ANNUAL REPORT
ANNUAL REPORT
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CONTENTS
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17
23
24
32
34
49
50
92
97
Tansim
Project
Western Australian
Projects
East Kimberley
Graphite Project
Tenement
Schedule
Resources
and Reserves
Directors’
Report
Auditor’s Independence
Declaration
Financial
Statements
ASX
Information
Corporate
Directory
The Company
Highlights
Sayona's Expansion
Strategy
Managing Director’s
Review
2
3
4
5
8
Leadership
Team
10
Operations
Review
12
Authier
Project
CONTENTS
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INTO AN
ELECTRIC
FUTURE
PLUGGED
INTO AN
ELECTRIC
FUTURE
2
3
4
5
6
8
The Company
Highlights
Sustainability
Sayona's Expansion
Strategy
Managing Director’s
Review
Leadership
Team
10
Review of
Operations
North American Lithium
Moblan Lithium Project
Authier Lithium Project
10 Review of Operations
10
12
14
16
16
18
19
22
Tenement
Schedule
Tansim Lithium Project
Lac Albert Project
Novonix Testing
Western Australian Projects
30
35
54
56
Resources
and Reserves
Directors’
Report
Auditor’s Independence
Declaration
Financial
Statements
108
ASX
Information
113
Corporate
Directory
Sayona Mining Limited I Annual Report 2022 1
Lac Albert Project Tansim Lithium Project Novonix Testing
Western Australian Projects
THE COMPANY
North American Lithium
Authier Lithium
Moblan Lithium
Pilbara Lithium/Gold
Lithium development
Lithium exploration
Sayona Mining Limited (ASX:SYA;
OTCQB:SYAXF) is an emerging
lithium producer with projects in
Québec, Canada and Western
Australia.
Sayona is focused on becoming in
2023 the first local supplier of
spodumene in North America, paving
the way to being the region's leading
supplier of lithium
carbonate/hydroxide.
In September 2022, Sayona's growth
in market value was recognised with
the Company's promotion to the
benchmark S&P/ASX200 index.
This followed a number of milestones
in fiscal 2022, including the
successful acquisition of the North
American Lithium (NAL) operation in
Québec. A pre-feasibility study
announced in May 2022 showed the
value of NAL as part of the
Company's emerging Abitibi hub.
The acquisition of a 60% stake in the
Moblan Lithium Project has also
spurred the creation of a northern
hub, as Sayona rapidly gains the
leading spodumene (lithium)
resource base in North America.
Meanwhile in Western Australia, the
Company has a prospective portfolio
of gold and lithium projects in the
Pilbara region, with the latter subject
to an earn-in agreement with Morella
Corporation.
With lithium prices and demand
hitting all-time highs in 2022 on the
back of the accelerating electric
vehicle (EV) revolution, Sayona is well
placed to generate increased value
for shareholders.
Importantly, the Company is
operating in a sustainable and stable
jurisdiction, with leading ESG
benefits due to Québec's clean and
green hydropower and proximity to
North American battery markets.
SAYONA'S GROWTH IN
MARKET VALUE WAS
RECOGNISED WITH THE
COMPANY'S
PROMOTION TO THE
BENCHMARK
S&P/ASX200 INDEX
2
HIGHLIGHTS
Completion of successful acquisition
of North American Lithium (NAL)
operation in Québec, offering fast-track
to production
Positive NAL pre-feasibility study
confirms technical and financial
viability over 27-year life of mine
3
Li
6.941
Acquisition of 60% stake in Moblan
Lithium Project, becoming
centrepiece of expanding northern
lithium hub
Successful doubling of Québec
lithium resource base, becoming
the largest in North America
Substantial growth in market value,
culminating in September 2022
promotion to S&P/ASX200 index
Sayona Mining Limited I Annual Report 2022 3
As part of our commitment, Sayona
is participating in the Towards
Sustainable Mining initiative, a
globally recognised performance
system that helps mining companies
evaluate and manage their
environmental and social
responsibilities.
Read more about our sustainability
initiatives in the 2021 CSR Report,
which is available via the Company's
website.
SUSTAINABILITY
Sayona's 2021 Corporate Social
Responsibility (CSR) Report has
highlighted the Company's
commitment to sustainable
development.
The Company is committed to
investing in the communities in
which we operate to provide them
with a better future. A strong
commitment to health, safety,
sustainability and social
responsibility is not just good for
business, it also reduces risks for all
stakeholders and inspires healthy
relationships with all communities.
Our commitment to sustainable
development is based on the
following principles:
RESPECT –
We operate with respect for cultures,
customs, social values, laws and
human rights.
SOCIAL
RESPONSIBILITY –
We are committed to contributing to
the social and economic
development of the communities
with which we work, and to
maintaining fair and respectful
relationships with our employees
and external partners. We actively
engage with our host communities
by listening to their needs and
contributing to their vision of a
sustainable future.
HEALTH AND SAFETY –
We provide a work environment
where human health and safety is a
priority for everyone.
ENVIRONMENTAL
GOVERNANCE –
We aim to minimise our impact on
the environment to maintain
sustainability and diversity, and do
so continuously to encourage
sustainable development.
4
SAYONA’S EXPANSION STRATEGY
Stepping up the lithium
value chain.
2022 - 2024
! Targeting Abitibi
hub production up
to 180kt of SC6
! Develop Abitibi
downstream
refinery plans
! Complete northern
hub and start
Moblan production
2022
! Complete NAL
restart plan & Abitibi
hub
! Expand Moblan as
northern hub
! WA gold/lithium
exploration
2027 +
! Targeting expansion
of northern hub
capacity
! Further invest in
Québec battery
metals to increase
supply
2025 - 2026
! Targeting start of
refinery operations
at Abitibi
! Ramp-up SC6
production at
Moblan
! Develop refinery
operation to
support lithium
production from
northern hub
Sayona Mining Limited I Annual Report 2022 5
MANAGING DIRECTOR’S REVIEW
Dear Shareholder
Little steps, but quickly.
That has been the mantra for
Sayona as we have climbed up the
lithium value chain, acquiring the
leading lithium resource base in
North America in preparation for
moving downstream into lithium
carbonate/hydroxide production.
The market's confidence in our
strategy has been aptly
demonstrated. In September 2022,
Sayona was promoted to the
benchmark S&P/ASX200 index, a
significant milestone that reflected
our substantial growth in market
value to more than A$2 billion.
There were numerous highlights
during fiscal 2022, some of which I
will touch upon here, with all of them
contributing to our overall expansion
strategy.
Finalisation of NAL
acquisition
A highlight for the past fiscal year
was the completion in August 2021
of the acquisition of North American
Lithium (NAL), in partnership with
Piedmont Lithium (Sayona 75%;
Piedmont 25%). Some C$400 million
has already been invested in the
operation, including a concentrator,
mining operations and significantly,
a carbonate plant.
Sayona has wasted no time with our
plan to recommence spodoumene
(lithium) production at NAL in the
first quarter of 2023.
Senior management personnel have
been recruited, major long-lead
items ordered and permitting and
other approvals advanced.
As of September 2022, procurement
was 94% completed and nearly all
the required permits had been
obtained, with construction activities
also ramping up on-site. Québec
company, L. Fournier & Fils, was
also awarded the contract for mining
operations at NAL, a C$200 million,
four-year contract that highlights the
economic benefits of the operation
to the province and our commitment
to local stakeholders.
With operational works to
commence in October 2022, we are
progressing well towards our target
and I look forward to announcing the
milestone of first production next
year!
Positive NAL pre-feasibility
study
The potential value of NAL was
highlighted in a positive pre-
feasibility study (PFS) released in
May 2022, which confirmed the
technical and financial viability of the
operation over a projected 27-year
mine life. Initially, NAL is scheduled
to produce a lithium concentrate for
general market conversion, before
ultimately becoming a primary feed
source for our planned downstream
products.
The PFS showed an estimated net
present value of around A$1 billion
(pre-tax), with a high internal rate of
return of 140% and capital payback
within two years.
Significantly, the operation only has
modest capex requirements of
around A$100 million, with further
upgrades planned to improve
operational efficiency, grade, quality
and recovery.
Notably, the PFS was based on an
estimated spodumene concentrate
price of US$1,242 per tonne – a
fraction of recent reported prices of
around US$7,000.
When combined with our nearby
Authier Lithium Project, NAL will be a
very profitable, long-life operation
and we look forward to maximising
the benefits of our Abitibi hub.
Creation of northern hub
Sayona also took a major step
forward in our Québec resource
base during the past fiscal year, with
the acquisition of a 60% stake in the
Moblan Lithium Project. (SOQUEM
Inc, a wholly owned subsidiary of
Investissement Québec, holds the
remaining 40% interest).
Located in the Eeyou-Istchee James
Bay region of northern Québec,
Moblan is a top quality lithium
deposit in a region that hosts world-
class lithium resources such as the
Whabouchi mine.
Importantly for Sayona, Moblan
creates the opportunity for the
development of a northern hub,
adding to our Abitibi hub in the
south. In January 2022, Sayona
acquired 121 new claims around
3.5km west of Moblan, the Lac
Albert Project, which spans more
than 6,500 ha.
6
OUR SHAREHOLDER
BASE ALMOST DOUBLED
OVER THE PAST YEAR,
FROM AROUND 20,000 IN
SEPTEMBER 2021 TO
CURRENTLY NEARLY
39,000, RANKING SAYONA
AMONG THE MOST
POPULAR COMPANIES
ON THE ASX
Yours sincerely
Brett Lynch
Managing Director/CEO
Sayona has conducted some
28,000m of drilling at Moblan (as at
October 2022) and the results have
been excellent, with the potential to
significantly expand the resource
base.
Ultimately, as a first step Moblan has
the potential to generate up to 200kt
SC6 (spodumene) or 25kt LCE
(lithium carbonate equivalent),
adding to the targeted 220kt SC6 or
30kt LCE from the Abitibi hub.
Several potential refinery locations
are under review and we look
forward to updating the market on
our progress.
Investor support
Sayona would not have achieved
recent progress without support
from investors, and I would like to
thank all shareholders, both
longstanding and recent, who have
backed our capital raisings over the
past year.
The latest raising in May 2022 was
an institutional placement of A$190
million to fund NAL's restart, with
significant demand seen from global
institutional, professional and
sophisticated investors.
It is gratifying to see such support
particularly amid the volatile financial
markets experienced in 2022, in the
wake of geopolitical events and
rising inflation and interest rates.
Our shareholder base almost
doubled over the past year, from
around 20,000 in September 2021 to
currently nearly 39,000, ranking
Sayona among the most popular
companies on the ASX.
We have also attracted increasing
attention from institutional investors,
particularly in the wake of our
promotion to the S&P/ASX200 index.
I welcome the support from such
investors from across North
America, Europe, Asia and Australia.
I would also like to acknowledge the
contribution made by all our team
across Canada and Australia,
including employees, contractors,
suppliers and everyone associated
with Sayona's successful growth.
There will be no slowdown in the
year ahead, with further expected
growth in our staff, particularly in
Québec, to facilitate the start of
production at NAL.
Electric outlook
Recent reports highlight the electric
outlook for the lithium sector, based
on the strength of demand from the
EV and battery industry.
Industry analysts Benchmark Mineral
Intelligence have projected that
more than 300 new mines need to
be built over the next decade to
meet the demand for EV and energy
storage batteries, including 74 new
lithium mines with an average size of
45,000 tonnes by 2035.
With supply badly lagging demand,
the onus is on companies such as
Sayona to get into production as
quickly and as efficiently as
possible.
I can assure you that we are working
as fast and hard as we can to make
this happen.
Sayona Mining
Limited I Annual Report 2022
7
We have also attracted increasing attention from institutional investors, particularly in the wake of our promotion to the S&P/ASX200
index. I welcome the support from such investors from across North America, Europe, Asia and Australia.
I would also like to acknowledge the contribution made by all our team across Canada and Australia, including employees,
contractors, suppliers and everyone associated with Sayona's successful growth.
There will be no slowdown in the year ahead, with further expected growth in our staff, particularly in Québec, to facilitate the start of
production at NAL.
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
Morella Corporation.
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 Morella
Corporation.
8
Québec leadership
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
Interim General
Manager, NAL
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.
SAL VITALE
Chief Financial Officer,
Sayona Québec
A graduate of McGill
University, Sal has held
senior finance positions
with companies operating
in the retail, distribution,
mining, transportation and
manufacturing industries.
He joined Sayona Québec
in May 2022.
Sayona Mining Limited I Annual Report 2022 9
REVIEW OF OPERATIONS
North American Lithium
The acquisition of North
American Lithium (NAL)
marked a transformational
year for Sayona.
Forming the key part of
Sayona's Abitibi hub along
with the nearby Authier Lithium
Project, the restored NAL
operation together with the
Company's emerging northern
hub, now comprises North
America's largest lithium
(spodumene) resource base.
This will allow Sayona to launch
production ahead of other North
American projects, generating
sustainable cash flows and putting
the Company on a fast track to go
downstream into value-added
lithium carbonate or hydroxide
production.
The NAL acquisition was completed
in August 2021 through a strategic
partnership with subsidiary, Sayona
Québec Inc (Sayona Quebec) and
Piedmont Lithium Inc. (Piedmont)
(SYA 75%; PLL 25%).
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 project. The
Company plans to combine ore
produced from Authier with ore
produced at NAL to facilitate a
significant improvement in plant
performance and economics and
transform both operations.
10
In June 2022 a formal agreement
was announced by Sayona Québec
and Piedmont to restart spodumene
production at NAL. This will
ultimately include the development
of a spodumene conversion facility
at NAL to produce lithium hydroxide
or lithium carbonate, as per the
Company's agreement with the
Québec Government to develop a
local downstream processing
capability in proximity to the North
American battery market.
The restart of NAL operations will
signal the beginning of revenue
generation for Sayona, another step
on its journey to becoming a leading
North American lithium producer.
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.
As of September 2022, procurement
was 94% completed and nearly all
the required permits had been
obtained, with construction activities
also ramping up on-site.
In the same month, Québec
company, L. Fournier & Fils, was
awarded the contract for mining
operations at NAL, a C$200 million,
four-year contract that highlights the
economic benefits of the operation
to the province and Sayona's
commitment to local stakeholders.
Sayona is committed to supporting
the local economy and local
employability. More than 85% of the
workforce comes from local
communities.
Sayona is on track for the
recommencement of spodumene
(lithium) production at NAL in the
first quarter of 2023.
OPERATIONS REVIEW
REVIEW OF OPERATIONS
North American Lithium
Piedmont Partnership
The acquisition of North
American Lithium (NAL)
marked a transformational
year for Sayona.
Forming the key part of
Sayona's Abitibi lithium hub
along with the nearby Authier
Lithium Project, the restored
NAL operation together with
the Company's emerging
northern Québec hub, now
comprises North America's
largest lithium (spodumene)
resource base.
This will allow Sayona to launch
production ahead of other North
American projects, generating
sustainable cash flows and putting
the Company on a fast track to go
downstream into value added
lithium carbonate or hydroxide
production.
in August 2021 through a strategic
partnership with subsidiary, Sayona
Quebec Inc (Sayona Quebec) and
Piedmont Lithium Inc. (Piedmont)
(SYA 75%; PLL 25%).
NAL has a lithium mine and
performance and economics and
transform both operations.
In June 2022 a formal agreement
was announced by Sayona Quebec
and Piedmont to restart spodumene
production at NAL. This will
ultimately include the development
of a spodumene conversion facility
at NAL to produce lithium hydroxide
or lithium carbonate, as per the
Company's agreement with the
Québec Government to develop a
local downstream processing
capability in proximity to the North
American battery market.
The restart of NAL operations will
signal the beginning of revenue
generation for Sayona, another step
on its journey to becoming a leading
North American lithium producer.
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
As of September 2022, procurement
was 94% completed and nearly all
the required permits had been
obtained, with construction activities
also ramping up on-site.
The NAL acquisition was completed
processing and EV production.
concentrator located in Abitibi, near
In the same month, Québec
the established mining district of Val
company, L. Fournier & Fils, was
d'Or, Québec and in proximity to
awarded the contract for mining
Sayona's Authier project. The
Company plans to combine ore
produced from Authier with ore
produced at NAL to facilitate a
significant improvement in plant
operations at NAL, a C$200 million,
four-year contract that highlights the
Sayona is on track for the
economic benefits of the operation
recommencement of spodumene
to the province and Sayona's
(lithium) production at NAL in the
commitment to local stakeholders.
first quarter of 2023.
The bid for NAL was undertaken by
subsidiary Sayona Québec (75%)
supported by leading US based
lithium corporation, Piedmont
Lithium Inc. (25%).
Upon restart of operations, an
offtake agreement with Piedmont will
come into effect, whereby Piedmont
is entitled to purchase the greater of
113,000 metric tonnes per year of
spodumene concentrate or 50% of
production from NAL. Prior to the
NAL restart, the agreement provides
for offtake of 60,000 tonnes or 50%
of concentrate produced from ore
mined at Sayona's nearby Authier
Lithium Project.
This offtake agreement will remain in
place until the commencement of
operation of a lithium conversion
plant in Québec. At this point,
spodumene concentrate produced
from NAL will be preferentially
delivered to that chemical plant. Any
remaining concentrate not required
by the conversion plant will be
delivered to Piedmont.
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 2022 11
REVIEW OF OPERATIONS
Authier Lithium Project
The Authier Lithium Project
(Authier) in Québec is a hard
rock spodumene lithium
deposit set to play a key role
in the Company's planned
multi-project Abitibi lithium
hub, as a source of
supplementary ore for
processing at NAL when
production restarts.
Following the acquisition of the NAL
mine and concentrator, the Authier
project's operating strategy was
revised to include only mining
operations and waste and water
management onsite.
The Authier mine will serve as a
supplementary or secondary mine
and will deliver ore to NAL for
processing.
The plan to process Authier ore at
NAL may 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.
Positive NAL pre-feasibility study
* This includes conservative
allowances for non (or low)
mineralised diluted material from the
upper and lower contact of the
pegmatite/mining horizon.
Key outcomes of the PFS included
an estimated pretax NPV of C$952
million) (8% discount rate), a pretax
IRR of 140% and capital payback
period within two years. The life of
mine has been extended to 27
years, based on an estimated JORC
Proved and Probable Ore Reserves
of 29.2 Mt @ 0.96% Li O (Proved
Reserve 1.2Mt @ 0.92% Li O and
Probable Reserve 28.0Mt @ 0.96%
Li O).
2
2
2
In May 2022, Sayona
announced a positive
prefeasibility study (PFS)
confirming NAL's technical
and financial viability.
12
REVIEW OF OPERATIONS
Table 1: NAL Operation Including Authier Ore Supply – PFS Key Results
Item
Average Annual Ore Feed to Plant
Total Ore Mined
Unit
Mtpa
Mt
Results
1.5
183.4
Annual Spodumene Concentrate Production (@ 6% Li O)2
Tonnes/y
163,266
Rod Mill Feed Grade
Blended Li O Recovery
2
Life of Mine (LOM)
Total Spodumene Concentrate Produced
LOM Strip Ratio
Spodumene Concentrate Market Price
Capital Cost Estimate
Total Net Revenue
Project EBITDA
Total C1 Cash Cost
Total Cash Cost FOB / tonne product
Pre-Tax Net Present Value (NPV)
Pre-Tax Internal Rate of Return (IRR)
Discount Rate
Pre-Tax Project payback period
After-tax NPV
After-tax payback period
After-tax IRR
Exchange Rate
%
%
years
Mt
waste:ore
$
$M
$M
$M
$M
$
$M
%
%
years
$M
Years
%
1
67.7
27
4.4
5.3
AUD
1,836
102
7,888
3,234
3,812
873
1,070
140
8
2
844
2.1
139
A$:C$ C$:US$
0.89
USD
1,242
69
5,335
2,187
2,578
590
724
140
8
2
571
2.1
139
0.76
CAD
1,634
91
7,020
2,878
3,392
777
952
140
8
2
751
2.1
139
Sayona Mining Limited I Annual Report 2022 13
REVIEW OF OPERATIONS
Moblan Lithium Project
In October 2021, Sayona
completed the acquisition of
the Moblan Lithium Project
(Moblan) in a joint venture with
SOQUEM Inc, a wholly owned
subsidiary of Investissement
Québec. (Sayona
60%/SOQEM 40%)
Moblan is in the Eeyou-Istchee
James Bay region of northern
Québec, a proven lithium mining
province which hosts established,
world-class lithium resources
including the Whabouchi mine. It is
well serviced by key infrastructure
and transport and has access to
low-cost, environmentally friendly
hydropower.
Moblan is host to high-grade
spodumene mineralisation, in a well-
studied deposit with more than
17,000 metres of diamond drilling.
The Project covers around 433 ha
for a total of 20 claims.
2
A Mineral Resource Foreign
Estimate of 12.03Mt @ 1.4% Li O*
has been identified at Moblan and
there is potential to expand this
resource based on previous
geotechnical drilling which
intersected up to 29.1m of
continuous spodumene-bearing
pegmatites outside the resource
envelope.
14
REVIEW OF OPERATIONS
In January 2022, Sayona
commenced a major drilling
program at the project in partnership
with SOQUEM. In April 2022, Sayona
announced the discovery of a
significant new southern lithium
pegmatite zone, the Moblan South
Discovery. The following month the
Company announced the discovery
of multiple new mineralised lithium
pegmatites at Moblan South,
South-East Extension, Moleon and
extensions to the Main Moblan
lithium deposit.
