Renascor Resources Limited annual report 2019
1
Renascor Resources Limited annual report 2019 Contents
Chairman’s letter
Operating Activities Review
Directors’ Report
Auditor’s Independence Declaration
Financial Statements
Directors’ Declaration
Independent Auditor’s Report
Shareholder’s information
3
6
14
25
26
56
57
61
Corporate directory
inside back cover
Port Augusta
Whyalla
Kimba
Port
Pirie
Yadnarie
Cowell
Cleve
Siviour Graphite
Project
Arno Bay
Port Neill
Tumby Bay
Port Lincoln
South Australia
Siviour
Port Adelaide
Renascor tenements
Power (transmission line)
Townships
Major roads
Railway
Port Adelaide
Adelaide
0
50
100 km
Competent Persons Statement
Exploration Results
The information in this document that relates to exploration activities and exploration results is based on information compiled and reviewed by
Mr G.W. McConachy who is a Fellow of the Australasian Institute of Mining and Metallurgy. Mr McConachy is a director of the Company. Mr McConachy
has sufficient experience relevant to the style of mineralisation and type of deposits being considered to qualify as a Competent Person as defined by
the 2012 Edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (the JORC Code, 2012 Edition).
Mr McConachy consents to the inclusion in the report of the matters based on the reviewed information in the form and context in which it appears.
Mineral Resource
The information in this document that relates to Mineral Resources is based upon information compiled by Mrs Christine Standing who is a Member
of the Australasian Institute of Mining and Metallurgy and a Member of the Australian Institute of Geoscientists. Mrs Standing is an employee of Optiro
Pty Ltd and has sufficient experience relevant to the style of mineralisation, the type of deposit under consideration and to the activity undertaken
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.
Ore Reserve
The information in this document that relates to Ore Reserves is based on information complied and reviewed by Mr Ben Brown, who is a Member
of the Australasian Institute of Mining and Metallurgy. Mr Brown is an employee of Optima Consulting and Contracting Pty Ltd and a consultant to
the Company. Mr Brown has sufficient experience relevant to the type of deposit under consideration to qualify as a Competent Person as defined
by the 2012 Edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (the JORC Code, 2012 Edition).
This report may contain forward-looking statements. Any forward-looking statements reflect management’s current beliefs based on information
currently available to management and are based on what management believes to be reasonable assumptions. It should be noted that a number
of factors could cause actual results, or expectations to differ materially from the results expressed or implied in the forward-looking statements.
2
EYRE PENINSULA Chairman’s letter
Dear Shareholder,
I am very pleased to present Renascor’s annual report for the 12 month period
ending 30 June 2019.
While the past year has been challenging for ASX-listed graphite companies,
Renascor strongly believes that the high quality of the Siviour Graphite Project,
together with an increasing projected demand for new graphite projects, offers
shareholders significant opportunity for value up lift in the near-term.
Our work over the past year has highlighted some of the key advantages of
Siviour as a world-class graphite project. These advantages include:
•
High quality ore body
The scale, grade and near-surface, flat-lying orientation of the Siviour orebody
highlights the potential to produce high quality graphite products at a low
cost over a long-term mine life. We are confident that the comparative quality
of the Siviour deposit will be a key determining factor in advancing Siviour
through development and financing into production.
•
Established infrastructure
Siviour’s prime location in coastal South Australia, near established
infrastructure and population centres, offers capital cost savings and
reduces project delivery risk, while taking advantage of Australia’s skilled
mining work force.
•
Low sovereign risk and security of supply
In the context of the global supply chain for graphite, which is dominated
by historical supply from China and emerging production from East Africa,
Siviour’s location in Australia, a first-world mining jurisdiction with low
sovereign risk, offers a further important advantage.
‘Siviour: a world-class graphite project’
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Renascor Resources Limited annual report 2019 Chairman’s letter
We plan to exploit these real and comparative advantages to become a reliable
producer of high quality graphite products, at a competitive low cost to market,
unfettered by country risk.
Our location will give Renascor many benefits, including being able to employ
a skilled local labour force with ready access to contract specialists trades people
and engineers for the smooth commissioning and operation of our proposed
mine and process plant.
The large scale of the Siviour graphite deposit offers flexibility for future
production rates backed by a long-term mine life in excess of thirty years.
This will also allow us to consider long-term downstream processing, such as
spherical graphite, to take further advantage of the growing renewable
energy sector.
Our engineering and financial advisors who have partnered with Renascor
recongise these advantages and are keen to assist us in transitioning Siviour
from a promising graphite development to a first tier mining operation.
During the recently completed financial year, Renascor has achieved several
breakthroughs in the development of Siviour, including:
•
SiviourDefinitiveFeasibilityStudy(DFS)
Much of our work during the year has focused on the Siviour DFS, with
key work programs including completing a detailed infill drill program,
undertaking extensive metallurgical test work and pilot plant production
of graphite concentrates and moving into final engineering phases. We are
nearing the completion of the Siviour DFS, with results expected imminently.
•
Optimised Development Plan
As part of our DFS work programs, we also completed an optimised
development plan for Siviour that increases the production profile of our
planned stage-one production by four times, while still maintaining low
operating and capital costs. This optimised plan forms the basis for the Siviour
DFS and has been used in connection with finance and offtake discussions.
•
InPrincipleFinancialSupport
We achieved an important financial milestone in receiving a Letter of Interest
for export credit agency (ECA) cover received from Atradius Dutch State
Business (Atradius), the Government of the Netherlands official ECA. We
expect that up to approximately 60% of initial Siviour capital expenditure
may qualify for Dutch export credit cover.
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Chairman’s letter
•
Strategic Partnership with Royal IHC
We entered into a Strategic Partnership Agreement with international
Engineering, Procurement and Construction (EPC) contractor, Royal IHC Australia
(Royal IHC). As part of this agreement, Royal IHC committed $1 million to
undertake early project works and to lead an integrated team in delivering the
Siviour DFS and to provide an EPC proposal upon the completion of the DFS.
•
SphericalGraphitePrefeasibilityStudy(PFS)
We completed a PFS that confirms the opportunity to unlock further value from
Siviour through Australia’s first integrated graphite concentrate and spherical
graphite operation. The spherical PFS suggests Siviour is uniquely advantaged in
its potential to produce high quality spherical graphite product for the growing
market for lithium-ion battery anodes.
•
Mineral Lease
The Mineral Lease for Siviour Graphite Project was granted by the South
Australian Minister for Energy and Mining. The grant of the Mineral Lease
followed an extensive three-year period of preparation and review of all potential
environmental, social, economic and technical aspects of the Siviour Project.
The steady progress Renascor achieved during the past year puts Renascor in
an excellent position to take the project through the DFS and final regulatory
approvals and into offtake, finance and final investment decision (FID).
We are particularly grateful of the support offered by shareholders during the year,
notwithstanding difficult market conditions and subdued equity prices.
With the work undertaken last year, together with this year’s work programs and
favourable graphite market dynamics, we believe there is strong potential for
a re-rating of Renascor by the equity markets.
On behalf of the Board and my fellow shareholders, I thank our Managing Director
David Christensen and the entire Renascor team for their dedicated work during
an exciting year. I also offer my sincere thanks to you, our shareholders, for your
continued support.
Your sincerely,
Dick Keevers
Chairman
5
Renascor Resources Limited annual report 2019
Operating activities review
Company overview
Renascor Resources Limited (Renascor) is an ASX-listed, Australian-
based company focused on the development of economically
viable deposits containing graphite and other minerals.
Siviour Graphite Project
Renascor’s principal activity during the financial year was exploration
and evaluation of the Siviour Graphite Project near Arno Bay,
South Australia.
SiviourDefinitiveFeasibilityStudy
During the year, Renascor worked extensively on advancing the
Siviour DFS toward completion.
Key work programs completed during the year included:
• Optimised Development Plan
Renascor completed an optimised development plan for Siviour
that significantly expands upon the production profile of the stage-
one processing capacity described in the Siviour Prefeasibility Study
by approximately four times. It also provides for the construction
of a similar-sized processing plant in stage-two. This optimised
plan forms the basis for the Siviour DFS and has been used in
connection with finance and offtake discussions.
•
Drilling
Renascor completed an infill drilling program primarily designed to
increase the confidence in the Indicated Resource for the DFS. The
program consisted of 99 reverse circulation and air core drill holes
for 4,631 metres and 15 diamond holes drilled for 837 metres.
• Pilot plant production
Renascor completed a bulk sample production program on
composite diamond drill core to assess flow sheet parameters and
provide additional concentrate for evaluation by potential offtake
partners and further metallurgical testing. The program was under
undertaken by SGS Lakefield in Canada.
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Operating Activities Review
• Metallurgical test programs
Renascor completed extensive metallurgical test work designed to
assess the process design parameters for the DFS. Test programs
included six-cycle continuous circuit and variability and optimisation
mineral process test work.
• Environment
Renascor completed key DFS environmental and site test studies,
including hydrogeology, geotechnical site evaluations (with respect
to plant construction and tailings storage), flora and fauna, socio-
economic, noise, dust, traffic and visual amenity.
•
Infrastructure
Renascor completed early works engineering, approvals and
construction planning for desalinisation water supply, power line
and grid connection, roads and communications infrastructure.
•
Mining
Renascor completed a detailed geo-metallurgical model and
incorporated the model into the DFS mining schedule.
•
Engineering
Renascor finalised the plant flowsheet and plant layout and
commenced the front-end engineering design.
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Operating Activities Review
Strategic Partnership with Royal IHC
In November 2018, Renascor entered into a Strategic Partnership
Agreement with international Engineering, Procurement and
Construction (EPC) contractor, Royal IHC.
As part of this agreement, Royal IHC committed $1 million for early
project works, including metallurgical testing and detailed engineering
and design work.
Royal IHC agreed to lead an integrated team in delivering the Siviour DFS
and, upon completion of the DFS, to present Renascor with an
EPC proposal.
This Strategic Partnership Agreement with Royal IHC is the first step in
what is planned to be a long and mutually beneficial relationship for both
Renascor and Royal IHC, leading to project financing and completion of
the Siviour project under an EPC contract.
8
Operating Activities Review
Spherical Graphite Prefeasibility Study (PFS)
In February 2019, Renascor completed a Pre-Feasibility Study (the
“Spherical PFS”) assessing the viability of producing spherical
graphite using graphite concentrates to be produced from the
Siviour Graphite Project.
The project economics of the Spherical PFS highlight Siviour’s potential
to achieve significant economic returns through the vertically integrated
development of a mine and flake graphite concentrate operation, plus
downstream production of spherical graphite.
Estimated values of key parameters of the Spherical PFS are shown
in table 1, in addition to key economics of an integrated large-scale
operation producing both spherical graphite and graphite concentrates
as contemplated in Renascor’s Graphite Concentrate Prefeasibility Study
(the “Concentrate PFS”) (see Renascor ASX announcement dated
14 May 2018).
Annual production of spherical graphite
Life of mine/project
29,085t
30 years
Capital cost of spherical operation
AU$89.9m US$67.4m
Total capital (concentrate and spherical)
AU$221.5m US$166.0m
NPV10 (after tax) of spherical operation
AU$487m US$365m
NPV10 (after tax) of integrated operation
AU$889m US$667m
IRR (after tax) of integrated operation
53%
Average spherical graphite cash operating
cost (net of by-product credit)1
AU$1,883/t US$1,412/t
Projected spherical graphite sales price
AU$4,800/t US$3,600/t
Table 1: Financial highlights
1 Assumes sale of approximately 30,000t per annum of recarburiser by-product at sales price of AU$733/US$550
per tonne. Siviour graphite concentrates are assumed to be procured at production costs contemplated by the
Concentrate PFS.
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Renascor Resources Limited annual report 2019 Operating Activities Review
In addition to offering the potential to achieve more robust project
economics through the increased sales margin associated with the
production of spherical graphite, potential upside benefits from spherical
graphite production include:
• More direct exposure to lithium-ion battery market
Increased interest in renewable energy is driving significant growth
in the lithium-ion battery market. By offering a spherical graphite
product for use in lithium-ion battery anodes, Renascor would gain
more direct exposure to this high-growth market.
• Support graphite concentrate operation
A spherical graphite product is considered to be a highly sought-after
product which could be the subject of a robust sales contract. This
would in turn underpin the mining project by securing offtake for a
significant portion of the flake production.
• Comparative advantage
The Concentrate PFS suggests that Siviour graphite concentrates
might be produced at amongst the lowest cost of any new graphite
development globally. As the cost of graphite concentrates is one of
the primary costs in producing spherical graphite, Renascor might
enjoy a potential comparative advantage in producing a low-cost
spherical graphite product.
• Supply chain security from Australia
Presently, nearly all uncoated spherical graphite that is used in
anodes for lithium-ion batteries is sourced from China. By offering
a spherical product mined and processed into spherical graphite
in Australia, Renascor believes it may have a further comparative
advantage in offering potential buyers’ access to Renascor’s vertically
integrated processing operation and diversity of supply from a low
sovereign risk jurisdiction.
10
Operating Activities Review
Upgraded Mineral Resource
In April 2019, Renascor upgraded the JORC Mineral Resource estimate for
the Siviour Graphite Project to:
•
Measured Resource Estimate of 15.8Mt at 8.8% TGC for
approximately 1.4Mt of contained graphite, and
•
Total Mineral Resource Estimate (Measured, Indicated and Inferred)
of 87.4Mt at 7.5% TGC for approximately 6.6Mt of contained graphite
(with 64% classified as Measured or Indicated).
Resource
Category
Tonnes of
mineralisation (Mt)
Total
Graphitic
Carbon (TGC)
Tonnes of
contained
graphite (Mt)
Measured
Indicated
Inferred
Total
15.8
39.5
32.1
87.4
8.8%
7.2%
7.2%
7.5%
1.4
2.8
2.3
6.6
Note: Cut-off grade of 2.3% total graphitic carbon
Table 1: Siviour Mineral Resource estimate as of 29 April 2019
In Principle Financial Support
In April 2019, Renascor received a Letter of Interest (LOI) for export
credit agency (ECA) cover received from Atradius Dutch State Business
(Atradius), the Government of the Netherlands official ECA.
