ANNUAL
REPORT
2018
ANNUAL
REPORT
2018
SAYONA – SUPPORTING
THE WORLD’S CLEAN
ENERGY FUTURE
“The clean energy revolution is driving demand for new lithium
developments such as our Authier project, providing a positive
long-term outlook. We will now step up our engagement with
potential partners and investors, while continuing our close
consultations with the local community and government to ensure
sustainable and beneficial outcomes for all stakeholders.”
Dan O'Neill
Managing Director
CONTENTS
The Company
Highlights
2
3
4
8
9
Authier Project
15
Tenement Schedule
Tansim Project
16
Resources and
Reserves
Western Australian
Lithium
19
Directors’ Report
13
East Kimberley
Graphite Project
31
Auditor’s
Independence
Declaration
32
66
69
Financial Statements
ASX Information
Corporate Directory
Sayona Mining Limited I Annual Report 2018 1
THE COMPANY
East Kimberley Graphite
Mt Edon Lithium
Tansim Lithium
Authier Lithium
Pilbara Lithium
Lithium development
Lithium exploration
Graphite exploration
Sayona’s strategy is to
develop projects to supply
the raw materials required
to construct lithium-ion
batteries for use in the
rapidly growing new and
green technology sectors.
2
The company’s flagship project is
the near-term Authier lithium project
in Canada’s Quebec province.
Sayona also holds exploration
tenements in Western Australia
prospective for lithium and large
flake graphite.
Sayona is backed by a board and
management team who have a track
record of successful lithium mine
development so the company is well
positioned to develop its projects
and provide a return for
shareholders.
Sustainable development is
fundamental to all of the company’s
operations. Sayona is committed to
protecting the environments and
supporting the communities in which
it operates.
The completion of the Definitive
Feasibility Study (DFS) for the
Authier Lithium Project in Canada in
September 2018, subsequent to
period end, was a transformative
event for Sayona. The company can
now progress the project through
the development stage, completing
permitting activities and moving into
the engineering and construction
phases. In Australia, Sayona will
focus on drilling its prospective
lithium projects.
A successful capital raising of (AUD)
$12 million, which completed during
the year, will ensure the company is
well funded for its next stage of
development.
HIGHLIGHTS
DFS confirms the project profitability
with a projected pre-tax NPV of C$184m (A$194m)
Increased Ore Reserve to 12.1 million tonnes
All major Authier environment studies completed
AUD $12 million capital raising
Acquisition of Tansim exploration permits
Drilling program for WA lithium projects
Sayona Mining Limited I Annual Report 2018 3
OPERATIONS
Authier Project
Sayona’s Authier Lithium Project
(Authier) is a hard rock spodumene
lithium deposit scheduled for
development as an open cut mine
initially producing a 6% spodumene
concentrate. Production is planned
to commence in 2020.
Authier is located around 45
kilometres from the city of Val d’Or, a
major mining service centre in the
Canadian province of Quebec, with
many industry support facilities and
services, and a highly skilled local
workforce
The project is approximately 466
kilometres north-west of Montreal
and is easily accessed by a rural
road network connected to a
national highway. Nearby
infrastructure includes:
! Five kilometres to a sealed
highway to export ports
! Five kilometres from an electricity
grid supplied by hydro-electric
power; and
! 20 kilometres to rail facilities
connected to an export port
CANADA
N
Rouyn-
Noranda
Cu
48° N
-78° W
-76° W
-74° W
-72° W
Authier Lithium Project
Val-d'Or
Quebec Lithium
La Tuque
Grande Anse
48° N
Quebec
Becancour
46° N
Maniwaki
Nemaska Lithium
Tros-Rivieres
46° N
0
50
100km
Montreal
-78° W
-76° W
Ottawa
-74° W
-72° W
USA
Authier Project location
4
Definitive Feasibility Study
Key findings of the DFS include:
The DFS, completed at the time of
this report, has confirmed the
Authier Project’s viability as a
profitable and sustainable new
lithium mine that will provide new
jobs, investment and strong returns
for all stakeholders.
Authier will be an open cut mining
operation producing a projected life
of mine 1.58 million tonnes of
spodumene concentrate, the source
of high grade, low contaminant
lithium carbonate. An updated JORC
Ore Mineral Resource and Reserve
statement, reported in September
2018, has identified a Total Resource
of 20.94 million tonnes at 1.01%
Li2O, and a Proved Reserve of 12.1
million tonnes at 1.00% Li2O *.
Production from the mine is
scheduled to commence in 2020.
The new mine has the potential to
create 160 jobs in construction and
130 jobs in operation, with the
company giving priority to local
employment and suppliers.
The deposit at Authier is hosted in a
spodumene bearing pegmatite
intrusion and has been defined by
more than 31,000 metres of drilling.
It will be mined by open cut methods
enhanced by the shallow and thick
nature of the mineralisation, allowing
spodumene ore to be processed
from the commencement of mining.
The DFS clearly demonstrates the
viability of a mining and processing
operation, with the necessary
infrastructure in place to support the
development of the project.
! Pre-tax NPV of C$184.8 million
and IRR 33.7% (real terms at 8%
discount rate);
! Annual average concentrate
production of 87,400 tonnes at
6% Li2O;
! Average annual revenue of C$80
million;
! FOB Port cash costs of C$482/t
(US$366/t);
! Low start-up capital of C$89.9
million;
! LOM strip ratio of 6.9:1;
! 18-year mine life;
! Estimated payback of 2.6 years.
(Refer ASX announcement
24 September 2018 ‘Positive Authier
Definitive Feasibility Study’)
Offtake
Sayona is targeting a number of
potential markets for its product,
which is in increasing demand due
to the role of lithium-ion battery
technology in the clean energy
revolution for cars and electricity.
These include:
! Chinese converters - direct sales
of concentrate to Chinese
converters that produce lithium
products suitable for the global
battery markets. A number of
Chinese companies have
expressed interest in purchasing
Authier concentrates.
! Canadian converters – two
conversion plants are planned in
Quebec and are expected to be
in operation by 2019-2020.
In 2017 the company signed a non-
binding Memorandum of
Understanding (MOU) with Huan
Changyuan Lico Co. Ltd.
(Changyuan) for the potential
purchase of Authier concentrates.
Changyuan, a subsidiary of China
Minmetals Group, is a battery
research, development and
production company. The MOU
paves the way for advancing
discussions to facilitate a
development alliance exploring
marketing, technical and financial
opportunities for the Authier project.
Sayona is also engaging with a
number of parties to secure
financing for the Authier project.
Environmental, Community
and First Nations
Environmental Baseline Studies
were completed in October 2017 for
the Authier project. Additional
studies were undertaken in May and
June 2018 to complete information
required based on the change of the
location of some infrastructure.
In May 2018, the company delivered
its Environmental Assessment Study
(EAS) that presented the results of
the baseline studies (physical,
biological and social environment),
the project description and the effect
of the project on the environment.
These were updated for the DFS
and will be resubmitted when the
company lodges its initial permit
application. Mitigation measures
and environmental follow-ups were
also presented.
A Community Relations Program
has been developed to approach
and engage local stakeholders. This
*Refer Resources and Reserves, page 16
Sayona Mining Limited I Annual Report 2018 5
program includes information
sessions and consultations with
municipalities, landowners, First
Nations communities, non-
government environmental
organisations and recreational
associations.
The objective of this program was to
provide baseline information to
address some of the communities’
concerns and take them into
consideration in the permitting
process and in the design of the
operation phase. The involvement of
stakeholders will continue
throughout the various project
stages.
In addition, the company has been
engaging with the broader
community outside the immediate
project area. Meetings have been
held with regional councils, other
mining companies successfully
operating in the region, Government
organisations, and other key
business stakeholders in the region.
At the same time, the mine closure
plan has been completed and
submitted to the Ministry of Energy
and Natural Resources (MERN) for
public consultation.
The results of the EAS showed that
the project will have no impact on
the water quality of the Esker Saint-
Mathieu-Berry, a local source of
potable water, and that any other
impacts arising from the operations
will be low after the application of
mitigation measures.
Permitting
The company is currently continuing
its consultation process to comply
with the permitting process required
6
by both the MERN and the Ministry
of Sustainable Development,
Environment and the Fight against
Climate Change (MDDELCC).
Sayona is confident that all
necessary approvals can be
achieved within the planned
development timetable.
A Mining Lease will be granted only
when the following conditions are
fulfilled:
! Completion of a feasibility study
(complete);
! Completion of a scoping and
marketing study for processing
within Quebec (complete);
! Rehabilitation and restoration
plans have been approved;
(submitted for approval)
! The MDDELCC authorisation
required under the Environment
Quality Act has been issued for
the project (in progress); and
! A survey plan has been
formalised by the Office of the
Surveyor-General of Québec.
(submitted for assessment)
Before a Mining Lease can be
granted for a metal mine project
where the mine has a production
capacity of less than 2,000 metric
tons per day, a public consultation
initiated by the proponent must be
held in the region in which the mine
will be located.
The company has now facilitated
five public consultation sessions and
more than 40 information meetings
with different stakeholders located
near the project including the La
Motte Council and the Abitibiwinni
First Nations community. Further
information sessions are planned
during follow-up meetings in late
2018. The purpose of the meetings
is to present the results of the
environmental studies and address
any stakeholder concerns about the
project.
Project Implementation
The company’s project development
plan encompasses the following
activities:
! Detailed engineering;
! Procurement and ordering of
long lead items;
! Completion of environmental and
Mining Lease permitting;
! Community and First Nations
consultation;
! Binding off-take agreements;
! Finance; and
! Construction and
commissioning.
Sayona is targeting construction
commencing second half 2019 and
commissioning second half 2020.
The company’s strategy is to initially
develop Authier and sell lithium
concentrates whilst it completes the
test work and feasibility study for a
downstream processing facility.
Sayona has previously completed a
scoping study, demonstrating the
economic viability of building a
lithium carbonate and/or hydroxide
production conversion facility to
enhance the project value, and to
improve the long-term competitive
position of the project. A test work
program is currently underway at
SGS Canada Inc. in Lakefield,
Ontario, to produce lithium
carbonate and hydroxide from
Authier spodumene concentrate.
The results will be incorporated into
a pre-feasibility study for a
downstream processing plant.
Authier Lithium Project DFS Highlights
AUTHIER LITHIUM PROJECT DFS HIGHLIGHTS
Description
Average Annual Ore Feed to the Plant
Annual Average Spodumene Production
Life-of-Mine
Life-of-Mine Strip Ratio
Average Spodumene Price
Initial Development Capital Costs
Total Life of Mine Capital Costs
Total Net Revenue (real terms)
Total Project EBITDA (real terms)
Average Life of Mine Cash Costs (Mine-gate)
Average Life of Mine Cash Costs (Montreal Port FOB)
Net Present Value (real terms @ 8% discount rate)
Pre-Tax Internal Rate of Return
Project Payback Period
Exchange Rate
Unit
tonnes
tonnes
years
waste to ore
US$/tonne
C$ million
C$ million
C$ million
C$ million
C$/tonne
C$/tonne
C$ million
%
years
CAD:USD
Results
675,500
87,400
18
6.9:1
675
89.9
83.6
1,394
460
416
482
184.8
33.7
2.6
0.76
Sayona Mining Limited I Annual Report 2018 7
Tansim Project
In January, Sayona announced the
expansion of its Canadian lithium
footprint with the staged acquisition
of the Tansim lithium exploration
project, 82 kilometres south west of
the Authier project in Quebec.
Activities during the year comprised
reinterpretation of historic
geophysical data, an airborne
geophysics survey, surface
mapping, and sampling of the
pegmatites to define drilling targets.
Exploration is being closely
coordinated with the local First
Nations group, Long Point First
Nation, who will provide support
services for the future work
programs.
The project comprises 65 mineral
claims of 12,000 hectares and is
prospective for lithium, tantalum,
and beryllium.
CANADA
-78° W
-76° W
-74° W
-72° W
-70° W
N
Authier Lithium Project
N
Tansim Lithium Project
48° N
Val-d'Or
North American
Lithium
48° N
Tansim Lithium Project
La Tuque
5km
Quebec
Maniwaki
Nemaska Lithium
Tros-Rivieres
Becancour
46° N
USA
46° N
0
50
100km
-78° W
-76° W
Ottawa
-74° W
-72° W
-70° W
Montreal
Tansim Project location
8
Western Australian Lithium Projects
Western Australia is a premium lithium province with world-class, high-grade
lithium deposits associated with rare metal pegmatites.
Port Hedland
N
Exmouth
Pilgangoora Lithium Deposit
Pilbara
Lithium Project
WESTERN
AUSTRALIA
Mt Magnet
Geraldton
Mount Edon
Lithium Project
PERTH
Kalgoorlie
Mount Marion
Lithium Deposit
Greenbushes
Lithium
Deposit
Cattlin Creek
Lithium Deposit
Esperance
250km
Albany
Sayona Mining Limited I Annual Report 2018 9
Pilbara tenure is displayed in the
figure below.
Sayona holds a lease position of
1898km2 within the world class
Pilgangoora lithium district of the
Pilbara region. Nine tenements,
including the pegmatite rights within
the Tabba Tabba tenement are held
with a 100% interest. A further six
tenements are under Option with
Great Sandy Pty Ltd, whereby
Sayona can acquire an 80% interest
by making staged payments, with a
final payment due in December
2018.
Work during the year focussed on
systematic exploration of the large
tenement holding which has not
previously been explored for its
lithium potential. Results have
identified fertile source granites,
fractionated rare metal pegmatites,
and, at Mallina, new spodumene
bearing pegmatites. The lithium
prospectivity of the package has
been advanced and drilling has
been planned at the Mallina and
Tabba Tabba project area.
N
Port Hedland
E 45/2364
Tabba Tabba
ELA 47/3829
Deep Well
ELA 47/3950
Mt Dove
E 45/4716
Red Rock
E 45/4775
Carlindie
E 45/4727
Moolyella 4
E 45/4721
Moolyella 3
E 45/4703
Tabba Tabba East
Pilgangoora Lithium Project
Pilgangoora Lithium Project
Altura Lithium Project
Altura Lithium Project
Moolyella
Moolyella
Wodgina
Wodgina
Mine
Mine
E 45/4726
West Wodgina
E 45/4738
Cooglegong
E 45/4687
White Springs
E 45/4700
Moolyella 2
E 46/1103
Dorringtons
0
25
50km
E 47/2983
Mallina
ELA 47/3802
Friendly Creek
LEGEND
Sayona tenement
Great Sandy Option
tenement
Road
Rail
Pilbara Tenements
10
Mallina Project
Of the Pilbara tenements, the Mallina
project is the most advanced with
multiple zones of spodumene
pegmatite identified within a 25km2
zone. These pegmatites are newly
discovered and have not been
tested by any past lithium
exploration.
RC drilling of 18 holes for 1,343m
was completed in June to July 2017,
targeting the Discovery and Eastern
pegmatite groups. The best
intercept, of 5m @ 1.00% Li2O, was
from 46m depth in hole SMRC012.
Subsequent work during the year
has included pegmatite mapping,
rock sampling and extensive soil
geochemistry. This has led to the
identification of the Area C prospect,
a 800m strike length anomaly.
Bedrock is poorly exposed but
spodumene pegmatite identified
along its extents has returned up to
4.60% Li2O in rock chip grab
sampling.
A summary plan of the Mallina
project exploration is displayed in
the figure below.
606000 E
608000 E
610000 E
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Pegmatites
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Area C Pegmatites
and Drill Area
Eastern Group
Pegmatites
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Rock to 2.83% Li O2
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Eastern No.2
Pegmatite
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7670000 N
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Eastern No.3
Pegmatite
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606000 E
608000 E
610000 E
LEGEND
Mapped pegmatite
Area of 2018 drilling
Soil Li O - ppm
2
400 to 10,000
200 to 400
150 to 200
80 to 150
40 to 80
-20 to 40
0
1
2km
MALLINA PROJECT
LITHIUM GEOCHEMISTRY
and PROPOSED DRILL AREAS
N
Port Hedland
E 47/2983
Mallina
Pilgangoora
Lithium
Deposit
50km
Wodgina Mine
Mallina Project
Sayona Mining Limited I Annual Report 2018 11
Deep Well project
The Deep Well tenement application
covers an area of 119km2 near Port
Hedland. It was pegged to secure
an area of interpreted granites
prospective for lithium and has
subsequently been considered
prospective for the conglomerate
hosted style of gold mineralisation.
The tenement has poor exposure of
bedrock but areas of Fortescue
aged Mt Roe Basalt crop out in the
in the western tenement region,
margined by younger Mallina
Formation sediments. Elsewhere in
the Pilbara the contact between
these units is prospective for gold
mineralisation. At Deep Well the
Mallina sediments are also a target,
comprising basin margin, high
energy sediments, close in age to
the Central Rand Group, which
hosts the majority of the gold in the
Witwatersrand.