As of October 2022, Sayona had
completed approximately 28,000m
of drilling at the project.
In company with the nearby Lac
Albert Project, Moblan forms the
basis of a major northern hub for
Sayona in Québec, targeting
production of more than 25,000
tonnes of lithium carbonate
equivalent (LCE) by 2027 and
complementing the Abitibi hub in the
south. Sayona has now established
an office in the region, at
Chibougamau and hired a liaison
officer in Mistissini .
* The Mineral Resources and Ore
Reserves stated are foreign estimates
and are not reported in accordance with
the JORC Code. A competent person
has not done sufficient work to classify
the foreign estimates as Mineral
Resources or Ore Reserves in
accordance with the JORC Code. It is
uncertain that following evaluation and/or
further exploration work that the foreign
estimates will be able to be reported as
Mineral Resources or Ore Reserves in
accordance with the JORC Code.
Sayona Mining Limited I Annual Report 2022 15
REVIEW OF OPERATIONS
Lac Albert Project
In January 2022, Sayona announced
the acquisition of 121 new claims in
the vicinity of Moblan known as the
Lac Albert Project. Located 3.5km
west of the Moblan project, in the
same proven lithium mining
province, the new claims span 6,592
ha. These claims are separate to the
current Moblan joint venture
agreement.
Past work has been limited and the
geology of the new claim area at Lac
Albert is poorly understood, with
much of the area obscured by
glacial moraines. A till and soil
sampling program was undertaken
at Lac Albert in May 2022 and
mapping of outcrops and boulders
completed.
Tansim Lithium Project
The Tansim Lithium Project (Tansim)
is situated 82 kilometres southwest
of Authier and is prospective for
lithium, tantalum and beryllium. The
project comprises 355 claims
spanning a total of 20,546 ha.
Sayona is focused on ensuring the
project generates maximum benefits
for all local stakeholders, including
First Nations, together with
minimising any environmental
impacts.
The main prospects at Tansim are
ViauDallaire, Viau and Vezina. An
Exploration Target for the Viau-
Dallaire prospect has been
estimated at between 5 million and
25 million tonnes, at an estimated
grade of 1.2 – 1.3% Li O.*2
No significant activities were
undertaken at Tansim during the
year while the focus was on
the Abitibi and northern hubs.
16
*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.
REVIEW OF OPERATIONS
WHABOUCHI
PROJECT
Lac Albert
PROJECT
MOBLAN
PROJECT
CHAPAIS
CHIBOUGAMAU
AUTHIER
PROJECT
AMOS
LEBEL-SUR-QUEVILLON
ALMA
SAGUENAY
ROUYN-NORANDA
TAMSIM
PROJECT
SENNETERRE
VAL-D’OR
NORTH
AMERICAN
LITHIUM
PROJECT
LA TUQUE
MONT AURIER
QUEBEC
N
NORTH BAY
MANIWAKI
TROS-RIVIERES
OTTAWA
MONTREAL
0
100
200km
Sayona
Québec
Nemaska
Lithium
Cities and
municipalities
Port
Airport
Factory
Railroad
Roads
Figure 1: Sayona's Lithium Project Locations in Québec
Sayona Mining Limited I Annual Report 2022 17
REVIEW OF OPERATIONS
* 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 CO2;
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.
Novonix Testing
In April 2022, Sayona announced
product trials with leading battery
researcher, Novonix Limited
(Novonix) had reaffirmed the quality
of the Author spodumene product.
Results 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.
Samples were then sent to the
Novonix Battery Technology
Solutions laboratories for testing.
The results showed the discharge
capacity of Sayona's
hydroxidebased cathode cells was
the same as benchmark cathode
cells using currently available
commercial lithium hydroxide.
18
REVIEW OF OPERATIONS
Western Australian Projects
Sayona's leases in Western
Australia cover 1,072 sq km
and comprise lithium, gold
and graphite tenure in the
Pilbara, Yilgarn and East
Kimberley regions.
The Pilbara projects comprise 12
lithium leases totaling 933 sq km in
the Pilgangoora lithium district, with
10 of the tenements also having
associated gold rights. These are
proximal to the De Grey Mining's
10.6 Moz Au Mallina Gold Project,
which includes the 8.5 Moz Au Hemi
gold discovery.
Of the 12 Pilbara tenements with
lithium rights, nine are subject to an
earnin agreement, where Morella
Corporation Limited (ASX:1MC,
Morella), previously Altura Mining, is
carrying out exploration to earn an
interest. The three remaining
tenements are held within Sayona's
100% owned lithium exploration
portfolio.
N
Port Hedland
E 45/5289
Strelley West
E 45/5904
Mac Well
E 45/5288
Strelley
E 47/3829
Deep Well
Au, Li
- 100% SYA
Hemi Gold
Discovery
(De Grey Mining)
E 45/2364
Tabba Tabba
Li - 100% SYA
E 47/2983
Mallina
E 47/3950
Mt Dove
E 45/5817
Indee
E 45/4703
Tabba Tabba East
E 45/4716
Red Rock
Au, Li
- 100% SYA
LEGEND
Sayona tenement
(gold and lithium)
Sayona tenement
(lithium only)
Morella Corp. has an earn-in right
for lithium on all tenements
except where otherwise noted
Road
Rail
Wodgina
Lithium Mine
(MinRes/Albemarle)
Pilgangoora
Lithium Mine
(Pilbara Minerals)
E 47/3802
Friendly Creek
E 45/4726
West Wodgina
0
10
20km
Figure 2: Sayona's tenements in Western Australia
Sayona Mining Limited I Annual Report 2022 19
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
REVIEW OF OPERATIONS
Morella Lithium Earn-In
In 2021, Morella commenced an
earn-in agreement with Sayona
covering eight tenements including
the Mallina, Tabba East and Strelley
areas, all in the Pilgangoora lithium
district, and two tenements in the
South Murchison. Morella has to
spend A$1.5 million on exploration
within three years to earn a 51%
interest.
Mt Edon Lithium Project
E59/2092
This project located in the South
Murchison covers the southern
portion of the Payne's Find
greenstone belt and hosts an
extensive swarm of pegmatites.
During the period, Morella
commenced exploration, mapping a
total of 53 pegmatite outcrops. Rock
chip assay results indicate the
potential of the area for lithium
mineralisation.
Sayona Pilbara Gold
Exploration (100%)
Sayona's Pilbara gold leases are
prospective for intrusion related gold
mineralisation, similar in style to that
identified at the Hemi gold
600000 E
650000 E
700000 E
Strelley
N
Hemi Gold Deposit
8.5Moz Au (part of 10.6Moz Au)
Mallina Gold Project
(De Grey)
Deep Well
South Hedland
Strelley
Mac 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
Gillies Prospect
(De Grey)
LEGEND
Sayona Gold Tenement
Gold Resource
7650000 N
Hemi Discovery
Pilbara Mining Centre
7650000 N
Mt Dove
Kangan
Tabba Tabba
Tabba Tabba
7700000 N
Red Rock
Mt York (Kairos)
873,000 oz Au
Indee
Wingina (De Grey)
357,000 oz Au
Wodgina
Mining Centre
Wodgina
Friendly Creek
25km
650000 E
700000 E
De Grey Tenement
De Grey Intrusion
De Grey Target
Road
Rail
Town
600000 E
Figure 3: Sayona's Pilbara gold projects
20
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 planning further drill
testing of the mineralisation to obtain
samples for metallurgical and
beneficiation testwork.
REVIEW OF OPERATIONS
discovery. This style of
mineralisation is hosted within
altered late stage hiMg diorites.
Sayona's tenement portfolio remains
effectively untested for its gold
potential with large areas masked by
surficial cover.
Mt Dove Project
E47/3950
The Mt Dove Project is within 5km of
De Grey's greater Hemi project area,
a 15km trend which includes Hemi
and adjacent intrusions and which is
host to 8.5Moz Au in gold resources.
During the year, airborne magnetic
surveys and geological mapping
was undertaken which identified
magnetic features for drill testing.
Deep Well Project
E47/3829
The Deep Well Project covers an
area of 119 sq km to the west of Port
Hedland.
Interpretation of new high resolution
geophysical data, covering the
entire lease area, has identified 11
discrete magnetic anomalies. An air-
core drilling program, carried out in
May, completed a total of 60 drill
holes for 1,677m. Drill samples have
been submitted for gold, lithium and
multi-element analysis. Results are
pending.
Drilling targeted magnetic features
that display similarities to the Hemi
style of intrusion-related gold
mineralisation. The T1, T2, T3, T7,
T12a and T12b targets were tested.
Planning for follow up RC drilling is
underway.
Sayona Pilbara Lithium
Exploration (Sayona
100%)
Sayona holds the lithium rights at
the Deep Well, Tabba Tabba and
Red Rock tenements which cover a
total of 334 sq km.
Tabba Tabba Project
E45/2364
The Tabba Tabba Project is located
north of the Pilgangoora lithium
mining area, in a region of historic
tin and tantalum mining.
Soil geochemistry and geological
mapping has identified pegmatite
and geochemical anomalies.
Planning for drill testing of these
features in the 2022 season are
advanced.
Red Rock Project
E45/4716
During the period a geological and
regolith terrain mapping study was
undertaken over the tenement area,
identifying a north-east trading
structural corridor extending from
Pilgangoora in the south.
As a first pass test for lithium and
gold mineralisation, a soil
geochemical sampling program was
completed over a 10km+ extent to
this target zone. Once results are
returned they will be assessed for
potential targets for drill testing.
Sayona Mining Limited I Annual Report 2022 21
TENEMENT SCHEDULE
As at 31 August 2022
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 Morella Lithium Earn-in
22
TENEMENT SCHEDULE
Canadian Tenement Schedule - Authier
Canadian Tenement Schedule - Tansim
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
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
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
1133877
2415443
2415444
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
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%
Sayona Mining Limited I Annual Report 2022 23
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
24
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 2022 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%
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
26
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 2022 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%
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
28
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%
Canadian Tenement Schedule - Moblan
Tenement
Location
Interest in
Tenement
2331201
2331202
2331203
2331204
2331205
2331206
2331207
2331208
2331353
2331354
2331355
2331356
2331357
2331358
2331359
2195586
2195587
2338382
2378688
2378689
Moblan, Québec
Moblan, Québec
Moblan, Québec
Moblan, Québec
Moblan, Québec
Moblan, Québec
Moblan, Québec
Moblan, Québec
Moblan, Québec
Moblan, Québec
Moblan, Québec
Moblan, Québec
Moblan, Québec
Moblan, Québec
Moblan, Québec
Moblan, Québec
Moblan, Québec
Moblan, Québec
Moblan, Québec
Moblan, Québec
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 2022 29
RESOURCES AND RESERVES
In March 2022, the Company
announced a total JORC combined
Measured, Indicated and Inferred
Mineral Resource of 119.1 million
tonnes (mt) @ 1.05% Li O with the
total Canadian National Instrument
43-101 Measured and Indicated
Mineral Resource statement rising to
87.8 Mt @ 1.05% Li O. The
2
2
identification of the first underground
constrained resources at NAL,
taking advantage of higher-grade
mineralisation at depth, together
with significant inferred
mineralisation within the open pit
constrained estimation offers scope
for further future resource increases
under the NI 43-101 reporting code.
Mineral Resources
Estimates: NAL & Authier
JORC Code (2012) compliant and
NI43-101 Mineral Resource
estimates for the NAL and Authier
deposits are presented in Tables 1
and 2 below.
Authier JORC Mineral Resource Estimate (0.55% Li 0 cut-off grade)
2
Table 2:
Category
Measured Resource
Indicated Resource
Inferred Resource
Total Resource
Measured + Indicated Resource
Tonnes (Mt)
Grades (% Li 0)2
Contained Li 0 (t)
2
6.58
10.60
17.18
3.76
20.94
1.02
1.01
1.01
0.98
1.01
67,100
107,100
174,200
36,800
211,000
Table 1: JORC Mineral Resource Estimates, NAL and Authier
NAL – Open Pit Constrained Mineral Resource Statement using a 0.6% Li O cut-off
2
Category
Measured
Indicated
Measured and Indicated
Inferred
Tonnes
1,471,000
52,806,000
54,277,000
13,874,000
Li 0 %2
0.99
1.01
1.01
0.96
Contained Li 0 (t)
2
14,600
533,300
548,200
133,200
NAL – Underground Constrained Mineral Resource Statement using a 0.8% Li O cut-off
2
Category
Measured
Indicated
Measured and Indicated
Inferred
Tonnes
-
19,398,000
19,398,000
14,372,000
Li 0 %2
-
1.18
1.18
1.19
Contained Li 0 (t)
2
-
228,900
228,900
171,000
NAL – Total Open Cut and Underground Mineral Resource Statement
Category
Tonnes
Li 0 %2
Contained Li 0 (t)
2
Total JORC Resource
(Measured, Indicated and Inferred)
101,921,000
1.06
1,081,300
30
Note: The Ore Reserve Estimate is inclusive of dilution and ore loss.
Table 1: JORC Mineral Resource Estimates, NAL and Authier (continued)
Authier – Open Pit Constrained Mineral Resource Statement using a 0.55% Li O cut-off
2
Category
Measured
Indicated
Measured and Indicated
Inferred
Tonnes
6,042,000
8,098,000
14,140,000
2,996,000
Li 0 %2
0.98
1.03
1.01
1.00
Contained Li 0 (t)
2
59,200
83,400
142,800
30,000
Authier – Total Mineral Resource Statement
Measured and Indicated
Category
Tonnes
Li 0 %2
Contained Li 0 (t)
2
Total JORC Resource
(Measured, Indicated and Inferred)
17,136,000
1.01
173,000
Total Mineral Resource Statement NAL and Authier
NAL – Underground Constrained Mineral Resource Statement using a 0.8% Li O cut-off
2
Li 0 %2
Contained Li 0 (t)
2
Category
Tonnes
Li 0 %2
Contained Li 0 (t)
2
Measured and Indicated
NAL and Authier JORC Mineral
Resource Estimate
(Measured, Indicated and Inferred)
119,057,000
1.05
1,250,000
Table 2: NI43-101 Mineral Resource Estimates, NAL and Authier
NAL – Open Pit Constrained Mineral Resource Statement using a 0.6% Li O cut-off
2
Li 0 %2
Contained Li 0 (t)
2
Category
Measured
Indicated
Inferred
Category
Measured
Indicated
Inferred
Category
Tonnes
1,471,000
52,806,000
54,277,000
13,874,000
Tonnes
-
19,398,000
19,398,000
14,372,000
Tonnes
73,675,000
28,246,000
0.99
1.01
1.01
0.96
-
1.18
1.18
1.19
1.05
1.08
14,600
533,300
548,200
133,200
-
228,900
228,900
171,000
77,100
304,200
NAL – Total Open Cut and Underground Mineral Resource Statement
Li 0 %2
Contained Li 0 (t)
2
Total NI43-101 Measured and Indicated
Total NI43-101 Inferred
Sayona Mining Limited I Annual Report 2022 31
The NI43-101 compliant Foreign Estimates of mineralisation for the NAL and Authier deposits are tabulated below.
Table 2: NI43-101 Mineral Resource Estimates, NAL and Authier
NAL – Open Pit Constrained Mineral Resource Statement using a 0.6% Li O cut-off
2
Category
Measured
Indicated
Measured and Indicated
Inferred
Tonnes
1,471,000
52,806,000
54,277,000
13,874,000
Li 0 %2
0.99
1.01
1.01
0.96
Contained Li 0 (t)
2
14,600
533,300
548,200
133,200
NAL – Underground Constrained Mineral Resource Statement using a 0.8% Li O cut-off
2
Category
Measured
Indicated
Measured and Indicated
Inferred
Tonnes
-
19,398,000
19,398,000
14,372,000
Li 0 %2
-
1.18
1.18
1.19
Contained Li 0 (t)
2
-
228,900
228,900
171,000
NAL – Total Open Cut and Underground Mineral Resource Statement
Category
Total NI43-101 Measured and Indicated
Total NI43-101 Inferred
Tonnes
73,675,000
28,246,000
Li 0 %2
1.05
1.08
Contained Li 0 (t)
2
77,100
304,200
Authier – Open Pit Constrained Mineral Resource Statement using a 0.55% Li O cut-off
2
Category
Measured
Indicated
Measured and Indicated
Inferred
Tonnes
6,042,000
8,098,000
14,140,000
2,996,000
Authier – Total Mineral Resource Statement
Category
Tonnes
Total NI43-101 Measured and Indicated
14,140,000
Total NI43-101 Inferred
2,996,000
Total Mineral Resource Statement NAL and Authier
Category
Tonnes
Total NI43-101 Measured and Indicated
87,815,000
Total NI43-101 Inferred
31,242,000
Li 0 %2
0.98
1.03
1.01
1.00
Li 0 %2
1.01
1.00
Li 0 %2
1.05
1.07
Contained Li 0 (t)
2
59,200
83,400
142,800
30,000
Contained Li 0 (t)
2
142,800
30,000
Contained Li 0 (t)
2
919,900
334,200
Cautionary Note: National Instrument 43101 is a national instrument for the Standards of Disclosure for Mineral Projects
within Canada. The Mineral Resources stated are foreign estimates and are not reported in accordance with JORC Code.
See Table 1 above for JORC (2012) Resource Reporting for the NAL and Authier projects.
32
Based on the substantially increased Mineral Resource Estimate Sayona developed a Pre-feasibility Study (PFS) and
Ore Reserves estimate for the NAL project.
NAL Ore Reserve Estimate
Table 3 below presents the NAL Ore Reserve Estimate. In addition to the 29.2 Mt of ore, a total of 150.4 Mt of waste
and 3.8 Mt of overburden must be mined, resulting in an overall LOM strip ratio of 5.3.
Table 3: North American Lithium Project Ore Reserves Estimate
North American Lithium Project JORC Ore Reserve Estimate (0.60% Li O cut-off grade)
2
Category
Proved Ore Reserve
Probable Ore Reserve
Total Ore Reserve
* Metallurgical recovery not applied
Tonnes (Mt)
1.2
28.0
29.2
Grades (%Li 0)2
0.92
0.96
0.96
Contained Li 0 (kt)*
2
10.9
269.4
280.3
Sayona Mining Limited I Annual Report 2022 33
SAYONA IS FOCUSED ON
BECOMING IN 2023, THE
FIRST LOCAL SUPPLIER
OF SPODUMENE IN
NORTH AMERICA, PAVING
THE WAY TO BEING THE
REGION'S LEADING
SUPPLIER OF LITHIUM
CARBONATE/HYDROXIDE.
34
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 2022. 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
2022 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 16 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
ELIGIBLE TO
ATTEND
16
16
16
16
ATTENDED
16
16
15
16
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 has changed significantly over the last 12 months. The Board
is currently reviewing its corporate governance regime. An audit committee will be constituted as part of that
process.
INFORMATION ON DIRECTORS AND COMPANY SECRETARY
The names and qualifications of current Directors are summarised as follows:
Brett L. Lynch
Qualifications
Experience
Managing Director
Company Director Diploma; Graduate Diploma of Business (Accounting); Bachelor
of Engineering (Mining) (Honours).
Appointed to 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 emergent 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
132,643,993 ordinary shares, 30,624,999 listed options and 2,000,000 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. Over 40 years of commercial experience, including
various technical and management roles within the minerals, coal and petroleum
industries. Principal of his own corporate consultancy firm, providing accounting,
corporate governance, business advisory and commercial management services.
Interest in Securities
159,585,689 ordinary shares and 20,000,000 unlisted options.
Directorships in other listed
entities during the 3 years
prior to current year
Nil
Sayona Mining Limited I Annual Report 2022 35
DIRECTORS’ REPORT
Allan C Buckler
Qualifications
Experience
Director (Non-Executive)
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
102,589,057 ordinary shares and 10,000,000 unlisted options.
Directorships in other listed
entities during the 3 years
prior to current year
Morella Corporation Limited (formerly 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. Mr Brown is an experienced mining
company executive with over 40 years' experience in the mining industry in Australia,
United States, Africa and Indonesia, including the last 14 years in the Managing
Director role at Morella Corporation. Mr Brown has successfully sourced, developed
and operated numerous key global projects with a focus on lithium and battery
materials. He has an extensive global investment network to underpin the capital
requirements for project investment and development.
Interest in Securities
757,094 ordinary shares and 10,000,000 unlisted options.
Directorships in other listed
entities during the 3 years
prior to current year
DIVIDENDS
Morella Corporation Limited (formerly Altura Mining Limited), Greenwing
Resources Limited.
No dividends were declared or paid during the financial year.
SHARE OPTIONS
At the date of this report, the unissued ordinary shares of Sayona Mining Limited under option are as follows:
Grant Date
Expiry Date
Exercise Price
No. under Option
29 November 2019
29 April to 7 August 2020
28 January 2022
29 November 2022
29 April 2023
28 July 2023
4.0 cents
2.0 cents
15.0 cents
2,000,000
243,136,935
40,000,000
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 employee options are set out in the significant state of affairs section of this
report and Note 22 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.
36
DIRECTORS’ REPORT
INDEMNIFICATION OF DIRECTORS AND AUDITORS
The 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 Group. The contracts
include a prohibition on disclosure of the premium paid and nature of the liabilities covered under the policy.
The Group 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 Group or a related body corporate during
the year and up to the date of this report.