Atradius is the official ECA that administers the ECA scheme for the
Government of the Netherlands. In order to promote Dutch exports,
Atradius offers insurance and guarantee products for projects involving
the export of capital goods from the Netherlands. ECA Cover from
Atradius is often used to assist Dutch exporters in winning export
transactions and increasing the capacity to raise finance from banks for
projects involving Dutch exports.
The Dutch ECA scheme was identified as applicable to Renascor’s Siviour
Graphite Project based on the sourcing of Dutch content through
Renascor’s Dutch strategic engineering partner, Royal IHC.
Renascor has estimated that up to approximately 60% of project capital
expenditure is expected to qualify under the Atradius ECA Cover.
Interest rates charged by lenders on debt guaranteed by ECA Cover
are typically lower than commercial rates, as repayment of the debt is
insured, with longer tenor also a feature of ECA supported debt.
The LOI represents the first milestone in Renascor’s engagement with
Atradius. The next step in obtaining ECA Cover involves further due
diligence by Atradius and, assuming a satisfactory outcome, a decision
from the relevant committees of Atradius.
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Renascor Resources Limited annual report 2019
Operating Activities Review
Mineral Lease
In April 2019, the Mineral Lease for Siviour Graphite Project was granted
by the South Australian Minister for Energy and Mining. The grant of the
Mineral Lease followed an extensive three-year period of preparation
and review of all potential environmental, social, economic and technical
aspects of the Siviour Project.
The Mineral Lease, granted to Renascor’s 100%-owned subsidiary
company, Ausmin Development Pty Ltd, demonstrates that the
Government of South Australia is satisfied that the proposed level of
impact of the Siviour Graphite Project is acceptable given the anticipated
economic and social benefits.
With the grant of the Mineral Lease, the terms that Renascor must
follow during the construction, mining and operation phases are now
established.
The Mineral Lease also details the conditions that that must be
addressed in a Program for Environment Protection and Rehabilitation
(PEPR), which is the second step in the Government’s two-stage
assessment and approval process.
The PEPR, which must be approved before mining operations may
commence, is intended to establish how the conditions outlined in the
Mineral Lease will be met. Prior to approval, the PEPR must be evaluated
by the Department for Energy and Mining (Department) against the
conditions of the Mineral Lease, as well as applicable legislation and
Department regulations and guidelines.
Renascor is currently preparing the PEPR, which it expects to lodge with
the Department later this year.
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Directors’ Report
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Directors’ Report
The directors present their report, together
with the financial statements, on the
consolidated entity (referred to hereafter as
the ‘Group’) consisting of Renascor Resources
Limited (referred to hereafter as the
‘Company’ or ‘parent entity’) and the entities
it controlled at the end of, or during, the year
ended 30 June 2019.
Dividends
There were no dividends paid, recommended or
declared during the current or previous financial year.
Review of operations
Corporate and financial
For the year ended 30 June 2019, the loss for the
Group after providing for income tax amounted
to $1,321,558 (2018: $3,434,543). This included an
impairment write down of capitalised exploration
and evaluation expenditure of $387,751 (2018:
$2,305,666).
On 22 November 2018, the Company announced that
it had completed the 100% acquisition of Ausmin
Development Pty Ltd (Ausmin), which holds the rights
to the Siviour Graphite Project. Previously, at a
shareholder meeting on 3 September 2018, Renascor’s
shareholders had granted approval for the Company
to acquire all of the shares in Ausmin in exchange for
approximately 189.6 million shares in Renascor. The
shares were issued on 22 November 2018.
In April 2019, Renascor received a LOI for export
credit agency (ECA) cover received from Atradius
Dutch State Business (Atradius), the Government of
the Netherlands official ECA. ECA Cover from Atradius
is often used to assist Dutch exporters in winning
export transactions and increasing the capacity to
raise finance from banks for projects involving Dutch
exports. The LOI represents the first milestone in
Renascor’s engagement with Atradius. The next step
in obtaining ECA Cover involves further due diligence
by Atradius and, assuming a satisfactory outcome, a
decision from the relevant committees of Atradius.
Operations
Renascor’s activities and events during the past
financial year were primarily directed at developing
the Siviour Graphite Project.
Significant activities undertaken on the Siviour
Graphite Project during the year included:
• Work programs associated with the Saviour
DFS including the completion of the optimised
Development Plan, infill drilling, pilot plant
production, metallurgical testing, environment
assessments and mining, engineering and
infrastructure studies.
• In November 2018, Renascor entered into a
Strategic Partnership Agreement with international
Engineering, Procurement and Construction (EPC)
contractor, Royal IHC. This Strategic Partnership
Agreement with Royal IHC is the first step in what
is planned to be a long and mutually beneficial
relationship for both Renascor and Royal IHC,
leading to project financing and completion of the
Siviour project under an EPC contract.
• In April 2019, the Mineral Lease for Siviour
Graphite Project was granted by the South
Australian Minister for Energy and Mining. The
Mineral Lease, granted to Renascor’s 100%-owned
subsidiary company, Ausmin Development
Pty Ltd, demonstrates that the Government of
South Australia is satisfied that the proposed
level of impact of the Siviour Graphite Project is
acceptable given the anticipated economic and
social benefits.
In addition to its activities at the Siviour Graphite
Project, Renascor has maintained a strong
exploration portfolio, identifying and maintaining a
strong pipeline of targets for development of copper,
gold, nickel, cobalt and other mineral assets. To
limit non-essential expenditure, Renascor has also
relinquished tenements considered less prospective.
Significant changes in the state of affairs
There were no significant changes in the state of
affairs of the Group during the financial year.
Matters subsequent to the end of the
financial year
No matter or circumstance has arisen since 30
June 2019 that has significantly affected, or may
significantly affect the Group’s operations, the results
of those operations, or the Group’s state of affairs in
future financial years.
Likely developments and expected results of
operations
The Company will continue activities in the
exploration, evaluation, development and acquisition
of viable projects with the objective of establishing a
significant production business.
Environmental regulation and performance
The directors have put in place strategies and
procedures to ensure that the Group manages its
compliance with environmental regulations. The
directors are not aware of any breaches of any
material applicable environmental regulations.
14
Directors’ Report 30 June 2019
Information on directors
Stephen Bizzell, Non-Executive Director
Experience and expertise: Stephen is Chairman
of boutique corporate advisory and funds
management group Bizzell Capital Partners. He
is highly experienced in the fields of corporate
restructuring, debt and equity financing, mergers
and acquisitions and has over 20 years corporate
finance and public company management experience
in the resources sector in Australia and Canada.
Stephen was previously an Executive Director of
Arrow Energy from 1999 to until its acquisition
in 2010 by Royal Dutch Shell and PetroChina for
$3.5 billion. Stephen was instrumental in Arrow’s
corporate and commercial success and its growth
from a junior explorer to a large integrated energy
company. Stephen spent his early career in the
corporate finance division of Ernst & Young and the
tax division of Coopers & Lybrand and qualified as a
Chartered Accountant. He is also a former director of
Queensland Treasury Corporation.
Other current directorships: Armour Energy Limited,
Laneway Resources Limited, Stanmore Coal Limited,
Strike Energy Limited
Former directorships (last 3 years): Diversa Limited, UIL
Energy Limited
Interests in shares: 28,122,982
Interests in options: 6,250,000
David Christensen, Managing Director
Experience and expertise: David Christensen is
an experienced mining executive, with successful
experience managing and developing mining
operations. Prior to founding the Company, David
served as Chief Executive Officer of Adelaide based
companies, Heathgate Resources Pty Ltd and Quasar
Resource Pty Ltd, where he oversaw the operation
of the Beverley uranium mine and the development
of the Four Mile uranium deposit. David’s experience
also includes trading and marketing, and having
served as President of Nuclear Fuels Corporation.
David commenced his career as an attorney in
California and London offices of international
law firm Latham & Watkins, where he advised on
corporate finance and mergers and acquisitions.
David was educated at Cornell University (BA,
Economics and Classical Civilizations), the University
of California, Los Angeles (JD) and the Universitá di
Bologna (Fulbright Fellow).
Other current directorships: None
Former directorships (last 3 years): None
Interests in shares: 16,064,637
Interests in options: 150,000
Richard (Dick) Keevers, Non-Executive Chairman
Experience and expertise: Dick Keevers has over 40
years of experience in the resource sector, having
previously held senior executive positions with
Broken Hill South Limited and Newmont Mining
Corporation. Dick’s experience includes advancing
multiple producing mines from discovery phase
through development, including the Telfer gold
and copper mine, the Phosphate Hill phosphate
mine and the Baal Gammon copper mine. Dick also
was a substantial shareholder of, and served as an
executive director for, Pembroke Josephson Wright
Limited, an Australian share brokerage firm. Dick
has served on boards of several ASX-listed resource
companies, and he is currently a non-executive
director of Santana Minerals Limited. Dick is a
graduate of the University of New England, NSW (BSc,
Geology), and is a fellow of Australasian Institute of
Mining and Metallurgy.
Other current directorships: Santana Minerals Limited
Former directorships (last 3 years): None
Interests in shares: 46,265,810
Interests in options: 7,834,399
15
Renascor Resources Limited annual report 2019 Other current directorships’ (quoted previously)
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.
Company secretary
Pierre van der Merwe is a Chartered Accountant
of more than 30 years experience with extensive
knowledge in the provision of corporate secretarial
and accounting services to ASX listed companies. He
also has experience as CFO and was a Partner from
2004 to 2016 in HLB Mann Judd (SA), an Australasian
and International accountancy and business advisory
group. During this time he headed the Corporate
Team in Adelaide which provides corporate
secretarial and accounting services to a host of ASX
listed companies in various industries, specialising in
exploration and mining entities.
Meetings of directors
The number of meetings of the Company’s Board of
Directors (‘the Board’) held during the year ended 30
June 2019, and the number of meetings attended by
each director were:
Full Board
Audit & Risk
Committee
Attended Held
Attended Held
Richard Keevers
David Christensen
Geoffrey McConachy
Chris Anderson
Stephen Bizzell
6
6
6
2
6
6
6
6
2
6
2
2
2
-
2
2
2
2
-
2
Held: represents the number of meetings held during the
time the director held office.
Directors’ Report 30 June 2019
Geoffrey McConachy, Non-Executive Director
Experience and expertise: Geoffrey McConachy is
an accomplished geologist with over thirty years of
Australian and international experience in the mining
industry assessing a wide range of commodities.
Prior to joining the Company, Geoffrey worked for
Heathgate Resources Pty Ltd and Quasar Resources
Pty Ltd, where his roles included Managing Director,
Exploration. While at Heathgate and Quasar, Geoffrey
led the exploration and development team in the
discovery, definition and evaluation of four uranium
deposits including the Four Mile deposit, for which
he was co-honoured with the Prospector of the Year
award from the Australian Association of Mining
& Exploration Companies. His experience includes
instrumental roles in the discovery of the Fosterville
gold deposit in Victoria and the Potosi base metal
deposit in New South Wales. Geoffrey is a fellow of
the Australasian Institute of Mining and Metallurgy
and a former Director of the Uranium Information
Centre.
Other current directorships: None
Former directorships (last 3 years): None
Interests in shares: 9,249,699
Interests in options: 235,294
Chris Anderson, Non-Executive Director -
Resigned 12 October 2018
Experience and expertise: Chris Anderson is an
experienced geophysicist with over 40 years in
mineral exploration in Australia and abroad. His
experience includes an instrumental role in the 2005
discovery of the Carrapateena copper-gold mine in
South Australia. His earlier experience includes acting
as Placer Pacific’s Exploration Manager for Eastern
Australia, where he was instrumental in the discovery
of the Kalkaroo copper-gold-molybdenum deposit
in South Australia. Chris’ significant international
experience includes geophysical interpretation in
Zambia for Equinox Resources Ltd, and in Tanzania
for North Mara Gold Mines, where he contributed to
the discovery of the one million ounce Gokona gold
deposit. From 2005 to 2010 Chris served as executive
director of ASX listed Stellar Resources Ltd, with
exploration interests in South Australia, New South
Wales, Victoria and Tasmania. Chris is a graduate of
Adelaide University (BSc, Geology and Geophysics)
(Hons), and is a fellow of Australasian Institute of
Mining and Metallurgy.
Other current directorships: None
Former directorships (last 3 years): None
Interests in shares: 9,753,240
Interests in options: 588,235
16
Directors’ Report 30 June 2019
Remuneration Report
(audited)
The remuneration report details the key
management personnel remuneration arrangements
for the Group, in accordance with the requirements
of the Corporations Act 2001 and its Regulations.
Key management personnel are those persons
having authority and responsibility for planning,
directing and controlling the activities of the entity,
directly or indirectly, including all directors.
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 information
• Additional disclosures relating to key management
personnel
Principles used to determine the nature and
amount of remuneration
The objective of the Group’s executive reward
framework is to ensure reward for performance is
competitive and appropriate for the results delivered.
The framework aligns executive reward with the
achievement of strategic objectives and the creation
of value for shareholders, and it is considered to
conform to the market best practice for the delivery
of reward. The Board of Directors (‘the Board’)
ensures that executive reward satisfies the following
key criteria for good reward governance practices:
• competitiveness and reasonableness;
• acceptability to shareholders;
• performance linkage / alignment of executive
compensation; and
• transparency.
The Board carried out the functions of the
Nomination and Remuneration Committee and
is responsible for determining and reviewing
remuneration arrangements for its directors and
executives. The performance of the Group depends
on the quality of its directors and executives. The
remuneration philosophy is to attract, motivate and
retain high performance and high quality personnel.
