ANNUAL REPORT
2021
PLUGGED
INTO AN
ELECTRIC
FUTURE
CONTENTS
2
3
4
5
The Company
8
Leadership
Team
24
Tenement
Schedule
Highlights
10
Operations
Review
32
Resources
and Reserves
Sayona's
Expansion
Strategy
Managing
Director’s
Review
12
Authier
Project
34
Directors’
Report
14
Tansim
Project
17
Western
Australian
Projects
49
Auditor’s
Independence
Declaration
50
Financial
Statements
23
East Kimberley
Graphite
Project
92
ASX
Information
97
Corporate
Directory
Sayona Mining Limited I Annual Report 2021 1
THE COMPANY
North American Lithium
Tansim Lithium
Authier Lithium
Pilbara Lithium/Gold
Lithium development
Lithium exploration
The NAL bid tied in with the Québec
Government’s strategy of developing
a complete lithium value chain in the
province, servicing the expanding
North American lithium-ion battery
market and electric vehicle industry.
In Western Australia, the Company is
exploring for Hemi-style gold
mineralisation in the Pilbara region,
while its lithium projects are subject
to an earn-in agreement with Altura
Mining Limited.
Sayona has seen significant growth
in market value over the past
financial year, in line with its
development into an emerging
lithium producer amid an
accelerating clean energy revolution.
Sayona Mining Limited (ASX:SYA;
OTCQB:SYAXF) is an emerging
lithium producer with projects in
Québec, Canada and Western
Australia.
The past year has culminated in a
significant milestone for Sayona with
its successful acquisition of North
American Lithium (NAL) in Québec.
The bid was undertaken in
partnership with Sayona’s new
strategic investor and major
shareholder, Piedmont Lithium Inc.
(Nasdaq:PLL; ASX:PLL).
This acquisition, coupled with
Sayona’s nearby Authier and Tansim
Lithium Projects, will see the
Company transform from explorer to
developer on its way to becoming an
established spodumene producer
from its world-scale Abitibi lithium
hub.
SAYONA HAS SEEN
SIGNIFICANT GROWTH
IN MARKET VALUE OVER
THE PAST FINANCIAL
YEAR, IN LINE WITH ITS
DEVELOPMENT INTO AN
EMERGING LITHIUM
PRODUCER AMID AN
ACCELERATING CLEAN
ENERGY REVOLUTION
2
HIGHLIGHTS
Company-making acquisition
of North American Lithium, with an
established mine and concentrator
3
Li
6.941
World-scale Abitibi lithium hub rapidly
progressing, with NAL at centre
supported by emerging Authier and
Tansim Lithium Projects
Gold exploration underway
in Western Australia, focused
on Hemi-style targets
Altura Mining earn-in
boosts WA lithium projects
Share price soars 1,000%
during FY21 as investors
back strategy
Sayona Mining Limited I Annual Report 2021 3
SAYONA’S EXPANSION STRATEGY
Stepping up the lithium
value chain.
SHORT TERM
Junior explorer
MEDIUM TERM
World-scale
spodumene
producer
!
Integrate NAL with
Authier project
! Further expand Québec
operations with Tansim
project to create world-
scale Abitibi lithium hub,
supplying North
American market
! Advance flagship Authier
Lithium Project towards
development; acquire
nearby North American
Lithium (NAL), backed by
tie-up with Piedmont
Lithium
! Expand lithium resources
in Québec (Authier and
Tansim project)
! Advance gold/lithium
exploration in Pilbara, WA
4
LONG TERM
Battery material
processor
! Generate added value
through downstream
processing to produce
clean and green lithium
carbonate/hydroxide for
North American market
(scoping study
underway)
! Partner with Québec’s
vertical integration
strategy, securing its
position as supplier of
choice to North
American battery market
MANAGING DIRECTOR’S REVIEW
Dear Shareholder
The past year has been
transformational for Sayona as we
transition from junior explorer to
world-scale lithium producer.
With our share price increasing by
almost 1,000 per cent during fiscal
2021, investors have backed our
vision of becoming a leading lithium
producer in North America.
I can assure you however, we are
only just getting started.
Our growth has followed an
accelerating EV revolution in Asia,
Europe and North America, with the
world’s biggest economies now
committed to ‘net zero’ emission
targets.
The scale of this clean energy
transformation is enormous, with
trillions of dollars globally committed
to making the transition.
As a company that will contribute to
this revolution, we are determined to
help realise Québec’s EV vision and
become a clean and green supplier
of lithium to the North American
battery market.
Fiscal 2021 was my second year as
your Managing Director and I am
very proud of the tremendous results
achieved by our team.
Successful NAL acquisition
The year’s biggest highlight has
been our successful acquisition of
North American Lithium (NAL), in
partnership with our major
shareholder and strategic partner,
Piedmont Lithium.
Starting with our initial expression of
interest in NAL in September 2019,
countless hours were spent by our
team across different time zones in
developing a successful bid.
During calendar 2020, our bid team
expanded to include former NAL
management together with leading
consultants from engineering,
environmental, financial, legal and
other fields.
Despite a number of extensions to
the bidding process by the monitor
(administrator), we continued to
advance our cause, highlighting the
unique combination offered by
integrating NAL’s former mine and
concentrator with our nearby Authier
and Tansim projects.
Finally, in May 2021, the monitor
announced it would seek court
approval for our bid, backed by
NAL’s two secured creditors.
On 30 June, court approval was
announced, with the Superior Court
of Québec approving Sayona
Québec’s acquisition of NAL.
As I stated at the time, “This is a
pivotal point for not only ourselves
and our bid partner Piedmont
Lithium, but also Québec and its
future as a leading player in the
clean energy industry of the 21st
century.”
Post-balance date, on 30 August
2021, we were delighted to
announce that our acquisition had
been finalised and we could now get
started on our turnaround plan at
NAL.
Sayona is committed to developing
a profitable and sustainable
business at NAL, delivering new
jobs and investment for the benefit
of the local community and
advancing Québec’s clean energy
industry.
The acquisition agreement also
included plans for downstream
processing in Québec and we look
forward to progressing this further,
potentially using Australian
technology (refer below).
Abitibi lithium hub
advances
NAL is set to form the centrepiece of
our Abitibi lithium hub,
encompassing our nearby Authier
and Tansim projects.
Both projects have potential for
further expansion as we grow our
lithium asset base in Québec.
In January 2021, we announced an
8,700m drilling program,
representing around a 30% increase
on our previous drilling in Québec.
Some 31 drill holes for a total of
4,500m of diamond drilling are
planned at Authier, where we aim to
expand the resource and improve its
strip ratio.
At Tansim, 26 drill holes for around
4,200m are planned, following the
encouraging results received from
initial drilling in 2019, with the aim of
completing a JORC-compliant
resource estimate.
Tansim also expanded thanks to the
acquisition of additional claims
during the fiscal year, with the
project now encompassing 355
Sayona Mining Limited I Annual Report 2021 5
MANAGING DIRECTOR’S REVIEW
claims for more than 20,000ha of
prospective lithium acreage.
West Australian gold,
lithium exploration
Sayona is fortunate to have assets in
world-class mining districts and
stable investment jurisdictions.
Adding to our flagship projects in
Canada, our gold and lithium
projects in Western Australia (WA)
have considerable potential to add
value for shareholders.
Gold is a traditional safe haven
favourite for investors and there are
few better jurisdictions than WA to
explore for the precious metal.
During fiscal 2021, Sayona
committed further investment in our
gold exploration, where we are
seeking Hemi-style targets near De
Grey Mining’s groundbreaking
discovery in the Pilbara.
Our Pilbara gold projects all lie
within a 10-50 km radius and
encircle the expanding Hemi, which
is shaping up to be a large footprint,
world-scale deposit.
Meanwhile, our WA lithium projects
also have considerable potential,
being located within the world-class
Pilgangoora lithium district. In June
2021, Sayona entered into a new
earn-in agreement with Altura Mining
Limited, covering the core of the
lithium tenements reflected in the
previous 2019 earn-in agreement.
Under the new agreement, Altura
has the right to earn a 51% interest
in these assets by spending a
minimum of A$1.5 million on
exploration over three years, with
Sayona retaining the remaining
project interest.
The regulatory approval process for
Authier continues to advance, with
no ‘show stoppers’ identified in the
latest feedback from Québec’s
Ministry of the Environment and the
Fight against Climate Change.
Piedmont Lithium’s investment in
Sayona, as announced in January
2021, has effectively underwritten
the future of our Abitibi lithium hub.
Under the agreement, Piedmont will
acquire up to 60,000 tonnes per
annum or 50% of Sayona Québec’s
production, for its operation in North
Carolina, USA.
Clean and green lithium
hydroxide
Sayona aims to develop a “clean
and green” lithium hydroxide
product perfect for the needs of
leading EV makers and we are
working with a number of parties in
this regard.
Spodumene samples from Authier
have been processed into lithium
hydroxide using the closed loop
technology developed by Australia’s
ICS Lithium. Post-balance date, in
July 2021, testing by the CSIRO
confirmed the exceptional 99.99%
lithium hydroxide grade of these
samples.
In Canada, battery researcher
Novonix is evaluating the lithium
hydroxide samples to enable
performance comparisons with
current battery standards, with the
results expected to confirm our
ability to produce a product of the
highest quality.
6
The agreement is a win-win for both
parties, allowing the experienced
lithium miners at Altura to advance
the projects while Sayona focuses
on our expansion in Québec
together with our WA gold assets.
Investor backing crucial
Sayona would not have achieved the
past year’s tremendous gains
without the support of our
shareholders and I would like to
express my appreciation for all
investors, both longstanding and
more recent.
Our capital raisings received
enormous support, as highlighted by
the latest Placement and Share
Purchase Plan (SPP). Both of these
were significantly oversubscribed,
with the SPP receiving applications
nearly 14 times the targeted amount,
an enormous vote of confidence in
our strategy.
These funds have enabled the
finalisation of the NAL acquisition
and will ensure the further growth of
Sayona for shareholders’ benefit.
For our North American investors,
Sayona’s listing on the OTCQB
Venture Market, under the stock
code of SYAXF, further enhances
access to our stock amid growing
global investor interest in Sayona.
Our Board and management have
made enormous strides over the
past year and I would like to thank
everyone for their efforts, including
our employees, contractors,
suppliers and all others associated
with Sayona.
With our share price
increasing by almost
1,000 per cent during
fiscal 2021, investors
have backed our vision of
becoming a leading
lithium producer in North
America.
MANAGING DIRECTOR’S REVIEW
One of our longstanding team
members, Dan O’Neill resigned as a
Non-Executive Director in January
2021, having served on the Board
since March 2000. Dan played a key
role in advancing Authier’s definitive
feasibility study and I thank him for
his service.
Looking ahead, Sayona has an
extremely bright outlook, thanks to
our key role in driving North
America’s clean energy future. The
worldwide coronavirus pandemic
has only further highlighted the need
for global cooperation to fight
challenges such as climate change
and Québec is playing its part.
After a milestone year in fiscal 2021,
I am confident that even more
success lies ahead for Sayona. We
will not be resting on our laurels.
Yours sincerely
Brett Lynch
Managing Director/CEO
Sayona Mining Limited I Annual Report 2021 7
LEADERSHIP TEAM
BRETT LYNCH
Managing Director
CEO
Brett is an experienced
mining engineer, company
director and CEO with a
strong background in
international mining and
mining related businesses.
He has over 30 years’
experience in business
development and
management, with a
proven track record of
delivering shareholder
value through converting
opportunities to outcomes.
Brett was appointed
Managing Director in July
2019.
PAUL CRAWFORD
Executive Director
Company Secretary
Paul is an experienced
company secretary with
qualifications in
accountancy, financial
management and
business law. He has more
than 40 years of
commercial experience,
including various technical
and management roles
within the minerals, coal
and petroleum industries.
Paul is the principal of his
own corporate consultancy
firm, providing accounting,
corporate governance,
business advisory and
commercial management
services. He joined the
Board in 2000.
JAMES BROWN
Non-Executive
Director
James is a mining
engineer with extensive
operational and
development experience in
the coal mining industry in
Australia and Indonesia,
including 22 years with
New Hope Corporation.
He was appointed to the
Board in 2013. James is
also Managing Director of
Altura Mining Limited.
ALAN BUCKLER
Non-Executive
Director
Alan has over 45 years’
experience in the mining
industry and has been
directly responsible for the
commercialisation of
several projects in
Australia and Indonesia,
from resource
identification through to
production. He is a former
Director and Chief
Operations Officer of New
Hope Corporation. Alan
joined the Board in 2013.
He is also a Non-Executive
Director of Altura Mining
Limited.
8
GUY LALIBERTÉ
Chief Executive Officer,
Sayona Québec
Guy is an experienced project director
and construction manager in the mining
and heavy industry sector. Born in
Québec, he has more than 35 years’
project management experience in major
international mining and construction
projects. The Authier development will be
the fourth open pit mining project he has
led, either as project director or
construction manager. Guy joined Sayona
in May 2019.
YVES DESROSIERS
Authier Project Director
An experienced mining executive, Yves
has served in various roles including COO
and General Manager at NAL and Vice
President of Mining Operations for
BlackRock Metals. He is responsible for
the technical aspects and technical team
for NAL, Authier and other projects
developed by Sayona Québec, including
NAL’s restart.
Yves joined Sayona Québec in March
2021.
A well-credentialled leadership team is in
place to take Sayona through the transition
from junior explorer to world-scale lithium
producer. The Board has a history of
managing major resources projects from
exploration through to production. It is
further supported by an experienced
executive team on the ground in Québec,
skilled in local community and stakeholder
engagement, to ensure the responsible
and sustainable development of the
Company’s projects.
Sayona Mining Limited I Annual Report 2021 9
OPERATIONS REVIEW
North American Lithium Acquisition
In a major milestone for the
Company, court approval was
granted for the bid for NAL in
June 2021, with the
transaction finalised post-
balance date in August 2021.
NAL has a lithium mine and
concentrator located in Abitibi,
near the established mining
district of Val d’Or, Québec
and in proximity to Sayona’s
Authier and Tansim Lithium
Projects.
The Company plans to combine ore
produced from Authier with ore
produced at NAL to facilitate a
significant improvement in plant
performance and economics.
Sayona will pursue the
establishment of downstream
processing facilities, including the
development of a spodumene
conversion facility at NAL for the
production of lithium hydroxide or
lithium carbonate.
The integration of NAL with the
Authier and Tansim projects will
transform both operations and
create a world-scale Abitibi lithium
hub. It will also advance plans for
downstream processing in Québec,
taking advantage of its
environmental and economic
advantages including low cost,
renewable hydropower, an
established mining services industry
and proximity to the North American
battery market.
It will also support the Québec
Government’s plans for a clean
energy future based on the
development of its own battery
industry, from mining to downstream
processing and EV production.
10
North American Lithium operation
Piedmont Partnership
The bid for NAL was undertaken by
subsidiary Sayona Québec Inc.,
supported by leading US based
lithium corporation, Piedmont
Lithium Inc.
In January 2021, Sayona announced
a strategic partnership with
Piedmont to expedite the
Company’s growth plans in Québec
and to enhance access to the US
market and investors.
Under the agreement, Piedmont
acquired an initial 9.9% equity
interest in Sayona and up to a
further 10% of Sayona’s issued
capital for a total consideration of
around US$7 million. Piedmont also
agreed to invest approximately
US$5 million for a 25% stake in
subsidiary, Sayona Québec.
In addition, Piedmont signed a
binding offtake arrangement under
which it will acquire up to 60,000
tonnes per annum of spodumene
concentrate or 50% of Sayona
Québec’s production, whichever is
greater, for Piedmont’s planned
lithium hydroxide plant in North
Carolina, USA.
The supply agreement is conditional
upon Piedmont and Sayona
agreeing to a start date for
spodumene concentrate deliveries
between July 2023 and July 2024,
based on the development
schedules of both parties.
Sayona Mining Limited I Annual Report 2021 11
OPERATIONS REVIEW
Authier Lithium Project
The Authier Lithium Project
(Authier) in Québec is a hard
rock spodumene lithium
deposit.
Authier is set to play a key role in the
Company’s planned multi-project
Abitibi lithium hub, which has the
potential to generate new jobs and
investment for the benefit of
Québec, and to create wealth for
shareholders.
During the year, a 31-hole drilling
campaign for a total of 4,500m
commenced at Authier to expand
the current ore resource, improve
the strip ratio and to accelerate
production to enhance its
profitability.
A revised definitive feasibility study
announced in 2019 showed its
potential to become a sustainable
and profitable new mine, with an
estimated NPV of C$216 million, a
pre-tax IRR of 33.9% and estimated
capital payback within 2.7 years.
All drilling was conducted with the
Algonquin Abitibiwinni community of
Pikogan (First Nation Abitibiwinni),
with whom Sayona has an
exploration agreement. The
agreement provides benefits for the
Pikogan, both economic and in
Authier Lithium Project
CANADA
N
Rouyn-
Noranda
Val-d'Or
Tansim Lithium Project
Québec
100km
Authier Project location
12
Ottawa
Montreal
USA
OPERATIONS REVIEW
terms of sustainable development,
and is a tangible demonstration of
Sayona’s commitment to the First
Nations community.
The Authier Project is subject to the
environmental impact assessment
and review procedures under the
BAPE (bureau d'audiences
publiques sur l'environnement).
With the acquisition of NAL,
including its on-site processing
plant, the need to process ore on
site at Authier may not be necessary,
which will impact on the
requirements for approvals under
the BAPE process.