PROCEEDINGS ON BEHALF OF THE COMPANY
No person has applied for leave of Court to bring proceedings on behalf of the Company or intervene in any
proceedings to which the Company is a party for the purpose of taking responsibility on behalf of the Company for
all or any part of those proceedings.
The Company was not a party to any such proceedings during the year.
AUDITOR INDEPENDENCE
A copy of the auditor’s independence declaration as required under section 307C of the Corporations Act 2001 is
attached.
Non-Audit Services
There were no non-audit services provided by the Company’s auditors in the current or previous financial year.
Sayona Mining Limited I Annual Report 2022 37
DIRECTORS’ REPORT -
OPERATING AND FINANCIAL REVIEW
PRINCIPAL ACTIVITY
The consolidated Group’s principal activity during the financial year continued as the identification, acquisition,
evaluation and development of mineral exploration assets, focusing on lithium.
During the year, the Group completed the A$128.6M acquisition of North American Lithium Inc. (NAL) with its
strategic partner, Piedmont Lithium Inc., through its subsidiary Sayona Québec Inc.
The Group is presently undertaking a major refurbishment of the plant at NAL with a view to recommencing
spodumene concentrate production by first quarter 2023. The budgeted cost of the refurbishment is
approximately C$100M.
During the year, the Group also acquired a 60% interest in the Moblan joint venture for US$86.5M. With this
investment, the Group aims to form a northern Quebec hub, targeting production of more than 25,000 tonnes
LCE (Lithium Carbonate equivalent by 2027).
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.
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 will be achieved
through implementation of the Company’s business model of identifying, evaluating and developing its
portfolio of exploration and development assets.
The acquisitions of NAL and Moblan and integration with existing assets will potentially transform the Group
into a significant lithium producer in North America. It will also advance plans for downstream processing in
Quebec, taking advantage of its environment and economic advantage including low cost, renewable
hydropower, an established mining services industry and proximity to the North American battery market.
OPERATING RESULTS
The entity’s consolidated profit for the financial year after applicable income tax was A$83,686,172 (2021:
A$4,379,498 loss). Included in the profit for the year was a A$108,374,739 gain on acquisition of the North
American Lithium Inc. subsidiary.
REVIEW OF OPERATIONS
The Group’s operations during the year have been focused on the development of its lithium assets in Quebec
and working to realise value from its lithium and gold tenements in Western Australia.
Canada
North American Lithium Inc (NAL)
In August 2021, the Group announced the completion of its A$128.6m acquisition of North American Lithium Inc.
(NAL) with its strategic partner, Piedmont Lithium Inc.
NAL comprises 19 contiguous claims covering approximately 582 ha, situated in La Corne township in Québec’s
Abitibi-Témiscamingue region. The project lies 60 km north of the city of Val d’Or, a major mining service centre,
and in proximity to Sayona’s Authier Lithium Project (Authier).
The Group is targeting the restart of spodumene concentrate production at NAL from the first quarter 2023. In
addition, an evaluation of downstream processing at NAL will be undertaken.
In June 2022, the Group announced formal agreement by Sayona Québec Inc (SYA 75%; Piedmont Lithium 25%)
to restart spodumene concentrate production at NAL. The restart will feature significant operational upgrades
totalling approximately C$98M (~A$110M) to improve product quality and plant utilisation.
38
DIRECTORS’ REPORT -
OPERATING AND FINANCIAL REVIEW
Prior to the decision to restart production at NAL, the Group undertook studies in relation to the resources
available from both NAL and Authier, together with a preliminary feasibility study on the proposed NAL
operation.
In March 2022, the Group announced a total JORC combined Measured, Indicated and Inferred Mineral Resource
for NAL and Authier of 119.1M tonnes (Mt) @ 1.05% Li2O. The JORC Code (2012) compliant Mineral Resource
estimates for the NAL and Authier deposits are presented below.
NAL – Open Pit Constrained Mineral Resource Statement using a 0.6% Li2O cut-off
Tonnes
Category
1,471,000
Measured
52,806,000
Indicated
54,277,000
Measured and Indicated
13,874,000
Inferred
Li2O %
0.99
1.01
1.01
0.96
14,600
533,300
548,200
133,200
Contained Li2O (t)
Li2O %
Tonnes
NAL – Underground Constrained Mineral Resource Statement using a 0.8% Li2O cut-off
Category
Measured
Indicated
Measured and Indicated
Inferred
NAL – Total Open Cut and Underground Mineral Resource Statement
Category
Total JORC Resource
(Measured, Indicated and Inferred)
19,398,000
19,398,000
14,372,000
1.18
1.18
1.19
101,921,000
1,081,300
Tonnes
Li2O %
1.06
Contained Li2O (t)
228,900
228,900
171,000
Contained Li2O (t)
Authier – Open Pit Constrained Mineral Resource Statement using a 0.55% Li2O cut-off
Category
Measured
Indicated
Measured and Indicated
Inferred
Tonnes
6,042,000
8,098,000
14,140,000
2,996,000
Contained Li2O (t)
59,200
83,400
142,800
30,000
Li2O %
0.98
1.03
1.01
1.00
Authier – Total Mineral Resource Statement
Category
Total JORC Resource
(Measured, Indicated and Inferred)
Tonnes
17,136,000
Total Mineral Resource Statement NAL and Authier
Category
NAL and Authier JORC Mineral Resource
Estimate
Indicated and
Inferred)
(Measured,
Tonnes
119,057,000
Li2O %
Contained Li2O (t)
1.01
173,000
Li2O %
Contained Li2O (t)
1.05
1,250,000
In May 2022, the Group announced a positive pre-feasibility study (PFS) confirming NAL’s technical and financial
viability.
Based on a substantially increased Mineral Resource Estimate, the Group mandated BBA Inc., an experienced
Canadian engineering firm, to develop the PFS and Ore Reserves estimate for the NAL project and its integration
with the Authier project.
Key outcomes of the PFS included an estimated pre-tax NPV of C$952M) (8% discount rate), a pre-tax IRR of
140% and capital payback period within two years. The life of mine has been extended to 27 years, based on an
estimated JORC Proved and Probable Ore Reserves of 29.2 Mt @ 0.96% Li2O (Proved Reserve 1.2Mt @ 0.92%
Li2O and Probable Reserve 28.0Mt @ 0.96% Li2O). This includes conservative allowances for non (or low)
mineralised diluted material from the upper and lower contact of the pegmatite/mining horizon.
Sayona Mining Limited I Annual Report 2022 39
DIRECTORS’ REPORT -
OPERATING AND FINANCIAL REVIEW
The Group will implement a ROM (run-of-mine) ore stockpile management system whereby diluted material,
lower grade ore and higher-grade feed will be segregated and managed via a stockpile management plan to
ensure consistent feed to the plant. This will allow for production campaigns of similar material, providing the
concentrate plant sufficient feed stock to maximise product recovery and grade.
Table 1: NAL Operation Including Authier Ore Supply – PFS Key Results
Item
Average Annual Ore Feed to Plant
Total Ore Mined
Annual Spodumene Concentrate Production (@
6% Li2O)
Rod Mill Feed Grade
Blended Li2O Recovery
Life of Mine (LOM)
Total Spodumene Concentrate Produced
LOM Strip Ratio
Spodumene Concentrate Market Price
Capital Cost Estimate
Total Net Revenue
Project EBITDA
Total C1 Cash Cost
Total Cash Cost FOB / tonne product
Pre-Tax Net Present Value (NPV)
Pre-Tax Internal Rate of Return (IRR)
Discount Rate
Pre-Tax Project payback period
After-tax NPV
After-tax payback period
After-tax IRR
Exchange Rate
Results
Results
Unit
Mtpa
Mt
Results
1.5
183.4
Tonnes/y
163,266
%
%
years
Mt
waste:ore
$
$M
$M
$M
$M
$
$M
%
%
years
$M
Years
%
A$:C$
C$:US$
1.0
67.7
27
4.4
5.3
AUD
1,836
102
7,888
3,234
3,812
873
1,070
140
8
2
844
2.1
139
0.89
CAD
1,634
91
7,020
2,878
3,392
777
952
140
8
2
751
2.1
139
USD
1,242
69
5,335
2,187
2,578
590
724
140
8
2
571
2.1
139
0.76
A project revision process was initiated upon completion of the NAL acquisition and the provision of historical
geological, mining and process data. The data reviewed allowed for the update of the Ore Reserves Estimate and
increased concentrator mill throughput, from 3,800 tonnes per day (tpd) to 4,200 tpd to produce a 6% Li2O
spodumene concentrate.
40
DIRECTORS’ REPORT -
OPERATING AND FINANCIAL REVIEW
NAL Ore Reserves Estimate
Table 2 below presents the NAL Ore Reserves Estimate. In addition to the 29.2 Mt of ore, a total of 150.4 Mt of
waste and 3.8 Mt of overburden must be mined, resulting in an overall LOM strip ratio of 5.3.
Table 2: North American Lithium Project Ore Reserves Estimate
North American Lithium Project JORC Ore Reserve Estimate (0.60% Li2O cut-off grade)
Category
Tonnes (Mt)
Grades (%Li2O)
Contained Li2O (kt)*
Proved Ore Reserve
Probable Ore Reserve
Total Ore Reserves
1.2
28.0
29.2
*Metallurgical recovery not applied
Moblan Lithium Project
0.92
0.96
0.96
10.9
269.4
280.3
In October 2021, the Group announced it had completed the acquisition of its 60% interest in Moblan tenements
for US$86.5M (A$116.6M). The remaining 40% interest is held by SOQUEM Inc, a wholly owned subsidiary of
Investissement Québec.
Moblan is located in the Eeyou-Istchee James Bay region of northern Québec, a proven lithium mining province
which hosts established, world-class lithium resources including Nemaska Lithium’s Whabouchi mine. It is well
serviced by key infrastructure and transport and has access to low-cost, environmentally friendly hydropower.
Moblan is host to high-grade spodumene mineralisation in a well-studied deposit with more than 17,000 metres
of diamond drilling. It has a Mineral Resource Foreign Estimate of 12.03Mt @ 1.4% Li2O* and there is potential
to expand this resource based on previous geotechnical drilling, which intersected up to 29.1m of continuous
spodumene-bearing pegmatites outside the resource envelope.
In April 2022, Sayona announced the discovery of a significant new southern lithium pegmatite zone, the
Moblan South Discovery, following a 35 hole, 4,683m diamond drilling program. The lithium mineralisation was
at a shallow, 60m vertical depth, open in all directions and just 200m south of the main Moblan deposit.
The highlights included 5m @ 1.85% Li2O from 3.5m and 35m @ 1.62% Li2O from 27.6m in hole DDH135,
together with 6.6m @ 1.69% Li2O from 2.1m and 27.2m @ 1.53% Li2O from 22m in hole DDH136.
In June, the Group announced the discovery of multiple new mineralised lithium pegmatites at Moblan South,
South East Extension, Moleon and extensions to the Main Moblan lithium deposit.
Highlights included 23.4m @ 1.69% Li2O from 17.6m and 27.1m @ 1.5% Li2O from 53.1m in drill hole DDH 134
(Moblan South); 32.1m @ 2% Li2O from 94.1m (Main Moblan dyke); and 23m @ 1.79% Li2O from 34.7m
(Moblan East). Drill hole locations and selected intercepts are displayed in Figure 2.
* The Mineral Resources and Ore Reserves stated are foreign estimates and are not reported in accordance with
the JORC Code. A competent person has not done sufficient work to classify the foreign estimates as Mineral
Resources or Ore Reserves in accordance with the JORC Code. It is uncertain that following evaluation and/or
further exploration work that the foreign estimates will be able to be reported as Mineral Resources or Ore
Reserves in accordance with the JORC Code.
Sayona Mining Limited I Annual Report 2022 41
DIRECTORS’ REPORT -
OPERATING AND FINANCIAL REVIEW
Figure 2: Moblan drillhole plan view with selected drill intercepts
The Moleon prospect is located approximately 1km east of the Moblan deposit. Two main dykes, oriented
north-south were intercepted in DDH 150B with results including 14m @ 1.93% Li2O from 63.3m and 25.6m @
1.84% Li2O from 85.2m downhole.
Results from all of the holes at the Moleon sector have been encouraging, identifying more substantial
mineralisation at depth than recognised at surface. The large number of pegmatite occurrences at surface
which remain untested indicate the high potential for further discoveries as well as the benefit from drilling out
the newly identified mineralisation.
Following the positive drill results, a new 20,000m drilling program was launched to enable a new resource
calculation for the Moblan deposit, the new Moblan South discovery and Moleon areas. More than 215 new
drill sites have been permitted by the Québec resources ministry (MERN), with the objective of exploring and
defining new lithium resources at Moblan. Results are pending
Expansion of Northern Québec Lithium Hub
On 25 January 2022, the Group announced the expansion of its Northern Québec lithium hub through the
acquisition of 121 new claims west of the Moblan Lithium Project. Known as the Lac Albert Project, the new
claims span 6,592 ha and will be assessed for lithium pegmatite occurrences during the 2022 Northern
Hemisphere summer. The new claims are separate to the Moblan joint venture agreement.
Authier Lithium Project
Authier is a hard rock spodumene lithium deposit which has a key role in the Group’s planned multi-project
Abitibi lithium hub.
The Group continues to advance regulatory approvals for the project however, since the acquisition of NAL, these
will be based on a much smaller environmental footprint (ie, no requirement for a concentrator on-site).
42
DIRECTORS’ REPORT -
OPERATING AND FINANCIAL REVIEW
A portion of the lithium hydroxide sample was dispatched to Novonix Battery Technology Solutions in Nova Scotia
Canada, to evaluate its conformity with lithium-ion battery standards and its performance in commercial cells.
This will demonstrate the project’s ability to deliver a high-purity product suitable for leading battery and
cathode makers in North America. Results are pending.
In December 2021, a 25-hole, 3,908 metre diamond drill program was completed at Authier with the aim of
expanding the current ore resource, improving the strip ratio and accelerating production to enhance its
profitability. The drilling campaign also tested for potential repetition of lithium pegmatite in the southern lease
sector.
The results included 9m @ 1.46% Li2O, with lithium pegmatite mineralisation identified west of the resource and
the planned mining area. Three additional follow-up holes were completed to infill new mineralisation, with
assay results pending. Follow-up work includes updated resource estimates (announced in March 2022) and an
updated definitive feasibility study integrating Authier with NAL.
Western Australian Assets
The Group’s leases in Western Australia cover 1,072 sq km and comprise lithium, gold and graphite tenure in the
Pilbara, Yilgarn and East Kimberley regions.
The Pilbara project comprises 12 lithium leases totalling 933 sq km in the Pilgangoora lithium district with ten of
the tenements also having associated gold rights. These are proximal to the De Grey Mining’s 10.6 Moz Au
Mallina Gold Project which includes the 8.5 Moz Au Hemi gold discovery.
Of the 12 Pilbara tenements with lithium rights, nine are subject to an earn-in agreement, where Morella
Corporation Limited is carrying out exploration to earn an interest. The three remaining tenements are held
within the Group’s 100% owned lithium exploration portfolio.
In August 2021, Morella commenced an earn-in agreement with the Group covering eight tenements including
the Mallina, Tabba Tabba East and Strelley areas, all in the Pilgangoora lithium district, and two tenements in the
South Murchison. Morella has to spend A$1.5M on exploration within three years to earn a 51% interest.
The Group’s 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.
The Group’s Pilbara gold leases are prospective for intrusion related gold mineralisation, similar in style to that
identified at the Hemi gold discovery. This style of mineralisation is hosted within altered late stage hi-Mg diorites.
Sayona’s tenement portfolio remains effectively untested for its gold potential with large areas masked by
surficial cover
FINANCIAL POSITION, CONTINUED OPERATIONS AND FUTURE FUNDING
At 30 June 2022, the Group’s Consolidated Statement of Financial Position shows total assets of A$661,161,605
(2021: A$71,721,323), of which A$184,559,499 (2021: A$35,502,596) was cash, total liabilities of A$90,365,746
(2021: A$3,835,196) and net assets of A$570,795,859 (2021: A$67,886,127).
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.
During the year, the Company raised approximately A$388M (before costs) though the issue of securities. This
comprised approximately A$384M through a number of shareholder offers and private placement, together with
approximately A$4M from the exercise of options.
The Group’s primary focus over the next 12 months is the restart of spodumene concentrate production at NAL
together with an evaluation of downstream processing potential. In addition, the Group intends upgrading the
mineral resource at its Moblan project and completing a feasibility study on project’s development. An
evaluation of downstream processing options will also be undertaken.
The Group has sufficient cash on hand to fund planned operations through to the end of the 2023 financial year.
However, the Group’s plans to move to downstream processing of spodumene to lithium carbonate and
hydroxide, will require additional funding.
Sayona Mining Limited I Annual Report 2022 43
DIRECTORS’ REPORT -
OPERATING AND FINANCIAL REVIEW
The Group has funding initiatives in place, including the A$200M “At the Market” facility with Acuity Capital and
potentially A$4.8M through the exercise of listed options. Options are exercisable at A$0.02 each, prior to 29
April 2023. 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.
Directors believe that the Group is in a strong and stable financial position to grow it current operations.
SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS
Significant changes during the year include:
•
•
•
•
•
•
•
•
In July 2021, Sayona undertook a placement to raise A$45M through the issue of 600,000,000 new fully
paid shares at an offer price of A$0.075 per new share. Sayona’s major shareholder and strategic
partner, Piedmont, subscribed for A$8M in the Placement.
In August 2021, Sayona completed its A$128.6M acquisition of North American Lithium Inc. (NAL) with
its strategic partner, Piedmont Lithium Inc.
Sayona also launched a Share Purchase Plan (SPP) for shareholders at the same offer price as the
Placement. The SPP closed oversubscribed, with applications totalling approximately A$68M, more than
13 times the initial amount targeted. The Board subsequently used its discretion to accept
oversubscriptions to A$20M.
In October 2021, the Group announced it had completed the acquisition of its 60% interest in Moblan
tenements for US$86.5M (A$116.6M).
In October 2021, Sayona announced a Placement to global institutional, professional and sophisticated
investors raising A$100M through the issue of 689,655,173 new fully paid ordinary shares at an offer
price of A$0.145 per new share.
Sayona also undertook a Non-Renounceable Rights Issue at the same offer price as the Placement. It
was conducted on the basis of one new share for every 35 existing shares and raised A$17,325,395
through valid acceptances and applications for additional shortfall shares from eligible shareholders,
amounting to 119,671,618 new shares.
Sayona also received firm commitments from institutional, professional and sophisticated investors for
the remaining rights issue shortfall of 56,370,424 shares, totalling A$8,173,700.
In June 2022, Sayona completed a A$190M placement to global institutional, professional and
sophisticated investors, resulting in the issue of 1,054,406,346 new fully paid ordinary shares. Issue price
was $0.18 per share.
SIGNIFICANT EVENTS AFTER BALANCE DATE
• On 29 July 2022, the listed option securities exercisable at A$0.03 each expired. Of the 52,201,664
options on issue at 30 June 2022, 47,432,492 were exercised subsequent to year end and the balance of
2,750,795 expired unexercised.
• On 25 July 2022, Sayona, Morella Corporation and Lithium Royalty Corp (LRC) agreed to binding terms
for a royalty on lithium products produced from both the Mt Edon lithium project, tenements E59/2092
and E59/2055 and the Tabba Tabba lithium project, tenement E45/4703.
In consideration for the grant of a 1.25% Gross Overriding Revenue royalty on the Mt Edon project, LRC
will pay Morella an initial sum of US$450,000 with a further US$100,000 payable if a Mineral Resource
estimate is declared with a minimum 5 Mt and 1% Li2O grade.
In consideration for the grant of a 1.25% Gross Overriding Revenue royalty on the Tabba Tabba project,
LRC will pay Morella an initial sum of US$650,000 with a further US$350,000 payable if a Mineral
Resource estimate is declared with a minimum 5 Mt and 1% Li2O grade.
The initial royalty funding will be used in the development of the Western Australian projects with a
view to delineating a maiden JORC Resource.
44
DIRECTORS’ REPORT -
OPERATING AND FINANCIAL REVIEW
• On 5 August 2022, Sayona increased the current Controlled Placement Agreement limit of A$15M to a
new limit of A$200M and to extend the expiry date to 31 July 2025. The Agreement, provides Sayona
with standby equity capital of up to A$200M over the period to 31 July 2025. Under the agreement,
Sayona issued 95M shares in June 2021 as collateral. These shares were issued at no cost and are similar
to treasury shares. The collateral shares are cancellable at any time by Sayona 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. Sayona receives 90% of subscription monies with the remaining 10%
retained by the subscriber.
• On 27 September 2022, Sayona announced that the Group awarded a four-year, approximately C$200
million contract to Québec company L. Fournier & Fils for mining operations in relation to the restart
and ongoing production at its North American Lithium (NAL) operation.
No other matters or key events have arisen since 30 June 2022 which significantly affect or may significantly
affect the operations of Sayona, the results of those operations, or the state of affairs of Sayona in subsequent
financial years.
FUTURE DEVELOPMENTS, PROSPECTS AND BUSINESS STRATEGIES
During the year, the Group completed the A$128.6M acquisition of North American Lithium Inc. (NAL). The
Group is presently undertaking a major refurbishment of the concentrator plant at NAL with a view to
recommencing spodumene concentrate production by first quarter 2023
Significant steps have been made to expedite the restart, having recruited key personnel, secured critical long
lead equipment items, progressed detailed engineering design work and obtained nearly all of the required
regulatory approvals.
