A.C.N. 006 639 514
ANNUAL REPORT AND
FINANCIAL STATEMENTS
FOR THE YEAR ENDED
30 JUNE 2020
Reedy Lagoon Corporation Limited
Contents
30 June 2020
Chairman's letter
Review of operations
Tenement schedule
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
Corporate directory
2
3
11
12
21
22
23
24
25
26
43
44
48
50
1
Level 18, 530 Collins Street
Melbourne, Australia
Ph: (03) 8420 6280
Postal Address: P O Box 2236
Richmond VIC 3121
Email:
info@reedylagoon.com.au
reedylagoon.com.au
28 October, 2020
Dear Shareholders
Annual Report for FY 2020
During the financial year ended 30 June 2020 Reedy Lagoon expanded its focus beyond lithium and iron to include
gold.
The Company’s Burracoppin Gold project is described in the Review of operations. Subsequent to the end of the
financial year, in August 2020 Reedy Lagoon raised approximately $674,000 before costs principally to fund
exploration for gold and iron.
In addition, Reedy Lagoon has expanded the objectives of its Burracoppin Iron Project to incorporate the goal of
establishing a smelter in Western Australia using HIsmelt technology to produce pig iron from Burracoppin magnetite.
The Company has also obtained advice that the HIsmelt technology can use biomass as the source of carbon in the
smelter instead of coal, thus opening up the prospect of being able to produce “green” iron. The Company is currently
investigating the potential for it being involved in the supply of biomass (processed into biochar) as carbon feedstock
to the smelter.
Reedy Lagoon is maintaining its lithium projects in Nevada, USA while it awaits developments in technology for the
treatment of brines with low water consumption.
The Company continues to assess other projects for acquisition.
Thank you for your continued support.
Yours sincerely,
Jonathan Hamer
Chairman
2
Reedy Lagoon Corporation Limited
Review of operations
30 June 2020
Overview
During the report period Reedy Lagoon identified
areas prospective for gold, investigated additional
process options for its iron project in Western
Australia and maintained lithium brine projects in
Nevada (USA).
The Burracoppin Gold project was commenced during
the report period. The gold price has been rising in
USD and AUD terms since the start of calendar 2019
but events since the start of calendar 2020 have seen
it rise substantially (up 24% in AUD; 30% in US dollar
to end August 2020). The effects of Covid 19 on global
economies are likely to keep interest rates low and the
gold price elevated.
to
relation
Iron project,
the Burracoppin
In
investigations into potential development options have identified that project economics would be enhanced
by processing Burracoppin’s magnetite mineralisation to produce high quality pig iron in Western Australia for
sale into the steel making market. Studies found that the alternative of selling magnetite concentrate (an iron
ore) into the iron ore market carries greater price risk for the project as the iron ore market is dominated by a
single buyer, China, with over 80% of the seaborne trade. This market dominance exposes the market to large
price swings as is evidenced by price movements over the last two years ranging from around US$60 to
US$120 per tonne of iron ore. In contrast, the market for solid pig iron is more diverse being spread across
USA (60%), EU (30%) and others (10%) creating greater price stability with prices over the last two years in
the range US$290 to US$410 per tonne of solid pig iron. Work is continuing to build confidence that pig iron
production using HIsmelt technology will provide a pathway for the development of the Burracoppin deposit.
At 30 June 2020 the Company held two lithium
brine projects located in Nevada: Alkali Lake North
and Clayton Valley. The project areas are in closed
geological basins which share similar geology with
Clayton Valley where North America's only lithium
producing brine operation is located.
The lithium brine projects are being maintained
pending the development of technology (process
pathways) that enable direct extraction of lithium
from brines (that is, salty ground-water).
Post Report Period activities
The Company’s current focus is on gold exploration including at its Burracoppin gold project and its ongoing
search for new prospects. The Company is also identifying ways to expand its Burracoppin Iron project to
include the establishment of a HIsmelt smelter to produce and market pig iron and potentially further processed
metals and hydrogen.
3
Reedy Lagoon Corporation Limited
Review of operations
30 June 2020
Exploration
Gold
Burracoppin Gold
Western Australia
RLC 100%
E70/4941 (58 km2); applications: E70/5467, E70/5544 (183 km2)
The Burracoppin Gold project was established during the report period.
Orientation soil sampling is planned. The initial focus includes a structural feature, the Yandina Shear Zone,
and areas adjacent to it. Old workings at Lady Janet, which had supported small scale shallow underground
mining described in a 1936 geological report, are located adjacent to the Yandina Shear Zone within E70/5467
which lends support to the prospectivity of this target. Apart from some shallow RAB drilling in the vicinity of
Lady Janet conducted in 1994 (maximum depth 27 metres and all but 3 holes less than 14 metres deep) most
of the 30 kilometre strike length of the Yandina Shear Zone within the project area has seen very little
exploration. The orientation sampling is being planned to include preliminary investigations for the presence
of gold and a range of path finder elements at various locations within the project area.
The Burracoppin gold project is located 60 kilometres north of the Tampia gold deposit and 30 kilometres south
west from the operating Edna May gold mine.
4
Reedy Lagoon Corporation Limited
Review of operations
30 June 2020
Iron
Burracoppin Iron
Burracoppin Magnetite Deposit: E70/4941 (58 km2)
Western Australia
RLC 100%
The Burracoppin
comprising
deposit, was re-established in early 2019.
Iron project, currently
the Burracoppin magnetite
(ASX
The Burracoppin Magnetite deposit was
discovered when drilling proved a strongly
magnetic feature is caused by magnetite
mineralisation
release dated 23
November 2012). Metallurgical test work
conducted on samples from the drilling has
shown that high-quality iron concentrate can
be produced at a relatively coarse particle
size (p80 -150 micron) (ASX releases dated
18 January 2013 and 17 November 2014).
Development options for the project were investigated during the report period. These investigations identified
that in addition to producing a high quality iron concentrate for sale to smelters, further processing the
Burracoppin concentrate using HIsmelt technology to produce a high-quality Pig Iron for export could be
achieved (ASX release dated 10 September 2019).