Regardless, the Company will
continue the development of the
Authier project under strict
guidelines to minimise impacts on
the environment, including reducing
wind and water erosion, promoting
revegetation and optimising water
management practices.
The Company continues to engage
closely with all stakeholders,
including local municipalities,
landowners, First Nations
communities, non‐governmental
organisations and other
stakeholders, with the engagement
effort led by Sayona’s local team in
Québec.
Drilling at Authier
Sayona Mining Limited I Annual Report 2021 13
OPERATIONS REVIEW
Tansim Lithium Project
The Tansim Lithium Project is
situated south‐west of Authier
and is prospective for lithium,
tantalum and beryllium.
Tansim, in conjunction with Authier
and NAL, will enable Sayona to
become a world-scale lithium
producer with three spodumene
mines supplying a central
concentrator to feed the North
American battery market.
The main prospects at Tansim are
Viau‐Dallaire, Viau and Vezina.
Drilling conducted in 2019 resulted
in an Exploration Target for the Viau-
Dallaire prospect of between 5
million and 25 million tonnes, at an
estimated grade of 1.2 – 1.3% Li O.*2
During the year Sayona completed
its acquisition of the Tansim project,
following a final payment of
C$250,000 to Quebec Precious
Metals Corporation for the remaining
50% stake in tenements subject to
an option agreement.
*Note: The potential quantity and grade
of the Exploration Target is conceptual in
nature and is therefore an approximation.
There has been insufficient exploration to
estimate a Mineral Resource and it is
uncertain if further exploration will result
in the estimation of a Mineral Resource.
The project has expanded
significantly during the period with
the acquisition of 170 additional
claims. Tansim now comprises 355
claims spanning a total of 20,546 ha.
N
Rouyn-
Noranda
Val-d'Or
Authier Lithium Project
CANADA
Tansim Lithium Project
Québec
100km
Tansim Project location
14
Ottawa
Montreal
USA
Novonix Testing
Early in 2021, Sayona announced
plans to conduct product trials with
leading battery researcher, Novonix
Limited, focused on delivering a
clean and green 99.97% lithium
hydroxide battery suitable for North
American EV makers. Results have
confirmed that spodumene from
Authier can be refined to produce
high purity, 99.99% lithium
hydroxide.*
Spodumene samples from Authier
were processed into lithium
hydroxide by Australian hydroxide
technology provider, ICS Lithium,
using its sustainable, closed loop
refining system. The samples were
then analysed at CSIRO’s mineral
resources laboratories in Perth,
Western Australia, which confirmed
their exceptional purity.
OPERATIONS REVIEW
The most recently acquired claims
are situated on the northern and
south-east flank of the project. They
secure prospective areas marginal
to the Réservior Decelles Batholith, a
suite of monzogranite intrusions
typical of the parent magma
associated with spodumene bearing
pegmatite systems at a worldwide
scale. These claims also cover a
similar stratigraphy to the Viau and
Viau-Dallaire prospects. It is
anticipated new tracks traversing the
area will allow rapid and efficient
exploration for spodumene
pegmatites over the new area.
In March 2021, Sayona reaffirmed
confidence in the lithium potential of
its Tansim project following the
compilation of a Canadian National
Instrument (NI) 43-101 Technical
Report, which concluded that the
project’s exploration potential
remains high and that the potential
to increase the size of the currently
modelled pegmatites is also high.
A 26-hole diamond drill program for
4,200m is planned for Tansim, with
some 3,400m at the Viau‐Dallaire
prospect and approximately 800m at
the Viau prospect. The program
aims to expand the lithium
mineralisation at Viau‐Dallaire and
provide material for mineralogical
study and metallurgical test work to
support a Mineral Resource
estimate.
Further testing is being undertaken
by Novonix to evaluate the
sample’s conformity with lithium‐ion
battery standards and its
performance in commercial cells,
highlighting the project’s ability to
deliver a high‐purity product
suitable for leading battery and
cathode makers in North America.
* Disclaimer: The purity of the material
is defined as the weight of LiOH.H O in
the sample divided by the total sample
weight, comprised of lithium values as
LiOH.H O‐plus‐impurities, expressed as
a percentage. To five figures the sample
purity is 99.990%.
2
2
The analysis does not extend to anions
other than the hydroxide ion OH. It does
not determine levels of chloride,
carbonate or nitrate, while sulphur
present is assumed to be as sulphate
ion. Sodium and potassium values are
likely to be present as nitrates while any
carbonate present would arise from
contamination from atmospheric CO ; 2
the processing facilities cannot entirely
exclude exposure of samples to the
atmosphere. Impurity levels are
generally so low that they are at the
threshold of measurement capabilities
by the analytical equipment employed,
so variations are to be expected in
repeat analyses on material from the
one sample batch.
Sayona Mining Limited I Annual Report 2021 15
OPERATIONS REVIEW
Québec’s strategic position
Québec has been a long-term
supporter of the lithium sector,
recognising its importance as
a critical mineral in lithium-ion
battery production. The
provincial government is
focused on developing a
complete lithium value chain
from mining through to
downstream processing.
The Québec Government has
launched a three-pronged strategy
to develop its battery sector,
including the production and
transformation of minerals such as
lithium to manufacture battery
components, such as anodes and
cathodes; the production of
commercial EVs; and the
development of battery recycling.
Government-backed Investissement
Québec aims to quickly position the
province as a leading hub in North
America for the manufacturing and
assembly of lithium-ion batteries for
electric cars, and has a mandate to
attract investors to support this plan.
Significantly, the Canadian auto
market has also joined the EV
revolution, as shown by recent
investments by the Canadian federal
and Ontario governments
supporting Ford Motor Co’s C$2
billion investment in EV production in
Ontario, together with a C$1.5 billion
investment by Fiat Chrysler in plug-
in hybrids and EVs.
16
The Québec Government has also
banned the sale of new gasoline-
powered passenger cars from 2035,
as part of a C$6.7 billion plan over
five years to curb greenhouse gas
emissions. The Canadian federal
government has followed suit,
banning the sale of fuel-burning new
cars and light-duty trucks from 2035.
Recent events like the coronavirus
pandemic and trade tensions
between the U.S. and China have
shown the importance of a strong
local procurement chain. Sayona
fully supports this strategy and has
proposed the creation of lithium
value hubs in the Abitibi and James
Bay regions, feeding lithium
concentrators and establishing a
large-scale lithium hydroxide facility.
Québec’s competitive advantages
include access to economical and
environmentally sustainable
hydropower, together with
world‐class infrastructure and skilled
mining labour in a transparent
regulatory environment.
Studies undertaken by EY‐Parthenon
have reaffirmed Québec’s position
as the leading supplier of
spodumene to North America based
on cost, quality, reliability and
carbon footprint.
An Abitibi hub, as proposed by
Sayona, could deliver spodumene
ore to the North American market at
the lowest cost and with the smallest
environmental footprint compared to
competitors in Australia and South
America.
OPERATIONS REVIEW
Western Australian Projects
Sayona’s leases in
Western Australia cover
1,186 sq km, comprising
lithium and gold tenure in
the Pilbara and Yilgarn
areas and graphite
prospective tenements in
the East Kimberley region.
The Pilbara projects comprise
12 leases totalling 1,016 sq km
within the world-class
Pilgangoora lithium district. Ten
of the tenements, covering 911
sq km, have associated gold
rights and are proximal to De
Grey Mining’s Hemi gold
discovery.
De Grey Mining has reported a
maiden resource estimate at
Hemi of 6.8Moz gold, with 9Moz
Au within the greater Mallina
Gold Project. These results
cement the Pilbara as a Tier 1
exploration province.
Wyndham
Broome
N
Port Hedland
Exmouth
Pilgangoora Lithium Deposit
Pilbara Gold & Lithium Project
WESTERN
AUSTRALIA
Mt Magnet
Geraldton
Mount Edon
Lithium Project
Kalgoorlie
Mount Marion
Lithium Deposit
PERTH
Greenbushes
Lithium
Deposit
Cattlin Creek
Lithium Deposit
500km
Esperance
Albany
Sayona Mining Limited I Annual Report 2021 17
OPERATIONS REVIEW
Port Hedland
E 45/5904
Mac Well
ELA 47/3829
Deep Well
)
E 45/2364
Tabba Tabba
E 45/5289
Strelley West
E 45/5288
Strelley
N
)
Goldsworthy
E 45/5817
Indee
Hemi Gold Discovery
(De Grey Mining)
) Mallina
E 47/3950
Mt Dove
E 45/4716
Red Rock
) Tabba Tabba
E 45/4703
Tabba Tabba East
Pilgangoora Lithium Mine
(Pilbara Mining)
E 47/2983
Mallina
Wodgina Lithium Mine
(MinRes/Albemarle)
E 47/3802
Friendly Creek
E 45/4726
West Wodgina
Sayona’s Pilbara Projects
Gold Exploration
During the year, Sayona resumed full
ownership over its Pilbara gold
tenements in Western Australia.
These are considered prospective
for Hemi-style intrusion-related gold
mineralisation.
Sayona commissioned Magspec
Airborne Surveys to complete a high
resolution airborne magnetic survey
over the entire area of the Deep Well
Project and part of the Mt Dove
18
Project, where prior high resolution
data is not available. The survey was
completed in April 2021 and
processing and interpretation of the
Mt Dove magnetics data has been
undertaken.
The identification of 16 new
magnetic anomalies at the Deep
Well and Mt Dove Projects
encouraged the ramping up of gold
exploration, with the Company
committing to a A$2 million budget
for calendar year 2021.
LEGEND
Sayona tenement
(gold and lithium)
Sayona tenement
(lithium only)
Road
Rail
0
25
50km
Planned exploration includes drill
testing of the identified airborne
magnetic anomalies at the Mt Dove
and Deep Well Projects on the
completion of statutory requirements
and heritage clearance. A number
of secondary targets and features
for additional testing have also been
identified.
OPERATIONS REVIEW
600000 E
650000 E
700000 E
Strelley
N
South Hedland
Strelley
Mac Well
Hemi Gold Discovery
(De Grey)
Deep Well
Mt Berghaus
(De Grey)
181,000 oz Au
7700000 N
Mallina (De Grey)
307,000 oz Au
Mallina
Withnell
(De Grey)
794,000 oz Au
Toweranna
524,000 oz Au
LEGEND
Sayona Gold Tenement
Gold Resource
Hemi Discovery
De Grey Tenement
De Grey Intrusion
De Grey Target
Road
Rail
Town
Gillies Prospect
(De Grey)
Pilbara Mining Centre
7650000 N
Friendly Creek
Pilbara Gold Projects
Mt Dove Project
The Mt Dove Project is the closest
Sayona lease to Hemi, located 10km
south‐west of the Falcon prospect
and 12 km south‐west of the Brolga
prospect. It is within 5km of the
greater Hemi project area, a 15km
trend which includes Hemi and
adjacent intrusions. A number of
Tabba Tabba
Tabba Tabba
7700000 N
Red Rock
Mt York (Kairos)
873,000 oz Au
Indee
Wingina
(De Grey)
357,000 oz Au
Mt Dove
Kangan
Wodgina
Mining Centre
Wodgina
25km
650000 E
700000 E
targets have also been identified by
De Grey within their tenure to the
north, the north‐east and to the west
of the Mt Dove lease.
Much of the Mt Dove area is masked
by surface cover which has
previously hampered exploration
and testing for gold potential.
The Company is using its knowledge
of late-stage intrusions, built up in
the search for pegmatite
mineralisation, to fast-track
identification of Hemi‐style targets.
At Hemi, part of the mineralisation
identified to date has an associated
magnetic feature and Sayona’s initial
exploration includes airborne
magnetics surveying to identify
similar targets.
Sayona Mining Limited I Annual Report 2021 19
OPERATIONS REVIEW
N
640000 E
650000 E
Shaggy
Eagle
Electroenas
Antwerp
Crow
Scooby
Aquila
Brolga
7690000 N
Diucon
Falcon
Hemi
7690000 N
7680000 N
Greater Hemi Area
(De Grey)
E 47/3950
Mt Dove
7680000 N
640000 E
650000 E
LEGEND
Sayona tenement
Hemi discovery
0
5
10km
Other known intrusion / target
De Grey tenement
Ultramafic intrusion
E 47/3950 - MT DOVE PROJECT
REGIONAL LOCATION
Mt Dove lease and surrounding De Grey targets and Hemi Deposit
Mt Dove displays a range of
magnetic features, the majority of
which are interpreted to relate to
localised accumulations of
magnetite within sand dune systems
and in fossil river terraces along the
margins of the Yule River.
Preliminary interpretation of data has
identified five magnetic features and
a number of north‐east trending
structures and dykes that may have
acted as pathways for intrusions
within the tenement area.
20
OPERATIONS REVIEW
Deep Well Project
The Deep Well Project covers an
area of 119 sq km to the west of
Port Hedland.
Interpretation of the new high
resolution geophysical data which
cover the entire lease area has
identified 11 discrete magnetic
anomalies, as shown in the figure
on the right.
The magnetics data has also
helped resolve bedrock geology
of the tenement area which is
obscured by surficial cover. A
large area of the western
tenement area is interpreted to be
underlain by Mallina Basin
sediments, which have been
intruded by six main intrusions of
the Portree Suite.
The Portree intrusions are the
same age as the target Indee
Suite intrusives. The magnetic
signature of each of the Portree
intrusions is variable and includes
intrusions with magnetic margins
and variable magnetic intensity,
indicating a potential range in
intrusive rock types.
Tabba Tabba Project
7700000 N
The Tabba Tabba Project is
located north of the Pilgangoora
lithium mining area, in a region of
historic tin and tantalum mining. It
comprises four tenements that
margin the Tabba Tabba shear
zone, which has been a focus for
of a variety of late-stage
intrusions, including prospective
Indee suite high‐Mg diorites.
595000 E
600000 E
605000 E
E 47/3829 - DEEP WELL PROJECT
GEOPHYSICS
5km
0
2.5
N
7715000 N
Northern Portree
Intrusion
T10
T9
LEGEND
SYA tenement
7710000 N
Interpreted
Granite Contact
Magnetic Anomaly
Intrusion/Target
Central Portree
Intrusion
E 47/3829
7710000 N
T8
T11
7705000 N
7705000 N
T5
T6
T1
South Western
Portree Intrusion
T3
T7
T2
T4
South Eastern
Portree Intrusion
7700000 N
Southern Portree
Intrusion
South Central
Portree Intrusion
595000 E
600000 E
605000 E
Mt Dove Project with RTP AGC magnetics and targets
Sayona Mining Limited I Annual Report 2021 21
OPERATIONS REVIEW
Geological mapping has been
completed and geochemistry,
testing north‐east trending
veining, structures and intrusive
rocks within E45/4703 has been
planned. This target orientation is
a predominant structural trend
affecting Indee Suite intrusions
such as the Peawah Granodiorite
to the south-west.
Friendly Creek Project
During the year, a mining and
tribute agreement was entered
into with Gardner Mining Pty Ltd,
providing them with rights to
alluvial gold within the tenement.
Sayona is to receive a tribute
payment of 10% (net of costs) on
any gold recovered and retains
100% of the gold rights within
bedrock. The tenement is located
within the Yandeyarra Aboriginal
Reserve and an Access
Agreement is required before any
ground activities can commence.
22
Western Australian Lithium
Altura Earn-in
Mt Edon Lithium Project
In June 2021, Sayona announced a
new earn-in agreement with Altura
Mining Limited over the Company’s
Pilbara lithium tenure. The new
agreement covers the core of the
lithium tenements reflected in the
previous 2019 earn-in agreement,
spanning more than 1,000 square
kilometres.
Under the new agreement, Altura
has the right to earn a 51% interest
by spending a minimum of A$1.5
million on exploration over three
years, with Sayona retaining the
remaining 49% project interest.
Altura must spend at least
A$500,000 and complete a
minimum of 1,500m of drilling at the
Mallina Lithium Project. Sayona will
hold the right to contribute to project
evaluation and development in the
future.
The Company’s earn-in agreement
with Altura will allow Sayona to focus
on its gold projects in Australia,
while still benefitting from the
potential upside of any lithium
discoveries by Altura.
Mallina Lithium Project
Mallina is the priority focus, being
the most advanced project in the
lithium portfolio with multiple zones
of spodumene pegmatite identified
within a 25 sq km zone. Previous
drilling campaigns and studies have
identified priority drill sites at the
tenement.
This project located in the South
Murchison covers the southern
portion of the Paynes Find
greenstone belt and hosts 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,
feldspar and beryl.
Reconnaissance exploration has
identified lepidolite (lithium mica)
bearing pegmatite with a peak assay
of 1.57% Li O. Geochemical results
indicate that the pegmatite suite
becomes increasingly fractionated
towards the west.
2
Tabba Tabba Lithium
Project (SYA: 100% of
lithium rights only)
The Tabba Tabba tenement
E45/2364 is not part of the Altura
Earn-In. It is centred in an area of
historic tin and tantalum mining.
Spodumene pegmatites have been
identified in adjacent tenure and the
lease provides exposure to the
area’s emerging lithium
perspectivity.
Exploration has identified three new
areas of fractionated rare metal
pegmatites, as well as seven soil
anomalies of LCT type pegmatite
geochemistry. To date, none of the
prospect areas have been drilled.
Targets are displayed in the figure on
page 23.