The restart of NAL operations will signal the start of revenue generation for the Group, another step to
becoming a leading North American lithium producer. Combined with the Group’s emerging northern lithium
hub, NAL will ensure Québec is at the centre of lithium carbonate production, becoming an axis on which, a
successful battery ecosystem can be built.
On recommencement of operations, an offtake agreement with Piedmont will come into effect, whereby
Piedmont is entitled to purchase the greater of 113,000 metric tons per year of spodumene concentrate or
50% of production from NAL. Prior to the NAL restart, the agreement provided for offtake of 60,000 tonnes or
50% of concentrate produced from ore mined at The Group’s nearby Authier Lithium Project.
This offtake agreement will remain in place until the commencement of operation of a lithium conversion plant
in Québec. At that point, spodumene concentrate produced from NAL will be preferentially delivered to that
chemical plant. Any remaining concentrate not required by the conversion plant will be delivered to Piedmont.
The Group is committed to the development of a downstream processing capability in Québec, comprising
lithium carbonate and/or lithium hydroxide production.
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;
•
technical works will not achieve the results expected;
•
restart of NAL’s spodumene concentrate operations may take longer and be more expensive than initially
expected;
• price variation on sales of spodumene concentrate;
• exploration and evaluation success on individual projects; and
•
the ability to raise additional funds in the future.
Sayona Mining Limited I Annual Report 2022 45
DIRECTORS’ REPORT -
OPERATING AND FINANCIAL REVIEW
ENVIRONMENTAL REGULATION
The Group’s operations are subject to environmental regulation under the law in Australia and Canada.
The Directors monitor the Group’s compliance with environmental regulation under law, in relation to its
exploration and future mining activities.
The technical studies for the proposed restart of the NAL spodumene concentrate operations provide Directors
with the necessary information/ technical details of the environmental regulations as they apply to the mining
and manufacturing operations.
In addition, the Authier project is subject to review procedures under the BAPE (bureau d'audiences publiques
en environnement) as the Group seeks permitting approval to develop and operate a new mine.
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.
46
DIRECTORS’ REPORT –
REMUNERATION REPORT
REMUNERATION POLICY
INTRODUCTION
On behalf of the Directors of Sayona Mining Limited, we are pleased to present the Remuneration Report for
the year ending 30 June 2022.
This report is designed to provide our shareholders with information regarding our approach to remunerating
our Key Management Personnel (KMP) including the principles that underpin our Remuneration Framework.
The Group’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 Group, including the
criticality of funds being utilised to achieve development objectives.
This report has been prepared in accordance with section 300A of the Corporations Act 2001 (Cth) (Act) and
audited as required by section 308(3C) of the Act.
KEY MANAGEMENT PERSONNEL
For the purpose of this report, KMP are defined as those persons having authority and responsibility for
planning, directing and controlling the major activities of the Group, directly or indirectly, including any
directors of the Group.
The table below outlines those individuals who were KMP during FY22. Individuals were KMP for the full year
unless otherwise stated.
Non-Executive Directors
Mr Alan Buckler
Mr James Brown
Executive Directors
Mr Brett Lynch
Mr Paul Crawford
REMUNERATION POLICY AND GOVERNANCE
Setting remuneration arrangements
Non-Executive Director
Non-Executive Director
Managing Director and Chief Executive Officer
Executive Director and Chief Financial Officer
The Board recognises that remuneration has an important role to play in supporting the implementation and
achievement of the Group’s strategy and ongoing performance. The key principles that underpin the design of
the remuneration arrangements are to:
•
Support the execution of our strategy
• Be market competitive and designed to attract, retain and motivate
• Comprise fixed and at-risk components which link a significant proportion to performance and the
creation of value for our shareholders
• Apply demanding performance conditions to at-risk components
• Performance incentives (at-risk components) are only paid once performance conditions have been met
The intention is for the Group to attract the highest calibre of executives possible and reward them for
performance results leading to long-term growth in shareholder wealth.
Sayona Mining Limited I Annual Report 2022 47
DIRECTORS’ REPORT –
REMUNERATION REPORT
Rewarding performance
The performance of the Executive KMP is measured against criteria agreed annually with each party and is
predominantly on the forecast growth of the Group, project milestones and shareholders’ value. The Board
may, however, exercise its discretion in relation to approving performance-based pay.
Review of reward arrangements
The Board reviews KMP packages annually by reference to the consolidated Group’s performance, executive
performance and comparable information from industry sectors.
As a result of the current review, the Group is planning to implement a new Reward Framework from FY23.
The Board believes these changes are appropriate in setting reward at the right level for Sayona’s size and
business stage and effective in achieving the right balance of objectives for the company, with a focus on
rewarding performance during the year and the continued value created for shareholders.
Prohibition of hedging
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 Sayona’s shares as
collateral in any financial transaction, including margin loan arrangements.
EMPLOYMENT DETAILS OF EXECUTIVES
The following table provides employment details of persons who were, during the financial year, members of
KMP of the 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 2022
& change during the year
Contract Details
(Term)
Proportion of Remuneration:
Related to
performance
Shares
Cash
Not related to
performance
Salary & Fees
B Lynch
CEO/Managing Director.
P Crawford
Executive Director
Company Secretary
A Buckler
Non-executive Director
J Brown
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
85%
-
-
-
-
-
-
-
15%
100%
100%
100%
Employment Contract of Managing Director and Chief Executive Officer
Mr Brett Lynch was appointed Managing Director and Chief Executive Officer of the Group on 1 July 2019. The
Company has entered into a contract of service with Mr Lynch.
48
DIRECTORS’ REPORT –
REMUNERATION REPORT
Under the agreement, the Company may terminate the Mr Lynch’s contract by giving three months’ notice. In
the case of serious misconduct, the Company can terminate employment at any time. 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 and annual reviews of remuneration. The terms of this agreement are not expected to change in the
immediate future.
NON-EXECUTIVE DIRECTOR REMUNERATION
The Board’s policy is to remunerate Non-Executive Directors at market rates for time, commitment, and
responsibilities. The Board collectively reviews and determines payments to the Non-Executive Directors
annually, and may seek independent, external advice in doing so.
The current maximum aggregate amount of fees that can be paid to Non-Executive Directors (Fee Pool) is
$500,000 per annum and was approved by shareholders at the Annual General Meeting AGM on 28 January
2022.
FY22 PERFORMANCE AND REMUNERATION OUTCOMES
The details in the Section outline the key performance measures for Sayona in FY22 and remuneration
outcomes for Executives and Non-Executive Directors.
The following table shows some key performance data of the Group for the last four years, together with the
share price at the end of the respective financial years.
Performance Measure
2022
2021
2020
2019
Total lithium resource (tonnes @ grade)
Total lithium reserve (tonnes @ grade)
119,057,000
20,940,000
20,940,000
20,940,000
@ 1.05%
@1.01%
@1.01%
@1.01%
41,300,000
12,100,000
12,100,000
12,100,000
@ 1.05%
@ 1.0%
@ 1.0%
@ 1.0%
Exploration expenditure (A$’000)
10,314
4,984
3,439
5,922
Exploration Tenements
applications)
(No.
including
558
400
184
185
Net Assets (A$’000)
570,795
67,886
21,146
21,224
Share price on 30 June (A$)
Dividends paid (A$)
0.15
Nil
0.09
Nil
0.008
0.008
Nil
Nil
Sayona Mining Limited I Annual Report 2022 49
DIRECTORS’ REPORT –
REMUNERATION REPORT
Relationship Between Remuneration Policy and Company Performance
The remuneration policy has been tailored to increase goal congruence between KMP and shareholders. Two
methods have been applied to achieve this aim:
• performance-based short-term incentives for Executive KMP based on challenging Key Performance
Indicators (KPIs), and
•
the issue of shares and/or options to KMP to encourage the alignment of personal and shareholder
interests.
The Board believes this policy has been effective in increasing shareholder wealth over recent years, subject to
volatility in commodity prices and financial markets.
Fixed Remuneration and Director Fees
No increases were granted in FY22 in relation to Director Fees for Non-Executive Directors or Fixed
Remuneration for Executive KMP.
Short-Term Incentive Awarded in Respect of FY22
Challenging performance hurdles, or KPIs, are approved by the Board each year, in consultation with KMP.
These KPIs target areas the Board believes hold greater potential for Group expansion and shareholder value,
with a focus on elements within the control of management over the financial year.
Over FY22, in addition to a 75% growth in the share price, the Group achieved a number of significant
milestones, including:
• The acquisitions of NAL, Moblan and Lac Albert;
• NVX certification;
•
For Moblan, the A$100M financing and the drilling results; and
•
For NAL, the pre-feasibility study and the A$100M PLL NAL restart confirmed.
The Board took these achievements into account when deliberating on the incentive payments for FY22.
Long-Term Incentive Granted in FY22
At the AGM on 28 January 2022, shareholders voted in favour of the issue of Options for Mr Crawford,
Mr Buckler and Mr Brown. The Options have an exercise price of $0.15 and have an expiry date of 18 months
after grant date of 28 January 2022.
The table below outlines the details of the grant of Options.
KMP
Non-Executive Directors
A Buckler
J Brown
Executive Directors
P Crawford
Grant
Date
No. of
Options
granted
Exercise
Price
Value per
Option at
Grant Date
Payable on
Exercise(1)
Expiry
Date
28-Jan-22
10,000,000
15 cents
4 cents
$1,500,000
28-Jul-23
28-Jan-22
10,000,000
15 cents
4 cents
$1,500,000
28-Jul-23
28-Jan-22
20,000,000
15 cents
4 cents
$3,000,000
28-Jul-23
(1) The maximum amount payable on exercise is the number of Options granted multiplied
by an exercise price of $0.15 per Option.
Options granted under incentive arrangements do not carry dividend or voting rights. Each option is entitled to
be converted into one ordinary share once the interim or final financial report has been disclosed to the public
and is measured using a Black Scholes valuation model which incorporates all market vesting conditions.
50
DIRECTORS’ REPORT –
REMUNERATION REPORT
Other Share-Based Remuneration Granted in FY22
At the AGM on 28 January 2022, shareholders also voted in favour of the issue of 17,500,000 shares to Mr Lynch.
As explained in the Notice of Meeting, the Board developed several key targets in 2020/21 that were likely to
underwrite the long-term future value of Sayona, with specific and direct links to the performance and within
the control of Executive Directors and Management. It was expected that these targets, intended to deliver long-
term value to shareholders, would be delivered progressively from their inception in early 2021 through to
June 2023.
The Board believes the exceptional grant of shares to Mr Lynch is reasonable, based on the relatively low value
in equity-based remuneration that had been paid to him since he joined Sayona, and in light of the contractual
commitments as part of his service agreement.
STATUTORY REMUNERATION EXPENSE FOR FY22
The table below details the statutory disclosures required under the Corporations Act and in accordance
with the Australian Accounting Standards. The amounts shown reflect the remuneration for each KMP
relating to their service in FY22.
KMP
Short-term benefits
Salary
and fees
Cash
bonus
A$
A$
Non-
monetary
benefits
A$
Post-
Employ
Benefits
Terminati
on
benefits
Other
long-term
benefits(1)
Share-based
payments(2)
Total
Remunerat
ion
Super-
annuation
A$
A$
A$
A$
A$
Non-Executives
A Buckler(3)
J Brown
Executives
B Lynch(4)
P Crawford
Totals
FY22
FY21
FY22
FY21
72,000
72,000
72,000
72,000
-
-
-
-
-
-
-
-
-
-
-
-
FY22 319,360 420,000
FY21 325,000 903,000
FY22 285,741
FY21 278,310 73,500
FY22 747,310 420,000
FY21 747,310 976,500
-
78,004
31,254
-
-
78,004
31,254
27,500
25,000
14,259
21,690
46,690
46,690
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
400,000
-
400,000
-
472,000
72,000
472,000
72,000
2,058,000
903,000
726,500
-
3,584,500
903,000
2,902,864
2,187,254
1,026,500
373,500
4,876,504
2,704,754
(1) Other long-term benefits include the accounting expense of annual and long-service leave movements.
(2) Share-based payments are the amortised fair value of equity instruments granted to KMP.
(3) Represents payments made to Shazo Holdings Pty Ltd, an entity controlled by Mr Allan Buckler, to
provide directorial and technical services.
(4) Represents an accrual of FY21 bonus payable due to settlement of the bonus structure post 30 June
2021.
Sayona Mining Limited I Annual Report 2022 51
DIRECTORS’ REPORT –
REMUNERATION REPORT
LOOKING FORWARD TO FY23
As our business continues to grow, we regularly review our remuneration arrangements to ensure they deliver
on their intended purpose, which is to incentivise and reward our Executives at a competitive level, while
reflecting Sayona’s overall performance and the experience of our shareholders.
As a result of reviews undertaken during FY22, our Reward Framework from FY23 will be revised with
consideration given to the following key principles:
• Alignment of reward outcomes to the performance of the company over a financial year;
• Overall quantum compared to peer companies and industry norms;
• Good Reward Governance (i.e., design, challenging performance hurdles, disclosure and the used of
Board discretion);
•
Sufficient Disclosure of STI hurdles, weightings and outcomes; and
• Board rationale for performance outcomes.
KMP SHAREHOLDINGS
The number of ordinary shares held by each KMP of the Group during the financial year is as follows:
KMP
Non-Executive Directors
A Buckler
J Brown
Executive Directors
B Lynch
P Crawford
Totals
Held at
1 Jul 2021
No.
Received as
remuneration
No.
Exercise of
Options
No.
Other net
change (1)
No.
Held at
30 June 2022
No.
125,808,253
-
-
-
24,381,861
(40,601,063)
109,589,051
757,094
-
757,094
105,501,619
23,100,000
2,000,000
(12,492,511)
118,109,108
149,488,108
-
15,843,081
(5,745,500)
159,585,689
380,797,980
23,100,000
42,982,036
(58,839,074)
388,040,942
(1) Other net change includes purchases, participation in share issues (in capacity as shareholders) and
sales of vested/exercised shares.
OTHER EQUITY-RELATED KMP TRANSACTIONS
The table below details the options held by KMP at 30 June 2022.
KMP
Non-Executive Directors
A Buckler (2)
J Brown (2)
Executive Directors
B Lynch (1)
P Crawford (2)
Held at
1 Jul 2021
No.
Granted
Exercised
No.
No.
Other net
change
No.
Held at
30 June 2022
No.
29,941,861
10,000,000
(24,381,861)
(5,560,000)
10,000,000
872,094
10,000,000
(757,094)
(115,000)
10,000,000
49,159,884
-
(2,000,000)
-
47,159,884
14,949,186
20,000,000
(15,843,081)
893,895
20,000,000
(1) Mr Lynch holds 2,000,000 unlisted options and 45,159,884 listed options at 30 June 2022.
(2) All options held at 30 June 2022 are unlisted.
52
DIRECTORS’ REPORT –
REMUNERATION REPORT
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 and elsewhere in the financial report, 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: 29 September 2022
Brisbane, Queensland
Paul Crawford
Director
Sayona Mining Limited I Annual Report 2022 53
Auditor’s Independence Declaration
Under Section 307C of the Corporations Act 2001
To the Directors of Sayona Mining Limited
As the lead auditor for the audit of the financial report of Sayona Mining Limited for the year ended
30 June 2022, I declare that, to the best of my knowledge and belief, 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
Ann-Maree Robertson
Director
Date: 28 September 2022
54
WITH LITHIUM PRICES AND
DEMAND HITTING ALL-TIME
HIGHS IN 2022 ON THE BACK
OF THE ACCELERATING
ELECTRIC VEHICLE
REVOLUTION, SAYONA IS
WELL PLACED TO GENERATE
INCREASED VALUE FOR
SHAREHOLDERS.
Sayona Mining Limited I Annual Report 2022
55
FINANCIAL STATEMENTS 2022
56
CONTENTS
Statement of Profit and Loss
and Comprehensive Income
58
59
60
61
62
Statement of
Financial Position
Statement of
Changes in Equity
Statement of
Cash Flows
Notes to the
Financial Statements
101
Directors’
Declaration
104
Independent
Auditor’s Report
FINANCIAL STATEMENTS 2022
CONTENTS
58
59
60
61
62
Statement of Profit and Loss
and Comprehensive Income
Statement of
Financial Position
Statement of
Changes in Equity
Statement of
Cash Flows
Notes to the
Financial Statements
101
Directors’
Declaration
102
Independent
Auditor’s Report
34
Sayona Mining Limited I Annual Report 2022 57
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 2022
Revenue
Other income
Administration and Corporate expenses
Capitalised exploration expenditure written-off
Employee benefit expense
Foreign exchange losses
Occupancy costs
Depreciation and amortisation expense
Transaction cost on project acquisition
Finance Costs
Consolidated Group
Note
2022
$
2021
$
2(a)
2(b)
3(ii)
3(i)
3(ii)
3(i)
498,218
645,387
108,374,739
(9,548,843)
-
(10,517,341)
(2,108,773)
(680,878)
(50,069)
(1,352,809)
(928,072)
-
(3,003,696)
(81,708)
(1,884,058)
-
-
(51,758)
-
(3,665)
Profit/(Loss) before income tax
83,686,172
(4,379,498)
Tax expense
4
-
-
Profit/(Loss) for the year
Other comprehensive income
Items that will be reclassified subsequently to profit or loss
when specific conditions are met:
83,686,172
(4,379,498)
Exchange differences on translating foreign operations
4(c)
14,105,312
(18,639)
Items that will not be reclassified subsequently to profit or loss
-
-
Other comprehensive income/(loss) for the year
14,105,312
(18,639)
Total comprehensive income/(loss) for the year
97,791,484
(4,398,137)
Total comprehensive income/(loss) attributable to:
- members of the company
- non-controlling interest
Earnings per share from continuing operations:
Basic earnings per share (cents per share)
Diluted earnings per share (cents per share)
58,894,895
24,791,277
83,686,172
(4,379,498)
-
(4,379,498)
7
7
1.23
1.16
(0.13)
-
The accompanying notes form part of these financial statements.
58
SAYONA MINING LIMITEDAND CONTROLLED ENTITIES
ABN 26 091 951 978
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 3O JUNE 2022
ASSETS
CURRENT ASSETS
Cash and cash equivalents
Trade and other receivables
Other assets
Total Current Assets
NON-CURRENT ASSETS
Mine properties
Property, plant and equipment
Exploration and evaluation asset
Intangible Assets
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
Other financial liabilities
Other liabilities
Provisions
Interest bearing borrowings
Total Non-Current Liabilities
TOTAL LIABILITIES
NET ASSETS
EQUITY
Issued capital
Reserves
Accumulated losses
Non-controlling Interests
TOTAL EQUITY
Consolidated Group
Note
2022
$
2021
$
9
10
11
12
13
14
15
16
17
16
18
16
20
21
18
19
22
23
184,559,499
9,680,669
13,700,194
207,940,362
35,502,596
10,412,500
43,648
45,958,744
61,783,059
232,381,790
158,861,990
184,875
9,529
453,221,243
-
162,222
25,552,728
-
47,629
25,762,579
661,161,605
71,721,323
6,921,952
10,240
323,787
7,255,979
3,665,560
37,540
116,872
3,819,972
-
11,503,791
17,058,804
31,085,639
23,461,533
83,109,767
15,224
-
-
-
-
15,224
90,365,746
3,835,196
570,795,859
67,886,127
504,254,583
14,385,595
(7,360,822)
59,516,503
128,727,789
304,633
(67,643,223)
6,496,928
570,795,859
67,886,127
The accompanying notes form part of these financial statements.
Sayona Mining Limited I Annual Report 2022 59
SAYONA MINING LIMITEDAND CONTROLLED ENTITIES
ABN 26 091 951 978
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2022
Consolidated Group
Share
Capital
Accumulated
Losses
$
$
Foreign
Currency
Translation
Reserve
$
Option
Reserve
Non-
Controlling
Interests
Total
$
$
$
Balance at 30 June 2020
84,930,181
(64,112,907)
214,319
114,135
Loss attributable to members of
the entity
Other comprehensive income for the
year
Total comprehensive income
for the year
-
-
-
(4,379,498)
-
-
(18,639)
(4,379,498)
(18,639)
-
-
-
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
22
29
33
47,008,233
(3,210,625)
-
-
43,797,608
-
-
-
849,182
-
849,182
-
-
-
-
-
-
-
844,000
(849,182)
-
-
-
-
-
-
-
-
21,145,728
(4,379,498)
(18,639)
(4,398,137)
47,008,233
(3,210,625)
844,000
-
-
(5,182)
6,496,928
6,496,928
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
Profit/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
Total transactions with owners
-
-
-
58,894,895
-
- 24,791,277
83,686,172
-
12,428,088
58,894,895
12,428,088
-
-
1,677,224
14,105,312
26,468,501
97,791,484
22
29
392,474,768
(16,947,974)
-
-
-
-
-
375,526,794
1,387,506
1,387,506
-
-
-
-
-
- 26,551,074 419,025,842
(16,947,974)
-
-
3,040,380
-
3,040,380
1,387,506)
-
1,652,874 26,551,074 405,118,248
-
Balance at 30 June 2022
504,254,583
(7,360,822)
12,623,768
1,761,827 59,516,503 570,795,859
The accompanying notes form part of these financial statements.