Ongoing investigations have strengthened the case for producing high quality pig iron. It has been found that
processing the Burracoppin magnetite concentrate into pig iron better captures the value of the concentrate
than selling the unprocessed concentrate into the iron ore market. This is a function of the coarse grained
nature of the Burracoppin mineralisation, its amenity to the HIsmelt process and the higher sale price
achievable for pig iron than for magnetite concentrate. Unlike conventional blast furnaces that smelt the bulk
of the world’s iron ore into iron, HIsmelt can use the coarse Burracoppin concentrate as direct feed into the
smelter. Finer grained iron ore (including concentrate) feed generally requires processing into either pellets or
sinter before it can be fed into the smelter. Neither of these steps would be required for Burracoppin magnetite
feed for HIsmelt (ASX release 20 August 2020).
5
Reedy Lagoon Corporation Limited
Review of operations
30 June 2020
Current work is investigating potential for achieving net zero CO2 emissions for the smelt reaction under the
proposed HIsmelt process .
Net zero CO2 emissions could be achieved by using biomass as the source of carbon used in the smelt reaction
rather than coal. The smelt reaction involves the conversion of magnetite concentrate to pig iron using carbon
as the reductant. Using biomass to produce biochar for use as the source of carbon for the smelt reaction
rather than coal means that all the CO2 produced in the smelt reaction will have come from CO2 extracted from
the air in growing the biomass.
The potential for pig iron to be made with net zero CO2 emissions from the smelt reaction by substituting
biochar for coal holds significant importance in a world increasingly adopting ways to mitigate CO2 emissions.
Such “green” pig iron may also attract a price premium (ASX release 20 August 2020).
The next steps for RLC include further investigations into the potential identified for biomass to support the
proposed HIsmelt operation and establishing local magnetite resources including by additional drilling at
Burracoppin.
The Burracoppin magnetite deposit is well positioned with existing open access infrastructure including, rail
and port facilities.
6
Reedy Lagoon Corporation Limited
Review of operations
30 June 2020
Lithium
Nevada Lithium Brine Projects
Alkali Lake North:
Clayton Valley:
Big Smoky South:
Columbus Salt Marsh:
Nevada, USA
LITHIUM BRINES
128 claims – 2,554 acres (1,033 ha)
112 claims – 2,240 acres ( 906 ha)
Divested 31 August 2019
Divested 31 August 2019
RLC 100%
The Nevada lithium brine projects comprise: Alkali Lake North and Clayton Valley. The projects are located in
2 large and separate ground water catchment areas in Nevada, USA. The projects are within 25 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.
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 evaporation ponds. Reduced water consumption has
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.
During the report period the Big Smoky South and Columbus Salt Marsh projects were divested.
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.
7
Reedy Lagoon Corporation Limited
Review of operations
30 June 2020
LITHIUM in BRINE
Alkali Lake North Project
RLC 100%
Alkali Lake North Project covers part of a discrete sub basin located 25 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.
Nevada, USA
A brine target potentially comprising multiple brine aquifers within sediments over a vertical interval from 500
to 600 metres below ground surface has been identified in audio magnetotelluric (3D AMT) survey data (refer
ASX release 28/08/2018).
The project tenements are being maintained while work is on hold pending developments in brine processing
technologies. Work planned includes drilling the brine target in order to recover water samples to test for
dissolved lithium. Seismic survey may also provide data that could aid delineation of potential aquifers
associated with the target prior to drilling.
Clayton Valley Project
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.
LITHIUM in BRINE
Nevada, USA
A brine target potentially comprising a 200 metre thick interval of sediments containing multiple brine filled
aquifers has been identified in audio magnetotelluric (3D AMT) survey data (refer ASX release 23/08/2018).
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.
The project tenements are being maintained while work is on hold pending developments in brine processing
technologies. Work planned includes drilling the brine target in order to recover water samples to test for
dissolved lithium. Seismic survey may also provide data that could aid delineation of potential aquifers
associated with the target prior to drilling.
Big Smoky South Project – divested on 31 August 2019.
All rehabilitation works have been completed and approved by the Bureau of Land Management. All bond
monies held pending satisfactory completion of rehabilitation have been released back to the Company.
Columbus Salt Marsh Project – divested on 31 August 2019.
Areas disturbed by the Company’s exploration within the project area including prior drilling activities were
contoured and seeded during 2019. The rehabilitation work was inspected by the Bureau of Land Management
(“BLM”) in May 2020 and the reclamation obligation was reduced to $US5,429. A further review is expected
later in 2020 when the balance of the bond (US$5,429) is expected to be refunded.
Reedy Lagoon’s strategy for lithium:
The Company sees strong long-term demand fundamentals for battery-grade lithium products resulting from
the growth in the use of lithium-ion batteries in electric vehicles, energy storage systems and portable
electronics. Commodity research group Roskill has reported Li-ion capacity reached 180GWh in 2019 and
forecasts the pipeline capacity of battery gigafactories will exceed 2,000GWh in 2029. Short term demand has
8
Reedy Lagoon Corporation Limited
Review of operations
30 June 2020
been affected by oversupply of mined lithium products in 2018 and 2019 as well as the global fall in motor
vehicle sales including battery electric vehicles in reaction to the measures implemented to contain the spread
of COVID-19, but the long term demand fundamentals are likely to remain strong.
From a mining point of view there are two alternative sources of lithium. One is from hardrock ore deposits,
which are most commonly based on spodumene minerals but also include lepidolite, petalite and others. The
other source is from brines (saline ground water), commonly salt lakes (or “Salars”) with high lithium
concentrations and where the lithium exists typically as lithium chloride in solution.
Where suitable brine compositions and process methods allow, production costs for battery-grade lithium
products from brines can be less than from hardrock (mineral) deposits.
Reedy Lagoon has targeted brine sources of lithium because it intends becoming a low-cost producer of battery
grade lithium. It sees risk in producing a lithium concentrate for sale as feedstock to a convertor which will
process the concentrate into a battery grade (or other) lithium product.
In 2016 when the Company initiated its Nevada lithium brine projects, a new way to extract lithium from brines
located in Clayton Valley, Nevada had been reported by Pure Energy Minerals (a “direct extraction” method).