In some areas of the Deep Well
project iron-rich oxidised pyrite
cubes (metamorphosed authigenic
pyrite) are present on surface.
Sampling of this material indicates
they contain elevated gold (to a
maximum 120ppb Au) and bismuth,
molybdenum, antimony, nickel,
tellurium, uranium and other
pathfinder elements. Further work is
planned to better understand the
area’s geology and potential.
Moolyella and other Pilbara
project areas
The Moolyella project is located to
the east of Marble Bar. The area
hosts a number of lithium, tin and
tantalum occurrences including the
old Moolyella tin field and other
explorers have identified
spodumene pegmatite associated
with the intrusion of the Moolyella
monzogranite.
Within the company’s tenure (three
tenements covering 334 km2) a
number of lithium-cesium-tantalum
albite pegmatites and fractionated
fertile source granites have been
identified. Orientation rock and soil
sampling has been undertaken and
further exploration to target the
anomalous areas is planned.
Mt Edon lithium project
The project is located in the
southern portion of the Paynes Find
greenstone belt, South Murchison,
which is host to an extensive swarm
of pegmatites. The pegmatites have
not previously been assessed for
their lithium potential but have been
variably prospected and mined for
tantalum, mainly within an excised
mining lease.
Reconnaissance exploration has
identified lepidolite (lithium mica)
bearing pegmatite with a peak assay
of 1.57% Li2O. Geochemical results
indicate that the pegmatite suite
becomes increasingly fractionated
to the west and further exploration is
planned to focus in this area.
Permitting for stage 2 drilling at
Mallina, including the Area C
prospect is now complete. The
project has been awarded a co-
funded government grant. This
incentive scheme, funded by the
Government of Western Australia,
allows for a 50% rebate on direct
drilling costs, up to a maximum of
$150,000. A 30-hole, 2,225m RC
drilling program was completed in
September 2018, subsequent to
period end. Results from this
program are pending.
Tabba Tabba project
The Tabba Tabba project, located
40km north of Pilgangoora, is an
area of historic tin and tantalum
mining currently being re-evaluated
for its lithium potential. Spodumene
pegmatite has been identified in
adjacent tenure and the Tabba
Tabba project, which covers
508km2, provides exposure to the
area’s emerging lithium
prospectivity.
Exploration has identified three new
rare metal pegmatites as well as
lithium geochemical anomalies
which are being actively explored.
The Northern River prospect
contains lithium anomalism while the
southern prospects are tantalum
rich.
Drill approvals are in place to carry
out first phase drilling at three
prospect areas. This work is
anticipated to take place later in
2018.
12
East Kimberley Graphite Project
The Corkwood graphite project
comprises two tenements covering
151km2. Located in a region of
proven coarse flake, high purity
graphite mineralisation, the project
secures a 25km strike extent of
conductive, graphite bearing
Tickalara Formation. Drilling carried
out by the company in 2015 over
part of this target identified thick but
low grade coarse flake graphite
mineralisation from surface.
believes that the Corkwood graphite
project has considerable value and
is seeking partners to explore and
develop the project.
During the year Sayona’s primary
activities were focused on its lithium
projects. However, the company
Wyndham
Kununurra
N
240km
LEGEND
SYA Tenement
Mineral Deposit
Host stratigraphy
Road
Town
Port
G re at
E 80/4949
Corkwood
y
a
w
h
H i g
t h e r n
N o r
E 80/4511
Western Iron
E 80/4511
Western Iron
McIntosh Project
Hexagon Resources
East Kimberley Graphite Project location
Sayona Mining Limited I Annual Report 2018 13
SAYONA’S STRATEGY
IS TO DEVELOP
PROJECTS TO SUPPLY
THE RAW MATERIALS
REQUIRED TO
CONSTRUCT LITHIUM-ION
BATTERIES FOR USE
IN THE RAPIDLY GROWING
NEW AND GREEN
TECHNOLOGY
SECTORS
14
TENEMENT SCHEDULE
Tenement
Location
Interest in
Tenement
Tenement
Location
Interest in
Tenement
E59/2092
Western Australia
E59/2055
Western Australia
E45/2364
Western Australia
E45/4703
Western Australia
E45/4716
Western Australia
E45/4726
Western Australia
E45/4738
Western Australia
E45/4775
Western Australia
E80/4511
Western Australia
E80/4949
Western Australia
ELA47/3802
Western Australia
ELA47/3829
Western Australia
ELA47/3950
Western Australia
80%, with rights to 100%
of pegmatite minerals
100%
(pegmatite minerals)
100%
(pegmatite minerals)
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
E47/2983
Western Australia
Option Rights to 80%
E46/1103
Western Australia
Option Rights to 80%
E45/4687
Western Australia
Option Rights to 80%
E45/4721
Western Australia
Option Rights to 80%
E45/4727
Western Australia
Option Rights to 80%
E45/4700
Western Australia
Option Rights to 80%
2116146
Quebec, Canada
2116154
Quebec, Canada
2116155
Quebec, Canada
2116156
Quebec, Canada
2183454
Quebec, Canada
2183455
Quebec, Canada
2187651
Quebec, Canada
2187652
Quebec, Canada
2192470
Quebec, Canada
2192471
Quebec, Canada
2194819
Quebec, Canada
2195725
Quebec, Canada
2219206
Quebec, Canada
2219207
Quebec, Canada
2219208
Quebec, Canada
2219209
Quebec, Canada
2240226
Quebec, Canada
2240227
Quebec, Canada
2247100
Quebec, Canada
2247101
Quebec, Canada
2472424
Quebec, Canada
2472425
Quebec, Canada
2480180
Quebec, Canada
2507910
Quebec, Canada
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
Sayona Mining Limited I Annual Report 2018 15
RESOURCES AND RESERVES
In September 2018, subsequent to
period end, Sayona announced
updated Resource and Reserve
estimates for the Authier project.
(Refer ASX announcement 24
September 2018 ‘Authier Project
Expanded JORC Ore Reserves &
Resource’).
The DFS, which is the subject of a
separate announcement in
September, demonstrated the
technical and financial viability of
constructing an open-cut mining
operation and processing facility
producing spodumene concentrate.
The positive DFS is considered
sufficient to determine, in
accordance with the JORC Code
2012, that a subset of the Measured
and Indicated Mineral Resource be
classified as Ore Reserves – see
Table 1.
The Authier project has been subject
to more than 31,000 metres of
drilling. Between 2010 and 2012
Glen Eagle, the previous tenement
holders, completed 8,990 metres of
diamond drilling in 69 diamond drill
holes (DDH) of which 7,959 metres
were drilled on the Authier deposit;
609 metres (five DDH) were drilled
on the northwest and 422 metres on
the south-southwest of the property.
Sayona has completed three phases
of drilling totalling more than 11,000
metres in 81 DDH. All the holes
completed by Sayona and included
in the Mineral Resource Estimate
have used standard DDH, HQ or NQ
core diameter size, using a standard
tube and bit. The drilling programs
have been subject to very robust
QA/QC procedures.
A revised independent JORC
Mineral Resource (2012) estimate
has been prepared and is outlined in
Table 2.
The company confirms that it is not
aware of any new information or
data that materially affects the
information included in the original
market announcement and all
material assumptions and technical
parameters continue to apply and
have not materially changed. The
company confirms that the form and
context in which the Competent
Person’s findings are presented
have not been materially modified
from the original market
announcements.
Table 1:
Authier JORC Ore Reserve Estimate (0.55% Li 0 cut-off grade)
2
Category
Proven Reserve
Probable Reserve
Total Reserves
Tonnes (Mt)
Grades (% Li 0)2
Contained Li 0 (t)
2
6.10
6.00
12.10
0.99
1.02
1.00
60,390
61,200
121,590
Note: The Ore Reserve Estimate is inclusive of dilution and ore loss.
Table 2:
Authier JORC Mineral Resource Estimate (0.55% Li 0 cut-off grade)
2
Category
Tonnes (Mt)
Measured Resource
Indicated Resource
Mea. + Ind. Resource
Inferred Resource
Total Resource
6.58
10.60
17.18
3.76
20.94
Grades (% Li 0)2
1.02
1.01
1.01
0.98
1.01
Contained Li 0 (t)
2
67,100
107,100
174,200
36,800
211,000
16
Competent Person Statements
Authier, Canada
The information in this report that
relates to Exploration Results and
Mineral Resources is based on
information compiled by Dr Gustavo
Delendatti, a member of the
Australian Institute of Geoscientists.
Dr Delendatti is an independent
consultant, and has sufficient
experience which is relevant to the
style of mineralisation and type of
deposit under consideration and to
the activity which it is undertaking to
qualify as a Competent Person as
defined in the JORC Code (2012
Edition) of the “Australasian Code
for Reporting of Exploration Results,
Mineral Resources and Ore
Reserves. Dr Delendatti was
responsible for the design and
conduct of Sayona’s three
exploration drilling campaigns,
supervised the preparation of the
technical information and audit of all
the historical drilling data contained
in this release, and has relevant
experience and competence of the
subject matter. Dr Delendatti, as
Competent Person for this
announcement, has consented to
the inclusion of the information in
the form and context in which it
appears herein.
The information in this report that
relates to the Ore Reserves for the
Authier Lithium deposit is based on
information compiled by Isabelle
Leblanc, Professional Engineer and
member of the Ordre des Ingénieurs
du Québec (#144395). Isabelle
Leblanc is the Mining Department
Manager of BBA and has sufficient
experience that is relevant to the
activity of Ore Reserve estimation to
qualify as a Competent Person as
defined in the 2012 Edition of the
Australian Code for Reporting of
Exploration Results, Mineral
Resources and Ore Reserves.
Isabelle Leblanc was responsible for
the mining engineering and financial
sections of the Definitive Feasibility
Study concerning the Authier
project.
Sayona Mining Limited I Annual Report 2018 17
LITHIUM - METAL OF THE 21 CENTUARY
st
The lithium-ion battery is
changing the way we generate,
use, distribute and store energy.
Renewable
grid storage
Transportation
electric and
hybrid vehicles
Electronics
consumer
Battery & energy
storage
for high technology
industries
18
>30%
*
25-30%
*
8-10%
*
Driving
unprecedented
demand
* projected compound annual
growth rate until 2025
DIRECTORS’ REPORT
Your Directors present their report on the consolidated entity (Group) consisting of Sayona Mining Limited
and its controlled entities for the financial year to 30 June 2018. The information in the following
operating and financial review and the Remuneration Report forms part of this Directors’ Report for the
financial year ended on 30 June 2018 and is to be read in conjunction with the following information.
DIRECTORS
The Directors of the Company during or since the end of the financial year are listed below. During the year,
there were 14 meetings of the full Board of Directors. The meetings attended by each Director were:
DIRECTOR
D.C. O’Neill
P.A. Crawford
A. C. Buckler
J. S. Brown
ELIGIBLE TO
ATTEND
14
14
14
14
ATTENDED
14
14
14
14
The Company does not have an Audit Committee. The role of the Audit Committee has been assumed by
the full Board. The size and nature of the Company’s activities does not justify the establishment of a
committee at this time.
INFORMATION ON DIRECTORS AND COMPANY SECRETARY
The names and qualifications of current Directors are summarised as follows:
Dennis C O’Neill
Managing Director
Qualifications
Bachelor of Science - Geology
Experience
Board member since 2000. Over 40 years’ experience in exploration project
and corporate management. He has held positions with a number of
Australian and multinational exploration companies and has managed
exploration programs in a diverse range of commodities and locations.
Interest in Shares
86,593,477 ordinary shares
Directorships in other
listed entities during the
3 years prior to current
year
Altura Mining Limited
Paul A Crawford
Director (Executive) & Company Secretary
Qualifications
Experience
Bachelor of Business – Accountancy; CPA, Master of Financial
Management, Graduate Diploma in Business Law, Graduate Diploma in
Company Secretarial Practice.
Board member since 2000. 40 years of commercial experience, including
various technical and management roles within the minerals, coal and
petroleum industries. Principal of his own corporate consultancy firm,
providing accounting, corporate governance, business advisory and
commercial management services.
Interest in Securities
98,440,535 ordinary shares and 769,650 listed options
Directorships in other
listed entities during the
3 years prior to current
year
Nil
Sayona Mining Limited I Annual Report 2018 19
DIRECTORS’ REPORT
Allan C Buckler
Director (Non-Executive)
Qualifications
Experience
Certificate in Mine Surveying and Mining, First Class Mine Managers
Certificate and a Mine Surveyor Certificate issued by the Queensland
Government’s Department of Mines.
Appointed to the Board on 5 August 2013. Over 35 years’ experience in
the mining industry and has taken lead roles in the establishment of
in both Australia and
several leading mining and port operations
Indonesia. Significant operations such as PT Adaro
Indonesia, PT
Indonesia Bulk Terminal and New Hope Coal Australia have been
developed under his leadership.
Interest in Securities
97,924,530 ordinary shares and 980,392 listed
options Directorships in other
listed entities during the
3 years prior to current
year
Altura Mining Limited, Interra Resources Limited
James S Brown
Director (Non-Executive)
Qualifications
Experience
Graduate Diploma in Mining from University of Ballarat
Appointed to the Board on 12 August 2013. Over 30 years’ experience in
the coal mining industry in Australia and Indonesia, including 22 years at
New Hope Corporation. He was appointed as Managing Director of Altura
in September 2010. His coal development and operations experience
includes the New Acland and Jeebropilly mines in South East Queensland,
the Adaro and Multi Harapan Utama operations in Indonesia and Blair
Athol in the Bowen Basin in Central Queensland.
Interest in Securities
3,187,463 ordinary shares and 69,294 listed
options Directorships in other
listed entities during the
3 years prior to current
year
Altura Mining Limited
DIVIDENDS
No dividends were declared or paid during the financial year.
SHARE OPTIONS
At the date of this report, the unissued ordinary shares of Sayona Mining Limited under option are as follows:
Grant Date
Expiry Date
Exercise Price No. under Option
31 May 2018
30 April 2020
7.8 cents
120,242,789
Options holders do not have any rights to participate in any issue of shares or other interests of the
Company or any other entity.
Movements in listed shareholder options and unlisted employee options are set out in the state of affairs
section of this report and Note 22 in the financial report.
During the year ended 30 June 2018, the following ordinary shares of Sayona Mining Limited were issued
on the exercise of options granted:
Options
Issue Date
Exercise Price Number of Share Issued
Employee Option Plan
29 December 17
Employee Option Plan
29 December 17
$0.035
$0.045
2,500,000
2,500,000
20
DIRECTORS’ REPORT
INDEMNIFICATION OF DIRECTORS AND AUDITORS
The consolidated Group has paid insurance premiums to indemnify each of the Directors against
liabilities for costs and expenses incurred by them in defending any legal proceedings arising out of their
conduct while acting in the capacity of Director of the Company, other than conduct involving a wilful
breach of duty in relation to the Company The contracts include a prohibition on disclosure of the
premium paid and nature of the liabilities covered under the policy.
The Company has not given an indemnity or entered into any agreement to indemnify, or paid or agreed
to pay insurance premiums in respect of any person who is or has been an auditor of the Company or
a related body corporate during the year and up to the date of this report.
PROCEEDINGS ON BEHALF OF THE COMPANY
No person has applied for leave of Court to bring proceedings on behalf of the Company or intervene
in any proceedings to which the Company is a party for the purpose of taking responsibility on behalf of
the Company for all or any part of those proceedings.
The Company was not a party to any such proceedings during the year.
AUDITOR INDEPENDENCE
A copy of the auditor’s independence declaration as required under section 307C of the Corporations Act
2001 is attached.
Non-Audit Services
There were no non-audit services provided by the Company’s auditors in the current or previous financial
year.
Sayona Mining Limited I Annual Report 2018 21
OPERATING AND FINANCIAL REVIEW
PRINCIPAL ACTIVITY
The consolidated Group’s principal activity during the financial year has been the identification, acquisition
and evaluation of mineral exploration assets, focusing on lithium. During the year, the Company undertook
feasibility studies on the Authier Project in Canada and exploration activity on a number of projects in
Australia and Canada.
There were no significant changes in these activities during the financial year.
BUSINESS MODEL AND OBJECTIVES
The Company’s primary objective is to provide shareholders with satisfactory returns.
This is to be achieved through implementation of the Company’s business model of identifying, evaluating
and developing its portfolio of exploration and development assets.
Operating Results
The entity’s consolidated operating loss for the financial year after applicable income tax was $2,328,463
(2017:
$2,570,538). Tenement acquisition, exploration and evaluation expenditure during the year totalled
$5,724,378 (2017: $7,109,318).
Review of Operations
The Company’s primary focus during the year has been on completing the studies required to
commence the development of the Authier project, including the Definitive Feasibility Study. Authier is a
near-term development project and cash-flow generation opportunity. The Company believes it will create
significant share value-uplift potential for shareholders as the project advances towards development.