The Board is responsible for managing:
• non-executive director fees;
• executive remuneration (directors and other
executives); and
• the over-arching executive remuneration
framework and incentive plan policies.
Their objective is to ensure that remuneration
policies and structures are fair and competitive and
aligned with the longterm interests of the Group.
Relationship between remuneration and Group
performance:
During the financial year, the Group has generated
losses as its principal activity was exploration for
graphite and other minerals within South Australia.
As the Group is still in the exploration and evaluation
stage, the link between remuneration, Group
performance and shareholder wealth is sometimes
tenuous. Share prices are subject to the influence of
metals prices, market sentiment towards the sector
and the global economy and as such increases or
decreases may occur quite independent of executive
performance or remuneration.
In accordance with best practice corporate
governance, the structure of non-executive director
and executive director remuneration is separate.
Non-executive directors remuneration
Fees and payments to non-executive directors reflect
the demands and responsibilities of their role. Non-
executive directors’ fees and payments are reviewed
periodically by the Board. The chairman’s fees are
determined independently to the fees of other non-
executive directors based on comparative roles in the
external market. The chairman is not present at any
discussions relating to the determination of his own
remuneration. Non-executive directors do not receive
any performance-based pay.
ASX listing rules require the aggregate non-executive
directors’ remuneration be determined periodically
by a general meeting. The most recent determination
was at the Annual General Meeting held on 5 August
2010, where the shareholders approved a maximum
annual aggregate remuneration of $350,000.
Retirement allowances for non-executive
directors
In line with guidance from the ASX Corporate
Governance Council on non-executive director’s
remuneration, no retirement allowances are
provided for non-executive directors. Superannuation
contributions required under the Australian
superannuation guarantee legislation continue to
be made as required and are deducted from the
directors’ overall fee entitlements.
17
Renascor Resources Limited annual report 2019 Directors’ Report 30 June 2019
Executive remuneration
The objective of the Group’s executive reward
framework is to ensure reward for performance is
competitive and appropriate for the results delivered.
The framework aligns executive reward with
achievement of strategic objectives and the creation
of value for shareholders, and conforms to market
practice for delivery of reward. The Board ensures
that executive reward satisfies the following key
criteria for good reward governance practices:
• competitiveness and reasonableness;
• acceptability to shareholders;
• performance linkage/alignment of executive
compensation;
• transparency; and
• capital management.
The Group has structured an executive remuneration
framework that is market competitive and
complementary to the reward strategy of the
organisation.
Alignment to shareholders’ interests:
• has economic profit as a core component of plan
design;
• focuses on sustained growth in shareholder
wealth;
• delivering constant return on assets as well as
focusing the executive on key non-financial drivers
of value; and
• attracts and retains high calibre executives.
Alignment to program participants’ interests:
• rewards capability and experience;
• reflects competitive reward for contribution to
growth in shareholder wealth;
• provides a clear structure for earning rewards; and
• provides recognition for contribution.
The framework provides a mix of fixed and long-term
incentives.
The Board carried out the functions of the
Remuneration and Nominations Committees
and is responsible for reviewing and negotiating
compensation arrangements of senior executives.
It assesses the appropriateness of the nature
and amount of remuneration of such officers on
a periodic basis by relevant employment market
conditions with the overall objective of ensuring
maximum stakeholder benefit from the retention of
a high quality board and executive team. The board
manages remuneration and incentive policies and
practices and remuneration packages and other
terms of employment for executive directors, other
senior executives and non-executive directors.
The Board ensures that executive reward satisfies
the following key criteria for good reward governance
practices:
• base pay and benefits, including superannuation;
• short-term performance incentives through a cash
bonus may be determined by the Board; and
• long-term incentives through the issue of share
options and performance rights.
The combination of these comprises the executive’s
total remuneration.
Base pay and benefits
Base pay and benefits are structured as a total
employment cost package which may be delivered as
a combination of cash and prescribed non-financial
benefits, at the executive’s discretion and subject to
board approval.
Executives are offered a competitive base pay that
comprises the fixed component of pay and rewards
to ensure base pay is set to reflect the market
for a comparable role. Base pay for executives is
reviewed periodically to ensure the executive’s pay is
competitive with the market.
There is no guaranteed base pay increase included in
any of the executives’ contracts.
Consolidated entity performance and link to
remuneration
Remuneration for certain individuals is directly
linked to the performance of the Group. A portion
of any cash bonus and incentive payments are at
the discretion of the Nomination and Remuneration
Committee. Refer to the “additional information”
section below for details of the earnings and total
shareholders return for the last five years.
The Nomination and Remuneration Committee is of
the opinion that the continued improved results can
be attributed in part to the adoption of performance
based compensation and is satisfied that this
improvement will continue to increase shareholder
wealth if maintained over the coming years.
Voting and comments made at the Company’s
29 November 2018 Annual General Meeting
(‘AGM’)
At the 29 November 2018 AGM, 99.8% of the votes
received supported the adoption of the remuneration
report for the year ended 30 June 2018. The
Company did not receive any specific feedback at the
AGM regarding its remuneration practices.
18
Directors’ Report 30 June 2019
Details of remuneration
Amounts of remuneration
Details of the remuneration of key management personnel of the Group are set out in the following tables.
Short-term benefits
Post-employment
benefits
Long-term benefits
Cash salary
and fees
$
Non-
monetary
$
Superannuation
$
Long service Performance
Rights
$
leave
$
2019
Non-Executive Directors:
Chris Anderson
Stephen Bizzell
Richard Keevers
19,058
40,000
54,795
Geoffrey McConachy*
202,022
Executive Directors:
-
-
-
-
-
-
5,205
11,190
-
-
-
47,841
-
-
-
-
David Christensen**
273,600
9,663
20,531
-
177,675
481,469
Other Key Management Personnel:
Pierre van der Merwe
118,009
-
-
-
-
118,009
707,484
9,663
36,926
47,841
177,675
979,589
*
Mr McConachy became a non-executive director on the 5th of January 2019. Short term benefits paid to Mr
McConachy includes $42,310 in annual leave entitlements paid during the year.
** Short term benefits paid to Mr Christensen includes $24,000 in annual leave entitlements paid during the year.
Short-term benefits
Post-employment
benefits
Long-term
benefits
Share-based
payments
Cash salary
and fees
$
Non-
monetary
$
Superannuation
$
Long service
leave
$
NEDSP
shares
$
2018
Non-Executive Directors:
Chris Anderson
Stephen Bizzell
Richard Keevers
Andrew Martin
Executive Directors:
David Christensen
Geoffrey McConachy
19,250
23,333
28,905
6,428
273,600
239,200
Other Key Management Personnel:
Angelo Gaudio
Pierre van der Merwe
93,113
8,333
-
-
-
-
9,950
-
-
-
-
-
4,338
1,350
20,049
20,049
-
-
-
-
-
-
8,545
6,299
-
-
13,750
16,667
25,000
7,778
-
-
-
-
Total
$
19,058
40,000
60,000
261,053
Total
$
33,000
40,000
58,243
15,556
312,144
265,548
93,113
8,333
692,162
9,950
45,786
14,844
63,195
825,937
At the AGM held on 27 November 2014, shareholders approved the Non-Executive Directors Share Plan (NEDSP) for
non-executive directors to receive up to 50% of their compensation in shares in the Company. Commencing on
1 October 2014 non-executive directors received payment for 50% of their director fees. On 1 May 2018, the NEDSP
agreement was suspended with the option of reintroducing it in the future if required.
At 30 June 2018, NEDSP shares for the period 1 March 2018 to 30 April 2018 had not been issued and were settled by
a cash payment in September 2018.
19
Renascor Resources Limited annual report 2019
Directors’ Report 30 June 2019
The proportion of remuneration linked to performance and the fixed proportion are as follows:
Fixed remuneration
At risk - STI
At risk - LTI
2019
2018
2019
2018
2019
2018
Non-Executive Directors:
Chris Anderson
Stephen Bizzell
Richard Keevers
Geoffrey McConachy *
Executive Directors:
David Christensen**
100%
100%
100%
100%
100%
100%
100%
100%
63%
100%
Other Key Management Personnel:
Pierre van der Merwe
100%
100%
* Mr McConachy became a non-executive director on the 5th of January 2019
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
37%
-
-
-
-
-
-
-
** During the year ended 30 June 2019 shareholders granted approval for the issue of performance rights to
Mr David Christensen. Further information pertaining to the Performance Rights can be found in
Note 31 “Share Based Payments”. The total value of performance-related bonuses paid to key management
personnel and executives during the year was $177,675 (2018: $Nil).
Key management personnel and executives were not paid cash bonuses during the years ended
30 June 2019 and 2018.
Service agreements
Share-based compensation
Issue of shares
There were no shares issued to directors and other
key management personnel as part of compensation
during the year ended 30 June 2019.
Options
There were no options over ordinary shares issued to
directors and other key management personnel
as part of compensation that were outstanding as at
30 June 2019.
Remuneration and other terms of employment for
key management personnel are formalised in service
agreements.
Details of these agreements are as follows:
David Christensen, Managing Director
Term of agreement: Indefinite term, subject to six-
month’s notice or a termination payment of six
months.
Details: Per annum rate of $249,600, exclusive of
superannuation. In addition, David is also entitled to
private health insurance.
Geoffrey McConachy, Exploration Director
Term of agreement: The agreement was terminated in
January 2019 when Mr McConachy transitioned to
Non-Executive Director role.
Details: Per annum rate of $239,200, exclusive of
superannuation
Pierre van der Merwe,
Chief Financial Officer and Company Secretary
Term of agreement: The agreement is with HLB Mann
Judd SA and may be terminated by either party on
one months’ notice.
Details: Services are provided at a rate of $10,000 per
month plus GST plus expenses.
Key management personnel have no entitlement to
termination payments in the event of removal for
misconduct.
20
Directors’ Report 30 June 2019
Performance rights
The terms and conditions of each grant of performance rights over ordinary shares affecting remuneration of
directors and other key management personnel in this financial year or future reporting years are as follows:
Grant date
Expiry date
Share price hurdle for vesting
Fair value per right at grant date
Tranche A 22 November 2018
22 November 2022
Tranche B 22 November 2018
22 November 2022
Tranche C 22 November 2018
22 November 2022
$0.00
$0.00
$0.06
$0.020
$0.020
$0.008
Performance rights granted carry no dividend or voting rights.
Details of performance rights over ordinary shares granted, vested and lapsed for directors and other key
management personnel as part of compensation during the year ended 30 June 2019 are set out below:
Name
Grant date
Number
of rights
granted
Number
of rights
vested
$
Value of
rights
granted
$
Value of
rights in
the period
Number of Value of
rights
lapsed
rights expensed
lapsed
$
David Christensen 22 November 2018 18,000,000
-
261,600
177,675
-
-
Further information regarding the Performance Rights can be found in Note 31 “Share Based Payments”.
Additional information
Refer to the sections below for details of the earnings and total shareholders return for the last five years:
The earnings of the Group for the five years to 30 June 2019 are summarised below:
(Loss) for the year attributable to owners ($)
(1,321,558)
(3,434,543)
(1,085,492)
(890,079)
(4,932,426)
Increase/(decrease) in share price (%)
5%
25%
(25%)
-
(46%)
2019
$
2018
$
2017
$
2016
$
2015
$
The factors that are considered to affect total shareholders return (‘TSR’) are summarised below:
Share price at financial year end (cents)
Basic earnings per share (cents per share)
2019
2.1
(0.1)
2018
2.0
(0.5)
2017
2016
1.6
(0.2)
2.0
(0.4)
2015
2.0
(3.5)
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 Group, including their personally related parties, is set out below:
Ordinary shares
Chris Anderson*
Stephen Bizzell
David Christensen
Richard Keevers
Geoffrey McConachy
Balance at
the start of
the year
Received
as part of
remuneration
Additions
Other
Balance at
the end of
the year
15,753,240
26,946,512
15,770,519
43,799,340
9,249,699
111,519,310
-
-
-
-
-
-
- (6,000,000)
9,753,240
1,176,470
- 28,122,982
294,118
- 16,064,637
2,466,470
- 46,265,810
-
-
9,249,699
3,937,058 (6,000,000) 109,456,368
* Mr Anderson resigned as director on 12 October 2018. At the time of his resignation he had an interest in
15,753,240 ordinary shares.
21
Renascor Resources Limited annual report 2019
Directors’ Report 30 June 2019
Additional disclosures relating to key management personnel continued
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 Group, including their personally related parties, is
set out below:
Options over ordinary shares
Chris Anderson*
Stephen Bizzell
David Christensen
Richard Keevers
Geoffrey McConachy
Balance at
the start of
the year
588,235
6,250,000
150,000
7,834,399
235,294
15,057,928
Acquired
Exercised
Other
Balance at
the end of
the year
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
588,235
6,250,000
150,000
7,834,399
235,294
15,057,928
* Mr Anderson resigned as director on 12 October 2018. At the time of his resignation he had an interest in
588,235 options.
All options are vested at 30 June 2019 and are exercisable at any time until they reach their expiry dates.
Performance rights holding
The number of performance rights over ordinary shares in the Company held during the financial year by each
director and other members of key management personnel of the Group, including their personally related
parties, is set out below:
Performance rights over ordinary shares
David Christensen
Balance at
the start of
the year
Granted
Vested
Expired/
forfeited/
other
Balance at
the end of
the year
-
-
18,000,000
18,000,000
-
-
- 18,000,000
- 18,000,000
Other transactions with key management personnel and their related parties
Mr G W McConachy and Mr C Anderson are directors of Euro Exploration Services Pty Ltd (Euro). Euro has
provided the company with exploration services, geochemical sampling services as well as the provision of
geological personnel services during the year. The services provided are based on normal commercial terms
and conditions. During the financial year the Company incurred costs of $203,768 (2018: $44,351) from Euro.
An amount of $7,384 (2018: $8,353) was owing to Euro at 30 June 2019.