The new direct extraction method not only had low projected operating costs for battery-grade lithium
carbonate and lithium hydroxide production but most importantly, involved extraction of the lithium as a first
step allowing the bulk of the brine to be returned to the basin. All existing production of lithium from brines
involves pre-treating the brine prior to extracting the lithium and this pre-treatment involves pumping the brine
through vast evaporation ponds from which the bulk of the brine water is evaporated.
Reedy Lagoon now considers there are at least 3 alternative direct extraction process methods that might
enable commercial production of lithium from brine. Two are being developed in Nevada: Pure Energy is
continuing its work in Clayton Valley having introduced a partner to build a pilot plant for its process; Dajin
Resources Corporation with a project in Alkali Lake (Nevada) has an alliance with Moselle Technologies which
is developing a method it describes as a magnetic extraction process involving nanoparticle technology which
selectively removes lithium from brine; and Eramet has reported it and its partners have developed an active
solid which selectively removes lithium from brine.
The critical importance of the direct extraction processes is their potential to drastically reduce the volume of
water consumed by enabling the brine to be returned to the basin unchanged other than by the removal of
lithium.
Water rights control access to ground water including lithium-bearing brine. While the mineral rights including
the ownership of lithium contained in a brine, are held in a Placer Claim (under Nevada legislation) the legal
right to pump ground water from a basin is controlled separately. Water in deserts is a valuable and scarce
commodity. Water rights as a consequence are highly regulated and allocations are restricted.
Reedy Lagoon’s two lithium brine projects in Nevada each have brine targets defined in detailed geophysical
data (3D-AMT). There are insufficient water rights available for conventional evaporation-pond based brine
processing at either of the Company’s projects.
Accordingly, the Company intends holding and maintaining its existing brine projects while minimising its
expenditure on them until a suitable direct extraction process is available.
Geof Fethers
Managing Director
9
Reedy Lagoon Corporation Limited
Review of operations
30 June 2020
Competent Person’s Statements:
The information in this report other than information in the section headed “Lithium” 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.
The information in the Exploration section headed “Lithium” 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.
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.
10
Reedy Lagoon Corporation Limited
Tenement Schedule
30 June 2020
Tenements held at 15 September 2020:
Located in Australia
Tenement
E70/4941
Burracoppin (WA)
E70/5467
Burracoppin (WA)
E70/5544
Burracoppin (WA)
Minimum Annual
Expenditure
Commitment
$
Company
Interest
(direct or indirect)
Status
Current
20,000
100% 1, & 2
Application
28,000
100% 1, & 2
Area
(km2)
58
81
102
Application
35,000
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. It
was granted for a 5 year term commencing 11 February 2019. Applications for E70/5467 and E70/5544
have been made in the name of 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.
Expenditure requirements commence at grant and do not apply while under application.
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 maintenance fees payable to the BLM and Esmeralda County are payable
in respect of the Placer Claims. All Land Fees were paid up to 31 August 2021. There is no minimum
exploration expenditure requirement for Placer Claims located in Nevada, USA.
11
Reedy Lagoon Corporation Limited
Directors' report
30 June 2020
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 2020.
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 Australia and the United States of America.
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 $383,743 (30 June 2019:
$875,403(Loss)).
Refer to the separate review of operations that comes 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
Shareholders subscribed $674,620.74 for 67,462,074 RLC shares at an issue price of $0.01 per share under a pro rata
non-renounceable rights offer and the related offer of additional shares both of which closed on 21 August 2020.
The COVID-19 pandemic has created unprecedented uncertainty in the economic environment both domestically and
globally. Actual economic events and conditions may be materially different from those estimated by the Group at
reporting date. In the event, the COVID-19 pandemic impacts are more severe or prolonged than anticipated, this may
have further adverse impacts in the Group. At the date of annual report, an estimate of the future effects of the COVID-
19 pandemic on the group cannot be made, as the impact will depend on the magnitude and duration of the economic
downturn, with the full range of possible effects unknown.
No other matter or circumstance has arisen since 30 June 2020 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
Information on likely developments in the operations of the consolidated entity and the expected results of operations
have not been included in this report because the directors believe it would be likely to result in unreasonable prejudice
to the consolidated entity.
At the date of this report, there are no future developments of the Company which warrant disclosure.
12
Reedy Lagoon Corporation Limited
Directors' report
30 June 2020
Environmental regulation
The consolidated entity'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.
Information on directors
Name:
Title:
Age:
Qualifications:
Experience and expertise:
Jonathan M. Hamer
Chairman – Non Executive
65
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 13 years.
Nil
Other current directorships:
Former directorships (last 3 years): Nil
Interests in shares:
Interests in options:
13,661,946 fully paid ordinary shares
2,500,907 options
Name:
Title:
Age:
Qualifications:
Experience and expertise:
Geoffrey H. Fethers
Managing Director
63
B.Sc.(Hons), M AusIMM
Manages the operations of RLC. He is a geologist with approximately 30 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:
Nil
Former directorships (last 3 years): Nil
Special responsibilities:
Interests in shares:
Interests in options:
Manages the operations of RLC.
33,301,385 fully paid ordinary shares
5,875,000 options
Name:
Title:
Age:
Qualifications:
Experience and expertise:
Adrian C. Griffin
Director - Non Executive
67
B.Sc.(Hons), M AusIMM
Adrian Griffin, aged 67, 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:
Nil
Former directorships (last 3 years): Nil
Nil
Special responsibilities:
34,011,037 fully paid ordinary shares
Interests in shares:
4,442,652 options
Interests in options:
13
Reedy Lagoon Corporation Limited
Directors' report
30 June 2020
'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 2020,
and the number of meetings attended by each director were:
Jonathan M. Hamer
Geoffrey H. Fethers
Adrian C. Griffin
Held: represents the number of meetings held during the time the director held office.
Full Board
Attended
Held
10
10
8
10
10
10
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.
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.
14
Reedy Lagoon Corporation Limited
Directors' report
30 June 2020
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 2020 financial year.
Voting and comments made at the company's 12 November 2019 Annual General Meeting ('AGM')
At the 12 November 2019 AGM, 97.62% 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
and the sub-section: Service Agreements below.