Authier, Canada
JORC Mineral Resources Upgrade
In June 2017, the Company reported a JORC 2012 compliant Mineral Resource following the Phase 2
drilling program. During the year, the Mineral Resource was updated to include the Northern Pegmatite
which was not previously incorporated in the Mineral Resource. In addition, the Authier Main pegmatite has
been increased due to refinement of the lithium solids model for the main pegmatite and inclusion of
new mineralisation from the Phase 3 drilling program. The Authier deposit has approximately 23,000
metres of drilling in 176 holes.
Table 1 – Authier JORC Mineral Resources Estimate (0.45% Li20 cut-off grade)
Category
Tonnes (Mt)
Grades %Li20
Contained Li20
Measured
Indicated
Inferred
Total
6.09
11.55
2.82
20.46
1.01%
1.04%
0.98%
1.02%
61,509
120,120
27,636
209,265
(Ref ASX Announcement 12 April 2018 – Authier Lithium Project JORC Mineral Resource Expansion)
Based on the results of the new information, a new Proven and Probable Ore Reserve estimate of
11.66Mt @ 1.03% Li20 at a 0.45% Li20 cut-off grade (Table1) has been defined.
Table 2– Authier JORC Ore Reserve Estimate (0.45% Li20 cut-off grade)
Category
Tonnes (Mt)
Grades (%Li20)
Contained Li20
Proven Reserve
Probable Reserve
Total Reserves
5.59
6.07
11.66
0.99
1.06
1.03
55,341
64,363
119,704
Note: The Ore Reserve estimate is based on the details published in a separate ASX
release “Authier JORC Ore Reserve”, 11 December 2017. The Ore Reserve Estimate is
inclusive of 2% dilution and 5% ore loss.
22
OPERATING AND FINANCIAL REVIEW
Authier Optimised Pre-Feasibility Study
During the year, the Company completed the Optimised Pre-Feasibility Study (“PFS”). The PFS
incorporates the expanded JORC Mineral Resource from phase 2 drilling, results from a number of
technical optimisation programs, and realignment of pricing to reflect a concentrate grade of 6% Li2O and
more recent industry forecasts. The PFS confirms the technical and financial viability of constructing a
facility producing spodumene
simple, low-strip ratio, open-cut mining operation and processing
concentrate. The positive PFS demonstrates the opportunity to create substantial long-term sustainable
shareholder value at a low capital cost.
Authier Definitive Feasibility Study
In November 2017, the Company awarded the main components of Authier Definitive Feasibility Study
(“DFS”)
including the mining, processing and infrastructure to BBA. BBA is an independent Canadian
consulting engineering firm operating internationally. BBA have extensive experience in the Canadian
mining industry and have been actively involved in Feasibility Studies for Quebec lithium projects
including Nemaska and the North American Lithium project.
A number of other DFS work programs including geotechnical, transport and environmental were
outsourced to specialist contractors.
The DFS will incorporate the new JORC Resource estimate and the results of the successful 5-tonne
pilot metallurgy program. The company is targeting completion of the DFS in September 2018, which has
taken longer than expected due to finalisation of design work on parts of the process plant following late
completion of the pilot metallurgy program.
Authier Marketing and Finance
With DFS nearing completion, the Company is actively engaging with a number of potential production off-
takers. Strong interest has been received from Chinese concentrate converters interested in purchasing
Authier concentrates or value-adding in country. The Company will be undertaking a marketing
roadshow in China in July/August to secure binding off-take contracts for the Authier production.
In addition, the Company is engaged with a number of parties interested in financing the Authier project.
Potential financing strategies include royalties, concentrate pre-sales and convertible notes. The objective
of the financing strategy it to minimise dilution to shareholders.
Environmental Work Programs
The Company commissioned a number of environmental studies to examine whether the Authier mine
has any physical, biological or social impacts on the environment and communities. The studies were
undertaken by highly reputable independent consultants with extensive experience and expertise in the
region, including SNC Lavalin, Lamont Inc, Hydrogeology Richelieu and Groupe DDM.
Authier has now been the subject of a number of detailed environmental studies. In 2010, a comprehensive
base- line environmental study was completed by environmental consultancy group, Dessau. Since the
Company’s acquisition of the Authier project in late 2016, all of the environmental studies have been
updated.
The studies have not identified any potential environmental issues at the Authier project or any major
impact on
the local communities. The Authier project is planned to be an operation processing 1,900
tonnes of ore per day which is significantly smaller than other operations in the district.
Permitting Process Update
The Company’s strategy is to initially develop Authier and sell lithium concentrates while it completes the
test work and feasibility study for a downstream processing facility producing lithium carbonate and/or
hydroxide. The strategy is analogous to other lithium developers in Quebec including Nemaska and North
American Lithium.
The Company is currently continuing its consultation process to comply with the permitting process
required by Quebec Government agencies.
Tansim Exploration Project
In January 2018, the Company entered into an acquisition agreement to acquire a number of tenements.
Tansim is situated 82 kilometres south-west of the Authier lithium project in Quebec. The project
comprises 65 mineral claims of 12,000 hectares, and is prospective for lithium, tantalum, and beryllium.
Sayona Mining Limited I Annual Report 2018 23
OPERATING AND FINANCIAL REVIEW
A recent airborne geophysics survey confirmed a strong east-west magnetic anomaly coincident with
historical surface mapping of pegmatites over an area of 9 kilometres long and up to 700 metres wide.
Mapping and sampling programs are planned to define the geometry of the pegmatites for future
drilling. Exploration is being closely coordinated with the local First Nations group, Long Point First
Nation, who will provide support services for the future work programs.
Western Australian Lithium Projects
Exploration tenure in Western Australia includes leases covering some 1,780 km2 in the world class
Pilgangoora
lithium district. The 141 km2 Mallina project, E47/2983, is the most advanced with three
zones of spodumene pegmatite identified by the Company’s exploration to date. Other advancing projects
include Tabba Tabba where
three drill targets have been outlined and lithium anomalous albite
pegmatites at the Moolyella project. Pilbara lithium tenure is displayed in the figure below.
Mallina Project
The Mallina project now includes multiple areas of spodumene bearing pegmatites in three broad groups,
within a 20 km2 zone. During the year soil geochemistry and geological mapping were carried out. These
identified new geochemical anomalies and pegmatite occurrences, enhancing the projects prospectivity
and calibre of the drill targets identified so far.
Permitting at Mallina is now complete and a 20 hole, 2,500m RC drilling programme is planned to
commence in August. The programme is principally designed as a first pass test of the Area C prospect
and other spodumene pegmatites, where rock chip sampling has returned spodumene mineralisation up to
4.6% LiO2. The pegmatite has a generally poor outcrop but is geochemically defined by a strong lithium
soil anomaly extending over 1,400m in extent.
The project has been awarded a co-funded Government grant. This incentive scheme grant, funded by the
Western Australia Government, provides up to 50% rebate on direct drilling costs, up to a maximum of
$150,000. The planned work includes RC and diamond drilling.
Tabba Tabba Project
The Tabba Tabba project, located 40km north of Pilgangoora, is an area of historic tin and tantalum
mining, currently being re-evaluated for its lithium potential. Within the Company’s tenure first pass drilling
is planned at three pegmatite targets following receipt of statutory approvals for drill testing. Prospects
include previously undrilled pegmatites at the Northern River, Roadside and Turley areas. Orientation soil
geochemistry, carried out in the northern part of the lease during the year, returned elevated lithium
results to 396ppm Li2O. A more comprehensive programme of 450 samples collected along the northern
5km extent of the tenement has now been completed. Results of this work are pending.
Subsequent to the end of the financial year, two exploration licenses were applied for to the north and along
strike to the Tabba Tabba project. Exploration and geological data on these areas is being compiled and it
is anticipated
they will provide the company with additional exposure to the areas emerging lithium
prospectivity.
Moolyella and Other Pilbara Project Areas
The Moolyella project is located east of Marble Bar in an area of lithium, tin and tantalum mineralisation,
including spodumene pegmatite associated with the intrusion of the Moolyella monzogranite. Within the
Company’s tenure (three tenements covering 334 km2) a number of lithium-cesium-tantalum (LCT)
albite pegmatites have been identified. Orientation soil sampling has been completed and results are
awaited.
Great Sandy Option
During the year, the Company made the first stage option payment to Great Sandy Pty Ltd (“Great
Sandy”) to acquire a 694 km2 package of 6 tenements in the world-class Pilgangoora lithium district of
Western Australia. This package includes the Mallina and Moolyella project areas.
The Great Sandy purchase terms include an option to acquire an 80% interest in all the tenements by making
staged payments in cash or shares at Great Sandy’s election of $300,000 within 12 months (paid 28
December 2017), and $300,000 within 24 months and free carrying Grant Sandy to Decision to Mine. At
the Decision to Mine, Great Sandy can either elect to dilute or contribute to ongoing expenditure
commitments or convert the 20% interest to a 2% gross smelter royalty.
24
OPERATING AND FINANCIAL REVIEW
Corporate
On 10 November 2017, the company completed a pro rata renounceable rights issue, comprising an offer
on the basis of one (1) new share for every two (2) existing shares held at an issue price of 1 cent per
share. Under the rights issue, 487,409,777 new shares were issued raising $4,874,097 before the costs of
the offer.
On 24 April 2018, the Company completed a capital raising to international and domestic institutional,
and sophisticated investors. This involved the issue of 218,000,273 new shares, raising A$11.1 million,
before costs.
In addition, the Company granted 109,000,137 free attaching options exercisable at 7.8
cents or before 30 April 2020.
On 31 May 2018, the company completed a pro rata renounceable rights issue, comprising an offer on the
basis of one (1) new share for every twenty-two (22) existing shares held at an issue price of 5.1 cents per
share, together with one (1) free attaching rights option exercisable at 7.8 cents or before 30 April 2020 for
every two (2) rights shares subscribed. Under the rights issue, 22,485,064 new shares and 11,442,562
options were issued raising $1,146,738 before the costs of the offer.
FINANCIAL POSITION, CONTINUED OPERATIONS AND FUTURE FUNDING
At 30 June 2018, the Company's Statement of Financial Position shows total assets of $24,260,022, of
which $10,275,738 was cash, total liabilities of $1,579,300 and net assets of $22,680,722.
The financial statements have been prepared on a going concern basis which contemplates that the
Group will continue to meet its commitments and can therefore continue normal business activities and
the realisation of assets and settlement of liabilities in the ordinary course of business.
Over recent years the Group has focused on its exploration and evaluation of its assets to the point
where the Authier Lithium Project is subject to a definitive feasibility study, with the potential to advance
to development within the next 12 months.
The Directors believe that the Group is in a strong and stable financial position to grow it current operations.
SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS
Significant changes during the year include:
• On 10 November 2017, the company completed a pro rata renounceable rights issue, comprising
an offer on the basis of one (1) new share for every two (2) existing shares held at an issue price of 1
cent per share. Under the rights issue, 487,409,777 new shares were issued raising $4,874,097 before
the costs of the offer;
• On 24 April 2018, the Company completed a capital raising to international and domestic institutional,
and sophisticated investors. This involved the issue of 218,000,273 new shares, raising A$11.1
million, before costs. In addition, the Company granted 109,000,137 free attaching options
exercisable at 7.8 cents or before 30 April 2020; and
• On 31 May 2018, the company completed a pro rata renounceable rights issue, comprising an offer
on the basis of one (1) new share for every twenty-two (22) existing shares held at an issue price of
5.1 cents per share, together with one (1) free attaching rights option exercisable at 7.8 cents or
before 30 April 2020 for every two (2) rights shares subscribed. Under the rights issue,
22,485,064 new shares and 11,442,562 options were issued raising $1,146,738 before the costs of
the offer.
SIGNIFICANT EVENTS AFTER BALANCE DATE
Other than ongoing exploration activity, no other matters or circumstances have arisen since 30 June 2018
which significantly affect or may significantly affect the operations of the Company, the results of those
operations, or the state of affairs of the Company in subsequent financial years.
FUTURE DEVELOPMENTS, PROSPECTS AND BUSINESS STRATEGIES
During the year, the Company has focused on completing the studies required to commence the
development of the Authier Lithium Project, including the Definitive Feasibility Study. Authier is a near-term
development project and cash-flow generation opportunity. The Company believes it will create significant
share value-uplift potential for shareholders as the project advances towards development.
Sayona Mining Limited I Annual Report 2018 25
OPERATING AND FINANCIAL REVIEW
The Company’s strategic focus will continue to be on the development of Authier and the exploration
and evaluation its other assets. The assets range from early stage exploration to advanced projects with
potential for advancement to production.
To complete mine development at the Authier Project, the Company is likely to require additional funding.
The form of this funding is currently undetermined and likelihood of success unknown. Consequently, it is
not possible at this stage, to predict future results of the activities.
Business Risks
The following exposure to business risks may affect the Group’s ability to achieve the objectives outlined
above:
that the feasibility study and associated technical works will not achieve the results expected;
•
• all relevant approvals are obtained to conduct proposed operations;
• exploration and evaluation success on individual projects; and
•
the ability to raise additional funds in the future;
ENVIRONMENTAL REGULATION
The Company’s operations are subject to environmental regulation under the law in Australia and Canada.
The Directors monitor the Company’s compliance with environmental regulation under law, in relation to
its exploration activities. The Directors are not aware of any compliance breach arising during the year and
up to the date of this report.
PREVIOUS DISCLOSURE - 2012 JORC CODE
Certain Information relating to Mineral Resources, Exploration Targets and Exploration Data associated with
the Company’s projects in this Report has been extracted from the following ASX Announcements:
• Authier JORC Resource Expanded , 12 April 2018
• Authier Phase 3 Drilling Results, 10 April 2018
• Authier Maiden JORC Ore Reserve, 11 December 2017
• Authier Pilot Metallurgy Program, 13 April 2018
• Tansim Geophysics Program, 21 March 2018
these
reports are available
Copies of
the Sayona Mining Limited website
www.sayonamining.com.au. These reports were issued in accordance with the 2012 Edition of the JORC
Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves. The
Company confirms that it is not aware of any new
information or data that materially affects the
information included in the original market announcement. The Company confirms that the form and
context in which the Competent Person’s findings are presented have not been materially modified from
the original market announcement.
to view on
CORPORATE GOVERNANCE
Sayona’s Corporate Governance Statement
www.sayonamining.com.au/corporate-governance.
is
available
on
the
company’s website
26
REMUNERATION REPORT
REMUNERATION POLICY
The Company’s remuneration policy ordinarily seeks to align Director and executive objectives with
those of shareholders and the business, while at the same time recognising the development stage of the
Company and the criticality of funds being utilised to achieve development objectives. The Board
believes that the current policy has been appropriate and effective in achieving a balance of objectives.
The Board’s policy for determining the nature and amount of remuneration for KMP of the consolidated
Group is based on the following:
• The remuneration policy developed and approved by the Board;
• KMP may receive a base salary, superannuation, fringe benefits, options and performance incentives;
• The remuneration structure for KMP is based on a number of factors including length of service,
particular experience of the individual concerned and overall performance of the Group;
• Performance incentives are generally only paid once predetermined key performance indicators (KPIs)
have been met;
•
Incentives paid in the form of options or rights are intended to align the interests of the KMP and
company with those of the shareholders; and
• The Board reviews KMP packages annually by reference to the consolidated Group’s
performance, executive performance and comparable information from industry sectors.
The performance of KMP is measured against criteria agreed annually with each party and is based
predominantly on the forecast growth of the consolidated Group, project milestones and shareholders’
value. All bonuses and incentives must be linked to predetermined performance criteria. The Board may,
however, exercise its discretion in relation to approving incentives, bonuses and options. Any change must
be justified by reference to measurable performance criteria. The policy is designed to attract the highest
calibre of executives possible and reward them for performance results leading to long-term growth in
shareholder wealth.
All remuneration paid to KMP is valued at the cost to the company and expensed.
The Board’s policy is to remunerate non-executive directors at market rates for time, commitment and
responsibilities. The Board collectively determines payments to the non-executive directors and reviews
their remuneration annually, based on market practice, duties and accountability. Independent external
advice is sought when required. The maximum aggregate amount of fees that can be paid to non-
executive directors is subject to approval by shareholders at the annual general meeting.
KMP are also entitled and encouraged to participate in the employee share and option arrangements to
align their interests with shareholders’ interests.
Options granted under incentive arrangements do not carry dividend or voting rights. Each option is entitled
to be converted into one ordinary share once the interim or final financial report has been disclosed to the
public and is measured using a binomial lattice pricing model which incorporates all market vesting
conditions.
KMP or closely related parties of KMP are prohibited from entering into hedge arrangements that would have
the effect of limiting the risk exposure relating to their remuneration.