Mr C Anderson is a director of Pondray Pty Ltd trading as CG Anderson & Associates (CGAA). CGAA has
provided geophysical services to the company. During the financial year the Company incurred costs of $7,700
(2018: 73,300) from CGAA. An amount of $Nil (2018: $15,730) was owing to CGAA at 30 June 2019.
Mr S Bizzell is a director of Bizzell Capital Partners Pty Ltd (BCP). BCP has provided corporate advisory and
underwriting services to the company in relation to its capital raising. The services provided are based on
normal commercial terms and conditions. During the financial year the Company incurred costs of $Nil (2018:
$168,515) from BCP. An amount of $3,667 (2018: $23,207) was owing to BCP at 30 June 2019.
This concludes the remuneration report, which has been audited.
22
Directors’ Report 30 June 2019
Shares under option
Indemnity and insurance of officers
Unissued ordinary shares of Renascor Resources
Limited under option at the date of this report are as
follows:
Grant date
Expiry date
Exercise
Number
price under option
The Company has indemnified the directors and
executives of the Company for costs incurred, in their
capacity as a director or executive, for which they
may be held personally liable, except where there is a
lack of good faith.
05/12/2016
05/12/2019
$0.05
15,000,000
28/11/2017
31/10/2019
$0.03
114,761,096
129,761,096
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 under performance rights
Unissued ordinary shares of Renascor Resources
Limited under option at the date of this report are as
follows:
Grant date
Expiry date
22 November 22 November
Exercise
price
Number
under rights
During the financial year, the Company paid a
premium in respect of a contract to insure the
directors and executives of the Company against a
liability 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.
Indemnity and insurance of auditor
The Company has not, during or since the end of the
financial year, indemnified or agreed to indemnify the
auditor of the Company or any related entity against
a liability incurred by the auditor.
During the financial year, the Company has not paid
a premium in respect of a contract to insure the
auditor of the Company or any related entity.
2018
2022
$0.00
18,000,000
Proceedings on behalf of the Company
No person has applied to the Court under section
237 of the Corporations Act 2001 for leave to
bring proceedings on behalf of the Company, or to
intervene in any proceedings to which the Company
is a party for the purpose of taking responsibility
on behalf of the Company for all or part of those
proceedings.
No person entitled to exercise the performance rights
had or has any right by virtue of the performance
right 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 Renascor
Resources Limited issued on the exercise of options
during the year ended 30 June 2019 and up to the
date of this report.
Shares issued on the exercise of performance
rights
There were no ordinary shares of Renascor
Resources Limited issued on the exercise of
performance rights during the year ended
30 June 2019 and up to the date of this report.
23
Renascor Resources Limited annual report 2019
Directors’ Report 30 June 2019
Non-audit services
Auditor
BDO Audit (SA) Pty Ltd continues in office in
accordance with section 327 of the Corporations
Act 2001.
This report is made in accordance with a resolution
of directors, pursuant to section 298(2)(a) of the
Corporations Act 2001.
On behalf of the directors
David Christensen,
Director
27 September 2019
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 22 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 22 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 BDO Audit (SA) Pty Ltd
There are no officers of the Company who are former
partners of BDO Audit (SA) Pty Ltd.
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.
24
Auditor’s Independence Declaration
Tel: +61 8 7324 6000
Fax: +61 8 7324 6111
www.bdo.com.au
Level 7, BDO Centre
420 King William St
Adelaide SA 5000
GPO Box 2018, Adelaide SA 5001
AUSTRALIA
DECLARATION OF INDEPENDENCE
BY ANDREW TICKLE
TO THE DIRECTORS OF RENASCOR RESOURCES LIMITED
As lead auditor of Renascor Resources Limited for the year ended 30 June 2019, I declare that, to the
best of my knowledge and belief, there have been:
1. No contraventions of the auditor independence requirements of the Corporations Act 2001 in
relation to the audit; and
2. No contraventions of any applicable code of professional conduct in relation to the audit.
This declaration is in respect of Renascor Resources Limited and the entities it controlled during the
period.
Andrew Tickle
Director
BDO Audit (SA) Pty Ltd
Adelaide, 27 September 2019
BDO Audit (SA) Pty Ltd ABN 33 161 379 086 is a member of a national association of independent entities which are all members of BDO (Australia) Ltd ABN 77 050 110 275,
an Australian company limited by guarantee. BDO Audit (SA) Pty Ltd and BDO (Australia) Ltd are members of BDO International Ltd, a UK company limited by guarantee, and
form part of the international BDO network of independent member firms. Liability limited by a scheme approved under Professional Standards Legislation.
25
Renascor Resources Limited annual report 2019
Financial Report
General information
The financial statements cover Renascor Resources
Limited as a Group consisting of Renascor Resources
Limited and the entities it controlled at the end of,
or during, the year. The financial statements are
presented in Australian dollars, which is Renascor
Resources Limited’s functional and presentation
currency.
Renascor Resources Limited is a listed public
company limited by shares, incorporated and
domiciled in Australia. Its registered office and
principal place of business is:
36 North Terrace
Kent Town SA 5067
Phone: + 61 8 363 6989
Email: info@renascor.com.au
Website: www.renascor.com.au
A description of the nature of the Group’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
27 September 2019.
The directors have the power to amend and reissue
the financial statement
26
Statement of profit or loss and other
comprehensive income For the year ended 30 June 2019
Revenue
Interest revenue
Other revenue
Expenses
Administration and consulting
Depreciation and amortisation expense
Employee benefits expense
Office accommodation
Impairment of exploration expenditure
Legal fees
Other expenses
Loss before income tax expense
Income tax expense
Consolidated
2019
$
2018
$
Note
94,818
36,902
-
4,036
(287,837)
(341,058)
(2,236)
(2,130)
(435,483)
(276,955)
(30,596)
(30,596)
(387,751)
(2,305,666)
(26,996)
(21,705)
4
5
6
7
(245,477)
(497,371)
(1,321,558)
(3,434,543)
8
-
-
Loss after income tax expense for the year attributable to the owners of
Renascor Resources Limited
18
(1,321,558)
(3,434,543)
Other comprehensive income for the year, net of tax
-
-
Total comprehensive income for the year attributable to the owners of
Renascor Resources Limited
Basic earnings per share
Diluted earnings per share
(1,321,558)
(3,434,543)
Cents
Cents
(0.1)
(0.1)
(0.5)
(0.5)
30
30
The above statement of profit or loss and other comprehensive income should be read in conjunction with the
accompanying notes.
27
Renascor Resources Limited annual report 2019
Statement of financial position As at 30 June 2019
Assets
Current assets
Cash and cash equivalents
Other receivables
Other
Total current assets
Non-current assets
Receivables
Property, plant and equipment
Exploration and evaluation
Total non-current assets
Total assets
Liabilities
Current liabilities
Trade and other payables
Provisions
Total current liabilities
Total liabilities
Net assets
Equity
Issued capital
Reserves
Accumulated losses
Total equity
Consolidated
2019
$
2018
$
Note
9
2,877,843
8,188,830
10
11
32,598
288,551
28,655
8,850
2,939,096
8,486,231
20,000
20,000
12
4,662
4,751
13
15,034,092
7,369,924
15,058,754
7,394,675
17,997,850
15,880,906
14
15
516,450
603,176
112,595
222,792
629,045
825,968
629,045
825,968
17,368,805
15,054,938
16
32,210,012
28,752,262
17
407,903
230,228
18
(15,249,110)
(13,927,552)
17,368,805 15,054,938
The above statement of financial position should be read in conjunction with the accompanying notes.
28
Statement of changes in equity For the year ended 30 June 2019
Contributed Share-based
Business
equity
Payments Combination Accumulated Non-controlling
interest
Reserve
Reserve
Losses
Total equity
Consolidated
$
$
$
$
Balance at 1 July 2017
18,628,616
1,400,629
(1,417,790)
(10,493,009)
$
-
$
8,118,446
-
(3,434,543)
-
(3,434,543)
-
-
-
-
-
(3,434,543)
-
(3,434,543)
-
-
-
-
-
9,742,748
-
-
$
-
628,287
15,054,938
$
15,054,938
-
(1,321,558)
-
(1,447,043)
-
-
-
-
-
(1,321,558)
-
(1,447,043)
Loss after income tax
expense for the year
Other comprehensive income
for the year, net of tax
Total comprehensive
income for the year
Transactions with owners in
their capacity as owners:
-
-
-
Contributions of equity, net
of transaction costs (note 17) 9,742,748
-
-
-
-
Share-based payments
(note 32)
380,898
247,389
Balance at 30 June 2018
28,752,262
1,648,018
(1,417,790)
(13,927,552)
Consolidated
$
$
$
$
Balance at 1 July 2018
28,752,262
1,648,018
(1,417,790)
(13,927,552)
Loss after income tax
expense for the year
Other comprehensive income
for the year, net of tax
Total comprehensive income
for the year
Transactions with owners in
their capacity as owners:
-
-
-
Contributions of equity, net
of transaction costs (note 16) 3,457,750
-
-
-
-
Share-based payments
(note 31)
-
177,675
-
-
-
-
Balance at 30 June 2019
32,210,012
1,825,693
(1,417,790)
(15,249,110)
The above statement of changes in equity should be read in conjunction with the accompanying notes.
-
-
-
3,457,750
177,675
17,368,805
29
Renascor Resources Limited annual report 2019
Statement of cash flows For the year ended 30 June 2019
Consolidated
2019
$
2018
$
Note
Cash flows from operating activities
Payments to suppliers and employees (inclusive of GST)
(1,452,201)
(741,657)
Receipts from Goods & Services Tax paid
Interest received
Research & Development tax concession
Other revenue
498,735
205,170
94,818
36,902
212,358
-
-
4,036
Net cash used in operating activities
29
(646,290)
(495,549)
Cash flows from investing activities
Payments for property, plant and equipment
Payments for exploration and evaluation
Net cash used in investing activities
Cash flows from financing activities
Proceeds from issue of shares
Share issue transaction costs
Net cash from financing activities
Net increase/(decrease) in cash and cash equivalents
Cash and cash equivalents at the beginning of the financial year
12
13
16
(2,145)
(2,594)
(4,662,552)
(2,531,539)
(4,664,697)
(2,534,133)
-
-
-
10,790,584
(802,285)
9,988,299
(5,310,987)
6,958,617
8,188,830
1,230,213
Cash and cash equivalents at the end of the financial year
9
2,877,843
8,188,830
The above statement of cash flows should be read in conjunction with the accompanying notes
30
Notes to the financial statements 30 June 2019
designated at fair value through profit or
loss, the standard requires the portion of the
change in fair value that relates to the entity’s
own credit risk to be presented in OCI (unless
it would create an accounting mismatch). New
simpler hedge accounting requirements are
intended to more closely align the accounting
treatment with the risk management activities
of the entity. New impairment requirements
use an ‘expected credit loss’ (ECL) model
to recognise an allowance. Impairment is
measured using a 12-month ECL method unless
the credit risk on a financial instrument has
increased significantly since initial recognition
in which case the lifetime ECL method is
adopted. For receivables, a simplified approach
to measuring expected credit losses using a
lifetime expected loss allowance is available.
AASB 15 Revenue from Contracts with
Customers
The Group has adopted AASB 15 from
1 July 2018. The standard provides a single
comprehensive model for revenue recognition.
The core principle of the standard is that
an entity shall recognise revenue to depict
the transfer of promised goods or services
to customers at an amount that reflects the
consideration to which the entity expects to be
entitled in exchange for those goods or services.
The standard introduced a new contract-based
revenue recognition model with a measurement
approach that is based on an allocation of the
transaction price. This is described further in
the accounting policies below. Credit risk is
presented separately as an expense rather
than adjusted against revenue. Contracts
with customers are presented in an entity’s
statement of financial position as a contract
liability, a contract asset, or a receivable,
depending on the relationship between the
entity’s performance and the customer’s
payment. Customer acquisition costs and costs
to fulfil a contract can, subject to certain criteria,
be capitalised as an asset and amortised over
the contract period.
1. Significant accounting policies
The principal accounting policies adopted in
the preparation of the financial statements are
set out either in the respective notes or below.
These policies have been consistently applied to
all the years presented, unless otherwise stated.
New or amended Accounting Standards
and Interpretations adopted
The Group 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 Group.
The following Accounting Standards and
Interpretations are most relevant to the Group:
AASB 9 Financial Instruments
The Group has adopted AASB 9 from
1 July 2018. The standard introduced new
classification and measurement models for
financial assets. A financial asset shall be
measured at amortised cost if it is held within
a business model whose objective is to hold
assets in order to collect contractual cash flows
which arise on specified dates and that are
solely principal and interest. A debt investment
shall be measured at fair value through other
comprehensive income if it is held within a
business model whose objective is to both hold
assets in order to collect contractual cash flows
which arise on specified dates that are solely
principal and interest as well as selling the asset
on the basis of its fair value. All other financial
assets are classified and measured at fair value
through profit or loss unless the entity makes
an irrevocable election on initial recognition to
present gains and losses on equity instruments
(that are not held-for-trading or contingent
consideration recognised in a business
combination) in other comprehensive income
(OCI). Despite these requirements,
a financial asset may be irrevocably designated
as measured at fair value through profit or
loss to reduce the effect of, or eliminate, an
accounting mismatch. For financial liabilities
31
Renascor Resources Limited annual report 2019
Notes to the financial statements 30 June 2019
1. Significant accounting policies continued
Basis of preparation
These general purpose financial statements
have been prepared in accordance with
Australian Accounting Standards and
Interpretations issued by the Australian
Accounting Standards Board (AASB) and the
Corporations Act 2001, as appropriate for
for-profit oriented entities. These financial
statements also comply with International
Financial Reporting Standards as issued by
the International Accounting Standards Board
(IASB).
Historical cost convention
The financial statements have been prepared
under the historical cost convention, except for,
where applicable, the revaluation of available-
for-sale financial assets, financial assets and
liabilities at fair value through profit or loss, 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 Group’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 2.