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-
employmen
t benefits
Long-term
benefits
Share-
based
payments
Cash
salary
Non-
Super-
and fees * Bonus
monetary annuation
$
$
$
$
Long
service
leave
$
Equity-
settled
$
Total
$
36,530
20,000
27,870
84,400
-
-
-
-
-
-
-
-
3,470
-
-
-
874
291
40,874
20,291
12,500
15,970
2,452
2,452
1,456
2,621
44,278
105,443
2020
Non-Executive Directors:
J Hamer
A Griffin
Executive Directors:
G Fethers
*
Also includes annual leave expenses.
Directors agreed to not receive or be entitled to receive much of their remuneration otherwise payable to them in
respect of the report period on the basis that amounts not receivable during the period would become payable if and
only if (1) the board agreed to make payment; (2) the Company is solvent at the time of payment; and (3) the
Company would remain solvent after the payment.
15
Reedy Lagoon Corporation Limited
Directors' report
30 June 2020
Short-term benefits
Post-
employmen
t benefits
Long-term
benefits
Share-
based
payments
Cash
salary
Non-
Super-
and fees * Bonus
monetary annuation
$
$
$
$
Long
service
leave
$
Equity-
settled
$
Total
$
73,059
40,000
119,542
232,601
-
-
-
-
-
-
-
-
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
2019
Non-Executive Directors:
J Hamer
A Griffin
Executive Directors:
G Fethers
*
Also includes annual leave expenses.
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
2020
At risk - STI
At risk - LTI
2020
2019
2020
2019
98%
99%
98%
99%
99%
98%
-
-
-
-
-
-
2%
1%
2%
1%
1%
2%
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:
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. No payments or retirement benefits are payable on termination.
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. His annual rate was increased from $40,000 to $80,000
commencing 1 January 2018. There is no fixed term and no set retirement benefits
are payable on termination.
16
Reedy Lagoon Corporation Limited
Directors' report
30 June 2020
Name:
Title:
Agreement commenced:
Term of agreement:
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 2020. No shares were issued to any director in lieu of cash payable for fees/salary/super during the year
ended 30 June 2020.
Options
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:
Vesting date and
Fair value
per option
Exercise
Grant date
exercisable date
Expiry date
price
at grant date
11 December 2019
11 December 2019
31 December 2022
$0.0049
$0.0029
Options granted carry no dividend or voting rights.
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 2020 are set out below:
Name
J Hamer
G Fethers
A Griffin
Number of Number of Number of Number of
options
granted
options
granted
options
vested
options
vested
during the
during the
during the
during the
year
2020
year
2019
year
2020
year
2019
300,000
500,000
100,000
300,000
500,000
100,000
300,000
500,000
100,000
300,000
500,000
100,000
17
Reedy Lagoon Corporation Limited
Directors' report
30 June 2020
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:
Balance at Received
in lieu of
the start of
the year
remuneration Additions
Held on
appointment
Balance at
the end of
the year
Ordinary shares
G Fethers
J Hamer
A Griffin
33,301,385
13,661,946
34,011,037
80,974,368
-
-
-
-
-
-
-
-
- 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
Granted
Exercised
Expired /
Forfeited
5,375,000
2,200,907
4,342,652
11,918,559
500,000
300,000
100,000
900,000
-
-
-
-
Balance at
the end of
the year
5,875,000
-
2,500,907
-
-
4,442,652
- 12,818,559
This concludes the remuneration report, which has been audited.
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
11 December 2019
31 December 2020
6 April 2021
31 December 2021
31 December 2022
Exercise
price
Number
under option
$0.0375
900,000
$0.0800 37,710,515
900,000
$0.0160
900,000
$0.0049
40,410,515
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 2020 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.
18
Reedy Lagoon Corporation Limited
Directors' report
30 June 2020
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.
Non-audit services
Details of the amounts paid or payable to the auditor for non-audit services provided during the financial year by the
auditor are outlined in note 19 to the financial statements.
The directors are satisfied that the provision of non-audit services during the financial year, by the auditor (or by another
person or firm on the auditor's behalf), is compatible with the general standard of independence for auditors imposed by
the Corporations Act 2001.
The directors are of the opinion that the services as disclosed in note 17 to the financial statements do not compromise
the external auditor's independence requirements of the Corporations Act 2001 for the following reasons:
●
all non-audit services have been reviewed and approved to ensure that they do not impact the integrity and
objectivity of the auditor; and
none of the services undermine the general principles relating to auditor independence as set out in APES 110
Code of Ethics for Professional Accountants issued by the Accounting Professional and Ethical Standards Board,
including reviewing or auditing the auditor's own work, acting in a management or decision-making capacity for the
company, acting as advocate for the company or jointly sharing economic risks and rewards.
●
Officers of the company who are former partners of Moore Australia Audit (Vic)
There are no officers of the company who are former partners of Moore Australia Audit (Vic).
Auditor's independence declaration
A copy of the auditor's independence declaration as required under section 307C of the Corporations Act 2001 is set
out immediately after this directors' report.
Auditor
Moore Australia Audit (Vic) continues in office in accordance with section 327 of the Corporations Act 2001.