In addition, the Board’s remuneration policy prohibits directors and KMP from using the Company’s
shares as collateral in any financial transaction, including margin loan arrangements.
ENGAGEMENT OF REMUNERATION CONSULTANTS
The Company does not engage remuneration consultants.
PERFORMANCE BASED REMUNERATION
KPIs are set annually, in consultation with KMP. The measures are specifically tailored to the area each
individual is involved in and has a level of control over. The KPIs target areas the Board believes hold
greater potential for Group expansion and shareholder value, covering financial and non-financial as well as
short and long-term goals. The level set for each KPI is based on budgeted figures for the Group and
relevant industry standards.
Sayona Mining Limited I Annual Report 2018 27
REMUNERATION REPORT
RELATIONSHIP BETWEEN REMUNERATION POLICY AND COMPANY PERFORMANCE
The remuneration policy has been tailored to increase goal congruence between shareholders,
directors and executives. Two methods have been applied to achieve this aim. The first is a performance
based bonus based on KPIs, and the second is the issue of options to executives and directors to
encourage the alignment of personal and shareholder interests. The Company believes this policy has
been effective in increasing shareholder wealth over recent years.
The following table shows some key performance data of the Group for the last 3 years, together with the
share price at the end of the respective financial years.
Exploration Expenditure ($)
Exploration Tenements (no. including
applications) Net Assets ($)
Share Price at Year-end ($)
Dividends Paid ($)
2016
2017
2018
2,712,521
7,109,318
5,625,576
14
25
40
1,333,669
8,861,943
22,680,722
0.0287
Nil
0.015
Nil
0.040
Nil
EMPLOYMENT DETAILS OF MEMBERS OF KEY MANAGEMENT PERSONNEL
The following table provides employment details of persons who were, during the financial year,
members of KMP of the consolidated Group. The table also illustrates the proportion of remuneration that
was performance and non-performance based, and the proportion of remuneration received in the form of
options.
Key
Management
Personnel
Position held at
30 June 2018 &
change during
the year
Contract Details
Proportion of Remuneration:
Related to
performance
Not related to
performance
Total
Options
Salary & Fees
D O'Neill
Executive Director
P Crawford
Executive Director
Company
Secretary
A Buckler
J Brown
C Nolan
Non-
executive
Director
Non-
executive
Director
Resigned as Chief
Executive Officer on
3 May 2018, and
ceased
employment on 31
July 2018
No fixed term,
termination as
provided by
Corporations Act
No fixed term,
termination as
provided by
Corporations Act
No fixed term,
termination as
provided by
Corporations Act
No fixed term,
termination as
provided by
Corporations Act
No fixed term, 3
months’ notice
to terminate
-
-
-
-
-
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
28
REMUNERATION REPORT
Employment Contract of Chief Executive Officer
The Company entered into a contract for service with Mr Corey Nolan, Chief Executive Officer on 1 July
2015. Mr Nolan resigned on 3 May 2018 and ceased employment on 31 July 2018.
The Chief Executive Officer responsibilities have been assumed by the Executive Directors, pending
recruitment of an appropriate person. Mr O’Neill is Managing Director. No formal contract is in place
with the Executive Directors. This is not expected to change in the immediate future.
CHANGES IN DIRECTORS AND EXECUTIVES SUBSEQUENT TO YEAR-END
There have been no changes to Directors or executives since the end of the financial year.
REMUNERATION EXPENSE DETAILS
The remuneration of each Director and Chief Executive Officer of the Company during the year is detailed in
the following table. Amounts have been calculated in accordance with Australian Accounting Standards.
2018
Short term benefits
Key
Management
Personnel
Salary &
Fees
Non-
Cash
Benefits
Equity
Settled
Options
Post-
employment
superannuation
Long
term
benefits
Total
D O'Neill
P Crawford
A Buckler (2)
J Brown
C Nolan
123,288
123,288
60,000
60,000
241,482
608,058
-
-
-
-
-
-
-
-
-
-
-
-
11,712
11,712
22,941
46,365
2017
Short term benefits
Key
Management
Personnel
Salary &
Fees
Non-
Cash
Benefits
Equity
Settled
Options
Post-
employment
superannuation
D O'Neill
P Crawford (1)
A Buckler (2)
J Brown (3)
C Nolan
109,589
120,000
60,000
67,500
228,311
585,400
-
-
-
-
-
-
-
-
-
-
-
-
10,411
21,689
32,100
-
-
-
-
-
-
-
-
-
-
-
Long
term
benefits
-
-
-
-
-
-
135,000
135,000
60,000
60,000
264,423
654,423
Total
120,000
120,000
60,000
67,500
250,000
617,500
(1) Represents payments made to Cambridge Business & Corporate Services, an entity controlled by Mr
Paul Crawford, to provide directorial and corporate financial services.
(2) Represents payments made to Shazo Holdings Pty Ltd, an entity controlled by Mr Allan Buckler, to
provide directorial and exploration technical services.
(3) Represents fees accrued but not paid at year end to Mr James Brown.
SECURITIES RECEIVED THAT ARE NOT PERFORMANCE-RELATED
No members of KMP may receive securities that are not performance-based as part of their remuneration
package.
SHARE BASED PAYMENTS
No options were granted as remuneration to KMP during the current or previous year. KMP may hold
shareholder options acquired in their capacity as shareholders.
Sayona Mining Limited I Annual Report 2018 29
REMUNERATION REPORT
KMP SHAREHOLDINGS
The number of ordinary shares held by each KMP of the Group during the financial year is as follows:
Key
Management
Personnel
D O'Neill
P Crawford
A Buckler
J Brown
C Nolan
Total
Balance
1 July
2017
71,593,477
89,001,236
85,963,747
2,048,295
15,200,000
263,806,755
Remun-
eration
Exercise
of
Options
(*)
Other
Changes
(**)
Balance
30 June
2018
-
-
-
-
-
-
-
-
-
-
-
-
15,000,000
86,593,477
9,439,299
98,440,535
11,960,783
97,924,530
1,139,168
3,187,463
(6,950,000)
8,250,000
30,589,250
294,396,005
*Remuneration options and shareholder options
** Share trades and participation in share issues
OTHER EQUITY-RELATED KMP TRANSACTIONS
Options acquired by KMP in their capacity as shareholders were:
P Crawford 769,650 listed options
A Buckler 980,392 listed options
J Brown 69,294 listed options
There were no other transactions involving equity instruments apart from those described in the tables
above relating to options and shares.
OTHER TRANSACTIONS WITH KMP AND/OR THEIR RELATED PARTIES
There were no other transactions conducted between the Group and KMP or their related parties, other than
those disclosed above, that were conducted other than in accordance with normal employee,
relationships on terms no more favourable than those reasonably expected
customer or supplier
under arm’s length dealings with unrelated persons.
The Directors’ Report, incorporating the Remuneration Report, is signed in accordance with a resolution
of the Board of Directors.
Dennis O’Neill
Director
Signed: 13 September 2018
Brisbane, Queensland
Paul Crawford
Director
30
Auditor’s Independence Declaration
Under Section 307C of the Corporations Act 2001
To the Directors of Sayona Mining Limited
I declare that, to the best of my knowledge and belief, during the year ended 30 June 2018 there
have been no contraventions of:
(i)
the auditor independence requirements as set out in the Corporations Act 2001 in relation
to the audit; and
(ii)
any applicable code of professional conduct in relation to the audit.
This declaration is in respect of Sayona Mining Limited and the entities it controlled during the year.
Nexia Brisbane Audit Pty Ltd
N D Bamford
Director
Date: 13 September 2018
Sayona Mining Limited I Annual Report 2018 31
32 FINANCIAL
STATEMENTS
2018
34
Statement of Profit
and Loss and
Comprehensive Income
35
Statement of
Financial Position
36 Statement of
Changes in Equity
CONTENTS
37
38
60
61
Statement of Cash Flows
Notes to the Financial Statements
Director’s Declaration
Independent Auditor’s Report
Sayona Mining Limited I Annual Report 2018 33 STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE
FOR THE YEAR ENDED 30 JUNE 2018
INCOME
expenditure expensed during
year
loss on financial asset at fair value through
Revenue and other
income
expenses
Administrative
Exploration
Employee
Foreign
Occupancy
Net
benefit
expense
exchange losses
costs
Loss
before
income tax
Tax
expense
Loss for
the year
Note
Consolidated
2018
$
Group
2017
$
2
3
3
3
4
79,288
14,539
(1,273,353)
(229,352)
(832,231)
(14,495)
(58,320)
-
(1,039,795)
(723,893)
(655,701)
(34,553)
(52,673)
(78,462)
(2,328,463)
(2,570,538)
-
-
(2,328,463)
(2,570,538)
profit
and loss
Other comprehensive
Items
when
income
that will be reclassified
specific
conditions
are met:
subsequently
to profit
or
loss
Exchange
differences
on
translating foreign
operations
106,478
(125,752)
Items
that will not
be reclassified
subsequently
to profit
or
loss
-
-
Other comprehensive
income/(loss) for
the year
106,478
(125,752)
Total comprehensive
income or
(loss) attributable to members
(2,221,985)
(2,696,290)
Earnings
per
Share:
Basic
and diluted
earnings
per
share
(cents per
share)
6
(0.17)
(0.31)
Dividends
per
share
(cents per
share)
-
-
The
accompanying
notes form part
of these
financial statements.
34
STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2018
ASSETS
CURRENT
ASSETS
Cash and cash
and other
Trade
assets
Other
equivalents
receivables
Note
Consolidated
2018
$
Group
2017
$
8
9
10
10,275,738
484,445
175,134
1,216,054
321,259
42,264
Total Current
Assets
10,935,317
1,579,577
NON-CURRENT ASSETS
Property,
Exploration
plant
and equipment
and evaluation asset
Total Non -Current Assets
TOTAL ASSETS
LIABILITIES
CURRENT
LIABILITIES
and other
Trade
Provisions
payables
11
12
5,518
13,319,187
7,297
7,824,161
13,324,705
7,831,458
24,260,022
9,411,035
13
14
1,531,489
47,811
502,821
46,271
Total Current
Liabilities
1,579,300
549,092
TOTAL LIABILITIES
1,579,300
549,092
NET ASSETS
EQUITY
Issued capital
Reserves
Accumulated
losses
TOTAL EQUITY
22,680,722
8,861,943
15
16
79,183,501
(19,274)
(56,483,505)
63,165,259
(125,752)
(54,177,564)
22,680,722
8,861,943
The
accompanying
notes form part
of these
financial statements.
Sayona Mining Limited I Annual Report 2018 35
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2018
Consolidated Group
Share Capital
Accumulated
Losses
Foreign
Currency
Translation
Reserve
Option
Reserve
Total
$
$
$
$
$
Balance at 1 July 2016
52,945,695
(51,758,985)
Loss attributable to members of the entity
Other comprehensive income for the year
Total comprehensive income for the year
Other transfers
Reserve transferred to retained earnings
Total other
Transactions with owners in
their capacity as owners
Shares issued during the year
Transaction costs
Share based payments
Total transactions with owners
Balance at 30 June 2017
Loss attributable to members of the entity
Other comprehensive income for the year
Total comprehensive income for the year
Other
Reserve transferred to retained earnings
Total other
Transactions with owners in
their capacity as owners
Shares issued during the year
Transaction costs
Share based payments
Total transactions with owners
Balance at 30 June 2018
-
-
-
-
-
15
22
10,968,353
(748,789
)
-
10,219,564
63,165,259
-
-
-
-
-
15
22
17,578,853
(1,560,611
)
-
16,018,242
-
-
(2,570,538)
-
(125,752)
(2,570,538)
(125,752)
151,959
151,959
-
-
-
-
-
-
-
-
-
-
(54,177,564)
(125,752)
146,959
1,333,669
-
-
-
(2,570,538)
(125,752)
(2,696,290)
(151,959)
(151,959)
-
-
-
-
5,000
10,968,353
(748,789)
5,000
5,000
-
10,224,564
8,861,943
(2,328,463)
-
-
106,478
(2,328,463)
106,478
-
-
-
(2,328,463)
106,478
(2,221,985)
22,522
22,522
-
-
-
-
-
-
-
-
-
-
(22,522)
(22,522)
-
-
-
-
22,522
17,578,853
(1,560,611)
22,522
22,522
16,040,764
79,183,501
(56,483,505)
(19,274)
-
22,680,722
The accompanying notes form part of these financial statements.
36
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2018
CASH FLOWS FROM OPERATING ACTIVITIES
Payments to suppliers and employees
Sale of technical information
Interest received
Note
Consolidated Group
2017
2018
$
$
(1,586,817)
12,500
66,788
(2,379,033)
-
14,539
Net cash provided by (used in) operating activities
17
(1,507,529)
(2,364,494)
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property, plant and equipment
Capitalised exploration expenditure
11
12
(4,862)
(5,207,482)
(8,342)
(6,436,177)
Net cash provided by (used in) investing activities
(5,212,344)
(6,444,519)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issue of shares
Costs associated with share and option issues
15
16,920,493
(1,142,251)
10,672,053
(709,589)
Net cash provided by (used in) financing activities
15,778,242
9,962,464
Net increase (decrease) in cash held
Cash at beginning of financial year
9,058,369
1,153,451
1,216,054
62,603
Effect of exchange rates on cash holdings in foreign currencies
1,315
-
Cash at end of financial year
8
10,275,738
1,216,054
The accompanying notes form part of these financial statements.
Sayona Mining Limited I Annual Report 2018 37
NOTES TO THE FINANCIAL STATEMENTS FOR THE
YEAR ENDED 30 JUNE 2018
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
These consolidated financial statements and notes represent those of Sayona Mining Limited and Controlled
Entities (the “Consolidated Group” or “Group”).
The separate financial statements of the parent entity, Sayona Mining Limited, have not been presented within this
financial report as permitted by the Corporations Act 2001.
Financial information for Sayona Mining Limited as an individual entity is included in Note 25. The
financial statements have been authorised for issue as at the date of the Directors' Declaration.
Basis of Preparation
These general purpose financial statements have been prepared in accordance with the Corporations Act
2001, Australian Accounting Standards and Interpretations of the Australian Accounting Standards Board and
International Financial Reporting Standards as issued by the International Accounting Standards Board. The Group
is a for-profit entity for financial reporting purposes under Australian Accounting Standards. Material accounting
policies adopted in the preparation of these financial statements are presented below and have been
consistently applied unless stated otherwise.
Except for cash flow information, the financial statements have been prepared on an accruals basis and are based
on historical costs, modified, where applicable, by the measurement at fair value of selected non-current
assets, financial assets and financial liabilities.
Principles of Consolidation
The consolidated financial statements incorporate all of the assets, liabilities and results of the parent
(Sayona Mining Limited) and all of the subsidiaries. Subsidiaries are entities the parent controls. The parent
controls an entity when it is exposed to, or has rights to, variable returns from its involvement with the entity and has
the ability to affect those returns through its power over the entity. A list of the subsidiaries is provided in Note 26.
The assets, liabilities and results of all subsidiaries are fully consolidated into the financial statements of the Group
from the date on which control is obtained by the Group. The consolidation of a subsidiary is discontinued from the
date that control ceases. Intercompany transactions, balances and unrealised gains or losses on transactions
between group entities are fully eliminated on consolidation. Accounting policies of subsidiaries have been
changed and adjustments made where necessary to ensure uniformity of the accounting policies adopted by the
Group.
Income Tax
The income tax expense/(income) for the year comprises current income tax expense/(income) and deferred tax
expense/(income).
Current income tax expense charged to profit or loss is the tax payable on taxable income. Current tax
liabilities/(assets) are measured at the amounts expected to be paid to/(recovered from) the relevant taxation
authority.
Deferred income tax expense reflects movements in deferred tax asset and deferred tax liability balances during
the year as well unused tax losses.
Current and deferred income tax expense/(income) is charged or credited outside profit or loss when the tax relates
to items that are recognised outside profit or loss.
Deferred tax assets and liabilities are calculated at the tax rates that are expected to apply to the period when
the asset is realised or the liability is settled and their measurement also reflects the manner in which
management expects to recover or settle the carrying amount of the related asset or liability. With respect to
non-depreciable items of property, plant and equipment measured at fair value, the related deferred tax liability or
deferred tax asset is measured on the basis that the carrying amount of the asset will be recovered entirely through
sale.
38
NOTES TO THE FINANCIAL STATEMENTS FOR THE
YEAR ENDED 30 JUNE 2018
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Income Tax (cont)
Deferred tax assets relating to temporary differences and unused tax losses are recognised only to the extent that
it is probable that future taxable profit will be available against which the benefits of the deferred tax asset can
be utilised.
Where temporary differences exist in relation to investments in subsidiaries, deferred tax assets and liabilities are
not recognised where the timing of the reversal of the temporary difference can be controlled and it is not probable
that the reversal will occur in the foreseeable future.