Going concern
The Directors believe it is appropriate to
prepare the consolidated financial report on
a going concern basis, which contemplates
realisation of assets and settlement of liabilities
in the normal course of business. As disclosed
in the financial report, the group has incurred
a loss after tax for the year of $1,321,558 (2018:
$3,434,543) and net operating cash outflow of
$646,290 (2018: $495,549). At 30 June 2019,
the Group had net current assets of $2,310,051
(30 June 2018: $7,660,263).
The consolidated entity’s ability to continue
as a going concern is contingent on raising
additional capital and/or the successful
exploration and subsequent exploitation of its
areas of interest through sale or development.
The matters set out above indicate the
existence of a material uncertainty that may
cast significant doubt about the entity’s ability
to continue as a going concern and therefore
the entity may be unable to realise its assets
and discharge its liabilities in the normal
course of business. The financial statements
do not include any adjustments that may be
necessary if the consolidated entity is unable to
continue as a going concern. The consolidated
entity’s ability to continue as a going concern
is contingent on raising additional capital and/
or the successful exploration and subsequent
exploitation of its areas of interest through sale
or development. The matters set out above
indicate the existence of a material uncertainty
that may cast significant doubt about the
entity’s ability to continue as a going concern
and therefore the entity may be unable to
realise its assets and discharge its liabilities in
the normal course of business. The financial
statements do not include any adjustments that
may be necessary if the consolidated entity is
unable to continue as a going concern
Parent entity information
In accordance with the Corporations Act 2001,
these financial statements present the results
of the Group only. Supplementary information
about the parent entity is disclosed in note 26.
Principles of consolidation
The consolidated financial statements
incorporate the assets and liabilities of all
subsidiaries of Renascor Resources Limited
(‘Company’ or ‘parent entity’) as at 30 June 2019
and the results of all subsidiaries for the year
then ended. Renascor Resources Limited and
its subsidiaries together are referred to in these
financial statements as the ‘Group’.
Subsidiaries are all those entities over which the
Group has control. The Group controls an entity
when the Group is exposed to, or has rights to,
variable returns from its involvement with the
entity and has the ability to affect those returns
through its power to direct the activities of the
entity. Subsidiaries are fully consolidated from
the date on which control is transferred to the
Group. They are de-consolidated from the date
that control ceases.
Intercompany transactions, balances and
unrealised gains on transactions between
entities in the Group are eliminated.
Unrealised losses are also eliminated unless
the transaction provides evidence of the
impairment of the asset transferred. Accounting
policies of subsidiaries have been changed
where necessary to ensure consistency with the
policies adopted by the Group.
32
Notes to the financial statements 30 June 2019
1. 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 Group loses control over a
subsidiary, it derecognises the assets including
goodwill, liabilities and noncontrolling interest
in the subsidiary together with any cumulative
translation differences recognised in equity.
The Group 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.
The financial statements are presented in
Australian dollars, which is Renascor Resources
Limited’s functional and presentation currency.
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.
R & D Tax Incentives
R&D tax incentives are considered more akin
to government grants because they are not
conditional upon earning taxable income and
the group accounts for any R&D Tax incentives
received as government grants under AASB
120 Accounting for Government Grants and
Disclosure of Government Assistance.
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 Group’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 Group’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.
33
Renascor Resources Limited annual report 2019
Notes to the financial statements 30 June 2019
1. Significant accounting policies continued
Provisions
Impairment of non-financial assets
Goodwill and other intangible assets that
have an indefinite useful life are not subject
to amortisation and are tested annually for
impairment, or more frequently if events or
changes in circumstances indicate that they
might be impaired.
Other non-financial assets are reviewed for
impairment whenever events or changes
in circumstances indicate that the carrying
amount may not be recoverable. An impairment
loss is recognised for the amount by which the
asset’s carrying amount exceeds its recoverable
amount.
Recoverable amount is the higher of an asset’s
fair value less costs of disposal and value-in-
use. The value-in-use is the present value of the
estimated future cash flows relating to the asset
using a pre-tax discount rate specific to the
asset or cash-generating unit to which the asset
belongs. Assets that do not have independent
cash flows are grouped together to form a cash-
generating unit.
Goods and Services Tax (‘GST’) and other
similar taxes
Revenues, expenses and assets are recognised
net of the amount of associated GST, unless the
GST incurred is not recoverable from the tax
authority. In this case it is recognised as part of
the cost of the acquisition of the asset or as part
of the expense.
Receivables and payables are stated inclusive
of the amount of GST receivable or payable.
The net amount of GST recoverable from, or
payable to, the tax authority is included in other
receivables or other payables in the statement
of financial position.
Cash flows are presented on a gross basis.
The GST components of cash flows arising
from investing or financing activities which
are recoverable from, or payable to the tax
authority, are presented as operating cash
flows.
Commitments and contingencies are disclosed
net of the amount of GST recoverable from, or
payable to, the tax authority.
Provisions for legal claims are recognised when:
the Group has a present legal or constructive
obligation as a result of past events; it is more
likely than not that an outflow of resources will
be required to settle the obligation; and the
amount has been reliably estimated. Provisions
are not recognised for future operating losses.
Where there are a number of similar
obligations, the likelihood that an outflow will
be required in settlement is determined by
considering the class of obligations as a whole.
A provision is recognised even if the likelihood
of an outflow with respect to any one item
included in the same class of obligations may be
small.
The Group has obligations to restore and
rehabilitate certain areas where drilling has
occurred on exploration tenements.
These obligations are currently being met as the
drilling is completed and as such no provision
has been recognised.
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 Group for the
annual reporting period ended 30 June 2019.
The Group’s assessment of the impact of these
new or amended Accounting Standards and
Interpretations, most relevant to the Group, are
set out following.
AASB 16 Leases
This standard is applicable to annual reporting
periods beginning on or after 1 January 2019.
The standard replaces AASB 117 ‘Leases’ and
for lessees will eliminate the classifications of
operating leases and finance leases. Subject
to exceptions, a ‘right-of-use’ asset will be
capitalised in the statement of financial
position, measured at the present value of the
unavoidable future lease payments to be made
over the lease term. The exceptions relate to
short-term leases of 12 months or less and
leases of low-value assets (such as personal
computers and small office furniture) where
an accounting policy choice exists whereby
either a ‘right-of-use’ asset is recognised or
lease payments are expensed to profit or
loss as incurred. A liability corresponding to
the capitalised lease will also be recognised,
adjusted for lease prepayments, lease
34
Notes to the financial statements 30 June 2019
1. Significant accounting policies continued
Share-based payment transactions
incentives received, initial direct costs incurred
and an estimate of any future restoration,
removal or dismantling costs. Straight-line
operating lease expense recognition will be
replaced with a depreciation charge for the
leased asset (included in operating costs) and
an interest expense on the recognised lease
liability (included in finance costs). In the earlier
periods of the lease, the expenses associated
with the lease under AASB 16 will be higher
when compared to lease expenses under AASB
117. However Earnings Before Interest, Tax,
Depreciation and Amortisation (EBITDA) results
will be improved as the operating expense is
replaced by interest expense and depreciation
in profit or loss under AASB 16. For classification
within the statement of cash flows, the lease
payments will be separated into both a principal
(financing activities) and interest (either
operating or financing activities) component.
For lessor accounting, the standard does not
substantially change how a lessor accounts for
leases. The consolidated entity will adopt this
standard from 1 January 2019 but the impact of
its adoption is not considered to be material.
2.
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.
The Group measures the cost of equity-settled
transactions with employees by reference to
the fair value of the equity instruments at the
date at which they are granted. The fair value
is determined by using either the Binomial
or Black-Scholes model taking into account
the terms and conditions upon which the
instruments were granted. The accounting
estimates and assumptions relating to equity-
settled share-based payments would have
no impact on the carrying amounts of assets
and liabilities within the next annual reporting
period but may impact profit or loss and equity.
Details of share based payment transactions
are presented in Note 31.
Exploration and evaluation costs
Exploration and evaluation costs have been
capitalised on the basis that the Group will
commence commercial production in the
future, from which time the costs will be
amortised in proportion to the depletion of
the mineral resources. Key judgements are
applied in considering costs to be capitalised
which includes determining expenditures
directly related to these activities and allocating
overheads between those that are expensed
and capitalised. In addition, costs are only
capitalised that are expected to be recovered
either through successful development or sale
of the relevant mining interest.
Factors that could impact the future commercial
production at the mine include the level of
reserves and resources, future technology
changes, which could impact the cost of mining,
future legal changes and changes in commodity
prices. To the extent that capitalised costs
are determined not to be recoverable in the
future, they will be written off in the period in
which this determination is made. Details of
capitalised exploration and evaluation costs are
presented in Note 13.
35
Renascor Resources Limited annual report 2019
Notes to the financial statements 30 June 2019
3. Operating segments
The Group has identified its operating segments
based on the internal reports that reviewed
and used by the Managing Director (Chief
Operating Decision Maker ‘CODM’) and the
board of directors in assessing performance
determining the allocation of resources. The
Group is managed primarily on a geographic
basis, that is, the location of the respective
areas of interest (tenements) in Australia.
Operating segments are determined on the
basis of financial information reported to the
board which is at the consolidated level. The
Group does not have any products or services it
derives revenue from.
Accordingly, management currently identifies
the Group as having only one reportable
segment, being the exploration for graphite,
copper, gold, uranium and other minerals
in Australia. There have been no changes
in the operating segments during the year.
Accordingly, all significant operating decisions
are based upon analysis of the Group as
one segment. The financial results from
this segment are equivalent to the financial
statements of the Group as a whole.
Accounting policy for 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 CODM. The CODM
is responsible for the allocation of resources
to operating segments and assessing their
performance.
36
Notes to the financial statements 30 June 2019
4. Employee benefits expense
Employee benefits expense
Employee share-based payment expense
Defined contribution superannuation expense
Consolidated
2019
$
2018
$
216,007
234,382
177,675
-
41,801
42,573
435,483
276,955
Employee share-based payment expense comprises of Performance Rights granted to
Mr David Christensen. Further information pertaining to the Performance Rights can be
found in Note 31 “Share Based Payments”.
5. Office accommodation
Minimum office lease payments
6.
Impairment of exploration expenditure
Impairment of exploration expenditure
Consolidated
2019
$
2018
$
30,596
30,596
Consolidated
2019
$
2018
$
387,751
2,305,666
37
Renascor Resources Limited annual report 2019
Notes to the financial statements 30 June 2019
7. Other expenses
Business development & marketing
Investor and public relations
Travel
Other expenses
8.
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%
Tax effect amounts which are not deductible/(taxable) in calculating taxable income:
Entertainment expenses
Share-based payments
Research and development tax concession
Current year temporary differences not recognised
Income tax expense
Consolidated
2019
$
2018
$
108,853
257,500
66,998
131,356
48,392
21,234
72,033
36,482
245,477
497,371
Consolidated
2019
$
2018
$
(1,321,558)
(3,434,543)
(363,428)
(944,499)
-
323
61,236
63,938
-
(51,968)
(302,192)
(932,206)
302,192
932,206
-
-
The Group has tax losses arising in Australia of $21,044,733 (2018: $15,377,990) that may be available
and may be offset against future taxable profits. In addition, these tax losses can only be utilised in the
future if the continuity of ownership test is passed, or if failing that, the same business test is passed.
The Group had nil franking credits in its franking account at 30 June 2019 (2018: Nil).
No deferred tax liability has been recognised for expenditure pertaining to exploration and evaluation.
The amount of $3,195,869 is fully offset by the Company’s deferred tax assets (2018: $1,692,662).
No deferred tax asset has been recognised because it is not likely future assessable income is derived of
a nature and of an amount sufficient to enable the benefit to be realised.
38
Notes to the financial statements 30 June 2019
9.
Current assets - cash and cash equivalents
Cash on hand
Cash at bank
Consolidated
2019
$
100
2018
$
100
2,877,743
8,188,730
2,877,843
8,188,830
Cash at bank accounts are interest bearing attracting normal market interest rates.
As funds are held with AA/AA1 to A/A1 credit rated financial institutions (as per S&P/Moody’s ratings)
there is minimal counterparty credit risk of funds held.
Accounting policy for 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.
The carrying amount for cash and cash equivalents equals the fair value.
10. Current assets - Other receivables
GST refundable
Sundry receivables
Research and development tax concession
Consolidated
2019
$
2018
$
23,874
99,277
8,724
300
-
188,974
32,598
288,551
Allowance for expected credit losses
The Group has recognised a loss of $0 (2018: $0) in profit or loss in respect of the expected credit losses
for the year ended 2019.
The ageing of the receivables and allowance for expected credit losses provided for above are as follows:
Expected credit loss rate
Carrying amount
Allowance for expected
credit losses
Consolidated
Not overdue
2019
%
-
2018
%
2019
$
2018
$
-
32,598
288,551
2019
$
-
2018
$
-
Accounting policy for trade and other receivables
Trade receivables are initially recognised at fair value and subsequently measured at amortised cost
using the effective interest method, less any allowance for expected credit losses. Trade receivables are
generally due for settlement within 30 days.
The Group has applied the simplified approach to measuring expected credit losses, which uses a
lifetime expected loss allowance. To measure the expected credit losses, trade receivables have been
grouped based on days overdue.
Other receivables are recognised at amortised cost, less any allowance for expected credit losses.
39
Renascor Resources Limited annual report 2019
Notes to the financial statements 30 June 2019
11. Current assets - other
Prepayments
12. Non-current assets - property, plant and equipment
Computer equipment - at cost
Less: Accumulated depreciation
Office equipment - at cost
Less: Accumulated depreciation
Consolidated
2019
$
2018
$
28,655
8,850
Consolidated
2019
$
2018
$
41,570
39,424
(37,248)
(35,137)
4,322
4,444
4,287
4,444
(4,104)
(3,980)
340
4,662
464
4,751
Accounting policy for property, plant and equipment
Plant and equipment is stated at historical cost less accumulated depreciation and impairment. Historical
cost includes expenditure that is directly attributable to the acquisition of the items.