OPERATIONS REVIEW
Tabba Tabba anomalies and prospects
East Kimberley Graphite
Past exploration by Sayona has
identified graphite mineralisation
within a 25-kilometre strike extent of
the Corkwood geochemical and
geophysical anomaly. The target is
structurally deformed, higher grade
graphite portions of the stratigraphy
with the potential to host coarse
flake, high purity graphite
mineralisation.
Sayona is reviewing the Corkwood
project to see the best way of
maximising the value of its 100%
held interest. No fieldwork was
carried out during the year.
Sayona Mining Limited I Annual Report 2021 23
TENEMENT SCHEDULE
As at 31 August 2021
Australian Tenement Schedule
Tenement
Name
Status
Interest in Tenement
E59/2092
E59/2055
E45/2364
E45/4703
E45/4716
E45/4726
E80/4511
E80/4949
E47/3802
E47/3829
E47/3950
E45/5288
E45/5289
E47/2983
E45/5817
E45/5904
Mt Edon
Mt Edon West
Tabba Tabba
Tabba Tabba East
Red Rock
West Wodgina
Western Iron
Corkwood
Friendly Creek
Deep Well
Mt Dove
Strelley
Strelley West
Mallina
Indee
Mac Well
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
80% (pegmatite minerals)*
100% (pegmatite minerals)*
100% (pegmatite minerals)
100%*
100%*
100%*
100%*
100%*
100%*
100%
100%*
100%*
100%*
100% (pegmatite minerals)*
Application
Application
100%*
100%*
Note: * Tenement subject to Altura Lithium Farm‐In Agreement
24
Canadian Tenement Schedule
Tenement
Location
Interest in
Tenement
Tenement
Location
Interest in
Tenement
2116146
2116154
2116155
2116156
2183454
2183455
2187651
2187652
2192470
2192471
2194819
2195725
2219206
2219207
2219208
2219209
2240226
2240227
2247100
2247101
2472424
2472425
2480180
2507910
1133877
2415443
2415444
Authier, Québec
Authier, Québec
Authier, Québec
Authier, Québec
Authier, Québec
Authier, Québec
Authier, Québec
Authier, Québec
Authier, Québec
Authier, Québec
Authier, Québec
Authier, Québec
Authier, Québec
Authier, Québec
Authier, Québec
Authier, Québec
Authier, Québec
Authier, Québec
Authier, Québec
Authier, Québec
Authier, Québec
Authier, Québec
Authier, Québec
Authier, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
2436732
2436733
2436734
2438472
2438473
2438474
2438475
2438476
2438477
2438478
2438723
2440836
2440837
2440838
2440839
2440840
2440841
2440842
2440843
2440844
2440845
2440846
2440847
2440848
2440849
2440850
2440851
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
100%
100%
100%
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 2021 25
TENEMENT SCHEDULE
Tenement
Location
Interest in
Tenement
Tenement
Location
Interest in
Tenement
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
2440852
2440853
2440854
2440855
2440856
2440857
2440858
2440859
2440860
2440890
2440891
2440892
2440893
2440894
2440895
2440896
2440897
2440898
2440899
2440900
2440901
2440902
2440903
2440907
2440908
2440909
2440919
2440920
2440925
2440930
2440935
26
2440936
2440993
2440994
2450758
2519251
2519252
2519253
2519254
2519255
2519256
2519257
2519258
2519259
2519260
2519261
2519262
2519263
2519264
2519265
2519266
2519267
2519268
2519269
2519270
2519271
2519272
2519273
2519274
2519275
2519276
2519277
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
50%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
TENEMENT SCHEDULE
Tenement
Location
Interest in
Tenement
Tenement
Location
Interest in
Tenement
2519278
2519279
2519280
2519281
2519282
2519283
2519284
2519285
2519286
2519287
2519288
2519289
2519290
2519291
2519292
2519293
2519294
2519295
2519296
2519297
2519298
2519299
2519300
2519301
2519302
2519303
2519304
2519305
2519306
2519307
2519308
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
2519309
2519310
2519311
2519312
2519313
2519314
2519315
2519316
2519317
2519318
2519319
2519320
2519321
2519322
2519323
2519324
2572665
2572666
2572667
2572668
2572669
2572670
2572671
2572672
2572673
2572674
2572675
2572676
2572677
2572678
2572679
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
100%
100%
100%
100%
100%
100%
100%
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 2021 27
TENEMENT SCHEDULE
Tenement
Location
Interest in
Tenement
Tenement
Location
Interest in
Tenement
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
2572680
2572681
2572682
2572683
2572684
2572685
2572686
2572687
2572688
2572689
2572690
2572691
2572692
2572693
2572694
2572695
2572696
2572697
2572698
2572699
2572700
2572701
2572702
2572703
2579261
2579262
2579263
2579264
2579265
2579266
2579267
28
2579268
2579269
2579270
2579271
2601761
2601762
2601763
2601764
2601765
2601766
2601767
2601768
2601769
2601770
2601771
2601772
2601773
2601774
2601775
2601776
2601777
2601778
2601778
2601780
2601781
2601782
2601783
2601784
2601785
2601786
2601787
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
TENEMENT SCHEDULE
Tenement
Location
Interest in
Tenement
Tenement
Location
Interest in
Tenement
2601788
2601789
2601790
2601791
2601792
2601793
2601794
2601795
2601796
2601797
2601798
2601799
2601803
2601804
2601805
2601806
2601807
2601808
2601809
2601810
2601811
2601812
2601813
2601814
2601815
2601816
2601817
2601818
2601819
2601820
2601821
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
2601822
2601823
2601824
2601825
2601826
2601827
2601828
2601829
2601830
2601831
2601832
2601833
2601834
2601835
2601836
2601837
2601838
2601839
2601840
2601841
2601862
2601863
2601864
2601865
2601866
2601867
2601868
2601869
2601870
2601871
2601872
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
100%
100%
100%
100%
100%
100%
100%
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 2021 29
TENEMENT SCHEDULE
Tenement
Location
Interest in
Tenement
Tenement
Location
Interest in
Tenement
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
2601918
2601922
2603761
2603762
2603763
2603764
2603765
2603766
2603767
2603768
2603769
2603770
2603771
2603772
2603773
2603774
2603775
2603776
2603777
2603778
2603779
2603780
2603781
2603782
2603783
2603784
2603785
2603786
2603787
2603788
2603789
30
2603790
2603791
2603792
2603793
2603794
2603795
2603796
2603797
2603798
2603799
2603800
2603801
2603802
2603803
2603804
2603805
2603806
2603807
2603808
2603809
2603810
2603811
2603812
2603813
2603814
2603815
2603816
2603817
2603818
2603819
2603820
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
TENEMENT SCHEDULE
Tenement
Location
Interest in
Tenement
2603821
2603822
2603823
2603824
2603825
2603826
2603827
2603828
2603829
2603830
2603831
2603832
2603833
2603834
2603835
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
Tansim, Québec
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
Sayona Mining Limited I Annual Report 2021 31
RESOURCES AND RESERVES
In September 2018 Sayona
announced updated Resource and
Reserve estimates for the Authier
project.
A DFS, completed in September
2018, demonstrated the technical
and financial viability of constructing
an open-cut mining operation and
processing facility producing
spodumene concentrate. This was
confirmed by a revised DFS,
completed in November 2019.
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:
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 north-west 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.
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
Measured Resource
Indicated Resource
Measured + Indicated Resource
Inferred Resource
Total Resource
Tonnes (Mt)
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
32
QUÉBEC HAS BEEN A
LONG-TERM SUPPORTER
OF THE LITHIUM SECTOR,
RECOGNISING ITS
IMPORTANCE AS A CRITICAL
MINERAL IN LITHIUM-ION
BATTERY PRODUCTION.
THE PROVINCIAL
GOVERNMENT IS FOCUSED
ON DEVELOPING A
COMPLETE LITHIUM VALUE
CHAIN FROM MINING
THROUGH TO
DOWNSTREAM
PROCESSING.
Sayona Mining Limited I Annual Report 2021 33
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 2021. 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 2021 and is to be read in conjunction with this Directors’ Report.
DIRECTORS
The Directors of the Company during or since the end of the financial year are listed below. During the
year, there were 15 meetings of the full Board of Directors. The meetings attended by each Director were:
DIRECTOR
B. L. Lynch
P.A. Crawford
A. C. Buckler
J. S. Brown
D.C. O’Neill *
ELIGIBLE TO
ATTEND
15
15
15
15
11
ATTENDED
15
15
15
14
11
Mr O’Neill resigned as a Non-Executive Director on 25 January 2021.
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:
Brett L Lynch
Managing Director
Qualifications
Experience
Company Director Diploma; Graduate Diploma of Business (Accounting);
Bachelor of Engineering (Mining) (Honours).
Appointed a Director on 1 July 2019. An experienced International Company
Director and CEO with a strong background in mining and mining related
businesses across Australia, Asia, USA, Russia and emerging markets.
Global executive and leadership experience with a focus on commercial
results and owner/shareholder value. International Business Development
Manager with proven ability to translate opportunities to outcomes.
Interest in Shares
106,701,619 ordinary shares, 45,159,884 listed options and 4,000,000
unlisted options.
Directorships in other
listed entities during the 3
years prior to current year
Nil
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.
34
DIRECTORS’ REPORT
Interest in Securities
150,288,108 ordinary shares and 14,949,186 listed options.
Directorships in other
listed entities during the 3
years prior to current year
Nil
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 several
leading mining and port operations in both Australia and 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
118,690,114 ordinary shares.
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 include
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
872,094 unlisted options.
Directorships in other
listed entities during the 3
years prior to current year
DIVIDENDS
Altura Mining Limited
No dividends were declared or paid during the financial year.
Sayona Mining Limited | Annual Report 2021 35
DIRECTORS’ REPORT
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
23 August to 29 November 2019
29 November 2019
29 November 2019
29 April to 7 August 2020
23 July 2022
29 November 2021
29 November 2022
29 April 2023
3.0 cents
3.0 cents
4.0 cents
2.0 cents
70,396,579
4,000,000
4,000,000
328,753,198
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 and unlisted shareholder options, together with unlisted employee options are set
out in the state of affairs section of this report and Note 16 in the financial report.
No person entitled to exercise the option had or has any right by virtue of the option to participate in any
share issue of any other body corporate.
Since the end of the year, an additional 13,200,000 unlisted options were granted over unissued shares
and were exercised.
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.
36
DIRECTORS’ REPORT -
OPERATING AND FINANCIAL REVIEW
PRINCIPAL ACTIVITY
The consolidated Group’s principal activity during the financial year continued as the identification,
acquisition and evaluation of mineral exploration assets, focusing on lithium. During the year, the
Company advanced permitting and lodged a revised bid to acquire the assets of North American
Lithium Inc., a lithium miner and processing plant operator in Quebec, Canada. In addition,
exploration activity continued on a number of projects in Australia and Canada including, in respect of
the Australian projects, entering into revised earn-in arrangements with Altura Mining Ltd.
NAL acquisition was completed on 30th August 2021 after obtaining Court Approval from Canada’s
Superior Court.
There were no other 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. The integration of
NAL with Sayona’s flagship Authier Lithium project will transform both operations and create a world-
scale Abitibi lithium hub. It will also advance plans for downstream processing in Quebec, taking
advantage of its environmental and economic advantages including low cost, renewable hydropower,
an established mining services industry and proximity to the North American battery market.
In January 2021, Sayona entered into a strategic partnership with Piedmont Lithium Limited to
expedite the Company’s growth plans in Québec and to enhance access to the US markets and
investors.
Under the agreement, Piedmont acquired a 19.9% equity interest in Sayona for approximately US$7
million. Piedmont also agreed to invest approximately US$5 million for a 25% stake in Sayona
Québec.
Future activity of Sayona Québec, including NAL, will be jointly funded by Sayona 75% and Piedmont
25%.
OPERATING RESULTS
The entity’s consolidated operating loss for the financial year after applicable income tax was
$4,379,498 (2020: $5,403,751). Tenement acquisition, exploration and evaluation expenditure during
the year totalled $4,395,428 (2020:$3,438,587).
REVIEW OF OPERATIONS
The Company’s primary focus during the year has been on completing the studies and seeking the
approvals required to commence the development of the Authier Lithium Project. Authier is a near-
term development project and cash-flow generation opportunity. In concert with the Company’s
primary focus, the Company has sought and been given approval to acquire NAL. The Company
believes it will create significant share value-uplift potential for shareholders as these projects
advance towards commercial development.
Sayona’s focus during the year has been two pronged; firstly, the development of its lithium assets, in
particular its flagship project, the advanced stage Authier Lithium Project (Authier) in Québec,
Canada, but also working to realise value from its lithium and gold tenements in Western Australia.
The second focus for Sayona during the period has been its bid for the North American Lithium (NAL)
mine in Québec. Sayona considers NAL a near-term growth opportunity, given its proximity to the
Company’s flagship Authier Lithium Project.
Sayona Mining Limited | Annual Report 2021 37
DIRECTORS’ REPORT -
OPERATING AND FINANCIAL REVIEW
There are substantial synergies with the Authier project offering opportunities for the integration of
both operations enhancing overall operational efficiencies and output. The successful bid for NAL
(post balance date) now offers the fastest pathway for Sayona to becoming a world-scale producer
and achieving the Company’s goal of advancing from junior explorer to mid-tier miner and producer.
Authier Lithium Project
Authier is a hard rock spodumene lithium deposit scheduled for development as an open cut mine,
producing a 6% spodumene concentrate. Pending regulatory approvals, mining operations could
commence as early as 2023. Authier will be used as a “feed” source of raw materials to the NAL
production facility.
A drilling campaign was initiated in 2021 to expand the current ore resource, improve the strip ratio
and to accelerate production to enhance its profitability. Some 31 drill holes are planned for a total of
approximately 4,500m of diamond drilling. The drilling campaign is also testing for potential repetition
of lithium pegmatite in the southern lease sector.
The drilling is being conducted by Les Forages Pikogan, a member of the Algonquin Abitibiwinni
community of Pikogan (First Nation Abitibiwinni), with whom Sayona has an exploration agreement.
The agreement provides benefits for the Pikogan, both economic and in terms of sustainable
development, and is a tangible demonstration of Sayona’s commitment to the First Nations
community.
As part of the Authier approval process, Sayona produced a revised Environmental Impact Statement
(EIS), a rigorous scientific study containing all the necessary documentation in accordance with the
environmental impact assessment and review procedures under Québec’s Environmental Quality Act.
Sayona received further feedback from Quebec’s Ministry of the Environment and the Fight Against
Climate Change (MELCC) regarding areas such as road access, flora and fauna and air quality, which
are normal for a project of this nature. The Company continues to work through questions raised.
Sayona continues to engage closely with all stakeholders, including local municipalities, landowners,
First Nations communities, non-‐governmental organisations and other stakeholders, with the
engagement effort led by its local team in Québec.
North American Lithium bid
Sayona’s acquisition of North American Lithium (NAL) is seen as an opportunity to fast-track the
company’s expansion plans. NAL has a lithium mine and concentrator located in Abitibi, in close
proximity to the Authier Project in Québec. Combining ore produced from Authier with ore produced
at NAL would provide the opportunity for a significant improvement in plant performance and
economics of scale.
In February 2021, Sayona was requested to resubmit an official bid backed by a world-class advisory
team comprising operational, engineering, financial and other necessary expertise, including former
NAL management.
On 30 June 2021, the Superior Court of Québec (Commercial Division) granted an approval and
vesting order regarding the Group’s (75%) joint bid with Piedmont Lithium Inc. (25%) for the
acquisition by Sayona Québec Inc. of NAL. Under the Share Purchase Agreement, entered into
between Sayona Québec and NAL, at completion of the transaction, Sayona Québec will acquire all
the issued and outstanding shares of NAL, which will keep substantially all its assets. The order of the
Superior Court of Québec provides that the NAL assets will be free and clear of any encumbrances
other than certain specific permitted encumbrances.
38
DIRECTORS’ REPORT -
OPERATING AND FINANCIAL REVIEW
On 30 August 2021, the Company completed the acquisition of NAL. Now that the acquisition of NAL
is completed it is expected to fast-track the Group to becoming a world-scale spodumene producer,
advancing from junior explorer to mid-tier miner with potentially three operating mines supplying a
central concentrator. It would also secure local jobs and investment and support Québec’s plans for a
clean energy future based on the development of its own battery industry.
Tansim Project
The Tansim Project (Tansim) is situated south-‐west of the Authier Project in Québec and is
prospective for lithium, tantalum and beryllium.
Mineralisation is hosted within spodumene-‐bearing pegmatite intrusions striking east-‐west, dipping to
the north and hosted by metasedimentary – metavolcanic rocks of the Pontiac sub-‐province.
Tansim, in conjunction with the Authier Project and NAL will enable Sayona to become a world-scale
producer with three spodumene mines supplying a central concentrator to feed the North American
battery markets.
During the year, Sayona announced the expansion of the project with the application and grant of an
additional 215 claims, bringing the project to a total of 355 claims, covering 20,256 ha of prospective
lithium ground.
Western Australian Assets
Sayona’s leases in Western Australia cover 1,141 sq km and comprise lithium tenure in the Pilbara and
Yilgarn areas and graphite tenements in the East Kimberley, together with prospective gold
mineralisation. The Pilbara projects cover 971 sq km’s and are centred in the world-class Pilgangoora
lithium district.
In August 2019, Sayona announced an Earn-‐In agreement with Altura Mining Limited (Altura). During
the year, the Company terminated that agreement and resumed responsibility for its Pilbara gold and
lithium tenements. Altura had not earned any interest in the tenements during the period up to the
termination.