19
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 2020, 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 AUSTRALIA AUDIT (VIC)
ABN 16 847 721 257
RYAN LEEMON
Partner
Audit & Assurance
Melbourne, Victoria
28 October 2020
21
Reedy Lagoon Corporation Limited
Statement of profit or loss and other comprehensive income
For the year ended 30 June 2020
Revenue
Interest revenue calculated using the effective interest method
Expenses
Corporate and administration expenses
Employee and director benefits expense
Exploration expenditure
Share based payments expense
Other expenses
Loss before income tax expense
Income tax expense
Note
Consolidated
2020
$
2019
$
128
2,350
(155,747)
(103,297)
(121,415)
(2,621)
(791)
(197,958)
(242,163)
(425,166)
(4,408)
(8,058)
(383,743)
(875,403)
5
-
-
Loss after income tax expense for the year attributable to the owners of
Reedy Lagoon Corporation Limited
(383,743)
(875,403)
Other comprehensive income
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
-
-
16,145
16,145
(383,743)
(859,258)
Cents
Cents
Basic earnings per share
Diluted earnings per share
25
25
(0.095)
(0.095)
(0.218)
(0.218)
The above statement of profit or loss and other comprehensive income should be read in conjunction with the
accompanying notes
22
Reedy Lagoon Corporation Limited
Statement of financial position
As at 30 June 2020
Assets
Current assets
Cash and cash equivalents
Trade and other receivables
Other
Total current assets
Non-current assets
Other
Total non-current assets
Total assets
Liabilities
Current liabilities
Trade and other payables
Employee benefits
Provisions
Total current liabilities
Total liabilities
Net assets
Equity
Issued capital
Reserves
Accumulated losses
Total equity
Note
Consolidated
2020
$
2019
$
6
7
8
9
10
11
220,123
2,355
-
222,478
366,627
3,832
10,795
381,254
7,755
7,755
231,891
231,891
230,233
613,145
9,000
129,470
10,000
148,470
17,477
122,783
10,000
150,260
148,470
150,260
81,763
462,885
12
13
20,928,910 20,928,910
801,228
(21,650,996) (21,267,253)
803,849
81,763
462,885
The above statement of financial position should be read in conjunction with the accompanying notes
23
Reedy Lagoon Corporation Limited
Statement of changes in equity
For the year ended 30 June 2020
Consolidated
Issued
capital
$
Accumulate
d
losses
$
Reserves
$
Total 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 income for the year
-
-
-
(875,403)
-
-
16,145
(875,403)
16,145
(875,403)
16,145
(859,258)
Transactions with owners in their capacity as owners:
Contributions of equity, net of transaction costs (note 12)
Share-based payments
9,750
-
-
-
-
4,547
9,750
4,547
Balance at 30 June 2019
20,928,910 (21,267,253)
801,228
462,885
Consolidated
Issued
capital
$
Accumulate
d
losses
$
Reserves
$
Total equity
$
Balance at 1 July 2019
20,928,910 (21,267,253)
801,228
462,885
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:
Share-based payments
-
-
-
-
(383,743)
-
(383,743)
-
-
-
(383,743)
-
(383,743)
-
2,621
2,621
Balance at 30 June 2020
20,928,910 (21,650,996)
803,849
81,763
The above statement of changes in equity should be read in conjunction with the accompanying notes
24
Reedy Lagoon Corporation Limited
Statement of cash flows
For the year ended 30 June 2020
Cash flows from operating activities
Receipts from customers (inclusive of GST)
Payments to suppliers and employees (inclusive of GST)
Payments for exploration activities
Interest received
Note
Consolidated
2020
$
2019
$
128
(249,353)
(121,415)
-
4,461
(429,999)
(471,750)
2,350
Net cash used in operating activities
24
(370,640)
(894,938)
Cash flows from investing activities
Receipts from refund of deposits
Net cash from investing activities
Cash flows from financing activities
Proceeds from issue of shares
Net cash from financing activities
9
224,136
224,136
-
-
12
-
-
9,750
9,750
Net decrease in cash and cash equivalents
Cash and cash equivalents at the beginning of the financial year
Effects of exchange rate changes on cash and cash equivalents
(146,504)
366,627
-
(885,188)
1,248,204
3,611
Cash and cash equivalents at the end of the financial year
6
220,123
366,627
The above statement of cash flows should be read in conjunction with the accompanying notes
25
Reedy Lagoon Corporation Limited
Notes to the financial statements
30 June 2020
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 3000
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 28 October 2020.
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.
Any new or amended Accounting Standards or Interpretations that are not yet mandatory have not been early adopted.
The adoption of these Accounting Standards and Interpretations did not have any significant impact on the financial
performance or position of the consolidated entity.
The following Accounting Standards and Interpretations are most relevant to the consolidated entity:
AASB 16 Leases
The consolidated entity has adopted AASB 16 from 1 January 2019. The standard replaces AASB 117 'Leases' and for
lessees eliminates the classifications of operating leases and finance leases. Except for short-term leases and leases
of low-value assets, right-of-use assets and corresponding lease liabilities are recognised in the statement of financial
position. Straight-line operating lease expense recognition is replaced with a depreciation charge for the right-of-use
assets (included in operating costs) and an interest expense on the recognised lease liabilities (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 improve as the operating expense is now replaced by interest expense and depreciation in profit
or loss. For classification within the statement of cash flows, the interest portion is disclosed in operating activities and
the principal portion of the lease payments are separately disclosed in financing activities. For lessor accounting, the
standard does not substantially change how a lessor accounts for leases. The consolidated entity does not hold leases,
and therefore the impact of its adoption was not material.
Going concern
For the year ended 30 June 2020 the consolidated entity made a loss of $383,743 (2019: loss of $875,403), had net
assets of $81,763 (2019: Net assets $462,885), and had operating cash outflows $370,640 (2019: $894,938). All project
assets are valued in the accounts at $0 (refer to Exploration, Evaluation and Development Expenditure below).
26
Reedy Lagoon Corporation Limited
Notes to the financial statements
30 June 2020
Note 2. Significant accounting policies (continued)
The Directors have assessed the Company’s current financial position and are of the view that the continued application
of the going concern basis of accounting is appropriate. They note in particular that:
●
Shareholders subscribed $674,620.74 for 67,462,074 RLC shares at an issue price of $0.01 per share under a pro
rata non-renounceable rights offer and the related offer of additional shares both of which closed on 21 August
2020.
At the beginning of October the Group had approximately $750k in bank deposits.
There were no known committed liabilities (other than trade payable and employee provisions).
Annual overheads have been budgeted at $500,000.
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).
●
●
●
●
In the event the above matters do not eventuate as detailed or circumstances significantly change, or in the event that
the Group cannot raise additional funding or enter into joint venture arrangements to permit continued project
exploration, the Group may not be able to continue its operations as a going concern.
Comparatives
The comparative figures have been classified in certain circumstances to provide a more meaningful representation of
the financial statements.
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 financial assets and liabilities at fair value through profit or loss, financial assets at fair value through other
comprehensive income, 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 21.
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 2020 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.
27
Reedy Lagoon Corporation Limited
Notes to the financial statements
30 June 2020
Note 2. Significant accounting policies (continued)
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.
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.
Foreign currency translation
The financial statements are presented in Australian dollars, which is Reedy Lagoon Corporation Limited's functional
and presentation currency.