The cost of an item of plant and equipment also includes the initial estimate of the costs of dismantling
and removing the item and restoring the site on which it is located.
Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as
appropriate, only when it is probable that future economic benefits associated with the item will flow to
the Group and the cost of the item can be measured reliably. The carrying amount of any component
accounted for as a separate asset is derecognised when replaced. All other repairs and maintenance are
charged to profit or loss during the reporting period in which they are incurred.
Depreciation is calculated on a straight-line basis to write off the net cost of each item of property, plant
and equipment (excluding land) over their expected useful lives as follows:
Plant and equipment
3-10 years
The residual values, useful lives and depreciation methods are reviewed, and adjusted if appropriate, at
each reporting date.
An item of property, plant and equipment is derecognised upon disposal or when there is no future
economic benefit to the Group. Gains and losses between the carrying amount and the disposal
proceeds are taken to profit or loss. Any revaluation surplus reserve relating to the item disposed of is
transferred directly to retained profits.
40
Notes to the financial statements 30 June 2019
13. Non-current assets - exploration and evaluation
Reconciliations
Reconciliations of the written down values at the beginning and end of the current and previous financial
year are set out below:
Consolidated
Balance at 1 July 2017
Expenditure during the year
Impairment losses
R & D tax refund offset against capitalised exploration and evaluation #
Balance at 30 June 2018
Expenditure during the year
Acquisition of Ausmin Development Pty Ltd
Impairment losses
R & D tax refund offset against capitalised exploration and evaluation #
Balance at 30 June 2019
Total
$
7,333,025
2,531,539
(2,305,666)
(188,974)
7,369,924
4,662,553
3,412,750
(387,751)
(23,384)
15,034,092
# Note: Refundable tax incentives (Research and development tax concession) are accounted for as government grants
under AASB 120 Accounting for Government Grants and Disclosure of Government Assistance and offset against
capitalised exploration and evaluation expenditure.
Accounting policy for exploration and evaluation assets
Exploration and evaluation expenditure in relation to separate areas of interest for which rights of tenure
are current is carried forward as an asset in the statement of financial position where it is expected that
the expenditure will be recovered through the successful development and exploitation of an area of
interest, or by its sale, or exploration activities are continuing in an area and activities have not reached
a stage which permits a reasonable estimate of the existence or otherwise of economically recoverable
reserves. Where a project or an area of interest has been abandoned, the expenditure incurred thereon
is written off in the year in which the decision is made.
Exploration and evaluation expenditure comprises of net direct costs and includes an appropriate
portion of related salaries and wages expenditure associated with each area of interest. During the
financial year the Group has allocated $352,267 of internal personnel costs (2018: $418,121) which form
part of the exploration expenditure for the year.
14. Current liabilities - trade and other payables
Trade and other payables
Sundry creditor and accrued expenses
Consolidated
2019
$
2018
$
462,331
530,949
54,119
72,227
516,450
603,176
Refer to note 20 for further information on financial instruments.
Accounting policy for trade and other payables
These amounts represent liabilities for goods and services provided to the Group 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.
41
Renascor Resources Limited annual report 2019
Notes to the financial statements 30 June 2019
15. Current liabilities - provisions
Annual leave
Long service leave
Accounting policy for employee benefits
Short-term employee benefits
Consolidated
2019
$
2018
$
45,376
113,391
67,219
109,401
112,595
222,792
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.
Amounts not expected to be settled within the next 12 months
The current provision for employee benefits includes all unconditional entitlements where employees
have completed the required period of service and also those where employees are entitled to pro-rata
payments in certain circumstances. The entire amount is presented as current, since the Group does not
have an unconditional right to defer settlement. However, based on past experience, the Group does not
expect all employees to take the full amount of accrued leave or require payment within the next
12 months.
16. Equity - issued capital
Ordinary shares - fully paid
1,153,424,340
961,327,113
32,210,012
28,752,262
Consolidated
2019
Shares
2018
Shares
2019
$
2018
$
42
Notes to the financial statements 30 June 2019
16. Equity - issued capital continued
Movements in ordinary share capital
Details
Balance
Conditional placement to professional and
sophisticated investors.
Issue of Ordinary Shares as part of
Non-Executive Director’s Share Plan.
Conditional placement to professional and
sophisticated investors
Issue of Ordinary Shares as consideration for
marketing services provided
Issue of Ordinary Shares as consideration for
marketing services provided
Issue of Ordinary Shares as part of
Non-Executive Director’s Share Plan.
Conditional placement to professional and
sophisticated investors.
Issue of Ordinary Shares pursuant to
Share Purchase Plan
Issue of Ordinary Shares as consideration for
marketing services provided
Conditional placement to professional and
sophisticated investors
Less: Transaction costs arising on share issues,
net of tax
Date
Shares
Issue price
$
1 July 2017
482,793,861
18,628,616
27 September 2017
120,698,060
$0.02
2,051,867
3 October 2017
2,574,404
$0.02
56,593
24 November 2017
58,824,140
$0.02
1,000,010
22 December 2017
2,500,000
$0.03
80,000
28 February 2018
2,500,000
$0.03
85,000
28 February 2018
2,317,889
$0.04
93,644
8 May 2018
159,302,080
$0.03
4,301,156
1 June 2018
45,877,699
$0.03
1,238,698
1 June 2018
2,500,000
$0.03
67,500
29 June 2018
81,438,980
$0.03
2,198,852
-
$0.00
(1,049,674)
Balance
30 June 2018
961,327,113
28,752,262
Issue of Ordinary Shares as consideration
for marketing services provided
Issue of Ordinary Shares as consideration for
the acquisition of Ausmin Development Pty Ltd
22 November 2018
2,500,000
$0.02
45,000
22 November 2018
189,597,227
$0.02
3,412,750
Balance
30 June 2019 1,153,424,340
32,210,012
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.
43
Renascor Resources Limited annual report 2019
Notes to the financial statements 30 June 2019
16. Equity - issued capital continued
Capital risk management
The Group’s objectives when managing capital is to safeguard its ability to continue as a going concern,
so that it can provide returns for shareholders and benefits for other stakeholders and to maintain an
optimum capital structure to reduce the cost of capital.
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.
In order to maintain or adjust the capital structure, the Group may adjust the amount of dividends paid
to shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt.
The Group would look to raise capital when an opportunity to invest in a business or company was seen
as value adding relative to the current Company’s share price at the time of the investment. The Group is not
actively pursuing additional investments in the short term as it continues to integrate and grow its existing
businesses in order to maximise synergies.
The Group is subject to certain financing arrangements covenants and meeting these is given priority
in all capital risk management decisions. There have been no events of default on the financing
arrangements during the financial year.
The capital risk management policy remains unchanged from the 30 June 2018 Annual Report.
Accounting policy for 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.
17. Equity - reserves
Options reserve
Performance rights reserve
Business combination reserve
Consolidated
2019
$
2018
$
1,579,734
1,579,734
245,959
68,284
(1,417,790)
(1,417,790)
407,903
230,228
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.
Business combination
The reserve is used to recognise the difference between the value of consideration paid to acquire the
non-controlling interests and value of the non-controlling interest.
18. Equity - accumulated losses
Consolidated
2019
$
2018
$
Accumulated losses at the beginning of the financial year
(13,927,552)
(10,493,009)
Loss after income tax expense for the year
(1,321,558)
(3,434,543)
Accumulated losses at the end of the financial year
(15,249,110)
(13,927,552)
19. Equity - dividends
There were no dividends paid, recommended or declared during the current or previous financial year.
44
Notes to the financial statements 30 June 2019
20. Financial instruments
Financial risk management objectives
The Group’s activities expose it to a variety of financial risks: market risk (including price risk and interest
rate risk), credit risk and liquidity risk. The Group’s overall risk management program focuses on the
unpredictability of financial markets and seeks to minimise potential adverse effects on the financial
performance of the Group. The board is responsible for managing the Group’s finance facilities. The
Group does not currently undertake hedging of any kind and is not directly exposed to currency risk.
The Group holds the following financial instruments:
Consolidated
2019
$
2018
$
2,877,843
8,188,830
32,598
288,551
2,910,441
8,477,381
462,331
530,949
54,119
72,227
516,450
603,176
Financial assets at amortised cost
Cash and cash equivalents
Other receivables
Total financial assets
Financial liabilities at amortised cost
Trade and other payables
Sundry creditors and accrued expenses
Total financial liabilities at amortised cost
Market risk
Price risk
The Group is not exposed to any significant price risk.
Interest rate risk
As at 30 June 2019 and 30 June 2018, the Group had no borrowings. As such the group is not exposed to
any significant interest rate risk.
At the reporting date, the Company is exposed to changes in market interest rates through its bank
deposits, which are subject to variable interest rates.
The following table illustrates the sensitivity of the net result for the year and equity to a reasonably
possible change in interest rates of +0.50% and -0.05% (2018: +0.05%/-0.05%), with effect from the
beginning of the year. These changes are considered to be reasonably possible based on observation
of current market conditions. The calculations are based on the cash and cash equivalents held at the
beginning of each reporting period. All other variables are held constant.
Consolidated 2019
Basis points increase
Basis points decrease
Basis points Effect on profit Effect on Basis points Effect on profit Effect on
equity
before tax
before tax
change
change
equity
Cash and cash equivalents
50
40,944
40,944
(50)
(40,944)
(40,944)
Consolidated 2018
Cash and cash equivalents
50
6,151
6,151
(50)
(6,151)
(6,151)
45
Renascor Resources Limited annual report 2019
Notes to the financial statements 30 June 2019
20. Financial instruments continued
Credit risk
Credit risk is managed on a Group basis. Credit risk arises from cash and cash equivalents and deposits
with banks and financial institutions. For banks and financial institutions, only independently rated
parties with a minimum rating of ‘A’ are accepted. The majority of cash and cash equivalents is held with
a single financial institution.
Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in
financial loss to the Group. The Group does not hold any collateral to mitigate this risk.
The Group 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 Group based on recent sales
experience, historical collection rates and forwardlooking information that is available.
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.
The credit quality of financial assets that are neither past due nor impaired can be assessed by reference
to external credit ratings (if available) or to historical information about counterparty default rates:
Cash and cash equivalents
Minimum rating of A
Liquidity risk
Consolidated
2019
$
2018
$
2,877,843
8,188,830
Prudent liquidity risk management implies maintaining sufficient cash and marketable securities and
the availability of funding through an adequate amount of committed credit facilities to meet obligations
when due and close out market positions. At the end of each reporting period the Group held deposits
at call of $2,877,843 (2018: $8,188,830) that are expected to readily generate cash inflows for managing
liquidity risk. The Group has sufficient funds to finance its operations and exploration activities and to
allow for reasonable contingencies.
Remaining contractual maturities
The following tables detail the Group’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.
46
Notes to the financial statements 30 June 2019
20. Financial instruments continued
Consolidated 2019
Non-derivatives
Non-interest bearing
Trade payables
Other payables
Total non-derivatives
Consolidated 2018
Non-derivatives
Non-interest bearing
Trade payables
Other payables
Total non-derivatives
Weighted
average
Remaining
contractual
interest rate 1 year or less and 2 years and 5 years Over 5 years maturities
$
Between 1
Between 2
%
$
$
$
$
-
-
-
%
-
-
462,331
54,119
516,450
$
530,949
72,227
603,176
-
-
-
$
-
-
-
-
-
-
$
-
-
-
-
462,331
-
-
$
-
-
-
54,119
516,450
$
530,949
72,227
603,176
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.
21. Key management personnel disclosures
Compensation
The aggregate compensation made to directors and other members of key management personnel of
the Group is set out below:
Short-term employee benefits
Post-employment benefits
Long-term benefits
Share-based payments
Performance rights
Consolidated
2019
$
2018
$
717,147
702,112
36,926
47,841
-
177,675
45,786
14,844
63,195
-
979,589
825,937
Details of the remuneration of each director of the Company and each of the other key management
personnel of the Group, including their personally related entities, are set out in the remuneration report.
47
Renascor Resources Limited annual report 2019
Notes to the financial statements 30 June 2019
21. Key management personnel disclosures continued
Other transactions with key management personnel
Mr G W McConachy and Mr C Anderson are directors of Euro Exploration Services Pty Ltd (Euro). Euro has
provided the company with exploration services, geochemical sampling services as well as the provision
of geological personnel services during the year. The services provided are based on normal commercial
terms and conditions. During the financial year the Company incurred costs of $203,768 (2018: $44,351)
from Euro. An amount of $7,384 (2018: $8,353) was owing to Euro at 30 June 2019.
Mr C Anderson is a director of Pondray Pty Ltd trading as CG Anderson & Associates (CGAA). CGAA has
provided geophysical services to the company. During the financial year the Company incurred costs of
$7,700 (2018: $73,300) from CGAA. No amount was owing to CGAA at 30 June 2019 (2018: $15,730).
Mr S Bizzell is a director of Bizzell Capital Partners Pty Ltd (BCP). BCP has provided corporate advisory
and underwriting services to the company in relation to its capital raising. The services provided are
based on normal commercial terms and conditions. During the financial year the Company did not incur
any non-director’s fees costs from BCP (2018: $168,515). An amount of $3,667 of director’s fees was
owing to BCP at 30 June 2019 (2018: $23,207).
22. Remuneration of auditors
During the financial year the following fees were paid or payable for services provided by BDO Audit (SA)
Pty Ltd, the auditor of the Company:
Audit services - BDO Audit (SA) Pty Ltd
Audit or review of the financial statements
Other services
Amounts paid/payable to a related practice of the auditor for tax compliance
and advisory services for the entity or any entity in the Group
Amounts paid/payable to a related practice of the auditor for expert and
valuation services in relation to the acquisition of Eyre Peninsula Minerals Pty Ltd
Consolidated
2019
$
2018
$
36,543
33,594
4,591
4,735
-
4,591
2,450
7,185
41,134
40,779
23. Contingent liabilities
Renascor has entered into an agreement with a Royal IHC to contribute $1 million of services towards
the definitive feasibility study on the basis that they will subsequently be awarded the engineering,
procurement and construction contract for the Siviour project. Renascor may be liable to reimburse this
contribution in either cash or equity if the contract is not awarded to this party. As at the date of this
report this contribution has been received.