On 2 June 2021, the Company announced that it had established a new Earn-In Agreement with
Altura, subject to due diligence. This new agreement covers a number of tenements and will enable
the Group to maximise the value of its Western Australia exploration assets.
Under the terms of the new agreement, Altura with spend AUD$1.5 million on exploration across the
Pilgangoora project portfolio over a three-‐year period, earning a 51% interest. Sayona will retain the
remaining project interest and the right to contribute to project evaluation and development in the
future to participate in the upside potential.
Sayona will retain 100% of the projects not included in the Earn-in agreement and continues to
manage and to invest in those projects as part of the Group’s strategy for Western Australian assets.
FINANCIAL POSITION, CONTINUED OPERATIONS AND FUTURE FUNDING
At 30 June 2021, the Company's Statement of Financial Position shows total assets of $71,721,323
(2020: $22,190,444), of which $35,502,596 (2020: $492,660) was cash, total liabilities of $3,835,196
(2020: $1,044,716) and net assets of $67,886,127 (2020: $21,145,728).
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.
Sayona Mining Limited | Annual Report 2021 39
DIRECTORS’ REPORT -
OPERATING AND FINANCIAL REVIEW
The ability of the Group to execute its currently planned activities requires the Group to raise
additional capital within the next 12 months. Subsequent to year end, the Company raised AUD$45
million through a placement and a further AUD$20 million through a Share Purchase Plan which was
heavily oversubscribed. The Group has other initiatives in place to fund the Group’s activities.
During the year, Sayona entered into a strategic partnership with Piedmont Lithium Limited to
expedite the Company’s growth plans in Québec and to enhance access to the US market and
investors. Under the agreement, Piedmont acquired a 19.9% equity interest in Sayona for
approximately US$7 million and a 25% interest in Sayona Québec for US$5 million. Future activity of
Sayona Québec, including NAL, will be jointly funded by Sayona 75% and Piedmont 25%.
During the period the Company was given approval by the Superior Court as the successful bidder
for the North American Lithium (NAL) mine in Québec. NAL is considered a near-term growth
opportunity, given its proximity to the Company’s flagship Authier Lithium Project. Subsequent to
year end, the acquisition of NAL was finalised.
The Directors believe that the Group is in a strong and stable financial position to grow its current
operations.
SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS
Significant changes during the year included:
• During the year, the Company entered into a Share Placement Agreement with Battery Metals
Capital Group, LLC. The agreement provides for a US$2 million prepayment of a placement of
ordinary shares worth US$2.18 million. At balance date, Battery Metals had advanced US$2
million to the Group and new shares to the value of US$2.18 million had been issued. The
facility was terminated in January 2021.
•
In January 2021, Sayona announced a strategic partnership with Piedmont to expedite the
Company’s growth plans in Québec and to enhance access to the US market and investors.
Under the agreement, Piedmont acquired an initial 9.9% equity interest in Sayona and two
unsecured convertible notes, which upon conversion, would result in Piedmont being issued a
further 10% of Sayona’s issued capital for a total consideration of around US$7 million.
Piedmont also agreed to invest approximately US$5 million for a 25% stake in subsidiary,
Sayona Québec.
The convertible notes were exercised on 10 June 2021.
In addition, Piedmont signed a binding offtake arrangement under which it will acquire up to
60,000 tonnes per annum of spodumene concentrate or 50% of Sayona Québec’s production,
whichever is greater, for Piedmont’s planned lithium hydroxide plant in North Carolina, USA.
• On 27 April 2021, the Company issued 638,468,200 new shares, pursuant to a fully
underwritten 1 for 6 renounceable entitlement issue to raise up to approximately A$20.4 million,
before costs.
• During the financial year, the Company activated the Controlled Placement Agreement (CPA)
with Acuity Capital and subsequently issued a total of 163,700,000 shares to raise $6,450,000.
On 29 April 2021, the Company increased the current CPA limit of $3 million to a new limit of
$15 million and extended the expiry date to 31 July 2023. The agreement provides the Group
with standby equity capital of up to $15 million over the period to 31 July 2023.
• On 2 June 2021, the Company announced a revised Earn-‐in Agreement with lithium producer
Altura Mining Limited, over a number of Sayona’s Western Australian lithium tenements. This
follows the termination of the previous agreement where no interest in the tenements was
earned.
40
DIRECTORS’ REPORT -
OPERATING AND FINANCIAL REVIEW
• On 30 June 2021, the Superior Court of Québec (Commercial Division) granted an approval
and vesting order regarding the Sayona group’s (75%) joint bid with Piedmont Lithium Inc.
(25%) for the acquisition by Sayona Québec Inc. of NAL.
Under the Share Purchase Agreement, entered into between Sayona Québec and NAL, at
completion of the transaction, Sayona Québec will acquire all the issued and outstanding
shares of NAL, which will keep substantially all its assets. The order of the Superior Court of
Québec provides that the NAL assets will be free and clear of any encumbrances other than
certain specific permitted encumbrances.
• During the year, the Company issued 85,111,521 new shares as a result of the conversion of
options. Total funds raised were $1,279,843.
•
•
Including the above share issues and others in the year (refer Note 16 in the financial
statements), the Company issued a total of 2,684,736,675 shares in the year and $43.8 million
of capital was raised. A total of 262,260,432 options were issued, and a total of 85,111,521
options were exercised.
Impacts on the Group, during the year and subsequent, of the COVID-19 pandemic are
outlined below.
SIGNIFICANT EVENTS AFTER BALANCE DATE
• On 2 June 2021, the Company announced that it had established a new (revised) Earn-in
agreement with Altura that was subject to due diligence. On 6th August, Altura announced that
it had completed its due diligence on the Pilbara lithium projects, with the Earn-In period
commencing immediately. The Earn-In covers a number of the Group’s lithium tenements in
Western Australia, with Altura to spend AUD$1.5 million on exploration within three years to
earn a 51% interest.
• On 12 July 2021, the Group completed a share placement, raising AUD$45 million (before
costs) to fund the NAL acquisition.
• On 25 August 2021, the Company completed a Share Purchase Plan (SPP), resulting in the
issue of 266,666,917 new shares to raise A$20m. On 24 August 2021, the Company
announced that it listed on the OCTQB Venture Market in the US under the stock code
‘SYAXF’.
• On 30 August 2021, the Group announced that the acquisition of North American Lithium (NAL)
has now been successfully completed. The purchase cost was approximately C$198m, made
of a cash component of C$98m and assumed debt of approximately C$112m.
• On 30 September 2021, the Group announced plans to acquire a 60% interest in the Moblan
Lithium project in Quebec from Guo Ao Lithium Ltd for consideration of US$86.5 million. The
transaction is subject to financing and other customary conditions.
• In March 2020, the World Health Organisation declared the outbreak of a novel coronavirus
(COVID-19) as a pandemic, which continued to spread throughout Australia and the world. The
spread of COVID-19 has caused significant volatility in Australian and international markets.
There is significant uncertainty around the breadth and duration of business disruptions related
to COVID-19, as well as its impact on Australian and international economies.
The Group’s core business is mineral exploration and development in Australia and Canada.
Throughout the year and to the date of this report the Group has not experienced any
significant adverse impact. Government directives and travel restrictions, primarily in Quebec,
have limited the Group’s ability to undertake some activity. The situation has eased
significantly recently and operations are returning to normal.
Sayona Mining Limited | Annual Report 2021 41
DIRECTORS’ REPORT -
OPERATING AND FINANCIAL REVIEW
The Directors are actively monitoring the Group’s financial condition, operations and workforce.
Although the Group cannot estimate the length or gravity of the impacts of these events at this time, if
the pandemic continues beyond the short-term or worsens, then this may have an adverse effect on
the Group’s results of future operations, financial position and liquidity in the financial year 2022.
No other matters or key events have arisen since 30 June 2021 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 permitting process, required to
commence the development of the Authier project and the acquisition of the North American Lithium
assets. Authier is a near-term development project and cash-flow generation opportunity. The
Company plans to combine ore extracted from Authier with ore extracted at NAL to facilitate a
significant improvement in plant performance and economics. The Company believes it will create
significant share value-uplift potential for shareholders as the project advances towards development.
The Company’s strategic focus will continue to be on the development of Authier, the resumption of
operations at NAL, and the exploration and evaluation of its other assets. The assets range from early
stage exploration to advanced projects with potential for advancement to production. Australia n
projects’ exploration will be undertaken through the Altura Agreement and through direct
management of the projects outside of the agreement.
To complete mine development at the Authier Project and refurbishment/restart of the NAL assets, 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:
• all relevant approvals are obtained to conduct proposed operations;
•
• potential delays arising through the various stages to commissioning of the Authier and other
technical works will not achieve the results expected;
projects;
•
restart of NAL’s spodumene concentrate operations may take longer and be more expensive
than initially expected;
• exploration and evaluation success on individual projects; and
•
the ability to raise additional funds in the future.
42
DIRECTORS’ REPORT -
OPERATING AND FINANCIAL REVIEW
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. In addition, the Authier project is subject to review procedures under the
BAPE (bureau d'audiences publiques sur l’environnement) as the Company seeks permitting approval
to develop and operate a new mine.
The technical studies for the future restart of the NAL spodumene concentrate operations are
expected to provide the Directors with the necessary information/ technical details of the
environmental regulations as they apply to the manufacturing operations.
The Directors are not aware of any compliance breach arising during the year and up to the date of
this report.
CORPORATE GOVERNANCE
Sayona’s Corporate Governance Statement is available on the Company’s website
www.sayonamining.com.au/corporate-governance.
Sayona Mining Limited | Annual Report 2021 43
DIRECTORS’ REPORT –
REMUNERATION REPORT
REMUNERATION POLICY
The Company’s remuneration policy 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 Key Management
Personnel (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 shares/options 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
their remuneration annually, based on market practice, duties and accountability.
reviews
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.
44
DIRECTORS’ REPORT –
REMUNERATION REPORT
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.
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 shares/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,
subject to volatility in commodity prices and financial markets.
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 ($)
5,921,618
3,438,587
4,395,428
Exploration Tenements (no. including applications)
185
184
400
2019
2020
2021
Net Assets ($)
Share Price at Year-end ($)
Dividends Paid ($)
21,223,571
21,145,728
67,886,127
0.008
Nil
0.008
Nil
0.09
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 (shares/cash, excluding options).
Key
Management
Personnel
Position held at 30 June
2021 & change during
the year
Proportion of Remuneration:
Contract Details
(Term)
Related to
performance
Not related to
performance
Shares/Cash Salary & Fees
B Lynch
CEO/Managing Director
P Crawford
Executive Director
Company Secretary
A Buckler
Non-Executive Director
J Brown
Non-Executive Director
D O’Neill
Non-Executive Director
No fixed term, 3
months’ notice to
terminate.
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
Resigned 25
January 2021
-/-
-/-
-/-
-/-
-/-
100%
100%
100%
100%
100%
Sayona Mining Limited | Annual Report 2021 45
DIRECTORS’ REPORT –
REMUNERATION REPORT
Employment Contract of Chief Executive Officer
Mr Brett Lynch was appointed Chief Executive Officer of the Group on 1 July 2019. The Company has
entered into a contract of service with Mr Lynch.
Under the agreement, the Company may terminate the Chief Executive Officer's contract by giving 3
months’ notice. In the case of serious misconduct the Company can terminate employment at any
time. If the Company terminates the agreement within the first twelve months of employment or in the
event of a change of control transaction involving the Company his employment is involuntarily
terminated without cause, Mr Lynch will be entitled to twelve months’ notice or payment in lieu of
notice.
The contract provides for the payment of short-term cash or equity incentives and equity based long-
term incentives. The contract provides for an annual review of the compensation value. The terms of
this agreement are not expected to change in the immediate future.
CHANGES IN DIRECTORS AND EXECUTIVES SUBSEQUENT TO YEAR-END
Mr Dennis O’Neill resigned as a Non-Executive Director on 25 January 2021. There have been no
other changes to Directors or executives since the end of the financial year.
REMUNERATION EXPENSE DETAILS (KMP)
The remuneration of each Director of the Company during the year is detailed in the following table.
Amounts have been calculated in accordance with Australian Accounting Standards.
2021
Short Term Benefits
Equity Settled
Key
Management
Personnel
Salary &
Fees
B Lynch
P Crawford
D O’Neill
A Buckler (1)
J Brown
Total
325,000
278,310
36,521
72,000
72,000
783,831
Move’t in
AL
balance
31,254
-
-
-
-
31,254
Total
Salary &
Fees
356,254
278,310
36,521
72,000
72,000
815,085
Bonus
(2)
903,000
73,500
-
-
-
976,500
Non-
Cash
Benefits
-
-
-
-
-
-
Shares Options
-
-
-
-
-
-
-
-
-
-
-
-
Post
Employ’t
benefits
25,000
21,690
5,479
-
-
52,169
Long
Term
Benefits
-
-
-
-
-
-
Total
1,284,254
373,500
42,000
72,000
72,000
1,843,754
2020
Short Term Benefits
Key
Management
Personnel
Salary &
Fees
B Lynch
D O’Neill
P Crawford
A Buckler (1)
J Brown
Total
317,945
170,785
282,648
72,000
72,000
915,378
Move’t in
AL
balance
31,255
-
-
-
-
Total
Salary &
Fees
349,200 140,000
170,785
282,648
72,000
72,000
-
-
-
-
Bonus Non-Cash
Benefits
Equity Settled
Shares Options
-
20,000
12,050
-
-
-
-
-
-
-
-
-
-
-
-
31,255
946,633 140,000
-
20,000
12,050
Post
Employ’t
benefits
30,205
14,215
17,352
-
-
61,772
Long
Term
Benefits
-
-
-
-
-
-
Total
551,455
185,000
300,000
72,000
72,000
1,180,455
(1) Represents payments made to Shazo Holdings Pty Ltd, an entity controlled by Mr Allan Buckler,
to provide directorial and technical services.
(2) Represents an accrual of bonus payable, pending settlement of the bonus structure.
46
DIRECTORS’ REPORT –
REMUNERATION REPORT
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.
SHARES ISSUED AS REMUNERATION
No shares were granted as remuneration to KMP during the current year. KMP may hold other shares
acquired in their capacity as shareholders.
In the prior year, Mr Lynch received 2,000,000 ordinary shares on 29 November 2019 valued at $0.01
each as remuneration.
OPTIONS GRANTED AS REMUNERATION
No options were granted as remuneration to KMP during the current year. KMP may hold other
options acquired in their capacity as shareholders.
Options granted as remuneration consist of:
Grant Details
Exercised
Lapsed
KMP
Balance
1 July
2020
Issued
Date
No.
Value
$
No.
Value $
No.
B Lynch
2,000,000
B Lynch
2,000,000
-
-
-
-
-
-
-
-
-
-
-
-
Balance
30 June
2021
2,000,000
2,000,000
DESCRIPTION OF OPTIONS ISSUED AS REMUNERATION
Details of options granted by Sayona Mining Limited as remuneration to those KMP listed in the
previous table are as follows:
Grant Date
Entitlement on
Exercise
Dates
Exercisable
Exercise
Price
Value per
Option at
Grant Date
Amount
Paid/Payable by
Recipient
29.09.19
29.09.19
1:1 ordinary
share
1:1 ordinary
share
From vesting to
29.09.21
From vesting to
29.09.22
3.0 cents
0.2648 cents
4.0 cents
0.3377 cents
-
-
Option values at grant date were determined using the binomial valuation method. These are the
only remuneration options held by KMP.
Sayona Mining Limited | Annual Report 2021 47
DIRECTORS’ REPORT –
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
Balance
1 July 2020
Remun-
eration
Exercise of
Options
Other
Changes (**)
Balance
30 June
2021
B Lynch
D O'Neill (***)
P Crawford
A Buckler
J Brown
Total
79,819,767
89,587,664
128,483,108
157,808,253
6,164,565
461,863,357
-
-
-
-
-
-
-
-
-
-
-
25,681,852
105,501,619
(40,027,000)
49,560,664
21,005,000
149,488,108
(32,000,000)
125,808,253
(6,164,565)
-
(31,504,713)
430,358,644
** Share trades and participation in share issues (in capacity as shareholders)
*** Year-end balance for Mr O’Neill represents his holding at the time of his resignation
OTHER EQUITY-RELATED KMP TRANSACTIONS
Options held by KMP at 30 June 2021:
B Lynch
D O’Neill
45,159,884 listed options and 4,000,000 unlisted options
625,000 listed options and 872,094 unlisted options
P Crawford
14,949,186 listed options
A Buckler
29,941,861 listed options
J Brown
872,094 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, customer or supplier relationships on terms no more favourable than those reasonably
expected 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.