Foreign currency transactions
Foreign currency transactions are translated into Australian dollars using the exchange rates prevailing at the dates of
the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the
translation at financial year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are
recognised in profit or loss.
Foreign operations
The assets and liabilities of foreign operations are translated into Australian dollars using the exchange rates at the
reporting date. The revenues and expenses of foreign operations are translated into Australian dollars using the average
exchange rates, which approximate the rates at the dates of the transactions, for the period. All resulting foreign
exchange differences are recognised in other comprehensive income through the foreign currency reserve in equity.
The foreign currency reserve is recognised in profit or loss when the foreign operation or net investment is disposed of.
Exploration, Evaluation and Development Expenditure
Expenditure incurred on the acquisition of exploration properties and exploration, evaluation and development costs,
including acquisition of Nevada Lithium Pty Ltd 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.
Restoration costs are provided for at the time of the activities that give rise to the need for restoration. If this occurs prior
to commencement of production, the costs are included in deferred exploration and development expenditure. If it occurs
after commencement of production, restoration costs are provided for and charged to the statement of financial
performance as an expense.
28
Reedy Lagoon Corporation Limited
Notes to the financial statements
30 June 2020
Note 2. Significant accounting policies (continued)
Revenue recognition
The consolidated entity recognises revenue as follows:
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 allowance for
doubtful receivables.
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.
29
Reedy Lagoon Corporation Limited
Notes to the financial statements
30 June 2020
Note 2. Significant accounting policies (continued)
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.
Trade and other receivables
Other receivables are recognised at amortised cost, less any allowance for expected credit losses.
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.
Provisions
Provisions are recognised when the consolidated entity has a present (legal or constructive) obligation as a result of a
past event, it is probable the consolidated entity will be required to settle the obligation, and a reliable estimate can be
made of the amount of the obligation. The amount recognised as a provision is the best estimate of the consideration
required to settle the present obligation at the reporting date, taking into account the risks and uncertainties surrounding
the obligation. If the time value of money is material, provisions are discounted using a current pre-tax rate specific to
the liability. The increase in the provision resulting from the passage of time is recognised as a finance cost.
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.
The cost of equity-settled transactions are 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 are 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.
30
Reedy Lagoon Corporation Limited
Notes to the financial statements
30 June 2020
Note 2. Significant accounting policies (continued)
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.
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.
31
Reedy Lagoon Corporation Limited
Notes to the financial statements
30 June 2020
Note 2. Significant accounting policies (continued)
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 2020.
The consolidated entity has not yet assessed the impact of these new or amended Accounting Standards and
Interpretations.
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 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.
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.
32
Reedy Lagoon Corporation Limited
Notes to the financial statements
30 June 2020
Note 4. Operating segments
Identification of reportable operating segments
The Company is organised into one operating segments: mineral exploration in Australia. 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 5. Income tax expense
Numerical reconciliation of income tax expense and tax at the statutory rate
Loss before income tax expense
Tax at the statutory tax rate of 27.5% (2019: 30%)
Tax effect amounts which are not deductible/(taxable) in calculating taxable income:
Capital allowances share issue costs
Non deductible equity settled benefits expense
Other non-deductible (deductible) expenses
Non deductible overseas exploration expenditure
Current year tax losses not recognised
Income tax expense
Tax losses not recognised
Unused tax losses for which no deferred tax asset has been recognised
Potential tax benefit @ 27.5%
Consolidated
2020
$
2019
$
(383,743)
(875,403)
(105,529)
(262,621)
(19,889)
721
-
20,097
(21,698)
1,364
1,560
109,092
(104,600)
104,600
(172,303)
172,303
-
-
Consolidated
2020
$
2019
$
8,187,650
7,812,532
2,251,604
2,148,446
The above potential tax benefit for tax losses has not been recognised in the statement of financial position. These tax
losses can only be utilised in the future if the continuity of ownership test is passed, or failing that, the same business
test is passed.
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 6. Current assets - cash and cash equivalents
Cash at bank
33
Consolidated
2020
$
2019
$
220,123
366,627
Reedy Lagoon Corporation Limited
Notes to the financial statements
30 June 2020
Note 7. Current assets - trade and other receivables
GST receivable
Note 8. Current assets - other
Prepayments
Note 9. Non-current assets - other
Security deposits
Consolidated
2020
$
2019
$
2,355
3,832
Consolidated
2020
$
2019
$
-
10,795
Consolidated
2020
$
2019
$
7,755
231,891
The security deposits are monies held in respect of rehabilitation works required on the Company’s tenements located
in the USA. During the report period inspections of works completed led to the amount being reduced US$164,979
(A$231,891) to US$5,429 (A$7,755) and the difference was refunded. A further review is expected later in 2020 when
the balance of the security deposits is expected to be refunded to the Company.
Note 10. Current liabilities - trade and other payables
Consolidated
2020
$
2019
$
9,000
17,477
Consolidated
2020
$
2019
$
95,590
33,880
91,355
31,428
129,470
122,783
Other payables and accruals
Refer to note 15 for further information on financial instruments.
Note 11. Current liabilities - employee benefits
Annual leave
Long service leave
34
Reedy Lagoon Corporation Limited
Notes to the financial statements
30 June 2020
Note 12. Equity - issued capital
Consolidated
2020
Shares
2019
Shares
2020
$
2019
$
Ordinary shares - fully paid
402,271,710 402,271,710 20,928,910 20,928,910
Movements in ordinary share capital
Details
Date
Shares
Issue price
$
Balance
Shares issued to directors
1 July 2018
29 September 2018
401,408,878
862,832
$0.0113
20,919,160
9,750
Balance
Balance
30 June 2019
402,271,710
20,928,910
30 June 2020
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 is maintained.
The capital risk management policy remains unchanged from the 30 June 2019 annual report.
Note 13. Equity - reserves
Foreign currency reserve
Share-based payments reserve
Consolidated
2020
$
2019
$
16,145
787,704
16,145
785,083
803,849
801,228
35
Reedy Lagoon Corporation Limited
Notes to the financial statements
30 June 2020
Note 13. Equity - reserves (continued)
Foreign currency reserve
The reserve is used to recognise exchange differences arising from the translation of the financial statements of foreign
operations to Australian dollars. It is also used to recognise gains and losses on hedges of the net investments in foreign
operations.