Current tax assets and liabilities are offset where a legally enforceable right of set-off exists and it is intended that
net settlement or simultaneous realisation and settlement of the respective asset and liability will occur. Deferred
tax assets and liabilities are offset where a legally enforceable right of set-off exists, the deferred tax assets
and liabilities relate to income taxes levied by the same taxation authority on either the same taxable entity or
different taxable entities where it is intended that net settlement or simultaneous realisation and settlement of the
respective asset and liability will occur in future periods in which significant amounts of deferred tax assets or
liabilities are expected to be recovered or settled.
Property, Plant and Equipment
Plant and equipment are measured on the cost basis and therefore carried at cost less accumulated depreciation
and any accumulated impairment. In the event the carrying amount of plant and equipment is greater than the
estimated recoverable amount, the carrying amount is written down immediately to the estimated recoverable
amount and impairment losses are recognised either in profit or loss or as a revaluation decrease if the
impairment losses relate to a revalued asset. A formal assessment of recoverable amount is made when
impairment indicators are present.
The carrying amount of plant and equipment is reviewed annually by directors to ensure it is not in excess of the
recoverable amount from these assets. The recoverable amount is assessed on the basis of the expected net
cash flows that will be received from the asset’s employment and subsequent disposal. The expected net cash
flows have been discounted to their present values in determining recoverable amounts.
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. All other repairs and maintenance are recognised as expenses in profit or
loss during the financial period in which they are incurred.
Depreciation
The depreciable amount of all fixed assets is depreciated on a straight-line basis over their useful lives to
the consolidated group commencing from the time the asset is held ready for use. Leasehold improvements
are depreciated over the shorter of either the unexpired period of the lease or the estimated useful lives of
the improvements. The depreciation rates used for plant and equipment are in the range between 20% and 40%.
The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each
reporting period. An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s
carrying amount is greater than its estimated recoverable amount.
Gains and losses on disposals are determined by comparing proceeds with the carrying amount. These gains
and losses are recognised in profit or loss in the period in which they arise.
Sayona Mining Limited I Annual Report 2018 39
NOTES TO THE FINANCIAL STATEMENTS FOR THE
YEAR ENDED 30 JUNE 2018
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Exploration and Development Expenditure
Exploration, evaluation and development expenditures incurred are capitalised in respect of each identifiable area
of interest. These costs are only capitalised, where the Group has right of tenure, to the extent that they are
expected to be recovered through the successful development of the area or where activities in the area have not
yet reached a stage that permits reasonable assessment of the existence of economically recoverable reserves.
Accumulated costs in relation to an abandoned area are written off in full against profit or loss in the year in which
the decision to abandon the area is made. A regular review is undertaken of each area of interest to determine the
appropriateness of continuing to capitalise costs in relation to that area of interest.
When production commences, the accumulated costs for the relevant area of interest are amortised over the life
of the area according to the rate of depletion of the economically recoverable reserves.
The term "Joint Operation" has been used to describe "farm-in" and "farm-out" arrangements.
Where the Group has entered into joint operation agreements on its areas of interest, the earn-in contribution by
the joint operation partner is offset against expenditure incurred. Earn-in contributions paid, or expenditure
commitments incurred by the company to acquire a joint venture interest are expensed when incurred up to the
time an interest is acquired.
Restoration Costs
The Group currently has no obligation for any restoration costs in relation to discontinued operations, nor is it
currently liable for any future restoration costs in relation to current areas of interest. Consequently, no provision for
restoration has been deemed necessary.
Leases
Lease payments for operating leases, where substantially all the risks and benefits remain with the lessor,
are charged as expenses in the periods in which they are incurred.
Impairment of Assets
At the end of each reporting period, the Group assesses whether there is any indication that an asset may
be impaired. The assessment will include consideration of external and internal sources of information. If such
an indication exists, the recoverable amount of the asset, being the higher of the asset’s fair value less costs to
sell and value in use, is compared to the asset’s carrying value. Any excess of the asset’s carrying value over its
recoverable amount is recognised immediately in profit or loss.
Where it is not possible to estimate the recoverable amount of an individual asset the Group estimates the
recoverable amount of the cash generating unit to which the asset belongs.
Fair Value of Assets and Liabilities
The Group measures some of its assets and liabilities at fair value on either a recurring or non-recurring basis after
initial recognition, depending on the requirements of the applicable Accounting Standard.
Fair value is the price the Group would receive to sell an asset or would have to pay to transfer a liability in an
orderly (ie unforced) transaction between independent, knowledgeable and willing market participants at the
measurement date.
Financial Instruments
Initial Recognition and Measurement
Financial assets and financial liabilities, are recognised when the entity becomes a party to the contractual
provisions of the instrument. This is equivalent to the date that the Group commits itself to either the purchase or
sale of the asset (ie trade date accounting is adopted).
40
NOTES TO THE FINANCIAL STATEMENTS FOR THE
YEAR ENDED 30 JUNE 2018
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Financial Instruments (continued)
Financial instruments are initially measured at fair value plus transactions costs, except where the instrument is
classified "at fair value through profit or loss" in which case transactions are expensed to profit or loss immediately.
Classification and Subsequent Measurement
Financial instruments are subsequently measured at fair value, amortised cost using the effective interest method,
or cost.
Amortised cost is calculated as the amount at which the financial asset or financial liability is measured at initial
recognition less principal repayments and any reduction for impairment, and adjusted for any cumulative
amortisation of the difference between that initial amount and the maturity amount calculated using the effective
interest method.
The effective interest method is used to allocate interest income or interest expense over the relevant period and
is equivalent to the rate that discounts estimated future cash payments or receipts (including fees, transaction
costs and other premiums or discounts) over the expected life (or when this cannot be reliably predicted, the
contractual term) of the financial instrument to the net carrying amount of the financial asset or financial liability.
Revisions to expected future net cash flows will necessitate an adjustment to the carrying amount with a
consequential recognition of an income or expense item in profit or loss.
The Group does not designate any interests in subsidiaries as being subject to the requirements of
Accounting Standards specifically applicable to financial instruments.
i. Loans and receivables
Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted
in an active market and are subsequently measured at amortised cost. Gains or losses are recognised in profit or
loss through the amortisation process and when the financial asset is derecognised.
ii. Financial Liabilities
Non-derivative financial liabilities (excluding financial guarantees) are subsequently measured at amortised cost.
Gains or losses are recognised in profit or loss through the amortisation process and when the financial liability is
derecognised.
Impairment
A financial asset (or group of financial assets) is deemed to be impaired if, and only if, there is objective evidence
of impairment as a result of one or more events (a "loss event") having occurred, which has an impact on the
estimated future cash flows of the financial asset(s).
In the case of financial assets carried at amortised cost, loss events may include: indications that the debtors or
a group of debtors are experiencing significant financial difficulty, default or delinquency in interest or principal
payments; indications that they will enter bankruptcy or other financial reorganisation; and changes in arrears or
economic conditions that correlate with defaults.
For financial assets carried at amortised cost (including loans and receivables), a separate allowance account is
used to reduce the carrying amount of financial assets impaired by credit losses. After having taken all possible
measures of recovery, if management establishes that the carrying amount cannot be recovered by any means, at
that point the written-off amounts are charged to the allowance account or the carrying amount of impaired financial
assets is reduced directly if no impairment amount was previously recognised in the allowance account.
When the terms of financial assets that would otherwise have been past due or impaired have been renegotiated, the
Group recognises the impairment for such financial assets by taking into account the original terms as if the terms
have not been renegotiated so that the loss events that have occurred are duly considered.
Sayona Mining Limited I Annual Report 2018 41
NOTES TO THE FINANCIAL STATEMENTS FOR THE
YEAR ENDED 30 JUNE 2018
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Financial Instruments (continued)
Derecognition
Financial assets are derecognised where the contractual rights to receipt of cash flows expires or the asset
is transferred to another party whereby the entity no longer has any significant continuing involvement in the
risks and benefits associated with the asset. Financial liabilities are derecognised when the related obligations are
either discharged, cancelled or expire. The difference between the carrying value of the financial liability
extinguished or transferred to another party and the fair value of consideration paid, including the transfer of
non-cash assets or liabilities assumed, is recognised in profit or loss.
Foreign Currency Transactions and Balances
Functional and presentation currency
The functional currency of each of the Group’s entities is measured using the currency of the primary
economic environment in which that entity operates. The consolidated financial statements are presented in
Australian dollars which is the parent entity’s functional currency.
Transaction and balances
Foreign currency transactions are translated into functional currency using the exchange rates prevailing at the date
of the transaction. Foreign currency monetary items are translated at the year-end exchange rate. Non-monetary
items measured at historical cost continue to be carried at the exchange rate at the date of the transaction.
Non- monetary items measured at fair value are reported at the exchange rate at the date when fair values
were determined.
Exchange differences arising on the translation of monetary items are recognised in the profit or loss, except
where deferred in equity as a qualifying cash flow or net investment hedge.
Exchange differences arising on the translation of non-monetary items are recognised directly in other
comprehensive income to the extent that the underlying gain or loss is recognised in other comprehensive
income otherwise the exchange difference is recognised in the profit or loss.
Group companies
The financial results and position of foreign operations whose functional currency is different from the Group’s
presentation currency are translated as follows:
- assets and liabilities are translated at year-end exchange rates prevailing at that reporting date;
- income and expenses are translated at average exchange rates for the period; and
- retained earnings are translated at the exchange rates prevailing at the date of the transaction.
Exchange differences arising on translation of foreign operations with functional currencies other than Australian
dollars are recognised in other comprehensive income and included in the foreign currency translation reserve in
the statement of financial position. The cumulative amount of these differences is reclassified into profit or loss in
the period in which the operation is disposed of.
Employee Benefits
Short-term employee benefits
Provision is made for the Group’s obligation for short-term employee benefits. Short-term employee benefits are
benefits (other than termination benefits) that are expected to be settled wholly before 12 months after the end of the
annual reporting period in which the employees render the related service, including wages, salaries and sick
leave. Short-term employee benefits are measured at the (undiscounted) amounts expected to be paid when the
obligation is settled.
42
NOTES TO THE FINANCIAL STATEMENTS FOR THE
YEAR ENDED 30 JUNE 2018
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Employee Benefits (continued)
The Group’s obligations for short-term employee benefits such as wages, salaries and sick leave are recognised
as a part of current trade and other payables in the statement of financial position. The Group’s obligations for
employees’ annual leave and long service leave entitlements are recognised as provisions in the statement
of financial position.
Other long-term employee benefits
Provision is made for employees’ long service leave and annual leave entitlements not expected to be settled
wholly within 12 months after the end of the annual reporting period in which the employees render the related
service. Other long-term employee benefits are measured at the present value of the expected future payments to
be made to employees. Expected future payments incorporate anticipated future wage and salary levels,
durations of service and employee departures and are discounted at rates determined by reference to market
yields at the end of the reporting period on government bonds that have maturity dates that approximate the
terms of the obligations. Any remeasurements for changes in assumptions of obligations for other long-term
employee benefits are recognised in profit or loss in the periods in which the changes occur.
The Group’s obligations for long-term employee benefits are presented as non-current provisions in its statement of
financial position, except where the Group does not have an unconditional right to defer settlement for at least 12
months after the end of the reporting period, in which case the obligations are presented as current provisions.
Equity Settled Compensation
The Group operates an employee share and option plan. Share-based payments to employees are measured at
the fair value of the instruments issued and amortised over the vesting periods. Share-based payments to non-
employees are measured at the fair value of goods or services received or the fair value of the equity
instruments issued, if it is determined the fair value of the goods or services cannot be reliably measured, and are
recorded at the date the goods or services are received. The fair value of options is determined using a binomial
pricing model. The number of shares and options expected to vest is reviewed and adjusted at the end of each
reporting period such that the amount recognised for services received as consideration for the equity instruments
granted is based on the number of equity instruments that eventually vest.
Cash and Cash Equivalents
Cash and cash equivalents include cash on hand, deposits available on demand with banks and other short-
term highly liquid investments with original maturities of three months or less.
Provisions
Provisions are recognised when the Group has a legal or constructive obligation, as a result of past events, for
which it is probable that an outflow of economic benefits will result and that outflow can be reliably measured.
Provisions are measured using the best estimate of the amounts required to settle the obligation at the end of
the reporting period.
Trade and Other Payables
Trade and other payables represent the liabilities for goods and services received by the entity that remain unpaid at
the end of the reporting period. The balance is recognised as a current liability with amounts normally paid within
30 days of recognition of the liability.
Sayona Mining Limited I Annual Report 2018
43
NOTES TO THE FINANCIAL STATEMENTS FOR THE
YEAR ENDED 30 JUNE 2018
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Issued Capital
Ordinary shares are classified as equity. Transaction costs (net of tax, where the deduction can be utilised) arising
on the issue of ordinary shares are recognised in equity as a reduction of the share proceeds received.
Where share application monies have been received, but the shares have not been allotted, these monies are
shown as a payable in the statement of financial position.
Share options are classified as equity and issue proceeds are taken up in the option reserve. Transaction costs (net
of tax where the deduction can be utilised) arising on the issue of options are recognised in equity as a reduction of
the option proceeds received.
Revenue and Other Income
Interest revenue is recognised using the effective interest method. All revenue is stated net of the amount of goods
and services tax.
Goods and Services Tax (GST)
Revenues, expenses and assets are recognised net of the amount of GST, except where the amount of GST
incurred is not recoverable from the Australian Taxation Office (ATO).
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 ATO is included with other receivables or payables in the statement of
financial position.
Goods and Services Tax (GST) (cont)
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 ATO are presented as operating cash flows
included in receipts from customers or payments to suppliers.
Comparative Figures
When required by Accounting Standards, comparative figures have been adjusted to conform to changes in
presentation for the current financial year.
Earnings per Share (EPS)
Basic earnings per share
Basic earnings per share is calculated by dividing the loss attributable to equity holders of the parent entity,
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 any bonus elements in ordinary shares issued during the
year.
Diluted earnings per share
Diluted earnings per ordinary 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.
Adjusting Events
The weighted average number of shares outstanding during the period and for all periods presented are
adjusted for events, other than the conversion of potential ordinary shares, that have changed the number of
ordinary shares outstanding without a corresponding change in resources.
44
NOTES TO THE FINANCIAL STATEMENTS FOR THE
YEAR ENDED 30 JUNE 2018
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Critical Accounting Estimates and Judgements
The directors evaluate estimates and judgments incorporated into the financial report based on historical knowledge
and best available current information. Estimates assume a reasonable expectation of future events and are based
on current trends and economic data, obtained both externally and within the Group.
Key Estimates:
Impairment - general
The Group assesses impairment at the end of each reporting period by evaluating conditions and events specific
to the Group that may be indicative of impairment triggers. No impairment has been recognised for the year.
Key Judgments:
Exploration and evaluation expenditure (Note 12):
The Group capitalises expenditure relating to exploration and evaluation where it is considered likely to be
recoverable or where the activities have not reached a stage that permits a reasonable assessment of the existence
of reserves. While there are certain areas of interest from which no reserves have been extracted, the directors
are of the continued belief that such expenditure should not be written off since technical and feasibility studies
in such areas have not yet concluded. During the year exploration and evaluation expenditure totalled $5,724,378,
of which $229,352 was written-off and $5,495,026 was capitalised. Capitalised expenditure at the end of the
reporting period is $13,319,187.
Tax Losses Available (Note 4):
The availability of the Group's carry forward tax losses are based on estimates of tax deductibility of exploration
expenditure, and compliance with tax laws in Australia and Canada.
New Accounting Standards for Application in Future Periods
Accounting Standards and Interpretations issued by the AASB that are relevant to the Group, but not yet
mandatorily applicable, together with an assessment of the potential impact of such pronouncements on the
Group when adopted in future periods, are discussed below:
AASB 9: Financial Instruments and associated Amending Standards (applicable to annual reporting periods
beginning on or after 1 January 2018).
The Standard will be applicable retrospectively and includes revised requirements for the classification and
measurement of financial instruments, revised recognition and derecognition requirements for financial instruments
and simplified requirements for hedge accounting.
The directors currently anticipate that the adoption of AASB 9 will have no significant impact on the Group’s
financial instruments.
AASB 2014-7: Amendments to Australian Accounting Standards arising from AASB 9 (December 2014).
This Standard gives effect to the consequential amendments to Australian Accounting Standards (including
Interpretations) arising from the issue of AASB 9: Financial Instruments (December 2014). More significantly,
additional disclosure requirements have been added to AASB 7: Financial Instruments: Disclosures regarding credit
risk exposures of the entity. This Standard also makes various editorial corrections to Australian Accounting
Standards and an Interpretation.
AASB 2014-7 mandatorily applies to annual reporting periods beginning on or after 1 January 2018. Earlier
application is permitted, provided AASB 9 (December 2014) is applied for the same period.