Brett Lynch
Managing Director
Signed: 30 September 2021
Brisbane, Queensland
Paul Crawford
Director
48
Auditor’s Independence Declaration
Under Section 307C of the Corporations Act 2001
To the Directors of Sayona Mining Limited
As lead auditor for the audit of Sayona Mining Limited I declare that, to the best of my knowledge
and belief, during the year ended 30 June 2021 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: 30 September 2021
Sayona Mining Limited | Annual Report 2021 49
FINANCIAL STATEMENTS 2021
50 CONTENTS
52
Statement of Profit and Loss
and Comprehensive Income
53
Statement of
Financial Position
54
Statement of
Changes in Equity
55
Statement of
Cash Flows
56
Notes to the
Financial Statements
84
Directors’
Declaration
85
Independent
Auditor’s Report
Sayona Mining Limited | Annual Report 2021 51 SAYONA MINING LIMITED AND CONTROLLED ENTITIES
ABN 26 091 951 978
STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2021
Consolidated Group
Note
2021
$
2020
$
Revenue and other income
2
645,387
60,429
Administration and Corporate expenses
Exploration expenditure expensed during year
Employee benefit expense
Foreign exchange losses
(3,059,119)
(81,708)
(1,884,058)
-
(2,261,051)
(1,682,996)
(1,473,782)
(46,351)
Loss before income tax
Tax expense
Loss for the year
3
4
(4,379,498)
(5,403,751)
-
-
(4,379,498)
(5,403,751)
Other comprehensive income
Items that will be reclassified subsequently to profit or
loss when specific conditions are met:
Exchange differences on translating foreign operations
(18,639)
(409,386)
Items that will not be reclassified subsequently to profit
or loss
-
-
Other comprehensive income/(loss) for the year
(18,639)
(409,386)
Total comprehensive income or (loss) for the year
(4,398,137)
(5,813,137)
Total comprehensive loss attributable to:
- members of the Company
- non-controlling interest
Earnings per Share:
(4,379,498)
-
(4,379,498)
(5,403,751)
-
(5,403,751)
Basic and diluted earnings per share (cents per share)
6
(0.13)
(0.26)
Dividends per share (cents per share)
-
-
The accompanying notes form part of these financial statements.
52
SAYONA MINING LIMITEDAND CONTROLLED ENTITIES
ABN 26 091 951 978
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 3O JUNE 2021
ASSETS
CURRENT ASSETS
Cash and cash equivalents
Trade and other receivables
Other assets
Total Current Assets
NON-CURRENT ASSETS
Property, plant and equipment
Exploration and evaluation asset
Right of Use Asset
Total Non-Current Assets
TOTAL ASSETS
LIABILITIES
CURRENT LIABILITIES
Trade and other payables
Lease Liability
Provisions
Total Current Liabilities
NON-CURRENT LIABILITIES
Lease Liability
Total Non-Current Liabilities
TOTAL LIABILITIES
NET ASSETS
EQUITY
Issued capital
Reserves
Accumulated losses
Non-controlling Interests
TOTAL EQUITY
Consolidated Group
Note
2021
$
2020
$
8
9
10
11
12
13
14
13
15
13
16
17
35,502,596
10,412,500
43,648
45,958,744
492,660
228,361
38,864
759,885
162,222
25,552,728
47,629
25,762,579
151,720
21,193,106
85,733
21,430,559
71,721,323
22,190,444
3,665,560
37,540
116,872
3,819,971
15,224
15,224
894,189
37,540
61,429
993,158
51,558
51,558
3,835,195
1,044,716
67,886,127
21,145,728
128,727,789
304,633
(67,643,223)
6,496,928
67,886,127
84,930,181
328,454
(64,112,907)
-
21,145,728
The accompanying notes form part of these financial statements.
Sayona Mining Limited | Annual Report 2021 53
SAYONA MINING LIMITEDAND CONTROLLED ENTITIES
ABN 26 091 951 978
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2021
Consolidated Group
Share
Capital
Accumulated
Losses
Foreign
Currency
Translatio
n Reserve
Option
Reserve
Non-
Controlling
Interests
$
$
$
$
Balance at 30 June 2019
79,309,022
(58,709,156)
623,705
-
-
-
(5,403,751)
-
-
(409,386)
(5,403,751)
(409,386)
-
-
-
-
Total
$
21,223,571
(5,403,751)
(409,386)
(5,813,137)
Loss attributable to members
of the entity
Other comprehensive
income for the year
Total comprehensive income
for the year
Transactions with owners
in their capacity as owners
Shares issued during the
year
Transaction costs
Share based payments
16
23
5,999,379
(378,220)
-
-
-
-
-
-
-
-
-
-
114,135
-
114,135
-
-
-
-
-
5,999,379
(378,220)
114,135
5,735,294
Total transactions with
owners
5,621,159
Balance at 30 June 2020
84,930,181
(64,112,907)
214,319
114,135
- 21,145,728
Loss attributable to members
of the entity
Other comprehensive
income for the year
Total comprehensive income
for the year
Transactions with owners
in their capacity as owners
Shares issued during the
year
Transaction costs
Share based payments
Reserve transferred to
retained earnings
Recognition of Non-
Controlling Interests
Total transactions with
owners
16
23
27
-
-
(4,379,498)
-
-
(18,639)
-
(4,379,498)
(18,639)
-
-
-
-
(4,379,498)
-
(18,639)
-
(4,398,137)
47,008,233
(3,210,625)
-
-
-
-
-
-
-
-
-
844,000
- 47,008,233
(3,210,625)
-
-
-
849,182
(849,182)
-
-
6,496,928
6,496,928
43,797,608
849,182
-
(5,182) 6,496,928 51,138,536
Balance at 30 June 2021
128,727,789
(67,643,223)
195,680
108,953 6,496,928 67,886,127
The accompanying notes form part of these financial statements.
54
SAYONA MINING LIMITEDAND CONTROLLED ENTITIES
ABN 26 091 951 978
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2021
CASH FLOWS FROM OPERATING ACTIVITIES
Payments to suppliers and employees
Government Subsidies
Interest received
Other income
Finance costs
Consolidated Group
Note
2021
$
2020
$
(10,736,509)
315,190
2,252
17,584
(773,636)
(2,846,654)
50,000
10,429
-
(790,130)
Net cash provided by (used in) operating activities
18
(11,175,119)
(3,576,355)
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property, plant and equipment
Capitalised exploration expenditure
11
12
(31,758)
(4,272,756)
(26,942)
(2,974,613)
Net cash provided by (used in) investing activities
(4,304,514)
(3,001,555)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issue of shares
Costs associated with share and option issues
Proceeds from minority interest investment in subsidiary
Proceeds from convertible note facility
Repayment of convertible notes
Repayment of lease liabilities
16
27
46,491,520
(2,167,693)
6,496,928
8,044,030
(8,044,030)
(36,334)
5,262,655
(337,367)
-
1,102,538
(783,790)
(34,738)
Net cash provided by (used in) financing activities
50,784,421
5,209,298
Net increase (decrease) in cash held
35,304,788
(1,368,612)
Cash at beginning of financial year
492,660
1,822,133
Effect of exchange rates on cash holdings in foreign
currencies
(294,852)
39,139
Cash at end of financial year
8
35,502,596
492,660
The accompanying notes form part of these financial statements.
Sayona Mining Limited | Annual Report 2021 55
SAYONA MINING LIMITED AND CONTROLLED ENTITIES
ABN 26 091 951 978
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2021
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
These consolidated financial statements and notes represent those of Sayona Mining Limited (“the
Company”) and Controlled Entities (the “Consolidated Group” or “Group”).
The separate financial statements of the parent entity, Sayona Mining Limited, have been presented
within this financial report as permitted by the Corporations Act 2001.
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.
Continued Operations and Future Funding
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.
The Group will need to source new funds to proceed with its Canada based projects. Net current asset
surplus of the Group at balance date totals $42,138,772, and cash balance was $35,502,596.
The ability of the Group to settle its liabilities and execute its currently planned activities requires the
Group to raise additional capital within the next 12 months. Because of the nature of its operations, the
Directors recognise that there is a need on an ongoing basis for the Group to regularly raise additional
cash to fund future exploration activity and meet other necessary corporate expenditure. Accordingly,
when necessary, the Group investigates various options for raising additional funds which may include
but is not limited to an issue of shares, borrowings, a farm-out of an interest in one or more exploration
tenements or the sale of exploration assets where increased value has been created through previous
exploration activity.
As set out in Note 24, since balance date the Group raised $65,000,000 of new capital. In addition, the
Group has a controlled placement agreement in place with standby capital of $15,000,000, drawn to
$6,450,000 at balance date (Note 30).
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 27.
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.
56
SAYONA MINING LIMITED AND CONTROLLED ENTITIES
ABN 26 091 951 978
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2021
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont’d)
Equity interests in a subsidiary not attributable, directly or indirectly, to the Group are presented as
“non-controlling interests”. The Group initially recognises non-controlling interests that are present
ownership interests in subsidiaries and are entitled to a proportionate share of the subsidiary’s net
assets on liquidation at either fair value or the non-controlling interests’ proportionate share of the
subsidiary’s net assets. Subsequent to initial recognition, non-controlling interests are attributed their
share of profit or loss and each component of other comprehensive income. Non-controlling interests
are shown separately within the equity section of the statement of financial position and statement of
comprehensive income.
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 as 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.
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, and 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.
The Company and its wholly-owned Australian resident entities have formed a tax-consolidated group
and are therefore taxed as a single entity from that date. The head entity within the tax-consolidated
group is Sayona Mining Limited. The members of the tax-consolidated group are identified in Note 27.
Tax consolidation
Tax expense/income, deferred tax liabilities and deferred tax assets arising from temporary differences
of the members of the tax-consolidated Group are recognised in the separate financial statements of
the members of the tax-consolidated Group using the “separate taxpayer within group” approach by
reference to the carrying amounts in the separate financial statements of each entity and the tax values
applying under tax consolidation.
Current tax liabilities and assets and deferred tax assets arising from unused tax losses and relevant tax
credits of the members of the tax-consolidated Group are recognised by the Company (as head entity
in the tax-consolidated Group). Tax funding and sharing arrangements are currently in place between
entities in the tax-consolidated Group.
Sayona Mining Limited | Annual Report 2021 57
SAYONA MINING LIMITED AND CONTROLLED ENTITIES
ABN 26 091 951 978
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2021
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont’d)
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 in profit or
loss. A formal assessment of the 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 the 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 4% and 40%.
The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at the end of
each reporting period.
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.
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.
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.
58
SAYONA MINING LIMITED AND CONTROLLED ENTITIES
ABN 26 091 951 978
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2021
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont’d)
Leases
At inception of a contract, the Group assesses if the contract contains or is a lease. If there is a lease
present, a right-of-use asset and a corresponding lease liability is recognised by the Group where the
Group is a lessee. However, all contracts that are classified as short-term leases (leases with remaining
lease term of 12 months or less) and leases of low value assets are recognised as an operating
expense on a straight-line basis over the term of the lease.
Initially the lease liability is measured at the present value of the lease payments still to be paid at
commencement date. The lease payments are discounted at the interest rate implicit in the lease. If this
rate cannot be readily determined, the Group uses the incremental borrowing rate.
Lease payments included in the measurement of the lease liability are as follows:
•
•
•
•
•
fixed lease payments less any lease incentives;
variable lease payments that depend on an index or rate, initially measured using the index or
rate at the commencement date;
the amount expected to be payable by the lessee under residual value guarantees;
the exercise price of purchase options, if the lessee is reasonably certain to exercise the
options;
lease payments under extension options if the lessee is reasonably certain to exercise the
options; and
• payments of penalties for terminating the lease, if the lease term reflects the exercise of an
option to terminate the lease.
The right-of-use assets comprise the initial measurement of the corresponding lease liability as
mentioned above, any lease payments made at or before the commencement date as well as any initial
direct costs. The subsequent measurement of the right-of-use assets is at cost less accumulated
depreciation and impairment losses.
Right-of-use assets are depreciated over the lease term or useful life of the underlying asset whichever
is the shortest.
Where a lease transfers ownership of the underlying asset or the cost of the right-of-use asset reflects
that the Group anticipates to exercise a purchase option, the specific asset is depreciated over the
useful life of the underlying asset.
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.
Sayona Mining Limited | Annual Report 2021 59
SAYONA MINING LIMITED AND CONTROLLED ENTITIES
ABN 26 091 951 978
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2021
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont’d)
Financial Instruments
Initial recognition and measurement
Financial assets and financial liabilities are recognised when the Group becomes a party to the
contractual provisions to the instrument. For financial assets, this is the date that the Group commits
itself to either the purchase or sale of the asset (ie trade date accounting is adopted).
Financial instruments are initially measured at fair value plus transaction costs, except where the
instrument is classified “at fair value through profit or loss”, in which case transaction costs are
expensed to profit or loss immediately.
Financial Liabilities
Financial liabilities are subsequently measured at amortised cost using the effective interest method.
The effective interest method is a method of calculating the amortised cost of a debt instrument and of
allocating interest expense in profit and loss over the relevant period. The effective interest rate is the
internal rate of return of the financial asset or liability. That is, it is the rate that exactly discounts the
estimated future cash flows through the expected life of the instrument to the net carrying amount at
initial recognition.
Financial assets
Financial assets are subsequently measured at amortised cost.
Measurement is on the basis of two primary criteria:
•
•
the contractual cash flow characteristics of the financial asset; and
the business model for managing the financial assets.
A financial asset that meets the following conditions is subsequently measured at amortised cost:
•
•
the financial asset is managed solely to collect contractual cash flows; and
the contractual terms within the financial asset give rise to cash flows that are solely payments
of principal and interest on the principal amount outstanding on specified dates.
Derecognition
Derecognition refers to the removal of a previously recognised financial asset or financial liability from
the statement of financial position.
Derecognition of financial liabilities
A liability is derecognised when it is extinguished (ie when the obligation in the contract is discharged,
cancelled or expires). An exchange of an existing financial liability for a new one with substantially
modified terms, or a substantial modification to the terms of a financial liability is treated as an
extinguishment of the existing liability and recognition of a new financial liability.
The difference between the carrying amount of the financial liability derecognised and the
consideration paid and payable, including any non-cash assets transferred or liabilities assumed, is
recognised in profit or loss.
Derecognition of financial assets
A financial asset is derecognised when the holder's contractual rights to its cash flows expires, or the
asset is transferred in such a way that all the risks and rewards of ownership are substantially
transferred.
All of the following criteria need to be satisfied for derecognition of a financial asset:
the right to receive cash flows from the asset has expired or been transferred;
§
§ all risk and rewards of ownership of the asset have been substantially transferred; and
§
the Group no longer controls the asset (ie the Group has no practical ability to make a
unilateral decision to sell the asset to a third party).
60
SAYONA MINING LIMITED AND CONTROLLED ENTITIES
ABN 26 091 951 978
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2021
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont’d)
On derecognition of a financial asset measured at amortised cost, the difference between the asset's
carrying amount and the sum of the consideration received and receivable is recognised in profit or
loss.
Impairment
The Group recognises a loss allowance for expected credit losses, using the simplified approach under
AASB 9, which requires the recognition of lifetime expected credit loss at all times.
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 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 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.
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.
Sayona Mining Limited | Annual Report 2021 61
SAYONA MINING LIMITED AND CONTROLLED ENTITIES
ABN 26 091 951 978
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2021
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont’d)
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 (Share Based) Payments
The Group uses shares and options to settle liabilities. 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. Amounts are initially recognised at
fair value, and subsequently measured at amortised cost.
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.
62
SAYONA MINING LIMITED AND CONTROLLED ENTITIES
ABN 26 091 951 978
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2021
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont’d)
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
The Group's only revenue is interest and sundry income items, recognised on an accrual basis.
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 taxation authority.
Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net
amount of GST recoverable from, or payable to, the taxation authority is included with other receivables
or payables in the statement of financial position.
Cash flows are presented on a gross basis. The GST components of cash flows arising from investing
or financing activities are presented as operating cash flows included in receipts from customers or
payments to suppliers.
These accounting policies also apply in respect of the Group's Canada operations in relation to GST.
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.
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.
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.
Sayona Mining Limited | Annual Report 2021 63
SAYONA MINING LIMITED AND CONTROLLED ENTITIES
ABN 26 091 951 978
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2021
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont’d)
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. For some areas of interest, the Group has assessed the existence of
reserves and considers the expenditure is recoverable through successful development of the area.
For other areas of interest exploration activity continues and 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.
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
There have been no new accounting standards applied for the first time in the preparation of the
financial statements for the year ended 30 June 2021. New accounting standards issued as at 30 June
2021 that are not yet applicable are not expected to have a material effect on the amounts reported in
the financial statements.
NOTE 2: REVENUE AND OTHER INCOME
Interest received from unrelated parties
FX Currency Gain
Government subsidy and incentive receipts (R&D/Cashboost)
Other income
Total revenue and other income
NOTE 3: LOSS FOR THE YEAR
(i) Expenses:
Included in expenses are the following items:
Foreign exchange loss
Depreciation and amortisation
Amortisation on right of use assets
Finance costs on lease liabilities
Short Term Lease Expenses
(ii) Significant Revenue and Expenses
2021
$
2020
$
2,252
310,361
315,190
17,584
645,387
-
13,654
38,104
3,665
44,120
10,429
-
50,000
-
60,429
46,351
15,466
38,103
4,862
59,666
The following significant revenue and expense items are relevant in explaining the financial
performance:
Capitalised exploration & evaluation expenditure written-off
Exploration and evaluation expenditure expensed during the
year
Finance costs incurred in relation to various finance facilities
Capital raising fees and commissions expenses
Legal advisory and share registry
2021
$
(81,708)
-
(769,971)
(160,876)
(878,274)
2020
$
(1,545,618)
(137,378)
(785,268)
-
-
64
SAYONA MINING LIMITED AND CONTROLLED ENTITIES
ABN 26 091 951 978
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2021
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 26.0% (2020: 27.5%).