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 1 July 2018
Foreign currency translation
Share based payments
Balance at 30 June 2019
Share based payment
Balance at 30 June 2020
Note 14. Equity - dividends
Share based
payments
$
Foreign
currency
$
Total
$
780,536
-
4,547
785,083
2,621
-
16,145
-
780,536
16,145
4,547
16,145
-
801,228
2,621
787,704
16,145
803,849
There were no dividends paid, recommended or declared during the current or previous financial year.
Note 15. 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.
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.
Price risk
The consolidated entity is not exposed to any significant price risk.
36
Reedy Lagoon Corporation Limited
Notes to the financial statements
30 June 2020
Note 15. Financial instruments (continued)
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 has adopted a lifetime expected loss allowance in estimating expected credit losses to trade
receivables through the use of a provisions matrix using fixed rates of credit loss provisioning. These provisions are
considered representative across all customers of the consolidated entity based on recent sales experience, historical
collection rates and forward-looking information that is available.
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.
Generally, trade receivables are written off when there is no reasonable expectation of recovery. Indicators of this include
the failure of a debtor to engage in a repayment plan, no active enforcement activity and a failure to make contractual
payments for a period greater than 1 year.
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.
Consolidated - 2020
Non-derivatives
Non-interest bearing
Trade other payables
Total non-derivatives
Consolidated - 2019
Non-derivatives
Non-interest bearing
Trade other payables
Total non-derivatives
Weighted
average
interest rate
%
1 year or less
$
Between 1
and 2 years
$
Between 2
and 5 years
$
Remaining
contractual
maturities
$
Over 5 years
$
-
9,000
9,000
-
-
-
-
-
-
9,000
9,000
Weighted
average
interest rate
%
1 year or less
$
Between 1
and 2 years
$
Between 2
and 5 years
$
Remaining
contractual
maturities
$
Over 5 years
$
-
17,477
17,477
-
-
-
-
-
-
17,477
17,477
37
Reedy Lagoon Corporation Limited
Notes to the financial statements
30 June 2020
Note 15. Financial instruments (continued)
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 16. 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
Note 17. Remuneration of auditors
Consolidated
2020
$
2019
$
84,400
15,970
2,452
2,621
232,601
31,941
2,555
4,408
105,443
271,505
During the financial year the following fees were paid or payable for services provided by Moore Australia Audit (Vic),
the auditor of the Company:
Audit services - Moore Australia Audit (Vic)
Audit or review of the financial statements
Other services - Moore Australia Audit (Vic)
Tax and compliance services
Consolidated
2020
$
2019
$
16,000
22,000
8,600
14,765
24,600
36,765
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 Company’s 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 18. Contingent liabilities
The consolidated entity did not have any contingent liabilities at 30 June 2020 or 30 June 2019.
38
Reedy Lagoon Corporation Limited
Notes to the financial statements
30 June 2020
Note 19. Exploration expenditure commitments
Lithium Brine Projects
The consolidated entity 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 each year. The Annual Land Fees
payable in 2020 in respect of the 240 Placer Claims amounted to US$42,540. At the date of this report all Land Fees
were paid up to 31 August 2021. There is no minimum exploration expenditure requirement for Placer Claims located in
Nevada, USA.
Burracoppin Iron Ore Project
The consolidated entity held one tenement, E70/4941 and two tenement applications, E70/5467 and E70/5544, located
in Western Australia at the date of this report. 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 11/02/2021.
No provision has been made in the accounts for exploration commitments.
Note 20. Related party transactions
Parent entity
Reedy Lagoon Corporation Limited is the parent entity.
Subsidiaries
Interests in subsidiaries are set out in note 22.
Key management personnel
Disclosures relating to key management personnel are set out in note 16 and the remuneration report included in the
directors' report.
Transactions with related parties
There were no transactions with related parties during the current and previous financial year.
Receivable from and payable to related parties
There were no trade receivables from or trade payables to related parties at the current and previous reporting date.
Loans to/from related parties
There were no loans to or from related parties at the current and previous reporting date.
Note 21. 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
39
Parent
2020
$
2019
$
(305,900)
(522,133)
(305,900)
(522,133)
Reedy Lagoon Corporation Limited
Notes to the financial statements
30 June 2020
Note 21. 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
2020
$
2019
$
157,754
2,716,592
3,055,528
2,843,397
138,470
152,585
138,470
152,585
20,928,910 20,928,910
785,083
(18,799,556) (19,023,181)
787,704
2,917,058
2,690,812
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 2020 and 30 June 2019.
Contingent liabilities
The parent entity had no contingent liabilities as at 30 June 2020 and 30 June 2019.
Capital commitments - Property, plant and equipment
The parent entity had no capital commitments for property, plant and equipment at as 30 June 2020 and 30 June 2019.
Conversion of loans to equity for fund movements between RLC and its subsidiary companies
On 30 June 2020 Nevada Lithium Pty Ltd (NL) issued 2,892,815 shares in NL to RLC in consideration for RLC
transferring and assigning to NL all RLC’s right, title and interest in loans made by RLC to Sierra Lithium LLC (SL) to the
extent which they remain owing, excluding US$5,429 owing by SL to RLC in respect of loans made by RLC to fund
bonds.
On 30 June 2020 NL converted all loans and other amounts owing by SL to NL including the loans acquired by NL
detailed above, into capital in SL and for that purpose, released SL from its obligations as debtor in respect of those
loans in substitution for SL treating the amount of the loans as a capital contribution to SL made by NL.
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 22. Interests in subsidiaries
The consolidated financial statements incorporate the assets, liabilities and results of the following subsidiaries in
accordance with the accounting policy described in note 2:
Name
Bullamine Magnetite Pty Ltd
Nevada Lithium Pty Ltd
Sierra Lithium LLC
Principal place of business /
Country of incorporation
Australia
Australia
USA
40
Ownership interest
2019
2020
%
%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
Reedy Lagoon Corporation Limited
Notes to the financial statements
30 June 2020
Note 23. Events after the reporting period
Shareholders subscribed $674,620.74 for 67,462,074 RLC shares at an issue price of $0.01 per share under a pro rata
non-renounceable rights offer and the related offer of additional shares both of which closed on 21 August 2020.