60
SAYONA MINING LIMITEDAND CONTROLLED ENTITIES
ABN 26 091 951 978
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2022
CASH FLOWS FROM OPERATING ACTIVITIES
Payments to suppliers and employees
Government Subsidies
Interest received
Other income
Interest and other costs of finance paid
Finance costs
Note
Consolidated Group
2021
2022
$
$
(20,950,781)
42,133
110,638
345,447
(1,430)
-
(10,736,509)
315,190
2,252
17,584
-
(773,636)
Net cash provided by (used in) operating activities
24
(20,453,993)
(11,175,119)
CASH FLOWS FROM INVESTING ACTIVITIES
Payment for subsidiary, net of cash acquired
Payment for Moblan tenements
Capitalised exploration expenditure
Purchase of property, plant and equipment
Net receipt of royalty advances
Deposits for Rehabilitation provisions
Net cash provided by (used in) investing activities
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
Net cash provided by (used in) financing activities
Net increase (decrease) in cash held
Cash at beginning of financial year
5A
5B
14
13
5B
22
(105,264,361)
(116,661,862)
(10,160,134)
(21,864,633)
8,619,784
(10,503,432)
-
-
(4,272,756)
(31,758)
-
-
(255,834,638)
(4,304,514)
423,876,147
(15,577,814)
16,510,768
-
-
(42,524)
46,491,520
(2,167,693)
6,496,928
8,044,030
(8,044,030)
(36,334)
424,766,577
50,784,421
148,477,946
35,304,788
35,502,596
492,660
Effect of exchange rates on cash holdings in foreign currencies
578,957
(294,852)
Cash at end of financial year
9
184,559,499
35,502,596
The accompanying notes form part of these financial statements.
Sayona Mining Limited I Annual Report 2022 61
SAYONA MINING LIMITED AND CONTROLLED ENTITIES
ABN 26 091 951 978
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2022
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.
At 30 June 2022 total assets of the Group were A$661,161,605 including cash balances of A$184,559,499, property,
plant & equipment of A$232,381,790, together with mine and exploration assets of A$220,645,049.
The Group’s focus over the next 12 months is the restart of spodumene concentrate production at NAL from the first
quarter 2023, together with an evaluation of downstream processing potential.
In addition, the Group intends upgrading the mineral resource at its Moblan project and completing a feasibility study
on project development. An evaluation of downstream processing options will also be undertaken.
Because of the nature of the Group's proposed operations and expansion strategies into downstream processing,
additional funding will be required in the future to fund this and other activities. 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.
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 33.
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.
62
SAYONA MINING LIMITED AND CONTROLLED ENTITIES
ABN 26 091 951 978
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2022
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Business Combinations
Business combinations occur where an acquirer obtains control over one or more businesses.
A business combination is accounted for by applying the acquisition method, unless it is a combination involving entities
or businesses under common control. The business combination will be accounted for from the date that control is
obtained, whereby the fair value of the identifiable assets acquired and liabilities (including contingent liabilities)
assumed is recognised (subject to certain limitations).
Where measuring consideration transferred in the business combination, any assets or liability resulting from a
contingent consideration arrangement is also included. Subject to initial recognition, contingent consideration classified
as equity is not remeasured and its subsequent settlement is accounted for within equity. Contingent consideration
classified as an assets or liability is remeasured in each reporting period to fair value, recognising any change to fair
value in profit and loss, unless the change in value can be identified as existing at acquisition date.
All transaction costs incurred in relation to business combinations, other than those associated with the issue of a
financial instrument, are recognised as expenses in profit or loss as incurred.
The acquisition of a business may result in the recognition of goodwill or a gain from a bargain purchase.
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.
Sayona Mining Limited I Annual Report 2022 63
SAYONA MINING LIMITED AND CONTROLLED ENTITIES
ABN 26 091 951 978
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2022
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Deferred tax assets and liabilities are offset where a legally enforceable right of set-off exists, the deferred tax assets
and liabilities relate to income taxes levied by the same taxation authority on either the same taxable entity or different
taxable entities where it is intended that net settlement or simultaneous realisation and settlement of the respective
asset and liability will occur in future periods in which significant amounts of deferred tax assets or liabilities are
expected to be recovered or settled.
Tax consolidation
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 33. 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 arrangements are currently in place
between entities in the tax-consolidated group.
Property, Plant and Equipment
Each class of property, plant and equipment is carried at cost or fair value as indicated less, where applicable, any
accumulated depreciation and impairment losses.
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.
Construction Work in Progress are measured on the cost basis and represent complete assets or partial
assets/components that will be part of the refurbishment works to modernise the plant to be a world class lithium
processing plant. These costs will form part of the plant and equipment costs once the refurbishment works are
completed and the plant is then fully operational.
Property
Freehold land and buildings are carried at their fair value (being the amount for which an asset could be exchanged
between knowledgeable, willing parties in an arm's length transaction), based on periodic, but at least triennial,
valuations by external independent valuers, less accumulated impairment losses and accumulated depreciation for
buildings.
Increases in carrying amount arising on revaluation of land and buildings are credited to a revaluation surplus in equity.
Decreases that offset previous increases in the same asset are recognised against revaluation surplus directly in equity.
All other decreased are recognised in the profit or loss. Any accumulated depreciation at the date of revaluation is
eliminated against the gross carrying amount of the asset.
64
SAYONA MINING LIMITED AND CONTROLLED ENTITIES
ABN 26 091 951 978
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2022
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
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 depreciable amount of buildings, excluding freehold land, is depreciable on a straight line basis over the asset's
useful life to the Consolidated Group commencing from the time the asset is held ready for use. The rate of depreciation
applicable to buildings is 2.5%.
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.
Intangible Assets
Computer software is recorded at cost. Where software is acquired at no cost, or at nominal cost, the cost is its fair
value as at the date of acquisition. It has a finite life and is carried at cost less accumulated amortisation and any
impairment losses. Software has an estimated useful life of between one and three years. It is assessed annually for
impairment.
Interests in Joint Arrangements
Joint arrangements represent the contractual sharing of control between two or more parties in a business venture
where decisions about the relevant activities of the arrangement (those that significantly affect the companies’
returns) require the unanimous consent of the parties sharing control.
Separate joint venture entities providing the joint venturers with an interest to the net asset as classified as a joint
venture and accounting for using the equity method.
Joint operations represent arrangements in which the joint operators maintain direct interests in each asset, and
obligations for the liabilities, relating to the arrangement. The Group's interest in the assets and liabilities, revenue and
expenses of joint operations are included in the respective line items of consolidation financial statements.
Gains and losses resulting from sales to joint operation are recognised to the extent of the other parties' interests.
When the Group makes purchases from a joint operation, it does not recognise its share of the gains and losses from
the joint arrangement until it resells the goods/assets to a third party.
Sayona Mining Limited I Annual Report 2022 65
SAYONA MINING LIMITED AND CONTROLLED ENTITIES
ABN 26 091 951 978
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2022
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Restoration Costs
Costs of site restoration are provided for over the life of the project from when exploration commences and are included
in the costs of that stage. Site restoration costs include the dismantling and removal of mining plant, equipment and
building structures, waste removal, and rehabilitation of the site in accordance with local laws and regulations and
clauses of the permits. Such costs have been determined using estimates of future costs, current legal requirements
and technology on an undiscounted basis.
Any changes in the estimates for the costs are accounted for on a prospective basis. In determining the costs of site
restoration, there is uncertainty regarding the nature and extent of the restoration due to community expectations and
future legislation. Accordingly, the costs have been determined on the basis that the restoration will be completed
within one year of abandoning the site.
Provision is made for close-down, restoration and environmental costs when the obligation occurs, based on the net
present value of estimated future costs required to satisfy the obligation. Management uses its judgment and
experience to determine the potential scope of closure rehabilitation work required to meet the Group’s legal, statutory
and constructive obligations, and any other commitments made to stakeholders, and the options and techniques
available to meet those obligations and estimate the associated costs and the likely timing of those costs.
Mine Properties
Mines under construction
Mine properties under construction comprises exploration and evaluation expenditure once the work completed to
date supports the future development of the property and such development receives appropriate approvals.
All subsequent expenditure on the construction, installation or completion of infrastructure facilities is capitalised in
’Mines under construction’. Development expenditure is net of proceeds from the sale of ore extracted during the
development phase to the extent that it is considered integral to the development of the mine. Any costs incurred in
testing the assets to determine if they are functioning as intended, are capitalised, net of any proceeds received from
selling any product produced while testing. Where these proceeds exceed the cost of testing, any excess is recognised
in the statement of profit or loss and other comprehensive income. After production starts, all assets included in ‘Mines
under construction’ are then transferred to ’Producing mines’ which is also a sub-category of ’Mine properties’.
Mine Properties and Mineral Deposits
Estimates of ore reserves and, in some cases, mineral resources can impact depreciation and amortisation rates; the
carrying values of intangible assets and property, plant and equipment; provisions for close-down and restoration
costs; and the recovery of deferred tax assets. The Group estimates its ore reserves and mineral resources based on
information compiled by Competent Persons as defined in accordance with the Joint Ore Reserves Committee (JORC)
code.
Estimation requires assumptions about future commodity prices and demand, exchange rates, production costs,
transport costs, close-down and restoration costs, recovery rates and discount rates and, in some instances, the renewal
of mining licences. There are many uncertainties in the estimation process and assumptions that are valid at the time
of estimation may change significantly when new information becomes available. New geological or economic data, or
unforeseen operational issues, may change estimates of ore reserves and mineral resources. The Group uses judgment
as to when to include mineral resources in accounting estimates, for example, the use of mineral resources in the
Group’s depreciation policy is described in Note 1 above and in the determination of the date of closure as described in
Note 1.
66
SAYONA MINING LIMITED AND CONTROLLED ENTITIES
ABN 26 091 951 978
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2022
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
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.
Reporting by operating segments
An internally determined transfer price is set for all intersegment sales. This price is reset quarterly and is based on
what would be realised in the event the sale was made to an external party at arm's length. All such transactions are
eliminated on consolidation of the Group's financial statements.
Corporate charges are allocated to reporting segments based on the segments' overall proportion of revenue generation
with the Group. The Board of Directors that is representative of likely consumption of head office expenditure that
should be used in assessing segment performance and cost recoveries.
Sayona Mining Limited I Annual Report 2022 67
SAYONA MINING LIMITED AND CONTROLLED ENTITIES
ABN 26 091 951 978
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2022
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Segment Assets
Where an asset is used across multiple segments, the asset is allocated to the segment that receives the majority of the
economic value from the asset. In most instances, segment assets are clearly identifiable on the basis of their nature
and physical location.
Segment Liabilities
Liabilities are allocated to segments where there is a direct nexus between the incurrence of the liability abd the
operations of the segment. Borrowings and tax liabilities are generally considered to relate to the Group as a whole and
are not allocated. Segment liabilities include trade and other payable and certain direct borrowings.
All Other Segments
The following items of revenue, expenses, assets and liabilities are not allocated to operating segments as they are not
considered part of the core operations of any segment:
•
•
•
•
•
•
•
•
•
•
derivatives
net gains on disposal pf available-for-sale investments
impairment of assets and other non-recurring items of revenue or expense
income tax expense
deferred tax assets and liabilities
current tax liabilities
other financial liabilities
intangible assets
discontinued operations; and
retirement benefit obligations.
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
(i.e. unforced) transaction between independent, knowledgeable and willing market participants at the measurement
date.
Financial Instruments
Initial recognition and measurement
Financial assets and financial liabilities are recognised when the 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.
68
SAYONA MINING LIMITED AND CONTROLLED ENTITIES
ABN 26 091 951 978
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2022
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
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).
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.
Sayona Mining Limited I Annual Report 2022 69
SAYONA MINING LIMITED AND CONTROLLED ENTITIES
ABN 26 091 951 978
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2022
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
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.
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
The Group’s obligations for short-term employee benefits such as wages, salaries and sick leave are recognised as a part
of current trade and other payables in the statement of financial position. The Group’s obligations for employees’ annual
leave and long service leave entitlements are recognised as provisions in the statement of financial position.
Other long-term employee benefits
Provision is made for employees’ long service leave and annual leave entitlements not expected to be settled wholly
within 12 months after the end of the annual reporting period in which the employees render the related service. Other
long-term employee benefits are measured at the present value of the expected future payments to be made to
employees. Expected future payments incorporate anticipated future wage and salary levels, durations of service and
employee departures and are discounted at rates determined by reference to market yields at the end of the reporting
period on government bonds that have maturity dates that approximate the terms of the obligations. Any
remeasurements for changes in assumptions of obligations for other long-term employee benefits are recognised in
profit or loss in the periods in which the changes occur.
The Group’s obligations for long-term employee benefits are presented as non-current provisions in its statement of
financial position, except where the Group does not have an unconditional right to defer settlement for at least 12
months after the end of the reporting period, in which case the obligations are presented as current provisions.
70
SAYONA MINING LIMITED AND CONTROLLED ENTITIES
ABN 26 091 951 978
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2022
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
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.
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 revenue is interest and sundry income, 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.
Sayona Mining Limited I Annual Report 2022 71
SAYONA MINING LIMITED AND CONTROLLED ENTITIES
ABN 26 091 951 978
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2022
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
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.
The Group has identified new significant judgements and estimates and assumptions in the half year period:
Significant Judgements:
Accounting for acquisition of a business
The Group completed the acquisition of North American Lithium Inc (NAL) on 27 August 2021.
Accounting for business combinations under the scope of AASB3: Business Combinations is complex and requires
judgements and estimates to be made in determining several matters including but not limited to:
•
Identifying the acquirer
• Determining the date on which the Group achieved control of the subsidiary
• Determining the purchase price consideration paid
•
Identifying the assets acquired and liabilities assumed as part of the transaction, and
• Determining the fair values to be attributed to the identifiable assets acquired and liabilities assumed.
72
SAYONA MINING LIMITED AND CONTROLLED ENTITIES
ABN 26 091 951 978
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2022
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Purchase Price Consideration
Other NAL assets and liabilities (i.e. other than those detailed above) were excluded from the valuation prepared by the
independent expert. The book value of other assets and liabilities acquired, namely current accounts receivable and
current accounts payable and accruals as at acquisition date were assumed to approximate their fair value.
As detailed in Note 5(A) the purchase price consideration included cash and the issue of redeemable preference shares.
The difference between the consideration paid by the vendors for the fair value of the assets acquired and liabilities
assumed at acquisition date, resulted in a A$108,374,739 gain on acquisition. The fair value of the assets acquired and
liabilities assumed was estimated by calculating the present value of the future expected cash flows. A discount rate of
10% was used.
Significant judgements are involved in assessing the future cash flows of the acquired business, including revenue,
expenditure and growth rates applied for revenue and gross main. The assessment of discount rates required
judgement, with the IRR determined as the appropriate discount rate.
Judgement has been applied as to valuation methodology and valuation range. The directors engaged an independent
expert to assist. In determining the fair value of NAL the independent expert prepared an Estimate Valuation Report in
conformity with Canadian Institute of Chartered Business Valuators Practice Standards for valuation reports in respect
of the following NAL assets and liabilities:
• Plant and equipment
• Mining Interest
• Reclamation Provision
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.
Exploration and evaluation expenditure
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.
Royalty Advance - Other Liability
The Group will amortise the royalty advance (deferred revenue) in line with the contractual obligations as agreed with
the funder (LRC) in the agreement dated 8 August 2021. These requirements refer to royalties payable based on
production tonnages and either a Gross Overriding Revenue (GOR) royalty being applied or a Net Smelter Return (NSR)
being applied – depending on the property. The royalty advance will be amortised in accordance with the tonnages
produced.
Significant Estimates:
Uncertain tax position – Unutilised tax losses on acquisition
Tax benefits acquired as part of a business combination, but not satisfying the criteria for separate recognition at that
date, are recognised subsequently if new information about facts and circumstances arises. The adjustment is treated
as a reduction to goodwill if it has occurred during the measurement period or if outside the recognition period, is
recognised in the statement of profit or loss and other comprehensive income.
Sayona Mining Limited I Annual Report 2022 73
SAYONA MINING LIMITED AND CONTROLLED ENTITIES
ABN 26 091 951 978
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2022
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Functional currency
Management have determined the functional currency for the parent entity and its subsidiaries, is the currency of the
primary economic environment in which the entity operates, which is the Australian dollar. The currencies of entities
in the Group are the Canadian dollar and Australian dollar. Determining the functional currency involves judgements
to identify the primary economic environment and the Company will reconsider the functional currency of its entities if
there is a change in events and conditions which determined the primary economic environment.
Mine restoration
The ultimate mine restoration costs are uncertain, and costs estimates can vary in response to many factors including
estimates of the extent of costs of rehabilitation activities, technological changes, regulatory changes, cost increases
compared to inflation rates and changes in discount rates. The provision at reporting date represents management’s
best estimate of the present value of the future rehabilitation costs required.
Tax losses available
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 Adopted
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 2022. New accounting standards issued as at 30 June 2022 that are not yet applicable are
not expected to have a material effect on the amounts reported in the financial statements.
AASB 2020-8: Amendments to Australian Accounting Standards – Interest Rate Benchmark Reform – Phase 2
The Group has applied AASB 2020-8 which amends various standards to help listed entities to provide financial
statement users with useful information about the effects of the interest rate benchmark reform on those entities
financial statements.
As a result of these amendments, an entity:
a) will not have to derecognise or adjust the carrying amount of financial instruments for changes required by the
reform, but will instead update the effective interest rate to reflect the change to the alternative benchmark
rate;
b) will not have to discontinue its hedge accounting solely because it makes changes required by the reform, if the
hedge meets other hedge accounting criteria; and
c) will be required to disclose information about new risks arising from the reform and how it manages the
transition to alternative benchmark rates.
New and Amended Accounting Standards Not Yet Adopted by the Group
AASB 2020-3: Annual Improvements to IFRS Standards 2018–2020 and Other Amendments
This Standard amends:
a) the application of AASB 1 by a subsidiary that becomes a first-time adopter after its parent in relation to the
measurement of cumulative translation differences;
b) AASB 3 to update references to the Conceptual Framework for Financial Reporting;
c) AASB 9 to clarify when the terms of a new or modified financial liability are substantially different from the
terms of the original financial liability;
74
SAYONA MINING LIMITED AND CONTROLLED ENTITIES
ABN 26 091 951 978
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2022
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
d) AASB 116 to require an entity to recognise the sales proceeds from selling items produced while preparing
property, plant and equipment for its intended use and the related cost in profit or loss, instead of deducting
the amounts received from the cost of the asset;
e) AASB 137 to specify the costs that an entity includes when assessing whether a contract will be loss-making;
and
f) AASB 141 to align the fair value measurement requirements in AASB 141 with those in other Australian
Accounting Standards.
The Group plans on adopting the amendment for the reporting period ending 30 June 2023. The impact of the initial
application is not yet known.
AASB 2020-1: Amendments to Australian Accounting Standards – Classification of Liabilities as Current or Non-
Current
Amends AASB 101 to clarify that liabilities are classified as either current or non-current, depending on the rights that
exist at the end of the reporting period. Classification is unaffected by the expectations of the entity or events after
the reporting date (for example, the receipt of a waiver, a breach of covenant, or settlement of the liability). The
mandatory application date of the amendment has been deferred by 12 months to 1 January 2023 by AASB 2020-6.
The Group plans on adopting the amendment for the reporting period ending 30 June 2024. The amendment is not
expected to have a material impact on the financial statements once adopted.
AASB 2021-2: Amendments to Australian Accounting Standards – Disclosure of Accounting Policies and Definition of
Accounting Estimates
This Standard amends:
a) AASB 7, to clarify that information about measurement bases for financial instruments is expected to be
material to an entity’s financial statements;
b) AASB 101, to require entities to disclose their material accounting policy information rather than their
significant accounting policies;
c) AASB 108, to clarify how entities should distinguish changes in accounting policies and changes in accounting
estimates;
d) AASB 134, to identify material accounting policy information as a component of a complete set of financial
statements; and
e) AASB Practice Statement 2, to provide guidance on how to apply the concept of materiality to accounting
policy disclosures.
Additional conforming amendments to AASB 1049, AASB 1054, and AASB 1060 were made by AASB 2021-6.
The Group plans on adopting the amendment for the reporting period ending 30 June 2024. The impact of the
initial application is not yet known.
AASB 2021-5: Amendments to Australian Accounting Standards - Deferred Tax related to Assets and Liabilities
arising from a Single Transaction
The amendment narrowed the scope of the recognition exemption in paragraphs 15 and 24 of AASB 112 (recognition
exemption) so that it no longer applies to transactions that, on initial recognition, give rise to equal taxable and
deductible temporary differences. The amendment applies to transactions that occur on or after the beginning of the
earliest comparative period presented.
The Group plans on adopting the amendment for the reporting period ending 30 June 2024. The impact of the initial
application is not yet known.