Sayona Mining Limited I Annual Report 2018 45
NOTES TO THE FINANCIAL STATEMENTS FOR THE
YEAR ENDED 30 JUNE 2018
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
New Accounting Standards for Application in Future Periods (continued)
AASB 16: Leases (applicable to annual reporting periods beginning on or after 1 January 2019).
When effective, this Standard will replace the current accounting requirements applicable to leases in AASB
117: Leases and related Interpretations. AASB 16 introduces a single lessee accounting model that eliminates the
requirement for leases to be classified as operating or finance leases.
The main changes introduced by the new Standard include:
- recognition of a right-to-use asset and liability for all leases (excluding short-term leases with less than 12
months of tenure and leases relating to low-value assets);
- depreciation of right-to-use assets in line with AASB 116: Property, Plant and Equipment in profit or loss and
unwinding of the liability in principal and interest components;
- variable lease payments that depend on an index or a rate are included in the initial measurement of the
lease liability using the index or rate at the commencement date;
- by applying a practical expedient, a lessee is permitted to elect not to separate non-lease components and
instead account for all components as a lease; and
- additional disclosure requirements.
The transitional provisions of AASB 16 allow a lessee to either retrospectively apply the Standard to comparatives in
line with AASB 108 or recognise the cumulative effect of retrospective application as an adjustment to opening
equity on the date of initial application.
The Directors are currently of the view that any impact is immaterial to the financial statements.
46
NOTES TO THE FINANCIAL STATEMENTS FOR
THE YEAR ENDED 30 JUNE 2018
NOTE 2: REVENUE AND OTHER INCOME
Interest received from unrelated parties
Sale of technical information
Foreign exchange gains
Total revenue and other income
NOTE 3: LOSS FOR THE YEAR
(i) Expenses:
Included in expenses are the following items:
Net loss on financial asset at fair value through profit and loss
Rental expense on operating lease
Foreign exchange loss
Depreciation
(ii) Significant Revenue and Expenses
The following significant revenue and expense items are relevant in
explaining the financial performance:
2018
$
2017
$
66,788
12,500
-
79,288
14,539
-
-
14,539
-
55,996
14,495
6,641
78,462
38,504
34,553
7,070
Exploration and evaluation expenditure expensed during the year
(229,352)
(723,893)
NOTE 4: INCOME TAX EXPENSE
(a) The prima facie tax on loss from ordinary activities is reconciled to the income tax as
follows:
Prima facie tax payable on loss from ordinary activities before income tax at 27.5%
(2017: 27.5%).
Adjust for tax effect of:
Exploration expenditure capitalised
Other deductible costs (net)
Other non-deductible costs (net)
Tax losses and temporary differences not brought to account
Income tax expense attributable to entity
Weighted average effective tax rate (nil due to tax losses)
(b)
Deferred tax assets and liabilities not brought to account, the net benefit of which will
only be realised if the conditions for deductibility set out in Note 1 occur:
Temporary differences
Tax losses - Revenue
Tax losses - Capital
Net unbooked deferred tax asset
(640,327)
(706,898)
(1,315,724)
-
334,667
1,621,384
-
0.00%
(511,369)
(54,152)
-
1,272,419
-
0.00%
172,017
7,756,000
6,175,038
14,103,055
188,823
6,117,809
6,175,038
12,481,670
The Group has unconfirmed carry forward losses for revenue of $28,203,636 (2017: $22,246,580) and for capital
of $22,454,683 (2017: $22,454,683). Prior year carry forward revenue losses have been re-instated to agree to amended
tax returns due for lodgement.
The tax benefits will only be obtained if the conditions in Note 1 are satisfied; the economic entity derives future
assessable income of a nature and of an amount sufficient to enable the benefit from the deductions for the losses to be
realised and if the economic entity continues to comply with the conditions for deductibility imposed by the relevant tax
legislation.
Sayona Mining Limited I Annual Report 2018 47
NOTES TO THE FINANCIAL STATEMENTS FOR
THE YEAR ENDED 30 JUNE 2018
NOTE 5: KEY MANAGEMENT PERSONNEL COMPENSATION
Refer to the remuneration report contained in the directors report for details of the remuneration paid or payable to each
member of the Group's key management personnel (KMP), and other information (including equity interests) for the year
ended 30 June 2018.
(a) The names of key management personnel of the Group who have held office during the financial year are:
Key Management Personnel
Position
Dennis
O’Neill Paul
Crawford
Allan Buckler
James Brown
Corey Nolan
Managing Director
Director - Executive
Director - Non-executive
Director - Non-executive
Chief Executive Officer
(b)
The totals of remuneration paid to KMP of the Company and Group during the year
are as follows:
Short-term employee benefits
Post-employment benefits
Other long-term benefits
Share-based payments
Total KMP compensation
2018
$
608,057
46,366
-
-
2017
$
585,400
32,101
-
-
654,423
617,501
Short-term employee benefits
These amounts include salary, fees and paid leave benefits paid to the directors, or their related entities (Note 18).
Post-employment benefits
These amounts are the superannuation contributions made during the year.
Other long-term benefits
These amounts represent long service benefits accruing during the year.
Share-based payments
These amounts represent the expense related to the participation of KMP in equity-settled
benefit schemes as measured by the fair value of the option, rights and shares granted on
grant date.
NOTE 6: EARNINGS PER SHARE
The earnings figures used in the calculation of both the basic EPS and the dilutive EPS
are the same as the profit or (loss) in the statement of profit or loss and other
comprehensive income.
Weighted average number of ordinary shares outstanding during the year used in the
calculation of basic EPS
Weighted average number of options outstanding
1,333,621,930
-
826,212,422
-
Weighted average number of ordinary shares and potential ordinary shares outstanding
during the year used in the calculation of diluted EPS
1,333,621 ,930
826,212,422
Options to acquire ordinary shares in the parent company are the only securities
considered as potential ordinary shares in determination of diluted EPS. These securities
are not presently dilutive and have been excluded from the calculation of diluted EPS.
48
NOTES TO THE FINANCIAL STATEMENTS FOR
THE YEAR ENDED 30 JUNE 2018
NOTE 7: AUDITORS' REMUNERATION
Remuneration of the auditor for:
- auditing or reviewing the financial reports
- other assurance services
NOTE 8: CASH AND CASH EQUIVALENTS
Cash at bank and on hand
Short-term bank deposits
Cash at bank and on hand
2018
$
2017
$
34,000
-
34,000
34,000
-
34,000
1,221,575
9,054,163
155,704
1,060,350
10,275,738
1,216,054
The effective interest rate on short-term bank deposits was 2.49% (2017: 1.25%). These
deposits have an average maturity of 56 days.
Reconciliation of cash
Cash at the end of the financial year as shown in the statement of cash flow is reconciled to
items in the statement of financial position as follows:
Cash and cash equivalents
10,275,738
1,216,054
NOTE 9: TRADE AND OTHER RECEIVABLES
Current (unsecured):
Other Debtors
Other debtors includes $449,722 (2017: $210,931) of GST/VAT amounts due from the
Australian and Canadian taxation authorities, which represents a significant concentration
of credit risk to the Group.
NOTE 10: OTHER ASSETS
Current:
Deposits
Prepayments
NOTE 11: PLANT AND EQUIPMENT
Plant and equipment
At cost
Accumulated depreciation
Total plant and equipment
Reconciliation of the carrying amounts for property, plant and equipment:
Balance at the beginning of year
Additions
Depreciation expense
Carrying amount at the end of year
484,445
321,259
484,445
321,259
2,154
172,980
175,134
-
42,264
42,264
24,728
(19,210)
19,842
(12,545)
5,518
7,297
7,297
4,862
(6,641)
5,518
6,025
8,342
(7,070)
7,297
Sayona Mining Limited I Annual Report 2018 49
NOTES TO THE FINANCIAL STATEMENTS FOR
THE YEAR ENDED 30 JUNE 2018
NOTE 12: EXPLORATION AND EVALUATION ASSET
Exploration and evaluation expenditure carried forward in respect of areas of interest are:
Exploration and evaluation phase - group interest 100% (a)
Exploration and evaluation phase - subject to joint operation (b)
(a) Movement in exploration and evaluation expenditure:
Opening balance - at cost
Capitalised exploration and evaluation expenditure
Carrying amount at end of year
2018
$
2017
$
12,712,550
606,637
7,697,147
127,014
13,319,187
7,824,161
Non-Joint Operation
7,697,147
5,015,403
1,362,774
6,334,373
12,712,550
7,697,147
(b) Movement in exploration and evaluation expenditure:
Subject to Joint Operation
Opening balance - at cost
Capitalised exploration and evaluation expenditure
Carrying amount at end of year
127,014
479,623
75,962
51,052
606,637
127,014
Recoverability of the carrying amount of exploration assets is dependent on the successful exploration and development of
projects, or alternatively, through the sale of the areas of interest.
Movements during the year on exploration and evaluation assets included $4,769,829 (2017: $6,207,579) on the Authier
Lithium project in Canada . A further $725,197 (2017: $177,846) has been expended on existing and new projects. Of that
total, $80,000 was settled by issue of 1,869,159 ordinary shares in the company.
Commitments in respect of exploration projects are set out in Note 19. In addition, the Group has options on projects as set
out in Note 24.
NOTE 13: TRADE AND OTHER PAYABLES
Current (unsecured):
Trade creditors
Sundry creditors and accrued expenses
Total trade and other payables
1,115,265
416,224
272,242
230,579
1,531,489
502,821
Financial liabilities at amortised cost classified as trade and other payables:
Financial liabilities as trade and other liabilities (refer Note 20)
1,531,489
502,821
NOTE 14: PROVISIONS
Current:
Provision for employee entitlements
Opening balance
Additional provisions
Amounts used
Balance at year end
50
47,811
46,271
39,632
(38,092)
47,811
46,271
19,710
26,561
-
46,271
NOTES TO THE FINANCIAL STATEMENTS FOR
THE YEAR ENDED 30 JUNE 2018
NOTE 15: ISSUED CAPITAL
Fully paid ordinary shares
Ordinary shares issued during the year
Balance at the beginning of the reporting period
Shares issued during the prior year:
Shares issued during the current
year:
10 November 2017, new issue of shares at $0.01 per share following a rights issue.
16 November 2017 , new issue of shares at $0.0269 per share in settlement of services.
28 December 2017, new issue of shares at $0.0428 per share in part settlement of
tenement acquisition.
29 December 2017, new issue of shares at $0.035 per share following the exercise of
options.
29 December 2017, new issue of shares at $0.045 per share following the exercise of
options.
24 April 2018, new issue of shares at $0.051 from placement of shares to
institutional and sophisticated investors.
2018
$
2017
$
79,183,501
63,165,259
No.
No.
974,819,553
537,262,813
437,556,740
487,410,061
5,947,955
1,869,159
2,500,000
2,500,000
218,000,273
-
-
-
-
-
-
31 May 2018, new issue of shares at $0.051 per share following a rights
issue.
Balance at reporting date
22,485,064
-
1,715,532,065
974,819,553
The November 2017 rights issue was on the basis of 1 share for every 2 shares
held. The May 2018 rights issue was on the basis of 1 share for every 22 shares
held.
Ordinary shares participate in dividends and the proceeds on winding up of the parent entity in proportion to the number
of shares held. At shareholders' meetings each ordinary share is entitled to one vote when a poll is called, otherwise
each shareholder has one vote on a show of hands.
The company does not have authorised capital or par value in respect of its issued shares.
Options on issue are as follows:
(i) Unlisted employee and officer options
Balance at beginning of reporting period
Granted (Note 22)
Exercised (Note 22)
Expired
Balance at reporting date
(ii)
Listed options
Balance at beginning of reporting period
Granted (Note 22)
Exercised
Expired
Balance at reporting date
-
5,000,000
(5,000,000)
(13,500,000)
(17,000,000)
99,399,814
136,372,298
(43,764,995)
(192,007,117)
120,242,789
120,242,789
Sayona Mining Limited I Annual Report 2018 51
NOTES TO THE FINANCIAL STATEMENTS FOR
THE YEAR ENDED 30 JUNE 2018
NOTE 15: ISSUED CAPITAL (continued)
Capital management policy
Exploration companies such as Sayona Mining are funded by share capital during exploration and a combination of share
capital and borrowings as they move into the development and operating phases of their business life.
Management controls the capital of the Group in order to maintain a sustainable debt to equity ratio, generate long-term
shareholder value and ensure that the Group can fund its operations and continue as a going concern. The Group’s debt
and capital include ordinary share capital and financial liabilities, supported by financial assets.
Management effectively manages the Group’s capital by assessing the Group’s financial risks and adjusting its capital
structure in response to changes in these risks and in the market.
There are no externally imposed capital requirements.
There have been no changes in the strategy adopted by management to control the capital of the Group
since the prior year.
NOTE 16: RESERVES
Foreign currency translation reserve
The foreign currency translation reserve recorded exchange differences arising on translation of a foreign controlled
subsidiary.
Options reserve
The options reserve records amounts recognised as expenses on valuation of employee share options.
NOTE 17: CASH FLOW INFORMATION
(a) Reconciliation of Cash Flow from Operations with Loss
from Ordinary Activities after Income Tax:
Loss from ordinary activities after income tax
Non-cash flows in profit from ordinary activities:
Depreciation
Share based payments - exploration and corporate
Share based payments - remuneration
Loss on financial asset at fair value through profit and loss
Changes in operating assets and liabilities:
(Increase)/Decrease in receivables
(Increase)/Decrease in other assets
(Decrease)/Increase in creditors and accruals
(Increase)/Decrease in provisions
Cash flows from operations
(b) Non-cash Financing and Investing Activities
2018
$
2017
$
(2,328,463)
(2,570,538)
6,641
160,000
22,522
-
7,070
187,100
-
78,462
(158,168)
(129,146)
917,545
1,540
(284,373)
(27,414)
218,638
26,561
(1,507,529) (2,364,494)
On 28 December 2017, 1,869,159 new shares were issued in part settlement of a tenement
acquisition. On 24 April 2018, 588,235 new shares were issued in consideration of fees relating to a
capital raising.
On 24 April 2018, 1,143,137 new shares were issued in consideration of fees relating to an underwriting fee for a
capital raising.
On 24 April 2018, 6,471,765 new shares were issued in consideration of fees relating to a capital raising.
52
NOTES TO THE FINANCIAL STATEMENTS FOR
THE YEAR ENDED 30 JUNE 2018
NOTE 18: RELATED PARTY TRANSACTIONS
(a) The Group's main related parties are as follows:
Key Management Personnel:
Any persons having authority and responsibility for planning, directing and controlling the activities of the Group,
directly or indirectly, including any director (whether executive or non-executive) of the Group, are considered key
management personnel (see Note 5).
(b) Transactions with related parties:
Transactions between related parties are on normal commercial terms and conditions, no more favourable than those
available to other parties unless otherwise stated.
During the year, the parent entity engaged Shazo Holdings Pty Ltd, an entity controlled by Mr Allan Buckler, a director
of the company, to provide directorial and exploration technical services. Fees of $60,000 were incurred during the
year (2017:$60,000). $15,000 was owed by the company at 30 June (2017: $15,000).
NOTE 19: COMMITMENTS
(a) Operating lease commitments
Non-cancellable operating leases contracted for but not recognised in the
financial statements:
Not later than 1 year
Between 1 year and 5 years
Total commitment
In addition to the above, the Group has a month to month lease for office premises.
(b) Exploration commitments
2018
$
2017
$
3,904
3,579
7,483
3,904
7,483
11,388
The entity must meet minimum expenditure commitments on granted exploration tenements to maintain those tenements in
good standing. If the relevant mineral tenement is relinquished the expenditure commitment also ceases.
The following commitments exist at balance date but have not been brought to account.
Not later than 1 year
Between 1 year and 5 years
Total commitment
NOTE 20: FINANCIAL RISK MANAGEMENT
765,004
-
300,632
-
765,004
300,632
The Group’s financial instruments mainly comprises cash balances, receivables and payables. The main purpose of
these financial instruments is to provide finance for group operations.
totals
for each category of
The
in accordance with AASB 139: Financial
instruments, measured
Instruments: Recognition and Measurement as detailed in the accounting policies to these financial statements are
detailed in the table outlining financial instruments composition and maturity analysis in part (b) below.
financial
Financial Risk Management Policies
The Board of the company meets on a regular basis to analyse exposure and to evaluate treasury management strategies in
the context of the most recent economic conditions and forecasts.
The Board has overall responsibility for the establishment and oversight of the company's risk management framework.
Management is responsible for developing and monitoring the risk management policies.