The COVID-19 pandemic has created unprecedented uncertainty in the economic environment both domestically and
globally. Actual economic events and conditions may be materially different from those estimated by the Group at
reporting date. In the event, the COVID-19 pandemic impacts are more severe or prolonged than anticipated, this may
have further adverse impacts in the Group. At the date of annual report, an estimate of the future effects of the COVID-
19 pandemic on the group cannot be made, as the impact will depend on the magnitude and duration of the economic
downturn, with the full range of possible effects unknown.
No other matter or circumstance has arisen since 30 June 2020 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 24. Reconciliation of loss after income tax to net cash used in operating activities
Loss after income tax expense for the year
Adjustments for:
Share-based payments
Change in operating assets and liabilities:
Decrease in trade and other receivables
Decrease/(increase) in other operating assets
Decrease in trade and other payables
Increase in employee benefits
Decrease in other provisions
Net cash used in operating activities
Note 25. Earnings per share
Consolidated
2020
$
2019
$
(383,743)
(875,403)
2,621
4,547
1,477
10,795
(8,477)
6,687
-
31,372
(540)
(18,794)
8,000
(44,120)
(370,640)
(894,938)
Consolidated
2020
$
2019
$
Loss after income tax attributable to the owners of Reedy Lagoon Corporation Limited
(383,743)
(875,403)
Weighted average number of ordinary shares used in calculating basic earnings per
share
402,271,710
400,994,028
Weighted average number of ordinary shares used in calculating diluted earnings per
share
402,271,710
400,994,028
Number
Number
Basic earnings per share
Diluted earnings per share
Cents
Cents
(0.095)
(0.095)
(0.218)
(0.218)
41
Reedy Lagoon Corporation Limited
Notes to the financial statements
30 June 2020
Note 25. Earnings per share (continued)
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.
42
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 2020, the
(consolidated) statement of profit or loss and other comprehensive income, the (consolidated) statement
of changes in equity and the (consolidated) statement of cash flows for the year then ended, and notes to
the financial 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 2020 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 2020 of
$383,743 and operating cash outflows of $370,640. 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 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.
44
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 2020, 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:
https://www.auasb.gov.au/admin/file/content102/c3/ar1_2020.pdf. This description forms part of our
auditor’s report.
45
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 14 to 18 of the directors’ report for the year
ended 30 June 2020.
In our opinion, the Remuneration Report of Reedy Lagoon Corporation Ltd, for the year ended 30 June
2020 complies with section 300A of the Corporations Act 2001.
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the Remuneration
Report in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an
opinion on the Remuneration Report, based on our audit conducted in accordance with Australian Auditing
Standards.
MOORE AUSTRALIA AUDIT (VIC)
ABN 16 847 721 257
RYAN LEEMON
Partner
Audit & Assurance
Melbourne, Victoria
28 October 2020
46
Reedy Lagoon Corporation Limited
Shareholder information
30 June 2020
The shareholder information set out below was applicable as at 15 September 2020.
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
Number
of holders
of ordinary
shares
41
25
73
473
328
940
398
Twenty largest quoted equity security holders
The names of the twenty largest security holders of quoted equity securities are listed below:
Total shares issued: 469,733,784
Ordinary shares
Number held
% of total
shares
Issued
34,011,037
33,000,000
29,549,843
28,627,460
20,038,623
18,500,735
16,718,750
13,622,594
10,806,892
10,512,115
9,773,292
9,699,564
8,775,000
7,425,000
6,720,000
6,580,000
6,000,000
4,500,000
4,000,000
3,259,200
7.24
7.03
6.29
6.09
4.27
3.94
3.56
2.90
2.30
2.24
2.08
2.06
1.87
1.58
1.43
1.40
1.28
0.96
0.85
0.69
282,120,105
187,613,679
60.06
39.94
469,733,784
100.00
Mr Adrian C. Griffin
Needmore Investments Pty Ltd
Chromite Pty Ltd (Spinel A/C)
Citycastle Pty Ltd
Jagen Pty Ltd
Sked Pty Ltd
Park Road SF Pty Ltd (Park Road Super Fund A/C)
Mr Jonathan M. Hamer
Yucaja Pty Ltd (The Yoegiar Family A/C)
M&K Korkidas Pty Ltd (M&K Korkidas P/L S/Fund A/C)
Pyrope Holdings Pty Ltd (Chromite Staff S/Fund A/C)
BNP Paribas Nominees Pty Ltd
Tromso Pty Limited
Wifam Investments Pty Ltd (Wischer Family S/F A/C)
Mr Jamie Lai
DJ Coughlan Drilling Pty Ltd
Est Clark Barnett Dudley
Dale Estates No 1 Pty Ltd
RFCJ Pty Ltd (RCJ Super Fund A/C)
JHY Investments Pty Ltd
Top 20 shareholders
Other shareholders
TOTAL:
48
Reedy Lagoon Corporation Limited
Shareholder information
30 June 2020
Substantial holders
Substantial holders in the Company as at 15 September 2020 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
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
Mr Adrian C. Griffin
Needmore Investments Pty Ltd
Ordinary shares
Number held
% of total
shares
issued
28,627,460
18,500,735
2,141,518
2,345,948
51,615,661
29,549,843
1,532,010
9,773,292
771,588
41,626,733
34,011,037
10.99
8.86
7.24
33,000,000
7.03
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.
Options on issue
Listed (ASX:RLCO)
Unlisted
Unlisted
Unlisted
Expiry Date
Exercise Price
Number
6 April 2021
31 December 2020
31 December 2021
31 December 2022
8 cents
3.75 cents
1.16 cents
0.49 cents
37,710,515
900,000
900,000
900,000
49
Reedy Lagoon Corporation Limited
Corporate directory
30 June 2020
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
Link Market Services Limited (ABN 54 063 214 537)
Tower 4, 727 Collins Street
Melbourne, Victoria 3008
Telephone : 1300 554 474
www.linkmarketservices.com.au
Moore Australia Audit (Vic)
Level 18, 530 Collins Street
Melbourne
Victoria 3000
www.moore-australia.com.au
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/
50