Sayona Mining Limited I Annual Report 2022 75
SAYONA MINING LIMITED AND CONTROLLED ENTITIES
ABN 26 091 951 978
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2022
NOTE 2: REVENUE AND OTHER INCOME
(a)
Revenue
Revenue from contracts with customers
Other sources of revenue:
Interest received:
unrelated parties
Government subsidy and incentive receipts (R&D/Cashboost)
Royalty payments
FX Currency gain
Other income
Total revenue and other revenue
(b) Other Income
Gain from bargain purchase
Total revenue and other income
NOTE 3: PROFIT/(LOSS) FOR THE YEAR
(i)
Expenses:
Included in expenses are the following items:
Depreciation and amortisation expense: -
Depreciation and amortisation
Amortisation on right of use assets
Finance costs: -
Lease Liabilities
Preference shares
Short term lease expenses
Defined Benefit Contribution superannuation expenses
(ii)
Significant Revenue and Expenses
The following significant revenue and expense items are relevant in explaining
the financial performance:
Transaction cost on Moblan acquisition
Royalty buy-back - Tansim royalty cost
Finance costs - preference shares
Capitalised exploration & evaluation expenditure written-off
Net foreign exchange loss/(gain)
Finance broker fees
Capital raising fees and commissions expenses
Legal advisory and registry management
76
2022
$
2021
$
-
-
110,638
42,133
92,255
-
253,192
498,218
2,252
315,190
-
310,361
17,584
645,387
108,374,739
108,872,957
-
645,387
11,969
38,100
50,069
1,430
926,642
928,072
213,639
60,510
1,352,809
2,169,752
926,642
-
2,108,773
678,474
-
1,701,782
13,654
38,104
51,758
3,665
-
3,665
44,120
59,125
-
-
-
81,708
-
769,971
160,876
878,274
SAYONA MINING LIMITED AND CONTROLLED ENTITIES
ABN 26 091 951 978
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2022
NOTE 4: INCOME TAX EXPENSE
2022
$
2021
$
(a)
The prima facie tax on loss from ordinary activities is reconciled to the
income tax as follows:
Prima facie tax payable on profit from ordinary activities before income tax at
25.0% (2021: 26%).
20,921,543
(1,138,669)
Adjust for tax effect of:
Non-Deductible Expenses
Other non-assessable income
Gain from bargain purchase
Tax losses and temporary differences not brought to account
2,543,441
(10,533)
(27,093,685)
3,639,234
218,135
(85,982)
-
1,006,516
Income tax expense attributable to entity
-
-
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
(25,744,785)
48,768,951
5,613,671
28,637,837
(726,827)
7,018,041
5,613,671
11,904,885
The Group has unconfirmed carry forward losses for revenue of A$185,272,561 (2021: A$27,608,259) and for capital of
A$22,454,683 (2021: A$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.
(c)
The tax expense of each component of comprehensive income:
Consolidated Group
Exchange gain differences on translating foreign operations:
Before Tax
Tax (expense)/benefit
Net of tax amount
2022
$
14,105,312
-
14,105,312
2021
$
(18,639)
-
(18,639)
Sayona Mining Limited I Annual Report 2022 77
SAYONA MINING LIMITED AND CONTROLLED ENTITIES
ABN 26 091 951 978
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2022
NOTE 5: SIGNIFICANT TRANSACTION AND EVENTS
This section provides additional information which will help users understand how changes in the Group structure have
impacted the financial position and performance of the Group as a whole and the significant events that have occurred
during the year impacting the financial position and performance of the Group.
(A) Business Combinations
The Group acquired 100% of the issued capital of Lithium Amerique Du Nord Inc (North American Lithium Inc. - NAL), a
known lithium reserve and former producer of spodumene, on 27 August 2021, for a purchase consideration of
A$128.6M.
The acquisition is part of the Group’s strategy to integrate NAL's assets with its nearby Authier Lithium Project and
expand its lithium reserves and processing operations in the lithium battery industry.
(a) Acquisition date fair values - NAL
The fair values of identifiable assets and liabilities of NAL as at the date of acquisition were:
Fair value on acquisition
Assets
Mine properties (pre-production) (1)
Mine plant and equipment
Receivables (2)
Cash and cash equivalents
Liabilities
Trade and other payables
Provisions (Note 18)
Total identifiable net assets at fair value
Gain from bargain purchase
Total consideration
A$
C$
59,889,276
203,387,264
3,031,408
1,524,703
267,832,651
54,905,000
186,460,390
2,779,120
1,397,810
245,542,320
(720,025)
(660,102)
(30,133,223)
(27,625,390)
(30,853,248)
236,979,403
(108,374,739)
128,604,664
(28,285,492)
217,256,828
(99,355,268)
117,901,560
Because the mine was in care and maintenance prior to acquisition, significant expenditure is planned to
(1)
restore operations to full commercial production stage.
(2)
The directors believe the receivables are fully recoverable and no provision for impairment is required.
(b) Acquisition-date fair value of consideration transferred
Cash paid
Preference shares issued
A$
106,789,064
21,815,600
128,604,664
C$
97,901,560
20,000,000
117,901,560
The Group used a discounted cash flow model to estimate acquisition fair values, based on the life-of-mine plans.
Expected future cash flows are based on estimates of future production and commodity prices, operating costs,
and forecast capital expenditures using the life-of-mine plan as at the acquisition date.
78
SAYONA MINING LIMITED AND CONTROLLED ENTITIES
ABN 26 091 951 978
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2022
NOTE 5: SIGNIFICANT TRANSACTION AND EVENTS (continued)
A replacement-cost approach was used to determine the fair value of other property, plant and equipment.
(a) NAL filed for bankruptcy protection in May 2019 and the sale process did not occur until 2021, more than two
years after the commencement of bidding for an asset in a Companies' Creditors Arrangement Act ("CCAA")
process and thus the price paid can be lower than full value in a non-bankruptcy sale;
(b) Over the 12 months prior to approval of the Group's bid, a number of government restrictions including travel
restrictions were in place due to the COVD-19 pandemic. It is possible that travel restrictions and capital
markets uncertainties resulting from COVID-19 also impacted the market competition for the NAL assets;
(c) NAL had over C$400M invested. NAL's historical investment in mining, concentrate and refining capacity
significantly exceeds the aggregate purchase price; and
(d)
The Company's share price was A$0.031 and market capitalization was A$138.9M on 26 May 2021, the day
prior to signing an agreement to acquire NAL. At the end of business day on 27 May, the Company's share price
rose to A$0.045 and market capitalization increased to A$201.5M, an increase of approximately 45%. This
demonstrates the market's view that the NAL acquisition is value accretive to the Group.
From the date of acquisition to 30 June 2022, NAL bargain purchase contributed A$108M to Group revenue and A$105M
to Group profit.
Included within other expenses in the statement of profit or loss and other comprehensive income are acquisition-
related costs totalling A$130,380. The costs include advisory, legal, accounting and other professional fees.
(B) Joint Arrangements - 'Moblan'
During the period, the Group entered into a joint arrangement in Quebec through the acquisition of a 60% interest in
the Moblan Lithium Project for US$86.5M (A$116.7M on the date of acquisition) and transaction costs of A$1,352,809
were incurred. The remaining 40% interest is held by SOQUEM Inc., a wholly owned subsidiary of Investissement
Québec. Sayona will manage the project on behalf of the joint holders.
Under the agreement with Lithium Royalty Corp. (LRC), Sayona acquired a 60% interest in the Moblan project held by
Guo Ao Lithium Ltd. The project includes certain mineral claims, technical data and studies as well as the rights of Guo
Ao in the joint venture formed with SOQUEM.
In consideration for the assignment by LRC of its rights to acquire the Moblan Interest, Sayona has agreed to the
following terms with LRC:
(a) In consideration for a US$5M payment by LRC, the grant by Sayona to LRC of a Gross Overriding Revenue (GOR)
Royalty on the Moblan Interest, calculated as follows:
(i)
2.5% for the first 1 million tonnes (Mt) of ore per annum produced from the Moblan Project;
(ii)
1.5% for any tonne of ore per annum produced from the Moblan Project in excess of the first 1 Mt.
(b) In consideration for a US$3M payment by LRC, Sayona will cause the transfer to LRC of the 2% Net Smelter
Return (NSR) Royalty currently owned by Quebec Precious Metals Inc. on the Tansim project;
(c) In consideration for a US$500,000 payment by LRC, the grant by Sayona to LRC of a 1.5% GOR Royalty on
Sayona’s Mallina Project in Western Australia;
(d) Sayona and LRC have also agreed to enter into an offtake agreement with respect to the Moblan Project on the
following key terms:
Sayona Mining Limited I Annual Report 2022 79
SAYONA MINING LIMITED AND CONTROLLED ENTITIES
ABN 26 091 951 978
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2022
NOTE 5: SIGNIFICANT TRANSACTION AND EVENTS (continued)
(i) 10% of Sayona’s ownership participation in the Moblan Project of the annual production for life of mine;
(ii) price at a 5% discount to the prevailing market terms; and
(e) Payment by Sayona to LRC of a US$1M structuring fee on closing of the acquisition of LRC’s rights to acquire
the Moblan Interest.
(C) Share Placement
On 27 May 2022, the Group successfully completed a A$190M institutional placement to fund the NAL restart and
provide additional working capital for other broader development initiatives. The proceeds are primarily to fund the
restart of NAL operation in Quebec, Canada amid rapidly growing demand for battery metals produced in North
America. The recent Pre-Feasibility Study (PFS) for NAL demonstrated the operation's technical and financial viability
and will form the basis of a Definitive Feasibility Study (DFS) expected in the second half of 2022.
NOTE 6: 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 2022.
(a) The names of key management personnel of the Group who have held office during the financial year are:
Key Management Personnel
Brett Lynch
Paul Crawford
Allan Buckler
James Brown
Position
Managing Director/CEO
Director - Executive
Director - Non-executive
Director - Non-executive
(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
2022
$
1,247,105
41,759
-
3,584,500
4,873,364
2021
$
1,791,585
52,169
-
-
1,843,754
These amounts include salary, fees and paid leave benefits paid to the directors, or their related entities (Note 25).
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.
80
SAYONA MINING LIMITED AND CONTROLLED ENTITIES
ABN 26 091 951 978
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2022
NOTE 7: EARNINGS PER SHARE
The earnings figures used in the calculation of both the basic EPS and the
dilutive EPS are the same as the profit or loss in the statement of profit or loss
and other comprehensive income.
Weighted average number of ordinary shares outstanding during the year used
in the calculation of basic EPS
Weighted average number of options outstanding
Weighted average number of ordinary shares and potential ordinary shares
outstanding during the year used in the calculation of diluted EPS
2022
$
2021
$
6,794,835,604
3,431,676,525
407,180,140
-
7,202,015,744
3,431,676,525
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 included in the
calculation of diluted EPS.
NOTE 8: AUDITORS' REMUNERATION
Remuneration of the auditor for:
- auditing or reviewing the financial reports
- other assurance services
NOTE 9: CASH AND CASH EQUIVALENTS
Cash at bank and on hand
Short-term bank deposits
Cash at bank and on hand
2022
$
2021
$
211,325
-
211,325
53,000
-
53,000
184,509,499
50,000
35,452,596
50,000
184,559,499
35,502,596
The effective interest rate on short-term bank deposits was 0.06% (2021:
0.1%). These deposits have an average maturity of 25 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
184,559,499
35,502,596
NOTE 10: TRADE AND OTHER RECEIVABLES
Current (unsecured):
Trade and other debtors (a)
Receivable - share issue (b)
Financial assets at amortised cost classified as Trade and other
receivables (Refer Note 27):
9,680,669
-
4,612,500
5,800,000
9,680,669
10,412,500
9,680,669
10,412,500
(a) Other debtors include A$5,809,385 of GST/VAT amounts due from the Australian and Canadian taxation
authorities, which represents a significant concentration of credit risk to the Group. A further A$3,1112,872
(C$2,804,682) in Sayona Quebec Inc. cash calls were in transit at year end. Funds were received in July 2022.
Sayona Mining Limited I Annual Report 2022 81
SAYONA MINING LIMITED AND CONTROLLED ENTITIES
ABN 26 091 951 978
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2022
NOTE 10: TRADE AND OTHER RECEIVABLES (continued)
Other debtors in the prior year included A$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 acquisition of NAL.
(b) The prior year 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.
NOTE 11: OTHER ASSETS
Current:
Deposits
Prepayments
2022
$
2021
$
13,120,369
579,825
13,700,194
-
43,648
43,648
Under the terms of the rehabilitation fund, the Group have obtained a Revocable Line of Credit from Desjardin Bank
for C$15M, with C$9.6M of the facility having been utilised.
As security for the Revocable Line of Credit, there are 2 term deposits totalling C$9.6M lodged with Desjardin Bank.
NOTE 12: MINE PROPERTIES
Opening balance
Acquisition (refer Note 5(A))
Foreign currency translation movement
Closing balance
2022
$
-
59,889,276
1,893,783
2021
$
-
-
-
61,783,059
-
During the period, the Group acquired the mining interests in North American Lithium Inc (NAL). The Group plans to
refurbish the production facilities and recommence production. The mine properties are valued at fair value on a
non-recurring basis.
NOTE 13: PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment
Land and buildings
At cost
Accumulated depreciation
FX Adjustment
Office and mobile equipment
At Cost
Accumulated Depreciation
FX Adjustment
2022
$
2021
$
76,591,770
(13,970)
2,425,189
79,002,989
1,714,923
(6,933)
17,031
1,725,021
148,164
(11,648)
779
137,295
8,110
(3,757)
-
4,353
82
27,204
(6,797)
167
20,574
-
-
-
-
162,222
Total
$
-
151,720
31,758
-
-
(22,202)
946
162,222
-
-
-
-
-
-
-
SAYONA MINING LIMITED AND CONTROLLED ENTITIES
ABN 26 091 951 978
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2022
NOTE 13: PROPERTY, PLANT AND EQUIPMENT (Continued)
Machinery and equipment
At Cost
Accumulated Depreciation
FX Adjustment
Capital works in progress
At Cost
Transfers
FX Adjustment
Total property, plant and equipment
126,285,499
(14,406)
4,155,700
130,426,793
21,226,987
-
-
21,226,987
232,381,790
Land &
Buildings
Office &
Mobile Equip
Machinery &
Equipment
Capital Works
in Progress
$
$
$
$
Consolidated Group
Balance as at 1 July 2020
Additions
Disposals
Acquisitions through business
combinations
Depreciation Expense
FX Adjustment
Balance as at 30 June 2021
Balance as at 1 July 2021
Additions
Disposals
Additions through acquisition
(Note 5(A))
Depreciation Expense
FX Adjustment
Balance as at 30 June 2022
118,061
30,103
-
-
(11,648)
779
137,295
137,295
-
76,443,606
(2,322)
2,424,410
79,002,989
8,110
-
-
(3,757)
-
4,353
4,353
1,021,282
-
685,531
(3,176)
17,031
1,725,021
25,549
1,655
-
-
(6,797)
167
20,574
20,574
-
-
-
21,226,987
-
162,222
22,248,269
-
126,258,128
(7,609)
4,155,700
130,426,793
-
-
-
21,226,987
203,387,265
(13,107)
6,597,141
232,381,790
Capital Works in Progress represents the cost of the replacement assets or parts thereof that have been or will be
used as part of the NAL plant refurbishment due for completion at the end of March 2023. The planned cost of the
refurbishment is estimated to be costing around C$98M (A$110M).
NOTE 14: EXPLORATION AND EVALUATION ASSET
2022
$
Exploration and evaluation expenditure carried forward in respect of areas of interest are:
2021
$
Exploration and evaluation phase - group interest 100% (a)
Exploration and evaluation phase - subject to joint operation (b)
34,800,724
124,061,266
23,523,843
2,028,885
158,861,990
25,552,728
Sayona Mining Limited I Annual Report 2022 83
SAYONA MINING LIMITED AND CONTROLLED ENTITIES
ABN 26 091 951 978
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2022
NOTE 14: EXPLORATION AND EVALUATION ASSET (Continued)
(a) Movement in exploration and evaluation expenditure:
Opening balance - at cost
Capitalised exploration and evaluation expenditure
Transfer (to)/from joint operations
Capitalised exploration expenditure written-off
Foreign currency translation movement
Carrying amount at end of year
(b) Movement in exploration and evaluation expenditure:
Opening balance - at cost
Capitalised exploration and evaluation expenditure
Additions through acquisition (Note 5(B))
Transfer from/(to) non-joint operations
Capitalised exploration expenditure written-off
Foreign currency translation movement
Carrying amount at end of year
2022
$
2021
$
Non-Joint Operation
23,523,843
7,972,562
1,908,058
-
1,396,261
17,839,978
3,805,078
1,842,720
(81,708)
117,775
34,800,724
23,523,843
Joint Operation
2,028,885
2,342,622
116,561,471
(1,908,058)
-
5,036,346
3,353,128
508,642
-
(1,842,720)
9,835
-
124,061,266
2,028,885
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.
During the period, the Group entered into a Earn-In Agreement for its Pilbara lithium tenement portfolio with Morella
Corporation Limited (formerly known as Altura Mining Limited). Morella had not earned any interest in the tenements
as at 30 June 2022.
During the period, the Group entered into a joint arrangement in Canada through the acquisition of a 60% interest in
the Moblan Lithium Project for US$86.5 million. The remaining 40% interest is held by SOQUEM Inc., a wholly owned
subsidiary of Investissement Québec. The Group will manage the project on behalf of the joint holders.
Located approximately 130km north-west of Chibougamau, Moblan is host to high-grade spodumene mineralisation,
with a Mineral Resource Foreign Estimate of 12.03Mt @ 1.4% Li2O. It is hosted in a well-studied deposit, with
previous exploration work comprising 132 diamond drill holes for more than 17,559 metres.
Movements during the year on exploration and evaluation assets in Canada included A$7,679,030 (2021:
A$2,338,349) on the NAL and Authier project, together with A$2,598,621 (2021: nil) on the Moblan project. A further
A$663,774 (2021: A$265,601) was incurred on the Australian projects.
On 2 March 2022, the Group paid the final C$50,000 option payment to Exiro Minerals Inc. to acquire the remaining
interest in relevant Tansim tenements. The Group now holds a 100% interest in the tenements.
Commitments in respect of exploration projects are set out in Note 26. In addition, the Group has options on projects
as set out in Note 30.
84
SAYONA MINING LIMITED AND CONTROLLED ENTITIES
ABN 26 091 951 978
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2022
NOTE 15: INTANGIBLE ASSETS
Computer Software (at cost)
-Accumulated depreciation
Total net intangibles
Year Ended 30 June 2021
Balance at the beginning of the year
Additions
Acquisitions
FX Adjustment
Year Ended 30 June 2022
2022
$
-
20,581
184,875
2021
$
-
-
-
Computer
Software
$
164,294
-
20,581
184,875
Computer software is initially recorded at cost. It has a finite life and is carried at cost less accumulated amortisation
and any impairment losses.
Software has an estimated useful life of between one and three years. It is assessed annually for impairment.
NOTE 16: 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 premises
Accumulated depreciation
Movement in carrying amounts:
Opening balance at cost
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
27
2022
2021
$
123,836
(114,307)
$
123,836
(76,207)
9,529
47,629
47,629
(38,100)
85,733
(38,104)
9,529
47,629
10,240
-
10,240
38,100
1,430
39,600
37,540
15,224
52,764
38,106
3,665
39,600
Sayona Mining Limited I Annual Report 2022 85
SAYONA MINING LIMITED AND CONTROLLED ENTITIES
ABN 26 091 951 978
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2022
NOTE 17: TRADE AND OTHER PAYABLES
Current (unsecured):
Trade creditors
Sundry creditors and accrued expenses
Total trade and other payables
2022
$
2021
$
5,146,065
1,775,887
1,648,184
2,017,376
6,921,952
3,665,560
Financial liabilities at amortised cost classified as trade and other
payables:
Financial liabilities as trade and other liabilities (refer Note 27)
27
6,921,952
3,665,560
NOTE 18: PROVISIONS
Current:
Provision for employee entitlements
Opening balance
Additional provisions
Amounts used
Balance at year end
Non-Current
Provision for mine restoration
Opening balance
Additions through acquisition (Note 5(A))
Additional provisions
Amounts used
Foreign currency translation movement
Balance at year end
Provision for Mine Restoration
2022
$
2021
$
323,787
116,872
116,872
266,128
(59,213)
323,787
2022
$
31,085,639
-
30,133,223
-
-
952,416
31,085,639
61,429
64,734
(9,291)
116,872
2021
$
-
-
-
-
-
-
-
The Group acquired a provision for the future cost of rehabilitating mine sites and related production facilities as part
of the NAL acquisition.
The provision represents the present value of rehabilitation costs, which are expected to be incurred up to to the time
when the producing mine properties cease operations. These provisions have been created based on the Group’s
internal estimates and modified by the Ministere de I'Energie et des Ressources Naturelles ("MERN"). A discount rate
of 10% adjusted to reflect the risk inherent in the mining operation has been applied.
Assumptions based on the current economic environment have been made, which management believes are a
reasonable basis upon which to estimate the future liability. These estimates are reviewed regularly to take into
account any material changes to the assumptions. However, actual rehabilitation costs will ultimately depend upon
future market prices for the necessary rehabilitation works required that will reflect market conditions at the relevant
time.
The timing of rehabilitation is likely to depend on when the mine ceases to produce at economically viable rates. This,
in turn, will depend upon future lithium prices, which are inherently uncertain.
Provision for Employee Benefits
Provision for employee benefits represents amounts accrued for annual leave.
86
SAYONA MINING LIMITED AND CONTROLLED ENTITIES
ABN 26 091 951 978
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2022
NOTE 19: INTEREST BEARING BORROWINGS
2022
$
2021
$
Non-convertible redeemable cumulative preference shares
27
23,461,533
-
(a) Preference Shares on issue are as follows:
Issued during the period:
27 August 2021, issued as part of the settlement of the acquisition of North
American Lithium (Note 5(A))
Interest accrued
Foreign currency translation movement
Balance at reporting date
21,815,600
926,642
719,291
23,461,533
-
-
-
-
On August 2021, as part of the acquisition of NAL by Sayona Quebec the Group exchanged Investissement Quebec
(IQ)'s second ranking debt of C$63M for NAL's 20,000,000 non-convertible redeemable cumulative preference shares
a par value of C$1.00.