Sayona Mining Limited I Annual Report 2018 53
NOTES TO THE FINANCIAL STATEMENTS FOR
THE YEAR ENDED 30 JUNE 2018
NOTE 20: FINANCIAL RISK MANAGEMENT (continued)
Specific Financial Risk Exposures and Management
The main risks the Group is exposed to through its financial instruments are credit risk, liquidity risk and market risk,
consisting of interest rate risk and foreign exchange risk. These risks are managed through monitoring of forecast
cashflows, interest rates, economic conditions and ensuring adequate funds are available.
(a) Credit Risk
Credit risk arises from exposures to deposits with financial institutions and sundry receivables (Notes 8 and 9).
Credit risk is managed and reviewed regularly by the Board. The Board monitors credit risk by actively assessing the rating
quality and liquidity of counter parties.
The carrying amount of cash and receivables recorded in the financial statements represent the Group's maximum exposure
to credit risk. Concentration of credit risk is set out in Note 9.
(b) Liquidity Risk
Liquidity risk is the risk that the company will not be able meet its financial obligations as they fall due. This risk is
managed by ensuring, to the extent possible, that there is sufficient liquidity to meet liabilities when due, without incurring
unacceptable losses or risking damage to the Group's reputation.
The Board manages liquidity risk by sourcing long-term funding, primarily from equity sources.
Financial liability and financial asset maturity analysis
The table below reflects an undiscounted contractual maturity analysis for financial assets and financial liabilities and
reflects management's expectations as to the timing of termination and realisation of financial assets and liabilities.
Consolidated Group
2018
Financial assets
Cash and cash equivalents (i)
Receivables (ii)
Financial liabilities
Payables (ii)
Net cash flow on financial instruments
2017
Financial assets
Cash and cash equivalents (i)
Receivables (ii)
Financial liabilities
Payables (ii)
Net cash flow on financial instruments
1 year or less 1 to 2 years More than 2
Total
$
$
years
$
$
10,275,738
484,445
10,760,183
1,531,489
1,531,489
9,228,694
-
-
-
-
-
-
-
-
-
-
-
-
1 year or less 1 to 2 years
$
$
More than 2
years
$
1,216,054
321,259
1,537,313
502,821
502,821
1,034,492
-
-
-
-
-
-
-
-
-
-
-
-
10,275,738
484,445
10,760,183
1,531,489
1,531,489
9,228,694
Total
$
1,216,054
321,259
1,537,313
502,821
502,821
1,034,492
(i) Floating interest with a weighted average effective interest rate of 2.49% (2017: 2.16%).
(ii) Non-interest bearing
54
NOTES TO THE FINANCIAL STATEMENTS FOR
THE YEAR ENDED 30 JUNE 2018
NOTE 20: FINANCIAL RISK MANAGEMENT (continued)
(c) Market Risks
(i) Interest Rate Risk
The Group's exposure to interest rate risk, which is the risk that a financial instrument's value will fluctuate as a result of
changes in market interest rates, arises in relation to the company's bank balances.
This risk is managed through the use of variable rate bank accounts.
(ii) Foreign exchange risk
The Group operates internationally and is exposed to foreign exchange risk arising from currency movements, primarily in
respect of the Canadian and US Dollar. No derivative financial instruments are employed to mitigate the exposed risks. Risk
is reviewed regularly, including forecast movements in these currencies by the senior executive team and the Board.
These foreign exchange risks arose from
- Cash held in Canadian and US dollars.
- Canadian and US dollar denominated receivables and payables.
The Group's exposure to foreign currency risk at the reporting date was as follows:
Cash and cash equivalents
Receivables
Payables
Net exposure
Cash and cash equivalents
Receivables
Payables
Net exposure
(d) Sensitivity analysis
CAD
2018
102,394
443,179
(1,280,987)
(735,414)
CAD
201
7
21,764
186,427
(29,716)
178,475
USD
2018
11,598
-
(34,620
)
(23,022
)
USD
201
7
7,333
-
(15,780
)
(8,447
)
If the spot Australian Dollar rate strengthened/weakened by 5 percent against the US Dollar, with all other variables held
constant, the Group's post-tax result for the year would have been $1,139 +/- (2017: $549).
If the spot Australian Dollar rate strengthened/weakened by 5 percent against the Canadian Dollar, with all other variables
held constant, the Group's post-tax result for the year would have been $36,770 +/- (2017: $9,174).
The Group has performed sensitivity analysis relating to its exposure to interest rate risk. At year end, the effect on profit
and equity as a result of a 1% change in the interest rate, with all other variables remaining constant would be +/-
$102,757 (2017: $12,161).
(e) Fair Values
The aggregate fair values and carrying amounts of financial assets and liabilities are disclosed in the statement of financial
position and notes to the financial statements. Fair values are materially in line with carrying values, due to the short term
nature of all these items.
NOTE 21: CONTINGENT LIABILITIES
There were no material contingent liabilities at the end of the reporting period.
Sayona Mining Limited I Annual Report 2018 55
NOTES TO THE FINANCIAL STATEMENTS FOR
THE YEAR ENDED 30 JUNE 2018
NOTE 22: SHARE BASED PAYMENTS
Options
On 16 November 2017, 5,000,000 options were granted under the Company's Share Option Plan, pursuant to an
Employment Agreement. 2,500,000 options were exercisable at $0.035 each and 2,500,000 options were exercisable at
$0.045 each. All options were due to expire on 30 June 2019. The options were exercised in December 2017 and raised
$200,000 in capital.
On 31 May 2018, 11,242,652 options were granted to shareholders as part of the rights issue. These options are exercisable
at $0.078 each and expire on 30 April 2020.
On 31 May 2018, 109,000,137 options were granted pursuant to a private placement. These options are exercisable at
$0.078 each and expire on 30 April 2020.
Options issued under employee share based
payment arrangements are summarised as:
Outstanding at beginning of the year
Granted
Forfeited
Exercised
Expired
Outstanding at period end
Exercisable and vested at year end
2018
2017
Number of
Options
No
-
5,000,000
-
5,000,00
0
-
-
-
Weighted
Average
Exercise
Price
$
-
0.040
-
0.04
0
-
-
-
Number of
Options
No
30,500,000
-
-
13,500,00
0
17,000,000
-
-
Weighted
Average
Exercise
Price
$
0.023
-
-
0.01
4
0.030
-
-
The Company established the Sayona Mining Limited Employees and Officers Share Option Plan on 26 November 2014. All
members become eligible to participate at the discretion of the Board. Options forfeit one month after the holders ceases
to be employed by the Company.
At the date of exercise, the share price was $0.076.
The weighted average fair value of options granted in 2018 was $0.0045, determined by reference to a binomial
option valuation method. The fair value of options granted represents the value of employee services received over the
vesting period.
Inputs used in the valuation of the options were:
Weighted average exercise price
Weighted average life
Expected share price volatility
Risk free interest rate
Share price
Dividend yield
$0.04
1.6 years
100%
2%
$0.016
0%
Historical share price volatility has been used on the assumption it is indicative of future volatility.
Shares
On 16 November 2017, 5,947,955 new shares were issued in consideration of fees relating to corporate services. On
28 December 2017, 1,869,159 new shares were issued in part settlement of a tenement acquisition.
On 24 April 2018, 588,235 new shares were issued in consideration of fees relating to a capital raising.
On 24 April 2018, 1,143,137 new share were issued in consideration of fees relating to an underwriting fee for a capital
raising.
On 24 April 2018, 6,471,765 new shares were issued in consideration of fees relating to a capital raising. The
value of the shares issued was determined by reference to market price.
56
NOTES TO THE FINANCIAL STATEMENTS FOR
THE YEAR ENDED 30 JUNE 2018
NOTE 23: EVENTS AFTER BALANCE SHEET DATE
The Group continues with its exploration program, with the Canada project being the primary focus.
The Company's CEO Mr Corey Nolan resigned on 3 May 2018, and ceased employment on 31 July
2018. There have been no other key events since the end of the financial year.
NOTE 24 JOINT ARRANGEMENTS
The Group has entered into joint arrangements with the following parties. Joint arrangements are in the form of options to
acquire mineral tenements (refer Note 12).
Sayona Lithium Pty Ltd
On 4 February 2016, the Company entered into a binding heads of agreement with Mr Bruce Legendre to acquire a
100% interest in Western Australian mineral tenement E59/2092.
The agreement provides for an initial payment of $15,000 and issue of 1,000,000 fully paid ordinary shares in the
parent entity to acquire 80% of the tenement with a further 3 year option to acquire the remaining 20% for $100,000.
The Group holds an 80% interest in the project at 30 June 2018. Under the agreement, the vendor is entitled to receive a
1% gross production royalty and is entitled to explore for and develop other non-lithium commodity within the
Tenement during the option period.
During the period, the Company made the first stage option payment to Great Sandy Pty Ltd (“Great Sandy”) to acquire a
694 km2 package of 6 tenements in the world-class Pilgangoora lithium district of Western Australia. This package includes
the Mallina and Moolyella project areas.
The Great Sandy purchase terms include an option to acquire an 80% interest in all the tenements by making
staged payments in cash or shares at Great Sandy’s election of $300,000 within 12 months (paid 28 December 2017),
and $300,000 within 24 months and free carrying Grant Sandy to Decision to Mine. At the Decision to Mine, Great Sandy
can either elect to dilute or contribute to ongoing expenditure commitments or convert the 20% interest to a 2% gross
smelter royalty.
NOTE 25: PARENT ENTITY INFORMATION
The following information relates to the parent entity, Sayona Mining Limited. This information has been prepared using
consistent accounting policies as presented in Note 1.
Current assets
Non-current assets
Total assets
Current liabilities
Non-current liabilities
Total liabilities
Net Assets
Contributed equity
Option Reserve
Accumulated losses
Total equity
2018
$
2017
$
10,229,890
12,731,956
9,371,478
7,414
22,961,846
9,378,892
281,124
-
281,124
22,680,722
516,949
-
516,949
8,861,943
79,183,501
-
(56,502,779)
63,165,259
-
(54,303,316)
22,680,722
8,861,943
Sayona Mining Limited I Annual Report 2018 57
NOTES TO THE FINANCIAL STATEMENTS FOR
THE YEAR ENDED 30 JUNE 2018
NOTE 25: PARENT ENTITY INFORMATION (continued)
Statement of Profit or Loss and Other Comprehensive Income
Total loss for the year
Total other comprehensive income
Total comprehensive loss for the year
2018
$
2017
$
2,176,941
-
2,544,331
-
2,176,941
2,544,331
Guarantees
There are no parent company guarantees.
Contingent Liabilities
There are no material contingent liabilities at the end of the reporting period.
NOTE 26: INTERESTS IN SUBSIDIARIES
Information about principal subsidiaries
Sayona Lithium Pty Ltd, incorporated in Australia on 4 September 1986. The parent entity holds 100% of the ordinary
shares of the entity. The company holds options to acquire and tenement applications for lithium tenements in Western
Australia.
Sayona East Kimberley Pty Ltd, incorporated in Australia on 18 June 2015. The parent entity holds 100% of the ordinary
shares of the entity. The company holds options on graphite tenements in Western Australia.
Sayona International Pty Ltd, incorporated in Australia on 29 April 2016. The parent entity holds 100% of the ordinary
shares of the entity. The company was established to hold overseas projects acquired by the Group. No assets were
held by the entity at 30 June 2018.
Sayona Quebec Inc, incorporated in Canada on 7 July 2016. The parent entity holds 100% of the ordinary shares of the
entity. The company was established to hold overseas projects acquired by the Group. The company holds the Authier
lithium project at 30 June 2018.
These subsidiaries have share capital consisting solely of ordinary shares which are held directly by the Group.
There are no significant restrictions over the Group's ability to access or use assets and settle liabilities of the
Group.
Each subsidiary's principal place of business is also its country of incorporation, and year ends coincide with the parent
company.
58
NOTES TO THE FINANCIAL STATEMENTS FOR
THE YEAR ENDED 30 JUNE 2018
NOTE 27: SEGMENT REPORTING
The Group operates internationally, in the mineral exploration industry. Segment reporting is based on the whole of
entity. Geographical segment information is as follows:
Primary Reporting: Geographical Segments
REVENUE
Revenue
Total revenue from ordinary
activities
RESULT
Profit/(loss) from ordinary activities
before income tax expense
Income tax expense
Profit/(loss) from ordinary activities
after income tax expense
ASSETS
Segment assets
LIABILITIES
Segment liabilities
Australia
Overseas
2018
$
2017
$
2018
$
2017
$
Consolidated Group
2018
$
2017
$
78,875
14,539
78,875
14,539
413
413
-
-
79,288
14,539
79,288
14,539
(2,197,589)
(2,536,487)
(130,874)
(34,051)
(2,328,463)
(2,570,538
)
-
-
-
-
-
-
(2,197,589)
(2,536,487)
(130,874)
(34,051)
(2,328,463)
(2,570,538
)
Australia
2018
$
2017
$
Overseas
2018
$
2017
$
Consolidated Group
2017
$
2018
$
12,367,549
2,780,151
11,892,473
6,630,884 24,260,022
9,411,035
293,744
517,790
1,285,556
31,302
1,579,300
549,092
There were no transfers between segments reflected in the revenues, expenses or result above. The pricing of any
intersegment transactions is based on market values.
Segment accounting policies are consistent with the economic entity.
NOTE 28: FAIR VALUE MEASUREMENT
The Group does not measure any assets or liabilities at fair value on a recurring basis after initial recognition.
The Group does not subsequently measure any assets or liabilities at fair value on a non-recurring basis.
NOTE 29: COMPANY DETAILS
The registered office and principal place of business
is: Sayona Mining Limited
Unit 68
283 Given Terrace
Paddington Queensland 4064
Sayona Mining Limited I Annual Report 2018 59
DIRECTORS’ DECLARATION
The directors of the company declare that:
1.
The attached financial statements and notes are in accordance with the Corporations Act 2001
and:
(a)
(b)
comply with Australian Accounting Standards which, as stated in accounting policy
International
Note 1 to
Financial Reporting Standards (IFRS); and
financial statements, constitutes compliance with
the
give a true and fair view of the financial position as at 30 June 2018 and of the
performance of the consolidated Group for the year ended on that date.
2.
3.
In the directors' opinion there are reasonable grounds to believe that the company will be able
to pay its debts as and when they become due and payable; and
The directors have been given the declarations by their Chief Executive Officer and Chief
Finance Officer required by section 259A of the Corporations Act 2001.
This declaration is made in accordance with a resolution of the Board of Directors.
Dennis O’Neill
Director
Paul Crawford
Director
Dated this: 13th day of September 2018
60
Independent Auditor’s Report to the Members of Sayona Mining
Limited
Report on the Audit of the Financial Report
Opinion
comprises
of
which
We have audited the
Group)),
consolidated
changes
of
in
to
the
declaration.
financial
statement
equity
and
statements,
financial report of
Sayona
the
profit
consolidated
and
loss
or
the
consolidated
including
a
Mining
statement
other
statement
of
summary
Limited (the Company
of
financial
position
comprehensive
of
flows
cash
significant
income,
for
the
accounting
(the
subsidiaries
and its
2018,
at
the
June
30
as
statement
consolidated
the
and
ended,
year
notes
then
directors’
the
and
policies,
In
Act
our
2001,
opinion,
the
including:
accompanying
financial report
of
the
Group
is
in
accordance
with
the
Corporations
(i)
a
true
giving
performance
and
fair
for
the
year
view
of
then
the
ended;
Group’s
and
financial
position
as
at
30
June
2018
and
of
its
(ii)
complying
with
Australian
Accounting
Standards
and
the
Corporations
Regulations
2001.
Basis
for
opinion
further
standards
section
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under
Financial
those
Auditor’s
auditor
Report
independence
the
of
Professional
Accounting
Accountants
also
have
our
fulfilled
are
our
of
requirements
and
that
responsibilities
of
Act
Corporations
Board’s
Standards
of
to
audit
our
with
accordance
Responsibilities
in
the
Code
report
of
the
with
requirements
Ethics
for
Australia.
for
the
accordance
ethical
of
in
Group
and
110:
financial
Code.
Professional
Code)
(the
ethical
other
the
2001
APES
the
described
are
We
relevant
in
of
the
Ethical
independent
report.
Audit
the
the
the
are
We
in
We
given
time
confirm
the
to
this
of
the
that
directors
auditor’s
independence
the
of
report.
declaration
would
required
the
in
be
by
the
same
Corporations
given
if
terms
Act
to
2001,
the
which
directors
has
as
been
the
at
Company,
We
for
believe
our
that
opinion.
the
audit
evidence
we
have
obtained
is
sufficient
and
appropriate
to
provide
a
basis
Sayona Mining Limited I Annual Report 2018 61
Independent Auditor’s Report to the Members of Sayona Mining
Limited
(continued)
Key
audit
matters
those
Key
our
our
a
audit matters
of
audit
of
audit
separate
the
the
opinion
are
financial
financial
on
report
report
matters that, in
the
of
a
as
matters.
whole,
current
these
period.
in
and
our
professional
These
judgement,
were
matters
forming
our
opinion
thereon,
were
addressed
of most
in
we
and
significance
the
context
do
in
of
provide
not
Key
audit
matter
Carrying
evaluation
value
assets
our
How
matter
audit
addressed
the
key
audit
of
exploration
and
Our
procedures
included,
amongst
others:
Refer
evaluation
to
12
note
assets)
(exploration
and
June
2018
the
carrying
value
30
As
at
exploration
$13,319,187.
