lai
Park Road SF Pty Ltd (Park Road Super Fund A/C)
Pyrope Holdings Pty Ltd (Chromite Staff S/Fund A/C)
Dale Estates No 1 Pty Ltd
Mr Brett James Rudd
Florin Mining Investment Company Limited
M&K Korkidas Pty Ltd (M&K Korkidas P/L S/Fund A/C)
Mr Patrick Bernard David McManus & Mrs Vivienne Edwina McManus
Mr Glenn Edward Elias (Megan Louise Elias A/C)
Options over Ordinary
shares
% of total
options
Issued
10.99
9.28
7.96
6.63
5.74
4.91
4.23
2.85
2.65
2.65
2.64
2.45
2.44
2.32
1.99
1.33
1.33
1.13
0.86
0.86
75.23
Number
held
4,142,652
3,500,000
3,000,000
2,500,000
2,165,933
1,850,074
1,595,988
1,075,000
1,000,000
1,000,000
996,131
922,193
918,750
875,000
750,000
500,000
500,000
425,125
325,920
325,625
28,368,391
Unquoted Options
There was a total of 1,800,000 unquoted options on issue held by directors with terms as follows:
900,000
900,000
exercise price of 1.16 cents each
exercise price of 3.75 cents each
expiry date 31/12/2021
expiry date 31/12/2020
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Reedy Lagoon Corporation Limited
Shareholder Information
Substantial holders
Substantial holders in the company as at 12 September 2019 are set out below:
Sked Pty Ltd
City Castle Pty Ltd
Sked Pty Ltd
Sked Pty Ltd (Super Fund A/C
Traders Macquarie Pty Ltd
Traders Macquarie Pty Ltd (A/C)
Mr Adrian C. Griffin
Chromite Pty Ltd
Chromite Pty Ltd (Spinel A/C)
Geoffrey H. Fethers
Pyrope Holdings Pty Ltd (Chromite Staff S/Fund A/C)
Ranview Pty Ltd
Needmore Investments Pty Ltd
Ordinary shares
Number held
% of total
shares
issued
17,327,460
14,800,588
2,141,518
1,591,622
754,326
36,615,514
34,011,037
23,639,874
1,225,608
7,818,633
617,270
33,301,385
32,000,000
9.10
8.45
8.28
7.95
Voting rights
The voting rights attached to ordinary shares are set out below:
Ordinary shares
On a show of hands every member present at a meeting in person or by proxy shall have one vote and upon
a poll each share shall have one vote.
There are no other classes of equity securities.
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Reedy Lagoon Corporation Limited
Tenement Schedule
Tenement Schedule
Tenements held at 12 September 2019:
Located in Australia
Tenement
E70/4941
Burracoppin (WA)
Area
(km2)
Status
Minimum Annual
Expenditure
Commitment
$
Company
Interest
(direct or indirect)
58
Current
20,000
100% 1, & 2
Located in USA
Tenements (all Placer Claims located in Nevada) 3 & 4
Claim Name
Claim Numbers
Alkali Lake North Project
WH Claims
WH-1 to WH-128
Clayton Valley Project
CV Claims
CV-1 to CV-112
Corresponding
BLM NMC Number
Total Claims
Total Area
NMC 1138328
NMC 1138455
NMC 1176204
NMC 1176315
to
128
1,033 ha
to
112
906 ha
Notes to the tenement schedule:
1. E70/4941 is 100% owned by RLC through its wholly owned subsidiary, Bullamine Magnetite Pty Ltd.
2. The Statutory expenditure requirement for Australian tenements is subject to negotiation with the
relevant state department, and expenditure commitments may be varied between tenements, or reduced
subject to reduction of exploration area and/or relinquishment of non-prospective tenements.
3. The Placer Claims in the lithium brine projects in Nevada are owned 100% by RLC through its wholly
owned subsidiary, Sierra Lithium LLC.
4. Annual Land Fees comprising US$165 and US$22 per Placer Claim are payable to the BLM and
Esmeralda County respectively. Land Fees were paid up to 31 August 2020. There is no minimum
exploration expenditure requirement for Placer Claims located in Nevada, USA.
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