These shares are classified as a non-current financial liability in the balance sheet. Interest is accrued or payable at 5%
per annum. The shares may be redeemed at the option of NAL or at the option of IQ, subject to satisfaction of various
performance hurdles. The shares cannot be converted to equity.
Terms of the preference shares are detailed below:
-
-
Preference shareholders are not entitled to dividends or to vote at shareholder meetings.
In the event of default, liquidation, or receivership IQ rank before the ordinary shareholders in priority.
- Redemption commences in accordance with the NAL Constitution and Governance Agreement once a
feasibility study regarding spodumene carbonate production is economically feasible and/or the mine is in
commercial operation and the redemption term is up to 10 years after the first anniversary of the issue of
these shares.
-
Interest of A$926,642 was accrued in year to 30 June 2022.
At 30 June 2022, the financial liability has been recorded at its issue price plus accrued interest. Given the nature and
conditions impacting on potential redemption terms, the fair value assigned to the preference shares is their face value.
NOTE 20: OTHER FINANCIAL LIABILITIES
Non-Current
Royalty advances - at cost
2022
$
2021
$
27
11,503,791
11,503,791
-
-
As part of 9451-6705 Quebec Inc's Moblan acquisition on 8 August 2021, royalty arrangements were entered into with
LRC (Note 5(B)).
Sayona Mining Limited I Annual Report 2022 87
SAYONA MINING LIMITED AND CONTROLLED ENTITIES
ABN 26 091 951 978
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2022
NOTE 21: OTHER LIABILITIES
Joint funding advances
(i) NAL Funding Advances:
2022
$
17,058,804
17,058,804
2021
$
-
-
At 30 June 2022, Piedmont Lithium Limited (PLL) had agreed to joint funding advances for the purposes of the NAL
refurbishment. Although agreed, the C$2.804M funds due by the end of June 2022 were not transferred to NAL
until 12th July and have been reflected in the receivables at year end. The jointly funded advances included those
outstanding receivables.
This loan from Piedmont Lithium Limitedd (PLL), which represents approximately 25% of the cash advances has
been treated as an equity loan during the 2022 financial year.
NOTE 22: ISSUED CAPITAL
8,246,752,670 (2021: 5,153,695,375) Fully paid
ordinary shares
Ordinary shares issued during the year
Balance at the beginning of the reporting period
Shares issued during the prior year
Shares issued during the current year:
9 July 2021, issue of shares on conversion of options at $0.02
19 July 2021, placement of shares at $0.075
20 July 2021, issue of shares on conversion of options at $0.02
20 July 2021, issue of shares on conversion of options at $0.03
28 July 2021, issue of shares on conversion of options at $0.02
4 August 2021, issue of shares on conversion of options at $0.03
4 August 2021, issue of shares on conversion of options at $0.02
6 August 2021, issue of shares on conversion of options at $0.02
6 August 2021, issue of shares on conversion of options at $0.03
12 August 2021, issue of shares on conversion of options at $0.02
12 August 2021, issue of shares on conversion of options at $0.03
13 August 2021, issue of shares on conversion of options at $0.02
13 August 2021, issue of shares on conversion of options at $0.03
18 August 2021, issue of shares on conversion of options at $0.02
18 August 2021, issue of shares on conversion of options at $0.03
19 August 2021, issue of shares on conversion of options at $0.0145
23 August 2021, placement of shares at $0.0075
25 August 2021, issue shares under a Share Purchase Plan at $0.0075
25 August 2021, placement of shares at $0.0453
31 August 2021, issue of shares on conversion of options at $0.02
31 August 2021, issue of shares on conversion of options at $0.03
10 September 2021, issue of shares on conversion of options at $0.02
10 September 2021, issue of shares on conversion of options at $0.03
29 September 2021, issue of shares on conversion of options at $0.02
29 September 2021, issue of shares on conversion of options at $0.03
30 September 2021, issue of shares on conversion of options at $0.02
6 October 2021, issue of shares on conversion of options at $0.02
6 October 2021, issue of shares on conversion of options at $0.03
88
2022
$
2021
$
504,254,583
128,727,789
No.
5,153,695,375
-
No.
2,468,958,700
2,684,736,675
1,950,000
423,631,222
275,000
58,140
275,508
1,744,186
1,072,424
242,648
4,302,326
197,675
26,030,699
1,000,000
656,977
850,000
97,140
13,200,000
176,368,779
266,666,917
40,850,399
5,830,993
116,279
3,720,663
401,866
26,539,634
795,995
1,234,847
5,667,500
860,000
2021
$
SAYONA MINING LIMITED AND CONTROLLED ENTITIES
ABN 26 091 951 978
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2022
NOTE 22: ISSUED CAPITAL (Continued)
11 October 2021, issue of shares on conversion of options at $0.02
11 October 2021, issue of shares on conversion of options at $0.03
11 October 2021, placement of shares at $0.145
14 October 2021, placement of shares at $0.15470
19 October 2021, issue of shares on conversion of options at $0.02
19 October 2021, issue of shares on conversion of options at $0.03
19 October 2021, issue placement at $0.0145
27 October 2021, issue of shares on conversion of options at $0.02
1 November 2021, issue of shares on conversion of options at $0.02
1 November 2021, issue of shares on conversion of options at $0.145
16 November 2021, issue of shares on conversion of options at $0.02
16 November 2021, issue of shares on conversion of options at $0.03
23 November 2021, issue of shares on conversion of options at $0.02
6 December 2021, issue of shares on conversion of options at $0.02
6 December 2021, issue of shares on conversion of options at $0.03
6 December 2021, issue of shares on conversion of options at $0.03
20 December 2021, issue of shares on conversion of options at $0.02
28 January 2022, issue of shares on conversion of options at $0.02
28 January 2022, issue of shares on conversion of options at $0.03
28 January 2022, placement of shares at $0.1547
28 January 2022, issue of shares on conversion of options at $0.02
28 January 2022, issue incentive shares at $0.11
28 January 2022, issue incentive shares at $0.11
11 February 2022, issue of shares on conversion of options at $0.02
11 February 2022, issue of shares on conversion of options at $0.03
2 March 2022, issue of shares on conversion of options at $0.02
2 March 2022, placement of shares at $0.1236
8 April 2022, issue of shares on conversion of options at $0.02
8 April 2022, issue of shares on conversion of options at $0.03
8 April 2022, issue of shares on conversion of options at $0.04
14 April 2022, placement of shares at $0.0607
21 April 2022, issue of shares on conversion of options at $0.02
21 April 2022, issue of shares on conversion of options at $0.03
29 April 2022, issue of shares on conversion of options at $0.02
29 April 2022, issue of shares on conversion of options at $0.03
12 May 2022, issue of shares on conversion of options at $0.02
26 May 2022, issue of shares on conversion of options at $0.02
26 May 2022, issue of shares on conversion of options at $0.03
2 June 2022, placement of shares at $0.18
23 June 2022, issue of shares on conversion of options at $0.02
23 June 2022, issue of shares on conversion of options at $0.03
2022
$
2,007,552
755,814
689,655,173
133,971
11,604,902
538,392
3,279,401
1,040,466
15,902
176,042,042
1,050,000
348,837
194,820
1,181,061
925,000
4,000,000
800,000
1,063,879
1,310,229
33,284
2,313,745
23,100,000
15,533,420
1,194,262
465,875
2,054,321
440,670
29,954,876
14,036,019
2,000,000
22,631,142
8,381,903
187,840
3,202,506
174,419
2,762,630
5,306,265
20,000
1,054,406,346
2,991,688
1,280,826
8,246,754,692
5,153,695,375
Sayona Mining Limited I Annual Report 2022 89
SAYONA MINING LIMITED AND CONTROLLED ENTITIES
ABN 26 091 951 978
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2022
NOTE 22: ISSUED CAPITAL (Continued)
All share issues in the current period were for cash other than:
On 14 October 2021, 133,971 shares were issued at A$0.1547 as part of a performance bonus of a Sayona Quebec Inc
employee and were expensed to the Profit & Loss.
On 28 January 2022, 38,633,420 shares were issued at A$0.11 in settlement of employee bonus entitlements, approved
by shareholders at Annual General Meeting and were expensed to the Profit & Loss.
On 3 March 2022, 440,670 shares were issued at A$0.1236 in settlement of an option payment to acquire a further
interest in mineral tenements.
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 29)
Exercised
Expired
Balance at reporting date
Employee and officer incentive options consist of:
2022
No.
2021
No.
8,000,000
40,000,000
(6,000,000)
-
42,000,000
8,000,000
-
-
-
8,000,000
2,000,000 options to acquire ordinary shares at A$0.04 expiring on 29 November 2022. The options have been valued
at A$0.003 each, with A$6,750 recognised in the reserves and charged to profit & loss in a prior period.
40,000,000 options to acquire ordinary shares at A$0.15, expiring on 28 July 2023. The options have been valued at
A$0.04 each, with A$1,600,000 recognised in the reserves and charged to profit & loss in the current period.
All options have vested.
(ii) Listed options
Balance at beginning of reporting period
Granted
Exercised
Expired
Transfer from unlisted options
Balance at reporting date
2022
No.
2021
No.
474,857,645
-
(166,567,127)
-
-
308,290,518
182,716,433
195,593,766
(10,610,596)
-
107,158,042
474,857,645
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.
(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
Balance at reporting date
2022
No.
-
13,200,000
(13,200,000)
-
-
2021
No.
114,992,301
66,666,666
(74,500,925)
-
(107,158,042)
-
-
90
SAYONA MINING LIMITED AND CONTROLLED ENTITIES
ABN 26 091 951 978
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2022
NOTE 22: ISSUED CAPITAL (Continued)
The Company issued 13,200,000 listed options to Jett Capital Advisors LLC for services provided.
Each of the options were exercisable at A$0.0145 and were due to expire on 18 August 2024. The options were
exercised on 19 August 2021. The options have been valued at A$0.0138 each, with A$1,370,161 recognised in the
reserves and charged to share issue costs.
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, preference shares and financial liabilities, supported by
financial assets.
In the current year, the capital management strategy has included various new issues.
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 23: RESERVES
Foreign currency translation reserve
The foreign currency translation reserve recorded exchange differences arising on translation of a foreign controlled
subsidiary.
Options reserve
The options reserve records amounts recognised as expenses on valuation of employee share options.
NOTE 24: CASH FLOW INFORMATION
(a) Reconciliation of Cash Flow from Operations with profit/(loss) from
Ordinary Activities after Income Tax:
Profit/(loss) from ordinary activities after income tax
Non-cash flows in profit/(loss) from ordinary activities:
Depreciation/amortisation
Share based payments - corporate costs
Unrealised foreign exchange transactions
Royalty Costs
Interest on Preference Shares
Write off capitalised exploration expenditure
Gain on Acquisition of NAL
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
2022
$
2021
$
83,686,172
(4,379,498)
50,069
5,919,896
(2,875,718)
2,169,752
926,642
-
(108,374,739)
51,758
276,817
321,781
-
-
(81,708)
-
(3,962,089)
(518,892)
2,325,793
199,121
(20,453,993)
(10,180,888)
(6,936)
2,768,301
55,254
(11,175,119)
Sayona Mining Limited I Annual Report 2022 91
SAYONA MINING LIMITED AND CONTROLLED ENTITIES
ABN 26 091 951 978
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2022
NOTE 24: CASH FLOW INFORMATION (continued)
(b) Non-cash Financing and Investing Activities
In the 2022 financial year the following non-cash financing and investing transactions occurred:
• Issue of 133,971 shares valued at A$20,725 as an employee performance bonus - M Ratte.
• Issue of 13.2M options to Jett Capital Inc, valued at A$1,370,160 in settlement of services provided.
• Issue of 23.1M shares to B Lynch valued at A$2,541,000. Approved by shareholders at Annual General Meeting.
• Issue of 40M options to KMP valued at A$1.6M. Approved by shareholders at Annual General Meeting.
• Issue of 15,533,420 shares to employees valued at A$1,708,676. Approved at Annual General Meeting.
• Issue of 4,894,986 performance rights to employees valued at A$702,200. Approved at Annual General Meeting.
• Issue of 440,670 shares to Exiro Mineral Corporation - Tansim final tenant payment valued at A$54,467.
Approved at Annual General Meeting.
(c) Changes in liabilities from financing activities
Balance 30 June 2021
Cash Flows
Non-cash movements
Accrued Interest
FX Translation Movement
Balance 30 June 2022
Other
Financial
Liabilities
-
11,503,791
-
-
-
Preference
Shares
-
2,181,560
23,461,533
926,642
719,291
Lease liabilities
Total
52,764
(42,524)
-
-
-
52,764
13,642,827
23,461,533
926,642
719,291
11,503,791
27,289,026
10,240
38,803,057
NOTE 25: RELATED PARTY TRANSACTIONS
(a) The Group's main related parties are as follows:
Key Management Personnel
Morella Corporation Limited
Piedmont Lithium Limited
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 6).
Morella Corporation Limited is considered a related party due to common directors.
(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 a related party of Paul Crawford to provide accounting services and they
were paid A$49,400.
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 A$72,000 were incurred during the
year (2021: A$72,000).
92
SAYONA MINING LIMITED AND CONTROLLED ENTITIES
ABN 26 091 951 978
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2022
NOTE 25: RELATED PARTY TRANSACTIONS (continued)
During the period, the Group entered into a Earn-In Agreement for its Pilbara lithium tenement portfolio with Morella
Limited (formerly known as Altura Mining Limited). Morella had not earned any interest in the tenements.
Under the earn-in agreement, Morella Corporation is to spend A$1.5m on exploration over three years to earn a 51%
interest in lithium leases.
NOTE 26: 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
2022
$
2021
$
1,484,651
2,327,555
1,051,848
312,440
3,812,206
1,364,288
Under the earn-in agreement with Morella Corporate (formerly Altura Mining Limited) (refer Note 33), exploration
amounts paid will be applied to meet some of the above exploration commitments. The Earn-In Agreement does not
include all tenements which the Group currently controls, consequently, the Group will be responsible for the other
tenements.
(b) NAL commitments
On May 22, the Company announced its commitment to a A$110M ($C98M) refurbishment of NAL processing facility.
The planned restart is well advanced, targeting completion by end of first quarter 2023 - March 2023. The
refurbishment and upgrade will be funded from existing cash reserves.
NOTE 27: FINANCIAL RISK MANAGEMENT
The Group’s financial instruments mainly comprises cash balances, receivables, payables, leases and preference
shares. 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.
Sayona Mining Limited I Annual Report 2022 93
SAYONA MINING LIMITED AND CONTROLLED ENTITIES
ABN 26 091 951 978
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2022
NOTE 27: FINANCIAL RISK MANAGEMENT (continued)
Financial Risk Exposures and Management
(a) Credit Risk
Credit risk arises from exposures to deposits with financial institutions, trade and other debtors and deposits and
sundry receivables (Notes 9,10 and 11).
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 10.
(b) Liquidity Risk
Liquidity risk is the risk that the Group will not be able meet its financial obligations as they fall due. This risk is
managed by ensuring, to the extent possible, that there is sufficient liquidity to meet liabilities when due, without
incurring unacceptable losses or risking damage to the Group's reputation.
The Board manages liquidity risk by sourcing long-term funding, primarily from equity sources.
Financial liability and financial asset maturity analysis
The table below reflects an undiscounted contractual maturity analysis for financial assets and financial liabilities and
reflects management's expectations as to the timing of termination and realisation of financial assets and liabilities.
Total
1 year or less
1 to 5 years
Consolidated Group
More than 5
years
2022
Financial assets
Cash and cash equivalents (i)
Other assets - rehabilitation deposits (v)
Receivables (ii)
Financial liabilities
Payables (ii)
Interest bearing borrowings (iii)
Other financial liabilities - royalty advances (ii)
Lease liability (iv)
Net cash flow on financial instruments
2021
Financial assets
Cash and cash equivalents (i)
Receivables (ii)
Financial liabilities
Payables (ii)
Lease Liability (iv)
Net cash flow on financial instruments
$
$
$
$
184,559,499
-
9,680,669
194,240,168
6,921,952
-
-
10,240
6,932,192
187,307,976
13,120,369
-
13,120,369
-
-
-
-
-
13,120,369
1 year or less
1 to 5 years
-
-
-
-
-
23,461,533
11,503,791
-
34,965,324
(34,965,324)
More than 5
years
$
35,502,596
10,412,500
45,915,096
3,665,560
37,540
3,703,100
42,211,996
$
-
-
-
-
15,224
15,224
(15,224)
$
-
-
-
-
-
184,559,499
13,120,369
9,680,669
207,360,537
6,921,952
23,461,533
11,503,791
10,240
41,897,516
165,463,021
Total
$
35,502,596
10,412,500
45,915,096
3,665,560
52,764
3,718,324
42,196,772
94
SAYONA MINING LIMITED AND CONTROLLED ENTITIES
ABN 26 091 951 978
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2022
NOTE 27: FINANCIAL RISK MANAGEMENT (continued)
(i) Floating interest with a weighted average effective interest rate of 0.06% (2021: 0.10%).
(ii) Non-interest bearing.
(iii) Incremental borrowing rate 5.0%
(iv) Incremental borrowing rate 4.5%
(v) Rehabilitation deposits 0.67%
(c) Market Risks
(i) Interest Rate Risk
The Group's exposure to interest rate risk, which is the risk that a financial instrument's value will fluctuate as a result
of changes in market interest rates, arises in relation to the company's bank balances.
This risk is managed through the use of variable rate bank accounts.
(ii) Foreign exchange risk
The Group operates internationally and is exposed to foreign exchange risk arising from currency movements,
primarily in respect of the Canadian and US Dollar. No derivative financial instruments are employed to mitigate the
exposed risks. Risk is reviewed regularly, including forecast movements in these currencies by the senior executive
team and the Board.
These foreign exchange risks arose from
-
-
-
Cash held in Canadian and US dollars.
Canadian and US dollar denominated receivables and payables.
Canadian denominated preference shares.
The Group's exposure (in A$) to foreign currency risk at the reporting date was as follows:
Cash and cash equivalents
Receivables
Deposits
Payables
Interest bearing borrowings
Other liabilities
Other financial liabilities
Net exposure
Cash and cash equivalents
Receivables
Payables
Net exposure
CAD
2022
$
25,270,638
11,055,370
11,659,731
(5,384,641)
(20,849,655)
(15,159,716)
(10,223,120)
(3,631,393)
USD
2022
$
1,093,826
-
-
-
-
1,093,826
CAD
2021
USD
2021
145,413
4,553,595
(2,223,723)
14,079,247
-
-
2,475,285
14,079,247
Sayona Mining Limited I Annual Report 2022 95
SAYONA MINING LIMITED AND CONTROLLED ENTITIES
ABN 26 091 951 978
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2022
NOTE 27: FINANCIAL RISK MANAGEMENT (Continued)
(d) Sensitivity analysis
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 A$54,904 (2021 +/-
A$704,036).
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 A$347,705
+/-(2021: A$130,721).
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
+/- A$1,843,561 (2021: A$355,025).
(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, with the exception of preference shares which have a carrying amount of
A$23,461,533 and a fair value of A$22,344,317 (2021: A$ nil).
NOTE 28: CONTINGENT LIABILITIES
There were no material contingent liabilities at the end of the reporting period.
NOTE 29: SHARE BASED PAYMENTS
Options
The following options were issued during the year.
On 18 August 2021, 13,200,000 unlisted options were issued to Jett Capital Advisors LLC for services provided. Each
option is exercisable at A$0.0145 and were due to expire on 18 August 2024. Options were exercised during the
period.
On 28 January 2022, 40,000,000 unlisted options were issued to Directors of the Company following shareholder
approval. Each option is exercisable at A$0.15 and expire on 28 July 2023.
During the year, 6,000,000 unlisted employee options were exercised.
On 28 January 2022, 4,894,986 performance rights were issued to employees of the Group following shareholder
approval. Each right is exercisable at zero value and expire on 27 January 2024.
Options issued are summarised as:
2022
2021
Number of
Options
Weighted
Average
Exercise Price
Number of
Options
Weighted
Average Exercise
Price
No
$
No
$
Outstanding at beginning of the year
Granted
Forfeited
Exercised
Expired
Outstanding at period end
52,145,173
58,094,986
-
(20,918,750)
-
89,321,409
0.022
0.107
-
(0.019)
-
0.078
33,295,564
90,385,416
-
(71,535,807)
-
52,145,173
Exercisable and vested at year end
89,321,409
0.078
52,145,173
0.022
0.015
-
0.013
-
0.022
.
0.022
96
SAYONA MINING LIMITED AND CONTROLLED ENTITIES
ABN 26 091 951 978
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2022
NOTE 29: SHARE BASED PAYMENTS (continued)
Shares
The following shares were issued during the year:
Issue of 133,971 shares valued at A$20,725 as an employee performance bonus.
Issue of 38,633,420 shares valued at A$4,249,676 in settlement of employee bonus entitlements, approved by
shareholders at Annual General Meeting.
Issue of 440,670 shares valued at A$54,467 in settlement of an option payment to acquire a further interest in mineral
tenements.