48
Notes to the financial statements 30 June 2019
24. Commitments
In order to maintain current rights to tenure to exploration tenements, the Group is required to perform
minimum exploration work to meet the minimum expenditure requirements specified by various State
governments. These amounts are subject to renegotiation when application for a mining lease is made
and at other times. These amounts, which are not provided for in the financial report and are expected
to be capitalised as incurred but not recognised as liabilities, are as follows:
Exploration and mining lease commitments
Commitments in relation to exploration and mining leases held at the end
of each reporting period but not recognised as liabilities, payable:
Within one year
One to five years
Consolidated
2019
$
2018
$
1,792,500
1,356,827
-
345,000
1,792,500
1,701,827
To keep tenements in good standing, work programs should meet certain minimum expenditure
requirements. If the minimum expenditure requirements are not met, the Company has the option to
negotiate new terms or relinquish the tenements. The Company also has the ability to meet expenditure
requirements by joint venture or farm-in agreements.
Exploration and mining lease contingent liabilities
Pursuant to an Asset Sale Agreement with Hiltaba Gold Pty Ltd for EL5856, the Group has granted a 1%
net smelter return royalty to Hiltaba Gold Pty Ltd. Pursuant to a Royalty Deed with Barossa Vintage Ltd
in respect of EL5495, EL5618 and EL6197, the Group has granted a 1% gross royalty to the Milton Park
Trust. The timing and amount of any financial effect relating to these agreements are dependent on the
successful exploration and subsequent exploitation of the associated tenements.
Operating Lease Commitments
The office lease expired on 30 November 2013. The company continues to occupy the office with rent
payable monthly in advance on a month to month basis.
25. Related party transactions
Parent entity
Renascor Resources Limited is the parent entity.
Subsidiaries
Interests in subsidiaries are set out in note 27.
Key management personnel
Disclosures relating to key management personnel are set out in note 21 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, aside
from those set out in note 21.
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, aside from those set out in note 21.
Loans to/from related parties
There were no loans to or from related parties at the current and previous reporting date.
49
Renascor Resources Limited annual report 2019
Notes to the financial statements 30 June 2019
26. 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 income
Statement of financial position
Total current assets
Total assets
Total current liabilities
Total liabilities
Equity
Issued capital
Options reserve
Performance rights reserve
Accumulated losses
Total equity
Parent
2019
$
2018
$
(3,280,494)
(5,391,426)
(3,280,494)
(5,391,426)
Parent
2019
$
2018
$
2,938,998
8,486,231
17,997,850
15,880,906
629,045
825,968
629,045
825,968
32,210,012
28,751,962
1,579,734
1,579,734
245,959
68,284
(16,666,900)
(15,345,042)
17,368,805
15,054,938
Guarantees entered into by the parent entity in relation to the debts of its subsidiaries
The parent entity had no guarantees in relation to the debts of its subsidiaries as at 30 June 2019.
Contingent liabilities
In the year ended 30 June 2017 the Parent Entity had entered into Asset Sale Agreements with
Hiltaba Gold Pty Ltd for EL5856. Under this agreement, the company has granted a 1% royalty of the
Net Smelter Return.
Capital commitments - Property, plant and equipment
The parent entity had no capital commitments for property, plant and equipment as at 30 June 2019.
Significant accounting policies
The accounting policies of the parent entity are consistent with those of the Group, as disclosed in note 1,
except for the following:
• Investments in subsidiaries are accounted for at cost, less any impairment, in the parent entity;
• Investments in associates are accounted for at cost, less any impairment, in the parent entity; and
• Dividends received from subsidiaries are recognised as other income by the parent entity and its
receipt may be an indicator of an impairment of the investment.
50
Notes to the financial statements 30 June 2019
27. 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 1:
Principal place of business
Country of incorporation
Kulripa Uranium Pty Ltd
Astra Resources Pty Ltd
Sol Jar Property Pty Ltd
Eyre Peninsula Minerals Pty Ltd
Ausmin Development Pty Ltd
Australia
Australia
Australia
Australia
Australia
Ownership interest
2019
%
2018
%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
-
The Company completed a transaction to acquire 100% of Ausmin Development Pty Ltd (Ausmin), which
holds the rights to the Siviour Graphite Project. As consideration, the Company issued 189,597,227
ordinary shares. For accounting purposes the Company has treated the acquisition as an asset
acquisition.
28. Events after the reporting period
No matter or circumstance has arisen since 30 June 2019 that has significantly affected, or may
significantly affect the Group’s operations, the results of those operations, or the Group’s state of affairs
in future financial years.
29. Reconciliation of loss after income tax to net cash used in operating activities
Loss after income tax expense for the year
(1,321,558)
(3,434,543)
Consolidated
2019
$
2018
$
Adjustments for:
Depreciation and amortisation
Share-based payments
Write off exploration/inventories
Change in operating assets and liabilities:
Increase/(decrease) in provisions
Increase/(decrease) in trade and other payables
(Increase)/decrease in other receivables
(Increase)/decrease in other operating assets
Net cash used in operating activities
Non-cash financing and investing activities
2,236
2,130
222,675
282,944
387,751
2,494,640
(110,197)
87,691
(94,392)
318,951
284,856
(249,475)
(17,661)
2,113
(646,290)
(495,549)
Shares issued to non-executive directors in lieu of 50% of cash director fees
-
(150,237)
Options issued to lead managers for no cash consideration for
capital raising services
Shares issued to vendors of Ausmin Development Pty Ltd for no cash consideration
in respect of the acquisition of Ausmin Development Pty Ltd
-
(247,389)
(3,412,750)
-
(3,412,750)
(397,626)
51
Renascor Resources Limited annual report 2019
Notes to the financial statements 30 June 2019
30. Earnings per share
Loss after income tax attributable to the owners of
Renascor Resources Limited
Basic earnings per share
Diluted earnings per share
Consolidated
2019
$
2018
$
(1,321,558)
(3,434,543)
Cents
Cents
(0.1)
(0.1)
(0.5)
(0.5)
Number
Number
Weighted average number of ordinary shares used in calculating basic
earnings per share
1,077,638,036 642,520,257
Weighted average number of ordinary shares used in calculating diluted
earnings per share
1,077,638,036 642,520,257
Options and performance rights are considered anti-dilutive as the Group is loss making.
At 30 June 2019 there were 129,761,096 anti-dilutive options (2018: 129,761,096) and 18,000,000
performance rights (2018: Nil).
Accounting policy for earnings per share
Basic earnings per share
Basic earnings per share is calculated by dividing the profit attributable to the owners of Renascor
Resources 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.
31. Share-based payments
Directors and executives share based payments
There are no options that have been granted to directors and senior management as part of their
remuneration (2018: Nil).
There was no amount of the equity settled share-based payment recognised in the current period in
respect of options granted to directors and executives (2018: $Nil).
During the year the amount of the equity settled share-based payment recognised in the current period
in respect of options granted to consultants was $Nil (2018: $247,389). These options were issued as
consideration for capital raising services provided.
Exploration and evaluation share based payments
During the period the Company issued 189,597,227 shares to acquire 100% of the shares of Ausmin
Development Pty Ltd which owns the rights to the Siviour Graphite Project.
The amount of the equity settled share-based payment recognised in the current period in respect of
the ordinary shares issued is $3,412,750 (2018: $Nil). Amounts previously recognised have been included
as exploration and evaluation expenditure within the non-current assets in the statement of financial
position.
There were no options granted during the year in respect of exploration and evaluation
activities (2018: $Nil).
52
Notes to the financial statements 30 June 2019
31. Share-based payments continued
Share based payments to consultants
During the period the amount of the equity settled share-based payment recognised in the current
period in respect of shares issued to consultants was $45,000 (2018: $232,500). These shares were issued
as consideration for marketing services provided. The consultants received 2,500,000 ordinary shares
(2018: 7,500,000).
During the year there were no equity settled share-based payments recognised in the current period in
respect of options granted to consultants (2018: $247,389).
Set out below are summaries of the granted options:
2019
Grant date Expiry date
Exercise
price
Balance at
the start of
the year
05/12/2016 05/12/2019
$0.05
15,000,000
28/11/2017 31/10/2019
$0.03
25,000,000
40,000,000
Granted
Exercised
-
-
-
-
-
-
Expired/
forfeited/
other
Balance at
the end of
the year
-
-
-
15,000,000
25,000,000
40,000,000
Weighted average exercise price
$0.04
$0.00
$0.00
$0.00
$0.04
2018
05/12/2016 05/12/2019
$0.05
15,000,000
-
28/11/2017 31/10/2019
$0.03
-
25,000,000
15,000,000
25,000,000
-
-
-
-
-
-
15,000,000
25,000,000
40,000,000
Weighted average exercise price
$0.05
$0.03
$0.00
$0.00
$0.04
Set out below are the options exercisable at the end of the financial year:
Grant date
Expiry date
05/12/2016
05/12/2019
28/11/2017
31/10/2019
2019
Number
2018
Number
15,000,000
15,000,000
114,761,096 114,761,096
129,761,096 129,761,096
The weighted average remaining contractual life of options outstanding at the end of the financial year
was 0.3 years (2018: 1.4 years).
Performance rights granted to directors and senior management
At the Extraordinary General Meeting held on 3 September 2018 shareholders of the Company granted
approval for the issue of performance rights to Mr David Christensen. Details of the performance
rights are in the Notice of Extra Ordinary General Meeting dated 1 August 2018. However, the vesting
conditions are outlined below:
Tranche A Performance Rights. 6,000,000 Performance Rights will vest upon the completion of a positive Definite
Feasibility Study in respect of the production of graphite concentrates.
Tranche B Performance Rights. 6,000,000 Performance Rights will vest upon the commencement of construction
of a commercial graphite concentrate production facility.
Tranche C Performance Rights. 6,000,000 Performance Rights will vest upon (i) the share price of Renascor
ordinary shares having achieved a closing price of in excess of $0.055 for five consecutive days after the grant
date of such Performance Rights, and (ii) the date that is two and one-half years after the grant date of such
Performance Rights.
The Performance Rights are expensed over the expected vesting period. The total value of Performance
Rights recognised in the current period is $177,675 (2018: $0)
53
Renascor Resources Limited annual report 2019
Notes to the financial statements 30 June 2019
31. Share-based payments continued
The performance rights were valued as outlined below:
2019
Tranche A
Tranche B
Tranche C
Total
Total value
Expensed
at grant date during the year
$
$
108,000
108,000
108,000
45,600
55,290
14,385
261,600
177,675
The tranches were valued using the Black Scholes pricing model that takes into account the term of
the Performance Rights, the vesting and performance criteria (if applicable), the non-tradable nature of
the rights (if applicable), the share price at grant date, expected price volatility of the underlying share,
the expected dividend yield, the probability that the Performance Rights will issue and the risk-free
interest rate for the term of the Performance Right.
The probability that the Tranche C rights will vest (38%) was determined using the Monte Carlo
simulation. This model takes into account the randomness of the share price movements and the
volatility of the underlying share.
Set out below are summaries of performance rights granted to directors and senior management:
2019
Grant date Expiry date
Exercise
price
Balance at
the start of
the year
Granted
Exercised
Expired/
forfeited/
other
Balance at
the end of
the year
22/11/2018 22/11/2022
$0.00
22/11/2018 22/11/2022
$0.00
22/11/2018 22/11/2022
$0.00
-
-
-
-
6,000,000
6,000,000
6,000,000
18,000,000
-
-
-
-
-
-
-
-
6,000,000
6,000,000
6,000,000
18,000,000
Set out below are the performance rights exercisable at the end of the financial year:
Grant date
Expiry date
22/11/2018
22/11/2022
22/11/2018
22/11/2022
22/11/2018
22/11/2022
2019
Number
6,000,000
6,000,000
6,000,000
18,000,000
2018
Number
-
-
-
-
The weighted average remaining contractual life of performance rights outstanding at the end of the
financial year was 3.4 years (2018: 0 years).
54
Notes to the financial statements 30 June 2019
31. Share-based payments continued
Fair value of performance rights granted:
The assessed fair value at grant date of performance rights is allotted equally over the period from grant
date to vesting date. The fair value was independently determined using a Black-Scholes option pricing
model that takes into account the exercise price, the term of the option, the vesting and performance
criteria (if applicable), the impact of dilution, the nontradable nature of the option (if applicable), the
share price at grant date, expected price volatility of the underlying share, the expected dividend yield
and the risk free interest rate for the term of the option.
Historical volatility of a group of comparable companies has been the basis of determining expected
share price volatility, as it is assumed that this is indicative of future movements. No adjustment has
been made to the life of the option based on no past history regarding expected exercise or any variation
of the expiry date. Accordingly, the expected life of the options has been taken to the full period of time
from grant date to expiry date, which may fail to eventuate in the future.
For the performance rights granted during the current financial year, the valuation model inputs used to
determine the fair value at the grant date, are as follows:
Grant date Expiry date
Share price
at grant
date
Exercise
price
Expected
volatility
Dividend
yield
Risk-free
Fair value
interest rate at grant date
22/11/2018 22/11/2022
$0.02
$0.00
94.66%
22/11/2018 22/11/2022
$0.02
$0.00
94.66%
22/11/2018 22/11/2022
$0.02
$0.00
94.66%
-
-
-
2.30%
2.30%
2.30%
$0.020
$0.020
$0.008
Accounting policy for share-based payments
Share-based compensation benefits are provided to directors, executives and consultants through the
granting of share options and performance rights.