(1,138,669)
(1,486,031)
Adjust for tax effect of:
Exploration expenditure capitalised
Other non-deductible costs (net)
Other non-assessable income
Tax losses and temporary differences not brought to account
Income tax expense attributable to entity
(90,924)
(151,289)
106,557
(85,982)
1,209,018
-
530,186
(13,750)
1,120,884
-
Weighted average effective tax rate (nil due to tax losses)
0.00%
0.00%
(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
(726,827)
7,018,041
5,613,671
11,904,885
(337,507)
5,973,041
5,613,671
11,249,205
The Group has unconfirmed carry forward losses for revenue of $27,608,259 (2020: $23,621,838) and
for capital of $22,454,683 (2020: $22,454,683). Deferred tax assets and liabilities are stated at tax rates
expected to apply when the relevant items are realised. Prior year carry forward revenue losses have
been revised in the current year 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.
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 2021.
(a) The names of key management personnel of the Group who have held office during the financial
year are:
Key Management Personnel
Position
Brett Lynch
Paul Crawford
Allan Buckler
James Brown
Dennis O'Neill
Managing Director/CEO
Director - Executive
Director - Non-executive
Director - Non-executive
Director - Non-executive
Sayona Mining Limited | Annual Report 2021 65
SAYONA MINING LIMITED AND CONTROLLED ENTITIES
ABN 26 091 951 978
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2021
NOTE 5: KEY MANAGEMENT PERSONNEL COMPENSATION (CONTINUED)
(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
Short-term employee benefits
2021
$
1,791,585
52,169
-
-
1,843,754
2020
$
1,086,633
61,772
-
32,050
1,180,455
These amounts include salary, fees and paid leave benefits paid to the directors, or their related entities
(Note 19).
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 options, 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.
2021
$
2020
$
Weighted average number of ordinary shares outstanding
during the year used in the calculation of basic EPS
3,431,676,525 2,054,565,673
Weighted average number of options outstanding
-
-
Weighted average number of ordinary shares and potential
ordinary shares outstanding during the year used in the
calculation of diluted EPS
3,431,676,525 2,054,565,673
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.
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
2021
$
2020
$
53,000
-
48,000
-
53,000
48,000
35,452,596
50,000
442,660
50,000
35,502,596
492,660
66
SAYONA MINING LIMITED AND CONTROLLED ENTITIES
ABN 26 091 951 978
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2021
NOTE 8: CASH AND CASH EQUIVALENTS (CONTINUED)
The effective interest rate on short-term bank deposits was 0.1%
(2020: 0.25%). These deposits have an average maturity of 365
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
NOTE 9: TRADE AND OTHER RECEIVABLES
Current (unsecured):
Receivable - share issue
Other Debtors
2021
$
2020
$
35,502,596
492,660
5,800,000
4,612,500
-
228,361
10,412,500
228,361
The share issue receivable relates to shares issued pursuant to a Controlled Placement Agreement
with Acuity Capital. Shares were issued on 30 June 2021, with funds received on 1 July 2021.
Other debtors include $350,382 (2020: $158,079) of GST/VAT amounts due from the Australian and
Canadian taxation authorities, which represents a significant concentration of credit risk to the Group.
Other debtors also include $4,223,088 for the initial deposits lodged in support of our bid for the
acquisition of North American Lithium (NAL). Subsequent to year end, the deposits were utilised as
part of the settlement of the acquisition of NAL. Refer Note 24.
NOTE 10: OTHER ASSETS
Current:
Deposits
Prepayments
NOTE 11: PLANT AND EQUIPMENT
Plant and equipment
At cost
Accumulated depreciation
Total plant and equipment
2021
$
2020
$
-
43,648
43,648
2,238
36,626
38,864
2021
$
2020
$
219,142
(56,920)
194,855
(43,135)
162,222
151,720
Reconciliation of the carrying amounts for property, plant and equipment:
Balance at the beginning of year
Additions
Depreciation expense
Foreign currency translation
Carrying amount at the end of year
151,720
31,758
(13,654)
(7,602)
162,222
144,083
26,942
(15,466)
(3,839)
151,720
Sayona Mining Limited | Annual Report 2021 67
SAYONA MINING LIMITED AND CONTROLLED ENTITIES
ABN 26 091 951 978
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2021
NOTE 12: EXPLORATION AND EVALUATION ASSET
2021
$
2020
$
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)
23,523,843
2,028,885
17,839,978
3,353,128
(a) Movement in exploration and evaluation expenditure:
Opening balance - at cost
Capitalised exploration and evaluation expenditure
Transfer from joint operations
Capitalised exploration expenditure written-off
Foreign currency translation movement
Carrying amount at end of year
25,552,728
21,193,106
Non-Joint Operation
17,839,978
19,111,142
3,805,078
1,842,720
(81,708)
117,775
2,534,017
(1,849,946)
(1,545,618)
(409,617)
23,523,843
17,839,978
2021
$
2020
$
(b) Movement in exploration and evaluation expenditure:
Subject to Joint Operation
Opening balance - at cost
Capitalised exploration and evaluation expenditure
Transfer to/from joint operations
Foreign currency translation movement
Carrying amount at end of year
3,353,128
508,642
(1,842,720)
9,835
2,028,885
766,257
767,192
1,849,946
(30,267)
3,353,128
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 $2,338,349 (2020:
$1,385,539) on the Authier Lithium Project in Canada. A further $1,893,666 (2020: $1,915,670) has
been expended on existing and new projects. Of that total, $409,65 (2020: $309,345) was settled by
issue of 910,318 (2020: 30,217,160) ordinary shares in the company.
On 24 December 2020, the Group paid the final C$250,000 option payment to Quebec Precious Metals
Inc. to acquire the remaining 50% interest in relevant Tansim tenements. The Group now holds a 100%
interest in the tenements.
During the year, the Company increased the size of its Tansim Lithium Project in Quebec with the
application and subsequent grant of 165 additional claims, taking the total project area to 20,256 ha of
prospective lithium ground.
During the period, the Group resumed responsibility for its Pilbara gold and lithium tenement portfolio
after terminating its original Earn-In Agreement with Altura Mining Limited. Altura had not earned any
interest in the tenements. On 2 June 2021, the Company announced that it had established a new
Earn-in agreement with Altura subject to due diligence. Subsequent to year end, Altura advised it had
completed its due diligence and would commence the earn-in period. The earn-in covers a range of
lithium tenements in the Pilgangoora lithium district in Western Australia. Under the agreement, Altura
is required to spend $1.5 million on exploration within three years to earn a 51% interest. The
remaining tenements not included in the Earn-in are under the Group's direct control and will be
managed by the Group.
Commitments in respect of exploration projects are set out in Note 20. In addition, the Group has
options on projects as set out in Note 25.
68
SAYONA MINING LIMITED AND CONTROLLED ENTITIES
ABN 26 091 951 978
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2021
NOTE 13: RIGHT-OF-USE-ASSETS & LEASE LIABILITY
The Group has a lease of premises with possible expiry in 2022. Lease payments are subject to annual
adjustments, and there is an option to extend.
Right-of-use assets
Leased Building
Accumulated Depreciation
Movement in carrying amounts:
Opening Balance at cost
Recognised on initial application of AASB 16
Depreciation Expense
Net Carrying Amount
Lease Liability
Current
Non-Current
Depreciation charge related to right-of-use assets
Interest Expense on Lease Liabilities
Total Yearly cash outflows for leases
NOTE 14: TRADE AND OTHER PAYABLES
Current (unsecured):
Trade creditors
Sundry creditors and accrued expenses
Total trade and other payables
Financial liabilities at amortised cost classified as trade and
other payables:
Financial liabilities as trade and other liabilities (refer Note 21)
NOTE 15: PROVISIONS
Current:
2021
$
2020
$
123,836
(76,207)
123,836
(38,103)
47,629
85,733
85,733
-
(38,104)
-
123,836
(38,103)
47,629
85,733
37,540
15,224
52,764
38,104
3,665
39,600
37,540
51,558
89,098
38,103
4,862
39,600
1,648,184
2,017,376
642,963
251,226
3,665,560
894,189
3,665,560
894,189
2021
$
2020
$
Provision for employee entitlements
116,872
61,429
Opening balance
Additional provisions
Amounts used
Balance at year end
61,429
64,734
(9,291)
116,872
38,846
61,981
(39,398)
61,429
Sayona Mining Limited | Annual Report 2021 69
SAYONA MINING LIMITED AND CONTROLLED ENTITIES
ABN 26 091 951 978
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2021
NOTE 16: ISSUED CAPITAL
Fully paid ordinary shares
128,727,789
84,930,181
Balance at the beginning of the reporting period
2,468,958,700 1,722,574,344
746,384,356
Shares issued during the prior year:
Shares issued during the current year:
22 July 2020, new issue of shares at $0.008 per share issued
under an entitlement offer.
22 July 2020, new issue of shares at $0.008 per share issued as
a placement.
7 August 2020, new issue of shares at $0.008 per share issued
for services provided.
7 September 2020, new issue of shares at $0.007 per share
pursuant to the Battery Metals share placement agreement.
27 October 2020, new issue of shares at $0.0095 per share
pursuant to the Acuity Capital agreement.
2 November 2020, new issue of shares at $0.008 per share as a
Director Placement approved by shareholders.
2 November 2020, new issue of shares at zero value issued to
Battery Metals Capital. (Refer Note 30)
11 December 2020, new issue of shares at $0.006 per share
issued to Battery Metals Capital.
13 January 2021, new issue of shares at $0.0119 per share
pursuant to agreement with Piedmont Lithium Limited
18 January 2021, new issue of shares at $0.007 per share
issued to Battery Metals Capital.
18 January 2021, new issue of shares on conversion of options
at $0.03 per share
22 January 2021, new issue of shares on conversion of options
at $0.02 each
22 January 2021, new issue of shares on conversion of options
at $0.03 each
27 January 2021, new issue of shares on conversion of options
at $0.03 each
29 January 2021, new issue of shares at $0.045 per share in
settlement of tenement acquisition
1 February 2021, new issue of shares at $0.007 per share
issued to Battery Metals Capital.
5 February 2021, new issue of shares on conversion of options
at $0.02 each
5 February 2021, new issue of shares on conversion of options
at $0.03 each
10 February 2021, new issue of shares on conversion of options
at $0.02 each
4 March 2021, new issue of shares on conversion of options at
$0.013 per share
5 March 2021, new issue of shares on conversion of options at
$0.02 each
210,833,567
120,416,433
3,437,500
39,545,230
68,700,000
12,500,000
45,000,000
90,432,267
336,207,043
177,034,028
872,093
7,680,812
58,140
930,233
910,318
154,813,199
35,312
1,046,512
201,062
48,000,000
15,937
70
SAYONA MINING LIMITED AND CONTROLLED ENTITIES
ABN 26 091 951 978
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2021
NOTE 16: ISSUED CAPITAL (CONTINUED)
12 March 2021, new issue of shares on conversion of options at
$0.02 each
26 March 2021, new issue of shares at $0.0083 per share
pursuant to agreement with Piedmont Lithium Limited
29 March 2021, new issue of shares on conversion of options at
$0.02 each
29 March 2021, new issue of shares on conversion of options at
$0.03 each
8 April 2021, new issue of shares on conversion of options at
$0.012 each
27 April 2021, new issue of shares at $0.032 per share were
issued under an entitlement offer.
29 April 2021, new issue of shares at $0.032 per share in
settlement of services provided
29 April 2021, new issue of shares on conversion of options at
$0.02 each
31 May 2021, new issue of shares on conversion of options at
$0.0145 each
9 June 2021, new issue of shares on conversion of options at
$0.02 each
9 June 2021, new issue of shares on conversion of options at
$0.03 each
10 June 2021, exercise PLL con note Tranche A at $0.0119
each
10 June 2021, exercise PLL con note Tranche B at $0.0119
each
10 June 2021, exercise PLL con note Tranche C at $0.0083
each
10 June 2021, exercise PLL con note Tranche D at $0.032 each
28 June 2021, new issues of share on conversion of options at
$0.03 each
29 June 2021, new issues of shares on conversion of options at
$0.03 each
30 June 2021, new issue of shares to Acuity Capital at $0.061
each
30 June 2021, new issue of shares on conversion of options at
$0.03 each
2021
$
2020
$
6,250
43,028,619
66,328
58,140
4,869,141
638,468,300
5,357,236
7,500
18,666,666
39,255
290,698
342,873,866
81,100,000
54,261,687
79,705,861
872,093
1,104,651
95,000,000
290,698
Balance at reporting date
5,153,695,375 2,468,958,700
All share issues in the current period were for cash other than:
•
•
•
•
Issue of 8,794,736 shares valued at $198,932 for services provided (charged to Profit & Loss).
Issue of 39,545,230 shares valued at $276,817 pursuant to the Battery Metals share placement
agreement (charged to Profit & Loss).
Issue of 45,000,000 shares at nil value to Battery Metals Capital pursuant to the Battery Metals
share placement agreement.
Issue of 910,318 shares valued at $40,964 in settlement of an option payment to acquire a further
interest in mineral tenements.
Sayona Mining Limited | Annual Report 2021 71
SAYONA MINING LIMITED AND CONTROLLED ENTITIES
ABN 26 091 951 978
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2021
NOTE 16: ISSUED CAPITAL (CONTINUED)
Share issues to Battery Metals Capital and Acuity Capital relate to "share finance" facilities - refer Note
30.
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 23)
Exercised
Expired
2021
$
2020
$
8,000,000
-
-
-
-
8,000,000
-
-
Balance at reporting date
8,000,000
8,000,000
Employee incentive options consist of:
•
•
4,000,000 options to acquire ordinary shares at $0.03 - expiring on 29 November 2021
4,000,000 options to acquire ordinary shares at $0.04 - expiring on 29 November 2022
All options have vested.
The options have been valued at $0.003 each, with $24,100 recognised in the reserves and charged to
profit & loss in a prior period.
(ii) Listed options
Balance at beginning of reporting period
Granted
Exercised
Expired
Transfer from unlisted options
Balance at reporting date
2021
$
2020
$
182,716,433
195,593,766
(10,610,596)
-
107,158,042
120,242,589
182,716,433
(6,749)
(120,235,840)
-
474,857,645
182,716,433
Listed options issued during the year consisted of 171,875,016 options relating to shares subscribed
under the shortfall facility under the entitlement offer undertaken in April 2021.
One free option was issued for every 2 shares subscribed, each option is exercisable at $0.02 to
acquire 1 ordinary share with all options expiry on 29 April 2023.
No value is ascribed to the listed shareholder options for accounting purposes.
In addition, 23,718,750 options were issued to advisors providing services in relation to the capital
raise. These are also exercisable at $0.02 each and expire 29 April 2023. These options are valued at
$0.02 each for accounting purposes. (refer Note 23).
In May 2021, Sayona applied to list 107,158,042 previously unlisted options on the ASX. The options
are exercisable at $0.03 and expire 23 July 2022.
72
SAYONA MINING LIMITED AND CONTROLLED ENTITIES
ABN 26 091 951 978
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2021
NOTE 16: ISSUED CAPITAL (CONTINUED)
(iii) Other Unlisted options
Balance at beginning of reporting period
Granted during the period
Exercised during the period
Expired during the period
Transfer to listed options
2021
$
114,992,301
66,666,666
(74,500,925)
-
(107,158,042)
2020
$
-
114,992,301
-
-
-
Balance at reporting date
-
114,992,301
The Company made a placement and issued 48,000,000 listed options to Battery Metals LLC for
services provided.
Each option is exercisable at $0.013 and were due to expire on 2 November 2023. The options were
exercised on 4 March 2021.
The options have been valued at $0.005 each, with $240,000 recognised in the reserves and charged
to profit & loss. (Refer Note 23)
The Company issued 18,666,666 listed options to Jett Capital Advisors LLC for services provided.
Each option is exercisable at $0.0145 and were due to expire on 21 March 2024. The options were
exercised on 31 May 2021.
The options have been valued at $0.03 each, with $560,000 recognised in the reserves and charged to
profit & loss. (Refer Note 23).
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.
In the current year, the capital management strategy has included various new issues, the use of
collateral shares and convertible notes.
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 17: 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.
Sayona Mining Limited | Annual Report 2021 73
SAYONA MINING LIMITED AND CONTROLLED ENTITIES
ABN 26 091 951 978
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2021
NOTE 18: CASH FLOW INFORMATION
2021
$
2020
$
(a) Reconciliation of Cash Flow from Operations with Loss from Ordinary
from Activities after Income Tax:
Loss from ordinary activities after income tax
Non-cash flows in profit from ordinary activities:
Depreciation/amortisation
Share based payments - corporate costs
Unrealised foreign exchange transactions
Write off capitalised exploration expenditure
Changes in operating assets and liabilities:
(Increase)/Decrease in trade and other receivables
(Increase)/Decrease in other assets
(Decrease)/Increase in creditors and accruals
(Decrease)/Increase in provisions
Cash flows from operations
(b) Non-cash Financing and Investing Activities
(4,379,498)
(5,403,751)
51,758
276,817
321,781
(81,708)
53,569
49,182
64,100
1,545,618
(10,180,888)
(6,936)
2,768,301
55,254
(11,175,119)
101,239
53,941
(46,520)
6,267
(3,576,355)
Issue of 3,437,500 shares valued at $27,500 for services provided.
Issue of 39,545,230 shares valued at $276,817 pursuant to the Battery Metals share placement
agreement.
Issue of 45,000,000 shares at nil value to Battery Metals Capital pursuant to the Battery Metals share
placement agreement.