NOTE 30: EVENTS AFTER BALANCE DATE
Key events since the end of the financial year have been:
On 29 July 2022, the listed option securities exercisable at A$0.03 each expired. Of the 52,201,664 options on issue at
30 June 2022, 47,432,492 were exercised subsequent to year end and the balance of 2,750,795 expired unexercised.
On 25 July 2022, Sayona, Morella Corporation and Lithium Royalty Corp (LRC) agreed to binding terms for a royalty on
lithium products produced from both the Mt Edon lithium project, tenements E59/2092 and E59/2055 and the Tabba
Tabba lithium project, tenement E45/4703.
In consideration for the grant of a 1.25% Gross Overriding Revenue royalty on the Mt Edon project, LRC will pay
Morella an initial sum of US$450,000 with a further US$100,000 payable if a Mineral Resource estimate is declared
with a minimum 5 Mt and 1% Li2O grade.
In consideration for the grant of a 1.25% Gross Overriding Revenue royalty on the Tabba Tabba project, LRC will pay
Morella an initial sum of US$650,000 with a further US$350,000 payable if a Mineral Resource estimate is declared
with a minimum 5 Mt and 1% Li2O grade.
The initial LRC royalty funding will be used in the development of the Western Australian projects with a view to
delineating a maiden JORC resource.
On 5 August 2022, the Company increased the current Controlled Placement Agreement limit of A$15M to a new limit
of A$200M and to extend the expiry date to 31 July 2025. The agreement, provides the Group with standby equity
capital of up to A$200M over the period to 31 July 2025. Under the agreement, the Company issued 95M shares in
June 2021 as collateral. These shares were issued at no cost and are similar to treasury shares. The collateral shares
are cancellable at any time by Sayona for no consideration. The collateral shares may be applied by Sayona to meet
any share issues under the agreement when subscription monies are received. Sayona receives 90% of subscription
monies with the remaining 10% retained by the subscriber. PLL have agreed that the advances for NAL can be
converted to equity.
On 27 September 2022, the Group announced that the Group awarded a four-year, approximately C$200 million
contract to Québec company L. Fournier & Fils for mining operations in relation to the restart and ongoing production
at its North American Lithium (NAL) operation.
There have been no other key events since the end of the financial year.
NOTE 31: JOINT ARRANGEMENTS
Joint arrangements are in the form of options to acquire mineral tenements or joint venture agreements.
The Group has entered into joint arrangements with the following parties:
Sayona Mining Limited I Annual Report 2022 97
SAYONA MINING LIMITED AND CONTROLLED ENTITIES
ABN 26 091 951 978
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2022
NOTE 31: JOINT ARRANGEMENTS (continued)
Sayona Lithium Pty Ltd
The Group holds an 80% interest in the Western Australian mineral tenement E59/2092 (Mt Edon) at 30 June 2022.
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 into a revised Earn-In Agreement for its Pilbara lithium tenement portfolio with
Morella Corporation Limited (formerly known as Altura Mining Limited). Morella had not earned any interest in the
tenements as at 30 June 2022.
Sayona Quebec Inc.
On 28 February 2019, the Group entered into an acquisition agreement with Exiro Minerals Group in relation to a
number of mineral claims in Quebec.
All conditions have been met and the Group now holds 100% interest in the relevant claims.
Sayona Nord Inc.
On 15 October 2021, the Group acquired a 60% interest in the Moblan Lithium Project for US$86.5M. Moblan is 40%
owned by SOQUEM Inc., a wholly owned subsidiary of Investissement Québec.
NOTE 32: 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.
2022
$
171,161,455
266,902,636
2021
$
39,468,941
30,786,336
438,064,091
70,255,277
(1,487,695)
-
2,119,839
32,635
(1,487,695)
2,152,474
439,551,786
68,102,803
504,254,582
1,761,827
(66,464,623)
128,727,789
108,953
(60,733,939)
439,551,786
68,102,803
10,061,636
-
(2,315,467)
-
10,061,636
(2,315,467)
Current assets
Non-current assets
Total assets
Current liabilities
Non-current liabilities
Total liabilities
Net Assets
Contributed equity
Option Reserve
Accumulated losses
Total equity
Statement of Profit or Loss and Other Comprehensive Income
Total (profit)/loss for the year
Total other comprehensive income
Total comprehensive loss for the year
Guarantees
There are no parent company guarantees.
Contingent Liabilities
There are no material contingent liabilities at the end of the reporting period.
98
SAYONA MINING LIMITED AND CONTROLLED ENTITIES
ABN 26 091 951 978
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2022
NOTE 33: 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.
** 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 8 June 2021, Piedmont subscribed for US$5M worth of shares in Sayona Quebec to acquire a 25%
interest.
Lithium Amerique Du Nord Inc (North American Lithium Inc), incorporated in Canada on 9th June 2021. Sayona
Quebec Inc held 100% of the ordinary shares of the entity.
Development capital, future operating costs and working capital requirements of Sayona Quebec Inc. and North
American Lithium inc. will be jointly funded by Sayona 75% and Piedmont 25%.
9451-6705 Quebec Inc, incorporated in Canada on 8th October 2021. The parent entity holds 100% of the ordinary
shares of the entity.
Sayona Nord Inc, incorporated in Canada on 24th September 2021. 9451-6705 Quebec Inc owns 100% of the ordinary
shares of the entity.
These subsidiaries have share capital consisting solely of ordinary shares which are held directly by the Group and
minority interests.
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 end coincide with the parent
company.
** members of the Australian tax consolidated group
NOTE 34: SEGMENT REPORTING
The Group operates internationally, in the mineral exploration industry. Segment reporting is based on the whole of
entity. Geographical segment information is as follows:
Primary Reporting: Geographical Segments
REVENUE
Revenue
Total revenue from
ordinary activities
Australia
Overseas
2022
$
2021
$
2022
$
2021
$
Consolidated Group
2021
2022
$
$
114,509
644,591
383,709
796
498,218
645,387
114,509
644,591
383,709
796
498,218
645,387
Sayona Mining Limited I Annual Report 2022 99
SAYONA MINING LIMITED AND CONTROLLED ENTITIES
ABN 26 091 951 978
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2022
Australia
Overseas
2022
$
2021
$
2022
$
2021
$
Consolidated Group
2021
2022
$
$
(10,203,472)
(2,952,535)
93,889,644
(346,326)
83,686,172
(4,379,498)
-
-
-
-
-
-
(10,203,472)
(2,952,535)
93,889,644
(346,326)
83,686,172
(4,379,498)
174,324,897 40,969,047
486,836,708 30,752,276
1,161,605
71,721,323
RESULT
Profit/(loss) from
ordinary activities
before income tax
expense
Income tax expense
Profit/(loss) from
ordinary activities after
income tax expense
ASSETS
Segment assets
LIABILITIES
Segment liabilities
47,530,487
(1,557,110)
(137,896,233)
(2,278,086)
(90,365,746)
(3,835,196)
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 35: FAIR VALUE MEASUREMENT
Apart from software intangibles, 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 other assets or liabilities at fair value on a non-recurring basis.
NOTE 36: COMPANY DETAILS
The registered office and principal place of business is:
Sayona Mining Limited
Unit 68
283 Given Terrace
Paddington Queensland 4064
100
SAYONA MINING LIMITED AND CONTROLLED ENTITIES
ABN 26 091 951 978
DIRECTORS’ DECLARATION
The Directors of the Company declare that:
1. The attached financial statements and notes are in accordance with the Corporations Act 2001 and:
(a) 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 2022 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: 29th day of September 2022
Sayona Mining Limited I Annual Report 2022 101
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 controlled
entities (the Group)), which comprises the consolidated statement of financial position as at 30 June
2022, the consolidated statement of 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 2022 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 & Ethical Standards Board’s APES 110 Code of Ethics for Professional
Accountants (including Independence Standards) (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.
102
Independent Auditor’s Report to the Members of Sayona Mining Limited
(continued)
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.
Key audit matter
Acquisition of NAL mine – accounting
and fair values
Refer to Note 5(A) Significant
transactions and events – Business
Combination – NAL Acquisition
On 27 August 2021 the Group acquired the
issued capital of North American Lithium Inc.
(NAL) for a purchase price of A$128.6M. This
was an acquisition of a previously operating
mine in Quebec Canada which was in the
possession of the Canadian government.
As disclosed in Note 5(A) this acquisition has
been accounted for as a business combination
under Australian Accounting Standard AASB 3.
The note indicates this is a key estimate in
preparation of the financial statements, as the
current accounting treatment and fair values
reflect the complexity of the transaction and
the re-commissioning of the mine site.
In the financial statements the Group has
recorded at fair value for the acquisition total
assets of $267.8M, total liabilities of $30.8M,
and a gain on acquisition of $108.4M.
for
required
the acquisition was
The accounting
considered a key audit matter due to the
estimates
the
acquisition as a business combination, the
estimates required to measure the fair values
of the assets and liabilities acquired, and due
to the significant amounts involved.
to account
for
How our audit addressed the key audit
matter
Our procedures included, amongst others:
relevant agreements,
• We obtained an understanding of the acquisition
by examining
legal
documents, purchase price allocation reports, to
obtain an understanding of the transaction;
• We obtained an understanding of
the
operational status of the mine site by examining
relevant
the mine
recommissioning and mine operating plans;
documents
for
• We assessed whether the acquisition constituted
a business combination under AASB 3;
• We obtained and evaluated
the external
valuation report to assess the determination of
the fair values of the assets and liabilities
acquired;
• We
evaluated
competency
and
the
independence of management’s experts used in
their assessment of the mine recommissioning
and mine operating plans, and the fair values
adopted;
• We tested the calculation of the gain on bargain
purchase arising from the acquisition.
• We considered the key assumptions and
estimates used by management to apply AASB
3, and
• We assessed the appropriateness of disclosures
of the acquisition included in the notes to the
financial statements.
Sayona Mining Limited I Annual Report 2022 103
Independent Auditor’s Report to the Members of Sayona Mining Limited
(continued)
Joint Arrangements – Moblan Lithium
Project
Refer to Note 5(B) Significant
transactions and events – Moblan
Lithium Project
In October 2021 the Group acquired a 60 %
interest in tenements known as the ‘Moblan
Lithium Project’ for a purchase price of
A$116.7M and transaction costs of A$1.35M
were incurred. The Group will manage the
project on behalf of the joint holders.
The accounting for the acquisition of the
project was considered a key audit matter due
to due to the significant amount involved in the
transaction.
Carrying Value of Exploration and
Evaluation Assets
Refer to Note 14 Exploration and
Evaluation Assets
As at 30 June 2022 the carrying value of
exploration and evaluation assets is $158.9M
The Group’s accounting policy in respect of
exploration and evaluation assets is outlined in
Note 1.
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
whether
the capitalised exploration and
evaluation assets meet the recognition criteria
set out in Australian Accounting Standard
AASB 6.
Our procedures included, amongst others:
• We obtained an understanding of the acquisition
by examining relevant agreements, and legal
documents;
• We obtained evidence as to the rights to tenure
of the areas of interest acquired;
• 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; and
• We assessed the appropriateness of disclosures
of the acquisition of the included in the notes to
the financial statements.
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 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; and
• We assessed the appropriateness of disclosures
included in the notes to the financial statements.
104
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 2022, but does not include the
financial report and the auditor’s report thereon.
Our opinion on the financial report does not cover the other information and we do not express any
form of assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information
and, in doing so, consider whether the other information is materially inconsistent with the financial
report or our knowledge obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of the
other information we are required to report that fact. We have nothing to report in this regard.
Responsibilities of the Directors’ for the Financial Report
The directors of the Company are responsible for the preparation of the financial report that gives a
true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001
and for such internal control as the directors determine is necessary to enable the preparation of the
financial report that gives a true and fair view and is free from material misstatement, whether due to
fraud or error.
In preparing the financial report, the directors are responsible for assessing the 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 Responsibilities for the Audit of the Financial Report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is
free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that
includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that
an audit conducted in accordance with the Australian Auditing Standards will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered material
if, individually or in the aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of this financial report.
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.
Sayona Mining Limited I Annual Report 2022 105
Independent Auditor’s Report to the Members of Sayona Mining Limited
(continued)
Auditor’s Responsibilities for the Audit of the Financial Report (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 Group 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.
106
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 14 to 20 of the Directors’ Report for the
year ended 30 June 2022.
In our opinion, the Remuneration Report of Sayona Mining Ltd for the year ended 30 June 2022
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
Ann-Maree Robertson
Director
Level 28, 10 Eagle Street
Brisbane, QLD, 4000
Date: 29 September 2022
Sayona Mining Limited I Annual Report 2022 107
ASX INFORMATION
Additional information required by ASX and not disclosed elsewhere in the report. The following information is
provided as at 26 September, 2022.
1. Shareholding
Distribu on of shareholder numbers
Category Number
(Size of Holding)
1 - 1,000
1,001 - 5,000
5,001 - 10,000
10,001 - 100,000
100,001 Over
Ordinary Shares
(Number)
432
8,076
6,505
17,671
6,206
Total
38,890
Options – SYAOC
(Number)
19
75
59
226
240
619
The number of shareholdings held in less than marketable parcels is 2,523.
Top 20 Share Holdings
Rank Name
Piedmont Lithium Limited
HSBC Custody Nominees (Australia) Limited
Citicorp Nominees Pty Limited
J P Morgan Nominees Australia Pty Limited
BNP Paribas Noms Pty Ltd
Merrill Lynch (Australia) Nominees Pty Limited
BNP Paribas Nominees Pty Ltd ACF Clearstream
Cropanly Pty Ltd
1
2
3
4
5
6
7
8
9
V13669 A/C>
Acuity Capital Investment Management Pty Ltd
Terryjoy Pty Ltd
Bond Street Custodians Limited
Bnp Paribas Nominees Pty Ltd
National Nominees Limited
10
11
12
13
14
15 Mr Robert Veitch + Mrs Elaine Veitch
16
17 Mr Allan Charles Buckler
18 Mr Robert Desmond Wooding
19 Mr Richard Karl Hill
20
HSBC Custody Nominees (Australia) Limited
Bond Street Custodians Limited
A/C 2
–
108
Units
1,188,361,315
619,996,784
459,837,987
395,400,188
186,426,681
184,960,834
148,087,975
147,953,397
95,000,000
90,000,000
85,529,517
61,262,616
58,039,465
54,711,784
52,627,285
45,866,954
41,326,435
30,527,720
30,000,000
28,799,320
% Units
14.30
7.46
5.53
4.76
2.24
2.23
1.78
1.78
1.14
1.08
1.03
0.74
0.70
0.66
0.63
0.55
0.50
0.37
0.36
0.35
4,004,716,257
48.19
Top 20 Option Holdings - SYAOD
Name
Guy Laliberte
Terryjoy Pty Ltd
Dixon Sonoma Pty Ltd
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
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
19.
20.
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%
ASX INFORMATION
Number of
% of T otal
Options Held
Options Issued
Rank Name
Units % Units
Top 20 Option Holdings - SYAOC
Isaiah Sixty Pty Ltd
Bond Street Custodians Limited
Terryjoy Pty Ltd
1
2
3
4
Top Class Holdings Pty Ltd
Bond Street Custodians Limited
5
Mr Michael John Rae
6
Mr Shaun Pedler
7
Mr Robert Veitch + Mrs Elaine Veitch
8
9
Mr Adonis Diab
10 Mr Scott Russell Splade
10 Mr Mark Leslie Thomson
12
13 Mr Shuiwei Xie
14 Mr Jason Eric Cartmell
15 Mr Jason Corbo + Mrs Tracey Corbo
16
17 Mrs Althea Hawley
Rattler Racing Pty Ltd
Break The Mould Superannuation Pty Ltd
18 Mr Jason Lee Berry
19 Mr Elias Sis
20
Mr Jarrad Hunter Bayliss
20 Mr Michael John Kittelty
32,545,629
22,671,511
15,571,221
11,550,000
7,953,488
6,040,153
4,100,000
4,052,525
3,500,000
3,000,000
3,000,000
2,811,112
2,700,000
2,666,505
2,500,000
2,479,081
2,332,886
2,144,626
2,100,723
2,000,000
2,000,000
13.39
9.33
6.41
4.75
3.27
2.49
1.69
1.67
1.44
1.23
1.23
1.16
1.11
1.10
1.03
1.02
0.96
0.88
0.86
0.82
0.82
137,719,460
56.66
The names of the substantial shareholders listed in the Company’s register at the relevant date are:
Shareholder
Number of Shares Held
% of Issued Capital
Piedmont Lithium Limited
HSBC Custody Nominees (Australia) Limited
Citicorp Nominees Pty Limited
1,147,900,086
619,996,784
459,837,987
14.30%
7.46
5.53
Voting Rights
Each ordinary share is entitled to one vote when a poll is called, otherwise each member present at a meeting
has one vote on a show of hands.
There are no voting rights attaching to the Options, but voting rights as detailed above will attach to the
ordinary shares issued when the Options are exercised.
Sayona Mining Limited I Annual Report 2022 109
ASX INFORMATION
2. Registers of securities are held at the following address:
Computershare Investor Services Pty Limited
Level 1, 200 Mary Street,
Brisbane Qld 4000
3. Securities Exchange Lis ng
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.
Cautionary Statements
Forward-looking statements
This document may contain certain forward-looking statements. Such statements are only predictions, based on
certain assumptions and involve known and unknown risks, uncertainties and other factors, many of which are beyond
the company's control. Actual events or results may differ materially from the events or results expected or implied in
any forward-looking statement.
The inclusion of such statements should not be regarded as a representation, warranty or prediction with respect to
the accuracy of the underlying assumptions or that any forward-looking statements will be or are likely to be fulfilled.
Sayona Mining Limited undertakes no obligation to update any forward-looking statement to reflect events or
circumstances after the date of this document (subject to securities exchange disclosure requirements).
The information in this document does not take into account the objectives, financial situation or particular needs of
any person or organisation. Nothing contained in this document constitutes investment, legal, tax or other advice.
Competent Person Statements
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.
Mineral Resources
The information in this report that relates to Mineral Resources for the NAL project is based on information compiled by
Mr Todd McCracken, a member of the Association of Professional Geoscientists of Ontario (PGO).
110
Competent Person Statements - continued
Mr McCracken is a full time employee of BBA Inc, and has sufficient experience which is relevant to the style of
mineralisation and type of deposit under consideration and to the activity which it is undertaking to qualify as a
Competent Person as defined in the JORC Code (2012 Edition) of the “Australasian Code for Reporting of Exploration
Results, Mineral Resources and Ore Reserves.”
Mr McCracken supervised the preparation of the technical information in this release and has relevant
experience and competence in the subject matter. Mr McCracken, as competent person for this announcement, has
consented to the inclusion of the information in the form and context in which it appears herein.
The information in this report that relates to Mineral Resources for the Authier project is based on information compiled
by Mr Maxime Dupéré, B.Sc., géo. a member of the Ordre des Géologues du Québec (OGQ).
Mr Dupéré is an employee of SGS Geological Services, part of SGS Canada Inc, and has sufficient experience which
is relevant to the style of mineralisation and type of deposit under consideration and to the activity which it is
undertaking to qualify as a Competent Person as defined in the JORC Code (2012 Edition) of the “Australasian Code
for Reporting of Exploration Results, Mineral Resources and Ore Reserves.”
Mr Dupéré supervised the preparation of the technical information in this release and has relevant experience and
competence in the subject matter. M. Dupéré, as competent person for this announcement, has consented to the
inclusion of the information in the form and context in which it appears herein.
The information in this announcement that relates to Metallurgical Testwork for the Authier project is based on
information compiled by Dr Jarrett Quinn, P.Eng., Ph.D., a registered member of the Ordre des Ingénieurs du Québec.
Dr Quinn is an independent consultant, employed by Jarrett Quinn Consultant Inc., and has sufficient experience
which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which it is
undertaking to qualify as a Competent Person as defined in the JORC Code (2012 Edition) of the “Australasian Code
for Reporting of Exploration Results, Mineral Resources and Ore Reserves.”
Dr Quinn supervised the preparation of the technical information in this release and has relevant experience and
competence in the subject matter. Dr Quinn, as competent person for this announcement, has consented to the
inclusion of the information in the form and context in which it appears herein.
Sayona Mining Limited I Annual Report 2022 111
CORPORATE DIRECTORY
Sayona Mining Limited
ABN 26 091 951 978
ASX Code
SYA
Directors
Registered Office
Unit 68
Mr Brett Lynch – Managing Director/CEO
Mr Paul Crawford – Executive Director
Mr Alan Buckler – Non-Executive Director
Mr James Brown – Non-Executive Director
Company Secretary
Mr Paul Crawford
Auditors
Lawyers
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
Level 1, 200 Mary Street
Brisbane Qld 4000
Ph: 1300 787 272
Share Registry
Computershare Investor Services Pty Limited
www.sayonamining.com.au
Sayona Mining Limited I Annual Report 2022 113
112
CORPORATE DIRECTORY
Sayona Mining Limited
ABN 26 091 951 978
ASX Code
SYA
Directors
Registered Office
Auditors
Lawyers
Mr Brett Lynch – Managing Director/CEO
Mr Paul Crawford – Executive Director
Mr Alan Buckler – Non-Executive Director
Mr James Brown – Non-Executive Director
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.
1100, Boul Rene-Levesque W
Office 1230
Montreal, Québec
H3B 4N4
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 Limited
Level 1, 200 Mary Street
Brisbane Qld 4000
Ph: 1300 787 272
www.sayonamining.com.au
34
Sayona Mining Limited I Annual Report 2022 113
ANNUAL REPORT
ANNUAL REPORT
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