Options and performance rights are granted for no cash consideration. When these share options
and performance rights are granted, the fair value of the options and performance rights issued are
recognised as an employee benefits expense with a corresponding increase in equity. The amount
recognised as an expense is adjusted to reflect the number of share options and performance rights for
which the related service and non-market performance conditions are expected to be met, such that the
amount ultimately recognised as an expense is based on the number of share options and performance
rights that meet the related service and non-market performance conditions at the vesting date.
The fair value of share options and performance rights are measured using an appropriate pricing
model. Measurement inputs include the share price on measurement date, exercise price of the
instrument, expected price volatility of the underlying share, the expected dividend yield and the risk-free
interest rate for the term of the option and performance rights. Service and non-market performance
conditions attached to the transactions are not taken into account in determining fair value.
Upon the exercise of options and performance rights, the balance of the share-based payments reserve
relating to those options and performance rights is transferred to share capital.
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 Group or employee, the failure to satisfy the
condition is treated as a cancellation. If the condition is not within the control of the Group 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.
55
Renascor Resources Limited annual report 2019
Directors’ Declaration
In the directors’ opinion:
• the attached financial statements and notes
comply with the Corporations Act 2001, the
Accounting Standards, the Corporations
Regulations 2001 and other mandatory
professional reporting requirements;
• the attached financial statements and notes
comply with International Financial Reporting
Standards as issued by the International
Accounting Standards Board as described in
note 1 to the financial statements;
• the attached financial statements and notes give
a true and fair view of the Group’s financial
position as at 30 June 2019 and of its performance
for the financial year ended on that date; and
• there are reasonable grounds to believe that the
Company will be able to pay its debts as and when
they become due and payable.
The directors have been given the declarations
required by section 295A of the Corporations
Act 2001.
Signed in accordance with a resolution of directors
made pursuant to section 295(5)(a) of the
Corporations Act 2001.
On behalf of the directors
David Christensen, Director
27 September 2019
56
Independent Auditor’s Report
Tel: +61 8 7324 6000
Fax: +61 8 7324 6111
www.bdo.com.au
Level 7, BDO Centre
420 King William St
Adelaide SA 5000
GPO Box 2018, Adelaide SA 5001
AUSTRALIA
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF RENASCOR RESOURCES LIMITED
Report on the Audit of the Financial Report
Opinion
We have audited the financial report of Renascor Resources Limited (the Company) and its subsidiaries
(the Group), which comprises the consolidated statement of financial position as at 30 June 2019, the
consolidated statement of profit or loss and other comprehensive income, the consolidated statement
of changes in equity and the consolidated statement of cash flows for the year then ended, and notes
to the financial report, including a summary of significant accounting policies and the directors’
declaration.
In our opinion the accompanying financial report of the Group, is in accordance with the Corporations
Act 2001, including:
(i)
Giving a true and fair view of the Group’s financial position as at 30 June 2019 and of its
financial performance for the year ended on that date; and
(ii)
Complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under
those standards are further described in the Auditor’s responsibilities for the audit of the Financial
Report section of our report. We are independent of the Group in accordance with the Corporations
Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board’s
APES 110 Code of Ethics for Professional Accountants (the Code) that are relevant to our audit of the
financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance
with the Code.
We confirm that the independence declaration required by the Corporations Act 2001, which has been
given to the directors of the Company, would be in the same terms if given to the directors as at the
time of this auditor’s report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our opinion.
Material uncertainty related to going concern
We draw attention to Note 1 in the financial report which describes the events and/or conditions which
give rise to the existence of a material uncertainty that may cast significant doubt about the group’s
ability to continue as a going concern and therefore the group may be unable to realise its assets and
discharge its liabilities in the normal course of business. Our opinion is not modified in respect of this
matter.
BDO Audit (SA) Pty Ltd ABN 33 161 379 086 is a member of a national association of independent entities which are all members of BDO (Australia) Ltd ABN 77 050 110 275,
an Australian company limited by guarantee. BDO Audit (SA) Pty Ltd and BDO (Australia) Ltd are members of BDO International Ltd, a UK company limited by guarantee, and
form part of the international BDO network of independent member firms. Liability limited by a scheme approved under Professional Standards Legislation.
57
Renascor Resources Limited annual report 2019
Independent Auditor’s Report
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in
our audit of the financial report of the current period. These matters were addressed in the context of
our audit of the financial report as a whole, and in forming our opinion thereon, and we do not provide
a separate opinion on these matters. In addition to the matter described in the Material uncertainty
related to going concern section, we have determined the matters described below to be the key audit
matters to be communicated in our report.
Recoverability of exploration and evaluation assets
Key audit matter
How the matter was addressed in our audit
The Group carries significant exploration
and evaluation assets of $15,034,092 as at
30 June 2019 as disclosed in note 13 to
the financial statements.
The carrying value of exploration and
evaluation assets represents a significant
asset of the group and assessing whether
facts or circumstances exist to suggest
Our procedures, amongst others, included:
Evaluating management’s assessment of whether impairment
indicators in accordance with AASB 6 Exploration for and
Evaluation of Mineral Resources have been identified across
the group’s exploration projects.
Verifying a sample of current tenement licences to determine
whether the group has the rights to tenure and maintain the
tenements in good standing.
that impairment indicators were present,
Obtaining the exploration budget for the 2020 financial year to
and if present, whether the carrying
assess whether there is reasonable forecasted expenditure to
amount of this asset may exceed its
confirm continued exploration spend for the projects.
recoverable amount.
This assessment involves significant
judgement applied by management and
was considered key to the audit.
Reviewing ASX announcements and Board meeting minutes for
the year and subsequent to year end for exploration activity to
identify any indicators of impairment.
For each area of interest where impairment indicators existed,
we considered the completeness and accuracy of amounts
impaired.
Other information
The directors are responsible for the other information. The other information comprises the
information in the Group’s annual report for the year ended 30 June 2019, but does not include the
financial report and the auditor’s report thereon.
Our opinion on the financial report does not cover the other information and 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.
58
Independent Auditor’s Report
Responsibilities of the directors for the Financial Report
The directors of the Company are responsible for the preparation of the financial report that gives a
true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001
and for such internal control as the directors determine is necessary to enable the preparation of the
financial report that gives a true and fair view and is free from material misstatement, whether due to
fraud or error.
In preparing the financial report, the directors are responsible for assessing the ability of the group to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the
going concern basis of accounting unless the directors either intend to liquidate the Group or to cease
operations, or has no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the Financial Report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free
from material misstatement, whether due to fraud or error, and to issue an auditor’s report that
includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an
audit conducted in accordance with the Australian Auditing Standards will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered material
if, individually or in the aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of this financial report.
A further description of our responsibilities for the audit of the financial report is located at the
Auditing and Assurance Standards Board website at:
http://www.auasb.gov.au/auditors_responsibilities/ar1.pdf
This description forms part of our auditor’s report.
Report on the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included in pages 17 to 22 of the directors’ report for the
year ended 30 June 2019.
In our opinion, the Remuneration Report of Renascor Resources Limited, for the year ended 30 June
2019, complies with section 300A of the Corporations Act 2001.
59
Renascor Resources Limited annual report 2019
Independent Auditor’s Report
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the
Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our responsibility
is to express an opinion on the Remuneration Report, based on our audit conducted in accordance with
Australian Auditing Standards.
BDO Audit (SA) Pty Ltd
Andrew Tickle
Director
Adelaide, 27 September 2019
60
Shareholder Information
The shareholder information set out below was applicable as at 16 September 2019.
Distribution of equitable securities
Analysis of number of equitable security holders by size of holding:
Holding
Ordinary Shares
Listed Options
over ordinary Shares
Unlisted Options
over ordinary Shares
1 – 1000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,001 and over
45
18
65
837
966
1,931
Holding less than a marketable parcel
434
2
–
1
10
85
98
47
–
–
–
–
11
11
–
Equity security holders
The names of the twenty largest security holders of quoted ordinary shares are listed below:
Name
1 Kabininge Nominees Pty Ltd
2 Mr Richard Edward Keevers
3 Mr David Vigolo
4 BNP Paribas Nominees Pty Ltd
5 Rookharp Capital Pty Ltd
6 Dr Leon Eugene Pretorius
7 Pontifex Wines Pty Ltd
8 Mr Douglas Young
9 JP Morgan Nominees Australia
10 Mr Malcolm John Mcclure
11 Mrs Tracey Ann Mezzino
12 CPS Control Systems Pty Ltd
13 Mr Gregory Michael Josephson &
Mrs Mary Margaret Josephson
14 Bizzell Capital Partners Pty Ltd
15 David Christensen
16 Casalamada Pty Ltd
17 Citicorp Nominees Pty Ltd
18 Cannc Consulting Pty Ltd
19 Maja Nominees Pty Ltd
20 Mr Sarang Narahari Padey
Ordinary Shares
% of total
Number held
shares issued
134,014,646
11.62
40,855,328
40,000,000
37,386,984
26,500,000
16,000,000
14,736,111
14,482,148
12,948,172
12,110,287
12,000,000
11,291,112
10,000,000
9,833,334
9,761,241
9,753,240
9,188,285
8,916,666
8,000,000
7,945,353
445,722,907
3.54
3.47
3.24
2.30
1.39
1.28
1.26
1.12
1.05
1.04
0.98
0.87
0.85
0.85
0.85
0.80
0.77
0.69
0.69
38.66
61
Renascor Resources Limited annual report 2019
Shareholder Information
Equity security holders continued
The names of the twenty largest security holders of listed options are listed below:
Name
1 Rookharp Investments Pty Limited
2 First Investment Partners Pty Ltd
3 Mr Andrew Charles Alexander Mackenzie
4 Mr Neal Brent Birchall
5 Maja Nominees Pty Ltd
6 Mr Luke Jones
7 Slasn Pty Ltd
8 Bizzell Nominees Pty Ltd
9 Zenix Nominees Pty Ltd
10 Mastermines (Malaysia) Limited
11 IQ Global Asset Partners Pty Ltd
12 M & K Korkidas Pty Ltd
13 Mr Martin Music
14 Mr Seong Yun Kang
15 Mr Adam David Stone
16 Stanley Park Investments Pty Ltd
17 CPS Group Investments Pty Ltd
18 Mr Gunther Pollheim
19 Mr Farzad Alavi Moghadam
20 Mr Steven Vigolo
Name
David Christensen
Unquoted equity securities
Listed options over ordinary shares
Number held
% of total listed
options issued
9,249,667
8,791,500
7,233,340
6,867,009
5,500,000
5,487,798
5,000,000
5,000,000
4,000,000
3,499,429
3,400,000
2,996,000
2,125,500
1,900,000
1,837,752
1,600,000
1,544,118
1,532,505
1,500,000
1,500,000
8.06
7.66
6.30
5.98
4.79
4.78
4.36
4.36
3.49
3.05
2.96
2.61
1.85
1.66
1.60
1.39
1.35
1.34
1.31
1.31
80,564,618
70.20
Performance rights over ordinary shares
Number held % of total issued
18,000,000
100
Options over ordinary shares issued
15,000,000
11
Number on issue Number of holders
Substantial holders
Substantial holders in the Company are set out below:
Name
Kabininge Nominees Pty Ltd
Ordinary Shares
% of total
Number held
shares issued
134,014,646
11.62
62
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.
Restricted Securities
No restricted securities were on issue at 16 September 2019.
There are no other classes of equity securities.
Interests in tenements at 16 September 2019
Description
Tenement number
Interest owned %
Malbrom
Lipson Cove
Verran
Malbrom West
Dutton Bay
Willouran
Callanna
Outalpa
Cutana
Iron Baron
Old Wartaka
Carnding
EL 6197
EL 5495
EL 5618
EL 5714
EL 6032
EL 6170
EL 5586
EL 5584
EL 5585
EL 5822
EL 6191
EL 5856
Witchelina
ELA 2019/00068
Siviour Project
ML 6495
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
63
Renascor Resources Limited annual report 2019
Notes
64
Corporate directory
Directors
Stock exchange listing
Richard Keevers, Non-Executive Chairman
David Christensen, Managing Director
Renascor Resources Limited shares are listed on the
Australian Securities Exchange (ASX code: RNU)
Geoffrey McConachy, Non-Executive Director
Business objectives
Stephen Bizzell, Non-Executive Director
Chris Anderson, Non-Executive Director
(resigned 12 October 2018)
Company secretary, Pierre van der Merwe
Registered office &
principal place of business
36 North Terrace
Kent Town SA 5069
Telephone : + 61 8 363 6989
Email: info@renascor.com.au
Website: www.renascor.com.au
Share register
Link Market Services Limited
ANZ Building
Level 15, 324 Queen Street
Brisbane QLD 4000
Phone: + 61 2 8280 7454
Fax: + 61 2 9287 0303
Auditor BDO Audit (SA) Pty Ltd
Renascor Resources is an Australian-based company
focused on the development of economically viable
deposits containing graphite and other minerals.
Renascor has an extensive tenement portfolio,
holding interests in key mineral provinces of South
Australia and Western Australia. Its projects include
the Siviour graphite project near Arno Bay, South
Australia. The principal activity of the Group during
the financial year was mineral exploration and
evaluation.
Corporate Governance Statement
The board of directors of the Company (“Board”)
is responsible for the corporate governance of
the Company. The board guides and monitors the
business affairs of the Company on behalf of its
shareholders by whom they are elected and to
whom they are accountable. The Company believes
that good corporate governance enhances investor
confidence and adds value to stakeholders. The
Board continually monitors and reviews its policies,
procedures and charters with a view to ensure its
compliance with the ASX Corporate Governance
Council’s “Corporate Governance Principles and
Recommendations, 3rd Edition” to the extent
considered appropriate for the size of the Company
and its scale of its operations.
The Company’s Corporate Governance Statement is
available on the Company’s website.
www.renascor.com.au/corporate-governance
ASX code: RNU
65
Renascor Resources Limited annual report 2019 66