Issue of 910,318 shares valued at $40,964 in settlement of an option payment to acquire a further
interest in mineral tenements.
Issue of 5,357,236 shares valued at $171,432 for services provided.
(c) Changes in liabilities from financing
activities
Balance 30 June 2020
Cash Flows
Non-cash movements
Balance 30 June 2021
Convertible
Notes (note 30)
Lease
liabilities
Total
-
-
-
-
89,098
89,098
(36,334)
(36,334)
-
52,764
-
52,764
NOTE 19: 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
$72,000 were incurred during the year (2020: $72,000).
Included in payables (note 14) is $150,000 (2020: $227,555) remuneration payable to other directors.
Altura Mining Ltd is a director related entity - refer Note 12 for details of transactions.
74
SAYONA MINING LIMITED AND CONTROLLED ENTITIES
ABN 26 091 951 978
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2021
NOTE 20: COMMITMENTS
(a) Exploration commitments
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
2021
$
2020
$
1,051,848
312,440
1,193,834
997,271
1,364,288
2,191,105
Under the new earn-in agreement with Altura Mining (note 25), exploration amounts paid will be
applied to meet some of the above exploration commitments. The new Earn-In Agreement does not
include all tenements which the Company currently controls, consequently, the Company will be
responsible for the other tenements.
(b) NAL commitments
Subsequent to the end of the reporting period, the Group completed the acquisition of North American
Lithium (NAL). Commitments in respect of this transaction are set out in Note 24.
NOTE 21: FINANCIAL RISK MANAGEMENT
The Group’s financial instruments mainly comprises cash balances, receivables and payables. The
main purpose of these financial instruments is to provide finances for group operations.
The totals for each category of financial instruments, measured in accordance with AASB 139:
Financial 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 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.
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.
Sayona Mining Limited | Annual Report 2021 75
SAYONA MINING LIMITED AND CONTROLLED ENTITIES
ABN 26 091 951 978
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2021
NOTE 21: FINANCIAL RISK MANAGEMENT (continued)
(b) Liquidity Risk
Liquidity risk is the risk that the Group will not be able to 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
2021
Financial assets
Cash and cash equivalents (i)
Receivables (ii)
Financial liabilities
Payables (ii)
Lease Liability (iii)
Net cash flow on financial instruments
2020
Financial assets
Cash and cash equivalents (i)
Receivables (ii)
Financial liabilities
Payables (ii)
Lease Liability (iii)
Net cash flow on financial instruments
1 year or
less
$
1 to 2
years
$
More than
2 years
Total
$
$
35,502,596
10,412,500
45,915,096
3,665,560
37,540
3,703,100
42,211,996
1 year or
less
$
492,660
228,361
721,021
894,189
37,540
931,729
(210,708)
-
-
-
-
15,224
15,224
(15,224)
- 35,502,596
- 10,412,500
- 45,915,096
- 3,665,560
-
52,764
- 3,718,324
- 42,196,772
1 to 2
years
$
More than
2 years
Total
$
$
-
-
-
-
-
-
-
-
40,930
40,930
(40,930)
10,628
10,628
(10,628)
492,660
228,361
721,021
894,189
89,098
983,
(262,266)
(i)
(ii)
(iii)
Floating interest with a weighted average effective interest rate of 0.10% (2020: 0.75%).
Non-interest bearing.
Incremental borrowing rate 4.5%.
(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.
76
SAYONA MINING LIMITED AND CONTROLLED ENTITIES
ABN 26 091 951 978
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2021
NOTE 21: FINANCIAL RISK MANAGEMENT (continued)
(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 (in AUD) 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
2021
USD
2021
145,413
4,553,595
(2,223,723)
14,079,247
-
-
2,475,285
14,079,247
CAD
2020
183,856
151,355
(465,709)
(130,498)
USD
2020
3,877
-
-
3,877
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
increased/decreased by $704,036 (2020 +/- $194).
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
increased/decreased by $130,721 +/-(2020: $11,525).
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 +/- $355,025 (2020: $4,927).
(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 22: CONTINGENT LIABILITIES
There were no material contingent liabilities at the end of the reporting period.
NOTE 23: SHARE BASED PAYMENTS
Options
The following options were issued during the year.
On 22 July 2020, 22,000,000 listed options to Maye Capital Pty Ltd for services provided.
On 7 August 2020,1,718,750 listed options to Canning Corp Pty Ltd for services provided.
Sayona Mining Limited | Annual Report 2021 77
SAYONA MINING LIMITED AND CONTROLLED ENTITIES
ABN 26 091 951 978
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2021
NOTE 23: SHARE BASED PAYMENTS (CONTINUED)
On 2 November 2020, 48,000,000 unlisted options to Battery Metals LLC for services provided.
On 18 March 2021, 18,666,666 unlisted options to Jett Capital Advisors LLC for services provided.
2021
2020
Options issued are summarised as:
Outstanding at beginning of the year
Granted
Forfeited
Exercised
Expired
Outstanding at period end
Number of
Options
No
33,295,564
90,385,416
-
(71,535,807)
-
52,145,173
Weighted
Average
Exercise
Price
$
Number of
Options
Weighted
Average
Exercise Price
No
$
0.022
-
0.015 33,295,564
-
-
-
0.022 33,295,564
-
0.013
-
-
0.022
-
-
-
0.022
.
0.022
Exercisable and vested at year end
52,145,173
0.022 33,295,564
In addition to the above options, a total of 171,875,016 free options were issued to shareholders as part
of the April 2021 entitlement offer.
Shares
Issue of 3,437,500 shares valued at $27,500 for services provided.
Issue of 39,545,230 shares valued at $276,817 pursuant to the Battery Metals share placement
agreement.
Issue of 45,000,000 shares at nil value to Battery Metals Capital pursuant to the Battery Metals share
placement agreement.
Issue of 910,318 shares valued at $40,964 in settlement of an option payment to acquire a further
interest in mineral tenements.
Issue of 5,357,236 shares valued at $171,432 for services provided.
Other than where indicated otherwise, the value of the shares issued was determined by reference to
market price.
NOTE 24: EVENTS AFTER BALANCE DATE
Key events since the end of the financial year have been:
On 12 July 2021, the Company announced plans to raise $45m through the issue of 600,000,000
shares at $0.075 (7.5 cents). The placement to sophisticated and professional investors was
undertaken in 2 tranches, completing on 23 August 2021.
On 6 August 2021, the Company's Western Australian partner, Altura Mining Limited completed its due
diligence on the Pilbara lithium projects, with the earn-in period commencing immediately.
On 23 August 2021, the Company announced the closure of the share purchase plan, resulting in the
issue of 266,666,917 new shares at $0.075 (7.5 cents) per share. $20,000,000 was received.
On 30 June 2021, the Superior Court of Québec (Commercial Division) granted an approval and
vesting order regarding the Group’s (75%) joint bid with Piedmont Lithium Inc. (25%) for the acquisition
by Sayona Québec Inc. of NAL.
The NAL transaction was subject to regulatory approval which was obtained in August 2021 as a
condition for completion.
78
SAYONA MINING LIMITED AND CONTROLLED ENTITIES
ABN 26 091 951 978
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2021
NOTE 24: EVENTS AFTER BALANCE DATE (CONTINUED)
Under the Share Purchase Agreement entered into between Sayona Québec and NAL, at completion
of the transaction, Sayona Québec will acquire all the issued and outstanding shares of NAL, which will
keep substantially all its assets. The order of the Superior Court of Québec provides that the NAL
assets will be free and clear of any encumbrances other than certain specific permitted encumbrances.
The bid value was approximately C$198m, made of a cash component of C$98m and assumed debt of
approximately C$112m. The assumed debt represents NAL’s obligations under the senior and
subordinated secured debts of Investissement Québec (IQ).
The IQ Assigned Debt will be carried within the Group as an inter-company loan and eliminated on
consolidation, with no net financial impact on a group basis.
On 30 August 2021, the Company completed the acquisition of NAL. The group's cash contribution to
settlement was approximately C$69.5m.
Overall funding of C$198 million is financed through the Group's cash reserves and the assumption of
the existing debt facility. With the completion of the acquisition, the Group will now undertake activities
targeted at recommissioning and recommencement of mine operations.
On 30 September 2021, the Group announced plans to acquire a 60% interest in the Moblan Lithium
Project in Quebec from Guo Ao Lithium Ltd for consideration of US$86.5 million. The transaction is
subject to financing and other customary conditions.
In March 2020, the World Health Organisation declared the outbreak of a novel coronavirus (COVID-19)
as a pandemic, which continued to spread throughout Australia and the world. The spread of COVID-
19 has caused significant volatility in Australian and international markets. There is significant
uncertainty around the breadth and duration of business disruptions related to COVID-19, as well as its
impact on Australian and international economies.
The Group’s core business is mineral exploration and development in Australia and Canada. To the
date of this report the Group has not experienced any significant adverse impact. Government
directives and travel restrictions, primarily in Quebec, have limited the Group’s ability to undertake
some activity. The situation has eased significantly recently and operations are returning to normal.
The Directors are actively monitoring the Group’s financial condition, operations and workforce.
Although the Group cannot estimate the length or gravity of the impacts of these events at this time, if
the pandemic continues beyond the short-term or worsens, then this may have an adverse effect on
the Group’s results of future operations, financial position and liquidity in the financial year 2021.
There have been no other key events since the end of the financial year.
NOTE 25 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
The Group holds an 80% interest in the Western Australian mineral tenement E59/2092 (Mt Edon) at 30
June 2021. 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 Group entered an "Earn-In" Agreement with lithium producer Altura Mining
Limited (ASX:AJM) for 12 tenements subject to due diligence. The due diligence was completed in
August 2021. Altura is to spend $1.5m on exploration within three years to earn a 51% stake in the
Company's Australian lithium tenements.
Sayona Quebec Inc.
On 28 February 2019, the Company entered into an acquisition agreement with Exiro Minerals Group in
relation to a number of mineral claims in Quebec.
Sayona Mining Limited | Annual Report 2021 79
SAYONA MINING LIMITED AND CONTROLLED ENTITIES
ABN 26 091 951 978
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2021
NOTE 25 JOINT ARRANGEMENTS (CONTINUED)
Sayona can then earn a 100% interest in the property by completing the milestones in the timeframes
outlined below:
- Investing CAD$10k in exploration and pay CAD$40k in shares to Exiro within the second 12 months;
and
- Investing CAD$60k in exploration and pay CAD$50k in shares to Exiro within 24 and 36 months of
signing.
All conditions have been met other than the payment of CAD$110,000 in cash and shares which will be
paid according to the dates outlined in the Option Agreement.
Under the agreement, the vendor retains a 2% net smelter royalty return.
NOTE 26: 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
2021
$
2020
$
39,468,941
30,786,336
409,530
21,283,366
70,255,277
21,692,896
2,119,839
32,635
495,610
51,558
2,152,474
547,168
68,102,803
21,145,728
128,727,789
108,953
(60,733,939)
84,930,181
114,135
(63,898,588)
68,102,803
21,145,728
Statement of Profit or Loss and Other Comprehensive Income
Total (profit)/loss for the year
Total other comprehensive income
(2,315,467)
-
5,822,102
-
Total comprehensive loss for the year
(2,315,467)
5,822,102
Guarantees
There are no parent company guarantees.
Contingent Liabilities
There are no material contingent liabilities at the end of the reporting period.
NOTE 27: 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.
80
SAYONA MINING LIMITED AND CONTROLLED ENTITIES
ABN 26 091 951 978
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2021
NOTE 27: INTERESTS IN SUBSIDIARIES (CONTINUED)
Sayona East Kimberley Pty Ltd, incorporated in Australia on 18 June 2015. The parent entity holds
100% of the ordinary shares of the entity.
Sayona International Pty Ltd, incorporated in Australia on 29 April 2016. The parent entity holds 100%
of the ordinary shares of the entity.
Sayona Quebec Inc, incorporated in Canada on 7 July 2016. The parent entity held 100% of the
ordinary shares of the entity. On 8th June 2021, Piedmont subscribed for US$5 million worth of shares
in Sayona Quebec to acquire a 25% interest in Sayona's Canadian subsidiary.
In accordance with terms of the Subscription Agreement, the parent entity Sayona Mining Limited
converted its intercompany loan with Sayona Quebec to ordinary shares.
Future operating costs and working capital will be jointly funded by Sayona 75% and Piedmont 25%.
All future CAPEX on the NAL plant will be jointly funded by Sayona (75%) and Piedmont (25%).
These subsidiaries have share capital consisting solely of ordinary shares which are held directly by
the Group and minority interests (being Piedmont Lithium).
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.
NOTE 28: 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
Australia
Overseas
Consolidated Group
2021
$
2020
$
2021
$
2020
$
2021
$
2020
$
REVENUE
Revenue
644,591
54,866
796
5,563
645,387
60,429
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
644,591
54,866
796
5,563
645,387
60,429
(2,952,535)
5,057,425)
(1,426,963)
(346,326)
(4,379,498)
(5,403,751)
-
-
-
-
-
-
(2,952,535)
(5,057,425)
(1,426,963)
(346,326)
(4,379,498)
(5,403,751)
Sayona Mining Limited | Annual Report 2021 81
SAYONA MINING LIMITED AND CONTROLLED ENTITIES
ABN 26 091 951 978
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2021
NOTE 28: SEGMENT REPORTING (CONTINUED)
ASSETS
Australia
Overseas
Consolidated Group
2021
$
2020
$
2021
$
2020
$
2021
$
2020
$
Segment assets
40,969,047 2,345,992 30,752,276 19,844,452 71,721,323 22,190,443
LIABILITIES
Segment liabilities
(1,557,110)
(550,521)
(2,278,086)
(494,194)
(3,835,196)
(1,044,716)
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 29: 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 30: SHARE ISSUES FOR FINANCE FACILITIES
Controlled Placement Agreement
During the financial year, the Company activated the Acuity Controlled Placement Agreement (entered
into on 29 October 2019) and issued a total of 163,700,000 shares to raise $6,450,000.
On 29 April 2021, the Company increased the current Controlled Placement Agreement limit of $3
million to a new limit of $15 million and extended the expiry date to 31 July 2023. The Agreement,
provides the Group with standby equity capital of up to $15m over the period to 31 July 2023. The
Group controls all aspects of any such placement under the Agreement.
Under the Agreement, the Company issued 95m shares as collateral. These shares were issued at no
cost and are similar to treasury shares. The collateral shares are cancellable at any time by the Group
for no consideration. The collateral shares may be applied by the Group to meet any share issues
under the Agreement when subscription monies are received. The Company receives 90% of
subscription monies with the remaining 10% retained by the subscriber.
Share Placement Agreement
During the year, the Company entered into a Share Placement Agreement with Battery Metals Capital
Group, LLC. The agreement provides for a US$2 million prepayment of a placement of ordinary shares
worth US$2.18 million. At balance date, Battery Metals had advanced US$2 million to the Group and
new shares to the value of US$2.18 million had been issued.
The agreement was terminated in January 2021.
Under the agreement, 45,000,000 shares were issued as collateral for nil consideration, and are similar
to Treasury shares. On termination of the placement agreement, the collateral shares were sold raising
$315,000.
Convertible Note Facility
In January 2021, the Company announced a strategic partnership with Piedmont Lithium Limited.
Under the agreement, Piedmont acquired an initial 9.9% equity interest in Sayona and two unsecured
convertible notes, which upon conversion would result in Piedmont being issued a further 10% interest.
In March 2021, the company issued a further two convertible notes to Piedmont, which upon
conversion would maintain their 19.9% interest.
82
SAYONA MINING LIMITED AND CONTROLLED ENTITIES
ABN 26 091 951 978
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2021
NOTE 30: SHARE ISSUES FOR FINANCE FACILITIES (CONTINUED)
Key features of the notes are:
No. of Securities
Term
Subscription Price and Face
Value
Interest
Security
Conversion Price
Conversion
Tranche A convertible note (convertible into 342,873,866
shares)
Tranche B convertible note (convertible into 81,100,000 shares)
Tranche C convertible note (convertible into 54,261,687 shares)
Tranche D convertible note (convertible into 79,705,861 shares)
5 years
Tranche A convertible note - US$3,154,439.57
Tranche B convertible note - US$746,120.00
Tranche C convertible note A$448,093
Tranche D convertible note A$2,550,588
No interest is payable on Tranche A & B convertible notes if
completion of the project Investment occurs and on Tranche C
& D notes if shares are issued on conversion.
Unsecured
Tranche A & B convertible note - US$0.0092
Tranche C convertible note A$0.00826
Tranche D convertible note A$0.032
The Subscriber can convert the convertible notes at any time
during the Term, provided that the Subscriber must immediately
convert the convertible notes if completion of the Project
Investment occurs.
Movements in the convertible note facility were as follows:
Opening Balance
Issue of notes
Conversion into 557,941,414 ordinary shares (June 2021)
Closing Balance
Number
A$
-
4
(4)
-
-
8,044,030
(8,044,030)
-
The convertible notes were accounted for on issue date as a liability on the basis that the conversion to
shares is a variable number based on share price and foreign exchange rate.
NOTE 31: 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 | Annual Report 2021 83
SAYONA MINING LIMITED AND CONTROLLED ENTITIES
ABN 26 091 951 978
DIRECTORS’ DECLARATION
1. The attached financial statements and notes are in accordance with the Corporations Act 2001
and:
(a) Comply with Australian Accounting Standards applicable to the Company which, as stated
in accounting policy Note 1 to the financial statements, constitutes compliance with
International Financial Reporting Standards (IFRS); and
(b) give a true and fair view of the financial position as at 30 June 2021 and of the performance
of the Consolidated Group for the year ended on that date.