The
Group.
of
respect
in
outlined
is
evaluation
and
significant
This
a
accounting
Group’s
exploration
Note
and
1.
evaluation
assets
asset
of
is
of the
in
is
policy
assets
key
audit matter
due
applied
to
in
is
a
This
is
significant
whether
evaluation
set
Evaluation
out
judgement
the
assets
in
of
AASB6
Mineral
exploration
capitalized
the
meet
Exploration
recognition
Resources.
the
that
fact
determining
and
criteria
and
for
•
•
•
•
obtained
of
tenure
We
to
current
at
confirming
to
the
near
be
renewed
for
future;
evidence
the
balance
as
areas
to
of
date
to
tenements
whether
interest
as
and
are
tenure
will
that
rights
the
remained
well
as
expected
in
expire
that
rights
obtained
evidence
obtained
We
for
of
areas
the
budgeted
future
programs;
We
ongoing
interest;
We
made
the
evidence
management
an
exploration
obtained
by
recoverable
value
of
interest,
expenditure
the
future
including
and
intention
reviewing
work
related
understanding
programs,
of
for
the
the
status
areas
of
of
as
in
to
the
the
determination
assumptions
of
of
the
asset.
62
Independent Auditor’s Report to the Members of Sayona Mining
Limited
(continued)
Other information
the
The
in
and
the
auditor’s
not
directors
Group’s
are
Annual
responsible
Report
other
year
information.
ended
for
for
thereon.
on
the
the
The
the
auditor’s
report.
any
report
Our
form
opinion
of
assurance
Annual
financial
conclusion
express
June
will
does
30
Report
report
thereon.
The
other
2018,
be
but
made
information
does
not
available
the
the
comprises
financial
include
the
date
us
to
the
after
and
information
other
information
report
this
of
do
we
not
cover
In
and,
in
report
connection
doing
our
or
with
so,
our
audit
consider
the
of
whether
in
financial
the
the
other
audit
report,
our
information
otherwise
or
responsibility
is
materially
be
is
appears
to
to
the
read
inconsistent
materially
other
with
information
the
financial
misstated.
knowledge
obtained
we
When
required
read
the
Annual
to
communicate
the
Report,
if
matter
we
to
conclude
the
directors
that
there
is
a
request
material
that
a
and
correction
be
made.
misstatement
therein,
we
are
Directors’
responsibility
for
the
financial
report
are
responsible
for
the
preparation
of
the
The
true
and
financial
fraud
or
ability to
using
the
cease
to
of
directors
view
fair
and
internal
such
Company
accordance
the
the
in
as
control
gives
a
preparing
a
as
concern
going
basis
true
the
or
have
that
report
error.
In
continue
going
operations,
with
Australian
Accounting
directors
and
fair
financial
is
determine
and
the
view
report,
disclosing,
unless
alternative
free from
is
directors
are
applicable,
directors
so.
do
to
as
the
but
concern,
of
no
realistic
accounting
necessary
Standards
to
material
Act
that
gives
report
Corporations
the
financial
the
and
enable
misstatement,
for
related
to
preparation
whether
the
concern
the
assessing
going
to
liquidate
a
2001
the
of
due
to
Group’s
and
or
Group
responsible
matters
either
intend
Auditor’s
responsibility
for
the
audit
of
the
financial
report
are
objectives
material
opinion.
obtain
to
misstatement,
Reasonable
reasonable
Our
to
due
whether
from
a
is
high
our
Australian
the
conducted
exists. Misstatements can
misstatement when
could
the
in
if,
financial
taken
decisions
assurance
fraud
level
accordance
it
aggregate,
basis
assurance
with
they
this
of
or
users
individually
the
on
of
in
error,
about
or
the
whether
issue
to
and
of
is
but
assurance,
Auditing Standards
financial
a
is
report
auditor’s
as
a
report
guarantee
an
not
will always detect
are
influence
free
whole
includes
that
an
audit
that
a
material
considered material
economic
the
from
arise
reasonably
report.
fraud or error and
to
expected
be
As
of
part
judgement
an
and
in
audit
maintain
accordance
professional
with
the
scepticism
Australian
throughout
Auditing
the
Standards,
We
audit.
also:
we
exercise
professional
•
Identify
error,
or
that
is
material
may
internal
assess
and
and
design
sufficient
and
misstatement
collusion,
involve
control.
the
risks
perform
material
of
audit
appropriate
resulting
forgery,
misstatement
of
responsive
procedures
for
a
provide
to
basis
than
higher
is
fraud
from
omissions,
intentional
the
to
our
report,
and
risks,
financial
those
opinion.
one
The
resulting
misrepresentations,
for
risk
whether
obtain
of
from
or
due
audit
not
error,
to
fraud
evidence
a
fraud
of
detecting
as
override
the
Sayona Mining Limited I Annual Report 2018 63
Independent Auditor’s Report to the Members of Sayona Mining Limited
(continued)
• Obtain an understanding of
procedures that are appropriate
opinion
effectiveness
the
on
of
control
to
internal
the circumstances, but
in
control.
internal
Group’s
the
relevant
the
not
audit
the
for
in
order
purpose
to
of
design
expressing
audit
an
•
•
•
•
Evaluate
estimates
the
and
appropriateness
related
of
disclosures
accounting
made
by
the
directors.
policies
used
and
the
reasonableness
of
accounting
conclude
on
Conclude
based
and,
conditions
or
If
we
report
modify
our
continue
to
our
auditor’s
a
the
as
the
of
obtained,
doubt
significant
uncertainty
on
the
the
that
appropriateness
audit
evidence
may
that
a
related
opinion.
cast
material
disclosures
Our
conclusions
in
the
are
concern
going
uncertainty
to
continue
ability
of
the
material
use
directors’
a
whether
Group’s
the
on
required
we
exists,
are
if
or,
report
financial
the
based
audit
conditions
events
on
or
to
such
evidence
may
basis
exists
as
of
related
going
a
in
attention
our
inadequate,
are
the
up
date
to
cease
to
Group
accounting
to
events
concern.
auditor’s
to
of
to
obtained
the
cause
draw
disclosures
report.
going
concern.
However,
future
Evaluate
disclosures,
manner
a
the
overall
presentation,
and
whether
the
that
achieves
fair
financial
presentation.
structure
report
and
represents
content
the
the
of
underlying
financial
report,
transactions
including
and
events
the
in
sufficient
Obtain
business
responsible
responsible
appropriate
within
direction,
audit
the
opinion.
activities
the
for
our
for
audit
evidence
Group
to
supervision
regarding
an
performance
the
opinion
of
express
and
on
the
financial
information
financial
the
audit.
Group
of
the
report.
entities
We
We
remain
or
are
solely
We
the
identify
communicate
and
audit
during
with
significant
audit.
our
the directors
regarding,
audit
findings,
including
among
any
other
significant
matters,
the
planned scope
deficiencies
in
internal
and
control
timing
that
of
we
We
also
requirements
matters
that
safeguards.
provide
the
regarding
directors
independence,
with
may reasonably be
thought
statement
to
a
and
to bear
we
that
communicate
our
on
have
with
independence,
them
all
and
relationships
and
where
applicable,
ethical
other
related
complied
with
relevant
the
From
significance
We
matters.
disclosure
should
not
reasonably
about
be
be
matters
in
the
describe
the
communicated
of
audit
these
matter
the
matters
or
the
with
financial
in
when,
our
in
directors,
of
auditor’s
extremely
report
our
in
report
communicated
expected
to
outweigh
the
public
we
determine
the
current
period
unless
report
rare
those
and
or
law
that
therefore
matters
are
regulation
because
interest
the
benefits
adverse
of
circumstances,
determine
we
consequences
of
such
communication.
of
were
the
key
precludes
a
that
so
doing
most
audit
public
matter
would
64
Independent Auditor’s Report to the Members of Sayona Mining
Limited
(continued)
Report
on
the
Remuneration
Report
Opinion
on
the
Remuneration
Report
We have audited
ended
year
30
June 2018.
the Remuneration
Report included in
pages 10 to
13 of
the
Directors’ Report for
the
In
with
our
opinion,
section
the
300A
Remuneration
of
the
Corporations
Report
of
ABC
2001.
Act
Company
Ltd
for
the
year
ended
30
June
2017
complies
Responsibilities
directors
in
the
of
accordance
the
on
opinion
The
Report
an
Auditing
Standards.
Company
with
are
section
Remuneration
for
the
responsible
300A
Report,
the
based
and
preparation
2001.
Act
conducted
Corporations
audit
our
on
of
presentation
the
of
responsibility
accordance
Remuneration
express
to
Australian
is
with
Our
in
Nexia
Brisbane
Audit
Pty
Ltd
Bamford
ND
Director
Level
28,
Brisbane
10
Qld
Eagle
4000
Street
Date:
13
September
2018
Sayona Mining Limited I Annual Report 2018 65
ASX INFORMATION
Following is additional information required by the ASX Limited and not disclosed elsewhere in this
report. The following information is provided as at 12 October 2018.
1.
Shareholding:
Distribution of Shareholders Number:
Category Number
(Size of Holding)
Ordinary Shares
(Number)
1 - 1,000
1,001 - 5,000
5,001 - 10,000
10,001 - 100,000
100,001 - and over
233
292
425
2,316
1,546
4,812
The number of shareholdings held in less than marketable parcels is 1,217.
Twenty Largest Holders - Ordinary Shares
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17
18.
19.
20.
P Point Pty Ltd
Terryjoy Pty Ltd
Cropanly Pty Ltd
E M Enterprises (Qld) Pty Ltd
Citicorp Nominees Pty Limited
HSBC Custody Nominees (Australia) Limited
Mr Robert Desmond Wooding
Mr Robert Veitch + Mrs Elaine Veitch
Merrill Lynch (Australia) Nominees Pty Limited
Desgail Pty Ltd
J P Morgan Nominees Australia Limited
BNP Paribas Nominees Pty Ltd
HSBC Custody Nominees (Australia) Limited - A/C 2
Bubevich Investments Pty Ltd
BNP Paribas Noms Pty Ltd
Mr John Michael Moore
Mr Christopher Paul Dredge + Mrs Nanette Alexandra Dredge
Mr Christopher Mark Janson
Mr Hong Lam Pham
Mrs Marisa Mackow
Number of
Shares Held
95,598,950
93,755,813
93,590,000
84,391,052
69,754,415
43,322,190
31,201,299
30,481,114
26,120,738
21,351,960
18,593,828
18,570,917
17,085,152
15,000,000
13,452,533
13,054,729
11,821,030
% of Total
Issued
Capital
5.57
5.47
5.46
4.92
4.07
2.53
1.82
1.78
1.52
1.24
1.08
1.08
1.00
0.87
0.78
0.76
0.69
11,558,958
9,800,000
9,739,000
551,085,885
0.67
0.57
0.57
42.45%
66
ASX INFORMATION
Twenty Largest Holders - Options
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
19.
20.
HSBC Custody Nominees (Australia) Limited
HSBC Custody Nominees (Australia) Limited-GSCO ECA
Cs Third Nominees Pty Limited < HSBC Cust Nom Au Ltd 13 A/C>
Cs Fourth Nominees Pty Limited < HSBC Cust Nom Au Ltd 11 A/C>
HSBC Custody Nominees (Australia) Limited - A/C 2
Merrill Lynch (Australia) Nominees Pty Limited
Mr Nevres Crljenkovic
Citicorp Nominees Pty Limited
Ms Tara Vinay Shah
J P Morgan Nominees Australia Limited
Cck Pty Limited
Jannarn Pty Ltd
Mr Graham Mcintyre
Mr Trilochana Reddy
Spider Capital Ltd
M & K Korkidas Pty Ltd
Jomot Pty Ltd
Mr Man Kem Tan + Ms Hee Jeng Tou
Mr Samuel Beck
Lehav Pty Ltd
Number of
Options
Held
12,900,026
12,000,000
9,803,922
6,313,726
5,028,522
4,901,961
4,475,000
3,228,259
2,743,911
2,499,176
2,220,079
2,058,822
2,000,000
2,000,000
1,647,059
1,600,000
1,500,000
1,500,000
1,300,000
1,293,085
% of Total
Options
Issued
10.73
9.98
8.15
5.25
4.18
4.08
3.72
2.68
2.28
2.08
1.85
1.71
1.66
1.66
1.37
1.33
1.25
1.25
1.08
1.08
81,013,548
67.37%
The names of the substantial shareholders li sted in the Company’s register at the relevant date are:
Shareholder
P Point Pty Ltd
Terryjoy Pty Ltd
Cropanly Pty Ltd
Number of
Shares Held
% of Issued
Capital
95,598,950
93,755,813
82,118,883
5.57%
5.47%
5.46%
Voting Rights
Each ordinary share is entitled to one vote when a poll is called, otherwise each member present at a
meeting has one vote on a show of hands.
There are no voting rights attaching to the Options, but voting rights as detailed above will attach to
the ordinary shares issued when the Options are exercised.
Sayona Mining Limited I Annual Report 2018
67
ASX INFORMATION
2.
Registers of securities are held at the following address:
Computershare Investor Services Pty Limited
Level 1, 200 Mary Street,
Brisbane Qld 4000 Australia
3.
Securities Exchange Listing
Quotation has been granted for all the ordinary shares issued by the Company on all Member
Exchanges of the ASX Limited.
4.
Restricted Securities
The Company has no restricted securities on issue.
Forward Looking Statements
This presentation may contain certain forward looking statements. Such statements are only predictions,
based on certain assumptions and involve known and unknown risks, uncertainties and other factors, many
of which are beyond Sayona Mining Limited’s control. Actual events or results may differ materially from the
events or results expected or implied in any forward looking statement. The inclusion of such statements
should not be regarded as a representation, warranty or prediction with respect to the accuracy of the
underlying assumptions or that any forward looking statements will be or are likely to be fulfilled. Sayona
Mining Limited undertakes no obligation to update any forward-looking statement to reflect events or
circumstances after the date of this presentation (subject to securities exchange disclosure
requirements).The information in this presentation does not take into account the objectives, financial
situation or particular needs of any person. Nothing contained in this presentation constitutes investment,
legal, tax or other advice.
Reference To Previous ASX Releases
This presentation refers to the following previous ASX releases:
! Positive Authier Definitive Feasibility Study, 24 September 2018
! Authier Project Expanded JORC Ore Reserves & Resource, 24 September 2018
The company confirms that it is not aware of any new information or data that materially affects the
information included in the original market announcement and all material assumptions and technical
parameters continue to apply and have not materially changed. The company confirms that the form and
context in which the Competent Person’s findings are presented have not been materially modified from the
original market announcements.
68
SAYONA – SUPPORTING
THE WORLD’S CLEAN
ENERGY FUTURE
“The clean energy revolution is driving demand for new lithium
developments such as our Authier project, providing a positive
long-term outlook. We will now step up our engagement with
potential partners and investors, while continuing our close
consultations with the local community and government to ensure
sustainable and beneficial outcomes for all stakeholders.”
Dan O'Neill
Director
CORPORATE
DIRECTORY
Sayona Mining Limited
ABN 26 091 951 978
ASX Code
Directors
SYA
Mr Dennis O’Neill – Managing Director
Mr Paul Crawford – Executive Director
Mr Alan Buckler – Non-executive Director
Mr James Brown – Non-executive Director
Company Secretary
Mr Paul Crawford
Registered Office
Auditors
Lawyers
Unit 68
283 Given Terace
Paddington Qld 4066
Ph: +61 7 3369 7058
Email: info@sayonamining.com.au
Sayona Québec Inc.
+1 (514) 395-2158
1155 boul. René-Lévesque West
Bureau 2500
Montréal (Québec)
H3B-2K4
Nexia Brisbane Audit Pty Ltd
Level 28, 10 Eagle Street
Brisbane Qld 4000
Ph: +61 7 3229 2022
GRT Lawyers
Level 2, 400 Queen Street
BRISBANE QLD 4000
Ph: +61 7 3309 7000
Collin Biggers & Paisley
Level 35, 1 Eagle Street
BRISBANE QLD 4000
Ph: +61 7 3002 8700
Share Registry
Computershare Investor Services Pty
Level 1, 200 Mary Street
Brisbane Qld 4000
Ph: 1300 787 272
Limited
www.sayonamining.com.au
Sayona Mining Limited I Annual Report 2018 69
ANNUAL
REPORT
2018