2.
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
3. The Directors have been given the declaration of 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.
Brett Lynch
Managing Director
Paul Crawford
Director
Dated this: 30th day of September 2021
84
Independent Auditor’s Report to the Members of Sayona Mining Limited
Report on the Audit of the Financial Report
Opinion
We have audited the financial report of Sayona Mining Limited (the Company and its subsidiaries (the
Group)), which comprises the consolidated statement of financial position as at 30 June 2021, the
consolidated statement of profit or loss and other comprehensive income, the consolidated statement
of changes in equity and the consolidated statement of cash flows for the year then ended, and notes
to the financial statements, including a summary of significant accounting policies, and the directors’
declaration.
In our opinion, the accompanying financial report of the Group is in accordance with the Corporations
Act 2001, including:
(i) giving a true and fair view of the Group’s financial position as at 30 June 2021 and of its
performance for the year then ended; and
(ii) complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under
those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial
Report section of our report. We are independent of the Group in accordance with the auditor
independence requirements of the Corporations Act 2001 and the ethical requirements of the
Accounting Professional and Ethical Standards Board’s APES 110: Code of Ethics for Professional
Accountants (the Code) that are relevant to our audit of the financial report in Australia. We have also
fulfilled our other ethical responsibilities in accordance with the Code.
We confirm that the independence declaration required by the Corporations Act 2001, which has been
given to the directors of the Company, would be in the same terms if given to the directors as at the
time of this auditor’s report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our opinion.
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in
our audit of the financial report of the current period. These matters were addressed in the context of
our audit of the financial report as a whole, and in forming our opinion thereon, and we do not provide
a separate opinion on these matters.
Sayona Mining Limited | Annual Report 2021 85
Independent Auditor’s Report to the Members of Sayona Mining Limited
(continued)
How our audit addressed the key audit
matter
Our procedures included, amongst others:
• We obtained evidence as to whether the rights
to tenure of the areas of interest remained
current at balance date and as well as
confirming that rights to tenure are expected
to be renewed for tenements that will expire in
the near future.
• We obtained evidence of the future intention
for the areas of interest, including reviewing
future budgeted expenditure and related work
programs.
• We obtained an understanding of the status of
ongoing exploration programs, for the areas of
interest.
• We obtained evidence as to the assumptions
made by management in the determination of
the recoverable value of the asset.
Our procedures included, amongst others:
• We obtained evidence as to whether the share
issues were completed in compliance with
terms/conditions
issue
of
documentation.
share
• We obtained evidence as to receipt of new
issue subscription monies
• We evaluated adequacy of the disclosures of
made in the financial statements.
Key audit matter
Carrying value of exploration and
evaluation assets
Refer to note 12 (exploration and
evaluation assets)
and
As at 30 June 2021 the carrying value of
exploration
is
$25,552,728. The Group’s accounting policy in
respect of exploration and evaluation assets is
outlined in Note 1.
evaluation
assets
This is a key audit matter as this is a significant
asset of the Group, and due to the fact that
significant judgement is applied in determining
the capitalized exploration and
whether
evaluation assets meet the recognition criteria
set out in AASB 6 Exploration for and
Evaluation of Mineral Resources.
Increase in issued capital
Refer to note 16 (Issued Capital)
from
As at 30 June 2021 the Company’s issued
capital totalled $128,727,789, an increase of
$43,797,608
the prior year. The
Company completed numerous share issues in
the year
totalling 2,684,736,675 shares
relating to new issues, exercise of options and
exercise of convertible notes. The Group’s
accounting policy in respect of issued capital &
equity settled payments is outlined in Note 1.
This is a key audit matter as these share issues
are significant to the total shares and equity
on issue, the amount of the Group’s net
assets, and to the Group’s business strategies.
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86
Independent Auditor’s Report to the Members of Sayona Mining Limited
(continued)
Key audit matter
How our audit addressed the key audit
matter
Significant events after balance date
Our procedures included, amongst others:
Refer to note 24 (events after balance
date)
• We obtained evidence as to the transactions
entered into.
The Group has entered into a number of
significant events subsequent to balance date,
including issues of shares and completion of
various regulatory processes/approvals to
proceed with
the acquisition of North
American Lithium.
This is a key audit matter as these events
subsequent to balance date are significant to
the amounts of the Group’s total assets/total
liabilities/net assets/equity on issue, and to
the Group’s business strategies.
Preparation of financial statements on a
going concern basis
Refer to note 1 (Continued Operations
and Future Funding)
activities
exploration
As at 30 June 2021 the ability of the Group to
settle its liabilities and execute its currently
planned
requires
additional funds. On the basis of various
arrangements currently in place to raise
additional capital, and options available to
fund the exploration projects, the going
concern basis has been adopted in preparing
the financial statements.
This is a key audit matter as the availability of
funds is critical to the continuity of business,
and the carrying value and classification of
financial
assets and
statements.
liabilities
the
in
• We evaluated the adequacy of disclosures
made in the financial statements.
• We evaluated the accounting treatment of the
transactions as an event after balance date
pursuant to accounting standard AASB 110.
Our procedures included, amongst others:
• We evaluated management’s assessment of
the Group’s ability to continue as a going
concern.
• We reviewed the Group’s cash flow forecast,
including checking the mathematical accuracy,
agreed it to be the latest Board approved
forecast, and tested the key assumptions used
in the forecast.
• We performed sensitivity analysis on the cash
flow forecast.
• We evaluated the adequacy of the disclosures
made in the financial statements in relation to
going concern.
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Sayona Mining Limited | Annual Report 2021 87
Independent Auditor’s Report to the Members of Sayona Mining Limited
(continued)
Other information
The directors are responsible for the other information. The other information comprises the information
in the Group’s Annual Report for the year ended 30 June 2021, but does not include the financial report
and the auditor’s report thereon. The Annual Report will be made available to us after the date of this
auditor’s report.
Our opinion on the financial report does not cover the other information and we do not express any
form of assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information
and, in doing so, consider whether the other information is materially inconsistent with the financial
report or our knowledge obtained in the audit or otherwise appears to be materially misstated.
When we read the Annual Report, if we conclude that there is a material misstatement therein, we
are required to communicate the matter to the directors and request that a correction be made.
Directors’ responsibility for the financial report
The directors of the Company are responsible for the preparation of the financial report that gives a
true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001
and such internal control as the directors determine is necessary to enable the preparation of the
financial report that gives a true and fair view and is free from material misstatement, whether due to
fraud or error.
In preparing the financial report, the directors are responsible for assessing the Group’s ability to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the
going concern basis of accounting unless the directors either intend to liquidate the Group or to cease
operations, or have no realistic alternative but to do so.
Auditor’s responsibility for the audit of the financial report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free
from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes
our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit
conducted in accordance with the Australian Auditing Standards will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered material
if, individually or in the aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of this financial report.
As part of an audit in accordance with the Australian Auditing Standards, we exercise professional
judgement and maintain professional scepticism throughout the audit. We also:
•
Identify and assess the risks of material misstatement of the financial report, whether due to fraud
or error, design and perform audit procedures responsive to those risks, and obtain audit evidence
that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a
material misstatement resulting from fraud is higher than for one resulting from error, as fraud
may involve collusion, forgery, intentional omissions, misrepresentations, or the override of
internal control.
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88
Independent Auditor’s Report to the Members of Sayona Mining Limited
(continued)
• Obtain an understanding of internal control relevant to the audit in order to design audit
procedures that are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Group’s internal control.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by the directors.
• Conclude on the appropriateness of the directors’ use of the going concern basis of accounting
and, based on the audit evidence obtained, whether a material uncertainty exists related to events
or conditions that may cast significant doubt on the Group’s ability to continue as a going concern.
If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s
report to the related disclosures in the financial report or, if such disclosures are inadequate, to
modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of
our auditor’s report. However, future events or conditions may cause the Group to cease to
continue as a going concern.
• Evaluate the overall presentation, structure and content of the financial report, including the
disclosures, and whether the financial report represents the underlying transactions and events in
a manner that achieves fair presentation.
• Obtain sufficient appropriate audit evidence regarding the financial information of the entities or
business activities within the Group to express an opinion on the financial report. We are
responsible for the direction, supervision and performance of the Group audit. We remain solely
responsible for our audit opinion.
We communicate with the directors regarding, among other matters, the planned scope and timing of
the audit and significant audit findings, including any significant deficiencies in internal control that we
identify during our audit.
We also provide the directors with a statement that we have complied with relevant ethical
requirements regarding independence, and to communicate with them all relationships and other
matters that may reasonably be thought to bear on our independence, and where applicable, actions
taken to eliminate threats or safeguards applied.
From the matters communicated with the directors, we determine those matters that were of most
significance in the audit of the financial report of the current period and are therefore the key audit
matters. We describe these matters in our auditor’s report unless law or regulation precludes public
disclosure about the matter or when, in extremely rare circumstances, we determine that a matter
should not be communicated in our report because the adverse consequences of doing so would
reasonably be expected to outweigh the public interest benefits of such communication.
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Sayona Mining Limited | Annual Report 2021 89
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 the Remuneration Report included in pages 44 to 48 of the Directors’ Report for the
year ended 30 June 2021.
In our opinion, the Remuneration Report of Sayona Mining Limited for the year ended 30 June 2020
complies with section 300A of the Corporations Act 2001.
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the Remuneration
Report in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express
an opinion on the Remuneration Report, based on our audit conducted in accordance with Australian
Auditing Standards.
Nexia Brisbane Audit Pty Ltd
ND Bamford
Director
Level 28, 10 Eagle Street
Brisbane Qld 4000
Date: 30 September 2021
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90
THE PAST YEAR
HAS BEEN
TRANSFORMATIONAL
FOR SAYONA AS WE
TRANSITION FROM
JUNIOR EXPLORER
TO WORLD-SCALE
LITHIUM PRODUCER.
Sayona Mining Limited | Annual Report 2021 91 ASX INFORMATION
Additional information required by ASX and not disclosed elsewhere in the report. The following
information is provided as at 10 September 2021.
1.
Shareholding:
Distribution of Shareholder numbers:
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
TOTAL
234
1,601
2,879
10,479
4,849
20,042
Option Holders - SYAOC
(Number)
19
54
59
312
344
788
Option Holders - SYAOD
(Number)
0
0
4
39
85
128
The number of shareholdings held in less than marketable parcels is 531.
Top 20 Share Holdings
Number of
Shares Held
% of Total
Issued Capital
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
19.
20.
Piedmont Lithium Limited
Citicorp Nominees Pty Limited
Merrill Lynch (Australia) Nominees Pty Limited
BNP Paribas Nominees Pty Ltd ACF Clearstream
Cropanly Pty Ltd
HSBC Custody Nominees (Australia) Limited
Terryjoy Pty Ltd
Acuity Capital Investment Management Pty Ltd
Bond Street Custodians Limited
BNP Paribas Noms Pty Ltd
P Point Pty Ltd
BNP Paribas Nominees Pty Ltd
Mr Allan Charles Buckler
Mr Robert Veitch + Mrs Elaine Veitch
UBS Nominees Pty Ltd
E M Enterprises (Qld) Pty Ltd
Mr Michael William Gaule
Conseil De La Premiere Nation Abitibiwinni
Bond Street Custodians Limited
Mr Richarl Karl Hill
1,147,900,086
257,751,356
168,167,177
149,828,370
140,400,002
108,693,724
100,487,210
95,000,000
78,907,097
74,586,868
67,215,230
60,243,691
51,474,884
50,230,348
43,000,000
38,625,264
28,199,920
27,500,000
26,747,000
25,400,000
18.74
4.21
2.75
2.45
2.29
1.77
1.64
1.55
1.29
1.22
1.10
0.98
0.84
0.82
0.70
0.63
0.46
0.45
0.44
0.41
2,740,358,227
44.75%
92
ASX INFORMATION
Top 20 Option Holdings - SYAOD
Name
Number of
Options Held
% of Total
Options Issued
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
19.
20.
Terryjoy Pty Ltd
Dixon Sonoma Pty Ltd
Guy Laliberte
Bond Street Custodians Limited
Mrs Robyn Lynelle Crawford + Mr Paul Anthony Crawford
BNP Paribas Noms Pty Ltd
Mr James Stuart Brown + Mrs Michelle Lillian Brown
E M Enterprises (QLD) Pty Ltd
Natasha Sarina Buckler
Mrs Yvinne Tolato Hill + Mr Graeme Leslie Hill
Mr Matthew John Horsnell
Jannarn Pty Ltd
Mr Non Huynh Nguyen
Oodachi Pty Ltd
Sequencing Risk Pty Ltd
Mr Maxwell Terry Smith
Mr Robert Veitch + Mrs Elaine Veitch
Mr Xiaobin Yang
Ms Joy Galay Ydeo
Ms Furong Zhang
15,406,977
8,720,931
6,459,949
5,813,954
1,162,791
1,046,412
872,094
872,094
872,093
872,093
872,093
872,093
872,093
872,093
872,093
872,093
872,093
872,093
872,093
872,093
21.64
12.25
9.07
8.17
1.63
1.47
1.22
1.22
1.22
1.22
1.22
1.22
1.22
1.22
1.22
1.22
1.22
1.22
1.22
1.22
50,820,318
71.38%
Sayona Mining Limited | Annual Report 2021 93
ASX INFORMATION
Top 20 Option Holdings - SYAOC
Name
Number of
Options Held
% of Total
Options Issued
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
19.
20.
Isaiah Sixty Pty Ltd
Dixon Sonoma Pty Ltd
Terryjoy Pty Ltd
CS Third Nominees Pty Limited
Cropanly Pty Ltd
Bond Street Custodians Limited
Top Class Holdings Pty Ltd
Rattler Racing Pty Ltd
Mr Michael Jon Rae
Mr Adonis Diab
Manjaro Developments Pty Ltd
Mrs Althea Hawley
Mr Shaun Pedler
Mr Robert Veitch + Mrs Elaine Veitch
Ms Leanne Marion Hunter
JL and RA Roberts Pty Ltd
Mr Shuiwei Xie
Mr Farouk Ahmed
Mr Farouk Ahmed
Break The Mould Superannuation Pty Ltd
32,878,235
22,671,511
15,571,221
13,858,004
12,623,605
7,953,488
6,650,000
6,103,681
5,226,500
4,660,853
4,440,233
4,332,886
4,200,000
4,052,525
4,000,000
3,750,000
3,550,000
3,232,000
3,130,000
3,000,000
9.28
6.40
4.40
3.91
3.56
2.25
1.88
1.72
1.48
1.32
1.25
1.22
1.19
1.14
1.13
1.06
1.00
0.91
0.88
0.85
168,884,742
47.68%
The names of the substantial shareholders listed in the Company’s register at
the relevant date are
:
Shareholder
Piedmont Lithium Limited
Number of
Shares Held
% of Issued
Capital
1,147,900,086
18.45%
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.
2.
Registers of securities are held at the following address:
Computershare Investor Services Pty Limited
Level 1, 200 Mary Street,
Brisbane Qld 4000
94
ASX INFORMATION
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.
Reference To Previous ASX Releases
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. This
Annual Report also refers to the following previous ASX releases:
! Boost for Authier Project as JORC Ore Reserves Expand - 24 September 2018
! Revised Authier DFS Shows Boost to Profitability – 11 November 2019
! Potential for New Lithium Deposit at Viau-Dallaire – 19 November 2019
! Sayona Expands Tansim Project Amid Québec Lithium Drive – 06 August 2020
! Authier EIS Studies Advance as EV Sector Accelerates – 21 December 2020
! Drilling Program to Expand Quebec Lithium Resources – 27 January 2021
! Sayona invests in WA Exploration Assets – 3 February 2021
! Sayona Expands Tansim Project as Lithium Demand Accelerates
! Study confirms Tansim Project’s High Lithium Potential – 18 March 2021
! Magnetic Drill Targets Identified at Pilbara Gold Projects – 12 May 2021
! Drilling Underway at Authier Project; WA lithium Earn-In – 2 June 2021
! Sayona embarks on next phase of Pilbara gold exploration – 7 June 2021
! Tests confirm Authier delivers high purity lithium hydroxide – 7 July 2021
! NAL Acquisition Finalised and Production Plans Advance – 30 August 2021
– 11 March 2021
Copies of these reports are available to view on 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 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.
Competent Person Statement
Exploration Targets
The information in this report that relates to Exploration Targets 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 being undertaken 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, as competent person for this announcement, has consented to the inclusion of the
information in the form and context in which it appears.
Sayona Mining Limited | Annual Report 2021 95
96 CORPORATE DIRECTORY
Sayona Mining Limited
ABN 26 091 951 978
ASX Code
SYA
Directors
Mr Brett Lynch – Managing Director/CEO
Mr Paul Crawford – Executive Director
Mr Alan Buckler – Non-Executive Director
Mr James Brown – Non-Executive Director
Registered Office
Auditors
Lawyers
Company Secretary
Mr Paul Crawford
Unit 68
283 Given Terace
Paddington Qld 4064
Ph: +61 7 3369 7058
Email: info@sayonamining.com.au
Website: www.sayonamining.com.au
Sayona Québec Inc.
+1 (819) 384 3494
169, chemin du Quai
La Motte, Québec
J0Y 1T0
Website: www.sayonaquebec.com
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
Colin Biggers & Paisley Lawyers
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